Upwork:Quarterly Results/2023 Q4

Return to: Earnings Season:2023 Q4 | Upwork:Quarterly Results/2023 Q23 | Upwork:Quarterly Results/2023 Q2 | Upwork:Quarterly Results/2023 Q1

See also: Upwork: Main Insights from Jobs Posted in Upwork Platform | Upwork: Product Developments | Upwork: Conferences

Summary of the results

• Upwork’s Q4 revenue grew 14% y/y to $183.9 million, topping management's upper guidance of $180 million (+11.5%), adjusted EBITDA and Non-GAAP EPS of $30.5 million and $0.20 also execeeded upper management guidance of $28 million and $0.18, respectively.
• Upwork’s active clients grew by 5% y/y 851,000 while GSV was up 4% y/y to 1.072 billion (analysts’ estimate: $1.04 billion).
• Its take rate was up 150 bps y/y to 17.2% while its profit margin grew to 9% from -10% in the previous year.
• Upwork is guiding Q1 2024 revenue of $183-$188 million (+15.3% at the midpoint) and Non-GAAP EPS of $0.17-$0.19, both coming above analysts’ estimates of $181.63 million and $0.14, respectively.

See: Q4 2023 Earnings Presentation | Forum Discussions

Management Guidance and Analysts Estimate

Management Guidance

Items	Q4 2023						2023
	Lower-point	Y/Y	mid-point	Y/Y	Upper Point	Y/Y	Lower-point	Y/Y	mid-point	Y/Y	Upper Point
Revenue	$175 million	8.4%	$177.5 million	10%	$180 million	11.5%	$680 million	10%	$682.5 million	10.4%	$685 million	10.8%
Adjusted EBITDA	$24 million		$26 million		$28 million		$67 million		$69 million		$71 million
Adjusted EBITDA Margin	13.5%				15.8%
Non-GAAP Diluted EPS	$0.16		$0.17		$0.18		$0.47		$0.48 million		$0.49
Diluted weighted-average shares outstanding	143 million		144 million		145 million		141 million		142 million		143 million

• Management expects to generate positive free cash flow going forward..
• It expects stock-based compensation to be less than $20 million in Q4 2023.

Analysts Estimate

Yahoo Finance

Items	Q4 2023	Y/Y	Q1 2024	Y/Y
Revenue	$178.43 million	10.5%	$181.63 million	14.20%
Non-GAAP EPS	$0.17	325%	$0.14
GSV	$1.04 billion	0.97%

Seeking Alpha

Items	Q4 2023	Y/Y	Up revisions in the last 3 months	Down Revisions in the last 3 months	Q1 2024	Y/Y
Revenue	$178.16 million	10.36%	1	2	$181.66 million	12.93%
Non-GAAP EPS	$0.17	334.65%	1	1	$0.13

Competitor earnings expectations and results

Fiverr

Management Guidance

	Q4 2023						FY 2023
Items	Lower point	Y/Y	Midpoint	Y/Y	Upper Point	Y/Y	Lower point	Y/Y	Midpoint	Y/Y	Upper Point	Y/Y
Revenue	$88.1 million	6.0%	$91.6 million	10.2%	$95.1 million	14.4%	$358 million	6.1%	$361.5 million	7.1%	$365 million	8.2%
Adjusted EBITDA	$14.9 million	58.5%	$15.9 million	74.7%	$16.9 million	85.7%	$58 million	137.7%	$59 million	141.8%	$60 million	145.9%

Analysts estimate

Items	Q4 2023	Y/Y	Q1 2024	Y/Y	FY 2024	Y/Y
Revenue	$92.38 million	11.1%	$97.4 million	10.7%	$408.6 million	12.7%
EPS	$0.52	100%	$0.48	33.3%
Active buyers	4.16 million	-3.2%
Take rate	31.4%	4.0%
SPend per buyer	$276.79	5.6%

Analysts Opinions

Stock picking in 2024 will be driven by individual fundamentals

• January 19, 2024: Goldman Sachs sees stock picking being driven by “idiosyncratic fundamentals” in 2024 instead of the “bifurcation” seen in 2023 where mega-cap stocks outperformed other groups.

Stabilising macro environment to aid freelance business

• January 19, 2024: Goldman Sachs sees continued re-acceleration of Fiverr's revenue in 2024 as macro environment stabilizes.
• January 8, 2023: Jefferies analyst expects Upwork’s EBITDA margin to grow as the macro environment recovers and business confidence improves They view Upwork as a small-cap recovery play with acceleration. They added that renewed business momentum should expand Upwork's multiple above its historical average.