UPWK - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Upwork first quarter 2020 earnings conference call. At this time, all participants lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. Instructions]. [Operator

like Denise conference go Garcia, now speaker to ahead, hand Ms. today, Investor to would over the your ma'am. I Relations. Please

Denise Garcia

financial Officer. today Upwork's Leading Officer President and to discussion Upwork's its Executive quarter Welcome Chief Kinion, Financial of and Chief the Hayden are XXXX discussion Brian Brown, Upwork's first results.

Following management's be will we happy to prepared remarks, take your questions.

review the Safe statement. me Harbor let first, But

These we a the are business call, this laws. are that federal may under assumptions. forward-looking statements subject risks, related of our During guarantees and make to are rather securities future variety statements not but uncertainties statements performance, of to

Our actual expectations in results any from reflected forward-looking statements. differ could materially

actions COVID-XX matters beyond and statements impacts the rapidly. In addition, to COVID-XX regarding pandemic and any in related and control of future statements response to have are we taken business forward-looking the pandemic changing are current and our the on our

discussion our as SEC factors factors on today's risks the of on in the Investor and website For please material and other SEC risks available as discussed press important our website Relations results, to actual our release. other the filings a affect well and could important that refer

the Quarterly when be Report March ended information in Additional XX-Q for will set XXXX forth three filed. on also our months Form XX,

afternoon measures this addition, be issued found to be regarding press investors.upwork.com. our non-GAAP GAAP that made non-GAAP website reference at was to can will reconciliation in In financial Investor measures. of Information release Relations the on

of non-GAAP. measures GAAP always, of first XXXX noted, to the All comparisons figures first are unless quarter of rounded, as are otherwise cited As quarter the unless reported are XXXX.

the today's operating and regarding SEC we be impact Please conference concluded. call We of provide our website, will corresponding note pandemic these our into COVID-XX to available be the condition business. call disclosures disclosing on on our more financial plan types after today prepared remarks will detailed in Investor currently has on current guidance, to and insight the order in consistent calls. information earnings do The also the provide recent reviewed that, of information not results Relations to with future shortly

turn will call Hayden. I the over Now to

Hayden Brown

Thanks and by pandemic unsettled The are that us. with our I has to of all in dialing like COVID-XX for today. would thanks saying this event. by everyone Denise everyone start hearts unprecedented impacted

individuals We this frontlines many crisis. incredibly for you. the on are of so grateful Thank the

is clients, on In better the so opportunities of people of which Upwork economic drawing pandemic current In capabilities work practicing focusing on and mobilizing the XX create we they sense in economic of order internally to remote support to are face our the lives. years have a emerging urgent our the address environment, purpose challenges the renewed and to associated crisis, mission, need of and as expand work opportunities. and talent with as is many to their our well enabling whom are seeking remote

team members members before are XXX working to our X,XXX working pleased am home and remote has More to were prior our transition today highly given the already for company, approximately the been say our than half across smooth. us as experience pandemic remote all cities working I a of team work that remotely. of from

by operations a focused have gratitude deep while offering. innovate who the team stayed express dedicated result, have our maintained for serving this during of customers unparalleled successfully we high-performing our change. I product to on As efforts want continuing our Upwork time to incredible

people of at like positioned offering that before. the trends: across potential Last a the blanketed quarter, is our globe I never crossroads company planet First, access, major connect by high-speed four shared internet the to

comparable remote making tools, to collaboration better and being better work Second, increasingly face-to-face.

autonomy to greater from need be force, in to workers labor the differently, talent, demand freedom and competitive. for for in fourth, to companies seeking war people for Third, and attract increasingly of work running they work. workplace of out in the with which sands they types options the traditional how when increasing an And and shifting whom nine-to-five retain

In pace. Remote astonishing to remote the plan going current XX% mainstream recent crisis permanently the these the accelerated weeks, two after companies found and trends study of at in more is eight the have passes. last back gone work CFO work Gartner an bottle. of has to A genie not shift that

a benefits A out of them passes. moved the plan remotely working who found opened crisis recent lets more poll that work Additionally, during seek eyes after has from work, people Citrix workers' that this to home many to of crisis XX% job to remote remotely work the

believe Upwork today, the a was a are of a of in the are two of a placing and that be excel workforce these and companies premium greater to themselves crisis. workforce and in comfortable remote help normal companies very embracing world in businesses recognize what strategic being the current with finding flexibility how, cost portion and of sizes is that agility companies built time which efficiency, at will values, from We emerges talent hallmarks their all the engaged. remote new when talent on in conditions the value when

business staying are as a established. on is normal our this difficult up customers time to serving support We and through new our focused setting them

information, meet we a providing adapt regularly them steps clients and eight help with professionals last and the want to weeks customers. tools examples I independent emerging have of few needs the quickly. taken in First to and of the to we resources the our foremost, our highly-skilled are share

together manage Managing Remote training to a for We we We Center workforce. our launched webinars customers. practices a developed a with Resource online Teams began build of for And Udacity, series Work course. a Remote remote how with and best

their to hardship assists founding independent the to access critical quickly We our the the pandemic. of accelerating Rated freelancers offer mobilized freelancers. address which payments team Our XX%. their of funds, Freelancers a experiencing were a hourly moved of We contract Relief result by financial as Top workers faster to Fund, needs partner

enables new protection a payments which Upwork product fixed-price Contracts, freelancers We engagements Direct the the receive of our to also outside of service for escrow marketplace. called launched

streamlining help Upwork new to program, qualified our grants can most to better COVID-XX-related that them difficult professionals community to companies through possessing million platform important way our skills freelancer our fast-track The this of we our have to projects. professionals most time are in Last bringing offers by experience in-demand work. and work talent Together debuted is Grants we we $X independent seen opportunities. on open the for week hire the on to more identify most Talent them Work onboarding unprecedented Finally, talent which influxes

of clients act on set they response their help and continuity identify We also and launched to templates a immediately crisis curated business needs job have.

looking Upwork Speaking like our during for some I help provide would briefly critical to of crisis. this these on how have to been clients needs, color

workers. have can requests augmentation remote We source staff via open roles for from multiple help received and clients they their of reviewing which analyzing

We are work working a contractors creating to and or a multinational by talent pipeline deliver are cannot are crisis. employees with and case that corporation statement in large, to on of due projects completed providers the U.S.-based contingent typically work current

record HR Upwork, DevOps, roles supported we across by employer services. enterprise of European-based and accounting finance, development, client, could to that another identified move software our For

rapidly for non-profit design, area turned marketing Upwork launch Another COVID-XX user project-based experience the small is needed center. of A a and talent tech activity to translation to resource urgent work. they

lender, service its commercial to business customer to COVID-XX client, grow the meet team turned to demand small a Upwork customer crisis. Another to increased due

sports e-learning internal designers Larger for Upwork and develop to expertise of offering hiring project-based animation to clients The new Upwork materials teams gamification reality entirely user teams. instructional used work. new products coming testing, and marketing in company are source a augmented development, and experiences highly-skilled create independent A for they training also and developers agency experience professionals customers cybersecurity large, on quality Upwork is enablement software programs. training their as multinational assurance graphics to and design, with

unified visibility to move businesses and enhanced by professionals We strong also from to and classify mind the wanted to worker billing, platform offered of reporting, pay payroll to countries. and agencies These XXX global non-Upwork our which and of products, protection clients heard platform. control peace customers enable and compliantly take contractors advantage work our our independent their classification spend in asking

conglomerate, a on they sudden employees see able these onboard were onto border a restrictions. office current the ensuring program international humbling of and as Instead a ingenuity offers, pool to COVID-XX newly-hired creativity to the cancel of challenges. members' nimbly having platform truly of team rescind to continuity client, businesses our and these to the our is was talent U.S. program. relocate electronics with revealed faced to team the global due this human inability infrastructure remote adapt to members It One to

business, discussing into the Now, impact would I to of pandemic. performance including our the like the of transition

pandemic guidance of during representing million, $XX.X end strong, was our started to and revenue platform impact the March. our year-over-year quarter The high week of second exceeding first Our XX% growth range. the

week-over-week. in we this the weeks, to to was which fourth impending saw week accelerate the in initiating in we believe crisis phase work, two rebound pivoted response a and of shelter orders. March, the as triage started entering companies For they a and symptom place deceleration By of a client new focus clients activity

levels our early registrations surpass leading a last margin to continued such client week, on to own began has activity example, by as we numerous In to records new pre-crisis and we build. posts. job broke on momentum mid-April, for client the and In significant metrics indicators

we trends, these in optimistic work as new created. indicate they these spend in of phase revenue. will and constraints getting are GSV the they March signals from focused ways shifted These navigate phase done leading are to in future and has April, crisis in this typically transition early that opportunities now still it's have the triage on a they as into translate, do, While indicators as companies

said, beyond. a and risks unknown these small since The year business existing GSV. XXXX biggest throughout That well customers and our will continue macroeconomic is majority will businesses our this of comprise business fare, significant, to for mid-sized how unpredictable our persist

by the impact to report may approximately This quarter. as mix, to weathering industries Low week levels compared the research X% early with industry be Sachs So of our Exposure classified March in of GSV far, be our one-third average pandemic from to average starting decrease through the X muted appear clients in Goldman mid-sized a risk. these weekly and seen due and We generated relatively well. clients the earlier recession GSV small businesses observed April, to in by lasting clients'

performed Another one-third remainder with we Moderate in that as being to clients' the that This are that own that the to our work having industry. platform categories as the approximately High as of categories as of large from in as changes is majority unspecified one-third March of clients of Exposure on businesses our Further, industries hit our from platform work analysis believe are long Somewhat GSV additional an suggests classified X% these and are Essential us that of business. our an still on clients' comes only Essential. demand and leads half crisis Upwork endure Exposure the are will the saw in

I of and volatile at the which community may unpredictable shared to we its want to analyses today as impact. pace about of and the perspectives that will emphasize pandemic I change be am are subject global Personally, the shadow recent pandemic. the emerge this and given from ongoing data, nature the and concerned a

advantage as and to continue understand a doing of am I over work and resiliency the hard are the embracing way. now in sustaining strategic impact time see believe customers result confident we ensure of and prospective positive in will significant the current our However, Upwork the customers in business our we of and to a

will achieving XX% an XXXX, for for strategy years On provide and our our update shared rate call, for areas to our focus three-pronged come. in a QX. plus our I on backdrop, plan which I annual growth that revenue is sustaining growth Against last the

this climate and the achievable the beginning as critical were year, to are delivering that these since believe continue a as goal While three to global changed they now pillars economic the dramatically quarter ago. growth has I is of

increasing clients have as site the posts our only The In of versus the by first work. aim to goal, prospects to a forefront many of perception the among Too small for accompanied that high-value are our in traction has close either XX%, we that at brand believe on this gap volume we never job face. goal strength been reality QX, heard bigger marketplace. we or we wrongly saw gig prospective Upwork attract in clients, increasing with significant more year-over-year awareness and

pressing and needs. professionals new leverage assets clients' independent companies This our most quarter, speak their we the to needs are sales the our to at retooling current for immediately talk solution-focused pages and moment can that are tracks landing showcase target ways launching

We or through encouraged goal substantially progress accounts contract per users the single pandemic growth onset, spend GSV also of of even grew the million account, $X exceeded enterprise are increased and per the by In the more on enabling goal, number we every more client. of per second quarter. our spending for number week our QX,

businesses We capabilities sign-on a continued options authentication we to corporate accounts employer of onboarding streamline our of in work that improve of for all enhancements user on sizes, for enhanced our single secure engineering including record began service. and roadmap

to We to is in to teams invest work clients continue this highly around distributed, truly enabling ensure with solution unparalleled the flexible globe.

heightened our of levels on to the goal, a massive the most of of been as pandemic our particular site. the have existing make activity more since start talent we And well seen has make freelancers matches, high-quality third from influx the focus as the as new we

jobs as precisely we to number to made focused the scale fill to tokens up. than our and easier for key - in ever. more at as well match we our and to jobs, as changes is proposals search and match our to work rate highly-skilled ability out QX, and is pushing on connects and of to well to that a are our matching program talent changes professionals enhancements QX, contributed submit ready to for business them including modifications capabilities, that access have virtual Our And independent search system pre-vetted enterprise important positive clients. categorize used our In as rolling

about take minute to of how to during uncertainty. like are we expenses managing talk a time would this I Now,

general and and trimmed spending as our continuing of T&E spend, up productivity we for although have result saw sales softness hire to a expenses vendor such headcount have across to growth We in impact stepped support efforts management contracts. office-related areas immediate the board. and that ancillary in includes we companies' sign We are pandemic's on QX roles new willingness as cost some our This the priorities. re-evaluating larger

we hiring have of mind paused better top and approach address are further to Consequently, most sales our adapting clients' concerns. sales

QX in to our the to and as have larger of continue team We clients, close serving confidence full the quota, achieving sales of model imperative economics despite evidenced challenges sales March. in by the the

sales once more will larger re-initiate during economic clients predictable see activity We team hiring from we crisis. this

never these and to to cost relevant and of incrementally value serve strong are like this Given advantage and before. proposition, our we balance sheet moment redeploying reach investing savings take unprecedented customers

remote-friendly advertising, On from both performance the side, marketing the a see stronger unique to now. opportunity for customers we drive higher from flexible solutions direct more given right and appetite and brand

of rate customers us in XX% are moving the by with investing our in our the future, sustainable are drive product critical will both ahead. I serving market goal revenue towards plus growth the ways steps years to a are innovations this on today continuing And that invest opportunity. in R&D that billion year we confident the in taking fully side, the we in $XXX unlocking and growth am

this future continued exchange in can how greater job our FaceTime time, as like greater greater teams for our seeing would including our and modern commutes economy, tools, work. trust for powerful themselves painful we with deliver. to location-based from capabilities talent that And businesses workers, that with businesses, loyalty the freedom and satisfaction. for in with for they unshackle and requirements in a as trade and and autonomy for and whom future advantages during thank they as with pointless future Upwork, future integrate A outdated productivity customers organizations greater their the governed a work constraints unprecedented our have access that around-the-clock their I see, for investors

before to call over the questions. your Brian call open we the turn will to I Now

Brian Kinion

to I results before call and share a with outlook financial you afternoon thoughts brief and on first update like good Thank Hayden everyone. would our opening start your questions. to quarter our the regarding

in Core within expanding given March spend which our this XXX,XXX. the both accounts, retention first to in with where for the client clients accounts. quarter just $XXX.X million expectations, metric approximately as steady GSV, our on was increased quarter. XXX% new by Client XX, QX. services, fees adding first footprint not our includes Core additional other and with but in approximately X,XXX XXXX, existing line of charge increased was emphasis current we clients in was value-added spend

by in revenue. XX% $XX.X to year-over-year first by Revenue revenue by million. the Marketplace $XX.X increased was approximately COVID-XX quarter our in X% revenue $X.X revenue increased increased first by total as that representing $XX.X our of growth to our of quarter, million million pandemic. XX% services rate the first quarter, of to expected, the in exceeding XX% reduced high-end guidance X% We range estimate year-over-year Managed the million. QX growing the year-over-year

take the the quarter overall Our year from in XX.X% first XX.X%, in rate prior. was up

to which are rate improved several XX.X% payment bid XX.X% client increase the last after changes to platform in of X.XX% in Plus X%. subscription to take including first the year to new from improvement to the projects plans, and that in for marketplace QX independent connects, the of our paid fees was Our compared virtual from tokens professionals the This changes adoption allow prior. year, on Basic quarter we made client Upwork on and primarily

was in XX% cloud quarter our management and $XX.X million, to marketplace revenue, improvements was primarily growth of XX% in due with representing of costs. of compared the profit The the gross Non-GAAP the computing in first revenue increase XXXX.

delivery onetime customer organizational prior resulted million. Turning $X.X changes pandemic, significant to a the streamline that to we to February in operating the of end-to-end of XXXX charge experiences expenses. COVID-XX made In our

for period-to-period as from operating a in we of but continue absolute increase will dollars expenses as invest to revenue growth. percentage Our fluctuate

million brand driving performance prior. XX% campaign. focused the including are spend, XX% spend The million the direct we to and quarter, marketing total our of as driven $X appetite half remote-friendly In was million as of solutions. sales representing what above and by the to were and on we flexible quarter, second increased $XX.X the market's year-over-year expect in typically marketing investments workforce for the first in back awareness year through by our sales of increase brand we revenue $X both expenses additional XXXX and given compared an team Non-GAAP to marketing buildout the increased

the XX% XXXX. first expenses as were XX% Non-GAAP revenue compared R&D million, of $XX.X of representing in quarter total to

product in our invest to continue part We as strategy. of core growth innovation a

representing compared to were $X.X of quarter, the in Transaction representing Lastly, of $XX.X were million first of XX% million, total non-GAAP revenue X% G&A quarter XX% XXXX. expenses losses in first approximately total revenue. the

Our typical range has revenue. of and X% X% been between

to pay We high-end expect to the and to move return typical the top-rated of freelancers pay our to during faster. pandemic, clients' range in due to transaction ability losses the will changes COVID-XX due

million loss XXXX. in $X.X net quarter of income non-GAAP Non-GAAP first million compared in quarter the was to XXXX, $X.X first the of net of

Our $X.XX $X.X to to was in basic adjusted and XXXX. share was Adjusted EBITDA million EBITDA compared $X first quarter in in first the per of XXXX. diluted first the loss quarter of non-GAAP breakeven of of the million net quarter quarter loss compared in XXXX first the

Now, I share outlook. our regarding would thoughts like to

contemplate we rapidly in and and are annual our combination revenue performance evolving guidance. and revenue quarters, that we can both the tailwinds the impacting Given of headwinds few next the withdrawing unpredictable our environment

for of second We providing quarter are XXXX. however the guidance

impact associated activity, million. which will in to new range the activity slowdown of This translates the business second effect going in $XX aforementioned the forward. our as client March less in revenue into $XX million the be to revenue recurring expect We quarter anticipates of in weaker March

expect positive versus our for regarding on this not do bullish our on EBITDA to opportunities remain investing be and XXXX while to term our this At year changed. approach we funding both time, we term in long focus achieve near continue guidance EBITDA has ROI plan on Our not and and thresholds. growth our growth to closely monitoring initiatives as business performance profitability

and of discipline securities and strong our balance marketable first at preserving with to maintaining $XXX the our cash the We end will includes quarter. million sheet, continue while which over of costs manage cash

that future stronger remain our given for today. impacts about business that unknowns optimistic of and many about to there pandemic outlook to variety than business are a effects, executing trends we While durable exit are is allow the the its a and on this before. of cemented we model will current secular potential plan us are the the being crisis macroeconomic Upwork's

ensure and on activity resurgence we are in of future seen for weeks, prepared our the holds. platform are in we the speed strength we we by taking also While buoyed recent to the whatever are have measures

ongoing Our cash give runway a of event have even economic anticipates ample plans we these range confidence that hardship. planning years and in us of the outcomes macroeconomic of scenario

participate regular meetings the updates We are in plan and committed investor possible, conferences environment. and investor virtual alternative much to despite to as challenging providing as macroeconomic

your now questions. take will We

Operator

Marvin [Operator we have question Instructions]. And a with Fong BTIG. from

open. is line Your

Marvin Fong

Good adjustment afternoon. I questions. advertise brand and making start Thank just with for taking I are advertising. you thought the my awareness elaborating you marketing would on performance or

If to of ROI know? about talk calculate spending ROI interesting would this regards better with brand you follow-up. to And much And and awareness you is the Thanks. that ROI could are then that on well? a to I able also, have is, new as marketing, the your kind performance just how environment

Hayden Brown

really generational reasons building that's is We moment for a how one at terms of once we of in us all full force to this we that the thanks sending question. customers think our Marvin, moving solution sure a message of our for this very is up relevant the awareness are in and channels really that our the brand and shore about moment. are make to

the our couple terms actually have seen the over similar In marketing, on ROI months we we of last as historically. ROI performance and have weeks seen

what we we see seen scenario we invest where the to in marketing to been similar performance have continue has where the past returning So that spend in results opportunities.

into already in amongst target in investments closes trying fortified resulted a that we XX% the this increase our perception are awareness in think gap versus XXXX, have this market brand we made exists side, and place are brand I the On year market reality the the that brand heading buyers. to by in fact

users that driving are that for. as direct the a brand looking spending, are we than performance signs side. think always attributions bit although, you great what I deeper of measuring with around results there So some are have little on the are as are work we know, focused into doing funnel, conversion the we brand those increasingly the well is less And on we

stepping back, message lot is we time But customers all-time marketing at feel I really that think interest measures the have are this for to our relevancy a things them. at our this high taken to we in QX top and of and moment is where an speak a to of really very around assets of retool most mind

really where trialing the really that's some are our lower so to starting prepared help why we and them relevant relevant with barriers messaging think the and we we offering. understand And them of are can that out now

Brian Kinion

would that other marketing how I and channels. we the we doing And about thing add, think have is in where the been targeting

measuring ROI on back strong coming the and really and and channels in performance environment. pay see we making that outdoor get economics. on focusing for advertising, Again, we where right doing longer threshold radio this no So sure

the investment as I We of independent of network some stories is The is, our and it right to was bring will to QX together result do. where being thing customers Upwork existing million. really solution get would this other us we $X related in very the both allocated talent powerful deploying of this community some while professionals professionals thoughtful that of felt in program grant to It add part around this experience working to our and supporting new new thing in life. and ways, enables

Marvin Fong

understand very Thanks that, as guidance quarter follow-up indicators. March the was and metric in in to by about impacted happened Terrific. revenue I well. that Brian. guess for leading question, my was Hayden second it hear what And and And encouraging I April

first color that So you help of more operating kind could kind this me May. sense, just square perhaps to the are of you April into through in now just the kind that could run rate of add we half of if

was that history. indicate in to since far the million seem revenue above rate from is am so I You me your run first $XX your quarter that, the wrong, highest if correct quarter

me square made. of just kind So Thanks. help comments you two those

Hayden Brown

Marvin, still we strong a in aggressively really number is definitely into that have questions, indicators been how and seeing leading will revenue. quickly translate There few the weeks the terms in GSV how of last and

did a number looked around that we we tailwinds few of with forecast based macro could we what in the at of been seeing that as as number the scenarios to a have happen is, anticipate, and a the we planning various been things some this quarter's different So have last really well weeks outcomes on the environment of more both in business.

model. And barring think much basically to so be activity our where a with challenges to with that because facing how we will But baked of for areas headwinds balanced muted the also, came of have SMBs continuing happening approach in things as we deciding where up the continued some uncertainty, March worse business impact spend, we their environment. facing in still are their may still are they dampened macro in continue

So QX forecast. that's factored the into

and tailwinds have in to that a in significant way few last we just it until of in timing the in revenue. the the quarter, following anticipate not little GSV we but And the or at weeks, of bit late the also into seeing that been translate kind type quarter takes activity, due to upside may factored the given materialize of have which a pacing this that

we have balance factors different those some forecast. of tried this with So

Marvin Fong

I the you. safe color that healthy and am glad hope for everyone's Thanks I remains that Terrific. case. Thank and and

Hayden Brown

Same you. to Thanks.

Operator

you. Thank

comes Our from next Markets. Jian question Li with RBC Capital

Your line is open.

Jian Li

Mahaney. Mark is Jian, This you. Thank Great. for

think that the you. think you made where if subscriptions of couple I you most do take rate. And stabilized? have grow in you in adjustments there Wondering double-clicking just just connects? is on still has So One in? here. quarters? the follow-up. this room questions to improvement maybe a Or uptake? the then Thank Is the improvement in are new just a you metric can from a seeing it is few Or on next you highlight And

Brian Kinion

related connects is then was a to client bit last and rest subscription And of a the early call. that we the QX is that about lat be talked rollback in in little improvement The we going we changes had year of part last and QX, on of in kind year well the started QX. to QX for in last plans launched introduced into of there Thanks. the year, of headwind we as bit the which paid of adoption the little late to a QX as

X.XX%. that payment move client And fee then the increase the to year in we X% last last We that was year. also introduced

this watermark while for a take a the quite is here. us high for So on rate

with We QX come of in to we with mentioned year. changes expect and remain the line rest down the before connects it in the

Jian Li

you. Thank color the any has can SMB retention has around on stable rate in But higher been quarter. enterprise enterprise, Great. also retention seeing you client retention? especially versus Retention last versus think if I different just you wondering spend historically if rate. are share trends And

Thank if COVID been wondering Just before that or trend after the outbreak? increasing, either has you.

Hayden Brown

out We mid-market, We businesses or client about X%. staying quarters, remarks and by did on slightly really larger see different and see SMB I GSV customers. stable And mid-market X%. in an that would small it's performance. feel between X% mentioned spend uptick softening about a retention good in past of the where and netted our We did at say, midsize the

still for trailing this in trends Again, specifically, might us of far, out And I solid. really those in unforeseen So we it doesn't metric. looks customers would anticipate slightly where And cohort early it that say, metric, exist. innings the this offsetting to But terms XX-month may for of general the COVID bumpiness really existing go was looking of our really is that metric, for trend. there come seeing with it's are that since while positive. really a conditions strong, are some take things but flow-through is economic the macro could it it it's so

Jian Li

you. Great. Thank

Operator

from you. JMP Ron have Thank we Josey a with Securities. And question

David Yueh

higher can that unemployment of [indiscernible] or Thank demand some more as increases, increased or highlight And to lower number organizations services like do some design seeing technical two, and freelancers? freelancer shifting for performing creative these and worse? or demand then permanently you. you vertical, or any are see better you

Denise Garcia

Ron, can repeat your you question? me. Pardon

Hayden Brown

Sorry.

asking line the fixture for Ron cut question you my think more becoming related Ron, I the think to, can out of were first larger about a companies? repeat question. his asking part you while prominent I was freelancing

David Yueh

Yes.

for David Sorry. This Ron. is

You talked your some permanent more seeing can prepared for you unemployment in being am this demand I as demand remarks. if increased services freelancer And about increases? see some wondering of

Hayden Brown

Absolutely.

to Gartner, PwC and these now serve that overnight more that as CFOs well of as having business CEOs who the challenges that expect in important customers others before. trends of I will companies to that even even that and a how adapting are the to place a of passes be crisis. with let's of in flexibility now a and face dynamic ever right their models, more because think do conversations are in that after having talking who create something realizing the from looking workforce companies lot remote much landscape of folks they around variety certainly we a and be saying and I opportunities flexibility are it at that are more data the lot on like this we workforce figure are many are a scrambling flexibility them they that more than will flexible that crisis And to having is things work and we higher them outside are that's to think out premium

of the will be anticipate models going more do forward. we road that So and the flexible dynamic rule

IC I freelancing an we and and also because particularly solution. payrolling of think have is but record talent employer just we provide our interesting compliance, model not

right part our are have of global takes payroll also after those think of forms looking that will more start of new normal of the lot be distributed companies a advantage way things they a will And are that compliance. their become capabilities where the the moving companies are during at we as as the once opportunities now passes. crisis, their workforce both customer I crisis onto platform talent conversations the doing and types having it So we operating IC lot of well seeing take to of

Brian Kinion

this of they payments Hayden to a contracts direct protection platform only the work platform to The financial offering created on would aren't to get called freelancers add the escrow which service the bring services, was I Upwork's new mentioned so I we think for service. is thing their that which the

the more as will bring our well. freelancers which help on necessarily will as as them bring grow that hopefully, aren't So platform onto working their us more of more as that platform and well as well existing business

Hayden Brown

seeing we Your question right now. trends are second used around some of cases about the

lot activity a is a we themes incredible that think are and can I seeing. I happening few there of broad characterize

skills transformations first digital the and that tools and customers continuity implementing one now. of and digital are all planning pieces for really business superstructure right of for So their around looking the digital execution and IT is

help for And can time. with so they that first around freelancers who are for websites the deployments building customers coming look to

online. We COVID-XX moving are that or have brick-and-mortar had storefronts looking app digital build customers new to tracking from mechanisms to they

of So is IT of lot there around kind infrastructure activity a and support.

is that marketing theme seeing The second we around big are and content.

address So are to ways in many imagine, in needs new new as might companies customer so you channels. pivoting

there So trying customers that right that explosion relevant, a those concerns and content mind create timely to happening customers their pain for with of top is having are content now. broadly companies addresses points

writing, people animation. content then designers, are creating creation, areas and that's video around content theme for demand production, who the doing So same within strategy

of help those don't to with create new of marketing redeploying those of communicating would type have their all demand budgets types events they customers are to in-person maybe the activities. right usually and fully assets, and And in-house. as go et for now, Those that their virtual content cetera really are they events from videos, skills vehicles digital need looking in companies with for skills

a lot Because contacts. so in are with companies their around A struggling from regardless crisis seeing third companies, current benefiting of of a customer or we where many seeing are activity trend situation, prices, are is the support. customer are spike getting area whether that the we current

to surges messages these demand with can to unexpected so who really deal customer provide communicate them a critical resolve key so or which feedback get to issues. And customer support is or are reps to they us looking in speaking customers, with

some final have interesting definitely that would very niche and say fourth become verticals are I is there The active. thing

of use smaller delivering companies total this that that think, make really that type all they areas pivot stay very but business, instructional are design, the et sure need and are our surprised For moment. at imagine the areas cases leaning messages, into just to where to right much now cetera be I wouldn't to solutions, e-learning, are they relevant, us, relative the like are, game they of you to development, those

So that those of some are themes are the seeing. interesting really we

David Yueh

helpful. really you. Thank That's

Operator

[Operator for Thank Instructions]. you And questions I this concludes further am That time. showing participating. at for no call our today.

Everyone disconnect. You may day. have great now a

Upwork (UPWK) 7 May 202020 Q1 Earnings call transcript