UPWK - Earnings call 3 2023

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Operator

Good day, and thank you for standing by. Welcome to the Upwork Q3 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, David Anhalt, Manager of Investor Relations. Please go ahead.

David Anhalt

Thank you. of quarter discussion financial Upwork's to its XXXX third results. Welcome

Upwork's today Upwork's Chief are me President Chief Hayden Officer. Gessert, Joining Erica Brown, and and Executive Financial Officer;

your we harbor safe happy prepared review statement. will management's first, I'll remarks, to Following take questions. But the be

forward-looking call, are may business we securities federal this statements related under During our law. to make that statements

risks, performance Forward-looking uncertainties a are not statements historical facts. statements These to include all assumptions. subject of and statements but future other variety are than of statements of rather guarantees

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

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

Additional report also ended quarterly forth on X in XX, Form XXXX. information our months be the September for will set XX-Q

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

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

the to I'll Hayden. over call Now turn

Hayden Brown

match platform improvements product capabilities. the talent work, become goal core while as to continued AI-related Thanks, our experiences also work David. world's Upwork profitable our improving through third to drive to Thank significant our effectiveness speed the efficiency, the XXXX, and you made all of our durable, position and for while joining preeminent for destination the to us today. marketplace. quarter and In on progress growth We advancing on

year results, $XX.X EBITDA quarter, we improvement. a quarter, XXXX third million quarter up We demonstrating better-than-expected a income of and of generating made our margin adjusted recorded of very In million achieved $XX.X XX% net the $XXX.X huge from million, ago. rapid GAAP goals. revenue on We financial strides third this

and We importantly, long-term to to also continue efficiency to more professionals near- and adding include These contribute the in clients but features contribute These our of functionality new the ads products. opportunities. new growth Upwork to including they revenues innovations platform, the platform by to make important and more monetization products investments connect and quickly. helping

a of the most independent increase professionals One has is XXx pursuit foster the AI this, which announced the a talent. average hub, for growth extension in our world. ambitious second our most greatly we monthly of an in content seen educational yesterday, to the goals AI just of quarter. enhanced offers In Services in AI-empowered hub of visitors its generative designed since And especially launch apps with new and suite

ecosystem education, deep diverse Our creating scale aided work of us in technology marketplace as a offers has special clients partners for and that and span world's the and talent.

leading a for Adobe, services, offers skill-based their and advanced partnerships companies, Jasper that from professionals apps Upwork providers, and of into for independent featured alongside marketplace new AI-powered New tools have that like Academy. courses and Amazon, Udemy industry-leading ClickUp integration on AI Coursera, education and and AI Miro, educational content form generative include like

new projects and provide powered Upwork expanding by to about generative access QX logos new and our our the the of that added the platform from we third clients notable new the Enterprise professionals in recommendations Enterprise Dropbox, effectively. In University. third organizations and efficiently IT’SUGAR, starting, completing XXXX. quarter State the insights versus XX% Upwork specific, professionals in Upwork, Chat on XX Moderna are with and Upwork's launched on a unique our opportunity increasing responses Upwork by embedded like utilizes directly also Florida AI new application relevant to creating contextualized journey Pro on assisting continued unlock to quarter, We quarter, Pro, in them vast the Chat more Enterprise and in independent customer limited to needs space, roster GPT-X. We

our the the in third growth number the cohort value substantive clients drove $X more customers in trailing months, Enterprise as growth highest of of quarter, or million also XX% XX quarter-over-quarter. We over spending

AI to platform, with done our the customers, they of on continue We be optimizing making behalf critical innovating work to of and running of the growth. operations companies business durable, profitable progress long-term through tools to are drive the we our power providing our need with skills get pleased strategy on generative the toward our and all harnessing talent,

a track ahead. I'll are EBITDA, quarters now momentum and steady to over in adjusted course for set it a have in record both on sustained financials. XXXX year the turn in We Erica to deliver details the more on revenue and for

Erica Gessert

Revenue Thank revenue, revenue grew with marketplace with with successful hello, very million. revenue XX% Enterprise The includes million, quarter. a today flat you, of $XXX.X Hayden, and Enterprise I'm which everyone. and quarter. third third quarter-over-quarter to to of be the business again Services delighted was review here to exceeded $X in you million. unit, $XXX.X billion Managed GSV $XX.X

of $XX.X Active year-over-year XX.X% quarter, quarter quarter, of new of X% clients million, revenue, in Total million. flat take a a quarter. Total by the simplified in result our in the and to while X% move million growth in to of improvement efficiency $X,XXX, customer XX.X%, as quarter. Non-GAAP revenue improvements to active in of the per marketing strong of rate the gross year-over-year. Provision for is by efficiency quarter revenue quarter, by quarter-over-quarter on rate XX% which movement third improvements Services expenses client driven strong retention the well was action pricing or from management products a growth XX.X% and losses in $XXX.X XX% as to expense of XX% XX% to $XXX,XXX. as to operating year-over-year fee third saw In year-over-year year-over-year. third was These improvements year XXXX. Active the the XXXX Non-GAAP rates profit take $XXX client revenue quarter million, XX% profitable remarkable in active marketing from growth. ads the in sales Services representing quarter. a to in third the client XXXX revenue, by the of expense the focus revenue, in of just by G&A by Managed in down GSV were performance structure. in growth was and transaction to the third approximately R&D previous and of offsetting compared for Managed part were during was driven up XX% with Enterprise client quarter strength are decreasing efficiency our acquisition and particular, our costs $XX X% slightly reflection increased both clients. decreased XXXX compared The the expansion, increasing year-over-year, marketplace result X% and of period, to the XXXX. offset X% XX% aggressive our decreasing was strong reported year-over-year, to a growth we This decreased operating increased and prior to to of due

loss durable $XX.X the grow income in in quarter to huge while the in compared to made identify third also ways in million investing innovation will to We net third improve $X.X of focus our the was quarter, strides profitable XXXX third of we million quarter on business. In our to our XXXX. non-GAAP efficiency Non-GAAP net of growth. continue

efficiency. Adjusted is basic and $X.XX improvement quarter share XXXX and and of quarter year. XXXX. the XXXX, third third compared rapid negative in net margin year. income basic of $XX last in margin This compared EBITDA optimization in was loss of to negative EBITDA ability XX% in net was quickly diluted third non-GAAP in Our was areas the third $X.X to of third per share of in adjusted quarter to quarter, our last of as the X% of compared the cost of to quarter $X.XX of identify non-GAAP quarter per diluted the million million the third the result EBITDA Adjusted

as EBITDA strong cost revenue we've are performance implementation the to as of Our the programs optimization results discussed. well adjusted over due

expect our EBITDA year business, XX% remain to margin. part organic which guidance we of future cost reinvest are approximately to with previous We identify to these rapidly the growth ability we very XXXX, QX efficiencies our our pleased in quarters. In at committed in exiting in in

share of Directors approved of profitable and increasing of in on purchase equivalents financial our Board This ongoing cash have is also and securities marketable balances, approximately from million stock. growth. operating profitable authorization our to am third repurchase that common delighted cash is focus up $XX with to $XXX activities strong program to with a durable to our to of outstanding cash, million. I testament cash Our $XXX growth And our also performance commitment a the announce to million quarter. share

Turning guidance. now to

and rate between the million performance $XXX and monetization represents revenue We revenue resulted and third million, our $XXX revenue fourth are full to guidance million, saw the particularly quarter, between to at ads We're million in we around guidance revenue year quarter XX% a in to over guiding year-over-year our primarily growth due $XXX raising which the which midpoint. $XXX products.

be raising quarter $XX and of adjusted million million be an which and $XX year guidance We're expect our XX.X%. XX.X% EBITDA fourth XXXX million. We to full adjusted between represents million, adjusted also EBITDA between margin $XX to EBITDA $XX to

went in year post is to that continue any more of pace to than We on an XXXX EBITDA that adjusted we be double since public.

generate to expect flow on positive cash also ongoing basis. an We free

been has of one successful execute business, another efficiency proud our for quarter Upwork's goals. on I'm ability The team's our third rapidly to and

focusing our thank will successful everything and value to questions. you, customers we while now every also day EBITDA our driving commitment to I to contribute of for on we'll margin building fantastic the Upwork to to growing and turn growth your steady a and balance shareholder value. team expansion, forward, for revenue call want business. Thank Going they the continue strong

Operator

[Operator Farrell question line comes of first the Sandler. Instructions] Matt of from Our Piper

Matthew Farrell

Congrats really results. on the strong

around it Or letter, the the throughout slowed on to innovation and clients continued front. the among full talent ahead? highlighted sentiment both shareholder steam just hear all? evolving the things Have You love down is how is Would at topic. AI

Hayden Brown

Miro, been launching advantage of talent are Definitely, on we've directly to there of take the Upwork, and that tools CodeWhispere, and what's that can take like Amazon front. others exciting very including the innovations out sentiment is platform, Absolutely. advantage yesterday. on positive some pretty more now own partnerships Matt. really of eager the say, leveraging ClickUp specifically on this in ecosystem, clients Thanks, I'd talent and both our

all So freelancers these and on absolutely these quickly their for by forefront this transformed butter know, because ability deliver effectively technologies. Upwork first tools AI the the bread and puts what to at work is we're talent is clients and and of seeing, the to adoptions is of incredible outcomes table,

Upwork the So the is a around across with powered Pro, our own interest as platform. what we that GPT-X lot seeing also sentiment product amongst yesterday We're which announced with in of Chat talent is and by innovations strong, well. Upwork embedded

So a side. just, there's the on think, both side I excitement there talent the lot and clients of

Matthew Farrell

to what highlight would great? I any it's growth, And for provide commentary could areas of anything some going for whether are your next quantitative XXXX. opportunities aren't you year, But priorities know investments, for outsized of be you

Hayden Brown

Sure.

As science see already of Generative the we days and data on skills growing AI it's early Learning growing XX% We're QX. generative these of But up Machine of AI, tremendously. tremendously, obviously AI look growth and categories data platform, were at did and our work. work some quarter-over-quarter in analytics in seeing the we

come And a the is already can that we're talent. preeminent and destination where clients to that, really building base terms in So us be the every Upwork off year, this find we're starting see from. this of even this of to again, smaller for of priority size growing for

tools to next own going the be deliver year, going continue technologies around to can and effective. continue and to talent the on we're our they products We're so to for solutions innovate platform. So

all. our clients not talent to continuing we features business that, work Upwork. and generative in after ecosystem everyone of own part tools, both tools because comes on but AI business we're the leverage as leverage And partner a can best ensuring just and So using Upwork are that uses work powered functionality and deliver to is who our

Erica Gessert

Matt, Erica. just add. I'll this is

we're year improving said, point. at quarter, guidance EBITDA year revenue this giving upon As said, rates and committed it remains we a year-over-year. That margin XXXX from we as are to last not growth business 'XX, and consistent, any our our improving you on 'XX specific said to

And very, quarter. remains from you report we obviously, concrete very we that So give more when last we'll consistent guidance said what QX.

Operator

of Kunal line Next from question the comes of UBS. Madhukar

Jason Napier

This I on Kunal a Jason have for questions. couple of is from UBS.

The first OpEx. one on is

XXXX, for marketing the So was spend As lower rate declining help percentage if in OpEx, the terms well possible, to consistently and than of several lot you us the last range. how XX%, for has of XX% in think QX. as quarters could in expected of understand as revenue? sales QX new of a also about it been run the It

the could So efficiency, appreciated. that provide of you if it some would spend marketing be underlying details around greatly drivers

Erica Gessert

in Well, would our Sure, Yes. so over course year of indicate Jason. we spend, our reduction QX, to that that, be we decision the at the kind obviously, reduce reductions, the when beginning announced did gradual year. of the of brand the

QX, kind QX. think consistent We see the I some actually in So reductions good performance efficiencies with did of very are that. marketing on front

of XXXX. kind us yield efficient giving guidance we're that not to reduce also spend, on on which Just enabled cost. But more

year, as view, the XXXX rates committed So I to I margin am we not specific will XXXX earlier guide again, you run going margin. on XXXX about give more too guidance QX there. from exit you EBITDA concrete and sorry, in an the of on and year. the say, point XX% we when any we update -- we'll EBITDA round to expect QX And for

Jason Napier

Yes.

So sort EBITDA. which next of that's my is on question,

said in points. the XXX of QX, have decimal dropped to before, peaks sequentially margin in EBITDA typically QX, in You but basis XXX

decline how the the you of of QX sort Given the sequential characterize of off guide? magnitude would for guide EBITDA EBITDA QX, XX% margin a stronger-than-expected in

Erica Gessert

sure. Yes,

quarter innovations think, margin going side XX% look cost to in reducing for to the that. So where reduction of cost more proud quarter incredibly we I reinvesting really the business very I we business, the kind of very just to in for fact identify of plan AI/ML EBITDA do invest spend in near-term into our partnerships also product continue high were XXXX. costs hard working I improvements into can in ability of projects last when last committed also just longer-term of opportunities. Things which QX in look, we efficiencies platform and enable growth done, reduced spend, the in and expenses in That's the order as in growth and reflects QX, kind listen, talked that effectively. I'm well. we team in favor we not in QX AI discretionary reduce kind in other we of the places like -- brand in that I very, to to in about announced, the but actually sales about have talked on as we to came to

of -- So of the we growth kind we forward. But remain now appropriate right and to in offset are some you'll of and see QX, range deploying XXXX, in as that's to the why going ahead investment committed exit as that's margin a profitable little XX% we closer bit year.

Operator

the Logan from of Next question comes of line RBC. Reich

Logan Reich

quarter. the Congrats strong on

both your are Just the and to active clients to sort ask spend on question, per pertains wanted then trends you client. just seeing macro guys of on and macro a what backdrop with as in also it clients

a of on a from out to call Just impact East. And basis? sort geography wondering the size conflict just there then basis client Middle in also, there's any anything of if the or like

Erica Gessert

sure. you Yes, Hayden, add I'll take this Erica. one. Maybe can can obviously, This anything. you is --

customers the we and months would improvement clients, strength to even business our and say a difficult I environment seen And logo continue new the real And material that their as we're So in all be, to sometimes, in on especially as to despite year-over-year add The we I to the changing what side. Even characterize and external XX% little tending up quarter-over-quarter. pure uneven itself haven't keep honestly, any said macro can This control. growth to and X% enterprise would we anticipate. trends was lends tighter, a QX. continue focused macro active remarks, months. we're we this up quarter-over-quarter, little bit on in prepared this, seeing -- what large to

really we we're ability to pleased So execute uneven continuing with to of what environment. in an kind our consider be

our or things these aren't revenue and talked enabling to faster. to customer that, are products on are and also prepared is the revenue about, proposals subscription lifetime we monetization like jobs the important driving like boosted products efficiency remarks. the again, Upwork talent And bringing we in just they're value, strategies point platform also Plus. that really Freelancer like increasing Another ads from and These increasing get

higher Boosted about for use XX% of securing who talent Our Proposals, a chance have a example, job.

doing results we've So really couple for in macro really the ourselves success we're focused that. And from a said of think now display quarters our on that I untethering the environment. do

of margin. rates able expanding growth said, So we've both, proud really what and to to we're I revenue EBITDA and year-over-year been do, improving like committed

Hayden Brown

GSV address this leading and performance. call there. mention. business notable small to don't nothing question just Nothing ones side. of the like there's very think the the terms out Logan, our client quarter. anything their major about in specific say, to And pack really clients are Yes. I actually I'd But to

conflict is are absolutely the of by devastating East. to is It's impacted Obviously, these terms and really hearts this with horrific events In who our unfolding shocking impacting incredibly we terrible And sad everyone just the are -- in heartbreaking. way. in deeply civilians this Middle see a such and tragedy.

very We focused is across safety small that whose as members our region of business we're number area on. anticipate impact We our from and GSV any well-being to have negligible. team the don't a

Operator

Bernard Next & McTernan of question comes from of the line Needham Company.

Bernard McTernan

deeper in on of possible be Can do But to it's And being The the see when the wanted now? changes growth the if time? this decouple the take driving of double rate? full should opportunity? And to rate, provide much we the And it future? click the shareholder this this little a is then it's take X on you the letter just the of it period Just longer if could bit follow go much in rate conversion. on you Upwork think a those right used quarter? how used to take in ads into terms marketplace. spells benefit pressure over and how How sequential up rate expect pricing take to could

Hayden Brown

Bernie. Sure,

And the a years, see it we're to on ads starting of [indiscernible]. of runway monetization of the over this business. we've have and strategy area really lot couple last We building and the been

around people earlier, doing do to we qualified are about not about It's get talent about found the love excited a one and most to being in marketplace. goals is advances As discoverable, Erica so, that just mentioned the being it's thing monetizing really business. customer the way in this jobs so who faster are that

talent seeing we're is as more to badges are invites approximately Proposals who XX% not, that actually XX% get badged accepted, more here data higher who such So or than professional work feature using to get their likelihood invite is availability invite those or likely those are talent. Boosted XX%. receiving with increasing clients those are another by

are So different features still beyond. overall, already which actually strategy other types in further provide those there functionality is this products will in of because as opportunities well XXXX as launched, think and the ad early optimizing we've and around we that

kind focused are that's plus We and customers over on equitability and for for a time. really the shareholders the these efficiency, our the certainly, So of features. And that's think bigger picture. the around I optimization both

Erica Gessert

in of about dynamic the from question the course, little we we the about between -- get accretion, on on And breaking of that, moves we is this that into next and the of so reminder, means time itself out kind adjust bit the get, in at made a say pricing will more quarters. exact products. But rate to the over year not monetization have transition from a time at May and of change total -- to maybe that we dynamics. those just point We're we we price appropriately we get end the the around X to the and of as the did did given consistent. long said And When just the change your tier XX%. the made ads a simpler pricing runway year. call up next And the we've the a May, structure -- and And X% sort the that to the pricing to we flat fee structure how take of quarters, color when talent when to that that additional clients. But would next we when over accretion price expected X% first it several at half so their we of with accretion year. to also remains think

Operator

Thill comes next the question Jefferies. Brent of from The line of

Sang-Jin Byun

is for a Brent I macro. want John maybe the back Thill. bit on This get little to Byun

I been to predict hard monthly tick mentioned maybe first month-by-month. so anything terms there notable You other guess, through, of But than seen it's November far? of I including for you've is anything linearity, in seasonality? mean,

Erica Gessert

I make the to sure question. want just I Sorry, understood

in You're if seeing the asking, changing kind QX, any in Was dynamics? of kind that question? of we're

Sang-Jin Byun

QX Yes. month each far. mean, well so as of I through QX as

Erica Gessert

-- mean I say like notable changes. I not any said, I seeing I that would mean, we're

just to of we're coming some is think is -- of example types can on little I new a all kind trends that give platform. you Maybe sort platform. the affecting as the think, color One in all in I this environment. we're underlying seeing on I of of spend of environment the clients businesses the observing uncertainty

coming think more we one what that, years growth, just seeing ago. saw spend side. thing like that good have we the We clients are new seen that said, ramping the macro do than members slowly bit couple active of more to The we're is growing, of clients clearly a on speaks We some impacts. Enterprise a

hours per is up XX%. that hours year are spots, seeing even we're some bright And contract quarter-over-quarter. kind trends, contract per slightly up we over about actually, when are the also look Another X-year in at thing of

there that, robust the good, growth that strong think shows I on that happening is So platform.

Sang-Jin Byun

set AI and so on. on then the and -- Maybe skill

talent, great. how mean rate well the as metric else share I And else terms you would average think add is anything but [ of anything skills. much putting in ] could in ramping higher there projects is up and I of be that I shared X but you guess to that's terms

Hayden Brown

terms John, the so lot just in how a I terms platform what of impact to is seeing and in of we're think the are projects right talent of now. overall of skills trending, AI positives

that's think headline. really I the

categories it's AI AI-type growth also as understand and XX% which Learning, around want single us, big in important to we're some So is work for -- every in impact, another in we're job measuring -- up thing AI thing AI their up analytics category or are to who in are are posts. like Machine think categories so across is, that seeing who AI we year-on-year. are the science seeing and business in using XX% specific their the growth to translators AI categories the work. even for content understand Data is using in both positive well growth work is of And growth I though in like a where and of specifically these people writers AI categories demand generative talent as

And we're as seeing actually so that shift well.

the is, what of are extremely positive cases, we're are around we using around premiums for their tools their talent and terms actually upskilling, themselves which in kind that again again, the back see goes us is talent to which And evolving mix the shift wages, seeing who those as kit, deploying you in some of of the strategy actually tools seeing commanding see adding new and these partnerships. tool work

these specific of category, in tools getting as benefits really new working well growth as the and they're they it's how as the categories across go. evolving we're talent So seeing

Operator

the line Next of Rohit MKM. question of comes Kulkarni ROTH from

Rohit Kulkarni

the is flagged in of of due the a adds of One you uptick macro productivity in A Enterprise? you reps Enterprise there's cadence questions. believe that net growing adds. additions, are Anything team are inflection that new or ] [ that leads couple trend perhaps net is now this we maybe sustainable, to you'd new or kind sustainable of seeing to you on think client this in that

improving And that which trying clarification to rate growth on accelerating to say regarding quick 'XX. 'XX, committed you from what guess, I Erica's rate, are revenue growth to 'XX you're then means comments.

clarify that. Just want to

Hayden Brown

Yes, Rohit.

the business So in the march, kind Enterprise and continued unit. doing and Zoe's improvement on back started productivity. the work it's And in side, is leadership to certainly adding increase we've testament new a to under team to been QX definitely hard portfolio Land seeing logos been of that has the of we're the a Enterprise steady continuing the

of And speaks certainly which the this I despite value it macro products challenging, think is think, the most many environment. our to also businesses I for backdrop, in and

demand there, we're and execute there but continuing trend. is we're a to efficient certainly, even that perfectly going So to be quarter-to-quarter, completing demand. more more not that It be good that, sustaining may feel the at is and getting and

Erica Gessert

I have growth rate the everyone year-over-year, make Yes. committed question increase to And on clarifying on sure really our XXXX, the to What understands question on XXXX, revenue. that. we've appreciate to to, is from XXXX

versus to detailed XXXX, last the are that about to year That's really we expected year that on full rate margin guidance consistent. growth making and like And remains a is also full more our -- we XXXX from margin give comparison. increase. will what it's year-over-year, But on we on I EBITDA quarter, we'll say, talked call. Similarly, QX XXXX obviously, in

Rohit Kulkarni

algorithm more. add X, been the On Great. call what last, beyond has pricing as your revenue and about a it know GSV. GSV start in on it, GSV GSV, But that we that the into as to one the such? I I the be it in growth quarters. code would kind If changed weighing ZIP lot take could how just to for of think grow has overall, should X may

Erica Gessert

kind what And change out of seeing this we're really still hesitation that to settlement the spend is And the traditionally look, said nor GSV done really I so. would uncertainty that, Yes. lot We're being is environment. days. these month can not into types doubt no of now, and is I of a that that to guiding takes have translates to trends some of questions, earlier say Like there there, all month environment. GSV macro general to we right businesses affected in there's by for

kind per on Like there there nice spots increase dynamics kind contract. of year-over-X-year I under referenced basis. a said, on covers, see bright of I good some sequential the are We do hours the really kind of very some

think experiences, continue on I so we'll platform investments front that GSV innovative making expect the do that But into an more as And well. new XXXX. of we that, to help we us other like of approach the on will that also we're update on some as that give AI things the

Operator

JMP from line Our of Securities. of Boone Andrew question the comes next

Andrew Boone

would I have wanted a thinking macro improving, at should there right maybe will you large? to have back artificially that about demand or low a about that coming Or be go marketing. in Erica, apply? there back and expands? is it to period and it what we framework do be which we to and mean you but that sales framework is sales we as where should a Meaning, and marketing now think

Erica Gessert

So that couple growth improvements really yield things focused on We're -- into I some a spend. of with pleased on to we're with marketing performance do our those in to are our would really EBITDA continue the investments -- say, new commitment marketing R&D. going that. accretion there. investments now, growth. in performance Right on We of performance balance the see margin

that brand spend in The do seen and our launches. us is next feature brand year that reduced to around investments we new make product certainly since as the beginning other year do spend of well. plan surgical thing We do you've some the at

to will making brand from so time investments. see spend time And you us

bit that, it's too I to a think early beyond tell. little

that good we -- macro that return. that I time, factors margin as brand on Beyond of investment the do EBITDA accretion, while think that can balancing we a I kind think over believe return make fact

Hayden Brown

Yes.

other from the more environment, us improvements, as continue We're driving The just side want. right sales this, to add us optimization. over that those for efficient current see focused us team increasing will and team any on very I'd on deliver be an we can of is Andrew, and the is a the model help demand numbers on doing you help side which thing which to on the improved to great on sales I our macro, we can deliver and specifically. in time, the a or that time the macro performance have we this results in mean our think now, efficiency Enterprise

Andrew Boone

wanted to product you And a I then, question. Hayden, ask

a Upwork do tools the -- So be How see as help is freelancers Chat you platform? version understood efficient you first on I of AI guys product. a evolving Pro, basically this more the

Hayden Brown

the This here. And in is of lot different is features continue going This of in the experimenting. a more frankly, in to the we're working QX. definitely a we first and We features version latest have QX we've that QX, been launched pipeline. one on there's got --

delivering matching of these think really and across to tools the the of question clients, with touch of clients, that different do I There cycle have life their we with evolve? with talent great how many outcomes. work are so points delivering

work. puzzle to that knowing at the which think And workflows, are with discounted out rates, through have we tools Pro, do that to using lot that tools, our so experience I sure and the partnership platform the smooth in to better they at early still directly. pieces them we serve the days with making amazing within -- we to of market be are fingertips, give there's then with the deliver of the clearly, the a the can for their best delivery best them an in Chat side, the own work And even

again, early So, is this days.

pushing innovating are the product be the tools to we'll things in feedback market. of forward, going getting we're way just guide get better these think and the on continue tools along as we our that and go. map a better, both customer forefront really to those road ton I and to And own excited

Operator

from Sachs. line Goldman of of question Sheridan next Eric the comes Our

Eric Sheridan

strategy thinking partnerships, about well. and we've the what and is understand announced on term? medium potentially one maybe the team announcing everyone go-to-market newly through a step potentially And over like ask I'll your or these just us better take you're lot that at will term? of as of can return one big to big demand long longer picture help over you on how gotten the do look should topics. partnerships, hope be supply to the improving When you the we efficiency the I a platform the back

Hayden Brown

progress customers as scale valued doing ecosystem types because by now. different our strengthen Eric. to at this really a unique still partnerships is And right it, of Upwork, we We're data, of our good number feel and Thank about moat. further really building leveraging that we an really competitive differentiates insights, look our it's our

about partnership so our Upwork which the get this that through if we medium customer need acquisition, on did really a on in account really on their customers OpenAI strategy, client your who This to of end give saw example you is them how here know about to bucket a give doing question the not previous they otherwise as to vehicle, there's we to is partnership an we're to And the case OpenAI use talent about long quarter. return and an the go-to-market on term, look -- acquisition may of right and investment use partnerships to the Upwork. and

a with and is to really business we who on talent customers, kind the we replicate to other so they capacity, that of eager early access of that type have within very really that have lined Upwork can that model end their to for achieve partners And opportunity work their goals. to yet up us give exciting and

medium that's that the over term. in So play there. a And we're it there building is motion acquisition seeing of days and how whole early the long and could possible again, out

they quality can talent the enabling really of around again in around moment new revolution, deliver. that And category work you is value again, which all are which the better in results the and Udemy, this like the higher Coursera education then delivery, will more again so doing talent, this and partnerships are the that things ways, efficacy they particularly the this And in metrics of relevant. with around is as is really Upwork again, work, they and of AI a value driving the place is other most that are outcome. talent. XXx the and helps on of come delivering for drives metrics our our is delivering is as the some time are AI to XXx, our that as This effective types partnerships, just delivers. And which imagine, of is. And self-skill are strategy touch will our incredibly enabled, of third Then talent to of around around and upskill find drive the the talent the over that those flywheel like flywheel, around that Upwork and flywheel the what characteristics there tools which their platform, we

things acquisition early all but broader connects of existing again, and on particular. So that's it's existing in days it the our of this our vision flywheel kind like client for how to business,

Operator

Maria Instructions] next the question from of Our [Operator Ripps of line comes Canaccord.

Maria Ripps

in you XXXX? of environment, largely how anything something is about should there or Is with growth macro pace productivity a share First, think the sales us we of can of this the improved function terms else? in customer

Erica Gessert

it's not Sure. I Again, it. giving things. of any guidance on Look, we're probably of those specific combination think that all a

efficiency growth the Enterprise for and particularly, that sequential done on sales productivity side, I on really optimizing really, work new pleased the been that think, we've business. all specifically, in of the on progress in logos the we've considering on with

certainly, good. on of really we're So the CAC is seeing some the side on a we benefits and optimizations just help basis, that seeing the that, on And should the ongoing that there contributing. marketing combination us. that's performance that environment do we're helpful. believe been continued the really, Again, also an lower also macro think, of be would we're platform But making the I

Maria Ripps

helpful. very competitive do is how of of ton then share? you broadly, But that there's in That's on that progress environment? it. you any you this gaining product sort sort Obviously, been hiring positioning a there data are perhaps your demonstrates of Got track uncertain And that side. the view

Hayden Brown

our Maria, of stronger competitive think data view you frankly. strong a position can look There's or as ever, at. we lot than I

I data a think of new we the I built have certainly interesting executing but scale, a strength in we take competitive incredible our But customer place everything the market advantage very we ones building way the leader and product the weekly is basis. in as data on sit are launching set points the we -- certainly already around on it's size, we're our our we've this our to and industry -- one our of our around a the that along the asset, at business base, look as have working. innovations

work to really lend and of ecosystem. to so see partners to those to eager now ahead as of the all we with are they Upwork that as things not themselves continued think pull part competitors, us mention our be I our strength strengthen that of eager are

Maria Ripps

strong quarter. the on Congrats

Erica Gessert

Thank you so much, Maria.

Operator

time. David Thank the questions. this like to for further no your turn to for questions showing at Anhalt now right. I closing call you All I would am remarks. back

David Anhalt

thank the entire team, joining thank for On you you you. in Thank for of behalf interest Upwork. us and your Upwork today,

any to at our please concludes clarifications need follow-up to reach call. do you If or investor@upwork.com. out me questions, This not have any hesitate

Operator

your Thank program, disconnect. may now does This you conference. in for conclude participation you today's the and

Upwork (UPWK) 7 Nov 232023 Q3 Earnings call transcript