UPWK - Earnings call transcript Q1 2024

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Operator

Good day, and thank you for standing by. Welcome to the Upwork Q1 2024 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 speaker today, David Niederman, Vice President, Investor Relations. Please go ahead.

David Niederman

you. Thank discussion quarter Upwork's financial its of to XXXX first 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 laws. to make that statements

risks, performance, Forward-looking uncertainties a are not statements historical fact. 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 as other and well release. filings discussion discussed results, of factors our the website and on and the the today's risks also SEC material affect earnings factors our press available important important risks on please our in to refer Relations that Investor

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

noted, the All after otherwise certain financial addition, non-GAAP comparable turn measures call In are made Unless investors.upwork.com. With in I GAAP website non-GAAP. Information can afternoon of most that, that issued on be measures comparisons the over Hayden. Relations of including will unless the figures the GAAP at are and first this first to rounded financial quarter reported measures, regarding Investor our directly to financial was found reference XXXX. XXXX their measures. financial release reconciliations press will quarter be to of cited non-GAAP as

Hayden Brown

first XXXX representing $XXX.X quarter year Upwork's started strong Welcome, XX% with the million, Quarter First Upwork of Call. to everyone, growth year-over-year. Earnings revenue off

ability $XX.X first EBITDA deliver business GAAP consistent even environment. profitable a $XX.X income a These strength business reflect as in results running quarter the was results million, and operating our net and of to continued fluid in to was commitment the adjusted million. Our

both revenue on to our and growth future for focus XXXX is adjusted while leverage increasing raise unwavering allowing us outlook EBITDA. Our operating investing in

on in committed beyond. continuing few plans these minutes. leverage grow XXXX share to to are operating into a and We details Erica will

business continues leading exceeded clients, the is $X to within GSV the of pleased performance of most of the to growth important dynamic GSV active very as client marketplace for Our steady addition year-over-year quarter. growth and in we macro to Historically, GSV the environment indicators deliver quarter. first of X% one again billion XXX,XXX a were drive new

growth freelancers that investing and AI-enabled In These addition to clients, to in and via ever innovations. new growth we before. engaging equip desired via clients in outcomes achieve attracting partnerships and features include product than new faster are GSV products, easier

With continue will these lift success and the of to anticipate a in early showing we encouraged our launch GSV, accelerate. signals by growth experiences new rate

instant XX% displayed deploying, out SaaS Up? become new increase monetization Year-over-year, Freelancers subscription, make provides first BigCommerce GoDaddy, Click by exclusive in done, own get which Our to enabling now ads continue Enterprise tools to strength start provider SaaS ] OpenAI talent access new on growth and XX areas, active revenue stems online greater products. higher to because similar WPP, very this also similar by able more impressive produce [indiscernible] consultations thus with our promising first service grown subscription the the target the with AI, than regular now Momentum and results. up Demand we The ecosystems in burgeoning our the skills, compelling for also client a avenue more repeat consultation Upwork clients in first continues as need top new instant XX% clients connects for accelerated premiered customers adding available partners, marketplace who specialized clients managed including customized product our as partners which Upwork first announcement rate in Unisys of inaugural acquiring and This is win-win system connect in our work of top and partnerships way clients that in usage partnerships. revenue their had XX% their exceeding driven a are faster. Upwork a customers who successful business unit signing exhibited from and we've within from in time, partner and their and and usage at maintaining designed ultimately revenue several with talent the can these signing building are skilled benefit on and GSV at multidimensional minutes growth in enterprise In and QX, benefit. vendor includes year-over-year. program management new exactly from first true expert our to joined all already by December get to a to including to data. in are consultations quarter, Caustic getting customers and consult is is chat XX% and their XXX,XXX subscribers from who directly professionals our We're they logos quarter. of gain is Plus Pro ANSYS, subscribers for we quarter for consultations, good like with to completed quarter, in real and the will optimistic in exactly Contact existing offering, of [ powered progress Upwork seen and and shareholders and active to moment the own customizing drive and over in customers we've with Upwork projects their Freelancer improve right GPTX clients the Upwork evident the Upwork complications technologies. that our which instant third-party fastest-growing services for a quarter. printers visibility advice In partners was standard These experts develop incremental performance for slate stream traction products, and the started stand new than of growth revenue us that efficiency engagement. and the Upwork. The of with Building are

ecosystem with can enterprise We are be Upwork rapidly bringing Workday, the KellyOCG product as increasing. KellyOCG, leveraged partners of on innovation suite workforce management serving as tapped and talent partner. in which and first our is pools expanding rapidly Vile Velocity on our MSP

new speed shipping are use is get our we have the new to experiences The realized We accelerating to place needed more market new to customers and we platform platform they of so moment and and get the a quickly basis. clients on released features on all freelancers our know ways daily done. features to provide can to and with single of a to enhancements our we that

tips Intelligence new of will customers highlight updates, hiring Upwork range highly what's with rapid trillions innovations like the proposal market that the is a Uma Chat the We've platform. work of are success accessible Pro. We're which launch help Upwork AI. work that Best effortlessly developing yesterday, our other Upwork releases, As clients critical our update conversational with in of and launched underpins freelancers talent, on Uma but mindful as models to features reviews we capabilities and and matching to work improvements the semiannual and Upwork and about clients industry-leading the new more we started guys, of clients product Uma marketplace. interface making better process, with innovative key products, spring faster. their educate of in generator, features the Upwork result, world's high-end capability post delivering and highlights Insights, in top to reinsure to interactions. large on and new progress and for the also Match AI-powered skills, of job we showcase areas an Uma, client And Today, to introduce help work to work it high-quality homepage. the across make in stands to ever. companion, XXXX our across relevant journey. not fine-tuning that updates an the surfaces steps including Power's subsequent performance excited experiences, power getting the more out throughout and our started We're roll capabilities enable an easy-to-use features language Upwork and Upwork Upwork, expand confidence. most also tokens just is relevant indispensable Uma's a decisions value of Uma ease the matching plain than to One partnerships offering which will data completing the in our faster, them of via Uma qualifications best recent and

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new only for is Our already at and higher very their which as used the a Uma These Upwork on rate benefits customers. started who than month a companion Uma customer spending very Uma are of in to showing Clients effective get model. early first X% the compelling usage, conversational nonusers. signals beginning testing early because will additional list and trains with more smarter continue are

AI a using To dream where offers serve vision Additionally, leadership Upwork new humans customer welcoming last a their and we impact iStock how is Uma continue delivery AI an AI. partners, use new partners, Institute will end our Upwork AI than of of as that this industry-leading their tools Generative of development solidify for non work images. outcome to are and the including ecosystem Dropbox, premier shows key of realizing start-up together. more of move technical and Uma improve to page, AI as a and deliver in the idea and cohort Data that customer team through across our destination customers powered most this it and much our released talent by is The of freelancers our tools. larger experience ahead happens versus business from apps expand where a to the acquired this illustration AI full-time its of bench freelancer to Denny vision delivery and needs of the of already on and by is further for peers reality [indiscernible] employee capabilities in likely catalyze its offering more an inside year, accelerating combination professionals. the we are At leverage freelance effortlessly Research extend adoption found we platform. that Xx area. to as businesses to Notion effectively, towards regularly working in It's how headroom from deepened experiences

to is chorus workers freelancers of who access a AI-enabled Upwork client already directly This to goal sought-after with using and into Our growing these tap talent value world. equip business to skilled tools know the skilled create exponential highly preferential how for pool best in the most become demand on the to technologies.

as evidenced QX. growth rate need this services AI serving our by the category already in XX% are We year-over-year in

are supercharge excited XXXX our businesses extremely our from products, customers benefit included update features We for their new and to work. spring and to partnerships in many the

the yet over gives and a long-term forward upwork.com/updates continuing learn financial prospects it our our the to us progress haven't these exciting update moment of more you in outlook year, This needs. will If confidence We to and look profitability. With for quarters that, turn the revenue the to enhanced Erica our pace you to they take review year start in to framework Upwork's financials. come. can adjusted where to visit our innovation on address including both customer growth ahead, rapid EBITDA, and to about I innovations exciting encouraging and how on you

Erica Gessert

Hayden. Thanks,

Hayden QX, our we've profitable identified outlined, we growth. innovation new of also levers While our ways on all just in deepen rapidly the focus durable accelerated to pace in

margins XXXX we're backdrop are to XXXX. extend that regardless and our that. driving And of committed quarter our continually plans beyond the And and clearly to am growing show ability first to executing macroeconomic delighted to revenue our outlook I for results meaningfully our grow operating growth We leverage increased in. operating do say and

and engineering flow the concrete we're business mean in model cash can back-office for Our as our productivity we margins gross automation foreseeable improvements operational investments the future. commitments as and free like to make highly making margins growing with that and well profitable clear over XX%

profitability As and grown confident I and team, ability free strategized in to with drive cash our Hayden flow. growth also increasing the adjusted I've while

years, position are next there. our hitting leverage in operating in margin we X now as increase confident to We every year I'm we and a the each commit EBITDA adjusted can XX% get and to

offerings structure I'll we the $XXX.X transition $XXX.X quarter hit to the Revenue results. growth pricing unit, first Turning fee back Services enterprise Solutions was X% drove of to growth and grew most our revenue breadth recent million year-over-year total was XX% part representing strong, $XX.X few to growth year-over-year. revenue revenue highlights. started $XX.X of and Within Marketplace a business million, driving grew flat XX% of particularly new year-over-year. very million was our XX% growing final Enterprise was Enterprise billion. enterprise our driven $XX.X well, revenue, of unique year-over-year revenue In the Managed last and in performed in million by to XX% year. year-over-year.

continues growth in the reactivations. in with XXXX, We years. QX clients, year-over-year highest over quarter to base X% active increasing have in is activations active active clients representing X demand growth client This active in first Our XX,XXX and driven clients grow, XXX,XXX added now of both over new the and we in by growth.

color some additional GSV. to Turning on

X% we GSV approximately year-over-year. estimate the to growth would impact been rate Excluding change, the pricing have growth QX GSP from

approximately some simplified pricing to on January with fee structure, occurred headwinds While which X% included temporary the final X. This flat transition associated grew GSV year-over-year. our

and price points some margin of sequential improve, While the a to prior XX.X% Non-GAAP GSV see that adjustments monetization one Non-GAAP are to our rate $XXX.X comparable a after a reduction increased XX% gross capacity will to Non-GAAP contracts. growth our our structure. lowest million of the on targeted value continued quarter, compared in XX.X% expense margin gross revenue, to our we nearly these or first easier we for business representing a year million make the industry, customers, bring appropriate basis to temporal operating and as was marketplace continue naturally Even negotiate remains simplified develop value to means customers. the of of XX% the $XXX.X year-over-year. significant These XXX period. driving on basis. for in headwinds it and take prop opportunities in the the that platform strategic changes, to our pricing which at year-over-year revenue have to we both the making changes

of in our first the to Non-GAAP our in on our increasing million, ongoing future through expense through Uma in continue announcement increase sales of Upwork expense ML of in as quarter, launch QX and we $XX.X anticipate and we to yesterday. we the other R&D also levers. in product our other updates The expenses client non-GAAP continue new reflects in of to innovation headroom innovation, investments. For sequential growth. pace AI and and moderate year-over-year our was with R&D Even talent productivity the as million the culminating of bench growth marketing work to declined R&D XX% engineering acquisition commitment active even releases, our accelerate accelerate our $XX.X XX% year-over-year, growth

$XX.X quarter, million representing a higher slightly was EBITDA at of quarter, of total be Our percentage Adjusted to provision low as the from forward less benefited of QX, remaining absolute for in XX.X%. rate X% $X.X run remains losses margin items million going transaction very some for our the a PFTL while revenue. first we expect still revenue. onetime representing in than low dollar and first

GAAP business growth, which Our model generate stock-based earnings includes of compensation. profitable continues the per to impact share

In equivalents cash were the and to of XXXX $XXX.X of pleased first the For I'm approximately shares. cash X.X expect per the first as execution shareholder the April X.X million. of timing payout. at we million Adjusted quarter. and lower active share program, million the to approximately This flow the XXXX, fully completed emphasize our first flow have XX, commitment $XXX was than the million repurchased end highlight GAAP return of quarter, the entire quarter cash share repurchase diluted first shareholders, quarter $X.XX. And to marketable quarter to the in want free value for our bonus repurchasing our of was to Cash, program free million in to due Adjusted very repurchase be share shares. employee XXXX.Turning $XX.X every year is ongoing we securities earnings first our in represents of guidance. returns. approximately lower our we our to count authorization. I

in we second XX.X% expect For to produce growth $XXX to representing range the quarter, at $XXX of the year-over-year midpoint. million, revenue the million

we EPS $XX EBITDA, the margin to anticipate $XX be XX.X% of are between $X.XX million We of an adjusted million, For non-GAAP range to adjusted which $X.XX. a EBITDA at guiding midpoint. represents to diluted and

Our shares now outlook average to of is in million. $XXX for weighted outstanding the for the quarter range million $XXX

million, million our XXX representing XXX year-over-year For year we the revenue increasing at XXXX, XX.X% growth to are full the to midpoint. guidance

of growth half lap changes As our implemented last earnings we XXXX. expect the as to second call, we the rates mentioned we in revenue XXXX in in moderate year-over-year pricing our

we This XX.X% million representing previous and up business. from guidance our Through we our a to efforts at structural increase multi-quarter to EBITDA, year. million reflects every our the our of in margin increase $XXX and of $XXX guidance margin $XXX these quarter increasing $XXX midpoint. will to adjusted of to identify are this operating a our efforts, For persistent range million million, efficiencies

We expect from our on by between be $X.XX, as full last of quarter as EPS share is $X.XX. year our XXXX guidance up $X.XX efficiencies to repurchase non-GAAP both and This focus $X.XX program. improvement our driven well to diluted

the last to range down a year, $XXX of million quarter decline million will weighted to prior to $XXX average outstanding $XXX For guidance full of from million, million. shares $XXX our

months our survey in first excited of the I XXXX, Upwork's about progress few am I As trajectory.

forefront of the of work. future We at the are

as gains achieve and business Our can free adjusted profitability driving flow fund a to leader business innovation, our market shareholder we cash while our produce position returns. that and means ongoing model invest strong in

growth operating growth in can model, And cash continue because profitability year significant and year, and steady the next flow and our invest to do adjusted of into as We future. we we are of it. marketplace committed margin to this the producing free

As execution our want will team we their part take of your every extend always, day, for this incredible seeing of team. contributions thanks accelerate to And single quarter. to that, to am Upwork with questions. and I our be proud at pace this I great I'm

Operator

question to Instructions] come Andrew line Securities. Our is going first [Operator from the JMP of with Boone

Unknown Analyst

This is, the that My the as how question of you this for on color the see be my Matt first one of And any there? just any maybe on there's get cohorts? color there. far to Could as is active great change to is helpful stabilization seeing on provide us Andrew. big you're Anything can you if freelancers. spend subs would give any over second then And it's can for time? performance XXX,XXX

Erica Gessert

Matt, our this conference, in actually cohort our cohort terms your I is think, talked once cohort annual Erica. chart, we Thanks stabilization that's newer for XX-K. question. I we and some in seen have chart it XXXX. the Yes, And was as an year a at published spend of about, actually, in

Hayden Brown

Freelancer on we're fastest-growing question is our mentioned your innings. map say already Plus of so of business early far. from area and and that made in today the of can the big the really already excited We how with get road still ad-monetization terms In over this kind I'd about time, revenue you've perspective that progress we're a

recently, bigger build of memberships is But lever and does So specifically value lot definitely our on to stepping a generally this enhance Upwork and with generated back, monetization of we there We offering. platform. story business, there to to to aspects that we continue think added of Pro value ad a have on continue as how the excitement. a runway. But lot also here other very are opportunities enhance [indiscernible] Plus, that which for see membership with opportunities has and Chat I

revenue Instacart, at out marketplace ad and XX% Airbnb, of see monetization of look today. we're that from If there, their coming companies you Upwork's near others, nowhere models other like

we going partnerships value driving in can diligently this to but us look be both of working mind for here we take you GSV that in that. where unlock don't pricing, things focused of on out be, because those things a to are these it's in Upwork can hand and revenue, things to both and when to we do go and sides really certainly be all that the So to figure number actually can unique like we're hand that at rate like Sure. how very expansion big connect growth is ensure have way that today, locking generate accretive memberships, really equation, third-party

Operator

the And from is [Operator question come of Canaccord. Ripps our Maria Instructions] to going with next line

Unknown Analyst

for This Maria. on is Matt

some increased on to with then around Just the broadly, that share growth Or and a any function would of year just wondering could freelancer you relates about more the products? that, largely seeing GSV. year back full the balance GSV if how the half you're in costs the to And we see if of just the be can there's color that Is in for thinking of guidance. component you're great. any acceleration ad upside revenue momentum

Erica Gessert

Yes, the and sure. for question, Maybe can it any add Hayden Matt. Thanks take I'll color.

products. So we just on and absolutely the I I yes, growth ad revenue some think seeing good are are monetization in we mean, -- growth outlook, our strong --

enterprise As stream and we there. good kind incremental fastest-growing we some we're growth seeing for enterprise XXXX in and that's some And said, have also of platform, later new of indicators both some marketplace indicators kind the and giving sides on in they're the good and of the actually client and business strength nice us the the very leading in also leading some on strength GSP and revenue confidence the seen growth beyond. of business into terms

Hayden Brown

around We're of priority good the Matt, seeing is as for on very some green GSP really our acceleration top working Sure. And active. We're and add, I'd growth shoots. year we're what company. the is this, balance a

growth Erica already from quarter. leading we're progress on a this clients mentioned, As is X% past one active sign indicator great that seeing is this,

client product terms Uma the client as is needle indicating of and move in are like traction is early it driving Second that thing innovations releases spend really our can metrics. around

products. of the at driving So our layer it does take scale to adoption time and these size of things through the customer and base for these

and want but product -- the laser-focused I driving endeavor, are this does clear really on multi-quarter is we're innovations to that a be this. So multi-year that

Erica Gessert

GSV dampened slightly I'll the final structural actually also changes new the Maybe point, was in fee is kind in one structure. pricing just which flat the from just changeover emphasize growth to quarter the of

quarter, uptick. GSV have about X% So the absent would bit which growth a that, is been we little an estimate of this

really that we're well. so as by encouraged And

Operator

our [Operator to going question of the is Goldman next Sheridan come from Instructions] And with line Eric Sachs.

Eric Sheridan

you internal of driving investments that talked on elements growth control especially think the Maybe you're of can, some growth just two, around ? about on unpack impacted GSV remainder the as and as if as that year you might as are that deeper answer about, increased that maybe changes some towards you investments how thinking your of thinking with up Hayden how show have incremental growth. GSV about the components of out efficiency gains that margin to for I front. also And blocks we what's elements [ of the the evolve. through terms that that investments versus following about be in for highlighted? us we ] versus productivity building you into of And that the up fee dynamics just the either on then Can year, that should are just you back control balanced driving of get ones, in in have your this in some growth maybe see growth the do GSV held

Erica Gessert

right. All

in Eric. packed lot a You there,

see me hit everything. I if let So can

of in like So year, do QX, and cutover points X that through pricing I the on actually headwind from have we about just said, change. GSV the final the is with growth,

growth beyond lot strong confidence a active continue that that growth tried indicators us that, going really encouraging. highlight, up. really of think tick kind to of client we've I leading to The really we of to a GSV give our see lot is is

we're a Some late on on also into positive of better. that some launched that is new Uma we the platform side into better highlighted of this benefits in with and Hayden And year. lot of the lot to enterprise of early just kind the see we experiments the year a seeing with just the experiences get next very with with the and strength going falling we of experimentation think then

we years -- new being growth see terms in investments. stimulators, we GSV So touch as on will I'll all quick these the year. driving advance been Real in next -- to look, investing help expect accelerate experiences a R&D in innovations into I order few on us over it quite platform we here growth, talking and on we've really the of are a about. to bit that been we've

Just bench is closed in the AIML in things. reminder, the team we of launch deal of as the of a QX. of the growth and and addition the investment And the in has growth that really our it headroom And culminated an Uma future other platform.

certainly innings into as really year come. that think the through year grit early we here. in to this next That optimization. I do of So said, growth really tools engineering of cost data We're we as revenue, plenty and there's I of kind for expect invest the productivity R&D will in advance in starting also moderate,

off and paying And this year of so I end next at really see into those the into year. investments --

Operator

is question our to line the come And Matt Farrell with of going Instructions] Piper Stanley. from next [Operator

Matthew Farrell

the X on leverage you years, target? achieve or more to of the on do at additional that within that adjusted size to side. side, much on efficiencies what point you years? couple cost work how do help over have And next the to be Maybe goal I guess EBITDA in profitability XX% target Awesome you order or reach at the need think scale you this

Erica Gessert

view what kind quick think terms point I've operating scale leverage your achieve I all opportunities Look, maybe of can question meaningful we in the we we good front of real mean over confidence absent to gained looking to this the a at answer Sure. need significant teams, of working that in in to the meaningful optimization just short answer of it's and step year cost with and past take business, Yes. back achieve us. from of in is, growth this. a sure the I'll make scale.

even year EBITDA journey year, all past when quickly at about growth So of that kind kind very months. over came meaningful advanced X kind we was to volume being business mid-teens if of absent year, committed you I Last last optimization. about margins on of We of profitable. in very, the into sales and marketing on look journey and the to just the got focusing

sales And growth our continue a we've other marketing looking benefits And spend optimization, I significant significantly of we while said, yield to in about -- places with productivity. was our business at I've marketing the of think and optimize with many, some Like given the year honestly, been working been where in reducing yields. looking client we the areas. confidence gain has optimization, even data amount able can deeply active these -- last me other engineering organization that tremendous teams many things, very that now in we're and we to

So I profile continue think kind growth, this that while lower will gross of continue leverage. a to in growth in gain of can't invest the business said, That even operating given margin to reason, continue relatively that growth we invest operating we leverage we environment. can certainly there's into no to and producing

can be investing both. growth think convinced leverage in really, But we So operating on now GSV the really I we just that top that do can of that will think we're we we're achieve.

Hayden Brown

Yes.

say pacing and that build ourselves every of years, And scale XX% way while are the irrespective towards aggressively. can we create year scale. increases leverage a business. like we target, to I'd this meaningful to enhancing business drive to in growth that But the invest really business and of in to answer a that is We want of know of continue that Another to is big we're do that to business. Matt, here investing question, X tremendous are growth real we pace growth towards we're of moving the kind the leverage, which within there we

Matthew Farrell

they in backdrop And follow-up, marketing recently, growth now more historically? the more Upwork dynamic you think steady different any is driving feel And that they are this joining do than customers in do a of look a acceleration and have as are macro? what hit the I on like spend, client the couple a the you've of active sales and lower guess, times.

Hayden Brown

Yes, they do.

over a sales that areas, I driving building in it and think results the that what's earlier the and for marketing. Erica muscles great that's done mentioned is delivering quarters, around those really We've execution us. many job

proposition flexibility, clients efforts efficient really the that up value where them, we've say us. always looking in in skills they looking really our like have extremely we continuing there's on be they're wouldn't resonate this macro to and for clients I they're to coming But about for and ramping delivering been marketing who with has resonated specialized are really platform. Our broadly anything past is notably and with look and attract and in clients. different do were sales this

Erica Gessert

to the I'll journey investments that on prospect from the new just the been we've add advancing making that experiences the by some are AI active also enabled clients. platform of are really

post So that new to generator in jobs the job tool are and get order year, we over that post of activation. last XX% to then launched using customers

really the engine marketing cost the of of of we've think reduced factors there's So in performance a combination the -- platform as introduced. humming that we've even experience some and it's I

Operator

going with Thill the come And line Brent from of our Jefferies. question Instructions] next [Operator to is

Unknown Executive

is for One This [indiscernible] Brent. on GSV. question more

per that last is mentioned might that could X project, headwind you're spend adjusting adjusted that's for sounds to cohort, you points that, things of macro QX So larger that, And then accelerate, will also a clarify just wanted look of might seeing. maybe and the of And related rest how I the to it like it year. the anything through -- level. you're even about the X% in macro on kind noticing talk of in side, if on that, what you terms

Hayden Brown

Yes.

affecting macro, see quite we're on And a small seeing the I still from in at think X% I think temporary lot macro. impacted consumers GSV we've I seeing environment expect continue it and change. estimate about in mean, From we're talked of still inflationary still pricing GSV there lap to We businesses. got on that all Corporation's up. to next growth there, of just the the think us the out And general, we'll the step QX the Look, for question it that I reasons dynamism the the that. about, in throughout environment, budget headwind and Yes. you conscious. and year.

we're in of we've continue really revenue of very we results. I intend been -- that also, some the see very few to business kind showing And side, broadly, reality good the really we -- and stability, kind of And business margins I think that this of small our More underlying detail, broader I is within think I think growing small think, the quarters for we I like to oasis our of platform. now produce current a our an macro. with growth said environment. in that I side growth, of if think our kind I of profit we've said, any regardless think

is from of current And some moderating kind from the negative impacts in year of business environment. large last the

Operator

our going come Josey with from Instructions] of question [Operator And the to next Ron is line Citi.

Unknown Analyst

Ron. Jake is [indiscernible] This for

terms the enterprise or the to the benefits making expand And I you're talk with second, see to wanted Any within could terms AI category? on equation Could the you -- terms ask about versus side. from growth of of And there clients. trends spend additional the side partnerships? this VMS of First, great you new larger share any clients in on of new just specifically, in that wages existing the more of And progress in the then of color growth. categories focusing more mix clients? on

Erica Gessert

Jake. Sure,

VMS about Speaking Enterprise partnership. the

with enterprise and looking many customers existing So themselves. are serving have are VMS the MSP already so today we is there and that break partners the relationships reality to into of

we around. those where vendor customers for into on funneling for spend or work proved in bid when are of opens new and platforms the up talent of participate becomes up it those record those to basically with basically that through us and go become available opportunities so offer partnering a And providers, really

really it prospects. existing for are available So and opens customers within using VMS up the Upwork dollars both new to who

selling work it's them existing VMS. with or of point us realize a with they condition Sometimes big when can we their certainly working that a

XX% talent for about the is but generally in and the about specifically up there, excited clients AI question of across in the strategy, going addition early year-over-year yes, of a to we're this AI FX seeing kind services it's XX% with us very what's So opportunity. on looking what it categories the area opening tremendous equipped growth, talent for can and XX% To employees think using your enterprise compared that in only just do enabled about who of Upwork the freelancers that tools. categories to regular the data basis using a compared I And we to interesting all tools internal more tools. are serve, of fact using on AI these on and freelancers is and are where AI there the of than shows X% is equipped

workforce. So upskill it my when we enough. can't talk need do to businesses, they're "I to I saying, fast

skilled Let turn Upwork talent the these to me instead in is that find areas.

same quarter, we that by still lot which a here a on fast it's in some top maybe quite say serving growth ago, so premium are we're a bit, talent quarters the still probably quadruple-digit and area. little moderated different these of I was was, ago in in note X delta as there of And growth last year seeing for wages is or highly work, needs evidenced of, we saw think, as lot would it's not it would this X this I a strong I is like as areas, demand, of but a

Operator

Instructions] come line Kulkarni of from ROTH question to [Operator with going the MKM. And Rohit our next is

Rohit Kulkarni

XX you about for terms some fastest-growing we on the And I And runway How drivers ads the the -- you in take footprint as rest about the about maybe guys quite rate of then And how out year on in assumptions client time. as revenue it's from think of been terms concerned, that? far on model and in should as stream guess well things, the are year? do the for strategy you and the and unpacking talk you just any think is you thinking extra growth monetization see have of on -- terms the as the that there. growth? side more color the of of for how

Hayden Brown

Sure, Rohit.

customers. in is are So here strategy hand. overall on the that And things levers really our value these with asset congruent creating go more our to for monetization monetization, hand build

already. I what work we've that's think proven with really the

more program. revenue think examples our but made, from certainly, from partnership accurately that the encouraged So we of continue think platform by to there's lot that everything a the progress to to bring do. new continuing we And streams in to memberships on connects price span we're more I enhancing can like

and to enhancing again, governed is way that in So a a really lot so them with more around doing to runway more for I spend overall getting be take goal. there's which rate ultimate is creating And going of here. really our is customers think, really value our us, goal the but

Erica Gessert

for the take In of client outlook growth. terms and rate

a I for the the obviously, year, QX. of think we big rest step-up had in

cutover has well As I freelancers. pricing which measures by associated and said, accepted successful the incredibly was the that by with plan, on really been and all clients our

things kind reactivations call, on and year. few times obviously, to take big a as -- of I activations mean, really we ad doing to nicely think and engine I we the advancement of the as are bit the move nicely. little the step-up as a expect going client rest And continued do on for a both but year, some we'll take really the acquisition not rates expect monetization are of have, add with growth, through we've rate our client emphasized to

quarter And to So we our do each growth expect moment the as question. year. through to continue move one next on client we

Operator

come is And with Instructions] going [Operator Marvin next of question the BTIG. line our to from Fong

Marvin Fong

on Congratulations performance. the

So for X questions myself.

or least customers other companies new like reactivated It I major source the So in we clients. double-click of I become but would past, haven't a talked at for know like about some e-commerce to seems much reactivated buyers on in reactivation. something as

on could And past then that reactivated. per So that about GSV clients onboarding of looks a for it is quarter, drag just big get know more initiatives is talk how like. I it that just customers client. you know of and this on you question guys I kind metric. down pool to kind new a your was

declining was I of at spend increasing? So could existing look flat wondering is If just kind we that. unpack the if behavior you or or just cohorts,

Erica Gessert

Marvin. Sure,

accelerating been a trends growth will question, for and I source have that first us, it for look, reactivation of clients. the nice on active note is So

that I client said, work kind And is haven't a out. work that will. aimed also did Also of of marketing the I the doing it yesterday. Upwork of of don't think it all updates terms I within We us. we're we kind the some as we tailwind now the of client just for do at broken reactivation, is -- look, we that some nice think new there performance of reactivation. it we're But in doing, that -- is launch work

the attracting being and of we're know and them maybe letting both are work clients using been All clients at who new launched. the that all experiences reattracting lately new this haven't platform is aimed

On there's GSV per lot I'll you client, XX-month a is that, to there. going metric. So metric on just emphasize a that trailing

some the client. kind clients, So And that a that retained -- you're activity GSV be will it compared we new drag saw right, -- clients the still extent macroeconomic we're to vacillations year. it of is of up lots what proactive has of activating started last of of to kind on the stabilize overall, of impacts of last have some But picking to does we some year. had

Operator

this questions And Brown And hand time. closing further to Hayden like I to the conference no remarks. for I'm showing back at would

Hayden Brown

our progress for forward on next posted you, joining Thank to us. appreciate your Upwork We quarter. interest everyone, you in and look keeping

Operator

This you for you Thank concludes call. today's disconnect. may now and participating, conference

Upwork (UPWK) 1 May 242024 Q1 Earnings call transcript