Achieves record first quarter with revenue of $192.7 million, GAAP net income of $37.7 million and adjusted EBITDA of $56.0 million, resulting in 20% profit margin and 29% adjusted EBITDA marginReiterates FY2025 revenue guidance and raises full-year adjusted EBITDA guidance PALO ALTO, Calif., May 05, 2025 (GLOBE NEWSWIRE) -- Upwork Inc. (Nasdaq: UPWK), the world’s largest work marketplace that connects businesses with independent talent from across the globe, today announced its financial results for the fi ...

Core Insights - Upwork Inc. has released its Future Workforce Index, highlighting the significant rise of skilled freelancers in the U.S. workforce, with 28% of knowledge workers now freelancing and generating $1.5 trillion in earnings in 2024 [1][9] Freelance Workforce Trends - The demand for AI-related freelance work has surged, with gross services volume growing 60% year-over-year in 2024, indicating a strong market for AI-equipped talent [2] - There are over 12,000 AI specialists on Upwork in the U.S., and more than half of freelancers are upskilling in AI-specific skills [2] Skills and Competencies - Freelancers demonstrate superior skills in problem-solving (71% proficiency), critical thinking (67%), and adaptability (53%) compared to the overall freelancer population [3] - Skilled freelancers are increasingly investing in their development, with 37% holding postgraduate degrees, compared to 20% of full-time employees [9] Business Implications - Companies that adopt flexible workforce models, including freelancers, are experiencing growth and innovation, while those adhering to traditional models risk falling behind [4][5] - High-growth companies are more likely to integrate freelancers and AI collaboration into their workforce strategies, with 45% of top-performing companies embedding freelancers [9] Future Outlook - A significant portion of full-time employees (36%) are considering freelancing, while only 10% of freelancers wish to return to traditional employment, indicating a shift in workforce dynamics [9] - Gen Z is leading the trend towards freelancing, with 53% already engaged in freelance work, which is expected to reshape the workforce as they will represent 30% of U.S. workers by 2030 [9]

Core Insights - Upwork Inc. will report its financial results for Q1 2025 on May 5, 2025, after market close [1] - A Q&A conference call will be held on the same day at 2:00 p.m. Pacific Time [1] - The call will be accessible via a live webcast on Upwork's Investor Relations website [2] Company Overview - Upwork is the largest work marketplace connecting businesses with independent talent globally [3] - The platform supports a wide range of skills, including AI, software development, sales, marketing, customer support, and finance [3] - Upwork has facilitated over $25 billion in economic opportunities for talent worldwide [3]

Core Insights - Upwork has been recognized by Fast Company as one of the Most Innovative Companies of 2025 in the Human Resources category, highlighting its transformative approach in the work marketplace by integrating human expertise with AI tools [1][2] Company Innovation - Upwork is leading the AI-powered future of work by developing innovative products that enhance how businesses engage with talent, focusing on agile, skills-based hiring models [2][4] - Uma™, Upwork's Mindful AI, serves as an intelligent work companion that streamlines processes from hiring to project management, enabling faster execution and higher-value work for freelancers [3][4] Economic Impact - Upwork's platform has facilitated over $20 billion in economic opportunity for independent talent across more than 180 countries, allowing businesses to scale and professionals to access work beyond traditional barriers [5][7] Performance Metrics - In 2024, Upwork experienced a 60% year-over-year increase in gross services volume (GSV) from AI-related work and a 42% increase in clients engaging with AI projects, indicating a growing demand for tech-enabled solutions [4][6] - Freelancers working on AI-related projects earned 44% more per hour compared to those on non-AI projects in 2024, showcasing the financial benefits of engaging in AI work [6]

Core Insights - Upwork has been recognized by Fast Company as one of the Most Innovative Companies of 2025 in the Human Resources category, highlighting its transformative approach in the work marketplace through AI-powered tools [1][2] Company Innovation - Upwork is actively shaping the AI-powered future of work by developing innovative products that enhance how businesses and independent professionals achieve work outcomes [2] - The introduction of Uma™, an AI-driven intelligent work companion, streamlines collaboration, project management, and hiring processes, enabling faster execution of ideas [3] Business Impact - In 2024, Upwork experienced a 60% year-over-year increase in gross services volume (GSV) from AI-related work, alongside a 42% increase in clients engaging with AI projects, indicating a growing demand for tech-enabled solutions [4] - The platform has facilitated over $20 billion in economic opportunity for independent talent across more than 180 countries, allowing businesses to scale and professionals to access work beyond traditional barriers [5] AI-Driven Solutions - Upwork's AI-powered tools have led to accelerated hiring, with over 70% of new clients using the Job Post Generator, and high-value jobs filling at an 8% higher rate since Uma's introduction [6] - Freelancers working on AI-related projects earned 44% more per hour than those on non-AI projects in 2024, showcasing the financial benefits of engaging in AI work [6]

Core Insights - Upwork Inc. will participate in a fireside chat at The Citizens JMP Technology Conference on March 3, 2025, featuring President and CEO Hayden Brown and CFO Erica Gessert [1] - A live webcast of the event will be available on Upwork's Investor Relations website, with an archive accessible for 90 days post-event [2] - Upwork is recognized as the world's largest work marketplace, connecting businesses with independent talent globally, facilitating over $20 billion in economic opportunities [3] Company Overview - Upwork connects businesses with highly skilled independent talent across more than 10,000 skills, including AI, software development, and finance [3] - The platform serves a diverse clientele, from entrepreneurs to Fortune 100 companies, leveraging AI-powered solutions to enhance business outcomes [3] - Upwork enables businesses to scale and innovate by building agile teams through its trusted platform [3] Event Details - The fireside chat will take place at 12:00 p.m. PT/3:00 p.m. ET on March 3, 2025 [1] - Additional details regarding the conference can be obtained from the hosting financial institution [2] - The event may include disclosures of material developments affecting Upwork's business and financial performance [2]

Group 1 - The rapid advancement of AI technology is expected to significantly impact modern workforces in the near future [1] - Gary Alexander has extensive experience in covering technology companies and advising startups, contributing to insights on industry trends [1] Group 2 - The article emphasizes the ongoing relevance of AI-related news and its implications for various sectors [1]

Business Operations - The company operates the world's largest work marketplace, measured by Gross Services Volume (GSV), which reflects the total amount clients spend on offerings and additional fees charged[21]. - The work marketplace features over 10,000 skills across more than 125 categories, including emerging skills related to generative artificial intelligence[20]. - Revenue is primarily generated from talent service fees, which are a percentage of talent billings to clients, and client marketplace fees on a per-transaction basis[22]. - The company has engaged approximately 2,200 independent team members through its work marketplace to provide services on various internal projects throughout 2024[36]. - The work marketplace includes advanced tools for collaboration, time tracking, invoicing, and payment services to streamline client-talent interactions[26]. Client Engagement and Retention - The company has a strong retention metric, driven by long-term and recurring use of the work marketplace, leading to more predictable revenue[28]. - The enterprise solutions offer consolidated billing, dedicated account management, and detailed reporting to enhance hiring efficiency for clients[32]. - The enterprise sales team employs a "Land and Expand" strategy to acquire new clients and increase usage within existing client organizations[47]. - Upwork's community of customers, both talent and clients, is critical for future revenue growth, highlighting the need for effective customer attraction and retention strategies[74]. - Upwork's marketing efforts include targeted digital campaigns and lifecycle marketing programs to drive client retention and growth[51]. Technology and Innovation - The company has invested in AI-driven models to improve search and match capabilities, enhancing the overall user experience on the platform[24]. - Upwork acquired Objective AI, Inc. in 2024 to enhance its core search and matching capabilities, aiming for improved precision and efficiency in connecting talent and clients[57]. - Upwork's platform leverages artificial intelligence to create adaptive experiences for customers, utilizing a large repository of closed-loop data to predict successful outcomes[55]. - The company has integrated generative artificial intelligence tools into its work marketplace to enhance customer experience and productivity[101]. Financial Performance and Risks - The company experienced a 3% decline in Gross Services Volume (GSV) for the year ended December 31, 2024, compared to 2023 due to adverse macroeconomic conditions[79]. - The company has a history of net losses and may increase operating expenses in the future, which could impact profitability[78]. - The stock price has been volatile, posing a risk of losing part or all of the investment[78]. - Two clients accounted for more than 10% of trade and client receivables as of December 31, 2024, indicating potential revenue risk if either client is lost[76]. - The company is subject to extensive government regulation, and non-compliance could negatively impact business operations[78]. Compliance and Regulatory Challenges - The company is subject to extensive government regulations, and failure to comply with these laws could adversely impact its business and financial condition[123]. - The company has implemented policies for compliance with applicable laws, but there is no assurance that it will maintain compliance, which could result in enforcement actions or penalties[126]. - The regulatory landscape for worker classification is uncertain, and changes could adversely affect demand for independent contractors[130]. - The company may incur substantial costs to comply with evolving data privacy regulations and breach notification laws[115]. - New privacy regulations, such as the GDPR and CCPA, impose stringent compliance requirements and could lead to significant penalties for noncompliance[134]. Intellectual Property and Security - The company holds 19 issued U.S. patents and has 3 patent applications pending as of December 31, 2024, indicating a strong focus on intellectual property protection[66]. - The company faces risks related to intellectual property infringement claims, which could disrupt its business[145]. - Security breaches or privacy incidents could harm the company's reputation and lead to significant legal costs and liabilities[112]. - The company relies on trade secrets and various intellectual property rights to protect its proprietary technology and data[151]. Market and Competitive Landscape - The competitive landscape for independent talent is rapidly evolving, with increasing third-party investment and new entrants, necessitating continuous innovation and adaptation[63]. - The company competes with various online and offline platforms, including traditional staffing firms and emerging technology companies[102]. - The market for independent talent is rapidly evolving and unproven, with future success dependent on its growth and expansion[100]. Operational Challenges - The company faces challenges related to customer circumvention of its marketplace, which can lead to revenue loss[89]. - The company must improve systems and manage workforce effectively to sustain future growth, which may become more difficult amid economic uncertainty[79]. - The company is expanding its international footprint, which introduces significant challenges and risks related to compliance and operational management[91]. - The company faces intense competition for qualified personnel, which may lead to increased costs and challenges in retaining key personnel[94]. Financial Management and Capital Structure - The company reported a net operating loss (NOL) carryforward of $18.9 million for U.S. federal income tax purposes and $91.0 million for California state income tax purposes as of December 31, 2024[169]. - The company may require additional capital to support growth initiatives, and failure to secure such capital could adversely affect its operations[171]. - The company has provisions in its charter documents that may delay or prevent a change of control, including requiring super-majority voting to amend certain provisions[178][180]. - The company is subject to changes in tax laws and regulations that could increase its tax liabilities and compliance costs[166]. - The company does not intend to pay any cash dividends for the foreseeable future, retaining all future earnings for business development and share repurchases[177].

Core Insights - Upwork Inc. reported a 4% year-over-year increase in total revenue, with active clients reaching 832,000 at the end of the quarter [1] - The company anticipates first-quarter revenue between $186 million and $191 million, with adjusted earnings projected at 24 to 26 cents per share [1] Revenue and Client Metrics - Gross services volume (GSV) per active client increased by 1% year-over-year, reaching $4,815 [1] - Despite positive growth in Enterprise revenue and a 13% year-over-year increase in take rates, GSV is still declining [2] Analyst Perspectives - RBC Capital Markets noted that while there are improvements in key metrics, recovery in GSV may depend on macroeconomic factors, with other initiatives potentially not impacting until 2026 [2] - Erickson raised the FY25 adjusted EBITDA estimate to $187.5 million from $176.5 million but remains cautious about long-term growth signals [3] - Needham's analyst anticipates a slow macro environment in 2025, with lower take rate benefits and a decline in GSV and revenue year-over-year [3] Financial Adjustments - An 8% growth in adjusted EBITDA is modeled, driven by 250 basis points of margin expansion, despite lower GSV expectations [4] - Following better-than-expected fourth-quarter performance, revenue exceeded expectations by 6% and adjusted EBITDA by 25% [5] Strategic Focus - Upwork is concentrating on controllable factors, investing in AI, enterprise, and ads/monetization for growth [5] - Analysts expect estimates to rise, assuming no significant changes in the macro environment, with a target of 35% EBITDA margins over the next five years [6] Price Action and Ratings - UPWK shares increased by 7.08% to $16.63 [6] - RBC Capital Markets raised the price forecast to $18 from $16, while Needham raised it to $19 from $17, and Piper Sandler maintained an Overweight rating with a price forecast of $18 [8]

Core Insights - Upwork achieved record revenue of $769.3 million in 2024, marking a 12% year-over-year increase despite a 9% decline in the broader staffing industry [2] - The growth in revenue was significantly driven by AI-related work, which saw a 60% increase in gross services volume and a 42% rise in the number of clients engaging in AI projects [2][3] - Freelancers working on AI-related tasks earned 44% more per hour compared to their peers in other fields, indicating a strong demand for AI skills [3] Company Developments - Upwork has integrated AI innovations into its platform, including the introduction of an AI assistant named Uma, which aids freelancers in creating proposals and evaluating candidates [5] - The acquisition of AI-native search-as-a-service company Objective has enhanced Upwork's search and match capabilities, bolstering its AI and machine learning teams [6] - The company is adapting to the growing demand for AI talent, similar to past trends with social media managers and mobile developers [4] Market Trends - Organizations are increasingly seeking flexible talent models that incorporate AI technology alongside human workers to meet emerging skill demands [7] - Professionals across various sectors are looking for digitally powered work options that provide autonomy, flexibility, and enhanced earning potential [8]