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]

Financial Data and Key Metrics Changes - Upwork achieved record revenue and profitability in 2024, with revenue growing 12% year-over-year to a record $769.3 million, and adjusted EBITDA reaching a record $167.6 million [28][36][46] - Gross margin was 77.7% for Q4 and 77.4% for the full year 2024, while adjusted EBITDA margin was 26.2% for Q4 and 21.8% for the full year, both representing all-time highs [28][36] - Free cash flow for Q4 was $34.7 million, and $139.1 million for the full year, indicating strong cash generation capabilities [38][39] Business Line Data and Key Metrics Changes - Marketplace revenue for Q4 was $163.7 million, a 4% increase from $157.5 million in Q4 2023, while enterprise revenue increased 5% year-over-year to $27.8 million in Q4 [31][32] - Managed services revenue grew 8% year-over-year in Q4 and 12% for the full year to $59.4 million, reflecting steady demand for outcome-based delivery [32][36] - The active client base at the end of 2024 was 832,000, with GSV per active client showing strength across all business segments [32] Market Data and Key Metrics Changes - Upwork's revenue growth of 12% outperformed the estimated 9% decline in the broader staffing industry, marking the sixth consecutive year of double-digit growth outperformance [12][28] - GSV from AI-related work grew 60% year-over-year in 2024, with prompt engineering specifically up 93% year-over-year in Q4 [14][57] - The enterprise business was valued at $107 million for 2024, growing 4% year-over-year despite a challenging macroeconomic environment [18][31] Company Strategy and Development Direction - Upwork is focusing on growth catalysts including AI, enterprise, and ads & monetization, with plans for accelerated execution in 2025 [13][22] - The launch of Business Plus aims to enhance enterprise offerings and improve client engagement, with over 1,000 active users acquired since its launch [19][20] - The company is investing in AI innovations to improve customer experiences and operational efficiency, with Uma, an AI-powered job post generator, driving better job post quality and fill rates [15][70] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macroeconomic environment, noting that while some indicators showed signs of stabilization, they remain at multi-year lows [26][112] - Despite the challenges, Upwork's performance remains strong, with expectations for continued market share gains from traditional staffing firms [22][46] - The company anticipates revenue between $740 million and $760 million for the full year 2025, with a focus on maintaining profitability and expanding margins [41][43] Other Important Information - Stock-based compensation decreased by 8% in 2024, reflecting proactive measures to manage compensation costs [37] - The company plans to utilize free cash flow for strategic growth initiatives and share buybacks in 2025 [39][111] - Non-GAAP gross margin reached a record high of 78%, with disciplined cost management contributing to improved profitability [34][46] Q&A Session Summary Question: Revenue guidance and dynamics driving potential declines - Management acknowledged the record year in 2024 but noted ongoing macro headwinds affecting top-of-funnel dynamics, leading to cautious guidance for 2025 [51][52] Question: Impact of AI on business and GSV spend acceleration - Management highlighted the positive impact of AI advancements on the platform, with significant growth in AI-related work and improved matching capabilities through Uma [54][56][57] Question: Marketplace take rates and future trajectory - Management explained that the sequential decline in take rates was due to testing and expected modest growth in 2025, with ongoing strategies to enhance take rates [63][65] Question: Cost savings and investment areas for 2025 - Management detailed the operational realignment leading to cost reductions, focusing on enterprise and R&D, while also planning minor investments in growth catalysts [75][78] Question: GSV trends and factors driving increases - Management noted ongoing top-of-funnel weakness but highlighted positive signals in retained client engagement and GSV per active client growth [86][87] Question: Capital allocation strategy and guidance confidence - Management emphasized a judicious capital allocation strategy focused on organic growth opportunities and returning capital to shareholders through share repurchases [109][112]

Core Insights - Upwork reported revenue of $191.48 million for the quarter ended December 2024, reflecting a 4.1% increase year-over-year and a surprise of +6.24% over the Zacks Consensus Estimate of $180.24 million [1] - The company's EPS for the quarter was $0.30, up from $0.20 in the same quarter last year, resulting in a surprise of +20.00% compared to the consensus estimate of $0.25 [1] Financial Performance Metrics - Gross services volume reached $992.77 million, exceeding the average estimate of $916.52 million from two analysts [4] - Marketplace revenues were reported at $163.66 million, surpassing the average estimate of $153.72 million from three analysts [4] - Enterprise revenues amounted to $27.83 million, also exceeding the three-analyst average estimate of $26.53 million [4] Stock Performance - Over the past month, Upwork's shares have returned -4.6%, contrasting with the Zacks S&P 500 composite's +4.3% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Upwork surprised with strong earnings, yet GSV and active clients showed signs of decline.Online work marketplace Upwork (UPWK 1.97%) reported fourth-quarter earnings on Wednesday, Feb. 12, that topped analysts' consensus top- and bottom-line expectations. Record-breaking quarterly revenue of $191.5 million surpassed estimates of $180 million and were up 4.1% year over year. Adjusted diluted earnings per share (EPS) of $0.30 outpaced the $0.25 forecast. Although the financial results reflected strong earnin ...

Upwork (UPWK) came out with quarterly earnings of $0.30 per share, beating the Zacks Consensus Estimate of $0.25 per share. This compares to earnings of $0.20 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 20%. A quarter ago, it was expected that this online freelance marketplace operator would post earnings of $0.23 per share when it actually produced earnings of $0.29, delivering a surprise of 26.09%.Over the last four quar ...

Exhibit 99.1 Upwork Reports Fourth Quarter and Full Year 2024 Financial Results Achieves record revenue, GAAP net income and adjusted EBITDA for the fourth quarter and full year 2024 Fourth-quarter revenue of $191.5 million and GAAP net income of $147.2 million Fourth-quarter adjusted EBITDA of $50.2 million or 26% adjusted EBITDA margin, Upwork's highest ever Full-year revenue of $769.3 million, GAAP net income of $215.6 million, and adjusted EBITDA of $167.6 million 1 2,3 1 2,3 1 2,3 PALO ALTO, Calif. – F ...