Upwork(UPWK) - 2024 Q1 - Quarterly Report

Financial Performance - Gross Services Volume (GSV) for the three months ended March 31, 2024, was $1,008,797, a 1$1,003,345 in the same period in 2023[83] - Total revenue for the three months ended March 31, 2024, was $190,937,000, representing a 19$160,858,000 in the same period in 2023[108] - Net income for the three months ended March 31, 2024, was $18.4 million, compared to$17.2 million in the same period in 2023, representing a 7% increase[81] - Adjusted EBITDA for the three months ended March 31, 2024, was $33.3 million, a significant improvement from an adjusted EBITDA loss of$2.9 million in the same period in 2023[81] - Gross profit for the three months ended March 31, 2024, was $146,744,000, with a gross margin of 77$27.7 million, or 20%, to $164,330 for the three months ended March 31, 2024, compared to$136,676 in the same period in 2023[80] - Marketplace revenue increased by 20% to $164,330,000, accounting for 86$26,607,000, making up 14% of total revenue[109] - The company no longer reports revenue from its Enterprise Solutions offering in Marketplace revenue, aligning with current period presentation[84] Client Metrics - Active clients increased to 872, up 5% from 827 in the same period in 2023[83] - GSV per active client decreased to $4,755 for the three months ended March 31, 2024, down 4$4,967 in the same period in 2023[83] Cost Management - Cost-saving measures implemented in 2023 are expected to continue positively impacting net income and adjusted EBITDA in 2024[81] - Sales and marketing expenses decreased by 26% to $47,851,000, reflecting cost-saving measures implemented in 2023[116] - Provision for transaction losses significantly decreased by 86$927,000, down from $6,701,000 in the same period in 2023[120] Cash and Securities - As of March 31, 2024, the company had$24.7 million in cash and cash equivalents and $465.9 million in marketable securities[123] - Funds held in escrow, including funds in transit, increased to$222.9 million as of March 31, 2024, up from $212.4 million as of December 31, 2023[130] Share Repurchase and Financing - The company repurchased 5.0 million shares of common stock for$64.8 million at an average price of $12.83 per share during the three months ended March 31, 2024[129] - For the three months ended March 31, 2024, net cash used in financing activities was$56.2 million, primarily due to $66.9 million paid for share repurchases[142] - The company had$33.1 million available for repurchases under the Share Repurchase Program as of March 31, 2024[129] Future Outlook - The company expects continued growth in Marketplace revenue and take rate in 2024, driven by new and modified offerings[110] - The company anticipates that the balances of escrow funds will grow as Gross Services Volume (GSV) increases[130] - The company may need to raise additional capital through equity or debt financing, which could dilute existing stockholders' interests[126] - The company expects annual interest expense related to the Notes to be $2.7 million through 2025 and$1.8 million in 2026[127] Cash Flow - For the three months ended March 31, 2024, net cash provided by operating activities was $5.7 million, compared to a net cash used of$8.7 million for the same period in 2023[137][139] - For the three months ended March 31, 2024, net cash provided by investing activities was $6.1 million, primarily from maturities and sales of marketable securities[140]