Financial Data and Key Metrics Changes - Revenue for 2025 grew by 10%, accelerating from 8% in 2024 [4] - Adjusted EBITDA reached $92 million, up 23% year-over-year, with a margin of 21% [4] - Fourth quarter revenue was $107.2 million, up 3% year-over-year, with record adjusted EBITDA of $26.5 million and an adjusted EBITDA margin of 25% [15][16] - Free cash flow in Q4 2025 was $21.8 million [16] - For 2026, revenue is expected to be in the range of $380 million to $420 million, representing year-over-year growth of -12% to -3% [19][21] Business Line Data and Key Metrics Changes - Marketplace revenue in Q4 was $71.5 million, driven by 3.1 million active buyers and a spend per buyer of $342 [16] - Services revenue in Q4 was $35.6 million, representing year-over-year growth of 18% and accounting for 33% of total revenue [18] - GMV from transactions over $1,000 grew 22.8% year-over-year in Q4 [17] Market Data and Key Metrics Changes - The company is experiencing a shift in marketplace dynamics, with a decline in low-end transactions and an increase in high-value work [17][36] - Projects over $1,000 currently represent less than 15% of marketplace GMV but are growing at a rate of 23% year-over-year [8] Company Strategy and Development Direction - The company is transforming from a transaction-oriented marketplace to a trusted work platform, focusing on high-value, complex projects [5][10] - A multi-year execution plan is being developed around four pillars: matching, product, go-to-market, and operational excellence [11] - The company aims to prioritize high-value work and AI-native use cases, with a focus on building partnerships and expanding into enterprise channels [9][28] Management's Comments on Operating Environment and Future Outlook - Management believes that AI is reshaping access to talent and expanding project ambition, leading to increased demand for higher-value specialized work [7][12] - The company expects 2026 to be a transformational year, with significant investments in data infrastructure and product experience [11][19] - Management anticipates elevated volatility in marketplace revenue as the company deprioritizes low-end transactions [17] Other Important Information - The company has initiated a restructuring to accelerate its transformation and has appointed new leadership roles to support this transition [13][14] - The company maintains a disciplined capital allocation strategy, with $67.5 million remaining on its buyback authorization [19][73] Q&A Session Summary Question: Insights on execution plan around matching product and capital allocation - The company is deprioritizing low-end transactions to focus on high-end projects, which currently contribute less than 15% of revenues [26] - The balance sheet has approximately $300 million in cash, with a disciplined approach to M&A [30] Question: Financial implications of deprioritizing lower-end market - The deprioritization is aimed at directing resources towards high-end segments, which have shown significant growth [35][36] Question: Margin profile expectations post-transformation - Short-term EBITDA margins may see pressure due to increased investments, but long-term margins are expected to return to around 25% [41] Question: Revenue expectations for 2026 - Revenue is expected to decline in the second half of the year due to ongoing trends in the marketplace [60] Question: Free cash flow expectations for 2026 - Free cash flow is expected to follow EBITDA trends, with a midpoint EBITDA margin of 18% [68] Question: Building marketplace for recurring work - The company is upgrading data infrastructure and matching algorithms to optimize for recurring work [72] Question: Disconnect between new business formations and company performance - New business formations impact only a small part of the catalog focused on early-stage companies [77]