NASDAQ$UPWK

Upwork Inc · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Upwork's business and value proposition remained critical to customers amidst economic uncertainty, with revenue growing 24% year-over-year.

Upwork's Q3 2022 earnings showed revenue growth of 24% year-over-year, reaching $158.6 million. GSV grew 14% year-over-year, exceeding $1 billion. GAAP net loss was $(24.8) million, and adjusted EBITDA was $(2.9) million.

  • Revenue increased by 24% year-over-year, reaching $158.6 million.
  • Gross Services Volume (GSV) grew 14% year-over-year, exceeding $1 billion.
  • GAAP net loss amounted to $(24.8) million.
  • Adjusted EBITDA was $(2.9) million.

Headline financials

Total Revenue

$159M

Previous: $128M+23.8%
EPS (adj)

-$0.03

Previous: $0.04-175.0%
Gross services volume

$1B

Previous: $904M+10.6%
Active clients

818.0K

Previous: 752.0K+8.8%
Capital Expenditures

-$893K

Previous: -$565K-58.1%
Free Cash Flow

-$25.7M

Previous: -$9.88M-160.4%
Net Income

-$24.8M

Previous: -$9.31M-166.6%
Operating Income

-$25.4M

Previous: -$8.32M-205.9%
Gross Profit

$118M

Previous: $93.2M+26.8%
Cash & Equivalents

$156M

Previous: $600M-73.9%
Total Assets

$1.08B

Previous: $1.09B-1.4%
Stock-Based Comp

$20.4M

Previous: $13.9M+46.7%

Revenue & EPS history

Upwork · Revenue · Quarterly

$159M

Q3 2022+23.8%vs Q3 2021
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Revenue by segment

Upwork · $158M total across 2 segments · Q3 2022

  • Marketplace
    $145M+23.2%
  • Enterprise
    $12.5M+20.2%

Forward guidance

Upwork is guiding for Q4 2022 revenue to be between $158 million and $160 million, representing a 16% year-over-year increase at the midpoint. They are narrowing their full-year 2022 revenue guidance to between $615 million and $617 million, representing 23% year-over-year growth at the midpoint. Q4 2022 adjusted EBITDA is expected to be a loss between $(1) million and $(3) million.

Tailwinds

  • Revenue guidance for Q4 2022 is between $158 million and $160 million, a 16% year-over-year increase at the midpoint.
  • Full-year 2022 revenue guidance is narrowed to between $615 million and $617 million, a 23% year-over-year growth at the midpoint.
  • Target to be adjusted EBITDA positive on an annual basis starting in 2023 is reiterated.
  • Aim to increase adjusted EBITDA margin by a few hundred basis points per year.
  • Long-term target of an adjusted EBITDA margin of 30%-35% is reaffirmed.

Headwinds

  • Deceleration of quarter-over-quarter and year-over-year growth rates from Q3 to Q4 is expected.
  • This deceleration reflects continued softness in seasonal and macroeconomic conditions.
  • The lapping of a strong fourth quarter of 2021 is also contributing to the deceleration.
  • Q4 2022 adjusted EBITDA is expected to be a loss between $(1) million and $(3) million.
  • Expect to invest approximately $19 million in brand marketing in Q4 2022.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+1.3%

Avg return

Earnings day

+0.3%

Avg return

5 days after

-5.1%

Avg return

30 days after

47%

14 / 30 earnings

Positive

+48.0%

Q3 2020

Best reaction

-19.1%

Q4 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-2.1%-20.7%-17.2%
Q4 2025-19.1%-29.6%-36.9%
Q3 2025+13.2%+11.6%+25.3%
Q1 2025+18.0%+26.7%+13.3%
Q4 2024+6.6%+8.6%-18.9%
Q3 2024+12.9%+10.4%+17.9%
Q2 2024-13.2%-16.5%-11.9%
Q1 2024+11.0%+7.9%-9.7%
Q4 2023-0.3%-1.4%-14.1%
Q3 2023+17.3%+21.8%+21.4%
Q2 2023+43.5%+44.6%+49.3%
Q1 2023-9.2%-8.6%-0.2%
Q4 2022-10.3%-11.0%-23.8%
Q3 2022+1.4%+5.0%-8.0%
Q2 2022-14.2%-16.5%-20.8%
Q1 2022+10.0%+15.8%-3.5%
Q4 2021-6.0%-8.7%-16.7%
Q3 2021-15.5%-15.4%-35.1%
Q2 2021-10.8%-10.5%-23.8%
Q1 2021-6.5%-4.1%+3.8%
Q4 2020+3.8%+4.8%-15.5%
Q3 2020+48.0%+42.7%+63.0%
Q2 2020-10.3%-11.7%-13.0%
Q1 2020+4.3%+19.3%+40.0%
Q4 2019+5.0%+1.4%-21.9%
Q3 2019-15.9%-19.5%-26.0%
Q2 2019+10.0%-3.0%-9.0%
Q1 2019-18.6%-20.3%-30.5%
Q4 2018-6.1%-4.1%-19.9%
Q3 2018-6.9%-8.8%-11.9%
Q2 2018
Q1 2018
Q4 2017
Q3 2017
Q2 2017
Q1 2017

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