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Upwork Q1 revenue up 16%; gross services volume rises 21%

May 09, 2019

First-quarter revenue at Upwork Inc. (NASD: UPWK) rose 16.4%, and gross margin improved. The Mountain View, California-based online staffing platform also reported gross services volume increased 21.1% year over year to $487 million — gross service volume represents the total amount that clients spend on platform offerings and managed services as well as additional fees to clients and freelancers.

Upwork reported a net loss of $4.7 million in the first quarter, a smaller loss than the $6.8 million loss in the first quarter of last year.

(US$ thousands) Q1 2019 Q1 2018 % change
Revenue $68,924 $59,218 16.4%
Gross profit $47,799 $39,601 20.7%
Gross margin  69.4% 66.9%  
Net loss ($4,728) ($6,784) nm

The lion’s share of revenue comes through its marketplace segment, but both its marketplace and managed services segments posted increases.

Revenue by segment

(US$ thousands) Q1 2019 Q1 2018 % change
Marketplace $60,903 $51,959 17.2%
Managed services $8,021 $7,259 10.5%

Revenue was also up across geographies.

Revenue by geography

(US$ thousands) Q1 2019 Q1 2018 % change
From freelancers      
United States $11,888 $9,103 30.6%
India $6,630 $6,106 8.6%
Philippines $4,577 $3,955 15.7%
Rest of world $21,695 $19,025 14.0%
Total freelancers $44,790 $38,189 17.3%
       
From clients      
United States $17,674 $15,462 14.3%
Rest of world $6,460 $5,567 16.0%
Total clients $24,134 $21,029 14.8%
       
Total revenue $68,924 $59,218 16.4%

Quote

“During the quarter we made significant progress with the launch of several new products, features and enhancements to support our increasingly diverse and expanding online talent marketplace,” CEO Stephane Kasriel said.

Guidance

Upwork forecast second-quarter revenue of between $72.5 million and $73.5 million.

Share price and market cap

Upwork’s shares were down 8.28% to $18.79 at 11:22 a.m. Eastern time; the company had a market cap of $2.19 billion, according to FT.com.

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