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Upwork revenue up 19% in Q2, gross service volume increases 20% but net loss rises

August 08, 2019

Second-quarter revenue rose 18.5% at Upwork Inc. (NASDAQ: UPWK), and the online staffing platform operator reported “gross service volume” — the total amount clients spend on its platform as well as fees charged clients and freelancers — rose 20% year over year to $518.8 million. Gross margin also improved, but the company posted an increased net loss.

“Our focus on larger clients and our Enterprise customers drove four times more Upwork Business and Enterprise sales deals in the first half of 2019 compared to a year ago,” President and CEO Stephane Kasriel said. “With new products and brand marketing efforts to drive larger projects to the platform, we are focused on long-term, sustainable growth to build quality on both sides of our marketplace.”

(US$ thousands) Q2 2019 Q2 2018 % change
Revenue $74,256 $62,681 18.5%
Gross profit $52,668 $42,224 24.7%
Gross margin  70.9% 67.4%  
Net loss ($2,027) ($412) nm

Upwork noted 65% of project work on its platform is for larger engagements of more than $1,000 in spend with individual freelancers (excluding agency work). The portion of projects with less than $1,000 in spend was 15%, and agency engagements represented 20%.

The human cloud company has also increased its investment in its enterprise sales team.

Revenue by segment

(US$ thousands) Q2 2019 Q2 2018 % change
Marketplace $66,201 $55,454 19.4%
Managed services $8,055 $7,227 11.5%

Revenue by freelancers and clients and geography

(US$ thousands) Q2 2019 Q2 2018 % change
From freelancers      
United States $12,486 $9,554 30.7%
India $6,904 $6,467 6.8%
Philippines $4,929 $4,203 17.3%
Rest of world $22,588 $20,159 12.0%
Total freelancers $46,907 $40,383 16.2%
       
From clients      
United States $21,431 $18,187 17.8%
Rest of world $5,918 $4,111 44.0%
Total clients $27,349 $22,298 22.7%
       
Total revenue $74,256 $62,681 18.5%

Guidance

Upwork forecast third-quarter revenue of between $77 million and $78 million, representing a year-over-year increase of between 20.1% and 21.7%.

Share price and market cap

Shares in Upwork were up 6.22% to $17.25 as of around noon Eastern time; the company had a market cap of $1.74 billion.

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