Investors were excited about Upwork (UPWK -3.04%) from day one, with shares surging 41% above its IPO price in October. But the online marketplace for freelancers hasn't been put to the test since it went public last month. So investors had good reason to watch Upwork's third-quarter update this week, as it marked the company's first quarterly update as a publicly traded company.

Upwork's third quarter featured an array of interesting information about the company, including its strong growth in gross services volume (GSV), double-digit revenue growth, and impressive client spend retention. But it also revealed a quarterly loss.

Here's a look at some key insights from Upwork's third-quarter update.

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Image source: Getty Images.

Upwork's third-quarter results: The raw numbers


Q3 2018

Q3 2017

Year-Over-Year Growth


$64.1 million

$52.3 million


Non-GAAP net income (loss) per share




Data source: Upwork's third-quarter earnings release

What happened with Upwork this quarter?

  • Revenue increased 23% year over year to $64.1 million.
  • Upwork's non-GAAP net loss was $1.4 million compared with a non-GAAP net profit of $1.9 million in the same period last year.
  • Upwork's GSV, or the total amount that clients spend on the company's platform, increased 27% year over year.
  • Client spend retention increased from 95% in the year-ago quarter to 108%.

What management had to say

CEO Stephane Kasriel said in the company's third-quarter earnings release that he was "pleased" with the quarter, citing the company's new client growth and its deepened relationships with core clients as catalysts.

Kasriel added: "Through our innovation, Upwork is a leading force in creating a better future of work. Our continued success is fueling our mission to create economic opportunities so people have better lives." 

Looking forward

For its fourth quarter, Upwork said it expects revenue between $64.5 million and $66 million, implying about 1% to 3% growth sequentially. Management expects EBITDA to be between negative $50,000 and positive $500,000.

Beyond the company's guidance, investors will want to keep an eye on Upwork's GSV. While the company's 27% year-over-year growth in the amount clients are spending on its platform is notable, investors should keep in mind that it is a deceleration from the 30% GSV growth Upwork saw in the first six months of 2018 versus the same period in 2017. If Upwork's year-over-year GSV growth rate continues to come down, investors may need to lower their expectations for the company's long-term growth potential.

On a more positive note, it's good to see Upwork's client-spend retention rate increasing from 95% in the year-ago quarter to 108% in the third quarter of 2018. Investors should keep an eye on this metric in Q4 to see if this level of client spend retention is sustainable.