On Thursday afternoon, Upwork (UPWK 3.10%) reported quarterly results for the second time as a publicly traded company. The results, which were for the company's fourth quarter of 2018, highlighted robust revenue growth, strong client-retention spend, improved profitability, and more.
Here's an overview of the online marketplace for the company's fourth-quarter results and a look at management's commentary on Upwork's progress and opportunity.
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Upwork's fourth-quarter results: The raw numbers
|
Metric |
Q4 2018 |
Q4 2017 |
Change |
|---|---|---|---|
|
Revenue |
$67.3 million |
$59.7 million |
23% |
|
Non-GAAP net income (loss) per share |
($5.4 million) |
($11.7 million) | N/A |
Data source: Upwork's fourth-quarter earnings release. Table by author. GAAP = generally accepted accounting principles.
What happened with Upwork this quarter?
- Revenue increased 23% year over year, to $67.3 million, coming in ahead of management's guidance for revenue between $64.5 million and $66 million.
- Upwork's non-GAAP net loss was $5.4 million, an improvement from a loss of $11.7 million in the year-ago quarter.
- Non-GAAP earnings per share (EPS) was $0.03, up from a loss of $0.27 per share in the year-ago quarter.
- Upwork's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $3.6 million, up from negative $1.9 million in the same period last year.
- Gross profit increased 25% year over year, to $46.5 million.
- Upwork's gross profit margin was 69%, up from 68% in the year-ago quarter.
What management had to say
In the company's fourth-quarter and full-year update, management pointed out the company's impressive client-spend retention of 108%, up significantly from 99% year over year and in line with client-spend retention in Q3. In addition, management noted that Upwork's core clients, or clients that have spent $5,000 or more since they started using Upwork's platform and also have spend activity over the last 12 months, grew 22% year over year, to 105,000.
"We graduated from our chapter as a private company to the next level and gained more momentum than ever to lead our industry forward," said Upwork CEO Stephane Kasriel in the company's fourth-quarter earnings call. "We closed a pivotal year for Upwork, punctuated by exceeding our fourth-quarter expectations for both revenue and adjusted EBITDA."
Check out the latest earnings call transcript for Upwork.
Looking forward
The company is optimistic about the path ahead. "With macro-trends such as the skills shortages businesses are facing and the rise of remote work, plus our investments in product innovation, brand awareness and sales infrastructure," Kasriel explained, "we remain emboldened by our long-term opportunity."
Upwork guided for first-quarter revenue between $68 million to $69 million, up about 1.8% sequentially based on the midpoint of this range.
For the full year, management said it expects revenue between $298 million and $304 million, up from $253.4 million in 2018. In addition, management importantly forecast adjusted EBITDA in 2019 to be between breakeven and 1% of revenue.
