What happened
Shares of freelance work facilitator Upwork (UPWK 0.67%) are on a tear, up by 37% as of 10:30 a.m. EST Thursday after the company reported a smaller than expected third-quarter loss and greater than expected revenues Wednesday night.
Heading into earnings day, analysts had forecast that Upwork would lose $0.08 per share on revenue of $90.4 million. As it turned out, the company lost only $0.02 per share, and brought in revenue of $96.7 million.
Image source: Getty Images.
So what
Sales grew 24% year over year in the quarter, and gross profit margins on those revenues improved by 2 percentage points to 73%. Upwork's net loss for the quarter, $0.02, was therefore not only smaller than expected, but a 33% improvement from the $0.03 per share loss it booked in the year-ago quarter. Moreover, when adjusted for one-time items, Upwork said its pro forma profits were $0.04 per share -- compared to $0.01 per share in Q3 2019.
Now what
On top of that, Upwork updated its revenue guidance for the fourth quarter, for all of 2020, and for 2021 as well:
- For Q4, Upwork anticipates collecting revenue in the range of $96 million to $98 million.
- For 2020, revenues should land in the range of $363 million to $365 million.
- And for 2021, the company is predicting 20% revenue growth -- which would work out to roughly $437 million -- well ahead of the $407 million or so that Wall Street is projecting.
No wonder investors are pleased.
