Shares of freelancer marketplace Upwork (NASDAQ:UPWK) catapulted higher by as much as 53% on Thursday. Investors were impressed with the tech company's strong third-quarter results, which crushed analyst estimates.

"Our third quarter performance was fueled by strength from both existing and new clients, who adopted Upwork in record numbers," explained Upwork CEO Hayden Brown in the company's third-quarter earnings release. "As the world's largest work marketplace that connects businesses with independent talent, as measured by gross services volume, we have been building capabilities and tools for a world now increasingly ready to use them."

Shares have now risen by about 170% this year.

Here's a closer look at the key metrics driving so much enthusiasm for this growth stock

A person working on a laptop.

Image source: Getty Images.

1. 24% top-line growth

Upwork's third-quarter revenue jumped 24% year over year to a record $96.7 million. This was a notable acceleration from growth rates of 21% and 19% in the first and second quarters of 2020, respectively. Analysts on average were expecting revenue of $90.4 million.

2. 26% growth in marketplace revenue

Fueled primarily by a 23% year-over-year increase in gross services volume, or the total client spend and fees charged across its platform, Upwork's marketplace revenue jumped 26% year over year. Marketplace revenue consists of service fees that freelancers pay Upwork as a percentage of their total earnings on the platform. It comprises the bulk of Upwork's total revenue and gives investors good insight into its current business momentum.

3. A 73% gross margin

Since Upwork is still losing money on a GAAP basis, investors should watch for the tech company to continually demonstrate scalability in its business model. Upwork did exactly that, garnering a gross profit margin of 73% -- up from 71% in the year-ago period.

4. EBITDA of $6.7 million

While Upwork isn't profitable on a GAAP basis yet, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) is starting to look quite attractive. Third-quarter adjusted EBITDA was $6.7 million, up from $2.0 million in the year-ago quarter. This gave Upwork an adjusted EBITDA margin of 7%.

5. 3 significant analyst upgrades

Finally, analysts were impressed with the report. They're racing to upgrade their price targets and ratings on the stock. As of this writing, three analysts have already significantly upgraded their 12-month price targets for Upwork:

  • A Stifel analyst raised his price target for Upwork from $17 to $31
  • JMP Securities boosted its target from $20 to $28
  • BTIG now expects shares to rise to $27, up from a previous target of $19

Upwork is firing on all cylinders, solidifying its competitive position as the world's largest marketplace for freelancers. Strong growth like this shows that this freelancer platform is just getting started.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.