Upwork Announces Organizational Changes to Drive Continued Profitable Growth and Provides Preliminary Third Quarter 2024 Results Above Financial Guidance
Upwork (NASDAQ: UPWK) announced organizational changes and preliminary Q3 2024 results exceeding guidance. The company is implementing cost-saving measures, including a 21% workforce reduction, expected to generate $60 million in annual savings. Preliminary Q3 2024 results show revenue of $194 million, GSV of $998 million, net income of $28 million, and adjusted EBITDA of $43 million, all surpassing original guidance. The company achieved a record-high 22% adjusted EBITDA margin, progressing toward its 5-year target of 35%. The restructuring includes streamlining operations, optimizing R&D spend, and sharpening Enterprise strategy under newly appointed general manager Ernesto Lamaina.
Upwork (NASDAQ: UPWK) ha annunciato cambiamenti organizzativi e risultati preliminari per il terzo trimestre del 2024 che superano le previsioni. L'azienda sta attuando misure di risparmio sui costi, tra cui una riduzione della forza lavoro del 21%, che si prevede genererà 60 milioni di dollari di risparmi annuali. I risultati preliminari del Q3 2024 mostrano ricavi di 194 milioni di dollari, GSV di 998 milioni di dollari, un reddito netto di 28 milioni di dollari e un EBITDA rettificato di 43 milioni di dollari, tutti superiori alle previsioni originali. L'azienda ha raggiunto un margine EBITDA rettificato record del 22%, avanzando verso l'obiettivo di 5 anni del 35%. La ristrutturazione include il razionalizzazione delle operazioni, l'ottimizzazione della spesa in R&S e una strategia Enterprise più affilata sotto la direzione del nuovo direttore generale Ernesto Lamaina.
Upwork (NASDAQ: UPWK) anunció cambios organizativos y resultados preliminares del tercer trimestre de 2024 que superan las expectativas. La compañía está implementando medidas de ahorro de costos, incluida una reducción del 21% en la fuerza laboral, que se espera genere 60 millones de dólares en ahorros anuales. Los resultados preliminares del Q3 2024 muestran ingresos de 194 millones de dólares, GSV de 998 millones de dólares, un ingreso neto de 28 millones de dólares y un EBITDA ajustado de 43 millones de dólares, todos superando las previsiones originales. La empresa logró un margen EBITDA ajustado récord del 22%, avanzando hacia su objetivo de 5 años del 35%. La reestructuración incluye la optimización de operaciones, la optimización del gasto en I+D y el afilado de la estrategia empresarial bajo la dirección del nuevo gerente general Ernesto Lamaina.
Upwork (NASDAQ: UPWK)는 조직 개편과 기대 이상의 2024년 3분기 잠정 결과를 발표했습니다. 회사는 21%의 인력 감축을 포함한 비용 절감 조치를 시행하고 있으며, 이로 인해 연간 6000만 달러의 절감 효과가 예상됩니다. 2024년 3분기 잠정 결과에 따르면, 매출은 1억 9400만 달러, GSV는 9억 9800만 달러, 순이익은 2800만 달러, 조정된 EBITDA는 4300만 달러로, 모두 원래 예상치를 초과했습니다. 회사는 22%의 조정된 EBITDA 마진이라는 기록을 달성했으며, 5년 목표인 35%를 향해 나아가고 있습니다. 이번 구조조정은 운영 간소화, 연구 개발 비용 최적화, 그리고 새로운 일반 관리자 에르네스토 라마이나 아래에서의 기업 전략 강화 등을 포함합니다.
Upwork (NASDAQ: UPWK) a annoncé des changements organisationnels et des résultats préliminaires du troisième trimestre 2024 dépassant les prévisions. L'entreprise met en œuvre des mesures d'économies, y compris une réduction de 21 % de ses effectifs, qui devrait générer 60 millions de dollars d'économies annuelles. Les résultats préliminaires du T3 2024 affichent des revenus de 194 millions de dollars, un GSV de 998 millions de dollars, un revenu net de 28 millions de dollars et un EBITDA ajusté de 43 millions de dollars, tous dépassant les prévisions initiales. L'entreprise a atteint un taux de marge EBITDA ajusté record de 22%, progressant vers son objectif de 5 ans de 35%. La restructuration comprend la rationalisation des opérations, l'optimisation des dépenses en R&D et le renforcement de la stratégie Enterprise sous la direction du nouveau directeur général Ernesto Lamaina.
Upwork (NASDAQ: UPWK) hat organisatorische Änderungen und vorläufige Ergebnisse für das dritte Quartal 2024 bekannt gegeben, die die Erwartungen übertreffen. Das Unternehmen implementiert Maßnahmen zur Kostensenkung, darunter eine Reduzierung der Belegschaft um 21%, die voraussichtlich jährliche Einsparungen von 60 Millionen Dollar generiert. Die vorläufigen Ergebnisse für das Q3 2024 zeigen Einnahmen von 194 Millionen Dollar, GSV von 998 Millionen Dollar, einen Nettogewinn von 28 Millionen Dollar und ein bereinigtes EBITDA von 43 Millionen Dollar, die alle die ursprünglichen Prognosen übertreffen. Das Unternehmen erzielte einen Rekordwert von 22% beim bereinigten EBITDA-Margin und strebt sein 5-Jahres-Ziel von 35% an. Die Umstrukturierung umfasst die Rationalisierung der Abläufe, die Optimierung der F&E-Ausgaben und die Schärfen der Unternehmensstrategie unter der neu ernannten Generaldirektor Ernesto Lamaina.
- Q3 revenue exceeded guidance at $194 million
- Record-high 22% adjusted EBITDA margin achieved
- $28 million net income in Q3 2024
- $60 million expected annual cost savings from restructuring
- 21-point margin expansion over seven quarters (1% to 22%)
- 21% workforce reduction
- Restructuring and organizational changes may cause short-term disruption
Insights
The organizational restructuring and preliminary Q3 results reveal significant positive momentum for Upwork. The
- Revenue of
$194 million vs guidance of$179-184 million - Adjusted EBITDA of
$43 million vs guidance of$36-39 million - Record
22% adjusted EBITDA margin, up from1% in Q4 2022
The streamlined structure and focus on high-return investments position Upwork well against industry peers. Their trajectory toward a
The strategic realignment reflects Upwork's evolution from growth-at-all-costs to profitable scaling. The appointment of Ernesto Lamaina as Enterprise GM, with his staffing industry expertise, signals a sophisticated approach to enterprise customer acquisition and retention. The focus on optimizing R&D spend and leveraging automation indicates a mature, technology-driven strategy to improve unit economics. With
Approximately
Company expects to exceed revenue and adjusted EBITDA guidance for third quarter 2024 results
SAN FRANCISCO, Oct. 23, 2024 (GLOBE NEWSWIRE) -- Upwork Inc. (Nasdaq: UPWK) (“Upwork” or the “Company”), the world’s work marketplace that connects businesses with independent talent across the globe, today announced a more streamlined organizational structure and operational changes to continue the Company’s profitable trajectory, increase efficiency, and accelerate innovation for its customers.
“We are making ourselves a more streamlined and efficient organization, continuing our successful focus on durable, profitable growth and delivering value for our customers and shareholders,” said Hayden Brown, president and CEO, Upwork. “This is a continuation of our ongoing strategy to invest in growth levers that are high-return and high-potential while demonstrating proactive cost discipline.”
“Over the past year and a half, we made significant strides in reaching our 5-year profitability target, achieving record-high
As part of the announced actions, Upwork is:
- Streamlining organizational structure to further reduce costs and accelerate decision-making that empowers teams to deliver better outcomes for customers. The announced changes reduce Upwork’s total workforce by
21% and are expected to generate approximately$60 million in annualized cost savings. The Company is flattening team structures and leveraging more automation and third-party services to simplify processes and operate more efficiently at scale. - Optimizing R&D spend, as previously indicated, on a portfolio of high-return and high-potential product investments, along with rebalancing product and engineering resources to enable teams to more effectively serve customer needs.
- Sharpening Enterprise strategy, which remains a key pillar of the Company’s growth plans, by aligning clients with the right service offerings and driving a focus on profitability through lower cost to acquire and serve customers. This strategy leverages insights from successful pricing and packaging work underway for the past several quarters to introduce new client plans for both Marketplace and Enterprise that help high-value customers grow with Upwork. Ernesto Lamaina has been appointed as Upwork’s general manager of Enterprise and will lead the execution and expansion of this strategy. Lamaina has been at Upwork for more than a year and has deep experience building enterprise products and leading business units within traditional staffing providers. Lamaina previously served as CEO of Adia, a joint program between Adecco and Infosys, where he led the creation and commercialization of a tech-enabled staffing solution.
Preliminary Third Quarter 2024 Financial and Operating Results
“We are pleased to announce preliminary results for the third quarter that exceed the top end of our guidance. These results demonstrate our commitment to execution on both top and bottom lines, driven by disciplined cost management and continuous improvement in operational efficiency,” said Erica Gessert, CFO, Upwork. “We remain relentlessly focused on executing our strategic plan, growing our highly profitable business, and increasing shareholder value.”
The announced actions are part of Upwork’s long-term strategy that the Company has been successfully executing over many quarters. Management’s focus on driving profitable growth has resulted in the following to date:
- Industry-leading revenue growth: Upwork has reported consistently higher revenue growth than competitors and the broader staffing industry.2
- Sustainable margin expansion: Upwork has delivered on margin expansion and continues the march toward its 5-year profitability target of
35% adjusted EBITDA margin. Upwork has aggressively expanded margins by 21 points in the span of seven quarters, from1% in Q4 2022 to preliminary reported adjusted EBITDA margin of22% in Q3 2024.
Today, Upwork provided the following select estimated preliminary financial and operating results for the third quarter of 2024:
| Preliminary Q3 2024 Results | Original Q3 2024 Guidance | |
| GSV | N/A | |
| Revenue | ||
| Net Income | N/A | |
| Adjusted EBITDA1 |
These unaudited preliminary results are based on management’s initial analysis of operations for the quarter ended September 30, 2024. As such, these preliminary financial and operating results are estimates and subject to the completion of the Company’s normal quarter-end closing and other review procedures and execution of the Company’s internal control over financial reporting for the quarter ended September 30, 2024. Accordingly, actual financial and operating results that will be reflected in the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2024, including its condensed consolidated financial statements when they are completed and publicly disclosed, may differ materially from these preliminary results.
Third Quarter 2024 Financial Results Conference Call and Webcast
Upwork announced that it will report its full financial results for the third quarter of 2024 on Wednesday, November 6, 2024, after market close. The Company will host a Q&A conference call to discuss these results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on the same day.
A live webcast of the call will be available on the Upwork Investor Relations website at investors.upwork.com. An audio replay of the conference call will be available for one week following the call and will be archived via webcast on the Upwork Investor Relations website for approximately one year.
About Upwork
Upwork is the world’s work marketplace that connects businesses with independent talent from across the globe. We serve everyone from one-person startups to large, Fortune 100 enterprises with a powerful, trust-driven platform that enables companies and talent to work together in new ways that unlock their potential. Our talent community earned over
SAFE HARBOR
This press release of Upwork contains "forward-looking" statements within the meaning of the federal securities laws. Forward-looking statements include all statements other than statements of historical fact, including any statements regarding our estimated preliminary financial and operating results for the third quarter 2024, future operating results and financial position, information or predictions concerning the future of our business or strategy, anticipated events and trends, potential growth or growth prospects, competitive position, technological and market trends, the expected impact of cost-saving initiatives, and other future conditions.
We have based these forward-looking statements largely on our current expectations and projections as of the date hereof about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. As such, they are subject to inherent uncertainties, known and unknown risks, and changes in circumstances that are difficult to predict and in many cases outside our control, and you should not rely on such forward-looking statements as predictions of future events. We make no representation that the projected results will be achieved or that future events and circumstances will occur, and actual results may differ materially and adversely from our expectations. The forward-looking statements are made as of the date hereof, and we do not undertake, and expressly disclaim, any obligation to update or revise any forward-looking statements, to conform these statements to actual results, or to make changes in our expectations, except as required by law. Additional information regarding the risks and uncertainties that could cause actual results to differ materially from our expectations is included under the caption "Risk Factors" in our Quarterly Report on Form 10-Q filed with the SEC on August 7, 2024, and in our other SEC filings, which are available on our Investor Relations website at investors.upwork.com and on the SEC’s website at www.sec.gov.
Non-GAAP Financial Measures
To supplement our financial measures prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), we present certain non-GAAP financial measures in this press release, including adjusted EBITDA and adjusted EBITDA margin.
We define adjusted EBITDA as net income adjusted for stock-based compensation expense; depreciation and amortization; other income (expense), net, which includes interest expense; income tax benefit (provision); and, if applicable, certain other gains, losses, benefits, or charges that are non-cash or are significant and the result of isolated events or transactions that have not occurred frequently in the past and are not expected to occur regularly in the future.
We use non-GAAP financial measures in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance. These non-GAAP financial measures provide consistency and comparability with past financial performance, facilitate period-to-period comparisons of our core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. In addition, adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to certain items that can vary substantially from company to company.
Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as analytical tools, and investors should not consider them in isolation or as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. In particular, (1) adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy, (2) although depreciation and amortization expense are non-cash charges, the assets subject to depreciation and amortization may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements, and (3) adjusted EBITDA does not reflect: (a) changes in, or cash requirements for, our working capital needs; (b) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (c) tax payments that may represent a reduction in cash available to us. In addition, the non-GAAP measures we use may be different from non-GAAP financial measures used by other companies, including companies in our industry, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from the non-GAAP financial measures that we present. Reconciliations of the non-GAAP financial measures presented in this press release to their most directly comparable GAAP financial measures have been provided below, and investors are encouraged to review the reconciliations and not rely on any single financial measure to evaluate our business.
UPWORK INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(in thousands, except for percentages)
(preliminary)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income | $ | 27,758 | $ | 16,337 | $ | 68,420 | $ | 29,513 | |||||||
| Add back (deduct): | |||||||||||||||
| Stock-based compensation expense | 18,578 | 17,811 | 54,758 | 56,148 | |||||||||||
| Depreciation and amortization | 3,668 | 1,763 | 10,443 | 5,641 | |||||||||||
| Other income, net3 | (8,091 | ) | (5,766 | ) | (20,433 | ) | (52,748 | ) | |||||||
| Income tax provision | 1,126 | 895 | 3,636 | 3,547 | |||||||||||
| Other4 | 188 | 188 | 563 | 563 | |||||||||||
| Adjusted EBITDA | $ | 43,227 | $ | 31,228 | $ | 117,387 | $ | 42,664 | |||||||
| Profit margin | 14 | % | 9 | % | 12 | % | 6 | % | |||||||
| Adjusted EBITDA margin | 22 | % | 18 | % | 20 | % | 8 | % | |||||||
Contacts
Media:
Rachel Durfee, VP of Communications
press@upwork.com
Investors:
Samuel Meehan, VP of Investor Relations
investor@upwork.com
1 Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures and are presented for supplemental purposes only, and should not be considered in isolation or as substitutes for financial information presented in accordance with GAAP. An explanation of non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures can be found in the “Non-GAAP Financial Measures” section at the end of this press release.
2 In 2023, Upwork grew revenues +
3 During the nine months ended September 30, 2023, we recognized a gain of
4 During the three and nine months ended September 30, 2024 and 2023, we incurred
FAQ
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