“We see promising indicators in our business, and continue to be very optimistic about our future.” ~ Hayden Brown, President and CEO of Upwork
Upwork, a leading freelance marketplace, just released its first quarter 2020 financial report. Here’s what the report revealed…
Numbers on the Rise
A quick look at the figures shows that the past year has been relatively prosperous for Upwork.
Upwork’s gross services volume (GSV), which is based on the issued receipts, has grown by 15% since last year. Their GSV has reached $559.5 million in the first quarter of 2020, compared to $487 million in the same period of 2019.
Since the first quarter of last year, the freelance giant has seen 21% growth in total revenue, $83.2 million up from a previous $68.9 million.
They enjoyed a 24% increase in marketplace revenue alone which reached $74.8 million up from $60.9 million.
Marketplace revenue is the money generated by Upwork in fees and commissions which, as can be deduced from the numbers above, constitutes the company’s largest source of revenue.
Upwork’s gross margin, i.e, the difference between revenue and cost of goods sold divided by revenue, has expanded to 72%, exceeding last year’s rate by 3 percentage points.
Conversely, another area of growth for Upwork over the past year is its net loss. The financial report shows that the company has lost $10 million since last year; with a net loss of $5.2 million the year before.
Effects of the Pandemic on Upwork
Notably, the President and CEO of Upwork, Hayden Brown, has said that the ongoing pandemic has been “significantly accelerating the adoption of remote work and increasing the value that companies place on workforce flexibility.”
Without a doubt, COVID-19, while costly in many aspects, has had a positive impact on freelance marketplaces such as Upwork, which recently launched a COVID-19 relief program to support freelancers during these daring times.
Not only that, but the company also introduced faster payouts for hourly freelance contracts.
These unprecedented measures represent a portion of Upwork’s adaptive strategy facing the unstable global arena. As the financial report points out, the uncertainties caused by the pandemic are rapidly shifting macroeconomic conditions.
As a result, Upwork has decided to withdraw its previously-issued full-year 2020 revenue guidance.
Instead, the freelance company has provided revenue guidance solely for the second quarter of 2020, which is presented below:
- Revenue in the range of $79 million to $81 million.
- Weighted average shares outstanding in the range of $116 million to $118 million.