In This Article:
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Revenue: $192.7 million, a record for the first quarter.
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Adjusted EBITDA: $56 million, with a margin of 29%.
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Gross Margin: 78.3%.
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GSV (Gross Services Volume): $988 million.
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Net Income: $37.7 million, a 105% increase over 2024.
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Free Cash Flow: $30.8 million.
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Cash and Cash Equivalents: Approximately $622 million at the end of the first quarter.
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Enterprise Revenue: $26.4 million, relatively flat year-over-year.
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Managed Services Revenue: $15.3 million, a 3% year-over-year growth.
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Marketplace Take Rate: 18.3% in Q1 2025, up from 17.7% in Q1 2024.
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Stock Buyback: $33.1 million used to buy back 2.3 million shares.
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Guidance for Q2 2025 Revenue: $184 million to $189 million.
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Guidance for Full Year 2025 Revenue: $740 million to $760 million.
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Guidance for Full Year 2025 Adjusted EBITDA: $190 million to $200 million.
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Non-GAAP Diluted EPS Guidance for 2025: Between $1.05 and $1.10.
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Stock-Based Compensation for 2025: Expected to be between $60 million and $65 million.
Release Date: May 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Upwork Inc (NASDAQ:UPWK) reported a record first quarter revenue of $192.7 million, exceeding the high end of their guidance range.
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The company achieved a record high adjusted EBITDA of $56 million and an adjusted EBITDA margin of 29%.
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Upwork Inc (NASDAQ:UPWK) is seeing strong growth in its Business Plus offering, with active clients more than doubling quarter over quarter.
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The company is making significant strides in AI, with 80,000 AI specialists on the platform and AI-related work commanding a 40% premium in freelancer earnings.
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Upwork Inc (NASDAQ:UPWK) is well-positioned to lead the AI revolution with its investments in Uma, Upwork's Mindful AI, which is transforming customer experiences and driving platform engagement.
Negative Points
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Upwork Inc (NASDAQ:UPWK) is experiencing some pressure on active client count due to top of funnel demand challenges.
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The macroeconomic environment remains turbulent, with slight macro headwinds impacting customer activity.
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Enterprise revenue was relatively flat year-over-year as the company shifted its sales focus.
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The company anticipates that Q1 will be the high water mark for margins in 2025 as they reinvest in growth opportunities.
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Despite strong performance, Upwork Inc (NASDAQ:UPWK) is facing ongoing challenges in attracting new clients due to broader economic uncertainties.
Q & A Highlights
Q: Can you elaborate on the broader economic assumptions in your guidance and the role of AI in driving business growth? A: Erica Gessert, CFO, explained that customer spend dynamics in Q1 were positive, driven by product improvements and AI enhancements, despite slight macro headwinds. Hayden Brown, CEO, added that AI is a catalyst for growth, with AI-related work commanding a 40% premium, driving new client acquisition and increased platform volumes.
