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Upwork Reports Strong Q3 2024 Financial Results, Exceeding Expectations
- Elias Zeekeh, MBA, CPA, CMA
- Nov 6, 2024
- 2 min read
Upwork Inc. (NASDAQ: UPWK), the world's largest work marketplace, released its third-quarter 2024 financial results after market close on November 6, showcasing robust performance and surpassing analyst expectations.
Financial Highlights
The company reported revenue of $193.8 million, representing a 10% year-over-year increase and beating the analyst consensus estimate of $185.85 million[4]. This growth was driven by strong performance across various segments, including a 48% year-over-year increase in Freelancer Plus subscription revenue[1].
Upwork's profitability metrics were particularly impressive:
GAAP net income reached an all-time high of $27.8 million, up 70% compared to Q3 2023[1].
Adjusted EBITDA was $43.2 million, a 38% increase year-over-year[1].
Diluted earnings per share (EPS) came in at $0.29, surpassing analyst estimates of $0.26[4].
The company's free cash flow saw a significant boost, reaching $98 million compared to $33.4 million in the same quarter last year[4].
Operational Performance
Upwork's active client base grew 2% year-over-year to 855,000[1]. The company's Managed Services segment showed promising growth, with revenue increasing 5% year-over-year, reflecting increasing demand for work outcome delivery and a strong pipeline of new clients[4].
Strategic Developments
In addition to its financial results, Upwork announced several strategic initiatives:
Acquisition of Objective AI: This move aims to enhance Upwork's core search and match offerings and strengthen its AI talent bench[1].
New Share Repurchase Program: The company authorized a $100 million share repurchase program, demonstrating confidence in its financial position and commitment to delivering shareholder value[1][4].
AI-Related Growth: Upwork reported significant growth in AI-related work, with GSV from AI-related projects up 36% year-over-year and AI project clients increasing by 30%[1].
Outlook
Based on its strong performance, Upwork raised its full-year 2024 guidance for both revenue and adjusted EBITDA[1]. For the fourth quarter, the company expects revenue between $178 million and $183 million, with adjusted EPS projected to be between $0.24 and $0.28[4].
Market Reaction
Following the earnings release, Upwork's shares saw a positive response in after-hours trading, reflecting investor optimism about the company's performance and future prospects[4].
Upwork's Q3 results demonstrate its ability to execute its strategy effectively, delivering strong financial performance while investing in growth initiatives and technological advancements. The company's focus on AI-related services and strategic acquisitions positions it well to capitalize on evolving market trends in the gig economy and freelance work sector.
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