The growing adoption of remote work across organizations has helped organizations like Upwork (NASDAQ: UPWK) tremendously. As organizations become more open to the idea of workforce flexibility, Upwork will see an increase in the adoption of its services.
Upwork’s first quarter revenues grew 21% to $83.2 million. Net loss increased to $10 million compared with $5.2 million reported a year ago. On an adjusted basis, net loss was $0.03 per share compared with a break-even quarter last year. Analysts were looking for revenues of $81.76 million with a net loss of $0.05 per share.
Marketplace revenues grew 24% to $74.8 million. Managed services revenue grew 5% to $8.4 million.
Among key metrics, Gross services volume (GSV) increased 15% to $559.5 million. Marketplace take rate grew to 13.6% from 12.6% a year ago.
For the second quarter, Upwork expects revenues of $79-$81 million. It did not provide a guidance for the rest of the year. The market had forecast revenues of $82.5 million for the second quarter.
Upwork’s Product Upgrades
According to a recent Gartner CFO study, 74% of companies plan to permanently shift to more remote work even after lockdown conditions change. Besides employers, employees are also realizing the benefits of remote work. A Citrix poll recently found that 28% of people who moved to remote working conditions want to continue to work remotely in the longer term as well.
Upwork is looking to target this market by regularly providing organizations with access to highly skilled independent professionals. It recently launched a Remote Work Resource Center with best practices on how to build and manage a remote workforce. It has launched training webinars and tied up with Udacity to develop an online course on remote team management.
The crisis has also resulted in increased unemployment and furloughs across the globe. Upwork is seeing some of this talent join its platform and it is streamlining its talent onboarding experience to better identify the most qualified professionals with the in-demand skills and fast-track them to open opportunities. To help freelancers get jobs quickly, it launched a curated set of job templates that help clients identify and act on their crisis response and business continuity needs.
Earlier this week, Upwork also partnered with Citrix Systems for the launch of the new Upwork Talent Solution with Citrix Workspace. The new solution is designed to help organizations improve productivity while maintaining their remote-work conditions. The Citrix Workspace platform organizes and automates the tasks needed to optimize employee performance. It has been integrated with Upwork Talent Solution to allow businesses to onboard and integrate professionals and provide them with remote access to company resources.
Upwork’s stock is currently trading at $14.44 with a market capitalization of $1.7 billion. It hit a 52-week high of $17.75 a year ago and had fallen to a 52-week low of $5.14 in March this year. In October 2018 it had listed at $15 at a valuation of $1.5 billion. Prior to the listing, Upwork had raised $170 million in funding from investors including Kleiner Perkins Caufield & Byers, New Enterprise Associates, Stripes Group, Pequot Capital, Citigroup, Focus Ventures, T. Rowe Price, Sigma Partners, Benchmark, Globespan Capital Partners, DAG Ventures, and SV Angel.