According to a report by Peerism, freelancers could represent 80% of the global workforce by 2030 compared with the current estimated 35%-40% of the workforce. The ability to work remotely and the current economic conditions are accelerating the freelance worker requirement across industries. Organizations like Upwork (NASDAQ: UPWK) are seeing increased adoption of their services.
For the second quarter of the year, Upwork’s revenues grew 19% to $87.5 million. Marketplace revenues grew 19% to $78.5 million. Managed services revenue grew 12.3% to $9.1 million. Net loss increased to $11 million for the year compared with $2.5 million reported a year ago. On an adjusted basis, net loss was $0.03 per share compared with an EPS of $0.01. Analysts were looking for revenues of $80.3 million with a net loss of $0.09 per share.
Among key metrics, gross services volume (GSV) increased 12% to $582 million. Marketplace take rate grew to 13.7% from 12.9% a year ago.
For the third quarter, Upwork expects revenues of $89-$91 million. It did not provide a guidance for the rest of the year. The market had forecast revenues of $84.9 million for the third quarter.
Upwork’s Product Upgrades
To enable broader use case adoption amongst clients, Upwork partnered with Business Talent Group. As part of the agreement, clients with access to Upwork’s network of professional business consultants will be able to access Business Talent Group’s additional client base and vice-versa. With more customers reevaluating their talent programs because of the fully remote work environment, Upwork saw a significant adoption of its Bring Your Own Talent functionality. Bring Your Own Talent allows clients to use Upwork’s platform to onboard pre-existing individual contractors and agencies, for global unified billing, enhanced visibility and reporting, strong spend controls, and centralized team management.
To improve the relevance of search results and increase the client efficiency in search, Upwork enhanced its search and matching system. It also released a premium talent pool called Upwork Expert-Vetted Talent that builds on its expertise in vetting talent for its enterprise clients. Through a combination of both human and machine powered talent vetting and curation, it makes a pool of skilled talent accessible to organizations.
Upwork is also providing significant content to organizations. During the quarter, it released more than 50 new solution-focused pages that demonstrate how businesses can leverage freelancers on Upwork for urgent needs. It continued to provide awareness with larger customers through its Work Together Talent Grants program where it’s creating a freelance talent showcase that demonstrates the use of freelance talent on the problems being addressed by organizations.
The market is pleased with Upwork. Its stock is currently trading at $20.21 with a market capitalization of $2.4 billion. It was trading at a 52-week high of $20.63 earlier this month and had fallen to a 52-week low of $5.14 in March.
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