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Upwork:Quarterly Results/2023 Q1: Difference between revisions
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Return to: [[Earnings Season:2023 Q1]] / [[Upwork]] / [[Upwork: Quarterly Results]] | Return to: [[Earnings Season:2023 Q1]] / [[Upwork]] / [[Upwork: Quarterly Results]] | ||
=== Key Items to examine | == Earnings Call Insights == | ||
=== Macro Environment === | |||
* Enterprise clients reducing their spend or maintaining it at the same level has contributed more than half reduction in their outlook. | |||
* Their smaller clients are proving resilient. | |||
* U.S clients have continued to be stronger than EU clients. | |||
* Removed in their guidance outlook the expectation for the second half of the year to be stronger, which is normally the case in a non-macro impacted year. | |||
* Expects a shift in the second half of the year versus Q2, "because of the dynamics around a lot of our pricing changes and the laughing effects relative to last year in Q3 and Q4." | |||
=== Cost Cuts === | |||
* Reduced workforce by 137 roles or 15% of total full-time employees. | |||
* They are pausing brand marketing investment indefinitely. The company said, "Our team has done a phenomenal job increasing our unaided brand awareness, and our brand campaign is resonating with customers. However, in the current macroeconomic environment, we do not have enough visibility into exactly when we will see brand awareness translate into client conversion to continue prioritizing the investment at this time." | |||
* Reducing brand working media spend by more than $22 million in the second half of 2023, representing a 94% reduction from prio guidance. | |||
=== Generative AI === | |||
* The average weekly number of search queries related to generative AI in Q1 rose 1,000% year-over-year. | |||
* The average number of weekly job posts related to generative AI rose more than 600% year-over-year. | |||
* Hayden Brown likes that companies like IBM are now thinking of new ways of working(using AI) as it opens a window to discuss with them how Upwork can help them. | |||
* Data Science and Analytics job postings grew 33%, year-over-year and 22% sequentially. | |||
* Hayden noted that writing jobs(which is expected to be impacted by AI) is very small category for them today. | |||
* Hayden also said that they are no seeing any negative impact of AI today. | |||
* Hayden noted that 85% of their GSB today comes from longer complex projects and jobs on the platform; hence AI will augment instead of displacing them. | |||
* Hayden said that AI does not factor into their 2023 outlook because they don't expect an impact from it. | |||
* They are looking for ways they can incorporate AI into their internal processes. | |||
=== Fee Structure Change === | |||
* Take rate expansion is at the same level as last year. | |||
* Hayden Brown said that by the time freelancers reach the 5% talent fee, their relationships would have probably reached a natural endpoint. | |||
* Hayden said that their data going back to 2016 indicates that the 10% flat fee will drive more demand in the platform, hence the new fee structure is a positive change for the platform in the long-term. | |||
=== Expenses === | |||
* On R&D, they are not adding more products but driving their adoption and improving their quality. | |||
* AI also features in their R&D | |||
* On sales, they are shifting focus into the most high value and high performing areas of our portfolio. | |||
=== Full-time Hiring === | |||
* They are seeing very positive adoption. | |||
* They are excited to continue persuing it. | |||
== Key Items to examine == | |||
* Revenue growth. | * Revenue growth. | ||
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* Impact of brand marketing | * Impact of brand marketing | ||
== Earnings Estimates == | |||
==== Management Guidance and Analysts Estimate ==== | ==== Management Guidance and Analysts Estimate ==== | ||