Upwork revenue up 32% in Q4, surpasses guidance


Talent platform Upwork Inc. (NASDAQ: UPWK) reported fourth-quarter revenue rose 32.2% while gross margin widened.

Gross services volume at the Santa Clara, California-based firm rose 33% year over year in the fourth quarter to $727.7 million. Gross services volume includes the total amount clients spend on the platform as well as additional fees charged to both clients and freelancers for other services.

“2020 was a watershed year for Upwork. In the fourth quarter, we achieved our highest year-over-year growth since going public,” President and CEO Hayden Brown said. “Nearly a year into the pandemic, organizations are embracing remote work to unleash the potential of a global workforce of independent talent that gives them the agility, skills and efficiency they need.”

(US$ thousands) Q4 2020 Q4 2019 % change
Revenue $106,153 $80,288 32.2%
Gross profit $77,375 $57,351 34.9%
Gross margin  72.9% 71.4%  
Net income/loss $925 ($5,501) nm

Upwork’s revenue came in above the high end of guidance.

“Our business typically experiences a seasonal slowdown starting in November and peaking in the last two weeks of the year,” CFO Jeff McCombs said in prepared comments for analysts. “This year, the seasonal slowdown was virtually non-existent, which we had not assumed in guidance. In addition to particularly strong acquisition and quarter-over-quarter retention, this atypical seasonality was a key driver behind the revenue beat in the fourth quarter.”

McCombs said Covid-related restrictions may have increased the amount of work done this year compared to other years as holiday travel and social gatherings were reduced. “We wouldn’t anticipate this atypical seasonality to repeat in 2021.”

Revenue by segment

(US$ thousands) Q4 2020 Q4 2019 % change
Marketplace $96,866 $72,189 34.2%
Managed services $9,287 $8,099 14.7%

Full-year results

(US$ thousands) 2020 2019 % change
Revenue $373,628 $300,562 24.3%
Gross profit $269,361 $212,418 26.8%
Gross margin  72.1% 70.7%  
Net loss ($22,867) ($16,659) nm


Upwork forecast first-quarter revenue of $107 million to $109 million, a year-over-year increase of between 28.6% and 31.0%. The company also forecast full-year revenue of between $460 million and $470 million, an increase of between 23.1% and 25.8%.

Share price and market cap

Shares in Upwork were up 5.22% to $54.26 as of 1:22 p.m. Eastern time; they hit a new 52-week high by that time today when they reached $63.88; according to FT.com. The company has a market cap of $6.30 billion.