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Upwork Delivers Solid Q4 Results; Issues Guidance

Upwork (UPWK) delivered solid fourth-quarter and full-year results characterized by revenue and gross services volume (GSV) growth. UPWK shares fell 2.56% to close at $28.21 on February 10.

Upwork is a U.S. company that operates an online marketplace linking businesses with freelancers for short- or long-term projects.

Earnings Results

Revenue in the quarter grew 29% year-over-year to $136.9 million, exceeding consensus estimates of $131.8 million. The increase was driven by a 29% growth in Marketplace revenue to $125.4 million. Managed Services revenue grew 23% year-over-year to $11.4 million. Full-year revenue grew 35% year-over-year to $502.8 million.

Gross service volume in the fourth quarter increased 35% year-over-year to $980 million, with full-year GSV rising 41% year-over-year to $3.5 billion. Upwork ended Q4 2021 with about 771,000 active clients. GSV per active client increased 15% year-over-year to $4,600.

Non-GAAP net loss in the quarter totaled $6.1 million, down from earnings of $7.8 million for the fourth quarter of 2020. Consequently, Upwork posted a non-GAAP net loss per basic share of $0.05, in line with consensus estimates, but declining from a non-GAAP net income per basic share of $0.06 delivered in the same quarter last year.

Upwork expects first-quarter revenue to range between $139 million and $141 million, representing a 23% growth at the midpoint. Full-year revenue is expected at between $620 million and $630 million. The company also expects a non-GAAP basic loss per share of between $0.11 and $0.13, with a full-year loss of between $0.08 and $0.11 per share.

Stock Rating

Last week, BTIG analyst Marvin Fong reiterated a Buy rating on Upwork stock with a $50 price target, implying 77.24% upside potential to current levels.

Consensus among analysts is a Strong Buy based on 7 Buys and 1 Hold. The average Upwork price target of $46.13 implies 63.52% upside potential to current levels.

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