Afternoon Coffee: Upwork releases positive Q3 financials; Taulia launches database for global payment terms; Slow hiring, high first-time unemployment claims still a problem

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Upwork announced its Q3 2020 financial results yesterday, posting 24% year-over-year revenue growth — getting a lift as organizations become more comfortable with remote work and online freelancers in the COVID-19 economy. Upwork also reported other positive metrics and provided updates on product and operations on some other developments within the third quarter.

Upwork’s stock price yesterday at the market’s close — prior to the release of the Q3 results — was $20.28. At 10 a.m. EDT today, Upwork shares were trading at $29.49, up nearly 50% from yesterday’s closing price. At this share price, Upwork’s market cap was $3.4 billion.

Key Q3 Financial Results 

  • Gross services volume (GSV) grew to $654.5 million, by 23% year-over-year (y/y)
  • Revenue grew by 24% y/y to $96.7 million (Q2 2020 revenue growth was 19% y/y)
  • Marketplace revenue grew 26% year-over-year to $88 million (Q2 2020 revenue growth y/y was 19%)
  • Marketplace take rate was 13.6%, up from 13.3% a year ago
  • Gross margin percent widened two percentage points to 73% a year ago
  • Net loss was $2.7 million compared to a net loss of $3.5 million for Q3 2019
  • Non-GAAP net income was $5 million, or $0.04 per share, compared to non-GAAP
  • Adjusted EBITDA was reported $6.7 million compared to adjusted EBITDA of $2 million for Q3 2019

Upwork offered revenue guidance for Q4 2020 and Full Year 2020:

  • Q4 2020 revenue range: $96 million to $98 million
  • FY 2020 revenue range:  $363 million to $365 million

Upwork’s CEO also provided additional details about growth in the marketplace as well as for the BYOD freelancer service solution, which grew 37% y/y. With the BYO offering, organizations bring their own freelance talent onto their virtual talent benches and can subscribe to Upwork compliance, payroll/payment and other services.

The company spoke to its beta launch of its Project Catalog offering, whereby organizations can shop online for pre-defined, fixed-price services (e.g., write five blog posts for $100, etc.). Project Catalog will have a full launch early in 2020. For more information on this, see Spend Matters’ November 2020 Contingent Workforce/Services Hot list.

Upwork also reported that it is phasing out its Upwork Business tier offering and will be cutting one-third of its sales force in an optimization move. Upwork Basic and Plus self-service tier offerings will continue, and more attention will be directed to the Upwork Enterprise offering in the face of increased demand by midsize-to-large organizations.

Stay tuned for our upcoming PRO analysis of work/services platforms in the time of COVID-19.

Taulia launches global payments term database

Taulia, a capital management solution, announced the launch of a new International Payment Terms Database that will provide detailed listings of laws and codes governing payments terms for more than 60 countries globally.

According to a press release, Taulia researched over 180 countries’ legal texts or news articles while communicating with government trade and industry departments to create the resource. The database will aim to augment Taulia’s analytics capabilities while helping businesses to navigate the complicated legislation regarding payment terms. The database will allow a user to search by country and review any relevant laws, codes and notes pertaining to payments.

“We see that many countries understand the importance of providing timely payments to suppliers, especially as it relates to small businesses. The International Payment Terms Database is a valuable resource for businesses researching these laws and codes of conduct across the globe. We intend to iterate on and expand the research annually to ensure businesses can stay up-to-date as these regulations evolve,” Bob Glotfelty, VP of Growth at Taulia, said in the press release.

First-time unemployment claims falls to 751,000, but hiring slows

The Labor Department reported Thursday that the number of Americans seeking first-time unemployment benefits fell last week to 751,000, a historically high level that indicates many employers are continuing to cut jobs in the face of the COVID-19 pandemic, according to the Associated Press.

Weekly jobless claims still point to a stream of layoffs. The report also said the number of people continuing to receive traditional unemployment benefits declined to 7.3 million. The job market has faced intense pressure and scrutiny since the beginning of the coronavirus disruption, and it has regained barely half of the 22 million jobs lost during the pandemic. Rehiring has steadily weakened — from 4.8 million added jobs in June to 661,000 in September — according to the article.

“The economy is on its own against the virus,” AnnElizabeth Konkel, an economist at Indeed, told the Associated Press. “Accelerating cases are an ever-present threat during winter, and a virus surge means economic uncertainty for businesses. Until that uncertainty is eliminated, the labor market will struggle to return to what it used to be.”

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