Gig economy platform Upwork plans to focus more on larger companies in the coming months, as the company seeks to increase its market share in the fast-growing world of matching freelance labor with employers via digital technology. That news came as Upwork announced its Q3 2019 earnings results on Thursday (Nov. 7), which showed a 23 percent year-over-year increase in revenue to $78.8 million, reportedly just ahead of analyst estimates.
The company also posted a net loss of $28 million, which compares to $7.3 million for the same period last year. In the post-earnings conference call with analysts, CEO Stephane Kasriel detailed some of the recent client trends for Upwork.
“We’ve been acquiring about 5,000 core clients every quarter, more or less, for the last several quarters,” Kasriel said. “And we think that trend is going to continue for the foreseeable future. The second thing [is that] client spend [retention peaked] at 108 percent a couple of quarters ago. It's back to 104 percent right now. And we see a trend where it's probably going to soft land slowly back into the historical average over 100 — around 100 percent.”
The company, in its Q3 shareholder letter, also discussed its plans for the near future. “We believe now is the time to capitalize on the future of work trends ... to gain more share of our large market opportunity, and to achieve our ambitious long-term goals with profitable growth,” Upwork said. “Therefore, we have significantly increased our investment in the enterprise sales organization, starting in the fourth quarter of 2019.”
That letter also described some growth problems with the company’s other offerings. “Our small business offerings, Upwork Basic and Plus, and our managed-services offering, have lower growth rates than the overall business, but are generating positive cash flows,” the letter said. “With this cash, we have been increasing our investment in our enterprise sales team over the past two years.”
The latest earnings report from Upwork comes as more attention is paid to the issue of gig economy payments, an issue well documented by PYMNTS research. A growing number of freelance workers are turning to platforms like Uber, TaskRabbit and Upwork to earn extra money — or to even make gig work a main source of income. Yet, while the gig economy is upending many aspects of the traditional employee-employer dynamic, the way gig workers are paid has scarcely kept pace with these developments.