Upwork (NASDAQ:UPWK) shares jumped 20% in early Wednesday trade after the company reported third-quarter results.
EPS of $0.21 came in better than the consensus estimate of $0.10. Revenue grew 11% year-over-year to $175.73 million, beating the consensus estimate of $168.33M.
The growth was the result of take rate expansion driven by strength in the company’s ads products and its move in 2023 to a simplified, flat-fee pricing structure. Active clients grew 2% year-over-year and quarter-over-quarter to approximately 836,000.
For Q4, the company expects revenue to be in the range of $175-$180M, better than the consensus estimate of $172.72M, and EPS in the range of $0.16-$0.18, compared to the consensus of $0.16.
For the full year, the company expects revenue to be in the range of $680-$685M, better than the consensus estimate of $670.52M, and EPS in the range of $0.47-$0.49, compared to the consensus of $0.37.
"UPWK beat on the top and bottom line, driven by a much better-than-expected marketplace take rate and much-reduced marketing spend," said analysts at BTIG.
"It was a quarter of solid execution, and we take our estimates up. However, we are still cognizant that UPWK trades at nearly 3 times Fiverr's (FVRR, Buy, $44 PT) multiple on FY25E EBITDA (17x vs. 6x using UPWK's after-hours trading price), which strikes us as overly rich, keeping us at Neutral."
Additional reporting by Senad Karaahmetovic