Upwork Q3 Investor Presentation - October 2021 - Investor Relations | Upwork Inc.
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Upwork Q3 Investor Presentation October 2021 © 2021 Upwork Inc. Q3’21 Investor Presentation October 2021
Safe
Harbor This presentation and the accompanying oral commentary contain "forward-looking" statements based on the beliefs and assumptions of Upwork Inc.
(the "Company") and on information currently available to the Company. Forward-looking statements include all statements other than statements of
historical fact contained in this presentation, including information or predictions concerning the future of the Company's business, anticipated events and
trends, potential growth opportunities, competitive position, technological and market trends, industry environment, potential market opportunities, the
economy and other future conditions. Any forward-looking statements made herein or made elsewhere by the Company are made solely based on
information available to the Company as of the date hereof and based only on the Company's current beliefs, expectations and assumptions. As such,
they are subject to inherent uncertainties, known and unknown risks and changes in circumstances that are difficult to predict and in many cases outside
the Company's control, and you should not rely on such forward-looking statements. The Company makes no representation that the projected results will
be achieved, and actual results may differ materially from the Company's expectations. Furthermore, the Company does not undertake any obligation to
update or revise any forward-looking statements, to conform these statements to actual results or to make changes in the Company's expectations,
except as required by law. In addition, any statements regarding the current and future impacts of the COVID-19 pandemic on our business and current
and future impacts of actions we have taken in response to the COVID-19 pandemic are forward-looking statements and related to matters that are
beyond our control and changing rapidly. Additional information regarding these and other risks and uncertainties that could cause actual results to differ
materially from the Company's expectations is included under the caption "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the three
months ended September 30, 2021 filed when filed and the Company's other SEC filings.
This presentation also contains estimates, forecasts and other statistical data made by independent parties and by the Company relating to market size
and growth and other data about the Company's industry. This data involves a number of assumptions and limitations, and you are cautioned not to give
undue weight to such estimates. In addition, projections, assumptions and estimates of the Company's future performance and the future performance of
the markets in which the Company operates are necessarily subject to a high degree of uncertainty and risk.
Moreover, neither the Company nor any other person makes any representation or warranty as to the accuracy or completeness of the information herein.
This presentation is made solely for informational purposes.
All third-party trademarks, including names, logos and brands, referenced by the Company in this presentation are property of their respective owners.
All references to third-party trademarks are for identification purposes only and shall be considered nominative fair use under trademark law.
In addition to the GAAP financials, this presentation includes certain non-GAAP financial measures. The non-GAAP measures have limitations as analytical
tools, and you should not consider them in isolation or as a substitute for the most directly comparable financial measures prepared in accordance with
GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. Other
companies, including companies in the Company's industry, may calculate non-GAAP financial measures differently or may use other measures to
evaluate their performance, all of which could reduce the usefulness of non-GAAP financial measures as tools for comparison. The Company urges you to
review the reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures set forth in the Appendix, and not rely
on any single financial measure to evaluate the Company's business.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 2
Non-GAAP
Financial
Measures
To supplement our condensed consolidated financial statements, which are prepared in accordance with GAAP, we present non-GAAP cost of revenue
(and as a percentage of revenue), non-GAAP marketplace cost of revenue, non-GAAP managed services cost of revenue, non-GAAP gross profit (and as a
percentage of revenue), non-GAAP operating expenses (total and each line item, and total and each non-GAAP operating expense item as a percentage of
revenue), non-GAAP income (loss) from operations (and as a percentage of revenue), non-GAAP net income (loss) (and as a percentage of revenue and on
a per share basis), non-GAAP gross margin (total and for marketplace and managed services), and adjusted EBITDA in this presentation. Our use of
non-GAAP financial measures has limitations as an analytical tool, and these measures should not be considered in isolation or as a substitute for analysis
of financial results as reported under GAAP.
We use these non-GAAP financial measures in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including in
the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating
our financial performance. These measures provide consistency and comparability with past financial performance, facilitate period-to-period comparisons
of core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to
supplement their GAAP results. In addition, adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating
performance. We exclude the following items from one or more of our non-GAAP financial measures: stock-based compensation expense (non-cash
expense calculated by companies using a variety of valuation methodologies and subjective assumptions), depreciation and amortization (non-cash
expense), interest expense, other (income) expense, net, income tax (benefit) provision, and, if applicable, certain other non-cash transactions.
Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular,
(1) stock-based compensation expense has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our
business and an important part of our compensation strategy, (2) although depreciation and amortization expense are non-cash charges, the assets
subject to depreciation and amortization may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure
requirements for such replacements or for new capital expenditure requirements, and (3) adjusted EBITDA does not reflect: (a) changes in, or cash
requirements for, our working capital needs; (b) interest expense, or the cash requirements necessary to service interest or principal payments on our debt,
which reduces cash available to us; (c) tax payments that may represent a reduction in cash available to us; or (d) expense from our common stock warrant
issued to the Tides Foundation, which is recurring and will be reflected in our financial results for the foreseeable future. The non-GAAP measures we use
may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for
these limitations by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures. A reconciliation of these
non-GAAP measures has been provided in the financial statement tables included in this presentation and investors are encouraged to
review the reconciliation.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 3
Our Mission
Create
economic
opportunities
so people
have better
lives.
© 2021 Upwork Inc. Proprietary and
Q3’21
confidential.
Investor Do
Presentation
not distribute. October
Q2’21 2021
Investor Presentation July, 2021 © 2021 Upwork Inc. Proprietary and confidential. Do not distribute.
Our Vision
Independent
talent at the
heart of every
business.
© 2021 Upwork Inc. Proprietary and
Q3’21
confidential.
Investor Do
Presentation
not distribute. October
Q2’21 2021
Investor Presentation July, 2021 © 2021 Upwork Inc. Proprietary and confidential. Do not distribute.
Uniquely
Positioned to
Succeed
Massive TAM with Largest work Deep and expanding Multiple growth Proven and
secular tailwinds marketplace at scale1 competitive moats opportunities experienced
management team
1
As measured by gross services volume (GSV). See appendix for the definition of gross services volume.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 6
Creating a Massive and
Growing Opportunity
~225
Million x ~$5,850 = $1.3T
Estimated number of Average
global remote freelancer GSV 2
knowledge workers 1
Upwork Opportunity
1
2021 estimate from Gartner - Forecast Analysis: Remote Workers Forecast, Worldwide August 2020.
2
TTM as of Dec. 31, 2020.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 7
Upwork Is the Talent Marketplace TM
Most Comprehensive
Work Marketplace Enterprise Suite
Multiple ways to Upwork = the “always on” Bring Your Own Talent
solution for companies hiring and managing
freelancer programs at scale
Payroll
Direct Contracts
Project Catalog TM
Talent Scout TM
...What’s Next?
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 8
Featuring the Most
Robust Community of
Clients and Freelancers
10,000+ skills
73% of talent have college degrees 1
50+ categories with $10M+ in GSV 2
~40% of clients hired in multiple categories 2
1
February 2021 Upwork internally conducted survey.
2
Based on the trailing 12-month period ending September 30, 2021.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021
Freelancer Stages of Adoption
4 Freelancer-First
Companies change view from “why
Upwork?” to “why not Upwork?”
3 Scaling
Companies make investments to leverage
Customer Value
freelancers as core to the way they get work done
2 Hybrid
1 Freelancers complement FTEs and become
an option for additional projects
Project
Freelancers evaluated and vetted on a
project-by-project basis to solve specific
needs on a one-off basis
Freelancer Adoption Over Time
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 10Our Goal: 100% of businesses will have freelancers on their teams in the future © 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 11
Generating Abundant
Growth Opportunities
Expected horizon for significant value creation
Near Term Mid Term Long Term
Brand Awareness
Acquisition / Retention
Enterprise
Share of Wallet
Product Line Diversification
Internationalization and Localization
Talent Services
Product Integrations
Take Rate Expansion
Opportunistic M&A
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 12The Race to Win the $1.3T
Work Marketplace Opportunity
Platform-first service model Hybrid service model Traditional staffing service model
Work Marketplace
Vetting Platform & Shortlisting Sales
& talent payments & success
management management
Match & Payroll B2B Talent pool Regional Staffing Cos
reputation marketing
Local Staffing Cos
“Platform when you want it – people when you don’t.”
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 13Three Talent Plans
Freelancer Freelancer Agency
Basic Plus Plus
• Access to quality projects Includes all Freelancer Basic features + Includes all Freelancer Plus features +
• Quickly apply and get hired • Customized profile URL • Unlimited team members
• Get paid securely and on time • Insight into competitor • Shared Connects functionality
bid ranges
• Monthly Connects package*
*not included in Agency Plus
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 14Four Client Plans
Basic Plus Enterprise: Enterprise:
Standard Compliance
• Access to a global Includes all Basic features + Includes all Plus features + Includes all Enterprise: Standard features +
talent pool • Invites to talent • Custom reporting • Compliance services
• Safe and easy payments • Featured Jobs upgrade • API access • Worker classification
• Payment protection plan • Connects package • Expert-vetted talent pools • Misclassification
• Customer support and talent clouds indemnification
• Recruiting services
• SSO / permissions • Work protection program
• Purchase order
management
• Consolidated invoicing
and billing
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 15Creating a Virtuous Cycle
Value for Freelancers Value for Clients Value for Upwork
Find work quickly Quality talent This engine results in:
Access to quality, flexible projects from Global access to a verified Virtual Talent Bench™ Highly sticky double opt-in platform with
our global network across categories and price points long-term relationships and recurring use, leading
to increasing scale and recurring revenue
Get paid on time Fast access to talent
Receive security and peace of mind with Receive proposals within minutes;
Upwork Payment Protection 3 days average time to contract
More More skills /
freelancers categories
Build reputation Cost-effective projects
Establish long-term credibility and relationships Take hiring budgets further with average 50%
with roster of clients savings vs. hiring locally Cross-
selling
Growth opportunities Work efficiently, effectively
Increased More
Insights on in-demand skills and emerging areas End-to-end suite of workflow tools clients
GSV
Flexibility Flexibility
More / bigger
Expanding number of ways to Upwork Expanding number of ways to Upwork projects
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 16Infinite Personas and Categories
Growth through breadth
∞
Tech & Product Lead Marketing & Creative Lead Operations Lead
Example: VP, Engineering Example: VP, Marketing Example: COO
• Build and maintain my website • Augment my design staff • Recruit and manage my customer
support operations
• Build and maintain my mobile app • Translate my marketing assets
• Recruit and manage a skilled tech
Growth through depth
• Do QA testing on my product • Build my new landing page support team
• Augment or replace my internal • Develop my campaign strategy • Let me outsource my accounting to
UI / UX team a trusted accountant
• Develop my social media strategy
• Maintain a safe and secure dev • Provide me project-based
environment for me • Execute my social media strategy accounting support
• ... • ... • ...
∞
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 17Key Marketing and
Acquisition Growth
Levers for 2021 and
Beyond
1 2 3 4
Launched our work Expanding paid Improving conversion Automating and scaling
marketplace marketing acquisition reach by: rates by: SEM and social through
efforts to build proprietary bidding tool:
• Expanding SEM keywords • Matching intent to best
awareness and and mobile SEM conversion product lines • Increasing registration-to-Start
drive demand optimizations conversions through better
• Improving CLTV model client onboarding
• Growing international to optimize client
presence ~30% YoY via keyword bidding • Aggressively supporting
keyword expansion globally Enterprise Sales land and
expand efforts
• Shifting to new brand
messaging across channels • Optimizing reactivation
to improve CTRs and retention efforts by moving
to more holistic marketing
automation
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 18The
Enterprise + Many more globally
Opportunity
250+ employee US-based companies
51K assigned to sales teams
(both inbound and outbound)
8K Target ideal customer
profile (ICP) accounts
Target ICP customers
1,600 with spend currently
in the Marketplace
1,000 accounts
could deliver
200+
Current
Enterprise
clients
$1-2B in GSV
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 19Commitment
to Strong
ESG Practices
Focus Area Initiatives Achievements to Date
Environment • Reducing emissions by limiting our physical corporate ✓ Enabled team members to avoid over 1 million commuting
office footprint through our remote-first working model miles in 2019
• Reducing unnecessary commuting and travel ✓ Achieved carbon neutrality for 2019 and 2020
✓ Committed to remaining carbon neutral going forward
• Purchasing carbon offsets that promote environmental
sustainability
Social • Building a more robust diversity, inclusion and belonging ✓ 50% of Board is female
(DIBs) infrastructure ✓ 3 of our 8 directors are from underrepresented communities 1
• Leveraging data to inform strategic talent process decisions
• Preparing quantitative disclosures to demonstrate our progress on
DIBs-related initiatives
Governance • Evolving Board and governance practices to reflect our ✓ Implemented majority-vote standard for director elections and
maturation as a public company adopted proxy access
• Focusing on and responding to stockholder feedback ✓ The Board’s Nominating and Governance Committee oversees all
ESG functions
• Acting to protect and grow long-term stockholder value
1
As defined under California law AB 979, underrepresented communities includes certain racial, ethnic, and LGBT identities.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 20Our Winning
Strategy 1 Innovating the work marketplace
2 Becoming a world-renowned brand
3 Augment SMB by winning
the enterprise
4 Building an extraordinary hybrid
team of employees and freelancers
5 Investing aggressively for long-term
value creation
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 21Financial Highlights © 2021 Upwork Inc. Q3’21 Investor Presentation October 2021
Upwork
at a Glance
As of September 30, 2021
752K $4,375
Active Clients GSV per Active Client
Gross Services Volume (GSV) ($M) Revenue ($M) Adjusted EBITDA ($M)
21%↑ 38%↑ 24%↑ 32%↑ 89%↑ 23%↑
$2,524 $374
$374
$904
$2,087 $301
$301 $14.0
$655 $128
$97 $8.2
$7.4 $6.7
2019 2020 Q3’20 Q3’21 2019 2020 Q3’20 Q3’21 2019 2020 Q3’20 Q3’21
Note: Adjusted EBITDA is a non-GAAP measure. See appendix for the definition of GSV, Active Clients, and GSV per Active Client.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 23Strong Active
YoY Growth TTM Active Clients
Client Growth
700k
30%
27%
600k
25%
25% 25%
500k
20%
TTM Active Clients 1
YoY Growth
400k 17%
15%
300k
12%
10%
10% 10% 10%
200k 9% 9%
7%
5%
100k
0%
0k
Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021
1
See appendix for the definition of Active Clients.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 24GSV Per
TTM Avg GSV per Active Client(1) YoY Growth
Active Client
is Increasing
$4,000 15%
14%
$3,750 12% 12%
10% 10%
GSV per Active Client 1
9% 9%
YoY Growth
8%
$3,500
6%
5%
$3,250
4%
3%
2%
$3,000 0%
Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021
1
See appendix for the definition of GSV per Active Client.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021Our Compelling
Margin Structure % of Revenue FY2018 FY2019 FY2020 YTD2021 LT Target
• High and expanding gross margins
Marketplace 75% 77% 78% 78% 80-85%
Gross Margin 1
• Industry-leading investment levels in R&D
to extend competitive moats
Managed 17% 17% 19% 20% 20%
• Opportunities for leverage in R&D and G&A Services
Gross Margin 2
• Will invest aggressively in sales and marketing
to drive growth and maximize economic Total Gross 68% 71% 72% 73% 80-85%
value added Margin
R&D 21% 19% 20% 20% 15-20%
Notes:
1
Marketplace gross margin is defined as total gross S&M 28% 31% 34% 34% 20-25%
profit, excluding revenue from Managed Services and
cost of freelancer services to deliver Managed
Services, divided by Marketplace revenue.
G&A 16% 18% 15% 14% 8-10%
2
Managed Services gross margin is defined as
Managed Services revenue less cost of freelancer
services to deliver Managed Services, divided by Transaction 2% 1% 1% 1% 1-2%
Managed Services revenue.
Losses
Numbers are non-GAAP. Non-GAAP here excludes
SBC, amortization, and non-cash charitable donations.
All numbers reflect depreciation expense, except for Adjusted EBITDA 1% 2% 4% 6% 30-35%
Adjusted EBITDA.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 26GAAP to Non-GAAP $ and share counts in millions
Reconciliation Percentages and per share data as stated
Q3 2021 Q3 2020 9 Months 2021 9 Months 2020
GAAP Net Loss (9.3) (2.7) (33.7) (23.8)
Stock-based compensation expense 13.9 6.9 38.7 19.5
Depreciation and amortization 2.4 2.7 8.2 7.4
Interest expense 0.7 0.2 1.1 0.6
Other (income) expense, net 0.2 (0.5) 0.2 -
Income tax provision - - 0.1 0.1
Tides Foundation common stock warrant expense 0.2 0.2 0.6 0.6
Impairment expense - - 7.4 -
Non-GAAP Adjusted EBITDA 8.2 6.7 22.4 4.5
Marketplace cost of revenue, GAAP 26.7 19.5 75.3 54.2
Stock-based compensation (0.2) (0.2) (0.6) (0.6)
Marketplace cost of revenue, non-GAAP 26.5 19.3 74.7 53.6
Marketplace gross margin, non-GAAP (%) 77% 78% 78% 78%
Note: Figures have been rounded. Marketplace gross margin is using Marketplace revenue and total cost of revenue less Managed Services cost of revenue.
Managed Services gross margin is using Managed Services revenue and Managed Services cost of revenue. 27GAAP to Non-GAAP $ and share counts in millions
Reconciliation (Cont.) Percentages and per share data as stated
Q3 2021 Q3 2020 9 Months 2021 9 Months 2020
Managed Services cost of revenue, GAAP 8.2 7.1 23.2 21.3
Managed Services cost of revenue, non-GAAP 8.2 7.1 23.2 21.3
Managed Services gross margin, non-GAAP (%) 21% 19% 20% 19%
Cost of revenue, GAAP 34.9 26.6 98.5 75.5
Stock-based compensation (0.2) (0.2) (0.6) (0.6)
Total cost of revenue, non-GAAP 34.7 26.4 97.9 74.9
Total gross margin, non-GAAP (%) 73% 73% 73% 72%
Research and development, GAAP 30.9 20.8 85.6 60.7
Stock-based compensation (4.0) (2.6) (11.3) (7.3)
Research and development, non-GAAP 26.8 18.3 74.3 53.4
Sales and marketing, GAAP 43.2 33.6 128.6 98.7
Stock-based compensation (1.5) (1.2) (4.4) (3.5)
Sales and Marketing, non-GAAP 41.7 32.4 124.3 95.2
Note: Figures have been rounded. Marketplace gross margin is using Marketplace revenue and total cost of revenue less Managed Services cost of revenue.
Managed Services gross margin is using Managed Services revenue and Managed Services cost of revenue. 28GAAP to Non-GAAP $ and share counts in millions
Reconciliation (Cont.) Percentages and per share data as stated
Q3 2021 Q3 2020 9 Months 2021 9 Months 2020
General and administrative, GAAP 26.1 18.0 82.0 53.0
Stock-based compensation (8.2) (2.9) (22.4) (8.2)
Amortization of intangible assets - (0.7) (0.7) (1.3)
Tides Foundation common stock warrant expense (0.2) (0.2) (0.6) (0.6)
Impairment expense - - (7.4) -
General and administrative, non-GAAP 17.7 14.3 51.0 42.9
Loss from operations, GAAP (8.3) (3.0) (32.4) (23.1)
Stock-based compensation 13.9 6.9 38.7 19.5
Amortization of intangible assets - 0.7 0.7 1.3
Tides Foundation common stock warrant expense 0.2 0.2 0.6 0.6
Impairment expense - - 7.4 -
Income (loss) from operations, non-GAAP 5.8 4.7 14.9 (1.7)
Net loss, GAAP (9.3) (2.7) (33.7) (23.8)
Stock-based compensation 13.9 6.9 38.7 19.5
Note: Figures have been rounded. Marketplace gross margin is using Marketplace revenue and total cost of revenue less Managed Services cost of revenue.
Managed Services gross margin is using Managed Services revenue and Managed Services cost of revenue. 29GAAP to Non-GAAP $ and share counts in millions
Reconciliation (Cont.) Percentages and per share data as stated
Q3 2021 Q3 2020 9 Months 2021 9 Months 2020
Amortization of intangible assets - 0.7 0.7 1.3
Tides Foundation common stock warrant expense 0.2 0.2 0.6 0.6
Impairment expense - - 7.4 -
Net Income (loss), non-GAAP 4.8 5.0 13.6 (2.4)
Weighted-average shares outstanding used in computing loss per share, GAAP
Basic 127.9 120.7 126.7 117.1
Basic loss per share, GAAP $(0.07) $(0.02) $(0.27) $(0.20)
Weighted-average shares outstanding used in computing earnings (loss) per share, non-GAAP
Basic 127.9 120.7 126.7 117.1
Diluted 1 134.3 129.7 134.5 117.1
Basic earnings (loss) per share, non-GAAP $0.04 $0.04 $0.11 $(0.02)
Diluted earnings (loss) per share, non-GAAP $0.04 $0.04 $0.10 $(0.02)
Note: Figures have been rounded. Marketplace gross margin is using Marketplace revenue and total cost of revenue less Managed Services cost of revenue.
Managed Services gross margin is using Managed Services revenue and Managed Services cost of revenue. 30Guidance
Q4 2021 FY 2021
Revenue $130 million - $132 million $496 million - $498 million
Adjusted EBITDA $(2) million - $(4) million $18 million - $20 million
Basic weighted-average shares
128 million - 130 million N/A
outstanding
Diluted weighted-average shares
N/A 134 million - 136 million
outstanding
Non-GAAP basic loss per share $(0.03) - $(0.05) N/A
Non-GAAP diluted EPS N/A $0.05 - $0.07
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 31Upwork Team © 2021 Upwork Inc. Q3’21 Investor Presentation October 2021
Proven management team with decades
of experience at Upwork and other marketplace
and technology companies
Hayden Brown Jeff McCombs
President & CEO CFO
9 years 1 year
Zoe Harte Sam Bright
Chief People Officer Chief Product &
8 years Experience OfficerAppendix © 2021 Upwork Inc. Q3’21 Investor Presentation October 2021
Our Business
Model
Marketplace
Upwork Basic Freelancers $ Tiered service fees ( 5% / 10% / 20% ) and other
Clients $ Payment fee, FX, and other
Upwork Plus Freelancers $ Service fees (5% / 10% / 20%) and other
Clients $ Monthly subscription, payment fee, and other
Upwork Enterprise & Other Premium Offerings Freelancers $ Flat service fee
Clients $ Service fees, annual subscription, and other
Managed Services
• Upwork is responsible for the deliverable
Clients $ Markup on pay rate to freelancers
• Engage freelancers on behalf of the client
• Directly invoice the client
Gross Accounting Treatment
GSV = Revenue
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 35Illustrative Revenue
Recognition and
Margin Profile
Marketplace Client Spend Revenue Revenue Less COR
Upwork Basic and Plus $100 ~$121 75-80% ~$93
Compliance $100 ~$302 75-80% ~$233
Upwork Enterprise
Standard $100 ~$152 75-80% ~$113
Managed Services
$100 $100 ~19% ~$194
Notes: 1 Revenue does not include FX, payments, and freelancer subscription fees. 2 Illustrative rate assuming enterprise customer pays list price for enterprise compliance and standard. 3 Marketplace COR based on
2020 COR minus costs of freelancer services to deliver Managed Services as a percentage of 2020 Marketplace revenue. 4 Cost of freelancer services to deliver Managed Services based on 2020 cost of freelancer
services to deliver Managed Services as a percentage of 2020 Managed Services Revenue.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 36Key Metric Gross Services Volume (GSV)
Definitions Gross services volume, or GSV, includes both client spend and additional fees
charged for other services.
Active Client
A client who has had spend activity during the trailing 12-month period is
considered active.
GSV per Active Client
GSV per active client is calculated by dividing total trailing 12-month GSV by
the number of active clients at the date of measurement.
© 2021 Upwork Inc. Q3’21 Investor Presentation October 2021 37You can also read
