SAN FRANCISCO, Feb. 15, 2023 -- Upwork Inc. (Nasdaq: UPWK), the world’s largest work marketplace that connects businesses with independent talent, as measured by gross services volume (“GSV”), today announced its financial results for the fourth quarter and full year of 2022.

Fourth-quarter revenue rose 18% year over year at Upwork to $161.4 million, but the largest global talent platform noted caution among clients during the quarter.

“The fourth quarter demonstrated a continuation of the macroeconomic trends that we saw in the third quarter,” according to a shareholder letter released by Upwork. “We observed corporate caution during budgeting and planning cycles, leading to softer client acquisition and retention trends across our customer base.”

Gross services volume rose 5% year over year to $1.03 billion; it rose 14% year over year in the previous quarter. GSV represents the total amount clients spend on both marketplace and managed services offerings as well as additional fees charged to clients for other services. However, GSV was flat sequentially when comparing the fourth quarter to the third quarter, which Upwork attributed to several factors: a pricing structure change; softer client acquisition and retention trends expanding into midmarket and large business; and impacts from the war in Ukraine and its decision to suspend business operations in Russia and Belarus.

For the full-year 2022, Gross Services Volume (GSV) grew 16% year-over-year to reach $4.1 billion and revenue grew 23% year-over-year to reach $618 million. GAAP net loss was $(89.9) million and our adjusted EBITDA came in at $(4) million.

In the fourth quarter of 2022, GSV grew 5% year-over-year to once again exceed $1 billion and revenue grew 18% year-over-year to reach $161.4 million. GAAP net loss was $(16.5) million and adjusted EBITDA reached $1.1 million. The fourth quarter demonstrated a continuation of the macroeconomic trends that we saw in the third quarter. We observed corporate caution during budgeting and planning cycles, leading to softer client acquisition and retention trends across our customer base.

Meanwhile, the number of active clients rose 6% year over year in the fourth quarter to 814,000.

The San Francisco-based firm also discussed its announcement from earlier this week, which covered the new ability for clients to convert freelancers into full-time employees.

“Since we began testing contract-to-hire functionality, we have already amassed more than 2 million skilled professionals who have indicated openness to embarking on contract-to-hire opportunities for full-time work, and, since the beginning of 2023, clients have posted more than 40,000 contract-to-hire jobs on our marketplace,” according to the shareholder letter.

Guidance

Upwork forecast first-quarter revenue of between $157 million and $160 million, an increase of 12% year over year at the midpoint. Upwork also forecast full-year 2023 revenue of between $690 million and $705 million, an increase of 13% year over year at the midpoint.

Share price and market cap

Shares in Upwork were down 7.78% to $12.86 as of 11:57 a.m. Eastern time; they were 31.31% above their 52-week low, according to FT.com. The company had a market cap of $1.83 billion.

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