Financial reports are lengthy, confusing, and boring. I promise that I will keep it simple, brief, and straight to the point. I will let Upwork’s numbers do all the talking. Upwork’s Q1 2020 are out. Let’s dive right into the numbers financial results Numbers Never Lie First things first, how are Upwork’s stocks doing these days? NASDAQ: Upwork Upwork’s stocks aren’t an ideal choice for the faint-hearted investors as you can see for yourself. What’s happening with the number of jobs available on Upwork in 2020? Source: Thinknum It turns out that April was the to-be-or-not-to-be month for Upwork: On April 13, the . Since then, however, roughly 10,000 new gigs have been added, bringing the new total of available jobs on Upwork to 87,400. number of jobs on Upwork hit a low of 77,500 And, I’m not talking only about the Upwork’s stock prices and the number of jobs, but the number of user accounts, as well. Source: Thinknum Just before that, in early May, the as well. On March 31, the site reported 643,000 user accounts, or workers. As of this week, that number has swelled to 938,000. That’s still a far cry from the 2.6 million workers the site reported in February, but it appears that things are up again at Upwork. number of user accounts at Upwork began to grow Kudos to Upwork for doing their best in improving these numbers right before reporting their financial results in the first quarter of 2020. Were there any surprises worth mentioning? Well, I can think of a few. New Upwork Moments — Direct Contracts Without any exaggeration, Upwork Direct Contracts are the most shocking novelty. Why? Communicating with the clients or taking the work outside Upwork has always been a big no-no of their Terms. Every freelancer who works on Upwork knows all too well that these things can get you banned for good. Has Upwork become more flexible? With Direct Contracts, you can . Just like your other fixed-price contracts on Upwork, your client deposits project funds in escrow before the contract starts. When you’ve completed the work, you’ll request payment from your client. Once they’ve accepted your request, the funds are released to you. create and send fixed-price contract proposals to your clients that don’t have Upwork accounts Here’s the most interesting part of the “New Upwork Deal:” As a freelancer, but you won’t pay any freelancer service fees to Upwork. Your client won’t have to create an Upwork account or pay any additional fees, keeping the experience easy to use for them. you’ll pay a processing fee of 3.4% of the total contract amount It sounds too good to be true, doesn’t it? It almost makes you wonder, why do you need Upwork in the first place? You Ain’t Lost Till You Hit The Cost I saved the best for last. Source: Upwork The revenues are looking good, aren’t they? Revenue rose 21% from the year-earlier quarter to $83.2 million, of $81.3 million. pulling slightly ahead of analysts’ expectations Unfortunately, the operating costs are ruining the mood. Operating expenses rose around 30% in the quarter to $68.8 million, as the company had higher research and development, sales and marketing and general and administrative expenses. It also , compared with $637 million in the comparable quarter last year. set aside a $912 million provision for transaction losses in the quarter And, that’s not all. The global freelancing platform , or 5 cents a share, in the same quarter a year earlier. recorded a loss of $10 million, or 9 cents a share, compared with a loss of $5.2 million Plain and simple, Upwork is spending more than they earn. The Troubles in Upwork Paradise Shakespeare warned us to “beware of the Ides of March,” and April, if I may add in Upwork’s case. Remember April 13, when roughly more than 10K new jobs suddenly appeared and improved Upwork’s stats? Well, it turned out that some of them were fake. How many exactly? It’s hard to tell, but quite a few because this “phenomenon” just couldn’t go unnoticed in Upwork Community. Source: Upwork Community Eventually, Upwork admitted that they had a serious problem, apologized, “explained,” and offered to refund freelancers. Source: Upwork Community The fake jobs, or as Upwork formulated it as “test jobs,” problem officially solved. At the very end, a quick history tour. “The Sick Man Upon the Bosphorus” as a description of the declining Ottoman Empire was used for the first time in the 1850s. It took more than 70 years, give it or take, for the troubled Empire to find the “cure” by transforming into the modern Republic of Turkey. How long would it take for Upwork to present the positive financial results in every sense and section? It’s both difficult and unpleasant to predict. The fact remains that the growing operating expenses are threatening to cease all Upwork’s operations, for good. And, that’s not good, is it?
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