Upwork (UPWK) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 15% year-over-year to $193.1 million, with record GAAP net income of $22.2 million and adjusted EBITDA of $40.8 million (21% margin), reflecting strong operational efficiency and cost controls.

• Active clients increased 6% year-over-year to 868,000, but GSV declined 2.7% and GSV per active client fell 5% due to a shift toward smaller businesses.

• Take rate reached an all-time high of 19.2%, with marketplace take rate at 18%.

• AI-related work GSV surged 67% year-over-year, and ads & monetization revenue grew 75% year-over-year.

• Completed $100 million share repurchase program, buying 2.9 million shares in Q2 and 8.2 million shares in 2024.

Financial highlights

• Marketplace revenue rose 17% year-over-year to $166.8 million; enterprise revenue was flat at $26.3 million.

• Gross margin improved to 77% in Q2 2024; non-GAAP gross margin was 77.6%.

• Adjusted EBITDA margin reached 21.2%; free cash flow was $33.5 million.

• Diluted EPS was $0.17, compared to $(0.03) in Q2 2023.

• Cash, cash equivalents, and marketable securities totaled $497.7 million at quarter end.

Outlook and guidance

• Full-year 2024 revenue guidance is $735–$745 million (7% growth at midpoint); adjusted EBITDA expected at $140–$150 million, with margin outlook increased.

• Q3 2024 revenue expected between $179–$184 million; adjusted EBITDA guidance for Q3 is $36–$39 million (20% margin at midpoint); non-GAAP diluted EPS: $0.23–$0.25.

• Non-GAAP diluted EPS for 2024 guided to $0.90–$0.94, up from prior guidance.

• Guidance assumes no improvement in macro trends and factors in a structural impact from fewer Sundays in Q4.

• Stock-based compensation expense expected to average under $20 million per quarter in 2024.