Core client growth grew by a whopping 22% since last year and client retention increased by 108%. The lack of profit in Upwork is by design, the company is fueling growth with its profits vs. paying out big bonuses to its staff and large tax bills.
The loss on the books is misleading. Approximately $15 million was funded to cover Upwork’s escrow account at the end of the 3rd quarter, which returned to their account the following Monday in the 4th quarter after the escrow spread was covered through client spend. Had that money not gone to cover potential escrow shortages, Upwork would have shown a very large profit. NOTE: the $15 million escrow payment occured because Q3 ended on a Friday and by law Upwork has to have funding in the bank to cover potential escrow shortages.
In the upcoming months, Upwork intends to launch national advertising programs that will fuel its growth even further. With over $90M+ in cash in the bank from its IPO and capital on hand prior to the IPO, Upwork CEO Stephane Kasriel noted that they still can’t hire sales reps fast enough. Each sales rep hired makes a major impact to the revenue growth of Upwork according to Kasriel.
