Upwork, Inc 8-K, filed Jul 29, 2021

Upwork, Inc (UPWK)

8-K 2021-07-29 For: 2021-07-29

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Added on April 09, 2026

About this 8-K

Upwork, Inc filed this 8-K on July 29, 2021.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Delaware		001-38678	46-4337682
(State or Other Jurisdiction of Incorporation)		(Commission File Number)	(IRS Employer Identification No.)

475 Brannan Street, Suite 430
San Francisco,	California		94107
(Address of Principal Executive Offices)			(Zip Code)


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value per share	UPWK	The Nasdaq Stock Market LLC


Exhibit Number						Description
99.1						Press Release dated July 29, 2021
99.2						Shareholder Letter dated July 29, 2021
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)


	UPWORK INC.

Date: July 29, 2021	By:	/s/ Jeff McCombs
		Jeff McCombs Chief Financial Officer (Principal Financial and Accounting Officer)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue
Marketplace	$	114,460	$	78,464	$	219,130	$	153,246
Managed services	9,721		9,067		18,670		17,481
Total revenue	124,181		87,531		237,800		170,727
Cost of revenue	33,083		25,408		63,524		48,893
Gross profit	91,098		62,123		174,276		121,834
Operating expenses
Research and development	28,124		20,547		54,737		39,895
Sales and marketing	45,817		34,440		85,421		65,118
General and administrative	32,355		17,102		55,886		34,926
Provision for transaction losses	1,197		1,018		2,324		1,930
Total operating expenses	107,493		73,107		198,368		141,869
Loss from operations	(16,395)		(10,984)		(24,092)		(20,035)
Interest expense	110		258		309		488
Other (income) expense, net	17		(248)		(61)		483
Loss before income taxes	(16,522)		(10,994)		(24,340)		(21,006)
Income tax provision	(16)		(30)		(33)		(39)
Net loss	$	(16,538)	$	(11,024)	$	(24,373)	$	(21,045)

Net loss per share, basic and diluted	$	(0.13)	$	(0.09)	$	(0.19)	$	(0.18)
Weighted-average shares used to compute net loss per share, basic and diluted	126,742		116,524		126,011		115,321


	June 30, 2021		December 31, 2020
ASSETS
Current assets
Cash and cash equivalents	$	131,448	$	94,081
Marketable securities	40,990		75,570
Funds held in escrow, including funds in transit	165,082		135,042
Trade and client receivables, net	62,232		47,018
Prepaid expenses and other current assets	12,526		9,090
Total current assets	412,278		360,801
Property and equipment, net	23,683		28,139
Goodwill	118,219		118,219
Intangible assets, net	—		667
Operating lease asset	13,674		19,729
Other assets, noncurrent	1,406		1,672
Total assets	$	569,260	$	529,227

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	8,625	$	6,455
Escrow funds payable	165,082		135,042
Debt, current	6,344		7,581
Accrued expenses and other current liabilities	33,211		32,868
Deferred revenue	19,164		16,801
Total current liabilities	232,426		198,747
Debt, noncurrent	633		3,142
Operating lease liability, noncurrent	18,757		20,506
Other liabilities, noncurrent	8,916		7,522
Total liabilities	260,732		229,917

Stockholders’ equity
Common stock	13		12
Additional paid-in capital	527,712		494,122
Accumulated deficit	(219,197)		(194,824)
Total stockholders’ equity	308,528		299,310
Total liabilities and stockholders’ equity	$	569,260	$	529,227


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(16,538)	$	(11,024)	$	(24,373)	$	(21,045)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for transaction losses	1,006		839		1,907		1,606
Depreciation and amortization	2,554		2,478		5,748		4,786
Amortization of debt issuance costs	20		13		39		26
Amortization of premium (discount) on purchases of marketable securities, net	12		(83)		22		(257)
Amortization of operating lease asset	863		976		1,774		1,945
Tides Foundation common stock warrant expense	187		188		375		376
Stock-based compensation expense	13,534		7,134		24,760		12,671

Impairment expense	7,389		—		7,389		—
Changes in operating assets and liabilities:
Trade and client receivables	(11,251)		1,118		(16,835)		(4,773)
Prepaid expenses and other assets	(1,329)		(504)		(2,871)		(968)
Operating lease liability	(460)		(466)		(861)		(925)
Accounts payable	(3,372)		3,409		2,168		4,403
Accrued expenses and other liabilities	6,018		3,351		(273)		7,232
Deferred revenue	1,911		935		3,451		1,585
Net cash provided by operating activities	544		8,364		2,420		6,662
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(8,991)		(20,959)		(29,967)		(47,748)
Proceeds from maturities of marketable securities	33,500		31,000		64,500		64,000
Purchases of property and equipment	(264)		(4,339)		(334)		(5,627)
Internal-use software and platform development costs	(1,283)		(1,560)		(3,581)		(3,559)
Net cash provided by investing activities	22,962		4,142		30,618		7,066
CASH FLOWS FROM FINANCING ACTIVITIES:

Changes in escrow funds payable	3,680		5,998		30,040		20,832
Proceeds from exercises of stock options	3,130		12,845		5,727		16,010



Proceeds from borrowings on debt	—		3,000		—		18,000

Repayment of debt	(1,893)		(19,893)		(3,786)		(21,786)
Proceeds from employee stock purchase plan	2,688		2,661		2,688		2,661


	Three Months Ended June 30,										Six Months Ended June 30,
	2021			2020			Change				2021			2020			Change
Cost of revenue	$	33,083		$	25,408		$	7,675	30	%	$	63,524		$	48,893		$	14,631	30	%
Components of cost of revenue:
Cost of freelancer services to deliver managed services	7,796			7,272			524		7	%	15,003			14,234			769		5	%
Other components of cost of revenue	25,287			18,136			7,151		39	%	48,521			34,659			13,862		40	%
Total gross margin	73		%	71		%					73		%	71		%


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
GAAP Net Loss	$	(16,538)		$	(11,024)		$	(24,373)		$	(21,045)
Add back (deduct):
Stock-based compensation expense	13,534			7,134			24,760			12,671
Depreciation and amortization	2,554			2,478			5,748			4,786
Interest expense	110			258			309			488
Other (income) expense, net	17			(248)			(61)			483
Income tax provision	16			30			33			39
Tides Foundation common stock warrant expense	187			188			375			376
Impairment expense	7,389			—			7,389			—
Non-GAAP Adjusted EBITDA	$	7,269		$	(1,184)		$	14,180		$	(2,202)


Cost of Revenue Reconciliation:
Cost of revenue, GAAP	$	33,083		$	25,408		$	63,524		$	48,893
Stock-based compensation	(179		)	(202		)	(380		)	(376		)
Cost of revenue, Non-GAAP	$	32,904		$	25,206		$	63,144		$	48,517
% of revenue, GAAP	27		%	29		%	27		%	29		%
% of revenue, Non-GAAP	26		%	29		%	27		%	28		%

Gross Profit Reconciliation:
Gross profit, GAAP	$	91,098		$	62,123		$	174,276		$	121,834
Stock-based compensation	179			202			380			376
Gross profit, Non-GAAP	$	91,277		$	62,325		$	174,656		$	122,210
% of revenue, GAAP	73		%	71		%	73		%	71		%
% of revenue, Non-GAAP	74		%	71		%	73		%	72		%

Operating Expenses Reconciliation:
Research and development, GAAP	$	28,124		$	20,547		$	54,737		$	39,895
Stock-based compensation	(3,988		)	(2,769		)	(7,285		)	(4,719		)
Research and development, Non-GAAP	$	24,136		$	17,778		$	47,452		$	35,176
% of revenue, GAAP	23		%	23		%	23		%	23		%
% of revenue, Non-GAAP	19		%	20		%	20		%	21		%

Sales and marketing, GAAP	$	45,817		$	34,440		$	85,421		$	65,118
Stock-based compensation	(1,613		)	(1,312		)	(2,891		)	(2,240		)
Sales and marketing, Non-GAAP	$	44,204		$	33,128		$	82,530		$	62,878
% of revenue, GAAP	37		%	39		%	36		%	38		%