Upwork Inc.

Thank you for standing by. Welcome to the Upwork fourth quarter 2021 earnings conference call. At this time, all participants are on a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you can press star one on your telephone. Please be advised that today's conference is being recorded, and if you require any further assistance, please press star zero. I would like to hand the conference over to our speaker today, Evan Barbosa. Vice President, Investor Relations. Please go ahead.

Thank you. Welcome to Upwork's discussion of its fourth quarter and full year 2021 financial results. Leading the discussion today are Hayden Brown, Upwork's President and Chief Executive Officer, and Jeff McCombs, Upwork's Chief Financial Officer. Following management's prepared remarks, we will be happy to take your questions. But first, I'll review the safe harbor statement. During this call, we may make statements related to our business that are forward-looking statements under federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks, uncertainties, and assumptions. Our actual results could differ materially from expectations reflected in any forward-looking statements. In addition, any statements regarding the current and future impacts of the COVID-19 pandemic on our business and our current and future impacts of options we have taken in response to the COVID-19 pandemic are forward-looking statements and related to matters that are beyond our control and changing rapidly. For discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and on our investor relations website, as well as the risks and other important factors discussed in today's shareholder letter. Additional information will be set forth in our annual report on Form 10-K, for the year ended December 31, 2021, when filed. In addition, reference will be made to non-GAAP financial measures. Information regarding a reconciliation of non-GAAP to GAAP measures can be found in the shareholder letter that was issued this afternoon on our investor relations website at investors.upwork.com. As always, reported figures are rounded unless otherwise noted. Comparisons of the fourth quarter of 2021 are to the fourth quarter of 2020. and comparisons to the full year of 2021 are to the full year of 2020. All measures are GAAP unless cited as non-GAAP. Now, I'll turn the call over to Hayden.

Thanks, Evan, and thank you all for joining us today for our fourth quarter and full year 2021 earnings call. 2021 was a remarkable year for Upwork, not only in how far we pushed our business forward, but also in how clearly it has set our path for continued performance in 2022 and beyond. GSV grew 41% year over year to reach 3.5 billion, and revenue grew 35% year over year to reach 503 million for the full year 2021. Additionally, during the fourth quarter, we surpassed $15 billion in lifetime talent earnings on Upwork. This achievement highlights the magnitude of impact we have had and signals how we are leading the global movement to reimagine work. Last year, we launched a host of powerful products and features, including Project Catalog, Talent Scout, and Virtual Talent Bench, as well as valuable partnerships with technology and benefits providers, such as Loom and Catch. We had successful, high-profile collaborations with leading brands, including Budweiser and Kristin Kitsch, launched the Perfect Fit brand campaign, to raise awareness of Upwork to customers and prospects. And in the third quarter, as a result of our confidence in the long-term value creation opportunity in enterprise sales, we announced our intentions to double the number of account executives on our sales team by the end of 2022. And we are just getting started. We believe timing matters and timeframe matters. In terms of timing, the time continues to be now for investing in our business to win customer market share at a time when customer needs for our offering are accelerating and our brand awareness is low. We will do this with conviction in the year ahead as planned because we are building a powerful and sustainable business with leading share, economics, and growth rates for the long term. In terms of timeframe, 2021 was the first year executing our three-part strategy to innovate, evangelize, and scale our work marketplace. We have always known this strategy will take multiple years to fully deliver, and we are pleased with our progress to date. Due to this progress and our confidence in our execution, we are accelerating our target of achieving a billion dollars in revenue by one year to 2024, up from our previous timeline of 2025 with a compound annual growth rate of approximately 25 percent over the next three years. We're also excited to announce that we are setting an enterprise revenue target of $300 million by 2025, almost 10 times what we delivered in 2021, which represents a compound annual growth rate over the next four years of more than 70 percent. our innovation ambitions are bigger than ever. Amidst the backdrop of the work awakening, a time in which people are reevaluating what they want in work and life and realigning their priorities accordingly, we have embraced an expanded vision for Upwork as the world's work marketplace. We build for companies to flex into the new operating models of the new world, and we build for talent to flex into new ways of working. We anticipate that the businesses who embrace this work awakening will be poised to out-innovate companies who do not. 2022 is the year that Upwork takes the next steps in evolving from being the largest global freelance marketplace as measured by GSV to broadening our horizon as the world's work marketplace. Our focus has evolved because the world has evolved. The old binary notion of freelance versus full-time employee work are being revisited in a world where remote work is rampant, where career and work innovation is happening all around us, and where talent and clients are searching for new solutions to both new and old challenges they're struggling with. Many professionals are seeking to unbundle aspects of traditional full-time work to get benefits in new ways, while others are seeking new benefits without shackling themselves to a full-time job. We are poised to innovate these solutions with and for our customers, and our strong foundations help us do just that. We have distinctive know-how in building and delivering relationship-centered, flexible solutions for knowledge workers. We have products in the market that already empower workers to seamlessly transition from freelance to full-time work and back. And we have teams that already design and deliver modern work models at scale for our enterprise clients. This year, we will build on our existing foundations with a lineup of new offerings that will continue to make the transition from freelance to full-time and vice versa, and the integration of both working models seamless for all our customers. We at Upwork are focused on accelerating the work awakening, empowering professionals by building their online home for work that grows and flexes with them across their career and as their needs change, and for businesses delivering a singular destination that gives them access to the freelance and full-time professionals they need on the work marketplace that makes these powerful relationships and the tools to manage them a foregone conclusion. We have always seen ourselves as the pacesetters of innovation in work and in a time when the speed and creativity with which people are constructing their careers is accelerating and companies are rethinking their workforces. Upwork will be the work marketplace that empowers them to achieve their goals. Thank you for joining us on this journey. We will now open the call to your questions.