Upwork Inc.

Good day and thank you for standing by. Welcome to the Upwork Q3 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, David Enhalt, Manager of Investor Relations. Please go ahead.

Thank you. Welcome to Upwork's discussion of its third quarter 2023 financial results. Joining me today are Hayden Brown, Upwork's President and Chief Executive Officer, and Erica Gesser, 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 law. Forward-looking statements include all statements other than statements of historical facts. 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. 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 our investor relations website, as well as the risks and other important factors discussed in today's shareholder letter. Additional information will also be set forth in our quarterly report on Form 10-Q for the three months ended September 30th, 2023. In addition, reference will be made to certain 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, unless otherwise noted, Reported figures are rounded in comparisons of the third quarter of 2023 are to the third quarter of 2022. All financial measures are GAAP unless cited as non-GAAP. Now I'll turn the call over to Hayden.

Thanks, David. Thank you all for joining us today. In the third quarter of 2023, Upwork continued to drive durable, profitable growth while advancing our position as the world's work marketplace. We made significant progress on our goal to become the preeminent destination for AI-related talent and work, while also improving the efficiency, effectiveness, and speed to match on our platform through improvements to our core product experiences and capabilities. In the third quarter, we made huge strides on our financial goals. We achieved better than expected results, generating third quarter 2023 revenue of $175.7 million, up 11% from a year ago. We recorded GAAP net income of $16.3 million and adjusted EBITDA of $31.2 million this quarter, demonstrating very rapid margin improvement. We also continue to make important investments in near and long-term growth opportunities. These include adding new features and functionality to the platform, including new innovations to our ads and monetization products. These products contribute revenue to Upwork, but more importantly, They contribute to the efficiency of the platform by helping professionals and clients connect more quickly. One of our most ambitious growth goals is to foster the most AI-empowered independent professionals in the world. In pursuit of this, we greatly enhanced our AI Services Hub, which has seen a 10x increase in average monthly visitors since its launch in the second quarter, and just yesterday, announced an extension of the Hub with a new suite of generative AI apps, offers, and educational content specially designed for talent. Our scale as the world's work marketplace has aided us in creating a deep and diverse ecosystem of partners that span education, technology, and special offers for clients and talent. New featured partnerships for AI-powered apps and offers for independent professionals include industry-leading companies like Adobe, Amazon, ClickUp, and Miro that have advanced integration of generative AI into their tools and services alongside educational AI skill-based courses and content from leading providers like Coursera, Jasper, and Udemy that form a new education marketplace on Upwork Academy. We also launched limited access to Upwork Chat Pro a new generative AI application embedded directly on Upwork's platform and powered by GPT-4. Upwork Chat Pro utilizes unique insights from Upwork about independent professionals to provide specific contextualized responses and recommendations that are relevant to the needs of professionals on Upwork, assisting them in starting, creating, and completing projects more efficiently and effectively. In the third quarter, we continued on our journey to unlock the vast opportunity in the enterprise space, increasing our new enterprise logos in the quarter by 21% versus Q2 2023. We added 23 new enterprise clients in the third quarter, expanding our customer roster with notable new organizations like Dropbox, It's Sugar, Moderna, and Florida State University. We also drove substantive growth in our highest-value cohort of customers, as the number of enterprise clients in the third quarter spending $5 million or more over the trailing 12 months rose 43% quarter over quarter. We continue to be pleased with the progress we are making toward our long-term strategy of providing companies with the talent, skills, and tools they need to get critical work done Through harnessing the power of generative AI on the platform, innovating on behalf of all our customers, optimizing our operations, and running our business to drive durable, profitable growth, we are on track to deliver a record year in 2023 in both revenue and adjusted EBITDA and have set a steady course for sustained momentum in the quarters ahead. I'll now turn it over to Erica for more details on the financials.