A very brief update of my current view on Upwork GSV
After a surprisingly strong Q2 2023 in which we judged GSV wrong it became apparent that our current method of looking at Jobs posted on Upworks website has not been working reliably. (Nevertheless, we continue to track the data points as we are still trying to search for any possible correlation)
Q3 2023 was another stable quarter for GSV.
Finding ways to predict GSV could still be valuable as it could be a direct way to position before Upwork’s volatile earnings.
Since Q2 2022, GSV, active clients, and GSV per active clients have been remarkably stable. Likewise, in Q3 2023
- GSV from new client cohorts is balancing out client churn as Upwork’s active client count increased 2% y/y and 1.7% q/q. (Retention has been slightly better, while client acquisition was slightly worse according to Q2 insights)
- GSV from clients that increased spending balances spending cuts from other clients as GSV per active client decreases 1% y/y and 1.6% q/q.
Here are some theories for the bull case
- Since Q2 2022, Upwork has suffered from a trend back to the office. Small businesses and ventures founded during the lockdown period have been closed. Startups ran out of money. Nevertheless, Upworks GSV remained stable while Upworks SMB and software-heavy key industries went through a heavy recession.
- U.S. job openings fell from 12million to 9.5million in the period.
- Upwork GSV had a CAGR of 22% between 2016 and 2019 before Covid. The whole effect of current macro headwinds on Upwork might be a temporary pause of growth before underlying secular trends continue.
What are your thoughts? Is there reason to believe that this is too optimistic? (E.g. could a decline in sales for small businesses or labor weakness hurt? Are there any additional GSV insights from Upwork’s Q3 2023 conference call that should be added here for context?