Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2021 |
Document Transition Report | false |
Entity File Number | 001-38678 |
Entity Registrant Name | UPWORK INC. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 46-4337682 |
Entity Address, Address Line One | 475 Brannan Street, Suite 430 |
Entity Address, City or Town | San Francisco, |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 94107 |
City Area Code | 650 |
Local Phone Number | 316-7500 |
Title of 12(b) Security | Common Stock, $0.0001 par value per share |
Trading Symbol | UPWK |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding (in shares) | 127,616,789 |
Amendment Flag | false |
Entity Central Index Key | 0001627475 |
Document Fiscal Year Focus | 2021 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
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 of allowance of $1,886 and $1,661 as of June 30, 2021 and December 31, 2020, respectively | 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 | 0 | 667 |
Operating lease asset | 13,674 | 19,729 |
Other assets, noncurrent | 1,406 | 1,672 |
Total assets | 569,260 | 529,227 |
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 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity | ||
Common stock, $0.0001 par value; 490,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 127,616,789 and 124,795,222 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 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 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,886 | $ 1,661 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 490,000,000 | 490,000,000 |
Common stock, shares issued (in shares) | 127,616,789 | 124,795,222 |
Common stock, shares outstanding (in shares) | 127,616,789 | 124,795,222 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
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 (in dollars per share) | $ (0.13) | $ (0.09) | $ (0.19) | $ (0.18) |
Net loss per share, diluted (in dollars per share) | $ (0.13) | $ (0.09) | $ (0.19) | $ (0.18) |
Weighted-average shares used to compute new loss per share, basic (in shares) | 126,742,452 | 116,523,570 | 126,010,689 | 115,321,264 |
Weighted-average shares used to compute new loss per share, diluted (in shares) | 126,742,452 | 116,523,570 | 126,010,689 | 115,321,264 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 113,604,398 | |||
Beginning balance at Dec. 31, 2019 | $ 259,424 | $ 11 | $ 431,370 | $ (171,957) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock upon exercise of stock options (in shares) | 4,647,550 | |||
Issuance of common stock upon exercise of stock options | 16,010 | $ 1 | 16,009 | |
Stock-based compensation expense | 12,193 | 12,193 | ||
Issuance of common stock for settlement of RSUs (in shares) | 751,502 | |||
Tides Foundation common stock warrant expense and other | $ 900 | 900 | ||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 264,244 | |||
Issuance of common stock in connection with employee stock purchase plan | $ 2,661 | 2,661 | ||
Net loss | (21,045) | (21,045) | ||
Ending balance (in shares) at Jun. 30, 2020 | 119,267,694 | |||
Ending balance at Jun. 30, 2020 | 270,143 | $ 12 | 463,133 | (193,002) |
Beginning balance (in shares) at Mar. 31, 2020 | 114,866,938 | |||
Beginning balance at Mar. 31, 2020 | 258,736 | $ 11 | 440,703 | (181,978) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock upon exercise of stock options (in shares) | 3,697,663 | |||
Issuance of common stock upon exercise of stock options | 12,845 | $ 1 | 12,844 | |
Stock-based compensation expense | 6,866 | 6,866 | ||
Issuance of common stock for settlement of RSUs (in shares) | 438,849 | |||
Tides Foundation common stock warrant expense and other | $ 59 | 59 | ||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 264,244 | |||
Issuance of common stock in connection with employee stock purchase plan | $ 2,661 | 2,661 | ||
Net loss | (11,024) | (11,024) | ||
Ending balance (in shares) at Jun. 30, 2020 | 119,267,694 | |||
Ending balance at Jun. 30, 2020 | 270,143 | $ 12 | 463,133 | (193,002) |
Beginning balance (in shares) at Dec. 31, 2020 | 124,795,222 | |||
Beginning balance at Dec. 31, 2020 | 299,310 | $ 12 | 494,122 | (194,824) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock upon exercise of stock options (in shares) | 1,675,117 | |||
Issuance of common stock upon exercise of stock options | 5,727 | $ 1 | 5,726 | |
Stock-based compensation expense | 24,826 | 24,826 | ||
Issuance of common stock for settlement of RSUs (in shares) | 910,992 | |||
Tides Foundation common stock warrant expense and other | 350 | 350 | ||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 235,458 | |||
Issuance of common stock in connection with employee stock purchase plan | 2,688 | 2,688 | ||
Net loss | (24,373) | (24,373) | ||
Ending balance (in shares) at Jun. 30, 2021 | 127,616,789 | |||
Ending balance at Jun. 30, 2021 | 308,528 | $ 13 | 527,712 | (219,197) |
Beginning balance (in shares) at Mar. 31, 2021 | 125,962,107 | |||
Beginning balance at Mar. 31, 2021 | 305,501 | $ 13 | 508,147 | (202,659) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock upon exercise of stock options (in shares) | 926,721 | |||
Issuance of common stock upon exercise of stock options | 3,130 | 3,130 | ||
Stock-based compensation expense | 13,562 | 13,562 | ||
Issuance of common stock for settlement of RSUs (in shares) | 492,503 | |||
Tides Foundation common stock warrant expense and other | 185 | 185 | ||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 235,458 | |||
Issuance of common stock in connection with employee stock purchase plan | 2,688 | 2,688 | ||
Net loss | (16,538) | (16,538) | ||
Ending balance (in shares) at Jun. 30, 2021 | 127,616,789 | |||
Ending balance at Jun. 30, 2021 | $ 308,528 | $ 13 | $ 527,712 | $ (219,197) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (24,373) | $ (21,045) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Provision for transaction losses | 1,907 | 1,606 |
Depreciation and amortization | 5,748 | 4,786 |
Amortization of debt issuance costs | 39 | 26 |
Amortization of premium (discount) on purchases of marketable securities, net | 22 | (257) |
Amortization of operating lease asset | 1,774 | 1,945 |
Tides Foundation common stock warrant expense | 375 | 376 |
Stock-based compensation expense | 24,760 | 12,671 |
Impairment expense | 7,389 | 0 |
Changes in operating assets and liabilities: | ||
Trade and client receivables | (16,835) | (4,773) |
Prepaid expenses and other assets | (2,871) | (968) |
Operating lease liability | (861) | (925) |
Accounts payable | 2,168 | 4,403 |
Accrued expenses and other liabilities | (273) | 7,232 |
Deferred revenue | 3,451 | 1,585 |
Net cash provided by operating activities | 2,420 | 6,662 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (29,967) | (47,748) |
Proceeds from maturities of marketable securities | 64,500 | 64,000 |
Purchases of property and equipment | (334) | (5,627) |
Internal-use software and platform development costs | (3,581) | (3,559) |
Net cash provided by investing activities | 30,618 | 7,066 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Changes in escrow funds payable | 30,040 | 20,832 |
Proceeds from exercises of stock options | 5,727 | 16,010 |
Proceeds from borrowings on debt | 0 | 18,000 |
Repayment of debt | (3,786) | (21,786) |
Proceeds from employee stock purchase plan | 2,688 | 2,661 |
Net cash provided by financing activities | 34,669 | 35,717 |
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 67,707 | 49,445 |
Cash, cash equivalents, and restricted cash—beginning of period | 232,463 | 159,603 |
Cash, cash equivalents, and restricted cash—end of period | 300,170 | 209,048 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 283 | 499 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ACTIVITIES: | ||
Property and equipment purchased but not yet paid | 39 | 478 |
Internal-use software and platform development costs incurred but not yet paid | $ 36 | $ 170 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Upwork Inc., which is referred to as the Company or Upwork, operates a work marketplace that connects businesses, which are referred to as clients, with independent talent. Independent talent on the Company’s work marketplace, which are referred to as freelancers, and, together with clients, as users, include independent professionals and agencies of varying sizes and are an increasingly sought-after, critical, and expanding segment of the global workforce. The Company is currently headquartered in San Francisco, California. Unless otherwise expressly stated or the context otherwise requires, the terms “Upwork” and the “Company” in these notes to the condensed consolidated financial statements refer to Upwork and its wholly-owned subsidiaries. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, which is referred to as U.S. GAAP, and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which is referred to as the Annual Report, filed with the SEC on February 24, 2021. The condensed consolidated balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP. The condensed consolidated financial statements include the accounts of Upwork and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, changes in stockholders’ equity and cash flows for the interim periods, but do not purport to be indicative of the results of operations or financial condition to be anticipated for the full year ending December 31, 2021. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods presented. Such estimates include, but are not limited to: the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; standalone selling price of material rights and the period of time over which to defer and recognize the consideration allocated to the material rights; allowance for doubtful accounts; liabilities relating to transaction losses; stock-based compensation; and accounting for income taxes. Management bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The Company evaluates its estimates, assumptions, and judgments on an ongoing basis using historical experience and other factors and revises them when facts and circumstances dictate. The Company shifted to a flexible work model for its workforce and is evaluating its current need for office space. During the three months ended June 30, 2021, the Company executed a sub-sublease agreement to sublease the entirety of its former headquarters in Santa Clara, California. As a result, during the three months ended June 30, 2021, the Company incurred an impairment charge of $7.4 million related to the associated operating lease asset and property and equipment. The Company may determine to either close or sublease certain of its other offices, either of which may result in further impairment charges. See Note 5 for additional information regarding this impairment. Notwithstanding the foregoing, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. Recently Adopted Accounting Pronouncements The significant accounting policies applied in the Company’s audited consolidated financial statements, as disclosed in the Annual Report, are applied consistently in these unaudited interim condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted The Company has reviewed all accounting pronouncements issued during the six months ended June 30, 2021 and concluded they were either not applicable or not expected to have a material impact on the Company’s condensed consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue See “Note 9 —Segment and Geographical Information” for the Company’s revenue disaggregated by type of service and geographic area. Remaining Performance Obligations As of June 30, 2021, the Company had approximately $24.4 million of remaining performance obligations. The Company’s remaining performance obligations consist of transaction price that has been allocated to unexercised material rights related to the Company’s arrangements with freelancers subject to tiered service fees, subscriptions, memberships, “Connects” (virtual tokens that allow freelancers to bid on projects on the Company’s platform), and certain incentive payments made to the Company by payment processors. As of June 30, 2021, the Company expects to recognize approximately $19.2 million over the next 12 months, with the remaining balance recognized thereafter. The Company has applied the practical expedients and exemptions and does not disclose the value of remaining performance obligations for: (i) contracts with an original expected length of one year or less; and (ii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation under the series guidance. Contract Balances The following table provides information about the balances of the Company’s trade and client receivables, net of allowance and contract liabilities included in deferred revenue and other liabilities, noncurrent (in thousands): June 30, 2021 December 31, 2020 Trade and client receivables, net of allowance $ 62,232 $ 47,018 Contract liabilities Deferred revenue 19,164 16,801 Deferred revenue (component of other liabilities, noncurrent) 5,265 4,177 During the three and six months ended June 30, 2021, changes in the contract liabilities balances were a result of normal business activity and deferral, and subsequent recognition, of revenue related to arrangements with freelancers subject to tiered service fees and related allocation of transaction price to material rights. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company defines fair value as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance describes three levels of inputs that may be used to measure fair value: • Level I—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets; • Level II—Observable inputs other than Level I prices, such as unadjusted quoted prices for similar assets or liabilities in active markets, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level III—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation. The categorization of a financial instrument within the fair value hierarchy is based upon the lowest level of input that is significant to its fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the assets or liabilities. The Company’s financial instruments that are carried at fair value consist of Level I and Level II assets as of June 30, 2021 and December 31, 2020. The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): June 30, 2021 Level I Level II Level III Total Cash equivalents Money market funds $ 119,806 $ — $ — $ 119,806 Marketable securities Commercial paper — 35,983 — 35,983 U.S. government securities 5,007 — — 5,007 Total financial assets $ 124,813 $ 35,983 $ — $ 160,796 December 31, 2020 Level I Level II Level III Total Cash equivalents Money market funds $ 65,723 $ — $ — $ 65,723 Commercial paper — 5,999 — 5,999 Marketable securities Commercial paper — 50,965 — 50,965 Treasury Bills 4,499 — — 4,499 U.S. government securities 20,106 — — 20,106 Total financial assets $ 90,328 $ 56,964 $ — $ 147,292 For each of the three and six months ended June 30, 2021 and 2020, the gross unrealized gains and losses on the Company’s marketable securities were immaterial. As of June 30, 2021 and 2020, the Company considered any decreases in market value to be temporary in nature and did not consider any of the Company’s marketable securities to be other-than-temporarily impaired. As such, the Company did not record any impairment charges with respect to its marketable securities during each of the three and six months ended June 30, 2021 and 2020. As of June 30, 2021 and December 31, 2020, the Company had debt obligations outstanding of $7.0 million and $10.8 million, respectively, under the Company’s Loan and Security Agreement, as amended, which is referred to as the Loan Agreement. As of June 30, 2021, the carrying value approximated fair value as borrowings under the Loan Agreement bore interest at variable rates, and the Company believes its credit risk quality is consistent with when the debt was originated. The Company considered the balances outstanding under the Loan Agreement to be Level II liabilities as of June 30, 2021 and December 31, 2020. See Note 7. |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components Cash and Cash Equivalents, Restricted Cash, and Funds Held In Escrow, Including Funds In Transit The following table reconciles cash and cash equivalents, restricted cash, and funds held in escrow that are restricted as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 Cash and cash equivalents $ 131,448 $ 94,081 Restricted cash 3,640 3,340 Funds held in escrow, including funds in transit 165,082 135,042 Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows $ 300,170 $ 232,463 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): June 30, 2021 December 31, 2020 Computer equipment and software $ 5,052 $ 4,819 Internal-use software and platform development 24,126 20,727 Leasehold improvements 11,704 14,613 Office furniture and fixtures 3,239 3,354 Total property and equipment 44,121 43,513 Less: accumulated depreciation (20,438) (15,374) Property and equipment, net $ 23,683 $ 28,139 For the three months ended June 30, 2021 and 2020, depreciation expense related to property and equipment was $1.0 million and $0.8 million, respectively. For the six months ended June 30, 2021 and 2020, depreciation expense related to property and equipment was $2.0 million and $1.5 million, respectively. For the three months ended June 30, 2021 and 2020, the Company capitalized $1.3 million and $1.7 million of internal-use software and platform development costs, respectively. For the six months ended June 30, 2021 and 2020, the Company capitalized $3.4 million and $3.3 million of internal-use software and platform development costs, respectively. For the three months ended June 30, 2021 and 2020, amortization expense related to the capitalized internal-use software and platform development costs was $1.6 million and $1.1 million, respectively. For the six months ended June 30, 2021 and 2020, amortization expense related to the capitalized internal-use software and platform development costs was $3.1 million and $2.0 million, respectively. The Company shifted to a flexible work model for its workforce and is evaluating its current need for office space. In April 2021, the Company executed a sub-sublease agreement to sublease the entirety of its former headquarters in Santa Clara, California. The sub-sublease agreement became effective in May 2021 upon receipt of the consent of the Company’s landlord and master lessor. The term of the sub-sublease commenced on June 1, 2021 and expires on May 31, 2024 unless terminated earlier in accordance therewith. Rent payments begin on January 1, 2022 and approximate $0.1 million per month. Rent payments will be recorded within general and administrative expenses within the Company’s condensed consolidated statements of operations. Neither party has the option to renew or extend the sub-sublease agreement. Under the sub-sublease agreement, the Company is not relieved of its original obligation with the master lessor that expires on October 15, 2028. The Company determined the sub-sublease agreement is an operating lease, which is consistent with the classification of the original sublease with the master lessor. As a result of the execution of the sub-sublease agreement, the Company determined that indicators of impairment existed with respect to the asset group that consisted of the Santa Clara office operating lease asset and associated leasehold improvements, furniture and fixtures, and hardware. Accordingly, the Company conducted an impairment test to assess whether the fair value of the asset group was lower than its carrying value. The results of the impairment test indicated that the fair value of the asset group was lower than its carrying value. The Company determined the fair value of the asset group using the discounted cash flow method. The assumptions used in the discounted cash flow analysis included projected sublease income over the remaining term of the original sublease with the master lessor, expected downtime prior to the commencement of future subleases, and a discount rate the Company believes reflects the level of risk associated with these future cash flows. The Company considers these assumptions to be Level III inputs in accordance with the fair value hierarchy described in Note 4. During the three months ended June 30, 2021, the Company recorded an impairment charge of $7.4 million, of which $4.3 million was allocated to the Santa Clara office operating lease asset, $2.9 million was allocated to the associated leasehold improvements, and $0.2 million was allocated to the associated furniture and fixtures and hardware. The Company recorded this impairment charge within general and administrative expenses within its condensed consolidated statement of operations for the three and six months ended June 30, 2021. Intangible Assets, Net All of the Company’s identifiable intangible assets were fully amortized as of March 31, 2021. For the three months ended June 30, 2020, amortization expense of intangible assets was $0.7 million. For the six months ended June 30, 2021 and 2020, amortization expense of intangible assets was $0.7 million and $1.3 million, respectively. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2021 December 31, 2020 Accrued compensation and related benefits $ 12,100 $ 14,007 Accrued freelancer costs 1,141 1,235 Accrued indirect taxes 3,037 3,818 Accrued vendor expenses 9,921 8,662 Accrued payment processing fees 2,079 1,219 Operating lease liability, current 4,613 3,725 Other 320 202 Total accrued expenses and other current liabilities $ 33,211 $ 32,868 Stockholders’ Equity On January 18, 2021, which is referred to as the CEO Award Grant Date, the compensation committee of the board of directors of the Company approved a stock option grant, which is referred to as the CEO Award, exercisable for up to 1,500,000 shares of the Company’s common stock to Hayden Brown, the Company’s President and Chief Executive Officer, under the Company’s 2018 Employee Incentive Plan, which is referred to as the 2018 EIP. The CEO Award is subject to a service-based vesting requirement, which is referred to as the Service Condition, and a performance-based vesting requirement, which is referred to as the Market Condition. In order for any shares subject to the CEO Award to be exercisable, both the Service Condition and the Market Condition must be satisfied with respect to such shares. The CEO Award vests with respect to the Service Condition in sixteen equal quarterly installments following the CEO Award Grant Date, subject to Ms. Brown’s continuous service to the Company as Chief Executive Officer, Executive Chairperson, or any C-level officer position. The CEO Award vests with respect to the Market Condition upon the achievement of certain volume weighted-average common stock price targets measured over any consecutive 90-day period between the CEO Award Grant Date and April 18, 2026. The 90-day volume weighted-average common stock price targets, and the number of shares of the CEO Award that become vested with respect to the Market Condition upon the achievement of each such target, are reflected in the following table: Stock Price Number of Shares Vested $60 100,000 $70 200,000 $80 300,000 $90 400,000 $100 500,000 Stock-based compensation expense associated with the CEO Award will be recognized over the longer of the expected achievement period for the Market Condition and the Service Condition. The Market Condition period and the valuation of each tranche of the CEO Award were determined using a Monte Carlo simulation. Stock-based compensation expense for the CEO Award is recorded as a component of general and administrative expense in the Company’s condensed consolidated statement of operations. In the event the Market Condition is met prior to the expected achievement period, any then-unrecognized compensation expense associated with the shares that have vested with respect to both the Market Condition and the Service Condition will be recognized immediately in the Company’s condensed consolidated statements of operations. For the three and six months ended June 30, 2021, the Company recorded stock-based compensation expense of $2.8 million and $5.3 million, respectively, related to the CEO Award. As of June 30, 2021, total unrecognized stock-based compensation cost was $23.5 million, which is expected to be recognized over a weighted-average period of 2.2 years. On February 17, 2021, which is referred to as the PSU Grant Date, the compensation committee of the board of directors of the Company approved performance stock unit awards, which are referred to as PSU Awards, to certain members of the Company’s leadership team under the 2018 EIP. The number of performance stock units, which are referred to as PSUs, that are earned by the recipients, which is referred to as Earned PSUs, will be determined based on the Company’s revenue achievement during fiscal year 2021, which is referred to as the PSU Performance Condition. Upon attainment of the PSU Performance Condition, the Earned PSUs will be subject to a time-based vesting requirement conditioned on the recipient of the PSU Award continuing to provide service to the Company for four years from the PSU Grant Date, which is referred to as the PSU Service Condition. The Earned PSUs will vest with respect to 25% of the Earned PSUs on the one-year anniversary of the PSU Grant Date and 1/16th of the Earned PSUs on a quarterly basis thereafter. Stock-based compensation expense associated with the PSU Awards is a component of operating expenses in the Company’s condensed consolidated statements of operations and will be recognized over the longer of the expected achievement period for the PSU Performance Condition and the PSU Service Condition. The grant date fair value of the PSU Awards was determined using the Company’s closing common stock price on the PSU Grant Date multiplied by the number of PSUs that were probable of being earned on the PSU Grant Date. At each interim reporting date prior to the date on which the compensation committee of the board of directors certifies the PSU Performance Condition, the number of PSUs that are probable of being earned is reassessed and any changes are reflected in the total stock-based compensation expense associated with the PSU Awards. During the three and six months ended June 30, 2021, the Company recorded stock-based compensation expense of $0.9 million and $1.3 million related to the PSU Awards. As of June 30, 2021, total unrecognized stock-based compensation cost was $4.9 million, which is expected to be recognized over a weighted-average period of 2.0 years. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Letters of Credit In conjunction with the Company’s operating lease agreements, as of June 30, 2021 and December 31, 2020, the Company had three irrevocable letters of credit outstanding in the aggregate amounts of $0.8 million and $1.0 million, respectively. The letters of credit are collateralized by restricted cash in the same amount. No amounts had been drawn against these letters of credit as of June 30, 2021 and December 31, 2020. Contingencies The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Potential contingencies may include various claims and litigation or non-income tax matters that arise from time to time in the normal course of business. Due to uncertainties inherent in such contingencies, the Company can give no assurance that it will prevail in any such matters, which could subject the Company to significant liability or damages. Any claims, litigation, or other contingencies could have an adverse effect on the Company’s business, financial position, results of operations, or cash flows in or following the period that claims, litigation, or other contingencies are resolved. As of June 30, 2021 and December 31, 2020, the Company was not a party to any material legal proceedings or claims, nor is the Company aware of any pending or threatened litigation or claims, including non-income tax matters, that could reasonably be expected to have a material adverse effect on its business, operating results, cash flows, or financial condition. Accordingly, the amounts accrued for contingencies for which the Company believes a loss is probable were not material as of June 30, 2021 and December 31, 2020. Indemnification The Company has indemnification agreements with its officers, directors, and certain key employees to indemnify them while they are serving in good faith in their respective positions. In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to clients, business partners, vendors, and other parties, including, but not limited to, losses arising out of the Company’s breach of such agreements, claims related to potential data or information security breaches, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from the Company’s products and services or its acts or omissions. In addition, subject to the terms of the applicable agreement, as part of the Company’s Upwork Enterprise offering, the Company indemnifies clients that subscribe to worker classification services for losses arising from worker misclassification. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the facts and circumstances involved in each particular provision. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table presents the carrying value of the Company’s debt obligations as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 First Term Loan—18 months of interest-only payments ended in March 2019 followed by 36 equal monthly installments of principal plus interest, maturing March 2022; interest at prime plus 0.25% per annum $ 3,750 $ 6,250 Second Term Loan—17 months of interest-only payments ended in March 2019 followed by 42 equal monthly installments of principal plus interest, maturing September 2022; interest at prime plus 0.25% per annum 3,214 4,500 Total debt 6,964 10,750 Add (less): unamortized debt issuance and other costs, net 13 (27) Balance 6,977 10,723 Debt, current (6,344) (7,581) Debt, noncurrent $ 633 $ 3,142 Weighted-average interest rate 5.10 % 5.64 % Under the Loan Agreement, the aggregate amount of the facility is up to $49.0 million, consisting of a term loan in the original principal amount of $15.0 million, which is referred to as the First Term Loan, a term loan in the original principal amount of $9.0 million, which is referred to as the Second Term Loan, and, together with the First Term Loan, as the Term Loans, and a revolving line of credit, which permits borrowings of up to $25.0 million subject to customary conditions. The Company has granted its lender first-priority liens against substantially all of its assets, as collateral, excluding the Company’s intellectual property (but including proceeds therefrom) and the funds and assets held by the Company’s subsidiary, Upwork Escrow Inc. The Company has also agreed to a negative pledge on its intellectual property. The Loan Agreement also requires that the Company maintain an adjusted quick ratio of 1.75. The Loan Agreement also includes a restrictive covenant on dividend payments other than dividends paid solely in common stock. The Company was in compliance with its covenants under the Loan Agreement as of June 30, 2021 and December 31, 2020. During the three and six months ended June 30, 2021, the Company repaid $1.3 million and $2.5 million related to the First Term Loan, respectively, and $0.6 million and $1.3 million related to the Second Term Loan, respectively. During the three and six months ended June 30, 2020, the Company repaid $1.3 million and $2.5 million related to the First Term Loan, respectively, and $0.6 million and $1.3 million related to the Second Term Loan, respectively. As of June 30, 2021 and December 31, 2020, no amounts were outstanding on the Company’s revolving line of credit. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented (in thousands, except share and per share data): Three Months Ended Six Months Ended 2021 2020 2021 2020 Numerator: Net loss $ (16,538) $ (11,024) $ (24,373) $ (21,045) Denominator: Weighted-average shares used to compute net loss per share, basic and diluted 126,742,452 116,523,570 126,010,689 115,321,264 Net loss per share, basic and diluted $ (0.13) $ (0.09) $ (0.19) $ (0.18) The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive: As of June 30, 2021 2020 Options to purchase common stock 4,636,338 9,878,333 Common stock issuable upon exercise of common stock warrants 400,000 450,000 Common stock issuable upon vesting of restricted stock units 5,066,960 6,191,541 Common stock issuable in connection with employee stock purchase plan 287,448 964,974 Total 10,390,746 17,484,848 |
Segment and Geographical Inform
Segment and Geographical Information | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment and Geographical Information | Segment and Geographical Information The Company operates as one operating and reportable segment for purposes of allocating resources and evaluating financial performance. The following table sets forth total revenue by type of service for the periods presented (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 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 The Company generates its revenue from freelancers and clients. The following table sets forth total revenue by geographic area based on the billing address of its freelancers and clients for the periods presented (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 Freelancers United States $ 18,764 $ 14,300 $ 36,879 $ 28,297 India 10,734 7,879 20,321 15,352 Philippines 7,993 5,304 15,066 10,441 Rest of world 36,377 25,833 70,066 50,188 Total freelancers 73,868 53,316 142,332 104,278 Clients United States 37,353 24,354 70,614 47,313 Rest of world 12,960 9,861 24,854 19,136 Total clients 50,313 34,215 95,468 66,449 Total revenue $ 124,181 $ 87,531 $ 237,800 $ 170,727 Substantially all of the Company’s long-lived assets were located in the United States as of June 30, 2021 and December 31, 2020. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, which is referred to as U.S. GAAP, and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which is referred to as the Annual Report, filed with the SEC on February 24, 2021. The condensed consolidated balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by U.S. GAAP. The condensed consolidated financial statements include the accounts of Upwork and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, changes in stockholders’ equity and cash flows for the interim periods, but do not purport to be indicative of the results of operations or financial condition to be anticipated for the full year ending December 31, 2021. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods presented. Such estimates include, but are not limited to: the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; standalone selling price of material rights and the period of time over which to defer and recognize the consideration allocated to the material rights; allowance for doubtful accounts; liabilities relating to transaction losses; stock-based compensation; and accounting for income taxes. Management bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The Company evaluates its estimates, assumptions, and judgments on an ongoing basis using historical experience and other factors and revises them when facts and circumstances dictate. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements The significant accounting policies applied in the Company’s audited consolidated financial statements, as disclosed in the Annual Report, are applied consistently in these unaudited interim condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted The Company has reviewed all accounting pronouncements issued during the six months ended June 30, 2021 and concluded they were either not applicable or not expected to have a material impact on the Company’s condensed consolidated financial statements. |
Fair Value Measurements | The Company defines fair value as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance describes three levels of inputs that may be used to measure fair value: • Level I—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets; • Level II—Observable inputs other than Level I prices, such as unadjusted quoted prices for similar assets or liabilities in active markets, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level III—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation. The categorization of a financial instrument within the fair value hierarchy is based upon the lowest level of input that is significant to its fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the assets or liabilities. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table provides information about the balances of the Company’s trade and client receivables, net of allowance and contract liabilities included in deferred revenue and other liabilities, noncurrent (in thousands): June 30, 2021 December 31, 2020 Trade and client receivables, net of allowance $ 62,232 $ 47,018 Contract liabilities Deferred revenue 19,164 16,801 Deferred revenue (component of other liabilities, noncurrent) 5,265 4,177 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Financial Liabilities Measured at Fair Value on a Recurring Basis | The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): June 30, 2021 Level I Level II Level III Total Cash equivalents Money market funds $ 119,806 $ — $ — $ 119,806 Marketable securities Commercial paper — 35,983 — 35,983 U.S. government securities 5,007 — — 5,007 Total financial assets $ 124,813 $ 35,983 $ — $ 160,796 December 31, 2020 Level I Level II Level III Total Cash equivalents Money market funds $ 65,723 $ — $ — $ 65,723 Commercial paper — 5,999 — 5,999 Marketable securities Commercial paper — 50,965 — 50,965 Treasury Bills 4,499 — — 4,499 U.S. government securities 20,106 — — 20,106 Total financial assets $ 90,328 $ 56,964 $ — $ 147,292 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Cash and Cash Equivalents | The following table reconciles cash and cash equivalents, restricted cash, and funds held in escrow that are restricted as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 Cash and cash equivalents $ 131,448 $ 94,081 Restricted cash 3,640 3,340 Funds held in escrow, including funds in transit 165,082 135,042 Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows $ 300,170 $ 232,463 |
Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): June 30, 2021 December 31, 2020 Computer equipment and software $ 5,052 $ 4,819 Internal-use software and platform development 24,126 20,727 Leasehold improvements 11,704 14,613 Office furniture and fixtures 3,239 3,354 Total property and equipment 44,121 43,513 Less: accumulated depreciation (20,438) (15,374) Property and equipment, net $ 23,683 $ 28,139 |
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2021 December 31, 2020 Accrued compensation and related benefits $ 12,100 $ 14,007 Accrued freelancer costs 1,141 1,235 Accrued indirect taxes 3,037 3,818 Accrued vendor expenses 9,921 8,662 Accrued payment processing fees 2,079 1,219 Operating lease liability, current 4,613 3,725 Other 320 202 Total accrued expenses and other current liabilities $ 33,211 $ 32,868 |
Summary of Activity under Stock Option Plans | The 90-day volume weighted-average common stock price targets, and the number of shares of the CEO Award that become vested with respect to the Market Condition upon the achievement of each such target, are reflected in the following table: Stock Price Number of Shares Vested $60 100,000 $70 200,000 $80 300,000 $90 400,000 $100 500,000 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Carrying Value of Debt | The following table presents the carrying value of the Company’s debt obligations as of June 30, 2021 and December 31, 2020 (in thousands): June 30, 2021 December 31, 2020 First Term Loan—18 months of interest-only payments ended in March 2019 followed by 36 equal monthly installments of principal plus interest, maturing March 2022; interest at prime plus 0.25% per annum $ 3,750 $ 6,250 Second Term Loan—17 months of interest-only payments ended in March 2019 followed by 42 equal monthly installments of principal plus interest, maturing September 2022; interest at prime plus 0.25% per annum 3,214 4,500 Total debt 6,964 10,750 Add (less): unamortized debt issuance and other costs, net 13 (27) Balance 6,977 10,723 Debt, current (6,344) (7,581) Debt, noncurrent $ 633 $ 3,142 Weighted-average interest rate 5.10 % 5.64 % |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented (in thousands, except share and per share data): Three Months Ended Six Months Ended 2021 2020 2021 2020 Numerator: Net loss $ (16,538) $ (11,024) $ (24,373) $ (21,045) Denominator: Weighted-average shares used to compute net loss per share, basic and diluted 126,742,452 116,523,570 126,010,689 115,321,264 Net loss per share, basic and diluted $ (0.13) $ (0.09) $ (0.19) $ (0.18) |
Schedule of Potentially Dilutive Shares Excluded from Computation of Diluted Net Loss Per Share Attributable to Common Stockholders | The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive: As of June 30, 2021 2020 Options to purchase common stock 4,636,338 9,878,333 Common stock issuable upon exercise of common stock warrants 400,000 450,000 Common stock issuable upon vesting of restricted stock units 5,066,960 6,191,541 Common stock issuable in connection with employee stock purchase plan 287,448 964,974 Total 10,390,746 17,484,848 |
Segment and Geographical Info_2
Segment and Geographical Information (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Revenue by Type of Service | The following table sets forth total revenue by type of service for the periods presented (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 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 |
Revenue by Geographic Area Based on Billing Address of Freelancers and Clients | The following table sets forth total revenue by geographic area based on the billing address of its freelancers and clients for the periods presented (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 Freelancers United States $ 18,764 $ 14,300 $ 36,879 $ 28,297 India 10,734 7,879 20,321 15,352 Philippines 7,993 5,304 15,066 10,441 Rest of world 36,377 25,833 70,066 50,188 Total freelancers 73,868 53,316 142,332 104,278 Clients United States 37,353 24,354 70,614 47,313 Rest of world 12,960 9,861 24,854 19,136 Total clients 50,313 34,215 95,468 66,449 Total revenue $ 124,181 $ 87,531 $ 237,800 $ 170,727 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | |||
Impairment expense | $ 7,400 | $ 7,389 | $ 0 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue, remaining performance obligation, amount | $ 24.4 | $ 24.4 | ||
Contract with customer, liability, revenue recognized | 6.1 | $ 4.9 | 9.6 | $ 8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue, remaining performance obligation, amount | $ 19.2 | $ 19.2 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | 12 months |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Trade and client receivables, net of allowance | $ 62,232 | $ 47,018 |
Contract liabilities | ||
Deferred revenue | 19,164 | 16,801 |
Deferred revenue (component of other liabilities, noncurrent) | $ 5,265 | $ 4,177 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 160,796 | $ 147,292 |
Total debt | 6,964 | 10,750 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 119,806 | 65,723 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5,999 | |
Marketable securities | 35,983 | 50,965 |
Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 4,499 | |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 5,007 | 20,106 |
Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 124,813 | 90,328 |
Level I | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 119,806 | 65,723 |
Level I | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Level I | Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 4,499 | |
Level I | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 5,007 | 20,106 |
Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 35,983 | 56,964 |
Level II | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level II | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5,999 | |
Marketable securities | 35,983 | 50,965 |
Level II | Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | |
Level II | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | 0 |
Level III | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Level III | Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Level III | Treasury bills | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | |
Level III | U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 0 | $ 0 |
Balance Sheet Components - Cash
Balance Sheet Components - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||||
Cash and cash equivalents | $ 131,448 | $ 94,081 | ||
Restricted cash | 3,640 | 3,340 | ||
Funds held in escrow, including funds in transit | 165,082 | 135,042 | ||
Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows | $ 300,170 | $ 232,463 | $ 209,048 | $ 159,603 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 01, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||||||
Total property and equipment | $ 44,121 | $ 44,121 | $ 43,513 | |||
Less: accumulated depreciation | (20,438) | (20,438) | (15,374) | |||
Property and equipment, net | 23,683 | 23,683 | 28,139 | |||
Depreciation expense | 1,000 | $ 800 | 2,000 | $ 1,500 | ||
Capitalized internal-use software and platform development costs | 1,300 | 1,700 | 3,400 | 3,300 | ||
Amortization of internal-use software and platform development costs | 1,600 | $ 1,100 | 3,100 | 2,000 | ||
Lessor, operating lease, monthly payments to be received | $ 100 | |||||
Asset impairment charges | 7,400 | 7,389 | $ 0 | |||
Operating lease, impairment loss | 4,300 | |||||
Impairment of leasehold | 2,900 | |||||
Impairment, long-lived asset, held-for-use | 200 | |||||
Computer equipment and software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property and equipment | 5,052 | 5,052 | 4,819 | |||
Internal-use software and platform development | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property and equipment | 24,126 | 24,126 | 20,727 | |||
Leasehold improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property and equipment | 11,704 | 11,704 | 14,613 | |||
Office furniture and fixtures | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Total property and equipment | $ 3,239 | $ 3,239 | $ 3,354 |
Balance Sheet Components - Inta
Balance Sheet Components - Intangible Assets, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |||
Amortization expense of intangible assets | $ 0.7 | $ 0.7 | $ 1.3 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued compensation and related benefits | $ 12,100 | $ 14,007 |
Accrued freelancer costs | 1,141 | 1,235 |
Accrued indirect taxes | 3,037 | 3,818 |
Accrued vendor expenses | 9,921 | 8,662 |
Accrued payment processing fees | 2,079 | 1,219 |
Operating lease liability, current | 4,613 | 3,725 |
Other | 320 | 202 |
Total accrued expenses and other current liabilities | $ 33,211 | $ 32,868 |
Balance Sheet Components - Stoc
Balance Sheet Components - Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | Feb. 17, 2021 | Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($)installment$ / sharesshares | Jun. 30, 2020USD ($) | Jan. 18, 2021shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment arrangement, noncash expense | $ | $ 24,760 | $ 12,671 | |||
Performance Shares | CEO Award | Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercisable shares (in shares) | 1,500,000 | ||||
Number of installments | installment | 16 | ||||
Share-based payment arrangement, noncash expense | $ | $ 2,800 | $ 5,300 | |||
Stock-based compensation not yet recognized | $ | 23,500 | $ 23,500 | |||
Stock-based compensation not yet recognized, recognition period | 2 years 2 months 12 days | ||||
Performance Shares | CEO Award | Chief Executive Officer | Target one | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock price (in dollars per share) | $ / shares | $ 60 | ||||
Number of shares vested (in shares) | 100,000 | ||||
Performance Shares | CEO Award | Chief Executive Officer | Target two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock price (in dollars per share) | $ / shares | $ 70 | ||||
Number of shares vested (in shares) | 200,000 | ||||
Performance Shares | CEO Award | Chief Executive Officer | Target three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock price (in dollars per share) | $ / shares | $ 80 | ||||
Number of shares vested (in shares) | 300,000 | ||||
Performance Shares | CEO Award | Chief Executive Officer | Target four | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock price (in dollars per share) | $ / shares | $ 90 | ||||
Number of shares vested (in shares) | 400,000 | ||||
Performance Shares | CEO Award | Chief Executive Officer | Target five | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock price (in dollars per share) | $ / shares | $ 100 | ||||
Number of shares vested (in shares) | 500,000 | ||||
Performance Shares | PSU Award | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Performance Shares | PSU Award | Target one | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | ||||
Performance Shares | PSU Award | Target two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 6.25% | ||||
Performance Shares | PSU Award | Members of Companies Leadership | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment arrangement, noncash expense | $ | 900 | $ 1,300 | |||
Stock-based compensation not yet recognized | $ | $ 4,900 | $ 4,900 | |||
Stock-based compensation not yet recognized, recognition period | 2 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 30, 2021USD ($)letter | Dec. 31, 2020USD ($)letter |
Other Commitments [Line Items] | ||
Letters of credit held | letter | 3 | 3 |
Line of credit facility, maximum borrowing capacity (up to) | $ 49,000,000 | |
Letter of Credit | ||
Other Commitments [Line Items] | ||
Line of credit facility, maximum borrowing capacity (up to) | 800,000 | $ 1,000,000 |
Long-term line of credit | $ 0 | $ 0 |
Debt - Summary of Carrying Valu
Debt - Summary of Carrying Value of Debt (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021USD ($)installment | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | ||
Total debt | $ 6,964 | $ 10,750 |
Add (less): unamortized debt issuance and other costs, net | 13 | (27) |
Balance | 6,977 | 10,723 |
Debt, current | (6,344) | (7,581) |
Debt, noncurrent | $ 633 | $ 3,142 |
Weighted-average interest rate | 5.10% | 5.64% |
First Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | $ 3,750 | $ 6,250 |
Interest only payments term | 18 months | |
Number of equal monthly installments of principal and interest | installment | 36 | |
First Term Loan | Prime Rate | ||
Debt Instrument [Line Items] | ||
Debt, variable rate | 0.25% | |
Second Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | $ 3,214 | $ 4,500 |
Interest only payments term | 17 months | |
Number of equal monthly installments of principal and interest | installment | 42 | |
Second Term Loan | Prime Rate | ||
Debt Instrument [Line Items] | ||
Debt, variable rate | 0.25% |
Debt - Additional Information (
Debt - Additional Information (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity (up to) | $ 49,000,000 | $ 49,000,000 | |||
Adjusted quick ratio | 1.75 | ||||
Repayment of debt | $ 3,786,000 | $ 21,786,000 | |||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity (up to) | 25,000,000 | 25,000,000 | |||
Long-term line of credit | 0 | 0 | $ 0 | ||
First Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | 15,000,000 | 15,000,000 | |||
Repayment of debt | 1,300,000 | $ 1,300,000 | 2,500,000 | $ 2,500,000 | |
Second Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | 9,000,000 | 9,000,000 | |||
Repayment of debt | $ 600,000 | $ 1,300,000 |
Net Loss per Share - Summary of
Net Loss per Share - Summary of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||
Net loss | $ (16,538) | $ (11,024) | $ (24,373) | $ (21,045) |
Denominator: | ||||
Weighted-average shares used to compute new loss per share, basic (in shares) | 126,742,452 | 116,523,570 | 126,010,689 | 115,321,264 |
Weighted-average shares used to compute new loss per share, diluted (in shares) | 126,742,452 | 116,523,570 | 126,010,689 | 115,321,264 |
Net loss per share, basic (in dollars per share) | $ (0.13) | $ (0.09) | $ (0.19) | $ (0.18) |
Net loss per share, diluted (in dollars per share) | $ (0.13) | $ (0.09) | $ (0.19) | $ (0.18) |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares | 3 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 10,390,746 | 17,484,848 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 4,636,338 | 9,878,333 |
Common stock issuable upon exercise of common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 400,000 | 450,000 |
Common stock issuable upon vesting of restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 5,066,960 | 6,191,541 |
Common stock issuable in connection with employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares) | 287,448 | 964,974 |
Segment and Geographical Info_3
Segment and Geographical Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Segment and Geographical Info_4
Segment and Geographical Information - Revenue by Type of Service (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 124,181 | $ 87,531 | $ 237,800 | $ 170,727 |
Marketplace | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 114,460 | 78,464 | 219,130 | 153,246 |
Managed services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 9,721 | $ 9,067 | $ 18,670 | $ 17,481 |
Segment and Geographical Info_5
Segment and Geographical Information - Revenue by Geographic Area Based on Billing Address of Freelancers and Clients (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 124,181 | $ 87,531 | $ 237,800 | $ 170,727 |
Freelancers | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 73,868 | 53,316 | 142,332 | 104,278 |
Freelancers | United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 18,764 | 14,300 | 36,879 | 28,297 |
Freelancers | India | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 10,734 | 7,879 | 20,321 | 15,352 |
Freelancers | Philippines | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 7,993 | 5,304 | 15,066 | 10,441 |
Freelancers | Rest of world | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 36,377 | 25,833 | 70,066 | 50,188 |
Clients | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 50,313 | 34,215 | 95,468 | 66,449 |
Clients | United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 37,353 | 24,354 | 70,614 | 47,313 |
Clients | Rest of world | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 12,960 | $ 9,861 | $ 24,854 | $ 19,136 |