“In terms of the macro, I’d say things have been relatively stable in the course of Q3, with no real change since Q2,” Upwork President and CEO Hayden Brown said Monday (Nov. 3) during the company’s quarterly earnings call. Brown was responding to an analyst’s question about the state of freelancer demand and any changes the company has seen.
Earlier in the call, Brown characterized the labor market as “still sluggish.”
“So, it’s important to emphasize that against that backdrop, our GSV growth really has been driven by initiatives that we’ve executed, the success of AI and SMB [small and medium-sized business],” Brown said.
Brown said during the call that Upwork is “a structural beneficiary in the AI era of work” and that AI category growth in its marketplace was one of the drivers of its GSV gains in the third quarter.
During the quarter, Upwork saw the number of clients engaged in AI-related projects grow 43% year over year, the GSV from AI-related work increase 52% year over year, and the number of professionals on the platform who engaged in AI projects rise 41% year over year.
“As companies struggle to get AI work done and invest more in AI products and applications, we saw a notable expansion of AI projects and jobs on our platform in Q3,” Brown said. “Businesses of all sizes continue to come to Upwork to find the critical skilled talent they need to integrate this technology and drive more immediate ROI.”
In its most recent Monthly Hiring Report, Upwork said the AI-related skills that were most in demand in September were Python, video editing, graphic design, ChatGPT and AI-generated video.
Round out the top 10 AI-related skills that month were machine learning, virtual assistance, content writing, data entry and Adobe Illustrator.
Upwork’s number of active clients declined by 7% year over year during the third quarter, sliding from 855,000 last year to 794,000, according to a Monday earnings release. The company defines “active clients” as those who have had spend activities on one of its platforms or other workforce solutions in the previous 12 months, according to a presentation released Monday in conjunction with the call.
Upwork CFO Erica Gessert attributed the decline to the company’s focus on “high-value relationships.”
“Our strategy of focusing on quality over quantity is working, resulting in GSV per new client growth of 7% year over year,” Gessert said during the call. “Q2 marked a trough in our year-over-year active client growth, as both new client acquisition and churn rate improved.”
