EVENT DETAILS:
- Date & Time: Monday 2/11 @ 12:30PM ET
- Dial-In & Video Link: To be provided in a follow-up invite
- Add Call Details to Outlook Calendar: CLICK HERE
I LIKE THIS ONE SO MUCH I THINK I CAN ONLY WRITE IN BULLETS:
- Mostly untapped, expanding opportunity
- Very early in enterprise adoption
- Take rate moving lower will drive open ended market creation
- Shrink of time-to-hire accelerates booking of labor
- Which opens up a shift in productivity
WHAT ARE THE KEY DRIVERS?
- Supply side growth of freelancers on the platform way outpaces demand growth but creates the market
- Growth of clients on the market is the matching demand vector, at a multi year lag to supply growth; consider that there are 16MM+ freelancers on the site growing mid-high teens % Y/Y (i.e. supply) yet of the 2MM projects served in the 12 months ending June 30 2018, only 375K different freelancers were used. Supply creates demand
- 23 hour median time to fill a job on UPWK versus 31+ days in the normal economy (2017 data) implies massive flexibility and speed shift, a productivity accelerator
- Growth of categories and skills; in 2007 four categories made up 90% of billings, in 2012 90% of billings came from 35 categories…today only 40% of clients accessed freelancers across multiple categories; the growth of skills and categories across the site is a supply side driver which begets demand
- Adoption of large size enterprises: 80% of GSV in 2017 was booked by companies with sub-100 employees, F100 and F500 adoption still low, 1,400 companies with over $100k bookings drove 10% of GSV
THERE IS ALSO A LOT OF CRAP:
- Macro – the site provides labor efficiency in the long run but in the short run some of the excess labor needs will wane; a review of top projects getting sourced appear mostly discretionary / non-core which can create headwinds in the short run
- A very uneven merger and a historically uneven and reset cap table (which will make for an interesting lockup expiry)
- Lots of competition, no exclusivity on clients or freelancers
- Net expansion rates are non-contractual
- Take rate % of GSV is moving lower
- Disclosure of revenue drivers already shifted from S-1 to first 10-Q
Join us Monday as we take you through all the good & bad behind this name and explain why we think it could be a long term 10-bagger.
Please call or e-mail with any questions.
Ami Joseph
Managing Director
Yosef Vaitsblit
Analyst
