Third-quarter revenue at talent platform Upwork (NASDAQ: UPWK) rose 10.3% to $193.8 million. Upwork reported active clients rose by 2% year over year to 855,000, and the company added 42 new enterprise clients including Hunter Douglas, Bill.com, Berlitz and Guess.

The company also announced an agreement to acquire Objective AI — an AI-native search-as-a-service company — to further enhance its core search and match performance, strengthen its AI and machine learning team, and uplevel multi-modal capabilities to assist customers with images, videos and audio content. The transaction is expected to close in the fourth quarter, subject to the satisfaction of customary closing conditions.

Upwork saw “slight top-of-funnel improvements, momentum in managed services, an all-time high intake rate and continued growth from our ads and monetization products,” President and CEO Hayden Brown said in a conference call with investors.

Still, gross services volume — the total amount that clients spend on Upwork’s offerings as well as additional fees to talent and clients for other services — fell 3.1% year over year to $998.2 million, though Upwork noted that GSV from artificial intelligence-related work rose by 36% year over year and freelancers working on AI-related work earned 41% more per hour than those working on non-AI-related work.

Marketplace revenue — which includes all the company’s offerings except for its enterprise solutions — rose 11.8%.

Managed services revenue rose 5% year over year in the third quarter, reflecting “increasing demand for delivery of work outcomes and a strong pipeline of new managed services clients,” according to the company. Upwork now presents revenue from enterprise solutions and managed services together as enterprise revenue and no longer reports revenue from its enterprise solutions offering, previously referred to as Upwork Enterprise, in marketplace revenue.

Upwork in October announced it is streamlining operations, which includes a workforce reduction of 21%. In September, an investor had released an open letter saying the company was not living up to its potential.

The company also announced a new $100 million share repurchase authorization.

“We remain committed to executing our long-term strategy and will utilize our healthy balance sheet and strong cash generation to deliver shareholder value, including making the right investments in our growth levers, evaluating accretive M&A and opportunistically deploying capital to repurchase shares,” CFO Erica Gessert said in the conference call.

Upwork Inc. - Q3 2024

Revenue by Segment

Guidance

Upwork forecast fourth-quarter revenue of between $178 million to $183 million, a year-over-year decrease of between 0.5% and 3.2% and 4.7%. For full-year 2024, it expects revenue of $756 million to $761 million, representing 10% year-over-year growth at the midpoint.

Share Price

Shares in Upwork were up 15.09% to $16.78 as of 11:37 a.m. Eastern time on Nov. 7. They set a new 52-week high during today’s trading session when it reached $17.79.