Guidance

Guidance is the forecast Upwork Inc. gives in each earnings release for the coming quarter and the full year, stated as ranges for revenue, adjusted EBITDA, diluted share count and non-GAAP earnings per share.

Guidance appears in the Financial Outlook section of the earnings press release attached to the quarterly Form 8-K, and is repeated on the earnings call. It is management's expectation, not a commitment: the ranges are hedged with forward-looking-statement language and can be raised, lowered or withdrawn at the next release. Upwork guides on revenue, which is GAAP, and on adjusted EBITDA and non-GAAP diluted earnings per share, which are not, and it does not guide on gross services volume or active clients, so the marketplace metrics that matter most to freelancers and agencies have no forecast attached.

Guidance is what moves the share price on earnings day. A quarter that beats the previous guidance but lowers the range for the next one tends to be read as bad news; a quarter that merely meets it with a raised outlook as good. Because the company guides on profit measures rather than on volume, the direction of the ranges says where management's attention is.

For readers of the marketplace, guidance is also a tell about fees. Revenue growth guided above any plausible volume growth has to come from the take rate, which means pricing changes, new fees or more paid products on the way for the people who use the platform. Guidance from an earlier release is superseded by the next; only the latest applies.