Customer Metrics in Upwork’s IPO Filing

Upwork filed paperwork for its upcoming IPO (terms not yet solidified). While they didn’t disclose the standard metrics that Peter Fader and I have studied in our academic papers, two interesting customer metrics they did disclose which are very similar were “core clients” and “client spend retention.”

“Core clients” is basically what we would call “annual active users”, except that they only include active customers who have spent $5K+ over their lifetime to date.

“Client spend retention” is the ratio of total spend over the past 12 months relative to what those same customers had spent in the year earlier period — basically, a revenue retention rate (1 — revenue churn). Chart below.

There is nothing wrong per se about these metrics — and it is heartening to know that when you take all the people who spent a year ago, their total spend this year went up — this data is almost surely not enough to statistically identify any sort of reasonably sophisticated model for customer behavior.

For one, they really need to disclose some measure for new customer acquisition over time. Very sorely lacking. If I could have my druthers though, I wish all firms would simply disclose revenue by acquisition cohort over time. Period.

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