0001627475-22-000009 | 10-K | XBRL Viewer

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 187,205	$ 94,081
Marketable securities	497,566	75,570
Funds held in escrow, including funds in transit	160,813	135,042
Trade and client receivables – net of allowance of $3,410 and $1,661 as of December 31, 2021 and 2020, respectively	66,826	47,018
Prepaid expenses and other current assets	17,243	9,090
Total current assets	929,653	360,801
Property and equipment, net	21,329	28,139
Goodwill	118,219	118,219
Intangible assets, net	0	667
Operating lease asset	10,682	19,729
Other assets, noncurrent	1,178	1,672
Total assets	1,081,061	529,227
Current liabilities
Accounts payable	4,996	6,455
Escrow funds payable	160,813	135,042
Debt, current	0	7,581
Accrued expenses and other current liabilities	45,742	32,868
Deferred revenue	22,083	16,801
Total current liabilities	233,634	198,747
Debt, noncurrent	561,299	3,142
Operating lease liability, noncurrent	16,753	20,506
Other liabilities, noncurrent	9,858	7,522
Total liabilities	821,544	229,917
Commitments and contingencies (Note 6)
Stockholders’ equity
Common stock, $0.0001 par value; 490,000,000 shares authorized as of December 31, 2021 and 2020; 129,130,478 and 124,795,222 shares issued and outstanding as of December 31, 2021 and 2020, respectively	13	12
Additional paid-in capital	510,568	494,122
Accumulated deficit	(251,064)	(194,824)
Total stockholders’ equity	259,517	299,310
Total liabilities and stockholders’ equity	$ 1,081,061	$ 529,227

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 3,410	$ 1,661
Common stock, shares authorized (in shares)	490,000,000	490,000,000
Common stock, shares issued (in shares)	129,130,478	124,795,222
Common stock, shares outstanding (in shares)	129,130,478	124,795,222
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Revenue	$ 502,797	$ 373,628	$ 300,562
Cost of revenue	135,508	104,267	88,144
Gross profit	367,289	269,361	212,418
Operating expenses
Research and development	119,083	83,471	64,027
Sales and marketing	183,294	133,225	95,891
General and administrative	113,081	71,518	67,327
Provision for transaction losses	6,048	3,555	3,905
Total operating expenses	421,506	291,769	231,150
Loss from operations	(54,217)	(22,408)	(18,732)
Interest expense	2,180	778	1,306
Other income, net	(279)	(469)	(3,407)
Total loss before income taxes	(56,118)	(22,717)	(16,631)
Income tax provision	(122)	(150)	(28)
Net loss	$ (56,240)	$ (22,867)	$ (16,659)
Net loss per share basic (in dollars per share)	$ (0.44)	$ (0.19)	$ (0.15)
Net loss per share diluted (in dollars per share)	$ (0.44)	$ (0.19)	$ (0.15)
Weighted-average shares used to compute net loss per share, basic (in shares)	127,163,591	118,698,567	109,814,604
Weighted-average shares used to compute net loss per share, diluted (in shares)	127,163,591	118,698,567	109,814,604

CONSOLIDATED STATEMENTS STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment
Beginning balance (in shares) at Dec. 31, 2018			106,454,321
Beginning balance at Dec. 31, 2018	$ 243,745	$ (11,799)	$ 11	$ 387,233	$ (143,499)	$ (11,799)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)			6,429,471
Issuance of common stock upon exercise of stock options and common stock warrants	18,155		$ 0	18,155
Stock-based compensation expense	18,616			18,616
Tides Foundation common stock warrant expense and other	975			975
Issuance of common stock for settlement of RSUs (in shares)			163,943
Issuance of common stock in connection with employee stock purchase plan (in shares)			556,663
Issuance of common stock in connection with employee stock purchase plan	6,391			6,391
Net loss	(16,659)				(16,659)
Ending balance at Dec. 31, 2019	259,424		$ 11	431,370	(171,957)
Ending balance (in shares) at Dec. 31, 2019			113,604,398
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)			9,115,947
Issuance of common stock upon exercise of stock options and common stock warrants	31,028		$ 1	31,027
Stock-based compensation expense	25,677			25,677
Tides Foundation common stock warrant expense and other	1,135			1,135
Issuance of common stock for settlement of RSUs (in shares)			1,590,225
Issuance of common stock in connection with employee stock purchase plan (in shares)			484,652
Issuance of common stock in connection with employee stock purchase plan	4,913			4,913
Net loss	(22,867)				(22,867)
Ending balance at Dec. 31, 2020	$ 299,310		$ 12	494,122	(194,824)
Ending balance (in shares) at Dec. 31, 2020			124,795,222
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)	2,035,709		2,085,698
Issuance of common stock upon exercise of stock options and common stock warrants	$ 7,177		$ 1	7,176
Stock-based compensation expense	53,671			53,671
Tides Foundation common stock warrant expense and other	202			202
Issuance of common stock for settlement of RSUs (in shares)			1,865,444
Issuance of common stock for settlement of RSUs	1			1
Issuance of common stock in connection with employee stock purchase plan (in shares)			384,114
Issuance of common stock in connection with employee stock purchase plan	4,789			4,789
Purchase of capped calls related to convertible senior notes	(49,393)			(49,393)
Net loss	(56,240)				(56,240)
Ending balance at Dec. 31, 2021	$ 259,517		$ 13	$ 510,568	$ (251,064)
Ending balance (in shares) at Dec. 31, 2021			129,130,478

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (56,240)	$ (22,867)	$ (16,659)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for transaction losses	5,178	2,919	3,118
Depreciation and amortization	10,261	10,172	6,661
Amortization of debt issuance costs	1,182	61	52
Amortization of premium (accretion of discount) of purchases of marketable securities, net	298	(320)	(1,158)
Amortization of operating lease asset	3,545	3,860	3,945
Tides Foundation common stock warrant expense	750	750	711
Stock-based compensation expense	53,592	25,508	18,798
Impairment expense	8,741	0	0
Loss on disposal of fixed assets	0	44	14
Changes in operating assets and liabilities:
Trade and client receivables	(24,610)	(20,000)	(10,918)
Prepaid expenses and other assets	(6,960)	(1,198)	(2,069)
Operating lease liability	(1,163)	(1,851)	(1,453)
Accounts payable	(1,445)	5,822	(1,457)
Accrued expenses and other liabilities	10,253	15,438	(2,957)
Deferred revenue	7,454	4,027	4,430
Net cash provided by operating activities	10,836	22,365	1,058
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(525,343)	(107,281)	(168,786)
Proceeds from maturities of marketable securities	102,500	117,500	84,500
Purchases of property and equipment	(1,027)	(6,320)	(10,752)
Internal-use software and platform development costs	(5,110)	(8,045)	(5,886)
Net cash used in investing activities	(428,980)	(4,146)	(100,924)
CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in escrow funds payable	25,771	26,321	10,535
Proceeds from exercises of stock options and common stock warrant	7,177	31,028	18,155
Proceeds from employee stock purchase plan	4,789	4,913	6,391
Proceeds from borrowings on debt	0	18,000	50,000
Repayment of debt	(10,750)	(25,621)	(55,679)
Proceeds from issuance of convertible senior notes	575,000	0	0
Payment of debt issuance costs	(14,855)	0	0
Purchases of capped calls related to convertible senior notes	(49,393)	0	0
Net cash provided by financing activities	537,739	54,641	29,402
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	119,595	72,860	(70,464)
Cash, cash equivalents, and restricted cash—beginning of year	232,463	159,603	230,067
Cash, cash equivalents, and restricted cash—end of year	352,058	232,463	159,603
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	373	764	1,291
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment purchased but not yet paid	22	37	161
Internal-use software and platform development costs incurred but not yet paid	$ 106	$ 286	$ 684

Organization and Description of Business	12 Months Ended
Organization and Description of Business	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	Organization and Description of Business Upwork Inc., which is referred to as the Company or Upwork, operates a work marketplace that connects businesses, which are referred to as clients, with independent talent. Independent talent on the Company’s work marketplace, which are referred to as talent, and, together with clients, as users, include independent professionals and agencies of varying sizes and are an increasingly sought-after, critical, and expanding segment of the global workforce. The Company was originally incorporated in the state of Delaware in December 2013 prior to and in connection with the combination, which is referred to as the Elance-oDesk Combination, of Elance, Inc., which is referred to as Elance, and oDesk Corporation, which is referred to as oDesk. The Company changed its name to Elance-oDesk, Inc. shortly before the Elance-oDesk Combination in March 2014, and later to Upwork Inc. The Company is currently headquartered in San Francisco, California. Unless otherwise expressly stated or the context otherwise requires, the terms “Upwork” and the “Company” in these notes to the consolidated financial statements refer to Upwork and its wholly-owned subsidiaries.

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, which is referred to as U.S. GAAP, and include the accounts of Upwork Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods presented. Such estimates include, but are not limited to: the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; standalone selling price of material rights and the period of time over which to defer and recognize the consideration allocated to the material rights; allowance for doubtful accounts; liabilities relating to transaction losses; stock-based compensation; and accounting for income taxes. Management bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The Company evaluates its estimates, assumptions, and judgments on an ongoing basis using historical experience and other factors and revises them when facts and circumstances dictate.

Given the Company’s shift to a flexible work model for its workforce, in 2021, the Company subleased the entirety of its former headquarters in Santa Clara, California and subleased a portion of its current headquarters in San Francisco, California. As a result, during the year ended December 31, 2021, the Company incurred impairment charges of $8.7 million related to the associated operating lease assets and property and equipment. The Company may determine to either close or sublease certain of its other offices, either of which may result in further impairment charges. See “Note 5—Balance Sheet Components” for additional information regarding these impairments.

Notwithstanding the foregoing, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Cash and Cash Equivalents

The Company classifies as cash and cash equivalents its cash held in checking and interest-bearing accounts and investments in money market funds, U.S. government securities, and debt securities with maturities of 90 days or less from the date of purchase.

Restricted Cash

As of December 31, 2021 and 2020, the Company maintained restricted cash of $4.0 million and $3.3 million, respectively, related to cash reserve requirements under the escrow laws and regulations of the California Department of Financial Protection and Innovation and collateral for letters of credit issued in conjunction with operating leases. Short-term restricted cash included in prepaid expenses and other current assets was $3.2 million

and $2.3 million as of December 31, 2021 and 2020, respectively, and long-term restricted cash included in other assets, noncurrent was $0.8 million and $1.0 million as of December 31, 2021 and 2020, respectively.

Funds Held in Escrow, Including Funds in Transit

The Company maintains its users’ funds held in escrow in demand or checking accounts at U.S. financial institutions, as well as two California licensed money transmitters. The balance in these accounts was in excess of federally insured limits as of December 31, 2021 and 2020. Users’ funds held in escrow are denominated exclusively in U.S. dollars.

The Company is an internet escrow agent and is therefore required to hold its users’ escrowed funds and escrow funds in transit in trust as an asset and record a corresponding liability for escrow funds payable on its consolidated balance sheets. For this reason, funds held in escrow, including funds in transit, are restricted cash. Escrow funds in transit arise due to the time it takes to clear transactions through external payment networks. When clients fund their escrow account using credit cards, there is a clearing period before the cash is received and settled. Accordingly, the funds are treated as escrow funds in transit until the transaction is settled to the escrow trust bank account or, in the case of international credit card settlements, to the Company’s bank accounts. Escrow regulations require the Company to fund the trust with its own operating cash if there is ever a shortage due to the timing of cash receipts from clients for completed hourly billings. As of December 31, 2021 and 2020, the Company recorded $160.8 million and $135.0 million, respectively, as funds held in escrow, including funds in transit.

The below table reconciles cash, cash equivalents, and restricted cash as reported in the consolidated balance sheets to the total of the same amounts shown in the consolidated statements of cash flows for the years ended December 31, 2021, 2020, and 2019:


(In thousands)	2021		2020		2019
Cash and cash equivalents	$	187,205	$	94,081	$	48,392
Restricted cash	4,040		3,340		2,490
Funds held in escrow, including funds in transit	160,813		135,042		108,721
Total cash, cash equivalents, and restricted cash as shown in the consolidated statement of cash flows	$	352,058	$	232,463	$	159,603

Marketable Securities

The Company's marketable securities consist of commercial paper, corporate debt securities, treasury bills, U.S. government securities, asset-backed securities, and Yankee debt securities issued by foreign governments or entities and denominated in U.S. dollars, all of which have contractual maturities within 24 months from the date of purchase. The marketable securities are available for current operations and are classified as available-for-sale. These marketable securities are carried at estimated fair value with unrealized gains and losses, net of taxes, included within the stockholders’ equity section of the Company’s consolidated balance sheet.

The Company periodically assesses its portfolio of debt investments for impairment. For debt securities in an unrealized loss position, this assessment first takes into account the Company’s intent to sell, or whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the debt security’s amortized cost basis is written down to fair value through other (income) expense, net. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, the Company assesses whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. In making this assessment, the Company considers factors such as the extent to which fair value is less than the amortized cost basis, the financial condition of the issuer, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded through other (income) expense, net, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive loss. Changes in the allowance for credit losses are reflected as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell are met. These changes are recorded in other income, net. The Company determines realized gains or losses from the sale of marketable securities on a specific identification method and records such gains or losses as other (income) expense, net within the Company’s consolidated statements of operations.

Escrow Funds Payable

Escrow funds payable represent user funds that are held in escrow by the Company on behalf of both talent and clients. Escrow funds payable to talent are comprised primarily of funds available to be withdrawn by talent for work performed and paid by clients. Escrow funds payable to clients primarily represent deposits received from certain clients to set up an account or to apply toward future payments to talent upon completion of the project defined and agreed between the client and talent.

Concentration of Risk

Financial instruments that subject the Company to concentration of risk consist primarily of cash, restricted cash, funds held in escrow, including funds in transit, and trade and client receivables. The Company maintains its cash balances with large, high-credit quality financial institutions and other payment companies. At times, such deposits may be in excess of federally insured limits. The Company has not experienced any losses on its deposits. Credit risk on trade receivables is limited as a result of the large size of the Company’s client base as well as a large portion of payments made using pre-authorized credit cards. The Company performs ongoing credit evaluations of its clients and maintains allowances for potential credit losses. For any receivables that are deemed not collectible, losses are recorded when probable and estimable. These losses, when incurred, have been within the range of the Company’s expectations.

One client accounted for more than 10% of trade and client receivables as of December 31, 2021. Three clients each accounted for more than 10% of trade and client receivables as of December 31, 2020. For the years ended December 31, 2021 and 2020, the Company did not have any clients that accounted for more than 10% of total revenue. For the year ended December 31, 2019, the Company generated $32.0 million in revenue from one client, which accounted for more than 10% of revenue during the year ended December 31, 2019.

The Company is dependent upon third parties, such as Amazon Web Services, in order to meet the uptime and performance needs of its users.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, funds held in escrow, including funds in transit, marketable securities, trade and client receivables, prepaid and other current assets, escrow funds payable, and debt.

The Company believes that the carrying values of the remaining financial instruments approximate their fair values.

Trade and Client Receivables and Related Allowance for Doubtful Accounts

Trade and client receivables are primarily comprised of amounts receivable from clients for completed work, including amounts in transit. It also includes unbilled amounts due from clients primarily through the Company’s managed services offering. Trade and client receivables are recorded and stated at realizable value, net of an allowance for doubtful accounts. Credit is extended generally without collateral to the Company’s managed services and marketplace clients with Upwork Enterprise offerings based on an initial and ongoing evaluation of their financial condition and other factors. In aggregate, gross trade receivables were $19.7 million and $15.9 million and gross client receivables were $50.5 million and $32.8 million as of December 31, 2021 and 2020, respectively.

The allowance for doubtful accounts is the Company’s estimate of the probable credit losses on accounts receivable. The Company periodically assesses the collectability of the accounts and determines the allowance recognized by taking into consideration the aging of its receivable balances, historical write-off experience, probability of collection, and other relevant data. Trade and client receivables are written off against the allowance when management determines a balance is uncollectible and no longer actively pursues collection of the receivable.

The following table presents the changes in the allowance for doubtful accounts as of December 31, 2021, 2020, and 2019:


(In thousands)	2021		2020		2019
Allowance for doubtful accounts, beginning balance	$	1,661	$	2,215	$	2,832
Provision for doubtful accounts	4,803		3,143		3,193
Amounts written off	(3,054)		(3,697)		(3,810)
Allowance for doubtful accounts, ending balance	$	3,410	$	1,661	$	2,215

Derivative Instruments

The Company uses derivative financial instruments not designated as hedges, such as foreign currency forward contracts, to minimize the short-term impact of foreign currency exchange rate fluctuations on certain foreign currency denominated assets and liabilities, as well as certain foreign currency denominated expenses, hedging the gains or losses generated by the re-measurement of significant foreign currency denominated monetary assets and liabilities. The Company does not enter into derivative instruments for speculative or trading purposes and these instruments generally have maturities within 12 months.

The foreign currency forward contracts are recorded at fair value and, when in gain positions, are reported within prepaid expenses and other current assets. When in loss positions, the foreign currency forward contracts are recorded within accrued expenses and other current liabilities in the consolidated balance sheets. Gains or losses from changes in the fair value of these foreign currency forward contracts not designated as hedging instruments are recorded in other income, net to offset the changes in the fair value of the underlying assets or liabilities being hedged.

The notional amounts associated with the Company’s foreign currency forward contracts at December 31, 2021 and 2020 were $7.2 million and $7.6 million, respectively, none of which were designated as cash flow hedges. The carrying values of the foreign currency forward contracts approximated their fair values due to their relatively short settlement durations. The fair values of the Company’s outstanding foreign currency forward contracts not designated as hedging instruments as of December 31, 2021 and 2020 were not material. Losses on foreign currency forward contracts not designated as hedging instruments were $0.5 million for the year ended December 31, 2021. Losses on foreign currency forward contracts not designated as hedging instruments were $0.6 million for the year ended December 31, 2020. Gains on foreign currency forward contracts not designated as hedging instruments were $0.9 million for the year ended December 31, 2019.

Leases

The Company accounts for leases in accordance with Financial Accounting Standards Board, which is referred to as the FASB, Accounting Standards Update, which is referred to as ASU, No. 2016-02, Leases (Topic 842), which the Company adopted on December 31, 2019 effective as of January 1, 2019 using the effective date method.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, which are generally two to five years. Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining lease term or their estimated useful lives. Repair and maintenance costs are charged to expense as incurred.

Internal-Use Software and Platform Development Costs

The Company’s policy is to capitalize certain costs to develop its internal-use software and platform when (i) preliminary project planning is completed, (ii) the Company has committed project resourcing, and (iii) it is probable that the project will be completed and the software will be used as intended. Costs incurred for enhancements that are expected to result in additional significant functionality are also capitalized. Such costs are generally amortized on a straight-line basis over their estimated useful lives determined on a project-by-project basis, which historically has ranged between two to three years, beginning when the asset is ready for its intended use. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. Amortization of capitalized internal-use software and platform development costs is allocated to functional expense categories based on headcount and the nature and intended use of the project.

Segment Information

The Company has one reportable segment. The Company’s chief operating decision maker is its President and Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

Goodwill, Acquired Intangible Assets, and Other Long-Lived Assets

Goodwill represents the excess of the aggregate fair value of the consideration transferred over the fair value of the net tangible and identifiable intangible assets acquired in the Elance-oDesk Combination. Goodwill is not amortized, but rather is assessed for impairment at least annually, or more frequently if events and changes in circumstances indicate that its carrying amount may not be recoverable. The Company performs its annual impairment assessment during the fourth quarter of each calendar year based on a single reporting unit structure by comparing the carrying value of the reporting unit to its fair value. An impairment would occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. There has been no impairment of goodwill for any of the periods presented.

The Company’s long-lived assets consist of property and equipment and acquired identifiable, finite-lived intangible assets, namely developed technology, user relationships, trade names, and domain names. The finite-lived intangible assets are carried at cost, less accumulated amortization. The Company amortizes the finite-lived intangible assets over their estimated useful lives ranging from two to seven years based on the pattern in which the economic benefits of the intangible assets are consumed, or the straight-line method when the pattern cannot be reliably determined. The Company periodically reviews the remaining estimated useful lives of its long-lived tangible and amortizable intangible assets. If the estimated useful life assumption for any asset is changed, the remaining unamortized balance would be depreciated or amortized over the revised estimated useful life, on a prospective basis. Intangible amortization expense related to developed technology and trade names is recorded as cost of revenue. Intangible amortization expense related to user relationships and domain names is included in operating expenses.

The Company evaluates the recoverability of its long-lived assets, including finite-lived intangible assets, for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If it is determined that the asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset group exceeds the aggregate future undiscounted cash flows. When an impairment loss is recognized, the carrying amount of such assets is reduced to fair value.

For 2021, the Company conducted its goodwill impairment testing by performing the first step of the two-step impairment model. The fair value was determined by the Company using quoted market prices of the Company’s common stock. The Company determined that the fair value of its reporting unit exceeded the carrying value, and, as such, the Company concluded that there was no impairment of goodwill at the impairment testing date.

There was no impairment of long-lived assets in any of the periods presented.

Convertible Senior Notes

The Company accounts for its convertible senior notes, which are referred to as the Notes, as a single liability measured at amortized cost. The carrying value of the liability equals the proceeds received from the issuance of the Notes less debt issuance costs. See “Note 7—Debt” for additional information.

Debt Issuance Costs

Debt issuance costs incurred in connection with securing the Company’s financing arrangements are capitalized and amortized over the term of the respective financing arrangement under the straight-line method as the results obtained are not materially different from those that would result from the use of the effective interest method. Debt issuance costs are generally presented in the Company’s consolidated balance sheets as a reduction to the carrying amount of the outstanding borrowings.

Revenue Recognition

The Company primarily generates revenue from clients from its marketplace and managed service offerings and from talent from its marketplace. The Company accounts for revenue in accordance with FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which the Company adopted on December 31, 2019 effective as of January 1, 2019 using the modified retrospective method. Revenue is recognized upon transfer of control of

promised services to users in an amount that reflects the consideration the Company expects to receive in exchange for those services.

In the ordinary course of business, the Company makes payments to users when those users provide services in their capacity as vendors. These payments are for distinct services and are at fair value. These transactions are primarily with certain financial institutions that the Company uses as payment processors on the work marketplace. The Company accounts for the consideration payable to these users in their capacity as vendors as a purchase of services from a vendor and records such payments in either cost of revenue or sales and marketing within the consolidated statements of operations.

Marketplace Offerings

The Company’s marketplace revenue, which represents the majority of its revenue, consists primarily of revenue derived from Upwork Basic, Plus, and Enterprise offerings. The Company generates marketplace revenue from both talent and clients. Revenue from the Company’s Upwork Basic and Plus offerings are primarily comprised of talent service fees, and to a lesser extent, payment processing and administration fees charged to clients. Revenue from the Company’s Upwork Enterprise offering, which is referred to as Enterprise Revenue, includes all client fees, subscriptions, and talent service fees. The Company also generates marketplace revenue from fees for premium offerings associated with its Upwork Basic, Plus, and Enterprise offerings, including talent memberships, purchases of Connects, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar, and the Company’s Upwork Payroll offering.

Upwork Basic, Plus, and Other Premium Offerings

The Company earns fees from talent under the Upwork Basic, Plus, and associated premium offerings, which represent a single promise to provide continuous access (i.e. stand-ready performance obligation) to the Company’s work marketplace and site services. As each day of providing access to the work marketplace and site services (including, but not limited to, communication, invoicing, reporting, dispute resolution, and payment services) is substantially the same and talent simultaneously receive and consume the benefits as access is provided, the Company’s single promise under its Upwork Basic and Plus offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. The Company’s Upwork Basic and Plus arrangements may include fixed and variable consideration, or a combination of the two, comprised of the following:

Service fees. Talent are provided access to the Upwork work marketplace to market their businesses, send proposals to and communicate with prospective clients, and, if engaged by a client, to perform specified services agreed between talent and clients, which are referred to as talent services. Talent charge clients on an hourly or a milestone basis for services rendered to clients through the Upwork work marketplace, which are referred to as talent billings. The Company charges talent a service fee as a percentage of talent billings primarily using a tiered service fee model based on cumulative lifetime billings by talent to each client. The arrangements subject to tiered service fees also include contract renewal options that represent a material right. The Company takes no responsibility for talent services, and therefore, does not control talent services. Additionally, talent and clients negotiate and agree upon the scope and the price for talent services directly with each other, and the Company is not a party to those agreements. Accordingly, for these tiered service fee arrangements, the Company presents revenue on a net basis, as an agent. The Company recognizes the service fees for each distinct service period when it has the contractual right to bill for the services.

Withdrawal fees. The Company charges withdrawal fees to talent when talent withdraw their escrow funds held by the Company. A withdrawal fee is charged for each withdrawal transaction, which represents variable consideration. The Company presents revenue from withdrawal fees on a gross basis as a principal and not net of the third-party payment processing costs incurred because the Company controls the payment processing services prior to providing to the Company's talent. The Company recognizes the withdrawal fees when transactions are processed, which is when it has the contractual right to bill for the services.

Membership fees. The Company charges membership fees to talent. These fees are fixed consideration and are charged monthly. The Company recognizes the revenue over the period of the membership, which is generally monthly, consistent with the common measure of progress for the entire performance obligation.

Connects fees. The Company charges fees to talent for the purchase of Connects, which are virtual tokens that are required for talent to bid on projects on the Company’s work marketplace. These fees represent variable consideration and are allocated to and recognized in the distinct service period in which the Connects are used.

The Company earns fees from clients under the Upwork Basic and Plus offerings, which represent a single promise to provide continuous access (i.e. stand-ready performance obligation) to the Company’s work marketplace and site services. As each day of providing access to the work marketplace and site services is substantially the same and the client simultaneously receives and consumes the benefits as access is provided, the Company’s single promise under its Upwork Basic and Plus offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. The Company’s Upwork Basic and Plus arrangements may include fixed and variable consideration, or a combination of the two, comprised of the following:

Client payment processing and administration fees. The Company charges clients for payment processing services at the time the client is charged for the amounts due from the client. This fee is charged on a per-transaction basis and is variable consideration. Per-transaction payment processing fees are recognized when the client is charged for the amount due and fees charged on a monthly basis are recognized over the month that payment processing services are provided. For client payment processing fees, the Company presents revenue on a gross basis as a principal and not net of the third-party payment processing costs incurred because the Company controls the payment processing and administration services prior to providing to the Company’s clients. The Company recognizes the revenue when a payment from a client is processed, which is when it has the contractual right to bill for the services.

Foreign currency exchange fees. The Company charges clients a fixed mark-up above foreign currency exchange rates that are charged to the Company when the Company collects amounts denominated in foreign currency. Foreign currency exchange fees are variable consideration and recognized as they are earned for each transaction processed, which is when the Company has the contractual right to bill for the services.

Membership fees. The Company charges membership fees to clients. These fees are charged monthly, are fixed consideration, and are recognized over the period of the membership, which is generally monthly consistent with the common measure of progress for the entire performance obligation.

Upwork Payroll service fees. The Company charges clients using the Upwork Payroll offering when their talent are classified as employees for engagements on the Upwork work marketplace. The client enters into an Upwork Payroll agreement with the Company, and Upwork separately contracts with unrelated third-party staffing providers that provide employment services to such clients. In such arrangements, talent providing talent services to clients become employees of third-party staffing providers. In arrangements where clients enter into Upwork Payroll agreements, the Company charges Upwork Payroll service fees to clients and does not charge service fees to talent who are employees of the third-party staffing providers. Such service fees are variable consideration and charged as a fixed percentage of the total talent billings. Under an Upwork Payroll agreement, the Company provides the client access to the Upwork work marketplace to procure and manage talent services, as well as access to employment services provided by the third-party staffing providers. The Company presents Upwork Payroll service fees revenue on a net basis as an agent of the client for providing access to employment services provided by the third-party staffing providers. The Company does not control these employment services performed by the third-party on behalf of the client or for the services performed by talent that are employed by the third-party staffing providers. Therefore, the Company is not considered the principal for these services. The Company recognizes the service fees for each distinct service period when it has the contractual right to bill for the services.

Upwork Enterprise and Other Premium Offerings

The Company earns fees from talent under Upwork Enterprise and other associated premium offerings, each of which represent a single promise to provide continuous access (i.e. stand-ready performance obligation) to the Company’s work marketplace and site services. As each day of providing access to the work marketplace and site services is substantially the same and talent simultaneously receive and consume the benefits as access is provided, the Company’s single promise under its Upwork Enterprise and other premium offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. These arrangements include variable consideration as follows:

Service fees. The Company provides talent access to the Upwork work marketplace to perform talent services for clients. The Company charges talent a service fee as a percentage of talent billings. The Company earns service fees based on a fixed percentage of talent billings. For service fees charged to talent, the Company presents revenue on a net basis, as an agent, for providing access to the Upwork work marketplace as it does not control talent services provided to clients, and therefore the Company is not considered the principal for talent services. Additionally, talent and clients negotiate and agree upon the scope and the price for talent

services directly with each other, and the Company is not a party to their agreement. The Company recognizes the service fees for each distinct service period in which it has the contractual right to bill for the services.

The Company earns fees from clients under Upwork Enterprise and other premium offerings, each of which represent a single promise to provide continuous access (i.e. stand-ready performance obligation) to the Company’s work marketplace and site services. As each day of providing access to the work marketplace and site services is substantially the same and the client simultaneously receives and consumes the benefits as access is provided, the Company’s single promise under its Upwork Enterprise and other premium offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. These arrangements may include fixed and variable consideration, or a combination of the two, comprised of the following:

Client service fees. The Company offers clients access to the Company’s work marketplace to source talent in exchange for a client service fee calculated as a percentage of talent billings; these fees represent variable consideration. The Company recognizes the service fees for each distinct service period in which it has the contractual right to bill for the services.

Enterprise compliance service fees. The Company charges fees to its enterprise compliance service clients that engage the Company to provide services to determine whether talent should be classified as an employee or an independent contractor based on the scope of talent services agreed between the client and talent and other factors. The Company charges enterprise compliance service fees as a percentage of talent billings; these fees represent variable consideration. The Company recognizes the service fees for each distinct service period in which it has the contractual right to bill for the services.

Subscription fees. The Company charges monthly or annual subscription fees to clients for subscription services. These subscription fees are fixed consideration and are recognized over the period of the subscription consistent with the common measure of progress for the entire performance obligation.

Upwork Payroll service fees. Upwork Payroll service fees are recognized on the same basis as described under the Upwork Basic and Plus offerings and are variable consideration.

Revenue sharing arrangements

Certain of the Company’s offerings include revenue sharing arrangements under which the Company generates a revenue share as a percentage of the fees charged by certain financial institutions to talent for payment withdrawals. These arrangements are considered a single performance obligation comprised of variable consideration and are recognized over time based on transactions processed.

Managed Services

Under a managed services arrangement, the Company is responsible for providing services and engaging talent directly or as employees of third-party staffing providers to perform the services for clients on the Company’s behalf. These arrangements are generally time- and materials-based, and are invoiced on a monthly basis. These fees represent variable consideration. The Company controls and directs the services performed on behalf of talent and presents revenue on a gross basis as principal. As each day of providing managed services is substantially the same and the client simultaneously receives and consumes the benefits as services are provided, the Company’s single promise under its managed services is comprised of a series of distinct service periods. For managed services arrangements with clients, the Company allocates the variable amounts to each distinct service period within the series in which it has the contractual right to bill and recognizes revenue as each distinct service period is performed.

Arrangements with Multiple Performance Obligations

Certain of the Company’s contracts with talent contain multiple performance obligations in the event the Company determines a material right exists. Specifically, the arrangements with talent subject to tiered service fees include contract renewal options that represent a material right. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price by applying the portfolio approach practical expedient under Topic 606. Standalone selling prices for offerings subject to tiered service fees are estimated based on observable transactions when these services are sold on a standalone basis. Standalone selling price for a material right is estimated by determining the discount that talent would obtain when exercising the option, adjusted for the likelihood that the option will be exercised. Significant judgment is applied in the application of the portfolio approach practical expedient, which includes estimating the standalone selling price of the material rights and the period of time over which to defer and recognize the consideration allocated to the material rights. Specifically, management applied significant judgment in assessing the appropriateness of the

model for the estimates, which include assessing the appropriateness of the methodology and relevant data inputs to (i) estimate the standalone selling price of the material rights, which includes the standalone selling price of the services when sold separately and the likelihood of exercise of the material rights; and (ii) estimate the period of time over which to defer and recognize the consideration allocated to the material rights. The Company utilized historical user transaction data in developing the estimates. The Company recognizes revenue related to the material rights based on the Company’s estimate of when the material rights are exercised and adjusts revenue for changes in estimates in the period of change on a cumulative catch-up basis.

Deferred Revenue

Deferred revenue consists of subscription, membership, and Connects fees collected in advance of performing the service. The Company also recognizes deferred revenue for amounts attributable to unexercised material rights related to arrangements with talent that are subject to tiered service fees.

Cost of Revenue

Cost of revenue consists primarily of the cost of payment processing fees, costs of talent to deliver services under the Company’s managed services offering, personnel-related costs for the Company’s services and support personnel, third-party hosting fees, and amortization expense associated with acquired intangibles and capitalized internal-use software. The Company defines personnel-related costs as salaries, bonuses, benefits, and stock-based compensation costs for employees, and costs related to other service providers the Company engages to provide internal services to the Company.

Research and Development

Research and development expense primarily consists of personnel-related costs. Research and development costs are expensed as incurred, except to the extent that such costs are associated with internal-use software and platform development that qualify for capitalization.

Advertising Expense

The Company expenses advertising costs as incurred. The Company incurred $90.8 million, $51.4 million, and $37.4 million in advertising expenses during the years ended December 31, 2021, 2020, and 2019, respectively.

Provision for Transaction Losses

Provision for transaction losses consists primarily of losses resulting from fraud on the work marketplace and bad debt expense associated with the Company’s trade and client receivables balance and transaction losses expense related to chargebacks. Provision for these items represents estimates of losses based on the Company’s actual historical incurred losses and other factors.

Stock-Based Compensation

The Company accounts for stock options with service- and market-based conditions, restricted stock units, which are referred to as RSUs, performance stock units, which are referred to as PSUs, and purchase rights granted under the 2018 Employee Stock Purchase Plan, which is referred to as the 2018 ESPP, to employees and directors based on their estimated fair value on the date of grant. The fair value and derived service period of stock options with market-based conditions is estimated using the Monte Carlo valuation model. The Company evaluates the assumptions used to value option awards upon each grant of stock options. The fair value of RSUs awarded to employees is based on the closing price of the Company’s common stock, as reported on The Nasdaq Global Select Market on the date of grant. The grant date fair value of PSUs is determined using the Company’s closing common stock price on the grant date multiplied by the number of PSUs that are probable of being earned as of the grant date. The fair value of purchase rights granted under the 2018 ESPP is estimated using the Black-Scholes valuation model. The model requires the Company to make a number of assumptions, including the value of the Company’s common stock, expected volatility, expected term, risk-free interest rate, and expected dividends.

Stock-based compensation expense associated with service- and market-based stock options will be recognized over the longer of the expected achievement period for the service condition and market condition. The Company generally recognizes stock-based compensation expense for RSUs on a straight-line basis over the vesting term. Stock-based compensation expense associated with PSUs is recognized over the longer of the expected achievement period for the performance condition and the service condition. Stock-based compensation for purchase rights granted under the 2018 ESPP is recognized over the offering period. The Company accounts for forfeitures as they occur.

Foreign Currency

The functional currency of the Company and its subsidiaries is the U.S. dollar. Transactions with users denominated in currencies other than the U.S. dollar are remeasured at the exchange rate in effect on the date of the transaction. At the end of each reporting period, monetary assets and liabilities are remeasured using exchange rates in effect at the balance sheet date. Foreign currency transaction gains and losses are included in other income, net in the consolidated statements of operations. The Company recorded net foreign currency transaction losses of $0.5 million for the year ended December 31, 2021, net foreign currency transaction losses of $0.6 million for the year ended December 31, 2020, and net foreign currency transaction gains of $0.9 million for the year ended December 31, 2019.

Comprehensive Loss

For the years ended December 31, 2021, 2020, and 2019, net unrealized losses from the Company’s marketable securities were immaterial. Comprehensive loss approximates net loss for all periods presented. Accordingly, the consolidated statements of comprehensive loss have been omitted from the consolidated financial statements.

Income Taxes

The Company accounts for income taxes in accordance with the asset and liability method. Under the asset and liability method, deferred assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The provision for income taxes is comprised of the current tax liability and the change in deferred tax assets and liabilities. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be recoverable against future taxable income.

Deferred tax assets and liabilities are measured using the enacted tax rates that will be in effect for the years in which those tax assets are expected to be realized or settled. The Company regularly assesses the likelihood that its deferred tax assets will be realized from recoverable income taxes or recovered from future taxable income based on the realization criteria set forth in the relevant authoritative guidance. To the extent that the Company believes any amounts are not more likely than not to be realized, the Company records a valuation allowance to reduce its deferred tax assets. The realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. If the Company subsequently realizes deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in an adjustment to earnings in the period such determination is made.

In addition, the calculation of tax liabilities involved dealing with uncertainties in the application of complex tax regulations. The Company recognized potential liabilities based on its estimate of whether, and the extent to which, additional taxes will be due. The Company accounts for uncertain tax positions in accordance with the relevant guidance, which prescribes a recognition threshold and measurement approach for uncertain tax positions taken or expected to be taken in a company’s income tax return, and also provides guidance on recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The guidance utilized a two-step approach for evaluation uncertain tax positions. Step one, Recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit. Step two, Measurement, is based on the largest amount of benefit, which is more likely than not to be realized on ultimate settlement. A liability is reported for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Any interest and penalties related to unrecognized tax benefits are recorded as income tax expense.

Net Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss is computed by adjusting net loss to reallocate undistributed earnings based on the potential impact of dilutive securities, including outstanding common stock options, RSUs, PSUs, warrants to purchase common stock, common stock issuable in connection with the 2018 ESPP, and common stock issuable in connection with the Notes. For periods in which the Company has reported net losses, diluted net loss per share is the same as basic net loss per share because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Recent Accounting Pronouncements Not Yet Adopted

The Company has reviewed all recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019—12 (Topic 740), Simplifying the Accounting for Income Taxes. This guidance simplifies accounting for income taxes by removing certain exceptions to the general principles and amending existing guidance to improve consistent application. The Company is required to adopt this guidance in the year ended December 31, 2021. The Company concluded that there was not a material impact to its consolidated financial statements as a result of the adoption.

In August 2020, the FASB issued ASU No. 2020—06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. For public companies, this guidance is effective for fiscal years beginning after December 15, 2021 and interim periods within those fiscal years. Early adoption is permitted. The Company early adopted the standard as of January 1, 2021 and applied this guidance to the Notes issued in August 2021. Refer to “Note 7—Debt” for additional information.

Revenue

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue

Disaggregation of Revenue

See Note 12 for the Company’s revenue disaggregated by type of service and geographic area.

Remaining Performance Obligations

As of December 31, 2021, the Company had approximately $28.4 million of remaining performance obligations. The Company’s remaining performance obligations consist of transaction price that has been allocated to unexercised material rights related to the Company’s arrangements with talent subject to tiered service fees, subscriptions, memberships, and Connects. As of December 31, 2021, the Company expects to recognize approximately $22.1 million over the next 12 months, with the remaining balance recognized thereafter.

The Company has applied the practical expedients and exemptions and does not disclose the value of remaining performance obligations for (i) contracts with an original expected length of one year or less; and (ii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation under the series guidance.

Contract Balances

The following table provides information about the balances of the Company’s trade and client receivables, net of allowance and contract liabilities included in deferred revenue and other liabilities, noncurrent as of December 31, 2021 and 2020:


(In thousands)	2021		2020
Trade and client receivables, net of allowance	$	66,826	$	47,018
Contract liabilities
Deferred revenue	22,083		16,801
Deferred revenue (component of other liabilities, noncurrent)	6,349		4,177

During 2021, changes in the contract liabilities balances were a result of normal business activity and deferral, and subsequent recognition, of revenue related to arrangements with talent subject to tiered service fees and related allocation of transaction price to material rights.

Revenue recognized during the year ended December 31, 2021 that was included in deferred revenue as of December 31, 2020 was $15.5 million. Revenue recognized during the year ended December 31, 2020 that was included in deferred revenue as of December 31, 2019 was $13.0 million.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Fair Value Measurements and Marketable Securities

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements and Marketable Securities

Fair Value Measurements and Marketable SecuritiesThe Company defines fair value as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must

maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance describes three levels of inputs that may be used to measure fair value:

•Level I—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets;

•Level II—Observable inputs other than Level I prices, such as unadjusted quoted prices for similar assets or liabilities in active markets, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•Level III—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation.

The categorization of a financial instrument within the fair value hierarchy is based upon the lowest level of input that is significant to its fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the assets or liabilities.

The Company’s financial instruments that are carried at fair value consist of Level I and Level II assets as of December 31, 2021 and 2020. The following tables summarize the Company’s cash and available-for-sale marketable securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category reported as cash and cash equivalents or marketable securities as of December 31, 2021 and 2020:


(In thousands) December 31, 2021	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	16,596	$	—	$	—	$	16,596	$	16,596	$	—
Level I
Money market funds	108,204		—		—		108,204		108,204		—
Treasury bills	89,992		1		—		89,993		15,000		74,993
U.S. government securities	94,839		—		(285)		94,554		—		94,554
Total Level I	293,035		1		(285)		292,751		123,204		169,547
Level II
Commercial paper	171,918		—		—		171,918		29,544		142,374
Corporate bonds	183,303		1		(217)		183,087		17,861		165,226
Asset-backed securities	13,749		—		(11)		13,738		—		13,738
Yankee bonds	6,693		—		(12)		6,681		—		6,681
Total Level II	375,663		1		(240)		375,424		47,405		328,019
Total	$	685,294	$	2	$	(525)	$	684,771	$	187,205	$	497,566


(In thousands) December 31, 2020	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	22,359	$	—	$	—	$	22,359	$	22,359	$	—
Level I
Money market funds	65,723		—		—		65,723		65,723		—
Treasury bills	4,498		1		—		4,499		—		4,499
U.S. government securities	20,082		24		—		20,106		—		20,106
Total Level I	90,303		25		—		90,328		65,723		24,605
Level II
Commercial paper	56,964		—		—		56,964		5,999		50,965



Total Level II	56,964		—		—		56,964		5,999		50,965
Total	$	169,626	$	25	$	—	$	169,651	$	94,081	$	75,570

The Company did not record any impairment charges with respect to its marketable securities during the years ended December 31, 2021, 2020, and 2019.

As of December 31, 2020, the Company had debt obligations outstanding of $10.8 million under the Company’s Loan and Security Agreement, as amended, which is referred to as the Loan Agreement. As of December 31, 2020, the carrying value approximated fair value as borrowings under the Loan Agreement bore interest at variable rates, and the Company believes its credit risk quality is consistent with when the debt was originated. The Company considered the balances outstanding under the Loan Agreement to be Level II liabilities as of December 31, 2020. As of December 31, 2021, the Loan Agreement had been terminated and no amounts thereunder were outstanding. See “Note 7—Debt.”

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Balance Sheet Components

12 Months Ended

Dec. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

Property and Equipment, Net

Property and equipment, net consisted of the following as of December 31, 2021 and 2020:


(In thousands)	2021		2020
Computer equipment and software	$	5,493	$	4,819
Internal-use software and platform development costs	25,738		20,727
Leasehold improvements	11,644		14,613
Office furniture and fixtures	3,365		3,354
Total property and equipment	46,240		43,513
Less: accumulated depreciation	(24,911)		(15,374)
Property and equipment, net	$	21,329	$	28,139

Depreciation expense related to property and equipment was $3.7 million, $3.6 million, and $2.8 million for the years ended December 31, 2021, 2020, and 2019, respectively.

The Company capitalized $5.0 million, $8.0 million, and $6.4 million of internal-use software and platform development costs during the years ended December 31, 2021, 2020, and 2019, respectively.

Amortization expense related to the capitalized internal-use software and platform development costs was $5.9 million for the year ended December 31, 2021, of which $3.8 million was included in cost of revenue related to developed technology used on the work marketplace. Amortization expense related to the capitalized internal-use software and platform development costs was $3.9 million for the year ended December 31, 2020, of which $2.9 million was included in cost of revenue related to developed technology used on the work marketplace. Amortization expense related to the capitalized internal-use software and platform development costs was $1.2 million for the year ended December 31, 2019, of which $0.9 million was included in cost of revenue related to developed technology used on the work marketplace.

Intangible Assets, Net

All of the Company’s identifiable intangible assets were fully amortized as of December 31, 2021. Total amortization expense of intangible assets was $0.7 million for the year ended December 31, 2021. Total amortization expense of intangible assets was $2.7 million for each of the years ended December 31, 2020 and 2019. Amortization expense is included in general and administrative expenses. As of December 31, 2020, intangible assets, net consisted of the following:


	As of December 31, 2020
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade names	$	2,293	$	2,293	$	—
User relationships	18,678		18,011		667
Developed technology	10,356		10,356		—
Domain names	529		529		—
Total	$	31,856	$	31,189	$	667

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of December 31, 2021 and 2020:


(In thousands)	2021		2020
Accrued compensation and related benefits	$	23,047	$	14,007
Accrued vendor expenses	7,728		8,662
Operating lease liability, current	6,315		3,725
Accrued indirect taxes	4,137		3,818
Accrued payment processing fees	2,085		1,219
Accrued talent costs	1,417		1,235
Other	1,013		202
Total accrued expenses and other current liabilities	$	45,742	$	32,868

Operating Leases

The Company leases office space and certain equipment under various operating leases, with the vast majority of its lease portfolio consisting of operating leases for office space. The Company has also entered into arrangements where it acts as a sublessor in its leases of office space. The Company has not entered into any significant finance, sales-type, or direct financing leases.

The Company’s significant judgments include determining whether an arrangement is or contains a lease, the determination of the discount rate used to calculate the lease liability, and whether or not lease incentives are reasonably certain to occur in the initial measurement of the lease liability. Operating lease assets and lease liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. Lease expense is recognized on a straight-line basis over the lease term.

A contract is or contains an embedded lease if the contract meets all of the below criteria:

•There is an identified asset;

•The Company has the right to obtain substantially all of the economic benefit of the asset; and

•The Company has the right to direct the use of the asset.

For initial measurement of the present value of lease payments and for subsequent measurement of lease modifications, the Company is required to use the rate implicit in the lease. Since the majority of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which is a collateralized rate. The application of the incremental borrowing rate is performed on a lease-by-lease basis and approximates the rate at which the Company could borrow, on a secured basis for a similar term, an amount equal to its lease payments in a similar economic environment.

The Company’s leases have remaining lease terms of approximately one year to eight years, which may include the option to extend the lease. The Company includes lease payments associated with renewal options in its operating

lease asset and liability only when it becomes reasonably certain the company will exercise the renewal option. The Company has not included renewal options for any of its operating leases in its determination of lease liabilities. The Company does not have lease agreements with residual value guarantees, sale leaseback terms, or material restrictive covenants. Leases with an initial term of 12 months or less are not recognized on the consolidated balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The following table summarizes the Company’s operating lease assets and lease liabilities as of December 31, 2021 and 2020:


(In thousands)
Balance Sheet Classification		2021		2020
Assets
Operating—noncurrent	Operating lease asset	$	10,682	$	19,729
Liabilities
Operating—current	Accrued expenses and other current liabilities	6,315		3,725
Operating—noncurrent	Operating lease liability, noncurrent	16,753		20,506
Total lease liabilities		$	23,068	$	24,231

For the years ended December 31, 2021, 2020, and 2019, operating lease cost, inclusive of variable lease charges, was $6.0 million, $6.0 million, and $5.9 million, respectively, and sublease income recognized was approximately $0.5 million, $0.3 million, and $0.4 million, respectively. For the years ended December 31, 2021, 2020, and 2019, charges related to operating leases that are variable, and therefore not included in the measurement of the lease liabilities, were $1.2 million, $0.7 million, and $0.6 million, respectively. For the years ended December 31, 2021, 2020, and 2019, the Company made lease payments of $6.4 million, $3.3 million, and $3.3 million, respectively.

San Francisco Sublease

In December 2021, the Company executed a sublease agreement to sublease one of the two suites the Company is currently leasing as its headquarters in San Francisco, California. The suite that was not subleased will continue to be utilized by the Company as it was prior to entering into the sublease agreement. The sublease agreement became effective in December 2021 upon receipt of the consent of the Company’s landlord. The term of the sublease commences on February 1, 2022 and expires on August 31, 2024, unless terminated earlier in accordance therewith. Rent payments begin on March 1, 2022 and approximate $0.1 million per month. Rent payments will be recorded within general and administrative expenses within the Company’s consolidated statements of operations. Neither party has the option to renew or extend the sublease agreement.

Under the sublease agreement, the Company is not relieved of its original obligation with the master lessor, which expires on August 31, 2024. The Company determined the sublease agreement is an operating lease, which is consistent with the classification of the original sublease with the landlord. As a result of the execution of the sublease agreement, the Company determined that indicators of impairment existed with respect to the asset group that consisted of the operating lease asset and related leasehold improvements associated with the suite being subleased. Accordingly, the Company conducted an impairment test to assess whether the fair value of the asset group was lower than its carrying value. The results of the impairment test indicated that the fair value of the asset group was lower than its carrying value. The Company determined the fair value of the asset group using the discounted cash flow method. The assumptions used in the discounted cash flow analysis included projected sublease income over the remaining term of the original lease with the landlord and a discount rate the Company believes reflects the level of risk associated with these future cash flows. The Company considers these assumptions to be Level III inputs in accordance with the fair value hierarchy described in “Note 4—Fair Value Measurements and Marketable Securities.”

As a result of the partial sublease of its San Francisco office, during the year ended December 31, 2021, the Company recorded an impairment charge of $1.4 million, of which $1.2 million was allocated to the operating lease asset and $0.2 million was allocated to the associated leasehold improvements. The Company recorded this impairment charge within general and administrative expenses within its consolidated statement of operations for the year ended December 31, 2021.

Santa Clara Sub-Sublease

In April 2021, the Company executed a sub-sublease agreement to sublease the entirety of its former headquarters in Santa Clara, California. The sub-sublease agreement became effective in May 2021 upon receipt of the consent of the Company’s landlord and master lessor. The term of the sub-sublease commenced on June 1, 2021 and expires on May 31, 2024, unless terminated earlier in accordance therewith. Rent payments begin on January 1, 2022 and approximate $0.1 million per month. Rent payments will be recorded within general and administrative expenses within the Company’s consolidated statements of operations. Neither party has the option to renew or extend the sub-sublease agreement.

Under the sub-sublease agreement, the Company is not relieved of its original obligation with the master lessor that expires on October 15, 2028. The Company determined the sub-sublease agreement is an operating lease, which is consistent with the classification of the original sublease with the master lessor. As a result of the execution of the sub-sublease agreement, the Company determined that indicators of impairment existed with respect to the asset group that consisted of the Santa Clara office operating lease asset and associated leasehold improvements, furniture and fixtures, and hardware. Accordingly, the Company conducted an impairment test to assess whether the fair value of the asset group was lower than its carrying value. The results of the impairment test indicated that the fair value of the asset group was lower than its carrying value. The Company determined the fair value of the asset group using the discounted cash flow method. The assumptions used in the discounted cash flow analysis included projected sublease income over the remaining term of the original sublease with the master lessor, expected downtime prior to the commencement of future subleases, and a discount rate the Company believes reflects the level of risk associated with these future cash flows. The Company considers these assumptions to be Level III inputs in accordance with the fair value hierarchy described in “Note 4—Fair Value Measurements and Marketable Securities.”

As a result of the sublease of its Santa Clara office, during the year ended December 31, 2021, the Company recorded an impairment charge of $7.4 million, of which $4.3 million was allocated to the Santa Clara office operating lease asset, $2.9 million was allocated to the associated leasehold improvements, and $0.2 million was allocated to the associated furniture and fixtures and hardware. The Company recorded this impairment charge within general and administrative expenses within its consolidated statement of operations for the year ended December 31, 2021.

Chicago Lease

On January 1, 2020, the Company commenced an operating lease of one additional floor in its Chicago, Illinois office. As a result, the Company recognized a $1.7 million operating lease asset and $1.7 million operating lease liability on January 1, 2020, which are included in operating lease asset and operating lease liability, noncurrent, respectively, on the Company’s consolidated balance sheet as of December 31, 2020. The lease has an initial term of five years with the option to renew for an additional five years at the end of the initial lease term. Total minimum lease payments under the initial term are $2.1 million. For the initial measurement of the present value of the lease payments associated with this lease, the Company used its incremental borrowing rate, which is a collateralized rate and approximates the rate at which the Company could borrow, on a secured basis for a similar term, an amount equal to its lease payments in a similar economic environment.

As of December 31, 2021 and 2020, the Company had no material finance leases.

The following table shows the Company’s future lease commitments due in each of the next five years and thereafter for operating leases, which excludes amounts received in the form of sublease income discussed above:


(In thousands)
Year Ended December 31,	Leases
2022	$	6,588
2023	6,776
2024	5,843
2025	2,356
2026	1,729
Thereafter	3,208

Total lease payments	26,500
Adjustment for discount to present value	(3,432)
Total	$	23,068

As of and for the year ended December 31, 2021, the weighted-average remaining lease term is 4.6 years, and the weighted-average discount rate is 5.80%.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Letters of Credit In conjunction with the Company’s operating lease agreements, as of December 31, 2021 and 2020, the Company had three irrevocable letters of credit outstanding in the aggregate amounts of $0.8 million and $1.0 million, respectively. The letters of credit are collateralized by restricted cash in the same amount. No amounts had been drawn against these letters of credit as of December 31, 2021 and 2020. Contingencies The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Potential contingencies may include various claims and litigation or non-income tax matters that arise from time to time in the normal course of business. Due to uncertainties inherent in such contingencies, the Company can give no assurance that it will prevail in any such matters, which could subject the Company to significant liability or damages. Any claims, litigation, or other contingencies could have an adverse effect on the Company’s business, financial position, results of operations or cash flows in or following the period that claims, litigation or other contingencies are resolved. As of December 31, 2021 and 2020, the Company was not a party to any material legal proceedings or claims, nor is the Company aware of any pending or threatened litigation or claims, including non-income tax matters, that could reasonably be expected to have a material adverse effect on its business, operating results, cash flows, or financial condition. Accordingly, the amounts accrued for contingencies for which the Company believes a loss is probable were not material as of and for the years ended December 31, 2021 and 2020. Indemnification The Company has indemnification agreements with its officers, directors, and certain key employees to indemnify them while they are serving in good faith in their respective positions. In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to clients, business partners, vendors, and other parties, including, but not limited to, losses arising out of the Company’s breach of such agreements, claims related to potential data or information security breaches, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from the Company’s offerings and services or its acts or omissions. In addition, subject to the terms of the applicable agreement, as part of the Company’s Upwork Enterprise and certain other premium offerings, the Company indemnifies clients that subscribe to worker classification services for losses arising from worker misclassification. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the facts and circumstances involved in each particular provision.

Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

The following table presents the carrying value of the Company’s debt obligations as of December 31, 2021 and 2020:


(In thousands)	2021			2020
Convertible senior notes—interest accrues from August 2021 and will be payable semiannually in arrears on February 15 and August 15 of each year, beginning February 2022, maturing August 2026; interest at 0.25% per annum	$	575,000		$	—
First term loan—18 months of interest-only payments ended in March 2019 followed by 36 equal monthly installments of principal plus interest, maturing March 2022; interest at prime plus 0.25% per annum	—			6,250
Second term loan—17 months of interest-only payments ended in March 2019 followed by 42 equal monthly installments of principal plus interest, maturing September 2022; interest at prime plus 0.25% per annum	—			4,500

Total debt	575,000			10,750
Less: Unamortized debt issuance costs	(13,701)			(27)
Balance	561,299			10,723
Debt, current	—			(7,581)
Debt, noncurrent	$	561,299		$	3,142
Weighted-average interest rate	0.76		%	5.64		%

Term and Revolving Loans

The Loan Agreement, which was subsequently amended in November 2017, September 2018, March 2019, and August 2020, was terminated in August 2021. Under the Loan Agreement, the aggregate amount of the facility was up to $49.0 million, consisting of a term loan in the original principal amount of $15.0 million, which is referred to as the First Term Loan, a term loan in the original principal amount of $9.0 million, which is referred to as the Second Term Loan and, together with the First Term Loan, as the Term Loans, and a revolving line of credit, which permitted borrowings of up to $25.0 million subject to customary conditions.

In August 2021, the Company entered into an agreement, which is referred to as the Payoff Agreement, with its lender to fully repay the remaining outstanding principal amounts plus accrued and unpaid interest outstanding under its Term Loans and terminate the Loan Agreement. There were no amounts outstanding under the Company’s revolving line of credit as of the date of termination. Pursuant to the Payoff Agreement, the full repayment of the Term Loans amounted to $5.8 million, and as of August 5, 2021, the Loan Agreement, including the Term Loans and revolving line of credit, was terminated. As of December 31, 2021, no amounts remained outstanding under the Loan Agreement. The Company was in compliance with its covenants under the Loan Agreement as of August 5, 2021 and December 31, 2020.

During the year ended December 31, 2021, the Company repaid $6.3 million and $4.5 million related to the First Term Loan and the Second Term Loan, respectively. During the year ended December 31, 2020, the Company repaid $5.0 million and $2.6 million related to the First Term Loan and the Second Term Loan, respectively. Amortization expense related to the debt discount was immaterial for the years ended December 31, 2021, 2020, and 2019.

Convertible Senior Notes Due 2026

On August 10, 2021, the Company issued, at par value, $575.0 million aggregate principal amount of 0.25% convertible senior notes due 2026. The issuance included the full exercise of an option granted by the Company to the initial purchasers of the Notes to purchase an additional $75.0 million aggregate principal amount of Notes. The Notes were issued pursuant to and are subject to the terms and conditions of an indenture, which is referred to as the Indenture, between the Company and Wells Fargo Bank, National Association, as trustee. The Notes were offered and sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

The Notes are senior, unsecured obligations of the Company and will bear interest at a rate of 0.25% per year. Interest will accrue from August 10, 2021 and will be payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2022, and the principal amount of the Notes will not accrete. The Notes will mature on August 15, 2026, unless earlier redeemed, repurchased, or converted in accordance with the terms of the Notes.

Holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount at the option of the holder (i) prior to the close of business on the business day immediately preceding May 15, 2026, only upon satisfaction of certain conditions and during certain periods specified below, and (ii) on or after May 15, 2026, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date:

•during any calendar quarter commencing after the calendar quarter ending on December 31, 2021, if the last reported sale price of the Company’s common stock is greater than or equal to 130% of the conversion price for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter of the conversion price on each applicable trading day;

•during the five consecutive business day period after any five consecutive trading day period, which is referred to as the Measurement Period, in which the trading price (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day;

•if the Company calls such Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and

•upon the occurrence of specified corporate events described in the Indenture.

Upon conversion, the Notes may be settled in shares of the Company’s common stock, cash or a combination of cash and shares of the common stock, at the election of the Company. The Notes have an initial conversion rate of 15.1338 shares of common stock per $1,000 principal amount of Notes, which is subject to adjustment in certain circumstances. This is equivalent to an initial conversion price of approximately $66.08 per share of the Company’s common stock. The conversion rate is subject to customary adjustments under certain circumstances in accordance with the terms of the Indenture. In addition, if certain corporate events that constitute a make-whole fundamental change (as defined in the Indenture) occur or if the Company issues a notice of redemption with respect to the Notes prior to the maturity date, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

The Company may redeem for cash all or any portion of the Notes (subject to a partial redemption limitation), at the Company’s option, on or after August 20, 2024, if the last reported sale price per share of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the Notes, which means that the Company is not required to redeem or retire the Notes periodically.

Upon the occurrence of a fundamental change (as defined in the Indenture), subject to certain conditions, holders have the right to require the Company to repurchase for cash all or a portion of their Notes at a price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest thereon, if any, until, but excluding, the fundamental change repurchase date.

The Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company’s existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.

The net proceeds from the issuance of the Notes were approximately $560.1 million, after deducting debt issuance costs. The total debt issuance costs incurred and recorded by the Company amounted to $14.9 million, which were recorded as a reduction to the face amount of the Notes and will be amortized to interest expense on a straight-line basis, which produces a materially consistent amount as the effective interest method over the contractual term of the Notes.

For the year ended December 31, 2021, interest expense was $0.6 million and amortization of the issuance costs was $1.1 million related to the Notes. As of December 31, 2021, the if-converted value of the Notes did not exceed the outstanding principal amount. As of December 31, 2021, the total estimated fair value of the Notes was $538.3 million and was determined based on a market approach using actual bids and offers of the Notes in an

over-the-counter market on the last trading day of the period. The Company considers these assumptions to be Level II inputs in accordance with the fair value hierarchy described in “Note 4—Fair Value Measurements and Marketable Securities.”

Capped Calls

In connection with the pricing of the Notes on August 5, 2021 and in connection with the full exercise by the initial purchasers on August 9, 2021 of their option to purchase additional Notes, the Company used approximately $49.4 million of the net proceeds from the issuance of the Notes to enter into privately negotiated capped call transactions, which are referred to as the Capped Calls, with various financial institutions.

Subject to customary anti-dilution adjustments substantially similar to those applicable to the Notes, the Capped Calls cover the number of shares of the Company’s common stock initially underlying the Notes. By entering into the Capped Calls, the Company expects to reduce the potential dilution to its common stock (or, in the event a conversion of the Notes is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the Notes its common stock price per share exceeds the conversion price of the Notes, with such reduction subject to a cap based on the cap price. If, however, the market price per share of common stock, as measured under the terms of the Capped Calls, exceeds the cap price of the Capped Calls, there would be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that the then-market price per share of common stock exceeds the cap price of the Capped Calls. The initial cap price of the Capped Calls is $92.74 per share of common stock, which represents a premium of 100% over the last reported sale price of the common stock of $46.37 per share on August 5, 2021, and is subject to certain customary adjustments under the terms of the Capped Calls; provided that the cap price will not be reduced to an amount less than the strike price of $66.08 per share.

The Capped Calls are separate transactions and are not part of the terms of the Notes. The Capped Calls meet the criteria for classification as equity and, as such, are not remeasured each reporting period and are included as a reduction to additional paid-in-capital within stockholders’ equity.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
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-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Preferred and Common Stock

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Preferred and Common Stock

Preferred Stock

As of December 31, 2021 and 2020, the Company was authorized to issue up to 10,000,000 shares of undesignated preferred stock, $0.0001 par value per share. The Company did not have any outstanding shares of preferred stock as of December 31, 2021 and 2020.

Common Stock

Holders of common stock are entitled to one vote per share and are entitled to receive dividends, if any, on a pro rata basis whenever funds are legally available and when, as, and if declared by the Company’s board of directors.

As of December 31, 2021 and 2020, the Company was authorized to issue 490,000,000 shares of common stock. As of December 31, 2021 and 2020, the Company had reserved shares of common stock for future issuance as follows:


	2021	2020
Options issued and outstanding	4,264,068	4,858,590
RSUs and PSUs issued and outstanding	4,583,823	5,568,225

Warrant to purchase common stock	350,000	400,000


Remaining shares reserved for future issuances under 2018 Equity Incentive Plan	22,250,297	18,332,765
Remaining shares reserved for future issuances under 2018 Employee Stock Purchase Plan	3,033,401	2,419,154
Common stock issuable in connection with convertible senior notes	8,701,935	—
Total	43,183,524	31,578,734

Common Stock Warrant

In 2018, the Company established The Upwork Foundation initiative. The program includes a donor-advised fund created through the Tides Foundation. In 2018, the Company issued a warrant to purchase 500,000 shares of its common stock at an exercise price of $0.01 per share to the Tides Foundation. The vesting and exercisability provisions of the warrant became effective upon the Company’s initial public offering, which is referred to as the IPO, in October 2018. This warrant is exercisable as to 1/10th of the shares on each anniversary of the IPO, with proceeds from the sale of such shares to be donated in accordance with the Company’s directive.

In each of 2019, 2020, and 2021 this warrant was exercised as to all 50,000 of the then-vested and exercisable shares. In lieu of a cash payment, the holder of the warrant surrendered shares of common stock to cover the exercise price. For the years ended December 31, 2021, 2020, and 2019, the Company recorded $0.8 million, $0.8 million, and $0.7 million, respectively, of expense related to this warrant, which is included in general and administrative expense in the Company’s consolidated statement of operations.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Equity Incentive Plans

2014 Equity Incentive Plan

In 2014, the Company’s board of directors and stockholders each adopted the 2014 Equity Incentive Plan, which is referred to as the 2014 EIP. The total number of shares of common stock reserved and available for grant and issuance pursuant to such plan was originally 12,462,985 plus (i) shares that were then subject to outstanding option grants under the oDesk Corporation 2004 Stock Plan, the Elance 1999 Stock Option Plan, and the Elance 2009 Stock Option Plan, which are referred to collectively as the Prior Plans, but subsequently ceased to be subject to an award for any reason other than exercise of a stock option, (ii) shares that had been reserved but not subject to any outstanding awards under the Prior Plans and (iii) shares issued under the Prior Plans that were repurchased, forfeited, or used to pay employee withholding or exercise price obligations. Under the terms of the 2014 EIP, incentive stock options may be granted at prices not less than 100% of the fair value of the Company’s common stock on the date of grant unless determined in writing by the Company’s board of directors. The options granted under the 2014 EIP generally vest over a four-year period from the original date of grant and expire ten years from the original grant date.

2018 Equity Incentive Plan

In 2018, the Company’s board of directors and stockholders each adopted the 2018 Equity Incentive Plan, which is referred to as the 2018 EIP, which became effective on the date immediately prior to the date of the IPO. A total of 10,701,505 shares of common stock were initially reserved for issuance pursuant to future awards under the 2018 EIP. On January 1 of each year, shares available for issuance are increased based on the provisions of the 2018 EIP. Any shares subject to outstanding awards under the 2014 EIP that are canceled or repurchased subsequent to the 2018 EIP’s effective date are returned to the pool of shares reserved for issuance under the 2018 EIP. Awards granted under the 2018 EIP may be (i) incentive stock options, (ii) nonqualified stock options, (iii) RSUs, (iv) restricted stock awards, or (v) stock appreciation rights, as determined by the Company’s board of directors or compensation committee at the time of grant.

Pursuant to the terms of the 2018 EIP, the number of shares available for grant was increased by 6,239,761 shares in January 2021.

Option Awards

The fair value of options with service- and performance-based conditions is determined using the Black-Scholes valuation model as of the grant date using the following assumptions:

Dividend Yield—The dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to do so.

Expected Term—The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. For awards containing only service conditions, the Company determines the expected term using the simplified method as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior at the time of grant. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. For performance-based awards, the Company uses relevant data, including past exercise patterns, if available, to determine the expected term.

Risk-Free Interest Rate—The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term.

Expected Volatility—Since the Company did not have a sufficient trading history of its common stock at the time of grant, the expected volatility is derived from the average historical stock volatilities of several unrelated public companies within the Company’s industry that the Company considers to be comparable to its business over a period equivalent to the expected term of the stock option grants.

Fair Value of Common Stock—Given the absence of a public trading market prior to the IPO, the Company’s board of directors considered numerous objective and subjective factors to determine the fair value of its common stock at each grant date. These factors included, but were not limited to: (i) independent contemporaneous third-party valuations of common stock; (ii) the prices for the Company’s redeemable convertible preferred stock sold to outside investors; (iii) the rights and preferences of redeemable convertible preferred stock relative to common stock; (iv) the lack of marketability of its common stock; (v) developments in the business; and (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions. Subsequent to the IPO, the fair value of common stock is based on the closing price of the Company’s common stock, as reported on The Nasdaq Global Select Market on the date of grant.

The following table summarizes activity under the Company’s stock option plans:


	Number of Shares Underlying Outstanding Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)








Balances at December 31, 2020	4,858,590	$	3.83	5.80	$	149,046
Granted	1,500,000	38.80
Exercised	(2,035,709)	3.53
Forfeited and canceled	(58,813)	4.42
Balances at December 31, 2021	4,264,068	16.29		6.37	76,025
Vested and exercisable as of December 31, 2021	2,542,329	4.02		4.80	76,626
Vested and expected to vest as of December 31, 2021	4,264,068	16.29		6.37	76,025

In 2021, the compensation committee of the Company’s board of directors approved a stock option grant, which is referred to as the CEO Award, exercisable for up to 1,500,000 shares of the Company’s common stock to Hayden Brown, the Company’s President and Chief Executive Officer, under the 2018 EIP. The CEO Award is subject to a service-based vesting requirement, which is referred to as the Service Condition, and a performance-based vesting requirement, which is referred to as the Market Condition. In order for any shares subject to the CEO Award to be exercisable, both the Service Condition and the Market Condition must be satisfied with respect to such shares. The CEO Award vests with respect to the Service Condition in sixteen equal quarterly installments following the grant date, subject to Ms. Brown’s continuous service to the Company as Chief Executive Officer, Executive Chairperson, or any C-level officer position. The CEO Award vests with respect to the Market Condition upon the achievement of certain volume weighted-average common stock price targets measured over any consecutive 90-day period between the grant date and April 18, 2026. The 90-day volume weighted-average common stock price targets, and the number of shares of the CEO Award that become vested with respect to the Market Condition upon the achievement of each such target, are reflected in the following table:


Stock Price						Number of Shares Vested
$60						100,000
$70						200,000
$80						300,000
$90						400,000
$100						500,000

Stock-based compensation expense associated with the CEO Award will be recognized over the longer of the expected achievement period for the Market Condition and the Service Condition. The Market Condition period and the valuation of each tranche of the CEO Award were determined using a Monte Carlo simulation. In the event the Market Condition is met prior to the expected achievement period, any then-unrecognized compensation expense associated with the shares that have vested with respect to both the Market Condition and the Service Condition will be recognized immediately in the Company’s consolidated statements of operations. For the year ended December 31, 2021, the Company recorded stock-based compensation expense of $11.3 million related to the CEO Award. Stock-based compensation expense for the CEO Award is recorded as a component of general and administrative expense in the Company’s consolidated statement of operations.

The Company estimated the fair value of the CEO Award using a Monte Carlo simulation. The Company estimates the expected term based on a future exercise assumption. The weighted-average derived service period for the CEO Award is 2.1 years. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes. The expected volatility is derived from the average historical stock volatility of the Company over a period equivalent to the expected term of the CEO Award. The following assumptions were used to estimate the fair value of the CEO Award:


Dividend yield	—	%
Risk-free interest rates	1.7	%
Expected volatility	65	%

In 2019, the Company entered into a transition agreement, which is referred to as the Transition Agreement, with Stephane Kasriel pursuant to which Mr. Kasriel tendered his resignation as the Company’s President and Chief Executive Officer effective as of December 31, 2019. As a result, for the year ended December 31, 2019, the Company recorded $3.5 million of additional stock-based compensation expense related to the Transition Agreement.

The fair values of the awards modified by the Transition Agreement were estimated using the Black-Scholes valuation model with the following assumptions:


Dividend yield	—	%
Expected term (in years)	0.3 - 1.3
Risk-free interest rates	1.5% - 1.6%
Expected volatility	38% - 39%

For the years ended December 31, 2021, 2020, and 2019, the intrinsic value of options exercised was $88.9 million, $124.1 million, and $73.0 million, respectively. The aggregate intrinsic value represents the difference between the

exercise price of the options and the closing price of the Company’s common stock on The Nasdaq Global Select Market on the day prior to the date of exercise.

For the year ended December 31, 2021, the weighted-average grant-date fair value of options granted was $19.19. The Company did not grant any stock option awards during the years ended December 31, 2020 and 2019. As of December 31, 2021, total unrecognized stock-based compensation cost was $17.9 million, which is expected to be generally recognized on a straight-line basis over a weighted-average period of 1.8 years.

RSU and PSU Awards

The fair value of RSUs awarded to employees is based on the closing price of the Company’s common stock, as reported on The Nasdaq Global Select Market on the date of grant.

The following table summarizes the RSU and PSU activity and related information under the 2018 EIP:


	Number Outstanding	Weighted-Average Grant Date Fair Value
Unvested balance - January 1, 2021	5,568,225	$	12.20
Granted	2,075,311	51.53
Vested	(1,865,444)	16.37
Forfeited/canceled	(1,194,269)	16.42
Unvested balance - December 31, 2021	4,583,823	$	26.86

In 2021, the compensation committee of the Company’s board of directors approved PSU grants to certain members of the Company’s leadership team under the 2018 EIP. The number of PSUs that were earned by the recipients, which are referred to as Earned PSUs, was determined based on the Company’s revenue achievement during the year ended December 31, 2021, which is referred to as the PSU Performance Condition. The Earned PSUs are subject to a time-based vesting requirement conditioned on the recipient of the PSU Award continuing to provide service to the Company for four years from the PSU Grant Date, which is referred to as the PSU Service Condition. The Earned PSUs will vest with respect to 25% of the Earned PSUs on the one-year anniversary of the PSU Grant Date and 1/16th of the Earned PSUs on a quarterly basis thereafter.

Stock-based compensation expense associated with the PSU Awards is a component of operating expenses in the Company’s consolidated statements of operations and will be recognized over the longer of the expected achievement period for the PSU Performance Condition and the PSU Service Condition. The grant date fair value of the PSU Awards was determined using the Company’s closing common stock price on the PSU Grant Date multiplied by the number of PSUs that were probable of being earned on the PSU Grant Date. At each interim reporting date prior to the date on which the compensation committee of the Company’s board of directors certifies the PSU Performance Condition, the number of PSUs that are probable of being earned is reassessed and any changes are reflected in the total stock-based compensation expense associated with the PSU Awards.

For the year ended December 31, 2021, the weighted-average grant-date fair value of PSUs granted was $56.42. During the year ended December 31, 2021, the Company recorded stock-based compensation expense of $3.4 million related to the PSUs. As of December 31, 2021, unrecognized stock-based compensation cost was $3.4 million, which is expected to be recognized over a weighted-average period of 1.8 years.

For the years ended December 31, 2021, 2020, and 2019, the weighted-average grant-date fair value of RSUs granted was $51.37, $10.96, and $16.15, respectively. For the years ended December 31, 2021, 2020, and 2019, the fair value of RSUs vested was $30.5 million, $20.3 million, and $2.6 million, respectively. As of December 31, 2021, there was $108.1 million of unrecognized stock-based compensation expense related to outstanding RSUs to employees that is expected to be recognized over a weighted-average period of 3.1 years.

2018 Employee Stock Purchase Plan

In 2018, the Company’s board of directors and stockholders each adopted the 2018 ESPP. A total of 1,700,000 shares of common stock was initially reserved for issuance under the 2018 ESPP. On January 1 of each year, shares available for issuance are increased based on the provisions of the 2018 ESPP. The 2018 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount of up to 15% through payroll deductions of their eligible compensation, subject to any plan limitations. Except for the initial offering period, the 2018 ESPP provides for 24-month offering periods beginning November 15 and May 15 of each year, and each

offering period consists of four 6-month purchase periods. Pursuant to the terms of the 2018 ESPP, in January 2021, the number of shares of common stock available for issuance was increased by 998,361 shares.

For the years ended December 31, 2021, 2020, and 2019, the assumptions used to determine the fair value of the shares to be awarded was estimated on the grant date using the Black-Scholes valuation model with the following assumptions:


	2021		2020		2019
Dividend yield	—	%	—	%	—	%
Expected term (in years)	0.5 - 2.0		0.5 - 2.0		0.5 - 2.0
Risk-free interest rates	—% - 0.5%		0.1% - 0.2%		1.5% - 2.4%
Expected volatility	60% - 76%		50% - 82%		38%

On each purchase date, eligible employees may purchase the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date or (2) the fair market value of the Company’s common stock on the purchase date. In the event the price is lower on the last day of any purchase period, that price is used as the purchase price for that purchase period.

Additionally, in the event the fair market value of the Company’s common stock on the first day of a subsequent offering period is less than the fair market value of the Company’s common stock on the offering date of the current offering period, the offering period resets, and the new lower price becomes the new offering price for a new 24 month offering period. During the year ended December 31, 2021, the Company issued 384,114 shares of common stock under the 2018 ESPP.

As of December 31, 2021, there was $5.8 million of unrecognized stock-based compensation expense that is expected to be recognized over the remaining term of the respective offering periods.

Stock-Based Compensation

The following table summarizes the components of stock-based compensation expense recognized in the consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019:


(In thousands)	2021		2020		2019
Cost of revenue	$	794	$	779	$	456
Research and development	16,232		9,783		6,471
Sales and marketing	5,923		4,440		2,609
General and administrative	30,643		10,506		9,262
Total	$	53,592	$	25,508	$	18,798

Stock-Based Compensation to Employees

Stock-based compensation expense related to employees for the year ended December 31, 2021 was $12.7 million, $38.8 million, and $2.2 million related to stock option grants, RSU and PSU grants, and the 2018 ESPP, respectively. Stock-based compensation expense related to employees for the year ended December 31, 2020 was $2.5 million, $20.0 million, and $3.2 million related to stock option grants, RSU grants, and the 2018 ESPP, respectively. Stock-based compensation expense related to employees for the year ended December 31, 2019 was $8.5 million, $7.9 million, and $2.6 million related to stock option grants, RSUs, and the 2018 ESPP, respectively.

Net Loss per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Net Loss Per Share

Net Loss per Share

The following table sets forth the computation of the Company’s basic and diluted net loss per share for the years ended December 31, 2021, 2020, and 2019:


(In thousands, except share and per share data)	2021		2020		2019
Numerator:
Net loss	$	(56,240)	$	(22,867)	$	(16,659)



Denominator:
Weighted-average shares used to compute net loss per share, basic and diluted	127,163,591		118,698,567		109,814,604
Net loss per share, basic and diluted	$	(0.44)	$	(0.19)	$	(0.15)

For the years ended December 31, 2021, 2020, and 2019, the following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive:


	2021	2020	2019
Options to purchase common stock	4,264,068	4,858,590	15,140,579

Common stock issuable upon exercise of common stock warrants	350,000	400,000	450,000

Common stock issuable upon vesting of RSUs and PSUs	4,583,823	5,568,225	2,503,182
Common stock issuable in connection with employee stock purchase plan	329,650	540,580	1,651,263
Common stock issuable in connection with convertible senior notes	8,701,935	—	—
Total	18,229,476	11,367,395	19,745,024

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

For the years ended December 31, 2021, 2020, and 2019, the loss before income taxes consisted of the following:


(In thousands)	2021		2020		2019
Domestic	$	(56,165)	$	(22,748)	$	(16,658)
Foreign	47		31		27
Total loss before income taxes	$	(56,118)	$	(22,717)	$	(16,631)

For the years ended December 31, 2021, 2020, and 2019, the components of the income tax provision were as follows:


(In thousands)	2021		2020		2019
Current:
Federal	$	—	$	(19)	$	—
State	(120)		(127)		(26)
Foreign	(2)		(4)		(2)
Total current	$	(122)	$	(150)	$	(28)
Deferred:
Federal	$	—	$	—	$	—
State	—		—		—
Foreign	—		—		—
Total deferred	$	—	$	—	$	—
Total income tax benefit (provision)	$	(122)	$	(150)	$	(28)

The Company had an effective tax rate of (0.21)%, (0.66)%, and (0.17)% for the years ended December 31, 2021, 2020, and 2019, respectively. The reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2021, 2020, and 2019 were as follows:


	2021		2020		2019
Tax at federal statutory rate	21.00	%	21.00	%	21.00	%
State tax, net of federal benefit	(0.19)		(0.49)		(0.27)
Stock-based compensation	44.13		94.02		51.45

Other items	(0.16)		(0.59)		(4.34)
Research and development credits	7.04		9.74		13.74
Net operating loss expiration	(8.08)		(14.00)		(18.33)
Change in valuation allowance	(63.95)		(110.34)		(63.42)
Effective tax rate	(0.21)	%	(0.66)	%	(0.17)	%

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2021 and 2020, the significant components of the Company’s deferred tax assets and liabilities were as follows:


(In thousands)	2021		2020
Deferred tax assets:
Net operating loss carryforwards	$	100,836	$	77,230
Stock-based compensation	5,617		230
Operating lease liability	5,296		5,555
Non-deductible accrued expenses, reserves and other	7,259		4,903


Research and development credits	17,044		11,352
Gross deferred tax assets	136,052		99,270
Valuation allowance	(132,162)		(92,390)
Total deferred tax assets	3,890		6,880
Deferred tax liabilities:
Acquired intangible assets	—		(89)
Operating lease asset	(2,452)		(4,523)
Debt issuance cost	(75)		—
Depreciation and amortization	(1,363)		(2,268)
Total deferred tax liabilities	(3,890)		(6,880)
Net deferred tax assets	$	—	$	—

The change in valuation allowance for deferred tax assets was as follows for the periods presented:


(In thousands) Year Ended December 31,	Balance at Beginning of Year		Additions Charged to Costs & Expenses		Additions Charged to Other Accounts		Deductions		Balance at End of Year

2021	$	92,390	$	39,772	$	—	$	—	$	132,162
2020	63,542		28,848		—		—		92,390
2019	49,439		14,103		—		—		63,542

The Company records a full valuation allowance of $132.2 million and $92.4 million as of December 31, 2021 and 2020, respectively, against its net deferred tax assets. The Company determines its valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized. Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. Due to the history of losses the Company has generated in the past, the Company believes that it is not more likely than not that all of the deferred tax assets can be realized as of December 31, 2021. Accordingly, the Company has recorded a full valuation allowance on its deferred tax assets.

The Company has federal net operating loss, which is referred to as NOL, carryforwards of approximately $444.6 million and $343.1 million as of December 31, 2021 and 2020, respectively. The federal NOLs generated in the

years ended December 31, 2001 through 2017 began to expire in 2021, including $21.6 million that expired in 2021 and $23.0 million that will expire in 2022. NOLs originating before January 1, 2018, are eligible to offset taxable income, if not otherwise limited under Internal Revenue Code, which is referred to as IRC, §382 limitations. NOLs generated after December 31, 2017, have an infinite carryforward period and subject to 80% deduction limitation based upon pre-NOL deduction taxable income. The Company has California NOL carryforwards of approximately $90.4 million and $72.9 million as of December 31, 2021 and 2020, respectively. California NOLs generated in the years ended December 31, 2008 through 2018 will begin to expire in 2028. California NOLs generated before 2008 have expired in accordance the California Revenue Taxation Code and related regulations.

The Company has federal research and development credits, which are referred to as Credits, of approximately $19.1 million and $12.0 million as of December 31, 2021 and 2020, respectively. In 2021, $0.1 million of federal research and development credits expired and the remaining carryforward is subject to expiration through 2041. The Company has California Credits of approximately $13.6 million and $13.1 million as of December 31, 2021 and 2020, respectively. California Credits have an infinite carryforward period.

Utilization of the NOL and Credit carryforwards that were generated prior to January 1, 2018 may be subject to a substantial annual limitation due to ownership changes that may have occurred or that could occur in the future, as required by IRC §382 and §383, as well as similar state provisions.

Uncertain Tax Positions

As of December 31, 2021, the Company’s total amount of unrecognized tax benefits was $15.4 million, none of which would impact the Company’s effective tax rate, if recognized.

For the years ended December 31, 2021, 2020, and 2019, the activity related to the unrecognized tax benefits were as follows:


(In thousands)	2021		2020		2019
Gross unrecognized tax benefits—beginning balance	$	13,338	$	12,782	$	10,973
Increase related to tax positions taken during prior year	697		131		—
Decrease related to tax positions taken during prior year	(148)		—		(164)
Increase related to tax positions taken during current year	1,635		608		1,973

Decrease related to expiration of unrecognized tax benefit	(131)		(183)		—
Gross unrecognized tax benefits—ending balance	$	15,391	$	13,338	$	12,782

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the provision for income taxes in the period that such determination is made. As of December 31, 2021, the Company did not currently recognize any penalties or interest charges relating to uncertain tax positions. The Company does not anticipate the recorded reserves to change significantly in the next 12 months.

The Company is subject to taxation in the United States and various other state and foreign jurisdictions. Due to certain tax attribute carryforwards, the tax years 2001 to 2021 remain open to examination by the major taxing jurisdictions in which the Company is subject to tax. As of December 31, 2021, the Company was not under examination by the Internal Revenue Service or any state or foreign tax jurisdiction.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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+ Details

Segment and Geographical Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment and Geographical Information

The Company operates as one operating and reportable segment for purposes of allocating resources and evaluating financial performance.

The following table sets forth total revenue by type of service for the years ended December 31, 2021, 2020, and 2019:


(In thousands)	2021		2020		2019
Marketplace
Basic, Plus, and other	$	427,476	$	317,942	$	253,099
Enterprise	34,864		20,210		15,185
Managed services	40,457		35,476		32,278
Total	$	502,797	$	373,628	$	300,562

The Company generates its revenue from talent and clients. The following table sets forth total revenue by geographic area based on the billing address of its talent and clients for the years ended December 31, 2021, 2020, and 2019:


(In thousands)	2021		2020		2019
Talent:
United States	$	74,890	$	60,861	$	50,154
India	42,277		33,109		27,369
Philippines	32,918		22,924		19,660
Rest of world	146,894		109,805		90,259
Total talent	296,979		226,699		187,442
Clients:
United States	153,003		107,359		87,241
Rest of world	52,815		39,570		25,879
Total clients	205,818		146,929		113,120
Total	$	502,797	$	373,628	$	300,562

Substantially all of the Company’s long-lived assets were located in the United States as of December 31, 2021 and 2020.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

401(k) Plan	12 Months Ended
401(k) Plan	Dec. 31, 2021
Retirement Benefits [Abstract]
401(k) Plan	401(k) PlanThe Company offers the Upwork Retirement Savings Plan, which is referred to as the Retirement Plan, a defined contribution plan that allows employees to contribute a portion of their salary, subject to the annual limits. Under the Retirement Plan, eligible employees may defer a portion of their pretax salaries, but not more than the statutory limits. The Retirement Plan provides for a discretionary employer cash matching contribution. The Company makes matching cash contributions equal to 50% of each dollar contributed, subject to a maximum contribution of $5,000 annually per participant. The Company’s total expense for the matching contributions was $2.5 million, $2.5 million, and $2.0 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2021
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, which is referred to as U.S. GAAP, and include the accounts of Upwork Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods presented. Such estimates include, but are not limited to: the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; standalone selling price of material rights and the period of time over which to defer and recognize the consideration allocated to the material rights; allowance for doubtful accounts; liabilities relating to transaction losses; stock-based compensation; and accounting for income taxes. Management bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The Company evaluates its estimates, assumptions, and judgments on an ongoing basis using historical experience and other factors and revises them when facts and circumstances dictate. Given the Company’s shift to a flexible work model for its workforce, in 2021, the Company subleased the entirety of its former headquarters in Santa Clara, California and subleased a portion of its current headquarters in San Francisco, California. As a result, during the year ended December 31, 2021, the Company incurred impairment charges of $8.7 million related to the associated operating lease assets and property and equipment. The Company may determine to either close or sublease certain of its other offices, either of which may result in further impairment charges. See “Note 5—Balance Sheet Components” for additional information regarding these impairments. Notwithstanding the foregoing, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.
Cash and Cash Equivalents and Restricted Cash	Cash and Cash Equivalents The Company classifies as cash and cash equivalents its cash held in checking and interest-bearing accounts and investments in money market funds, U.S. government securities, and debt securities with maturities of 90 days or less from the date of purchase. Restricted Cash As of December 31, 2021 and 2020, the Company maintained restricted cash of $4.0 million and $3.3 million, respectively, related to cash reserve requirements under the escrow laws and regulations of the California Department of Financial Protection and Innovation and collateral for letters of credit issued in conjunction with operating leases.
Funds Held in Escrow, Including Funds in Transit	Funds Held in Escrow, Including Funds in Transit The Company maintains its users’ funds held in escrow in demand or checking accounts at U.S. financial institutions, as well as two California licensed money transmitters. The balance in these accounts was in excess of federally insured limits as of December 31, 2021 and 2020. Users’ funds held in escrow are denominated exclusively in U.S. dollars. The Company is an internet escrow agent and is therefore required to hold its users’ escrowed funds and escrow funds in transit in trust as an asset and record a corresponding liability for escrow funds payable on its consolidated balance sheets. For this reason, funds held in escrow, including funds in transit, are restricted cash. Escrow funds in transit arise due to the time it takes to clear transactions through external payment networks. When clients fund their escrow account using credit cards, there is a clearing period before the cash is received and settled. Accordingly, the funds are treated as escrow funds in transit until the transaction is settled to the escrow trust bank account or, in the case of international credit card settlements, to the Company’s bank accounts. Escrow regulations require the Company to fund the trust with its own operating cash if there is ever a shortage due to the timing of cash receipts from clients for completed hourly billings.
Marketable Securities	Marketable Securities The Company's marketable securities consist of commercial paper, corporate debt securities, treasury bills, U.S. government securities, asset-backed securities, and Yankee debt securities issued by foreign governments or entities and denominated in U.S. dollars, all of which have contractual maturities within 24 months from the date of purchase. The marketable securities are available for current operations and are classified as available-for-sale. These marketable securities are carried at estimated fair value with unrealized gains and losses, net of taxes, included within the stockholders’ equity section of the Company’s consolidated balance sheet. The Company periodically assesses its portfolio of debt investments for impairment. For debt securities in an unrealized loss position, this assessment first takes into account the Company’s intent to sell, or whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the debt security’s amortized cost basis is written down to fair value through other (income) expense, net. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, the Company assesses whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. In making this assessment, the Company considers factors such as the extent to which fair value is less than the amortized cost basis, the financial condition of the issuer, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded through other (income) expense, net, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive loss. Changes in the allowance for credit losses are reflected as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell are met. These changes are recorded in other income, net. The Company determines realized gains or losses from the sale of marketable securities on a specific identification method and records such gains or losses as other (income) expense, net within the Company’s consolidated statements of operations.
Concentration of Risk	Concentration of Risk Financial instruments that subject the Company to concentration of risk consist primarily of cash, restricted cash, funds held in escrow, including funds in transit, and trade and client receivables. The Company maintains its cash balances with large, high-credit quality financial institutions and other payment companies. At times, such deposits may be in excess of federally insured limits. The Company has not experienced any losses on its deposits. Credit risk on trade receivables is limited as a result of the large size of the Company’s client base as well as a large portion of payments made using pre-authorized credit cards. The Company performs ongoing credit evaluations of its clients and maintains allowances for potential credit losses. For any receivables that are deemed not collectible, losses are recorded when probable and estimable. These losses, when incurred, have been within the range of the Company’s expectations. One client accounted for more than 10% of trade and client receivables as of December 31, 2021. Three clients each accounted for more than 10% of trade and client receivables as of December 31, 2020. For the years ended December 31, 2021 and 2020, the Company did not have any clients that accounted for more than 10% of total revenue. For the year ended December 31, 2019, the Company generated $32.0 million in revenue from one client, which accounted for more than 10% of revenue during the year ended December 31, 2019. The Company is dependent upon third parties, such as Amazon Web Services, in order to meet the uptime and performance needs of its users.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, restricted cash, funds held in escrow, including funds in transit, marketable securities, trade and client receivables, prepaid and other current assets, escrow funds payable, and debt. The Company believes that the carrying values of the remaining financial instruments approximate their fair values.
Trade and Client Receivables and Related Allowance for Doubtful Accounts	Trade and Client Receivables and Related Allowance for Doubtful Accounts Trade and client receivables are primarily comprised of amounts receivable from clients for completed work, including amounts in transit. It also includes unbilled amounts due from clients primarily through the Company’s managed services offering. Trade and client receivables are recorded and stated at realizable value, net of an allowance for doubtful accounts. Credit is extended generally without collateral to the Company’s managed services and marketplace clients with Upwork Enterprise offerings based on an initial and ongoing evaluation of their financial condition and other factors. In aggregate, gross trade receivables were $19.7 million and $15.9 million and gross client receivables were $50.5 million and $32.8 million as of December 31, 2021 and 2020, respectively. The allowance for doubtful accounts is the Company’s estimate of the probable credit losses on accounts receivable. The Company periodically assesses the collectability of the accounts and determines the allowance recognized by taking into consideration the aging of its receivable balances, historical write-off experience, probability of collection, and other relevant data. Trade and client receivables are written off against the allowance when management determines a balance is uncollectible and no longer actively pursues collection of the receivable.
Derivatives Instruments	Derivative Instruments The Company uses derivative financial instruments not designated as hedges, such as foreign currency forward contracts, to minimize the short-term impact of foreign currency exchange rate fluctuations on certain foreign currency denominated assets and liabilities, as well as certain foreign currency denominated expenses, hedging the gains or losses generated by the re-measurement of significant foreign currency denominated monetary assets and liabilities. The Company does not enter into derivative instruments for speculative or trading purposes and these instruments generally have maturities within 12 months. The foreign currency forward contracts are recorded at fair value and, when in gain positions, are reported within prepaid expenses and other current assets. When in loss positions, the foreign currency forward contracts are recorded within accrued expenses and other current liabilities in the consolidated balance sheets. Gains or losses from changes in the fair value of these foreign currency forward contracts not designated as hedging instruments are recorded in other income, net to offset the changes in the fair value of the underlying assets or liabilities being hedged. The notional amounts associated with the Company’s foreign currency forward contracts at December 31, 2021 and 2020 were $7.2 million and $7.6 million, respectively, none of which were designated as cash flow hedges. The carrying values of the foreign currency forward contracts approximated their fair values due to their relatively short settlement durations. The fair values of the Company’s outstanding foreign currency forward contracts not designated as hedging instruments as of December 31, 2021 and 2020 were not material. Losses on foreign currency forward contracts not designated as hedging instruments were $0.5 million for the year ended December 31, 2021. Losses on foreign currency forward contracts not designated as hedging instruments were $0.6 million for the year ended December 31, 2020. Gains on foreign currency forward contracts not designated as hedging instruments were $0.9 million for the year ended December 31, 2019.
Leases	Leases The Company accounts for leases in accordance with Financial Accounting Standards Board, which is referred to as the FASB, Accounting Standards Update, which is referred to as ASU, No. 2016-02, Leases (Topic 842), which the Company adopted on December 31, 2019 effective as of January 1, 2019 using the effective date method.
Property and Equipment	Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, which are generally two to five years. Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining lease term or their estimated useful lives. Repair and maintenance costs are charged to expense as incurred.
Internal-Use Software and Platform Development Costs	Internal-Use Software and Platform Development Costs The Company’s policy is to capitalize certain costs to develop its internal-use software and platform when (i) preliminary project planning is completed, (ii) the Company has committed project resourcing, and (iii) it is probable that the project will be completed and the software will be used as intended. Costs incurred for enhancements that are expected to result in additional significant functionality are also capitalized. Such costs are generally amortized on a straight-line basis over their estimated useful lives determined on a project-by-project basis, which historically has ranged between two to three years, beginning when the asset is ready for its intended use. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. Amortization of capitalized internal-use software and platform development costs is allocated to functional expense categories based on headcount and the nature and intended use of the project.
Segment Information	Segment Information The Company has one reportable segment. The Company’s chief operating decision maker is its President and Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.
Goodwill, Acquired Intangible Assets, and Other Long-Lived Assets	Goodwill, Acquired Intangible Assets, and Other Long-Lived Assets Goodwill represents the excess of the aggregate fair value of the consideration transferred over the fair value of the net tangible and identifiable intangible assets acquired in the Elance-oDesk Combination. Goodwill is not amortized, but rather is assessed for impairment at least annually, or more frequently if events and changes in circumstances indicate that its carrying amount may not be recoverable. The Company performs its annual impairment assessment during the fourth quarter of each calendar year based on a single reporting unit structure by comparing the carrying value of the reporting unit to its fair value. An impairment would occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. There has been no impairment of goodwill for any of the periods presented. The Company’s long-lived assets consist of property and equipment and acquired identifiable, finite-lived intangible assets, namely developed technology, user relationships, trade names, and domain names. The finite-lived intangible assets are carried at cost, less accumulated amortization. The Company amortizes the finite-lived intangible assets over their estimated useful lives ranging from two to seven years based on the pattern in which the economic benefits of the intangible assets are consumed, or the straight-line method when the pattern cannot be reliably determined. The Company periodically reviews the remaining estimated useful lives of its long-lived tangible and amortizable intangible assets. If the estimated useful life assumption for any asset is changed, the remaining unamortized balance would be depreciated or amortized over the revised estimated useful life, on a prospective basis. Intangible amortization expense related to developed technology and trade names is recorded as cost of revenue. Intangible amortization expense related to user relationships and domain names is included in operating expenses. The Company evaluates the recoverability of its long-lived assets, including finite-lived intangible assets, for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If it is determined that the asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset group exceeds the aggregate future undiscounted cash flows. When an impairment loss is recognized, the carrying amount of such assets is reduced to fair value. For 2021, the Company conducted its goodwill impairment testing by performing the first step of the two-step impairment model. The fair value was determined by the Company using quoted market prices of the Company’s common stock. The Company determined that the fair value of its reporting unit exceeded the carrying value, and, as such, the Company concluded that there was no impairment of goodwill at the impairment testing date. There was no impairment of long-lived assets in any of the periods presented.
Convertible Senior Notes and Debt Issuance Costs	Convertible Senior Notes The Company accounts for its convertible senior notes, which are referred to as the Notes, as a single liability measured at amortized cost. The carrying value of the liability equals the proceeds received from the issuance of the Notes less debt issuance costs. See “Note 7—Debt” for additional information. Debt Issuance Costs Debt issuance costs incurred in connection with securing the Company’s financing arrangements are capitalized and amortized over the term of the respective financing arrangement under the straight-line method as the results obtained are not materially different from those that would result from the use of the effective interest method. Debt issuance costs are generally presented in the Company’s consolidated balance sheets as a reduction to the carrying amount of the outstanding borrowings.
Revenue Recognition	Revenue Recognition The Company primarily generates revenue from clients from its marketplace and managed service offerings and from talent from its marketplace. The Company accounts for revenue in accordance with FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which the Company adopted on December 31, 2019 effective as of January 1, 2019 using the modified retrospective method. Revenue is recognized upon transfer of control of promised services to users in an amount that reflects the consideration the Company expects to receive in exchange for those services. In the ordinary course of business, the Company makes payments to users when those users provide services in their capacity as vendors. These payments are for distinct services and are at fair value. These transactions are primarily with certain financial institutions that the Company uses as payment processors on the work marketplace. The Company accounts for the consideration payable to these users in their capacity as vendors as a purchase of services from a vendor and records such payments in either cost of revenue or sales and marketing within the consolidated statements of operations. Marketplace Offerings The Company’s marketplace revenue, which represents the majority of its revenue, consists primarily of revenue derived from Upwork Basic, Plus, and Enterprise offerings. The Company generates marketplace revenue from both talent and clients. Revenue from the Company’s Upwork Basic and Plus offerings are primarily comprised of talent service fees, and to a lesser extent, payment processing and administration fees charged to clients. Revenue from the Company’s Upwork Enterprise offering, which is referred to as Enterprise Revenue, includes all client fees, subscriptions, and talent service fees. The Company also generates marketplace revenue from fees for premium offerings associated with its Upwork Basic, Plus, and Enterprise offerings, including talent memberships, purchases of Connects, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar, and the Company’s Upwork Payroll offering. Upwork Basic, Plus, and Other Premium Offerings The Company earns fees from talent under the Upwork Basic, Plus, and associated premium offerings, which represent a single promise to provide continuous access (i.e. stand-ready performance obligation) to the Company’s work marketplace and site services. As each day of providing access to the work marketplace and site services (including, but not limited to, communication, invoicing, reporting, dispute resolution, and payment services) is substantially the same and talent simultaneously receive and consume the benefits as access is provided, the Company’s single promise under its Upwork Basic and Plus offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. The Company’s Upwork Basic and Plus arrangements may include fixed and variable consideration, or a combination of the two, comprised of the following: Service fees. Talent are provided access to the Upwork work marketplace to market their businesses, send proposals to and communicate with prospective clients, and, if engaged by a client, to perform specified services agreed between talent and clients, which are referred to as talent services. Talent charge clients on an hourly or a milestone basis for services rendered to clients through the Upwork work marketplace, which are referred to as talent billings. The Company charges talent a service fee as a percentage of talent billings primarily using a tiered service fee model based on cumulative lifetime billings by talent to each client. The arrangements subject to tiered service fees also include contract renewal options that represent a material right. The Company takes no responsibility for talent services, and therefore, does not control talent services. Additionally, talent and clients negotiate and agree upon the scope and the price for talent services directly with each other, and the Company is not a party to those agreements. Accordingly, for these tiered service fee arrangements, the Company presents revenue on a net basis, as an agent. The Company recognizes the service fees for each distinct service period when it has the contractual right to bill for the services. Withdrawal fees. The Company charges withdrawal fees to talent when talent withdraw their escrow funds held by the Company. A withdrawal fee is charged for each withdrawal transaction, which represents variable consideration. The Company presents revenue from withdrawal fees on a gross basis as a principal and not net of the third-party payment processing costs incurred because the Company controls the payment processing services prior to providing to the Company's talent. The Company recognizes the withdrawal fees when transactions are processed, which is when it has the contractual right to bill for the services. Membership fees. The Company charges membership fees to talent. These fees are fixed consideration and are charged monthly. The Company recognizes the revenue over the period of the membership, which is generally monthly, consistent with the common measure of progress for the entire performance obligation. Connects fees. The Company charges fees to talent for the purchase of Connects, which are virtual tokens that are required for talent to bid on projects on the Company’s work marketplace. These fees represent variable consideration and are allocated to and recognized in the distinct service period in which the Connects are used. The Company earns fees from clients under the Upwork Basic and Plus offerings, which represent a single promise to provide continuous access (i.e. stand-ready performance obligation) to the Company’s work marketplace and site services. As each day of providing access to the work marketplace and site services is substantially the same and the client simultaneously receives and consumes the benefits as access is provided, the Company’s single promise under its Upwork Basic and Plus offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. The Company’s Upwork Basic and Plus arrangements may include fixed and variable consideration, or a combination of the two, comprised of the following: Client payment processing and administration fees. The Company charges clients for payment processing services at the time the client is charged for the amounts due from the client. This fee is charged on a per-transaction basis and is variable consideration. Per-transaction payment processing fees are recognized when the client is charged for the amount due and fees charged on a monthly basis are recognized over the month that payment processing services are provided. For client payment processing fees, the Company presents revenue on a gross basis as a principal and not net of the third-party payment processing costs incurred because the Company controls the payment processing and administration services prior to providing to the Company’s clients. The Company recognizes the revenue when a payment from a client is processed, which is when it has the contractual right to bill for the services. Foreign currency exchange fees. The Company charges clients a fixed mark-up above foreign currency exchange rates that are charged to the Company when the Company collects amounts denominated in foreign currency. Foreign currency exchange fees are variable consideration and recognized as they are earned for each transaction processed, which is when the Company has the contractual right to bill for the services. Membership fees. The Company charges membership fees to clients. These fees are charged monthly, are fixed consideration, and are recognized over the period of the membership, which is generally monthly consistent with the common measure of progress for the entire performance obligation. Upwork Payroll service fees. The Company charges clients using the Upwork Payroll offering when their talent are classified as employees for engagements on the Upwork work marketplace. The client enters into an Upwork Payroll agreement with the Company, and Upwork separately contracts with unrelated third-party staffing providers that provide employment services to such clients. In such arrangements, talent providing talent services to clients become employees of third-party staffing providers. In arrangements where clients enter into Upwork Payroll agreements, the Company charges Upwork Payroll service fees to clients and does not charge service fees to talent who are employees of the third-party staffing providers. Such service fees are variable consideration and charged as a fixed percentage of the total talent billings. Under an Upwork Payroll agreement, the Company provides the client access to the Upwork work marketplace to procure and manage talent services, as well as access to employment services provided by the third-party staffing providers. The Company presents Upwork Payroll service fees revenue on a net basis as an agent of the client for providing access to employment services provided by the third-party staffing providers. The Company does not control these employment services performed by the third-party on behalf of the client or for the services performed by talent that are employed by the third-party staffing providers. Therefore, the Company is not considered the principal for these services. The Company recognizes the service fees for each distinct service period when it has the contractual right to bill for the services. Upwork Enterprise and Other Premium Offerings The Company earns fees from talent under Upwork Enterprise and other associated premium offerings, each of which represent a single promise to provide continuous access (i.e. stand-ready performance obligation) to the Company’s work marketplace and site services. As each day of providing access to the work marketplace and site services is substantially the same and talent simultaneously receive and consume the benefits as access is provided, the Company’s single promise under its Upwork Enterprise and other premium offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. These arrangements include variable consideration as follows: Service fees. The Company provides talent access to the Upwork work marketplace to perform talent services for clients. The Company charges talent a service fee as a percentage of talent billings. The Company earns service fees based on a fixed percentage of talent billings. For service fees charged to talent, the Company presents revenue on a net basis, as an agent, for providing access to the Upwork work marketplace as it does not control talent services provided to clients, and therefore the Company is not considered the principal for talent services. Additionally, talent and clients negotiate and agree upon the scope and the price for talent services directly with each other, and the Company is not a party to their agreement. The Company recognizes the service fees for each distinct service period in which it has the contractual right to bill for the services. The Company earns fees from clients under Upwork Enterprise and other premium offerings, each of which represent a single promise to provide continuous access (i.e. stand-ready performance obligation) to the Company’s work marketplace and site services. As each day of providing access to the work marketplace and site services is substantially the same and the client simultaneously receives and consumes the benefits as access is provided, the Company’s single promise under its Upwork Enterprise and other premium offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. These arrangements may include fixed and variable consideration, or a combination of the two, comprised of the following: Client service fees. The Company offers clients access to the Company’s work marketplace to source talent in exchange for a client service fee calculated as a percentage of talent billings; these fees represent variable consideration. The Company recognizes the service fees for each distinct service period in which it has the contractual right to bill for the services. Enterprise compliance service fees. The Company charges fees to its enterprise compliance service clients that engage the Company to provide services to determine whether talent should be classified as an employee or an independent contractor based on the scope of talent services agreed between the client and talent and other factors. The Company charges enterprise compliance service fees as a percentage of talent billings; these fees represent variable consideration. The Company recognizes the service fees for each distinct service period in which it has the contractual right to bill for the services. Subscription fees. The Company charges monthly or annual subscription fees to clients for subscription services. These subscription fees are fixed consideration and are recognized over the period of the subscription consistent with the common measure of progress for the entire performance obligation. Upwork Payroll service fees. Upwork Payroll service fees are recognized on the same basis as described under the Upwork Basic and Plus offerings and are variable consideration. Revenue sharing arrangements Certain of the Company’s offerings include revenue sharing arrangements under which the Company generates a revenue share as a percentage of the fees charged by certain financial institutions to talent for payment withdrawals. These arrangements are considered a single performance obligation comprised of variable consideration and are recognized over time based on transactions processed. Managed Services Under a managed services arrangement, the Company is responsible for providing services and engaging talent directly or as employees of third-party staffing providers to perform the services for clients on the Company’s behalf. These arrangements are generally time- and materials-based, and are invoiced on a monthly basis. These fees represent variable consideration. The Company controls and directs the services performed on behalf of talent and presents revenue on a gross basis as principal. As each day of providing managed services is substantially the same and the client simultaneously receives and consumes the benefits as services are provided, the Company’s single promise under its managed services is comprised of a series of distinct service periods. For managed services arrangements with clients, the Company allocates the variable amounts to each distinct service period within the series in which it has the contractual right to bill and recognizes revenue as each distinct service period is performed. Arrangements with Multiple Performance Obligations Certain of the Company’s contracts with talent contain multiple performance obligations in the event the Company determines a material right exists. Specifically, the arrangements with talent subject to tiered service fees include contract renewal options that represent a material right. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price by applying the portfolio approach practical expedient under Topic 606. Standalone selling prices for offerings subject to tiered service fees are estimated based on observable transactions when these services are sold on a standalone basis. Standalone selling price for a material right is estimated by determining the discount that talent would obtain when exercising the option, adjusted for the likelihood that the option will be exercised. Significant judgment is applied in the application of the portfolio approach practical expedient, which includes estimating the standalone selling price of the material rights and the period of time over which to defer and recognize the consideration allocated to the material rights. Specifically, management applied significant judgment in assessing the appropriateness of the model for the estimates, which include assessing the appropriateness of the methodology and relevant data inputs to (i) estimate the standalone selling price of the material rights, which includes the standalone selling price of the services when sold separately and the likelihood of exercise of the material rights; and (ii) estimate the period of time over which to defer and recognize the consideration allocated to the material rights. The Company utilized historical user transaction data in developing the estimates. The Company recognizes revenue related to the material rights based on the Company’s estimate of when the material rights are exercised and adjusts revenue for changes in estimates in the period of change on a cumulative catch-up basis. Deferred Revenue Deferred revenue consists of subscription, membership, and Connects fees collected in advance of performing the service. The Company also recognizes deferred revenue for amounts attributable to unexercised material rights related to arrangements with talent that are subject to tiered service fees.
Cost of Revenue	Cost of Revenue Cost of revenue consists primarily of the cost of payment processing fees, costs of talent to deliver services under the Company’s managed services offering, personnel-related costs for the Company’s services and support personnel, third-party hosting fees, and amortization expense associated with acquired intangibles and capitalized internal-use software. The Company defines personnel-related costs as salaries, bonuses, benefits, and stock-based compensation costs for employees, and costs related to other service providers the Company engages to provide internal services to the Company.
Research and Development	Research and Development Research and development expense primarily consists of personnel-related costs. Research and development costs are expensed as incurred, except to the extent that such costs are associated with internal-use software and platform development that qualify for capitalization.
Advertising Expense	Advertising ExpenseThe Company expenses advertising costs as incurred.
Provisions for Transactions Losses	Provision for Transaction Losses Provision for transaction losses consists primarily of losses resulting from fraud on the work marketplace and bad debt expense associated with the Company’s trade and client receivables balance and transaction losses expense related to chargebacks. Provision for these items represents estimates of losses based on the Company’s actual historical incurred losses and other factors.
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock options with service- and market-based conditions, restricted stock units, which are referred to as RSUs, performance stock units, which are referred to as PSUs, and purchase rights granted under the 2018 Employee Stock Purchase Plan, which is referred to as the 2018 ESPP, to employees and directors based on their estimated fair value on the date of grant. The fair value and derived service period of stock options with market-based conditions is estimated using the Monte Carlo valuation model. The Company evaluates the assumptions used to value option awards upon each grant of stock options. The fair value of RSUs awarded to employees is based on the closing price of the Company’s common stock, as reported on The Nasdaq Global Select Market on the date of grant. The grant date fair value of PSUs is determined using the Company’s closing common stock price on the grant date multiplied by the number of PSUs that are probable of being earned as of the grant date. The fair value of purchase rights granted under the 2018 ESPP is estimated using the Black-Scholes valuation model. The model requires the Company to make a number of assumptions, including the value of the Company’s common stock, expected volatility, expected term, risk-free interest rate, and expected dividends. Stock-based compensation expense associated with service- and market-based stock options will be recognized over the longer of the expected achievement period for the service condition and market condition. The Company generally recognizes stock-based compensation expense for RSUs on a straight-line basis over the vesting term. Stock-based compensation expense associated with PSUs is recognized over the longer of the expected achievement period for the performance condition and the service condition. Stock-based compensation for purchase rights granted under the 2018 ESPP is recognized over the offering period. The Company accounts for forfeitures as they occur.
Foreign Currency	Foreign CurrencyThe functional currency of the Company and its subsidiaries is the U.S. dollar. Transactions with users denominated in currencies other than the U.S. dollar are remeasured at the exchange rate in effect on the date of the transaction. At the end of each reporting period, monetary assets and liabilities are remeasured using exchange rates in effect at the balance sheet date. Foreign currency transaction gains and losses are included in other income, net in the consolidated statements of operations.
Comprehensive Loss	Comprehensive Loss For the years ended December 31, 2021, 2020, and 2019, net unrealized losses from the Company’s marketable securities were immaterial. Comprehensive loss approximates net loss for all periods presented. Accordingly, the consolidated statements of comprehensive loss have been omitted from the consolidated financial statements.
Income Taxes	Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Under the asset and liability method, deferred assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The provision for income taxes is comprised of the current tax liability and the change in deferred tax assets and liabilities. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be recoverable against future taxable income. Deferred tax assets and liabilities are measured using the enacted tax rates that will be in effect for the years in which those tax assets are expected to be realized or settled. The Company regularly assesses the likelihood that its deferred tax assets will be realized from recoverable income taxes or recovered from future taxable income based on the realization criteria set forth in the relevant authoritative guidance. To the extent that the Company believes any amounts are not more likely than not to be realized, the Company records a valuation allowance to reduce its deferred tax assets. The realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. If the Company subsequently realizes deferred tax assets that were previously determined to be unrealizable, the respective valuation allowance would be reversed, resulting in an adjustment to earnings in the period such determination is made. In addition, the calculation of tax liabilities involved dealing with uncertainties in the application of complex tax regulations. The Company recognized potential liabilities based on its estimate of whether, and the extent to which, additional taxes will be due. The Company accounts for uncertain tax positions in accordance with the relevant guidance, which prescribes a recognition threshold and measurement approach for uncertain tax positions taken or expected to be taken in a company’s income tax return, and also provides guidance on recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The guidance utilized a two-step approach for evaluation uncertain tax positions. Step one, Recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit. Step two, Measurement, is based on the largest amount of benefit, which is more likely than not to be realized on ultimate settlement. A liability is reported for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Any interest and penalties related to unrecognized tax benefits are recorded as income tax expense.
Net Loss per Share	Net Loss per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss is computed by adjusting net loss to reallocate undistributed earnings based on the potential impact of dilutive securities, including outstanding common stock options, RSUs, PSUs, warrants to purchase common stock, common stock issuable in connection with the 2018 ESPP, and common stock issuable in connection with the Notes. For periods in which the Company has reported net losses, diluted net loss per share is the same as basic net loss per share because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.
Recent Accounting Pronouncements Not Yet Adopted and Recently Adopted Accounting Pronouncements	Recent Accounting Pronouncements Not Yet Adopted The Company has reviewed all recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019—12 (Topic 740), Simplifying the Accounting for Income Taxes. This guidance simplifies accounting for income taxes by removing certain exceptions to the general principles and amending existing guidance to improve consistent application. The Company is required to adopt this guidance in the year ended December 31, 2021. The Company concluded that there was not a material impact to its consolidated financial statements as a result of the adoption. In August 2020, the FASB issued ASU No. 2020—06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. For public companies, this guidance is effective for fiscal years beginning after December 15, 2021 and interim periods within those fiscal years. Early adoption is permitted. The Company early adopted the standard as of January 1, 2021 and applied this guidance to the Notes issued in August 2021. Refer to “Note 7—Debt” for additional information.

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents


(In thousands)	2021		2020		2019
Cash and cash equivalents	$	187,205	$	94,081	$	48,392
Restricted cash	4,040		3,340		2,490
Funds held in escrow, including funds in transit	160,813		135,042		108,721
Total cash, cash equivalents, and restricted cash as shown in the consolidated statement of cash flows	$	352,058	$	232,463	$	159,603

Schedule of allowance for doubtful accounts

The following table presents the changes in the allowance for doubtful accounts as of December 31, 2021, 2020, and 2019:


(In thousands)	2021		2020		2019
Allowance for doubtful accounts, beginning balance	$	1,661	$	2,215	$	2,832
Provision for doubtful accounts	4,803		3,143		3,193
Amounts written off	(3,054)		(3,697)		(3,810)
Allowance for doubtful accounts, ending balance	$	3,410	$	1,661	$	2,215

Revenue (Tables)

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Contract balances


(In thousands)	2021		2020
Trade and client receivables, net of allowance	$	66,826	$	47,018
Contract liabilities
Deferred revenue	22,083		16,801
Deferred revenue (component of other liabilities, noncurrent)	6,349		4,177

Fair Value Measurements and Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Financial Instruments Measured at Fair Value on a Recurring Basis

The following tables summarize the Company’s cash and available-for-sale marketable securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category reported as cash and cash equivalents or marketable securities as of December 31, 2021 and 2020:


(In thousands) December 31, 2021	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	16,596	$	—	$	—	$	16,596	$	16,596	$	—
Level I
Money market funds	108,204		—		—		108,204		108,204		—
Treasury bills	89,992		1		—		89,993		15,000		74,993
U.S. government securities	94,839		—		(285)		94,554		—		94,554
Total Level I	293,035		1		(285)		292,751		123,204		169,547
Level II
Commercial paper	171,918		—		—		171,918		29,544		142,374
Corporate bonds	183,303		1		(217)		183,087		17,861		165,226
Asset-backed securities	13,749		—		(11)		13,738		—		13,738
Yankee bonds	6,693		—		(12)		6,681		—		6,681
Total Level II	375,663		1		(240)		375,424		47,405		328,019
Total	$	685,294	$	2	$	(525)	$	684,771	$	187,205	$	497,566


(In thousands) December 31, 2020	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	22,359	$	—	$	—	$	22,359	$	22,359	$	—
Level I
Money market funds	65,723		—		—		65,723		65,723		—
Treasury bills	4,498		1		—		4,499		—		4,499
U.S. government securities	20,082		24		—		20,106		—		20,106
Total Level I	90,303		25		—		90,328		65,723		24,605
Level II
Commercial paper	56,964		—		—		56,964		5,999		50,965



Total Level II	56,964		—		—		56,964		5,999		50,965
Total	$	169,626	$	25	$	—	$	169,651	$	94,081	$	75,570

Balance Sheet Components (Tables)

12 Months Ended

Dec. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Property and Equipment, Net

Property and equipment, net consisted of the following as of December 31, 2021 and 2020:


(In thousands)	2021		2020
Computer equipment and software	$	5,493	$	4,819
Internal-use software and platform development costs	25,738		20,727
Leasehold improvements	11,644		14,613
Office furniture and fixtures	3,365		3,354
Total property and equipment	46,240		43,513
Less: accumulated depreciation	(24,911)		(15,374)
Property and equipment, net	$	21,329	$	28,139

Schedule of Finite Lived Intangible Assets

As of December 31, 2020, intangible assets, net consisted of the following:


	As of December 31, 2020
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade names	$	2,293	$	2,293	$	—
User relationships	18,678		18,011		667
Developed technology	10,356		10,356		—
Domain names	529		529		—
Total	$	31,856	$	31,189	$	667

Schedule of Indefinite-Lived Intangible Assets

As of December 31, 2020, intangible assets, net consisted of the following:


	As of December 31, 2020
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade names	$	2,293	$	2,293	$	—
User relationships	18,678		18,011		667
Developed technology	10,356		10,356		—
Domain names	529		529		—
Total	$	31,856	$	31,189	$	667

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of December 31, 2021 and 2020:


(In thousands)	2021		2020
Accrued compensation and related benefits	$	23,047	$	14,007
Accrued vendor expenses	7,728		8,662
Operating lease liability, current	6,315		3,725
Accrued indirect taxes	4,137		3,818
Accrued payment processing fees	2,085		1,219
Accrued talent costs	1,417		1,235
Other	1,013		202
Total accrued expenses and other current liabilities	$	45,742	$	32,868

Assets And Liabilities, Lessee

The following table summarizes the Company’s operating lease assets and lease liabilities as of December 31, 2021 and 2020:


(In thousands)
Balance Sheet Classification		2021		2020
Assets
Operating—noncurrent	Operating lease asset	$	10,682	$	19,729
Liabilities
Operating—current	Accrued expenses and other current liabilities	6,315		3,725
Operating—noncurrent	Operating lease liability, noncurrent	16,753		20,506
Total lease liabilities		$	23,068	$	24,231

Lessee, Operating Lease, Liability, Maturity


(In thousands)
Year Ended December 31,	Leases
2022	$	6,588
2023	6,776
2024	5,843
2025	2,356
2026	1,729
Thereafter	3,208

Total lease payments	26,500
Adjustment for discount to present value	(3,432)
Total	$	23,068

Debt (Tables)

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Summary of Carrying Value of Debt

The following table presents the carrying value of the Company’s debt obligations as of December 31, 2021 and 2020:


(In thousands)	2021			2020
Convertible senior notes—interest accrues from August 2021 and will be payable semiannually in arrears on February 15 and August 15 of each year, beginning February 2022, maturing August 2026; interest at 0.25% per annum	$	575,000		$	—
First term loan—18 months of interest-only payments ended in March 2019 followed by 36 equal monthly installments of principal plus interest, maturing March 2022; interest at prime plus 0.25% per annum	—			6,250
Second term loan—17 months of interest-only payments ended in March 2019 followed by 42 equal monthly installments of principal plus interest, maturing September 2022; interest at prime plus 0.25% per annum	—			4,500

Total debt	575,000			10,750
Less: Unamortized debt issuance costs	(13,701)			(27)
Balance	561,299			10,723
Debt, current	—			(7,581)
Debt, noncurrent	$	561,299		$	3,142
Weighted-average interest rate	0.76		%	5.64		%

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Preferred and Common Stock (Tables)

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Summary of Common Stock Shares Reserved for Future Issuance

As of December 31, 2021 and 2020, the Company had reserved shares of common stock for future issuance as follows:


	2021	2020
Options issued and outstanding	4,264,068	4,858,590
RSUs and PSUs issued and outstanding	4,583,823	5,568,225

Warrant to purchase common stock	350,000	400,000


Remaining shares reserved for future issuances under 2018 Equity Incentive Plan	22,250,297	18,332,765
Remaining shares reserved for future issuances under 2018 Employee Stock Purchase Plan	3,033,401	2,419,154
Common stock issuable in connection with convertible senior notes	8,701,935	—
Total	43,183,524	31,578,734

- Definition

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

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+ Details

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Summary of Activity under Stock Option Plans

The following table summarizes activity under the Company’s stock option plans:


	Number of Shares Underlying Outstanding Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)








Balances at December 31, 2020	4,858,590	$	3.83	5.80	$	149,046
Granted	1,500,000	38.80
Exercised	(2,035,709)	3.53
Forfeited and canceled	(58,813)	4.42
Balances at December 31, 2021	4,264,068	16.29		6.37	76,025
Vested and exercisable as of December 31, 2021	2,542,329	4.02		4.80	76,626
Vested and expected to vest as of December 31, 2021	4,264,068	16.29		6.37	76,025

The 90-day volume weighted-average common stock price targets, and the number of shares of the CEO Award that become vested with respect to the Market Condition upon the achievement of each such target, are reflected in the following table:


Stock Price						Number of Shares Vested
$60						100,000
$70						200,000
$80						300,000
$90						400,000
$100						500,000

Summary of Fair Value Assumptions on Stock Options Granted

The expected volatility is derived from the average historical stock volatility of the Company over a period equivalent to the expected term of the CEO Award. The following assumptions were used to estimate the fair value of the CEO Award:


Dividend yield	—	%
Risk-free interest rates	1.7	%
Expected volatility	65	%

Summary of Fair Value Assumptions on Employee Stock Purchas Plans

The fair values of the awards modified by the Transition Agreement were estimated using the Black-Scholes valuation model with the following assumptions:


Dividend yield	—	%
Expected term (in years)	0.3 - 1.3
Risk-free interest rates	1.5% - 1.6%
Expected volatility	38% - 39%


	2021		2020		2019
Dividend yield	—	%	—	%	—	%
Expected term (in years)	0.5 - 2.0		0.5 - 2.0		0.5 - 2.0
Risk-free interest rates	—% - 0.5%		0.1% - 0.2%		1.5% - 2.4%
Expected volatility	60% - 76%		50% - 82%		38%

Summary of Activity under RSU Plans

The following table summarizes the RSU and PSU activity and related information under the 2018 EIP:


	Number Outstanding	Weighted-Average Grant Date Fair Value
Unvested balance - January 1, 2021	5,568,225	$	12.20
Granted	2,075,311	51.53
Vested	(1,865,444)	16.37
Forfeited/canceled	(1,194,269)	16.42
Unvested balance - December 31, 2021	4,583,823	$	26.86

Summary of Components of Stock-Based Compensation Expense Recognized

The following table summarizes the components of stock-based compensation expense recognized in the consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019:


(In thousands)	2021		2020		2019
Cost of revenue	$	794	$	779	$	456
Research and development	16,232		9,783		6,471
Sales and marketing	5,923		4,440		2,609
General and administrative	30,643		10,506		9,262
Total	$	53,592	$	25,508	$	18,798

Net Loss per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders

The following table sets forth the computation of the Company’s basic and diluted net loss per share for the years ended December 31, 2021, 2020, and 2019:


(In thousands, except share and per share data)	2021		2020		2019
Numerator:
Net loss	$	(56,240)	$	(22,867)	$	(16,659)



Denominator:
Weighted-average shares used to compute net loss per share, basic and diluted	127,163,591		118,698,567		109,814,604
Net loss per share, basic and diluted	$	(0.44)	$	(0.19)	$	(0.15)

Schedule of Potentially Dilutive Shares Excluded from Computation of Diluted Net Loss Per Share Attributable to Common Stockholders


	2021	2020	2019
Options to purchase common stock	4,264,068	4,858,590	15,140,579

Common stock issuable upon exercise of common stock warrants	350,000	400,000	450,000

Common stock issuable upon vesting of RSUs and PSUs	4,583,823	5,568,225	2,503,182
Common stock issuable in connection with employee stock purchase plan	329,650	540,580	1,651,263
Common stock issuable in connection with convertible senior notes	8,701,935	—	—
Total	18,229,476	11,367,395	19,745,024

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax

For the years ended December 31, 2021, 2020, and 2019, the loss before income taxes consisted of the following:


(In thousands)	2021		2020		2019
Domestic	$	(56,165)	$	(22,748)	$	(16,658)
Foreign	47		31		27
Total loss before income taxes	$	(56,118)	$	(22,717)	$	(16,631)

Schedule of Components of Income Tax Expense

For the years ended December 31, 2021, 2020, and 2019, the components of the income tax provision were as follows:


(In thousands)	2021		2020		2019
Current:
Federal	$	—	$	(19)	$	—
State	(120)		(127)		(26)
Foreign	(2)		(4)		(2)
Total current	$	(122)	$	(150)	$	(28)
Deferred:
Federal	$	—	$	—	$	—
State	—		—		—
Foreign	—		—		—
Total deferred	$	—	$	—	$	—
Total income tax benefit (provision)	$	(122)	$	(150)	$	(28)

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2021, 2020, and 2019 were as follows:


	2021		2020		2019
Tax at federal statutory rate	21.00	%	21.00	%	21.00	%
State tax, net of federal benefit	(0.19)		(0.49)		(0.27)
Stock-based compensation	44.13		94.02		51.45

Other items	(0.16)		(0.59)		(4.34)
Research and development credits	7.04		9.74		13.74
Net operating loss expiration	(8.08)		(14.00)		(18.33)
Change in valuation allowance	(63.95)		(110.34)		(63.42)
Effective tax rate	(0.21)	%	(0.66)	%	(0.17)	%

Schedule of Deferred Tax Assets and Liabilities

As of December 31, 2021 and 2020, the significant components of the Company’s deferred tax assets and liabilities were as follows:


(In thousands)	2021		2020
Deferred tax assets:
Net operating loss carryforwards	$	100,836	$	77,230
Stock-based compensation	5,617		230
Operating lease liability	5,296		5,555
Non-deductible accrued expenses, reserves and other	7,259		4,903


Research and development credits	17,044		11,352
Gross deferred tax assets	136,052		99,270
Valuation allowance	(132,162)		(92,390)
Total deferred tax assets	3,890		6,880
Deferred tax liabilities:
Acquired intangible assets	—		(89)
Operating lease asset	(2,452)		(4,523)
Debt issuance cost	(75)		—
Depreciation and amortization	(1,363)		(2,268)
Total deferred tax liabilities	(3,890)		(6,880)
Net deferred tax assets	$	—	$	—

Summary of Valuation Allowance

The change in valuation allowance for deferred tax assets was as follows for the periods presented:


(In thousands) Year Ended December 31,	Balance at Beginning of Year		Additions Charged to Costs & Expenses		Additions Charged to Other Accounts		Deductions		Balance at End of Year

2021	$	92,390	$	39,772	$	—	$	—	$	132,162
2020	63,542		28,848		—		—		92,390
2019	49,439		14,103		—		—		63,542

Summary of Unrecognized Tax Benefits

For the years ended December 31, 2021, 2020, and 2019, the activity related to the unrecognized tax benefits were as follows:


(In thousands)	2021		2020		2019
Gross unrecognized tax benefits—beginning balance	$	13,338	$	12,782	$	10,973
Increase related to tax positions taken during prior year	697		131		—
Decrease related to tax positions taken during prior year	(148)		—		(164)
Increase related to tax positions taken during current year	1,635		608		1,973

Decrease related to expiration of unrecognized tax benefit	(131)		(183)		—
Gross unrecognized tax benefits—ending balance	$	15,391	$	13,338	$	12,782

Segment and Geographical Information (Tables)

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Revenue by Type of Service

The following table sets forth total revenue by type of service for the years ended December 31, 2021, 2020, and 2019:


(In thousands)	2021		2020		2019
Marketplace
Basic, Plus, and other	$	427,476	$	317,942	$	253,099
Enterprise	34,864		20,210		15,185
Managed services	40,457		35,476		32,278
Total	$	502,797	$	373,628	$	300,562

Revenue by Geographic Area Based on Billing Address of Freelancers and Clients

The following table sets forth total revenue by geographic area based on the billing address of its talent and clients for the years ended December 31, 2021, 2020, and 2019:


(In thousands)	2021		2020		2019
Talent:
United States	$	74,890	$	60,861	$	50,154
India	42,277		33,109		27,369
Philippines	32,918		22,924		19,660
Rest of world	146,894		109,805		90,259
Total talent	296,979		226,699		187,442
Clients:
United States	153,003		107,359		87,241
Rest of world	52,815		39,570		25,879
Total clients	205,818		146,929		113,120
Total	$	502,797	$	373,628	$	300,562

Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) transmitter customer segment	Dec. 31, 2020 USD ($) customer	Dec. 31, 2019 USD ($)
Subsidiary, Sale of Stock [Line Items]
Impairment expense	$ 8,741,000	$ 0	$ 0
Restricted cash	4,040,000	3,340,000	2,490,000
Restricted cash, current	3,200,000	2,300,000
Restricted cash, noncurrent	$ 800,000	1,000,000
Number of money transmitters \| transmitter	2
Escrow funds payable	$ 160,813,000	$ 135,042,000
Number of major customers, receivables \| customer	1	3
Revenue	$ 502,797,000	$ 373,628,000	300,562,000
Gross trade receivables	19,700,000	15,900,000
Gross client receivables	50,500,000	32,800,000
Foreign currency transactions gain (loss)	$ (500,000)	(600,000)	900,000
Number of reportable segments \| segment	1
Goodwill impairment	$ 0
Advertising expense	$ 90,800,000	51,400,000	37,400,000
Minimum
Subsidiary, Sale of Stock [Line Items]
Property and equipment, useful lives	2 years
Capitalized costs, amortization period	2 years
Intangible asset, useful life	2 years
Maximum
Subsidiary, Sale of Stock [Line Items]
Property and equipment, useful lives	5 years
Capitalized costs, amortization period	3 years
Intangible asset, useful life	7 years
Foreign Currency Forward Contracts
Subsidiary, Sale of Stock [Line Items]
Derivative, notional amount	$ 7,200,000	$ 7,600,000
Revenue \| Customer Concentration Risk \| Client Accounting For More than 10% revenue
Subsidiary, Sale of Stock [Line Items]
Revenue			$ 32,000,000

Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents	$ 187,205	$ 94,081	$ 48,392
Restricted cash	4,040	3,340	2,490
Funds held in escrow, including funds in transit	160,813	135,042	108,721
Total cash, cash equivalents, and restricted cash as shown in the consolidated statement of cash flows	$ 352,058	$ 232,463	$ 159,603	$ 230,067

Basis of Presentation and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Allowance for Doubtful Accounts Receivable [Roll Forward]
Allowance for doubtful accounts, beginning balance	$ 1,661	$ 2,215	$ 2,832
Provision for doubtful accounts	4,803	3,143	3,193
Amounts written off	(3,054)	(3,697)	(3,810)
Allowance for doubtful accounts, ending balance	$ 3,410	$ 1,661	$ 2,215

Revenue - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Remaining performance obligation, amount	$ 28.4
Revenue recognized	15.5	$ 13.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, amount	$ 28.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue from Contract with Customer [Abstract]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months

Revenue - Contract Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Disaggregation of Revenue [Line Items]
Trade and client receivables, net of allowance	$ 66,826	$ 47,018
Deferred revenue	22,083	16,801
Deferred revenue (component of other liabilities, noncurrent)	6,349	$ 4,177
Calculated under Revenue Guidance in Effect before Topic 606 [Member]
Disaggregation of Revenue [Line Items]
Trade and client receivables, net of allowance	$ 66,826

Fair Value Measurements and Marketable Securities - Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Assets, Fair Value Disclosure [Abstract]
Cash	$ 187,205	$ 94,081
Amortized Cost	685,294	169,626
Unrealized Gain	2	25
Unrealized Loss	(525)	0
Fair Value	684,771	169,651
Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	187,205	94,081
Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	497,566	75,570
Level I
Assets, Fair Value Disclosure [Abstract]
Cash	16,596	22,359
Amortized Cost	293,035	90,303
Unrealized Gain	1	25
Unrealized Loss	(285)	0
Fair Value	292,751	90,328
Level I \| Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	123,204	65,723
Level I \| Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	169,547	24,605
Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	375,663	56,964
Unrealized Gain	1	0
Unrealized Loss	(240)	0
Fair Value	375,424	56,964
Level II \| Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	47,405	5,999
Level II \| Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	328,019	50,965
Money market funds \| Level I
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	108,204	65,723
Unrealized Gain	0	0
Unrealized Loss	0	0
Fair Value	108,204	65,723
Money market funds \| Level I \| Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	108,204	65,723
Money market funds \| Level I \| Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	0	0
Treasury bills \| Level I
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	89,992	4,498
Unrealized Gain	1	1
Unrealized Loss	0	0
Fair Value	89,993	4,499
Treasury bills \| Level I \| Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	15,000	0
Treasury bills \| Level I \| Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	74,993	4,499
U.S. government securities \| Level I
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	94,839	20,082
Unrealized Gain	0	24
Unrealized Loss	(285)	0
Fair Value	94,554	20,106
U.S. government securities \| Level I \| Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0	0
U.S. government securities \| Level I \| Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	94,554	20,106
Commercial paper \| Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	171,918	56,964
Unrealized Gain	0	0
Unrealized Loss	0	0
Fair Value	171,918	56,964
Commercial paper \| Level II \| Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	29,544	5,999
Commercial paper \| Level II \| Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	142,374	$ 50,965
Corporate bonds \| Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	183,303
Unrealized Gain	1
Unrealized Loss	(217)
Fair Value	183,087
Corporate bonds \| Level II \| Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	17,861
Corporate bonds \| Level II \| Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	165,226
Asset-backed securities \| Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	13,749
Unrealized Gain	0
Unrealized Loss	(11)
Fair Value	13,738
Asset-backed securities \| Level II \| Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0
Asset-backed securities \| Level II \| Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	13,738
Yankee bonds \| Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	6,693
Unrealized Gain	0
Unrealized Loss	(12)
Fair Value	6,681
Yankee bonds \| Level II \| Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0
Yankee bonds \| Level II \| Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	$ 6,681

Fair Value Measurements and Marketable Securities - Additional Information (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Outstanding long-term debt	$ 575,000,000	$ 10,750,000
Term Loans
Debt Instrument [Line Items]
Outstanding long-term debt	$ 0	$ 10,800,000

Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 46,240	$ 43,513
Less: accumulated depreciation	(24,911)	(15,374)
Property and equipment, net	21,329	28,139
Computer equipment and software
Property, Plant and Equipment [Line Items]
Total property and equipment	5,493	4,819
Internal-use software and platform development costs
Property, Plant and Equipment [Line Items]
Total property and equipment	25,738	20,727
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	11,644	14,613
Office furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 3,365	$ 3,354

Balance Sheet Components - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Mar. 01, 2022	Jan. 31, 2022	Jan. 01, 2020
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 3,700	$ 3,600	$ 2,800
Capitalized costs	5,000	8,000	6,400
Internal-use software and platform development costs capitalized, amortization expense	5,900	3,900	1,200
Amortization of intangible assets	700	2,700	2,700
Operating lease cost	6,000	6,000	5,900
Sublease income	500	300	400
Variable lease cost	1,200	700	600
Impairment expense	8,741	0	0
Operating lease payments	6,400	3,300	3,300
Operating lease asset	10,682	19,729
Operating lease liabilities	23,068	24,231
Total minimum lease payments	$ 26,500
Long-term purchase commitment, period	5 years
Weighted average remaining lease term	4 years 7 months 6 days
Operating lease, weighted average discount rate	5.80%
Chicago Lease, Additional Office Floor
Property, Plant and Equipment [Line Items]
Operating lease, term	5 years
Operating lease asset						$ 1,700
Operating lease liabilities						$ 1,700
Total minimum lease payments	$ 2,100
San Francisco, California
Property, Plant and Equipment [Line Items]
Impairment expense	1,400
San Francisco, California \| Subsequent Event
Property, Plant and Equipment [Line Items]
Monthly rent expense				$ 100
San Francisco, California \| Operating Lease Asset
Property, Plant and Equipment [Line Items]
Impairment expense	1,200
San Francisco, California \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Impairment expense	200
Santa Clara, California
Property, Plant and Equipment [Line Items]
Impairment expense	7,400
Santa Clara, California \| Subsequent Event
Property, Plant and Equipment [Line Items]
Monthly rent expense					$ 100
Santa Clara, California \| Operating Lease Asset
Property, Plant and Equipment [Line Items]
Impairment expense	4,300
Santa Clara, California \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Impairment expense	2,900
Santa Clara, California \| Furniture and Fixtures
Property, Plant and Equipment [Line Items]
Impairment expense	$ 200
Minimum
Property, Plant and Equipment [Line Items]
Operating lease, term	1 year
Maximum
Property, Plant and Equipment [Line Items]
Operating lease, term	8 years
Developed technology
Property, Plant and Equipment [Line Items]
Cost of revenue	$ 3,800	$ 2,900	$ 900

Balance Sheet Components - Intangible Assets, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount		$ 31,856
Accumulated Amortization		31,189
Net Carrying Amount	$ 0	667
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount		2,293
Accumulated Amortization		2,293
Net Carrying Amount		0
User relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount		18,678
Accumulated Amortization		18,011
Net Carrying Amount		667
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount		10,356
Accumulated Amortization		10,356
Net Carrying Amount		0
Domain names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount		529
Accumulated Amortization		529
Net Carrying Amount		$ 0

Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accrued Liabilities and Other Liabilities [Abstract]
Accrued compensation and related benefits	$ 23,047	$ 14,007
Accrued vendor expenses	7,728	8,662
Operating lease liability, current	6,315	3,725
Accrued indirect taxes	4,137	3,818
Accrued payment processing fees	2,085	1,219
Accrued talent costs	1,417	1,235
Other	1,013	202
Total accrued expenses and other current liabilities	$ 45,742	$ 32,868

Balance Sheet Components - Lessee, Operating Lease, Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Balance Sheet Related Disclosures [Abstract]
Operating lease asset	$ 10,682	$ 19,729
Operating lease liability, current	6,315	3,725
Operating lease liability, noncurrent	16,753	20,506
Total lease liabilities	$ 23,068	$ 24,231
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued expenses and other current liabilities	Accrued expenses and other current liabilities

Balance Sheet Components - Schedule of Operating Lease Liability Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Balance Sheet Related Disclosures [Abstract]
2022	$ 6,588
2023	6,776
2024	5,843
2025	2,356
2026	1,729
Thereafter	3,208
Total lease payments	26,500
Adjustment for discount to present value	(3,432)
Total lease liabilities	$ 23,068	$ 24,231

Commitments and Contingencies (Details) $ in Millions	Dec. 31, 2021 USD ($) letter	Dec. 31, 2020 USD ($) letter
Commitments and Contingencies Disclosure [Abstract]
Letters of credit (in letter) \| letter	3	3
Letters of credit outstanding, amount \| $	$ 0.8	$ 1.0

Debt - Summary of Carrying Value of Debt (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) installment	Aug. 10, 2021 USD ($)	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Total debt	$ 575,000		$ 10,750
Less: Unamortized debt issuance costs	(13,701)		(27)
Balance	561,299		10,723
Debt, current	0		(7,581)
Debt, noncurrent	$ 561,299		$ 3,142
Weighted-average interest rate	0.76%		5.64%
Convertible Senior Notes
Debt Instrument [Line Items]
Debt, interest rate	0.25%	0.25%
Total debt	$ 575,000	$ 575,000	$ 0
First Term Loan
Debt Instrument [Line Items]
Interest only payments term	18 months
Number of equal monthly installments of principal and interest \| installment	36
Debt, variable rate	0.25%
Total debt	$ 0		6,250
Second Term Loan
Debt Instrument [Line Items]
Interest only payments term	17 months
Number of equal monthly installments of principal and interest \| installment	42
Debt, variable rate	0.25%
Total debt	$ 0		$ 4,500

Debt - Term Detail (Details) - USD ($)	1 Months Ended	12 Months Ended
Debt - Term Detail (Details) - USD ($)	Aug. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Sep. 30, 2017
Debt Instrument [Line Items]
Long-term line of credit	$ 0
Repayments of debt		$ 10,750,000	$ 25,621,000	$ 55,679,000
Outstanding long-term debt		575,000,000	10,750,000
Term Loans
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity (up to)					$ 49,000,000
Repayments of debt	$ 5,800,000
Outstanding long-term debt		0	10,800,000
First Term Loan
Debt Instrument [Line Items]
Debt instrument, face amount					15,000,000
Repayments of debt		6,300,000	5,000,000
Outstanding long-term debt		0	6,250,000
Second Term Loan
Debt Instrument [Line Items]
Debt instrument, face amount					9,000,000
Repayments of debt		4,500,000	2,600,000
Outstanding long-term debt		$ 0	$ 4,500,000
Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity (up to)					$ 25,000,000

Debt - Convertible Senior Notes (Details) $ / shares in Units, $ in Thousands		12 Months Ended
	Aug. 10, 2021 USD ($)	Dec. 31, 2021 USD ($) $ / shares	Dec. 31, 2021 USD ($) $ / shares	Dec. 31, 2021 USD ($) segment $ / shares	Dec. 31, 2021 USD ($) $ / shares	Dec. 31, 2021 USD ($) tradingDay $ / shares	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Total debt		$ 575,000	$ 575,000	$ 575,000	$ 575,000	$ 575,000	$ 10,750
Redemption price, percentage of principal amount redeemed					100.00%
Proceeds from issuance of convertible senior notes			575,000				0	$ 0
Interest expense			2,180				778	1,306
Amortization of debt issuance costs			1,182				61	$ 52
Convertible Senior Notes
Debt Instrument [Line Items]
Total debt	$ 575,000	$ 575,000	$ 575,000	$ 575,000	$ 575,000	$ 575,000	$ 0
Additional aggregate amount to be purchased	$ 75,000
Debt, interest rate	0.25%	0.25%	0.25%	0.25%	0.25%	0.25%
Convertible debt, threshold trading days				20		20
Convertible debt, consecutive trading days \| tradingDay						30
Convertible debt, threshold percentage of stock price trigger					130.00%
Convertible debt, business period		5 days
Convertible debt, measurement period		5 days
Convertible debt, measurement period percentage					98.00%
Convertible debt, conversion rate					1.51338%
Convertible debt, conversion price (in dollars per share) \| $ / shares		$ 66.08	$ 66.08	$ 66.08	$ 66.08	$ 66.08
Redemption price, percentage of principal amount redeemed					100.00%
Proceeds from issuance of convertible senior notes	$ 560,100
Debt issuance costs, gross	$ 14,900
Interest expense			$ 600
Amortization of debt issuance costs			1,100
Convertible Senior Notes \| Level II
Debt Instrument [Line Items]
Estimated fair value of debt		$ 538,300	$ 538,300	$ 538,300	$ 538,300	$ 538,300

Debt - Capped Calls (Details) - Convertible Senior Notes - USD ($) $ / shares in Units, $ in Millions			12 Months Ended
	Aug. 09, 2021	Aug. 05, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Purchases of capped calls related to convertible senior notes			$ 49.4
Call Option
Debt Instrument [Line Items]
Strike price (in dollars per share)	$ 92.74	$ 66.08
Premium over last reported sale price, percentage		100.00%
Price per share of stock transaction (in dollars per share)		$ 46.37

Preferred and Common Stock - Preferred Stock and Common Stock (Details)	Dec. 31, 2021 vote $ / shares shares	Dec. 31, 2020 $ / shares shares
Equity [Abstract]
Preferred stock (in shares)	10,000,000	10,000,000
Preferred stock (in dollars per share) \| $ / shares	$ 0.0001	$ 0.0001
Common Stock, votes per share (in votes) \| vote	1
Common stock, shares authorized (in shares)	490,000,000	490,000,000

Preferred and Common Stock - Reserved for Future Issuance (Details) - shares	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2018	Oct. 03, 2018
Class of Stock [Line Items]
Common stock shares reserved for future issuance (in shares)	43,183,524	31,578,734
Common stock issuable in connection with convertible senior notes
Class of Stock [Line Items]
Common stock shares reserved for future issuance (in shares)	8,701,935	0
2018 Equity Incentive Plan
Class of Stock [Line Items]
Common stock shares reserved for future issuance (in shares)	22,250,297	18,332,765		10,701,505
2018 Employee Stock Purchase Plan
Class of Stock [Line Items]
Common stock shares reserved for future issuance (in shares)	3,033,401	2,419,154	1,700,000
Warrant to purchase common stock
Class of Stock [Line Items]
Common stock shares reserved for future issuance (in shares)	350,000	400,000
Options
Class of Stock [Line Items]
Common stock shares reserved for future issuance (in shares)	4,264,068	4,858,590
RSU's
Class of Stock [Line Items]
Common stock shares reserved for future issuance (in shares)	4,583,823	5,568,225

Preferred and Common Stock - Common Stock Warrant (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Class of Warrant or Right [Line Items]
Common stock warrant exercisable conversion	10.00%
Revaluation of warrant expense	$ 750	$ 750	$ 711
Common Stock Warrant \| Tides Foundation
Class of Warrant or Right [Line Items]
Number of shares issued upon exercisable of warrants (in shares)				500,000
Exercise price of warrants (in dollars per share)				$ 0.01
Class of warrant or right, exercised (in shares)			50,000

Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands		1 Months Ended		12 Months Ended
	Feb. 17, 2021	Jan. 31, 2021 shares	Aug. 31, 2018	Dec. 31, 2021 USD ($) installment $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares	Dec. 31, 2018 offering_period shares	Dec. 31, 2014 shares	Oct. 03, 2018 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares reserved for future issuance (in shares) \| shares				43,183,524	31,578,734
Stock-based compensation expense				$ 53,592	$ 25,508	$ 18,798
Intrinsic value of options exercised				$ 88,900	$ 124,100	73,000
Weighted-average grant-date fair value of options granted (in dollars per share) \| $ / shares				$ 19.19
Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares reserved for future issuance (in shares) \| shares				4,264,068	4,858,590
Stock-based compensation expense				$ 12,700	$ 2,500	8,500
Expected dividend rate				0.00%
RSU's
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares reserved for future issuance (in shares) \| shares				4,583,823	5,568,225
Stock-based compensation expense				$ 38,800	$ 20,000	$ 7,900
Granted (in dollars per share) \| $ / shares				$ 51.37	$ 10.96	$ 16.15
Fair value of awards vested				$ 30,500	$ 20,300	$ 2,600
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares available for issuance (in shares) \| shares		998,361
ESPP Plan shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense				$ 2,200	$ 3,200	2,600
2014 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant (in shares) \| shares								12,462,985
Grant price, threshold of fair value price must meet (percent)								100.00%
Vesting period								4 years
Expiration period								10 years
2018 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant (in shares) \| shares		6,239,761
Common stock shares reserved for future issuance (in shares) \| shares				22,250,297	18,332,765				10,701,505
Offering period							24 months
Common shares available for issuance (in shares) \| shares				384,114
2018 Equity Incentive Plan \| Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation cost				$ 17,900
Unrecognized stock-based compensation cost, weighted average period of recognition				1 year 9 months 18 days
2018 Equity Incentive Plan \| RSU's
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation cost				$ 108,100
Unrecognized stock-based compensation cost, weighted average period of recognition				3 years 1 month 6 days
Transition Agreement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense						$ 3,500
Expected dividend rate				0.00%
CEO Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense				$ 11,300
Expected dividend rate				0.00%
Exercisable shares (in shares) \| shares				1,500,000
Number of installments \| installment				16
CEO Award \| Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period				2 years 1 month 6 days
2018 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares reserved for future issuance (in shares) \| shares				3,033,401	2,419,154		1,700,000
Expected dividend rate				0.00%	0.00%	0.00%
Unrecognized stock-based compensation cost				$ 5,800
Discount on share at purchase date from original option price							15.00%
Offering period							24 months
Number of offering periods in ESPP \| offering_period							4
Length of offering period							6 months
Common stock percentage of purchase price			85.00%
2018 Employee Incentive Plan - PSU Award \| PSU's
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years
2018 Employee Incentive Plan - PSU Award \| PSU's \| Target one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	25.00%
2018 Employee Incentive Plan - PSU Award \| PSU's \| Target two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage	6.25%
2018 Employee Incentive Plan - PSU Award \| Members of the Companies Leadership \| PSU's
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense				$ 3,400
Weighted-average grant-date fair value of options granted (in dollars per share) \| $ / shares				$ 56.42
Unrecognized stock-based compensation cost				$ 3,400
Unrecognized stock-based compensation cost, weighted average period of recognition				1 year 9 months 18 days

Stock-Based Compensation - Fair Value Assumptions (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CEO Award
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%
Risk-free interest rates	1.70%
Expected volatility	65.00%
Transition Agreement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%
Transition Agreement \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)			3 months 18 days
Risk-free interest rates			1.50%
Expected volatility			38.00%
Transition Agreement \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)			1 year 3 months 18 days
Risk-free interest rates			1.60%
Expected volatility			39.00%
2018 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%
Expected volatility			38.00%
2018 Employee Stock Purchase Plan \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 months	6 months	6 months
Risk-free interest rates	0.00%	0.10%	1.50%
Expected volatility	60.00%	50.00%
2018 Employee Stock Purchase Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	2 years	2 years	2 years
Risk-free interest rates	0.50%	0.20%	2.40%
Expected volatility	76.00%	82.00%

Stock-Based Compensation - Summary of Activity under stock Option Plans, Common Stock Price Targets (Details)	12 Months Ended
	Dec. 31, 2021 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price (in dollars per share) \| $ / shares	$ 3.53
Number of shares vested (in shares) \| shares	2,035,709
CEO Award \| Target one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price (in dollars per share) \| $ / shares	$ 60
Number of shares vested (in shares) \| shares	100,000
CEO Award \| Target two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price (in dollars per share) \| $ / shares	$ 70
Number of shares vested (in shares) \| shares	200,000
CEO Award \| Target three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price (in dollars per share) \| $ / shares	$ 80
Number of shares vested (in shares) \| shares	300,000
CEO Award \| Target four
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price (in dollars per share) \| $ / shares	$ 90
Number of shares vested (in shares) \| shares	400,000
CEO Award \| Target five
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price (in dollars per share) \| $ / shares	$ 100
Number of shares vested (in shares) \| shares	500,000

Stock-Based Compensation - Summary of Activity under Stock Option Plans (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Number of Shares Underlying Outstanding Options
Beginning balance (in shares)	4,858,590
Granted (in shares)	1,500,000
Exercised (in shares)	(2,035,709)
Forfeited and canceled (in shares)	(58,813)
Ending balance (in shares)	4,264,068	4,858,590
Vested and exercisable (in shares)	2,542,329
Vested and expected to vest (in shares)	4,264,068
Weighted-Average Exercise Price
Beginning balance (in dollars per share)	$ 3.83
Granted (in dollars per share)	38.80
Exercised (in dollars per share)	3.53
Forfeited and canceled (in dollars per share)	4.42
Ending balance (in dollars per share)	16.29	$ 3.83
Vested and exercisable (in dollars per share)	4.02
Vested and expected to vest (in dollars per share)	$ 16.29
Additional Disclosures
Weighted-Average Remaining Contractual Term (Years)	6 years 4 months 13 days	5 years 9 months 18 days
Weighted-Average Remaining Contractual Term (Years), vested and exercisable (in years)	4 years 9 months 18 days
Weighted-Average Remaining Contractual Term (Years), vested and expected to vest	6 years 4 months 13 days
Aggregate Intrinsic Value (in thousands)	$ 76,025	$ 149,046
Aggregate Intrinsic Value (in thousands), vested and exercisable	76,626
Aggregate Intrinsic Value (in thousands), vested and expected to vest	$ 76,025

Stock-Based Compensation - Summary of Activity under Restricted Stock Unit Plans (Details) - RSU's and PSU's	12 Months Ended
	Dec. 31, 2021 $ / shares shares
Number Outstanding
Unvested balance - beginning balance (in shares) \| shares	5,568,225
Granted (in shares) \| shares	2,075,311
Vested (in shares) \| shares	(1,865,444)
Forfeited/canceled (in shares) \| shares	(1,194,269)
Unvested balance - ending balance (in shares) \| shares	4,583,823
Weighted-Average Grant Date Fair Value
Unvested balance - beginning balance (in dollars per share) \| $ / shares	$ 12.20
Granted (in dollars per share) \| $ / shares	51.53
Vested (in dollars per share) \| $ / shares	16.37
Forfeited/canceled (in dollars per share) \| $ / shares	16.42
Unvested balance - ending balance (in dollars per share) \| $ / shares	$ 26.86

Stock-Based Compensation - Components of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expense	$ 53,592	$ 25,508	$ 18,798
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expense	794	779	456
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expense	16,232	9,783	6,471
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expense	5,923	4,440	2,609
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Compensation expense	$ 30,643	$ 10,506	$ 9,262

Net Loss per Share - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Numerator:
Net loss	$ (56,240)	$ (22,867)	$ (16,659)
Denominator:
Weighted-average shares used to compute net loss per share, basic (in shares)	127,163,591	118,698,567	109,814,604
Weighted-average shares used to compute net loss per share, diluted (in shares)	127,163,591	118,698,567	109,814,604
Net loss per share basic (in dollars per share)	$ (0.44)	$ (0.19)	$ (0.15)
Net loss per share diluted (in dollars per share)	$ (0.44)	$ (0.19)	$ (0.15)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Net Loss per Share - Schedule of Potentially Dilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	18,229,476	11,367,395	19,745,024
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	4,264,068	4,858,590	15,140,579
Common stock issuable upon exercise of common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	350,000	400,000	450,000
Common stock issuable upon vesting of RSUs and PSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	4,583,823	5,568,225	2,503,182
Common stock issuable in connection with employee stock purchase plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	329,650	540,580	1,651,263
Common stock issuable in connection with convertible senior notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	8,701,935	0	0

Income Taxes - Loss Before Tax (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Domestic	$ (56,165)	$ (22,748)	$ (16,658)
Foreign	47	31	27
Total loss before income taxes	$ (56,118)	$ (22,717)	$ (16,631)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Income Taxes - Components of Income Tax Benefit (Provision) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current:
Federal	$ 0	$ (19)	$ 0
State	(120)	(127)	(26)
Foreign	(2)	(4)	(2)
Total current	(122)	(150)	(28)
Deferred:
Federal	0	0	0
State	0	0	0
Foreign	0	0	0
Total deferred	0	0	0
Total income tax benefit (provision)	$ (122)	$ (150)	$ (28)

Income Taxes - Effective Tax Rate (Details)	12 Months Ended
Income Taxes - Effective Tax Rate (Details)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Tax at federal statutory rate	21.00%	21.00%	21.00%
State tax, net of federal benefit	(0.19%)	(0.49%)	(0.27%)
Stock-based compensation	44.13%	94.02%	51.45%
Other items	(0.16%)	(0.59%)	(4.34%)
Research and development credits	7.04%	9.74%	13.74%
Net operating loss expiration	(8.08%)	(14.00%)	(18.33%)
Change in valuation allowance	(63.95%)	(110.34%)	(63.42%)
Effective tax rate	(0.21%)	(0.66%)	(0.17%)

Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Net operating loss carryforwards	$ 100,836	$ 77,230
Stock-based compensation	5,617	230
Operating lease liability	5,296	5,555
Non-deductible accrued expenses, reserves and other	7,259	4,903
Research and development credits	17,044	11,352
Gross deferred tax assets	136,052	99,270
Valuation allowance	(132,162)	(92,390)
Total deferred tax assets	3,890	6,880
Deferred tax liabilities:
Acquired intangible assets	0	(89)
Operating lease asset	(2,452)	(4,523)
Debt issuance cost	(75)	0
Depreciation and amortization	(1,363)	(2,268)
Total deferred tax liabilities	(3,890)	(6,880)
Net deferred tax assets	$ 0	$ 0

Income Taxes - Narrative (Details) - USD ($)	12 Months Ended
Income Taxes - Narrative (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2017	Dec. 31, 2022	Dec. 31, 2018
Operating Loss Carryforwards [Line Items]
Effective tax rate	(0.21%)	(0.66%)	(0.17%)
Deferred tax assets, valuation allowance	$ 132,162,000	$ 92,390,000
Operating loss carryforwards expiration	$ 21,600,000
Change in valuation allowance	(63.95%)	(110.34%)	(63.42%)
Tax credit carryforward, subject to expiration	$ 100,000
Unrecognized tax benefits	15,391,000	$ 13,338,000	$ 12,782,000			$ 10,973,000
Unrecognized tax benefits that impact effective tax rate	0
Forecast [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards expiration					$ 23,000,000
Federal
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	444,600,000	343,100,000
Tax credit carryforwards	19,100,000	12,000,000
State
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	90,400,000	72,900,000
Change in valuation allowance				80.00%
Tax credit carryforwards	$ 13,600,000	$ 13,100,000

Income Taxes - Valuation Allowance (Details) - Valuation Allowance, Deferred Tax Asset - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Year	$ 92,390	$ 63,542	$ 49,439
Additions Charged to Costs & Expenses	39,772	28,848	14,103
Additions Charged to Other Accounts	0	0	0
Deductions	0	0	0
Balance at End of Year	$ 132,162	$ 92,390	$ 63,542

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Gross unrecognized tax benefits—beginning balance	$ 13,338	$ 12,782	$ 10,973
Increase related to tax positions taken during prior year	697	131	0
Decrease related to tax positions taken during prior year	(148)	0	(164)
Increase related to tax positions taken during current year	1,635	608	1,973
Decrease related to expiration of unrecognized tax benefit	(131)	(183)	0
Gross unrecognized tax benefits—ending balance	$ 15,391	$ 13,338	$ 12,782

Segment and Geographical Information - Narrative (Details)	12 Months Ended
	Dec. 31, 2021 segment
Segment Reporting [Abstract]
Number of operating segments	1
Number of reportable segments	1

Segment and Geographical Information - Revenue by Type (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Revenue	$ 502,797	$ 373,628	$ 300,562
Basic, Plus, and other
Disaggregation of Revenue [Line Items]
Revenue	427,476	317,942	253,099
Enterprise
Disaggregation of Revenue [Line Items]
Revenue	34,864	20,210	15,185
Managed services
Disaggregation of Revenue [Line Items]
Revenue	$ 40,457	$ 35,476	$ 32,278

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Segment and Geographical Information - Geographic Area (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 502,797	$ 373,628	$ 300,562
Talent
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	296,979	226,699	187,442
Talent \| United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	74,890	60,861	50,154
Talent \| India
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	42,277	33,109	27,369
Talent \| Philippines
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	32,918	22,924	19,660
Talent \| Rest of world
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	146,894	109,805	90,259
Clients
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	205,818	146,929	113,120
Clients \| United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	153,003	107,359	87,241
Clients \| Rest of world
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 52,815	$ 39,570	$ 25,879

- Definition

+ References

+ Details

401(k) Plan (Details) - USD ($)	12 Months Ended
401(k) Plan (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Retirement Benefits [Abstract]
Company matching cash contributions	50.00%
Maximum annual contributions per employee	$ 5,000
Expense for matching contributions	$ 2,500,000	$ 2,500,000	$ 2,000,000