Thank you for standing by, and welcome to the Upwork Q1 2022 Financial Results. At this time, all participants are in a listen-only mode. After the presentation, there will be a question-and-answer session. To ask a question during that session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to Evan Barbosa, Vice President of Investor Relations. The floor is yours. Thank you. Welcome to Upwork's discussion of its Q1 2022 Financial Results. Leading the discussion today are Hayden Brown, Upwork's President and Chief Executive Officer, and Jeff McCombs, Upwork's Chief Financial Officer. Following management's prepared remarks, we will be happy to take your questions. First, I'll review the safe harbor statement. During this call, we may make statements related to our business that are forward-looking statements under federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks, uncertainties and assumptions. Our actual results could differ materially from expectations reflected in any forward-looking statements. In addition, any statements regarding the current and future impacts of Russia's invasion of Ukraine and our decision to suspend business operations in Russia and Belarus and the COVID-19 pandemic on our business and current and future impacts of actions we have taken in response to Russia's invasion of Ukraine and the COVID-19 pandemic are forward-looking statements and related to matters that are beyond our control and changing rapidly. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the SEC filings available on the SEC website and on our investor relations website, as well as the risks and other important factors discussed in today's shareholder letter. Additional information will be set forth in our quarterly report on Form 10-Q for the quarter ended March 31st, 2022 when filed. In addition, reference will be made to non-GAAP financial measures. Information regarding a reconciliation of non-GAAP to GAAP measures can be found in the shareholder letter that was issued this afternoon on our investor relations website at investors.upwork.com. As always, unless otherwise noted, reported figures are rounded, and comparisons of the Q1 of 2022 are to the Q1 of 2021. All measures are GAAP unless cited as non-GAAP. Now I'll turn the call over to Hayden. Thanks, Evan, and thank you all for joining us today for our Q1 2022 Earnings Call. The Q1 presented no shortage of global uncertainty and conflict. It also demonstrated the strength of Upwork's business as we continue to execute on our strategy to innovate, evangelize, and scale the world's work marketplace. In the first quarter of 2022, GSV grew 27% year- over- year to over $1 billion, and revenue grew 24% year- over- year to $141.3 million. This is the first time our quarterly GSV has hit $1 billion, marking an important landmark in our growth. As we continue to build recognition of Upwork and our offerings, we are also thrilled to be recognized on the TIME100 Most Influential Companies list. Our continued momentum was marked by milestones spanning product, marketing, and sales. Our product innovation and scaling continued with the launch of Project Catalog consultations, the rollout of Boosted Proposals and availability badges to all talent, and the announcement of the simplification of our pricing and packaging for non-enterprise clients. We also launched improvements to in-contract messaging between clients and talent, furthering their ability to build long-lasting relationships on our work marketplace. On the marketing side, we continue to be laser-focused on raising awareness of Upwork with customers and prospects and are encouraged by early signals we are seeing from our brand marketing investments. This includes a 20% increase in overall website traffic and 24% increase in client registrations from the levels in the Q3 of 2021 prior to our brand marketing investment ramping. On the sales front, we delivered another strong quarter with new enterprise client deals up 33% year-over-year, and enterprise revenue growing 57% year-over-year. We operate a global business in more than 180 countries, and the Russian invasion of Ukraine on February 24 impacted our team, our customers, and our business. Approximately 10% of our 2021 revenue stemmed from work where either the talent or client was located in Ukraine, Russia, or Belarus, and approximately 10% of our own team members were located in these three countries. While this quarter has put us to the test, this test has highlighted three truths about Upwork. First, that our team and customer relationships are strengthened by our shared purpose and values. Second, that our business is robust and resilient. Third, that the Upwork business has attributes that are increasingly relevant and distinctive in our evolving world. The first truth from this crisis has been the power of our shared purpose and values in aligning our internal team and our global community. We moved thoughtfully but decisively in making the decision to suspend operations in Russia and Belarus. It was clear from a values and an operational perspective that this was the right choice for Upwork and our global customer base. We operate a people-centric business with trust-based relationships at its core. We took extreme care with every step of the decision to suspend new business initiation with customers in Russia and Belarus beginning on March 7th, and to end all active contracts between talent and clients in those countries on May 1st. Our implementation of these changes and related efforts have been undertaken to strengthen our team and our customer relationships, deliver on our brand promise, and reinforce our community ties even during a difficult time. To support talent in Ukraine, we reoriented our product roadmap to quickly launch features to support and protect their livelihoods, including a way to donate directly to talent via Project Catalog with no talent fees, no intermediaries, and no expectations for the work to be completed. Waiving any potential negative impact on talent's job success scores was also important so they can preserve their hard-won Upwork reputations even if they are currently unable to work. We provided faster access to funds through expedited payments and launched a feature for freelancers to easily and quickly let clients know about their safety and work status. Upwork has a long legacy in Ukraine with deep roots going back to the founding days of our company, and we have thousands of talent, clients, and our own team members who call Ukraine home. To ensure we were honoring that history and supporting our people, we donated $1 million to Direct Relief and established a $100,000 matching program for donations from our own team to provide humanitarian support to the Ukrainian population. The second truth highlighted by the crisis has been the resilience of the talent on Upwork and our Upwork marketplace model in the face of disruption. We have seen relatively muted impacts from the crisis on our business in the Q1, estimating that revenue loss directly attributed to the war was approximately $1 million. We have all been in awe of the resilience of the Ukrainian people over the past two months, and we have seen a microcosm of this resilience on the Upwork platform. Even as offices may be shuttered and people forced to move from place to place, the fact that talent can take their Upwork work with them anywhere is never more valuable than right now. Ukrainian professionals are logging on to Upwork to work and support their families at the highest levels we have seen. Talent registrations in Ukraine reached record numbers, and the number of Ukraine-based talent earning for the first time on Upwork jumped to more than 2x pre-invasion levels. Additionally, the unique scale and heterogeneity of our platform offers its own type of resilience from disruption. An ecosystem containing over 90 categories of work and over 10,000 skills, and a globally distributed talent pool engaging in over 3 million jobs annually are each a testament to the strength of the Upwork Marketplace. We are pleased with the business continuity we have been able to deliver through this crisis for talent and clients alike. Our metrics across the business remain strong. For example, we've seen no noticeable impact to our job fill rates since the start of the crisis. The third truth emerging from the crisis has been the increased relevance of competitive advantages of our business around trust, safety, and security, which have been made even more relevant as the world changes and business priorities evolve. This difficult and heartbreaking war has crystallized our clients' need for a partner and trusted advisor with a shared set of values that can fulfill their remote talent needs through a diversified, highly skilled global talent pool able to withstand volatility in a dynamic world. We've heard from customers during this crisis that they trust Upwork as a destination for high-quality remote knowledge workers in an increasingly low-trust, fragmented global economy. They require peace of mind knowing Upwork offers solutions, safeguards, and talent they can trust. They rely on us for comprehensive solutions that enhance their own flexibility, stability, business continuity, and resiliency. This is a unique attribute of our market category leadership in which we will continue to invest. Organizations demand for a solution that powers their talent access, growth, digital transformation, cost savings, and agility has not abated. Whether clients want to hire in their country, globally, in a specific time zone, near or far, they need a powerful, secure digital platform that matches and delivers talent they can trust with the exact skills to get the job done. Meanwhile, talent across the globe continue to demand the freedom and flexibility to work on their terms and in ways that fulfill their needs from small to large projects and from freelance to full-time work, along with assurances that they will get expediently paid for the great work they deliver. In sum, this quarter has illuminated and reinforced a number of Upwork's long-standing strengths and most formidable attributes, including established trust, a people-centric mentality and action, responsible stewardship for small and large customers alike, steadfast decision-making, and unparalleled resilience. These strengths propelled customers to spend $1 billion in GSV on Upwork in the Q1 of this year. They will also continue to serve as anchors of our offering and promise to customers. They will uniquely equip us to successfully innovate, evangelize, and scale the world's work marketplace. They will underpin our ability to deliver profitable growth, and they will permeate our leadership in the global movement to reimagine work. Thank you for joining us on this journey. We will now open the call to your questions. Thank you. As a reminder, to ask a question, simply press star one on your telephone. To withdraw the question, press the pound or hash key. Your first question comes from Eric Sheridan with Goldman Sachs. Please go ahead. Thank you so much for taking the questions. Maybe two, if I can. You know, last quarter, we talked a lot about investments you wanted to make against a long-term opportunity set you see. Can we revisit that and understand better what you're seeing in terms of the marketing and brand investments you're making in the business today and how we should be thinking about the yield or the return on those investments over the long run? Similar with respect to continuing to ramp the sales force and the productivity you're getting from the sales force in the years ahead. Thanks so much. Sure. We believe that the time continues to be right now to really lean into the opportunity we have in the ecosystem. As we look out across our client and talent opportunity, and we know that we still have the single digit unaided brand awareness, and yet customers are finding more and more value on our platform every day. We see that with the increase in GSV per client. We see that in our enterprise sales team continuing to actually exceed their goals in terms of number of new accounts landed per quarter and per year. We know that the demand is there, and we know that we're getting really good, better every day, actually, at serving that demand with our Upwork Marketplace. Yet, the vast majority of customers still don't know about us. We've seen some really nice promising signs. I mentioned the 20% increase in client traffic, 24% increase in registrations from clients, relative to Q3 of last year before we started the brand investment. We think that the opportunity is both there and it's now in this critical time around the war for talent, and we're seeing the results in terms of the numbers starting to peek through, although it is definitely early days, and we know that some of these investments around brand, for example, will take multiple quarters to fully see and measure the ROI around. Jeff might wanna provide a little bit more on some of the way we're thinking about the governance framework on that investment. Sure. I'd add on the sales front, we're also executing well against our hiring plans. As we indicated before, we expect to double the size of the account execs by end of 2022. We're well on track to do that. On the brand front, you know, we're gonna take the same approach that we have with other areas of investment that we're looking to make sure that we deliver an IRR comfortably above our WACC. Obviously brand has its own unique challenges that cause the ability to do that to be a little bit more elongated. We're bringing that same mindset that we wanna make sure we drive unaided brand awareness and that that converts to real business outcomes, and monitoring the early signals that we can so that we can pivot and optimize as quickly as we can, but we also need to bring patience to the investment opportunity. Thanks, Eric. Thank you. Thank you. Your next question comes from Bernie McTernan with Needham & Company. Please go ahead. Great. Thank you for taking the questions. Maybe just to start on guidance. I was just wondering if you could maybe talk through the moving pieces of providing the revenue guidance for the year but not the EBITDA guidance. What we should be thinking about in terms of range of possible outcomes when it comes to costs. Sure. With respect to our annual revenue guidance, first off, the rest of the business outside the impacted region continues to perform well. The change from our previous guidance to our new guidance is purely a reflection of the impact of the war in Ukraine. There's two key dynamics that we look at, that kind of will influence where we net out. One is the level of substitution that we see of contracts that were in place with talent in the region, and if they're, you know, for Russia and Belarus, to the extent those freelancers don't move outside the region, what happens with the client activity in the future? We don't yet have data. We'll get better data once the May first termination date occurs. That may take months or quarters to really get a good sense for how clients will respond, but that's the first big variable. The second is what happens with respect to Ukraine. Obviously, it's a volatile dynamic and, you know, we have limited visibility into that. Once we have substitution data from Russia and Belarus, we'll be able to hone in, hopefully, on the potential range of outcomes for Ukraine and narrow our revenue guidance in the future. With respect to EBITDA, we just thought it was too early to provide an update on our guidance there. We'll continue to monitor our investments. As we get better a better sense for the substitution dynamic and are able to narrow the revenue outcome, we'll likely update the EBITDA or reinstate the EBITDA guidance at that point in time. Once again, we're committed to, you know, achieving a long-term EBITDA target of 30%-35%, and we'll have good discipline on our investments in the interim. Thanks, Bernie. Understood. Just a follow-up. Some encouraging commentary on the new client acquisition exceeding record levels in the Q1. I was just hoping you could dive into what's driving this, whether it's Project Catalog, the macro, the brand marketing coming through. On the other side of it, the net adds weren't at record levels. What you're seeing on the churn front and if churn should maybe peak in the H1 of the year and then get better in the H2 of the year. Is that the right way to think about it? Thank you. Sure. I'll start. With respect to the record acquisition, I think it is a combination of the various things you mentioned. Both performance marketing performing well, brand marketing, you know, kicking off, catalog representing a larger portion of new acquisitions than you know a year ago or whatnot. We're very pleased to see that we achieved that record number. The deceleration in the year-over-year growth rate of active clients is a bit of a tricky one, and primarily because that's a trailing 12-month metric. That deceleration is largely driven by the strength in the acquisition that we had a year ago. Essentially, you have a larger portion of the denominator that is from newly acquired clients, and the churn rate of newly acquired clients is always higher than it is for tenured accounts. Because it represented a larger mix a year ago and in that denominator, the acquisition strength that we saw a year ago is creating a headwind in our overall growth rates now. The good news is that the churn levels for those different cohorts have, you know, are absolutely operating within normal historical ranges, and it's just a function of that kind of mix shift. Thank you very much. Understood. Thanks, Jeff. Thank you. Your next question comes from Maria Ripps with Canaccord Genuity. Please go ahead. Great. Thanks so much for taking my questions. First, maybe just to follow up, on your guidance, sort of understanding that it's still too early to know the level of substitution for contracts in Russia and Ukraine, and I appreciate all the color there, but could you maybe talk to us about sort of what kind of assumptions around the impact are broadly embedded in your Q2 and full year outlook? Sure. At a high level, you know, we really looked at a range of potential outcomes, both for the substitution that we could see in Russia and Belarus, and then what might happen in Ukraine. Those went into a variety of scenarios informing both what we might see on each of those. You know, as we mentioned, we're really pleased that while after we saw a drop in the business activity in Ukraine at the start of the war, it bounced back to 90% of pre-invasion levels. It's really hard to predict exactly where that goes from here. We just looked at a variety of assumptions to inform both that and the substitution. The other point I wanna echo again is, while we have very limited data right now on the substitution front, we think that we will begin getting more as soon as the contracts terminate on May 1st. But it may take those months and quarters, depending upon how clients respond. You know, part of the platform is that clients have great relationships with these freelancers, and they're not quick to move to new ones necessarily. They have vested interest in those relationships. Just like we saw with our existing freelancers on the platform. We don't know how long it will take, but we imagine that we'll be in a much better position on next quarter's call to provide more context on that. Got it. That's very helpful. Maybe can you talk about your WMSD business outside of the region? For the other 75% of that business, have you seen the engagement per freelancer increasing? Do those freelancers have the capacity to take on more projects? How are you thinking about your ability to attract more talent across Web and Mobile in other regions? Sure, Maria, I can jump in on that one. You know, we've seen a lot of strength in that WMSD category. I think the fact that our fill rates didn't move down at all, even though a substantial portion of talent, you know, all of the talent from Russia and Belarus became essentially invisible after we made the shift earlier in the quarter. I think that really speaks to the fact that talent from all over the world are very active in that category, you know, all over Europe, Asia, U.S., et cetera. So we've seen our clients be really successful in continuing to hire, you know, at the same rates in that category, find the quality of talent in that category that they were looking at before the conflict even today. So that's, I think, a microcosm there. Stepping back and looking at talent globally. You know, our business has always been driven by word of mouth on the talent side. You know, we don't do any direct marketing to talent, and yet we still have essentially a surplus of talent relative to client demand on the platform because I think more and more we see the secular trend where people wanna be working flexibly, they want control over their careers. Entrepreneurship is, you know, high interest, and our platform offers a great solution for them to really build those businesses. You know, our focus is how do we really build that momentum with more client awareness and close that gap on the awareness side through brand marketing and other investments to bring more of that demand to the talent we have on the platform because that's really where the constraint is in the business. We're not really constrained on the talent side even today, even having gone through that conflict thus far. Got it. That's very helpful. Thank you both. Thank you. Your next question comes from Marvin Fong with BTIG. Please go ahead. Great. Good evening. Thanks for taking my question. Excuse me. My first one, You know, again, just on guidance, because I think, you know, investors are obviously keenly focused on that. Could you just kind of discuss further? It sounds like your adjustment to guidance is entirely due to Ukraine and that region, as you said. Basically, are you, how confident are you that, you know, the rest of the world, business activity will stay firm given, you know, all the stresses and monetary tightening and all that? It sounds like, you know, a lot of investors are just broadly concerned about the impact of that. What's sort of your view relative to your guidance about why you're so confident that that's gonna hold in there? Then I have a follow-up. Sure. We haven't yet seen any dynamics play out on the rest of the business. You know, we've been closely monitoring the region on the periphery of the war zone. Nothing notable to comment on in terms of, you know, clear impacts to that region, but we'll continue to pay attention to that because obviously it does represent a risk. The issues that you flag are also potential risks to the business. Now, we have seen in the past that our business often does well when there's kind of, you know, disruption in the economy, whether it is an acceleration of the economy or a deceleration of the economy. Our value prop resonates with clients and freelancers to help them either expand more quickly or have a more flexible workforce to be able to deal with, you know, a contraction. Now, clearly as things play out, we'll continue to update, you know, guidance, but we're not seeing any dynamics right now that cause us to change our forecast for the rest of the business. Great. That's great to hear, Jeff. A follow-up on what you were saying about what you wrote in the shareholder letter about Project Catalog. 47% of clients made a repeat purchase, and of those, you know, it's only 2%, you know, were on the Talent Marketplace, 50% bought another catalog project. You know, did any of those metrics surprise you, or were those in line with your expectations? You know, how should we think about that? Thank you. Thanks, Marvin. I think these are just, these aren't metrics we've necessarily been, you know, forecasting even internally or driving towards, but rather represent outputs we're really happy to see that validate our overall hypothesis of why a single work marketplace where customers can come and get work done in a variety of ways through Project Catalog, through Talent Scout, through our Talent Marketplace, graduating up to our enterprise offerings. What we're really seeing with those metrics is customers find that success, in this case, through, you know, one of the newer products that we've launched, a new entry point for them, and then continuing to be very successful in both, you know, repeat usage, adoption of other ways of working, etc. Which we believe when we launched the strategy, you know, 12, 18+ months ago, we believe that this would drive that type of unlock for customers. You know, it's still early, but we are starting to see that with the behavior that we shared, and we'll continue building out that single work marketplace where we can serve the very heterogeneous needs that customers have across the different ways that they need to transact and buy services, and form these different relationships. That's great. Thank you, Hayden. Appreciate it. Thanks. Thank you. Your next question comes from Matt Farrell with Piper Sandler. Please go ahead. Thanks. Congratulations on the extremely strong execution in the quarter as you navigated all the moving pieces. On the enterprise side, another impressive set of logos this quarter. What are some of the common themes that you are seeing on why more and more enterprise clients are adopting Upwork? Do you think the current macro and geopolitical environment is a potential tailwind for enterprise adoption moving forward? Thanks, Matt. Yeah, I'd say the commentary in terms of what we're seeing on teams is the broader secular trend in favor of more flexible work models. The talent war that companies are really struggling with in terms of running into dead ends with their existing legacy ways of sourcing talent, operating with talent, their full-time employee models, staffing models, etc., those are just run out of steam for so many of our customers, and they're waking up to the fact that both to find the workers they need today and to modernize their capabilities to really keep up with where the industry is, they need a solution like ours in their toolkit. That has really been resonating. Our team has been evolving their playbook in terms of landing those accounts in a really sophisticated way. That's been great to see on the one hand. To your question about the macro environment, you know, I don't think that a lot of our enterprise customers are telegraphing to us that the war in Ukraine is really changing any of those strategies, specifically. I think what the overlay is they really need a trusted partner. You know, their forefront in their minds is safety, security, reliability, having a partner for these important talent strategies that they know can create that business continuity with and for them. I think that's where, you know, our leading position in the market, the solutions that we have at every layer of our stack around, you know, vetting talent, around having work protections and guarantees for all parties. Like, there's just so much that's embedded in our model, the trust and safety approach that we have. You know, all of that comes into play when customers are still needing to pursue these growth strategies and find talent, but are recognizing that the ecosystem and the world is maybe more fraught and more challenging today than it was in the past. I think that's where both bringing to the fore some of our messaging and our solutions has been relevant in terms of shining a light on that when it's relevant for our customers. Thanks. Maybe a follow-up for Jeff. On the EBITDA line, you mentioned that there was a, in the shareholder letter that there was a push-out in some brand spending. Was that driven by the crisis itself, or was there another dynamic going on that caused the push-out? As we think longer term, could you remind us just some of the major drivers, to push the EBITDA line from current levels to your long-term target over the next couple of years? Thanks. Thanks, Matt. Sure. We mentioned that $6 million of brand spend was pushed from Q1 to other periods. That wasn't related to the war. It was really, you know, we hired our new CMO, Melissa Waters, in early Q1. We had a plan in place before then. She's coming in, putting her fingerprints on that plan, and just moving dollars around and activities around in line with that overall $80 million investment for this year. In terms of the long-term EBITDA margin target and the key levers to get there, they're really across the board. From a cost to revenue perspective, we believe that we'll be able to continue to drive improvements across a number of fronts, whether that's, you know, payments, hosting, customer support, whatnot. We should be able to get leverage in a number of those key areas over the long run. You know, with the pricing change that we made this time, we'll start to make some progress against that, we believe, depending upon what clients choose, whether or not they're gonna choose ACH or credit card. Within G&A, we'll continue to bring down that as a percentage of overall revenue on a non-GAAP basis. I think it's 13%-14% right now. We believe we can get that down to 8%-10% over the long run just by driving greater efficiencies. In sales and marketing, you know, I think right now maybe we're at 40-ish%. We continue to believe there's really attractive opportunities to invest there, and we want to do that for as long as we possibly can. You know, once we've kind of, you know, not exhausted, but over time, as we lean into that, the revenue will accrete to those investments, and we'll be able to bring down the overall investment level to closer to the 25% level. Then product and development, you know, we're the leader right now. We're able to invest more than others in building out the Upwork Marketplace, which provides us a great, you know, a great platform to be able to provide more value to clients and freelancers. We wanna continue to be able to do that, but over time, we'll be able to gain efficiencies there as the revenue grows. Thanks for the question, Matt. Your next question comes from Andrew Boone with JMP Securities. Hi. Good afternoon. Thanks for taking my questions. I've got two on product. The first, just with Boosted Proposals going GA, and understood we're just a couple of months in here, but can you talk about the early adoption that you're seeing from freelancers and how they're using the product and just what's the expectation as that relates to the model? Then secondly, the new marketplace pricing plan. What do the new features unlock for buyers? How do we think about the financial impact as you guys move to the plan? Just talk about the strategic change of why you guys made that decision. Thanks so much. Sure. On the side of Boosted Proposals, you know, talent have been really excited about this feature because it's clearly driving higher win rates for those that end up winning those auctions and getting pinned to the top of the results in our applicant tracking system. The reception has been really positive. I think awareness is frankly still building amongst, you know, the full talent population now that we are rolling that out. It's still, you know, it's still early, and we'll be continuing to iterate on that product, but definitely seeing really great signs in terms of the results and the feedback from talent so far. On the side of the pricing structure, you know, it was really research with our customers that revealed many of them would value and benefit from the features that have been behind that paywall of the Client Plus plan. Some of the examples of that are, number one, access to premium talent, which is not as evident and easy to do without that premium plan. Advanced freelancer search is another capability that was in the Plus plan in the past. The ability to invite up to 30 freelancers to your job post was another one. Then there were a bunch of features kind of related to scaling your usage of Upwork, both your Upwork team and with your team members in your company. Things around reporting options, having coworker teammates and permissions that were much more sophisticated in your account setup, activity codes for organizing work, and then drawing the reports related to that. This was a whole package of features that essentially really help clients at various points in the journey in adopting Upwork and scaling Upwork and understanding the full benefits and the ways that they can really make this a core part of their talent and work strategy. What we saw was, clients were not necessarily ready to jump in and pay the upfront subscription to get access to those features, but instead wanted those features and basically to pay as you go through the take rate and as they basically adopt and work with talent on the take rate side and through the client fees, that they themselves are paying. With that shift, we're better able to get more of these critical premium features that drive adoption, usage, and scaling for the clients at the same time as just monetizing it differently through more of the fee structure on the back end, rather than upfront with a gating around a paid subscription. A few additional comments. The benefits from the pricing model were reflected in our both our previous guidance. We've been working on this for a couple quarters, and obviously is reflected in our current guidance. At least qualitatively, we expect that it will increase take rate, as we've alluded to in the past. It's one of the contributors to that over time, and then should also increase gross margin, you know, it should be a driver of a higher gross margin, because of the some clients will be choosing the ACH option, which will bring down payment costs there, and other clients will be choosing the 5% plan, which will, you know, increase margin as well. Thank you. Thank you. Your next question comes from Rohit Kulkarni with MKM Partners. Please go ahead. Hey, thanks. Question on take rate and new pricing plan. To the extent we can say, and also the most recent trend in the marketplace take rate. Three things into one. Marketplace take rate sequentially increased. That's encouraging. Any specific call-outs there and how sustainable that is? On the pricing plan, how should we think about the trend line in the take rate or what is the direct impact on the change in pricing and the take rate and the mix of GSV per client that you anticipate? Sure. On take rates and marketplace take rate, you saw a quarter-over-quarter increase, but relatively flat over the last couple quarters. The dynamic that we've had that's been driving the take rate decline over the last, I don't know, five-ish quarters or so, has really been the very positive signal of clients spending more with existing freelancers that they're working with. That appears in our client spend per active client metric. As a result of that, they age into the lower price points on our pricing tier. You know, that trend we expect will likely continue. We do think that the upward pressure on take rate will come from, you know, growth of enterprise, growth of Talent Scout, growth of Project Catalog, as well as this pricing change. We're not breaking out the exact impact that we're forecasting from the pricing change. Part of it, you know, we'll need to get data to figure out how much what are clients choosing to do. Clients that were on the plus plan or the basic plan, are they choosing to pay with ACH or not? That will impact the numbers a bit. All our assumptions on all that are baked into the guidance that we had as well as the previous guidance from before. Okay. Was there another question, Rohit? Yes. Or was I- Just on guidance, again, kind of obviously you're reinstating the guidance, so maybe just double-click on what you have seen in the last six weeks that gives you more confidence of the visibility into the year. Then on the guidance, the reduction is definitely less than 10%, so given the exposure that you have talked about in Ukraine and Russia has been around that. Perhaps are you assuming any substitution already, or does that imply strength in the rest of the business that you're actually raising guidance for the rest of the business in some way? Anything you can give on that. Excellent. Yeah, the forecast for the rest of the business largely remains the same versus our prior guidance that had been pulled. Really, the vast preponderance of the impact of the reduction from our prior annual guidance is due to the impact of the war in Ukraine. What we've seen over the last, you know, since the war broke out is that activity in Ukraine has been able to continue, surprisingly, to remain at very high levels. A testament to both the folks in that country as well as the platform's ability to meet their needs in supporting their families. That's been operating about 90% the level that it was before the invasion started. Now it's, you know, it's hard to know where that will go. Our guidance assumes a range of outcomes in terms of, you know, potential impact to that level. On the substitution front, with respect to Russia and Belarus, our guidance also assumes a range of substitution. As I said before, we don't have great data at this point in time, just because the contracts. Certainly some contracts have ended and some of those clients have moved to new freelancers. The majority of them will terminate on May 1st, and we'll start to get data in May as to what is the activity that we're seeing from them. Then we'll be able to, you know, hopefully after a few months, maybe a couple quarters, we'll be able to, have much better perspective on how that will play out. Thanks, Rohit. Thanks, Jeff. Thank you. Your last question comes from Brent Thill with Jefferies. Please go ahead. Thanks. Hayden, many investors are, you know, taking into their forecast a weakening global macro environment. Many ask us how Upwork can sustain in a downturn. If you could remind us all in the last downturn how what kind of behavior you saw from that side. Sure, Brent. I'd say, you know, the macro environment certainly is, you know, unclear what's gonna happen exactly. If we look at data points such as how our business performed in 2008, that was a really strong period for us. I think that really was evidence of the flexibility that our platform offers on both sides. I'd say where we are at this moment is the flexibility around working opportunities for talent is so much more relevant and sought after, coveted by talent today than ever before. That's, you know, if people are laid off, if they're looking for different opportunities, our platform can certainly be a great source of opportunity for people regardless of the conditions that may come up. On the client side, you know, our clients are always looking for a variety of things. They're looking for access to skilled talent. They're looking for flexibility in their business model that they can really build in a long-term way, cost savings and efficiency in terms of how they deploy those resources and how quickly they can spin them up and spin them down. In a tighter economy, in a time of more uncertainty, we've seen in the past and we would anticipate that those value propositions again become extremely relevant, as they are already, but again, just shine a light even more on why those are so critical and valuable for customers going through a tougher time. Based on those things, the performance we saw through the pandemic, which also had echoes of, you know, similar time of uncertainty and customers flocking to solutions that gave them more options and more flexibility through those times of uncertainty, we feel good that the business is positioned well with fundamental attributes that really serve customers through, you know, any economic condition. That's great. Just a quick follow-up on you know, on the product roadmap, you know, how are you keeping the engineering, product roadmaps on track given, you know, a third of the staff is in those affected regions? What's the secret sauce here? Yeah. First of all, I'm just so proud of how our team has executed and operated through the last 8-plus weeks. I mean, starting with before the conflict late last year and early in the Q1, preparing for a potential outcome such as what we saw, we were hoping that wouldn't happen. We sent emails to customers in January saying, you know, "We're here to help you get ready." Anyways, the team has just done a phenomenal job. As it comes to our internal operations, we've done a couple things. One is we've been really successful in relocating a large number, 75% or so of our Russian and Belarusian talent out of Russia and Belarus so that they can continue working with us without any disruption. That's a huge testament to their commitment to Upwork and the success that our teams have had in making that happen in a very short timeframe. Secondarily, as it pertains to our talent base in Ukraine and our many team members there, I mean, these folks have done an incredible job, really wanting to refocus on work. You know, this is, in some ways an outlet for them in a trying time where they can kind of have something that feels more normal. They've been engaging at basically the same levels now we're back to the operational capacity with our Ukrainian talent, basically that we were at before the conflict, which is really incredible. At the same time, we're doing a lot to make sure that we are bolstered in the event of further disruptions or changes in the environment. That includes, number one, you might not be surprised, using our own platform to source talent as needed, to serve a variety of needs and also have extra staff available in the event that other team members are impacted by the conflict and end up being offline for periods of time or other types of effects. With all of that together, I think what I've seen is our team incredibly capable of managing an unprecedented disruption, delivering new customer value and features throughout the entire timeframe and coming out stronger, which makes me so excited about what we're gonna do for the rest of the year. Thanks, Hayden. Thank you. With that, we end Q&A, and I pass the call back to Evan Barbosa for his final remarks. On behalf of the entire Upwork team, thank you for joining us today, and thank you for your interest in Upwork. If you need any clarifications or have any follow-up questions, please do not hesitate to reach out to me at investor@upwork.com. This concludes our call. Thank you for joining. You may now disconnect.