WEBVTT - ICYMI: Recruiting for AI Powered Solutions

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>You're listening to Bloomberg Business Week with Carol Masser and

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<v Speaker 2>Tim Stenoveek on Bloomberg Radio.

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<v Speaker 3>We're going to go back a little bit too earnings,

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<v Speaker 3>because that's definitely been on our radar as of late.

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<v Speaker 3>I know we talked a lot about geopolitics, and we

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<v Speaker 3>might roll a little bit of that into our next conversation.

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<v Speaker 3>Want to go to Upwork Shares ralling big time yesterday

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<v Speaker 3>following their quarterly update. The online recruitment company reported second

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<v Speaker 3>quarter results that beat expectations. They also raised their full

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<v Speaker 3>year forecasts. The one point seven billion dollar market cap company,

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<v Speaker 3>it connects businesses and independent professionals, so freelance, freelancers and

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<v Speaker 3>others for remote work opportunities. The stock down more than

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<v Speaker 3>twenty percent year to date, and about ten percent of

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<v Speaker 3>the float is short. The company though a useful indicator

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<v Speaker 3>of what is going on in the labor force, and

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<v Speaker 3>so let's get to it. Today's CFO briefing with us

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<v Speaker 3>as Erica Gesser. She is chief financial officer at Upwork.

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<v Speaker 3>She joins US for San Francisco. She will be featured

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<v Speaker 3>in an upcoming edition of the Bloomberg CFO Briefing newsletter,

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<v Speaker 3>which you can find at Bloomberg dot com slash CFO

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<v Speaker 3>Briefing and also with us as Nina Trupman. She's Bloomberg

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<v Speaker 3>News senior editor who writes the Bloomberg CFO Briefing newsletter.

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<v Speaker 3>She joins us here in studio. Eric, good to have

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<v Speaker 3>you here with Nina, Jess and myself. Your stock did

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<v Speaker 3>soar on your latest quarterly update and outlook. Talk to

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<v Speaker 3>us about the business and what's driving growth.

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<v Speaker 1>Yeah, thanks so much, Carol, it's great to be here.

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<v Speaker 1>You know, we had a standout quarter in Q two

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<v Speaker 1>in so many ways, but you know, I think really

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<v Speaker 1>the most distinctive thing is that is the AI category

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<v Speaker 1>of work. So many different types of work are developing

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<v Speaker 1>in AI and on our platform. Our AI category group

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<v Speaker 1>thirty percent year over year in the second quarter, and

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<v Speaker 1>that was actually an acceleration from the first quarter. And

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<v Speaker 1>one of the other drivers is actually all of the

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<v Speaker 1>AI enablement on our platform. So if you think about

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<v Speaker 1>the high hiring process just in general, you know that

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<v Speaker 1>you know, posting a job freelancers, you know, bidding on

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<v Speaker 1>a job, and then and then you know the interview

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<v Speaker 1>process well, we have now enabled AI all across the

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<v Speaker 1>hiring process, pulling out friction from every single part of

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<v Speaker 1>the customer experience, and we actually attribute about eighty million

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<v Speaker 1>dollars a volume on our platform just from those improved

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<v Speaker 1>customer experiences.

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<v Speaker 4>Erica, thanks for joining us. I'm just wanting to follow

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<v Speaker 4>up on this. Of course, your platform operates all around

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<v Speaker 4>the world. It's not just an indicator of job markets

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<v Speaker 4>in the US, but also in other countries. Just wondering

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<v Speaker 4>if we're looking at your US business in particular, I'm wondering,

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<v Speaker 4>what does the growth that you've seen in the latest

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<v Speaker 4>quarter tell you about the state of the labor market

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<v Speaker 4>more broadly.

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<v Speaker 1>You know, it's really interesting Nina, and and hello, good

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<v Speaker 1>to Good to talk to you again. You know, we overall,

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<v Speaker 1>you know, I think on the in the labor market

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<v Speaker 1>writ large. You know, there are obviously persistent winds hitting

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<v Speaker 1>the labor market, the BLS data coming down, and you know,

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<v Speaker 1>public staffing, if you look at the kind of public

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<v Speaker 1>market public staffing companies, they reported about a four percent

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<v Speaker 1>on average down quarter in Q two and actually projecting

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<v Speaker 1>even you know, even more kind of negative growth. We're

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<v Speaker 1>actually really pleased in that context that you know, upper

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<v Speaker 1>kind of growth quorder in Q two and that actually

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<v Speaker 1>just shows the strength and the attractiveness of our digital platform.

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<v Speaker 1>But you know, I would just say that the vagaries

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<v Speaker 1>of the BLS data in general, you know, if that's

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<v Speaker 1>telling us anything, it's that things are really uncertain out there,

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<v Speaker 1>and that uncertainty is affecting our clients and people in

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<v Speaker 1>small businesses in general that are just unsure about what's

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<v Speaker 1>around the corner.

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<v Speaker 2>When you're looking at particularly your share price actually being

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<v Speaker 2>down roughly seventeen percent year to date, why is that

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<v Speaker 2>And what do you think investors are telling you when

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<v Speaker 2>it comes to their chief concerns right now?

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<v Speaker 1>You know, it's a great question, and and you know,

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<v Speaker 1>we obviously, uh, you know, disagree with what the market

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<v Speaker 1>is saying right now. And I think I think that

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<v Speaker 1>the reality is is some of these kind of broader

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<v Speaker 1>labor market concerns are affecting a lot of stocks in

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<v Speaker 1>the human capital industry, and we're kind of getting pulled

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<v Speaker 1>down with the pack, even though our results and the

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<v Speaker 1>progress on the platform is really standing out from the crowd.

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<v Speaker 1>You know, I think that in general, there's been this

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<v Speaker 1>you know concept out there that you know, as these

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<v Speaker 1>really really exciting advances in a AI come forward, that

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<v Speaker 1>they're going to start to substitute work. And there's actually

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<v Speaker 1>no doubt that in certain categories at the very lowest

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<v Speaker 1>end of you know, the types of work that are

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<v Speaker 1>getting done and writing and translation, you do see AI substitution.

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<v Speaker 1>But on platforms like ours, where we we we actually

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<v Speaker 1>supply much larger, more complex work with skilled workers, we're

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<v Speaker 1>seeing AI actually enhance work and actually start to augment

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<v Speaker 1>and accelerate categories that that some people thought would be disrupted,

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<v Speaker 1>things like video and animation, contract law, accounting, and bookkeeping.

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<v Speaker 1>All of these categories are actually being accelerated and advanced

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<v Speaker 1>by Aiay.

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<v Speaker 4>Eric I will turn to AI in a second. I

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<v Speaker 4>think Carol has a follow up on that. I'm just wondering.

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<v Speaker 4>You said one thing about the BLS that I thought

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<v Speaker 4>was interesting and actually one of the things I had

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<v Speaker 4>wanted to to ask to you about as the CFO

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<v Speaker 4>of a business that is, of course labor related. I'm

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<v Speaker 4>wondering what you make of the firing of President Trump

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<v Speaker 4>of the Commissioner of the Bureau of Labor Statistics recently.

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<v Speaker 1>Uh, well, it's it's it's hard to comment on on

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<v Speaker 1>sort of on those decisions. I think, you know, these

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<v Speaker 1>types of data get you know, get get revised all

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<v Speaker 1>the time. These were actually large revisions. But you know,

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<v Speaker 1>it's hard to comment on that decision. It was it

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<v Speaker 1>was certainly very surprising.

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<v Speaker 2>Is it?

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<v Speaker 3>But is it a data point that you respect and

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<v Speaker 3>have looked at and compared it to know what's going

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<v Speaker 3>on in your world?

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<v Speaker 1>Look, I mean, we, of course as a business, you know,

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<v Speaker 1>in a business in the human capital industry, watch the

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<v Speaker 1>labor market very very carefully. And you know, and we

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<v Speaker 1>have seen historically that you know, our kind of volume

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<v Speaker 1>related trend what we call GSV in our platform have

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<v Speaker 1>some correlation to kind of the movement of the Jolt

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<v Speaker 1>report on a lagging on a lagging as a lagging indicator.

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<v Speaker 1>But you know, what we're what we're seeing now is

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<v Speaker 1>that all the improvements on our platform and again, you know,

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<v Speaker 1>some of the strength that we're seeing in certain categories

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<v Speaker 1>is actually helping us to kind of buck the trends

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<v Speaker 1>of what's going on out there. And you know, we're

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<v Speaker 1>really kind of we're relying on the strength of our

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<v Speaker 1>platform and advancements in our own tech to offset you

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<v Speaker 1>know what continues to be a very very uncertain operating environment.

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<v Speaker 1>Erica Nina was right.

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<v Speaker 3>I want to go back to AI for a moment

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<v Speaker 3>because I'm kind of blown away that you say AI

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<v Speaker 3>is kind of enhancing your your work and your platform

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<v Speaker 3>in a big way, because I think there is this

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<v Speaker 3>feeling like could even AI make what you guys do

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<v Speaker 3>obsolete at some point? But educate because I think as

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<v Speaker 3>we go along and we throw so much about AI

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<v Speaker 3>into one little bucket, like, help us understand how you

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<v Speaker 3>are using it on the platform, how it is actually

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<v Speaker 3>driving things in your business.

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<v Speaker 1>Yeah, so it is driving things in our business in

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<v Speaker 1>two ways, you know. The first is you know what

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<v Speaker 1>I refer to is that AI enhancements on our platforms,

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<v Speaker 1>So just making it easier for our clients, which are

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<v Speaker 1>you know, businesses of all sizes who are coming onto

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<v Speaker 1>our platform, you know, looking for great talent to get

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<v Speaker 1>work done. In the past, they would have to write

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<v Speaker 1>up a job post, you know, post the job interview,

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<v Speaker 1>interview freelancers a series of freelancers, and the freelancers themselves

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<v Speaker 1>have to write a proposal. Now all of that is

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<v Speaker 1>done by AI, and it's taking what used to take

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<v Speaker 1>hours and hours, you know, down to minutes. So that's

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<v Speaker 1>a huge advancement just in the enablement of finding a

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<v Speaker 1>great match to get the work that you want to

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<v Speaker 1>get done done quickly and easily. But the even more

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<v Speaker 1>interesting trends are really around how AI is enhancing every

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<v Speaker 1>single category of work. I mean, you know, what we're

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<v Speaker 1>seeing on our platform is you know, freelancer, you know,

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<v Speaker 1>job descriptions popping up saying hey, I'm an AI video animator,

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<v Speaker 1>I'm an AI artist. You know, it's not just prompt

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<v Speaker 1>engineering or or you know, ll and building, of which

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<v Speaker 1>we have you know, many, many, many, nearly two hundred

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<v Speaker 1>and fifty thousand, you know, AI skilled talent on our platform.

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<v Speaker 1>But it's really impacting every single area of work. And

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<v Speaker 1>what we're finding is, you know, it's enabling our freelancers

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<v Speaker 1>to get work done faster, to get get work done better,

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<v Speaker 1>and clients are actually looking for freelancers who are using

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<v Speaker 1>AI to get to get work done.

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<v Speaker 3>Hey, listen, we just have about thirty forty seconds. I

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<v Speaker 3>know Nina has one last question that she wants to

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<v Speaker 3>ask us quickly.

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<v Speaker 4>Yeah, Eric, I was just wondering you completed two transactions

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<v Speaker 4>recently and wondering did any of the macro uncertainty influence

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<v Speaker 4>those so the deal making for those transactions.

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<v Speaker 1>That's an interesting question. You know, I don't think the

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<v Speaker 1>macro uncertainty, you know, really played into it at all.

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<v Speaker 1>These two game changing transactions that we did, the names

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<v Speaker 1>of the companies are buve Tea and Assen. These are

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<v Speaker 1>really adding kind of digitally native capabilities to our enterprise

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<v Speaker 1>offering to integrate you know, kind of an incredible AI

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<v Speaker 1>kind of enhanced platform with our talent, as well as

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<v Speaker 1>a broader contingent labor solution that will enable enterprises to

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<v Speaker 1>again quickly and easily and kind of get through all

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<v Speaker 1>the red tape of compliance and everything else to hire

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<v Speaker 1>the contingent labor that they need.

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<v Speaker 3>Thank you so much, You're so real.

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<v Speaker 2>Love it.

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<v Speaker 3>Erica Guessert, two financial officer at Atwork, featured in an

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<v Speaker 3>upcoming Bloomberg CFO briefing, and of course, Anita Treatman Bloomberg

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<v Speaker 3>new Senior Editor