Upwork Reports Fourth Quarter and Full Year 2025 Financial Results
Rhea-AI Summary
Upwork (Nasdaq: UPWK) reported record full-year 2025 revenue of $787.8 million and full-year adjusted EBITDA of $225.6 million (29% margin). Fourth-quarter revenue was $198.4 million with GAAP net income of $15.6 million and adjusted EBITDA of $52.9 million (27% margin). Cash from operations was $248.3 million for 2025 and free cash flow was $223.1 million. Active clients were 785,000 as of December 31, 2025, and the company repurchased $136 million of shares in 2025.
Positive
- Record full-year revenue of $787.8 million in 2025
- Adjusted EBITDA rose 35% to $225.6 million in 2025
- Adjusted EBITDA margin improved to 29% for full year 2025
- Cash provided by operations increased 62% to $248.3 million
- Free cash flow of $223.1 million in 2025
- Share repurchases of $136 million in 2025 (9.3M shares)
Negative
- GAAP net income declined 46% to $115.4 million in 2025
- Active clients fell 6% year-over-year to 785,000
- GAAP net income for Q4 2025 dropped 89% versus prior year
Market Reaction
Following this news, UPWK has declined 23.95%, reflecting a significant negative market reaction. Our momentum scanner has triggered 12 alerts so far, indicating notable trading interest and price volatility. The stock is currently trading at $14.29. This price movement has removed approximately $773M from the company's valuation.
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Key Figures
Market Reality Check
Peers on Argus
UPWK gained 6.23% while peers were mixed: YELP +0.62%, RUM +5.09%, WB +1.09%, IAC +0.14%, and GENI -3.64%, suggesting a stock-specific earnings reaction rather than a broad sector move.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 03 | Q3 2025 earnings | Positive | -1.9% | Q3 2025 beat with record adjusted EBITDA and raised full-year guidance. |
| Aug 07 | Q2 2025 earnings | Positive | +13.6% | Q2 2025 record revenue, strong net income growth, higher AI-related GSV. |
| Aug 06 | Q2 2025 earnings | Positive | +13.6% | Q2 2025 results with record revenue and raised full-year 2025 guidance. |
| May 05 | Q1 2025 earnings | Positive | +18.0% | Q1 2025 strong revenue, record profitability, and rising AI usage metrics. |
| Apr 23 | Workforce study | Positive | +2.5% | Study highlighting $1.5T freelancer earnings and strong AI work growth. |
Earnings releases have generally been received positively, with four prior tagged earnings events showing gains and one showing a small decline, indicating a tendency for constructive reactions to financial updates.
Across prior earnings-related events in 2025, Upwork reported steady revenue growth, rising profitability, and expanding adjusted EBITDA margins, often tied to AI initiatives, Lifted enterprise expansion, and share repurchases. Most of those announcements saw positive price reactions, with only one negative move despite raised guidance. Today’s Q4 and full-year 2025 results, featuring record revenue and adjusted EBITDA plus 2026 guidance, fit into this pattern of improving fundamentals and AI-driven growth.
Historical Comparison
In the past year, UPWK’s 5 earnings-tagged events saw an average move of 9.18%. Today’s 6.23% post-earnings gain is smaller but directionally consistent with this pattern.
Earnings updates through 2025 showed steady revenue and adjusted EBITDA growth, increasing AI-related activity, and expanding enterprise offerings, culminating in today’s record full-year 2025 results and initial 2026 guidance.
Market Pulse Summary
The stock is dropping -23.9% following this news. A negative reaction despite positive elements like record $787.8M 2025 revenue and higher adjusted EBITDA would fit a pattern where one prior earnings beat saw a price decline. Investors have also seen active clients fall to 785,000 and GAAP net income down versus 2024, which could weigh on sentiment. Past earnings moves averaging 9.18% suggest volatility around financial updates, especially as expectations reset to 2026 guidance levels.
Key Terms
adjusted EBITDA financial
free cash flow financial
Rule 10b5-1 regulatory
Schedule 13G regulatory
Form 4 regulatory
RSUs financial
convertible senior notes financial
AI-generated analysis. Not financial advice.
Record full-year 2025 revenue of
Fourth-quarter revenue of
Fourth-quarter adjusted EBITDA of
Full-year 2025 GAAP net income of
PALO ALTO, Calif., Feb. 09, 2026 (GLOBE NEWSWIRE) -- Upwork Inc. (Nasdaq: UPWK), the world’s human and AI-powered work marketplace, today announced its financial results for the fourth quarter and full year of 2025.
“2025 marked the year we rebuilt Upwork for the age of human-plus-AI collaboration, turning global change into a definitive tailwind, all while demonstrating strong financial performance,” said Hayden Brown, president and CEO, Upwork Inc. “We enter 2026 as the leader of a new category, serving as the operational backbone for businesses navigating this new AI era of work. This is our most exciting chapter yet as we tackle the
“In 2025, we delivered on our commitments to return to GSV growth, achieving this goal two quarters earlier than planned, while also achieving record annual revenue and adjusted EBITDA margin,” said Erica Gessert, CFO, Upwork Inc. “We expect 2026 to be a year of accelerating growth. Our diversified growth path across AI, SMB and Enterprise gives us confidence in our guidance of
Fourth Quarter & Full Year 2025 Financial Highlights
- Revenue grew
4% year over year to$198.4 million in the fourth quarter of 2025 - Revenue grew
2% year over year to$787.8 million for full year 2025 - Active clients2 were 785,000 as of December 31, 2025
- GSV per active client2 was
$5,129 in the fourth quarter of 2025, an increase of7% year over year - GAAP Net income was
$15.6 million in the fourth quarter of 2025, compared to$147.2 million in the fourth quarter of 20243 - GAAP Net income was
$115.4 million in 2025, compared to$215.6 million in 20243 - GAAP Diluted earnings per share was
$0.12 in the fourth quarter of 2025, compared to$1.03 in the fourth quarter of 20243 - GAAP Diluted earnings per share was
$0.84 in 2025, compared to$1.52 in 20243 - Adjusted EBITDA4 was
$52.9 million in the fourth quarter of 2025, a5% increase compared to$50.2 million in the fourth quarter of 20245 - Adjusted EBITDA4 was
$225.6 million in 2025, a35% increase compared to$167.6 million in 20245 - Cash provided by operating activities was
$63.7 million in the fourth quarter of 2025, compared to$38.6 million in the fourth quarter of 2024 - Cash provided by operating activities was
$248.3 million in 2025, compared to$153.6 million in 2024 - Free cash flow4 was
$57.3 million in the fourth quarter of 2025, compared to$34.7 million in the fourth quarter of 2024 - Free cash flow4 was
$223.1 million in 2025, compared to$139.1 million in 2024 - Share repurchase program returned
$136 million to shareholders in 2025 with the purchase of 9.3 million shares, including the purchase of 2.0 million shares in the fourth quarter for$34 million . As of December 31, 2025, the company had$64 million in remaining authorization in its repurchase program.
_______________
1 Estimated 2028 market size from Upwork Market Study, a commissioned third-party study that estimates the size of the flexible digital knowledge work market based on data from, among other sources, the Bureau of Labor Statistics, World Bank, and International Labour Organization (October 2025).
2 See Key Definitions in our fourth quarter and full year 2025 earnings presentation.
3 GAAP net income and diluted earnings per share for the three and twelve months ended December 31, 2024, include a non-cash income tax benefit of
4 An explanation of non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures can be found in the “Non-GAAP Financial Measures" section and the subsequent tables at the end of this press release.
5 For each of the three and twelve months ended December 31, 2024, adjusted EBITDA does not include restructuring charges related to the restructuring plan that was announced on October 23, 2024, or the Restructuring Plan.
Fourth Quarter 2025 Operational Highlights
Building the World’s Human and AI-Powered Work Marketplace
- Drove over
$100 million in incremental GSV in 2025 through search and recommendation improvements, largely driven by AI. - Introduced Uma™ AI-generated work summaries in Q4 2025, which boosted spend per client.
- Announced a partnership with OpenAI to offer AI training, certifications, and upskilling to global independent professionals on the Upwork Marketplace — the first of many upcoming partnerships that deepen Upwork’s commitment to helping talent succeed in this new era of work.
Growing AI Work on the Marketplace
- GSV from AI-related work surpassed
$300 million on an annualized basis in Q4 2025, up more than50% from the prior year. - GSV from AI Integration & Automation work grew more than
90% year over year in Q4 2025. - GSV from Generative AI & Creative Production increased by
50% year over year in Q4 2025. - Upwork’s February 4th In-Demand Skills 2026 report found that demand for top AI-enabled skills more than doubled year-over-year in 2025, and that hiring for human expertise remains strong across work categories.
Winning Bigger with SMBs
- Q4 2025 GSV from Upwork Business Plus offering for SMBs increased
24% quarter over quarter. - Q4 2025 Business Plus active clients grew
49% quarter over quarter. 38% of active clients on Business Plus in Q4 2025 were net-new customers to Upwork.
Unlocking the Enterprise Opportunity
- Continued team and platform integration work and finalized the go-to-market strategy for Lifted, Upwork’s wholly owned subsidiary purpose-built to serve enterprise clients, which was launched in August 2025.
- Won two Lifted clients who are new to the Upwork family of companies.
Financial Guidance & Outlook
Upwork’s guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, and non-GAAP diluted EPS for the first quarter of 2026 is:
- Revenue:
$192 million to$197 million - Adjusted EBITDA:
$45 million to$47 million - Diluted weighted-average shares outstanding: 136 million to 139 million
- Non-GAAP diluted EPS:
$0.26 t o$0.28
Upwork’s guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, and non-GAAP diluted EPS for full year 2026 is:
- Revenue:
$835 million to$850 million - Adjusted EBITDA:
$240 million to$250 million - Diluted weighted-average shares outstanding: 137 million to 140 million
- Non-GAAP diluted EPS:
$1.43 t o$1.48
| UPWORK INC. Key Financial and Operational Metrics (Unaudited) | |||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
| (In thousands, except percentages ) | 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||
| GSV(1) | $ | 1,020,332 | $ | 992,776 | 3 | % | $ | 4,028,386 | $ | 4,008,107 | 1 | % | |||||||||
| Marketplace revenue(1) | $ | 171,358 | $ | 163,655 | 5 | % | $ | 682,883 | $ | 662,108 | 3 | % | |||||||||
| Enterprise revenue(1) | $ | 27,051 | $ | 27,828 | (3) | % | $ | 104,901 | $ | 107,217 | (2) | % | |||||||||
| Gross profit | $ | 154,738 | $ | 148,842 | 4 | % | $ | 613,032 | $ | 595,231 | 3 | % | |||||||||
| Gross profit margin | 78 | % | 78 | % | 26 bps | 78 | % | 77 | % | 45 bps | |||||||||||
| Operating expenses | $ | 126,444 | $ | 135,259 | (7) | % | $ | 483,725 | $ | 530,025 | (9) | % | |||||||||
| Net income | $ | 15,634 | $ | 147,166 | (89) | % | $ | 115,425 | $ | 215,586 | (46) | % | |||||||||
| Adjusted EBITDA(2) | $ | 52,857 | $ | 50,206 | 5 | % | $ | 225,556 | $ | 167,593 | 35 | % | |||||||||
| Profit margin | 8 | % | 77 | % | -6,898 bps | 15 | % | 28 | % | -1,337 bps | |||||||||||
| Adjusted EBITDA margin(2) | 27 | % | 26 | % | 42 bps | 29 | % | 22 | % | 685 bps | |||||||||||
| Cash provided by operating activities | $ | 63,701 | $ | 38,582 | 65 | % | $ | 248,259 | $ | 153,563 | 62 | % | |||||||||
| Free cash flow(2) | $ | 57,273 | $ | 34,717 | 65 | % | $ | 223,120 | $ | 139,119 | 60 | % | |||||||||
| As of December 31, | |||||||
| (In thousands) | 2025 | 2024 | % Change | ||||
| Active clients(1) | 785 | 832 | (6)% | ||||
(1) See Key Definitions in our fourth quarter and full year 2025 earnings presentation.
(2) An explanation of non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures can be found in the “Non-GAAP Financial Measures" section and the subsequent tables at the end of this press release.
Fourth Quarter and Full Year 2025 Financial Results Conference Call and Webcast
Upwork will host a conference call today at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss the company’s fourth quarter and full year 2025 financial results. An audio webcast archive will be available following the live event for approximately one year at investors.upwork.com. Please visit the Upwork Investor Relations website at investors.upwork.com/financial-information/quarterly-results to view Upwork’s fourth quarter and full year 2025 earnings presentation.
Disclosure Information
We use our Investor Relations website (investors.upwork.com), our Blog (upwork.com/blog), our X handle (twitter.com/Upwork), Hayden Brown’s X handle (twitter.com/hydnbrwn) and LinkedIn profile (linkedin.com/in/haydenlbrown), and Erica Gessert’s LinkedIn profile (linkedin.com/in/erica-gessert) as means of disseminating or providing notification of, among other things, news or announcements regarding our business or financial performance, investor events, press releases, and earnings releases, and as means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD.
About Upwork
Upwork Inc.’s (Nasdaq: UPWK) family of companies connects businesses with global, AI-enabled talent across every contingent work type including freelance, fractional, and payrolled. This portfolio includes the Upwork Marketplace, which connects businesses with on-demand access to highly skilled talent across the globe, and Lifted, which provides a purpose-built solution for enterprise organizations to source, contract, manage, and pay talent across the full spectrum of contingent work. From Fortune 100 enterprises to entrepreneurs, businesses rely on Upwork Inc. to find and hire expert talent, leverage AI-powered work solutions, and drive business transformation. With access to professionals spanning more than 10,000 skills across AI & machine learning, software development, sales & marketing, customer support, finance & accounting, and more, the Upwork family of companies enables businesses of all sizes to scale, innovate, and transform their workforces for the age of AI and beyond.
Since its founding, Upwork Inc. has facilitated more than
Contact:
Investor Relations
investor@upwork.com
Safe Harbor:
This press release of Upwork Inc. (together with its wholly owned subsidiaries, the “Company,” “we,” “us,” or “our”) contains “forward-looking” statements within the meaning of the federal securities laws. Forward-looking statements include all statements other than statements of historical fact, including any statements regarding our future operating results and financial position, including expected financial results for the first quarter and full year 2026, information or predictions concerning the future of our business or strategy, future market opportunity and market size, future products, features, or functionality, anticipated events and trends, potential growth or growth prospects, competitive position, technological and market trends, industry environment, the economy, our plans with respect to share repurchases, the expected impact and timing of strategic initiatives, including the launch of Lifted, our enterprise-focused subsidiary, and its acquisitions of Bubty B.V. (“Bubty”) and Ascen Inc. (“Ascen”), and other future conditions.
We have based these forward-looking statements largely on our current expectations and projections as of the date hereof about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short and long-term business operations and objectives, and financial needs. As such, they are subject to inherent uncertainties, known and unknown risks, and changes in circumstances that are difficult to predict and in many cases outside our control, and you should not place undue reliance on such forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. We make no representation that the plans, intentions, expectations, or results disclosed in these forward-looking statements will be achieved or that future events and circumstances will occur, and actual results or events may differ materially and adversely from our expectations. The forward-looking statements are made as of the date hereof, and we do not undertake, and expressly disclaim, any obligation to update or revise any forward-looking statements, conform these statements to actual results, or make changes in our expectations, except as required by law. Additional information regarding the risks and uncertainties that could cause actual results to differ materially from our expectations is included under the caption "Risk Factors" in our Quarterly Report on Form 10-Q for the three months ended September 30, 2025, filed with the SEC on November 4, 2025, and in our other SEC filings, which are available on our Investor Relations website at investors.upwork.com and on the SEC’s website at www.sec.gov. Additional information will also be set forth under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, when filed.
Upwork, Lifted, “Uma™, Upwork’s Mindful AI,” and other registered or common law trade names, trademarks, or service marks of Upwork appearing in this press release are the property of Upwork. This press release may also contain additional trade names, trademarks, and service marks of other companies, including names and brands. All third-party trademarks are property of their respective owners, and any references to third-party trademarks are for identification purposes only and shall be considered nominative fair use under trademark law.
| UPWORK INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) (Unaudited) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Revenue: | |||||||||||||||
| Marketplace | $ | 171,358 | $ | 163,655 | $ | 682,883 | $ | 662,108 | |||||||
| Enterprise | 27,051 | 27,828 | 104,901 | 107,217 | |||||||||||
| Total revenue | 198,409 | 191,483 | 787,784 | 769,325 | |||||||||||
| Cost of revenue | 43,671 | 42,641 | 174,752 | 174,094 | |||||||||||
| Gross profit | 154,738 | 148,842 | 613,032 | 595,231 | |||||||||||
| Operating expenses | |||||||||||||||
| Research and development | 47,055 | 53,491 | 185,544 | 209,283 | |||||||||||
| Sales and marketing | 36,005 | 43,934 | 143,412 | 185,211 | |||||||||||
| General and administrative | 41,665 | 35,602 | 146,629 | 128,803 | |||||||||||
| Provision for transaction losses | 1,719 | 2,232 | 8,140 | 6,728 | |||||||||||
| Total operating expenses | 126,444 | 135,259 | 483,725 | 530,025 | |||||||||||
| Income from operations | 28,294 | 13,583 | 129,307 | 65,206 | |||||||||||
| Other income, net | 5,757 | 4,788 | 23,869 | 25,221 | |||||||||||
| Income before income taxes | 34,051 | 18,371 | 153,176 | 90,427 | |||||||||||
| Income tax (provision) benefit | (18,417 | ) | 128,795 | (37,751 | ) | 125,159 | |||||||||
| Net income | $ | 15,634 | $ | 147,166 | $ | 115,425 | $ | 215,586 | |||||||
| Net income per share: | |||||||||||||||
| Basic | $ | 0.12 | $ | 1.10 | $ | 0.87 | $ | 1.61 | |||||||
| Diluted | $ | 0.12 | $ | 1.03 | $ | 0.84 | $ | 1.52 | |||||||
| Weighted-average shares used to compute net income per share: | |||||||||||||||
| Basic | 130,619 | 134,265 | 132,485 | 133,621 | |||||||||||
| Diluted | 139,414 | 143,098 | 140,660 | 143,152 | |||||||||||
| UPWORK INC. CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | |||||||
| December 31, 2025 | December 31, 2024 | ||||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 294,356 | $ | 305,757 | |||
| Marketable securities | 378,425 | 316,344 | |||||
| Funds held in escrow, including funds in transit | 180,752 | 195,736 | |||||
| Trade and client receivables, net | 76,236 | 75,490 | |||||
| Prepaid expenses and other current assets | 21,064 | 17,727 | |||||
| Total current assets | 950,833 | 911,054 | |||||
| Property and equipment, net | 44,421 | 30,056 | |||||
| Goodwill | 149,192 | 121,064 | |||||
| Intangible assets, net | 37,161 | 12,989 | |||||
| Operating lease asset | 5,011 | 5,752 | |||||
| Deferred tax asset | 111,495 | 128,779 | |||||
| Other assets, noncurrent | 1,467 | 1,919 | |||||
| Total assets | $ | 1,299,580 | $ | 1,211,613 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 7,858 | $ | 6,128 | |||
| Escrow funds payable | 180,752 | 195,736 | |||||
| Debt, current | 359,770 | — | |||||
| Accrued expenses and other current liabilities | 94,023 | 59,300 | |||||
| Deferred revenue | 7,765 | 7,269 | |||||
| Total current liabilities | 650,168 | 268,433 | |||||
| Debt, noncurrent | — | 357,928 | |||||
| Operating lease liability, noncurrent | 9,707 | 9,567 | |||||
| Other liabilities, noncurrent | 9,390 | 308 | |||||
| Total liabilities | 669,265 | 636,236 | |||||
| Stockholders’ equity | |||||||
| Common stock | 13 | 14 | |||||
| Additional paid-in capital | 592,599 | 653,575 | |||||
| Accumulated and other comprehensive income | 754 | 264 | |||||
| Accumulated deficit | 36,949 | (78,476 | ) | ||||
| Total stockholders’ equity | 630,315 | 575,377 | |||||
| Total liabilities and stockholders’ equity | $ | 1,299,580 | $ | 1,211,613 | |||
| UPWORK INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
| Net income | $ | 15,634 | $ | 147,166 | $ | 115,425 | $ | 215,586 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
| Provision for transaction losses | 999 | 1,972 | 6,706 | 5,505 | |||||||||||
| Depreciation and amortization | 7,024 | 4,370 | 25,710 | 14,813 | |||||||||||
| Amortization of debt issuance costs | 461 | 461 | 1,842 | 1,842 | |||||||||||
| Accretion of discount on purchases of marketable securities, net | (2,499 | ) | (1,480 | ) | (8,198 | ) | (11,911 | ) | |||||||
| Amortization of operating lease asset | 177 | 409 | 741 | 2,837 | |||||||||||
| Tides Foundation common stock warrant expense | 187 | 187 | 750 | 750 | |||||||||||
| Stock-based compensation expense | 17,352 | 13,633 | 65,390 | 68,391 | |||||||||||
| Deferred taxes | 18,892 | (129,258 | ) | 18,493 | (129,258 | ) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||||||
| Trade and client receivables | (1,630 | ) | (4,566 | ) | (3,284 | ) | (4,802 | ) | |||||||
| Prepaid expenses and other assets | (2,610 | ) | 1,812 | (2,570 | ) | (656 | ) | ||||||||
| Operating lease liability | (412 | ) | (136 | ) | 188 | (4,351 | ) | ||||||||
| Accounts payable | (656 | ) | 428 | (1,160 | ) | 969 | |||||||||
| Accrued expenses and other liabilities | 10,960 | 5,097 | 27,737 | 4,730 | |||||||||||
| Deferred revenue | (178 | ) | (1,513 | ) | 489 | (10,882 | ) | ||||||||
| Net cash provided by operating activities | 63,701 | 38,582 | 248,259 | 153,563 | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
| Purchases of marketable securities | (119,239 | ) | (127,818 | ) | (485,178 | ) | (362,322 | ) | |||||||
| Proceeds from maturities of marketable securities | 117,711 | 121,623 | 420,436 | 486,892 | |||||||||||
| Proceeds from sale of marketable securities | 7,747 | 3,354 | 11,348 | 41,775 | |||||||||||
| Acquisition of business, net of cash acquired | 1,440 | (14,333 | ) | (58,406 | ) | (14,333 | ) | ||||||||
| Purchases of property and equipment | (455 | ) | (1,549 | ) | (5,790 | ) | (3,528 | ) | |||||||
| Internal-use software and platform development costs | (5,973 | ) | (2,316 | ) | (19,349 | ) | (10,916 | ) | |||||||
| Net cash provided by (used in) investing activities | 1,231 | (21,039 | ) | (136,939 | ) | 137,568 | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
| Change in escrow funds payable, net | (29,756 | ) | (22,052 | ) | (6,731 | ) | 9,956 | ||||||||
| Proceeds from exercises of stock options and common stock warrant | 21 | 1,358 | 750 | 3,293 | |||||||||||
| Proceeds from employee stock purchase plan | 1,736 | 1,878 | 3,935 | 4,795 | |||||||||||
| Repurchase of common stock | (34,036 | ) | — | (135,959 | ) | (100,000 | ) | ||||||||
| Net cash (used in) financing activities | (62,035 | ) | (18,816 | ) | (138,005 | ) | (81,956 | ) | |||||||
| NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 2,897 | (1,273 | ) | (26,685 | ) | 209,175 | |||||||||
| Cash, cash equivalents, and restricted cash—beginning of period | 476,011 | 506,866 | 505,593 | 296,418 | |||||||||||
| Cash, cash equivalents, and restricted cash—end of period | $ | 478,908 | $ | 505,593 | $ | 478,908 | $ | 505,593 | |||||||
The following 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 as of the following (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||
| Cash and cash equivalents | $ | 294,356 | $ | 305,757 | |||
| Restricted cash | 3,800 | 4,100 | |||||
| Funds held in escrow, including funds in transit | 180,752 | 195,736 | |||||
| Total cash, cash equivalents, and restricted cash as shown in the consolidated statement of cash flows | $ | 478,908 | $ | 505,593 | |||
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), we present certain non-GAAP financial measures in this press release, including adjusted EBITDA, adjusted EBITDA margin, free cash flow, and non-GAAP diluted EPS.
We define adjusted EBITDA as net income adjusted for stock-based compensation expense; depreciation and amortization; other income (expense), net, which includes interest expense; income tax benefit (provision); and, if applicable, certain other gains, losses, benefits, or charges that are non-cash or are significant and the result of isolated events or transactions that have not occurred frequently in the past and are not expected to occur regularly in the future. We define free cash flow as cash provided by operations less purchases of property, plant and equipment and cash outflows from internally developed software.
We use non-GAAP financial measures in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance. These non-GAAP financial measures provide consistency and comparability with past financial performance, facilitate period-to-period comparisons of our core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. In addition, adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to certain items that can vary substantially from company to company, and free cash flow allows investors to evaluate the cash generated from our underlying operations across periods.
Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as analytical tools, and investors should not consider them in isolation or as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. In particular, (1) adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy, (2) although depreciation and amortization expense are non-cash charges, the assets subject to depreciation and amortization may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements, and (3) adjusted EBITDA does not reflect: (a) changes in, or cash requirements for, our working capital needs; (b) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; (c) tax payments that may represent a reduction in cash available to us; or (d) material acquisition-related deal costs. In addition, the non-GAAP financial measures we use may be different from non-GAAP financial measures used by other companies, including companies in our industry, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from the non-GAAP financial measures that we present. Reconciliations of the non-GAAP financial measures presented in this press release to their most directly comparable GAAP financial measures have been provided below, and investors are encouraged to review the reconciliations and not rely on any single financial measure to evaluate our business.
We have not reconciled our adjusted EBITDA guidance to GAAP net income or non-GAAP diluted EPS guidance to GAAP diluted EPS because certain items that impact GAAP net income and GAAP diluted EPS are uncertain or out of our control and cannot be reasonably predicted. In particular, stock-based compensation expense is impacted by the future fair market value of our common stock and other factors, all of which are difficult to predict, subject to frequent change, or not within our control. The actual amount of these expenses during the first quarter of 2026 and fiscal year 2026 will have a significant impact on our future GAAP financial results. Accordingly, a reconciliation of adjusted EBITDA guidance to GAAP net income and non-GAAP diluted EPS guidance to GAAP diluted EPS is not available without unreasonable effort.
| UPWORK INC. RECONCILIATION OF GAAP TO NON-GAAP RESULTS (In thousands, except for percentages and share data) (Unaudited) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net income | $ | 15,634 | $ | 147,166 | $ | 115,425 | $ | 215,586 | |||||||
| Add back (deduct): | |||||||||||||||
| Stock-based compensation expense | 17,352 | 13,633 | 65,390 | 68,391 | |||||||||||
| Depreciation and amortization | 7,024 | 4,370 | 25,710 | 14,813 | |||||||||||
| Other income, net | (5,757 | ) | (4,788 | ) | (23,869 | ) | (25,221 | ) | |||||||
| Income tax provision (benefit)(1) | 18,417 | (128,795 | ) | 37,751 | (125,159 | ) | |||||||||
| Other(2)(3)(4) | 187 | 18,620 | 5,149 | 19,183 | |||||||||||
| Adjusted EBITDA | $ | 52,857 | $ | 50,206 | $ | 225,556 | $ | 167,593 | |||||||
| Profit margin | 8 | % | 77 | % | 15 | % | 28 | % | |||||||
| Adjusted EBITDA margin | 27 | % | 26 | % | 29 | % | 22 | % | |||||||
| Cost of revenue, GAAP | $ | 43,671 | $ | 42,641 | $ | 174,752 | $ | 174,094 | |||||||
| Stock-based compensation expense | (180 | ) | (262 | ) | (760 | ) | (1,586 | ) | |||||||
| Other(2) | — | (317 | ) | — | (317 | ) | |||||||||
| Cost of revenue, Non-GAAP | 43,491 | 42,062 | 173,992 | 172,191 | |||||||||||
| As a percentage of total revenue, GAAP | 22 | % | 22 | % | 22 | % | 23 | % | |||||||
| As a percentage of total revenue, Non-GAAP | 22 | % | 22 | % | 22 | % | 22 | % | |||||||
| Gross profit, GAAP | $ | 154,738 | $ | 148,842 | $ | 613,032 | $ | 595,231 | |||||||
| Stock-based compensation expense | 180 | 262 | 760 | 1,586 | |||||||||||
| Other(2) | — | 317 | — | 317 | |||||||||||
| Gross profit, Non-GAAP | 154,918 | 149,421 | 613,792 | 597,134 | |||||||||||
| Gross margin, GAAP | 78 | % | 78 | % | 78 | % | 77 | % | |||||||
| Gross margin, Non-GAAP | 78 | % | 78 | % | 78 | % | 78 | % | |||||||
| Research and development, GAAP | $ | 47,055 | $ | 53,491 | $ | 185,544 | $ | 209,283 | |||||||
| Stock-based compensation expense | (5,495 | ) | (6,394 | ) | (23,023 | ) | (29,923 | ) | |||||||
| Intangible amortization | (2,495 | ) | (704 | ) | (8,192 | ) | (1,900 | ) | |||||||
| Other(2) | — | (7,872 | ) | — | (7,872 | ) | |||||||||
| Research and development, Non-GAAP | 39,065 | 38,521 | 154,329 | 169,588 | |||||||||||
| As a percentage of total revenue, GAAP | 24 | % | 28 | % | 24 | % | 27 | % | |||||||
| As a percentage of total revenue, Non-GAAP | 20 | % | 20 | % | 20 | % | 22 | % | |||||||
| Sales and marketing, GAAP | $ | 36,005 | $ | 43,934 | $ | 143,412 | $ | 185,211 | |||||||
| Stock-based compensation expense | (1,557 | ) | (2,116 | ) | (6,347 | ) | (11,670 | ) | |||||||
| Intangible amortization | — | (167 | ) | (1,236 | ) | (167 | ) | ||||||||
| Other(2) | — | (7,007 | ) | — | (7,007 | ) | |||||||||
| Sales and marketing, Non-GAAP | 34,448 | 34,645 | 135,829 | 166,368 | |||||||||||
| As a percentage of total revenue, GAAP | 18 | % | 23 | % | 18 | % | 24 | % | |||||||
| As a percentage of total revenue, Non-GAAP | 17 | % | 18 | % | 17 | % | 22 | % | |||||||
| General and administrative, GAAP | $ | 41,665 | $ | 35,602 | $ | 146,629 | $ | 128,803 | |||||||
| Stock-based compensation expense | (10,120 | ) | (4,861 | ) | (35,260 | ) | (25,212 | ) | |||||||
| Other(2)(3)(4) | (188 | ) | (3,424 | ) | (5,149 | ) | (3,987 | ) | |||||||
| General and administrative, Non-GAAP | 31,357 | 27,317 | 106,220 | 99,604 | |||||||||||
| As a percentage of total revenue, GAAP | 21 | % | 19 | % | 19 | % | 17 | % | |||||||
| As a percentage of total revenue, Non-GAAP | 16 | % | 14 | % | 13 | % | 13 | % | |||||||
| Total operating expenses, GAAP | $ | 126,444 | $ | 135,259 | $ | 483,725 | $ | 530,025 | |||||||
| Stock-based compensation expense | (17,172 | ) | (13,371 | ) | (64,630 | ) | (66,805 | ) | |||||||
| Intangible amortization | (2,495 | ) | (871 | ) | (9,428 | ) | (2,066 | ) | |||||||
| Other(2)(3)(4) | (188 | ) | (18,303 | ) | (5,149 | ) | (18,866 | ) | |||||||
| Total operating expenses, Non-GAAP | 106,589 | 102,714 | 404,518 | 442,288 | |||||||||||
| As a percentage of total revenue, GAAP | 64 | % | 71 | % | 61 | % | 69 | % | |||||||
| As a percentage of total revenue, Non-GAAP | 54 | % | 54 | % | 51 | % | 57 | % | |||||||
| Income from operations, GAAP | $ | 28,294 | $ | 13,583 | $ | 129,307 | $ | 65,206 | |||||||
| Stock-based compensation expense | 17,352 | 13,633 | 65,390 | 68,391 | |||||||||||
| Intangible amortization | 2,495 | 871 | 9,428 | 2,066 | |||||||||||
| Other(2)(3)(4) | 188 | 18,881 | 5,149 | 19,444 | |||||||||||
| Income from operations, Non-GAAP | 48,329 | 46,968 | 209,274 | 155,107 | |||||||||||
| Net income, GAAP | $ | 15,634 | $ | 147,166 | $ | 115,425 | $ | 215,586 | |||||||
| Stock-based compensation expense | 17,352 | 13,633 | 65,390 | 68,391 | |||||||||||
| Intangible amortization | 2,495 | 871 | 9,428 | 2,066 | |||||||||||
| Release of valuation allowance on deferred tax assets | — | (140,339 | ) | — | (140,339 | ) | |||||||||
| Tax effect of non-GAAP adjustments | 14,294 | 2,149 | 682 | (18,000 | ) | ||||||||||
| Other(2)(3)(4) | 188 | 18,881 | 5,149 | 19,444 | |||||||||||
| Net income, Non-GAAP | 49,963 | 42,361 | 196,074 | 147,148 | |||||||||||
| Weighted-average shares outstanding used in computing earnings per share, GAAP | |||||||||||||||
| Basic (in millions) | 130.6 | 134.3 | 132.5 | 133.6 | |||||||||||
| Diluted (in millions) | 139.4 | 143.1 | 140.7 | 143.2 | |||||||||||
| Basic earnings per share, GAAP | $ | 0.12 | $ | 1.10 | $ | 0.87 | $ | 1.61 | |||||||
| Diluted earnings per share, GAAP | $ | 0.12 | $ | 1.03 | $ | 0.84 | $ | 1.52 | |||||||
| Weighted-average shares outstanding used in computing earnings per share, Non-GAAP | |||||||||||||||
| Basic (in millions) | 130.6 | 134.3 | 132.5 | 133.6 | |||||||||||
| Diluted (in millions) | 139.4 | 143.1 | 140.7 | 143.2 | |||||||||||
| Basic earnings (loss) per share, Non-GAAP | $ | 0.38 | $ | 0.32 | $ | 1.48 | $ | 1.10 | |||||||
| Diluted earnings (loss) per share, Non-GAAP | $ | 0.36 | $ | 0.30 | $ | 1.41 | $ | 1.04 | |||||||
(1) During each of the three and twelve months ended December 31, 2024, we recognized a non-cash tax benefit of
(2) During each of the three and twelve months ended December 31, 2024, we incurred
(3) During each of the three and twelve months ended December 31, 2025 and 2024, we incurred
(4) During the twelve months ended December 31, 2025, we incurred acquisition-related costs of
| UPWORK INC. RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands) (Unaudited) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Cash provided by operating activities | $ | 63,701 | $ | 38,582 | $ | 248,259 | $ | 153,563 | ||||||||
| Less: purchases of property, plant & equipment and cash outflows from internally developed software | (6,428 | ) | (3,865 | ) | (25,139 | ) | (14,444 | ) | ||||||||
| Free cash flow | $ | 57,273 | $ | 34,717 | $ | 223,120 | $ | 139,119 | ||||||||
| UPWORK INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA (In thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
| December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |||||||||||||||||||||||||
| Net Income | $ | 15,634 | $ | 29,335 | $ | 32,726 | $ | 37,730 | $ | 147,166 | $ | 27,758 | $ | 22,220 | $ | 18,442 | ||||||||||||||||
| Add back (deduct): | ||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 17,352 | 19,789 | 15,977 | 12,272 | 13,633 | 18,578 | 19,238 | 16,942 | ||||||||||||||||||||||||
| Depreciation and amortization | 7,024 | 7,946 | 5,879 | 4,861 | 4,370 | 3,668 | 3,629 | 3,146 | ||||||||||||||||||||||||
| Other income, net | (5,757 | ) | (5,917 | ) | (5,878 | ) | (6,317 | ) | (4,788 | ) | (8,091 | ) | (5,620 | ) | (6,722 | ) | ||||||||||||||||
| Income tax provision (benefit)(1) | 18,417 | 6,340 | 5,717 | 7,277 | (128,795 | ) | 1,126 | 1,181 | 1,329 | |||||||||||||||||||||||
| Other(2)(3)(4) | 187 | 2,134 | 2,640 | 188 | 18,620 | 188 | 187 | 188 | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 52,857 | $ | 59,627 | $ | 57,061 | $ | 56,011 | $ | 50,206 | $ | 43,227 | $ | 40,835 | $ | 33,325 | ||||||||||||||||
| Profit margin | 8 | % | 15 | % | 17 | % | 20 | % | 77 | % | 14 | % | 12 | % | 10 | % | ||||||||||||||||
| Adjusted EBITDA margin | 27 | % | 30 | % | 29 | % | 29 | % | 26 | % | 22 | % | 21 | % | 17 | % | ||||||||||||||||
(1) During three months ended December 31, 2024, we recognized a non-cash tax benefit of
(2) During the three months ended December 31, 2024, we incurred
(3) For all periods presented, we incurred
(4) During the three months ended June 30, 2025 and September 30, 2025, we incurred
FAQ
How did Upwork (UPWK) perform in revenue and profitability for full year 2025?
What were Upwork's fourth-quarter 2025 results for revenue, net income, and adjusted EBITDA (UPWK)?
What guidance did Upwork (UPWK) give for 2026 revenue and adjusted EBITDA?
How did Upwork's 2025 cash flow and capital return to shareholders look (UPWK)?
What operational trends did Upwork highlight about AI work and client metrics in 2025 (UPWK)?
