Upwork Reports Third Quarter 2026 Financial Results

Higher quarterly profit accompanied lower services volume, fewer active clients and weaker cash generation.

Rhea-AI Summary

Upwork (UPWK) reported third-quarter 2026 revenue of $185.6 million, alongside higher net income and its Lifted subsidiary’s acquisition of WorkMotion. Revenue compared with $201.7 million a year earlier. GAAP net income rose 8% to $31.8 million, with diluted earnings per share of $0.25 versus $0.21. Adjusted EBITDA, a non-GAAP profit measure, increased 7% to $63.8 million.

Gross services volume fell 10.1% year over year, and active clients declined 10%. Free cash flow fell 22% to $53.9 million. Upwork expects WorkMotion to strengthen its enterprise offering and reduce reliance on outside employers of record, which employ workers for clients. Fourth-quarter revenue guidance is $169 million–$177 million; full-year guidance is $742 million–$750 million. CFO Erica Gessert will step down January 1, 2027, with Chief Business Officer Peter Sanborn appointed her successor.

18 points · 1 major

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It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

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0 major · 14 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major pointCurrent debt was zero at September 30, 2026, versus $359.770 million at December 31, 2025.
• Moderate pointQ3 GAAP net income rose 8% to $31.810 million; diluted EPS increased to $0.25 from $0.21.
• Moderate pointQ3 adjusted EBITDA increased 7% to $63.789 million; nine-month adjusted EBITDA rose 7% to $185.268 million.
• Moderate pointQ3 adjusted EBITDA margin increased 481 basis points to 34%; nine-month margin rose 305 basis points to 32%.
• Moderate pointQ3 profit margin increased 260 basis points to 17% year over year.
• Moderate pointOperating expenses fell 15% to $106.702 million in Q3 and 4% to $343.061 million over nine months.
• Moderate pointQ3 operating income increased to $34.593 million from $29.758 million a year earlier.
• Moderate pointQ3 services volume per active client increased 8% year over year to $5,418.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Lifted acquired WorkMotion, which will directly employ contingent talent across more than 30 countries.
• Moderate pointQ3 services volume from freelancers with AI skills grew 55% year over year, nearing $450 million estimated annualized.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Upwork guides Q4 adjusted EBITDA to $51 million–$55 million and non-GAAP diluted EPS to $0.30–$0.32.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Upwork guides 2026 adjusted EBITDA to $236 million–$240 million and non-GAAP diluted EPS to $1.45–$1.47.

6 minor points

• Minor pointLifted signed three new customers while continuing Enterprise customer migration to its platform.
• Minor pointBusiness Plus Q3 services volume grew 13% quarter over quarter and 132% year over year.
• Minor pointBusiness Plus Q3 active clients grew 9% quarter over quarter and 154% year over year.
• Minor pointBusiness Plus attracted first-time Upwork spending from 40% of its Q3 active clients.
• Minor pointMCP server weekly active users increased 20x since August launch.
• Minor pointAI agents made nearly 50 million requests, driving more than $3 million in estimated annualized Connects revenue.

Negative

• Moderate pointQ3 revenue declined to $185.599 million from $201.730 million; nine-month revenue fell to $572.742 million from $589.375 million.
• Moderate pointGross services volume fell 10.1% to $914.064 million in Q3 and 4.7% to $2,866.539 million over nine months.
• Moderate pointActive clients declined 10% year over year to 717,000 at September 30, 2026.
• Moderate pointGross profit fell 9% to $141.295 million in Q3 and 4% to $438.509 million over nine months.
• Moderate pointGross margin fell 115 basis points to 76% in Q3 and 120 basis points to 77% over nine months.
• Moderate pointOperating cash flow fell 12% to $65.947 million in Q3 and 26% to $135.840 million over nine months.
• Moderate pointFree cash flow declined 22% to $53.854 million in Q3 and 38% to $102.697 million over nine months.
• Moderate pointCash fell to $227.986 million from $294.356 million; marketable securities fell to $76.346 million from $378.425 million since year-end.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Q4 revenue guidance of $169 million–$177 million is below Q3 revenue of $185.599 million.

5 minor points

• Minor pointMarketplace revenue fell 9% to $159.321 million in Q3 and 3% to $496.884 million over nine months.
• Minor pointEnterprise revenue declined 3% to $26.278 million in Q3 and 3% to $75.858 million over nine months.
• Minor pointNine-month net income fell 11% to $88.675 million; diluted EPS decreased to $0.69 from $0.72.
• Minor pointNine-month profit margin declined 145 basis points to 15% year over year.
• Minor pointNine-month operating income fell to $95.448 million from $101.013 million a year earlier.

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Key Figures

Revenue: $185.6 million GSV: $914.1 million GAAP net income: $31.8 million; up 8% year over year +4 more

Revenue

$185.6 million

Q3 2026; compared with $201.7 million in Q3 2025

GSV

$914.1 million

Q3 2026; compared with $1,016.7 million in Q3 2025

GAAP net income

$31.8 million; up 8% year over year

Q3 2026

Adjusted EBITDA

$63.8 million; up 7% year over year

Q3 2026

Free cash flow

$53.9 million

Q3 2026; compared with $69.4 million in Q3 2025

Revenue guidance

$742 million to $750 million

Full year 2026

Adjusted EBITDA guidance

$236 million to $240 million

Full year 2026

Previous Earnings Reports

2 past events · Latest: Aug 10

Same Type 2 events

1. Aug 10

   Quarterly earnings

   24h Move

   -14.9%

   Q2 revenue and net income declined year over year while adjusted EBITDA increased.

2. Nov 03

   Quarterly earnings

   24h Move

   +13.2%

   Q3 2025 revenue and adjusted EBITDA grew, and the company raised full-year guidance.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

adjusted ebitda, gaap, free cash flow, weighted-average shares outstanding, +1 more

5 terms

adjusted ebitda financial

"Third quarter adjusted EBITDA of $63.8 million or 34.4% adjusted EBITDA margin"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

gaap financial

"GAAP net income was $31.8 million, an increase of 8% year-over-year"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

free cash flow financial

"Free cash flow(2) was $53.9 million, compared to free cash flow of $69.4 million"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

View in glossary

weighted-average shares outstanding financial

"diluted weighted-average shares outstanding: 125 million to 128 million"

Weighted-average shares outstanding is the average number of shares of a company's stock that are available to investors over a specific period, adjusted for any changes like new share issues or buybacks. It matters to investors because it ensures that earnings and profits are accurately divided among all shareholders, providing a fair view of the company's profitability per share over time.

model context protocol technical

"The Upwork Model Context Protocol (MCP) server has seen rapid growth in adoption"

A model context protocol is a set of rules or guidelines that determine how a financial model interprets and applies information within a specific situation. It helps ensure consistent and accurate analysis by clarifying what data or assumptions are relevant in a given scenario. For investors, it provides clarity on how predictions or assessments are made, increasing confidence in decision-making.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Lifted, an Upwork company, acquires WorkMotion, a leading employer of record (EOR) 

Third quarter revenue of $185.6 million and GAAP net income of $31.8 million

Third quarter adjusted EBITDA of $63.8 million or 34.4% adjusted EBITDA margin

PALO ALTO, Calif., Nov. 02, 2026 (GLOBE NEWSWIRE) -- Upwork Inc. (Nasdaq: UPWK), the world’s human and AI-powered work marketplace, today announced its financial results for the third quarter of 2026.

"In the third quarter, Upwork executed strongly as our strategic growth pillars continued to gain momentum," said Hayden Brown, president and CEO of Upwork Inc. "We are doubling down on our enterprise strategy with Lifted’s acquisition of WorkMotion, a leading Berlin-based EOR, to capture growing global demand. At the same time, the launch of Upwork’s MCP server is opening our marketplace to AI agents as a new class of client, and today we launched Upwork Now so clients can find talent to start work right away. Both mark a transformational shift toward making Upwork a capability wherever work begins. Combined with continued growth of our higher-margin products and high-value customers, we’re well positioned to capture new opportunities while continuing to drive strong, profitable growth."

“Our focus remains squarely on sustained profitability and disciplined execution across our growth pillars,” said Erica Gessert, CFO of Upwork Inc. “Our strong free cash flow profile and durable, high-margin business model give us the financial flexibility to navigate evolving market dynamics while delivering consistent long-term value.”

Third Quarter 2026 Financial Highlights

• GSV⁽¹⁾ of $914.1 million
• Revenue of $185.6 million
• Active clients⁽¹⁾ of 717,000
• GSV per active client⁽¹⁾ of $5,418, an increase of 8% year-over-year
• GAAP Net income was $31.8 million, an increase of 8% year-over-year
• GAAP Diluted earnings per share was $0.25, compared to diluted earnings per share of $0.21 in the third quarter of 2025
• Adjusted EBITDA⁽²⁾ was $63.8 million, up 7% year-over-year
• Cash provided by operating activities was $65.9 million, compared to cash provided by operating activities of $75.1 million in the third quarter of 2025
• Free cash flow⁽²⁾ was $53.9 million, compared to free cash flow of $69.4 million in the third quarter of 2025
  

Third Quarter 2026 and Recent Operational Highlights

Building the World’s Human and AI-Powered Work Marketplace

• The Upwork Model Context Protocol (MCP) server has seen rapid growth in adoption and usage among clients and freelancers. Weekly active users have increased 20x since the launch in August, while AI agents have made nearly 50 million requests, driving more than $3 million in estimated annualized Connects revenue.
• Launched the public beta of Upwork Now, which connects clients with freelancers who are online and ready to start working immediately. Upwork Now is also available through the MCP server, so people and their AI agents can bring in those freelancers the moment a need arises and without leaving their AI workflow.

Growing AI Work on the Marketplace

• GSV from freelancers with AI-skills reached an estimated annualized run rate of nearly $450 million in Q3 2026.
• GSV from freelancers with AI-skills increased 55% year-over-year in Q3 2026.

Winning Bigger with SMB

• Q3 2026 GSV from the Business Plus offering for SMBs increased 13% quarter-over-quarter and 132% year-over-year.
• Q3 2026 Business Plus active clients grew 9% quarter-over-quarter and 154% year-over-year.
• 40% of active clients on Business Plus in Q3 2026 had their first Upwork spend on Business Plus, signaling strong product-market fit.
  

Unlocking the Enterprise Opportunity

• We continue to make strong progress on the migration of Enterprise customers to the Lifted platform.
• Accelerated Lifted’s go-to-market momentum by signing three new logos, expanding the pipeline, and earning recognition as a leader in Everest Group’s Contractor of Record (CoR) and Contingent Employer of Record (CEoR) Solutions PEAK Matrix® Assessment for 2026.
• Building on the success of Ascen, Lifted acquired WorkMotion who will directly employ contingent talent across more than 30 countries. The acquisition is expected to strengthen our Enterprise offering, reduce third-party EOR dependency, and deliver more consistent pricing and experiences for global clients.
  

Financial Guidance & Outlook

Upwork’s guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, and non-GAAP diluted EPS for the fourth quarter of 2026 is:

• Revenue: $169 million to $177 million
• Adjusted EBITDA: $51 million to $55 million
• Diluted weighted-average shares outstanding: 125 million to 128 million
• Non-GAAP diluted EPS: $0.30 to $0.32

Upwork’s guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, and non-GAAP diluted EPS for full year 2026 is:

• Revenue: $742 million to $750 million
• Adjusted EBITDA: $236 million to $240 million
• Diluted weighted-average shares outstanding: 131 million to 133 million
• Non-GAAP diluted EPS: $1.45 to $1.47

Chief Financial Officer Transition

The Company also announced that Erica Gessert, Upwork’s CFO since April 2023, will step down as CFO on January 1, 2027 and remain with the Company in an advisory role for several months. Peter Sanborn, currently Upwork’s Chief Business Officer, has been appointed Upwork’s next CFO.

“Erica has been an exceptional business partner and financial leader for Upwork, and the Board and I are deeply grateful for her contributions,” said Brown. “During her tenure, Erica helped Upwork deliver record revenue and profitability, expand margins, strengthen cash generation, and manage our capital allocation strategy to drive value for our shareholders. She also developed a deep and talented finance team, hence the appointment of Peter Sanborn as our next CFO.”

“Peter has played an important role in shaping Upwork’s strategy, expanding our partnerships, establishing the new Lifted business, and bringing Upwork to more customers,” Brown continued. His experience across finance, strategy, corporate development, IR, investing, and partnerships, together with his deep understanding of Upwork’s market, customers, and long-term opportunity, make him well positioned to lead our finance team. All of us at Upwork wish Erica the very best and congratulate Peter on his new role.”

“It has been professionally and personally rewarding to serve as Upwork’s CFO, and I’m proud of all that we have accomplished together,” said Gessert. “With the growth pillars we’ve put in place across Business Plus, AI, and Lifted, as well as the operational discipline we’ve put in place, Upwork has a bright future with tremendous optionality. I’m especially thankful to Hayden, the Board, and to my colleagues across Upwork for their partnership. I look forward to supporting a smooth transition to Peter and to watching Upwork achieve even greater success.”

UPWORK INC. Key Financial and Operational Metrics (In thousands, except percentages and basis points) (Unaudited)
	Three Months Ended September 30,											Nine Months Ended September 30,
		2026				2025			Change				2026				2025			Change
GSV(1)	$	914,064			$	1,016,679			(10.1	)%		$	2,866,539			$	3,007,053			(4.7	)%
Marketplace revenue(1)	$	159,321			$	174,572			(9	)%		$	496,884			$	511,525			(3	)%
Enterprise revenue(1)	$	26,278			$	27,158			(3	)%		$	75,858			$	77,850			(3	)%
Gross profit	$	141,295			$	155,887			(9	)%		$	438,509			$	458,294			(4	)%
Gross profit margin		76	%			77	%		-115 bps				77	%			78	%		-120 bps
Operating expenses	$	106,702			$	126,129			(15	)%		$	343,061			$	357,281			(4	)%
Net income	$	31,810			$	29,335			8	%		$	88,675			$	99,791			(11	)%
Adjusted EBITDA(2)	$	63,789			$	59,627			7	%		$	185,268			$	172,699			7	%
Profit margin		17	%			15	%		260 bps				15	%			17	%		-145 bps
Adjusted EBITDA margin(2)		34	%			30	%		481 bps				32	%			29	%		305 bps
Cash provided by operating activities	$	65,947			$	75,079			(12	)%		$	135,840			$	184,558			(26	)%
Free cash flow(2)	$	53,854			$	69,431			(22	)%		$	102,697			$	165,847			(38	)%

	As of September 30,
(In thousands)	2026		2025		% Change
Active clients(1)	717		794		(10	)%

⁽¹⁾ See Key Definitions in our third quarter 2026 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.

Third Quarter 2026 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 third quarter 2026 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 third quarter 2026 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 worker classification. 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 $30 billion in total transactions and services as it fulfills its purpose to create opportunity in every era of work. Learn more about the Upwork Marketplace at upwork.com and follow on LinkedIn, Facebook, Instagram, TikTok, and X; and learn more about Lifted at go-lifted.com and follow on LinkedIn.

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 fourth 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, including our MCP server and other AI-enabled offerings, 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 acquisition of WorkMotion Software GmbH by a subsidiary of the Company, or cost-saving initiatives, 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 June 30, 2026, filed with the SEC on August 10, 2026, 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 Quarterly Report on Form 10-Q for the three months ended September 30, 2026, when filed.

Upwork, Lifted, Uma^TM, 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. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) (Unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Revenue
Marketplace	$	159,321			$	174,572			$	496,884			$	511,525
Enterprise		26,278				27,158				75,858				77,850
Total revenue		185,599				201,730				572,742				589,375
Cost of revenue		44,304				45,843				134,233				131,081
Gross profit		141,295				155,887				438,509				458,294
Operating expenses
Research and development		34,889				47,494				122,090				138,489
Sales and marketing		33,832				34,985				106,183				107,407
General and administrative		36,805				41,257				108,841				104,964
Provision for transaction losses		1,176				2,393				5,947				6,421
Total operating expenses		106,702				126,129				343,061				357,281
Income from operations		34,593				29,758				95,448				101,013
Other income, net		3,951				5,917				12,909				18,112
Income before income taxes		38,544				35,675				108,357				119,125
Income tax provision		(6,734	)			(6,340	)			(19,682	)			(19,334	)
Net income	$	31,810			$	29,335			$	88,675			$	99,791
Net income per share:
Basic	$	0.25			$	0.22			$	0.71			$	0.75
Diluted	$	0.25			$	0.21			$	0.69			$	0.72
Weighted-average shares used to compute net income per share:
Basic		125,103				131,987				125,701				133,114
Diluted		128,261				139,666				131,383				140,910

UPWORK INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
	September 30, 2026				December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	227,986			$	294,356
Marketable securities		76,346				378,425
Funds held in escrow, including funds in transit		164,606				180,752
Trade and client receivables, net		79,315				76,236
Prepaid expenses and other current assets		19,651				21,064
Total current assets		567,904				950,833
Property and equipment, net		61,625				44,421
Goodwill		149,192				149,192
Intangible assets, net		28,388				37,161
Operating lease asset		11,773				5,011
Deferred tax asset		108,305				111,495
Other assets, noncurrent		3,910				1,467
Total assets	$	931,097			$	1,299,580
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	9,336			$	7,858
Escrow funds payable		164,606				180,752
Debt, current		—				359,770
Accrued expenses and other current liabilities		69,725				94,023
Deferred revenue		8,620				7,765
Total current liabilities		252,287				650,168
Operating lease liability, noncurrent		13,514				9,707
Other liabilities, noncurrent		11,271				9,390
Total liabilities		277,072				669,265
Stockholders’ equity
Common stock		13				13
Additional paid-in capital		528,633				592,599
Accumulated other comprehensive (loss) income		(245	)			754
Retained earnings		125,624				36,949
Total stockholders’ equity		654,025				630,315
Total liabilities and stockholders’ equity	$	931,097			$	1,299,580

UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	31,810			$	29,335			$	88,675			$	99,791
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for transaction losses		876				2,113				4,993				5,707
Depreciation and amortization		11,353				7,946				29,232				18,686
Amortization of debt issuance costs		409				460				1,330				1,381
Accretion of discount on purchases of marketable securities, net		(238	)			(2,195	)			(3,017	)			(5,699	)
Amortization of operating lease asset		444				179				1,280				564
Tides Foundation common stock warrant expense		188				188				563				563
Stock-based compensation expense		9,173				19,789				38,717				48,038
Deferred taxes		1,555				(2,463	)			3,190				(399	)
Loss on disposal of fixed assets		—				—				178				—
Changes in operating assets and liabilities:
Trade and client receivables		(1,352	)			(2,014	)			(2,741	)			(1,654	)
Prepaid expenses and other assets		5,827				3,378				192				40
Operating lease liability		(697	)			(208	)			(1,253	)			600
Accounts payable		2,311				4,571				1,466				(504	)
Accrued expenses and other liabilities		4,244				13,866				(27,820	)			16,777
Deferred revenue		44				134				855				667
Net cash provided by operating activities		65,947				75,079				135,840				184,558
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities		—				(106,791	)			—				(365,939	)
Proceeds from maturities of marketable securities		61,890				70,314				302,111				302,725
Proceeds from sale of marketable securities		—				64				1,986				3,601
Purchase of equity investment		(250	)			—				(250	)			—
Acquisition of business, net of cash acquired		—				(39,436	)			—				(59,846	)
Purchases of property and equipment		(4,152	)			(482	)			(7,493	)			(5,335	)
Internal-use software and platform development costs		(7,941	)			(5,166	)			(25,650	)			(13,376	)
Net cash provided by (used in) investing activities		49,547				(81,497	)			270,704				(138,170	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in escrow funds payable, net		(31,237	)			6,451				(19,553	)			23,025
Proceeds from exercises of stock options and common stock warrants		24				76				793				729
Proceeds from employee stock purchase plan		—				—				1,646				2,199
Repayment of convertible senior notes		(360,998	)			—				(360,998	)			—
Repurchase of common stock		—				(31,001	)			(109,725	)			(101,923	)
Payment of debt issuance costs		—				—				(1,223	)			—
Net cash used in financing activities		(392,211	)			(24,474	)			(489,060	)			(75,970	)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(276,717	)			(30,892	)			(82,516	)			(29,582	)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—beginning of period		673,109				506,903				478,908				505,593
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—end of period	$	396,392			$	476,011			$	396,392			$	476,011

The following table reconciles cash, cash equivalents, and restricted cash as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows as of the following (in thousands):

	September 30, 2026			December 31, 2025
Cash and cash equivalents	$	227,986		$	294,356
Restricted cash		3,800			3,800
Funds held in escrow, including funds in transit		164,606			180,752
Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows	$	396,392		$	478,908

Non-GAAP Financial Measures
To supplement our condensed 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. Free cash flow is defined 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 and certain of our other non-GAAP financial measures exclude 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 and certain of our other non-GAAP financial measures do 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 utility of free cash flow as a measure of our liquidity is limited as it does not represent the total increase or decrease in our cash balance for a given period. Moreover, 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 fourth 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 September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Net income	$	31,810			$	29,335			$	88,675			$	99,791
Add back (deduct):
Stock-based compensation expense(1)		9,173				19,789				38,717				48,038
Depreciation and amortization(1)		11,353				7,946				29,232				18,686
Other income, net(1)		(3,951	)			(5,917	)			(12,909	)			(18,112	)
Income tax provision		6,734				6,340				19,682				19,334
Other(1)(2)(3)(4)		8,670				2,134				21,871				4,962
Adjusted EBITDA	$	63,789			$	59,627			$	185,268			$	172,699
Profit margin		17	%			15	%			15	%			17	%
Adjusted EBITDA margin		34	%			30	%			32	%			29	%
Cost of revenue, GAAP	$	44,304			$	45,843			$	134,233			$	131,081
Stock-based compensation expense(1)		(74	)			(193	)			(324	)			(580	)
Other(1)		(1	)			—				(271	)			—
Cost of revenue, Non-GAAP		44,229				45,650				133,638				130,501
As a percentage of total revenue, GAAP		24	%			23	%			23	%			22	%
As a percentage of total revenue, Non-GAAP		24	%			23	%			23	%			22	%
Gross profit, GAAP	$	141,295			$	155,887			$	438,509			$	458,294
Stock-based compensation expense(1)		74				193				324				580
Other(1)		1				—				271				—
Gross profit, Non-GAAP		141,370				156,080				439,104				458,874
Gross margin, GAAP		76	%			77	%			77	%			78	%
Gross margin, Non-GAAP		76	%			77	%			77	%			78	%
Research and development, GAAP	$	34,889			$	47,494			$	122,090			$	138,489
Stock-based compensation expense(1)		(2,598	)			(6,101	)			(10,269	)			(17,528	)
Intangible amortization		(2,930	)			(3,067	)			(8,772	)			(5,697	)
Other(1)		(2,442	)			—				(8,909	)			—
Research and development, Non-GAAP		26,919				38,326				94,140				115,264
As a percentage of total revenue, GAAP		19	%			24	%			21	%			23	%
As a percentage of total revenue, Non-GAAP		15	%			19	%			16	%			20	%
Sales and marketing, GAAP	$	33,832			$	34,985			$	106,183			$	107,407
Stock-based compensation expense(1)		(959	)			(1,615	)			(3,700	)			(4,790	)
Intangible amortization		—				(403	)			—				(1,236	)
Other(1)		(302	)			—				(3,439	)			—
Sales and marketing, Non-GAAP		32,571				32,967				99,044				101,381
As a percentage of total revenue, GAAP		18	%			17	%			19	%			18	%
As a percentage of total revenue, Non-GAAP		18	%			16	%			17	%			17	%
General and administrative, GAAP	$	36,805			$	41,257			$	108,841			$	104,964
Stock-based compensation expense(1)		(5,542	)			(11,880	)			(24,424	)			(25,140	)
Other(1)(2)(3)(4)		(7,567	)			(2,134	)			(10,893	)			(4,962	)
General and administrative, Non-GAAP		23,696				27,243				73,524				74,862
As a percentage of total revenue, GAAP		20	%			20	%			19	%			18	%
As a percentage of total revenue, Non-GAAP		13	%			14	%			13	%			13	%
Total operating expenses, GAAP	$	106,702			$	126,129			$	343,061			$	357,281
Stock-based compensation expense(1)		(9,099	)			(19,596	)			(38,393	)			(47,458	)
Intangible amortization		(2,930	)			(3,470	)			(8,772	)			(6,933	)
Other(1)(2)(3)(4)		(10,311	)			(2,134	)			(23,241	)			(4,962	)
Total operating expenses, Non-GAAP		84,362				100,929				272,655				297,928
As a percentage of total revenue, GAAP		57	%			63	%			60	%			61	%
As a percentage of total revenue, Non-GAAP		45	%			50	%			48	%			51	%
Income from operations, GAAP	$	34,593			$	29,758			$	95,448			$	101,013
Stock-based compensation expense(1)		9,173				19,789				38,717				48,038
Intangible amortization		2,930				3,470				8,772				6,933
Other(1)(2)(3)(4)		10,312				2,134				23,690				4,962
Income from operations, Non-GAAP		57,008				55,151				166,627				160,946
Net income, GAAP	$	31,810			$	29,335			$	88,675			$	99,791
Stock-based compensation expense(1)		9,173				19,789				38,717				48,038
Intangible amortization		2,930				3,470				8,772				6,933
Tax effect of non-GAAP adjustments		(2,959	)			(4,897	)			(8,864	)			(13,613	)
Other(1)(2)(3)(4)		10,312				2,134				23,690				4,962
Net income, Non-GAAP		51,266				49,831				150,990				146,111
Weighted-average shares outstanding used in computing earnings per share, GAAP
Basic (in millions)		125.1				132.0				125.7				133.1
Diluted (in millions)		128.3				139.7				131.4				140.9
Basic earnings per share, GAAP	$	0.25			$	0.22			$	0.71			$	0.75
Diluted earnings per share, GAAP	$	0.25			$	0.21			$	0.69			$	0.72
Weighted-average shares outstanding used in computing earnings per share, Non-GAAP
Basic (in millions)		125.1				132.0				125.7				133.1
Diluted (in millions)		128.3				139.7				131.4				140.9
Basic earnings per share, Non-GAAP	$	0.41			$	0.38			$	1.20			$	1.10
Diluted earnings per share, Non-GAAP	$	0.40			$	0.36			$	1.16			$	1.05

⁽¹⁾ For the three and nine months ended September 30, 2026, we incurred $4.3 million and $18.1 million in costs related to the restructuring announced in May 2026, respectively. Of these amounts, $2.7 million and $15.6 million, respectively, are included in Other, while the remaining amounts are allocated among “Stock-based compensation expense”, “Depreciation and amortization”, and “Other income, net”.

⁽²⁾ For each of the three months ended September 30, 2026 and 2025, we incurred $0.2 million of expense related to the warrant to purchase 500,000 shares of our common stock at an exercise price of $0.01 per share issued to the Tides Foundation in 2018, and for each of the nine months ended September 30, 2026 and 2025, we incurred $0.6 million of such expense.

⁽³⁾ For each of the three and nine months ended September 30, 2026, we incurred transaction-related costs of $5.7 million in connection with the WorkMotion Software GmbH acquisition. These costs primarily consisted of legal, accounting, and other professional fees, and were recorded in general and administrative expenses in the condensed consolidated statements of operations.

⁽⁴⁾ For the three and nine months ended September 30, 2025, we incurred acquisition-related costs of $1.9 million and $4.4 million, respectively, in connection with our business combinations. These costs primarily consisted of legal, accounting, and other professional fees, and were recorded in general and administrative expenses in the condensed consolidated statements of operations.

UPWORK INC. RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands) (Unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
			2026				2025				2026				2025
Cash provided by operating activities		$	65,947			$	75,079			$	135,840			$	184,558
Less: purchases of property, plant & equipment and cash outflows from internally developed software			(12,093	)			(5,648	)			(33,143	)			(18,711	)
Free cash flow		$	53,854			$	69,431			$	102,697			$	165,847

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Upwork’s third-quarter 2026 earnings?

Upwork earned $31.8 million in GAAP net income, up 8% year over year, on revenue of $185.6 million. Diluted earnings per share increased to $0.25 from $0.21 in the third quarter of 2025.

What is Upwork’s full-year 2026 financial guidance?

Upwork forecasts revenue of $742 million to $750 million, adjusted EBITDA of $236 million to $240 million, and non-GAAP diluted earnings per share of $1.45 to $1.47. Its guidance assumes diluted weighted-average shares outstanding of 131 million to 133 million.

What is Upwork Now, and how can clients use it?

Upwork Now is a public beta connecting clients with freelancers who are online and ready to begin work immediately. It is also available through Upwork’s Model Context Protocol server, allowing clients and their AI agents to bring freelancers into their AI workflows.

Will Erica Gessert remain at Upwork after stepping down as CFO?

Erica Gessert will remain with Upwork in an advisory role for several months after stepping down as CFO on January 1, 2027. Peter Sanborn, currently Chief Business Officer, has been appointed the next CFO.