Exhibit 99.1
Upwork Reports Second Quarter 2026 Financial Results
GSV per Active Client Reaches Record $5,230 Marking Eighth Consecutive Quarter of Sequential Growth
Second-quarter revenue of $191.7 million and GAAP net income of $25.4 million
Second-quarter adjusted EBITDA of $64.1 million or 33% adjusted EBITDA margin
PALO ALTO, Calif. – August 10, 2026 – Upwork Inc. (Nasdaq: UPWK), the world’s human and AI-powered work marketplace, today announced its financial results for the second quarter of 2026.
"In the second quarter, Upwork demonstrated solid execution against our strategic plan in a challenging operating environment," said Hayden Brown, president and CEO of Upwork Inc. “While lower-complexity work continues to shift toward automation, we are increasingly seeing what is emerging in its place: growing demand for high-value AI talent, more complex projects, and new categories of work across SMB and Enterprise. We are on track with our enterprise strategy, staying disciplined in how we execute, and continuing to build the AI capabilities that will make Upwork essential infrastructure as work becomes increasingly human-and-agent driven.”
Second Quarter 2026 Financial Highlights
•GSV(1) was $966.4 million, decreased 4% year-over-year
•Revenue decreased 2% year-over-year to $191.7 million
•Active clients(1) of 763,000
•GSV per active client(1) of $5,230 increased 5% year-over-year
•GAAP Net income was $25.4 million, a decrease of 22% year-over-year
•GAAP Diluted earnings per share was $0.20, compared to diluted earnings per share of $0.24 in the second quarter of 2025
•Adjusted EBITDA(2) was $64.1 million, up 12% year-over-year
•Cash provided by operating activities was $46.9 million, compared to cash provided by operating activities of $72.5 million in the second quarter of 2025
•Free cash flow(2) was $35.9 million, compared to free cash flow of $65.6 million in the second quarter of 2025
•Share repurchase program returned $109.7 million to shareholders during the six months ended June 30, 2026 with the repurchase of 8.3 million shares. As of June 30, 2026, the Company had $254.3 million in remaining authorization in its repurchase program
Second Quarter 2026 and Recent Operational Highlights
Building the World’s Human and AI-Powered Work Marketplace
•Following the April launch of Upwork’s app for ChatGPT, launched the Upwork Claude Connector, a new app inside Anthropic’s Claude that embeds Upwork’s marketplace at the moment businesses use AI to plan and scope work, connecting them with the experts they need as a project takes shape.
•Launched Upwork’s Model Context Protocol (MCP) server, allowing clients and freelancers to direct AI agents to find talent, source opportunities, and help manage work on Upwork's marketplace from within the tools and workflows they already use.
Growing AI Work on the Marketplace
•GSV from AI-related work increased more than 22% year-over-year in Q2 2026.
•GSV from AI Strategy & Consulting, an AI-related work sub-category, grew over 50% year-over-year in Q2 2026.
Winning Bigger with SMB
•Q2 2026 GSV from Upwork Business Plus offering for SMB increased 24% quarter-over-quarter and 174% year-over-year.
•Q2 2026 Business Plus active clients grew 16% quarter-over-quarter and 219% year-over-year.
•38% of active clients on Business Plus in Q2 2026 had their first Upwork spend on Business Plus.
Unlocking the Enterprise Opportunity
•Lifted migrated its first wave of enterprise customers onto its new platform at the end of June and expanded the go-to-market team, including hiring a new head of sales.
•The Lifted value proposition is resonating: Q2 2026 GSV from our EOR offering within Enterprise Solutions, that we bolstered in 2025 with Lifted’s acquisition of Ascen, increased 29% year-over-year.
Financial Guidance & Outlook
Upwork’s guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, and non-GAAP diluted EPS for the third quarter of 2026 is:
•Revenue: $176 million to $184 million
•Adjusted EBITDA: $50 million to $54 million
•Diluted weighted-average shares outstanding: 130 million to 133 million
•Non-GAAP diluted EPS: $0.31 to $0.33
Upwork’s guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, and non-GAAP diluted EPS for full year 2026 is:
•Revenue: $730 million to $750 million
•Adjusted EBITDA: $225 million to $235 million
•Diluted weighted-average shares outstanding: 132 million to 135 million
•Non-GAAP diluted EPS: $1.38 to $1.43
UPWORK INC.
Key Financial and Operational Metrics
(In thousands, except percentages and basis points)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | | | Six Months Ended June 30, | | |
| 2026 | | 2025 | | Change | | 2026 | | 2025 | | Change |
GSV(1) | $ | 966,439 | | | $ | 1,002,650 | | | (3.6) | % | | $ | 1,952,461 | | | $ | 1,990,363 | | | (1.9) | % |
Marketplace revenue(1) | $ | 166,858 | | | $ | 170,660 | | | (2) | % | | $ | 337,563 | | | $ | 336,953 | | | — | % |
Enterprise revenue(1) | $ | 24,802 | | | $ | 24,279 | | | 2 | % | | $ | 49,580 | | | $ | 50,692 | | | (2) | % |
| Gross profit | $ | 146,372 | | | $ | 151,507 | | | (3) | % | | $ | 297,214 | | | $ | 302,407 | | | (2) | % |
| Gross profit margin | 76 | % | | 78 | % | | -135 bps | | 77 | % | | 78 | % | | -124 bps |
| Operating expenses | $ | 118,235 | | | $ | 118,942 | | | (1) | % | | $ | 236,359 | | | $ | 231,152 | | | 2 | % |
| Net income | $ | 25,404 | | | $ | 32,726 | | | (22) | % | | $ | 56,865 | | | $ | 70,456 | | | (19) | % |
Adjusted EBITDA(2) | $ | 64,053 | | | $ | 57,061 | | | 12 | % | | $ | 121,479 | | | $ | 113,072 | | | 7 | % |
Profit margin | 13 | % | | 17 | % | | -353 bps | | 15 | % | | 18 | % | | -349 bps |
Adjusted EBITDA margin(2) | 33 | % | | 29 | % | | 415 bps | | 31 | % | | 29 | % | | 221 bps |
| Cash provided by operating activities | $ | 46,874 | | | $ | 72,514 | | | (35) | % | | $ | 69,893 | | | $ | 109,479 | | | (36) | % |
Free cash flow(2) | $ | 35,938 | | | $ | 65,626 | | | (45) | % | | $ | 48,843 | | | $ | 96,416 | | | (49) | % |
| | | | | | | | | | | | | | | | | |
| As of June 30, | | |
| (In thousands) | 2026 | | 2025 | | % Change |
Active clients(1) | 763 | | | 796 | | | (4) | % |
(1) See Key Definitions in our second 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.
Second 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 second 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 second 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 third 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 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 March 31, 2026, filed with the SEC on May 7, 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 June 30, 2026, when filed.
Upwork, Lifted, UmaTM, 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
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Revenue | | | | | | | |
Marketplace | $ | 166,858 | | | $ | 170,660 | | | $ | 337,563 | | | $ | 336,953 | |
Enterprise | 24,802 | | | 24,279 | | | 49,580 | | | 50,692 | |
| Total revenue | 191,660 | | | 194,939 | | | 387,143 | | | 387,645 | |
| Cost of revenue | 45,288 | | | 43,432 | | | 89,929 | | | 85,238 | |
| Gross profit | 146,372 | | | 151,507 | | | 297,214 | | | 302,407 | |
| Operating expenses | | | | | | | |
| Research and development | 43,894 | | | 44,843 | | | 87,201 | | | 90,995 | |
| Sales and marketing | 34,914 | | | 36,671 | | | 72,351 | | | 72,422 | |
| General and administrative | 36,878 | | | 35,659 | | | 72,036 | | | 63,707 | |
| Provision for transaction losses | 2,549 | | | 1,769 | | | 4,771 | | | 4,028 | |
| Total operating expenses | 118,235 | | | 118,942 | | | 236,359 | | | 231,152 | |
| Income from operations | 28,137 | | | 32,565 | | | 60,855 | | | 71,255 | |
| Other income, net | 3,966 | | | 5,878 | | | 8,958 | | | 12,195 | |
| Income before income taxes | 32,103 | | | 38,443 | | | 69,813 | | | 83,450 | |
| Income tax provision | (6,699) | | | (5,717) | | | (12,948) | | | (12,994) | |
| Net income | $ | 25,404 | | | $ | 32,726 | | | $ | 56,865 | | | $ | 70,456 | |
| | | | | | | |
| Net income per share: | | | | | | | |
| Basic | $ | 0.21 | | | $ | 0.25 | | | $ | 0.45 | | | $ | 0.53 | |
| Diluted | $ | 0.20 | | | $ | 0.24 | | | $ | 0.44 | | | $ | 0.50 | |
| | | | | | | |
| Weighted-average shares used to compute net income per share: | | | | | | | |
| Basic | 123,918 | | | 132,183 | | | 126,005 | | | 133,687 | |
| Diluted | 129,958 | | | 140,198 | | | 132,784 | | | 141,866 | |
UPWORK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| | | | | | | | | | | |
| June 30, 2026 | | December 31, 2025 |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 476,040 | | | $ | 294,356 | |
| Marketable securities | 138,204 | | | 378,425 | |
| Funds held in escrow, including funds in transit | 193,269 | | | 180,752 | |
| Trade and client receivables, net | 76,459 | | | 76,236 | |
| Prepaid expenses and other current assets | 25,018 | | | 21,064 | |
| Total current assets | 908,990 | | | 950,833 | |
| Property and equipment, net | 58,605 | | | 44,421 | |
| Goodwill | 149,192 | | | 149,192 | |
| Intangible assets, net | 31,318 | | | 37,161 | |
| Operating lease asset | 12,217 | | | 5,011 | |
| Deferred tax asset | 109,860 | | | 111,495 | |
| Other assets, noncurrent | 4,222 | | | 1,467 | |
| Total assets | $ | 1,274,404 | | | $ | 1,299,580 | |
| | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| Current liabilities | | | |
| Accounts payable | $ | 7,030 | | | $ | 7,858 | |
| Escrow funds payable | 193,269 | | | 180,752 | |
| Debt, current | 360,691 | | | 359,770 | |
| Accrued expenses and other current liabilities | 68,683 | | | 94,023 | |
| Deferred revenue | 8,576 | | | 7,765 | |
| Total current liabilities | 638,249 | | | 650,168 | |
| | | |
| Operating lease liability, noncurrent | 14,367 | | | 9,707 | |
| Other liabilities, noncurrent | 10,522 | | | 9,390 | |
| Total liabilities | 663,138 | | | 669,265 | |
| | | |
| Stockholders’ equity | | | |
| Common stock | 12 | | | 13 | |
| | | |
| Additional paid-in capital | 517,479 | | | 592,599 | |
| Accumulated and other comprehensive (loss) income | (39) | | | 754 | |
| Retained earnings | 93,814 | | | 36,949 | |
| Total stockholders’ equity | 611,266 | | | 630,315 | |
| Total liabilities and stockholders’ equity | $ | 1,274,404 | | | $ | 1,299,580 | |
UPWORK INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | |
| Net income | $ | 25,404 | | | $ | 32,726 | | | $ | 56,865 | | | $ | 70,456 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
| Provision for transaction losses | 2,171 | | | 1,528 | | | 4,117 | | | 3,594 | |
| Depreciation and amortization | 8,780 | | | 5,879 | | | 17,879 | | | 10,740 | |
| Amortization of debt issuance costs | 461 | | | 461 | | | 921 | | | 921 | |
| Accretion of discount on purchases of marketable securities, net | (929) | | | (1,561) | | | (2,779) | | | (3,504) | |
| Amortization of operating lease asset | 439 | | | 183 | | | 836 | | | 385 | |
| Tides Foundation common stock warrant expense | 187 | | | 187 | | | 375 | | | 375 | |
| Stock-based compensation expense | 14,123 | | | 15,977 | | | 29,544 | | | 28,249 | |
| Deferred taxes | 1,542 | | | 2,064 | | | 1,635 | | | 2,064 | |
| Loss on disposal of fixed assets | 178 | | | — | | | 178 | | | — | |
| | | | | | | |
| Changes in operating assets and liabilities: | | | | | | | |
| Trade and client receivables | (605) | | | 3,895 | | | (1,389) | | | 360 | |
| Prepaid expenses and other assets | (2,155) | | | (40) | | | (5,635) | | | (3,338) | |
| Operating lease liability | (531) | | | (22) | | | (556) | | | 808 | |
| Accounts payable | (3,969) | | | (3,088) | | | (845) | | | (5,075) | |
| Accrued expenses and other liabilities | 1,402 | | | 14,019 | | | (32,064) | | | 2,911 | |
| Deferred revenue | 376 | | | 306 | | | 811 | | | 533 | |
| Net cash provided by operating activities | 46,874 | | | 72,514 | | | 69,893 | | | 109,479 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | |
| Purchases of marketable securities | — | | | (208,440) | | | — | | | (259,148) | |
| Proceeds from maturities of marketable securities | 111,895 | | | 181,031 | | | 240,221 | | | 232,411 | |
| Proceeds from sale of marketable securities | 1,986 | | | 3,257 | | | 1,986 | | | 3,537 | |
| | | | | | | |
| Acquisition of business, net of cash acquired | — | | | (20,410) | | | — | | | (20,410) | |
| Purchases of property and equipment | (1,618) | | | (2,381) | | | (3,341) | | | (4,853) | |
| Internal-use software and platform development costs | (9,318) | | | (4,507) | | | (17,709) | | | (8,210) | |
| Net cash provided by (used in) investing activities | 102,945 | | | (51,450) | | | 221,157 | | | (56,673) | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | |
| Change in escrow funds payable, net | (11,870) | | | (2,684) | | | 11,684 | | | 16,574 | |
| Proceeds from exercises of stock options and common stock warrants | 686 | | | 1 | | | 769 | | | 653 | |
| Proceeds from employee stock purchase plan | 1,646 | | | 2,199 | | | 1,646 | | | 2,199 | |
| | | | | | | |
| Repurchase of common stock | (1,834) | | | (37,868) | | | (109,725) | | | (70,922) | |
| | | | | | | |
| | | | | | | |
| Payment of debt issuance costs | (1,223) | | | — | | | (1,223) | | | — | |
| Net cash used in financing activities | (12,595) | | | (38,352) | | | (96,849) | | | (51,496) | |
| NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 137,224 | | | (17,288) | | | 194,201 | | | 1,310 | |
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—beginning of period | 535,885 | | | 524,191 | | | 478,908 | | | 505,593 | |
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—end of period | $ | 673,109 | | | $ | 506,903 | | | $ | 673,109 | | | $ | 506,903 | |
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):
| | | | | | | | | | | |
| June 30, 2026 | | December 31, 2025 |
| Cash and cash equivalents | $ | 476,040 | | | $ | 294,356 | |
| Restricted cash | 3,800 | | | 3,800 | |
| Funds held in escrow, including funds in transit | 193,269 | | | 180,752 | |
| Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows | $ | 673,109 | | | $ | 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 third 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 June 30, | | Six Months Ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Net income | $ | 25,404 | | | $ | 32,726 | | | $ | 56,865 | | | $ | 70,456 | |
| Add back (deduct): | | | | | | | |
Stock-based compensation expense (1) | 14,123 | | | 15,977 | | | 29,544 | | | 28,249 | |
| Depreciation and amortization | 8,780 | | | 5,879 | | | 17,879 | | | 10,740 | |
Other income, net (1) | (3,966) | | | (5,878) | | | (8,958) | | | (12,195) | |
| Income tax provision | 6,699 | | | 5,717 | | | 12,948 | | | 12,994 | |
Other (1)(2)(3) | 13,013 | | | 2,640 | | | 13,201 | | | 2,828 | |
| Adjusted EBITDA | $ | 64,053 | | | $ | 57,061 | | | $ | 121,479 | | | $ | 113,072 | |
| Profit margin | 13 | % | | 17 | % | | 15 | % | | 18 | % |
| Adjusted EBITDA margin | 33 | % | | 29 | % | | 31 | % | | 29 | % |
| | | | | | | |
| Cost of revenue, GAAP | $ | 45,288 | | | $ | 43,432 | | | $ | 89,929 | | | $ | 85,238 | |
Stock-based compensation expense (1) | (88) | | | (200) | | | (250) | | | (387) | |
Other (1) | (271) | | | — | | | (271) | | | — | |
| Cost of revenue, Non-GAAP | 44,929 | | | 43,232 | | | 89,408 | | | 84,851 | |
| As a percentage of total revenue, GAAP | 24 | % | | 22 | % | | 23 | % | | 22 | % |
| As a percentage of total revenue, Non-GAAP | 23 | % | | 22 | % | | 23 | % | | 22 | % |
| | | | | | | |
| Gross profit, GAAP | $ | 146,372 | | | $ | 151,507 | | | $ | 297,214 | | | $ | 302,407 | |
Stock-based compensation expense (1) | 88 | | | 200 | | | 250 | | | 387 | |
Other (1) | 271 | | | — | | | 271 | | | — | |
| Gross profit, Non-GAAP | 146,731 | | | 151,707 | | | 297,735 | | | 302,794 | |
| Gross margin, GAAP | 76 | % | | 78 | % | | 77 | % | | 78 | % |
| Gross margin, Non-GAAP | 77 | % | | 78 | % | | 77 | % | | 78 | % |
| | | | | | | |
| Research and development, GAAP | $ | 43,894 | | | $ | 44,843 | | | $ | 87,201 | | | $ | 90,995 | |
Stock-based compensation expense (1) | (2,866) | | | (5,615) | | | (7,671) | | | (11,427) | |
| Intangible amortization | (2,912) | | | (1,315) | | | (5,842) | | | (2,630) | |
Other (1) | (6,467) | | | — | | | (6,467) | | | — | |
| Research and development, Non-GAAP | 31,649 | | | 37,913 | | | 67,221 | | | 76,938 | |
| As a percentage of total revenue, GAAP | 23 | % | | 23 | % | | 23 | % | | 23 | % |
| As a percentage of total revenue, Non-GAAP | 17 | % | | 19 | % | | 17 | % | | 20 | % |
| | | | | | | |
| Sales and marketing, GAAP | $ | 34,914 | | | $ | 36,671 | | | $ | 72,351 | | | $ | 72,422 | |
Stock-based compensation expense (1) | (1,321) | | | (1,674) | | | (2,741) | | | (3,175) | |
Intangible amortization | — | | | (333) | | | — | | | (833) | |
Other (1) | (3,137) | | | — | | | (3,137) | | | — | |
| Sales and marketing, Non-GAAP | 30,456 | | | 34,664 | | | 66,473 | | | 68,414 | |
| As a percentage of total revenue, GAAP | 18 | % | | 19 | % | | 19 | % | | 19 | % |
| As a percentage of total revenue, Non-GAAP | 16 | % | | 18 | % | | 17 | % | | 18 | % |
| | | | | | | |
| General and administrative, GAAP | $ | 36,878 | | | $ | 35,659 | | | $ | 72,036 | | | $ | 63,707 | |
Stock-based compensation expense (1) | (9,848) | | | (8,488) | | | (18,882) | | | (13,260) | |
Other (1)(2)(3) | (3,138) | | | (2,640) | | | (3,326) | | | (2,828) | |
| General and administrative, Non-GAAP | 23,892 | | | 24,531 | | | 49,828 | | | 47,619 | |
| As a percentage of total revenue, GAAP | 19 | % | | 18 | % | | 19 | % | | 16 | % |
| As a percentage of total revenue, Non-GAAP | 12 | % | | 13 | % | | 13 | % | | 12 | % |
| | | | | | | |
| Total operating expenses, GAAP | $ | 118,235 | | | $ | 118,942 | | | $ | 236,359 | | | $ | 231,152 | |
Stock-based compensation expense (1) | (14,035) | | | (15,777) | | | (29,294) | | | (27,862) | |
| Intangible amortization | (2,912) | | | (1,648) | | | (5,842) | | | (3,463) | |
Other (1)(2)(3) | (12,742) | | | (2,640) | | | (12,930) | | | (2,828) | |
| Total operating expenses, Non-GAAP | 88,546 | | | 98,877 | | | 188,293 | | | 196,999 | |
| As a percentage of total revenue, GAAP | 62 | % | | 61 | % | | 61 | % | | 60 | % |
| As a percentage of total revenue, Non-GAAP | 46 | % | | 51 | % | | 49 | % | | 51 | % |
| | | | | | | |
| Income from operations, GAAP | $ | 28,137 | | | $ | 32,565 | | | $ | 60,855 | | | $ | 71,255 | |
Stock-based compensation expense (1) | 14,123 | | | 15,977 | | | 29,544 | | | 28,249 | |
| Intangible amortization | 2,912 | | | 1,648 | | | 5,842 | | | 3,463 | |
Other (1)(2)(3) | 13,191 | | | 2,640 | | | 13,379 | | | 2,828 | |
| Income from operations, Non-GAAP | 58,363 | | | 52,830 | | | 109,620 | | | 105,795 | |
| | | | | | | |
| Net income, GAAP | $ | 25,404 | | | $ | 32,726 | | | $ | 56,865 | | | $ | 70,456 | |
Stock-based compensation expense (1) | 14,123 | | | 15,977 | | | 29,544 | | | 28,249 | |
| | | | | | | |
| Intangible amortization | 2,912 | | | 1,648 | | | 5,842 | | | 3,463 | |
| | | | | | | |
| Tax effect of non-GAAP adjustments | (3,211) | | | (5,085) | | | (5,905) | | | (8,716) | |
Other (1)(2)(3) | 13,191 | | | 2,640 | | | 13,379 | | | 2,828 | |
| Net income, Non-GAAP | 52,419 | | | 47,906 | | | 99,725 | | | 96,280 | |
| | | | | | | |
| Weighted-average shares outstanding used in computing earnings per share, GAAP |
| Basic (in millions) | 123.9 | | | 132.2 | | | 126.0 | | | 133.7 | |
| Diluted (in millions) | 130.0 | | | 140.2 | | | 132.8 | | | 141.9 | |
| Basic earnings per share, GAAP | $ | 0.21 | | | $ | 0.25 | | | $ | 0.45 | | | $ | 0.53 | |
| Diluted earnings per share, GAAP | $ | 0.20 | | | $ | 0.24 | | | $ | 0.44 | | | $ | 0.50 | |
| | | | | | | |
| Weighted-average shares outstanding used in computing earnings per share, Non-GAAP |
| Basic (in millions) | 123.9 | | | 132.2 | | | 126.0 | | | 133.7 | |
| Diluted (in millions) | 130.0 | | | 140.2 | | | 132.8 | | | 141.9 | |
| Basic earnings per share, Non-GAAP | $ | 0.42 | | | $ | 0.36 | | | $ | 0.79 | | | $ | 0.72 | |
| Diluted earnings per share, Non-GAAP | $ | 0.41 | | | $ | 0.35 | | | $ | 0.76 | | | $ | 0.69 | |
(1) During the three and six months ended June 30, 2026, we incurred $13.8 million in costs related to the execution of the restructuring announced in May 2026. Of this amount, $12.8 million is included in Other, while the remaining amount is allocated between stock-based compensation and Other income, net.
(2) For each of the three months ended June 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 six months ended June 30, 2026 and 2025, we incurred $0.4 million of such expense.
(3) During the three and six months ended June 30,2025, we incurred acquisition-related costs of $2.5 million in connection with our business combinations. These costs primarily consist of legal, accounting, and other professional fees, and are 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 June 30, | | Six Months Ended June 30, |
| | 2026 | | 2025 | | 2026 | | 2025 |
| Cash provided by operating activities | | $ | 46,874 | | | $ | 72,514 | | | $ | 69,893 | | | $ | 109,479 | |
| Less: purchases of property, plant & equipment and cash outflows from internally developed software | | (10,936) | | | (6,888) | | | (21,050) | | | (13,063) | |
| Free cash flow | | $ | 35,938 | | | $ | 65,626 | | | $ | 48,843 | | | $ | 96,416 | |
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