Generates GAAP net income of $29.3 million and record adjusted EBITDA of $59.6 million, resulting in 15% profit margin and all-time high 30% adjusted EBITDA margin
Raises FY2025 revenue and adjusted EBITDA guidance
PALO ALTO, Calif., Nov. 03, 2025 (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 2025.
"The third quarter marked the start of the next chapter for Upwork. As we build the world's human and AI-powered work marketplace, we're driving phenomenal user productivity and engagement, resulting in a return to positive GSV growth," said Hayden Brown, president and CEO, Upwork Inc. "We are executing with speed and precision across our growth levers of AI, SMB, and Enterprise, and are now on the path to sustained, multi-year growth."
"Our third quarter was exceptional, with record performance. We crossed the $200 million revenue milestone, with net income of $29.3 million and 15% profit margin, and our adjusted EBITDA hit an all-time high of $59.6 million, at a record 30% adjusted EBITDA margin," said Erica Gessert, CFO, Upwork Inc. "Our strong and growing free cash flow yield also enabled us to announce another $100 million share repurchase authorization in early September. On the back of such positive momentum, we have once again raised our full-year guidance for both revenue and adjusted EBITDA. We have proven our ability to meaningfully expand margins while accelerating topline growth, reinforcing our confidence in achieving our long-term 35% adjusted EBITDA margin target."
Third Quarter 2025 Financial Highlights
GSV(1) grew 2% year-over-year
Revenue grew 4% year-over-year to $201.7 million
Active clients(1) of 794,000
GSV per active client(1) of $5,036 increased 5% year-over-year
Net income was $29.3 million, up 6% year-over-year
Diluted earnings per share was $0.21, compared to diluted earnings per share of $0.20 in the third quarter of 2024
Adjusted EBITDA(2) was $59.6 million, up 38% year-over-year
Cash provided by operating activities(3) was $75.1 million, compared to cash provided by operating activities of $61.0 million in the third quarter of 2024
Free cash flow(2)(3) was $69.4 million, compared to free cash flow of $56.8 million in the third quarter of 2024
Third Quarter Operational Highlights
Building the World's Human and AI-Powered Work Marketplace
Uma™, Upwork's Mindful AI, continued to evolve into an always-on work agent, further increasing customer engagement and productivity.
Scaled Uma's capabilities across the customer journey with additional premium features like AI interviews, recruiting, and collaborative hiring capabilities for teams.
Uma Proposal Writer provided a 15% uplift in Uma-generated proposals.
Launched agentic talent sourcing solution for Business Plus clients, reducing the median time to receive a high-quality talent shortlist for their jobs by more than 75%.
Growing AI Work on the Marketplace
GSV from AI-related work accelerated to 53% year-over-year growth in Q3 2025, compared to 30% year-over-year growth in Q2 2025.
GSV from Generative AI work grew 65% year-over-year in Q3 2025.
GSV from Prompt Engineering grew 71% year-over-year and increased 23% quarter-over-quarter in Q3 2025.
The number of clients engaging in AI-related projects grew 45% year-over-year in Q3 2025.
Winning Bigger with SMBs
GSV from Upwork Business Plus offering for SMBs increased 33% quarter-over-quarter.
Business Plus active clients increased 36% quarter-over-quarter, with 36% of active clients on Business Plus in Q3 being net-new customers to Upwork.
Generating New Value through Ads & Monetization Strategies
Revenue from Ads & Monetization grew 19% year-over-year in Q3 2025.
Connects revenue increased 18% year-over-year in Q3 2025.
Freelancer Plus subscription revenue grew 24% year-over-year in Q3 2025.
Unlocking the Enterprise Opportunity
Launched Lifted, Upwork's new enterprise-focused subsidiary, creating a unique offering of full-stack, end-to-end contingent work solutions for large enterprises following Lifted's acquisitions of Bubty and Ascen.
Rapidly integrating acquired companies and products, in anticipation of onboarding first customers onto the new Lifted platform by early 2026.
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 2025 is:
Revenue: $193 million to $198 million
Adjusted EBITDA: $49 million to $52 million
Diluted weighted-average shares outstanding: 138 million to 140 million
Non-GAAP diluted EPS: $0.31 to $0.33
Upwork's guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, non-GAAP diluted EPS, and stock-based compensation expense for full year 2025 is:
Revenue: $782 million to $787 million
Adjusted EBITDA: $222 million to $225 million
Diluted weighted-average shares outstanding: 140 million to 142 million
Non-GAAP diluted EPS: $1.35 to $1.37
Stock-based compensation expense: Approximately $65 million
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,
2025
2024
Change
2025
2024
Change
GSV(1)
$
1,017,680
$
998,268
1.9
%
$
3,008,054
$
3,015,331
(0.2)%
Marketplace revenue(1)
$
174,572
$
167,337
4
%
$
511,525
$
498,453
3
%
Enterprise revenue(1)
$
27,158
$
26,439
3
%
$
77,850
$
79,389
(2
)%
Gross profit
$
155,887
$
150,368
4
%
$
458,294
$
446,389
3
%
Gross profit margin
77
%
78
%
-32 bps
78
%
77
%
51 bps
Operating expenses
$
126,129
$
129,575
(3
)%
$
357,281
$
394,766
(9
)%
Net income
$
29,335
$
27,758
6
%
$
99,791
$
68,420
46
%
Adjusted EBITDA(2)
$
59,627
$
43,227
38
%
$
172,699
$
117,387
47
%
Profit margin
15
%
14
%
22 bps
17
%
12
%
509 bps
Adjusted EBITDA margin(2)
30
%
22
%
725 bps
29
%
20
%
899 bps
Cash provided by operating activities(3)
$
75,079
$
60,964
23
%
$
184,558
$
114,981
61
%
Free cash flow(2)(3)
$
69,431
$
56,797
22
%
$
165,847
$
104,402
59
%
As of September 30,
(In thousands)
2025
2024
% Change
Active clients(1)
794
855
(7
)%
(1) See Key Definitions in our third quarter 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.
(3) We elected to change the presentation of certain cash flows on our Consolidated Statement of Cash Flow, reclassifying the change in Trade and client receivables, related to amounts received on behalf of talent to fund their escrow account, from operating activities to financing activities. Prior period comparative amounts have been recast to conform to the current period presentation.
Third Quarter 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 third quarter 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 third quarter 2025 earnings presentation.
Disclosure InformationWe 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 UpworkUpwork 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 $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
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 2025, information or predictions concerning the future of our business or strategy, 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, the Company's enterprise-focused subsidiary, and its acquisitions of Bubty B.V., which we refer to as Bubty, and Ascen Inc., which we refer to as 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 rely on such forward-looking statements. We make no representation that the projected results will be achieved or that future events and circumstances will occur, and actual results 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, 2025, filed with the SEC on August 6, 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 Quarterly Report on Form 10-Q for the three months ended September 30, 2025, when filed.
Upwork, "Uma™, Upwork's Mindful AI," Lifted 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 presentation 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 EndedSeptember 30,
Nine Months EndedSeptember 30,
2025
2024
2025
2024
Revenue
Marketplace
$
174,572
$
167,337
$
511,525
$
498,453
Enterprise
27,158
26,439
77,850
79,389
Total revenue
201,730
193,776
589,375
577,842
Cost of revenue
45,843
43,408
131,081
131,453
Gross profit
155,887
150,368
458,294
446,389
Operating expenses
Research and development
47,494
50,411
138,489
155,792
Sales and marketing
34,985
46,093
107,407
141,277
General and administrative
41,257
31,276
104,964
93,201
Provision for transaction losses
2,393
1,795
6,421
4,496
Total operating expenses
126,129
129,575
357,281
394,766
Income from operations
29,758
20,793
101,013
51,623
Other income, net
5,917
8,091
18,112
20,433
Income before income taxes
35,675
28,884
119,125
72,056
Income tax provision
(6,340
)
(1,126
)
(19,334
)
(3,636
)
Net income
$
29,335
$
27,758
$
99,791
$
68,420
Net income per share:
Basic
$
0.22
$
0.21
$
0.75
$
0.51
Diluted
$
0.21
$
0.20
$
0.72
$
0.50
Weighted-average shares used to compute net income per share:
Basic
131,987
132,603
133,114
133,404
Diluted
139,666
139,294
140,910
140,552
UPWORK INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited)
September 30, 2025
December 31, 2024
ASSETS
Current assets
Cash and cash equivalents
$
260,838
$
305,757
Marketable securities
382,259
316,344
Funds held in escrow, including funds in transit
211,373
195,736
Trade and client receivables, net
76,433
75,490
Prepaid expenses and other current assets
18,048
17,727
Total current assets
948,951
911,054
Property and equipment, net
40,373
30,056
Goodwill
150,471
121,064
Intangible assets, net
39,656
12,989
Operating lease asset
5,188
