Third quarter 2026
Filed Nov 2, 2026Third 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.
Upwork delivered higher GAAP net income, adjusted EBITDA and adjusted EBITDA margin despite year-over-year declines in GSV, total revenue, active clients, operating cash flow and free cash flow. Fourth-quarter revenue guidance is below third-quarter reported revenue.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| GSV, three months ended September 30, 2026other | $914.1M | – | (10.1) % |
| Total revenue, three months ended September 30, 2026GAAP | $185.6M | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $141.3M | – | (9) % |
| Gross margin, three months ended September 30, 2026GAAP | 76 % | – | -115 bps |
| Total operating expenses, three months ended September 30, 2026GAAP | $106.7M | – | (15) % |
| Income from operations, three months ended September 30, 2026GAAP | $34.59M | – | – |
| Net income, three months ended September 30, 2026GAAP | $31.81M | – | 8 % |
| Basic earnings per share, three months ended September 30, 2026GAAP | $ 0.25 | – | – |
| Diluted earnings per share, three months ended September 30, 2026GAAP | $ 0.25 | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $63.79M | – | 7 % |
| Adjusted EBITDA margin, three months ended September 30, 2026non-GAAP | 34 % | – | 481 bps |
| Non-GAAP net income, three months ended September 30, 2026non-GAAP | $51.27M | – | – |
| Non-GAAP diluted earnings per share, three months ended September 30, 2026non-GAAP | $ 0.40 | – | – |
| Cash provided by operating activities, three months ended September 30, 2026GAAP | $65.95M | – | (12) % |
| Free cash flow, three months ended September 30, 2026non-GAAP | $53.85M | – | (22) % |
| Active clients, as of September 30, 2026other | 717K | – | (10) % |
| GSV per active client, third quarter 2026other | $5,418 | – | an increase of 8% year-over-year |
| GSV, nine months ended September 30, 2026other | $2.87B | – | (4.7) % |
| Total revenue, nine months ended September 30, 2026GAAP | $572.7M | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $438.5M | – | (4) % |
| Gross margin, nine months ended September 30, 2026GAAP | 77 % | – | -120 bps |
| Total operating expenses, nine months ended September 30, 2026GAAP | $343.1M | – | (4) % |
| Income from operations, nine months ended September 30, 2026GAAP | $95.45M | – | – |
| Net income, nine months ended September 30, 2026GAAP | $88.67M | – | (11) % |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $ 0.69 | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $185.3M | – | 7 % |
| Adjusted EBITDA margin, nine months ended September 30, 2026non-GAAP | 32 % | – | 305 bps |
| Cash provided by operating activities, nine months ended September 30, 2026GAAP | $135.8M | – | (26) % |
| Free cash flow, nine months ended September 30, 2026non-GAAP | $102.7M | – | (38) % |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Marketplace revenue, three months ended September 30, 2026 | $159.3M | – | (9) % |
| Enterprise revenue, three months ended September 30, 2026 | $26.28M | – | (3) % |
| Marketplace revenue, nine months ended September 30, 2026 | $496.9M | – | (3) % |
| Enterprise revenue, nine months ended September 30, 2026 | $75.86M | – | (3) % |
Fourth quarter of 2026 and full year 2026 outlook
- RevenueFourth quarter of 2026: $169 million to $177 million
- NoteFourth quarter of 2026 adjusted EBITDA: $51 million to $55 million
- NoteFourth quarter of 2026 diluted weighted-average shares outstanding: 125 million to 128 million
- NoteFourth quarter of 2026 non-GAAP diluted EPS: $0.30 to $0.32
- NoteFull year 2026 revenue: $742 million to $750 million
- NoteFull year 2026 adjusted EBITDA: $236 million to $240 million
- NoteFull year 2026 diluted weighted-average shares outstanding: 131 million to 133 million
- NoteFull year 2026 non-GAAP diluted EPS: $1.45 to $1.47
Capital returns
- Repurchase of common stock, nine months ended September 30, 2026: $ 109,725 (In thousands), compared to $ 101,923 (In thousands) in the nine months ended September 30, 2025.
- Repayment of convertible senior notes, nine months ended September 30, 2026: $ 360,998 (In thousands).
- Repurchase of common stock, three months ended September 30, 2026: —, compared to $ 31,001 (In thousands) in the three months ended September 30, 2025.
What drove it
- GSV from freelancers with AI-skills reached an estimated annualized run rate of nearly $450 million in Q3 2026 and increased 55% year-over-year.
- 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.
- Weekly active users of the Upwork MCP server increased 20x since the launch in August, while AI agents made nearly 50 million requests, driving more than $3 million in estimated annualized Connects revenue.
- Lifted acquired WorkMotion, which is expected to strengthen the Enterprise offering, reduce third-party EOR dependency, and deliver more consistent pricing and experiences for global clients.
Concerns
- Third-quarter GSV declined (10.1) % year-over-year and active clients declined (10) %.
- Third-quarter Marketplace revenue declined (9) % and Enterprise revenue declined (3) % year-over-year.
- GAAP gross margin declined -115 bps year-over-year to 76 %.
- Third-quarter cash provided by operating activities declined (12) % and free cash flow declined (22) % year-over-year.
- Nine-month free cash flow declined (38) % year-over-year.
- Erica Gessert will step down as CFO on January 1, 2027; Peter Sanborn has been appointed as the next CFO.
What to watch
- Fourth-quarter revenue guidance of $169 million to $177 million and adjusted EBITDA guidance of $51 million to $55 million.
- Execution of the WorkMotion acquisition and its expected impact on Enterprise offerings and third-party EOR dependency.
- MCP server adoption, AI-agent request volume, and estimated annualized Connects revenue.
- Business Plus GSV and active-client growth.
- GSV, active-client trends, gross margin, operating cash flow and free cash flow.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $ 227,986 (In thousands), compared to $ 294,356 (In thousands) as of December 31, 2025.
- Marketable securities as of September 30, 2026: $ 76,346 (In thousands), compared to $ 378,425 (In thousands) as of December 31, 2025.
- Funds held in escrow, including funds in transit, as of September 30, 2026: $ 164,606 (In thousands), compared to $ 180,752 (In thousands) as of December 31, 2025.
- Debt, current, as of September 30, 2026: —, compared to $ 359,770 (In thousands) as of December 31, 2025.
- Total assets as of September 30, 2026: $ 931,097 (In thousands), compared to $ 1,299,580 (In thousands) as of December 31, 2025.
- Total liabilities as of September 30, 2026: $ 277,072 (In thousands), compared to $ 669,265 (In thousands) as of December 31, 2025.
- Net cash provided by operating activities, three months ended September 30, 2026: $ 65,947 (In thousands), compared to $ 75,079 (In thousands) in the prior-year period.
- Purchases of property and equipment, three months ended September 30, 2026: $ 4,152 (In thousands), compared to $ 482 (In thousands) in the prior-year period.
- Internal-use software and platform development costs, three months ended September 30, 2026: $ 7,941 (In thousands), compared to $ 5,166 (In thousands) in the prior-year period.
Analysis
Upwork reported third-quarter revenue of $ 185,599 (In thousands), compared with $ 201,730 (In thousands) in the prior-year quarter. GSV was $ 914,064 (In thousands), down (10.1) %, while active clients were 717 (In thousands), down (10) %. Marketplace revenue was $ 159,321 (In thousands), down (9) %, and Enterprise revenue was $ 26,278 (In thousands), down (3) %. Against those volume and revenue declines, GSV per active client was $5,418, an increase of 8% year-over-year.
Profitability improved despite the lower revenue base. GAAP net income was $ 31,810 (In thousands), up 8 %, and income from operations was $ 34,593 (In thousands), compared with $ 29,758 (In thousands). Total operating expenses declined (15) % to $ 106,702 (In thousands). Adjusted EBITDA increased 7 % to $ 63,789 (In thousands), and adjusted EBITDA margin expanded 481 bps to 34 %. GAAP gross margin was 76 %, down -115 bps from 77 %.
Cash generation declined year over year. Cash provided by operating activities was $ 65,947 (In thousands), down (12) %, while free cash flow was $ 53,854 (In thousands), down (22) %. For the nine months ended September 30, 2026, operating cash flow was $ 135,840 (In thousands), down (26) %, and free cash flow was $ 102,697 (In thousands), down (38) %. The company repaid $ 360,998 (In thousands) of convertible senior notes during the nine-month period and repurchased $ 109,725 (In thousands) of common stock.
The company highlighted momentum in higher-value offerings and AI-related activity. GSV from freelancers with AI-skills reached an estimated annualized run rate of nearly $450 million and increased 55% year-over-year. Business Plus GSV increased 13% quarter-over-quarter and 132% year-over-year, while Business Plus active clients grew 9% quarter-over-quarter and 154% year-over-year. The MCP server's weekly active users increased 20x since its August launch, and AI agents made nearly 50 million requests.
Fourth-quarter guidance calls for revenue of $169 million to $177 million, adjusted EBITDA of $51 million to $55 million, and non-GAAP diluted EPS of $0.30 to $0.32. Full-year guidance calls for revenue of $742 million to $750 million and adjusted EBITDA of $236 million to $240 million. The company also announced a CFO transition: Erica Gessert will step down on January 1, 2027 and Peter Sanborn will become CFO, while Gessert remains in an advisory role for several months.
Management, verbatim
In the third quarter, Upwork executed strongly as our strategic growth pillars continued to gain momentum.
Hayden Brown, president and CEO of Upwork Inc.
Our focus remains squarely on sustained profitability and disciplined execution across our growth pillars.
Erica Gessert, CFO of Upwork Inc.
Erica has been an exceptional business partner and financial leader for Upwork, and the Board and I are deeply grateful for her contributions.
Hayden Brown, president and CEO of Upwork Inc.
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore no comparison of actual results with prior guidance is available.
- Third-quarter prior-quarter financial metrics were not provided.
- Guidance for gross margin, operating expenses and tax rate was not provided.
- Dividend information was not provided.
- A GAAP reconciliation for adjusted EBITDA guidance and non-GAAP diluted EPS guidance was not provided, as the company stated it was not available without unreasonable effort.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.