Second quarter 2026
Filed Aug 10, 2026GSV per Active Client Reaches Record $5,230 Marking Eighth Consecutive Quarter of Sequential Growth
Revenue decreased 2% year-over-year and GSV decreased 4% year-over-year, while adjusted EBITDA increased 12% year-over-year and adjusted EBITDA margin was 33%. GAAP net income, operating cash flow, and free cash flow declined year-over-year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $191.7 million | – | decreased 2% year-over-year |
| GSVother | $966,439 (In thousands) | – | (3.6) % |
| GSV per active clientother | $5,230 | – | increased 5% year-over-year |
| Active clientsother | 763,000 | – | (4) % |
| Gross profitGAAP | $146,372 (In thousands) | – | (3) % |
| Gross profit marginGAAP | 76 % | – | -135 bps |
| Operating expensesGAAP | $118,235 (In thousands) | – | (1) % |
| Net incomeGAAP | $25.4 million | – | a decrease of 22% year-over-year |
| Profit marginGAAP | 13 % | – | -353 bps |
| Diluted earnings per shareGAAP | $0.20 | – | – |
| Adjusted EBITDAnon-GAAP | $64.1 million | – | up 12% year-over-year |
| Adjusted EBITDA marginnon-GAAP | 33 % | – | 415 bps |
| Cash provided by operating activitiesother | $46.9 million | – | (35) % |
| Free cash flownon-GAAP | $35.9 million | – | (45) % |
| Six months ended June 30, 2026 GSVother | $1,952,461 (In thousands) | – | (1.9) % |
| Six months ended June 30, 2026 gross profitGAAP | $297,214 (In thousands) | – | (2) % |
| Six months ended June 30, 2026 gross profit marginGAAP | 77 % | – | -124 bps |
| Six months ended June 30, 2026 operating expensesGAAP | $236,359 (In thousands) | – | 2 % |
| Six months ended June 30, 2026 net incomeGAAP | $56,865 (In thousands) | – | (19) % |
| Six months ended June 30, 2026 adjusted EBITDAnon-GAAP | $121,479 (In thousands) | – | 7 % |
| Six months ended June 30, 2026 adjusted EBITDA marginnon-GAAP | 31 % | – | 221 bps |
| Six months ended June 30, 2026 cash provided by operating activitiesother | $69,893 (In thousands) | – | (36) % |
| Six months ended June 30, 2026 free cash flownon-GAAP | $48,843 (In thousands) | – | (49) % |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Marketplace revenueRevenue decreased 2% year-over-year. | $166,858 (In thousands) | – | (2) % |
| Enterprise revenueLifted 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. | $24,802 (In thousands) | – | 2 % |
Third quarter of 2026 and full year 2026 outlook
- RevenueThird quarter of 2026: $176 million to $184 million; full year 2026: $730 million to $750 million
- NoteThird quarter of 2026 adjusted EBITDA: $50 million to $54 million
- NoteThird quarter of 2026 diluted weighted-average shares outstanding: 130 million to 133 million
- NoteThird quarter of 2026 non-GAAP diluted EPS: $0.31 to $0.33
- NoteFull year 2026 adjusted EBITDA: $225 million to $235 million
- NoteFull year 2026 diluted weighted-average shares outstanding: 132 million to 135 million
- NoteFull year 2026 non-GAAP diluted EPS: $1.38 to $1.43
Capital returns
- 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.
What drove it
- GSV per active client of $5,230 increased 5% year-over-year and marked the eighth consecutive quarter of sequential growth.
- GSV from AI-related work increased more than 22% year-over-year in Q2 2026.
- GSV from AI Strategy & Consulting grew over 50% year-over-year in Q2 2026.
- Q2 2026 GSV from the 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.
- Q2 2026 GSV from the EOR offering within Enterprise Solutions increased 29% year-over-year.
Concerns
- GSV decreased 4% year-over-year to $966.4 million.
- Revenue decreased 2% year-over-year to $191.7 million.
- Active clients were 763,000, compared with 796 (In thousands) as of June 30, 2025.
- Gross profit margin was 76 %, compared with 78 %, a change of -135 bps.
- GAAP net income was $25.4 million, a decrease of 22% year-over-year.
- Cash provided by operating activities and free cash flow decreased 35% and 45%, respectively.
What to watch
- Execution against third-quarter revenue guidance of $176 million to $184 million.
- Execution against third-quarter adjusted EBITDA guidance of $50 million to $54 million.
- Whether AI-related work, AI Strategy & Consulting, and Business Plus continue their reported growth.
- Enterprise customer migration to the new Lifted platform and the expanded enterprise go-to-market team.
- Trends in active clients, GSV, GSV per active client, gross profit margin, operating cash flow, and free cash flow.
Balance sheet and cash flow
- 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 was $35.9 million, compared to free cash flow of $65.6 million in the second quarter of 2025.
- Six months ended June 30, 2026 cash provided by operating activities was $69,893 (In thousands), compared to $109,479 (In thousands) in 2025.
- Six months ended June 30, 2026 free cash flow was $48,843 (In thousands), compared to $96,416 (In thousands) in 2025.
Analysis
Upwork reported second-quarter revenue of $191.7 million, down 2% year-over-year, alongside GSV of $966.4 million, down 4% year-over-year. Active clients were 763,000, while GSV per active client reached a record $5,230 and increased 5% year-over-year. The release frames the transaction trend as a mix shift away from lower-complexity work and toward higher-value AI talent, more complex projects, and new SMB and enterprise work categories.
Marketplace revenue was $166,858 (In thousands), down 2%, while enterprise revenue was $24,802 (In thousands), up 2%. AI-related work GSV increased more than 22% year-over-year, and AI Strategy & Consulting grew over 50% year-over-year. Business Plus showed reported growth in GSV and active clients, while Enterprise Solutions EOR GSV increased 29% year-over-year. Management also cited the end-of-June migration of the first wave of enterprise customers to the new Lifted platform and an expanded go-to-market team.
Profitability showed divergent GAAP and adjusted measures. GAAP net income was $25.4 million, down 22% year-over-year, and gross profit margin was 76 %, down -135 bps. Adjusted EBITDA was $64.1 million, up 12% year-over-year, with adjusted EBITDA margin of 33 %, up 415 bps. Operating expenses were $118,235 (In thousands), down 1%, but cash provided by operating activities was $46.9 million and free cash flow was $35.9 million, down 35% and 45%, respectively.
Capital allocation included $109.7 million returned through repurchases during the six months ended June 30, 2026, covering 8.3 million shares, with $254.3 million remaining authorization. Third-quarter guidance calls for revenue of $176 million to $184 million, adjusted EBITDA of $50 million to $54 million, and non-GAAP diluted EPS of $0.31 to $0.33. Full-year guidance calls for revenue of $730 million to $750 million and adjusted EBITDA of $225 million to $235 million. Key points for the next report are execution against these targets, active-client trends, AI and Business Plus growth, enterprise migration progress, and cash-flow performance.
Management, verbatim
In the second quarter, Upwork demonstrated solid execution against our strategic plan in a challenging operating environment.
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.
Hayden Brown, president and CEO of Upwork Inc.
Not in the filing
stated, not guessed- GAAP operating income
- GAAP diluted weighted-average shares outstanding for the second quarter of 2026
- Non-GAAP net income for the second quarter of 2026
- Actual non-GAAP diluted EPS for the second quarter of 2026
- Total revenue prior-year dollar amount
- Total revenue prior-quarter amount and quarter-over-quarter change
- GSV per active client prior-year dollar amount
- Prior-quarter amounts and quarter-over-quarter changes for GSV, revenue, gross profit, gross profit margin, operating expenses, net income, profit margin, adjusted EBITDA, adjusted EBITDA margin, operating cash flow, and free cash flow
- Cash balance
- Debt balance
- Dividend information
- Third-quarter and full-year gross margin guidance
- Third-quarter and full-year operating-expense guidance
- Third-quarter and full-year tax-rate guidance
- Prior-quarter outlook for comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.