Upwork Inc. reported record full‑year revenue of $787.8 million and fourth‑quarter revenue of $198.4 million, both up 2% and 4% respectively from the same periods in 2024. Adjusted EBITDA rose to $225.6 million for the year and $52.9 million for the quarter, giving a full‑year margin of 29% and a Q4 margin of 27% (some sources note 26.6%). The company posted a diluted earnings per share of $0.36 for Q4, beating the consensus estimate of $0.31 by $0.05, and a full‑year EPS of $1.43 to $1.48, slightly above analyst expectations.
The revenue growth was driven by a 50% increase in AI‑related work, with GSV from AI projects surpassing $300 million on an annualized basis, and a 49% sequential rise in Business Plus clients. Enterprise revenue fell 3% year‑over‑year in Q4, but the higher‑margin marketplace segment offset the decline, allowing the company to maintain pricing power and expand its adjusted EBITDA margin. Cost discipline, particularly in marketing and technology spend, helped keep operating expenses below 20% of revenue, supporting the margin expansion.
Management highlighted that the Q4 EPS beat was largely a result of disciplined cost control and a favorable mix shift toward higher‑margin AI and enterprise contracts. The company’s investment in the Lifted acquisition is still in the integration phase, contributing to short‑term headwinds but positioning Upwork for long‑term enterprise growth. The guidance for Q1 2026—$192 million to $197 million in revenue—misses consensus estimates of $200.8 million to $201 million, reflecting caution about near‑term demand and the impact of a 6% decline in active clients to 785,000 from 832,000 in 2025.
Full‑year 2026 revenue guidance of $835 million to $850 million is a modest upside to analyst expectations of $832.5 million to $838.3 million, while the adjusted EPS guidance of $1.43 to $1.48 remains in line with consensus. The guidance signals confidence in the AI‑enabled marketplace and enterprise platform, but the weaker Q1 outlook and client churn highlight potential short‑term challenges that could temper growth momentum.
CEO Hayden Brown said, “2025 marked the year we rebuilt Upwork for the age of human‑plus‑AI collaboration, turning global change into a definitive tailwind, all while demonstrating strong financial performance.” CFO Erica Gessert added, “We expect 2026 to be a year of accelerating growth. Our diversified path across AI, SMB and Enterprise gives us confidence in our guidance of 4% to 6% GSV growth and 6% to 8% revenue growth for the year.” These comments underscore the company’s focus on high‑value AI services while acknowledging integration costs and client retention as key risks.
The market reaction was tempered by the Q1 guidance miss and the decline in active clients, which investors view as a warning sign of potential demand softness. Analysts noted that while the company’s AI strategy and enterprise expansion are promising, the near‑term slowdown in client acquisition and the integration of Lifted could dampen momentum until the platform fully matures.
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