Upwork — research brief (BMC #091 on gallery, queue id 91)

Prepared 2026-10-12 (America/Chicago). Upwork Inc. is public (Nasdaq: UPWK), headquartered in Palo Alto, CA; fiscal year = calendar year. Labels: FACT = stated by Upwork in SEC filings (10-K, 10-Q, 8-K), earnings releases, prepared remarks, Help Center or pricing pages. SECONDARY = third-party or transcript sources (StockAnalysis/Quartr transcript of the Q2 2026 call). INFERENCE = interpretation by this project.

Sources (accessed 2026-10-12)

Form 10-K FY2025 (filed Feb 13, 2026): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000012/upwk-20251231.htm
Q4 / FY2025 results release (Feb 9, 2026, Ex. 99.1): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000005/exhibit991-upwork4q25andfu.htm
Q4 2025 prepared remarks: https://investors.upwork.com/static-files/7e465f62-cdc2-4e00-aa07-f0afe4a29791
2025 annual report to shareholders (record FCF $223.1M): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000028/a2025ars.pdf
Q2 2026 results release (Aug 10, 2026): https://investors.upwork.com/news-releases/news-release-details/upwork-reports-second-quarter-2026-financial-results
Form 10-Q Q2 2026: https://www.sec.gov/Archives/edgar/data/1627475/000162747526000047/upwk-20260630.htm
8-K May 7, 2026 (restructuring, ~24% workforce, $16M–$23M charges): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000033/upwork-20260507.htm
8-K Jun 23, 2026 ($150M BofA revolving credit facility): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000039/upwork-20260623.htm
8-K Jul 16, 2026 (CFO Erica Gessert temporary medical leave; CEO Hayden Brown interim principal financial officer): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000042/upwork-20260714.htm
Help Center, Freelancer Service Fee (0%–15%; Enterprise typically 10%): https://support.upwork.com/hc/en-us/articles/211062538-Learn-about-the-Freelancer-Service-Fee
Freelancer pricing (Freelancer Plus $19.99/mo, 100 Connects, Connects $0.15): https://www.upwork.com/pricing/freelancer
Client pricing (Basic 5%/3% ACH + $0.99–$14.99 contract initiation fee; Business Plus 10%/8%): https://www.upwork.com/pricing/client
Business Plus fees (up to $4.99 initiation under $100; Net 30): https://support.upwork.com/hc/en-us/articles/30915724346387-How-Business-Plus-plan-fees-work-on-Upwork
Client Marketplace Fee (flat up to 7.99% for some Basic clients; 3% by bank): https://support.upwork.com/hc/en-us/articles/4660220468499-What-is-the-Client-Marketplace-Fee
"Is Upwork free?" pricing breakdown 2026 (payout methods, Agency Plus): https://www.upwork.com/resources/is-upwork-free
Q2 2026 earnings call transcript (StockAnalysis / Quartr): https://stockanalysis.com/stocks/upwk/transcripts/662731-q2-2026/
Logo: project monogram ("U" on a green tile), not Upwork's official mark. Trademark of its owner; identification only.

Teaching arc

Upwork is a two-sided talent marketplace that holds client money in escrow and takes a percentage from both the freelancer (0%–15%) and the client (3%–10%), then layers on Connects, memberships and ads. It has pushed its take rate from 15.4% to 18.7% in two years and turned solidly profitable, but in 2026 AI is automating the simple jobs that used to fill the marketplace, so volume and revenue are shrinking while it bets on bigger SMB clients, AI work and its Lifted enterprise arm.

Key figures (FACT unless labeled)

FY2025 revenue $787.8M ($787,784K) vs $769.3M FY2024 (+2.4%, reported as +2%) and $689.1M FY2023. Marketplace $682.9M (87%, +3%); Enterprise $104.9M (13%, −2%; new Enterprise client acquisition paused during move to Lifted platform).
FY2025 gross profit $613.0M (78% margin); income from operations $129.3M (vs $65.2M); net income $115.4M (vs $215.6M in FY2024, which included a $125.2M income tax benefit); adjusted EBITDA $225.6M (29%, non-GAAP); free cash flow $223.1M (non-GAAP, annual report).
FY2025 costs: cost of revenue $174.8M (payment processing, Managed Services talent payments, support staff, AWS hosting, amortized platform software); R&D $185.5M; S&M $143.4M (−23%); G&A $146.6M; provision for transaction losses $8.1M; SBC $65.4M.
GSV $4,028.4M (+1%); Marketplace take rate 18.7% (18.0% in 2024, 15.4% in 2023) on ads and monetization; active clients 785K (−6%); GSV per active client $5,129 (+7%). ~71% of GSV from US clients; ~25% from US talent; India and the Philippines next. 180+ countries.
Fees: talent service fee variable 0%–15% per new contract since May 2025, fixed for the contract; client marketplace fee 5% (3% ACH); Business Plus 10% (8% ACH); contract initiation fees; Connects $0.15 each (min 10), required to bid and to buy ads; Freelancer Plus / Agency Plus $19.99/mo; Direct Contracts 5% on Basic, 0% on Freelancer Plus. Upwork also earns FX fees and interest on funds held for customers (in Marketplace revenue).
Lifted (Enterprise): independent contractors, AOR, EOR, staff augmentation, outsourcing; Enterprise Solutions and Managed Services. Acquired Bubty B.V. (Jun 27, 2025) and Ascen Inc. (Aug 18, 2025, $40.8M purchase price).
People: ~630 employees at Dec 31, 2025; ~1,600 independent team members engaged in 2025 (10-K). May 2026 restructuring: ~24% workforce reduction, $16M–$23M charges ($13.8M incurred in Q2). No other headcount used.
2026 (not full-year; never annualized): Q2 revenue $191.7M (−2%); H1 revenue $387.1M vs $387.6M; Q2 GSV $966.4M (−4%); active clients 763K; GSV per active client $5,230 (+5%); Q2 net income $25.4M; Q2 take rate 19.6% (10-Q; 19.8% stated on call). FY2026 guidance (Aug 10): revenue $730M–$750M; adj. EBITDA $225M–$235M. Business Plus GSV +174% YoY; AI-related GSV +22% YoY (~$330M annualized run rate, SECONDARY call); EOR GSV +29% YoY.
SECONDARY (Q2 2026 call): Connects and talent subscriptions are 15% of total revenue; paid search is the largest acquisition channel after Google search changes; restructuring is an annualized $70M opex reduction (~$40M realized in 2026); US/Canada EOR moving from third-party partners to Ascen's own entities.
Balance sheet (Jun 30, 2026): escrow funds $193.3M; current debt $360.7M (0.25% convertible notes due Aug 15, 2026; company planned to repay at maturity); $109.7M of buybacks in H1 2026.
$30B+ transacted since founding; 10,000+ skills (Q2 2026 release "About Upwork").

Worked example (INFERENCE)

$1,000 contract, 10% freelancer fee, client on Basic paying by card: client pays $1,050 + a contract initiation fee; freelancer nets $900; Upwork keeps ~$150 (~15% of billings) before payment processing costs. Actual blended take rate was 18.7% of Marketplace GSV in FY2025 because GSV and revenue also include Connects, memberships and other services.

Atlas notes

primaryTag: take-rate — 87% of FY2025 revenue is Marketplace revenue, primarily percentage fees on both sides of each contract (18.7% take rate).
Ranks on FY2025 revenue $787.8M (+2%), FY2025 net income $115.4M.

Not used

Analyst estimates, third-party traffic/user counts, registered freelancer counts, market-cap/valuation figures, and any annualizing of 2026 quarters.

# Upwork — research brief (BMC #091 on gallery, queue id 91) Prepared 2026-10-12 (America/Chicago). Upwork Inc. is **public** (Nasdaq: UPWK), headquartered in Palo Alto, CA; fiscal year = calendar year. Labels: **FACT** = stated by Upwork in SEC filings (10-K, 10-Q, 8-K), earnings releases, prepared remarks, Help Center or pricing pages. **SECONDARY** = third-party or transcript sources (StockAnalysis/Quartr transcript of the Q2 2026 call). **INFERENCE** = interpretation by this project. ## Sources (accessed 2026-10-12) - Form 10-K FY2025 (filed Feb 13, 2026): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000012/upwk-20251231.htm - Q4 / FY2025 results release (Feb 9, 2026, Ex. 99.1): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000005/exhibit991-upwork4q25andfu.htm - Q4 2025 prepared remarks: https://investors.upwork.com/static-files/7e465f62-cdc2-4e00-aa07-f0afe4a29791 - 2025 annual report to shareholders (record FCF $223.1M): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000028/a2025ars.pdf - Q2 2026 results release (Aug 10, 2026): https://investors.upwork.com/news-releases/news-release-details/upwork-reports-second-quarter-2026-financial-results - Form 10-Q Q2 2026: https://www.sec.gov/Archives/edgar/data/1627475/000162747526000047/upwk-20260630.htm - 8-K May 7, 2026 (restructuring, ~24% workforce, $16M–$23M charges): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000033/upwork-20260507.htm - 8-K Jun 23, 2026 ($150M BofA revolving credit facility): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000039/upwork-20260623.htm - 8-K Jul 16, 2026 (CFO Erica Gessert temporary medical leave; CEO Hayden Brown interim principal financial officer): https://www.sec.gov/Archives/edgar/data/1627475/000162747526000042/upwork-20260714.htm - Help Center, Freelancer Service Fee (0%–15%; Enterprise typically 10%): https://support.upwork.com/hc/en-us/articles/211062538-Learn-about-the-Freelancer-Service-Fee - Freelancer pricing (Freelancer Plus $19.99/mo, 100 Connects, Connects $0.15): https://www.upwork.com/pricing/freelancer - Client pricing (Basic 5%/3% ACH + $0.99–$14.99 contract initiation fee; Business Plus 10%/8%): https://www.upwork.com/pricing/client - Business Plus fees (up to $4.99 initiation under $100; Net 30): https://support.upwork.com/hc/en-us/articles/30915724346387-How-Business-Plus-plan-fees-work-on-Upwork - Client Marketplace Fee (flat up to 7.99% for some Basic clients; 3% by bank): https://support.upwork.com/hc/en-us/articles/4660220468499-What-is-the-Client-Marketplace-Fee - "Is Upwork free?" pricing breakdown 2026 (payout methods, Agency Plus): https://www.upwork.com/resources/is-upwork-free - Q2 2026 earnings call transcript (StockAnalysis / Quartr): https://stockanalysis.com/stocks/upwk/transcripts/662731-q2-2026/ - Logo: project monogram ("U" on a green tile), **not** Upwork's official mark. Trademark of its owner; identification only. ## Teaching arc **Upwork is a two-sided talent marketplace that holds client money in escrow and takes a percentage from both the freelancer (0%–15%) and the client (3%–10%), then layers on Connects, memberships and ads. It has pushed its take rate from 15.4% to 18.7% in two years and turned solidly profitable, but in 2026 AI is automating the simple jobs that used to fill the marketplace, so volume and revenue are shrinking while it bets on bigger SMB clients, AI work and its Lifted enterprise arm.** ## Key figures (FACT unless labeled) - **FY2025 revenue $787.8M** ($787,784K) vs $769.3M FY2024 (**+2.4%**, reported as +2%) and $689.1M FY2023. Marketplace $682.9M (87%, +3%); Enterprise $104.9M (13%, −2%; new Enterprise client acquisition paused during move to Lifted platform). - FY2025 gross profit $613.0M (78% margin); income from operations **$129.3M** (vs $65.2M); **net income $115.4M** (vs $215.6M in FY2024, which included a $125.2M income tax benefit); adjusted EBITDA $225.6M (29%, non-GAAP); free cash flow $223.1M (non-GAAP, annual report). - FY2025 costs: cost of revenue $174.8M (payment processing, Managed Services talent payments, support staff, AWS hosting, amortized platform software); R&D $185.5M; S&M $143.4M (−23%); G&A $146.6M; provision for transaction losses $8.1M; SBC $65.4M. - GSV $4,028.4M (+1%); Marketplace take rate 18.7% (18.0% in 2024, 15.4% in 2023) on ads and monetization; active clients 785K (−6%); GSV per active client $5,129 (+7%). ~71% of GSV from US clients; ~25% from US talent; India and the Philippines next. 180+ countries. - Fees: talent service fee variable 0%–15% per new contract since May 2025, fixed for the contract; client marketplace fee 5% (3% ACH); Business Plus 10% (8% ACH); contract initiation fees; Connects $0.15 each (min 10), required to bid and to buy ads; Freelancer Plus / Agency Plus $19.99/mo; Direct Contracts 5% on Basic, 0% on Freelancer Plus. Upwork also earns FX fees and interest on funds held for customers (in Marketplace revenue). - Lifted (Enterprise): independent contractors, AOR, EOR, staff augmentation, outsourcing; Enterprise Solutions and Managed Services. Acquired Bubty B.V. (Jun 27, 2025) and Ascen Inc. (Aug 18, 2025, $40.8M purchase price). - People: ~630 employees at Dec 31, 2025; ~1,600 independent team members engaged in 2025 (10-K). May 2026 restructuring: ~24% workforce reduction, $16M–$23M charges ($13.8M incurred in Q2). No other headcount used. - 2026 (not full-year; never annualized): Q2 revenue $191.7M (−2%); H1 revenue $387.1M vs $387.6M; Q2 GSV $966.4M (−4%); active clients 763K; GSV per active client $5,230 (+5%); Q2 net income $25.4M; Q2 take rate 19.6% (10-Q; 19.8% stated on call). FY2026 guidance (Aug 10): revenue $730M–$750M; adj. EBITDA $225M–$235M. Business Plus GSV +174% YoY; AI-related GSV +22% YoY (~$330M annualized run rate, SECONDARY call); EOR GSV +29% YoY. - SECONDARY (Q2 2026 call): Connects and talent subscriptions are 15% of total revenue; paid search is the largest acquisition channel after Google search changes; restructuring is an annualized $70M opex reduction (~$40M realized in 2026); US/Canada EOR moving from third-party partners to Ascen's own entities. - Balance sheet (Jun 30, 2026): escrow funds $193.3M; current debt $360.7M (0.25% convertible notes due Aug 15, 2026; company planned to repay at maturity); $109.7M of buybacks in H1 2026. - $30B+ transacted since founding; 10,000+ skills (Q2 2026 release "About Upwork"). ## Worked example (INFERENCE) $1,000 contract, 10% freelancer fee, client on Basic paying by card: client pays $1,050 + a contract initiation fee; freelancer nets $900; Upwork keeps ~$150 (~15% of billings) before payment processing costs. Actual blended take rate was 18.7% of Marketplace GSV in FY2025 because GSV and revenue also include Connects, memberships and other services. ## Atlas notes - primaryTag: **take-rate** — 87% of FY2025 revenue is Marketplace revenue, primarily percentage fees on both sides of each contract (18.7% take rate). - Ranks on FY2025 revenue $787.8M (+2%), FY2025 net income $115.4M. ## Not used - Analyst estimates, third-party traffic/user counts, registered freelancer counts, market-cap/valuation figures, and any annualizing of 2026 quarters.