Key Highlights

  • UPWK reported third quarter 2026 Revenue of $185.6 million, down 8.0% (calculated) from $201.7 million a year earlier.
  • Net income rose to $31.8 million, or $0.25 per diluted share, from $29.3 million, or $0.21.
  • Adjusted EBITDA was $63.8 million, a 34.4% margin, with free Cash Flow of $53.9 million.
  • Gross services Volume was $914 million, and the marketplace take rate expanded to 20.0%.
  • Full-year 2026 adjusted EBITDA is now guided to $236 million to $240 million.

Revenue Falls 8% While Net Income Rises as Operating Costs Drop

Upwork (NASDAQ:UPWK) reported results for the third quarter ended Sep 30, 2026 on Nov 2, 2026. Revenue was $185.6 million, down 8.0% (calculated) from $201.7 million a year earlier, but net income rose to $31.8 million from $29.3 million. Income from operations reached $34.6 million versus $29.8 million.

Upwork runs an online marketplace that connects businesses with independent professionals, and it also offers an enterprise platform called Lifted. Total operating expenses fell to $106.7 million from $126.1 million, with Research and Development dropping to $34.9 million from $47.5 million. Management said the quarter's revenue and gross services volume of $914 million both came in above the high end of its guidance.

Take Rate Reaches 20.0% as Business Plus Grows and Active Clients Shrink

The marketplace take rate expanded to 20.0%, up 110 basis points year over year, helped by higher-margin products. The company said Business Plus revenue grew 120% and now makes up 8% of gross services volume, while Freelancer Plus subscription revenue rose 25%.

Active clients totaled 717,000, down 10% from 794,000, as the company focuses on higher-value customers and more complex work. Gross services volume per active client hit a record $5,418, up 8%. Management said low-value work continues to roll off the platform at the expected rate and that changes in how clients find the site are weighing on demand.

Adjusted EBITDA was $63.8 million, a 34.4% margin, and free cash flow was $53.9 million, or 84% of adjusted EBITDA.

WorkMotion Purchase and a CFO Handover Accompany the Outlook Update

On Oct 30, 2026, Lifted completed the Acquisition of WorkMotion Software, a privately held, Germany-based employer-of-record business, for about $129.7 million in cash on hand. Management expects Lifted gross services volume to grow more than 30% in 2026 including WorkMotion. The company also said its chief financial officer will step down on Jan 1, with the chief business officer taking over.

For full-year 2026, Upwork expects revenue of $742 million to $750 million, including about $4 million from WorkMotion in the fourth quarter, offset by a lower-margin managed services project leaving the platform. Adjusted EBITDA is raised to $236 million to $240 million, a 32% Margin at the midpoint, and non-GAAP diluted EPS is guided to $1.45 to $1.47.

Fourth-quarter revenue is guided to $169 million to $177 million, with adjusted EBITDA of $51 million to $55 million and non-GAAP diluted EPS of $0.30 to $0.32.

Cash Falls After Note Repayment as Management Previews a Slow First Half of 2027

Cash and cash equivalents were $228.0 million at Sep 30, 2026, plus $76.3 million of marketable securities, down from $294.4 million and $378.4 million at year-end after the company repaid $361.0 million of notes and spent $109.7 million on Buybacks in the first nine months; none occurred in the third quarter. Management expects growth to stay under pressure in the first half of 2027, with improvement in the second half, and will give 2027 guidance when it reports fourth-quarter results in February.