Upwork (UPWK) Q3 2026 Earnings Call Transcript

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DATE

Mon, Nov. 02, 2026

CALL PARTICIPANTS

• Investor Relations – Denise Garcia
• President and Chief Executive Officer – Hayden Brown
• Chief Financial Officer – Erica Gessert
• Chief Business Officer – Peter Sanborn

TAKEAWAYS

• Revenue — $185.6 million, reflecting growth from ads and monetization products despite a softer GSV environment.
• GSV — $914.1 million, driven by a rotation toward higher-value work and larger clients.
• GAAP Net Income — $31.8 million, representing an 8% increase compared to the previous year.
• Adjusted EBITDA — $63.8 million, achieving a 34.4% adjusted EBITDA margin due to disciplined execution and operational efficiencies.
• Marketplace Revenue — $159.3 million, representing a 9% decrease compared to the third quarter of 2025.
• Enterprise Revenue — $26.3 million, representing a 3% decrease compared to the previous year.
• Active Clients — 717,000, reflecting the company’s strategy to acquire and serve higher-value customers.
• GSV per Active Client — $5,418, increasing 8% year over year due to increased engagement with existing clients.
• Marketplace Take Rate — 20.0%, expanding 110 basis points year over year driven by adoption of higher-margin products.
• AI-Skilled Talent GSV — $112 million, reaching an estimated annualized run rate of nearly $450 million in the third quarter.
• Business Plus GSV — Increased 132% year over year, now accounting for 8% of total GSV.
• Business Plus Revenue — Delivered 120% year-over-year revenue growth during the third quarter.
• MCP Server Connects Revenue — Reached a more than $3 million annual revenue run rate during the quarter.
• Free Cash Flow — $53.9 million, representing an 84% conversion rate from adjusted EBITDA.
• Large Contracts — Contracts of $100,000 or more increased 7% year over year, contributing to record GSV per contract.
• GSV per Contract — Grew 9% year over year, reaching the highest level in company history.
• Freelancer Plus Revenue — Increased 25% year over year during the third quarter.
• Non-GAAP Diluted EPS — $0.40, compared to $0.36 in the third quarter of 2025.
• Non-GAAP Operating Expenses — $84.4 million, representing 45% of revenue compared to 50% in the previous year.
• Q4 Revenue Guidance — $169 million to $177 million, reflecting business mix shifts and the integration of WorkMotion.
• Q4 Adjusted EBITDA Guidance — $51 million to $55 million, representing a 31% margin at the midpoint.
• Full Year 2026 Revenue Guidance — $742 million to $750 million, incorporating anticipated contributions from new acquisitions.
• Full Year 2026 Adjusted EBITDA Guidance — $236 million to $240 million, representing a 32% margin at the midpoint.
• Full Year 2026 Non-GAAP Diluted EPS Guidance — $1.45 to $1.47, reflecting current profitability trends.
• Full Year 2026 Stock-Based Compensation Guidance — $50 million to $53 million, with a projected step-down in 2027.

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RISKS

• Erica Gessert stated, “We expect our total growth rates to continue to be headwinded with some of the headwinds we’re seeing right now in the first half of 2027,” citing rotation in low-value work.
• Erica Gessert noted that the marketplace is experiencing “digital search traffic pressures with all the Google changes that are happening,” which has impacted client acquisition channels.

SUMMARY

Upwork Inc. (UPWK +6.23%) reported third-quarter results that reflected a strategic shift toward high-value clients and enterprise solutions through its Lifted platform. Management highlighted the acquisition of global employer of record provider WorkMotion to accelerate international expansion and contingent employment solutions. The company also introduced AI-driven initiatives, including the public beta of Upwork Now and the expansion of its Model Context Protocol server to integrate talent directly into AI workflows. Financial guidance for the fourth quarter assumes business mix shifts and the integration of new acquisitions as the platform navigates evolving digital acquisition channels.

• Management announced that Erica Gessert will step down as CFO on Jan. 1, 2027, with Peter Sanborn appointed as her successor.
• CEO Hayden Brown stated, “GSV from work started through our MCP server grew more than 150% month-over-month in October.”
• Weekly active users for the Model Context Protocol server increased 20-fold between the August launch and the end of the third quarter.
• AI agents have initiated nearly 50 million server calls through the Model Context Protocol since its launch.
• The company reported that 40% of active Business Plus clients in the third quarter initiated their first platform spend through that specific product.
• CFO Erica Gessert noted that marketplace take rate is expected to advance in the fourth quarter, though the business mix with Lifted will cause the overall take rate to decline sequentially.
• Management indicated that the acquisition of WorkMotion allows the company to reduce dependency on third-party employer of record providers while delivering consistent pricing.

INDUSTRY GLOSSARY

• GSV (Gross Services Volume): The total amount spent on the Upwork platform by clients, including the value of work performed and various fees.
• Take Rate: The percentage of GSV that Upwork retains as revenue through its marketplace and enterprise services.
• EOR (Employer of Record): A service that handles legal employment responsibilities, including payroll, taxes, and compliance, for talent on behalf of a client.
• MCP (Model Context Protocol): An open standard that enables AI agents to connect directly with data sources and tools like Upwork’s marketplace.
• Connects: A virtual currency on the Upwork platform that freelancers use to bid on projects and promote their services.
• Lifted: Upwork’s purpose-built platform for enterprise organizations to manage and pay contingent workers.
• Upwork Now: A real-time talent access product that connects clients with freelancers who are online and ready to start work immediately.

Full Conference Call Transcript

Operator: Thank you for standing by, and welcome to Upwork’s third quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. To remove yourself from the queue, you may press star one again. I would now like to hand the call over to Denise Garcia, Investor Relations. Please go ahead.

Denise Garcia: Thank you, and welcome to Upwork’s discussion of its third quarter 2026 financial results. Joining me today is Hayden Brown, Upwork’s Pre

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