Upwork Reports Second Quarter 2025 Financial Results

Achieves record second quarter with revenue of $194.9 millionGenerates GAAP net income of $32.7 million and adjusted EBITDA of $57.1 million, resulting in 17% profit margin and 29% adjusted EBITDA marginRaises FY2025 revenue and adjusted EBITDA guidanceAcquires Bubty and agrees to acquire Ascen to serve large clients with full range of contingent workforce and staffing solutions, positioning Upwork to capitalize on $650 billion Enterprise TAM opportunity(1) PALO ALTO, Calif., Aug. 07, 2025 (GLOBE NEWSWIRE) -- Upwork Inc. (Nasdaq: UPWK), the world’s largest human and AI-powered work marketplace, today announced its financial results for the second quarter of 2025. “Upwork delivered an exceptional second quarter, significantly outperforming across all key financial metrics. Our strong Marketplace performance was driven by AI features that delivered tremendous value to our full range of customers, from SMBs to large enterprises to talent,” said Hayden Brown, president and CEO, Upwork. “With our two announced acquisitions, we have enhanced our full-stack offering giving enterprise clients access to a complete array of contingent workforce solutions fueled by Upwork’s deep global talent pool. We’re harnessing these strategic levers to continue to lead the industry in this human and AI-powered era of work.” “Our record revenue of $194.9 million, net income of $32.7 million, and adjusted EBITDA of $57.1 million—representing a 16.8% profit margin and an all-time high 29.3% adjusted EBITDA margin—came in well above our expectations for the second quarter,” said Erica Gessert, CFO, Upwork. “With encouraging growth signals from key product and platform enhancements and continued rigorous cost discipline, we are raising our full-year guidance for both revenue and adjusted EBITDA. We have proven our ability to grow revenue while increasing profitability, and we reiterate our long-term 35% adjusted EBITDA margin target.” Second Quarter 2025 Financial Highlights Revenue grew 1% year-over-year to $194.9 millionActive clients(2) of 796,000GSV per active client(2) of $5,002 increased 5% year-over-year and average hours per contract in Q2 were the highest ever, as projects on the platform increase in size and complexityNet income was $32.7 million, up 47% year-over-yearDiluted earnings per share was $0.24, compared to diluted earnings per share of $0.17 in the second quarter of 2024Adjusted EBITDA(3) was $57.1 million, up 40% year-over-yearCash provided by operating activities(4) was $72.5 million, compared to cash provided by operating activities of $39.2 million in the second quarter of 2024Free cash flow(3)(4) was $65.6 million, compared to free cash flow of $35.5 million in the second quarter of 2024 Second Quarter Operational Highlights Building the World’s Human and AI-Powered Work Marketplace Upwork Updates, announced July 23, included major advancements to Uma™, Upwork’s Mindful AI. As an AI work agent, Uma™ now takes action on behalf of customers, accelerating hiring, collaboration, and work outcomes through new features like instant interviews, a reimagined job posting experience, Upwork Video Meetings, and Uma™-powered search.Uma™ adoption increased 24% quarter-over-quarter and recent feature launches are increasing value delivered to customers as well as spend: Improved search and match capabilities drove GSV and revenue outperformance, lifting average spend per contract by 4% and increasing Connects revenue by 3% compared to prior feature set.Uma™ Proposal Writer improvements led to a 58% increase in freelancers utilizing Uma™ to submit a proposal compared to the baseline experience. Growing AI Work on the Marketplace GSV from AI-related work accelerated to 30% year-over-year growth in Q2 2025, compared to 25% year-over-year growth in Q1 2025.Clients are turning to Upwork to hire AI specialists across 365+ different skills, including AI Agents, AI Model Tuning & Integration, and Natural Language Processing. GSV in Prompt Engineering subcategory grew 51% year-over-year.Average GSV per active client engaged in AI work is more than 3x larger than average GSV per active client across the Marketplace. Unlocking the Enterprise Opportunity Announced acquisition of Bubty and agreement to acquire Ascen through Upwork’s new wholly-owned Enterprise subsidiary, enhancing offering of full-stack, end-to-end contingent work solutions for large enterprises: Bubty is a purpose-built platform to help enterprises manage a broad range of contingent workforce models and contract types, from independent contractors to contingent W-2 workers.Ascen is a digitally native solution for contingent W-2 workers with easy-to-integrate APIs. Bubty and Ascen provide the foundation for the contingent talent industry’s fully integrated, digitally native, country- and contract-agnostic solution providing clients with access to a full range of contingent workforce models (independent contractors, agency-of-record, employer-of-record, staff augmentation, statement of work, and outsourcing) sourced from Upwork’s unparalleled talent pool, including over 250,000 AI experts globally.(5) Generating New Value through Ads & Monetization Strategies Continued strength in ads & monetization, with revenue increasing 17% year-over-year.Freelancer Plus subscription revenue grew 13% year-over-year and Connects revenue grew 19% year-over-year.GSV from Business Plus–Upwork’s offering gaining traction with larger clients in the SMB space–increased 190% and active clients increased 45% quarter-over-quarter. New customers represented 35% of active Business Plus clients, demonstrating strong demand with the right value proposition and product fit. Investing in AI Infrastructure Accelerated investments in Upwork’s internal AI infrastructure, such as embedded AI copilots and autonomous agents to drive productivity, streamline operations, and orchestrate cross-functional intelligence.Ramped up usage of customer service AI agent Upwork Assist, expanding from chat to voice channels, with pilot program already reaching 80%+ adoption, empowering frontline teams to handle more complex inquiries with AI-augmented efficiency.AI now contributes to over 35% of deployed engineering code. On the core Upwork Marketplace engineering team, fine-tuned LLM evaluation of match quality at scale reduced model iteration costs and cycle times by over 70% in Q2, accelerating ability to develop, optimize, and ship new product releases. Financial Guidance & Outlook Upwork’s guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, and non-GAAP diluted EPS for the third quarter of 2025 is: Revenue: $190 million to $195 millionAdjusted EBITDA: $47 million to $51 millionDiluted weighted-average shares outstanding: 140 million to 141 millionNon-GAAP diluted EPS: $0.28 to $0.30 Upwork’s guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, non-GAAP diluted EPS, and stock-based compensation expense for full year 2025 is: Revenue: $765 million to $775 millionAdjusted EBITDA: $206 million to $214 millionDiluted weighted-average shares outstanding: 140 million to 142 millionNon-GAAP diluted EPS: $1.24 to $1.27Stock-based compensation expense $60 million to $65 million UPWORK INC.Key Financial and Operational Metrics(In thousands, except percentages and basis points)(Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 Change 2025 2024 ChangeGSV(2)$1,002,650 $1,008,267 (0.6)% $1,990,363 $2,017,063 (1.3)%Marketplace revenue(2)$170,660 $166,786 2% $336,953 $331,116 2%Enterprise revenue(2)$24,279 $26,343 (8)% $50,692 $52,950 (4)%Gross profit$151,507 $149,277 1% $302,407 $296,021 2%Gross profit margin 78% 77% 43 bps 78% 77% 94 bpsOperating expenses$118,942 $131,496 (10)% $231,152 $265,191 (13)%Net income$32,726 $22,220 47% $70,456 $40,662 73%Adjusted EBITDA(3)$57,061 $40,835 40% $113,072 $74,160 52%Profit margin 17% 12% 528 bps 18% 11% 759 bpsAdjusted EBITDA margin(3) 29% 21% 813 bps 29% 19% 986 bpsCash provided by operating activities(4)$72,514 $39,203 85% $109,479 $54,017 103%Free cash flow(3)(4)$65,626 $35,456 85% $96,416 $47,605 103% As of June 30, (In thousands)2025 2024 % Change Active clients(2)796 868 (8)% (1) SIA, Global Staffing Market Estimates & Forecasts November 2024 | Staffing Industry Analysts(2) See Key Definitions in our second quarter 2025 earnings presentation.(3) An explanation of non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures can be found in the “Non-GAAP Financial Measures” section and the subsequent tables at the end of this press release.(4)The Company elected to change the presentation of certain cash flows on its Consolidated Statement of Cash Flow, reclassifying the change in Trade and client receivables, related to amounts received on behalf of talent to fund their escrow account, from operating activities to financing activities. Prior period comparative amounts have been recast to conform to the current period presentation.(5)The acquisition of Ascen is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions. Second Quarter 2025 Financial Results Conference Call and WebcastUpwork will host a conference call today at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss the company’s second quarter 2025 financial results. An audio webcast archive will be available following the live event for approximately one year at investors.upwork.com. Please visit the Upwork Investor Relations website at investors.upwork.com/financial-information/quarterly-results to view Upwork’s second quarter 2025 earnings presentation. Disclosure InformationWe use our Investor Relations website (investors.upwork.com), our Blog (upwork.com/blog), our X handle (twitter.com/Upwork), Hayden Brown’s X handle (twitter.com/hydnbrwn) and LinkedIn profile (linkedin.com/in/haydenlbrown), and Erica Gessert’s LinkedIn profile (linkedin.com/in/erica-gessert) as means of disseminating or providing notification of, among other things, news or announcements regarding our business or financial performance, investor events, press releases, and earnings releases, and as means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD. About UpworkUpwork is the world’s largest work marketplace that connects businesses with highly skilled, AI-enabled independent talent from across the globe. From entrepreneurs to Fortune 100 enterprises, companies rely on Upwork’s trusted platform and its mindful AI companion, Uma™, to find and hire expert talent, leverage AI-powered work solutions, and drive business transformation. With on-demand access to professionals spanning more than 10,000 skills across AI & machine learning, software development, sales & marketing, customer support, finance & accounting, and more, Upwork enables businesses of all sizes to scale, innovate, and build agile teams for the age of AI and beyond. Upwork’s platform has facilitated more than $25 billion in economic opportunity for talent around the world. Learn more at upwork.com and follow us on LinkedIn, Facebook, Instagram, TikTok, and X. Contact:Investor Relationsinvestor@upwork.com Safe Harbor:This press release of Upwork Inc. (the “Company,” “we,” “us,” or “our”) contains “forward-looking” statements within the meaning of the federal securities laws. Forward-looking statements include all statements other than statements of historical fact, including any statements regarding our future operating results and financial position, including expected financial results for the third quarter and full year 2025, information or predictions concerning the future of our business or strategy, anticipated events and trends, potential growth or growth prospects, competitive position, technological and market trends, industry environment, the economy, our plans with respect to share repurchases, the expected impact and timing of strategic initiatives, including the acquisitions of Bubty B.V. and Ascen Inc. by a subsidiary of the Company, and other future conditions. We have based these forward-looking statements largely on our current expectations and projections as of the date hereof about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short- and long-term business operations and objectives, and financial needs. As such, they are subject to inherent uncertainties, known and unknown risks, and changes in circumstances that are difficult to predict and in many cases outside our control, and you should not rely on such forward-looking statements as predictions of future events. We make no representation that the projected results will be achieved or that future events and circumstances will occur, and actual results may differ materially and adversely from our expectations. The forward-looking statements are made as of the date hereof, and we do not undertake, and expressly disclaim, any obligation to update or revise any forward-looking statements, conform these statements to actual results, or make changes in our expectations, except as required by law. Additional information regarding the risks and uncertainties that could cause actual results to differ materially from our expectations is included under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the three months ended March 31, 2025, filed with the SEC on May 5, 2025, and in our other SEC filings, which are available on our Investor Relations website at investors.upwork.com and on the SEC’s website at www.sec.gov. Additional information will also be set forth under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the three months ended June 30, 2025, when filed. Undue reliance should not be placed on the forward-looking statements in this press release. Neither we nor any other person makes any representation or warranty as to the accuracy or completeness of the information herein. This press release is made solely for informational purposes. Upwork, “Uma™, Upwork’s Mindful AI,” and other registered or common law trade names, trademarks, or service marks of Upwork appearing in this press release are the property of Upwork. This presentation may also contain additional trade names, trademarks, and service marks of other companies, including names and brands. All third-party trademarks are property of their respective owners, and any references to third-party trademarks are for identification purposes only and shall be considered nominative fair use under trademark law. UPWORK INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except for per share data) (Unaudited) Three Months EndedJune 30, Six Months EndedJune 30, 2025 2024 2025 2024Revenue Marketplace$170,660 $166,786 $336,953 $331,116 Enterprise 24,279 26,343 50,692 52,950 Total revenue 194,939 193,129 387,645 384,066 Cost of revenue 43,432 43,852 85,238 88,045 Gross profit 151,507 149,277 302,407 296,021 Operating expenses Research and development 44,843 52,465 90,995 105,381 Sales and marketing 36,671 47,333 72,422 95,184 General and administrative 35,659 29,924 63,707 61,925 Provision for transaction losses 1,769 1,774 4,028 2,701 Total operating expenses 118,942 131,496 231,152 265,191 Income from operations 32,565 17,781 71,255 30,830 Other income, net 5,878 5,620 12,195 12,342 Income before income taxes 38,443 23,401 83,450 43,172 Income tax provision (5,717) (1,181) (12,994) (2,510)Net income$32,726 $22,220 $70,456 $40,662 Net income per share: Basic$0.25 $0.17 $0.53 $0.30 Diluted$0.24 $0.17 $0.50 $0.30 Weighted-average shares used to compute net income per share: Basic 132,183 131,436 133,687 133,809 Diluted 140,198 138,266 141,866 140,798 UPWORK INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited) June 30, 2025 December 31, 2024ASSETS Current assets Cash and cash equivalents$291,070 $305,757 Marketable securities 343,509 316,344 Funds held in escrow, including funds in transit 212,033 195,736 Trade and client receivables, net 71,230 75,490 Prepaid expenses and other current assets 21,141 17,727 Total current assets 938,983 911,054 Property and equipment, net 38,109 30,056 Goodwill 141,473 121,064 Intangible assets, net 9,525 12,989 Operating lease asset 5,367 5,752 Deferred tax asset 126,715 128,779 Other assets, noncurrent 1,544 1,919 Total assets$1,261,716 $1,211,613 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable$1,027 $6,128 Escrow funds payable 212,033 195,736 Accrued expenses and other current liabilities 58,762 59,300 Deferred revenue 7,802 7,269 Total current liabilities 279,624 268,433 Debt, noncurrent 358,849 357,928 Operating lease liability, noncurrent 10,351 9,567 Other liabilities, noncurrent 4,238 308 Total liabilities 653,062 636,236 Stockholders’ equity Common stock 13 14 Additional paid-in capital 615,937 653,575 Accumulated and other comprehensive income 724 264 Accumulated deficit (8,020) (78,476)Total stockholders’ equity 608,654 575,377 Total liabilities and stockholders’ equity$1,261,716 $1,211,613 UPWORK INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024CASH FLOWS FROM OPERATING ACTIVITIES: Net income$32,726 $22,220 $70,456 $40,662 Adjustments to reconcile net income to net cash provided by operating activities: Provision for transaction losses 1,528 1,637 3,594 2,433 Depreciation and amortization 5,879 3,629 10,740 6,775 Amortization of debt issuance costs 461 461 921 921 Accretion of discount on purchases of marketable securities, net (1,561) (3,283) (3,504) (8,159)Amortization of operating lease asset 183 859 385 1,706 Tides Foundation common stock warrant expense 187 187 375 375 Stock-based compensation expense 15,977 19,238 28,249 36,180 Deferred taxes 2,064 — 2,064 — Changes in operating assets and liabilities: Trade and client receivables (1) 3,895 (1,856) 360 (5,087)Prepaid expenses and other assets (40) (3,004) (3,338) (5,133)Operating lease liability (22) (1,580) 808 (3,129)Accounts payable (3,088) (81) (5,075) 701 Accrued expenses and other liabilities 14,019 4,050 2,911 (6,847)Deferred revenue 306 (3,274) 533 (7,381)Net cash provided by operating activities 72,514 39,203 109,479 54,017 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities (208,440) (44,423) (259,148) (194,299)Proceeds from maturities of marketable securities 181,031 190,074 232,411 321,846 Proceeds from sale of marketable securities 3,257 8,485 3,537 35,394 Acquisition of business, net of cash acquired (20,410) — (20,410) — Purchases of property and equipment (2,381) (598) (4,853) (775)Internal-use software and platform development costs (4,507) (3,149) (8,210) (5,637)Net cash (used in) provided by investing activities (51,450) 150,389 (56,673) 156,529 CASH FLOWS FROM FINANCING ACTIVITIES: Change in escrow funds payable, net (1) (2,684) (6,194) 16,574 (4,802)Proceeds from exercises of stock options and common stock warrants 1 664 653 770 Proceeds from employee stock purchase plan 2,199 2,917 2,199 2,917 Repurchase of common stock (37,868) (33,124) (70,922) (100,000)Net cash (used in) financing activities (38,352) (35,737) (51,496) (101,115)NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (17,288) 153,855 1,310 109,431 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—beginning of period 524,191 251,994 505,593 296,418 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—end of period$506,903 $405,849 $506,903 $405,849 (1) The Company elected to change the presentation of certain cash flows on its Consolidated Statement of Cash Flow, reclassifying the change in Trade and client receivables, related to amounts received on behalf of talent to fund their escrow account, from operating activities to financing activities. Prior period comparative amounts have been recast to conform to the current period presentation. The following table reconciles cash, cash equivalents, and restricted cash as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows as of the following (in thousands): June 30, 2025 December 31, 2024Cash and cash equivalents$291,070 $305,757Restricted cash 3,800 4,100Funds held in escrow, including funds in transit 212,033 195,736Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows$506,903 $505,593 Non-GAAP Financial MeasuresTo supplement our condensed consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), we present certain non-GAAP financial measures in this press release, including adjusted EBITDA, adjusted EBITDA margin, free cash flow, and non-GAAP diluted EPS. We define adjusted EBITDA as net income adjusted for stock-based compensation expense; depreciation and amortization; other income (expense), net, which includes interest expense; income tax benefit (provision); and, if applicable, certain other gains, losses, benefits, or charges that are non-cash or are significant and the result of isolated events or transactions that have not occurred frequently in the past and are not expected to occur regularly in the future. Free cash flow is defined as cash provided by operations less purchases of property, plant and equipment and cash outflows from internally developed software. We use non-GAAP financial measures in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance. These non-GAAP financial measures provide consistency and comparability with past financial performance, facilitate period-to-period comparisons of our core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. In addition, adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to certain items that can vary substantially from company to company, and free cash flow allows investors to evaluate the cash generated from our underlying operations across periods. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as analytical tools, and investors should not consider them in isolation or as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. In particular, (1) adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy, (2) although depreciation and amortization expense are non-cash charges, the assets subject to depreciation and amortization may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements, and (3) adjusted EBITDA does not reflect: (a) changes in, or cash requirements for, our working capital needs; (b) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (c) tax payments that may represent a reduction in cash available to us. In addition, the non-GAAP financial measures we use may be different from non-GAAP financial measures used by other companies, including companies in our industry, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from the non-GAAP financial measures that we present. Reconciliations of the non-GAAP financial measures presented in this press release to their most directly comparable GAAP financial measures have been provided below, and investors are encouraged to review the reconciliations and not rely on any single financial measure to evaluate our business. We have not reconciled our adjusted EBITDA guidance to GAAP net income or non-GAAP diluted EPS guidance to GAAP diluted EPS because certain items that impact GAAP net income and GAAP diluted EPS are uncertain or out of our control and cannot be reasonably predicted. In particular, stock-based compensation expense is impacted by the future fair market value of our common stock and other factors, all of which are difficult to predict, subject to frequent change, or not within our control. The actual amount of these expenses during the third quarter of 2025 and fiscal year 2025 will have a significant impact on our future GAAP financial results. Accordingly, a reconciliation of adjusted EBITDA guidance to GAAP net income and non-GAAP diluted EPS guidance to GAAP diluted EPS is not available without unreasonable effort. UPWORK INC.RECONCILIATION OF GAAP TO NON-GAAP RESULTS(In thousands, except for percentages and share data)(Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024Net income$32,726 $22,220 $70,456 $40,662 Add back (deduct): Stock-based compensation expense 15,977 19,238 28,249 36,180 Depreciation and amortization 5,879 3,629 10,740 6,775 Other income, net (5,878) (5,620) (12,195) (12,342)Income tax provision 5,717 1,181 12,994 2,510 Other (1) (2) 2,640 187 2,828 375 Adjusted EBITDA$57,061 $40,835 $113,072 $74,160 Profit margin 17% 12% 18% 11%Adjusted EBITDA margin 29% 21% 29% 19% Cost of revenue, GAAP$43,432 $43,852 $85,238 $88,045 Stock-based compensation expense (200) (497) (387) (963)Cost of revenue, Non-GAAP 43,232 43,355 84,851 87,082 As a percentage of total revenue, GAAP 22% 23% 22% 23%As a percentage of total revenue, Non-GAAP 22% 22% 22% 23% Gross profit, GAAP$151,507 $149,277 $302,407 $296,021 Stock-based compensation expense 200 497 387 963 Gross profit, Non-GAAP 151,707 149,774 302,794 296,984 Gross margin, GAAP 78% 77% 78% 77%Gross margin, Non-GAAP 78% 78% 78% 77% Research and development, GAAP$44,843 $52,465 $90,995 $105,381 Stock-based compensation expense (5,615) (8,106) (11,427) (15,476)Intangible amortization (1,315) (398) (2,630) (797)Research and development, Non-GAAP 37,913 43,961 76,938 89,108 As a percentage of total revenue, GAAP 23% 27% 23% 27%As a percentage of total revenue, Non-GAAP 19% 23% 20% 23% Sales and marketing, GAAP$36,671 $47,333 $72,422 $95,184 Stock-based compensation expense (1,674) (3,393) (3,175) (6,329)Intangible amortization (333) — (833) — Sales and marketing, Non-GAAP 34,664 43,940 68,414 88,855 As a percentage of total revenue, GAAP 19% 25% 19% 25%As a percentage of total revenue, Non-GAAP 18% 23% 18% 23% General and administrative, GAAP$35,659 $29,924 $63,707 $61,925 Stock-based compensation expense (8,488) (7,242) (13,260) (13,412)Other (1) (2) (2,640) (187) (2,828) (375)General and administrative, Non-GAAP 24,531 22,495 47,619 48,138 As a percentage of total revenue, GAAP 18% 15% 16% 16%As a percentage of total revenue, Non-GAAP 13% 12% 12% 13% Total operating expenses, GAAP$118,942 $131,496 $231,152 $265,191 Stock-based compensation expense (15,777) (18,741) (27,862) (35,217)Intangible amortization (1,648) (398) (3,463) (797)Other (1) (2) (2,640) (187) (2,828) (375)Total operating expenses, Non-GAAP 98,877 112,170 196,999 228,802 As a percentage of total revenue, GAAP 61% 68% 60% 69%As a percentage of total revenue, Non-GAAP 51% 58% 51% 60% Income from operations, GAAP$32,565 $17,781 $71,255 $30,830 Stock-based compensation expense 15,977 19,238 28,249 36,180 Intangible amortization 1,648 398 3,463 797 Other (1) (2) 2,640 187 2,828 375 Income from operations, Non-GAAP 52,830 37,604 105,795 68,182 Net income, GAAP$32,726 $22,220 $70,456 $40,662 Stock-based compensation expense 15,977 19,238 28,249 36,180 Intangible amortization 1,648 398 3,463 797 Tax effect of non-GAAP adjustments (5,085) (6,815) (8,716) (12,387)Other (1) (2) 2,640 187 2,828 375 Net income, Non-GAAP 47,906 35,228 96,280 65,627 Weighted-average shares outstanding used in computing earnings per share, GAAPBasic (in millions) 132.2 131.4 133.7 133.8 Diluted (in millions) 140.2 138.3 141.9 140.8 Basic earnings per share, GAAP$0.25 $0.17 $0.53 $0.30 Diluted earnings per share, GAAP$0.24 $0.17 $0.50 $0.30 Weighted-average shares outstanding used in computing earnings per share, Non-GAAPBasic (in millions) 132.2 131.4 133.7 133.8 Diluted (in millions) 140.2 138.3 141.9 140.8 Basic earnings per share, Non-GAAP$0.36 $0.27 $0.72 $0.49 Diluted earnings per share, Non-GAAP$0.35 $0.26 $0.69 $0.48 (1) During the three and six months ended June 30, 2025 and 2024, we incurred $0.2 million and $0.4 million, respectively, of expense related to our Tides Foundation Warrant.(2) During the three and six months ended June 30, 2025, we incurred acquisition-related costs of $2.5 million in connection with our business combinations. These costs primarily consist of legal, accounting, and other professional fees, and are recorded in general and administrative expenses in the condensed consolidated statements of operations. Beginning in the second quarter of 2025, we included acquisition-related costs as an add-back to net income in the reconciliation to adjusted EBITDA. Acquisition-related costs incurred in prior periods were deemed immaterial and therefore not included as an add-back to adjusted EBITDA. UPWORK INC.RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW(In thousands)(Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024Cash provided by operating activities$72,514 $39,203 $109,479 $54,017 Less: purchases of property, plant & equipment and cash outflows from internally developed software (6,888) (3,747) (13,063) (6,412)Free cash flow$65,626 $35,456 $96,416 $47,605

Upwork Reports Second Quarter 2025 Financial Results

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