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“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 million
- Active clients(2) of 796,000
- GSV 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 complexity
- Net income was $32.7 million, up 47% year-over-year
- Diluted earnings per share was $0.24, compared to diluted earnings per share of $0.17 in the second quarter of 2024
- Adjusted EBITDA(3) was $57.1 million, up 40% year-over-year
- Cash 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 2024
- Free 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 million
- Adjusted EBITDA: $47 million to $51 million
- Diluted weighted-average shares outstanding: 140 million to 141 million
- Non-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 million
- Adjusted EBITDA: $206 million to $214 million
- Diluted weighted-average shares outstanding: 140 million to 142 million
- Non-GAAP diluted EPS: $1.24 to $1.27
- Stock-based compensation expense $60 million to $65 million
