Upwork reported record-breaking financial results for Q4 2024 and the full year 2024, achieving all-time highs in revenue ($769.3M, up 12%), GAAP net income ($215.6M, up 360%), and adjusted EBITDA ($167.6M, up 129%). The company also saw significant improvements in profitability, with a 26% adjusted EBITDA margin in Q4—its highest ever. AI innovation, including enhancements to Uma™, Upwork’s AI assistant, and the acquisition of Objective AI, played a key role in growth, particularly in AI-related work, which saw a 60% GSV increase YoY. Despite macroeconomic challenges, Upwork expects continued revenue growth in 2025, targeting $740M-$760M in revenue and a further rise in profit margins and free cash flow.

Achieves record revenue, GAAP net income¹ and adjusted EBITDA^2,3 for the fourth quarter and full year 2024
Fourth-quarter revenue of $191.5 million and GAAP net income¹ of $147.2 million
Fourth-quarter adjusted EBITDA^2,3 of $50.2 million or 26% adjusted EBITDA margin, Upwork’s highest ever
Full-year revenue of $769.3 million, GAAP net income¹ of $215.6 million, and adjusted EBITDA^2,3 of $167.6 million

PALO ALTO, Calif., Feb. 12, 2025 - Upwork Inc. (Nasdaq: UPWK), the world’s largest work marketplace that connects businesses with independent talent from across the globe, today announced its financial results for the fourth quarter and full year of 2024.

“2024 was a record year for Upwork, with full-year revenue, GAAP net income and adjusted EBITDA reaching all-time highs,” said Hayden Brown, president and CEO, Upwork. “Our 2024 results are a reflection of our strong execution driving durable, profitable growth, bringing new AI innovations to market, and building long-term shareholder value. Upwork’s superior scale and model means we are poised to continue to gain market share as a trusted source of high-quality talent and work outcomes, powered by AI, in the years ahead.”

“We are delivering on our plan to expand profit margins, achieving an adjusted EBITDA margin of 26% in the fourth quarter—our most profitable quarter ever,” said Erica Gessert, CFO, Upwork. “We continue to execute on all fronts, even in the face of a challenging macroeconomic environment. Regardless of the operating environment in 2025 and beyond, we expect to increase profitability and free cash flow each and every year as we make steady progress toward our 35% adjusted EBITDA margin target.”

________________________
_{¹ Includes a non-cash tax benefit of $140.3 million from the release of a valuation allowance on certain deferred tax assets
² For each of the three and 12 months ended December 31, 2024, adjusted EBITDA does not include restructuring charges related to the restructuring plan announced on October 23, 2024, or the Restructuring Plan.
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.}

Fourth Quarter & Full Year 2024 Financial Highlights

• Revenue grew 4% year-over-year to $191.5 million in the fourth quarter of 2024


• Revenue grew 12% year-over-year to $769.3 million for full year 2024


• Active clients of 832,000


• GSV per active client of $4,815 increased 1% quarter-over-quarter in the fourth quarter, representing the second consecutive quarter of sequential growth


• Net income¹ was $147.2 million in the fourth quarter of 2024, compared to net income of $17.4 million in the fourth quarter of 2023


• Net income¹ was $215.6 million in 2024, compared to net income of $46.9 million in 2023


• Diluted earnings per share was $1.03 in the fourth quarter of 2024, compared to diluted earnings per share of $0.13 in the fourth quarter of 2023


• Diluted earnings per share was $1.52 in 2024, compared to diluted earnings per share of $0.06 in 2023


• Adjusted EBITDA^2,3 was $50.2 million in the fourth quarter of 2024, a 65% increase compared to adjusted EBITDA of $30.5 million in the fourth quarter of 2023


• Adjusted EBITDA^2,3 was $167.6 million in 2024, a 129% increase compared to adjusted EBITDA of $73.1 million in 2023


• Cash provided by operating activities^4,5 was $38.6 million in the fourth quarter of 2024, compared to cash provided by operating activities of $31.4 million in the fourth quarter of 2023


• Cash provided by operating activities^4,5 was $153.6 million in 2024, compared to cash provided by operating activities of $52.7 million in 2023


• Free cash flow^3,4,5 was $34.7 million in the fourth quarter of 2024, compared to free cash flow of $27.8 million in the fourth quarter of 2023


• Free cash flow^3,4,5 was $139.1 million in 2024, compared to free cash flow of $39.4 million in 2023

________________________
_{⁴ Fourth quarter free cash flow includes cash paid of $17.1 million associated with the Restructuring Plan.
⁵ 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.}

Full Year 2024 Operational Highlights

Empowering Customers with AI

• Made rapid progress on AI roadmap by launching enhancements for Uma™, Upwork’s Mindful AI, throughout 2024 to create tailored proposal drafts for freelancers and evaluate candidates for clients.


• Premiered Uma™-powered Managed Services to more efficiently scope projects, evaluate skills, and design optimal teams of experts to deliver work outcomes for larger clients.


• Acquired Objective AI, Inc., an AI-native search-as-a-service company, to further enhance Upwork’s all-time-high core search and match performance, strengthen Upwork’s AI and machine learning teams, and continue to uplevel multi-modal capabilities for Uma™.

Strong AI Category Growth

• GSV from AI-related work grew 60% year-over-year in 2024.


• The number of clients engaging in AI-related projects grew 42% year-over-year in 2024.


• Freelance professionals working on AI-related work earned 44% more per hour than freelancers working on non-AI-related work in 2024.

Enterprise

• Enterprise revenue grew 4% year-over-year to $107.2 million in 2024.


• Managed Services revenue grew 12% year-over-year in 2024, reflecting increasing demand for delivery of work outcomes and strong pipeline of new Managed Services clients.


• Launched Upwork Business Plus, a premium plan that provides a smoother glidepath for larger clients and closes the gap between Marketplace and Enterprise offerings.

Ads & Monetization

• Continued strength in ads & monetization, with revenues increasing 51% year-over-year in 2024.


• Freelancer Plus subscription revenue grew 58% year-over-year in 2024.

Financial Guidance & Outlook
Upwork’s guidance for revenue, adjusted EBITDA, diluted weighted-average shares outstanding, and non-GAAP diluted EPS for the first quarter of 2025 is:

• Revenue: $186 million to $191 million


• Adjusted EBITDA: $46 million to $50 million


• Diluted weighted-average shares outstanding: 143 million to 145 million


• Non-GAAP diluted EPS: $0.24 to $0.26

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: $740 million to $760 million


• Adjusted EBITDA: $180 million to $190 million


• Diluted weighted-average shares outstanding: 138 million to 142 million


• Non-GAAP diluted EPS: $1.05 to $1.10


• Stock-based compensation expense is expected to be approximately $15 million per quarter in 2025

Fourth Quarter and Full Year 2024 Financial Results Conference Call and Webcast
Upwork will host a conference call today at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss the company’s fourth quarter and full year 2024 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 fourth quarter and full year 2024 earnings presentation.

Disclosure Information
We 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 Upwork
Upwork is the world’s largest work marketplace that connects businesses with highly-skilled independent talent from across the globe. From entrepreneurs to Fortune 100 enterprises, companies rely on Upwork’s trusted platform to tap into expert talent, leverage AI-powered work solutions, and drive meaningful business outcomes. With 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. Upwork’s platform has facilitated more than $20 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 Relations
investor@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 first 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, including artificial intelligence, industry environment, the economy, our plans with respect to share repurchases, the expected impact of cost-savings initiatives, the expected impact of our acquisition of Objective AI, Inc., 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-term 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 September 30, 2024, filed with the SEC on November 6, 2024, 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 Annual Report on Form 10-K for the year ended December 31, 2024, 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.