Key Highlights

  • UPWK brought in $185.6 million of Revenue for the quarter ended Sep 30, 2026, a fall of 8.0% (calculated) against $201.7 million the year before.
  • Net income climbed to $31.8 million, equal to $0.25 a diluted share, versus $29.3 million, which equals $0.21 a share.
  • Adjusted EBITDA reached $63.8 million, representing a 34.4% margin, while free Cash Flow totaled $53.9 million.
  • The take rate on the marketplace widened to 20.0%, and gross services Volume reached $914 million.
  • The 2026 adjusted EBITDA outlook was lifted to a range of $236 million to $240 million.

Lower Spending Helps Profit Advance Even as Sales Decline

Upwork (NASDAQ:UPWK) closed the three months ended Sep 30, 2026. Sales came to $185.6 million, which is 8.0% lower (calculated) than the $201.7 million booked twelve months before, yet Net Income advanced to $31.8 million, up from $29.3 million.

The company runs an online marketplace linking businesses with freelance professionals, and offers Lifted, an enterprise offering. Operating expenses in total were $106.7 million, against $126.1 million earlier, while R&D spending came in at $34.9 million, versus $47.5 million a year before. Leadership noted that quarterly sales and the $914 million gross services volume both exceeded the top of the guidance range.

Marketplace Take Rate Hits 20.0% While Active Client Count Falls to 717,000

Take rate gained 110 basis points year on year, reaching 20.0%, aided by higher-margin offerings. Business Plus revenue jumped 120% and accounts for 8% of gross services volume, and Freelancer Plus subscription income climbed 25%.

Active clients numbered 717,000, a 10% drop from 794,000, as the platform concentrates on higher-value buyers and larger projects. Each active client generated a record $5,418 in gross services volume, up 8%. Management indicated that lower-value work keeps leaving the platform as planned and that shifts in how buyers discover the site are hurting demand.

WorkMotion Deal Closes as Upwork Raises Its Adjusted EBITDA Target

On Oct 30, 2026, the Lifted unit finished buying WorkMotion Software, a privately held employer-of-record company based in Germany, for approximately $129.7 million. Management projects Lifted gross services volume growing above 30% in 2026 once WorkMotion is included. A leadership change is also underway: the CFO exits on Jan 1, and the chief business officer assumes that job.

Full-year 2026 revenue is projected at $742 million to $750 million. WorkMotion adds roughly $4 million in the closing period, partly counterbalanced by the exit of a managed services project with thinner margins. Adjusted EBITDA now stands at $236 million to $240 million, and the midpoint translates to a 32% margin. Non-GAAP diluted EPS guidance sits between $1.45 and $1.47.

For the final quarter, the company anticipates revenue between $169 million and $177 million, with non-GAAP Earnings between $0.30 and $0.32 per diluted share and adjusted EBITDA spanning $51 million to $55 million.

Note Repayment and Buybacks Reduce Cash Ahead of a Softer Early 2027 Stretch

Cash and cash equivalents closed Sep 30, 2026 at $228.0 million, with another $76.3 million in marketable securities; year-end balances were $294.4 million and $378.4 million respectively. The decline reflects $361.0 million of repaid notes and $109.7 million of repurchases during the first nine months, with no buybacks in the third quarter itself. Leadership expects growth to remain under pressure through the first half of 2027, with a recovery anticipated in the back half, and plans to Supply 2027 guidance alongside fourth-quarter results in February.