Upwork (UPWK) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 1% year-over-year to $195.5 million, with Marketplace revenue up 3% and Enterprise revenue down 6%, demonstrating resilience amid challenging demand and macroeconomic headwinds.

• Adjusted EBITDA rose 3% to $57.4 million, beating guidance by $10 million, and profitability was maintained despite a tough environment.

• Strategic focus on AI-powered work, SMB acceleration, and enterprise expansion is yielding strong results, with Business Plus and Lifted products outperforming expectations.

• Announced a major restructuring plan, including a 24% workforce reduction and leadership changes, targeting $70 million in annualized cost savings and $16–$23 million in one-time charges.

• Secured a $150 million revolving credit facility and continued share repurchases to enhance financial flexibility.

Financial highlights

• Q1 2026 revenue was $195.5 million (up 1% year-over-year); GSV was $987.1 million, flat year-over-year.

• Adjusted EBITDA was $57.4 million (29.4% margin); free cash flow was $12.9 million, down 58% year-over-year.

• Marketplace take rate increased to 19.8%, up 29 bps year-over-year.

• Net income for Q1 2026 was $31.5 million, down from $37.7 million in Q1 2025.

• Active clients declined 3% year-over-year to 784,000, while GSV per active client increased 5%.

Outlook and guidance

• 2026 revenue guidance is $760–$790 million, with adjusted EBITDA expected at $250–$260 million (33% margin) and a target of 35% margin in the back half of the year.

• Q2 2026 revenue expected at $187–$193 million; adjusted EBITDA at $56–$59 million (30–31% margin); non-GAAP diluted EPS for 2026 guided to $1.50–$1.55.

• Gross margin is expected to remain below prior year levels in 2026 due to increased amortization costs.

• Human-supervised agent product launch planned for 2H 2026 to further support SMB AI adoption.