Upwork (UPWK) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $191.7 million, down 2% year-over-year but at the high end of guidance, with adjusted EBITDA of $64.1 million, up 12% year-over-year and exceeding guidance, driven by disciplined cost management and strong monetization levers.

• Net income for Q2 2026 was $25.4 million, down 22% year-over-year, with a profit margin of 13%.

• GSV per active client reached a record $5,230, up 5% year-over-year, marking the eighth consecutive quarter of sequential growth.

• Growth in SMB, Enterprise, and AI segments, with Business Plus GSV up 174% year-over-year and AI strategy and consulting category up over 50% year-over-year.

• Major restructuring in May 2026 reduced workforce by 20%, incurring $13.8 million in charges, with further reductions expected by year-end.

Financial highlights

• Q2 2026 GSV was $966.4 million, down 4% year-over-year, reflecting AI automation and a subdued labor market; active clients totaled 763,000, down 4%.

• Marketplace revenue was $166.9 million, down 2% year-over-year; enterprise revenue was $24.8 million, up 2%.

• Gross margin was 76%, down from 78% year-over-year; adjusted EBITDA margin was 33.4%.

• Free cash flow was $35.9 million, impacted by one-time restructuring payments.

• Take rate reached 19.8%, up 40bps year-over-year, driven by high-margin revenue streams.

Outlook and guidance

• Full-year 2026 revenue expected between $730–$750 million, reflecting persistent AI and macro headwinds.

• Full-year adjusted EBITDA projected at $225–$235 million (31% margin midpoint); non-GAAP diluted EPS expected between $1.38 and $1.43.

• Q3 2026 revenue guidance is $176–$184 million, with adjusted EBITDA of $50–$54 million (29% margin midpoint); non-GAAP diluted EPS: $0.31–$0.33.

• Increased marketing spend by $5–$10 million planned for the back half of the year to drive customer acquisition.

• Management expects continued headwinds from AI adoption and macroeconomic uncertainty, impacting GSV, active clients, and revenue for the remainder of 2026.