Upwork (UPWK) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 2025 revenue of $201.7 million, up 4% year-over-year, with GAAP net income of $29.3 million and adjusted EBITDA of $59.6 million, reflecting a 38% increase year-over-year and a 29.6%–30% margin.

• Returned to GSV growth after five quarters of headwinds, with Q3 GSV reaching $1.02 billion, up 2% year-over-year, and GSV per active client exceeding $5,000, up 5%.

• AI-related GSV grew 53% year-over-year, with 45% more clients and significant growth in generative AI and prompt engineering subcategories.

• Launched Lifted, an enterprise-focused subsidiary, expanding into the $650 billion contingent work market and integrating acquisitions of Bubty and Ascen.

• Raised full-year 2025 guidance for revenue and adjusted EBITDA, reflecting strong business momentum and ongoing investment in AI and enterprise expansion.

Financial highlights

• Q3 2025 revenue was $201.7 million (+4% YoY); GSV reached $1.02 billion (+2% YoY); adjusted EBITDA was $59.6 million (29.6%–30% margin); net income was $29.3 million; diluted EPS was $0.21.

• Gross margin was 77%–77.3% in Q3 2025; non-GAAP operating expense was $101 million (50% of revenue, down from 57% a year ago).

• Free cash flow was $69.4 million, with a conversion rate of up to 116%; cash, cash equivalents, and marketable securities totaled $643 million at quarter end.

• Marketplace take rate was 18.9% in Q3, up from 18.3% a year ago, driven by dynamic pricing and Business Plus.

• $31 million was used to repurchase 2.1 million shares in Q3; $101.9 million and 7.3 million shares repurchased year-to-date; $98.1 million remained under the repurchase program.

Outlook and guidance

• Q4 2025 revenue expected between $193–$198 million; adjusted EBITDA guidance of $49–$52 million; non-GAAP diluted EPS: $0.31–$0.33.

• Full-year 2025 revenue guidance raised to $782–$787 million; adjusted EBITDA to $222–$225 million (28% margin midpoint); non-GAAP diluted EPS: $1.35–$1.37.

• Long-term adjusted EBITDA margin target reiterated at 35%; cost-saving measures expected to continue benefiting net income and adjusted EBITDA.

• Marketplace take rate expected to remain stable for the rest of 2025; margin dilution anticipated from recent acquisitions.

• Lifted expected to be accretive to GSV, revenue, and adjusted EBITDA in 2027; margin dilution of about two percentage points expected in 2026 due to Lifted investment.