0001627475FALSE00016274752025-02-122025-02-12

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________________________________
FORM 8-K
_______________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 12, 2025
_______________________________________________________

UPWORK INC.
(Exact name of Registrant as Specified in Its Charter)
_______________________________________________________
Delaware
001-38678
46-4337682
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
530 Lytton Avenue, Suite 301
Palo Alto,
 California
94301
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s Telephone Number, Including Area Code: (650) 316-7500
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
_______________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value per share
UPWK
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨



Item 2.02 Results of Operations and Financial Condition.
    
    On February 12, 2025, Upwork Inc., or the Company, will hold a conference call regarding its financial results for the quarter and year ended December 31, 2024. The Company issued a press release announcing its financial results for the quarter and year ended December 31, 2024. The full text of the press release is attached as Exhibit 99.1 to this report.

    The information furnished with this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

    The Company is making reference to non-GAAP financial information in the press release and the conference call. Reconciliations of GAAP to non-GAAP results are provided in the press release attached as Exhibit 99.1 to this report.

    The Company uses its Investor Relations website (investors.upwork.com), its blog (upwork.com/blog), its 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 its business or financial performance, investor events, press releases, and earnings releases and as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. The content of the Company's websites and information that the Company may post on or provide to online and social media channels, including those mentioned above, and information that can be accessed through the Company's websites or these online and social media channels are not incorporated by reference into this report or in any other report or document the Company files with the Securities and Exchange Commission, and any references to the Company's websites or these online and social media channels are intended to be inactive textual references only.

Item 9.01 Financial Statements and Exhibits.

    (d) Exhibits.
Exhibit NumberDescription
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UPWORK INC.
Date: February 12, 2025
By:/s/ Erica Gessert
Erica Gessert
Chief Financial Officer



Exhibit 99.1

Upwork Reports Fourth Quarter and Full Year 2024 Financial Results
Achieves record revenue, GAAP net income1 and adjusted EBITDA2,3 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 EBITDA2,3 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 EBITDA2,3 of $167.6 million
PALO ALTO, Calif. – February 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.”
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 EBITDA2,3 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
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.


•Adjusted EBITDA2,3 was $167.6 million in 2024, a 129% increase compared to adjusted EBITDA of $73.1 million in 2023
•Cash provided by operating activities4,5 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 activities4,5 was $153.6 million in 2024, compared to cash provided by operating activities of $52.7 million in 2023
•Free cash flow3,4,5 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 flow3,4,5 was $139.1 million in 2024, compared to free cash flow of $39.4 million in 2023
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.

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.


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


UPWORK INC.
Key Financial and Operational Metrics
(Unaudited)

Three Months Ended
December 31,		Twelve Months Ended
December 31,
(In thousands, except percentages )20242023% Change20242023% Change
GSV(1)
$992,766 $1,072,079 (7)%$4,008,107 $4,142,252 (3)%
Marketplace revenue(1)
$163,655 $157,490 4 %$662,108 $586,099 13 %
Enterprise revenue(1)
$27,828 $26,444 5 %$107,217 $103,037 4 %
Gross profit$148,842 $138,066 8 %$595,231 $518,686 15 %
Gross profit margin78 %75 %267 bps77 %75 %210 bps
Operating expenses$135,259 $129,638 4 %$530,025 $529,946 0%
Net income$147,166 $17,374 *$215,586 $46,887 *
Adjusted EBITDA(1)(2)
$50,206 $30,470 65 %$167,593 $73,134 129 %
Profit margin77 %9 %6,741 bps28 %7 %2,122 bps
Adjusted EBITDA margin(2)
26 %17 %965 bps22 %11 %1,117 bps
Cash provided by operating activities(3)
$38,583 $31,370 23 %$153,563 $52,708 191 %
Free cash flow(1)(2)(3)
$34,718 $27,756 25 %$139,119 $39,357 *
*Not meaningful
As of December 31,
(In thousands)20242023% Change
Active clients(1)
832 851 (2)%

Three Months Ended
December 31,		Twelve Months Ended
December 31,
20242024
New enterprise clients(1)
21 137

(1) See Key Definitions in our fourth quarter 2024 earnings presentation.

(2) 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.
(3)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.


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.




UPWORK INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share data)
(Unaudited)
Three Months Ended
December 31,		Twelve Months Ended
December 31,
2024202320242023
Revenue:
Marketplace$163,655 $157,490 $662,108 $586,099 
Enterprise27,828 26,444 107,217 103,037 
Total revenue191,483 183,934 769,325 689,136 
Cost of revenue42,641 45,868 174,094 170,450 
Gross profit148,842 138,066 595,231 518,686 
Operating expenses
Research and development53,491 46,217 209,283 177,363 
Sales and marketing43,934 49,304 185,211 220,681 
General and administrative35,602 32,003 128,803 118,925 
Provision for transaction losses2,232 2,114 6,728 12,977 
Total operating expenses135,259 129,638 530,025 529,946 
Income (loss) from operations13,583 8,428 65,206 (11,260)
Other income, net4,788 7,389 25,221 60,137 
Income before income taxes18,371 15,817 90,427 48,877 
Income tax benefit (provision)128,795 1,557 125,159 (1,990)
Net income$147,166 $17,374 $215,586 $46,887 
Net income per share:
Basic$1.10 $0.13 $1.61 $0.35 
Diluted$1.03 $0.13 $1.52 $0.06 
Weighted-average shares used to compute net income per share:
Basic134,265 136,620 133,621 134,774 
Diluted143,098 143,803 143,152 137,263 




UPWORK INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, 2024December 31, 2023
ASSETS
Current assets
Cash and cash equivalents$305,757 $79,641 
Marketable securities316,344 470,457 
Funds held in escrow, including funds in transit195,736 212,387 
Trade and client receivables, net75,490 103,061 
Prepaid expenses and other current assets17,727 17,825 
Total current assets911,054 883,371 
Property and equipment, net30,056 27,140 
Goodwill121,064 118,219 
Intangible assets, net12,989 3,048 
Operating lease asset5,752 4,333 
Deferred tax asset128,779 — 
Other assets, noncurrent1,919 1,430 
Total assets$1,211,613 $1,037,541 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$6,128 $5,063 
Escrow funds payable195,736 212,387 
Accrued expenses and other current liabilities59,300 58,192 
Deferred revenue7,269 17,361 
Total current liabilities268,433 293,003 
Debt, noncurrent357,928 356,087 
Operating lease liability, noncurrent9,567 6,088 
Other liabilities, noncurrent308 1,288 
Total liabilities636,236 656,466 
Stockholders’ equity
Common stock14 14 
Additional paid-in capital653,575 674,918 
Accumulated other comprehensive income264 205 
Accumulated deficit(78,476)(294,062)
Total stockholders’ equity575,377 381,075 
Total liabilities and stockholders’ equity$1,211,613 $1,037,541 



UPWORK INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
2024202320242023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$147,166 $17,374 $215,586 $46,887 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for transaction losses1,972 1,867 5,505 8,673 
Depreciation and amortization4,370 3,808 14,813 9,449 
Amortization of debt issuance costs461 461 1,842 2,098 
Accretion of discount of purchases of marketable securities, net(1,480)(4,598)(11,911)(14,430)
Amortization of operating lease asset409 834 2,837 3,269 
Tides Foundation common stock warrant expense187 187 750 750 
Stock-based compensation expense13,633 18,047 68,391 74,195 
Deferred taxes(129,258)— (129,258)— 
Gain on early extinguishment of convertible senior notes— — — (38,945)
Changes in operating assets and liabilities:
Trade and client receivables (1)
(4,565)(8,316)(4,802)(22,176)
Prepaid expenses and other assets1,812 (1,341)(656)146 
Operating lease liability(136)(1,528)(4,351)(5,903)
Accounts payable428 3,289 969 (2,513)
Accrued expenses and other liabilities5,097 6,823 4,730 5,746 
Deferred revenue(1,513)(5,537)(10,882)(14,538)
Net cash provided by operating activities38,583 31,370 153,563 52,708 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities(127,818)(260,034)(362,322)(709,214)
Proceeds from maturities of marketable securities121,623 197,753 486,892 648,800 
Proceeds from sale of marketable securities3,354 5,460 41,775 165,035 
Purchase of an intangible asset— (3,000)— (3,000)
Acquisition of business, net of cash acquired(14,333)— (14,333)— 
Purchases of property and equipment(1,549)(134)(3,528)(692)
Internal-use software and platform development costs(2,316)(3,480)(10,916)(12,659)
Net cash provided by (used in) investing activities(21,039)(63,435)137,568 88,270 
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in escrow funds payable, net (1)
(22,053)(2,293)9,956 25,443 
Proceeds from exercises of stock options and common stock warrant1,358 71 3,293 2,012 
Proceeds from employee stock purchase plan1,878 1,517 4,795 4,081 
Net cash paid for early extinguishment of convertible senior notes— — — (171,327)
Repurchase of common stock— — (100,000)— 
Net cash (used in) financing activities(18,817)(705)(81,956)(139,791)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH(1,273)(32,770)209,175 1,187 
Cash, cash equivalents, and restricted cash—beginning of period506,866 329,188 296,418 295,231 
Cash, cash equivalents, and restricted cash—end of period$505,593 $296,418 $505,593 $296,418 
(1) 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. This reclassification did not affect the previously reported total cash balances on the Consolidated Statement of Cash Flows.
The following table reconciles cash, cash equivalents, and restricted cash as reported in the consolidated balance sheets to the total of the same amounts shown in the consolidated statements of cash flows as of the following (in thousands):
December 31, 2024December 31, 2023
Cash and cash equivalents$305,757 $79,641 
Restricted cash4,100 4,390 
Funds held in escrow, including funds in transit195,736 212,387 
Total cash, cash equivalents, and restricted cash as shown in the consolidated statement of cash flows$505,593 $296,418 




Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), we present certain non-GAAP financial measures in this press release, including adjusted EBITDA, adjusted EBITDA margin, free cash flow, and non-GAAP diluted EPS.

We define adjusted EBITDA as net income (loss) adjusted for stock-based compensation expense; depreciation and amortization; other income (expense), net, which includes interest expense; income tax benefit (provision); and, if applicable, certain other gains, losses, benefits, or charges that are non-cash or are significant and the result of isolated events or transactions that have not occurred frequently in the past and are not expected to occur regularly in the future. Free cash flow is defined as cash provided by (used in) operations less purchases of property, plant and equipment and cash outflows from internally developed software.

We use non-GAAP financial measures in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance. These non-GAAP financial measures provide consistency and comparability with past financial performance, facilitate period-to-period comparisons of our core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. In addition, adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to certain items that can vary substantially from company to company, and free cash flow allows investors to evaluate the cash generated from our underlying operations across periods.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as analytical tools, and investors should not consider them in isolation or as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. In particular, (1) adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy, (2) although depreciation and amortization expense are non-cash charges, the assets subject to depreciation and amortization may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements, and (3) adjusted EBITDA does not reflect: (a) changes in, or cash requirements for, our working capital needs; (b) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (c) tax payments that may represent a reduction in cash available to us. In addition, the non-GAAP financial measures we use may be different from non-GAAP financial measures used by other companies, including companies in our industry, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from the non-GAAP financial measures that we present. Reconciliations of the non-GAAP financial measures presented in this press release to their most directly comparable GAAP financial measures have been provided below, and investors are encouraged to review the reconciliations and not rely on any single financial measure to evaluate our business.

We have not reconciled our adjusted EBITDA guidance to GAAP net income or non-GAAP diluted EPS guidance to GAAP diluted EPS because certain items that impact GAAP net income and GAAP diluted EPS are uncertain or out of our control and cannot be reasonably predicted. In particular, stock-based compensation expense is impacted by the future fair market value of our common stock and other factors, all of which are difficult to predict, subject to frequent change, or not within our control. The actual amount of these expenses during the first quarter of 2025 and fiscal year 2025 will have a significant impact on our future GAAP financial results. Accordingly, a reconciliation of adjusted EBITDA guidance to GAAP net income and non-GAAP diluted EPS guidance to GAAP diluted EPS is not available without unreasonable effort.


UPWORK INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(In thousands, except for percentages and share data)
(Unaudited)
Three Months Ended
December 31,		Twelve Months Ended
December 31,
2024202320242023
Net income$147,166 $17,374 $215,586 $46,887 
Add back (deduct):
Stock-based compensation expense13,633 18,047 68,391 74,195 
Depreciation and amortization4,370 3,808 14,813 9,449 
Other income, net (1)
(4,788)(7,389)(25,221)(60,137)
Income tax (benefit) provision (2)
(128,795)(1,557)(125,159)1,990 
Other (3)(4)
18,620 187 19,183 750 
Adjusted EBITDA$50,206 $30,470 $167,593 $73,134 
Profit margin77 %9 %28 %7 %
Adjusted EBITDA margin26 %17 %22 %11 %
Cost of revenue, GAAP$42,641 $45,868 $174,094 $170,450 
Stock-based compensation expense(262)(491)(1,586)(1,900)
Other (3)
(317)— (317)— 
Cost of revenue, Non-GAAP42,062 45,377 172,191 168,550 
As a percentage of total revenue, GAAP22 %25 %23 %25 %
As a percentage of total revenue, Non-GAAP22 %25 %22 %24 %
Gross profit, GAAP$148,842 $138,066 $595,231 $518,686 
Stock-based compensation expense262 491 1,586 1,900 
Other (3)
317 — 317 — 
Gross profit, Non-GAAP149,421 138,557 597,134 520,586 
Gross margin, GAAP78 %75 %77 %75 %
Gross margin, Non-GAAP78 %75 %78 %76 %
Research and development, GAAP$53,491 $46,217 $209,283 $177,363 
Stock-based compensation expense(6,394)(6,572)(29,923)(28,006)
Intangible amortization(704)— (1,900)— 
Other (3)
(7,872)— (7,872)— 
Research and development, Non-GAAP38,521 39,645 169,588 149,357 
As a percentage of total revenue, GAAP28 %25 %27 %26 %
As a percentage of total revenue, Non-GAAP20 %22 %22 %22 %
Sales and marketing, GAAP$43,934 $49,304 $185,211 $220,681 
Stock-based compensation expense(2,116)(4,358)(11,670)(14,030)
Intangible amortization(167)— (167)— 
Other (3)
(7,007)— (7,007)— 
Sales and marketing, Non-GAAP34,645 44,946 166,368 206,651 
As a percentage of total revenue, GAAP23 %27 %24 %32 %
As a percentage of total revenue, Non-GAAP18 %24 %22 %30 %


General and administrative, GAAP$35,602 $32,003 $128,803 $118,925 
Stock-based compensation expense(4,861)(6,626)(25,212)(30,259)
Other (3)(4)
(3,424)(320)(3,987)(883)
General and administrative, Non-GAAP27,317 25,057 99,604 87,783 
As a percentage of total revenue, GAAP19 %17 %17 %17 %
As a percentage of total revenue, Non-GAAP14 %14 %13 %13 %
Total operating expenses, GAAP$135,259 $129,638 $530,025 $529,946 
Stock-based compensation expense(13,371)(17,556)(66,805)(72,295)
Intangible amortization(871)— (2,066)— 
Other (3)(4)
(18,303)(320)(18,866)(883)
Total operating expenses, Non-GAAP102,714 111,762 442,288 456,768 
As a percentage of total revenue, GAAP71 %70 %69 %77 %
As a percentage of total revenue, Non-GAAP54 %61 %57 %66 %
Income (loss) from operations, GAAP$13,583 $8,428 $65,206 $(11,260)
Stock-based compensation expense 13,633 18,047 68,391 74,195 
Intangible amortization871 — 2,066 — 
Other (3)(4)
18,881 320 19,444 883 
Income from operations, Non-GAAP46,968 26,795 155,107 63,818 
Net income, GAAP$147,166 $17,374 $215,586 $46,887 
Stock-based compensation expense13,633 18,047 68,391 74,195 
Gain on early extinguishment of convertible senior notes (1)
— — — (38,945)
Intangible amortization871 — 2,066 — 
Release of valuation allowance on deferred tax assets(140,339)— (140,339)— 
Tax effect of non-GAAP adjustments2,149 (6,945)(18,000)(12,546)
Other (3)(4)
18,881 320 19,444 883 
Net income, Non-GAAP42,361 28,796 147,148 70,474 
Weighted-average shares outstanding used in computing earnings per share, GAAP
Basic (in millions)134.3 136.6 133.6 134.8 
Diluted (in millions)143.1 143.8 143.2 137.3 
Basic earnings per share, GAAP$1.10 $0.13 $1.61 $0.35 
Diluted earnings per share, GAAP$1.03 $0.13 $1.52 $0.06 
Weighted-average shares outstanding used in computing earnings per share, Non-GAAP
Basic (in millions)134.3 136.6 133.6 134.8 
Diluted (in millions)143.1 143.8 143.2 142.7 
Basic earnings (loss) per share, Non-GAAP$0.32 $0.21 $1.10 $0.52 
Diluted earnings (loss) per share, Non-GAAP$0.30 $0.20 $1.04 $0.52 
(1) During the twelve months ended December 31, 2023, we recognized a gain of $38.9 million on the early extinguishment of a portion of our 0.25% convertible senior notes due 2026, which is included in other income, net.


(2) During each of the three and twelve months ended December 31, 2024, we recognized a non-cash tax benefit of $140.3 million from the release of a valuation allowance on certain deferred tax assets.
(3) During each of the three and twelve months ended December 31, 2024, we incurred $19.2 million in costs related to the execution of the Restructuring Plan. Of this amount, $18.4 million is included in Other, while the remaining amount is allocated between stock-based compensation expense and Other income, net.
(4) During each of the three and twelve months ended December 31, 2024 and 2023, we incurred $0.2 million and $0.6 million, respectively, of expense related to our Tides Foundation Warrant.


UPWORK INC.
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES
TO FREE CASH FLOW
(In thousands)
(Unaudited)
Three Months Ended
December 31,		Twelve Months Ended
December 31,
2024202320242023
Cash provided by operating activities$38,583 $31,370 $153,563 $52,708 
Less: purchases of property, plant & equipment and cash outflows from internally developed software(3,865)(3,614)(14,444)(13,351)
Free cash flow$34,718 $27,756 $139,119 $39,357 


v3.25.0.1
Cover
Feb. 12, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 12, 2025
Entity Registrant Name UPWORK INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-38678
Entity Tax Identification Number 46-4337682
Entity Address, Address Line One 530 Lytton Avenue, Suite 301
Entity Address, City or Town Palo Alto,
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94301
City Area Code 650
Local Phone Number 316-7500
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.0001 par value per share
Trading Symbol UPWK
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001627475
Amendment Flag false
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