Upwork’s second quarter results were well received by the market, with management pointing to platform enhancements and a sharpened focus on AI-driven features as key reasons for the company’s performance. CEO Hayden Brown highlighted accelerated client hiring in AI-related work, improvements in marketplace monetization, and growth in the Business Plus segment. CFO Erica Gessert noted that Upwork’s targeted marketing and cost discipline contributed to margin expansion, even as the broader demand environment remained challenging. The company attributed a positive shift in gross services volume per client and higher contract values to new product features and AI-powered workflow improvements.
Is now the time to buy UPWK? Find out in our full research report (it’s free).
Upwork (UPWK) Q2 CY2025 Highlights:
- Revenue: $194.9 million vs analyst estimates of $187.6 million (flat year on year, 3.9% beat)
- Adjusted EPS: $0.35 vs analyst estimates of $0.28 (27.1% beat)
- Adjusted EBITDA: $57.06 million vs analyst estimates of $47.09 million (29.3% margin, 21.2% beat)
- The company lifted its revenue guidance for the full year to $770 million at the midpoint from $750 million, a 2.7% increase
- Management reiterated its full-year Adjusted EPS guidance of $1.16 at the midpoint
- EBITDA guidance for the full year is $210 million at the midpoint, above analyst estimates of $196.4 million
- Operating Margin: 16.7%, up from 9.2% in the same quarter last year
- Gross Services Volume: 796,000, down 72,000 year on year
- Market Capitalization: $1.81 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Upwork’s Q2 Earnings Call
- Joshua K. Chan (UBS): Asked for details on how Bubty and Ascen will be integrated and reported in revenue. CEO Hayden Brown explained these acquisitions expand Upwork’s offering for all contingent work types, with immediate but modest revenue impact and greater long-term contributions.
- Maria Ripps (Canaccord): Sought clarity on what drove take rate expansion and how AI, monetization products, and Business Plus factored in. CFO Erica Gessert attributed gains to pricing experiments, growth in Connects and Freelancer Plus, and ongoing AI enhancements.
- Jared Osteen (ROTH Capital Partners): Asked about new versus mature client behaviors in Business Plus. Brown indicated new Business Plus clients convert quickly, spend more, and adopt high-value features, with 35% of clients new to Upwork.
- Unidentified Analyst (Jefferies): Queried distinctions between marketplace, Business Plus, and enterprise offerings. Brown clarified that Bubty and Ascen target large enterprises, while Business Plus focuses on SMBs, with little overlap and clear upgrade paths.
- Matthew Dorrian Condon (Citizens Bank): Inquired about the rollout of variable freelancer fees and AI-driven internal efficiencies. Brown noted the fee strategy is still being tested and AI is significantly improving productivity across engineering, customer support, and corporate functions.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace and impact of Bubty and Ascen integration into Upwork’s enterprise subsidiary, (2) continued adoption of AI-driven features and their effect on client spend, and (3) the trajectory of Business Plus client growth and its contribution to overall revenue. We will also watch for signs that Upwork sustains its margin gains and navigates macroeconomic headwinds effectively.
Upwork currently trades at $13.65, up from $12.01 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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