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What changed in UPWORK, INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of UPWORK, INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+453 added−458 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-13)

Top changes in UPWORK, INC's 2025 10-K

453 paragraphs added · 458 removed · 345 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

67 edited+36 added−39 removed9 unchanged
Biggest changeWe 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.
Biggest changeWe 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. 9 The content of our websites and information that we may post on or provide to online and social media channels, including those mentioned above, and information that can be accessed through our websites or these online and social media channels are not incorporated by reference into this Annual Report or in any other report or document we file with or furnish to the SEC, and any references to our websites or these online and social media channels are intended to be inactive textual references only.
To support this strategy, the Upwork Research Institute publishes proprietary insights based on platform data and third-party research that are leveraged for marketing activities across the client acquisition funnel, driving thought leadership through speaking engagements, social media activations, and earned media, including widespread press coverage.
To support this strategy, the Upwork Research Institute publishes proprietary insights based on Upwork Marketplace platform data and third-party research that are leveraged for marketing activities across the client acquisition funnel, driving thought leadership through speaking engagements, social media activations, and earned media, including widespread press coverage.
These programs empower employees to take charge of their financial goals and 4 build long-term security. Additionally, we offer a tuition reimbursement program to support employees in upskilling and furthering their professional development, empowering them to grow their careers while contributing to our long-term success.
These programs empower employees to take charge of their financial goals and build long-term security. Additionally, we offer a tuition reimbursement program to support employees in upskilling and furthering their professional development, empowering them to grow their careers while contributing to our long-term success.
Many of the laws and regulations that are or may be applicable to our business are still evolving and being tested in courts and could be interpreted in ways that could adversely impact our business. In addition, the application and interpretation of 8 these laws and regulations often are uncertain, particularly in the industry in which we operate.
Many of the laws and regulations that are or may be applicable to our business are still evolving and being tested in courts and could be interpreted in ways that could adversely impact our business. In addition, the application and interpretation of these laws and regulations often are uncertain, particularly in the industry in which we operate.
Isolation as a Design Philosophy. Leveraging the philosophy of domain-driven design, we have divided our platform into multiple sections to reduce the likelihood that a failure in any one section would negatively impact other sections of our platform. 4. Intelligent Monitoring and Automated Remediation.
Isolation as a Design Philosophy. Leveraging the philosophy of domain-driven design, we have divided the platform into multiple sections to reduce the likelihood that a failure in any one section would negatively impact other sections of the platform. 4. Intelligent Monitoring and Automated Remediation.
Our platform is designed to continuously monitor its own health and act appropriately to maintain its health, particularly during our deployment of new code or in response to any single infrastructure or platform issue.
The platform is designed to continuously monitor its own health and act appropriately to maintain its health, particularly during our deployment of new code or in response to any single infrastructure or platform issue.
Our earned and owned media initiatives contribute to shaping influential conversations about the future of work and the value of flexible talent solutions, further enhancing brand awareness. Building on our brand positioning, we address key client needs throughout our marketing efforts, ensuring clients can easily identify and leverage the right Upwork product for their goals.
Our earned and owned media initiatives contribute to shaping influential conversations about the future of work and the value of flexible talent solutions, further enhancing brand awareness. 6 Building on our brand positioning, we address key client needs throughout our marketing efforts, ensuring clients can easily identify and leverage the right product for their goals.
See Part I, Item IA, “Risk Factors—Risks Related to Legal and Regulatory Matters” for more information. Available Information Our principal executive office is located at 530 Lytton Avenue, Suite 301, Palo Alto, California 94301, and our mailing address is 3490 S 4400 W #70008, West Valley City, Utah 84120.
See Part I, Item 1A, “Risk Factors—Risks Related to Legal and Regulatory Matters” for more information. Available Information Our principal executive office is located at 530 Lytton Avenue, Suite 301, Palo Alto, California 94301, and our mailing address is 3490 S 4400 W #70008, West Valley City, Utah 84120.
Empowered by our work marketplace, millions of people from diverse backgrounds and locations around the globe are accessing economic opportunities previously unavailable to them. We enable workers to engage with clients beyond their local labor market, choose when to work and what projects to pursue, and set their own rates.
Empowered by the Upwork Marketplace, millions of people from diverse backgrounds and locations around the globe are accessing economic opportunities previously unavailable to them. We enable workers to engage with clients beyond their local labor market, choose when to work and what projects to pursue, and set their own rates.
These laws and regulations may involve areas such as labor and employment (including worker classification and independent contractor relationships), data protection, content regulation, intellectual property, data sharing and privacy, taxation, consumer protection, background checks, payment services, money transmitter regulations, anti-corruption, anti-money laundering and sanctions laws, the development, use and training of artificial intelligence models, or other subjects.
These laws and regulations may involve areas such as labor and employment (including worker classification and independent contractor relationships), data protection, content regulation, intellectual property, data sharing and privacy, taxation, consumer protection, background checks, payment services, money transmitter regulations, anti-corruption, anti-money laundering and sanctions laws, the development, use and training of AI models, or other subjects.
We have focused on building a services-oriented architecture hosted on Amazon Web Services, which we refer to as AWS, designed to independently scale, or failover, as needed, by leveraging the capabilities of the AWS platform. As a result, we believe we are more resilient to unexpected surges in traffic or to new code changes that we may introduce. 3.
We have focused on building a services-oriented architecture hosted on Amazon Web Services, which we refer to as AWS, designed to independently scale, or failover, as needed, by leveraging the capabilities of the AWS platform. As a result, we believe the platform is resilient to unexpected surges in traffic or to new code changes that we may introduce. 3.
Competition The market segment for independent talent and the clients that engage them is highly competitive, rapidly evolving, fragmented, and subject to changing technology, shifting needs, and frequent introductions of new competitors as well as new offerings and services. The market continues to draw increased third-party investment and new competitor entrants, driven by changing labor market dynamics.
Competition The market for contingent talent and the clients that engage them is highly competitive, rapidly evolving, fragmented, and subject to changing technology, shifting needs, and frequent introductions of new competitors as well as new offerings and services. The market continues to draw increased third-party investment and new competitor entrants, driven by changing labor market dynamics.
Our platform contains a large repository of closed-loop data for the entire lifecycle of work, starting from when clients post 6 projects to when talent and clients match, how they communicate via on-platform messaging and collaboration tools, how and when payment is transferred, and feedback on their engagements.
Our Upwork Marketplace platform contains a large repository of closed-loop data for the entire lifecycle of work, starting from when clients post projects to when talent and clients match, how they communicate via on-platform messaging and collaboration tools, how and when payment is transferred, and feedback on their engagements.
Our feedback system enables talent to build their business reputation by establishing long-term credibility with project review and verified client feedback. Talent profiles also include data from their work history on our work marketplace, including client feedback, number of hours billed, projects completed, and amount earned.
Our feedback system enables talent to build their business reputation by establishing long-term credibility with project review and verified client feedback. Talent profiles include data from their work history on our platforms, including client feedback, number of hours billed, projects completed, and amount earned.
We believe the principal competitive factors in our market segment include: • platform features and functionality, including efficient and accelerated time to hire; • verified talent work history and client payment history; • size and engagement of customer base, including the ability to attract and retain clients with a need for talent services; • breadth of skill categories offered by a platform’s rated quality talent; • availability of high-quality projects from clients of all sizes, including Fortune 100 companies; • uniqueness, size, and scope of data assets; • ease of use; • brand awareness and reputation; • trust and safety; • level of customer satisfaction; • relationships with third-party partners; • strength of sales and marketing efforts; • ability to innovate and develop new or improved offerings and services; • greater flexibility with cost structure and reduced operating costs; and • level of workflow automation driven by machine learning and artificial intelligence tools.
We believe the principal competitive factors in our market segment include: • platform features and functionality, including efficient and accelerated time to hire; • verified talent work history, client feedback, and client payment history; • size and engagement of customer base, including the ability to attract and retain clients with a need for talent services; • breadth of skill categories offered by a platform’s rated quality talent; • depth and availability of qualified talent, including in high-demand skill categories; • availability of high-quality projects from clients of all sizes, including Fortune 100 companies; • uniqueness, size, and scope of data assets; • platform ease of use; • brand awareness and reputation; • trust and safety; • level of customer satisfaction; 8 • relationships with third-party partners; • strength of sales and marketing efforts; • ability to innovate and develop new or improved offerings and services, including AI tools, services, and functionality; • greater flexibility with cost structure and reduced operating costs; and • level of workflow automation driven by machine learning and AI tools.
We provide total rewards that attract and retain world-class employees through a total compensation package that includes equity-based awards for certain roles to align employee compensation with stockholder interests.
We provide total rewards that attract and retain world-class employees through a total compensation package that includes equity-based and long-term cash awards for certain roles to align employee compensation with stockholder interests.
We generally enter into confidentiality agreements and invention or work product assignment agreements with our employees, independent team members that we engage through our work marketplace, advisors, and consultants to control access to, and clarify ownership of, our software and other inventions and intellectual property, documentation, and other proprietary information.
We generally enter into confidentiality agreements and invention or work product assignment agreements with our employees, independent team members that we engage through our platforms and other workforce solutions, advisors, and consultants to control access to, and clarify ownership of, our software and other inventions and intellectual property, documentation, and other proprietary information.
We have engineered and implemented a modern, distributed core infrastructure design that provides for failures to occur at the individual system level without disrupting service or impacting the customer experience. 2. Services-Oriented Architecture.
We have engineered and implemented a modern, distributed core infrastructure design intended to provide for failures to occur at the individual system level without disrupting service or impacting the customer experience. 2. Services-Oriented Architecture.
Our Offerings Marketplace Our Marketplace offerings are designed for clients looking to identify quality talent and scale hiring quickly. Our Marketplace offerings provide clients with access to independent talent, including those with verified work history on our work marketplace and client feedback. Clients benefit from the ability to instantly match with the right talent and built-in collaboration features.
Our Offerings Marketplace Our Upwork Marketplace offerings are designed for clients looking to identify quality talent and scale hiring quickly. They provide access to independent talent, including those with verified work history and client feedback from the marketplace platform. Clients benefit from the ability to quickly match with the right talent and leverage built-in collaboration features.
These advantages include access to high-quality talent, reduced time-to-hire, greater flexibility, and cost efficiencies. Additionally, Upwork fosters trusted relationships while providing both clients and independent talent greater control over their businesses and careers.
These advantages include access to high-quality talent, reduced time-to-hire, greater flexibility, and cost efficiencies. Additionally, we foster trusted relationships while providing both clients and talent greater control over their businesses and careers.
They can also receive perks such as a verified client badge and highlighted job posts, which help clients stand out to top talent and achieve results. Upwork Payroll is available to clients when they choose to work with talent that they find on Upwork as employees.
They can also receive perks such as a verified client badge and highlighted job posts, which help clients stand out to top talent and support more efficient hiring outcomes. Upwork Payroll is available to clients when they choose to work with talent that they find on Upwork as employees.
Moreover, we provide escrow services to our customers and are therefore licensed as an internet escrow agent by the California Department of Financial Protection and Innovation, which we refer to as the DFPI.
Moreover, we provide escrow services to our customers and maintain a subsidiary licensed as an internet escrow agent by the California Department of Financial Protection and Innovation, which we refer to as the DFPI.
Our drive to create a more equitable and sustainable future of work has helped us identify new ways to serve our stakeholders—including our clients and the independent talent on our work marketplace, our own team members, our investors, and our community partners—and contribute to long-term value creation.
Our drive to create a more equitable and sustainable future of work has helped us identify new ways to serve our stakeholders—including our customers, our own team members, our investors, and our community partners—and contribute to long-term value creation.
Marketing We employ a holistic and integrated marketing strategy aimed at attracting clients to our work marketplace and guiding them toward the right product offerings to meet their business needs. Our approach begins with building 5 awareness of our brand and highlighting the advantages of hiring independent talent compared to traditional staffing models.
Marketing We employ a holistic and integrated marketing strategy aimed at attracting clients to our platforms and workforce solutions and guiding them toward the right product offerings to meet their business needs. Our approach begins with building awareness of our brand and highlighting the advantages of our direct-to-talent approach compared to traditional staffing models.
Workforce Engagement and People Analytics We engage our workforce in meaningful ways and take timely action in response to feedback. Research into workforce experience begins during onboarding and is sustained throughout a team member’s tenure at Upwork.
Workforce Engagement and People Analytics We engage with our workforce in meaningful ways and take timely action in response to feedback in connection with workforce-related practices. Research into workforce experience begins during onboarding and continues throughout a team member’s tenure at Upwork.
We believe that by facilitating remote work engagements and providing our customers with the tools they need to collaborate from afar, we are helping them avoid work-related commutes and business travel. Our work marketplace is also connecting sustainability professionals with mission-driven clients, including thousands of nonprofits on Upwork.
We believe that by facilitating remote work engagements and providing our customers with the tools they need to collaborate from afar, we are helping them avoid work-related commutes, business travel, and other limitations of a local-only model. The Upwork Marketplace also connects sustainability professionals with mission-driven clients, including thousands of nonprofits on the platform.
The robust functionality of our work marketplace is designed to enable talent to run and build their businesses more easily and to enable clients to find, hire, and collaborate with high-quality talent on a global scale.
This robust functionality is designed to enable talent to more easily run and build their businesses and to enable clients to find, hire, and collaborate with high-quality talent on a global scale.
Talent benefit from access to quality clients and secure and timely payments while enjoying the freedom to run their own businesses, create their own schedules, and work from their preferred locations on projects that they find fulfilling.
Through the Upwork Marketplace, talent benefit from access to quality clients and secure, timely payments while enjoying the flexibility to run their own businesses, set their own schedules, and work from their preferred locations on projects that they find fulfilling.
Our Work Marketplace We believe the following core aspects of our work marketplace provide Upwork with a competitive advantage: Trusted Work Marketplace Our work marketplace fosters trust and credibility among talent and clients, while reducing the friction associated with searching for, contracting and collaborating with, and paying highly-skilled independent talent for short-term and longer-term projects.
Our Work Platforms and Work Solutions We believe the following core aspects of our platforms and workforce solutions provide Upwork with a competitive advantage: Trusted Work Platforms and Workforce Solutions Our platforms and workforce solutions foster trust and credibility among talent and clients, while reducing the friction associated with sourcing, contracting and collaborating with, and paying highly skilled talent for short-term and longer-term projects.
Traditional query-based search capabilities are enriched by proprietary AI-powered models that drive real-time algorithms optimized to facilitate discovery and the “best match” between a client’s project requirements and talent’s unique skill set. We leverage AI to balance supply and demand within the platform as well. Talent receives data on market rates based on similar jobs when submitting proposals.
Traditional query-based search capabilities are enriched by proprietary AI-powered models that drive real-time algorithms optimized to facilitate discovery and the “best match” between a client’s project requirements and talent’s unique skill set. We leverage AI to balance supply and demand within the platform as well.
Upwork provides a new way for talent to market their skills and expertise and we enable inclusive hiring practices through continuous accessibility improvements, analysis of potential underlying bias in our technology, and features like our diversity-certified talent badges. We are also powering a more efficient and sustainable way to work.
The Upwork Marketplace provides a new way for talent to market their skills and expertise and enables inclusive hiring practices through continuous accessibility improvements and regular analysis of potential underlying bias in our technology. We are also powering a more efficient and sustainable way to work.
Our website is located at www.upwork.com, and our investor relations website is located at investors.upwork.com.
Our primary website is located at www.upwork.com, Lifted’s website is located at www.go-lifted.com, and our investor relations website is located at investors.upwork.com.
Our proprietary database maintains detailed and dynamic information, including skills possessed by talent, feedback, and success indicators of talent and clients transacting on our work marketplace. Leveraging this data through artificial intelligence, which we refer to as AI, including machine learning models, enables us to provide a trusted, convenient, and effective experience for both new and existing customers.
Our proprietary database maintains detailed and dynamic information, including skills possessed by talent, client feedback, talent work history, and success indicators of talent and clients transacting on our platforms. By leveraging this data through AI, including machine learning models, we are able to deliver a trusted, convenient, and effective experience for both new and existing customers.
This “lifecycle” approach to workforce research affords Upwork senior leadership and People team members ongoing and near-real-time insight into critical moments of worker experience and productivity. The collection of such data allows leadership, line managers, and our People team to identify successes and opportunities at many levels, including for individual team members, company-wide programs or larger organizational units.
This approach provides Upwork senior leadership and People 5 team members with ongoing and near-real-time insight into key stages of the workforce experience. The collection of such data allows leadership, managers, and our People team to identify successes and opportunities at multiple levels, including for individual team members, company-wide programs or larger organizational units.
Our focus on culture comes from our board of directors and flows throughout our company. In evaluating our Chief Executive Officer and management team, emphasis is put on their contributions to our overall culture.
Our board of directors meets regularly with management to discuss issues impacting our team members and ways to support our workforce. Our focus on culture comes from our board of directors and flows throughout our company. In evaluating our Chief Executive Officer and management team, emphasis is put on their contributions to our overall culture.
Our platform leverages artificial intelligence, including machine learning models, and we continue to invest in the latest advances in AI to train these models on our large, proprietary behavioral data to better predict future behaviors that drive successful outcomes for customers.
We continue to invest 7 in the latest advances in AI to train our models on our large, proprietary behavioral data to better predict future behaviors that drive successful outcomes for customers.
Scalability Our cloud-based platform has been designed to be elastic, scaling automatically with increased usage, supporting sudden traffic spikes by dynamically bringing additional capacity online as required, then scaling back to ensure consistent and predictable cost management. Our Social and Environmental Impact Our mission is to create economic opportunities so people have better lives.
Scalability Our cloud-based Upwork Marketplace platform has been designed to be elastic, scaling automatically with increased usage, supporting sudden traffic spikes by dynamically bringing additional capacity online as required, then scaling back to ensure consistent and predictable cost management.
Our People Our mission not only drives the creation and continuous development of our work marketplace, but it is also integral to how we engage our employees and our approach to creating and fostering an inclusive environment that promotes and encourages diversity, inclusion, belonging, career development, and wellness.
Our People Our purpose not only drives the creation and continuous development of our platforms and workforce solutions, but it is also integral to how we engage our team members and our approach to creating and fostering an inclusive environment that promotes and encourages team enablement, career development, and wellness.
We continually review our development efforts to assess the existence and patentability of new intellectual property. Government Regulation We have a robust regulatory compliance program built to comply with the various U.S. federal and state and foreign laws and regulations that are applicable to internet companies and businesses that operate online marketplaces connecting businesses with independent talent.
Government Regulation We have a robust regulatory compliance program built to comply with the various U.S. federal and state and foreign laws and regulations that are applicable to internet companies, businesses that operate online marketplaces connecting businesses with independent talent, and firms operating in the staffing sector.
As of December 31, 2024, we had approximately 600 employees, and throughout 2024, we engaged approximately 2,200 independent team members through our work marketplace to provide services to us on a variety of internal projects.
As of December 31, 2025, we had approximately 630 employees, and throughout 2025, we engaged approximately 1,600 independent team members through our platforms and other workforce solutions to provide services on a variety of internal projects.
Through Managed Services, clients engage us to deliver the work product, and we, in turn, engage talent either directly or as employees of third-party staffing providers to perform the work for clients on our behalf. We directly invoice the client and assume responsibility for the work performed.
Under Managed Services arrangements, clients engage Lifted to deliver work outcomes, and Lifted, in turn, engages talent either directly through its subsidiaries or as employees of third-party staffing providers to perform the work for clients on Lifted’s behalf. Lifted directly invoices the client and assumes responsibility for the work performed.
The Land team consists of business development representatives and other quota-carrying account executives who are primarily focused on acquiring new clients who have achieved, or aim to achieve, enterprise scale. The Expand team consists of quota-carrying account management and success team members who help new and existing clients scale usage of our work marketplace throughout their organizations.
Our Enterprise sales team consists of teams that focus on one of two primary areas—Land and Expand. The Land team consists of business development representatives and other quota-carrying account executives who are primarily focused on acquiring new clients who have achieved, or aim to achieve, enterprise scale.
We continuously assess our social and environmental impact, and we are committed to addressing both short- and long-term risks and opportunities across our value chain. We address these risks and opportunities across four key themes: economic opportunity; team enablement; the environment; and trust and ethics.
We continuously assess our social and environmental impact, and we are committed to addressing both short- and long-term risks and opportunities across our value chain.
By committing to carbon-neutral operations and to purchasing carbon-free electricity to match 100% of our office and remote work electricity consumption, we are demonstrating how companies across the globe can take action on climate change. We are also pursuing strategies to reduce our Scope 3 emissions intensity from employee commuting, business travel, and purchased goods and services as we grow.
By committing to carbon-neutral operations and to purchasing carbon-free electricity to match 100% of our office and remote work electricity consumption, we are demonstrating how companies across the globe can take positive remedial action on climate change.
We achieve this by strategically developing and growing relationships within client organizations at all levels, from users to buyers to executives, as well as executing persona-based workshops, webinars, and account-based marketing campaigns that drive additional client spend through our work marketplace.
We achieve this by strategically developing and growing relationships within client organizations at all levels, from users to buyers to executives, as well as executing persona-based workshops, webinars, and account-based marketing campaigns that drive additional client spend. We believe this land-and-expand strategy helps clients ramp their usage of our Enterprise offerings and drives more value, awareness, and adoption over time.
Benefits and Competitive Compensation We strive to offer market-competitive compensation and benefits to attract and retain employees for the long-term. We engage an independent compensation consultant to benchmark our employee compensation with external sources to ensure fair and equitable pay practices.
Through these programs, we seek to maintain consistent standards for performance and development and to support an effective, skilled, and adaptable workforce. Benefits and Competitive Compensation We strive to offer market-competitive compensation and benefits to attract and retain employees for the long-term. We regularly benchmark our employee compensation with external sources to ensure fair and equitable pay practices.
We also generate revenue through ads and monetization products, including purchases of Connects (which are virtual tokens that are required for talent to bid on projects and purchase ads products on our work marketplace), talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar.
Through the Upwork Marketplace offerings, we also generate revenue through ads and monetization products, talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar. The expansion of our ads and monetization products enhances marketplace efficiency and provides additional opportunities for talent and clients to connect.
Sales and Marketing Our sales and marketing organizations work closely together to increase awareness, generate customer demand, build a strong sales pipeline, and grow account relationships across clients of all sizes, including independent professionals and small businesses to Fortune 100 companies, to accelerate GSV and revenue growth.
Sales and Marketing Our sales and marketing organizations work closely together to increase awareness, generate customer demand, build a strong sales pipeline, and grow account relationships across clients of all sizes to accelerate GSV and revenue growth. Enterprise Sales Our Enterprise sales team focuses on clients interested in our Enterprise Solutions and Managed Services offerings delivered through Lifted.
For clients seeking a higher level of service, Managed Services offers a service-led program management and full project lifecycle solution that enables Enterprise customers to contract entire functions.
For clients seeking a higher level of service, Lifted’s Managed Services offerings provide a service-led program management and end-to-end project delivery solution that enables enterprise clients to outsource defined functions or projects.
We refer to talent and clients together as customers. We serve as a powerful discovery engine for talent, helping them find rewarding, engaging, and flexible work, as well as market their services and build their book of business.
Our platforms and other workforce solutions serve as a powerful discovery engine for talent, helping them find rewarding, engaging, and flexible work, as well as market their services and build their independent businesses and careers.
We compete with a number of online and offline platforms and services domestically and internationally, as well as traditional staffing firms, to attract and retain customers and expand our share of customer spend.
We compete with a number of online and offline platforms and services domestically and internationally, as well as traditional staffing firms, to attract and retain customers and expand our share of customer spend. AI tools are emerging as an additional area of competition as technology becomes capable of generating work outputs that could otherwise be produced by human talent.
In order to encourage our employees to recharge and make their well-being a priority, we provide unlimited paid time off in addition to our company-recognized holidays.
In order to encourage our employees to recharge and make their well-being a priority, we provide unlimited paid time off in addition to our company-recognized holidays. Board of Directors Oversight Our board of directors recognizes the importance of our team and the value of an effective, creative, and inclusive work environment centered around a merit-based culture.
For additional details regarding our cybersecurity risk management and strategy, see Part I, Item 1C, “Cybersecurity.” Artificial Intelligence Capabilities We leverage real-time and historical data to create an adaptive experience for our customers.
Additional information regarding our cybersecurity risk management, governance, and strategy is described in Part I, Item 1C, “Cybersecurity.” AI Capabilities The Upwork Marketplace platform utilizes AI, including machine learning models, leveraging real-time and, where appropriate, historical data to create an adaptive experience for our customers.
We closely monitor activity on our work marketplace to detect and prevent abuse and have integrated several third-party technologies, including an industry-leading fraud detection vendor. We provide clients with tools to validate work performed by talent and to provide both public and private feedback once the work is completed.
We closely monitor activity across our platforms and integrate third-party technologies, including industry-leading fraud detection solutions, to enhance security and trust. We provide clients with tools to track and monitor work performed by talent and to provide both public and private feedback following the completion of projects.
As of December 31, 2024, we held 19 issued U.S. patents, with 3 patent applications pending. As of December 31, 2024, we held seven registered trademarks in the United States, including Upwork, Elance, oDesk, “Work Without Limits,” and “Talent Cloud,” and also held 163 registered trademarks in foreign jurisdictions.
As of December 31, 2025, we held 21 issued U.S. patents, with one patent application pending, seven registered trademarks in the United States, including Upwork, Elance, oDesk, “Work Without Limits,” and the Uma rosette, and more than 160 registered trademarks in foreign jurisdictions. We continually review our development efforts to assess the existence and patentability of new intellectual property.
We generate revenue from both talent and clients of our Marketplace and Enterprise offerings. Revenue is primarily generated from fees charged to talent as a percentage of their billings to clients, which we refer to as talent service fees, and to a lesser extent, fees charged to clients on a per-transaction basis, which we refer to as client marketplace fees.
Revenue is primarily derived through the Upwork Marketplace, which charges fees to talent as a percentage of their billings to clients, which we refer to as talent service fees, and fees to clients as a percentage of payment to talent, which we refer to as client marketplace fees.
Additionally, we have a dedicated people analytics team, which has enabled us to build on insights from our lifecycle listening program, as well as broader data sources and methods, and uncover strategic and operational insights that will further improve the overall experience of our workforce and drive performance of our business.
Over time, the aggregation and analysis of such data informs workforce-related decision-making and supports business objectives. In addition, we have a dedicated people analytics team that builds on insights from workforce feedback, including our lifecycle listening program, as well as broader data sources and methods, to develop strategic and operational insights.
We utilize a flexible systems architecture to allow us to scale easily as our platform usage increases and to provide a consistent and robust customer experience. The core focus of our technology is on: Reliability Our infrastructure is designed to provide high reliability and robust platform performance. There are four components to our reliability strategy: 1. Modern Distributed Infrastructure.
These investments support reliability, security, AI capabilities, and scalability, across our platforms and workforce solutions, as discussed below. The core focus of our technology is on: Reliability The infrastructure of the Upwork Marketplace is designed to provide high reliability and robust platform performance. There are four components to our reliability strategy: 1. Modern Distributed Infrastructure.
We build and use software, leverage data analysis, and apply machine learning and artificial intelligence to highlight relevant talent, facilitate security and identity verification for account ownership, and flag suspicious activity to protect customers and prevent undesirable behavior on our platform.
We use a combination of advanced technology, data science, product features, and our skilled team to support trusted environments for getting work done. We build and deploy proprietary software, leverage data analysis, and apply machine learning and AI to highlight relevant talent, support identity verification, and identify potentially suspicious activity to protect customers and prevent undesirable behavior.
Training and Development As an organization built on talent and skills development, we understand the value of providing our employees with ongoing professional development and leadership opportunities to advance their careers.
We believe the positive relationship between us, our team members, and our unique, strong culture differentiates us and is a key driver of our business success. Training and Development As an organization built on talent and skills development, we recognize the importance of providing our employees with ongoing professional development and leadership opportunities to support career progression and business performance.
We provide a range of advanced tools designed to streamline how talent and clients work together, including our proprietary AI assistant Uma, which enhances productivity for both talent and clients. Our platform also includes search and collaboration capabilities, machine learning-driven talent matching and proposal ranking capabilities, time tracking and invoicing systems, and payments services.
Robust Functionality Our platforms provide clients with the ability to post jobs and leverage AI-powered recommendations to efficiently connect with talent, rank proposals, and collaborate on projects. We provide a range of advanced tools designed to streamline how talent and clients work together, including our proprietary AI assistant, Uma, which enhances productivity for both talent and clients.
For additional information related to how we calculate GSV, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — Business” and “ — Key Financial and Operational Metrics.” 1 For clients, our work marketplace provides fast, secure, and efficient access to high-quality talent with over 10,000 skills across more than 125 categories of work, such as web, mobile and software development, administrative support, sales and marketing, design and creative, and customer service, as well as more emergent categories and skills like those pertaining to generative artificial intelligence.
For clients, our platforms and other workforce solutions provide fast, secure, and efficient access to AI-augmented solutions and high-quality talent across more than 10,000 skills in over 130 categories of work, including AI-related projects, web, mobile and software development, administrative support, sales and marketing, design and creative, and customer service.
This expertise is a critical factor to establish and build trust, while promoting brand loyalty and giving clients confidence in hiring talent for their next project.
This expertise is a critical factor to establish and build trust, while promoting brand loyalty and giving clients confidence in hiring talent for their next project. 3 In addition, our platforms and workforce solutions include capabilities designed to support trusted and reliable remote engagements, such as escrow services, approval workflows, and dispute resolution processes that help ensure clients pay only for work that has been completed and talent are paid in full and on time.
We offer a direct-to-talent approach as an alternative to traditional intermediaries such as staffing firms, recruiters, and agencies by providing high-quality independent talent through our work marketplace with innovative technology features that help build trusted relationships and instill trust in remote work, including the ability to engage talent as either independent contractors or as employees of third-party staffing providers.
We offer a direct-to-talent approach as an alternative to traditional intermediaries such as third-party staffing firms, recruiters, and traditional agencies by enabling clients to engage high-quality talent through our platforms and other workforce solutions. These offerings enable clients to streamline workflows, including talent sourcing, outreach, contracting, and engagement management.
Additionally, we invest in advertising campaigns, including television, digital, and streaming audio placements, to further promote awareness and adoption of our solutions. Our Technology We invest substantial resources in research and development to enhance our platform, develop new products and features, and improve our infrastructure.
Our Technology We invest substantial resources in research and development to enhance our platforms and workforce solutions, develop new products and features, and improve our infrastructure. We utilize a flexible systems architecture to allow us to scale easily as platform usage increases and to provide a consistent and robust customer experience.
With Upwork Payroll, clients have access to third-party staffing providers to employ talent and meet their talent needs through our work marketplace. Enterprise Our Enterprise offerings deliver industry-leading work solutions for clients who have achieved, or aim to achieve, enterprise scale and who are looking to be more cost-efficient, innovative, productive, and growth-oriented.
With Upwork Payroll, clients have access to third-party staffing providers to employ talent and meet their talent needs through the Upwork Marketplace. Enterprise Our Enterprise workforce solutions delivered through Lifted provide enterprise organizations with scalable, flexible solutions to source, contract, manage, and pay talent across the full spectrum of contingent work.
Employee Wellness Employee safety and well-being is of paramount importance to us. We empower our team with cutting-edge productivity and collaboration tools, as well as training and toolkits designed to help leaders thrive in managing remote teams. In addition, we promote programs to support our employees’ physical, financial, and mental well-being.
These insights are used to inform workforce planning and initiatives related to employee experience and organizational effectiveness and to support overall business performance. Employee Wellness Employee safety and well-being is of paramount importance to us. We promote programs to support our employees’ physical, financial, and mental well-being.
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Item 1. Business. Overview We operate the world’s largest work marketplace that connects businesses with independent talent from across the globe, as measured by gross services volume, which we refer to as GSV. 1 Independent talent is an increasingly sought-after, critical, and expanding segment of the global workforce.
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Item 1. Business. Overview Upwork Inc., through its complementary, wholly owned subsidiaries, connects businesses with global, AI-enabled talent across every on-demand work type, including freelance, agency, fractional, and payrolled.
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During the year ended December 31, 2024, our work marketplace enabled $4.0 billion of GSV. Independent talent that advertise and provide services to clients through our work marketplace, which we refer to as talent, includes independent professionals and agencies of varying sizes. We define clients as customers that seek out and work with talent through our work marketplace.
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Our portfolio of platforms and other workforce solutions includes the Upwork Marketplace, the world’s human and AI-powered work marketplace that connects businesses with on-demand access to highly skilled independent talent worldwide, and Lifted, our wholly owned subsidiary that provides a purpose-built solution for enterprise organizations to source, contract, manage, and pay talent across the full spectrum of contingent work.
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Moreover, talent have real-time visibility into opportunities that are in high demand, so that they can invest their time and focus on developing sought-after skills. 1 GSV represents the total amount that clients spend on our offerings as well as additional fees we charge to talent and clients for other services.
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Our customers consist of both talent and clients. We define talent as those who deliver services through the Upwork Marketplace, Lifted, or other Upwork workforce solutions. We define clients as customers who seek and engage with talent through these platforms and other workforce solutions.
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Our work marketplace also enables clients to streamline workflows, including talent sourcing, outreach, and contracting. In addition, our work marketplace provides clients with access to essential functionality for remote engagements with talent, including communication and collaboration, the ability to receive all talent invoices through our work marketplace, and payment protection.
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Talent includes independent professionals and agencies of varying sizes, while clients range from small businesses and entrepreneurs to large enterprises, including Fortune 100 companies. We measure economic activity across our portfolio of platforms and other workforce solutions using Gross Services Volume, which we refer to as GSV.
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Our clients range in size from independent professionals and small businesses to Fortune 100 companies. We believe a key differentiator of our business is our track record of creating trusted relationships, enabling our customers to successfully connect at scale.
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GSV represents the total dollar value transacted through all Upwork platforms and other workforce solutions, including client spend for talent services.
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As the world’s largest work marketplace connecting businesses with independent talent, as measured by GSV, we benefit from network effects that drive growth in both the number of clients posting jobs and the number of talent seeking work. Long-term and recurring use of our work marketplace by our customers underscores its value and utility.
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GSV also includes other client and talent value-added services, such as AI-based solutions, purchases of Connects (which are virtual tokens that are required for talent to bid on projects and purchase ads products on the Upwork Marketplace), payment processing, memberships, and currency services. 1 With customers in over 180 countries, our platforms and other workforce solutions enabled $4.0 billion of GSV for the year ended December 31, 2025.
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Additionally, we earn interest on funds held on behalf of customers. The expansion of our ads and monetization products enhances marketplace efficiency and provides additional opportunities for talent and clients to connect.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we are unable to maintain similar levels of growth, our business, operating results, and financial condition could be adversely affected. • We continue to evolve our business strategy, offerings and pricing model, and changes that we make can adversely affect our business and make it difficult to evaluate our future prospects. • If we are unable to maintain our banking and payment partner relationships on favorable terms, or at all, our business could be adversely affected. • Our business depends in part on the success of our strategic relationships with third parties and their continued performance. • We face payment and fraud risks that could adversely impact our business. • Customers circumvent our work marketplace, which adversely impacts our business. • We are subject to disputes with or between customers of our work marketplace. • We face risks related to our international community of customers, which could increase as we seek to expand our international footprint. • If the market for independent talent and the services they offer does not grow, our business, operating results, and financial condition could be adversely affected. • If we are not able to develop and release new offerings and services or successful enhancements to our existing offerings and services, our business could be adversely affected. • We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results, and financial condition. • If internet search engines’ methodologies or other channels that we utilize to direct traffic to our website are modified to our disadvantage, or our search result page rankings decline for other reasons, our customer growth could decline. • If we or our third-party partners experience a security breach, other hacking or phishing attack, ransomware or other malware attack, or other privacy or security incident, our work marketplace may be perceived as not being secure, our reputation may be harmed, demand for our work marketplace may be reduced, our operations may be disrupted, we may incur significant legal costs, fines, or liabilities, and our business could be adversely affected. • If we fail to maintain and enhance our brand and reputation, our business and financial condition may be adversely affected. • Business or system errors, defects, or disruptions could diminish demand, adversely impact our business, operating results, and financial condition, and subject us to liability. 10 • Our business is subject to extensive government regulation and oversight.
Biggest changeIf we are unable to maintain similar levels of growth or manage future growth, our business, operating results, and financial condition could be adversely affected. • We continue to evolve our business strategy, offerings and pricing models, and changes that we make can adversely affect our business and make it difficult to evaluate our future prospects. • If we are unable to maintain our banking and payment partner relationships on favorable terms, or at all, our business could be adversely affected. • Our business depends in part on the success of our strategic relationships with third parties and their continued performance. • We face payment and fraud risks that could adversely impact our business. • Customers circumvent our platforms and other workforce solutions, which adversely impacts our business. • Issues relating to artificial intelligence and machine learning could adversely affect our business, operating results, and financial condition. • We are subject to disputes with or between our customers. • We face risks related to our international community of customers, which could increase as we seek to expand our international footprint. • Acquisitions, investments, and other strategic transactions could result in operating difficulties and harm our business. • If the market for independent talent and the services they offer does not grow, our business, operating results, and financial condition could be adversely affected. • If we are not able to develop and release new offerings and services or successful enhancements to our existing offerings and services, our business could be adversely affected. • If internet search engines’ methodologies or other channels that we utilize to direct traffic to our websites are modified to our disadvantage, or our search result page rankings decline for other reasons, our customer growth could decline. • We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results, and financial condition. • If we or our third-party partners experience a security breach, other hacking or phishing attack, ransomware or other malware attack, or other privacy or security incident, our platforms and other workforce solutions 10 may be perceived as not being secure, our reputation may be harmed, demand for our offerings may be reduced, our operations may be disrupted, we may incur significant legal costs, fines, or liabilities, and our business could be adversely affected. • If we fail to maintain and enhance our brands and reputation, our business and financial condition may be adversely affected. • Business or system errors, defects, or disruptions could diminish demand, adversely impact our business, operating results, and financial condition, and subject us to liability. • Our business is subject to extensive government regulation and oversight.
As a result, we may recognize additional tax expense and be subject to additional tax liabilities, including other liabilities for tax collection obligations due to changes in federal, state, and international tax laws, statutes, rules, regulations, or ordinances; changes in taxing jurisdictions and administrative interpretations and applications; results of tax examinations, settlements, or judicial decisions; changes in accounting principles; or changes to our business operations.
As a result, we may recognize additional tax expense and be subject to additional tax liabilities, including other liabilities for tax collection obligations due to changes in federal, state, and international tax laws, statutes, rules, regulations, or ordinances; changes to our business operations; changes in taxing jurisdictions and administrative interpretations and applications; results of tax examinations, settlements, or judicial decisions; or changes in accounting principles.
In addition, strategic transactions that do close may involve significant challenges, uncertainties, and risks, including: • the potential for our strategic transactions to use cash that we may need in the future to operate our business or result in dilutive issuances of our equity securities or the incurrence of significant indebtedness; • failure of the strategic transaction to advance our business strategy or realize its anticipated benefits; • disruptions of our ongoing operations and diversion of management’s attention; • potential exposure to new or incremental risks associated with the acquired businesses or assets, including becoming subject to different laws and regulations or more stringent scrutiny due to the nature or location of the acquired business, products, technologies, or other assets; • incurring substantial expenses or assuming substantial liabilities, ongoing obligations, or other risks, particularly if we fail to identify or accurately estimate commitments, liabilities, deficiencies, or other risks associated with the acquired businesses or assets; 15 • difficulties retaining key personnel of the acquired company or integrating acquired operations, products, systems, technologies, and employee cultures; • potential exposure to adverse tax consequences, substantial depreciation, impairment of goodwill or other intangible assets, or deferred compensation charges; or • difficulties related to being required to adopt or modify accounting policies.
In addition, strategic transactions that do close may involve significant challenges, uncertainties, and risks, including: • the potential for our strategic transactions to use cash that we may need in the future to operate our business or result in dilutive issuances of our equity securities or the incurrence of significant indebtedness; • failure of the strategic transaction to advance our business strategy or realize its anticipated benefits; • disruptions of our ongoing operations and diversion of management’s attention; • potential exposure to new or incremental risks associated with the acquired businesses or assets, including becoming subject to different laws and regulations or more stringent scrutiny due to the nature or location of the acquired business, products, technologies, or other assets; • incurring substantial expenses or assuming substantial liabilities, ongoing obligations, or other risks, particularly if we fail to identify or accurately estimate commitments, liabilities, deficiencies, or other risks associated with the acquired businesses or assets; • difficulties retaining key personnel of the acquired company or integrating acquired operations, products, systems, technologies, and employee cultures; • potential exposure to adverse tax consequences, substantial depreciation, impairment of goodwill or other intangible assets, or deferred compensation charges; or • difficulties related to being required to adopt or modify accounting policies.
Any failure or alleged failure by us or our employees, contractors, partners, customers, or agents to comply with applicable laws and regulations creates risk for our 20 business and our employees, partners, contractors, and customers and could result in enforcement actions or other proceedings, criminal or civil fines and penalties or other actions, civil lawsuits, forfeiture of significant assets, the limitation or suspension of our ability to operate our business or certain services in a particular jurisdiction, damages, interest, loss of export privileges, costs and fees (including legal fees), injunctions, loss of intellectual property rights, whistleblower complaints, termination of agreements by our partners, the diversion of management’s attention and resources, or reputational harm and adverse media coverage.
Any failure or alleged failure by us or our employees, contractors, partners, customers, or agents to comply with applicable laws and regulations creates risk for our business and our employees, partners, contractors, and customers and could result in enforcement actions or other proceedings, criminal or civil fines and penalties or other actions, civil lawsuits, forfeiture of significant assets, the limitation or suspension of our ability to operate our business or certain services in a particular jurisdiction, damages, interest, loss of export privileges, costs and fees (including legal fees), injunctions, loss of intellectual property rights, whistleblower complaints, termination of agreements by our partners, the diversion of management’s attention and resources, or reputational harm and adverse media coverage.
It is also possible that we could become subject to regulatory enforcement or other proceedings in states or other jurisdictions with escrow, money transmission, electronic money, or other similar statutes or regulatory requirements related to the handling, storing, or moving of money, and such risk may increase if we are required or choose to pursue additional or different licenses, which could in turn have a significant impact on our business.
It is also possible that we could become subject to 22 regulatory enforcement or other proceedings in states or other jurisdictions with escrow, money transmission, electronic money, or other similar statutes or regulatory requirements related to the handling, storing, or moving of money, and such risk may increase if we are required or choose to pursue additional or different licenses, which could in turn have a significant impact on our business.
For example, our competitors’ search engine optimization and other efforts such as paid search may result in their websites receiving a higher search result page ranking than ours, or we may make changes to our website or mobile applications that adversely impact our search engine optimization rankings and traffic to comply with requirements imposed by regulators, our vendors or third-party partners, or for other reasons.
For example, our competitors’ search engine optimization and other efforts such as paid search may result in their websites receiving a higher search result page ranking than ours, or we may make changes to our websites or mobile applications that adversely impact our search engine optimization rankings and traffic to comply with requirements imposed by regulators, our vendors or third-party partners, or for other reasons.
In any such event, we may expend additional resources to attempt to resolve the issue. Moreover, we may not carry sufficient business interruption insurance to cover losses that may occur as a result of any such events, and we cannot be certain that insurance will continue to be available to us on economically reasonable terms, or at all.
In any such event, we may expend additional resources to attempt to resolve the issue. Moreover, we may not carry sufficient business interruption insurance to cover losses that may occur as a result of any such events, and we cannot be certain that 19 insurance will continue to be available to us on economically reasonable terms, or at all.
If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties. 27 At any given time we may be subject to tax audits by various taxing authorities, in multiple jurisdictions, throughout the world.
If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties. At any given time we may be subject to tax audits by various taxing authorities, in multiple jurisdictions, throughout the world.
These changes may happen with little or no advance notice or implementation time, which can increase various short term costs of compliance. The impact and burden of these regulations and proposed regulations on our business and the businesses of our customers is uncertain and may have a negative impact on our business.
These changes may happen with little or no advance notice or implementation time, which can increase various short term 27 costs of compliance. The impact and burden of these regulations and proposed regulations on our business and the businesses of our customers is uncertain and may have a negative impact on our business.
However, following the law’s effectiveness in January 2020 and subsequent amendments and challenges, there is little guidance from the courts or the regulatory authorities charged with its enforcement and there remains a degree of uncertainty regarding its application. Further, in January 2024, the U.S.
However, following the law’s effectiveness in January 2020 and subsequent amendments and challenges, there is little guidance from the courts or the regulatory authorities charged with its 21 enforcement and there remains a degree of uncertainty regarding its application. Further, in January 2024, the U.S.
Most of our employees and all of the contractors with which we work are remote, which may make it more difficult to control use of confidential materials, increasing the risk that our source code or other confidential or trade secret information may be exposed.
Most of our employees and all of the contractors with which we 24 work are remote, which may make it more difficult to control use of confidential materials, increasing the risk that our source code or other confidential or trade secret information may be exposed.
From time to time, we are involved in litigation and other legal proceedings and make and receive demands and claims threatening possible legal proceedings. The outcome of any litigation or other legal proceeding (including 24 class actions and individual lawsuits or arbitration), regardless of its merits, is inherently uncertain.
From time to time, we are involved in litigation and other legal proceedings and make and receive demands and claims threatening possible legal proceedings. The outcome of any litigation or other legal proceeding (including class actions and individual lawsuits or arbitration), regardless of its merits, is inherently uncertain.
We track certain performance metrics with internal tools and do not independently verify such metrics. Certain of our performance metrics may not accurately reflect certain details of our business, are subject to 26 inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
We track certain performance metrics with internal tools and do not independently verify such metrics. Certain of our performance metrics may not accurately reflect certain details of our business, are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
In addition, many businesses may be unwilling to engage independent talent for a variety of reasons, including perceived negative connotations with outsourcing work, quality of work, fraud, privacy, or data security concerns, or the rapidly evolving regulation of independent contractor services more generally, as discussed elsewhere in these “Risk Factors.” Similarly, with the increased prevalence of remote work and increased flexibility in employment relationships in recent years, more skilled independent talent may choose traditional employment, reducing the number of qualified or desirable talent available on our work marketplace.
In addition, many businesses may be unwilling to engage independent talent for a variety of reasons, including perceived negative connotations with outsourcing work, quality of work, fraud, privacy, or data security concerns, or the rapidly evolving regulation of independent contractor services more generally, as discussed elsewhere in these “Risk Factors.” Similarly, with the increased prevalence of remote work and increased flexibility in employment relationships in recent years, more skilled independent talent may choose traditional employment, reducing the number of qualified or desirable talent available on the Upwork Marketplace.
Worker Classification Our clients are generally responsible for properly classifying the talent they engage through our work marketplace. Some clients opt to classify talent as employees for certain work, while talent in many other cases are classified as independent contractors.
Worker Classification Our clients are generally responsible for properly classifying the talent they engage through the Upwork Marketplace. Some clients opt to classify talent as employees for certain work, while talent in many other cases are classified as independent contractors.
Despite the precautions that we take, our 23 intellectual property is vulnerable to unauthorized access through employee or third-party error or actions, theft, cybersecurity incidents, private or public economic espionage, and other security breaches and incidents.
Despite the precautions that we take, our intellectual property is vulnerable to unauthorized access through employee or third-party error or actions, theft, cybersecurity incidents, private or public economic espionage, and other security breaches and incidents.
Clients have similarly diverse options to find and engage service providers, including other online or offline platforms, staffing firms and agencies, by engaging service providers directly, or by hiring temporary, full-time, or part-time employees directly or through an agency.
Clients have diverse options to find and engage service providers, including other online or offline platforms, staffing firms and agencies, by engaging service providers directly, or by hiring temporary, full-time, or part-time employees directly or through an agency.
Our banking and payment partners are critical to our business, and we may not always have a sufficient surplus of vendors in the event one or more relationships is terminated or interrupted for any reason.
Our banking and payment partners are critical to our business, and we may not always have a sufficient surplus of vendors in the event one or more relationships are terminated or interrupted for any reason.
We face significant risks if 22 we fail to comply with the FCPA and other anti-corruption laws. Local customs in international jurisdictions may involve practices that are prohibited by the FCPA or other applicable laws and regulations.
We face significant risks if we fail to comply with the FCPA and other anti-corruption laws. Local customs in international jurisdictions may involve practices that are prohibited by the FCPA or other applicable laws and regulations.
New and existing laws and regulations (or changes in interpretation of existing laws and regulations) may be adopted, implemented, or interpreted to apply to our business or our customers, including as a result of new products or features we may introduce or international expansion of our business.
New and existing laws and regulations (or changes in interpretation of existing laws and regulations) may be adopted, implemented, or interpreted to apply to our business or our customers, including as a result of new lines of business, products or features we may introduce or international expansion of our business.
We continue to evolve our business strategy, offerings and pricing model, and changes that we make can adversely affect our business and make it difficult to evaluate our future prospects. We continue to evolve our business strategy, offerings, and pricing model, as well as our sales, marketing, and brand positioning efforts.
We continue to evolve our business strategy, offerings and pricing models, and changes that we make can adversely affect our business and make it difficult to evaluate our future prospects. We continue to evolve our business strategy, offerings, and pricing model, as well as our sales, marketing, and brand positioning efforts.
Moreover, we may also issue shares of common stock, securities convertible into shares of our common stock, or preferred stock with preferences over our 29 common stock from time to time in connection with a financing, an acquisition, investments, or otherwise.
Moreover, we may also issue shares of common stock, securities convertible into shares of our common stock, or preferred stock with preferences over our common stock from time to time in connection with a financing, an acquisition, investments, or otherwise.
For example, Europe’s General Data Protection Regulation, which we refer to as the GDPR, the UK General Data Protection Regulation, and Europe’s Digital 21 Services Act impose stringent data protection and data handling compliance requirements and provide for significant penalties for noncompliance.
For example, Europe’s General Data Protection Regulation, which we refer to as the GDPR, the UK General Data Protection Regulation, and Europe’s Digital Services Act impose stringent data protection and data handling compliance requirements and provide for significant penalties for noncompliance.
Our systems, and the systems of our vendors and third-party partners, may be vulnerable to privacy or security incidents, such as computer viruses and other malicious software, physical or electronic break-ins, or vulnerabilities resulting from intentional or unintentional service provider actions, and similar disruptions that could make all or portions of our website or applications unavailable for periods of time.
Our systems, and the systems of our vendors and third-party partners, may be vulnerable to privacy or security incidents, such as computer viruses and other malicious software, physical or electronic break-ins, or vulnerabilities resulting from intentional or unintentional service provider actions, and similar disruptions that could make all or portions of our websites or applications unavailable for periods of time.
Further, while we take steps to improve our trust and safety program through the use of algorithms and machine learning techniques, any required or inadvertent disclosure of our security techniques or new laws restricting our use of them may make our efforts to prevent fraud or the improper use of our platform less effective and increase the risk of harm to our customers.
Further, while we take steps to improve our trust and safety program through the use of algorithms and machine learning techniques, any required or inadvertent disclosure of our security techniques or new laws restricting our use of them may make our efforts to prevent fraud or the improper use of our platforms less effective and increase the risk of harm to our customers.
If the internal tools we use to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data we report may not be accurate. Our performance metrics are also impacted by illegal or improper activity on our work marketplace, including fraud, spam, and fake accounts.
If the internal tools we use to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data we report may not be accurate. Our performance metrics are also impacted by illegal or improper activity on the Upwork Marketplace, including fraud, spam, and fake accounts.
The actual timing and amount of any repurchases under the 2024 Share Repurchase Authorization will depend on a variety of factors, including stock price, trading volume, market and business conditions, regulatory requirements, and other considerations, all of which may be impacted by factors outside of our control.
The actual timing and amount of any repurchases under the 2025 Share Repurchase Authorization will depend on a variety of factors, including stock price, trading volume, market and business conditions, regulatory requirements, and other considerations, all of which may be impacted by factors outside of our control.
If our chargeback or return rate becomes excessive, card networks may require us to pay fines or other fees or engage in costly remediation efforts or cease doing business with us; • the California Department of Financial Protection and Innovation, which we refer to as the DFPI, or other regulators may require us to hold larger cash reserves or take other action with respect to our internet escrow license or other licensing regimes; • customers may seek to hold us responsible for losses, lose confidence in and decrease use of our work marketplace, or publicize their negative experiences; • law enforcement or administrative agencies could seek to hold us responsible for the conduct of or content posted by customers and impose fines and penalties, bring criminal action, or require us to change our business practices, and private actions or public enforcement may increase depending on interpretations of and possible changes to applicable laws; • we may be subject to additional risk and liability exposure if employees or third-party service providers, including our independent team members, misappropriate or facilitate the fraudulent use of our or customer banking, payment, or other information; • if talent misstate their qualifications, identity or location, or produce insufficient or defective work product or work product with a harmful effect, clients or other third parties may seek to hold us responsible and may lose confidence in and decrease use of our work marketplace; and • we may bring, and have in the past brought, claims against clients and other third parties for their misuse of our work marketplace. 13 Customers circumvent our work marketplace, which adversely impacts our business.
If our chargeback or return rate becomes excessive, card networks may require us to pay fines or other fees or engage in costly remediation efforts or cease doing business with us; • the California Department of Financial Protection and Innovation, which we refer to as the DFPI, or other regulators may require us to hold larger cash reserves or take other action with respect to our internet escrow license or other licensing regimes; • customers may seek to hold us responsible for losses, lose confidence in and decrease use of our platforms and other workforce solutions, or publicize their negative experiences; • law enforcement or administrative agencies could seek to hold us responsible for the conduct of or content posted by customers and impose fines and penalties, bring criminal action, or require us to change our business practices, and private actions or public enforcement may increase depending on interpretations of and possible changes to applicable laws; • we may be subject to additional risk and liability exposure if employees or third-party service providers, including our independent team members, misappropriate or facilitate the fraudulent use of our or customer banking, payment, or other information; • if talent misstate their qualifications, identity or location, or produce insufficient or defective work product or work product with a harmful effect, clients or other third parties may seek to hold us responsible and may lose confidence in and decrease use of our platforms and other workforce solutions; and 13 • we may bring, and have in the past brought, claims against clients and other third parties for their misuse of our platforms.
Conducting business with an international customer base, engaging talent globally, and expanding our operations internationally subject us to significant challenges, uncertainties, and risks, including: • varying and overlapping laws and regulations and approaches to enforcement, including with respect to worker classification and data protection and privacy; • difficulties in, and costs of, establishing local brand recognition and staffing, managing, and operating international operations or support functions; • compliance with laws designed to combat money laundering and the financing of terrorist activities; • the imposition of taxes on transactions between us and our customers or among our customers, or liability for failing to collect and remit taxes owed by our customers; • tariffs, export and import restrictions, restrictions on foreign investments, sanctions, changes to existing trade arrangements between various countries, and other trade barriers or protection measures; • geopolitical instability and security risks, such as armed conflict and civil or military unrest, political instability, human rights concerns, terrorist activity, ransomware, and cyberterrorism in countries where we have customers and retaliatory actions that governments may take in response, including the interruption of internet access as a result of any of the foregoing; • costs of localizing services and business practices, including adding the ability for clients to pay in local currencies or modifying our platform to offer our website in local languages; • changes to laws, regulations, or central bank rules impacting us or our partners that may make payments for services exports more costly, difficult, or impossible to process, or that may reduce the availability of tools like digital wallets and related payment services; • any unenforceability of contractual provisions designed to protect and mitigate against risks, including terms of service, services agreements, arbitration and class action waiver provisions, disclaimers of warranties, limitations of liabilities, releases of claims, and indemnification provisions; 14 • economic weakness or currency-related challenges or crises; • regional or global public health events; • difficulties in obtaining and protecting our intellectual property rights outside the United States; • organizing or similar activity by workers, local unions, works councils, or other labor organizations; and • other risks relating to laws and regulations in jurisdictions outside the United States, as discussed elsewhere in these “Risk Factors.” These risks may make it costly or difficult for us to conduct or expand our operations internationally, particularly in markets where we have limited experience.
Conducting business with an international customer base, engaging talent globally, and expanding our operations internationally subject us to significant challenges, uncertainties, and risks, including: • varying and overlapping laws and regulations and approaches to enforcement, including with respect to worker classification and data protection and privacy; 14 • difficulties in, and costs of, establishing local brand recognition, adverse changes in customer sentiment between the United States and other countries, and staffing, managing, and operating international operations or support functions; • the imposition of taxes on transactions between us and our customers or among our customers, or liability for failing to collect and remit taxes owed by our customers; • compliance with laws designed to combat money laundering and the financing of terrorist activities; • tariffs, restrictions or fees applied to service exports and imports, restrictions on foreign investments, sanctions, changes to existing trade arrangements between various countries, and other trade barriers or protection measures; • geopolitical instability and security risks, such as armed conflict and civil or military unrest, political instability, human rights concerns, terrorist activity, ransomware, and cyberterrorism in countries where we have customers and retaliatory actions that governments may take in response, including the interruption of internet access as a result of any of the foregoing; • costs of localizing services and business practices, including adding the ability for clients to pay in local currencies or modifying our platforms to offer our websites in local languages; • changes to laws, regulations, or central bank rules impacting us or our partners that may make payments for services exports more costly, difficult, or impossible to process, or that may reduce the availability of tools like digital wallets and related payment services; • any unenforceability of contractual provisions designed to protect and mitigate against risks, including terms of service, services agreements, arbitration and class action waiver provisions, disclaimers of warranties, limitations of liabilities, releases of claims, and indemnification provisions; • economic weakness or currency-related challenges or crises; • regional or global public health events; • difficulties in obtaining and protecting our intellectual property rights outside the United States; • organizing or similar activity by workers, local unions, works councils, or other labor organizations; and • other risks relating to laws and regulations in jurisdictions outside the United States, as discussed elsewhere in these “Risk Factors.” These risks may make it costly or difficult for us to conduct or expand our operations internationally, particularly in markets where we have limited experience.
The 2024 Share Repurchase Authorization could affect the trading price of our common stock, increase volatility, and diminish our cash and cash equivalents and marketable securities available to fund working capital, repayment of debt, capital expenditures, strategic acquisitions, investments, or business opportunities, and other general corporate purposes.
The 2025 Share Repurchase Authorization could affect the trading price of our common stock, increase volatility, and diminish our cash and cash equivalents and marketable securities available to fund working capital, repayment of debt, capital expenditures, strategic acquisitions, investments, or business opportunities, and other general corporate purposes.
Any significant weakening of the economy in the United States or Europe or of the global economy, including a continued rise in inflation, hiring freezes, layoffs, more limited availability of credit, a reduction in business confidence and activity, decreased government or business spending, economic and political uncertainty, financial turmoil or instability affecting the banking system or financial markets, trade wars, sanctions, higher tariffs, global or regional public health events or conditions, a more limited market for independent professional service providers or information technology services, shifts away from remote work, and other adverse economic or market conditions may adversely impact our business and operating results.
Any significant weakening of the economy in the United States or Europe or of the global economy, including a continued rise in inflation, higher tariffs, trade wars, hiring freezes, layoffs, more limited availability of credit, a reduction in business confidence and activity, decreased government or business spending, government shutdowns, economic and political uncertainty, financial turmoil or instability affecting the banking system or financial markets, sanctions, global or regional public health events or conditions, a more limited market for contingent service providers or information technology services, shifts away from remote work, and other adverse economic or market conditions may adversely impact our business and operating results.
Our competitors and other third parties have in the past challenged, and may in the future challenge, our registration or use of our trademarks, including “Upwork,” and other intellectual property rights, and such a challenge, even if unsuccessful, could adversely affect our brand and business.
Our competitors and other third parties have in the past challenged, and may in the future challenge, our registration or use of our trademarks, including “Upwork,” and other intellectual property rights, and such a challenge, even if unsuccessful, could adversely affect our brands and business.
We depend in part on internet search engines and other channels to direct a significant amount of traffic to our website and mobile applications. Our ability to maintain the number of visitors directed to our website and mobile applications is not entirely within our control.
We depend in part on internet search engines and other channels to direct a significant amount of traffic to our websites and mobile applications. Our ability to maintain the number of visitors directed to our websites and mobile applications is not entirely within our control.
Given the technical limitations in developing controls to prevent, among other things, the ability of customers to publish on our work marketplace false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and unknowingly provide services to individuals or entities that are subject to sanctions or are located in a country subject to an embargo.
Given the technical limitations in developing controls to prevent, among other things, the ability of customers to publish on our platforms false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and unknowingly provide services to individuals or entities that are subject to sanctions or are located in a country subject to an embargo.
Even if we do introduce new offerings or services, we may experience a decline in revenue from our existing offerings that is not offset by revenue from the new offerings or services, and we may experience unintended negative effects from any modifications to our existing offerings, services, and features, including reduced client spend, diminished fill rates for projects on our work marketplace, errors and disruptions on our work marketplace, and customer dissatisfaction.
Even if we do introduce new offerings or services, we may experience a decline in revenue from our existing offerings that is not offset by revenue from the new offerings or services, and we may experience unintended negative effects from any modifications to our existing offerings, services, and features, including reduced client spend, diminished fill rates for client projects, errors and disruptions on our platforms, and customer dissatisfaction.
However, our historical growth should not be considered indicative of our future performance. There can be no 11 assurance that we will be able to sustain our historical growth rates or that any future investments in growth will be successful or cost-effective.
However, our historical growth should not be considered indicative of our future performance, and there can be no assurance that we will be able to sustain our historical growth rates or that any future investments in growth will be successful or cost-effective.
If we fail to promote and maintain our brand successfully, our business, operating results, and financial condition may be adversely affected. Business or system errors, defects, or disruptions could diminish demand, adversely impact our business, operating results, and financial condition, and subject us to liability.
If we fail to promote and maintain our brands successfully, our business, operating results, and financial condition may be adversely affected. Business or system errors, defects, or disruptions could diminish demand, adversely impact our business, operating results, and financial condition, and subject us to liability.
If we have not complied with the terms of an applicable open source software license, we may need to seek licenses from third parties to continue offering our work marketplace and the terms on which such licenses are available may not be economically feasible, and may be required to re-engineer our work marketplace to remove or replace the open source software, discontinue offering our work marketplace, pay monetary damages, or make available the source code for aspects of our proprietary technology, any of which could adversely affect our business, operating results, and financial condition.
If we have not complied with the terms of an applicable open source software license, we may need to seek licenses from third parties to continue offering a platform and the terms on which such licenses are available may not be economically feasible, and may be required to re-engineer a platform to remove or replace the open source software, discontinue offering the platform, pay monetary damages, or make available the source code for aspects of our proprietary technology, any of which could adversely affect our business, operating results, and financial condition.
The 2024 Share Repurchase Authorization may be suspended, terminated, or modified at any time for any reason, and we cannot guarantee that the 2024 Share Repurchase Authorization will be fully consummated, or at all, or that it will enhance long-term stockholder value.
The 2025 Share Repurchase Authorization may be suspended, terminated, or modified at any time for any reason, and we cannot guarantee that any share repurchase authorization will be fully consummated, or at all, or that it will enhance long-term stockholder value.
In connection with the Notes, we entered into the privately negotiated capped call transactions, which we refer to as the Capped Calls, with various financial institutions, which we refer to as the option counterparties. The Capped Calls remain in effect notwithstanding the March 2023 repurchase of a portion of the Notes.
In connection with the Notes, we entered into the privately negotiated Capped Calls with various financial institutions, which we refer to as the option counterparties. The Capped Calls remain in effect notwithstanding the March 2023 repurchase of a portion of the Notes.
We have in the past been, and may in the future be, subject to administrative inquiries and audits concerning our compliance with applicable laws and regulations, including the taxation and classification of our workers and the customers of our work marketplace.
We have in the past been, and may in the future be, subject to administrative inquiries and audits concerning our compliance with applicable laws and regulations, including the taxation and classification of our workers and customers.
If internet search engines’ methodologies or other channels that we utilize to direct traffic to our website are modified to our disadvantage, or our search result page rankings decline for other reasons, our customer growth could decline.
If internet search engines’ methodologies or other channels that we utilize to direct traffic to our websites are modified to our disadvantage, or our search result page rankings decline for other reasons, our customer growth could decline.
Summary of Risk Factors Some of the more material risks that we face include: • Our growth depends on our ability to attract and retain a community of talent and clients, and the failure to maintain or grow our community of customers and their activity on our platform in a cost-effective manner or at all could adversely impact our business, operating results, and financial condition. • We have experienced growth in recent periods and expect to invest in our growth in the future.
Summary of Risk Factors Some of the more material risks that we face include: • Our growth depends on our ability to attract and retain a community of talent and clients, and the failure to maintain or grow our community of active customers in a cost-effective manner or at all could adversely impact our business, operating results, and financial condition. • We have experienced growth in recent periods and expect to invest in our growth in the future.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are unpredictable or are outside of our control, including those described elsewhere in this “Risk Factors” section as well as the following: • actual or anticipated fluctuations in our operating results and performance metrics, particularly any failure to meet the estimates of securities analysts or the expectations of investors; 28 • the financial projections we provide to the public or our lowering of or failure to meet these projections; • the economy or equity markets as a whole and market conditions in our industry; • negative publicity related to the trustworthiness, quality, or security of our work marketplace; • changes in our board of directors, management or key personnel; • failure of securities analysts to initiate or maintain coverage of us, inaccurate or unfavorable research by analysts, or changes in financial estimates by any securities analysts who follow our company; • repurchases by us of any of our outstanding shares of common stock or the Notes; • speculative trading practices by stockholders and other market participants; • rumors and market speculation involving us or other companies in our industry and/or other industries; • legal and regulatory claims, litigation, or pre-litigation disputes and other proceedings; • announcements by us or our competitors of significant new or terminated products or services, technical innovations, or acquisitions, strategic partnerships, joint ventures, or capital commitments; • sales or expected sales of shares of our common stock by us, our officers, directors, employees or stockholders; • changes in the legal or regulatory landscape applicable to us or our customers, including worker classification and tax laws; and • geopolitical changes or events, including those resulting from war and incidents of terrorism.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are unpredictable or are outside of our control, including those described elsewhere in this “Risk Factors” section as well as the following: • actual or anticipated fluctuations in our operating results and performance metrics, particularly any failure to meet the estimates of securities analysts or the expectations of investors; • the financial projections we provide to the public or our lowering of or failure to meet these projections; • the economy or equity markets as a whole and market conditions in our industry, including as a result of tariffs and trade wars; • negative publicity related to the trustworthiness, quality, or security of our platforms and other workforce solutions; • changes in our board of directors, management or key personnel; 29 • failure of securities analysts to initiate or maintain coverage of us, inaccurate or unfavorable research by analysts, or changes in financial estimates by any securities analysts who follow our company; • repurchases by us of any of our outstanding shares of common stock or the Notes; • speculative trading practices by stockholders and other market participants; • rumors and market speculation involving us or other companies in our industry and/or other industries; • legal and regulatory claims, litigation, or pre-litigation disputes and other proceedings; • announcements by us or our competitors of significant new or terminated products or services, technical innovations, or acquisitions, strategic partnerships, joint ventures, or capital commitments; • sales or expected sales of shares of our common stock by us, our officers, directors, employees or stockholders; • changes in the legal or regulatory landscape applicable to us or our customers, including worker classification and tax laws; and • geopolitical changes or events, including those resulting from war and incidents of terrorism.
We anticipate that for the foreseeable future we will retain all of our future earnings for use in the development of our business, for repurchases under our 2024 Share Repurchase Authorization, and for general corporate purposes.
We anticipate that for the foreseeable future we will retain all of our future earnings for use in the development of our business, for repurchases under our 2025 Share Repurchase Authorization, and for general corporate purposes.
In the event that it is inconvenient or impossible for our customers to access and use our work marketplace on their mobile devices or our competitors develop offerings and services that are perceived to operate more effectively on mobile devices, our business, operating results, and financial condition could be adversely impacted.
In the event that it is inconvenient or impossible for our customers to access and use our platforms on their mobile devices or our competitors develop offerings and services that are perceived to operate more effectively on mobile devices, our business, operating results, and financial condition could be adversely impacted.
Any litigation or other disputes relating to allegations of intellectual property infringement could divert management attention and resources, subject us to significant legal costs and liability for damages or new licenses, invalidate our proprietary rights, or require us to alter our work marketplace, or marketing strategy or other aspects of our business.
Any litigation or other disputes relating to allegations of intellectual property infringement could divert management attention and resources, subject us to significant legal costs and liability for damages or new licenses, invalidate our proprietary rights, or require us to alter our platforms, or marketing strategy or other aspects of our business.
Our operating results and performance metrics in any given period can be influenced by numerous factors, many of which are unpredictable or are outside of our control, including those described elsewhere in this “Risk Factors” section as well as the following: • uncertainty regarding macroeconomic and political conditions and demand for our work marketplace; • our ability to maintain and grow our community of customers, including talent that provide the types and quality of services sought by clients on our work marketplace; • our ability to respond to competitive developments and other market and technological dynamics, such as the emergence of generative artificial intelligence, and introduce new offerings and services or enhance existing offerings; • changes to our pricing model and fee structure, including any resulting changes to our revenue recognition practices; • changes in the spending patterns of clients or the mix of products and services that clients demand; • the impact of reductions in our workforce or involuntary or voluntary separations, including claims against us from departing employees or others; • fluctuations in gross margin and revenue, including as a result of fluctuations in the use of our Managed Services offering due to our recognition of the entire GSV from our Managed Services offering as revenue, including the amounts paid to talent; • the productivity, effectiveness, and efficiency of our sales force and the length and complexity of our sales cycles; • the impact of changing, consolidating, or terminating offerings and services; • losses from clients failing to pay invoices, particularly in instances where we advance payments to talent for invoiced services on behalf of the client; • the disbursement methods chosen by talent and changes in the mix of disbursement methods offered; • fluctuations in the prices that talent charge clients on our work marketplace; • seasonality in the labor market and spending patterns by clients and the number of business days and the number of Sundays (i.e., the day we have the contractual right to bill and recognize revenue for the majority of our talent service fees each week) in any given period, as well as local, national, or international holidays; • fluctuations in transaction losses; • fluctuations in the mix of payment provider costs and the revenue generated from payment providers; • changes to financial accounting standards and the interpretation of those standards that may affect the way we recognize and report our financial results; • fluctuations in currency exchange rates, particularly if we are unable to fully offset the adverse financial effects of unfavorable movements in foreign exchange rates through derivative instruments designed to hedge against certain exposures to such fluctuations; and • revenue recognition fluctuations for arrangements subject to our tiered pricing model for talent service fees.
Our operating results and performance metrics in any given period can be influenced by numerous factors, many of which are unpredictable or are outside of our control, including those described elsewhere in this “Risk Factors” section as well as the following: 26 • uncertainty regarding macroeconomic and political conditions and demand for our business; • our ability to maintain and grow our community of customers; • our ability to respond to competitive developments and other market and technological dynamics, such as the emergence of AI, and introduce new offerings and services or enhance existing offerings; • changes to our pricing model and fee structure, including any resulting changes to our revenue recognition practices; • changes in the spending patterns of clients or the mix of products and services that clients demand; • the impact of reductions in our workforce or involuntary or voluntary separations, including claims against us from departing employees or others; • fluctuations in gross margin and revenue, including as a result of fluctuations in the use of our Enterprise business’s Managed Services offering due to our recognition of the entire GSV from the Managed Services offering as revenue, including the amounts paid to talent; • the productivity, effectiveness, and efficiency of our sales force and the length and complexity of our sales cycles; • the impact of changing, consolidating, or terminating offerings and services; • losses from clients failing to pay invoices, particularly in instances where we advance payments to talent for invoiced services on behalf of the client; • the disbursement methods chosen by talent and changes in the mix of disbursement methods offered; • fluctuations in the prices that talent charge clients on the Upwork Marketplace; • seasonality in the labor market and spending patterns by clients and the number of business days and the number of Sundays (i.e., the day we have the contractual right to bill and recognize revenue for the majority of our talent service fees each week) in any given period, as well as local, national, or international holidays; • fluctuations in transaction losses; • fluctuations in the mix of payment provider costs and the revenue generated from payment providers; • changes to financial accounting standards and the interpretation of those standards that may affect the way we recognize and report our financial results; and • fluctuations in currency exchange rates, particularly if we are unable to fully offset the adverse financial effects of unfavorable movements in foreign exchange rates through derivative instruments designed to hedge against certain exposures to such fluctuations.
Certain of our performance metrics may not accurately reflect certain details of our business, are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. • The stock price of our common stock has been and may continue to be volatile, and you could lose all or part of your investment. • We cannot guarantee that the 2024 Share Repurchase Authorization will be fully consummated or that repurchases made under our share repurchase authorizations will enhance long-term stockholder value.
Certain of our performance metrics may not accurately reflect certain details of our business, are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. • The stock price of our common stock has been and may continue to be volatile, and you could lose all or part of your investment. • We cannot guarantee that the 2025 Share Repurchase Authorization will be fully consummated or that share repurchases will enhance long-term stockholder value.
In addition, various countries regulate the import and export of certain encryption and other technology, including imposing import and export permitting and licensing requirements, and have enacted and may enact laws that could limit our ability to distribute aspects of our work marketplace or could limit our customers’ ability to access our work marketplace in those countries.
In addition, various countries regulate the import and export of certain encryption and other technology, including imposing import and export permitting and licensing requirements, and have enacted and may enact laws that could limit our ability to distribute aspects of our platforms or could limit our customers’ ability to access our platforms in those countries.
As of December 31, 2024, we have experienced ownership changes that will result in limitations in our ability to use certain NOLs and tax credit carryforwards.
As of December 31, 2025, we have experienced ownership changes that will result in limitations in our ability to use certain NOLs and tax credit carryforwards.
We rely on banks and payment partners to provide us with corporate banking services, escrow trust accounts or other regulated accounts, and clearing, processing, and settlement functions for the funding of all transactions on our work marketplace and disbursement of funds to customers.
We rely on banks and payment partners to provide us with corporate banking services, escrow trust accounts or other regulated accounts, and clearing, processing, and settlement functions for the funding of all transactions on our platforms and disbursement of funds to customers.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, a corporation that undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, is subject to limitations on its ability to utilize its pre-change NOL carryforwards to offset future taxable income.
In addition, under Section 382 of the Code, a corporation that undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, is subject to limitations on its ability to utilize its pre-change NOL carryforwards to offset future taxable income.
As a result, links to our website may not be prominent enough to drive sufficient traffic to our website, and we may not be able to influence search engine results.
As a result, links to our websites may not be prominent enough to drive sufficient traffic to our websites, and we may not be able to influence search engine results.
In particular, we are dependent on the services of Hayden Brown, our President and Chief Executive Officer, and our future vision, strategic direction, work marketplace, and technology could be compromised if she were to take another position, become ill or incapacitated, or otherwise become unable to serve as our President and Chief Executive Officer.
In particular, we are dependent on the services of Hayden Brown, our President and Chief Executive Officer, and our future vision, strategic direction, platforms, offerings, and technology could be compromised if she were to take another position, become ill or incapacitated, or otherwise become unable to serve as our President and Chief Executive Officer.
In addition, because our website is generally accessible by customers worldwide, we have received and may continue to receive notices from jurisdictions claiming that we or our customers are required to comply with their laws and regulations.
In addition, because our websites are generally accessible by customers worldwide, we have received and may continue to receive notices from jurisdictions claiming that we or our customers are required to comply with their laws and regulations.
Risks Related to our Business Operations, Execution, and Growth Our growth depends on our ability to attract and retain a community of talent and clients, and the failure to maintain or grow our community of customers and their activity on our platform in a cost-effective manner or at all could adversely impact our business, operating results, and financial condition.
Risks Related to our Business Operations, Execution, and Growth Our growth depends on our ability to attract and retain a community of talent and clients, and the failure to maintain or grow our community of active customers in a cost-effective manner or at all could adversely impact our business, operating results, and financial condition.
These adverse conditions have resulted in the past, and may again result, in reductions in revenue, increased operating expenses, longer sales cycles, and increased competition.
These adverse conditions have resulted, and may again result, in reductions in revenue, increased operating expenses, longer sales cycles, and increased competition.
Although we are a licensed internet escrow agent and believe that our operations comply with existing U.S. federal, state, and international laws and regulatory requirements related to escrow, generating interest from customer funds held in escrow, money transmission, and the handling or moving of money, developments in the laws and regulations or their interpretations, and changes in our operations and offerings may result in the application of new or different regulatory requirements to our business.
Although we believe that our operations comply with existing U.S. federal, state, and international laws and regulatory requirements related to escrow, generating interest from customer funds held in escrow, money transmission, and the handling or moving of money, developments in the laws and regulations or their interpretations, and changes in our operations and offerings may result in the application of new or different regulatory requirements to our business.
If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business. We cannot guarantee that the 2024 Share Repurchase Authorization will be fully consummated or that repurchases made under our share repurchase authorizations will enhance long-term stockholder value.
If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business. We cannot guarantee that the 2025 Share Repurchase Authorization will be fully consummated or that share repurchases will enhance long-term stockholder value.
We expect that bad actors will continue to attempt to use our marketplace to engage in unlawful or fraudulent conduct.
We expect that bad actors will continue to attempt to use our platforms to engage in unlawful or fraudulent conduct.
Any of these activities could adversely affect the value of our common stock. General Risks Adverse or changing economic conditions may negatively impact our business. Our business depends on the overall demand for labor and on the economic health of current and prospective clients that use our work marketplace.
Any of these activities could adversely affect the value of our common stock. General Risks Adverse or changing economic conditions may negatively impact our business. Our business depends on the overall demand for labor and on the economic health of current and prospective clients.
While we take precautions to prevent aspects of our work marketplace from being exported in violation of export controls, we cannot guarantee that these precautions will prevent violations of export controls and similar regulations.
While we take precautions to prevent aspects of our platforms from being exported in violation of export controls, we cannot guarantee that these precautions will prevent violations of export controls and similar regulations.
If the conditions in the general economy continue to deteriorate, our business, operating results, and financial condition could be adversely affected. Item 1B. Unresolved Staff Comments. Not applicable.
If the conditions in the general economy deteriorate, our business, operating results, and financial condition could be adversely affected. 32 Item 1B. Unresolved Staff Comments. Not applicable.
There is also a risk that when overall global economic conditions are positive, our business could be negatively impacted by a decreased demand for talent as businesses utilize more 31 full-time employees relative to their use of independent contractors. We cannot predict the timing, strength, or duration of any economic slowdown, or any subsequent recovery generally.
There is also a risk that when overall global economic conditions are positive, our business could be negatively impacted by a decreased demand for talent as businesses utilize more direct, full-time employees relative to their use of contingent workers. We cannot predict the timing, strength, or duration of any economic slowdown, or any subsequent recovery generally.
Even if we maintain proper controls and remain in compliance with applicable anti-corruption, anti-money laundering, and sanctions laws or regulations, should any of our competitors not implement sufficient controls and be found to have violated such laws or regulations, customer perception of online freelance marketplaces in general may decrease and our business, operating results, and financial condition may be adversely affected.
Even if we maintain proper controls and remain in compliance with applicable anti-corruption, anti-money laundering, and sanctions laws or regulations, should any of our competitors not implement sufficient controls and be found to have violated such laws or regulations, customer perception of contingent work platforms in general may decrease and our business, operating results, and financial condition may be adversely affected.
Our work marketplace enables our customers to manage important aspects of their businesses, and any errors, defects, disruptions in service, or other performance or availability problems with our work marketplace, or our inability to adequately prevent or timely detect or remedy errors, defects, or disruptions in service, could harm our brand and reputation, result in security breaches or the loss of critical data, adversely impact our business and our customers, impair or jeopardize our partner relationships, result in delays in invoicing of clients or payment to us or talent, negatively impact our ability to obtain or maintain important licenses, or result in claims by customers for losses sustained by them or investigation or corrective action by regulatory agencies.
Our platforms enable customers to manage important aspects of their businesses, and any errors, defects, disruptions in service, or other performance or availability problems with our platforms or other workforce solutions, or our inability to adequately prevent or timely detect or remedy errors, defects, or disruptions in service, could harm our brands and reputation, result in security breaches or the loss of critical data, adversely impact our business and our customers, impair or jeopardize our partner relationships, result in delays in invoicing of clients or payment to us or talent, negatively impact our ability to obtain or maintain important licenses, or result in claims by customers for losses sustained by them or investigation or corrective action by regulatory agencies.
The market for our work marketplace is characterized by rapid technological change, frequent product and service introductions and enhancements, changing customer demands, and evolving industry standards.
The market for contingent work is characterized by rapid technological change, frequent product and service introductions and enhancements, changing customer demands, and evolving industry standards.
We rely on various intellectual property rights, including patents, copyrights, trademarks, and trade secrets, as well as confidentiality provisions and contractual arrangements, to protect our proprietary rights and prevent third parties from infringing upon or misappropriating our intellectual property, copying our work marketplace, and using information that we regard as proprietary to create products and services that compete with ours.
We rely on various intellectual property rights, including patents, copyrights, trademarks, and trade secrets, as well as confidentiality provisions and contractual arrangements, to protect our proprietary rights and prevent third parties from infringing upon or misappropriating our intellectual property, copying our platforms and other workforce solutions, and using information that we regard as proprietary to create products and services that compete with ours.
If our performance metrics are not accurate representations of our business, customer base, or activity on our work marketplace; if we discover material inaccuracies in our metrics; or if the metrics we rely on to track our performance do not provide an accurate measurement of our business, our reputation may be harmed, we may be subject to legal or regulatory actions, and our operating and financial results could be adversely affected.
If our performance metrics are not accurate representations of our business, customer base, or activity on our platforms and other workforce solutions; if we discover material inaccuracies in our metrics; or if the metrics we rely on to track our performance do not provide an accurate measurement of our business, our reputation may be harmed, we may be subject to legal or regulatory actions, and our operating and financial results could be adversely affected.
Our efforts to attract and retain customers may not be successful or cost effective, and if customers, particularly significant clients, cease or reduce their use of our work marketplace and related services for any reason, our business, operating results, and financial condition would be adversely affected.
Our efforts to attract and retain customers may not be successful or cost effective, and if customers, particularly significant clients, 11 cease or reduce their use of our offerings and services for any reason, our business, operating results, and financial condition would be adversely affected.
Any of these could expose us to claims, litigation, fines, enforcement actions, other potential liability, and reputational harm. In addition, significant unavailability of our work marketplace due to security breaches or other privacy and security incidents could cause customers to decrease or cease their use of our work marketplace.
Any of these could expose us to claims, litigation, fines, enforcement actions, other potential liability, and reputational harm. In addition, significant unavailability of our platforms and other workforce solutions due to security breaches or other privacy and security incidents could cause customers to decrease or cease their use of our platforms and other workforce solutions.
Any interruption in the provision of services to us by these third parties for any reason or other unanticipated problems could result in interruptions to our work marketplace, and our and these third parties’ business continuity and disaster recovery plans may prove to be inadequate.
Any interruption in the provision of services to us by these third parties for any reason or other unanticipated problems could result in interruptions to our platforms and other workforce solutions, and our and these third parties’ business continuity and disaster recovery plans may prove to be inadequate.
Any of the foregoing could, individually or in the aggregate, harm our reputation, reduce demand for our marketplace, and adversely affect our business, operating results, and financial condition, and we could be required to make costly and burdensome changes to our business practices or compliance programs.
Any of the foregoing could, individually or in the aggregate, harm our reputation, reduce demand for our platforms and other workforce solutions, and adversely affect our business, operating results, and financial condition, and we could be required to make costly and burdensome changes to our business practices or compliance programs.
In addition, search engines and other channels that we utilize to drive customers to our website and mobile applications periodically change their algorithms, policies, and technologies, sometimes in ways that cause traffic to our website and mobile applications to decline.
In addition, search engines and other channels that we use to drive customers to our websites and mobile applications periodically change their algorithms, policies, and technologies, sometimes in ways that cause traffic to our websites and mobile applications to decline.
In addition, we have in the past seen, and may in the future see, unexpected or unintended negative effects as a result of changes to our pricing model, offerings, and sales and marketing efforts, including increased customer dissatisfaction, harm to our reputation, increased circumvention rates, reductions in the rate or size of projects that get posted or completed, or a failure to attract and retain customers.
In addition, we have in the past seen, and may in the future see, unexpected or unintended negative effects as a result of changes to our pricing model, offerings, and sales and marketing efforts, including increased customer dissatisfaction, harm to our reputation, increased circumvention rates, reductions in the number, size, or completion rate of client projects, or a failure to attract and retain customers.
In addition, customers of our Managed Services offering depend on our support organization to manage their projects and reach satisfactory project outcomes. Our ability to provide effective support is largely dependent on our ability to attract, resource, and retain service providers who are both qualified and well versed in our work marketplace.
In addition, customers of our Enterprise business’s Managed Services offering depend on its support organization to manage their projects and reach satisfactory project outcomes. Our ability to provide effective support is largely dependent on our ability to attract, resource, and retain service providers who are both qualified and well versed in our business.
We also have policies, procedures, and technology designed to allow us to comply with U.S. economic sanctions laws and prevent our work marketplace from being used to facilitate business in countries, regions, or with persons or entities included on designated lists promulgated by the U.S.
We also have policies, procedures, and technology designed to allow us to comply with U.S. economic sanctions laws and prevent our platforms and other workforce solutions from being used to facilitate business in countries, regions, or with persons or entities included on designated lists promulgated by the U.S.
Regulatory scrutiny on large companies, technology companies, and companies engaged in dealings with independent contractors, payments, or personal information and data has increased significantly and may continue to increase.
At the same time, regulatory scrutiny on large companies, technology companies, and companies engaged in dealings with independent contractors, payments, or personal information and data has increased significantly and may continue to increase.
In addition, we offer other premium offerings where we provide increased assistance to customers to find and contract with one another, which could increase employment-related risks. Third-party staffing providers employ talent classified as employees for clients, and failure of these staffing providers to comply with all legal and tax requirements could adversely affect our business.
In addition, we offer other premium offerings where we provide increased assistance to customers to find and contract with one another, which could increase employment-related risks. The failure of staffing providers that employ talent classified as employees to comply with all legal and tax requirements could adversely affect our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also regularly update our information security policies, standards and processes as needed to better reflect and account for updates in our cybersecurity posture, cybersecurity risks, and our risk mitigation strategies.
Biggest changeWe regularly review and update our information security policies, standards, and procedures to reflect changes in our cybersecurity posture, emerging risks, and risk mitigation strategies. We also provide regular, mandatory cybersecurity training to our personnel to raise awareness of cybersecurity risks, reinforce secure practices, and communicate updates to our information security policies, standards, processes, and practices.
Our board of directors, as a whole, has responsibility for risk oversight, although the committees of our board of directors oversee and review risk areas that are particularly relevant to their respective functions. Among its focus areas, our audit committee reviews matters relating to cybersecurity and data privacy and regularly reports to our board of directors regarding such matters.
Our board of directors, as a whole, has responsibility for risk oversight, and the committees of our board of directors oversee and review risk areas that are particularly relevant to their respective functions. Among its focus areas, our audit committee reviews matters relating to cybersecurity and data privacy and regularly reports to our board of directors regarding such matters.
We also have implemented controls and procedures that provide for the communication of material cybersecurity incidents to our Chief Executive Officer, Chief Financial Officer, and Chief Legal Officer, as well as to our audit committee and/or to our full board of directors on a timely basis.
We also have implemented controls and procedures that provide for the communication of material cybersecurity incidents to our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and Chief Legal Officer, as well as to our audit committee and/or to our full board of directors on a timely basis.
Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy Our cybersecurity and data privacy risk management processes are integrated in our overall risk management program, and we have developed processes for assessing, identifying, and managing material risks from cybersecurity threats.
Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy Our cybersecurity and data privacy risk management processes are integrated into our enterprise risk management program, and we have established processes for assessing, identifying, and managing material risks arising from cybersecurity threats.
For more information regarding cybersecurity risks that we face and potential impacts on our business related thereto, see our risk factor disclosures in Part I, Item 1A of this Annual Report on Form 10-K titled “If we or our third-party partners experience a security breach, other hacking or phishing attack, ransomware or other malware attack, or other privacy or security incident, our work marketplace may be perceived as not being secure, our reputation may be harmed, demand for our work marketplace may be reduced, our operations may be disrupted, we may incur significant legal costs, fines, or liabilities, and our business could be adversely affected.” Cybersecurity Governance While everyone at Upwork plays a part in managing cybersecurity and data privacy risks, oversight responsibility is shared by our board of directors, audit committee, and management.
For more information regarding cybersecurity risks that we face and potential impacts on our business related thereto, see “Risk Factors—If we or our third-party partners experience a security breach, other hacking or phishing attack, ransomware or other malware attack, or other privacy or security incident, our platforms and other workforce solutions may be perceived as not being secure, our reputation may be harmed, demand for our offerings may be reduced, our operations may be disrupted, we may incur significant legal costs, fines, or liabilities, and our business could be adversely affected.” Cybersecurity Governance While everyone at Upwork plays a part in managing cybersecurity and data privacy risks, oversight responsibility is shared by our board of directors, audit committee, and management.
We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, endpoint detection and response, logging, monitoring and alerting, anti-malware functionality, advanced email security, network security monitoring and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
We deploy technical safeguards designed to protect our information systems from cybersecurity threats, including network security controls, intrusion detection and prevention technologies, endpoint detection and response capabilities, logging, monitoring and alerting mechanisms, anti-malware protections, advanced email security, and access controls. These safeguards are evaluated and enhanced through vulnerability assessments and the use of 33 cybersecurity threat intelligence.
We engage third parties, including vendors and other external service providers, to support our cybersecurity and data privacy processes such as risk assessments, program enhancements, and value-added user verification services. These third parties provide security services, including regular reviews of our security environment to provide an independent, industry-recognized risk rating and internal audits of our technology and security controls.
We engage third parties, including vendors and other external service providers, to support elements of our cybersecurity and data privacy programs, such as risk assessments, program enhancements, and user verification services. These third parties provide security-related services, including independent evaluations of our security environment and assessments of our technology and security controls using industry-recognized frameworks.
Our CISO and audit committee also provide cybersecurity-related updates to the full board of directors three times per year, including regarding recent developments, evolving standards, metrics about cyber threat response preparedness, program maturity milestones, material cybersecurity risks and risk mitigation status, and the current and emerging threat landscape.
Our Chief Information Security Officer, who we refer to as our CISO, presents quarterly cybersecurity-related updates to our audit committee, including at least one update to the full board of directors each year, regarding recent developments, evolving standards, metrics about cyber threat response preparedness, program maturity milestones, material cybersecurity risks and risk mitigation status, and the current and emerging threat landscape.
We have also developed a program and engaged with a bug bounty service for ongoing identification of exploitable vulnerabilities in the environment. Separately, our information security team also conducts regular scans of the environment to identify known vulnerabilities for remediation. We also have processes to oversee and identify risks from cybersecurity threats associated with our use of third-party service providers.
We also operate a vulnerability disclosure and bug bounty program to support the ongoing identification of potential security vulnerabilities. In addition, our information security team performs regular security scans to identify known vulnerabilities and supports remediation efforts as appropriate. We maintain processes to identify, assess, and oversee cybersecurity risks associated with our use of third-party service providers.
We have adopted physical, technological, and administrative controls on data security and have a defined procedure for incident detection, containment, response, and remediation. Our information security team is primarily responsible for managing our cybersecurity processes and partners with our legal team on data privacy risk management processes.
We maintain physical, technical, and administrative safeguards designed to protect information assets and have defined procedures for incident detection, containment, response, and remediation. Our information security team is primarily responsible for managing cybersecurity risk and works in close coordination with our legal team on data privacy risk management.
To that end, we maintain a risk-based approach to identify and oversee cybersecurity risks presented by third parties, including vendors and service providers, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.
Our approach is risk-based and is designed to evaluate cybersecurity risks posed by vendors, service providers, and other third parties, including risks arising from third-party systems that could adversely affect our business in the event of a cybersecurity incident.
In addition, we perform diligence on our vendors and prospective vendors regarding their cybersecurity posture. We conduct and maintain a regular enterprise risk management program that is overseen by the audit committee of our board of directors, and efforts to address cybersecurity risks are an important component of our overall approach to enterprise risk management.
Cybersecurity risk management is integrated into our broader enterprise risk management program, which is overseen by the audit, risk and compliance committee of our board of directors, which we refer to as our audit committee, and cybersecurity considerations are an important component of our overall approach to enterprise risk management.
Our CISO monitors, and participates in, our various cybersecurity policies and procedures, and our cybersecurity team regularly updates our CISO on the current status of the cybersecurity environment, and cybersecurity incidents and actual or potential risks. Our CISO and his team provide regular updates to the management team and escalate events that require leadership’s attention.
Our CISO actively oversees and participates in the development and implementation of our cybersecurity policies and procedures, and the cybersecurity team provides the CISO with regular updates on the threat landscape, incidents, and emerging risks. Our CISO and his team provide regular updates to the management team and promptly escalate issues that warrant executive attention.
Our information security controls operate at multiple levels and are designed to detect, prevent, and mitigate cybersecurity threats that could impact the privacy and security of our data and our customers’ data. To operate at scale, we have automated several risk mitigation strategies.
Certain platforms and workforce solutions maintain separate certifications and attestations that reflect their distinct environments and enterprise customer needs. Our information security controls operate at multiple levels and are designed to detect, prevent, and mitigate cybersecurity threats that could affect the confidentiality, integrity, and availability of our data and our customers’ data.
We also have implemented controls and procedures that provide for the prompt escalation of cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.
We have implemented controls and procedures to support the timely identification and escalation of cybersecurity incidents, enabling management to evaluate, respond to, and determine appropriate disclosure and reporting actions in a timely manner.
To date, cybersecurity threats, including any previous cybersecurity incidents, have not materially affected our business strategy, operating results, and/or financial condition. If we were to experience a material cybersecurity incident in the future, such incident may have a material effect, including on our business strategy, operating results, or financial condition.
However, a future material cybersecurity incident could have a material adverse effect on our business strategy, operating results, or financial condition.
Our CISO is primarily responsible for our cybersecurity risk management program and partners with our legal team on data privacy matters at the management level. Our CISO has over 25 years of experience in various technology leadership positions across multiple industries including finance, healthcare and technology.
Our CISO leads our cybersecurity risk management program and collaborates closely with our legal team on data privacy matters at the management level.
He has held leadership positions specifically in the information security space since 2011 at four publicly traded companies. The CISO’s leadership team members are all seasoned information security professionals who have worked at some of the largest well-known brand names and are experts in their fields.
Our CISO is supported by a seasoned leadership team composed of information security professionals who have held roles at some of the most well-known global brands and are recognized experts in their respective fields.
One member of our audit committee earned the NACD’s CERT Certificate in Cybersecurity Oversight in 2023. Our audit committee receives quarterly cybersecurity-related updates from our Chief Information Security Officer, who we refer to as our CISO, including in the form of written reports and presentations.
One member of our audit committee earned NACD’s CERT Certificate in Cybersecurity Oversight in 2025.
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We conduct regular test exercises to ensure all relevant teams are aware of their responsibilities during a cybersecurity event or incident, and we use these exercises to promote a culture of continuous improvement.
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We conduct regular cybersecurity test exercises involving relevant stakeholders to reinforce roles, decision-making processes, and escalation protocols. These exercises are designed not only to confirm accountability, but also to strengthen organizational readiness by training teams to respond effectively under realistic conditions and to continuously improve our incident response capabilities.
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Our platform is designed to help ensure the security of our data and systems, protect our customers’ personal information, and meet the rigorous privacy and security requirements of our Enterprise clients.
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Our platforms and workforce solutions maintain security and privacy programs informed by industry-recognized standards and frameworks, including ISO standards and SOC reporting, as appropriate for their respective products, operating environments, and customer requirements. These programs are designed to support the protection of customer data and compliance with applicable security and privacy obligations.
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To that end, we have obtained and maintain the following security and privacy certifications: ISO 27001 and 27018, SOC 2 Type 2 certification, SOC 3 certification, PCI-DSS Level 1 certification, U.S. Department of Commerce Data Privacy Framework certifications, and TRUSTe Enterprise Privacy & Data Governance Practices certification from TrustArc.
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To support operations at scale, we have automated certain risk mitigation measures and regularly evaluate their effectiveness. We have implemented trust and safety processes intended to help prevent and detect suspicious and fraudulent activity on our platforms.
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We have implemented comprehensive trust and safety processes to help prevent and detect suspicious and fraudulent behavior on our platform. Over the years of developing our work marketplace, we have developed and refined specific pattern-matching algorithms to detect unusual behavior on our work marketplace, and we continue to improve such algorithms in the evolving threat landscape.
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As part of the development and operation of the Upwork Marketplace, we have designed and refined proprietary detection mechanisms, including pattern-based techniques, to identify anomalous or potentially malicious behavior, and we continue to enhance these capabilities in response to an evolving threat landscape.
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We provide regular, mandatory training for our personnel regarding cybersecurity threats as a means to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices.
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As part of these processes, we perform due diligence on vendors and prospective vendors with respect to their cybersecurity practices and controls.
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All access to our platform is encrypted using industry-standard transport layer security technology. When customers 32 enter sensitive information on our site, such as tax identification numbers, we encrypt the transmission of that information using secure socket layer technology.
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Access to our platform is encrypted using industry-standard transport layer security protocols. Sensitive information transmitted through our platform, including certain personal and financial data, is encrypted during transmission, and data stored on systems containing personally identifiable information is encrypted at rest.
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We also use the HSTS (HTTP strict transport security) to ensure visitors connect to the website over HTTPS which adds an additional layer of protection for our customers. For servers that store personally identifiable information, the data is encrypted.
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We also implement additional security mechanisms, such as HTTP Strict Transport Security (HSTS), to help ensure secure connections to our website. Customers may elect to enhance the security of their accounts by enabling multi-factor authentication.
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Moreover, our customers may elect to further secure their account credentials through two-factor authentication that requires them to authenticate with information provided by a second device.
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In addition, we maintain compliance with the Payment Card Industry Data Security Standard (PCI DSS) for payment processing, reflecting adherence to industry-recognized security requirements applicable to organizations that process payment card transactions. To date, cybersecurity threats, including any prior cybersecurity incidents, have not had a material impact on our business strategy, operating results, or financial condition.
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In order to make secure payments through our platform, we are Payment Card Industry Data Security Standard certified, which means we have demonstrated compliance with the Payment Card Industry security standards required for businesses that complete credit card or debit card transactions.
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Appointed as our CISO in April 2025 after joining Upwork in 2021, our CISO has over two decades of experience in technology leadership roles across the healthcare and technology industries, including dedicated information security leadership positions at two publicly traded companies (including Upwork) since 2016.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters are located in Palo Alto, California, where we lease approximately 12,685 square feet of office space pursuant to a lease that expires in September 2032.
Biggest changeItem 2. Properties. Our corporate headquarters are located in Palo Alto, California, where we lease approximately 21,615 square feet of office space pursuant to a lease that expires in September 2032.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. We are not a party to any material pending legal proceedings. See “Note 9—Commitments and Contingencies” of the notes to our consolidated financial statements included elsewhere in this Annual Report for additional information on our commitments and contingencies. 33
Biggest changeItem 3. Legal Proceedings. We are not a party to any material pending legal proceedings. See “Note 9—Commitments and Contingencies” of the notes to our consolidated financial statements included elsewhere in this Annual Report for additional information on our commitments and contingencies. 34

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities In October 2024, our board of directors authorized the repurchase of up to $100.0 million of shares of our outstanding common stock under the 2024 Share Repurchase Authorization. The 2024 Share Repurchase Authorization has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason.
Biggest change(3) In September 2025, we announced that our board of directors authorized the 2025 Share Repurchase Authorization to purchase up to $100.0 million of our common stock. The 2025 Share Repurchase Authorization does not have a fixed expiration date and does not obligate us to acquire any dollar amount or specific number of shares.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024, and is incorporated herein by reference.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2025, and is incorporated herein by reference.
We currently intend to retain all available funds and any future earnings for use in the development of our business, for repurchases under our 2024 Share Repurchase Authorization, and for general corporate purposes, and we do not anticipate paying any dividends on our capital stock in the foreseeable future.
We currently intend to retain all available funds and any future earnings for use in the development of our business, for repurchases under the 2025 Share Repurchase Authorization, and for general corporate purposes, and we do not anticipate paying any dividends on our capital stock in the foreseeable future.
Such returns are based on historical results and are not intended to suggest future 35 performance. The NASDAQ Composite Index and the NASDAQ 100 Technology Index assume reinvestment of any dividends. Recent Sales of Unregistered Securities None. Use of Proceeds None.
Such returns are based on historical results and are not intended to suggest future 36 performance. The NASDAQ Composite Index and the NASDAQ 100 Technology Index assume reinvestment of any dividends. Recent Sales of Unregistered Securities None. Use of Proceeds None.
The following graph shows a comparison from December 31, 2019 through December 31, 2024 of the cumulative total returns for our common stock, the NASDAQ Composite Index and the NASDAQ 100 Technology Index, respectively. The graph assumes $100 was invested at the market close on December 31, 2019 in the common stock of Upwork Inc.
The following graph shows a comparison from December 31, 2020 through December 31, 2025 of the cumulative total returns for our common stock, the NASDAQ Composite Index and the NASDAQ 100 Technology Index, respectively. The graph assumes $100 was invested at the market close on December 31, 2020 in the common stock of Upwork Inc.
Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Upwork Inc. under the Securities Act or the Exchange Act.
Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Upwork Inc. under the Securities Act or the Exchange Act.
Holders of Record As of January 31, 2025, there were approximately 1,300 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our common stock represented by these record holders.
Holders of Record As of January 30, 2026, there were approximately 1,150 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our common stock represented by these record holders.
As of December 31, 2024, we had $100.0 million available for repurchases under the 2024 Share Repurchase Authorization. There was no share repurchase activity during the three months ended December 31, 2024.
As of December 31, 2025, we had $64.0 million available for repurchases of our common stock under the 2025 Share Repurchase Authorization.
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Issuer Purchases of Equity Securities Share repurchases of our common stock under the 2025 Share Repurchase Authorization for the three months ended December 31, 2025 were as follows (in thousands, except share and per share amounts): Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1, 2025 - October 31, 2025 915,103 $ 16.59 915,103 $ 82,897 November 1, 2025 - November 30, 2025 789,024 17.47 789,024 69,112 December 1, 2025 - December 31, 2025 256,909 19.74 256,909 64,040 Total 1,961,036 $ 17.36 1,961,036 $ 64,040 37 (1) Shares purchased are as of trade date.
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(2) Average price paid per share is calculated on the trade date and excludes any excise tax that we accrue on our share repurchases as a result of the Inflation Reduction Act of 2022.
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Repurchases of our common stock under the 2025 Share Repurchase Authorization may be made from time to time on the open market (including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act), in privately negotiated transactions, or by other methods, at our discretion, and in accordance with applicable securities laws and other restrictions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following table sets forth our consolidated results of operations for the years ended December 31, 2024, 2023, and 2022: (In thousands) 2024 2023 2022 Revenue: Marketplace $ 662,108 $ 586,099 $ 518,282 Enterprise 107,217 103,037 100,036 Total revenue 769,325 689,136 618,318 Cost of revenue (1) 174,094 170,450 160,402 Gross profit 595,231 518,686 457,916 Operating expenses Research and development (1) 209,283 177,363 154,553 Sales and marketing (1) 185,211 220,681 246,882 General and administrative (1) 128,803 118,925 123,952 Provision for transaction losses 6,728 12,977 25,153 Total operating expenses 530,025 529,946 550,540 Income (loss) from operations 65,206 (11,260) (92,624) Other income, net 25,221 60,137 3,275 Income (loss) before income taxes 90,427 48,877 (89,349) Income tax benefit (provision) 125,159 (1,990) (536) Net income (loss) $ 215,586 $ 46,887 $ (89,885) (1) Includes stock-based compensation expense as follows: Cost of revenue $ 1,586 $ 1,900 $ 1,356 Research and development 29,923 28,006 26,881 Sales and marketing 11,670 14,030 11,511 General and administrative 25,212 30,259 35,753 Total $ 68,391 $ 74,195 $ 75,501 A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operation” included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 15, 2024. 41 Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, Change (In thousands, except percentages) 2024 2023 $ % Marketplace $ 662,108 $ 586,099 76,009 13 % Percentage of total revenue 86 % 85 % Enterprise $ 107,217 $ 103,037 4,180 4 % Percentage of total revenue 14 % 15 % Total revenue $ 769,325 $ 689,136 $ 80,189 12 % During the year ended December 31, 2024, macroeconomic conditions adversely impacted GSV, which declined 3%, compared to 2023.
Biggest changeInterest and penalties related to unrecognized tax benefits are recorded as income tax expense. 43 Results of Operations The following table sets forth our consolidated results of operations for the years ended December 31, 2025, 2024, and 2023: (In thousands) 2025 2024 2023 Revenue: Marketplace $ 682,883 $ 662,108 $ 586,099 Enterprise 104,901 107,217 103,037 Total revenue 787,784 769,325 689,136 Cost of revenue (1) 174,752 174,094 170,450 Gross profit 613,032 595,231 518,686 Operating expenses Research and development (1) 185,544 209,283 177,363 Sales and marketing (1) 143,412 185,211 220,681 General and administrative (1) 146,629 128,803 118,925 Provision for transaction losses 8,140 6,728 12,977 Total operating expenses 483,725 530,025 529,946 Income (loss) from operations 129,307 65,206 (11,260) Other income, net 23,869 25,221 60,137 Income before income taxes 153,176 90,427 48,877 Income tax (provision) benefit (37,751) 125,159 (1,990) Net income $ 115,425 $ 215,586 $ 46,887 (1) Includes stock-based compensation expense as follows: Cost of revenue $ 760 $ 1,586 $ 1,900 Research and development 23,023 29,923 28,006 Sales and marketing 6,347 11,670 14,030 General and administrative 35,260 25,212 30,259 Total $ 65,390 $ 68,391 $ 74,195 A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operation” included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 13, 2025.
Net cash provided by operating activities during 2024 was $153.6 million, which resulted from net income of $215.6 million and non-cash charges of $47.0 million, offset by net cash outflows of $15.0 million from changes in operating assets and liabilities.
Net cash provided by operating activities during 2024 was $153.6 million, which resulted from net income of $215.6 million offset by non-cash charges of $47.0 million and net cash outflows of $15.0 million from changes in operating assets and liabilities.
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.
We define adjusted EBITDA as net income 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.
GAAP for planning purposes, including the preparation of our annual operating budget, as a 45 measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and • adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our core operating results, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their U.S.
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; and • adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our core operating results, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their U.S.
Because of these and other limitations, you should consider adjusted EBITDA along with net income (loss) and our other financial performance measures prepared in accordance with U.S. GAAP. Liquidity and Capital Resources Our principal sources of liquidity are our cash and cash equivalents and marketable securities.
Because of these and other limitations, you should consider adjusted EBITDA along with net income and our other financial performance measures prepared in accordance with U.S. GAAP. Liquidity and Capital Resources Our principal sources of liquidity are our cash and cash equivalents and marketable securities.
GAAP. See “Key Financial and Operational Metrics—Non-GAAP Financial Measures” below for a definition of adjusted EBITDA and for information regarding our use of adjusted EBITDA and a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable financial measure prepared under U.S. GAAP.
See “Key Financial and Operational Metrics—Non-GAAP Financial Measures” below for a definition of adjusted EBITDA, information regarding our use of adjusted EBITDA, and a reconciliation of adjusted EBITDA to net income, the most directly comparable financial measure prepared under U.S. GAAP.
GAAP. See “—Non-GAAP Financial Measures” below for the definition of adjusted EBITDA, information regarding our use of adjusted EBITDA, and a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable financial measure prepared under U.S. GAAP.
GAAP. See “—Non-GAAP Financial Measures” below for the definition of adjusted EBITDA, information regarding our use of adjusted EBITDA, and a reconciliation of adjusted EBITDA to net income, the most directly comparable financial measure prepared under U.S. GAAP.
GAAP results. Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP.
GAAP results. 47 Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP.
Net cash provided by investing activities during 2023 was $88.3 million, which was primarily a result of proceeds from maturities of marketable securities of $648.8 million and proceeds from the sale of marketable securities of $165.0 million, including $143.7 million to enable the repurchase of a portion of the Notes, partially offset by investing $709.2 million in various marketable securities, as well as $12.7 million of internal-use software and platform development costs that we paid during the period, and $3.0 million for the purchase of an intangible asset.
Net cash provided by investing activities during 2023 was $88.3 million, which was primarily a result of proceeds from maturities of marketable securities of $648.8 million and proceeds from the sale of marketable securities of $165.0 million, including $143.7 million to enable the repurchase of a portion of the Notes, partially offset by investing $709.2 million in various marketable securities, as well as $12.7 million of internal-use software and platform development costs paid during the period, and $3.0 million for the purchase of an intangible asset.
We use the quoted market price of our common stock as reported on The Nasdaq Global Select Market for the fair value of RSUs, PSUs, stock options, and purchase rights under our 2018 ESPP.
We use the quoted market price of our common stock as reported on The Nasdaq Global Select Market for the fair value of RSUs, stock options, and purchase rights under the 2018 ESPP.
We expect the balances of our funds held in escrow, including funds held in transit, and the related liability to fluctuate based on marketplace activity and may vary from period to period.
We expect the balances of our funds held in escrow, including funds held in transit, and the related liability to fluctuate based on marketplace activity, and it may vary from period to period.
During the periods presented, we did not have, and we do not currently have, any commitments or obligations, including contingent obligations, arising from arrangements with unconsolidated entities or persons that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
During the periods presented, we did not have, nor do we currently have, any commitments or obligations, including contingent obligations, arising from arrangements with unconsolidated entities or persons that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
For additional information about our Notes, see the section below titled “—Convertible Senior Notes Due 2026.” In July 2024, we commenced a non-cancellable agreement for cloud infrastructure and other services that contains future purchase commitments of $40.0 million over two years, with $20.0 million in each year.
For additional information about our Notes, see the section below titled “—Convertible Senior Notes Due 2026 and Capped Calls.” Future Purchase Commitments for Cloud Infrastructure In July 2024, we commenced a non-cancellable agreement for cloud infrastructure and other services that contains future purchase commitments of $40.0 million over two years, with $20.0 million in each year.
We recognize revenue related to the material rights based on our estimate of when the material rights are exercised, and adjust revenue for changes in estimates in the period of change on a cumulative catch-up basis. 49 Stock-Based Compensation We measure and recognize compensation expense for all stock-based awards granted to employees and non-employee service providers, including stock options, restricted stock units, which we refer to as RSUs, performance stock units, which we refer to as PSUs, and purchase rights granted under our 2018 Employee Stock Purchase Plan, which we refer to as the 2018 ESPP, based on the estimated fair value of the award on the grant date.
We recognize revenue related to the material rights based on our estimate of when the material rights are exercised, and adjust revenue for changes in estimates in the period of change on a cumulative catch-up basis. 51 Stock-Based Compensation We measure and recognize compensation expense for all stock-based awards granted to employees and non-employee service providers, including stock options, restricted stock units, which we refer to as RSUs, performance stock units, which we refer to as PSUs, and purchase rights granted under the 2018 ESPP based on the estimated fair value of the award on the grant date.
(4) During each of the years ended December 31, 2024, 2023, and 2022, we incurred $0.8 million of expense related to the warrant to purchase 500,000 shares of our common stock at an exercise price of $0.01 per share issued to the Tides Foundation in 2018.
(4) During each of the years ended December 31, 2025, 2024, and 2023, we incurred $0.8 million of expense related to the warrant to purchase 500,000 shares of our common stock at an exercise price of $0.01 per share issued to the Tides Foundation in 2018.
Escrow Funding Requirements As a licensed internet escrow agent, we offer escrow services to customers of our work marketplace and, as such, we are required to hold our customers’ escrowed cash and in-transit cash in trust as an asset and record a corresponding liability for escrow funds held on behalf of talent and clients on our balance sheet.
Escrow Funding Requirements As a licensed internet escrow agent, we offer escrow services to customers and, as such, we are required to hold our customers’ escrowed cash and in-transit cash in trust as an asset and record a corresponding liability for escrow funds held on behalf of talent and clients on our balance sheet.
Revenue for a majority of our talent service fees is recognized on the Sunday of each week, as this is the day we have the contractual right to bill talent for the service fees. We charge a client marketplace fee of 5% on each transaction—or 3% if paid via ACH for eligible clients.
Revenue for a majority of talent service fees on the Upwork Marketplace is recognized on the Sunday of each week, as this is the day we have the contractual right to bill talent for the service fees. We charge a client marketplace fee of 5% on each transaction—or 3% if paid via ACH for eligible clients.
Operating Activities Our largest source of cash from operating activities is revenue generated from our work marketplace. Our primary uses of cash from operating activities are for personnel-related expenditures, payment processing fees, amounts paid to talent to deliver services for clients under our Managed Services offering, and third-party hosting costs.
Operating Activities Our largest source of cash from operating activities is Marketplace revenue. Our primary uses of cash from operating activities are for personnel-related expenditures, payment processing fees, amounts paid to talent to deliver services for clients under our Managed Services offering, and third-party hosting costs.
Investing Activities Net cash provided by investing activities during 2024 was $137.6 million, which was primarily a result of proceeds from maturities of marketable securities of $486.9 million and $41.8 million in proceeds from the sale of marketable securities, partially offset by investing $362.3 million in various marketable securities, $14.3 million cash paid, net of cash acquired, for the acquisition of Objective AI, $10.9 million of internal-use software and platform development costs that we paid during the period, and $3.5 million paid for purchases of property and equipment.
Net cash provided by investing activities during 2024 was $137.6 million, which was primarily a result of proceeds from maturities of marketable securities of $486.9 million and proceeds from the sale of marketable securities of $41.8 million, partially offset by investing $362.3 million in various marketable securities, $14.3 million cash paid, net of cash acquired, for the acquisition of Objective AI, Inc., $10.9 million of internal-use software and platform development costs paid during the period, and $3.5 million paid for purchases of property and equipment.
Management applies judgement in assessing the continued appropriateness for the estimates, which include assessing the continued appropriateness of the methodology and relevant data inputs to estimate the likelihood and the period of time over which to defer and recognize the consideration allocated to the material rights. We utilize historical customer transaction data in developing these estimates.
Management applies judgment in assessing the continued appropriateness for the estimates, which include assessing the continued appropriateness of the methodology and relevant data inputs to estimate the likelihood and the period of time over which to defer and recognize the consideration allocated to the material rights. We utilize historical customer transaction data in developing these estimates.
Any future indebtedness we incur may result in terms that could also be unfavorable to our equity investors. There can be no assurances that we will be able to raise additional capital on terms we deem acceptable, 46 or at all.
Any future indebtedness we incur may result in terms that could also be unfavorable to our equity investors. There can be no assurances that we will be able to raise 48 additional capital on terms we deem acceptable, or at all.
For our Enterprise Solutions offering, we charge clients a monthly or annual subscription fee and a service fee calculated as a percentage of the client’s spend on talent services, in addition to a 10% service fee paid by talent.
For our Enterprise Solutions offerings, we charge clients a monthly or annual subscription fee and a service fee calculated as a percentage of the client’s spend on talent services, in addition to a 10% service fee paid by talent.
Some of these limitations are as follows: • 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; • although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized 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; • 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; and • other companies, including companies in our industry, may calculate adjusted EBITDA or similarly titled measures differently, which reduces the usefulness of this measure for comparative purposes.
Some of these limitations are as follows: • 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; • although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized 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; • 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; (c) tax payments that may represent a reduction in cash available to us; or (d) material acquisition-related deal costs, and • other companies, including companies in our industry, may calculate adjusted EBITDA or similarly titled measures differently, which reduces the usefulness of this measure for comparative purposes.
Through our Managed Services offering, we are responsible for providing services and engaging talent directly or as employees of third-party staffing providers to perform services for clients on our behalf. The talent providing services in connection with our Managed Services offering include independent talent and agencies of varying sizes. Under U.S.
Through our Managed Services offering, we are responsible for providing services and engaging talent directly or as employees of Ascen and its subsidiaries or third-party staffing providers to perform services for clients on our behalf. The talent providing services in connection with our Managed Services offering include independent talent and agencies of varying sizes. Under U.S.
We expect our key metrics may fluctuate between periods due to a number of factors, including changing macroeconomic conditions; the number of Sundays (i.e., the day we have the contractual right to bill and recognize revenue for the majority of our talent service fees each week) in any given period; the lapping of significant launches of new products, pricing changes, and other monetization efforts; and ongoing efforts to improve processes on our work marketplace, including project proposals and purchases of Connects, among others.
We expect our key metrics may fluctuate between periods due to a number of factors, including changing macroeconomic conditions; the number of Sundays (i.e., the day we have the contractual right to bill and recognize revenue for the majority of our talent service fees each week) in any given period; the lapping of significant launches of new lines of business or products, pricing changes, and other monetization efforts; and ongoing efforts to improve processes on the Upwork Marketplace, including project proposals and purchases of Connects, among others.
We deposit a portion of funds held in escrow in interest-bearing checking accounts. 47 Convertible Senior Notes Due 2026 and Capped Calls As of December 31, 2024, $361.0 million aggregate principal amount of the Notes remained outstanding.
We deposit a portion of funds held in escrow in interest-bearing checking accounts. Convertible Senior Notes Due 2026 and Capped Calls As of December 31, 2025, $361.0 million aggregate principal amount of the Notes remained outstanding.
We also generate revenue through ads and monetization products, including purchases of Connects, talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar. Additionally, we earn interest on funds held on behalf of customers.
We also generate Marketplace revenue through ads and monetization products, including purchases of Connects, talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar. Additionally, we earn interest on funds held on behalf of customers, which is included in Marketplace revenue.
Adjusted EBITDA is not prepared in accordance with, and is not an alternative to, financial measures prepared in accordance with U.S. GAAP. 44 The following table presents a reconciliation of net income (loss), the most directly comparable financial measure prepared in accordance with U.S.
Adjusted EBITDA is not prepared in accordance with, and is not an alternative to, financial measures prepared in accordance with U.S. GAAP. 46 The following table presents a reconciliation of net income, the most directly comparable financial measure prepared in accordance with U.S.
Net cash used in financing activities during 2023 was $139.8 million, which was driven by $171.3 million that we paid to consummate the repurchase of a portion of the Notes, including related fees to effect the repurchases, partially offset by an increase in escrow funds payable of $25.4 million, proceeds received from our employee stock purchase plan of $4.1 million, and cash received from stock option exercises of $2.0 million.
Net cash used in financing activities during 2023 was $139.8 million, which was driven by $171.3 million that we paid to consummate the repurchase of a portion of the Notes, including related fees to effect the repurchases, partially offset by an increase in escrow funds payable of $25.4 million, proceeds received from the 2018 ESPP of $4.1 million, and cash received from stock option exercises of $2.0 million.
As was the case with the 2023 Share Repurchase Authorization, repurchases of our common stock under the 2024 Share Repurchase Authorization may be made from time to time on the open market (including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act), in privately negotiated transactions, or by other methods, at our discretion, and in accordance with applicable securities laws and other restrictions.
Repurchases of our common stock under the 2025 Share Repurchase Authorization may be made from time to time on the open market (including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act), in privately negotiated transactions, or by other methods, at our discretion, and in accordance with applicable securities laws and other restrictions.
We believe our existing cash and cash equivalents, marketable securities, and cash flow from operations (in periods in which we generate cash flow from operations) will be sufficient for at least the next 12 months to meet our requirements and plans for cash, including meeting our working capital requirements and capital expenditure requirements.
We believe our existing cash and cash equivalents, marketable securities, and cash flow from operations will be sufficient for at least the next 12 months to meet our requirements and plans for cash, including meeting our working capital requirements and capital expenditure requirements.
Financing Activities Net cash used in financing activities during 2024 was $82.0 million, which was driven by $100.0 million cash paid for repurchases under the 2023 Share Repurchase Authorization, partially offset by an increase in escrow funds payable of $10.0 million, proceeds received from our employee stock purchase plan of $4.8 million, and cash received from stock option exercises of $3.3 million.
Net cash used in financing activities during 2024 was $82.0 million, which was driven by $100.0 million cash paid for repurchases under the 2023 Share Repurchase Authorization, partially offset by an increase in escrow funds payable of $10.0 million, proceeds received from the 2018 ESPP of $4.8 million, and cash received from stock option exercises of $3.3 million.
Additionally, clients of our Enterprise Solutions offering can also subscribe to a compliance service that includes worker classification services for an additional fee and may also choose to use our work marketplace to engage talent that were not originally sourced through our work marketplace for a lower fee percentage.
Additionally, clients of our Enterprise Solutions offerings can subscribe to a compliance service that includes worker classification services for an additional fee and may also choose to use the Upwork Marketplace to engage talent that were not originally sourced through the Upwork Marketplace for a lower fee percentage.
Assuming the outstanding Notes are not converted into our common stock, repurchased, or redeemed prior to maturity, (i) annual interest expense relating to the Notes will be $2.7 million in each fiscal year through 2025 and $1.8 million in 2026 and (ii) principal in the amount of $361.0 million will be payable upon the maturity of the Notes on August 15, 2026.
Notes Assuming the outstanding Notes are not converted into our common stock, repurchased, or redeemed prior to maturity on August 15, 2026, (i) annual interest expense relating to the Notes will be $1.8 million for fiscal year 2026 and (ii) principal in the amount of $361.0 million will be payable upon maturity.
Therefore, in order to satisfy escrow funding requirements, every Sunday we match the shortage of cash in trust by restricting our own operating cash and typically collect this cash shortage from clients within the next several days. As of December 31, 2024 and 2023, funds held in escrow, including funds in transit, were $195.7 million and $212.4 million, respectively.
Therefore, in order to satisfy escrow funding requirements, every Sunday we match the shortage of cash in trust by restricting our own operating cash and typically collect this cash shortage from clients within the next several days. As of December 31, 2025 and 2024, 49 funds held in escrow, including funds in transit, were $180.8 million and $195.7 million, respectively.
To the extent existing cash and cash equivalents, cash from marketable securities, and cash from operations (in periods in which we generate cash flow from operations) are insufficient to fund our working capital and capital expenditure requirements, or should we require additional cash for other purposes, we will need to raise additional funds.
To the extent existing cash and cash equivalents, cash from marketable securities, and cash from operations are insufficient to fund our working capital and capital expenditure requirements, or should we require additional cash for other purposes, we will need to raise additional funds.
The 2024 Share Repurchase Authorization has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason. The 2024 Share Repurchase Authorization does not obligate us to repurchase any dollar amount or number of shares, and the timing and amount of any repurchases will depend on market and business conditions.
The 2025 Share Repurchase Authorization does not have an expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason. The 2025 Share Repurchase Authorization does not obligate us to repurchase any dollar amount or number of shares, and the timing and amount of any repurchases will depend on market and business conditions.
(3) During the year 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”.
(3) During the year 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.
In the long term, our ability to support our working capital and capital expenditure requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support research and development efforts, the cost to host our work marketplace, the introduction of new offerings and services, the continuing market adoption of our work marketplace, any acquisitions or investments that we make in complementary businesses, products, and technologies, macroeconomic conditions, any repurchases of shares of our outstanding common stock or of our outstanding Notes, and our ability to obtain equity or debt financing.
In the long term, our ability to support our working capital and capital expenditure requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the timing and extent of spending to support research and development efforts, investments to support and scale our Enterprise offerings, including integration costs associated with recent acquisitions, the expansion of sales and marketing activities, the cost to host our platforms and other workforce solutions, the introduction of new lines of business, offerings, and services, the continuing market adoption of our offerings, any acquisitions or investments that we make in complementary businesses, products, and technologies, macroeconomic conditions, any repurchases of shares of our outstanding common stock or the Notes, and our ability to obtain equity or debt financing.
We also generate revenue through ads and monetization products, including purchases of Connects, talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar. Additionally, we earn interest on funds held on behalf of customers. Enterprise Revenue.
We also generate Marketplace revenue through ads and monetization products, talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar. Additionally, we earn interest on funds held on behalf of customers. Enterprise Revenue. Enterprise offers two primary lines of service—Enterprise Solutions and Managed Services.
Share Repurchase Program In November 2023, our board of directors authorized the repurchase of up to $100.0 million of shares of our outstanding common stock under the 2023 Share Repurchase Authorization.
Share Repurchase Program In October 2024, our board of directors authorized the repurchase of up to $100.0 million of shares of our outstanding common stock under the 2024 Share Repurchase Authorization. In September 2025, our board of directors authorized the repurchase of up to $100.0 million of shares of our outstanding common stock under the 2025 Share Repurchase Authorization.
GAAP, to adjusted EBITDA for each of the periods indicated: Year Ended December 31, (In thousands) 2024 2023 2022 Net income (loss) $ 215,586 $ 46,887 $ (89,885) Add back (deduct): Stock-based compensation expense 68,391 74,195 75,501 Depreciation and amortization 14,813 9,449 8,057 Other income, net (1) (25,221) (60,137) (3,275) Income tax (benefit) provision (2) (125,159) 1,990 536 Other (3)(4)(5) 19,183 750 5,037 Adjusted EBITDA $ 167,593 $ 73,134 $ (4,029) (1) During the year ended December 31, 2023, we recognized a gain of $38.9 million on early extinguishment of debt, which is included in “Other income, net” in the consolidated statement of operations and comprehensive income (loss).
GAAP, to adjusted EBITDA for each of the periods indicated: Year Ended December 31, (In thousands) 2025 2024 2023 Net income $ 115,425 $ 215,586 $ 46,887 Add back (deduct): Stock-based compensation expense 65,390 68,391 74,195 Depreciation and amortization 25,710 14,813 9,449 Other income, net (1) (23,869) (25,221) (60,137) Income tax (benefit) provision (2) 37,751 (125,159) 1,990 Other (3)(4)(5) 5,149 19,183 750 Adjusted EBITDA $ 225,556 $ 167,593 $ 73,134 (1) During the year ended December 31, 2023, we recognized a gain of $38.9 million on early extinguishment of debt, which is included in “Other income, net” in the consolidated statement of operations and comprehensive income.
Enterprise offers two lines of service—Enterprise Solutions and Managed Services. 39 Our Enterprise Solutions offering includes access to additional product features, premium access to top talent, professional services, custom reporting, and flexible payment terms. Revenue from our Enterprise Solutions offering includes all client fees, subscriptions, and talent service fees.
Our Enterprise Solutions offerings includes access to additional product features, premium access to top talent, professional services, custom reporting, and flexible payment terms. Revenue from our Enterprise Solutions offerings includes all client fees, subscriptions, and talent service fees.
These include certain aspects of accounting for revenue recognition, stock-based compensation, and income taxes. Revenue Recognition We generate revenue from talent and clients from our Marketplace and Enterprise offerings. We account for revenue in accordance with Topic 606.
These include certain aspects of accounting for revenue recognition, stock-based compensation, and income taxes. Revenue Recognition We generate revenue from talent and clients through our platforms and other workforce solutions. We account for revenue in accordance with Topic 606.
Income Tax Benefit (Provision) We account for income taxes in accordance with the asset and liability method, which involves recognizing deferred assets and liabilities for expected future tax effects of differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.
Income Tax (Provision) Benefit We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax effects of temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases.
Other Income (Expense), Net Other income (expense), net consists primarily of interest income that we earn from our operating investments, namely our deposits in money market funds and investments in marketable securities, interest expense on our outstanding borrowings, as well as gains and losses from foreign currency exchange transactions.
Provisions for these items represent estimates of losses based on our actual historical incurred losses and other factors. 42 Other Income, Net Other income, net consists primarily of interest income that we earn from our operating investments, namely our deposits in money market funds and investments in marketable securities, interest expense on our outstanding borrowings, as well as gains and losses from foreign currency exchange transactions.
These variables include, but are not limited to, the expected dividend yield, the expected term of the awards, the risk-free interest rates, and the expected common stock price volatility over the term of the option awards.
These variables include, but are not limited to, the expected dividend yield, the expected term of the awards, the offering period for purchase rights granted under the 2018 ESPP, the risk-free interest rates, and the expected common stock price volatility over the term of the option awards.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” and in other parts of this Annual Report. Overview Business Independent talent is an increasingly sought-after, critical, and expanding segment of the global workforce.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” and in other parts of this Annual Report.
A valuation allowance is reduced or removed when, based on a comprehensive evaluation of all available evidence, it becomes more likely than not that the deferred tax assets will be realized.
The assessment of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, as the realizability of deferred tax assets may vary based on jurisdiction-specific factors. A valuation allowance is reduced or removed when, based on a comprehensive evaluation of all available evidence, it becomes more likely than not that the deferred tax assets will be realized.
During the year ended December 31, 2024, we repurchased and subsequently retired 8.1 million shares of common stock under the 2023 Share Repurchase Authorization for an aggregate amount of $100.0 million at an average price of $12.38 per share, including fees associated with the repurchases and excluding excise tax.
During the year ended December 31, 2025, we repurchased and subsequently retired 9.3 million shares of our common stock for an aggregate amount of $136.0 million at an average price of $14.61 per share, including fees associated with the repurchases and excluding excise tax, under the Share Repurchase Authorizations.
Marketplace revenue is primarily generated from talent service fees paid by talent as a percentage of the total amount talent charges clients for services accessed on our Marketplace, and to a lesser extent, client marketplace fees.
We believe Marketplace revenue provides comparability to other online marketplaces. We generate Marketplace revenue from both talent and clients. Marketplace revenue is primarily generated from talent service fees paid by talent as a percentage of the total amount talent charges clients for services accessed on the Upwork Marketplace and client marketplace fees.
We recognize the fair value of purchase rights granted under the 2018 ESPP as an expense on a straight-line basis over the offering period and account for forfeitures as they occur. Stock-based compensation expense associated with service and market-based stock options is recognized over the longer of the expected achievement period for the service condition and market condition.
We recognize the fair value of purchase rights granted under the 2018 ESPP as an expense on a straight-line basis over the offering period and account for forfeitures as they occur.
We establish a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be recoverable against future taxable income. 40 Deferred tax assets and liabilities are measured using the enacted tax rates that will be in effect for the years in which those tax assets are expected to be realized or settled.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods in which those amounts are realized or settled. We establish a valuation allowance to reduce deferred tax assets when it is more likely than not that such assets will not be realized based on future taxable income or available tax planning strategies.
As of December 31, 2024, we had remaining purchase commitments under this agreement of $30.0 million. As of December 31, 2024, our future lease commitments were $15.9 million (excluding adjustments for discount to present value), including $1.9 million for 2025.
As of December 31, 2025, we had remaining purchase commitments under this agreement of $13.5 million. Operating Leases for Office Space As of December 31, 2025, our future lease commitments were $14.0 million (excluding adjustments for discount to present value), including $3.0 million for 2026.
Our key metrics were as follows as of or for the periods presented: As of or for the Year Ended December 31, (In thousands, except GSV per active client and percentages) 2024 Change 2023 Change 2022 Change GSV $ 4,008,107 (3) % $ 4,142,252 1 % $ 4,104,891 16 % Marketplace revenue $ 662,108 13 % $ 586,099 13 % $ 518,282 21 % Marketplace take rate 18.0 % 265 bps 15.4 % 155 bps 13.8 % 58 bps Net income (loss) $ 215,586 * $ 46,887 152 % $ (89,885) 60 % Adjusted EBITDA (1) $ 167,593 129 % $ 73,134 * $ (4,029) * Active clients 832 (2) % 851 5 % 814 6 % GSV per active client $ 4,815 (1) % $ 4,867 (4) % $ 5,045 10 % *Not meaningful (1) Adjusted EBITDA is not prepared in accordance with, and is not an alternative to, financial measures prepared in accordance with U.S.
Key Financial and Operational Metrics The key financial and operational metrics that we monitor to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions were as follows as of or for the periods presented: As of or for the Year Ended December 31, (In thousands, except GSV per active client and percentages) 2025 Change 2024 Change 2023 Change GSV $ 4,028,386 1 % $ 4,008,107 (3) % $ 4,142,252 1 % Marketplace revenue $ 682,883 3 % $ 662,108 13 % $ 586,099 13 % Marketplace take rate 18.7 % 69 bps 18.0 % 265 bps 15.4 % 155 bps Net income $ 115,425 (46) % $ 215,586 * $ 46,887 152 % Adjusted EBITDA (1) $ 225,556 35 % $ 167,593 129 % $ 73,134 * Active clients 785 (6) % 832 (2) % 851 5 % GSV per active client $ 5,129 7 % $ 4,815 (1) % $ 4,867 (4) % *Not meaningful (1) Adjusted EBITDA is not prepared in accordance with, and is not an alternative to, financial measures prepared in accordance with U.S.
Sales and Marketing Year Ended December 31, Change (In thousands, except percentages) 2024 2023 $ % Sales and marketing $ 185,211 $ 220,681 $ (35,470) (16) % Percentage of total revenue 24 % 32 % For the year ended December 31, 2024, sales and marketing expense decreased by $35.5 million, or 16%, compared to 2023.
Sales and Marketing Year Ended December 31, Change (In thousands, except percentages) 2025 2024 $ % Sales and marketing $ 143,412 $ 185,211 $ (41,799) (23) % Percentage of total revenue 18 % 24 % For the year ended December 31, 2025, sales and marketing expense decreased by $41.8 million, or 23%, compared to 2024.
For purposes of determining countries where we enable GSV, we include both the countries in which the clients that paid for the applicable services are located, as well as the countries in which talent that provided those services are located. Growth in the number of active clients and GSV per active client are the primary drivers of GSV.
For purposes of determining countries where we enable GSV, we include both the countries in which the clients that paid for the applicable services are located, as well as the countries in which talent that provided those services are located. Marketplace Revenue Marketplace revenue represents the revenue derived from the Upwork Marketplace and is the primary driver of our business.
GAAP, adjusted EBITDA is a non-GAAP measure that we believe is useful in evaluating our operating performance.
Non-GAAP Financial Measures In addition to our results determined in accordance with U.S. GAAP, adjusted EBITDA is a non-GAAP measure that we believe is useful in evaluating our operating performance.
Certain of our performance metrics may not accurately reflect certain details of our business, are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.” 38 Gross Services Volume (GSV) GSV represents the amount of business transacted through our work marketplace.
Certain of our performance metrics may not accurately reflect certain details of our business, are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business” in Part I, Item 1A of this Annual Report. 40 Gross Services Volume (GSV) GSV represents the total dollar value transacted through all Upwork platforms and other workforce solutions.
Approximately 70% of our GSV in 2024 was generated from U.S. clients, compared to approximately 69% and 68% of GSV in 2023 and 2022, respectively, with clients in no other country representing more than 10% of our GSV in any such year. We generate revenue from both talent and clients of our Marketplace and Enterprise offerings.
As a global business connecting clients and talent worldwide, our GSV is generated across a diverse set of geographies. In 2025, approximately 71% of GSV was generated from U.S. clients, compared to approximately 70% and 69% in 2024 and 2023, respectively, with no other country representing more than 10% of GSV in any such year.
Since our inception, our business has consisted of the operation of an online work marketplace that connects businesses with independent talent from across the globe, and we do not make investments for trading or speculative purposes. As of December 31, 2024 and 2023, we had $305.8 million and $79.6 million in cash and cash equivalents, respectively.
Since our inception, our business has consisted of the operation of an online work marketplace that connects businesses with independent talent from across the globe, and the provision of additional contingent workforce solutions through Lifted and its subsidiaries. We do not make investments for trading or speculative purposes.
As of December 31, 2024 and 2023, we had $316.3 million and $470.5 million in marketable securities, respectively.
As of December 31, 2025 and 2024, we had $294.4 million and $305.8 million in cash and cash equivalents, respectively. As of December 31, 2025 and 2024, we had $378.4 million and $316.3 million in marketable securities, respectively.
During the year ended December 31, 2024, we did not repurchase any shares under the 2024 Share Repurchase Authorization. As of December 31, 2024, we had $100.0 million available for repurchases under the 2024 Share Repurchase Authorization.
The 2024 Share Repurchase Authorization was fully utilized as of December 31, 2025. As of December 31, 2025, we had $64.0 million available for repurchases under the 2025 Share Repurchase Authorization.
We expect gross margin to remain consistent in 2025 compared to 2024. 42 Research and Development Year Ended December 31, Change (In thousands, except percentages) 2024 2023 $ % Research and development $ 209,283 $ 177,363 $ 31,920 18 % Percentage of total revenue 27 % 26 % For the year ended December 31, 2024, research and development expense increased by $31.9 million, or 18%, compared to 2023.
Research and Development Year Ended December 31, Change (In thousands, except percentages) 2025 2024 $ % Research and development $ 185,544 $ 209,283 $ (23,739) (11) % Percentage of total revenue 24 % 27 % For the year ended December 31, 2025, research and development expense decreased by $23.7 million, or 11%, compared to 2024.
General and Administrative Year Ended December 31, Change (In thousands, except percentages) 2024 2023 $ % General and administrative $ 128,803 $ 118,925 $ 9,878 8 % Percentage of total revenue 17 % 17 % For the year ended December 31, 2024, general and administrative expense increased by $9.9 million, or 8%, compared to 2023.
As a result, personnel-related costs decreased by $30.8 million and marketing and advertising expense decreased by $7.6 million. 45 General and Administrative Year Ended December 31, Change (In thousands, except percentages) 2025 2024 $ % General and administrative $ 146,629 $ 128,803 $ 17,826 14 % Percentage of total revenue 19 % 17 % For the year ended December 31, 2025, general and administrative expense increased by $17.8 million, or 14%, compared to 2024.
Additionally, we earn interest on funds held on behalf of customers. The Company operates its business as one operating and reportable segment. For additional information, see “Note 15—Segment Information” in the notes to our consolidated financial statements included elsewhere in this Annual Report.
India and the Philippines were our next largest talent geographies in all three years. We operate our business as one operating and reportable segment. For additional information, see “Note 15—Segment Information” in the notes to our consolidated financial statements included elsewhere in this Annual Report.
Cost of Revenue and Gross Margin Year Ended December 31, Change (In thousands, except percentages) 2024 2023 $ % Cost of revenue $ 174,094 $ 170,450 $ 3,644 2 % Total gross margin 77 % 75 % For the year ended December 31, 2024, cost of revenue increased by $3.6 million, or 2%, compared to 2023, primarily due to increases in the cost of talent services to deliver Managed Services revenue of $5.0 million and amortization expense related to internal-use software and platform development costs of $4.1 million, offset by a reduction in payment processing fees of $2.6 million.
Cost of Revenue and Gross Margin Year Ended December 31, Change (In thousands, except percentages) 2025 2024 $ % Cost of revenue $ 174,752 $ 174,094 $ 658 — % Total gross margin 78 % 77 % For the year ended December 31, 2025, cost of revenue increased slightly compared to 2024, primarily due to a $3.8 million increase in amortization expense related to internal-use software and platform development and a $2.9 million increase in cost to deliver our Managed Services offering, largely driven by contract termination costs resulting from a reduction in work volume under a client contract.
Marketplace Take Rate Marketplace take rate measures the correlation between Marketplace revenue and Marketplace GSV and is calculated by dividing Marketplace revenue by Marketplace GSV. We define Marketplace GSV as GSV derived from our Marketplace offerings.
Marketplace Take Rate Marketplace take rate measures the correlation between Marketplace revenue and Marketplace GSV and is calculated by dividing Marketplace revenue by Marketplace GSV. We define Marketplace GSV as GSV derived from the Upwork Marketplace. Marketplace take rate is an important metric because it is the key indicator of how well we monetize spend on the Upwork Marketplace.
We expect the initiatives implemented over the past several quarters, along with operational efficiencies and cost savings from the Restructuring Plan, will continue to positively impact net income and adjusted EBITDA in 2025. 37 Adjusted EBITDA is not prepared in accordance with, and is not an alternative to, financial measures prepared in accordance with generally accepted accounting principles in the United States, which we refer to as U.S.
Adjusted EBITDA is not prepared in accordance with, and is not an alternative to, financial measures prepared in accordance with generally accepted accounting principles in the United States, which we refer to as U.S. GAAP.
The primary component of GSV is client spend, which we define as the total amount that clients spend on our offerings. GSV also includes fees charged to talent and clients, such as for transacting payments through our work marketplace, purchases of Connects, talent memberships, and foreign currency exchange.
The primary component of GSV is client spend, which we define as the total dollar amount that clients spend for talent services through such platforms and other workforce solutions. GSV also includes other client and talent value-added services, such as AI-based services, purchases of Connects, payment processing, memberships, and currency services.
Net cash provided by operating activities during 2023 was $52.7 million, which resulted from net income of $46.9 million and non-cash charges of $45.1 million, offset by net cash outflows of $39.2 million from changes in operating assets and liabilities.
Net cash provided by operating activities during 2025 was $248.3 million, which resulted from net income of $115.4 million, non-cash charges of $111.4 million, and net cash inflows of $21.4 million from changes in operating assets and liabilities.
Marketplace take rate is an important metric because it is the key indicator of how well we monetize spend on our work marketplace from our Marketplace offerings. Active Clients and GSV per Active Client We define an active client as a client that has had spend activity on our work marketplace during the 12 months preceding the date of measurement.
Active Clients and GSV per Active Client We define an active client as a client that has had spend activity on any Upwork platform or other workforce solution during the 12 months preceding the date of measurement.
During the year ended December 31, 2024, we generated net income of $215.6 million, compared to net income of $46.9 million in 2023. This included a non-cash tax benefit of $140.3 million from the release of a valuation allowance on certain deferred tax assets. Adjusted EBITDA increased to $167.6 million in 2024, from $73.1 million in 2023.
The decrease in net income was attributable to $140.3 million non-cash income tax benefit recognized in 2024 related to the release of a valuation allowance on certain deferred tax assets, which did not occur in 2025. Adjusted EBITDA increased to $225.6 million in 2025, from $167.6 million in 2024.
Net cash used in investing activities during 2022 was $69.5 million, which was primarily a result of investing $581.9 million in various marketable securities, as well as $7.5 million of internal-use software and platform development costs that we paid during the period and purchases of property and equipment of $1.2 million, partially offset by proceeds from maturities of marketable securities of $521.2 million.
Net cash provided by operating activities during 2023 was $52.7 million, which resulted from net income of $46.9 million and non-cash charges of $45.1 million, offset by net cash outflows of $39.2 million from changes in operating assets and liabilities. 50 Investing Activities Net cash used in investing activities during 2025 was $136.9 million, which was primarily a result of investing $485.2 million in various marketable securities, $58.4 million cash paid for the acquisitions of Bubty and Ascen, $19.3 million of internal-use software and platform development costs, and $5.8 million paid for purchases of property and equipment.
The second step is to measure the tax benefit as the largest amount that is more likely than not to be realized on ultimate settlement. A liability is reported for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return.
Second, for positions that meet the recognition threshold, we measure the tax benefit as the largest amount that is more likely than not to be realized upon settlement. Liabilities for unrecognized tax benefits are recorded for positions that do not meet the recognition threshold or are not measured at the full amount claimed.
In 2024, our work marketplace enabled $4.0 billion in GSV, with approximately 25% generated from U.S. talent, making the United States our largest talent geography in each of 2024, 2023, and 2022. India and the Philippines were our next largest talent geographies in all three years.
While our client base is concentrated in the United States, our talent base is more globally distributed. Approximately 25% of GSV in 2025 and 2024 and approximately 26% in 2023 was generated from U.S. talent, making the United States our largest talent geography in each of 2025, 2024, and 2023.
The number of active clients decreased 2% as of December 31, 2024 compared to December 31, 2023, driven by slower growth in acquisition of new clients. As a result, GSV per active client decreased 1% as of December 31, 2024 compared to December 31, 2023. We expect no material improvement to macroeconomic conditions in 2025.
The increase in GSV was primarily driven by the expansion of Lifted and customer experience improvements. The number of active clients decreased 6% as of December 31, 2025, compared to December 31, 2024, driven by slower growth in acquisition of new clients as well as lower retention of existing clients.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2024, 2023, and 2022: (In thousands) 2024 2023 2022 Net cash provided by operating activities (1) $ 153,563 $ 52,708 $ 11,497 Net cash provided by (used in) investing activities 137,568 88,270 (69,468) Net cash provided by (used in) financing activities (1) (81,956) (139,791) 1,143 Net change in cash, cash equivalents, and restricted cash (2) $ 209,175 $ 1,187 $ (56,828) (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.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2025, 2024, and 2023: 2025 2024 2023 Net cash provided by operating activities $ 248,259 $ 153,563 $ 52,708 Net cash (used in) provided by investing activities (136,939) 137,568 88,270 Net cash used in financing activities (138,005) (81,956) (139,791) Net change in cash, cash equivalents, and restricted cash (1) $ (26,685) $ 209,175 $ 1,187 (1) Includes decreases in funds held in escrow, including funds in transit, of $15.0 million and $16.7 million during the years ended December 31, 2025 and 2024, respectively, and an increase in funds held in escrow, including funds in transit, of $50.9 million during the year ended December 31, 2023.
The number of active clients is a primary driver of GSV and, in turn, Marketplace revenue.
The number of active clients is a driver of GSV and, in turn, revenue generated across our platforms and workforce solutions. Components of Our Results of Operations Revenue Marketplace Revenue. Marketplace revenue represents the revenue derived from the Upwork Marketplace and is primarily generated from talent service fees and client marketplace fees.
Provision for Transaction Losses Year Ended December 31, Change (In thousands, except percentages) 2024 2023 $ % Provision for transaction losses $ 6,728 $ 12,977 $ (6,249) (48) % Percentage of total revenue 1 % 2 % We maintain trust and safety measures to mitigate bad debt losses, instances of fraud, and chargeback losses.
Provision for Transaction Losses Year Ended December 31, Change (In thousands, except percentages) 2025 2024 $ % Provision for transaction losses $ 8,140 $ 6,728 $ 1,412 21 % Percentage of total revenue 1 % 1 % For the year ended December 31, 2025, provision for transaction losses increased by $1.4 million, or 21%, compared to 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024 and 2023, we had $361.0 million aggregate principal amount of borrowings outstanding under the Notes, respectively. 50 Additionally, we are exposed to interest rate risk relating to our investment portfolio. The primary objective of our investment activities from our operating investments is to preserve principal while maximizing income without significantly increasing risk.
Biggest changeAs of each of December 31, 2025 and 2024, we had $361.0 million aggregate principal amount of borrowings outstanding under the Notes. Additionally, we are exposed to interest rate risk relating to our investment portfolio. The primary objective of our investment activities from our operating investments is to preserve principal while maximizing income without significantly increasing risk.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate and foreign currency exchange rates. Interest Rate Risk Borrowings under the Notes have a fixed interest rate.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate and foreign currency exchange rates. 52 Interest Rate Risk Borrowings under the Notes have a fixed interest rate.
As such, the impact of foreign currency exchange rate fluctuations to our operating results have been immaterial to date. 51
As such, the impact of foreign currency exchange rate fluctuations to our operating results has been immaterial to date. 53

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