Upwork (UPWK) investor relations material

Executive summary

• Q1 2026 revenue grew 1% year-over-year to $195.5 million, with strong profitability and a strategic focus on AI, SMB, and enterprise growth pillars despite a challenging demand environment.

• Announced a major restructuring plan in May 2026, reducing workforce by 24% to drive efficiency and profitable growth, with expected pre-tax charges of $16–$23 million.

• Net income was $31.5 million, down from $37.7 million in Q1 2025, mainly due to higher costs and continued investment.

• Secured a commitment for a $150 million revolving credit facility to enhance financial flexibility.

• Reinvented business model focuses on AI-powered work, SMB acceleration, and enterprise expansion, positioning as a human and AI-powered work marketplace.

Financial highlights

• Q1 2026 revenue reached $195.5 million, up 1% year-over-year; GSV was $987.1 million, flat year-over-year.

• Adjusted EBITDA was $57.4 million (29.4% margin), up 3% year-over-year; free cash flow was $12.9 million, down 58% year-over-year.

• Marketplace take rate rose to 19.4%–19.8%, up year-over-year.

• Gross margin declined to 77% from 78% due to higher amortization of internal-use software.

• Share repurchases totaled $107.9 million in Q1 2026, with $256.1 million remaining under the current authorization.

Outlook and guidance

• Full-year 2026 revenue guidance: $760–$790 million; adjusted EBITDA: $250–$260 million (33% margin), with a target of 35% margin in the back half of the year.

• Q2 2026 revenue expected at $187–$193 million; adjusted EBITDA at $56–$59 million; non-GAAP diluted EPS: $0.35–$0.37.

• Non-GAAP diluted EPS for 2026 guided to $1.50–$1.55.

• Gross margin is expected to remain below prior year levels in 2026 due to increased amortization costs.

• Strategic focus on AI work, SMB growth, and enterprise expansion expected to drive future growth.