[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Upwork achieved record Q2 financial results, outperforming expectations with AI features and strategic acquisitions, raising full-year guidance - Upwork delivered an **exceptional second quarter**, significantly outperforming across all key financial metrics, driven by AI features[3](index=3&type=chunk) - Acquired Bubty and agreed to acquire Ascen to enhance full-stack offering for enterprise clients, targeting a **$650 billion** Enterprise TAM opportunity[2](index=2&type=chunk)[3](index=3&type=chunk) - Raised **FY2025 revenue and adjusted EBITDA guidance**, demonstrating ability to grow revenue while increasing profitability[1](index=1&type=chunk)[3](index=3&type=chunk) Q2 2025 Key Financial Highlights | Metric | Value | | :-------------------- | :------------ | | Revenue | $194.9 million | | GAAP Net Income | $32.7 million | | Profit Margin | 17% | | Adjusted EBITDA | $57.1 million | | Adjusted EBITDA Margin | 29% | [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Upwork reported robust financial growth in Q2 2025, with revenue increasing 1% year-over-year, net income surging 47%, and adjusted EBITDA up 40%, alongside significant increases in operating and free cash flow Q2 2025 Financial Highlights (YoY Change) | Metric | Q2 2025 Value | YoY Change | | :--------------------------------- | :-------------- | :--------- | | Revenue | $194.9 million | +1% | | Net income | $32.7 million | +47% | | Diluted earnings per share | $0.24 | From $0.17 | | Adjusted EBITDA | $57.1 million | +40% | | Cash provided by operating activities | $72.5 million | +85% | | Free cash flow | $65.6 million | +85% | [Second Quarter Operational Highlights](index=1&type=section&id=Second%20Quarter%20Operational%20Highlights) Upwork's Q2 2025 operational highlights demonstrate a strong focus on AI integration, enterprise expansion, and monetization strategies - Uma™ adoption increased **24% quarter-over-quarter**, with new features like instant interviews and Uma™-powered search accelerating hiring and collaboration[7](index=7&type=chunk)[13](index=13&type=chunk) - GSV from AI-related work accelerated to **30% year-over-year growth** in Q2 2025, up from **25% in Q1 2025**[13](index=13&type=chunk) - Announced acquisition of Bubty and agreement to acquire Ascen to enhance full-stack contingent work solutions for large enterprises, including access to over **250,000 AI experts**[13](index=13&type=chunk) - Continued strength in ads & monetization, with revenue increasing **17% year-over-year**[13](index=13&type=chunk) - Accelerated investments in internal AI infrastructure, including embedded AI copilots and autonomous agents, and ramped up usage of customer service AI agent Upwork Assist[13](index=13&type=chunk) [Building the World's Human and AI-Powered Work Marketplace](index=1&type=section&id=Building%20the%20World's%20Human%20and%20AI-Powered%20Work%20Marketplace) - Upwork Updates, announced July 23, included **major advancements to Uma™**, Upwork's Mindful AI, enabling it to take action on behalf of customers to accelerate hiring, collaboration, and work outcomes[5](index=5&type=chunk)[7](index=7&type=chunk) - **New features** include instant interviews, a reimagined job posting experience, Upwork Video Meetings, and Uma™-powered search[7](index=7&type=chunk) [Growing AI Work on the Marketplace](index=2&type=section&id=Growing%20AI%20Work%20on%20the%20Marketplace) - Uma™ adoption increased **24% quarter-over-quarter**[13](index=13&type=chunk) - Improved search and match capabilities drove GSV and revenue outperformance, lifting average spend per contract by **4%** and increasing Connects revenue by **3%**[13](index=13&type=chunk) - Uma™ Proposal Writer improvements led to a **58% increase** in freelancers utilizing Uma™ to submit proposals[13](index=13&type=chunk) - GSV from AI-related work accelerated to **30% year-over-year growth** in Q2 2025, compared to **25% year-over-year growth** in Q1 2025[13](index=13&type=chunk) - Clients are hiring AI specialists across **365+ different skills**, with GSV in Prompt Engineering subcategory growing **51% year-over-year**[13](index=13&type=chunk) - Average GSV per active client engaged in AI work is more than **3x larger** than average GSV per active client across the Marketplace[13](index=13&type=chunk) [Unlocking the Enterprise Opportunity](index=2&type=section&id=Unlocking%20the%20Enterprise%20Opportunity) - Announced acquisition of Bubty and agreement to acquire Ascen through Upwork's new wholly-owned Enterprise subsidiary[13](index=13&type=chunk) - Bubty is a platform for managing various contingent workforce models (independent contractors, contingent W-2 workers)[13](index=13&type=chunk) - Ascen is a digitally native solution for contingent W-2 workers with easy-to-integrate APIs[13](index=13&type=chunk) - These acquisitions provide a fully integrated, digitally native solution for a full range of contingent workforce models, sourced from Upwork's talent pool, including over **250,000 AI experts** globally[13](index=13&type=chunk) [Generating New Value through Ads & Monetization Strategies](index=2&type=section&id=Generating%20New%20Value%20through%20Ads%20%26%20Monetization%20Strategies) - Ads & monetization revenue increased **17% year-over-year**[13](index=13&type=chunk) - Freelancer Plus subscription revenue grew **13% year-over-year**[13](index=13&type=chunk) - Connects revenue grew **19% year-over-year**[13](index=13&type=chunk) - GSV from Business Plus increased **190% quarter-over-quarter**, with active clients up **45% quarter-over-quarter**[13](index=13&type=chunk) [Investing in AI Infrastructure](index=2&type=section&id=Investing%20in%20AI%20Infrastructure) - Accelerated investments in Upwork's internal AI infrastructure, such as embedded AI copilots and autonomous agents, to drive productivity and streamline operations[13](index=13&type=chunk) - Ramped up usage of customer service AI agent Upwork Assist, expanding from chat to voice channels, with a pilot program reaching over **80% adoption**[13](index=13&type=chunk) - AI now contributes to over **35% of deployed engineering code**[13](index=13&type=chunk) - Fine-tuned LLM evaluation of match quality reduced model iteration costs and cycle times by over **70% in Q2**, accelerating product releases[13](index=13&type=chunk) [Financial Guidance & Outlook](index=2&type=section&id=Financial%20Guidance%20%26%20Outlook) [Q3 2025 Guidance](index=3&type=section&id=Q3%202025%20Guidance) Upwork provided its financial guidance for the third quarter of 2025, projecting revenue between **$190 million and $195 million**, and adjusted EBITDA between **$47 million and $51 million** Q3 2025 Financial Guidance | Metric | Guidance Range | | :--------------------------------- | :----------------- | | Revenue | $190 million to $195 million | | Adjusted EBITDA | $47 million to $51 million | | Diluted weighted-average shares outstanding | 140 million to 141 million | | Non-GAAP diluted EPS | $0.26 to $0.28 | [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) For the full year 2025, Upwork raised its guidance, expecting revenue to be between **$765 million and $775 million**, and adjusted EBITDA between **$206 million and $214 million** Full Year 2025 Financial Guidance | Metric | Guidance Range | | :--------------------------------- | :----------------- | | Revenue | $765 million to $775 million | | Adjusted EBITDA | $206 million to $214 million | | Diluted weighted-average shares outstanding | 140 million to 142 million | | Non-GAAP diluted EPS | $1.14 to $1.18 | | Stock-based compensation expense | $60 million to $65 million | [Key Financial and Operational Metrics](index=4&type=section&id=Key%20Financial%20and%20Operational%20Metrics) [Key Financial and Operational Metrics Table](index=4&type=section&id=Key%20Financial%20and%20Operational%20Metrics%20Table) This section provides a detailed overview of Upwork's key financial and operational metrics for the three and six months ended June 30, 2025, compared to the same periods in 2024, highlighting revenue, profit, and cash flow growth despite a slight decrease in GSV and active clients Key Financial and Operational Metrics (Q2 2025 vs Q2 2024 & H1 2025 vs H1 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | H1 2025 (in thousands) | H1 2024 (in thousands) | Change (YoY) | | :--------------------------------- | :---------- | :---------- | :----------- | :---------- | :---------- | :----------- | | GSV | $1,002,650 | $1,008,267 | (0.6)% | $1,990,363 | $2,017,063 | (1.3)% | | Marketplace revenue | $170,660 | $166,786 | 2% | $336,953 | $331,116 | 2% | | Enterprise revenue | $24,279 | $26,343 | (8)% | $50,692 | $52,950 | (4)% | | Gross profit | $151,507 | $149,277 | 1% | $302,407 | $296,021 | 2% | | Gross profit margin | 78% | 77% | 43 bps | 78% | 77% | 94 bps | | Operating expenses | $118,942 | $131,496 | (10)% | $231,152 | $265,191 | (13)% | | Net income | $32,726 | $22,220 | 47% | $70,456 | $40,662 | 73% | | Adjusted EBITDA | $57,061 | $40,835 | 40% | $113,072 | $74,160 | 52% | | Profit margin | 17% | 12% | 528 bps | 18% | 11% | 759 bps | | Adjusted EBITDA margin | 29% | 21% | 813 bps | 29% | 19% | 986 bps | | Cash provided by operating activities | $72,514 | $39,203 | 85% | $109,479 | $54,017 | 103% | | Free cash flow | $65,626 | $35,456 | 85% | $96,416 | $47,605 | 103% | | Active clients (as of June 30) | 796 | 868 | (8)% | | | | [Company Information & Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) [Second Quarter 2025 Financial Results Conference Call and Webcast](index=4&type=section&id=Second%20Quarter%202025%20Financial%20Results%20Conference%20Call%20and%20Webcast) Upwork hosted a conference call on August 6, 2025, to discuss its second quarter 2025 financial results, with an audio webcast archive available for approximately one year on the company's investor relations website - Conference call held on **August 6, 2025**, at **2:00 p.m. Pacific Time/5:00 p.m. Eastern Time**[17](index=17&type=chunk) - Audio webcast archive available at investors.upwork.com for approximately **one year**[17](index=17&type=chunk) [Disclosure Information](index=4&type=section&id=Disclosure%20Information) Upwork utilizes its Investor Relations website, blog, X (formerly Twitter) handles, and LinkedIn profiles as official channels for disseminating news, announcements, and material nonpublic information, ensuring compliance with Regulation FD - Official disclosure channels include investors.upwork.com, upwork.com/blog, X handles (@Upwork, @hydnbrwn), and LinkedIn profiles (Hayden Brown, Erica Gessert)[18](index=18&type=chunk) [About Upwork](index=4&type=section&id=About%20Upwork) Upwork is the world's largest work marketplace, connecting businesses with highly skilled, AI-enabled independent talent globally, facilitating over $25 billion in economic opportunity - Upwork is the world's largest work marketplace connecting businesses with highly skilled, AI-enabled independent talent[19](index=19&type=chunk) - The platform offers on-demand access to professionals across more than **10,000 skills**, including AI & machine learning, software development, and sales & marketing[19](index=19&type=chunk) - Upwork's platform has facilitated over **$25 billion** in economic opportunity for talent worldwide[20](index=20&type=chunk) [Safe Harbor Statement](index=5&type=section&id=Safe%20Harbor%20Statement) This section contains forward-looking statements, subject to inherent uncertainties and risks, with actual results potentially differing materially - The press release contains "forward-looking" statements regarding future operating results, financial position, business strategy, and anticipated events[20](index=20&type=chunk) - These statements are based on current expectations and projections but are subject to inherent uncertainties, known and unknown risks, and changes in circumstances outside the company's control[21](index=21&type=chunk) - Upwork does not undertake any obligation to update or revise forward-looking statements, and actual results may differ materially and adversely from expectations[21](index=21&type=chunk) [Condensed Consolidated Financial Statements](index=7&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Upwork's condensed consolidated statements of operations for Q2 2025 show total revenue of **$194.9 million**, with Marketplace revenue growing **2% year-over-year**, gross profit of **$151.5 million**, and net income significantly increasing to **$32.7 million** Condensed Consolidated Statements of Operations (Q2 2025 vs Q2 2024 & H1 2025 vs H1 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Marketplace revenue | $170,660 | $166,786 | $336,953 | $331,116 | | Enterprise revenue | $24,279 | $26,343 | $50,692 | $52,950 | | Total revenue | $194,939 | $193,129 | $387,645 | $384,066 | | Cost of revenue | $43,432 | $43,852 | $85,238 | $88,045 | | Gross profit | $151,507 | $149,277 | $302,407 | $296,021 | | Total operating expenses | $118,942 | $131,496 | $231,152 | $265,191 | | Income from operations | $32,565 | $17,781 | $71,255 | $30,830 | | Net income | $32,726 | $22,220 | $70,456 | $40,662 | | Diluted EPS | $0.24 | $0.17 | $0.50 | $0.30 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Upwork reported total assets of **$1.26 billion**, an increase from **$1.21 billion** at December 31, 2024, with current assets at **$939.0 million**, total liabilities at **$653.1 million**, and total stockholders' equity increasing to **$608.7 million** Condensed Consolidated Balance Sheets (as of June 30, 2025 vs December 31, 2024) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $291,070 | $305,757 | | Marketable securities | $343,509 | $316,344 | | Funds held in escrow | $212,033 | $195,736 | | Total current assets | $938,983 | $911,054 | | Total assets | $1,261,716 | $1,211,613 | | Escrow funds payable | $212,033 | $195,736 | | Total current liabilities | $279,624 | $268,433 | | Total liabilities | $653,062 | $636,236 | | Total stockholders' equity | $608,654 | $575,377 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q2 2025, Upwork generated **$72.5 million** in cash from operating activities, an **85% increase year-over-year**, with investing activities resulting in a net cash inflow of **$150.4 million**, and financing activities using **$35.7 million**, leading to a net increase of **$153.9 million** in cash, cash equivalents, and restricted cash Condensed Consolidated Statements of Cash Flows (Q2 2025 vs Q2 2024 & H1 2025 vs H1 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net income | $32,726 | $22,220 | $70,456 | $40,662 | | Net cash provided by operating activities | $72,514 | $39,203 | $109,479 | $54,017 | | Net cash (used in) provided by investing activities | $150,389 | $(51,450) | $(56,673) | $156,529 | | Net cash (used in) financing activities | $(35,737) | $(38,352) | $(51,496) | $(101,115) | | Net change in cash, cash equivalents, and restricted cash | $153,855 | $(17,288) | $1,310 | $109,431 | | Cash, cash equivalents, and restricted cash—end of period | $506,903 | $405,849 | $506,903 | $405,849 | [Non-GAAP Financial Measures Reconciliation](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) [Explanation of Non-GAAP Measures](index=11&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Upwork presents non-GAAP measures for internal evaluation and peer comparison, cautioning investors on their limitations - Non-GAAP financial measures presented include adjusted EBITDA, adjusted EBITDA margin, free cash flow, and non-GAAP diluted EPS[31](index=31&type=chunk) - Adjusted EBITDA is defined as net income adjusted for stock-based compensation, depreciation and amortization, other income (expense) net, income tax, and certain other non-cash or isolated items[32](index=32&type=chunk) - Free cash flow is defined as cash provided by operations less purchases of property, plant and equipment and cash outflows from internally developed software[32](index=32&type=chunk) - Investors are cautioned about material limitations of non-GAAP measures and should not consider them in isolation or as a substitute for GAAP measures[34](index=34&type=chunk) - Reconciliation of adjusted EBITDA guidance to GAAP net income and non-GAAP diluted EPS guidance to GAAP diluted EPS is not provided due to the uncertainty and unpredictability of certain items like stock-based compensation expense[35](index=35&type=chunk) [Reconciliation of GAAP to Non-GAAP Results](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) This section provides detailed reconciliations of GAAP net income to Adjusted EBITDA and other non-GAAP metrics, showing adjustments for specific items for the three and six months ended June 30, 2025 and 2024 Reconciliation of GAAP Net Income to Adjusted EBITDA (Q2 2025 vs Q2 2024 & H1 2025 vs H1 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net income (GAAP) | $32,726 | $22,220 | $70,456 | $40,662 | | Stock-based compensation expense | $15,977 | $19,238 | $28,249 | $36,180 | | Depreciation and amortization | $5,879 | $3,629 | $10,740 | $6,775 | | Other income, net | $(5,878) | $(5,620) | $(12,195) | $(12,342) | | Income tax provision | $5,717 | $1,181 | $12,994 | $2,510 | | Other (Tides Foundation Warrant, acquisition costs) | $2,640 | $187 | $2,828 | $375 | | **Adjusted EBITDA** | **$57,061** | **$40,835** | **$113,072** | **$74,160** | | Profit margin | 17% | 12% | 18% | 11% | | Adjusted EBITDA margin | 29% | 21% | 29% | 19% | | Diluted EPS (GAAP) | $0.24 | $0.17 | $0.50 | $0.30 | | Diluted EPS (Non-GAAP) | $0.35 | $0.26 | $0.69 | $0.48 | [Reconciliation of Cash Provided by Operating Activities to Free Cash Flow](index=14&type=section&id=Reconciliation%20of%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) Upwork's free cash flow for Q2 2025 was **$65.6 million**, calculated by subtracting capital expenditures and internally developed software cash outflows from operating cash flow Reconciliation of Cash Provided by Operating Activities to Free Cash Flow (Q2 2025 vs Q2 2024 & H1 2025 vs H1 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Cash provided by operating activities | $72,514 | $39,203 | $109,479 | $54,017 | | Less: purchases of property, plant & equipment and cash outflows from internally developed software | $(6,888) | $(3,747) | $(13,063) | $(6,412) | | **Free cash flow** | **$65,626** | **$35,456** | **$96,416** | **$47,605** |

Strategic Acquisition - Upwork is acquiring a company to expand its presence in corporate staffing beyond freelancers [1] Industry Focus - The tech industry is observing Upwork's move into broader corporate staffing solutions [1]

Financial Performance - Company achieved record revenue of $194.9 million in Q2 2025, representing a 1% year-over-year growth [6][26] - GAAP net income reached $32.7 million, up 47% year-over-year, with a diluted earnings per share of $0.24 compared to $0.17 in Q2 2024 [6][26] - Adjusted EBITDA was $57.1 million, reflecting a 40% year-over-year increase and a 29% adjusted EBITDA margin [6][26] Operational Highlights - Active clients totaled 796,000, with a Gross Services Volume (GSV) per active client of $5,002, which increased by 5% year-over-year [6][26] - The company announced the acquisition of Bubty and an agreement to acquire Ascen, enhancing its offerings for large enterprises [6][10] - AI-related work GSV accelerated to 30% year-over-year growth in Q2 2025, compared to 25% in Q1 2025 [10][6] Strategic Initiatives - The acquisitions of Bubty and Ascen are expected to position the company to capitalize on a $650 billion Enterprise Total Addressable Market (TAM) opportunity [6][10] - Continued strength in advertising and monetization strategies, with revenue increasing 17% year-over-year [10] - Investments in AI infrastructure are ramping up, with AI now contributing to over 35% of deployed engineering code [10][6] Financial Guidance - The company raised its full-year guidance for both revenue and adjusted EBITDA, projecting revenue between $765 million to $775 million and adjusted EBITDA between $206 million to $214 million for FY 2025 [10][6] - Guidance for Q3 2025 includes revenue of $190 million to $195 million and adjusted EBITDA of $47 million to $51 million [10][6]

Core Insights - Upwork (UPWK) is set to announce its second-quarter 2025 results on August 6, with expected revenues between $184 million and $189 million and non-GAAP diluted EPS between 26 cents and 28 cents [1][9] - The Zacks Consensus Estimate for second-quarter revenues is currently at $186.41 million, reflecting a year-over-year decrease of 3.48% [1][2] Revenue and Earnings Expectations - The consensus for earnings is pegged at 26 cents per share, unchanged from the previous year [2] - Upwork has consistently beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 23.78% [2] Factors Influencing Performance - Continued investment in AI and product enhancements likely influenced Upwork's Q2 performance, with advancements in its AI agent Uma and tools like Proposal Writing and candidate evaluation contributing to marketplace growth [3][9] - Updates from late Q4 and Q1, such as semantic search and improved client dashboards, are expected to have positively impacted Q2 performance [4] Client Engagement and Market Dynamics - Marketing efforts have focused on attracting high-value clients, with a noted increase in client activations in Q1, which may have continued into Q2 despite overall pressure on total active clients [5][9] - The adjusted EBITDA margin is anticipated to have decreased from Q1 levels, as the company plans to increase investments in Enterprise growth and AI development [6] Earnings Model Insights - According to the Zacks model, Upwork currently has an Earnings ESP of 0.00% and a Zacks Rank of 3, indicating lower odds of an earnings beat [7]

Group 1 - Upwork has historically been a significant source of income for freelancers, with both positive and negative aspects associated with the platform [1] - The analysis emphasizes the importance of observing megatrends and technological advancements to identify investment opportunities [1] - The focus on fundamentals, quality of leadership, and product pipeline is crucial for uncovering potential investments [1] Group 2 - The analyst has experience in evaluating startups and emerging industries, indicating a strong background in assessing new market opportunities [1] - There is a growing interest in macrotrends and futurism, which can influence investment strategies [1] - The analyst's work includes international development and non-profit sectors, showcasing a diverse professional background [1]

Core Insights - Upwork has announced its Summer 2025 release, introducing over 75 new AI-driven innovations aimed at enhancing work outcomes and creating opportunities for businesses and freelancers in the AI era [1][5]. AI Innovations - The release features significant advancements to Uma, Upwork's Mindful AI, which is evolving into a more capable work agent, currently powering a majority of new client job posts and increasing successful matches for high-value projects by 8% [6]. - Instant interviews are a key feature, allowing clients to equip Uma with preferred interview questions, streamlining the hiring process and providing structured summaries of freelancer responses [7][13]. - Upwork video meetings are integrated into the messaging platform, offering AI-generated summaries, transcripts, and action items to enhance productivity and collaboration [12][14]. Enhanced Membership Plans - Upwork is enhancing its premium membership plans, Business Plus and Freelancer Plus, to provide faster hiring, smarter tools, and greater confidence in executing work [8]. - Business Plus now includes direct contracts, enabling businesses to manage and pay talent sourced beyond the Upwork platform seamlessly [14]. Economic Impact - Upwork's platform has facilitated over $25 billion in economic opportunities for talent globally, showcasing its significant role in the freelance economy [11].

Core Viewpoint - Upwork Inc. will report its financial results for Q2 2025 on August 6, 2025, and will host a Q&A conference call to discuss these results [1] Company Overview - Upwork is the world's largest work marketplace connecting businesses with highly skilled, AI-enabled independent talent globally [3] - The platform offers access to professionals across more than 10,000 skills, including AI & machine learning, software development, sales & marketing, customer support, and finance & accounting [3] - Upwork has facilitated over $25 billion in economic opportunity for talent worldwide [4] Investor Relations - A live webcast of the Q&A conference call will be available on Upwork's Investor Relations website [2] - An audio replay of the conference call will be accessible for one week following the call and archived for approximately one year [2]

Core Insights - Upwork, Inc. (NASDAQ: UPWK) is highlighted as a small-cap stock with potential investment opportunities in 2025, following previous attention from an activist investor [1]. Company Overview - Upwork is categorized as a small-cap company that has been public for 18 months to 6 years and is currently trading significantly below its initial offering price [1].

Core Insights - The study by Upwork Research Institute indicates that AI is transitioning from a tool to a teammate, enhancing productivity while emphasizing the importance of human connection in the workplace [1][4][6] Group 1: Productivity Gains - Employees utilizing AI report an average productivity boost of 40%, attributed to increased comfort with tools, product enhancements, self-directed upskilling, and employer-supported training [5] - 77% of C-suite leaders have observed productivity gains from AI adoption within their teams over the past year [5] Group 2: Emotional and Relational Costs - Workers experiencing the highest productivity gains due to AI also report significant burnout, with 88% indicating they feel burned out and are twice as likely to consider quitting compared to less productive workers [5] - 62% of high-performing AI users do not understand how their daily use of AI aligns with company goals, highlighting a disconnect that poses a risk for organizations [5] Group 3: Trust and Relationships - Over two-thirds of high-performing AI users trust AI more than their coworkers, with 64% stating they have a better relationship with AI than with human colleagues [5] - Nearly half of all workers use polite language when interacting with AI, indicating a trend towards anthropomorphizing AI and suggesting a need for organizations to rethink communication norms and team dynamics [5] Group 4: Freelancers vs. Full-time Employees - Freelancers report a more positive relationship with AI, with 90% stating it helps them acquire new skills faster, and 42% crediting AI for helping them specialize in a niche [5] - Freelancers are more likely than full-time employees to see a direct link between AI use, skill development, and tangible career outcomes [5] Group 5: Future Organizational Design - The findings suggest that organizations need to redesign work systems to support collaboration between humans and AI, prioritizing human connection and responsible AI design for sustainable growth [6]

Core Insights - The freelance economy is rapidly evolving, with Upwork Inc. (UPWK) and Fiverr International (FVRR) at the forefront, each adopting distinct strategies to leverage AI and cater to enterprise clients [1][5] Upwork Overview - Upwork reported record first-quarter results for 2025, with revenues of $193 million, a 1% year-over-year increase, and adjusted EBITDA of $56 million, reflecting a 29% margin [6] - The company is transitioning to an AI-native platform, utilizing its in-house AI assistant, Uma, which has seen a 52% increase in user engagement and a 58% rise in proposal-writing usage [7] - Upwork has access to over 80,000 AI specialists, addressing the talent gap as 63% of employers report a lack of skilled personnel [8] - For 2025, Upwork reaffirmed its revenue target of $740-$760 million and raised its adjusted EBITDA guidance to $190-$200 million, with EPS forecasted at $1.14-$1.18 [10] Fiverr Overview - Fiverr's first-quarter 2025 revenues increased by 15% year-over-year to $107.2 million, with an adjusted EBITDA margin of 18% [11] - The classic marketplace revenue declined by 0.8% to $77.7 million, while service revenues surged by 94% to $29.5 million, now representing 27.5% of total revenues [12] - Fiverr is evolving into a full-service work platform, focusing on larger clients and enhanced tools like Fiverr Pro and Fiverr Go, which are designed to improve buyer-seller interactions [13][15] - The company anticipates full-year revenues between $425-$438 million, with adjusted EBITDA margins expected to reach 20% in 2025 [11] Comparative Analysis - Upwork is positioned as a leader in AI integration within the freelance market, while Fiverr is gaining traction in high-margin services but faces challenges with a shrinking active buyer base [19][20] - Upwork's focus on AI and operational strength makes it a more compelling investment choice, currently rated as a Zacks Rank 1 (Strong Buy), compared to Fiverr's Zacks Rank 3 (Hold) [21]