Upwork, Inc.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 3 November 2025: press release. Guidance figures: 3 raised, 4 new, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Record quarterly revenue reported: Revenue grew 4% year-over-year to $201.7 million. Net income was $29.3 million, up 6%, and diluted EPS was $0.21 against $0.20 a year earlier. Source
• Adjusted EBITDA reached all-time high: Adjusted EBITDA was $59.6 million, up 38%, at a 30% margin, the highest level the company has reported. Source
• GSV returned to growth: GSV rose 1.9% to $1,017,680 thousand. Management described the result as a return to positive GSV growth, after nine months of GSV down 0.2%. Source
• AI-related GSV growth accelerated: GSV from AI-related work grew 53% year-over-year in the quarter, up from 30% in the second quarter of 2025. Source
• Buyback authorization of $100 million: The company announced another $100 million share repurchase authorization in early September. Repurchases were $31.0 million in the quarter and $101.9 million for nine months. Source
• Full year revenue and EBITDA raised: Full year revenue guidance rose to $782 million to $787 million and adjusted EBITDA guidance to $222 million to $225 million, from prior ranges. Source

“The third quarter marked the start of the next chapter for Upwork.”

Hayden Brown, president and CEO, Upwork Inc.

Guidance

What changed from last quarter

• Guidance raised: Full year 2025 revenue, adjusted EBITDA and non-GAAP diluted EPS guidance raised from the prior release. Source
• New guidance: Fourth quarter 2025 guidance given for revenue, adjusted EBITDA, diluted shares and non-GAAP diluted EPS. Source
• Guidance kept: Full year 2025 diluted share guidance kept at 140 million to 142 million. Source
• New: Lifted, a new enterprise-focused subsidiary, launched after the acquisitions of Bubty and Ascen. Source
• New: Another $100 million share repurchase authorization announced in early September. Source

Results and growth drivers

• Record quarterly revenue reported: Revenue grew 4% year-over-year to $201.7 million. Net income was $29.3 million, up 6%, and diluted EPS was $0.21 against $0.20 a year earlier. Source
• Adjusted EBITDA reached all-time high: Adjusted EBITDA was $59.6 million, up 38%, at a 30% margin, the highest level the company has reported. Source
• GSV returned to growth: GSV rose 1.9% to $1,017,680 thousand. Management described the result as a return to positive GSV growth, after nine months of GSV down 0.2%. Source
• Net income and EPS both rose: Net income was $29.3 million, up 6% year-over-year, with diluted EPS of $0.21 against $0.20 in the third quarter of 2024. Source

Segments and revenue streams

• Marketplace revenue up 4%: Marketplace revenue was $174,572 thousand in the quarter against $167,337 thousand a year earlier, and $511,525 thousand for nine months, up 3%. Source
• Enterprise revenue up 3% in quarter: Enterprise revenue was $27,158 thousand, up 3% in the quarter, while nine-month enterprise revenue was $77,850 thousand, down 2%. Source

“We have proven our ability to meaningfully expand margins while accelerating topline growth, reinforcing our confidence in achieving our long-term 35% adjusted EBITDA margin target.”

Erica Gessert, CFO, Upwork Inc.

AI work and product features

• AI-related GSV growth accelerated: GSV from AI-related work grew 53% year-over-year in the quarter, up from 30% in the second quarter of 2025. Source
• Prompt engineering and generative AI rose: GSV from Generative AI work grew 65% year-over-year. GSV from Prompt Engineering grew 71% year-over-year and rose 23% quarter-over-quarter. Source
• Uma features lift proposal output: Uma Proposal Writer produced a 15% uplift in Uma-generated proposals. Uma continued to develop into an always-on work agent with added premium features. Source
• Agentic sourcing cut shortlist time: An agentic talent sourcing solution launched for Business Plus clients reduced median time to a high-quality talent shortlist by more than 75%. Source

SMB and monetization

• Business Plus clients grew sharply: Business Plus active clients rose 36% quarter-over-quarter, and 36% of them were net-new customers to Upwork. GSV from Business Plus rose 33% quarter-over-quarter. Source
• Ads and monetization revenue up 19%: Connects revenue rose 18% and Freelancer Plus subscription revenue rose 24%, both year-over-year in the third quarter. Source

“We are executing with speed and precision across our growth levers of AI, SMB, and Enterprise, and are now on the path to sustained, multi-year growth.”

Hayden Brown, president and CEO, Upwork Inc.

Costs, margins and cash

• Operating expenses fell 3%: Operating expenses were $126.1 million, down 3% in the quarter and down 9% for nine months, with the company citing its cost discipline in prior release commentary. Source
• Gross margin edged lower: Gross profit margin was 77% in the quarter, down 32 basis points, and 78% for nine months, up 51 basis points. Source
• Free cash flow rose 22%: Free cash flow was $69.4 million, compared with $56.8 million in the third quarter of 2024. Operating cash flow was $75.1 million. Source
• Escrow cash flow reclassified: The company changed cash flow presentation, moving the change in receivables tied to talent escrow funding from operating to financing activities. Prior periods were recast. Source

Capital and shareholder returns

• Buyback authorization of $100 million: The company announced another $100 million share repurchase authorization in early September. Repurchases were $31.0 million in the quarter and $101.9 million for nine months. Source
• Debt shown as current liability: Debt, current was $359.3 million at September 30, 2025, against no current debt at December 31, 2024, with $358 million noncurrent debt at that earlier date. Source
• Acquisition cash spending in quarter: Cash paid for acquisitions, net of cash acquired, was $39.4 million in the quarter and $59.8 million for nine months. Source

Enterprise strategy and acquisitions

• Lifted onboarding planned for 2026: Acquired companies and products are being integrated quickly, with first customers expected onto the new Lifted platform by early 2026. Source
• Growth levers named as AI, SMB, Enterprise: Management said the company is executing on three growth levers, AI, SMB and Enterprise, and is now on the path to sustained, multi-year growth. Source

Financial guidance

• Full year revenue and EBITDA raised: Full year revenue guidance rose to $782 million to $787 million and adjusted EBITDA guidance to $222 million to $225 million, from prior ranges. Source
• Fourth quarter ranges given: Fourth quarter guidance: revenue of $193 million to $198 million and adjusted EBITDA of $49 million to $52 million. Source
• Long-term margin target maintained: Management said it is confident in the long-term adjusted EBITDA margin target of 35%, which was also reiterated in the prior release. Source

Coming up, as management said on 3 November 2025

• Lifted customers onboarding: First customers expected onto the new Lifted platform by early 2026. Source

Figures management reported

Risks management discussed

• Financial: Stock-based compensation expense depends on the future fair market value of the company’s common stock, which management says is difficult to predict. Source

Earlier plans management reported on

• Not stated: Management reiterated the 35% target in the second quarter and stated confidence in reaching it in the third quarter. Source
• Not stated: The prior release expected the Ascen acquisition to close in the second half of 2025; the third quarter release describes Lifted as having acquired Ascen.

Other quarters

• Q3 FY2026 results
• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.