Upwork, Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 7 May 2026: press release. Guidance figures: 2 raised, 2 lowered, 5 new. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue rose 1% year over year: Revenue was $195.5 million, compared with $192.7 million in the first quarter of 2025. Management described the quarter as dynamic. Source
• GAAP net income and EPS declined: GAAP net income was $31.5 million, against $37.7 million a year earlier. GAAP diluted EPS was $0.24, against $0.27. Income from operations was $32.7 million. Source
• Adjusted EBITDA rose 3%: Adjusted EBITDA was $57.4 million, compared with $56.0 million a year earlier. Non-GAAP diluted EPS was $0.35, against $0.34. Source
• GSV flat, spend per client up 5%: GSV was $987.1 million, approximately flat year over year. The release attributes the 5% rise in GSV per active client to AI work and SMB growth initiatives. Source
• Management cites a challenging demand environment: The CEO said the company delivered profitability while navigating a challenging demand environment. The CFO expects growth pillars to overshadow cyclical factors. Source
• AI-related GSV rose over 40%: AI Integration & Automation, the largest AI sub-category, grew more than 50% year over year. Source
• Workforce cut by about 24%: The restructuring plan reduces total workforce by approximately 24%, and the company expects it substantially complete in the fourth quarter of 2026. Source
• Free cash flow fell to $12.9 million: Operating cash flow was $23.0 million, down from $37.0 million, and free cash flow was $12.9 million, down from $30.8 million. Source

“The nature of work continues to shift as AI advances, and we continue to build Upwork for where work is headed.”

Hayden Brown, president and CEO of Upwork Inc.

Guidance

What changed from last quarter

• New guidance: Guidance was given for second-quarter 2026 revenue, adjusted EBITDA, diluted shares and non-GAAP diluted EPS. Source
• Guidance lowered: The full-year 2026 revenue range was lowered to $760 million to $790 million from $835 million to $850 million. Source
• Guidance raised: The full-year adjusted EBITDA range was raised to $250 million to $260 million from $240 million to $250 million. Source
• Guidance raised: The full-year non-GAAP diluted EPS range was raised to $1.50 to $1.55 from $1.43 to $1.48. Source
• Guidance lowered: The full-year diluted weighted-average share range was lowered to 132 million to 135 million from 137 million to 140 million. Source
• New: A restructuring plan was announced that reduces the total workforce, with substantial completion expected in the fourth quarter of 2026. Source
• New: The company secured a commitment letter for a $150 million revolving credit facility, with the credit agreement to be finalized later. Source
• New: The board authorized a new $300 million share repurchase program, announced on February 18, 2026. Source
• New: The Upwork Marketplace was made available in ChatGPT through an Upwork app for describing projects and drafting job posts. Source

Results and growth drivers

• Revenue rose 1% year over year: Revenue was $195.5 million, compared with $192.7 million in the first quarter of 2025. Management described the quarter as dynamic. Source
• GAAP net income and EPS declined: GAAP net income was $31.5 million, against $37.7 million a year earlier. GAAP diluted EPS was $0.24, against $0.27. Income from operations was $32.7 million. Source
• Adjusted EBITDA rose 3%: Adjusted EBITDA was $57.4 million, compared with $56.0 million a year earlier. Non-GAAP diluted EPS was $0.35, against $0.34. Source
• Full-year guidance moved in both directions: Full-year adjusted EBITDA and non-GAAP EPS ranges were raised, the revenue range was lowered, and the diluted share range was lowered. Source

Demand and client spend

• GSV flat, spend per client up 5%: GSV was $987.1 million, approximately flat year over year. The release attributes the 5% rise in GSV per active client to AI work and SMB growth initiatives. Source
• Management cites a challenging demand environment: The CEO said the company delivered profitability while navigating a challenging demand environment. The CFO expects growth pillars to overshadow cyclical factors. Source
• Enterprise sales pipeline expanded: Go-to-market work drove significant sales pipeline expansion with both new and existing enterprise clients. The release gives no pipeline figure. Source

“We are managing the business with a level of discipline, rigor, and agility that enables us to increase our bottom line outlook,”

Erica Gessert, CFO of Upwork Inc.

Segments, AI and SMB work

• Marketplace revenue up 3%: Marketplace revenue was $170.7 million, up from $166.3 million, and is the larger of the two revenue lines. Source
• Enterprise revenue down 6%: Enterprise revenue was $24.8 million, down from $26.4 million a year earlier. Source
• AI-related GSV rose over 40%: AI Integration & Automation, the largest AI sub-category, grew more than 50% year over year. Source
• SMB Business Plus GSV grew 34%: GSV from the Business Plus offering for SMB rose 34% quarter over quarter. Source

Costs and margins

• Operating expenses rose 5%: Operating expenses were $118.1 million, up from $112.2 million a year earlier. Source
• Research and development spend fell: R&D expense was $43.3 million, down from $46.2 million, while general and administrative expense rose to $35.2 million from $28.0 million. Source
• Gross margin down 114 basis points: Gross profit was $150.8 million, flat year over year. Source
• Adjusted EBITDA margin at 29%: Adjusted EBITDA margin was 29%, up 31 basis points, while GAAP profit margin fell to 16% from 20%. Source
• Depreciation and amortization rose: Depreciation and amortization was $9.1 million, up from $4.9 million a year earlier. Source

Restructuring and workforce

• Workforce cut by about 24%: The restructuring plan reduces total workforce by approximately 24%, and the company expects it substantially complete in the fourth quarter of 2026. Source
• Charges mostly cash over several quarters: Management expects most restructuring charges to be cash, recognized over two to three quarters, with the majority in the second quarter of 2026. Source
• CEO wrote to employees: A message from the CEO to employees about the announcement is available on the company's press page. Source
• Aim is a more efficient operating model: Management said the actions build a more efficient operating model and position the company for profitable growth. Source

Cash, capital and returns

• Free cash flow fell to $12.9 million: Operating cash flow was $23.0 million, down from $37.0 million, and free cash flow was $12.9 million, down from $30.8 million. Source
• Buybacks returned $107.9 million: The repurchase program returned $107.9 million to shareholders in the quarter through the repurchase of 8.1 million shares. Source
• Repurchase capacity remaining: The company had $256.1 million remaining authorization in its repurchase program at March 31, 2026. Source
• Cash rose, marketable securities fell: Cash and cash equivalents were $328.4 million, up from $294.4 million, while marketable securities were $251.3 million, down from $378.4 million. Source

Strategy and enterprise platform

• Upwork app launched in ChatGPT: Businesses can describe project needs, find talent and draft job posts inside ChatGPT through the Upwork app. Source
• Redesigned homepage and Uma updates: The company launched an AI-native homepage and platform experience, and Spring 2026 updates were driven by Uma, its AI work agent, for SMB users. Source
• Three growth pillars named: The CEO named AI, SMB and Enterprise as growth pillars, with momentum in each, and said the company is sharpening execution. Source

Coming up, as management said on 7 May 2026

• Lifted migration starts by June: Lifted expects to begin migrating its first wave of enterprise customers onto its new platform by the end of June. Source
• Restructuring substantially complete in Q4: The restructuring plan is expected to be substantially complete in the fourth quarter of 2026. Source
• Credit agreement to be finalized: The company expects to finalize the revolving credit agreement in the coming weeks. Source

Figures management reported

Risks management discussed

• Demand: The CFO said cyclical and near-term factors are currently affecting the business, alongside a challenging demand environment. Source
• Financial: Restructuring charges are mostly cash and spread across two to three quarters, which weighs on near-term cash generation. Source

Earlier plans management reported on

• Met: Management said the Lifted integration milestones were achieved, positioning the first enterprise migration wave. Source

Other quarters

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