Businesses need solutions for today’s new era of work
Companies are turning to Upwork: the world’s human & AI-powered work marketplace
Superior, tech-enabled marketplace model drives strong profitability and free cash flow
Adjusted EBITDA margin and free cash flow are non-GAAP financial measures and are presented for supplemental purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. An explanation of non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures can be found in the appendix of this presentation.
Leveraging client demand for our ~250k AI experts and savvy talent pool to drive AI category growth.
AI-powered features including Uma, Upwork’s Mindful AI, improve customer productivity and work outcomes.
Enterprise expansion
Differentiated, digital offering for contingent talent sourcing, workforce management and compliant employment.
Positioned to increase wallet share with large clients and unlock the more than
Long runway for value added services, market-defining dynamic pricing models, and subscription services (e.g., Freelancer Plus, Business Plus) -all of which enhance customer value, marketplace efficiency, and take rate.
1 SIA, Global Staffing Market Estimates & Forecasts November 2024 | Staffing Industry Analysts
Upwork expands Uma (Upwork’s Mindful AI) into an always-on AI work agent and rolls out 75+ features in H1 2025 to accelerate hiring and collaboration for freelancers and clients
stronger network effects, making the platform more valuable as it scales and expanding competitive moat
Freelancer Plus AI Interviewer Upwork Video Meetings Business Plus
Leverage Uma to interview talent, saving time and surfacing top talent, increasing hiring speed, and supercharging match quality.
Generate transcripts, summaries and action items to enhance collaboration, propose project milestones, and turn meetings into real progress.
Now bundles an AI-curated shortlists, off-platform hiring, and a simplified all-in-one payments platform, all in one plan.
Bubty is a purpose-built platform to help enterprises manage different contingent workforce models and contract types
1 SIA, Global Staffing Market Estimates & Forecasts November 2024 | Staffing Industry Analysts
2 The acquisition of Ascen Inc. is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions.
11
Enterprise: A singular, differentiated solution
IInnddeeppeennddeenntt CCoonnttrraaccttoorrss((IICC))
SSttaaffff AAuuggmmeennttaatitoionn/ / TTeemmppoorraarryySSttaaffiffinngg
Bubty will enable country/contract agnostic workforce management
Ascen1 + Upwork Enterprise’s talent sourcing enable new and enhanced capabilities
Upwork Enterprise Subsidiary: Differentiated, integrated & digital offering for all contingent work needs
1 The acquisition of Ascen Inc. is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions.
Ads & monetization
Drives marketplace quality and efficiency, and is expected to continue to provide a multi-year tailwind for take rate
presented in accordance with GAAP. An explanation of non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures can be found in the appendix of this presentation.
Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures and are presented for supplemental purposes only and should not be considered in isolation or as a substitute for financial information
Strong, growing free cash flow enables investments in growth levers, M&A and capital return
Strategic use of cash to drive long-term shareholder value:
isolation or as a substitute for financial information presented in accordance with GAAP. An explanation of non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures can be found in the appendix of this presentation.
satisfaction of customary closing conditions.
Free cash flow is a non-GAAP financial measure and is presented for supplemental purposes only and should not be considered in 1 The acquisition of Ascen Inc. is expected to close in the second half of 2025, subject to the
“GSV,” “Adjusted EBITDA,” “Free Cash Flow,” and “Take Rate” are defined in the definitions section of this presentation. Adjusted EBITDA, adjusted EBITDA margin, free cash flow, and free cash flow conversion rate are non-GAAP financial measures and are presented for supplemental purposes only and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. An explanation of non-GAAP financial measures and reconciliations to their most directly comparable GAAP financial measures can be found in the appendix of this presentation. For more information regarding our second quarter 2025 results, please refer to our press release dated August 6, 2025 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, when filed.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(In thousands, except for per share data) (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(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
The following table reconciles cash, cash equivalents, and restricted cash as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows as of the following (in thousands):
Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows $ 506,903 $ 505,593
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES
Less: purchases of property, plant & equipment and cash outflows from internally developed software (14,444) (13,351) (8,733)
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(1)During the three months ended March 31, 2023, we recognized a gain of $38.9 million on the early extinguishment of a portion of our 0.25% convertible senior notes due 2026, which is included in Other income, net.
(2)During three months ended December 31, 2024, we recognized a non-cash tax benefit of $140.3 million from the release of a valuation allowance on certain deferred tax assets.
(3)During the three months 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.
(4)For all periods presented, we incurred $0.2 million related to the Tides Foundation Warrant.
25
(5)During the three months ended June 30, 2025, we incurred acquisition-related costs of $2.5 million in connection with our business combinations. These costs primarily consist of legal, accounting, and other professional fees, and are recorded in general and administrative expenses in the condensed consolidated statements of operations. Beginning in the second quarter of 2025, we included acquisition-related costs as an add-back to net income in the reconciliation to adjusted EBITDA. Acquisition-related costs incurred in prior periods were deemed immaterial and therefore not included as an add-back to adjusted EBITDA.
Active Clients
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.
Adjusted EBITDA
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.
Enterprise Revenue
We define Enterprise Revenue as revenue from our Enterprise offerings, including all client fees, subscriptions, and talent service fees from our Enterprise Solutions offering (previously referred to as Upwork Enterprise) and our Managed Services offering.
Free Cash Flow
We define free cash flow as cash provided by operations less purchases of property, plant and equipment and cash outflows from internally developed software.
Connects
Virtual tokens that are required for talent to bid on projects and purchase ads products on our work marketplace.
Gross Services Volume (GSV)
Gross services volume, or 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.
Enterprise Client
We define an Enterprise Client as a client that has entered into a contract for its use of our Enterprise Solutions or Managed Services offerings.
GSV per Active Client
GSV per Active Client is calculated by dividing total GSV during the
26
four quarters ended on the date of measurement by the number of active clients on the date of measurement.
Marketplace revenue represents the majority of our revenue and is derived from our Marketplace offerings, which include all offerings other than our Enterprise offerings-Enterprise Solutions (previously referred to as Upwork Enterprise) and Managed Services.
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.
Take Rate
We define take rate as total revenue divided by total GSV.
Upwork is the world’s largest work marketplace that connects businesses with highly skilled, AI-enabled independent talent from across the globe. From entrepreneurs to Fortune 100 enterprises, companies rely on Upwork’s trusted platform and its mindful AI companion, UmaTM, to find and hire expert talent, leverage AI-powered work solutions, and drive business transformation. With on-demand access to professionals spanning more than 10,000 skills across AI & machine learning, software development, sales & marketing, customer support, finance & accounting, and more, Upwork enables businesses of all sizes to scale, innovate, and build agile teams for the age of AI and beyond.
Upwork’s platform has facilitated more than $25 billion in economic opportunity for talent around the world. Learn more at upwork.com and follow us on LinkedIn, Facebook, Instagram, TikTok, and X.
We 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.
To supplement our condensed consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), we present certain non-GAAP financial measures in this presentation, including adjusted EBITDA, adjusted EBITDA margin, free cash flow, and free cash flow conversion rate.
We use non-GAAP financial measures in conjunction with financial measures prepared in accordance with 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. These non-GAAP financial measures provide consistency and comparability with past financial performance, facilitate period-to-period comparisons of our core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. In addition, adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to certain items that can vary substantially from company to company, and free cash flow allows investors to evaluate the cash generated from our underlying operations across periods.
Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as analytical tools, and investors should not consider them in isolation or as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. In particular, (1) 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,
(2) although depreciation and amortization expense are non-cash charges, the assets subject to depreciation and amortization 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, and (3) 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. In addition, the non-GAAP financial measures we use may be different from non-GAAP financial measures used by other companies, including companies in our industry, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from the non-GAAP financial measures that we present. Reconciliations of the non-GAAP financial measures presented in this presentation to their most directly comparable GAAP financial measures have been provided in the financial statement tables included in this presentation, and investors are encouraged to review the reconciliations and not rely on any single financial measure to evaluate our business.
