Upwork (NASDAQ:UPWK) Releases Earnings Results, Beats Expectations By $0.10 EPS

Key Points

• Upwork reported Q1 EPS of $0.35, beating consensus by $0.10 with revenue of $195.48M roughly in line with expectations, and set FY2026 EPS guidance at 1.50–1.55 and Q2 EPS guidance at 0.35–0.37.
• Management lowered and widened revenue guidance to $760M–$790M for FY2026 and Q2 revenue to $187M–$193M due to softness in very small contracts, but raised full‑year adjusted EBITDA to $250M–$260M and expects a ~35% adjusted EBITDA margin in H2 after ~$70M of annualized cost savings and a ~24% workforce reduction (one‑time charges $16M–$23M).
• Upwork's updated LLM analysis shows only about 10% of GSV is AI‑at‑risk while AI‑related GSV exceeds $300M and is growing >40% YoY, and the company is rolling out AI products (Uma, ChatGPT app, human‑supervised agents) to capture that demand.

Upwork (NASDAQ:UPWK - Get Free Report) announced its earnings results on Thursday. The company reported $0.35 EPS for the quarter, beating analysts' consensus estimates of $0.25 by $0.10, FiscalAI reports. The firm had revenue of $195.48 million for the quarter, compared to analysts' expectations of $195.90 million. Upwork had a net margin of 14.65% and a return on equity of 18.76%. Upwork updated its FY 2026 guidance to 1.500-1.550 EPS and its Q2 2026 guidance to 0.350-0.370 EPS.

Here are the key takeaways from Upwork's conference call:

• Company lowered and widened full‑year 2026 revenue guidance to $760M–$790M and expects Q2 revenue of $187M–$193M, citing geopolitical headwinds and softness in the smallest contracts.
• Upwork raised its full‑year adjusted EBITDA outlook to $250M–$260M (≈33% margin) and now expects to reach a 35% adjusted EBITDA margin in H2 after announcing ~$70M in annualized cost savings and a ~24% workforce reduction (one‑time charges of $16M–$23M).
• An updated LLM‑based analysis indicates only about 10% of GSV is AI‑at‑risk (down from 11%), while AI‑related work is growing rapidly (>$300M annualized GSV, >40% YoY), and Upwork is rolling out AI products (Uma, ChatGPT app, human‑supervised agents) to capture that demand.
• Weakness is concentrated in very small businesses and sub‑$500 contracts—areas most affected by inflation, tariffs, energy costs, and higher rates—so marketplace volumes decelerated in late Q1 and management conservatively baked further downside into 2026 guidance.
• Strength in higher‑value segments continues—Business Plus GSV grew 34% QoQ, Lifted’s enterprise pipeline expanded (3x for new clients, 9x for existing) with migrations starting in June, and ~20% of net new enterprise pipeline is AI‑related.

Upwork Stock Performance

Shares of NASDAQ UPWK traded up $0.53 during midday trading on Thursday, hitting $10.61. 7,947,853 shares of the company's stock traded hands, compared to its average volume of 3,662,660. Upwork has a 1 year low of $10.02 and a 1 year high of $22.84. The stock has a market capitalization of $1.31 billion, a price-to-earnings ratio of 12.63 and a beta of 1.07. The firm has a fifty day moving average of $11.56 and a 200 day moving average of $16.06.

Key Stories Impacting Upwork

Here are the key news stories impacting Upwork this week:

• Positive Sentiment: Q1 EPS beat consensus — Upwork reported EPS above Street expectations and reiterated/raised full‑year adjusted EBITDA and provided FY EPS guidance that topped consensus, which supports profitability improvement. Upwork Reports First Quarter 2026 Financial Results
• Neutral Sentiment: Top‑line essentially flat — Q1 revenue was roughly in line with prior quarter/consensus (about $195M), showing slow year‑over‑year growth; some operational metrics (GSV per active client) improved modestly from SMB and AI work categories. Upwork NASDAQ: UPWK Reports Q1 CY2026 In Line With Expectations But Stock Drops 19.3%
• Negative Sentiment: Softer revenue guidance — Management cut Q2 and FY revenue targets (Q2: $187–$193M vs. consensus ~ $204M; FY: $760–$790M vs. consensus ~ $841M), signaling slower demand and driving the sharp after‑hours selloff. Upwork Stock Plunges On Q1 Earnings, Softer Revenue Outlook, Restructuring Plan
• Negative Sentiment: Operational and cash flow softness in certain reporting — third‑party summaries show declines in operating profit, net income and operating cash flow year‑over‑year, which may heighten near‑term investor concern about growth durability. Upwork Inc. (UPWK) Stock Falls on Q1 2026 Earnings
• Negative Sentiment: Insider selling and mixed institutional moves — notable insider sales over recent months are flagged in data services, which can amplify negative sentiment despite some large institutional buys reported in Q4 2025. Upwork Inc. (UPWK) Stock Falls on Q1 2026 Earnings

Upwork declared that its Board of Directors has authorized a share buyback program on Wednesday, February 18th that allows the company to repurchase $300.00 million in shares. This repurchase authorization allows the company to reacquire up to 18% of its shares through open market purchases. Shares repurchase programs are generally an indication that the company's board believes its shares are undervalued.

Insider Activity

In other news, CEO Hayden Brown sold 23,745 shares of the company's stock in a transaction dated Wednesday, March 18th. The shares were sold at an average price of $12.31, for a total transaction of $292,300.95. Following the completion of the sale, the chief executive officer owned 798,732 shares of the company's stock, valued at $9,832,390.92. This represents a 2.89% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, insider Dave Bottoms sold 7,000 shares of the company's stock in a transaction dated Thursday, March 19th. The shares were sold at an average price of $11.49, for a total transaction of $80,430.00. Following the sale, the insider directly owned 2,678 shares of the company's stock, valued at $30,770.22. The trade was a 72.33% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 235,186 shares of company stock valued at $3,156,199 in the last quarter. 7.50% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Upwork

Hedge funds and other institutional investors have recently made changes to their positions in the business. EverSource Wealth Advisors LLC grew its stake in shares of Upwork by 19,361.1% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 3,503 shares of the company's stock valued at $47,000 after acquiring an additional 3,485 shares during the period. Mcguire Capital Advisors Inc. bought a new position in shares of Upwork during the 4th quarter valued at approximately $66,000. PNC Financial Services Group Inc. grew its stake in shares of Upwork by 103.5% during the 4th quarter. PNC Financial Services Group Inc. now owns 4,103 shares of the company's stock valued at $81,000 after acquiring an additional 2,087 shares during the period. Parkside Financial Bank & Trust grew its stake in shares of Upwork by 37.2% during the 4th quarter. Parkside Financial Bank & Trust now owns 5,629 shares of the company's stock valued at $112,000 after acquiring an additional 1,527 shares during the period. Finally, Tower Research Capital LLC TRC grew its stake in shares of Upwork by 1,333.0% during the 2nd quarter. Tower Research Capital LLC TRC now owns 13,972 shares of the company's stock valued at $188,000 after acquiring an additional 12,997 shares during the period. Hedge funds and other institutional investors own 77.71% of the company's stock.

Analyst Upgrades and Downgrades

Several research firms have recently issued reports on UPWK. Scotiabank lowered their price target on Upwork from $17.00 to $15.00 and set a "sector perform" rating for the company in a research report on Tuesday, February 10th. Weiss Ratings reaffirmed a "hold (c+)" rating on shares of Upwork in a research report on Wednesday, January 21st. Citigroup lowered their price target on Upwork from $19.00 to $17.00 and set a "neutral" rating for the company in a research report on Tuesday, February 10th. Needham & Company LLC reaffirmed a "buy" rating and issued a $25.00 price target on shares of Upwork in a research report on Tuesday, February 10th. Finally, Wall Street Zen raised Upwork from a "hold" rating to a "buy" rating in a research report on Saturday, February 21st. Seven equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, Upwork has a consensus rating of "Moderate Buy" and an average target price of $22.60.

About Upwork

Upwork Inc operates a leading online talent marketplace that connects businesses with independent professionals worldwide. Through its digital platform, the company enables clients across industries—including technology, marketing, creative services and customer support—to source, hire and manage freelance talent on demand. Key features of the Upwork platform include streamlined job posting, proposal evaluation, time-tracking tools, invoicing and secure payment processing, all designed to simplify collaboration between clients and remote workers.

The company traces its roots to the merger of two pioneering freelance marketplaces, Elance (founded in 1998) and oDesk (founded in 2003), which combined in 2015 to form a unified entity.

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