GICS Sector : Industrials
Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally.The company's work marketplace provides access to talent with various skills across a range of categories, including sales and marketing, customer service, data science and analytics, design and creative, web, mobile, and software development.Its work marketplace also enables clients to streamline workflows, such as talent sourcing, outreach, and contracting.
Upwork's full-year 2025 financial performance was impressive, with over $4 billion in Gross Services Volume (GSV), $788 million in revenue, and $226 million in adjusted EBITDA. Revenue growth came in at 2.4%, while adjusted EBITDA margin was 29%. In Q4, GSV grew 3% year-over-year, revenue grew 4%, and adjusted EBITDA margin was 27%. The company's earnings per share (EPS) was $0.12, missing estimates of $0.23. Analysts had estimated revenue growth of 13.6% for the next year, indicating a potential upside.
Publication Date: 08:16
Upwork is focused on three growth pillars: AI, SMB, and enterprise. The AI category saw 50% GSV growth, with GSV surpassing $300 million on an annualized basis. Business Plus, a purpose-built SMB solution, scaled quickly, with active clients growing 49% sequentially. Enterprise revenue decreased 3% year-over-year in Q4, but the company expects 25% GSV growth in 2026. As Erica Gessert mentioned, "We're comfortable with the Q1 guidance," indicating a positive outlook for the company's growth drivers.
Upwork expects 2026 GSV growth of 4-6% and revenue growth of 6-8%, or $835-850 million. The company anticipates full-year 2026 adjusted EBITDA margin of approximately 29%, or $240-250 million, and non-GAAP diluted EPS of $1.43-1.48. For Q1, the company expects adjusted EBITDA of $45-47 million, representing a 23-24% margin. The guidance suggests a bridge quarter, with acceleration in revenue and GSV coming in the back half of the year.
Upwork's current valuation multiples are relatively reasonable, with a P/E Ratio of 14.9, P/B Ratio of 2.73, and P/S Ratio of 2.18. The EV/EBITDA ratio is 11.03, indicating a moderate valuation. The Free Cash Flow Yield is 13.58%, suggesting a strong ability to generate cash. The ROE is 18.76%, indicating a healthy return on equity. These metrics suggest that the company's stock is fairly valued, with potential for long-term growth driven by its AI, SMB, and enterprise growth pillars.
Insider Selling: Upwork (NASDAQ:UPWK) CEO Sells $1,699,497.60 in Stock
Feb -22
Upwork Announces $300 Million Share Repurchase Program
Feb -18
Upwork to Present at The Citizens Technology Conference
Feb -17
Upwork's Path To $20: Recovery Or Pipe Dream?
Feb -11
Why Upwork Stock Plunged Today
Feb -11
Stock Market Today: Major Indexes Mixed; Dow Hits All-Time High for 3rd Straight Session; Delayed Retail Sales Data Comes in Below Expectations
Feb -10
Upwork: Down But Not Knocked Out (Rating Upgrade)
Feb -10
These Analysts Revise Their Forecasts On Upwork Following Q4 Results
Feb -10
Upwork's marketplace growth is driven by increasing adoption of remote work, rising demand for skilled freelancers, and expansion into new industries. Additionally, the platform's investments in AI-powered matching technology, enhanced user experience, and strategic partnerships have contributed to its 12% growth.
Upwork's Enterprise segment growth is driven by increasing adoption of remote work, expansion into new industries, and growing demand for skilled freelancers. The company's investments in sales and marketing, coupled with its platform's scalability and flexibility, have enabled it to capitalize on these trends, resulting in 10% growth.
A platform for freelancers to find work and collaborate with clients
A platform for clients to find and hire skilled freelancers
A platform for large enterprises to find and manage a scalable workforce
A service that helps clients manage payments to freelancers
A messaging platform for clients and freelancers to communicate
A tool that helps freelancers track time spent on projects
A certification program that verifies freelancers' skills
Upwork's services are specialized and require a high level of expertise, making it difficult for substitutes to emerge.
While clients have some bargaining power due to the competitive nature of the freelance market, Upwork's platform and reputation help to mitigate this power.
Freelancers have limited bargaining power due to the abundance of skilled professionals on the platform, making it easy for clients to find alternative suppliers.
While there are some barriers to entry, the online freelance market is relatively easy to enter, and new platforms could potentially emerge as competitors.
The online freelance market is highly competitive, with many established players and new entrants vying for market share.
| Value | |
|---|---|
| Debt Weight | 48.70% |
| Debt Cost | 3.95% |
| Equity Weight | 51.30% |
| Equity Cost | 12.20% |
| WACC | 8.18% |
| Leverage | 94.94% |
Value: 3.9
Growth: 8.6
Quality: 8.2
Yield: 0.0
Momentum: 7.0
Volatility: 2.7
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Value: 8.3
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Value: 7.3
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Value: 6.0
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Volatility: 2.3
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