Upwork Inc.

Upwork reported Q2 2026 revenue of $191.7 million, at the high end of guidance, versus the prior-year comparison period not explicitly quantified on the call. Adjusted EBITDA was $64.1 million, above the high end of guidance, with adjusted EBITDA margin of 33.4%; non-GAAP gross margin was 77% and take rate was 19.8%. GSV was $966 million, active clients were 763,000, free cash flow was $35.9 million, and the company repurchased approximately 164,000 shares in Q2 and about 8.3 million shares year to date. For the full year 2026, management now expects revenue of $730 million to $750 million, adjusted EBITDA of approximately $225 million to $235 million, non-GAAP diluted EPS of $1.38 to $1.43, and stock-based compensation of approximately $60 million to $65 million. For Q3 2026, guidance is revenue of $176 million to $184 million, adjusted EBITDA of $50 million to $54 million, and non-GAAP diluted EPS of $0.31 to $0.33.

Hayden Brown framed the quarter as a period of strong execution in a difficult operating environment, emphasizing that Upwork is navigating a broader transition in work. She said AI is both reducing demand for some lower-complexity jobs and creating new demand for AI-related and higher-value work, and highlighted record GSV per active client, stronger Business Plus adoption, and new product capabilities like MCP as signs the strategy is working. Her tone was cautious on the near term but confident that Upwork is becoming a beneficiary of the AI shift.

The CFO commentary focused on profitability, monetization, and capital allocation. Management cited Q2 revenue of $191.7 million, adjusted EBITDA of $64.1 million, non-GAAP gross margin of 77%, free cash flow of $35.9 million, and take rate of 19.8%, with revenue from ads and monetization levers up 15% year over year. They also said the company has an annualized $70 million OpEx reduction plan that is expected to generate about $40 million of realized savings in fiscal 2026, and that a new $150 million revolving credit facility with a $50 million accordion positions Upwork to repay August 2026 convertible notes while supporting M&A and buybacks. The company repurchased about 164,000 shares in Q2 and 8.3 million year to date.

Analysts focused on how long the AI/search transition might last, whether the slowdown in AI category growth is real, and how management plans to offset weaker SEO. Hayden said the timing is hard to predict, but the company is seeing accelerating AI automation in low-complexity work, worse non-brand Google SEO, and stronger paid acquisition results, with incremental marketing spend of about $5 million to $10 million planned for the back half of the year. She also said AI category revenue is undercounted because many AI-related jobs are no longer explicitly labeled as such, and described the MCP server as a way to meet clients and freelancers inside the AI tools they already use. Questions on Lifted and enterprise AI risk were met with comments that migrations are on track, pipeline is healthy, and the broader enterprise offering should diversify Upwork away from dependence on any one work category.