UPWORK, INC

Previous wording

While evolving macroeconomic conditions continue to weigh on customer demand, these strategic initiatives contributed to Marketplace take rate expansion and revenue growth in the three and six months ended June 30, 2025.

Current wording

The execution of these initiatives delivered measurable financial benefits across our business. These strategic initiatives contributed to Marketplace take rate expansion and revenue growth in the three and nine months ended September 30, 2025.

Previous wording

Marketplace revenue increased by 2% to $170.7 million and $337.0 million for the three and six months ended June 30, 2025, respectively, as compared to $166.8 million and $331.1 million in the same periods in 2024, respectively.

Current wording

Marketplace revenue increased to $174.6 million, or 4%, and $511.5 million, or 3%, for the three and nine months ended September 30, 2025, respectively, as compared to $167.3 million and $498.5 million in the same periods in 2024, respectively.

Previous wording

Marketplace take rate increased to 18.5% and 18.4% for the three and six months ended June 30, 2025, respectively, as compared to 18.0% and 17.9% in the same periods in 2024, respectively, reflecting the growing contributions from ads and monetization products. We expect Marketplace take rate to remain relatively constant throughout the remainder of 2025.

Current wording

Marketplace take rate increased to 18.9% and 18.6% for the three and nine months ended September 30, 2025, respectively, as compared to 18.3% and 18.0% in the same periods in 2024, respectively, reflecting the growing contributions from ads and monetization products. We expect Marketplace take rate to remain relatively constant throughout the remainder of 2025.

Previous wording

During the three months ended June 30, 2025, we generated net income of $32.7 million and adjusted EBITDA of $57.1 million, compared to net income of $22.2 million and adjusted EBITDA of $40.8 million during the same period in 2024. During the six months ended June 30, 2025, we generated net income of $70.5 million and adjusted EBITDA of $113.1 million, as compared to net income of $40.7 million and adjusted EBITDA of $74.2 million during the same period in 2024.

Current wording

During the three months ended September 30, 2025, we generated net income of $29.3 million and adjusted EBITDA of $59.6 million, compared to net income of $27.8 million and adjusted EBITDA of $43.2 million during the same period in 2024. During the nine months ended September 30, 2025, we generated net income of $99.8 million and adjusted EBITDA of $172.7 million, as compared to net income of $68.4 million and adjusted EBITDA of $117.4 million during the same period in 2024. These changes are primarily due to cost-saving measures implemented in recent years, including reduced investments in brand marketing and vendor spend and workforce reductions. We expect these cost-saving measures will continue to positively impact net income and adjusted EBITDA throughout the remainder of 2025, as compared to 2024.

Previous wording

We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. As of and for the three and six months ended June 30, 2025 and 2024, our key financial and operating metrics were as follows:

Current wording

We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. As of and for the three and nine months ended September 30, 2025 and 2024, our key financial and operating metrics were as follows:

Previous wording

We believe these key financial and operational metrics are useful to evaluate period-over-period comparisons of our business and in understanding our operating results, and management uses these metrics to track our performance. We expect our key metrics may fluctuate between periods due to a number of factors, including changing macroeconomic conditions; the number of Sundays (i.e., the day we have the contractual right to bill and recognize revenue for the majority of our talent service fees each week) in any given period; the lapping of significant launches of new products, pricing changes, and other monetization efforts; and ongoing efforts to improve processes on our work marketplace, including project proposals and purchases of Connects, among others. For a discussion of limitations in the measurement of our key financial and operational metrics, see “Risk Factors—We track certain performance metrics with internal tools and do not independently verify such metrics. Certain of our performance metrics may not accurately reflect certain details of our business, are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business” in Part II, Item 1A of this Quarterly Report.

Current wording

We believe these key financial and operational metrics are useful to evaluate period-over-period comparisons of our business and in understanding our operating results, and management uses these metrics to track our performance. We expect our key metrics may fluctuate between periods due to a number of factors, including changing macroeconomic conditions; the number of Sundays (i.e., the day we have the contractual right to bill and recognize revenue for the majority of our talent service fees each week) in any given period; the lapping of significant launches of new lines of business or products, pricing changes, and other monetization efforts; and ongoing efforts to improve processes on the Upwork Marketplace, including project proposals and purchases of Connects, among others. For a discussion of limitations in the measurement of our key financial and operational metrics, see “Risk Factors—We track certain performance metrics with internal tools and do not independently verify such metrics. Certain of our performance metrics may not accurately reflect certain details of our business, are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business” in Part II, Item 1A of this Quarterly Report.

Previous wording

Marketplace revenue is the primary driver of our business, and we believe it provides comparability to other online marketplaces. 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 and Managed Services. We generate Marketplace revenue from both talent and clients. Marketplace revenue is primarily generated from talent service fees paid by talent as a percentage of the total amount talent charges clients for services accessed on our Marketplace, and to a lesser extent, client marketplace fees. We also generate Marketplace revenue through ads and monetization products, including purchases of Connects, talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar. Additionally, we earn interest on funds held on behalf of customers, which is included in Marketplace revenue.

Current wording

Marketplace revenue represents the revenue derived from the Upwork Marketplace and is the primary driver of our business. We believe marketplace revenue provides comparability to other online marketplaces. We generate Marketplace revenue from both talent and clients. Marketplace revenue is primarily generated from talent service fees paid by talent as a percentage of the total amount talent charges clients for services accessed on the Upwork Marketplace, and to a lesser extent, client marketplace fees. We also generate Marketplace revenue through ads and monetization products, including purchases of Connects, talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar. Additionally, we earn interest on funds held on behalf of customers, which is included in Marketplace revenue.

Previous wording

Marketplace take rate measures the correlation between Marketplace revenue and Marketplace GSV and is calculated by dividing Marketplace revenue by Marketplace GSV. We define Marketplace GSV as GSV derived from our Marketplace offerings. Marketplace take rate is an important metric because it is the key indicator of how well we monetize spend on our work marketplace from our Marketplace offerings.

Current wording

Marketplace take rate measures the correlation between Marketplace revenue and Marketplace GSV and is calculated by dividing Marketplace revenue by Marketplace GSV. We define Marketplace GSV as GSV derived from the Upwork Marketplace. Marketplace take rate is an important metric because it is the key indicator of how well we monetize spend on the Upwork Marketplace.

Previous wording

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. GSV per active client is calculated by dividing total GSV during the four quarters ended on the date of measurement by the number of active clients on the date of measurement. We believe that the number of active clients and GSV per active client are indicators of the growth and overall health of our business. The number of active clients is a primary driver of GSV and, in turn, Marketplace revenue.

Current wording

We define an active client as a client that has had spend activity on any Upwork platform or other workforce solution during the 12 months preceding the date of measurement. GSV per active client is calculated by dividing total GSV during the four quarters ended on the date of measurement by the number of active clients on the date of measurement. We believe that the number of active clients and GSV per active client are indicators of the growth and overall health of our business. The number of active clients is a driver of GSV and, in turn, Marketplace revenue.

Previous wording

(1)For the three and six months ended June 30, 2025 and 2024, we incurred $0.2 million and $0.4 million, respectively, of expense related to the warrant to purchase 500,000 shares of our common stock at an exercise price of $0.01 per share issued to the Tides Foundation in 2018.

Current wording

(1)For the three and nine months ended September 30, 2025 and 2024, we incurred $0.2 million and $0.6 million, respectively, of expense related to the warrant to purchase 500,000 shares of our common stock at an exercise price of $0.01 per share issued to the Tides Foundation in 2018.

Previous wording

(2)For each of the three and six months ended June 30, 2025, we incurred acquisition-related costs of $2.5 million in connection with 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.

Current wording

(2)For the three and nine months ended September 30, 2025, we incurred acquisition-related costs of $1.9 million and $4.4 million, respectively, in connection with 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.

Previous wording

•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; and

Current wording

•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; (c) tax payments that may represent a reduction in cash available to us; or (d) material acquisition-related deal costs, and

Previous wording

Marketplace Revenue. Marketplace revenue is primarily generated from talent service fees, and to a lesser extent, client marketplace fees. Effective May 2025, we introduced a variable pricing structure for talent service fees for new contracts. Under this variable pricing structure, talent are charged a fixed fee for each contract ranging from 0% to 15% of their earnings, depending on platform-specific supply and demand factors, such as project type, job availability, and client demand. The applicable fee is disclosed at contract inception and remains fixed for the duration of the contract. For contracts formed prior to May 2025, we maintain a flat talent service fee of 10% for talent working with clients through our Marketplace offerings.

Current wording

Marketplace Revenue. Marketplace revenue represents the revenue derived from the Upwork Marketplace and is primarily generated from talent service fees, and to a lesser extent, client marketplace fees. Effective May 2025, we introduced a variable pricing structure for talent service fees for new contracts. Under this variable pricing structure, talent on the Upwork Marketplace are charged a fixed fee for each contract ranging from 0% to 15% of their earnings, depending on platform-specific supply and demand factors, such as project type, job availability, and client demand. The applicable fee is disclosed at contract inception and remains fixed for the duration of the contract. For contracts formed prior to May 2025, we maintain a flat talent service fee of 10% for talent working with clients on the Upwork Marketplace.

Previous wording

Revenue for a majority of our talent service fees is recognized on the Sunday of each week, as this is the day we have the contractual right to bill talent for the service fees. We charge a client marketplace fee of 5% on each transaction—or 3% if paid via ACH for eligible clients. We also offer a Business Plus plan that includes premium features targeted at larger customers, which is subject to a client marketplace fee of 10% on each transaction—or 8% if paid via ACH for eligible clients.

Current wording

Revenue for a majority of our talent service fees on the Upwork Marketplace is recognized on the Sunday of each week, as this is the day we have the contractual right to bill talent for the service fees. We charge a client marketplace fee of 5% on each transaction—or 3% if paid via ACH for eligible clients. We also offer a Business Plus plan that includes premium features targeted at larger customers, which is subject to a client marketplace fee of 10% on each transaction—or 8% if paid via ACH for eligible clients.

Previous wording

We also generate revenue through ads and monetization products, including purchases of Connects, talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar. Additionally, we earn interest on funds held on behalf of customers.

Current wording

We also generate marketplace revenue through ads and monetization products, including purchases of Connects, talent memberships, and other services, such as foreign currency exchange when clients choose to pay in currencies other than the U.S. dollar. Additionally, we earn interest on funds held on behalf of customers.

Previous wording

Enterprise Revenue. Enterprise offers two lines of service—Enterprise Solutions and Managed Services.

Current wording

Enterprise Revenue. Enterprise offers two primary lines of service—Enterprise Solutions and Managed Services.

Previous wording

Our Enterprise Solutions offering includes access to additional product features, premium access to top talent, professional services, custom reporting, and flexible payment terms. Revenue from our Enterprise Solutions offering includes all client fees, subscriptions, and talent service fees. For our Enterprise Solutions offering, we charge clients a monthly or annual subscription fee and a service fee calculated as a percentage of the client’s spend on talent services, in addition to a 10% service fee paid by talent. Additionally, clients of our Enterprise Solutions offering can also subscribe to a compliance service that includes worker classification services for an additional fee and may also choose to use our work marketplace to engage talent that were not originally sourced through our work marketplace for a lower fee percentage.

Current wording

Our Enterprise Solutions offering includes access to additional product features, premium access to top talent, professional services, custom reporting, and flexible payment terms. Revenue from our Enterprise Solutions offering includes all client fees, subscriptions, and talent service fees. For our Enterprise Solutions offering, we charge clients a monthly or annual subscription fee and a service fee calculated as a percentage of the client’s spend on talent services, in addition to a 10% service fee paid by talent. Additionally, clients of our Enterprise Solutions offering can also subscribe to a compliance service that includes worker classification services for an additional fee and may also choose to use our Upwork Marketplace to engage talent that were not originally sourced through our Upwork Marketplace for a lower fee percentage.

Previous wording

Through our Managed Services offering, we are responsible for providing services and engaging talent directly or as employees of third-party staffing providers to perform services for clients on our behalf. The talent providing services in connection with our Managed Services offering include independent talent and agencies of varying sizes. Under U.S. GAAP, we are deemed to be the principal in these Managed Services arrangements and therefore recognize the entire GSV of Managed Services projects as

Current wording

Through our Managed Services offering, we are responsible for providing services and engaging talent directly or as employees of third-party staffing providers to perform services for clients on our behalf. The talent providing services in connection with our Managed Services offering include independent talent and agencies of varying sizes. Under U.S. GAAP, we are deemed to be the principal in these Managed Services arrangements and therefore recognize the entire GSV of Managed Services projects as Managed Services revenue, as compared to recognizing only the percentage of the client spend that we receive, as we do with our Marketplace and Enterprise Solutions offerings.

Previous wording

During the three and six months ended June 30, 2025, macroeconomic conditions impacted GSV, which declined 1%, respectively, compared to the same periods in 2024. The number of active clients decreased 8% as of June 30, 2025, compared to June 30, 2024, driven by slower growth in acquisition of new clients. By contrast, GSV per active client increased 5% as of June 30, 2025, compared to June 30, 2024, reflecting increased client engagement.

Current wording

The number of active clients decreased 7% as of September 30, 2025, compared to September 30, 2024, driven by slower growth in acquisition of new clients. By contrast, GSV per active client increased 5% as of September 30, 2025, compared to September 30, 2024, reflecting increased client engagement.

Previous wording

For the three and six months ended June 30, 2025, total revenue was $194.9 million and $387.6 million, representing a 1% increase compared to the same periods in 2024, respectively.

Current wording

For the three and nine months ended September 30, 2025, total revenue was $201.7 million and $589.4 million, representing a 4% and 2% increase compared to the same periods in 2024, respectively.

Previous wording

For the three and six months ended June 30, 2025, Marketplace revenue increased by $3.9 million and $5.8 million, respectively, or 2% in each period, compared to the same periods in 2024, primarily due to higher revenue from ads and monetization products and client marketplace fees. This increase was partially offset by a decrease in talent service fees resulting from our 2023 transition from a tiered service fee structure to a flat fee model. We expect Marketplace revenue to increase for the remainder of 2025 compared to the same periods in 2024, driven by a number of strategic initiatives intended to improve monetization and support long-term growth.

Current wording

For the three months ended September 30, 2025, Marketplace revenue increased by $7.2 million, or 4%, compared to the same period in 2024. For the nine months ended September 30, 2025, Marketplace revenue increased by $13.1 million, or 3%, compared to the same period in 2024. These increases were primarily due to higher revenue from ads and monetization products and client marketplace fees and were partially offset by a decrease in talent service fees resulting from our 2023 transition from a tiered service fee structure to a flat fee model. We expect Marketplace revenue to increase for the remainder of 2025 compared to the same periods in 2024, driven by a number of strategic initiatives intended to improve monetization and support long-term growth.

Previous wording

For the three months ended June 30, 2025, Enterprise revenue decreased by $2.1 million, or 8%, compared to the same period in 2024. For the six months ended June 30, 2025, Enterprise revenue decreased by $2.3 million, or 4% compared to the same period in 2024. These decreases were primarily driven by lower revenue from our Managed Services offering as a result of a reduction in client spend. Additionally, during the first half of 2025, we focused on supporting existing Enterprise clients, which contributed to stable active account trends despite a challenging macro environment, and improving year-over-year trends in spend per active enterprise client. As we continue refining our Enterprise strategy, we expect Enterprise revenue to decline for the remainder of the year compared to the same periods in 2024.

Current wording

For the three months ended September 30, 2025, Enterprise revenue increased by $0.7 million, or 3%, compared to the same period in 2024 primarily due to revenue generated by Ascen. For the nine months ended September 30, 2025, Enterprise revenue decreased by $1.5 million, or 2% compared to the same period in 2024 primarily driven by lower revenue from our Managed Services offering as a result of a reduction in client spend. During the nine months ended September 30, 2025, we focused on supporting existing Enterprise clients, which contributed to stable active account trends and improved year-over-year spend per active Enterprise client. As we continue to refine our Enterprise strategy and the transition of Enterprise clients to the Lifted platform, we expect Enterprise revenue to decline in the fourth quarter of

Previous wording

For the three and six months ended June 30, 2025, cost of revenue decreased by $0.4 million, or 1%, and $2.8 million, or 3%, respectively, compared to the same periods in 2024. The decreases were primarily due to reductions in data center and customer support costs of $1.1 million and $3.0 million, respectively, and lower costs associated with our Upwork Professional offering of $0.9 million and $2.0 million, respectively, reflecting hosting optimization efforts and workforce reductions. These decreases were partially offset by increases in cost to deliver our Managed Services offering of $0.8 million and $1.2 million, respectively, primarily due to contract termination costs triggered by a reduction in work volume under a client contract. In addition, amortization expense related to internal-use software and platform development increased by $0.8 million and $1.4 million, respectively.

Current wording

For the nine months ended September 30, 2025, cost of revenue decreased slightly compared to the same period in 2024. The decrease was primarily due to reductions in data center and customer support costs totaling $3.4 million and lower costs associated with our Upwork Professional offering of $2.4 million, reflecting hosting optimization efforts and workforce reductions. These decreases were partially offset by a $3.1 million increase in cost to deliver our Managed Services offering, primarily due to contract termination costs triggered by a reduction in work volume under a client contract, and a $2.5 million increase in amortization expense related to internal-use software and platform development.

Previous wording

For each of the three and six months ended June 30, 2025, gross margin increased to 78% compared to 77% in the same periods in 2024, primarily due to lower cost of revenue driven by cost-optimization efforts implemented in prior year, including workforce reductions and other cost-saving measures.

Current wording

For the nine months ended September 30, 2025, gross margin increased to 78% compared to 77% in the same period in 2024, primarily due to lower cost of revenue driven by cost-optimization efforts implemented in prior years, including workforce reductions and other cost-saving measures.

Previous wording

We expect cost of revenue to remain relatively consistent in the third and fourth quarters of 2025 compared to the same periods in 2024, reflecting cost optimization efforts, partially offset by higher amortization of capitalized internal-use software resulting from continued investment in platform enhancements. On a full-year basis, we expect total cost of revenue to be lower for the full year 2025 as compared to 2024. Amounts paid to talent in connection with our Managed Services offering are tied to the volume of managed services used by our clients. The level and timing of these items could fluctuate and affect our cost of revenue in the future. We expect gross margin to remain consistent throughout the remainder of 2025.

Current wording

We expect cost of revenue to be higher in the fourth quarter of 2025 compared to the same period in 2024, primarily due to increased costs associated with Lifted’s operations. On a full-year basis, total cost of revenue for 2025 is also expected to be higher than 2024, reflecting the impact of Lifted-related costs and higher amortization of capitalized internal-use software from continued investment in platform enhancements. Amounts paid to talent in connection with our Managed Services offering are tied to the volume of managed services used by our clients. The level and timing of these items could fluctuate and affect our cost of revenue in the future. We expect gross margin to remain consistent throughout the remainder of 2025.

Previous wording

For the three and six months ended June 30, 2025, research and development expense decreased by $7.6 million, or 15% and $14.4 million, or 14%, respectively, compared to the same periods in 2024. The decreases were primarily driven by reductions in personnel-related costs of $7.3 million and $12.8 million, respectively, reflecting workforce reductions and other cost-saving measures implemented in 2024. In addition, we capitalized $1.1 million and $2.2 million of incremental internal-use software and platform development costs during the three and six months ended June 30, 2025, respectively. These costs were partially offset by increases in amortization of intangible assets of $0.9 million and $1.8 million, respectively, compared to the same periods in 2024.

Current wording

For the three and nine months ended September 30, 2025, research and development expense decreased by $2.9 million, or 6%, and $17.3 million, or 11%, respectively, compared to the same periods in 2024. These decreases were primarily driven by reductions in personnel-related costs of $5.0 million and $17.4 million, respectively, reflecting workforce reductions and other cost-saving measures implemented in 2024. In addition, we capitalized $1.6 million and $3.8 million of incremental internal-use software and platform development costs during the three and nine months ended September 30, 2025, respectively. These costs were partially offset by increases in amortization of intangible assets of $2.7 million and $4.5 million, respectively, compared to the same periods in 2024.

Previous wording

For the three and six months ended June 30, 2025, sales and marketing expense decreased by $10.7 million, or 23% and $22.8 million, or 24%, respectively, compared to the same periods in 2024. The decreases were primarily driven by cost-optimization efforts implemented in the prior year, including the realignment and streamlining of our sales and marketing workforce. As a result, personnel-related costs decreased by $7.3 million and $16.7 million, respectively, and marketing and advertising expense decreased by $2.9 million and $4.8 million, respectively, compared to the same periods in 2024.

Current wording

For the three and nine months ended September 30, 2025, sales and marketing expense decreased by $11.1 million, or 24%, and $33.9 million, or 24%, respectively, compared to the same periods in 2024. These decreases were primarily driven by cost-optimization efforts implemented in the prior year, including the realignment and streamlining of our sales and marketing workforce. As a result, personnel-related costs decreased by $3.7 million and $24.1 million, respectively, and marketing and advertising expense decreased by $3.1 million and $7.9 million, respectively, compared to the same periods in 2024.

Previous wording

For the three and six months ended June 30, 2025, general and administrative expense increased by $5.7 million, or 19%, and $1.8 million, or 3%, respectively, compared to the same periods in 2024. The increases were primarily driven by higher personnel-related costs of $3.8 million and $1.2 million, respectively, largely due to increased bonus expense based on 2025 financial performance. In addition, legal fees increased $1.4 million and $1.1 million, compared to the same periods in 2024, primarily driven by acquisition-related costs.

Current wording

For the three and nine months ended September 30, 2025, general and administrative expense increased by $10.0 million, or 32%, and $11.8 million, or 13%, respectively, compared to the same periods in 2024. The increases were primarily driven by higher personnel-related costs of $5.9 million and $7.0 million, respectively, largely due to increased bonus expense based on 2025 financial performance, and higher consultant fees of $2.6 million and $3.0 million, primarily related to acquisition activities. In addition, for the nine months ended September 30, 2025, legal fees increased by $1.6 million compared to the same period in 2024 due to acquisition activities.

Previous wording

For the six months ended June 30, 2025, provision for transaction losses increased by $1.3 million, compared to the same period in 2024. The provision for the six months ended June 30, 2024 was lower primarily due to better than expected collections during that period. We expect provision for transaction losses to remain at a normalized level of approximately 1% of revenue for the remainder of 2025.

Current wording

For the three and nine months ended September 30, 2025, provision for transaction losses increased by $0.6 million and $1.9 million, respectively, compared to the same periods in 2024. The provision for each of the three and nine months ended September 30, 2024 was lower primarily due to better than expected collections during those periods. We expect provision for transaction losses to remain at a normalized level of approximately 1% of revenue for the remainder of 2025.

Previous wording

For the three and six months ended June 30, 2025, our income tax provision increased by $4.5 million and $10.5 million, respectively, compared to the same periods in 2024. Our effective tax rates were 14.9% and 15.6% for the three and six months ended June 30, 2025, respectively, compared to 5.0% and 5.8% for the same periods in 2024, respectively.

Current wording

For the three and nine months ended September 30, 2025, our income tax provision increased by $5.2 million and $15.7 million, respectively, compared to the same periods in 2024. Our effective tax rates were 17.8% and 16.2% for the three and nine months ended September 30, 2025, respectively, compared to 3.9% and 5.0% for the same periods in 2024, respectively.

Previous wording

The increase in our effective tax rates for the three and six months ended June 30, 2025, was primarily driven by the absence of a valuation allowance in the current periods, whereas the prior-year rates reflected lower tax expense due to the impact of a valuation allowance on our U.S. deferred tax assets.

Current wording

The increase in our effective tax rates for the three and nine months ended September 30, 2025, was primarily driven by the absence of a valuation allowance in the current periods, whereas the prior-year rates reflected lower tax expense due to the impact of a valuation allowance on our U.S. deferred tax assets.

Previous wording

Our income tax provision for the three and six months ended June 30, 2025, was primarily driven by income in the United States and non-deductible compensation, partially offset by the generation of research and development tax credits and the benefit from the Foreign-Derived Intangible Income deduction.

Current wording

Our income tax provision for the three and nine months ended September 30, 2025, was primarily driven by income in the United States and non-deductible compensation, partially offset by the generation of research and development tax credits and the benefit from the Foreign-Derived Intangible Income deduction.

Previous wording

Our principal sources of liquidity are our cash and cash equivalents and marketable securities. Our cash equivalents and marketable securities primarily consist of money market funds, commercial paper, treasury bills, corporate bonds, U.S. and foreign government securities, asset-backed securities, and other types of fixed income securities. The primary objective of our investment activities from our operating investments is to preserve principal while maximizing income without significantly increasing risk. Since our inception, our business has consisted of the operation of an online work marketplace that connects businesses with independent talent from across the globe, and we do not make investments for trading or speculative purposes. As of June 30, 2025 and December 31, 2024, we had $291.1 million and $305.8 million in cash and cash equivalents, respectively. As of June 30, 2025 and December 31, 2024, we had $343.5 million and $316.3 million in marketable securities, respectively.

Current wording

Our principal sources of liquidity are our cash and cash equivalents and marketable securities. Our cash equivalents and marketable securities primarily consist of money market funds, commercial paper, treasury bills, corporate bonds, U.S. and foreign government securities, asset-backed securities, and other types of fixed income securities. The primary objective of our investment activities from our operating investments is to preserve principal while maximizing income without significantly increasing risk. Since our inception, our business has consisted of the operation of an online work marketplace that connects businesses with independent talent from across the globe and the provision of additional contingent workforce solutions through Lifted and its subsidiaries. We do not make investments for trading or speculative purposes. As of September 30, 2025 and December 31, 2024, we had $260.8 million and $305.8 million in cash and cash equivalents, respectively. As of September 30, 2025 and December 31, 2024, we had $382.3 million and $316.3 million in marketable securities, respectively.

Previous wording

We believe our existing cash and cash equivalents, marketable securities, and cash flow from operations (in periods in which we generate cash flow from operations) will be sufficient for at least the next 12 months to meet our requirements and plans for cash, including meeting our working capital requirements and capital expenditure requirements. In the long term, our ability to support our working capital and capital expenditure requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support research and development efforts, the cost to host our work marketplace, the introduction of new offerings and services, the continuing market adoption of our work marketplace, any acquisitions or investments that we make in complementary businesses, products, and technologies, macroeconomic conditions, any repurchases of shares of our outstanding common stock or our 0.25% convertible senior notes due 2026, which we refer to as the Notes, and our ability to obtain equity or debt financing.

Current wording

In the long term, our ability to support our working capital and capital expenditure requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support research and development efforts, the cost to host our platforms and other workforce solutions, the introduction of new lines of business, offerings, and services, the continuing market adoption of our offerings, any acquisitions or investments that we make in complementary businesses, products, and technologies, macroeconomic conditions, any repurchases of shares of our outstanding common stock or the Notes, and our ability to obtain equity or debt financing.

Previous wording

Assuming the outstanding Notes are not converted into our common stock, repurchased, or redeemed prior to maturity on August 15, 2026, (i) annual interest expense relating to the Notes will be $1.4 million for the remainder of fiscal year 2025 and $1.8 million in 2026 and (ii) principal in the amount of $361.0 million will be payable upon maturity. For additional information about our Notes, see the section below titled “—Convertible Senior Notes Due 2026 and Capped Calls.”

Current wording

Assuming the outstanding Notes are not converted into our common stock, repurchased, or redeemed prior to maturity on August 15, 2026, (i) annual interest expense relating to the Notes will be $0.7 million for the remainder of fiscal year 2025 and $1.8 million in 2026 and (ii) principal in the amount of $361.0 million will be payable upon maturity. For additional information about our Notes, see the section below titled “—Convertible Senior Notes Due 2026 and Capped Calls.”

Previous wording

In July 2024, we commenced a non-cancellable agreement for cloud infrastructure and other services that contains future purchase commitments of $40.0 million over two years, with $20.0 million in each year. As of June 30, 2025, we had remaining purchase commitments under this agreement of $16.7 million.

Current wording

In July 2024, we commenced a non-cancellable agreement for cloud infrastructure and other services that contains future purchase commitments of $40.0 million over two years, with $20.0 million in each year. As of September 30, 2025, we had remaining purchase commitments under this agreement of $14.0 million.

Previous wording

In October 2024, our board of directors authorized a share repurchase purchase program for the repurchase of up to $100.0 million of shares of our outstanding common stock, which we refer to as the 2024 Share Repurchase Authorization. Repurchases of our common stock under the 2024 Share Repurchase Authorization may be made from time to time on the open market (including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act of 1934, as amended, which we refer to as the Exchange Act), in privately negotiated transactions, or by other methods, at our discretion, and in accordance with applicable securities laws and other restrictions. The 2024 Share Repurchase Authorization has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason. The 2024 Share Repurchase Authorization does not obligate us to repurchase any dollar amount or number of shares, and the timing and amount of any repurchases will depend on market and business conditions.

Current wording

Repurchases of our common stock under the Share Repurchase Authorizations may be made from time to time on the open market (including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act), in privately negotiated transactions, or by other methods, at our discretion, and in accordance with applicable securities laws and other restrictions. The Share Repurchase Authorizations have no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason. The Share Repurchase Authorizations do not obligate us to repurchase any dollar amount or number of shares, and the timing and amount of any repurchases will depend on market and business conditions.

Previous wording

During the three and six months ended June 30, 2025, we repurchased and subsequently retired 2.9 million and 5.2 million shares of our common stock for an aggregate amount of $37.9 million and $70.9 million at an average price of $13.00 and $13.52 per share, including fees associated with the repurchases and excluding excise tax, respectively. As of June 30, 2025, we had $29.1 million available for repurchases under the 2024 Share Repurchase Authorization.

Current wording

During the three and nine months ended September 30, 2025, we repurchased and subsequently retired 2.1 million and 7.3 million shares of our common stock for an aggregate amount of $31.0 million and $101.9 million at an average price of $14.75 and $13.87 per share, including fees associated with the repurchases and excluding excise tax, respectively, under the Share Repurchase Authorizations. As of September 30, 2025, we had $98.1 million available for repurchases under the 2025 Share Repurchase Authorization.

Previous wording

We previously repurchased $100.0 million of common stock pursuant to the share repurchase program authorized by our board of directors in November 2023, which is referred to as the 2023 Share Repurchase Authorization. The 2023 Share Repurchase Authorization was fully utilized as of December 31, 2024.

Current wording

We previously repurchased $100.0 million of our common stock pursuant to the share repurchase program authorized by our board of directors in November 2023, which we refer to as the 2023 Share Repurchase Authorization. The 2023 Share Repurchase Authorization was fully utilized as of December 31, 2024.

Previous wording

As a licensed internet escrow agent, we offer escrow services to customers of our work marketplace and, as such, we are required to hold our customers’ escrowed cash and in-transit cash in trust as an asset and record a corresponding liability for escrow funds held on behalf of talent and clients on our balance sheet. We expect the balances of our funds held in escrow, including funds held in transit, and the related liability to fluctuate based on marketplace activity and may vary from period to period. Escrow regulations require us to cover the trust with our operating cash in the event of shortages due to the timing of cash receipts from clients for completed hourly billings. Talent submit their billings for hourly contracts to their clients on a weekly basis every Sunday, and the aggregate amount of such billings is added to escrow funds payable to talent on the same day. As of each Sunday of each week, we have not yet collected funds for hourly billings from clients as these funds are in transit. Therefore, in order to satisfy escrow funding requirements, every Sunday we match the shortage of cash in trust by restricting our own operating cash and typically collect this cash shortage from clients within the next several days. As of June 30, 2025 and December 31, 2024, funds held in escrow, including funds in transit, were $212.0 million and $195.7 million, respectively. We deposit a portion of funds held in escrow in interest-bearing checking accounts.

Current wording

As a licensed internet escrow agent, we offer escrow services to customers and as such, we are required to hold our customers’ escrowed cash and in-transit cash in trust as an asset and record a corresponding liability for escrow funds held on behalf of talent and clients on our balance sheet. We expect the balances of our funds held in escrow, including funds held in transit, and the related liability to fluctuate based on marketplace activity and may vary from period to period. Escrow regulations require us to cover the trust with our operating cash in the event of shortages due to the timing of cash receipts from clients for completed hourly billings. Talent on the Upwork Marketplace submit their billings for hourly contracts to their clients on a weekly basis every Sunday, and the aggregate amount of such billings is added to escrow funds payable to talent on the same day. As of each Sunday of each week, we have not yet collected funds for hourly billings from clients as these funds are in transit. Therefore, in order to satisfy escrow funding requirements, every Sunday we match the shortage of cash in trust by restricting our own operating cash and typically collect this cash shortage from clients within the next several days. As of September 30, 2025 and December 31, 2024, funds held in escrow, including funds in transit, were $211.4 million and $195.7 million, respectively. We deposit a portion of funds held in escrow in interest-bearing checking accounts.