Revenue growth has stalled at -1.7% YoY in Q2 2026, while operating margin contracted to 14.7% from a 20.1% peak in Q1 2025, reflecting fading operating leverage and rising SG&A costs.
Upwork Inc. (UPWK) annual income statement — 10-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 |
|---|
| Sales/Revenue | 787.28M | 787.78M | 769.33M | 689.14M | 618.32M | 502.8M | 373.63M | 300.56M | 253.35M | 202.55M | 164.44M |
| Revenue Growth % | 1.86% | 2.4% | 11.64% | 11.45% | 22.98% | 34.57% | 24.31% | 18.63% | 25.08% | 23.17% | - |
| Cost of Goods Sold | 179.44M | 174.75M | 174.09M | 170.45M | 160.4M | 135.51M | 104.27M | 88.14M | 81.46M | 65.44M | 62.58M |
| COGS % of Revenue | - | 22.18% | 22.63% | 24.73% | 25.94% | 26.95% | 27.91% | 29.33% | 32.15% | 32.31% | 38.05% |
| Gross Profit | 607.84M | 613.03M | 595.23M | 518.69M | 457.92M | 367.29M | 269.36M | 212.42M | 171.9M | 137.11M | 101.87M |
| Gross Margin % | 77.21% | 77.82% | 77.37% | 75.27% | 74.06% | 73.05% | 72.09% | 70.67% | 67.85% | 67.69% | 61.95% |
| Gross Profit Growth % | - | 2.99% | 14.76% | 13.27% | 24.67% | 36.36% | 26.81% | 23.57% | 25.37% | 34.6% | - |
| Operating Expenses | 488.93M | 483.73M | 530.02M | 529.95M | 550.54M | 421.51M | 291.77M | 231.15M | 183.61M | 140.23M | 116.33M |
| OpEx % of Revenue | - | 61.4% | 68.89% | 76.9% | 89.04% | 83.83% | 78.09% | 76.91% | 72.47% | 69.23% | 70.74% |
| Selling, General & Admin | 296.4M | 288.14M | 314.01M | 339.61M | 370.83M | 296.38M | 204.74M | 163.22M | 122.3M | 90.38M | 72.88M |
| SG&A % of Revenue | - | 36.58% | 40.82% | 49.28% | 59.97% | 58.95% | 54.8% | 54.3% | 48.27% | 44.62% | 44.32% |
| Research & Development | 185.55M | 189.34M | 209.28M | 177.36M | 154.55M | 119.08M | 83.47M | 64.03M | 55.49M | 45.6M | 37.9M |
| R&D % of Revenue | - | 24.04% | 27.2% | 25.74% | 25% | 23.68% | 22.34% | 21.3% | 21.9% | 22.51% | 23.05% |
| Other Operating Expenses | 3.49M | 6.24M | 6.73M | 12.98M | 25.15M | 6.05M | 3.56M | 3.9M | -6.14M | -62K | -908K |
| Operating Income | 118.91M | 129.31M | 65.21M | -11.26M | -92.62M | -54.22M | -22.41M | -18.73M | -11.71M | -3.12M | -14.47M |
| Operating Margin % | 15.1% | 16.41% | 8.48% | -1.63% | -14.98% | -10.78% | -6% | -6.23% | -4.62% | -1.54% | -8.8% |
| Operating Income Growth % | - | 98.31% | 679.09% | 87.84% | -70.84% | -141.95% | -19.62% | -59.94% | -275.02% | 78.41% | - |
| EBITDA | 148.53M | 151.78M | 82.86M | 1.46M | -81.49M | -40.41M | -8.38M | -9.29M | -6.76M | 1.06M | -6.01M |
| EBITDA Margin % | 18.87% | 19.27% | 10.77% | 0.21% | -13.18% | -8.04% | -2.24% | -3.09% | -2.67% | 0.52% | -3.65% |
| EBITDA Growth % | 17.95% | 83.18% | 5582.85% | 101.79% | -101.65% | -382.46% | 9.81% | -37.32% | -736.22% | 117.7% | - |
| D&A (Non-Cash Add-back) | 29.62M | 22.47M | 17.65M | 12.72M | 11.14M | 13.81M | 14.03M | 9.45M | 4.95M | 4.19M | 8.46M |
| EBIT | 140.24M | 140.98M | 93.13M | 48.88M | -84.87M | -53.94M | -21.94M | -15.32M | -17.85M | -3.19M | -15.38M |
| Net Interest Income | 19.4M | 12.8M | 28M | 0 | -4.48M | -2.18M | -778K | -1.31M | -2.04M | -960K | -858K |
| Interest Income | 21.4M | 13.5M | 30.7M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 2M | 700K | 2.7M | 0 | 4.48M | 2.18M | 778K | 1.31M | 2.04M | 960K | 858K |
| Other Income/Expense | 20.63M | 23.87M | 25.22M | 60.14M | 3.27M | -1.9M | -309K | 2.1M | -8.18M | -1.02M | -1.77M |
| Pretax Income | 139.54M | 153.18M | 90.43M | 48.88M | -89.35M | -56.12M | -22.72M | -16.63M | -19.89M | -4.14M | -16.23M |
| Pretax Margin % | 17.72% | 19.44% | 11.75% | 7.09% | -14.45% | -11.16% | -6.08% | -5.53% | -7.85% | -2.05% | -9.87% |
| Income Tax | 37.7M | 37.75M | -125.16M | 1.99M | 536K | 122K | 150K | 28K | 15K | -22K | -1K |
| Effective Tax Rate % | 27.02% | 24.65% | -138.41% | 4.07% | -0.6% | -0.22% | -0.66% | -0.17% | -0.08% | 0.53% | 0.01% |
| Net Income | 101.83M | 115.42M | 215.59M | 46.89M | -89.89M | -56.24M | -22.87M | -16.66M | -19.91M | -4.12M | -16.23M |
| Net Margin % | 12.93% | 14.65% | 28.02% | 6.8% | -14.54% | -11.19% | -6.12% | -5.54% | -7.86% | -2.04% | -9.87% |
| Net Income Growth % | -58.5% | -46.46% | 359.8% | 152.16% | -59.82% | -145.94% | -37.27% | 16.32% | -382.83% | 74.6% | - |
| Net Income (Continuing) | 101.83M | 115.42M | 215.59M | 46.89M | -89.89M | -56.24M | -22.87M | -16.66M | -19.91M | -4.12M | -16.23M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.78 | 0.83 | 1.52 | 0.34 | -0.69 | -0.44 | -0.19 | -0.15 | -0.19 | -0.04 | -0.50 |
| EPS Growth % | -56.32% | -45.39% | 347.06% | 149.28% | -56.82% | -131.58% | -26.67% | 21.05% | -341.86% | 91.4% | - |
| EPS (Basic) | - | 0.87 | 1.61 | 0.35 | -0.69 | -0.44 | -0.19 | -0.15 | -0.19 | -0.04 | -0.50 |
| Diluted Shares Outstanding | 129.96M | 139.41M | 143.15M | 137.26M | 130.52M | 127.16M | 118.7M | 109.81M | 103.72M | 95.93M | 32.49M |
| Basic Shares Outstanding | 123.92M | 130.62M | 133.62M | 134.77M | 130.52M | 127.16M | 118.7M | 109.81M | 103.72M | 95.93M | 32.49M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying UPWK stock.
For fiscal year 2025, Upwork Inc. (UPWK) reported total revenue of $787.8M. This represents a 379.1% increase compared to $164.4M in 2016.
Upwork Inc. (UPWK) is profitable, generating $115.4M in net income for the fiscal year ending 2025 with a net profit margin of 14.7%.
Upwork Inc. (UPWK) reported an operating income of $129.3M, resulting in an operating profit margin of 16.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Upwork Inc. (UPWK) generated $613.0M in gross profit for the year, representing a gross profit margin of 77.8%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
AI-driven demand displacement
Metrics are mathematically derived from official filings.
Growth Stalls at Platform Maturity
Revenue growth decelerated to -1.7% YoY in Q2 2026, down from 18.7% in Q1 2024, per reported financials, signaling a mature marketplace with limited expansion levers.
The sequential deceleration from double-digit growth in early 2024 to negative growth by mid-2026 suggests the platform has reached a natural size, with GSV growth likely cooling. The mix shift toward enterprise and high-complexity work may support margins but appears insufficient to reaccelerate top-line growth, as evidenced by the 2.4% TTM growth rate. Investors should monitor whether the automation-driven mix shift can offset volume declines in lower-complexity categories.
Gross Margin Stability Masks Mix Shifts
Gross margin held at 76.4% in Q2 2026, down slightly from 78.3% in Q1 2025, as reported in financial statements, reflecting stable take rates but potential mix pressure from Managed Services.
The narrow range of gross margins (76.9%-78.3%) over the past ten quarters indicates a structurally capped margin profile, consistent with high variable costs for payment processing and cloud infrastructure. The slight decline in Q2 2026 may reflect a higher proportion of Managed Services revenue, which is recorded gross and carries lower margins. While the take rate appears stable, the ceiling on gross margin suggests that operating leverage must come from SG&A efficiency rather than product economics.
Operating Leverage Fades as Costs Rebound
Operating margin contracted to 14.7% in Q2 2026 from a peak of 20.1% in Q1 2025, based on reported figures, as SG&A and R&D spending outpaced revenue growth.
The 540 basis point decline in operating margin from Q1 2025 to Q2 2026 indicates that the company's cost discipline is wavering, with SG&A rising to $71.8M in Q2 2026 from $63.8M in Q1 2025, while revenue fell. This suggests that the pivot to profitability may be fragile, as the company appears to be reinvesting in sales and marketing to defend market share. The lack of operating leverage in a period of flat revenue implies that any further growth deceleration could compress margins more sharply.
EPS Volatility Masks Underlying Profitability
Q2 2026 EPS of $0.20 missed consensus by $0.14, while Q4 2024 EPS of $1.03 was inflated by a one-time tax benefit, per SEC filings, highlighting non-operating distortions.
The wide swings in EPS—from $0.11 in Q4 2025 to $0.27 in Q1 2025—are partly driven by tax items and other non-operating gains, as evidenced by the Q4 2024 net margin of 76.9% versus operating margin of 7.1%. Stock-based compensation remains a significant drag, averaging $16.3M per quarter, which bridges GAAP and non-GAAP profitability. Investors should focus on operating income trends rather than headline EPS, as the latter is subject to one-time items and tax rate anomalies.
R&D and SG&A Discipline Under Scrutiny
R&D spending fell to $43.9M in Q2 2026 from $53.5M in Q4 2024, while SG&A rose to $71.8M, as reported in financial statements, suggesting a shift toward sales investment.
The reduction in R&D as a percentage of revenue (from 27.9% in Q4 2024 to 22.9% in Q2 2026) may indicate a pivot away from long-term innovation toward near-term sales efficiency, which could be a response to competitive pressures. However, the increase in SG&A in Q2 2026 relative to Q1 2025 suggests that customer acquisition costs are not declining, potentially reflecting a more competitive environment. The sustainability of the 16.4% TTM operating margin depends on whether management can hold the line on these costs as growth remains subdued.
Q1 2025 Marks Peak Profitability
Q1 2025 delivered the highest operating margin (20.1%) and net margin (19.6%) in the ten-quarter period, as per reported data, representing a peak in operational efficiency.
The inflection point occurred in Q1 2025, when revenue growth stabilized at 0.9% YoY but operating income surged to $38.7M, driven by a sharp reduction in SG&A to $63.8M. This suggests that the company achieved a temporary cost structure that maximized profitability, but subsequent quarters show a reversion to higher spending, likely due to reinvestment or competitive pressures. The lasting impact is that the market now expects a higher baseline of profitability, making any deviation from this level a potential negative catalyst.
AI Threat and Growth Stagnation
The 2.4% TTM revenue growth and CEO commentary on automation shifting lower-complexity work suggest that generative AI may be structurally eroding the core marketplace, per recent earnings calls.
Short-sellers would argue that the deceleration to negative growth in Q2 2026 is not cyclical but secular, as AI tools replace the very tasks that historically drove platform volume. The maintained guidance for Q3/Q4 implies a back-half ramp that seems inconsistent with the Q2 miss, raising questions about the credibility of management's outlook. Additionally, the rising SG&A despite flat revenue suggests that the company is spending more to defend a shrinking pie, which could lead to a margin spiral if growth does not recover.