Upwork Reports 1% Revenue Growth and Doubled Net Income in Q1 2025

Upwork Inc. reported its financial results for the first quarter of 2025, revealing a total revenue of $192.7 million, a slight increase of 1% from $190.9 million in the same period last year. The company's net income more than doubled to $37.7 million, compared to $18.4 million in the first quarter of 2024. This significant growth in profitability was attributed to cost-saving measures implemented in previous years, including reductions in marketing expenses and operational efficiencies. The adjusted EBITDA for the quarter was $56.0 million, up 68% from $33.3 million in the prior year.

The company's Marketplace revenue, which constitutes the majority of its income, rose by 1% to $166.3 million, driven by increased contributions from ads and monetization products. However, the number of active clients decreased by 7% year-over-year, totaling 812,000 as of March 31, 2025. The Gross Services Volume (GSV) also saw a decline of 2%, amounting to $987.7 million, reflecting the impact of macroeconomic conditions on client spending behavior. Despite these challenges, the Marketplace take rate improved to 18.3%, up from 17.7% in the previous year.

In terms of operational developments, Upwork continued to focus on enhancing its service offerings and expanding its market presence. The company has been investing in generative AI capabilities and premium offerings, which are expected to contribute to future growth. Additionally, Upwork repurchased 2.3 million shares of its common stock for $33.1 million under its ongoing share repurchase program, leaving $66.9 million available for future repurchases.

The company’s balance sheet remains strong, with total assets of $1.24 billion as of March 31, 2025, compared to $1.21 billion at the end of 2024. Cash and cash equivalents stood at $304.4 million, slightly down from $305.8 million in the previous quarter. Upwork's total liabilities increased to $645.7 million, primarily due to a rise in escrow funds payable. The company continues to maintain a conservative approach to its capital structure, with a focus on preserving liquidity while navigating a competitive and evolving market landscape.

Looking ahead, Upwork anticipates that macroeconomic conditions will continue to pose challenges, particularly in client acquisition and spending. The company expects Marketplace revenue to decline for the remainder of 2025 compared to the previous year, reflecting these broader economic headwinds. However, it remains committed to its strategic initiatives aimed at enhancing operational efficiency and driving long-term growth.