Upwork Profit Rises 8% To $31.8 Million As Marketplace Volume Falls 10.1% And CFO Gessert Departs

Upwork, which runs online platforms connecting businesses with freelancers and agencies, posted third-quarter net income of $31.8 million, up 8% from a year earlier, even as the value of work billed through its marketplace fell 10.1% to $914.1 million. The company also said CFO Erica Gessert will step down January 1, 2027, to be succeeded by Chief Business Officer Peter Sanborn, according to an 8-K and release dated Monday.

Profit up, volume down

Revenue was $185.6 million, against $201.7 million a year earlier. Marketplace revenue fell 9% to $159.3 million, and enterprise revenue fell 3% to $26.3 million.

Active clients dropped 10% to 717,000 from 794,000. Spending per active client rose 8% to $5,418.

Operating expenses fell 15% to $106.7 million. Adjusted EBITDA, an earnings measure that excludes items such as stock pay, rose 7% to $63.8 million, a 34.4% margin. Diluted earnings per share were $0.25, versus $0.21 a year earlier.

Cash tells a different story: free cash flow fell to $53.9 million from $69.4 million, and cash from operations slipped to $65.9 million from $75.1 million. The company repaid $361.0 million of convertible notes in the quarter, and ended September with no current debt, against $359.8 million at the end of 2025.

For the fourth quarter, Upwork guided to revenue of $169 million to $177 million and adjusted EBITDA of $51 million to $55 million. Full-year 2026 revenue is guided to $742 million to $750 million.

A bet on AI, small business and enterprise

CEO Hayden Brown said the company is "doubling down on our enterprise strategy" through Lifted's purchase of WorkMotion, a Berlin-based employer-of-record firm that will directly employ contingent workers in more than 30 countries. Lifted, Upwork's enterprise unit, helps large organizations source, contract, manage and pay such workers. The company expects the deal to reduce its reliance on third-party employer-of-record providers.

Gross services volume from freelancers with AI skills rose 55% from a year earlier. Its MCP server, launched in August, opens the marketplace to AI agents as a new class of client; weekly active users have grown 20x since launch.

Business Plus, the small-business offering, grew volume 132% year over year, and its active clients rose 154%.

Sanborn takes over the finance chair

Gessert, CFO since April 2023, will serve in an advisory role through March 31, 2027. The 8-K says her decision was not the result of any disagreement with the company on operations, policies or practices.

Sanborn, 43, will stop being chief business officer when he becomes CFO. Compensation terms for him and for Gessert's advisory role have not yet been set; the company will file an 8-K amendment once the compensation committee approves them.

Upwork held its earnings call at 5:00 p.m. Eastern on Monday.

Sources

• 8-K Filing — UPWORK, INC (UPWK) — SEC EDGAR
• Exhibit upwork3q26-pressrelease_3q.htm — UPWORK, INC 8-K exhibit — SEC EDGAR
• Upwork Reports Third Quarter 2026 Financial Results — globenewswire.com