UPWK 10-K & 10-Q changes, risk factors and insider trading

•Our growth depends on our ability to attract and retain a community of talent and clients, and the failure to maintain or grow our community of active customers and their activity on our platform in a cost-effective manner or at all could adversely impact our business, operating results, and financial condition.

•We have experienced growth in recent periods and expect to invest in our growth in the future. If we are unable to maintain similar levels of growth or manage future growth, our business, operating results, and financial condition could be adversely affected.

•We continue to evolve our business strategy, offerings and pricing model,models, and changes that we make can adversely affect our business and make it difficult to evaluate our future prospects.

•Customers circumvent our workplatforms marketplace,and other workforce solutions, which adversely impacts our business.

•We are subject to disputes with or between customers of our work marketplace.customers.

•If we or our third-party partners experience a security breach, other hacking or phishing attack, ransomware or other malware attack, or other privacy or security incident, our workplatforms marketplaceand other workforce solutions may be perceived as not being secure, our reputation may be harmed, demand for our work marketplaceofferings may be reduced, our operations may be disrupted, we may incur significant legal costs, fines, or liabilities, and our business could be adversely affected.

•If we fail to maintain and enhance our brandbrands and reputation, our business and financial condition may be adversely affected.

•We have a history of net losses, may increase our operating expenses in the future, and may not be able to sustain profitability.

•We cannot guarantee that the 20242025 Share Repurchase Authorization will be fully consummated or that repurchases made under our share repurchase authorizationsrepurchases will enhance long-term stockholder value. Share repurchases could also increase the volatility of the trading price of our common stock and diminish our cash reserves.

Our growth depends on our ability to attract and retain a community of talent and clients, and the failure to maintain or grow our community of active customers and their activity on our platform in a cost-effective manner or at all could adversely impact our business, operating results, and financial condition.

Clients have similarly diverse options to find and engage service providers, including other online or offline platforms, staffing firms and agencies, by engaging service providers directly, or by hiring temporary, full-time, or part-time employees directly or through an agency. Clients may decrease or cease their use of our workplatforms marketplaceand other workforce solutions and our revenue may be adversely impacted for many reasons, including: if we fail to attract and retain talent; if the quality or types of services provided, or the pricing offered, by talent are not satisfactory to clients; or if generative artificial intelligenceAI tools provide a suitable replacement for traditional talent tasks. Further, expenditures by clients may be cyclical and may reflect overall macroeconomic conditions or budgeting patterns. Additionally, we had two clients that accounted for more than 10% of trade and client receivables as of December 31, 2024. The loss of a key client could have an adverse effect on our business.

Customers may stop using our work marketplaceplatforms and relatedother servicesworkforce solutions if the quality of the customer experience on our work marketplace or our offerings or services do not meet their expectations or keep pace with the timing or quality of competitive products and services. Customers may also choose to cease using our workplatforms marketplaceand other workforce solutions if they perceive that our pricing modelmodels isare not in line with the value they derive from our work marketplace.offerings. Our efforts to attract and retain customers may not be successful or cost effective, and if customers, particularly significant clients, cease or reduce their use of our work marketplaceofferings and related services for any reason, our business, operating results, and financial condition would be adversely affected.

We have experienced growth in recent periods and expect to invest in our growth in the future. If we are unable to maintain similar levels of growth or manage future growth, our business, operating results, and financial condition could be adversely affected.

We have experienced growth in a relatively short period of time and expect to invest in our growth in the future. However, our historical growth should not be considered indicative of our future performance.performance, Thereand there can be no assurance that we will be able to sustain our historical growth rates or that any future investments in growth will be successful or cost-effective. Moreover, sustaining our growth in future periods will become more difficult ifin periods of macroeconomic uncertainty, elevated interest rates, and inflation persist. For example, during the year ended December 31, 2024, macroeconomic conditions adversely impacted GSV, which declined 3% compared to 2023.inflation. To manage any future growth, we must improve our systems, motivate and effectively manage and train our workforce, and successfully manage the risks, challenges, and uncertainties associated with our business. If we are unable to grow successfully without compromising the quality of our offerings or customer experience, or if new systems that we implement to assist in managing our growth do not produce the expected benefits, our business, operating results, and financial condition could be adversely affected.

We continue to evolve our business strategy, offerings and pricing model,models, and changes that we make can adversely affect our business and make it difficult to evaluate our future prospects.

We continue to evolve our business strategy, offerings, and pricing model, as well as our sales, marketing, and brand positioning efforts. We continuously evaluate and revise our current offerings and pricing model and create and test additional offerings, pricing models, features, and services to serve our current and prospective customer base. For example, in August 2025, we launched Lifted, our enterprise-focused subsidiary offering a broader range of contingent work solutions for large enterprises.

Changes in our offerings and pricing model and the continued evolution of our business strategy and brand positioning subject us to a number of uncertainties, including our ability to plan for and project future growth and performance. Creating or modifying offerings is expensive and time consuming, diverts the attention of management, and may not be successful or cost-effective to maintain. In addition, we have in the past seen, and may in the future see, unexpected or unintended negative effects as a result of changes to our pricing model, offerings, and sales and marketing efforts, including increased customer dissatisfaction, harm to our reputation, increased circumvention rates, reductions in the ratenumber, size, or sizecompletion rate of projectsclient that get posted or completed,projects, or a failure to attract and retain customers. Additionally, implementing changes to business strategies could result in furloughs, layoffs, and reductions in force, such as our restructuring plan announced in October 2024, which we refer to as the Restructuring Plan. If there are unforeseen expenses associated with such realignments in our business strategies, and we incur unanticipated charges or liabilities, then we may not be able to effectively realize the expected cost savings or other benefits of such actions. Any negative impacts resulting from changes to our business strategy, offerings, or pricing model could adversely impact our business, operating results, and financial condition.

We rely on banks and payment partners to provide us with corporate banking services, escrow trust accounts or other regulated accounts, and clearing, processing, and settlement functions for the funding of all transactions on our work marketplaceplatforms and disbursement of funds to customers. Our banking and payment partners are critical to our business, and we may not always have a sufficient surplus of vendors in the event one or more relationships isare terminated or interrupted for any reason. This could occur for a number of reasons, including the following:

To grow our business, we need to continue to establish and maintain relationships with third parties, such as staffing providers, software and technology vendors, and payment processing and disbursement providers. For example, we depend on third-party staffing providers to support our employment offering, Upwork Payroll. We also have several partnerships that enable us to integrate generative artificial intelligenceAI tools into ourthe workUpwork marketplaceMarketplace aimed at improving customer experience and productivity. As our agreements with third-party partners terminate or expire, we may be unable to renew or replace these agreements on favorable terms or at all. Some of our strategic partners offer, or could offer, competing products and services or also work with our competitors. Moreover, we cannot guarantee that the parties with which we have strategic relationships will continue to offer the services for which we rely on them at economically reasonable terms or at all or devote the resources necessary to expand our reach, increase our distribution, or support an increased number of customers. If we are unsuccessful in establishing or maintaining our relationships with third parties on favorable terms, these relationships are not successful in improving our business, or one or more of our partners materially changes its business, our business, operating results, and financial condition may be adversely impacted.

We expect that bad actors will continue to attempt to use our marketplaceplatforms to engage in unlawful or fraudulent conduct. This conduct may include unauthorized or fraudulent acquisition or use of data, money laundering, moving funds to regions or persons restricted by sanctions or export controls, terrorist financing, fraudulent sale of services, bribery, breaches of security, extortion or use of ransomware, distribution or creation of malware or viruses, and piracy or misuse of software and other copyrighted or trademarked content.

Our controls relating to customer identity verification and authentication and fraud detection are complex, require continuous improvement, and may not be effective in detecting and preventing misconduct. Further, while we take steps to improve our trust and safety program through the use of algorithms and machine learning techniques, any required or inadvertent disclosure of our security techniques or new laws restricting our use of them may make our efforts to prevent fraud or the improper use of our platformplatforms less effective and increase the risk of harm to our customers. If our controls are not effective, any of the following could result, each of which could harm our reputation, divert the attention of management, and adversely impact our business, operating results, and financial condition:

•customers may seek to hold us responsible for losses, lose confidence in and decrease use of our workplatforms marketplace,and other workforce solutions, or publicize their negative experiences;

•if talent misstate their qualifications, identity or location, or produce insufficient or defective work product or work product with a harmful effect, clients or other third parties may seek to hold us responsible and may lose confidence in and decrease use of our workplatforms marketplaceand other workforce solutions; and

•we may bring, and have in the past brought, claims against clients and other third parties for their misuse of our work marketplace.platforms.

Customers circumvent our workplatforms marketplace,and other workforce solutions, which adversely impacts our business.

Our business depends on customers transacting through our workplatforms marketplace.and other workforce solutions. Despite our efforts to prevent them from doing so, customers circumvent our workplatforms marketplaceand other workforce solutions and engage with or take payment through other means to avoid our fees, and it is difficult or impossible to measure the losses associated with circumvention. Enhancements and changes we make to our pricing model,models, fees, offerings, services, and features may unintentionally cause customers to circumvent our workplatforms marketplace.and other workforce solutions. In addition, circumvention is likely to increase during a macroeconomic downturn, as customers may be more cost-sensitive. The loss of revenue associated with circumvention of our work marketplace adversely impacts our business, operating results, and financial condition. Moreover, our efforts to reduce circumvention may be costly or disruptive to implement, fail to have the intended effect or have an adverse effect on our brand or customer experience, reduce the attractiveness of our workplatforms marketplace,and other workforce solutions, or otherwise harm our business, operating results, and financial condition.

We are subject to disputes with or between customers of our work marketplace.customers.

•difficulties in, and costs of, establishing local brand recognitionrecognition, adverse changes in customer sentiment between the United States and other countries, and staffing, managing, and operating international operations or support functions;

•tariffs, exportrestrictions or fees applied to service exports and import restrictions,imports, restrictions on foreign investments, sanctions, changes to existing trade arrangements between various countries, and other trade barriers or protection measures;

•costs of localizing services and business practices, including adding the ability for clients to pay in local currencies or modifying our platformplatforms to offer our websitewebsites in local languages;

Our future success depends in large part on our ability to attract, retain, and motivate our senior management and other key personnel. In particular, we are dependent on the services of Hayden Brown, our President and Chief Executive Officer, and our future vision, strategic direction, workplatforms, marketplace,offerings, and technology could be compromised if she were to take another position, become ill or incapacitated, or otherwise become unable to serve as our President and Chief Executive Officer.

We face intense competition for qualified personnel from numerous technology companies. We may not be able to retain our current key personnel or attract, train, integrate, or retain other highly skilled personnel in the future and may incur significant costs to do so. Our senior management and other key personnel are all employed on an at-will basis, which means that they could terminate their employment with us at any time, for any reason, and without notice, and we do not maintain any “key-person” life insurance policies. In addition, changes in our management team resulting from the hiring or departure of executives and other personnel changes including reorganizations of reporting lines of our workforce, such as the Restructuring Plan announced in October 2024,workforce have resulted, and may in the future result, in increased attrition or reduced productivity of our personnel and could negatively impact our ability to attract qualified personnel. Volatility, depreciation, or lack of appreciation in our stock price may also affect our ability to attract and retain key personnel.

Our business strategy may, from time to time, include business combinations, acquisitions, and dispositions of products, services, technologies, businesses, or other assets, strategic investments, and commercial and strategic partnerships. However, there can be no assurance that we will be successful in identifying, negotiating and consummating strategic transaction opportunities. These transactions, even if undertaken and announced, may not close,close on the anticipated timeline or at all, including due to challenges in obtaining regulatory or other approvals. In addition, strategic transactions that do close may involve significant challenges, uncertainties, and risks, including:

The Upwork Marketplace connects businesses with on-demand access to highly skilled independent talent worldwide. The market for online independent talent and the services they offer is relatively new, rapidly evolving, and unproven, and it is difficult to predict the size, growth rate, and expansion of this market. Our future success will depend in large part on the continued growth and expansion of this market. The overall demand for independent talent will continue to be impacted by competition in the marketplace, technological developments (including artificial intelligenceAI), and macroeconomic, geopolitical, legal, and regulatory conditions. In addition, many businesses may be unwilling to engage independent talent for a variety of reasons, including perceived negative connotations with outsourcing work, quality of work, fraud, privacy, or data security concerns, or the rapidly evolving regulation of independent contractor services more generally, as discussed elsewhere in these “Risk Factors.” Similarly, with the increased prevalence of remote work and increased flexibility in employment relationships in recent years, more skilled independent talent may choose traditional employment, reducing the number of qualified or desirable talent available on ourthe workUpwork marketplace.Marketplace. If the market for independent talent and the services they offer does not grow, our business, operating results, and financial condition could be adversely affected.

The market for ourcontingent work marketplace is characterized by rapid technological change, frequent product and service introductions and enhancements, changing customer demands, and evolving industry standards. We invest substantial resources in researching and developing new offerings and services and enhancing our workplatforms marketplaceand other workforce solutions by incorporating additional features, improving functionality, modernizing our technology, and adding other improvements to meet our customers’ evolving demands in our increasingly highly competitive industry. For example, in August 2025, we havelaunched recently integrated generative artificial intelligence tools intoLifted, our enterprise-focused subsidiary offering a broader range of contingent work marketplacesolutions aimedfor atlarge improving customer experienceenterprises, and productivity.we continue to invest in its development. The success of any enhancements to our workplatforms marketplaceand other workforce solutions or any new offerings or services depends on several factors, including overall demand and market acceptance, competitive pricing, adequate quality testing, integration with our work marketplaceplatforms and third-party partners’ technologies, and timely completion. We cannot be sure that we will succeed in delivering enhancements or any new offerings or services or that any enhancements or new offerings or services will be successful or cost effective. Even if we do introduce new offerings or services, we may experience a decline in revenue from our existing offerings that is not offset by revenue from the new offerings or services, and we may experience unintended negative effects from any modifications to our existing offerings, services, and features, including reduced client spend, diminished fill rates for projectsclient on our work marketplace,projects, errors and disruptions on our work marketplace,platforms, and customer dissatisfaction.

The market for independentcontingent talent and the clients that engage them is highly competitive, rapidly evolving, fragmented, and subject to changing technology, shifting needs, and frequent introductions of new competitors as well as new offerings and services. We compete with a number of online and offline platforms and services domestically and internationally, as well as traditional staffing firms. Our main competitors fall into the following categories:

•other online providers of products and services for individuals or businesses seeking work or to advertise their services, including personal and professional social networks, such as LinkedIn and GitHub (each owned by Microsoft), employment marketplaces, platforms providing compliance services, recruiting websites, and project-based deliverable providers;

•software and business services companies focused on talent acquisition, management, invoicing, or staffing management products and services, such as Workdayservices;

•payment businesses that can facilitate payments to and from businesses and service providers, such as PayPal and Payoneerproviders;

•online and offline job boards, classified ads, and other traditional means of finding work and service providers, such as Craigslist, CareerBuilder, Indeed, Monster, and ZipRecruiter.providers.

In addition, well-established internet companies, such as Google, LinkedIn, and Amazon, social media platforms, such as Meta, and businesses that operate driving, delivery, and other commoditized marketplaces, such as Uber Technologies, have entered or may decide to enter our market segment.

We also compete with companies that utilize emerging technologies and assets, such as artificial intelligenceAI and machine learning, blockchain, augmented reality, and cryptocurrency, to provide automated alternatives to the talent onavailable through our workplatforms marketplace,and other workforce solutions, connect businesses with service providers, or otherwise change the way that businesses engage or pay service providers or that service providers perform work.

Internationally, we compete against localized competitors that have greater brand recognition in other countries and a stronger understanding of local or regional culture and commerce. Some competitors also offer their products and services in local languages and currencies that we do not offer. In addition, our decision to suspend our business operations in Russia and Belarus in March 2022 may increase the risk that new competitors emerge in the region.

If we or our third-party partners experience a security breach, other hacking or phishing attack, ransomware or other malware attack, or other privacy or security incident, our workplatforms marketplaceand other workforce solutions may be perceived as not being secure, our reputation may be harmed, demand for our work marketplaceofferings may be reduced, our operations may be disrupted, we may incur significant legal costs, fines, or liabilities, and our business could be adversely affected.

Our business involves the storage, processing, and transmission of customers’ proprietary, confidential, and personal information by us and our third-party partners and vendors. Our third-party partners and vendors also process certain proprietary and confidential information relating to our business and personal information of our personnel. Our systems, and the systems of our vendors and third-party partners, may be vulnerable to privacy or security incidents, such as computer viruses and other malicious software, physical or electronic break-ins, or vulnerabilities resulting from intentional or unintentional service provider actions, and similar disruptions that could make all or portions of our websitewebsites or applications unavailable for periods of time. Additionally, ransomware or other malware, viruses, social engineering (including business email compromise and related wire-transfer fraud), impersonation of our company and executives on social media, and general hacking in our industry have become more prevalent and more complex. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not foreseeable or recognized until launched against a target, we and our vendors and third-party partners may be unable to anticipate incidents or to implement adequate preventative measures. Data security breaches and other privacy and security incidents may also result from non-technical means, such as actions taken by employees or contractors,other includingservice talent that we engage on our work marketplace to perform services for us. We have also integrated, and expect to continue to integrate, generative artificial intelligence tools into our platform and products, or our vendors may in turn incorporate generative artificial intelligence tools into their own offerings. We and the providers of these generative artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to data privacy and protection.providers.

TheWe Companyoperate operates itsour business as one operating and reportable segment. For additional information, see “Note 15—Segment Information” in the notes to our consolidated financial statements included elsewhere in this Annual Report.

These initiatives contributed to an increase to Marketplace revenue ofincreased $76.0to $682.9 million, or 13%,3%, for the year ended December 31, 2024,2025, as compared to 2023.$662.1 million in 2024. Marketplace take rate also benefited from these initiatives, increasingincreased to 18.0%18.7% for the year ended December 31, 2024,2025, as compared to 15.4%18.0% in 2023.2024, reflecting the growing contributions from ads and monetization products.

During the year ended December 31, 2024,2025, we generated net income of $215.6$115.4 million, compared to net income of $46.9$215.6 million in 2023.2024. ThisThe includeddecrease ain net income was attributable to $140.3 million non-cash income tax benefit ofrecognized $140.3in million2024 fromrelated to the release of a valuation allowance on certain deferred tax assets.assets, which did not occur in 2025. Adjusted EBITDA increased to $225.6 million in 2025, from $167.6 million in 2024,2024. fromThe $73.1 millionincrease in 2023.Adjusted ThisEBITDA improvement wasis primarily due to strongcost-saving operationalmeasures discipline,implemented proactivein costrecent management,years, including reduced investments in brand marketing and highervendor marginspend revenueand growth.workforce reductions.

Adjusted EBITDA is not prepared in accordance with, and is not an alternative to, financial measures prepared in accordance with generally accepted accounting principles in the United States, which we refer to as U.S. GAAP. See “Key Financial and Operational Metrics—Non-GAAP Financial Measures” below for a definition of adjusted EBITDA and forEBITDA, information regarding our use of adjusted EBITDAEBITDA, and a reconciliation of adjusted EBITDA to net income (loss),income, the most directly comparable financial measure prepared under U.S. GAAP.

We monitor the followingThe key financial and operational metrics that we monitor to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.decisions were as follows as of or for the periods presented:

*Not meaningful (1)Adjusted EBITDA is not prepared in accordance with, and is not an alternative to, financial measures prepared in accordance with U.S. GAAP. See “—Non-GAAP Financial Measures” below for the definition of adjusted EBITDA, information regarding our use of adjusted EBITDA, and a reconciliation of adjusted EBITDA to net income (loss),income, the most directly comparable financial measure prepared under U.S. GAAP.

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 ourthe workUpwork marketplace,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.business” in Part I, Item 1A of this Annual Report.

GSV represents the amounttotal ofdollar businessvalue transacted through ourall workUpwork marketplace.platforms and other workforce solutions. The primary component of GSV is client spend, which we define as the total dollar amount that clients spend onfor ourtalent offerings.services through such platforms and other workforce solutions. GSV also includes feesother chargedclient toand talent andvalue-added clients,services, such as forAI-based transacting payments through our work marketplace,services, purchases of Connects, talentpayment processing, memberships, and foreign currency exchange.services.

Marketplace revenue represents the revenue derived from the Upwork Marketplace and is the primary driver of our business,business. and weWe believe itMarketplace revenue 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 ourthe Marketplace,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.customers, which is included in Marketplace revenue.

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 ourthe MarketplaceUpwork offerings.Marketplace. Marketplace take rate is an important metric because it is the key indicator of how well we monetize spend on ourthe workUpwork marketplace from our Marketplace offerings.Marketplace.

We define an active client as a client that has had spend activity on ourany workUpwork marketplaceplatform 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 primary driver of GSV and, in turn, Marketplacerevenue revenue.generated across our platforms and workforce solutions.

Marketplace Revenue. Marketplace revenue is primarily generated from talent service fees, and to a lesser extent, client marketplace fees. We maintain a flat talent service fee of 10% for talent working with clients on our Marketplace offerings. 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.

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.

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

Our Enterprise Solutions offeringofferings includes access to additional product features, premium access to top talent, professional services, custom reporting, and flexible payment terms. Revenue from our Enterprise Solutions offeringofferings includes all client fees, subscriptions, and talent service fees. For our Enterprise Solutions offering,offerings, 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 offeringofferings can also subscribe to a compliance service that includes worker classification services for an additional fee and may also choose to use ourthe workUpwork marketplaceMarketplace to engage talent that were not originally sourced through ourthe workUpwork marketplaceMarketplace for a lower fee percentage.

Through our Managed Services offering, we are responsible for providing services and engaging talent directly or as employees of Ascen and its subsidiaries or 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.

General and Administrative. General and administrative expense consists primarily of personnel-related costs for our executive, finance, legal, human resources, and operations functions;functions, outside consulting, legal, and accounting services;services, and insurance.

Other Income (Expense),Income, Net

Other income (expense),income, net consists primarily of interest income that we earn from our operating investments, namely our deposits in money market funds and investments in marketable securities, interest expense on our outstanding borrowings, as well as gains and losses from foreign currency exchange transactions.

Income Tax Benefit (Provision) Benefit

We account for income taxes in accordance withusing the asset and liability method, which involvesrequires recognizingthe recognition of deferred tax assets and liabilities for the expected future tax effects of temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the periods in which those amounts are realized or settled. We establish a valuation allowance to thereduce extentdeferred thattax assets when it is more likely than not that deferred taxsuch assets will not be recoverablerealized againstbased on future taxable income.income or available tax planning strategies.

In addition, theThe calculation of income tax liabilities involvesrequires dealing with uncertaintiesjudgment in the application of complex tax laws and regulations. We recognize potential liabilities based on an estimate of whether, and the extent to which, additional taxes will be due. We account forevaluate uncertain tax positions in accordance with the relevantapplicable guidance, which prescribes a two-step process for recognition threshold and measurementmeasurement. approachFirst, for uncertain tax positions taken or expected to be taken in our income tax return, and also provides guidance on recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The guidance utilizes a two-step approach for evaluation of uncertain tax positions. The first step is towe determine ifwhether the weight of available evidence indicates a tax positionit is more likely than not tothat a tax position will be sustained upon audit.examination Thebased secondon stepits istechnical tomerits. Second, for positions that meet the recognition threshold, we measure the tax benefit as the largest amount that is more likely than not to be realized on ultimateupon settlement. A liability is reportedLiabilities for unrecognized tax benefits resultingare fromrecorded uncertain taxfor positions takenthat do not meet the recognition threshold or expectedare tonot bemeasured takenat inthe afull taxamount return.claimed. Any interestInterest and penalties related to unrecognized tax benefits are recorded as income tax expense.

Enterprise revenue represented 14% of total revenue forDuring the year ended December 31, 20242025, andGSV increased by $4.2 million, or 4%,1% compared to 2023,2024. dueThe toincrease increasedin revenueGSV fromwas our Managed Services offerings,primarily driven by newthe spendexpansion fromof existingLifted clients.and customer experience improvements.

For the year ended December 31, 2024,2025, cost of revenue increased by $3.6 million, or 2%,slightly compared to 2023,2024, primarily due to increasesa in the cost of talent services to deliver Managed Services revenue of $5.0$3.8 million andincrease in amortization expense related to internal-use software and platform development and a $2.9 million increase in cost to deliver our Managed Services offering, largely driven by contract termination costs ofresulting $4.1 million, offset byfrom a reduction in paymentwork processingvolume feesunder a client contract. These increases were partially offset by reductions of $2.6$3.6 million. For the year ended December 31, 2024, gross margin increased to 77%, compared to 75%million in 2023,data primarilycenter drivenand bycustomer thesupport increasecosts and $2.4 million in Marketplacecosts revenue.associated with our internal service delivery resources, reflecting hosting optimization efforts and workforce reductions.

•The applicability of sales, use, and other tax laws or regulations onto our business could subject us or our customers to additional tax liability and related interest and penalties, and adversely impact our business.

•Our indebtedness could limit the cash flow available for our operationsoperations, and exposethe restrictive and financial covenants under our Credit Agreement could limit our operational flexibility, exposing us to risks that could adversely affect our business, operating results, and financial condition.

Clients have diverse options to find and engage service providers, including other online or offline platforms, staffing firms and agencies, by engaging service providers directly, or by hiring temporary, full-time, or part-time employees directly or through an agency. Clients may decrease or cease their use of our platforms and other workforce solutions and our revenue may be adversely impacted for many reasons, including: if we fail to attract and retain talent; if the quality or types of services provided, or the pricing offered, by talent are not satisfactory to clients; or if AI tools provide a suitable replacement for traditional talent tasks. Further, expenditures by clients may be cyclical and may reflect overall macroeconomic conditions or budgeting patterns. For example, GSV and active clients declined during the three and six months ended June 30, 2026, driven by the evolving impact of AI on certain categories of freelance work and on new client acquisition and retention, as well as macroeconomic uncertainty. The loss of a key client could have an adverse effect on our business.

We have experienced growth in a relatively short period of time and expect to invest in our growth in the future. However, our historical growth should not be considered indicative of our future performance, and there can be no assurance that we will be able to sustain our historical growth rates or that any future investments in growth will be successful or cost-effective. For example, for the three and six months ended June 30, 2026, GSV decreased 4% and 2%, respectively, as compared to the same periods in 2025 and total revenue decreased 2% for the three months ended June 30, 2026, compared to the same period in 2025. Moreover, sustaining our growth in future periods will become more difficult in periods of macroeconomic uncertainty, elevated interest rates, and inflation. To manage any future growth, we must improve our systems, motivate and effectively manage and train our workforce, and successfully manage the risks, challenges, and uncertainties associated with our business. If we are unable to grow successfully without compromising the quality of our offerings or customer experience, or if new systems that we implement to assist in managing our growth do not produce the expected benefits, our business, operating results, and financial condition could be adversely affected.

Changes in our offerings and pricing model and the continued evolution of our business strategy and brand positioning subject us to a number of uncertainties, including our ability to plan for and project future growth and performance. Creating or modifying offerings is expensive and time consuming, diverts the attention of management, and may not be successful or cost-effective to maintain. In addition, we have in the past seen, and may in the future see, unexpected or unintended negative effects as a result of changes to our pricing model, offerings, and sales and marketing efforts, including increased customer dissatisfaction, harm to our reputation, increased circumvention rates, reductions in the number, size, or completion rate of client projects, or a failure to attract and retain customers. Additionally, implementing changes to business strategies could result in furloughs, layoffs, and reductions in force, such as ourthe restructuring2026 planRestructuring announced in OctoberMay 2024.2026. If there are unforeseen expenses associated with such realignments in our business strategies, and we incur unanticipated charges or liabilities, then we may not be able to effectively realize the expected cost savings or other benefits of such actions. Any negative impacts resulting from changes to our business strategy, offerings, or pricing model could adversely impact our business, operating results, and financial condition.

We rely on banks and payment partners to provide us with corporate banking services, escrow trust accounts or other regulated accounts, and clearing, processing, and settlement functions for the funding of all transactions on our platforms and disbursement of funds to customers. Our banking and payment partners are critical to our business, and we may not always have a sufficient surplus ofalternative vendors in the event one or more relationships are terminated or interrupted for any reason. This could occur for a number of reasons, including the following:

To grow and maintain our business, offerings, and features, we need to continue to establish and maintain relationships with third parties, such as staffing providers, software and technology vendors, including third-party providers of AI technologies, and payment processing and disbursement providers. We also have several partnerships that enable us to integrate AI tools into the Upwork Marketplace aimed at improving customer experience and productivity. As our agreements with third-party partners terminate or expire, we may be unable to renew or replace these agreements on favorable terms or at all. Some of our strategic partners offer, or could offer, competing products and services or also work with our competitors. Moreover, we cannot guarantee that the parties with which we have strategic relationships will continue to offer the services for which we rely on them at economically reasonable terms or at allall, maintain compliance with applicable regulations or usage restrictions, or devote the resources necessary to expand our reach, increase our distribution, or support an increased number of customers. If we are unsuccessful in establishing or maintaining our relationships with third parties on favorable terms, these relationships are not successful in improving our business, or one or more of our partners materially changes its business, our business, operating results, and financial condition may be adversely impacted.

We expect that badBad actors willuse continueincreasingly sophisticated methods, including AI, to attempt to use our platforms to engage in unlawful or fraudulent conduct.conduct on our platforms. This conduct may include unauthorized or fraudulent acquisition or use of data, money laundering, moving funds to regions or persons restricted by sanctions or export controls, terrorist financing, fraudulent sale of services, bribery, breaches of security, extortion or use of ransomware, distribution or creation of malware or viruses, and piracy or misuse of software and other copyrighted or trademarked content.

Our controls relating to customer identity verification and authentication and fraud detection controls are complex, require continuous improvement, and may not be effective in detecting and preventing misconduct.misconduct, including as we expand our AI-enabled products and features. Further, while we take steps to improve our trust and safety program through the use of algorithms and machine learning techniques, any required or inadvertent disclosure of our security techniques or new laws restricting our use of them may make our efforts to prevent fraud or the improper use of our platforms less effective and increase the risk of harm to our customers. If our controls are not effective, any of the following could result, each of which could harm our reputation, divert the attention of management, and adversely impact our business, operating results, and financial condition:

We incorporate AI and machine learning technologies across our platforms, offerings, and internal operations and are making further investments in expanding our AI capabilities. In addition, GSV from AI-related work performed on the Upwork Marketplace has increased as demand for AI talent has grown in recent periods. As with many innovations, AI presents new and evolving risks and challenges that could undermine or slow its adoption or cause us to experience brand or reputational harm, competitive harm, legal liability, new or enhanced governmental or regulatory scrutiny, and to incur additional costs to resolve such issues, each of which could adversely impact our business, operating results, and financial condition. For example, AI outputs may be, or alleged to be, deficient, inaccurate, inappropriate, biased, or infringing on the intellectual property rights of third parties. Perceived or actual technical, legal, compliance, privacy, security, ethical, or other issues relating to the use of AI may cause public confidence in AI generally or in our use of AI to be undermined, which could slow our customers’ adoption of our offerings, services, and features that use AI or result in a decrease in demand for AI-related work. In addition, the rapid evolution of AI will require significant resources to develop, integrate, and maintain the AI technologies included in our offerings, services, and features in order to remain competitive and to implement these technologies responsibly and minimize unintended or harmful impacts. Moreover, our use of third-party AI technologies and the costs associated with such use, including usage-based pricing, may be higher than anticipated and increase over time. There can be no assurance that the developmentdevelopment, deployment, and deploymentuse of such technologies will be successful or cost effective.

Disputes sometimes arise between talent and clients, including with respect to service standards, payment, confidentiality, work product, and intellectual property ownership and infringement. If either party believes the contract terms were not met, the service agreements negotiated between our customers and our default terms provide a mechanism for the parties to request assistance from us and, for some contracts, a third-party arbitrator. If customer disputes are not resolved amicably, the parties might escalate to formal proceedings. Given our role in facilitating and supporting customers’ interactions, claims may be brought against us directly and talent or clients may bring us into claims filed against each other, particularly when one party is insolvent or facing financial difficulties. We generally disclaim responsibility and liability for disputes between customers; however, we cannot guarantee that these disclaimers will be effective in preventing or limiting our involvement in customer disputes, enforceable, or otherwise effectively prevent us from incurring liability. Disputes with or between customers may become more frequent based on the services offeredoffered, such as AI-powered features that automate or facilitate customer activity on our platforms, or conditions outside our control, such as a macroeconomic downturn or actions of bad actors seeking to take advantage of other customers. Such disputes, or any increase in the number of disputes, may adversely affect our business, operating results, and financial condition.

In addition, search engines and other channels that we use to drive customers to our websites and mobile applications periodically change their algorithms, policies, and technologies, sometimes in ways that cause traffic to our websites and mobile applications to decline. These changes can also result in an interruption in customers’ ability to access our websites or a misunderstanding among potential customers regarding the functionalities or purposes of our platforms. We may also be forced to significantly increase marketing expenditures in the event that market prices for online advertising and paid listings escalate or our organic ranking decreases. For example, AI-generated search alternatives and AI-related and other changes to search engine results pages have emerged recently, affecting new customer acquisition and resulting in changes to our customer acquisition strategy. Any of these changes could have an adverse impact on our customer acquisition, business, operating results, and financial condition.

The market for contingentperforming talent and the clients that engage themwork is highly competitive, rapidly evolving, fragmented, and subject to changing technology, shifting needs, and frequent introductions of new competitors as well as new offerings and services. We compete with a number of online and offline platforms and services domestically and internationally, as well as traditional staffing firms. Our main competitors fall into the following categories:

In addition, well-established internet companies, social media platforms, and businesses that operate driving, delivery, and other commoditized marketplaces,marketplaces have entered or may decide to enter our market segment.

There is significant uncertainty and unpredictability in the worker classification regulatory landscape and the application of worker classification laws, which are highly fact-sensitive, subject to divergent interpretations by various authorities, and regularly subject to further regulation, amendment, or re-interpretation. As a result, there is risk to us and our customers that independent contractors could be deemed to be misclassified under applicable law, including as a result of changes in our offeringsofferings, such as the use of AI on our platforms and other workforce solutions, or brand positioning that we may introduce. For example, in California, Assembly Bill 5 is widely viewed as expanding the scope of the definition of “employee” for most purposes under California law. However,Despite followingsubsequent theamendments, law’sexemptions, effectiveness in January 2020litigation, and subsequent amendments and challenges, there is little guidance from the courts or the regulatory authorities charged with its enforcement andactivity, thereuncertainty remains a degree of uncertainty regarding its application.application to certain business models, including marketplace and managed-service arrangements. Further, in January 2024, the U.S. Department of Labor published a final rule regarding the classification of workers as independent contractors or employees under the Fair Labor Standards Act. In February 2026, the U.S. Department of Labor released a Notice of Proposed Rulemaking proposing to rescind and replace the 2024 final rule. However, disparate standards that may apply in private litigation and under state law, and the continued regulatory uncertainty, may contribute to confusion and complicate compliance efforts for our customers. Other federal agencies, U.S. states, or jurisdictions outside the United States may enact similar legislation or rules. Disparate standards that may apply in private litigation, under state and federal law, and in jurisdictions outside the United States, together with continued regulatory uncertainty, may contribute to confusion and complicate compliance efforts for our customers.

We expect that there will continue to be new laws, regulations, and industry standards concerning privacy, data protection, automated processing, and information security. For example, Europe’s General Data Protection Regulation, which we refer to as the GDPR, the UK General Data Protection Regulation, and Europe’s Digital Services Act impose stringent data protection and data handling compliance requirements and provide for significant penalties for noncompliance. In California, the CCPA, as amended by the California Privacy Rights Act, requires, among other things, covered companies to provide certain disclosures to California consumers and affords such consumers certain rights, including the right to opt-out of certain sales of personal data. The CCPA also provides for civil penalties for violations as well as a private right of action for data breaches that may increase data breach litigation. A growing number of U.S. states have enacted similar or other data protection legislation that havehas or will go into staggered effect in the near future, and several other states and countries are considering expanding or passing privacy laws in the near term.

The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, including in the areas of consumer protection, intellectual property, cybersecurity, and privacy and data protection.protection, and worker classification. Compliance with new and emerging laws, regulations, and industry standards relating to AI in the United States and internationally, such as U.S. state regulations and the E.U. AI Act, may impose significant operational costs and may limit our, our vendors’, or our customers’ ability to develop, deploy, or use existing or future AI technologies.technologies, products, and features. Furthermore, the interplay between AI laws and regulations and those governing data protection is complex, jurisdiction-specific, and continuing to evolve. Our use of data, including customer data, in connection with developing, training, or improving our AI technologies may be subject to evolving legal requirements and customer expectations, and any perceived or actual misuse of such data could result in reputational harm, reduced customer trust, regulatory scrutiny, or legal liability. As a result, our ability to adapt our existing platforms and offerings or develop new offerings, services, and features using AI may be limited or restricted, third-party providers of AI technologies may limit, restrict, or terminate our access to or use of their offerings or impose more restrictive terms, and demand for AI-related work may decline, which could adversely impact our business, operating results, and financial condition.

Any litigation or other disputes relating to allegations of intellectual property infringement could divert management attention and resources, subject us to significant legal costs and liability for damages or new licenses, invalidate our proprietary rights, or require us to alter our platforms, or marketing strategy or other aspects of our business.

Moreover, we cannot ensure that our processes for controlling our use of open source software in our platforms will be effective. If we have not complied with the terms of an applicable open source software license, we may need to seek licenses from third parties to continue offering a platform and the terms on which such licenses are available may not be economically feasible, and we may be required to re-engineer a platform to remove or replace the open source software, discontinue offering the platform, pay monetary damages, or make available the source code for aspects of our proprietary technology, any of which could adversely affect our business, operating results, and financial condition.

We have incurred net losses in the past, and as of December 31, 2024, we had an accumulated deficit of $78.5 million. While we were in a retained earnings position as of MarchJune 31,30, 2026, we have made, and expect to continue to make in the future, significant expenditures related to the development and expansion of our business, including the launch and ongoing development of Lifted. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently, or at all, to offset these higher expenses. While our GSV and revenue have grown in recent years, we may not be able to sustain the same level of growth in future periods, or at all. For example, for the three and six months ended June 30, 2026, GSV wasdecreased relatively4% flatand 2%, respectively, as compared to the same periods in 2025 and total revenue increaseddecreased 1%2% for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025. In addition, although our profitability has improved in recent periods, if our revenue declines or fails to grow at a rate faster than increases in our operating expenses, we will not be able to maintain profitability in future periods and the trading price of our common stock could decline.

The applicability of sales, use, and other tax laws or regulations onto our business could subject us or our customers to additional tax liability and related interest and penalties, and adversely impact our business.

We are subject to numerous taxes and tax collection obligations in the U.S. and other foreign jurisdictions. Significant judgment is required to evaluate applicable tax obligations and in many cases the ultimate tax determination is uncertain because it is not clear how new and existing statutes might apply to our business. As a result, we may recognize additional tax expense and be subject to additional tax liabilities, including other liabilities for tax collection obligations due to changes in federal, state, and international tax laws, statutes, rules, regulations, or ordinances; changes to our business operations; changes in taxing jurisdictions and administrative interpretations and applications; results of tax examinations, settlements, or judicial decisions; or changes in accounting principles. Moreover, a number of countries and intergovernmental organizations have recently proposed, recommended, or enacted new laws or changes to existing laws that could impact our tax and reporting obligations or add new compliance costs to our business to administer, assess, collect, and remit those taxes, and countries may propose or enact new laws that tax our or our customers’ activities in response to the imposition of new trade barriers. These changes may happen with little or no advance notice or implementation time, which can increase various short termshort-term costs of compliance. The impact and burden of these regulations and proposed regulations on our business and the businesses of our customers is uncertain and may have a negative impact on our business.

To support our growth and business strategy, such as developing new features or enhancements to our platforms and other workforce solutions and improving our infrastructure, we have made and expect to continue to make significant financial investments in our business. In addition, we may, from time to time, seek to acquire or strategically invest in other complementary products, technologies, or businesses, or repurchase outstanding shares of our common stock or the Notes. For example, during the threesix months ended MarchJune 31,30, 2026, we repurchased $107.9$109.7 million of our common stock under the Share Repurchase Authorizations. As of MarchJune 31,30, 2026, we had no remaining balance under the 2025 Share Repurchase Authorization and $256.1$254.3 million available under the 2026 Share Repurchase Authorization for repurchases of our common stock. We may need to engage in equity or debt financings to obtain the funds required for these investments, acquisitions, and other business endeavors. If we raise additional funds through equity or convertible debt issuances, our existing stockholders may suffer significant dilution and these securities could have rights, preferences, and privileges that are superior to those of holders of our common stock. If we obtain additional funds through debt financing, we may not be able to obtain such financing on terms favorable to us. Such terms may involve additional restrictive covenants making it difficult to engage in capital raising activities and pursue business opportunities, including potential acquisitions and strategic investments. If we are unable to obtain adequate financing on terms satisfactory to us or at all, our ability to continue to support our business growth and business strategy could be significantly impaired and our business, operating results, and financial condition may be adversely affected.

During the threesix months ended MarchJune 31,30, 2026, we repurchased and subsequently retired 8.18.3 million shares of our common stock for an aggregate amount of $107.9$109.7 million under the Share Repurchase Authorizations, and we had $256.1$254.3 million available for repurchases under the 2026 Share Repurchase Authorization as of MarchJune 31,30, 2026. The actual timing and amount of any repurchases under the 2026 Share Repurchase Authorization will depend on a variety of factors, including stock price, trading volume, market and business conditions, regulatory requirements, and other considerations, all of which may be impacted by factors outside of our control. The 2026 Share Repurchase Authorization could affect the trading price of our common stock, increase volatility, and diminish our cash and cash equivalents and marketable securities available to fund working capital, repayment of debt, capital expenditures, strategic acquisitions, investments, or business opportunities, and other general corporate purposes. The 2026 Share Repurchase Authorization may be suspended, terminated, or modified at any time for any reason, and we cannot guarantee that any share repurchase authorization will be fully consummated, or at all, or that itany share repurchases will enhance long-term stockholder value.

In addition, our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, which we refer to as the DGCL, our restated certificate of incorporation, or our amended and restated bylaws, any action asserting a claim against us that is governed by the internal affairs doctrine, or any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL. Our amended and restated bylaws also provide that the federal district courts of the United States would be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to this provision. WeWhile note,the however,Delaware thatSupreme Court has upheld the facial validity of a federal forum provision for Securities Act claims, there isremains uncertainty as to whether aand courtin wouldwhat circumstances courts outside Delaware will enforce thissimilar provision.provisions. These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees.

Risks Related to Our Convertible Senior NotesIndebtedness

Our indebtedness could limit the cash flow available for our operationsoperations, and exposethe restrictive and financial covenants under our Credit Agreement could limit our operational flexibility, exposing us to risks that could adversely affect our business, operating results, and financial condition.

In August 2021, we issued the Notes. The Notes are senior, unsecured obligations and bear interest at a rate of 0.25% per year. The Notes will mature on August 15, 2026, unless earlier redeemed, repurchased, or converted in accordance with the terms of the Notes. In March 2023, we repurchased a portion of the outstanding Notes, and, as of MarchJune 31,30, 2026, $361.0 million aggregate principal amount of the Notes remained outstanding. In June 2026, we entered into the Credit Agreement providing the Revolving Credit Facility, which matures in June 2029. The Revolving Credit Facility is secured by liens on substantially all of our assets and those of our subsidiary guarantors, contains financial and other restrictive covenants, and bears interest at variable rates. As of June 30, 2026, we had no borrowings outstanding and $150.0 million of borrowing capacity available under the Revolving Credit Facility. We may also incur additional indebtedness to meet future financing needs. Our indebtedness could have significant negative consequences for our stockholders and our business, operating results, and financial condition by, among other things:

•limiting our flexibility to plan for, or react to, changes in our businessbusiness, including our ability to pursue or fund strategic initiatives or acquisitions;

Over the past several years, we have continued to execute on our strategic initiatives designed to drive sustainable growth and profitability, and improve operational efficiency. These initiatives have centered around four key growth drivers: (i) enhancing monetization and the supply and demand characteristics of the Upwork Marketplace with new ads products and other offerings, enhancing existing offerings, and optimizing our Connects pricing model; (ii) expanding our Enterprise offerings through enhanced solutions and strategic partnerships that enable us to serve a broader range of client segments and deliver end-to-end contingent workforce solutions through Lifted; (iii) expanding our small and medium-sized business, which we refer to as SMB, offerings and support through tailored solutions such as Business Plus; and (iv) advancing our AI capabilities and AI-native experiences, including through Uma™, our proprietary AI work agent, and other AI-driven features that enhance productivity for talent and clients across the Upwork Marketplace. While the execution of these initiatives contributed to Marketplace take rate expansion for the three and six months ended June 30, 2026, GSV and active clients declined during these periods driven by the evolving impact of AI on certain categories of freelance work and on new client acquisition and retention, as well as macroeconomic uncertainty. We expect these headwinds to continue to impact GSV, active clients, and revenue in the remainder of 2026, while our cost reduction efforts are expected to support continued adjusted EBITDA growth, subject to market conditions and execution. For example, in May 2026, we initiated the 2026 Restructuring to reduce our cost structure and improve operational efficiency, which contributed to adjusted EBITDA growth despite lower revenue and net income for the three and six months ended June 30, 2026.

TheMarketplace executionrevenue of these initiatives delivered measurable financial benefits across our business and contributeddecreased to Marketplace$166.9 takemillion, rateor expansion and revenue growth(2)%, for the three months ended MarchJune 31, 2026. Marketplace revenue increased to $170.7 million, or 3%, for the three months ended March 31,30, 2026, as compared to $166.3$170.7 million in the same period in 2025. Marketplace revenue was relatively flat for the six months ended June 30, 2026, as compared to the same period in 2025. Marketplace take rate increased to 19.4%19.6% and 19.5% for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to 18.3%18.5% and 18.4% in the same periodperiods in 2025, respectively, reflecting the growing contributions from ads and monetization products.

Enterprise revenue decreasedincreased to $24.8 million, or (6)%,2%, for the three months ended MarchJune 31,30, 2026, as compared to $26.4$24.3 million in the same period in 2025,2025. largelyEnterprise duerevenue decreased to a$49.6 reductionmillion, or (2)%, for the six months ended June 30, 2026, as compared to $50.7 million in client spend resulting from reduced efforts to acquire new customers as we prioritized the transitionsame ofperiod Enterprisein clients to the Lifted platform.2025. Unless otherwise indicated, Enterprise results discussed herein include the results of Ascen and Bubty following the date that each was acquired by Lifted.

During the three months ended MarchJune 31,30, 2026, we generated net income of $31.5$25.4 million and adjusted EBITDA of $64.1 million, compared to net income of $37.7$32.7 million and adjusted EBITDA of $57.1 million during the same period in 2025. TheDuring decreasethe insix months ended June 30, 2026, we generated net income primarilyof reflects$56.9 increasedmillion costand adjusted EBITDA of revenue$121.5 million, as compared to net income of $70.5 million and operatingadjusted expensesEBITDA drivenof by$113.1 ourmillion continuedduring investmentthe same period in the business, partially offset by revenue growth.2025.

In the third quarter of 2025, we refined our definition of GSV to better align with the continued evolution of our business model and service offerings, including as a result of Lifted’s acquisitions of Bubty B.V., which we refer to as Bubty, and Ascen Inc., which we refer to as Ascen. This change does not impact previously reported GSV amounts or affect the comparability of GSV across periods, and no historical periods have been recast.

(12) For each of the three months ended MarchJune 31,30, 2026 and 2025, we incurred $0.2 million 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 2018.2018, and for each of the six months ended June 30, 2026 and 2025, we incurred $0.4 million of such expense.

•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,costs; and

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

ForDuring the three and six months ended MarchJune 31,30, 2026, MarketplaceGSV revenuedecreased increased4% byand $4.42%, million,respectively, or 3%,as compared to the same periodperiods in 2025,2025. The decreases for both periods were primarily driven by higherdeclines revenuein fromclient adsacquisition and monetizationretention, products,partially asoffset wellby asgrowth increasedin adoptionEnterprise Solutions driven by the acquisition of Business Plus.Ascen.

For the three months ended March 31, 2026, Enterprise revenue decreased by $1.6 million, or 6%, compared to the same period in 2025. This decline was primarily driven by decreases in both Managed Services revenue and Enterprise Solutions revenue, both reflecting reduced client spend resulting from reduced efforts to acquire new customers as we focused on the transition of Enterprise clients to the Lifted platform. During the three and six months ended MarchJune 31,30, 2026, we focused on supporting existing Enterprise clients, while continuing to invest in the development of Lifted, which drove improvements in year-over-year spend per active Enterprise client. Investment in the expansion of Lifted is expected to support growth in Enterprise revenue infor the remainder of 2026, subject to market conditions and execution.

For the three and six months ended MarchJune 31,30, 2026, cost of revenue increased by $2.8$1.9 million, or 7%,4%, and $4.7 million, or 6%, respectively, compared to the same periodperiods in 2025. The increaseincreases waswere primarily driven by aincreases $2.9of $2.2 million increaseand $5.1 million, respectively, in amortization of capitalized internal-use software and platform development costs related to projects placed into service in 2025, partially offset by adecreases $0.2of $0.6 million decreaseand $0.8 million, respectively, in the cost of talent services tocosts deliverassociated with lower Managed Services revenue.client activity. The increases in amortization reflect the Company’s continued investments in internal-use software and platform development.

For the three and six months ended MarchJune 31,30, 2026, gross margin decreased to 77%76% and 77%, respectively, as compared to 78% in the same periodperiods in 2025, primarily reflecting the impact of higher amortization of capitalized internal-use software and platform development costs as a percentage of revenue.costs.

For the three months ended MarchJune 31,30, 2026, research and development expense decreased by $2.8 million, or 6%, compared to the samedecrease period in 2025,was primarily driven by a $2.4$6.3 million reductionof inlower personnel-related costs reflecting lower corporate bonus expense and $4.0stock-based compensation expense, and $4.3 million of incremental internal-use software and platform development costs.costs capitalized in the period. These costsdecreases were partially offset by $6.9 million in charges related to the 2026 Restructuring, a $1.6 million increase in amortization of intangible assetsassets, and $1.0a $0.9 million ofincrease higherin hosting costs.

For the three and six months ended MarchJune 31,30, 2026, sales and marketing expense increaseddecreased by $1.7$1.8 million, or 5%, and $0.1 million, respectively, compared to the same periodperiods in 2025, primarily driven by a $3.9 million increase in marketing and advertising spend, partially offset by a $2.0 million decrease in personnel-related costs.2025.

For the threesix months ended MarchJune 31,30, 2026, general and administrative expense increased by $7.1 million, or 25%, compared to the sameincrease period in 2025,was primarily driven by a $4.2$3.1 million increase in personnel-relatedcharges costs, largely attributablerelated to the 2026 Restructuring, $5.6 million of higher stock-based compensation,compensation expense, and a $2.0$1.8 million increase in contractor and professional service feesfees, relatedpartially tooffset acquisitionby activities.$2.2 million lower personnel-related costs primarily reflecting a decline in corporate bonus expense.

For the three and six months ended MarchJune 31,30, 2026, provision for transaction losses decreasedincreased 2%,by $0.8 million and $0.7 million, respectively, compared to the same periodperiods in 2025, and representedrepresenting approximately 1% of revenue for each of the three and six months ended MarchJune 31,30, 2026 and 2025.2026.

Other income, net decreased by $1.3$1.9 million, or 21%,33%, and $3.2 million, or 27%, for the three and six months ended MarchJune 31,30, 2026, respectively, compared to the same periodperiods in 2025. The decreasedecreases waswere primarily due to lower interest income on cash and investment balances.

For the three months ended MarchJune 31,30, 2026, our income tax provision decreasedincreased by $1.0 millionmillion, or 17%, compared to the same period in 2025. Our effective tax rate increased to 20.9% compared to 14.9% for the same period in 2025, primarily attributable to lower income before income taxes. Our effective tax ratedeficiencies was 16.6% for the three months ended March 31, 2026 comparedrelated to 16.2%stock-based for the same period in 2025.compensation.

Our principal sources of liquidity are our cash and cash equivalentsequivalents, marketable securities, and marketableavailable securities.borrowings under our Revolving Credit Facility (as defined below). 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 MarchJune 31,30, 2026 and December 31, 2025, we had $328.4$476.0 million and $294.4 million in cash and cash equivalents, respectively. As of MarchJune 31,30, 2026 and December 31, 2025, we had $251.3$138.2 million and $378.4 million in marketable securities, respectively.

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 timing and extent of spending to support research and development efforts, investments to support and scale our Enterprise offerings, including integration costs associated with recent acquisitions, the expansion of sales and marketing activities, 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,stock, and our ability to obtain equity or debt financing.

To the extent existing cash and cash equivalents, cash from marketable securities, and cash from operationsoperations, and available borrowings under our Revolving Credit Facility are insufficient to fund our working capital and capital expenditure requirements, or should we require additional cash for other purposes, we will need to raise additional funds. In the future, we may attempt to raise additional capital through the sale of equity securities or through equity-linked or debt financing arrangements as we did with the offering of the Notes.arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership and economic interests of our existing stockholders will be diluted. If we raise additional financing by incurring additional indebtedness, we will be subject to additional debt service requirements and could also be subject to additional restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we incur may result in terms that could also be unfavorable to our equity investors. There can be no assurances that we will be able to raise additional capital on terms we deem acceptable, or at all. The inability to raise additional capital as and when required would have an adverse effect, which could be material, on our results of operations, financial condition, and ability to achieve our business objectives.

Our principal commitments consist of the Notes, future purchase commitments for cloud infrastructure and other services, and obligations under our non-cancellablenon-cancelable operating leases for office space.

Assuming the outstanding Notes are not converted into our common stock,converted, repurchased, or redeemed prior to maturity on August 15, 2026, (i) annual interest expense relating to the Notes will be $1.1$0.4 million for the remainder of fiscal year 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.”

In JulyJune 2024,2026, we commencedentered into a non-cancellablenon-cancelable agreement for cloud infrastructure and other services that contains future purchase commitments of $40.0$44.0 million over two years, with $20.0$22.0 million in each year. AsThe of March 31, 2026, we had $2.0 million remaining under this agreement, whichagreement expires onin May 1, 2026. We expect to renew this agreement upon expiration.2028.

As of MarchJune 31,30, 2026, we had total remaining purchase commitments of $4.2$39.7 million, consisting of $2.0$38.1 million under the cloud infrastructure agreement described above and $2.2$1.6 million under various other vendor agreements.

In September 2025, our board of directors authorized a share repurchase program for the repurchase of up to $100.0 million of shares of our outstanding common stock, which we refer to as the 2025 Share Repurchase Authorization. Under the 2025 Share Repurchase Authorization, we repurchased and subsequently retired 2.1 million shares of our common stock for an aggregate amount of $36.0 million, at an average price of $17.33 per share, from September 2025 through December 2025, and an additional 4.6 million shares for an aggregate amount of $64.0 million, at an average price of $14.00 per share, from January 2026 through March 2026. As of MarchJune 31,30, 2026, we had no remaining balance available for repurchases under the 2025 Share Repurchase Authorization.

In February 2026, our board of directors authorized a share repurchase program for the repurchase of up to $300.0 million of shares of our outstanding common stock, which is referred to as the 2026 Share Repurchase Authorization, and we refer to the 2026 Share Repurchase Authorization and the 2025 Share Repurchase Authorization together as the Share Repurchase Authorizations. Under the 2026 Share Repurchase Authorization, we repurchased and subsequently retired 3.53.7 million shares of our common stock for an aggregate amount of $43.9$45.7 million, at an average price of $12.37$12.31 per share, since the authorization in MarchFebruary 2026. As of MarchJune 31,30, 2026, we had $256.1$254.3 million available for repurchase under the 2026 Share Repurchase Authorization.

Collectively, duringDuring the three and six months ended MarchJune 31,30, 2026, we repurchased and subsequently retired 8.10.2 million sharesand 8.3 million shares, respectively, of our common stockstock, for an aggregate amount of $107.9$1.8 million and $109.7 million, at an average price of $13.28$11.16 and $13.24 per share, respectively, including fees associated with the repurchases and excluding excise tax, under the Share Repurchase Authorizations.

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 itthey 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 MarchJune 31,30, 2026 and December 31, 2025, funds held in escrow, including funds in transit, were $203.7$193.3 million and $180.8 million, respectively. We deposit a portion of funds held in escrow in interest-bearing checking accounts.

As of MarchJune 31,30, 2026 and December 31, 2025, $361.0 million aggregate principal amount of the Notes remained outstanding.

The Notes were issued in August 2021, pursuant to and subject to the terms and conditions of an indenture between us and Computershare Trust Company, National Association (as successor in interest to Wells Fargo Bank, National Association), as trustee. The Notes are senior, unsecured obligations and bear interest at a rate of 0.25% per year, payable semiannually in arrears, and are due August 15, 2026. Upon conversion, we have an option to pay or deliver, as the caseNotes may be,be cash,settled sharesin of our common stock, or a combination of cash and shares of our common stock.cash.

For the threesix months ended MarchJune 31,30, 2026, net cash provided by operating activities was $23.0$69.9 million, which resulted from net income of $31.5$56.9 million, non-cash adjustments of $25.8$52.7 million, and net cash outflows of $34.2$39.7 million from changes in operating assets and liabilities.

For the threesix months ended MarchJune 31,30, 2025, net cash provided by operating activities was $37.0$109.5 million, which resulted from net income of $37.7$70.5 million and non-cash adjustments of $18.1$42.8 million, and net cash outflows of $18.9$3.8 million from changes in operating assets and liabilities.

For the threesix months ended MarchJune 31,30, 2026, net cash provided by investing activities was $118.2$221.2 million, primarily driven by $128.3$240.2 million in proceeds from maturities of marketable securities, partially offset by $8.4$17.7 million in internal-use software and platform development costs and $1.7$3.3 million for purchases of property and equipment.

For the threesix months ended MarchJune 31,30, 2025, net cash used in investing activities was $5.2$56.7 million, which was primarily a result of investing $50.7$259.1 million in various marketable securities, $3.7$20.4 million cash paid for the acquisition of Bubty, $8.2 million in internal-use software and platform development costs, and $2.5$4.9 million for purchases of property and equipment. These outflows were partially offset by $232.4 million in proceeds from maturities of marketable securities and $3.5 million in proceeds from the sale of marketable securities.