Upwork Inc. Q4 FY2025 earnings call

• AI: AI functionality embedded in the marketplace, with over 50% GSV growth from AI-related work in 2025. Introduced AI-generated work summaries and advanced search/recommendation functionality. Ooma agent strategy outlined with human-agent collaboration showing superior outcomes. - SMB: Business Plus scaled quickly, with targeted marketing campaigns launched in Q4, driving active client growth and high spend. - Enterprise: Listed platform launched with a focus on integrating with large enterprise workflows, nurturing a strong pipeline of enterprise accounts.

In 2025, Upwork achieved over $4 billion in GSV, $788 million in revenue, and $226 million in adjusted EBITDA. Revenue growth was 2.4% and adjusted EBITDA margin was 29%. For Q4 2025, GSV grew 3% year-over-year, revenue grew 4%, and adjusted EBITDA margin was 27%. Regarding segments: AI-related work saw GSV surpass $300 million annualized in Q4, up over 50% year-over-year. SMBs: Business Plus, a purpose-built solution for SMBs, had active clients grow 49% sequentially in Q4 with 38% of these clients new to Upwork, and clients spend almost two and a half times the marketplace average. Enterprise: Listed was launched, with Lyft winning two new clients, and a focus on prioritized enterprise accounts with over $50 million in annual contingent spend.

• Full year 2026: Expected GSV growth 4%-6%, revenue growth 6%-8% ($835-$850 million), adjusted EBITDA margin ~29% ($240M-$250M). - Q1 2026: Adjusted EBITDA guided $45M-$47M (margin 23%-24%), non-GAAP diluted EPS $0.26-$0.28. - Expect sequential growth in GSV, total rate, and revenue starting Q2 2026, driven by Lyfted integration and ramp.

• Risks from SEC filings and market uncertainties affecting actual results. - Integration risks associated with the Lyfted platform rollout and associated investments.

Q: Eric Sheridan asked about how to think about investments scaling in 2026 and momentum building.

A: Erica Gessert responded that there's a ramp throughout the year in GSV and revenue, with Lyfted expected to onboard and ramp customers in the back half, and marketplace growth levers like AI and Business Plus showing strong trajectories.

Q: Ron Josey inquired about AI search/recommendation functionality benefits and Business Plus marketing results.

A: Hayden Brown discussed AI search features like Ooma Recruiter improving time to hire, and Erica Gessert mentioned Business Plus campaigns with high client spend and good yields.

Q: John Young asked about Q1 guide seasonal factors and top-of-funnel impact.

A: Erica Gessert explained Q1 is a bridge quarter with enterprise investments and marketplace focus on larger clients, and early positive yields on GEO marketing channels.

Q: Maria Ripps asked about active client trends and AI talent bottlenecks.

A: Erica Gessert noted improving churn rates and positive top-of-funnel yields, while Hayden Brown stated no talent gap with AI category growth and OpenAI partnership for talent certification.

Q: Matt Condon asked about enterprise client demand and variable freelancer fee.

A: Hayden Brown spoke to healthy enterprise funnel and Erica Gessert discussed variable freelancer fee rollout starting Q1 with gradual expansion.

Q: Bernie McTernan asked about Business Plus go-to-market and enterprise GSV trends.

A: Hayden Brown highlighted Business Plus success with new and existing clients, and Erica Gessert explained enterprise revenue holding pattern with Lyfted ramp in back half.

Q: Rohit Kulkarni asked about AI client spend drivers and agent workflow.

A: Erica Gessert mentioned higher rates and project scope in AI spend, and Hayden Brown elaborated on human-agent collaboration workflow with HAPI benchmark showing improved success rates.

Q: Josh Chan asked about EBITDA bridge and enterprise milestones.

A: Erica Gessert discussed Q4 integration costs and Q1 temporary investments, and Hayden Brown spoke to enterprise pipeline and milestones for Lyfted platform rollout.

Q: Brad Erickson asked about marketplace headwinds and M&A.

A: Hayden Brown mentioned writing/translation category headwinds and Erica Gessert noted focus on long-term relationships, with Hayden Brown stating M&A considered for AI, SMB, or enterprise strategic fits.

Q: Marvin Fong asked about listed clients and Q1 guidance.

A: Hayden Brown spoke to listed client ideal profile and Erica Gessert explained Q1 enterprise revenue decline and new client spend ramp over time.