Following the market close on Monday, Upwork Inc (NASDAQ: UPWK) disclosed its financial results for the fourth quarter of 2025. The company surpassed Wall Street forecasts in both revenue and adjusted earnings per share, yet its cautious outlook for the upcoming quarters weighed heavily on investor sentiment.
In the final quarter of 2025, Upwork reported revenue amounting to $198.41 million, slightly outpacing analyst projections which had anticipated $197.52 million. This figure represents a 4% increase compared to the same quarter in the previous year. The adjusted earnings per share reached 36 cents, also exceeding the estimated 31 cents per share forecast by analysts.
Active client count stood at 785,000 by the end of the quarter, reflecting the company’s substantial user base. Alongside this, the gross services volume per active client was $5,129, marking a 7% increase year-over-year, underscoring enhanced engagement or spending on the platform services.
Operational cash flow was robust, with Upwork generating $63.7 million in cash from operations, and free cash flow amounted to $57.3 million during the quarter. The company highlighted that 2025 was a pivotal year with strategic initiatives focused on reshaping the platform to leverage human-plus-artificial intelligence collaboration effectively.
Hayden Brown, Upwork’s president and CEO, remarked on the company’s transformation, stating, "2025 marked the year we rebuilt Upwork for the age of human-plus-AI collaboration, turning global change into a definitive tailwind, all while demonstrating strong financial performance. We enter 2026 as the leader of a new category, serving as the operational backbone for businesses navigating this new AI era of work." This emphasizes the company's strategic positioning amidst technological advancements.
During the quarter, Upwork repurchased approximately two million shares for $34 million. As of December 31, 2025, the company retained $64 million available in its buyback program. Additionally, liquidity remained strong with cash and cash equivalents totaling $294.36 million at quarter end.
Looking forward, Upwork presented a tempered revenue forecast for the first quarter of 2026. The company expects quarterly revenue to range between $192 million and $197 million, which falls short of the $200.83 million anticipated by market analysts. Furthermore, projected adjusted earnings per share are $0.26 to $0.28, below the consensus estimate of $0.34 per share.
For the full fiscal year 2026, Upwork anticipates revenue between $835 million and $850 million, marginally encompassing the analyst forecast of approximately $836.15 million. The estimated full-year adjusted earnings per share are expected between $1.43 and $1.48, slightly above the consensus estimate of $1.42.
The cautious tone in Upwork's initial quarter guidance appears to have negatively impacted its share price during extended trading hours. At the time of publication Monday evening, Upwork shares had declined approximately 22.35%, trading at $14.59, signaling market concerns over near-term growth prospects.
An earnings call with company executives was scheduled for 5 p.m. Eastern Time, offering investors and analysts further opportunities to understand the financial results and management's outlook.
Overall, Upwork's financial report outlined positive fourth-quarter performance through key operating metrics and cash flow generation. However, the more subdued guidance for early 2026 raises questions about growth momentum as the company navigates a technology-driven transformation and evolving market dynamics.