Upwork, Inc 10-K for FY2024

Upwork, Inc (UPWK)

10-K 2025-02-13 For: 2024-12-31

Added on April 09, 2026

About this 10-K

Upwork, Inc filed this 10-K on February 13, 2025, covering the fiscal year ended December 31, 2024 (FY2024).

Headline figures

Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $769.33M; up 11.6% from $689.14M a year earlier
Net income: $215.59M; up 359.8% from net income of $46.89M a year earlier
Diluted EPS: $1.52; up 2433.3% from $0.06 a year earlier

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Delaware		46-4337682
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
530 Lytton Avenue, Suite 301
Palo Alto,	California	94301
(Address of principal executive offices)		(Zip Code)


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value per share	UPWK	The Nasdaq Stock Market LLC


Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


		Page
Special Note Regarding Forward-Looking Statements		1

PART I
Item 1.	Business	1
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	32
Item 1C.	Cybersecurity	32
Item 2.	Properties	33
Item 3.	Legal Proceedings	33
Item 4.	Mine Safety Disclosures	34

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	35
Item 6.	[Reserved]	36
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 8.	Financial Statements and Supplementary Data	52
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	93
Item 9A.	Controls and Procedures	93
Item 9B.	Other Information	93
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	94

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	94
Item 11.	Executive Compensation	94
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	94
Item 13.	Certain Relationships and Related Transactions, and Director Independence	94
Item 14.	Principal Accountant Fees and Services	94

PART IV
Item 15.	Exhibits and Financial Statement Schedules	95
Item 16.	Form 10-K Summary	97
Signatures		98


	As of or for the Year Ended December 31,
(In thousands, except GSV per active client and percentages)	2024			Change		2023			Change		2022			Change

GSV	$	4,008,107		(3)	%	$	4,142,252		1	%	$	4,104,891		16	%
Marketplace revenue	$	662,108		13	%	$	586,099		13	%	$	518,282		21	%
Marketplace take rate	18.0		%	265 bps		15.4		%	155 bps		13.8		%	58 bps
Net income (loss)	$	215,586		*		$	46,887		152	%	$	(89,885)		60	%
Adjusted EBITDA (1)	$	167,593		129	%	$	73,134		*		$	(4,029)		*
Active clients	832			(2)	%	851			5	%	814			6	%
GSV per active client	$	4,815		(1)	%	$	4,867		(4)	%	$	5,045		10	%


(In thousands)	2024		2023		2022
Revenue:
Marketplace	$	662,108	$	586,099	$	518,282
Enterprise	107,217		103,037		100,036
Total revenue	769,325		689,136		618,318
Cost of revenue (1)	174,094		170,450		160,402
Gross profit	595,231		518,686		457,916
Operating expenses
Research and development (1)	209,283		177,363		154,553
Sales and marketing (1)	185,211		220,681		246,882
General and administrative (1)	128,803		118,925		123,952
Provision for transaction losses	6,728		12,977		25,153
Total operating expenses	530,025		529,946		550,540
Income (loss) from operations	65,206		(11,260)		(92,624)
Other income, net	25,221		60,137		3,275
Income (loss) before income taxes	90,427		48,877		(89,349)
Income tax benefit (provision)	125,159		(1,990)		(536)
Net income (loss)	$	215,586	$	46,887	$	(89,885)


(1) Includes stock-based compensation expense as follows:

Cost of revenue	$	1,586	$	1,900	$	1,356
Research and development	29,923		28,006		26,881
Sales and marketing	11,670		14,030		11,511
General and administrative	25,212		30,259		35,753
Total	$	68,391	$	74,195	$	75,501


	Year Ended December 31,						Change
(In thousands, except percentages)	2024			2023			$		%
Marketplace	$	662,108		$	586,099		76,009		13	%
Percentage of total revenue	86		%	85		%
Enterprise	$	107,217		$	103,037		4,180		4	%
Percentage of total revenue	14		%	15		%
Total revenue	$	769,325		$	689,136		$	80,189	12	%


Report of Independent Registered Public Accounting Firm—PCAOB ID: 238			53
Consolidated Balance Sheets as of December 31, 2024 and 2023			55
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years ended December 31, 2024, 2023, and 2022			56
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024, 2023, and 2022			57
Consolidated Statements of Cash Flows for the Years ended December 31, 2024, 2023, and 2022			58
Notes to Consolidated Financial Statements			59


(In thousands, except share and per share data)	2024		2023
ASSETS
Current assets
Cash and cash equivalents	$	305,757	$	79,641
Marketable securities	316,344		470,457
Funds held in escrow, including funds in transit	195,736		212,387
Trade and client receivables – net of allowance of $4,646 and $5,141 as of December 31, 2024 and 2023, respectively	75,490		103,061
Prepaid expenses and other current assets	17,727		17,825
Total current assets	911,054		883,371
Property and equipment, net	30,056		27,140
Goodwill	121,064		118,219
Intangible assets, net	12,989		3,048
Operating lease asset	5,752		4,333
Deferred tax asset	128,779		—
Other assets, noncurrent	1,919		1,430
Total assets	$	1,211,613	$	1,037,541

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	6,128	$	5,063
Escrow funds payable	195,736		212,387

Accrued expenses and other current liabilities	59,300		58,192
Deferred revenue	7,269		17,361
Total current liabilities	268,433		293,003
Debt, noncurrent	357,928		356,087
Operating lease liability, noncurrent	9,567		6,088
Other liabilities, noncurrent	308		1,288
Total liabilities	636,236		656,466
Commitments and contingencies (Note 9)
Stockholders’ equity
Common stock, $0.0001 par value; 490,000,000 shares authorized as of December 31, 2024 and 2023; 135,348,453 and 137,272,754 shares issued and outstanding as of December 31, 2024 and 2023, respectively	14		14
Additional paid-in capital	653,575		674,918
Accumulated and other comprehensive income	264		205
Accumulated deficit	(78,476)		(294,062)
Total stockholders’ equity	575,377		381,075
Total liabilities and stockholders’ equity	$	1,211,613	$	1,037,541


(In thousands, except per share data)	2024		2023		2022
Revenue	$	769,325	$	689,136	$	618,318
Cost of revenue	174,094		170,450		160,402
Gross profit	595,231		518,686		457,916
Operating expenses
Research and development	209,283		177,363		154,553
Sales and marketing	185,211		220,681		246,882
General and administrative	128,803		118,925		123,952
Provision for transaction losses	6,728		12,977		25,153
Total operating expenses	530,025		529,946		550,540
Income (loss) from operations	65,206		(11,260)		(92,624)
Other income, net	25,221		60,137		3,275
Income (loss) before income taxes	90,427		48,877		(89,349)
Income tax benefit (provision)	125,159		(1,990)		(536)
Net income (loss)	$	215,586	$	46,887	$	(89,885)

Net income (loss) per share:
Basic	$	1.61	$	0.35	$	(0.69)
Diluted	$	1.52	$	0.06	$	(0.69)

Weighted-average shares used to compute net income (loss) per share, basic and diluted
Basic	133,621		134,774		130,518
Diluted	143,152		137,263		130,518

Other comprehensive income (loss), net of tax:
Net unrealized holding gain (loss) on marketable securities, net	$	59	$	3,290	$	(2,557)
Total comprehensive income (loss)	$	215,645	$	50,177	$	(92,442)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
(In thousands, except share amounts)	Shares	Amount
Balances as of December 31, 2021	129,130,478	$	13	$	511,096	$	(528)	$	(251,064)	$	259,517
Issuance of common stock upon exercise of stock options	412,171	—		1,642		—		—		1,642
Stock-based compensation expense	—	—		75,618		—		—		75,618
Issuance of common stock for settlement of RSUs	2,553,300	—		—		—		—		—
Tides Foundation common stock warrant expense	—	—		750		—		—		750
Issuance of common stock in connection with employee stock purchase plan	272,316	—		3,794		—		—		3,794
Unrealized loss on marketable securities	—	—		—		(2,557)		—		(2,557)
Net loss	—	—		—		—		(89,885)		(89,885)
Balances as of December 31, 2022	132,368,265	$	13	$	592,900	$	(3,085)	$	(340,949)	$	248,879
Issuance of common stock upon exercise of stock options and common stock warrants	640,687	—		2,012		—		—		2,012
Stock-based compensation expense	—	—		75,175		—		—		75,175
Issuance of common stock for settlement of RSUs	3,665,021	1		—		—		—		1
Tides Foundation common stock warrant expense	—	—		750		—		—		750
Issuance of common stock in connection with employee stock purchase plan	598,781	—		4,081		—		—		4,081
Unrealized gain on marketable securities	—	—		—		3,290		—		3,290
Net income	—	—		—		—		46,887		46,887
Balances as of December 31, 2023	137,272,754	$	14	$	674,918	$	205	$	(294,062)	$	381,075
Issuance of common stock upon exercise of stock options and common stock warrants	934,966	—		3,293		—		—		3,293
Stock-based compensation expense	—	—		70,095		—		—		70,095
Issuance of common stock for settlement of RSUs	4,559,933	1		—		—		—		1
Tides Foundation common stock warrant expense	—	—		750		—		—		750
Issuance of common stock in connection with employee stock purchase plan	657,526	—		4,795		—		—		4,795
Repurchase of common stock, including excise tax	(8,076,726)	(1)		(100,276)		—		—		(100,277)
Unrealized gain on marketable securities	—	—		—		59		—		59
Net income	—	—		—		—		215,586		215,586
Balances as of December 31, 2024	135,348,453	$	14	$	653,575	$	264	$	(78,476)	$	575,377


(In thousands) December 31, 2024	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value		Cash Equivalents		Marketable Securities
Level I
Money market funds	$	193,481	$	—	$	—	$	193,481	$	193,481	$	—
Treasury bills	131,022		40		—		131,062		—		131,062
U.S. government securities	32,625		22		(33)		32,614		—		32,614
Total Level I	357,128		62		(33)		357,157		193,481		163,676
Level II
Commercial paper	16,233		—		—		16,233		—		16,233
Corporate bonds	126,395		431		(144)		126,682		—		126,682
Commercial deposits	4,121		—		—		4,121		—		4,121
Asset-backed securities	592		2		—		594		—		594
Foreign government and agency securities	5,036		14		(12)		5,038		—		5,038

Total Level II	152,377		447		(156)		152,668		—		152,668
Total	$	509,505	$	509	$	(189)	$	509,825	$	193,481	$	316,344


(In thousands) December 31, 2023	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value		Cash Equivalents		Marketable Securities
Level I
Money market funds	$	4,782	$	—	$	—	$	4,782	4,782		—
Treasury bills	291,611		109		—		291,720		13,955		277,765
U.S. government securities	26,213		3		(18)		26,198		—		26,198
Total Level I	322,606		112		(18)		322,700		18,737		303,963
Level II
Commercial paper	35,699		—		—		35,699		—		35,699
Corporate bonds	92,979		189		(12)		93,156		—		93,156
Commercial deposits	15,371		—		—		15,371		—		15,371
Asset-backed securities	14,728		2		(42)		14,688		—		14,688
Foreign government and agency securities	3,075		5		—		3,080		—		3,080
U.S. agency securities	4,506		—		(6)		4,500		—		4,500
Total Level II	166,358		196		(60)		166,494		—		166,494
Total	$	488,964	$	308	$	(78)	$	489,194	$	18,737	$	470,457


(In thousands)	Amortized Cost		Fair Value
Due within one year	$	348,747	$	348,792
Due after one year through five years	160,758		161,033
Total	$	509,505	$	509,825


(In thousands)	Less Than 12 Months				12 Months or Longer				Total
Duration of unrealized losses December 31, 2024	Fair Value		Unrealized loss		Fair Value		Unrealized loss		Fair Value		Unrealized loss

U.S. government securities	$	12,522	$	(27)	$	4,122	$	(6)	$	16,644	$	(33)
Corporate bonds	33,386		(142)		2,819		(2)		36,205		(144)

Foreign government and agency securities	2,362		(12)		—		—		2,362		(12)

Total	$	48,270	$	(181)	$	6,941	$	(8)	$	55,211	$	(189)


(In thousands)	2024		2023		2022
Net cash provided by operating activities (1)	$	153,563	$	52,708	$	11,497
Net cash provided by (used in) investing activities	137,568		88,270		(69,468)
Net cash provided by (used in) financing activities (1)	(81,956)		(139,791)		1,143
Net change in cash, cash equivalents, and restricted cash (2)	$	209,175	$	1,187	$	(56,828)
(1) The Company elected to change the presentation of certain cash flows on its Consolidated Statement of Cash Flow, reclassifying the change in Trade and Client Receivables, related to amounts received on behalf of talent to fund their escrow account, from operating activities to financing activities. Prior period comparative amounts have been recast to conform to the current period presentation. For additional information, refer to “Note 2—Basis of Presentation and Summary of Significant Accounting Policies” of the notes to our consolidated financial statements included elsewhere in this Annual Report.
(2) Includes decreases in funds held in escrow, including funds in transit of $10.0 million and $25.4 million, during the years ended December 31, 2024 and 2023, respectively, and an increase in funds held in escrow, including funds in transit of $4.3 million during the year ended December 31, 2022.


(In thousands)	2024		2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	215,586	$	46,887	$	(89,885)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for transaction losses	5,505		8,673		23,306
Depreciation and amortization	14,813		9,449		8,057
Amortization of debt issuance costs	1,842		2,098		2,961
Accretion of discount on purchases of marketable securities, net	(11,911)		(14,430)		(1,486)
Amortization of operating lease asset	2,837		3,269		3,079
Tides Foundation common stock warrant expense	750		750		750
Stock-based compensation expense	68,391		74,195		75,501
Deferred taxes	(129,258)		—		—

Gain on early extinguishment of convertible senior notes	—		(38,945)		—
Changes in operating assets and liabilities:
Trade and client receivables (1)	(4,802)		(22,176)		(15,292)
Prepaid expenses and other assets	(656)		146		(630)
Operating lease liability	(4,351)		(5,903)		(5,389)
Accounts payable	969		(2,513)		2,579
Accrued expenses and other liabilities	4,730		5,746		3,689
Deferred revenue	(10,882)		(14,538)		4,257
Net cash provided by operating activities	153,563		52,708		11,497
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(362,322)		(709,214)		(581,887)
Proceeds from maturities of marketable securities	486,892		648,800		521,152
Proceeds from sale of marketable securities	41,775		165,035		—
Purchase of an intangible asset	—		(3,000)		—
Acquisition of business, net of cash acquired	(14,333)		—		—
Purchases of property and equipment	(3,528)		(692)		(1,248)
Internal-use software and platform development costs	(10,916)		(12,659)		(7,485)
Net cash provided by (used in) investing activities	137,568		88,270		(69,468)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in escrow funds payable, net (1)	9,956		25,443		(4,294)
Proceeds from exercises of stock options and common stock warrant	3,293		2,012		1,643
Proceeds from employee stock purchase plan	4,795		4,081		3,794

Net cash paid for early extinguishment of convertible senior notes	—		(171,327)		—

Repurchase of common stock	(100,000)		—		—


(In thousands)	2024		2023		2022
Allowance for expected credit losses, beginning balance	$	5,141	$	12,464	$	3,410
Provision for expected credit losses	5,767		9,490		22,167
Amounts written off	(6,262)		(16,813)		(13,113)
Allowance for expected credit losses, ending balance	$	4,646	$	5,141	$	12,464


(In thousands)	2024		2023		2022
Talent:
United States	$	111,691	$	95,833	$	86,892
Philippines	58,475		45,912		39,946
India	56,897		49,487		45,817
Rest of world (1)	212,065		178,693		162,016
Total talent	439,128		369,925		334,671
Clients:
United States	238,786		236,744		210,582
Rest of world (1)	91,411		82,467		73,065
Total clients	330,197		319,211		283,647
Total	$	769,325	$	689,136	$	618,318


(In thousands)
Balance Sheet and Cash Flow Classification		2024		2023
Assets
Operating—noncurrent	Operating lease asset	$	5,752	$	4,333
Liabilities
Operating—current	Accrued expenses and other current liabilities	1,624		5,687
Operating—noncurrent	Operating lease liability, noncurrent	9,567		6,088
Total lease liabilities		$	11,191	$	11,775


(In thousands)
Year Ended December 31,	Leases
2025	$	1,879
2026	2,962
2027	3,050
2028	2,735
2029	1,347
Thereafter	3,918

Total lease payments	15,891
Adjustment for discount to present value	(4,700)
Total	$	11,191


Cash and cash equivalents	$	4,779
Intangible assets	12,000
Other net, tangible assets acquired and liabilities assumed	(512)
Goodwill	2,845
Total purchase consideration	$	19,112


	Fair Value		Expected Useful life
Developed technology	$	11,000	3 years
Customer relationships	$	1,000	6 months


Balance at December 31, 2023	$	118,219
Increase in goodwill related to business combination	2,845
Balance at December 31, 2024	$	121,064


Developed technology			2.9 years
Assembled workforce			0.9 years
Customer relationships			0.4 years


(In thousands)
Year Ended December 31,	Estimated Amortization Expense
2025	$	5,961
2026	3,667
2027	3,361


Total	12,989


	2024	2023
Options issued and outstanding	2,392,899	3,260,914
RSUs and PSUs issued and outstanding	8,841,716	10,348,892

Warrant to purchase common stock	233,000	300,000


Remaining shares reserved for future issuances under 2018 Equity Incentive Plan	27,152,973	23,342,093
Remaining shares reserved for future issuances under 2018 Employee Stock Purchase Plan	4,694,949	4,254,293
Common stock issuable in connection with convertible senior notes	5,463,045	5,463,045
Total	48,778,582	46,969,237


	Number of Shares Underlying Outstanding Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Balances at December 31, 2023	3,260,914	$	20.15	4.86	$	18,684

Exercised	(868,015)	3.79

Balances at December 31, 2024	2,392,899	26.08		4.75	10,391
Vested and exercisable as of December 31, 2024	892,899	4.71		2.57	10,391
Vested and expected to vest as of December 31, 2024	2,392,899	26.08		4.75	10,391


Stock Price						Number of Shares Vested
$60						100,000
$70						200,000
$80						300,000
$90						400,000
$100						500,000


Dividend yield	—	%
Risk-free interest rates	1.7	%
Expected volatility	65	%


	Number Outstanding	Weighted-Average Grant Date Fair Value
Unvested balance - January 1, 2024	10,348,892	$	15.15
Granted	7,381,550	11.94
Vested	(4,559,933)	15.36
Forfeited/canceled	(4,328,793)	13.86
Unvested balance - December 31, 2024	8,841,716	$	12.99


(In thousands) Year Ended December 31,	Balance at Beginning of Year		Additions Charged to Costs & Expenses		Additions Charged to Other Accounts		Deductions		Balance at End of Year

2024	$	140,339	$	(140,339)	$	—	$	—	$	—
2023	157,353		(16,262)		(752)		—		140,339
2022	132,162		24,489		702		—		157,353


(in thousands)	Employee severance and benefit costs		Contract termination costs		Other charges		Total Restructuring Charges

Cost of revenue	$	139	$	198	$	—	$	337
Research and development	3,904		4,249		—		8,153
Sales and marketing	5,262		1,872		—		7,134
General and administrative	1,699		559		1,043		3,301
Other income, net	—		—		261		261
Total	$	11,004	$	6,878	$	1,304	$	19,186


(in thousands)	Restructuring Liability
Beginning balance as of January 1, 2024	$	—
Restructuring charges incurred	19,186
Payments	(17,101)
Ending balance as of December 31, 2024	$	2,085


	Upwork Inc.

Date: February 13, 2025	By:	/s/ Hayden Brown
		Hayden Brown
		President and Chief Executive Officer


EXECUTIVE	UPWORK INC.
/s/ Dave Bottoms	/s/ Hayden Brown
Dave Bottoms	By:	Hayden Brown
	Title:	President and Chief Executive Officer


Policy Name: Insider Trading Policy			Confidential: Internal Use Only
Owner: Chief Financial Officer and Chief Legal Officer			Policy applies to: All employees, independent contractors, vendors and the Upwork Board of Directors (collectively, “Service Providers”)
Last Updated: February 9, 2023


Name of Subsidiary						Jurisdiction
Elance, Inc.						Delaware

Upwork Global Inc.						California

Upwork Talent Group Inc.						Delaware

Upwork Escrow Inc.						Delaware

Elance Limited						Ireland

UPW Holdco, Inc.						Delaware

Upwork Payments Inc.						Delaware

Objective AI, Inc.						Delaware




Date:	February 13, 2025

		/s/ Hayden Brown
		Hayden Brown
		Chief Executive Officer
		(Principal Executive Officer)