All right. Thank you so much for coming in. We've got Hayden and Erica here from Upwork. Maybe we can just kick it off right away. Can you refresh us just in the broader macro environment? Obviously, a lot's been changing day to day here, and especially just year to date through 2026. Just what are you seeing today as we sit here in March?
Yeah. This is definitely a very choppy macro environment. We've seen that for multiple quarters now. We talked about in our earnings call recently the fact that even at the end of Q4 and early in Q1, things were actually continuing to decelerate from a macro perspective and just looked a little lighter and a little bit softer broadly in the environment and specifically on our platform. We see that with very small jobs under $300. That's really where we see some of the pressure and kind of the weakest segment. This is, I think, broadly consistent with what we've heard from other companies that have reported even in the last few weeks, where this is just a tough market. You know, a lot of companies are pulling back. They're not hiring. They're hiring at lower levels.
When we look at the BLS data, in December, I think job openings were down significantly versus pre-COVID levels, especially in areas like tech and professional services. Openings overall in the market in 2025, I think were their lowest non-recessionary year since 2003. That is the broader context that we're operating against, and frankly, that's one of the reasons we're excited that we've been able to continue to perform despite the fact that the macro is pretty weak right now.
Yeah. I would just add that, you know, I think that this kind of overall, and I think Hayden kind of talked about we see some of these kind of trends showing up in our lowest, kind of smallest, most transactional, you know, jobs on the platform. This really speaks to the benefits of our long-term strategy, you know, which is focusing on, you know, larger, more complex work and the diversification of our kind of three growth levers, which are AI, SMB, and enterprise, really driving that.
Maybe just to double-click on that point on the lower value work, do you think that that's macro-driven, or do you think that some of that's AI-driven taking, you know, replacing some of that very low-level, under $300, I think is what you guys have said before, type of work?
Yeah. I think it's definitely both.
Yeah.
We see macro, for sure, it's not a great environment, and that does weigh on kind of like all segments of the business. We do see it as most acute at the lower end. I think that's probably exacerbated by some of the AI displacement that has been happening for a long time already and is just continuing right now as well.
One of the, you know, phenomena that I think we are really starting to see the very or the early signs of is companies really rethinking their approach to their workforces in general and, you know, really rethinking to a more flexible model. I think this is, you know, a broader trend over the kind of medium to long term that's really gonna benefit platforms like ours.
Yeah. Maybe we can, we can talk about that some more, especially, you know, everyone saw last week with Block and, like, the laying off of half of their workforce, and we can debate whether that's actually AI or not. As you do see these AI tools continue to progress, you see Anthropic Claude, and people are getting more and more efficient with their internal workforces, just how do you think about that long term as, you know, employers look to either just utilize more of their internal workforce and not leverage contingent workforce? Is the pie just growing so much that then, you know, it's actually a tailwind to Upwork?
Yeah. I'd say it's definitely too early to know whether these types of technology advancements like Claude and CoWork will be a benefit to the labor market as a whole. What we do know is they will be a benefit to Upwork specifically.
The reason for that is, as companies have been implementing these AI solutions into their workflows over the last few years, we've seen a very consistent trend, which is they reimagine the workflow with AI at the center. That means that the existing full-time employees that they had before may not be relevant or the right ones or have the right skills to do that new level of work and work with these new tools. They typically are shifting their workforce from, you know, a large pool of full-time employees to a smaller pool of full-time employees complemented by flexible and contingent workers from our platform who are working alongside these tools. We see that with customers like Grammarly and what they're doing with their AI writing assistant. Examples are many across our customer base.
Our view is that we're seeing the early signs of this long-term trend, which is really a shift towards more fractional and flexible work inside companies of all sizes, and that's really where our platform benefits.
Yeah. Then maybe going to, like, the core business here, we can talk about enterprise in a second, but I know people are looking at the guidance for the year and the acceleration that's embedded in the guidance for the year. Can you maybe we can walk through each one of the catalysts that you see and what's embedded in that guidance, what should drive that, and, you know, we can double-click and go into each one of those?
Yeah. Maybe I'll start, Hayden can add on. You know, first and foremost, you know, we guided at our Investor Day in November, we, you know, we guided to the full year 2026, you know, 4%-6% GSV growth, 6%-8% revenue growth, and 29% adjusted EBITDA margin. We reiterated that guidance when we guided a few weeks ago, I think people were, you know, asking some questions around the ramp. Look, for Q1 is always, it's really kind of panning out exactly as we expected it to. It's always was gonna be a bit of a bridge quarter for us as we, you know, we're ramping these much larger, you know, kind of customers with longer-term spend.
When they join onto the platform, they actually kinda ramp their spend over time. Whereas the smaller type customers that really come on the platform, they do a transactional work, $300 fixed price work, these are kinda one and dones or, you know, really short-term contracts. There is sort of a ramp there. In terms of, you know, kinda the growth catalyst for our business, you know, we really have obviously AI and, you know, the investments we've made in Uma, our, you know, AI companion on the platform, which is really enabling work to, you know, the matches to happen faster, work to be done more efficiently on the platform. We've seen a GSV lift of $100 million in 2025 from that.
Of course, the growth of the AI category itself, which is at a $300 million run rate, growing about 50% per year. We see that continuing to ramp through 2026. To the extent that it actually kinda just goes faster than the 50% you know, run rate that we're seeing, then, you know, that would be even a greater benefit.
Got it. Maybe we can talk about Uma more generally and that $100 million uplift that you saw. Just how much further that can go as you just implement it more deeply across the entire marketplace? I know we've talked about, I think, the post-match workflow-
Mm-hmm.
also embedding Uma there. Just can you talk about just the broadening of Uma across the entirety of the marketplace?
There's a couple things that are behind that acceleration from our AI platform and Uma this year. One is there are a number of features and functionality that we added to Uma at the back half of last year that are just ramping this year in terms of rolling out more broadly to all customers, touching them as they go through their new workflows. That's definitely a catalyst for us. The second one is we are adding functionality for Uma in the, what we call the post-hire experience.
If you think about after a match is made and after a hire has been done, there's a lot that Uma can do to help project manage, to make sure the work is on track, to potentially evaluate and qualify the work, to review the work diary from the freelancer and make sure that anything that's, you know, unusual or should be brought to the light of a client is elevated. There's a lot we're adding to Uma in terms of that part of the experience. The last thing we're doing is we have launched Uma over the last two years with kind of point solutions and point value across our workflow. This year, we're actually changing the core user experience to put the Uma capabilities much more front and center for all customers.
It's becoming a bigger part of kind of the core workflow from onboarding and registration all the way through matching to post-hire. All three of those changes really give us a lot of runway, both this year and beyond, to ramp Uma and make sure that Uma is ensuring the flywheel on Upwork is moving faster, and we're delivering more value for customers and benefiting from that, such as we saw last year with the $100 million in GSV.
On, on the AI-related work, $300 million run rate, growing 50%, just how do you think that that progresses throughout 2026? How big can that get, and, like, what are the actual categories that you're talking about that's embedded in that AI-related work?
Yeah, like I said, you know, our, you know, the growth rates of the AI category, it's really been, you know, this is a highly tailwinded category of work, right. You know, 50% year-over-year, that's kinda how we, how we looked at it when we kinda built our plan for this year. Now, we're doing a lot in order to, you know, really kind of ignite those areas even faster, that's really around looking at opportunities to, you know, certify the talent on the platform so clients can quickly and easily find the, you know, the talent types they want. What we do find is actually, you know, clients come onto the platform, and they know they want some AI work done.
They don't always know the best way to describe it and to find the correct talent. To the point, you know, in terms of what are the kinda subcategories underneath AI, it's really AI infrastructure work, the building of AI models. AI-enabled creative work is another very large one on the platform. To a certain extent, data labeling as well, although that's actually a smaller one for us compared to those others.
Got it. Okay. Business Plus, that's another big catalyst for you in 2026. Can you just maybe level set for everybody what is Business Plus? What's the value proposition? How big is it today as a percentage of GSV, and what do you expect it to get to in 2026?
Business Plus is a kind of premium plan that we launched for the client side of our marketplace at the end of 2024. Really, we're ramping that product over the last year, adding new features and functionality, making it more widely available. Towards the end of last year, we started marketing it as well with some new marketing campaigns. The core value proposition for Business Plus is it's built for larger SMBs. Think about companies that have 50, 100 employees. They're looking to hire at bigger scale. They need things like collaborative hiring workflows. They need different reporting. They want things like net thirty payment terms. Importantly, all of these customers want access to our best and highest quality talent.
In this plan, you also get what we call our Expert-Vetted Talent tier and kind of unique access to the best talent on our platform. These are current features and capabilities that Business Plus has. It also has some enhanced AI capabilities, and we'll be adding more to that plan over the course of this year. Also, we'll be doing a lot more to kind of market and grow that part of the business because, again, it's only been in market for a year, and even then, a lot of it was kind of more testing, and customers had to go find it themselves. Now we're starting to promote it much more heavily 'cause we see it has such strong product market fit. Do you wanna talk a little about some of the numbers around Business Plus?
Oh, sure, yeah. Y ou know, at the end of 2025, Business Plus was around 2.5% of GSV on our platform. you know, obviously we, you know, we expect other parts of the platform to grow as well. Business Plus, we expect to at least double the GSV on the platform in 2026. you know, and, of course, it's both a GSV and a take rate driver because it's a premium product.
Yeah. Yeah, no, I think that's an important point. Also, the variable freelancer fee, you've rolled that out in 2025 but not to the entirety of the marketplace. Just how should we think about that progressing throughout 2026? That's another benefit obviously to your, to your take rates.
Yeah. You know, we really just started to experiment with the variable freelancer fee in 2025. We rolled it out just to a couple of categories. We're always very careful to kind of roll out these new strategies. Really, the way that the variable freelancer fee works is we're really looking at the supply and demand dynamics on the platform on a very granular kind of subcategory by subcategory basis and adjusting the fee according to whether, you know, we have an oversupply on some categories and lower supply on others. We tested it out in 2025, really just putting our toes in the water in a couple of categories. Now we have just launched into a few more categories just in the past couple months.
We're really... Honestly, we're less than 20% deployed right now, and we're kinda still testing it. This will be a gradual rollout but also a nice, very nice driver of take rate as we continue to expand that strategy. Just as a reminder, there are some categories in which we are testing with lowering the fees, you know, in order to stimulate demand. There are some GSV drivers there as well.
Enterprise. This is, I think, the big one for 2026, and the exciting one, and I think actually the most probably misunderstood by people.
Mm-hmm.
Maybe we can talk about just from a high level, just the acquisitions you made in 2025, like what that enables for the platform, and just how you think about that obviously rolling out as we, you know.
Yeah
throughout 2026.
This is a really important strategy for us because we have been in the enterprise space for more than a decade, serving large customers with usually independent contracted talent, which has kind of been the bread and butter of our offering. What we learned through many years of working with these customers, including some of the biggest companies in the world, is they really do need some different things than kind of the general marketplace platform that was built for SMBs. One of those things is a way to flexibly manage and hire contingent staff across all types of contract work, and that's not just independent contracting, but also staff augmentation, EOR. There's temp staff.
When we work with these big customers, they have, you know, $10 million-$100 million spend or more going through these different contract types, they've really wanted from us a single solution where they could get our talent served up any way they wanted to contract, so any of those contract types with our high-quality better talent. We tried, you know, doing this through kind of vendor relationships where they would provide maybe the employer of record services or other things and heard loud and clear from these customers they wanted it all in-house from Upwork. That led us last year to buy two companies, Bubty and Ascen.
Bubty gives us a flexible contingent work platform that was really built for enterprises to manage all types of their contract workers, and that's both independent contractors and other types of workers, AOR, EOR, temp staff augmentation. That platform gives us a new tool and a new way to serve enterprises with these, you know, huge accounts kind of running through our platform and really reaching that amazing talent on the other side. We also bought a company called Ascen, which is an EOR provider. They really provide compliant contracting for contingent work across types of work that we were not doing in-house today, so before.
Now, when we go to large enterprises, we can say to them, "Take your $50 million spend in this part of your contingent workforce budget, put it through Lifted," which is our enterprise offering that has all of these capabilities, "we can reduce the cost because we can actually make sure that we're optimizing for the contract type and the cost around that contract type while keeping you compliant. We can arbitrage across markets and geos to give you the highest quality talent at the best cost.
We can save you maybe 10%-30% on a multimillion-dollar staffing program." This is where we're taking this offering, and we've had really great signals so far in getting feedback from enterprise customers, both those that were working with us before and were saying, "Upwork, please, like, offer this expanded solution," and new customers who've been coming to us and sending us RFPs looking to get access to our phenomenal talent pool in this way that is compliant and easy, and they need to have, like, no switching costs to basically light up inside of their contingent work programs.
As you think about Upwork and what the structural advantages that Upwork has versus maybe the legacy providers in the marketplace, can you just talk about those? I think that's really important as you think about just, like, landing some of those new accounts and landing those budgets from even existing clients. I think, you know, you have a lot. That's always been the argument for me is, "Hey, you've got only 10% of budgets today.
Yeah. Right.
Like, you can easily probably just on the existing base get to 20 and double the enterprise business. Not to get too excited. That's always been the argument.
Let's talk about that.
I guess like taking a step back, maybe just talk about the structural advantages that Upwork has.
Yeah
Like, how do you differentiate?
If you look at the $650 billion staffing market for large enterprise specifically, which is where we're playing with this Lifted offering, we have several advantages. One is with the Lifted offering, now we can serve, as I mentioned, all types of contingent work. Other players in the market are usually really good at one or two types. Maybe like us in the past, we did independent contractor well, but we didn't have as robust an offering for other areas. Most staffing firms, which are the lion's share of the spend in the space, really pivot around employment of record or agency of record staffing, but they can't do other types of work. They're not very flexible. When they get a request from enterprise, they can only serve it one way.
It's like to them, you know, if you have a hammer, everything is a nail. They can only kind of do EOR or staff augmentation. We can look at the req, look at the work and say, "Interesting. We can actually compliantly contract this as IC or compliantly contract it a different way." That's one advantage we have. The other huge one is even, you know, the biggest legacy staffing firms in the world that have kind of a global business or global footprint, they really operate more like a constellation of independent small businesses that are in different regions and geographies.
If an enterprise company comes to them and says, "Hey, we need to staff this type of work," or, "We want workers in this geo," they have to jump through a lot of hoops to kind of activate that talent on the ground because their model is actually highly decentralized and highly fragmented. We have a different advantage, which is that enterprises can come to us, and they can say either, "We want, you know, workers in this country or region," or, "We don't mind where they are. Just cost optimize that for us." We can go into our incredible pool, 18 million talent and growing every single day, highly professional workers, and find those workers immediately because our platform is digital and real time and light them up compliantly for these customers.
That's a very different model than kind of the hoops and the timing and the quality that they get from alternatives in the market. Yeah.
Embedded in guidance is a pretty big acceleration in enterprise business in the back half of the year. These sales cycles can be a year plus. Can you maybe just give investors, you know, some more confidence in just the visibility in the enterprise business? What gives you confidence that, you know, those targets are achievable this year?
You know, Hayden referenced some of the... You know, we've already won two RFPs from kinda new clients coming in and inviting us before the Lifted platform has even launched. This is super exciting for us, and we've got a really nice slate of kind of, you know, customers in the backlog, you know, interested in working with us and talking to us about contracting now. Of course, we, you know, as Hayden mentioned, we have an incredible list of existing clients that because, you know, we were only able to access about 10% of their spend before, now they're coming, they're knocking on our doors, and they're saying, "Hey, you know, we just want to expand with you," working with them as well.
We feel really good about the pipeline that we've got, and, you know, we're just working as fast as possible to work on the integrations in order to launch the Lifted platform in the back half of the year.
Great. Maybe moving on to profitability. You know, you've set out these 35% EBITDA margin targets long term. We're actually not too far off of those right now.
Yeah.
Just as you think about maybe balancing growth and profitability and, you know, getting to those targets, like, what needs to happen in order to get there from where we are today?
Sure. I mean, look, we've obviously had a great journey with the kinda profitability and really being able to balance our focus on margin expansion, optimizing our cost base, you know, gone from, you know, 0%- 29% margins in just a couple of years. We still have other in, you know, kind of, you know, work in the pipeline of cost optimization that is coming in the back half of the year. Some of these are longer term in nature, you know, automation work and other things that we're doing that are gonna start to, you know, kinda benefit us. You know, we will on an ongoing basis continue to optimize our cost base, but we're gonna balance that. That's what we're doing this year.
You know, we're absorbing about two points of dilution, margin dilution from the Lifted strategy this year, but we're still, you know, gonna be the, you know, kind of flat margins on a year-over-year basis. From there, we'll continue to kind of, you know, balance the investments in growth because we have such great growth levers to invest in, with that margin expansion, but we feel really confident on, in the 35%.
Capital allocation, $300 million buyback announced last quarter. Just talk about the broader capital allocation strategy across M&A, reinvesting in the business?
Yeah
Also share repurchases and just, yeah, refreshing investors.
I mean, our board just approved an incremental $300 million stock buyback, and I think that is really reflective of their confidence in our growth strategy, and also of the, you know, some of the valuations that are out there right now, which, you know, frankly, we obviously think that, you know, this is a very good investment for us, given where everything is. You know, our overall capital allocation strategy really has not changed in that we're gonna continue to, you know, offset any dilution from stock-based comp and at this, you know, these prices retire shares. We also, you know, we continue to be very interested in accelerating, further accelerating our growth strategies through M&A.
We've had a really successful slate of, you know, first the two kind of acquihires in 2023 and 2024 on the AI side, and then, in 2025 with the, with the two acquisitions from the Lifted strategy. We feel really confident about our ability to make really, you know, high ROI, M&A decisions as well.
You know, are there any investor questions, as we have a couple minutes left here? All right. Well, we'll keep asking about AI then because I think that's what everybody's worried about.
That's what everyone wants to hear about.
Maybe we just come back to the original point, and I think that everyone's trying to figure out exactly what AI is gonna do, specifically in the labor market. Are there any proof points from your clients today and just, like, what you're seeing as far as, like, any replacement from existing clients or just what can you give investors?
Yeah
Leave investors with that can really just quell those fears of, you know, that's obviously what people are thinking about and worried about, I think, as they think about the Upwork story.
Totally. This is something that we are examining on a daily basis down to, you know, the details of every job post and what skills are being asked for and how are those, you know, filling on our platform. We have a very unique vantage point on this. 3 million jobs annually on Upwork, you know, thousands every single week in every category, you know, that we serve. We saw some very interesting things last year when we actually went about trying to offer our initial kind of beta experience around AI agents working for clients on our platform. Our original thought process was, let's expand our talent pool to include AI agents and get them to work on some of these client job posts. What we found very quickly is agents were not at all capable of completing client job posts.
Their success rates were extremely low. The quality was not good. We're talking about some of the best third-party agents that are out there. We set about to benchmark this agent performance and also to add human freelancers into the loop working with these AI agents to see what would happen. What we found was humans plus agents delivered far superior outcomes, basically better, faster, and in some cases cheaper than what agents could do alone, and certainly faster than what humans could do alone. We launched this as a benchmark in November of last year. It's called the HAPI or HAPI, Human and Agent Productivity Index Benchmark.
We're constantly now ongoingly benchmarking what agents can do, what they can't do, and how they perform with humans, which gives us a very unique view into the reality that agents really aren't capable on their own of doing a lot. When you bring a human in, success increases by 70% or more. That is really informing our view and our strategy to launch agents working alongside humans as kind of pairs or clusters in our marketplace where there's human supervision. We've heard clearly from clients that that's what they want. These are businesses. They can't afford to take risk with an agent that's gonna hallucinate or go off the rails. This human agent pairing is really where there's a ton of value creation. When we look at the jobs that are even being posted on Upwork today, we see this in spades.
Things like the term Claude and Gemini have been growing, you know, rapidly in the last weeks and months, even as OpenAI as a skill maybe hasn't been growing as fast because we're seeing the shift in the ecosystem around people adopting more of Claude's tools. We see those kind of broader shifts happening as new technology is launching, flowing through to the demand signal on our marketplace and this AI category, which is growing at more than, you know, 50% year-over-year, down to the job level where we see this opportunity to uniquely serve human and agent pairs, which is something we're launching more broadly to all of our customers over the course of 2025.
I'd just add a couple of other points here, which are really important in this question of sort of substitution versus augmentation. you know, if you look, we have seen substitution on our platform. We've talked about it, you know, writing and translation. These have been trends that we've been seeing for several years, right? you know, and then, you know, if to the extent that there's a little bit of headwind also at like the smallest kind of swath of, you know, most transactional jobs, which is really about 5% of our GSV. Now the, you know, on the other side, there is the growth of the AI category itself growing 50% a year and just at the very beginning, right, of its, of its trajectory. These are much larger, more complex jobs.
You know, the clients who spend on AI on the platform spend 3x the platform average. Freelancers make about 40% premium versus other tech jobs. You know, those are long-term, really large growth trends. You know, if there's some offset at the most transactional level, you know, we'll take it every time.
Well, thank you so much, Hayden and Erica. We always appreciate having you.
Thank you.
Thank you.
Great to be here. Thanks so much.