Slide 1: Upwork Investor Presentation
Upwork Investor Presentation February 2025 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation of Upwork Inc. (the “Company,” “we,” “us,” or “our”) contains "forward-looking" Undue reliance should not be placed on the forward-looking statements in this statements within the meaning of the federal securities laws. Forward-looking statements include prese
Slide 3: Traditional staffing solutions are no longer meeting customer needs
Traditional staffing solutions are no longer meeting customer needs Businesses are recognizing limitations of old models in a dynamic environment: • Traditional hiring & staffing models lack flexibility & speed that are essential in today’s environment of constant change • AI is changing work tools & pro
Slide 4: Companies instead turn to Upwork: the world's largest work marketplace
Companies instead turn to Upwork: the world’s largest work marketplace Upwork leads the market as the preferred alternative to traditional hiring and staffing: unique solution offering high quality talent, cost effectively, with unparalleled flexibility and speed • High scale global talent pool, spanning
Slide 5: Upwork is the market leader, with advantages in scale, project size, margins and balance sheet
Upwork is the market leader, with advantages in scale, project size, margins and balance sheet Industry Leading Delivering Large, Scale and Innovation Complex Projects • Upwork GSV has facilitated from AI-related more work than $20up billion in • Upwork projects are long-term, complex work economic
Slide 6: Upwork's differentiated strategy for unlocking large TAM opportunities
Upwork’s differentiated strategy for unlocking large TAM opportunities Activating 3 growth catalysts for 2026+ 1. Artificial Intelligence (AI) 2. Enterprise 3. Ads & Monetization Making Upwork the preeminent Market-leading products and services for Subscriptions, ad products and destination for AI tal
Slide 7: Making Upwork the preeminent destination for AI talent and work
Making Upwork the preeminent destination for AI talent and work AI has been the fastest-growing major category on Upwork for several quarters Example client use cases: • Prompt engineering (+93% GSV YoY in Q4 2024) • AI integration • Generative AI modeling • Data labeling and annotation 33% 27% YoY
Slide 8: Empowering customers with Uma, Upwork's Mindful AI
Empowering customers with Uma™, Upwork’s Mindful AI • April 2024 launched Uma: conversational work companion improving customer productivity and outcomes • Powering search + match across marketplace platform as well as Managed Services delivery • Powering search + match performance to all-time high
Slide 9: Objective acquisition advances Upwork's AI strategy
Objective acquisition advances Upwork’s AI strategy AI-native search-as-a-service company will further enhance Upwork core search, match, and discovery performance across both Marketplace and Enterprise Talent + technology will be force-multiplier for Upwork’s expertise in AI/ML, search and AI infra
Slide 10: Unlocking the Enterprise opportunity
Unlocking the Business Plus Enterprise opportunity The global enterprise TAM for contingent labor is very large We are executing a targeted approach and providing custom solutions for large enterprise clients Managed Services Introduced Business Plus plan in Q4 2024, which provides an Enterprise-lik
Slide 11: Ads & monetization
Ads & monetization Boosted Profiles Featured Jobs Drives marketplace quality and efficiency, and is expected to continue to provide a multi-year tailwind for take rate One of Upwork’s fastest-growing revenue streams for several Boosted Proposals Connects Purchases quarters Ads & monetization products i
Slide 12: Upwork on steady trajectory towards 35% adj. EBITDA margin target
Upwork on steady trajectory towards 35% adj. EBITDA margin target Has led to substantial expansion of Adjusted EBITDA margins over the past two years $50.2M Main drivers of margin expansion: 26.2% • Executing disciplined cost management across $ Millions Margin every area of our business $50.0 25.0%
Slide 13: Strong and growing free cash flow profile enables shareholder returns
Strong and growing free cash flow profile enables shareholder returns $ Millions Free Cash Flow $150 Record free cash flow in 2024 enables key $139.1 levers to drive long-term shareholder return: • M&A $100 • Investments in our growth catalysts: • AI • Enterprise $50 • Ads & Monetization • Share repurc
Slide 14: All-time highs in profitability and cash generation
All-time Q4’24 highs in GSV Revenue GAAP Gross Margin profitability and cash $992.8M $191.5M 78% generation -7% year-over-year +4% year-over-year +267 bps year-over-year Adjusted EBITDA Free Cash Flow Take Rate $50.2M¹ $34.7M 19.3% 26.2% adjusted EBITDA 69.1% FCF/adjusted +12% year-over-year margin E
Slide 15: Record full year revenue and adjusted EBITDA
Record Full Year ’24 revenue GSV Revenue GAAP Gross Margin and adjusted $4.0B $769.3M 77% EBITDA -3% year-over-year +12% year-over-year +210 bps year-over-year Adjusted EBITDA Free Cash Flow Take Rate $167.6M¹ $139.1M 19.2% 21.8% adjusted EBITDA 83.0% FCF/adjusted +15% year-over-year margin EBITDA 1
Slide 16: Appendix + Definitions
Appendix + Definitions © 2024 Upwork Inc. Proprietary and confidential. Do not distribute. 16
Slide 17: Condensed Consolidated Statements of Operations
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31 2024 2023 2024 2023 Revenue: Marketplace $ 163,655 $ 157,490 $ 662,108 $ 586,099 Enterprise 27,828 26,444 107,217 103,037 Total revenue 191,483 183,9
Slide 18: Condensed Consolidated Statements of Operations (Continued)
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) (In thousands, except for per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 Net income per share: Basic $ 1.10 $ 0.13 $ 1.61 $ 0.35 Diluted $ 1.03 $ 0.13 $ 1.52 $ 0.
Slide 19: Condensed Consolidated Balance Sheets
UPWORK INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) December 31, 2024 December 31, 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
Slide 20: Condensed Consolidated Balance Sheets (Continued)
UPWORK INC. CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (In thousands) (Unaudited) December 31, 2024 December 31, 2023 Stockholders’ equity Common stock 14 14 Additional paid-in capital 653,575 674,918 Accumulated other comprehensive income 264 205 Accumulated deficit (78,476) (294,062) Total
Slide 21: Condensed Consolidated Statements of Cash Flows
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 147,166 $ 17,374 $ 215,586 $ 46,887 Adjustments to reconcile net income to ne
Slide 22: Condensed Consolidated Statements of Cash Flows (Continued)
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities (127,818) (260,034) (362,322) (709,214) 121
Slide 23: Condensed Consolidated Statements of Cash Flows (Continued)
UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 CASH FLOWS FROM FINANCING ACTIVITIES: Change in escrow funds payable, net(1) (22,053) (2,293) 9,956 25,443 Proceeds
Slide 24: Reconciliation of GAAP Net Income to Adjusted EBITDA
UPWORK INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA (In thousands, except for percentages) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 Net income $ 147,166 $ 17,374 215,586 46,887 Add back (deduct): Stock-based compensation expense 13
Slide 25: Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
UPWORK INC. RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 2022 Cash provided by operating activities $ 38,583 $ 31,370 $ 153,563 $ 52,708 $ 11,497 Less: purchas
Slide 26: Reconciliation of GAAP Net Income to Adjusted EBITDA (Quarterly)
UPWORK INC. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA (In thousands) (Unaudited) Three Months Ended December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, 2024 2024 2024 2024 2023 2023 2023 2023 Net Income $ 147,166 $ 27,758 $ 22,220 $ 18,442 $ 17,374
Slide 27: Key Definitions
Key Definitions Active Clients Enterprise Revenue We define an Active Client as a client that has had spend activity on our work We define Enterprise Revenue as revenue from our Enterprise offerings, marketplace during the 12 months preceding the date of measurement. including all client fees, subscript
Slide 28: Key Definitions
Key Definitions Marketplace Revenue 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 (previously referred to as Upwork Enterprise) and Managed Services. Marketpla
Slide 29: About Upwork
About Upwork About Upwork Disclosure Information Upwork is the world’s largest work marketplace that connects We use our Investor Relations website (investors.upwork.com), businesses with highly skilled independent talent from across our Blog (upwork.com/blog), our X handle the globe. From entrepren
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement our condensed consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), we present certain non-GAAP financial measures in this presentation, including adjusted EBITDA, adjus