Upwork Inc (NASDAQ:UPWK) shares are soaring Tuesday after the company reported better-than-expected third-quarter financial results and issued fourth-quarter guidance above analyst estimates.
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What Happened: Upwork reported third-quarter earnings of 36 cents per share, beating the analyst estimate of 29 cents per share by 25.87%. The figure represents a 24.14% increase over earnings of 29 cents per share from the same period last year.
Upwork reported $201.7 million in revenue for the quarter, beating the consensus estimate of $193.3 million by 4.34%. That's also a 4.10% increase from the $193.8 million it reported in the same quarter last year, setting a company record for quarterly revenue.
The company posted $29.3 million in GAAP net income and a record $59.6 million in adjusted EBITDA. That translates to a 15% profit margin and a 30% adjusted EBITDA margin. Adjusted EBITDA rose 38% compared to the third quarter of 2024.
“The third quarter marked the start of the next chapter for Upwork. As we build the world’s human and AI-powered work marketplace, we’re driving phenomenal user productivity and engagement, resulting in a return to positive GSV growth,” said Hayden Brown, president and CEO of Upwork. “We are executing with speed and precision across our growth levers of AI, SMB, and Enterprise and are now on the path to sustained, multi-year growth.”
Upwork expects fourth-quarter revenue to fall between $193 million and $198 million, with adjusted EBITDA ranging from $49 million to $52 million. Analysts are looking for fourth-quarter revenue of $192.22 million, according to Benzinga Pro. The company also guided for fourth-quarter earnings of 31 cents to 33 cents per share versus estimates of 28 cents per share.
For the full year 2025, the company raised its revenue outlook to be between $782 million and $787 million. The company also lifted its full-year adjusted earnings guidance to a range of $1.35 to $1.37 per share.
Analysts responded positively to Upwork's latest results and guidance, with several firms raising their price targets. The positive analyst revisions appear to be helping boost shares on Tuesday.
Needham's Bernie McTernan and UBS's Joshua Chan both reiterated Buy ratings, lifting their targets to $25 and $23, respectively. Goldman Sachs analyst Eric Sheridan also maintained a Buy and nudged his target up to $25. Meanwhile, Scotiabank's Nat Schindler and RBC Capital's Brad Erickson kept Sector Perform ratings but raised their targets to $17 and $21, respectively. Citigroup's Ronald Josey held a Neutral stance, increasing his target from $16 to $19.
UPWK Price Action: Upwork shares were up 11.71% at $17.45 at the time of publication on Tuesday, according to Benzinga Pro.
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