by Deb Stowe
Revenue at freelancer marketplace Upwork grew by 1.0% year on year (y-o-y) to $193 million in Q1 2025, despite a 7% y-o-y fall in the number of active clients to 812,000 at the end of March.
Gross sales value (GSV) per active client was $4,912, up by 3% y-o-y — the first growth in six quarters — according to the company’s financial reporting.
Net income stood at $37.7 million in Q1 2025, up 105% y-o-y. Adjusted EBITDA rose by 68% to $56 million, while adjusted EBITDA margin rose to 29% in Q1 2025 from 17% in Q1 2024.
The quarter’s operational highlights centered on AI.
“Uma, Upwork’s Mindful AI, continues to gain traction as an always-on work companion with 52% more users engaging with Uma in Q1 2025 versus Q4 2024,” said the company.
“AI-enabled features are unlocking growth, improving user experience and driving incremental spend. Examples include Uma-powered Proposal Writer increasing engagement by 58% and Uma on Upwork’s homepage increasing user engagement by 340%.”
GSV from AI-related work rose 25% y-o-y in Q1 2025, while GSV from prompt engineering jumped 52%, as well as growing quarter-on-quarter.
Freelance professionals working on AI-related work continued to earn more than a 40% premium per hour compared to freelancers working on non-AI-related work in the quarter, noted the San Francisco-based company.
Upwork said it would be “[l]aunching several high-impact features in Q2 2025 focused on driving increased engagement, bids and incremental revenue, as we evolve Upwork into the world’s premier, largest-scale AI-native marketplace.”
Its number of Business Plus active clients more than doubled on the preceding quarter. Managed services revenue grew 3% y-o-y in Q1, while Freelancer Plus subscription revenue grew 20% y-o-y.
“Upwork is off to a strong start in 2025, delivering record first-quarter results across revenue and profitability, a testament to the team’s accelerated execution and the resilience of our business model,” said president and CEO Hayden Brown.
“We are incredibly excited by the early impact of our strategic product investments in AI, which are already enhancing customer productivity and engagement. With positive momentum across our business and a winning strategy for AI innovation, we are confident in our path to expand market share, drive ongoing profitability and continue to be the category leader at the intersection of talent, technology and work.”
“Our first-quarter results demonstrate our commitment to driving strong and expanding profit margins while investing in growth,” added CFO Erica Gessert.
“Our continued focus on cost discipline, combined with better-than-expected revenue performance, drove another quarter of record profitability, more than doubling net income from the prior year to $37.7 million, achieving $56.0 million in adjusted EBITDA and a new high of 29% adjusted EBITDA margin. This strong performance enables us to increase our adjusted EBITDA guidance range for 2025 and underscores our dedication to expanding profitability and growing free cash flow as we continue toward more meaningful topline growth.”
In September last year, Upwork said it was reducing its workforce by 21%, one of a series of what it termed “organizational changes to drive continued profitable growth.”
Founded in 2015, the company describes itself as “the world’s largest work marketplace.”
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