Why Upwork Stock Jumped Today
Key Points
Upwork's gross services volume is growing once again.
CEO Hayden Brown sees more artificial intelligence (AI)-fueled gains ahead.
- 10 stocks we like better than Upwork ›
Shares of Upwork (NASDAQ: UPWK) leaped 13% on Tuesday after the freelance marketplace delivered an upbeat third-quarter financial report.
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The gig economy is rebounding
Upwork's revenue rose by 4% year over year to $201.7 million, as clients spent more to hire freelancers. The company's gross services volume (GSV) -- the total dollar value of transactions facilitated by its platform -- grew by 2%, marking the first increase in five quarters.
During a conference call with analysts, CEO Hayden Brown credited the company's artificial intelligence (AI) initiatives with helping to drive the expansion in this critically important metric. The number of clients participating in AI-related projects on Upwork's platform surged by 45% compared to the third quarter of 2024.
"Q3 marked a turning point for our company," Brown said. "The work we've done over the last 18 months to rewire our business for the AI era came to fruition in the form of GSV growth."
Better still, Upwork's profit margins are expanding as it scales its operations. The company's free cash flow, in turn, increased by 22% to $69.4 million.
Management is using Upwork's excess cash to reward shareholders. "Our strong and growing free cash flow yield also enabled us to announce another $100 million share repurchase authorization in early September," CFO Erica Gessert said.
Management sees a path to sustained growth
These strong results prompted Upwork to boost its full-year sales and profit forecast. The company now expects revenue of $782 million to $787 million and adjusted earnings per share of $1.35 to $1.37 in 2025.
"Q3 2025 was a pivotal quarter for Upwork, marking our return to growth mode on a highly profitable foundation," Gessert said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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