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PALO ALTO - Upwork Inc. (NASDAQ:UPWK) presented its long-term growth strategy and financial outlook during its 2025 Investor Day on Tuesday, forecasting acceleration in gross service value (GSV) and double-digit compound annual growth rates for revenue and adjusted EBITDA through 2028. The company currently maintains impressive gross profit margins of 77.8% and has been profitable over the last twelve months with a diluted EPS of $1.74.
The work marketplace company detailed how it plans to capture a greater share of the $1.3 trillion global digital knowledge work market through three strategic initiatives: transforming human and AI work, accelerating small and medium business (SMB) growth, and expanding enterprise offerings. With a solid financial foundation where cash flows sufficiently cover interest payments and liquid assets exceed short-term obligations, Upwork appears well-positioned to execute its growth strategy.
"In the last three years, we've executed a complete reinvention of our business, achieving a return to GSV growth two quarters ahead of schedule," said Hayden Brown, president and CEO of Upwork Inc., according to the press release.
The company's AI strategy focuses on expanding AI-powered workflows across its marketplace with Uma, its AI work agent. Upwork reported that AI categories of work already represent $300 million of annualized GSV, growing over 50% year-over-year in Q3 2025.
For SMBs, Upwork has launched a premium offering called Business Plus, designed to attract higher-spending customers with stronger retention rates. The company is also entering the enterprise market with a new subsidiary called Lifted, which provides solutions for sourcing, contracting, managing, and paying contingent talent.
Upwork's financial outlook for 2026 includes GSV growth of 4-6%, revenue growth of 6-8%, and an adjusted EBITDA margin of approximately 29%. Looking further ahead to 2028, the company targets 7-9% CAGR for GSV, 13-15% CAGR for revenue, and approximately 20% CAGR for adjusted EBITDA. Currently trading at a P/E ratio of 9.34, the stock appears undervalued according to InvestingPro Fair Value estimates, with analysts setting price targets as high as $27.
CFO Erica Gessert stated that the company's "accelerating long-term targets paired with our commitment to margin growth reflect the results of this transformation and the structural advantage of our business model in the AI era."
The information in this article is based on a company press release.
In other recent news, Upwork Inc. reported significant developments in its third-quarter earnings, showcasing a return to positive Gross Services Value (GSV) growth at 2% year-over-year. The company achieved revenue of $202 million, marking a 4% increase compared to the previous year and surpassing analyst expectations by the same margin. Adjusted EBITDA was reported at $60 million, which is approximately 20% above consensus estimates, with margins reaching a record 30%. UBS raised its price target for Upwork to $23, citing the positive GSV growth, while maintaining a Buy rating. Scotiabank also increased its price target to $17, noting the company's profitability beat. Jefferies raised its price target to $22, highlighting a "positive turning point" for Upwork despite a challenging labor market. RBC Capital adjusted its price target to $21, observing that artificial intelligence is becoming a supportive factor for the company. Meanwhile, Canaccord Genuity reiterated its Buy rating, emphasizing the strong third-quarter results and the impact of AI-related work, which grew by 53% year-over-year.
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