Upwork Posts Q3 Beat, AI Likely To Pressure Growth Through 2027

After markets closed on Monday, Upwork Inc (NASDAQ:UPWK) reported its third-quarter results. Here are some key analyst takeaways:

• Scotiabank analyst Nat Schindler reaffirmed a Sector Perform rating, while lifting the price target from $8 to $10.
• Needham analyst Bernie McTernan reiterated a Buy rating, while raising the price target from $11 to $13.
• RBC Capital Markets analyst Brad Erickson maintained a Sector Perform rating and price target of $8.
• BTIG analyst Marvin Fong reaffirmed a Neutral rating on the stock.

Check out other analyst stock ratings.

Scotiabank: Upwork reported better-than-expected third-quarter results, with revenue of $185.6 million and EBITDA of $63.8 million, Schindler said in a note. He added, however, that growth remains an issue, with active clients and GSV (gross services volume) declining by around 10%.

The analyst said the fourth-quarter guidance came below Street expectations. Management expects current growth headwinds to persist through the first half of 2027 and for the company not to return to real year-on-year growth until 2028, he further noted.

Needham: While Upwork reported higher-than-expected results, revenues declined 9% year-on-year amid AI-driven headwinds, McTernan said. He added that AI continued to impact the business with:

• Low-value work being replaced
• Search demand shifting to AI-powered discovery

These headwinds are likely to accelerate the decline in marketplace GSV in the fourth quarter, and the pressure could continue through 2027, the analyst stated.

"Enterprise remains the part of the business with the best growth outlook, and we forecast another year of 30%+ GSV growth next year," he further wrote.

RBC Capital Markets: Upwork’s revenue came in 3.0% above Street expectations, while adjusted EBITDA was 22.4% ahead, Erickson said. Total GSV declined by 10%, while marketplace GSV contracted by 14% year-on-year, he added.

Active client losses accelerated to 46,000 from the previous quarter’s 21,000, with little to no visibility into an improvement, the analyst stated.

Expenses as a percentage of revenue declined, "reflecting active cost management that management stated will carry into 2027 and beyond," he further wrote.

BTIG: Underlying Upwork’s GSV of $914.1 million, which was above consensus of $891.3 million, was healthy 7.6% growth in trailing twelve months GSV per client to $5,418, Fong said. He added, however, that active clients of 717,000 came in below consensus of 739,000.

The sequential decline in active clients was "twice the largest prior sequential drop," at 23,000, posted in the fourth quarter of 2024.

"Despite the better-than-expected 3Q26 GSV performance, UPWK’s 4Q26 guidance was mixed, at best, reflecting ongoing churn in low-value work and disruption in search traffic," he further wrote.

UPWK Price Action: Shares of Upwork had risen by 2.42% to $9.96 at the time of publication on Tuesday.

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