Upwork lays out “New Upwork” long-term plan, targeting faster growth via AI, SMBs, and Enterprise

What happened

Upwork used its 2025 Investor Day to introduce the “New Upwork,” a refreshed long-term plan that calls for gross services volume (GSV) acceleration and double-digit compound annual growth in revenue and adjusted EBITDA through 2028. Management framed the strategy around three pillars: leaning into strong AI tailwinds across the marketplace, deepening traction with small and midsize businesses, and re-igniting Enterprise expansion. This comes on the heels of a year in which Upwork lifted its Marketplace take rate to 18–18.5%, held gross margins near 78%, and streamlined its cost base via a significant headcount reduction, but also guided to near-term Enterprise revenue declines and no macro improvement in 2025. The Investor Day narrative essentially shifts the focus from defensive cost discipline and monetization tweaks toward a more offensive, AI-led growth agenda over the next three years. However, management has not yet demonstrated in the reported numbers that GSV and Enterprise trends have sustainably inflected to match the new longer-term ambitions.

Implication

For investors, the “New Upwork” plan suggests upside optionality if the company can translate its AI investments and SMB traction into sustained GSV acceleration and double-digit revenue and adjusted EBITDA growth through 2028. If execution delivers on those targets while maintaining roughly 78% gross margins and stable-to-rising take rate, the setup could support a future re-rating toward a Buy, especially once there is clarity on refinancing or retiring the 2026 converts. Near term, however, the investment case remains execution-driven: Enterprise revenue is still expected to be weak in 2025, competition is intense, and regulatory risk around worker classification remains unresolved. Investors should look for interim proof points such as accelerating Marketplace GSV, stabilization and then growth in Enterprise/VMS channels, concrete AI-driven product wins, and any updated capital allocation or balance-sheet plans tied to the long-term outlook. Until those data points emerge, the shares still fit better as a Hold for investors who already own them, rather than a high-conviction new money idea purely on the basis of management’s long-range targets.

Thesis delta

Our core stance remains Hold/Neutral: the Investor Day presentation raises the medium-term ceiling on what Upwork might achieve but does not yet provide enough evidence of GSV or Enterprise inflection to change the rating absent valuation context. The main shift is a slightly more constructive bias on the 2–3 year growth and profitability trajectory, given management’s willingness to commit to double-digit revenue and adjusted EBITDA CAGRs anchored in AI, SMB, and Enterprise initiatives. We add progress versus the newly articulated 2028 targets (GSV, revenue, adjusted EBITDA) as a key watch item that could justify a future upgrade if early execution supports the plan.