BTIG Reiterates Neutral Rating on Upwork Inc. (UPWK)

BTIG analyst Marvin Fong reiterated a Neutral rating on Upwork Inc. (NASDAQ: UPWK).

The analyst comments "UPWK delivered mostly better-than-expected 3Q26 results. In our pre-earnings channel checks, we saw the potential for UPWK to post >$900MM in GSV, and the company delivered with GSV coming in at $914.1MM (consensus $891.3MM). Underlying that was healthy 7.6% growth in TTM GSV/client to $5,418 (consensus $5,230), but active clients came in below expectations at 717K (consensus 739K). The 46K q/q decline in active clients is twice the largest prior sequential drop of 23K posted in 4Q24. 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. 4Q26 revenue is expected to be $169MM-$177MM, which includes two months of revenue contribution totaling ~ $4MM from WorkMotion, a Germany-based employer of record business that UPWK acquired on Oct 30 for $129.7MM. Absent that contribution, guidance would be shy of the Street's $174.8MM revenue estimate for 4Q26. Fourth-quarter Adjusted EBITDA is expected to be $51MM-$55MM (Street $55.3MM), down from 3Q26's $63.8MM, as 4Q26 will be hit by a shift in expense timing, as well as costs to integrate WorkMotion. Looking ahead, UPWK telegraphed that it expects growth to remain under pressure in 1H27, but growth in Business Plus and Lifted, along with easier comps, should enable UPWK to post less negative growth rates in the back half of the year. UPWK also anticipates FY27 Adjusted EBITDA margin to contract 300-400 bps. Acknowledging that 2027 visibility is limited, we are moving our FY26/FY27 revenue estimates to $747.9MM/$702.7MM from $743.4MM/$764.9MM prior. We now project FY26/FY27 Adjusted EBITDA of $239.6MM/$199.4MM from $228.7MM/$235.0MM prior. Overall, while 3Q26 results surprised positively, the tougher FY27 outlook points to more volatility with risks skewed to the downside, in our view. Additionally, while we see the industrial logic of the WorkMotion acquisition, the reduction in net cash increases the risk profile of the stock at a challenging time for the business. Maintain NEUTRAL"

For an analyst ratings summary and ratings history on Upwork Inc. click here. For more ratings news on Upwork Inc. click here.

Shares of Upwork Inc. closed at $9.72 yesterday.

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