Upwork Set to Report Q2 Earnings: What's in Store for the Stock?

Upwork UPWK is scheduled to release second-quarter 2025 results on Aug. 6.

UPWK expects second-quarter 2025 revenues between $184 million and $189 million. Non-GAAP diluted EPS is expected between 26 cents and 28 cents.

The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $186.41 million, indicating a decrease of 3.48% year over year.

The consensus mark for earnings is currently pegged at 26 cents per share, which has remained unchanged over the past 60 days. The figure indicates no change from the year-ago quarter’s reported figure.

UPWK’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 23.78%. 

Upwork Inc. Price and EPS Surprise

Upwork Inc. price-eps-surprise | Upwork Inc. Quote

Let us see how things have shaped up for the upcoming announcement.

Factors Likely to Have Influenced UPWK’s Q2 Performance

Upwork’s second-quarter 2025 performance is likely to have been shaped by its continued investment in AI and product improvements. The company expanded the capabilities of Uma, its AI agent, moving from basic task support to more advanced features. Tools like Proposal Writing and candidate evaluation, which saw strong usage in the first quarter, are expected to have kept up that momentum. Integration of AI-powered search tech from Objective is also likely to have helped improve Gross Services Volume in the quarter to be reported.

Several updates launched in late fourth quarter and throughout the first quarter, like semantic search and better client dashboards, are expected to have carried over their benefits into the second quarter. With take rates projected by the company to stay stable at 18.3%, these enhancements might have supported healthy asset monetization. 

Marketing efforts remained focused on attracting high-value clients. Even though total active clients were still under pressure, the first quarter saw a quarter-over-quarter rise in client activations for the first time in over a year, which might have continued into the quarter under review. 

Adjusted EBITDA margin is expected to have dipped from first-quarter levels. The company had already indicated that the first quarter would be the peak for margins this year, as it planned to ramp up investments in areas like Enterprise growth and AI development. While broader demand challenges remained in the first quarter, Upwork did not see any new negative impact from macro developments during the second quarter, as reported in May.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

UPWK currently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Arista Networks ANET currently has an Earnings ESP of +0.96% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks shares have gained 6.3% in the year-to-date (YTD) period. Arista Networks is set to report its second-quarter 2025 results on Aug. 5.

AvePoint AVPT currently has an Earnings ESP of +5.88% and a Zacks Rank #2.

AvePoint shares have increased 8.7% YTD. AvePoint is slated to report its second-quarter 2025 results on Aug. 7.

Alight ALIT has an Earnings ESP of +15.79% and a Zacks Rank #3 at present.

Alight shares have lost 26.3% YTD. Alight is scheduled to report its second-quarter 2025 results on Aug. 5.

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This article originally published on Zacks Investment Research (zacks.com).

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