John Byun

John Byun asked for clarification on the comparability of the 3% organic growth in 2025 to the 8% revenue guide for 2026, and which concierge products are showing the most traction.

Answer

Noel Watson, Chief Operating Officer and Chief Financial Officer, confirmed that the 8% revenue guide for 2026 is comparable to the 3% organic growth in 2025, indicating an expected organic acceleration for the business. Jeffrey Stibel, Chairman and Chief Executive Officer, identified compliance-oriented concierge products as having the strongest uptake and biggest long-term opportunity due to the complexity of regulatory requirements. Watson added that activating customers through communication about their compliance status and offering reinstatement/ongoing management has been a successful approach.

John Byun asked for clarification on whether the 8% revenue growth guide for 2026 is comparable to the 3% organic growth in 2025, and which concierge products are experiencing the most traction.

Answer

Noel Watson, Chief Operating Officer and Chief Financial Officer, confirmed that the 8% revenue guide for 2026 is comparable to the 3% organic growth in 2025, indicating an expected organic acceleration. Jeffrey Stibel, Chairman and Chief Executive Officer, identified compliance-oriented concierge products as having the strongest uptake and biggest long-term opportunity, due to the complexity of regional, state, and national regulatory requirements. Noel Watson added that activating customers through communication about their compliance status has been a successful approach.

John Byun inquired about any special seasonal factors impacting the Q1 2026 revenue and GSV guide, particularly for the marketplace segment, and the impact of SEO versus GEO on top-of-funnel performance marketing channels.

Answer

Hayden Brown, Upwork's President and Chief Executive Officer, stated that Q1 2026 was a bridge quarter as expected, with upfront investments in Lifted and a focus on larger, longer-term marketplace customers. He also noted very good initial yields from GEO, though it's still early days for these new channels.

John Byun, representing Jefferies, inquired about any special seasonal factors impacting the Q1 2026 GSV and revenue guidance, particularly for the marketplace segment, and also asked about the impact of SEO versus GEO and different performance marketing channels on the top of the funnel.

Answer

CFO Erica Gessert stated that Q1 2026 was manifesting as expected, serving as a bridge quarter with upfront investments in Lifted and a focus on larger, longer-term marketplace customers. She noted positive initial yields from GEO channels but emphasized it's still early days, with some interplay between SEO and GEO.

John Byun, on for Brent Thill, requested further clarification on the Bubtea and Ascend acquisitions, asking about their distinction from the core marketplace, client migration paths, revenue recognition for large contracts, and their margin profile.

Answer

President and CEO Hayden Brown clarified that the acquisitions target large enterprises with complex needs distinct from the SMB focus of Marketplace and Business Plus, and a clear upgrade path will exist. CFO Erica Gessert stated that revenue will be recognized as work is performed, contracts will likely be gross revenue, and the company's 35% adjusted EBITDA margin target remains unchanged, with the new enterprise unit expected to be accretive by 2027.

John Byun asked about the sustainability of the renewed strength in the Core Platform segment, particularly in domains, and whether the financial impact from the .co registry change would persist into next year.

Answer

CFO Mark McCaffrey attributed the Core Platform's strength to a pickup in the aftermarket and the positive, sustainable impact of pricing and bundling initiatives within domains. He confirmed the .co registry impact would be very small next year and does not affect the company's ability to meet its 2026 financial targets.

John Byun, on behalf of Brent Thill, asked for the specific drivers behind management's confidence in the sustainability of the new user cohort strength and questioned the materiality of recent targeted price increases for 2025 and beyond.

Answer

President & COO Nir Zohar expressed confidence in cohort strength due to its continuation from Q2 into July, attributing it to fundamental brand strength and demand rather than temporary factors. He also clarified that the price increases are not material, were part of the original 2025 plan to remediate pricing disparities, and were already factored into the initial guidance.