UPWORK, INC 10-K

Item 8. Financial Statements and Supplementary Data. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm—PCAOB ID: 238 55 Consolidated Balance Sheets as of December 31, 2025 and 2024 57 Consolidated Statements of Operations and Comprehensive Income for the Years ended December 31, 2025, 2024, and 2023 58 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024, and 2023 59 Consolidated Statements of Cash Flows for the Years ended December 31, 2025, 2024, and 2023 60 Notes to Consolidated Financial Statements 61 54 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Upwork Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Upwork Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made 55 only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition – Talent Service Fee and Client Marketplace Fee As described in Note 2 to the consolidated financial statements, the Company earns fees from talent and clients under its marketplace offerings, which represent a single promise to provide continuous access to the Company’s work marketplace and site services. The Company’s single promise is comprised of a series of distinct service periods. The Company allocates consideration to each distinct service period in which it has the contractual right to bill. The Company’s marketplace offerings may include fixed and variable consideration. For the year ended December 31, 2025, the Company’s consolidated revenue was $787.8 million, of which a majority relates to talent service fee and client marketplace fee revenue. The principal consideration for our determination that performing procedures relating to revenue recognition for talent service fee and client marketplace fee revenue is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process for talent service fee and client marketplace fee revenue. These procedures also included, among others, testing revenue recognized for a sample of talent service fee and client marketplace fee revenue transactions by obtaining and inspecting source documents, such as contracts, terms of service, invoices, payment receipts, and client acceptance of the milestones. /s/ PricewaterhouseCoopers LLP San Jose, California February 12, 2026 We have served as the Company’s auditor since 2016. 56 UPWORK INC. CONSOLIDATED BALANCE SHEETS As of December 31, 2025 and 2024 (In thousands, except share and per share data) 2025 2024 ASSETS Current assets Cash and cash equivalents $ 294,356 $ 305,757 Marketable securities 378,425 316,344 Funds held in escrow, including funds in transit 180,752 195,736 Trade and client receivables – net of allowance of $ 5,919 and $ 4,646 as of December 31, 2025 and 2024, respectively 76,236 75,490 Prepaid expenses and other current assets 21,064 17,727 Total current assets 950,833 911,054 Property and equipment, net 44,421 30,056 Goodwill 149,192 121,064 Intangible assets, net 37,161 12,989 Operating lease asset 5,011 5,752 Deferred tax asset 111,495 128,779 Other assets, noncurrent 1,467 1,919 Total assets $ 1,299,580 $ 1,211,613 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 7,858 $ 6,128 Escrow funds payable 180,752 195,736 Debt, current 359,770 — Accrued expenses and other current liabilities 94,023 59,300 Deferred revenue 7,765 7,269 Total current liabilities 650,168 268,433 Debt, noncurrent — 357,928 Operating lease liability, noncurrent 9,707 9,567 Other liabilities, noncurrent 9,390 308 Total liabilities 669,265 636,236 Commitments and contingencies (Note 9) Stockholders’ equity Common stock, $ 0.0001 par value; 490,000,000 shares authorized as of December 31, 2025 and 2024; 130,545,236 and 135,348,453 shares issued and outstanding as of December 31, 2025 and 2024, respectively 13 14 Additional paid-in capital 592,599 653,575 Accumulated and other comprehensive income 754 264 Retained earnings (accumulated deficit) 36,949 ( 78,476 ) Total stockholders’ equity 630,315 575,377 Total liabilities and stockholders’ equity $ 1,299,580 $ 1,211,613 The accompanying notes are an integral part of these consolidated financial statements. 57 UPWORK INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME For the Years Ended December 31, 2025, 2024, and 2023 (In thousands, except per share data) 2025 2024 2023 Revenue $ 787,784 $ 769,325 $ 689,136 Cost of revenue 174,752 174,094 170,450 Gross profit 613,032 595,231 518,686 Operating expenses Research and development 185,544 209,283 177,363 Sales and marketing 143,412 185,211 220,681 General and administrative 146,629 128,803 118,925 Provision for transaction losses 8,140 6,728 12,977 Total operating expenses 483,725 530,025 529,946 Income (loss) from operations 129,307 65,206 ( 11,260 ) Other income, net 23,869 25,221 60,137 Income before income taxes 153,176 90,427 48,877 Income tax (provision) benefit ( 37,751 ) 125,159 ( 1,990 ) Net income $ 115,425 $ 215,586 $ 46,887 Net income per share: Basic $ 0.87 $ 1.61 $ 0.35 Diluted $ 0.84 $ 1.52 $ 0.06 Weighted-average shares used to compute net income per share, basic and diluted Basic 132,485 133,621 134,774 Diluted 140,660 143,152 137,263 Other comprehensive income, net of tax: Net unrealized holding gain on marketable securities, net $ 490 $ 59 $ 3,290 Total comprehensive income $ 115,915 $ 215,645 $ 50,177 The accompanying notes are an integral part of these consolidated financial statements. 58 UPWORK INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY For the Years Ended December 31, 2025, 2024, and 2023 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity (In thousands, except share amounts) Shares Amount Balances as of December 31, 2022 132,368,265 $ 13 $ 592,900 $ ( 3,085 ) $ ( 340,949 ) $ 248,879 Issuance of common stock upon exercise of stock options and common stock warrants 640,687 — 2,012 — — 2,012 Stock-based compensation expense — — 75,175 — — 75,175 Issuance of common stock for settlement of RSUs 3,665,021 1 — — — 1 Tides Foundation common stock warrant expense — — 750 — — 750 Issuance of common stock in connection with employee stock purchase plan 598,781 — 4,081 — — 4,081 Unrealized gain on marketable securities — — — 3,290 — 3,290 Net income — — — — 46,887 46,887 Balances as of December 31, 2023 137,272,754 $ 14 $ 674,918 $ 205 $ ( 294,062 ) $ 381,075 Issuance of common stock upon exercise of stock options and common stock warrants 934,966 — 3,293 — — 3,293 Stock-based compensation expense — — 70,095 — — 70,095 Issuance of common stock for settlement of RSUs 4,559,933 1 — — — 1 Tides Foundation common stock warrant expense — — 750 — — 750 Issuance of common stock in connection with employee stock purchase plan 657,526 — 4,795 — — 4,795 Repurchase of common stock, including excise tax ( 8,076,726 ) ( 1 ) ( 100,276 ) — — ( 100,277 ) Unrealized gain on marketable securities — — — 59 — 59 Net income — — — — 215,586 215,586 Balances as of December 31, 2024 135,348,453 $ 14 $ 653,575 $ 264 $ ( 78,476 ) $ 575,377 Issuance of common stock upon exercise of stock options and common stock warrants 264,931 — 750 — — 750 Stock-based compensation expense — — 70,160 — — 70,160 Issuance of common stock for settlement of RSUs 3,826,502 — — — — — Tides Foundation common stock warrant expense — — 750 — — 750 Issuance of common stock in connection with employee stock purchase plan 412,658 — 3,935 — — 3,935 Repurchase of common stock, including excise tax ( 9,307,308 ) ( 1 ) ( 136,571 ) — — ( 136,572 ) Unrealized gain on marketable securities — — — 490 — 490 Net income — — — — 115,425 115,425 Balances as of December 31, 2025 130,545,236 $ 13 $ 592,599 $ 754 $ 36,949 $ 630,315 The accompanying notes are an integral part of these consolidated financial statements. 59 UPWORK INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2025, 2024, and 2023 (In thousands) 2025 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 115,425 $ 215,586 $ 46,887 Adjustments to reconcile net income to net cash provided by operating activities: Provision for transaction losses 6,706 5,505 8,673 Depreciation and amortization 25,710 14,813 9,449 Amortization of debt issuance costs 1,842 1,842 2,098 Accretion of discount on purchases of marketable securities, net ( 8,198 ) ( 11,911 ) ( 14,430 ) Amortization of operating lease asset 741 2,837 3,269 Tides Foundation common stock warrant expense 750 750 750 Stock-based compensation expense 65,390 68,391 74,195 Deferred taxes 18,493 ( 129,258 ) — Gain on early extinguishment of convertible senior notes — — ( 38,945 ) Changes in operating assets and liabilities: Trade and client receivables ( 3,284 ) ( 4,802 ) ( 22,176 ) Prepaid expenses and other assets ( 2,570 ) ( 656 ) 146 Operating lease liability 188 ( 4,351 ) ( 5,903 ) Accounts payable ( 1,160 ) 969 ( 2,513 ) Accrued expenses and other liabilities 27,737 4,730 5,746 Deferred revenue 489 ( 10,882 ) ( 14,538 ) Net cash provided by operating activities 248,259 153,563 52,708 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities ( 485,178 ) ( 362,322 ) ( 709,214 ) Proceeds from maturities of marketable securities 420,436 486,892 648,800 Proceeds from sale of marketable securities 11,348 41,775 165,035 Purchase of an intangible asset — — ( 3,000 ) Acquisition of business, net of cash acquired ( 58,406 ) ( 14,333 ) — Purchases of property and equipment ( 5,790 ) ( 3,528 ) ( 692 ) Internal-use software and platform development costs ( 19,349 ) ( 10,916 ) ( 12,659 ) Net cash (used in) provided by investing activities ( 136,939 ) 137,568 88,270 CASH FLOWS FROM FINANCING ACTIVITIES: Change in escrow funds payable, net ( 6,731 ) 9,956 25,443 Proceeds from exercises of stock options and common stock warrant 750 3,293 2,012 Proceeds from employee stock purchase plan 3,935 4,795 4,081 Net cash paid for early extinguishment of convertible senior notes — — ( 171,327 ) Repurchase of common stock ( 135,959 ) ( 100,000 ) — Net cash used in financing activities ( 138,005 ) ( 81,956 ) ( 139,791 ) NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 26,685 ) 209,175 1,187 Cash, cash equivalents, and restricted cash—beginning of period 505,593 296,418 295,231 Cash, cash equivalents, and restricted cash—end of period $ 478,908 $ 505,593 $ 296,418 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for income taxes $ 13,529 $ 4,590 $ 1,984 Cash paid for interest $ 1,227 $ 920 $ 1,321 SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES: Right-of-use asset recognized $ — $ 4,436 $ — Property and equipment purchased but not yet paid $ — $ 26 $ 27 Internal-use software and platform development costs incurred but not yet paid $ 1,103 $ 400 $ 215 The accompanying notes are an integral part of these consolidated financial statements. 60 UPWORK INC. Notes to Consolidated Financial Statements Note 1— Organization and Description of Business Upwork Inc., which is referred to as the Company or Upwork, through its complementary, wholly owned subsidiaries, connects businesses with global, AI-enabled talent across every on-demand work type, including freelance, agency, fractional, and payrolled. The Company’s portfolio of platforms and other workforce solutions includes the Upwork Marketplace, the world’s human and AI-powered work marketplace that connects businesses with on-demand access to highly skilled independent talent worldwide, and Lifted, the Company’s wholly owned subsidiary that provides a purpose-built solution for enterprise organizations to source, contract, manage, and pay talent across the full spectrum of contingent work. The Company’s customers consist of both talent and clients, where talent includes independent professionals and agencies of varying sizes that deliver services through the Upwork Marketplace, Lifted, or other Company workforce solutions, and clients range from small businesses and entrepreneurs to large enterprises that seek and engage with talent through these platforms and other workforce solutions. Upwork Inc. is incorporated in the state of Delaware and is headquartered in Palo Alto, California. Unless otherwise expressly stated or the context otherwise requires, the terms “Upwork” and the “Company” in these notes to the consolidated financial statements refer to Upwork Inc. and its wholly owned subsidiaries. Note 2— Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, which is referred to as U.S. GAAP, and include the accounts of Upwork Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Prior period presentation has been revised to conform to the current period presentation as of December 31, 2025. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods presented. Such estimates include, but are not limited to: valuation of acquired intangible assets; the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; allowance for expected credit losses; liabilities relating to transaction losses; stock-based compensation; and accounting for income taxes. Management bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The Company evaluates its estimates, assumptions, and judgments on an ongoing basis using historical experience and other factors and revises them when facts and circumstances dictate. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. Cash and Cash Equivalents The Company classifies cash and cash equivalents to include cash held in checking and interest-bearing accounts and investments in money market funds, U.S. government securities, and debt securities with maturities of 90 days or less from the date of purchase. Restricted Cash As of December 31, 2025 and 2024, the Company maintained restricted cash of $ 3.8 million and $ 4.1 million, respectively, related to cash reserve requirements under the escrow laws and regulations of the California Department of Financial Protection and Innovation and collateral for letters of credit issued in conjunction with operating leases. Short-term restricted cash included in prepaid expenses and other current assets was $ 3.6 million as of December 31, 2025 and 2024, and long-term restricted cash included in other assets, noncurrent was $ 0.3 million and $ 0.6 million as of December 31, 2025 and 2024, respectively. 61 UPWORK INC. Notes to Consolidated Financial Statements—Continued Funds Held in Escrow, Including Funds in Transit The Company maintains its customers’ funds held in escrow in demand or interest-bearing checking accounts at U.S. financial institutions, as well as three California licensed money transmitters. The balance in these accounts was in excess of federally insured limits as of December 31, 2025 and 2024. Customers’ funds held in escrow are denominated exclusively in U.S. dollars. The Company is a licensed internet escrow agent, as such, is required to hold its customers’ escrowed funds and escrow funds in-transit in trust as an asset and record a corresponding liability for escrow funds payable on its consolidated balance sheets. Accordingly, funds held in escrow, including funds in transit, are classified as restricted cash. The balances of funds held in escrow, including funds in transit, and the related liabilities fluctuate based on customer activity and may vary from period to period. Escrow funds in-transit arise due to the time it takes to clear transactions through external payment networks. When clients fund their escrow account using credit cards, there is a clearing period before the cash is received and settled. Accordingly, the funds are treated as escrow funds in transit until the transaction is settled to the escrow trust bank account or, in the case of international credit card settlements, to the Company’s bank accounts. Escrow regulations require the Company to fund the trust with its own operating cash if there is ever a shortage due to the timing of cash receipts from clients for completed hourly billings. As of December 31, 2025 and 2024, the Company recorded $ 180.8 million and $ 195.7 million, respectively, as funds held in escrow, including funds in transit. The table below reconciles cash, cash equivalents, and restricted cash as reported in the consolidated balance sheets to the total of the same amounts shown in the consolidated statements of cash flows for the years ended December 31, 2025, 2024, and 2023: (In thousands) 2025 2024 2023 Cash and cash equivalents $ 294,356 $ 305,757 $ 79,641 Restricted cash 3,800 4,100 4,390 Funds held in escrow, including funds in transit 180,752 195,736 212,387 Total cash, cash equivalents, and restricted cash as shown in the consolidated statement of cash flows $ 478,908 $ 505,593 $ 296,418 Marketable Securities The Company’s marketable securities consist of money market funds, commercial paper, treasury bills, corporate bonds, U.S. government securities, asset-backed securities, and other types of fixed income securities issued by foreign governments or entities and denominated in U.S. dollars, which have contractual maturities within 36 months from the date of purchase. The marketable securities are available for current operations and are classified as available-for-sale. These marketable securities are carried at estimated fair value with unrealized gains and losses, net of taxes, included within the stockholders’ equity section of the Company’s consolidated balance sheet. The Company periodically assesses its portfolio of debt investments for impairment. For debt securities in an unrealized loss position, this assessment first takes into account the Company’s intent to sell, or whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the debt security’s amortized cost basis is written down to fair value through other income, net. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, the Company assesses whether the decline in fair value below the amortized cost basis resulted from a credit loss or other factors. In making this assessment, the Company considers factors such as the extent to which fair value is less than the amortized cost basis, the financial condition of the issuer, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded through other income, net, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are reflected as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell are met. These changes are recorded in other income, net. The Company determines realized gains or losses from the sale of marketable securities on a specific identification method and records such gains or losses in other income, net within the Company’s consolidated statements of operations and comprehensive income. 62 UPWORK INC. Notes to Consolidated Financial Statements—Continued Escrow Funds Payable Escrow funds payable represent customer funds that are held in escrow by the Company on behalf of both talent and clients. Escrow funds payable to talent are comprised primarily of funds available to be withdrawn by talent for work performed and paid by clients. Escrow funds payable to clients primarily represent deposits received from certain clients to set up an account or to apply toward future payments to talent upon completion of the project defined and agreed between the client and talent. Concentration of Risk Financial instruments that subject the Company to concentration of risk consist primarily of cash, restricted cash, funds held in escrow, including funds in transit, and trade and client receivables. The Company maintains its cash balances with large, high-credit quality financial institutions and other payment companies. At times, such deposits may be in excess of federally insured limits. The Company has not experienced any losses on its deposits. Credit risk on trade receivables is limited as a result of the large size of the Company’s client base as well as a large portion of payments made using pre-authorized credit cards. The Company performs ongoing credit evaluations of its clients and maintains allowances for potential credit losses. For any receivables that are deemed not collectible, losses are recorded when probable and estimable. These losses, when incurred, have been within the range of the Company’s expectations. The Company did not have any clients that accounted for more than 10% of trade and client receivables as of December 31, 2025. The Company had two clients that accounted for more than 10 % of trade and client receivables as of December 31, 2024. For the years ended December 31, 2025, 2024 and 2023, the Company did not have any clients that accounted for more than 10% of total revenue. The Company is dependent upon third parties, such as Amazon Web Services, in order to meet the uptime and performance needs of its customers. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, restricted cash, funds held in escrow, including funds in transit, marketable securities, trade and client receivables, prepaid and other current assets, escrow funds payable, and debt. The Company believes that the carrying values of financial instruments approximate their fair values. Trade and Client Receivables and Related Allowance for Expected Credit Losses Trade and client receivables are primarily comprised of amounts receivable from clients for completed work, including amounts in transit. It also includes unbilled amounts due from clients primarily through the Company’s Managed Services offering. Trade and client receivables are recorded and stated at realizable value, net of an allowance for expected credit losses. Credit is extended generally without collateral to the Company’s clients of its Enterprise offerings based on an initial and ongoing evaluation of their financial condition and other factors. In aggregate, gross trade receivables were $ 38.8 million and $ 28.5 million and gross client receivables were $ 43.3 million and $ 51.6 million as of December 31, 2025 and 2024, respectively. The allowance for expected credit losses is the Company’s estimate of the probable credit losses on accounts receivable. The Company periodically assesses the collectability of the accounts and determines the allowance recognized by taking into consideration the aging of its receivable balances, historical write-off experience, probability of collection, and other relevant data. Trade and client receivables are written off against the allowance when management determines a balance is uncollectible and no longer actively pursues collection of the receivable. 63 UPWORK INC. Notes to Consolidated Financial Statements—Continued The following table presents the changes in the allowance for expected credit losses as of December 31, 2025, 2024, and 2023: (In thousands) 2025 2024 2023 Allowance for expected credit losses, beginning balance $ 4,646 $ 5,141 $ 12,464 Provision for expected credit losses 7,360 5,767 9,490 Amounts written off ( 6,087 ) ( 6,262 ) ( 16,813 ) Allowance for expected credit losses, ending balance $ 5,919 $ 4,646 $ 5,141 Leases The Company accounts for leases in accordance with Financial Accounting Standards Board, which is referred to as the FASB, Accounting Standards Update, which is referred to as ASU, No. 2016-02, Leases (Topic 842). Property and Equipment, Net Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, which are generally two to five years . Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining lease term or their estimated useful lives. Repair and maintenance costs are charged to expense as incurred. Internal-Use Software and Platform Development Costs The Company’s policy is to capitalize certain costs to develop its internal-use software and platform when (i) preliminary project planning is completed, (ii) the Company has committed project resourcing, and (iii) it is probable that the project will be completed and the software will be used as intended. Costs incurred for enhancements that are expected to result in additional significant functionality are also capitalized. Such costs are generally amortized on a straight-line basis over their estimated useful lives determined on a project-by-project basis, which historically has ranged between two to three years , beginning when the asset is ready for its intended use. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. Amortization of capitalized internal-use software and platform development costs is allocated to functional expense categories based on headcount and the nature and intended use of the project. Segment Information The Company has one operating and reportable segment. The Company’s Chief Operating Decision Maker, which is referred to as the CODM, is its President and Chief Executive Officer, who reviews financial information presented on a consolidated basis for the purpose of allocating resources and evaluating financial performance. Business Combination and Goodwill The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Under the acquisition method of accounting, the assets acquired and liabilities assumed are recorded at their estimated fair values on the acquisition date. Any excess purchase consideration over the fair value of net assets acquired is recognized as goodwill. The Company determines the fair value of assets acquired and liabilities assumed by exercising judgment and using various estimates, including the selection of valuation methodologies, cash flow projections, discount rates, and comparable company analyses. To support this process, the Company may engage a third-party valuation firm, as needed, to assist in determining the fair values of acquired assets, assumed liabilities, and any contingent consideration in a business combination. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income. Goodwill is not amortized, but rather is assessed for impairment at least annually, or more frequently if events and changes in circumstances indicate that its carrying amount may not be recoverable. The Company performs its annual impairment assessment during the fourth quarter of each fiscal year based on a single reporting unit structure by comparing the carrying value of the reporting unit to its fair value. An impairment would occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. For 2025, the Company conducted its goodwill impairment testing by performing step one of the quantitative assessment, of the two-step impairment model. The Company determined the fair value by using quoted market prices of the Company’s common stock. The Company determined that the fair value of its reporting unit exceeded the carrying value, and, as such, the 64 UPWORK INC. Notes to Consolidated Financial Statements—Continued Company concluded that there was no impairment of goodwill at the impairment testing date. There has been no impairment of goodwill for any of the periods presented. Acquired Intangible and Other Long-Lived Assets The Company’s intangible assets include identifiable, finite-lived intangible assets such as developed technology and customer relationships, acquired as part of business combinations in 2024 and 2025, as well as an assembled workforce acquired in prior years. These intangible assets are carried at cost, less accumulated amortization. The Company amortizes the intangible assets over their estimated useful lives, either based on the pattern in which the economic benefits are consumed, or using the straight-line method when the pattern cannot be reliably determined. The estimated useful lives of the intangible assets range from two years to five years . Intangible amortization expense related to developed technology and an assembled workforce is included in research and development expense on the Company’s consolidated statement of operations and comprehensive income. Intangible amortization expense related to customer relationships is included in sales and marketing expense on the Company’s consolidated statement of operations and comprehensive income. The Company periodically reviews the remaining estimated useful lives of its long-lived tangible and amortizable intangible assets. If the estimated useful life assumption for any asset is changed, the remaining unamortized balance would be depreciated or amortized over the revised estimated useful life, on a prospective basis. The Company’s long-lived assets consist of property and equipment and internal-use software and platform development costs. The Company evaluates the recoverability of its long-lived assets, including identifiable intangible assets, for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If it is determined that the asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset group exceeds the aggregate future undiscounted cash flows. When an impairment loss is recognized, the carrying amount of such assets is reduced to fair value. There has been no asset impairments for any of the periods presented. Convertible Senior Notes The Company accounts for the 0.25 % convertible senior notes due 2026, which are referred to as the Notes, as a single liability measured at amortized cost. The carrying value of the liability equals the proceeds received from the issuance of the Notes less debt issuance costs. Revenue Recognition The Company generates revenue from talent and clients through its platforms and other workforce solutions. The Company accounts for revenue in accordance with FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Revenue is recognized upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services. In the ordinary course of business, the Company makes payments to customers when those customers provide services in their capacity as vendors. These payments are for distinct services and are at fair value. These transactions are primarily with certain financial institutions that the Company uses as payment processors on the work marketplace. The Company accounts for the consideration payable to these customers in their capacity as vendors as a purchase of services from a vendor and records such payments in either cost of revenue or sales and marketing within the consolidated statements of operations and comprehensive income. Marketplace Offerings The Company’s Marketplace revenue represents the majority of its revenue and is derived from the Upwork Marketplace. The Company generates Marketplace revenue from both talent and clients, primarily generated from talent service fees and client marketplace fees. The Company also generates Marketplace revenue through ads and monetization products, including purchases of Connects, which are virtual tokens required for talent to bid on projects and purchase ads products on the Upwork Marketplace, talent memberships, and other services, such as foreign currency exchange when clients choose to 65 UPWORK INC. Notes to Consolidated Financial Statements—Continued pay in currencies other than the U.S. dollar. Additionally, the Company earns interest on funds held on behalf of customers. The Company earns fees from talent under its Upwork Marketplace offerings and associated premium offerings, which represent a single promise to provide continuous access (i.e., stand-ready performance obligation) to the Upwork Marketplace and site services. As each day of providing access to the Upwork Marketplace and site services (including, but not limited to, communication, invoicing, reporting, dispute resolution, and payment services) is substantially the same and talent simultaneously receive and consume the benefits as access is provided, the Company’s single promise is comprised of a series of distinct service periods. The Company allocates consideration to each distinct service period in which it has the contractual right to bill. The Company’s talent arrangements may include fixed and variable consideration, or a combination of the two, comprised of the following: Talent service fees. Talent are provided access to the Upwork Marketplace to market their businesses, send proposals to and communicate with prospective clients, and, if engaged by a client, to perform specified services agreed between talent and clients, which are referred to as talent services. Talent charge clients on an hourly or a milestone basis for services rendered to clients through the Upwork Marketplace, which are referred to as talent billings. The Company charges talent a service fee as a percentage of talent billings. Effective May 2025, the Company introduced a variable pricing structure for talent service fees for new contracts on the Upwork Marketplace. Under this pricing structure, talent are charged a service fee for each contract ranging from 0 % to 15 % of their earnings, depending on platform-specific supply and demand factors, such as project type, job availability, and client demand. The applicable service fee is disclosed at contract inception and remains fixed for the duration of the contract. For contracts formed prior to May 2025, the Company continues to charge a flat talent service fee of 10 %. The Company does not control the talent services, and talent and clients negotiate and agree upon the scope and the price for talent services directly with each other. Accordingly, the Company presents revenue from talent service fees on a net basis as an agent. The Company recognizes talent service fees for each distinct service period when it has the contractual right to bill for the services, which for a majority of talent service fees occurs on a weekly basis. Withdrawal fees . The Company charges withdrawal fees to talent when talent withdraw their escrow funds held by the Company. A withdrawal fee is charged for each withdrawal transaction, which represents variable consideration. The Company presents revenue from withdrawal fees on a gross basis as a principal and not net of the third-party payment processing costs incurred because the Company controls the payment processing services prior to providing to the Company’s talent. The Company recognizes the withdrawal fees when transactions are processed, which is when it has the contractual right to bill for the services. Membership fees. The Company charges membership fees to talent. These fees are fixed consideration and are charged monthly. The Company recognizes the revenue over the period of the membership, which is generally monthly, consistent with the common measure of progress for the entire performance obligation. The Company charges fees to talent for the purchase of Connects. Connects represent a separate performance obligation. Connects fees represent fixed consideration and are allocated to and recognized in the distinct service period in which the Connects are used by talent. The Company earns fees from clients under the Marketplace offerings, which represents a single promise to provide continuous access (i.e., stand-ready performance obligation) to the Upwork Marketplace and site services. As each day of providing access to the Upwork Marketplace and site services is substantially the same and the client simultaneously receives and consumes the benefits as access is provided, the Company’s single promise under its Marketplace offering is comprised of a series of distinct service periods. The Company’s Marketplace offerings may include fixed and variable consideration, or a combination of the two, comprised of the following: Client marketplace fees. The Company charges a client marketplace fee on a per-transaction basis and is considered variable consideration. Client marketplace fees are assessed on both fixed price and hourly contracts. The Company allocates client marketplace fees to each distinct service period based on the contractual right to bill. For fixed price contracts, the Company recognizes revenue when a client funds a contract, and for hourly contracts, the Company recognizes revenue at the end of the weekly billing period, which is when the Company has the contractual right to bill for the services. For client marketplace fees, the Company presents revenue on a gross basis as a principal and not net of the third-party payment processing costs incurred because the Company controls the services prior to providing to the Company’s clients. 66 UPWORK INC. Notes to Consolidated Financial Statements—Continued Contract initiation fees. The Company charges a contract initiation fee on new contracts between talent and clients, which is considered fixed consideration. The contract initiation fee is assessed on both fixed price and hourly contracts. The Company allocates the contract initiation fee to each distinct service period based on the contractual right to bill. For fixed price contracts, the Company recognizes revenue when a client initially funds a contract, and for hourly contracts, the Company recognizes revenue at the first weekly billing period, which is when the Company has the contractual right to bill for the services. For contract initiation fees, the Company presents revenue on a gross basis as a principal and not net of the third-party payment processing costs incurred because the Company controls the services prior to providing to the Company’s clients. Foreign currency exchange fees. The Company charges clients a fixed mark-up above foreign currency exchange rates that are charged to the Company when the Company collects amounts denominated in foreign currency. Foreign currency exchange fees are variable consideration and recognized as they are earned for each transaction processed, which is when the Company has the contractual right to bill for the services. Upwork Payroll service fees. The Company charges clients using the Upwork Payroll offering when their talent are classified as employees for engagements on the Upwork Marketplace. The client enters into an Upwork Payroll agreement with the Company, and Upwork separately contracts with unrelated third-party staffing providers that provide employment services to such clients. In such arrangements, talent providing talent services to clients become employees of third-party staffing providers. In arrangements where clients enter into Upwork Payroll agreements, the Company charges Upwork Payroll service fees to clients and does not charge service fees to talent who are employees of the third-party staffing providers. Such service fees are variable consideration and charged as a fixed percentage of the total talent billings. Under an Upwork Payroll agreement, the Company provides the client access to the Upwork Marketplace to procure and manage talent services, as well as access to employment services provided by the third-party staffing providers. The Company presents Upwork Payroll service fees revenue on a net basis as an agent of the client for providing access to employment services provided by the third-party staffing providers. The Company does not control these employment services performed by the third-party on behalf of the client or for the services performed by talent that are employed by the third-party staffing providers. Therefore, the Company is not considered the principal for these services. The Company recognizes the service fees for each distinct service period when it has the contractual right to bill for the services. Certain of the Company’s Marketplace offerings include revenue sharing arrangements under which the Company generates a revenue share as a percentage of the fees charged by certain financial institutions to talent for payment withdrawals. These arrangements are considered a single performance obligation comprised of variable consideration and are recognized over time based on transactions processed. The Company earns interest on a portion of customer funds while they are held in escrow. The interest is considered variable consideration and is recognized when it is specified and earned from the financial institution. Enterprise Offerings The Company’s Enterprise offerings delivered through Lifted are designed to support enterprise organizations with more complex contingent workforce needs. Lifted offers two lines of service, Enterprise Solutions and Managed Services, which provide enterprise clients with access to platform capabilities and services to source, contract, manage, and pay talent across multiple engagement models. The Company earns fees from talent under its Enterprise Solutions offerings, which represents a single promise to provide continuous access (i.e., stand-ready performance obligation) to the Enterprise Solutions offerings and related services. As each day of providing access to the Enterprise Solutions offerings and related services is substantially the same and talent simultaneously receive and consume the benefits as access is provided, the Company’s single promise under its Enterprise Solutions offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. These arrangements include variable consideration as follows: Talent service fees. The Company provides talent access to the Enterprise Solutions offerings to perform talent services for clients. The Company charges talent a service fee as a percentage of talent billings. For service fees charged to talent, the Company presents revenue on a net basis, as an agent, for providing access to the Enterprise Solutions offerings and related services as it does not control talent services provided to clients, and therefore the Company is not considered the principal for talent services. Additionally, talent and clients negotiate and agree upon the scope and the price for talent services directly with each other, and the Company is not a party to their agreement. The Company recognizes the service fees for each distinct service period in which it has the contractual right to bill for the services. 67 UPWORK INC. Notes to Consolidated Financial Statements—Continued The Company earns fees from clients under its Enterprise Solutions and other premium offerings, each of which represent a single promise to provide continuous access (i.e., stand-ready performance obligation) to the Enterprise Solutions offerings and related services. As each day of providing access to the Enterprise Solutions offerings and related services is substantially the same and the client simultaneously receives and consumes the benefits as access is provided, the Company’s single promise under its Enterprise Solutions and other premium offerings is comprised of a series of distinct service periods. The Company allocates variable consideration to each distinct service period in which it has the contractual right to bill. These arrangements may include fixed and variable consideration, or a combination of the two, comprised of the following: Client service fees. The Company offers clients access to the Enterprise Solutions offerings and related services to source talent in exchange for a client service fee calculated as a percentage of talent billings; these fees represent variable consideration. The Company recognizes the service fees for each distinct service period in which it has the contractual right to bill for the services. Enterprise compliance service fees. The Company charges fees to clients of its Enterprise Compliance offering who engage the Company to provide services to determine whether talent should be classified as an employee or an independent contractor based on the scope of talent services agreed between the client and talent and other factors. The Company charges Enterprise Compliance service fees as a percentage of talent billings; these fees represent variable consideration. The Company recognizes the service fees for each distinct service period in which it has the contractual right to bill for the services. Subscription fees. The Company charges monthly or annual subscription fees to clients for subscription services. These subscription fees are fixed consideration and are recognized over the period of the subscription consistent with the common measure of progress for the entire performance obligation. Upwork Payroll service fees. Upwork Payroll service fees are recognized on the same basis as described under the Marketplace offering and are variable consideration. Under a Managed Services arrangement, the Company is responsible for providing services and engaging talent directly or as employees of third-party staffing providers to perform the services for clients on the Company’s behalf. These arrangements are generally time- and materials-based, and are invoiced on a monthly basis. These fees represent variable consideration. The Company controls and directs the services performed on behalf of talent and presents revenue on a gross basis as principal. As each day of providing Managed Services is substantially the same and the client simultaneously receives and consumes the benefits as services are provided, the Company’s single promise under its Managed Services offering is comprised of a series of distinct service periods. For Managed Services arrangements with clients, the Company allocates the variable amounts to each distinct service period within the series in which it has the contractual right to bill and recognizes revenue as each distinct service period is performed. Deferred Revenue Deferred revenue consists of subscription, membership, and Connects fees collected in advance of performing the service or the talent using the Connect. Cost of Revenue Cost of revenue consists primarily of the cost of payment processing fees, amounts paid to talent to deliver services for clients under our Managed Services offering, personnel-related costs for the Company’s services and support personnel, third-party hosting fees, and the amortization expense associated with capitalized internal-use software and platform development costs. The Company defines personnel-related costs as salaries, bonuses, benefits, travel and entertainment, and stock-based compensation costs for employees, and costs related to other service providers the Company engages to provide internal services to the Company. Research and Development Research and development expense primarily consists of personnel-related costs. Research and development costs are expensed as incurred, except to the extent that such costs are associated with internal-use software and platform development that qualify for capitalization. Advertising Expense Advertising costs are expensed as they are incurred, and are included in sales and marketing expense in the Company’s consolidated statement of operations and comprehensive income. The Company incurred $ 51.9 million, $ 57.1 million, and $ 83.2 million in advertising expenses during the years ended December 31, 2025, 2024, and 2023, respectively. 68 UPWORK INC. Notes to Consolidated Financial Statements—Continued Provision for Transaction Losses Provision for transaction losses consists primarily of losses resulting from fraud and bad debt expense associated with our trade and client receivable balance and transaction losses associated with chargebacks. Provision for these items represent estimates of losses based on the Company’s actual historical incurred losses and other factors. Stock-Based Compensation The Company accounts for stock options with service and market-based conditions, restricted stock units, which are referred to as RSUs, performance stock units, which are referred to as PSUs, and purchase rights granted under the 2018 Employee Stock Purchase Plan, which is referred to as the 2018 ESPP, to employees and directors based on their estimated fair value on the date of grant. The Company calculates the estimated fair value of stock options and purchase rights granted under the 2018 ESPP on the date of grant using the Black-Scholes option pricing model. The fair value and derived service period of stock options with market-based conditions is estimated using the Monte Carlo valuation model. The Company evaluates the assumptions used to value option awards upon each grant of stock options. The fair value of RSUs awarded to employees is based on the closing price of the Company’s common stock, as reported on The Nasdaq Global Select Market on the date of grant. The grant date fair value of PSUs is measured in a manner similar to RSUs for awards that vest based on service and performance conditions or using a Monte Carlo model for awards that vest based on service and market conditions. The fair value of purchase rights granted under the 2018 ESPP is estimated using the Black-Scholes valuation model. The model requires the Company to make a number of assumptions, including the value of the Company’s common stock, expected volatility, expected term, risk-free interest rate, and expected dividends. Stock-based compensation expense associated with service- and market-based stock options will be recognized over the longer of the expected achievement period for the service condition and market condition. The Company generally recognizes stock-based compensation expense for RSUs on a straight-line basis over the vesting term. Stock-based compensation expense associated with PSUs is recognized over the longer of the expected achievement period for the performance condition and the service condition, if applicable. Stock-based compensation for purchase rights granted under the 2018 ESPP is recognized over the offering period. The Company accounts for forfeitures as they occur. Foreign Currency The functional currency of our foreign subsidiaries is generally the local currency of the country in which the foreign subsidiary is located. At the end of each reporting period, monetary assets and liabilities are remeasured using exchange rates in effect at the balance sheet date, while revenues and expenses are translated at average exchange rates during the year. Foreign currency transaction gains and losses are included in other income, net in the consolidated statements of operations and comprehensive income. The Company recorded net foreign currency transaction losses of $ 0.5 million for the year ended December 31, 2025, and net foreign currency transaction gains of $ 0.1 million and $ 0.5 million for the years ended December 31, 2024 and 2023, respectively. Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Under the asset and liability method, deferred assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be recoverable against future taxable income. Deferred tax assets and liabilities are measured using the enacted tax rates that will be in effect for the years in which those tax assets are expected to be realized or settled. The Company regularly assesses the likelihood that its deferred tax assets will be realized from recoverable income taxes or recovered from future taxable income based on the realization criteria set forth in the relevant authoritative guidance. To the extent that the Company believes any amounts are not more likely than not to be realized, the Company records a valuation allowance to reduce its deferred tax assets. The realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. In addition, the calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes potential liabilities based on its estimate of whether, and the extent to which, additional taxes will be due. The Company accounts for uncertain tax positions in accordance with the relevant guidance, which prescribes a recognition threshold and measurement approach for uncertain tax positions taken or 69 UPWORK INC. Notes to Consolidated Financial Statements—Continued expected to be taken in a company’s income tax return, and also provides guidance on recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The guidance utilizes a two-step approach for evaluation of uncertain tax positions. Step one, Recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit. Step two, Measurement, is based on the largest amount of benefit, which is more likely than not to be realized on ultimate settlement. A liability is reported for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Any interest and penalties related to unrecognized tax benefits are recorded as income tax expense. Net Income per Share Basic net income per share is computed by dividing the net income by the weighted-average number of common shares outstanding for the period. Diluted net income is computed by adjusting net income to reallocate undistributed earnings based on the potential impact of dilutive securities, including outstanding common stock options, RSUs, PSUs, warrants to purchase common stock, common stock issuable in connection with the 2018 ESPP, and common stock issuable in connection with the Notes. For periods in which the Company has reported net losses, diluted net loss per share is the same as basic net loss per share because dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is referred to as ASU 2023-09 . ASU 2023-09 requires public entities to provide annual disclosures of specific categories in the rate reconciliation and to disclose income taxes paid, disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 retrospectively, effective as of January 1, 2025. As a result, the Company has updated its income tax disclosures in “Note 14 – Income Taxes,” providing more detail on specific categories in the rate reconciliation and disclosed income taxes paid, disaggregated by jurisdiction. Recent Accounting Pronouncements Not Yet Adopted With the exception of those discussed below, the Company has reviewed all recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which is referred to as ASU 2024-03. ASU 2024-03 requires public entities to disclose detailed information about specific types of expenses included within the expense captions presented on the face of the income statement. While ASU 2024-03 does not alter the presentation of expense captions on the face of the income statement, it introduces requirements for disaggregating certain expense captions into specified categories within the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statements and accompanying footnotes. In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which is referred to as ASU 2025-05. ASU 2025-05 provides an optional practical expedient to permit entities to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of short-term trade receivables and contract assets when developing reasonable and supportable forecasts for estimating expected credit losses. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those fiscal years, with early adoption permitted. The Company has evaluated the impact of ASU 2025-05 and does not expect its adoption to have a material impact on the consolidated financial statements. The Company’s trade receivables are short-duration in nature and have historically experienced low credit losses, and its existing aging-based allowance methodology is substantially consistent with the practical expedient introduced by ASU 2025-05. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which is referred to ASU 2025-06. ASU 2025-06 modernizes the accounting for internal-use software by removing all references to prescriptive and sequential software development stages. ASU 2025-06 requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those fiscal years, with early adoption 70 UPWORK INC. Notes to Consolidated Financial Statements—Continued permitted. The Company is currently evaluating the timing of adoption and the potential impact of this new guidance on its consolidated financial statements. Note 3— Revenue Revenue Recognition For information about how the Company derives revenue, as well as the Company’s accounting policies, refer to “Note 2—Basis of Presentation and Summary of Significant Accounting Policies.” Disaggregation of Revenue Based on the information provided to and reviewed by the CODM, the nature, amount, timing, and uncertainty of revenue and cash flows and how they are affected by economic factors are most appropriately depicted by the type of service and primary geographical markets. Revenues recorded within these categories are earned from similar products and services for which the nature of associated fees and the related revenue recognition models are substantially similar. The Company disaggregates revenue by two types of services: Marketplace revenue and Enterprise revenue. The following table sets forth total revenue by type of service for the years ended December 31, 2025, 2024, and 2023: (In thousands) 2025 2024 2023 Marketplace $ 682,883 $ 662,108 $ 586,099 Enterprise 104,901 107,217 103,037 Total revenue $ 787,784 $ 769,325 $ 689,136 The following table sets forth total revenue by geographic area based on the billing address of talent and clients for the years ended December 31, 2025, 2024, and 2023: (In thousands) 2025 2024 2023 Talent: United States $ 113,984 $ 111,691 $ 95,833 Philippines 57,869 58,475 45,912 India 53,531 56,897 49,487 Pakistan (1) 46,242 38,960 30,586 Rest of world (1)(2) 171,712 173,105 148,107 Total talent 443,338 439,128 369,925 Clients: United States 246,218 238,786 236,744 Rest of world (1)(2) 98,228 91,411 82,467 Total clients 344,446 330,197 319,211 Total revenue $ 787,784 $ 769,325 $ 689,136 (1) For the years ended December 31, 2024 and 2023, the Company revised the presentation of geographic revenue to separately present Pakistan to conform to the current period presentation. This change in presentation did not impact total talent revenue or total revenue for the periods presented. (2) During the years ended December 31, 2025, 2024, and 2023, no single country included in the Rest of world category had revenue that exceeded 10% of total talent revenue, total clients revenue, or total revenue. Deferred Revenue and Remaining Performance Obligation Deferred revenue represents amounts billed in advance for services not yet rendered. Deferred revenue expected to be recognized within the next twelve months is classified as current deferred revenue. The Company has applied the practical expedients and exemptions and does not disclose the value of remaining performance obligations for (i) contracts with an original expected length of one year or less; and (ii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation under the series guidance. 71 UPWORK INC. Notes to Consolidated Financial Statements—Continued Contract Balances The following table provides information about the balances of the Company’s Trade and client receivables, net of allowance and contract liabilities included in deferred revenue and other liabilities, noncurrent as of December 31, 2025 and 2024: (In thousands) 2025 2024 Trade and client receivables, net of allowance $ 76,236 $ 75,490 Contract liabilities Deferred revenue, current 7,765 7,269 During 2025, changes in the contract liabilities balances were primarily the result of normal business activity. Revenue recognized during the year ended December 31, 2025 that was included in deferred revenue as of December 31, 2024 was $ 7.3 million. Revenue recognized during the year ended December 31, 2024 that was included in deferred revenue as of December 31, 2023 was $ 17.3 million. Note 4— Fair Value Measurements The Company defines fair value as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance describes three levels of inputs that may be used to measure fair value: • Level I—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets; • Level II—Observable inputs other than Level I prices, such as unadjusted quoted prices for similar assets or liabilities in active markets, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level III—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation. The categorization of a financial instrument within the fair value hierarchy is based upon the lowest level of input that is significant to its fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the assets or liabilities. The Company’s financial instruments that are carried at fair value consist of Level I and Level II assets as of December 31, 2025 and 2024. The following tables summarize the Company’s available-for-sale marketable 72 UPWORK INC. Notes to Consolidated Financial Statements—Continued securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category reported as cash and cash equivalents or marketable securities as of December 31, 2025 and 2024. (In thousands) December 31, 2025 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash Equivalents Marketable Securities Level I Money market funds $ 73,519 $ — $ — $ 73,519 $ 73,519 $ — Treasury bills 257,425 88 — 257,513 39,697 217,816 U.S. government securities 37,642 122 — 37,764 — 37,764 Total Level I 368,586 210 — 368,796 113,216 255,580 Level II Corporate bonds 117,532 561 ( 1 ) 118,092 — 118,092 Foreign government and agency securities 4,738 15 — 4,753 — 4,753 Total Level II 122,270 576 ( 1 ) 122,845 — 122,845 Total $ 490,856 $ 786 $ ( 1 ) $ 491,641 $ 113,216 $ 378,425 (In thousands) December 31, 2024 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash Equivalents Marketable Securities Level I Money market funds $ 193,481 $ — $ — $ 193,481 $ 193,481 $ — Treasury bills 131,022 40 — 131,062 — 131,062 U.S. government securities 32,625 22 ( 33 ) 32,614 — 32,614 Total Level I 357,128 62 ( 33 ) 357,157 193,481 163,676 Level II Commercial paper 16,233 — — 16,233 — 16,233 Corporate bonds 126,395 431 ( 144 ) 126,682 — 126,682 Commercial deposits 4,121 — — 4,121 — 4,121 Asset-backed securities 592 2 — 594 — 594 Foreign government and agency securities 5,036 14 ( 12 ) 5,038 — 5,038 Total Level II 152,377 447 ( 156 ) 152,668 — 152,668 Total $ 509,505 $ 509 $ ( 189 ) $ 509,825 $ 193,481 $ 316,344 Additionally, the Company deposits funds held in escrow in interest-bearing and non-interest-bearing cash accounts. The interest earned on the interest-bearing accounts is included in Revenue in the Company’s consolidated statement of operations and comprehensive income. As of December 31, 2025 and 2024, the fair value of the Company’s funds held on behalf of customers and held in interest-bearing cash accounts was measured using Level I inputs. The Company’s non-financial assets acquired pursuant to its acquisitions of Bubty B.V., which is referred to as Bubty, Ascen Inc., which is referred to as Ascen, and Objective AI, Inc., which is referred to as Objective AI, including intangible assets and goodwill, are measured at estimated fair value on a non-recurring basis. For additional information, refer to “Note 7—Business Combination.” 73 UPWORK INC. Notes to Consolidated Financial Statements—Continued The following table summarizes the remaining contractual maturities of our cash equivalents and marketable securities as of December 31, 2025: (In thousands) Amortized Cost Fair Value Due within one year $ 334,915 $ 335,007 Due after one year through five years 155,941 156,634 Total $ 490,856 $ 491,641 For available-for-sale marketable debt securities with unrealized loss positions, the Company does not intend to sell these securities, nor does it anticipate that it will need to or be required to sell the securities. As of December 31, 2025 and 2024, the decline in fair value of these securities was attributable to changes in interest rates and not due to credit related factors. As of December 31, 2025 and 2024, the Company considered any decreases in market value to be temporary in nature and did not consider any of the Company’s marketable securities to be other-than-temporarily impaired. The Company did not record any impairment charges with respect to its marketable securities during the years ended December 31, 2025, 2024, and 2023. During the years ended December 31, 2025, 2024, and 2023, interest income was $ 27.4 million, $ 28.0 million, and $ 24.4 million, respectively, and is included in other income, net in the Company’s consolidated statement of operations and comprehensive income. Note 5— Balance Sheet Components Property and Equipment, Net Property and equipment, net consisted of the following as of December 31, 2025 and 2024: (In thousands) 2025 2024 Internal-use software and platform development $ 83,461 $ 59,815 Leasehold improvements 7,755 6,025 Computer equipment and software 7,630 6,817 Office furniture and fixtures 1,076 1,755 Total property and equipment 99,922 74,412 Less: accumulated depreciation ( 55,501 ) ( 44,356 ) Property and equipment, net $ 44,421 $ 30,056 Depreciation expense related to property and equipment, excluding internal-use software and platform development, was $ 2.2 million, $ 2.9 million, and $ 2.9 million for the years ended December 31, 2025, 2024, and 2023, respectively. The Company capitalized $ 24.8 million, $ 12.8 million, and $ 13.8 million of internal-use software and platform development costs during the years ended December 31, 2025, 2024, and 2023, respectively. Amortization expense related to the capitalized internal-use software and platform development costs was $ 14.0 million, $ 9.8 million, and $ 6.5 million for the years ended December 31, 2025, 2024, and 2023, respectively, of which $ 12.4 million, $ 8.6 million, and $ 4.5 million, respectively, were included in cost of revenue related to developed technology used on the Company’s platforms and other workforce solutions. 74 UPWORK INC. Notes to Consolidated Financial Statements—Continued Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following as of December 31, 2025 and 2024: (In thousands) 2025 2024 Accrued compensation and related benefits $ 51,858 $ 30,666 Accrued taxes 19,715 11,394 Accrued vendor expenses 12,899 9,485 Accrued payment processing fees 4,708 4,478 Operating lease liability, current 1,672 1,624 Accrued talent costs 1,678 801 Other 1,493 852 Total accrued expenses and other current liabilities $ 94,023 $ 59,300 Note 6— Leases Operating Leases The Company leases office space and certain equipment under various operating leases, with the vast majority of its lease portfolio consisting of operating leases for office space. The Company has also entered into arrangements where it acts as a sublessor in its leases of office space. The Company has not entered into any significant finance, sales-type, or direct financing leases. The Company’s significant judgments include determining whether an arrangement is or contains a lease, the determination of the discount rate used to calculate the lease liability, and whether or not lease incentives are reasonably certain to occur in the initial measurement of the lease liability. Operating lease assets and lease liabilities are recognized at commencement date and initially measured based on the present value of lease payments over the defined lease term. Lease expense is recognized on a straight-line basis over the lease term. A contract is or contains an embedded lease if the contract meets all of the below criteria: • there is an identified asset; • the Company has the right to obtain substantially all of the economic benefit of the asset; and • the Company has the right to direct the use of the asset. For initial measurement of the present value of lease payments and for subsequent measurement of lease modifications, the Company is required to use the rate implicit in the lease. Since the majority of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which is a collateralized rate. The application of the incremental borrowing rate is performed on a lease-by-lease basis and approximates the rate at which the Company could borrow, on a secured basis for a similar term, an amount equal to its lease payments in a similar economic environment. The Company’s leases have remaining lease terms of approximately three years to seven years . The Company includes lease payments associated with renewal options in its operating lease asset and liability only when it becomes reasonably certain the company will exercise the renewal option. The Company has not included renewal options for any of its operating leases in its determination of lease liabilities. The Company does not have lease agreements with residual value guarantees, sale leaseback terms, or material restrictive covenants. Leases with an initial term of 12 months or less are not recognized on the consolidated balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. 75 UPWORK INC. Notes to Consolidated Financial Statements—Continued The following table summarizes the Company’s operating lease assets and lease liabilities as of December 31, 2025 and 2024: (In thousands) Balance Sheet and Cash Flow Classification 2025 2024 Assets Operating—noncurrent Operating lease asset $ 5,011 $ 5,752 Liabilities Operating—current Accrued expenses and other current liabilities 1,672 1,624 Operating—noncurrent Operating lease liability, noncurrent 9,707 9,567 Total lease liabilities $ 11,379 $ 11,191 For the years ended December 31, 2025, 2024, and 2023, operating lease cost, inclusive of variable lease charges, was $ 2.6 million, $ 5.6 million, and $ 6.3 million, respectively, and sublease income recognized was approximately $ 1.2 million, $ 1.7 million, and $ 1.7 million, respectively. For the years ended December 31, 2025, 2024, and 2023, charges related to operating leases that are variable, and therefore not included in the measurement of the lease liabilities, were $ 1.0 million, $ 2.1 million, and $ 2.2 million, respectively. For the years ended December 31, 2025, 2024, and 2023, the Company made lease payments of $ 2.0 million, $ 5.8 million , and $ 6.8 million , respectively. Palo Alto Office Lease In June 2024, the Company entered into a new lease agreement to lease approximately 12,685 square feet of office space in Palo Alto, California, which serves as the Company’s corporate headquarters. The lease commenced in September 2024, and rent payments began in March 2025. The initial lease term is 91 months from the commencement date and is scheduled to expire in September 2032, unless terminated earlier. The lease includes two options to extend the term, each for an additional three years , exercisable under certain conditions specified in the lease agreement. The Company evaluated these extension options as part of the lease accounting under ASC 842 and determined that the extension options are not reasonably certain to be exercised. As such, the options have not been included in the measurement of the right-of-use asset or lease liability. As a result of entering into this lease, the Company recorded a right-of-use asset and lease liability of $ 4.5 million and $ 4.4 million, respectively. Monthly rent payments under the lease are approximately $ 0.1 million and are recorded within general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income. Santa Clara Sub-Sublease In November 2023, the Company amended its sub-sublease agreement, originally executed in April 2021, to sublease the entirety of its former headquarters in Santa Clara, California. The amended sub-sublease extends the term by an additional 51 months, through August 31, 2028, unless terminated earlier. The amended sub-sublease term aligns substantially with the remaining term of the Company’s master lease. Monthly rent payments under the amended agreement are approximate $ 0.1 million and are recorded within general and administrative expenses within the Company’s consolidated statements of operations and comprehensive income. Neither party has the option to renew or extend the sub-sublease agreement. Under the amended sub-sublease agreement, the Company is not relieved of its original obligation with the master lessor, which expires on October 15, 2028. The Company determined that the sublease agreement constitutes an operating lease, consistent with the classification of the original sublease agreement with the landlord. Chicago Leases In December 2024, as a result of the restructuring plan announced in October 2024, which is referred to as the Restructuring Plan, the Company entered into an early termination agreement for the Chicago leases, which was effective December 31, 2024. The Company recognized approximately $ 1.1 million in early termination costs, primarily consisting of remaining lease payments under the termination agreement. Operating lease costs for the year ended December 31, 2024, including variable lease charges, reflected amounts incurred prior to the lease termination. 76 UPWORK INC. Notes to Consolidated Financial Statements—Continued The following table shows the Company’s future lease commitments due in each of the next five years for operating leases, which excludes amounts received in the form of sublease income discussed above: (In thousands) Year Ended December 31, Leases 2026 $ 2,962 2027 3,050 2028 2,735 2029 1,347 2030 1,387 Thereafter 2,531 Total lease payments 14,012 Adjustment for discount to present value ( 2,633 ) Total $ 11,379 As of December 31, 2025, the weighted-average remaining lease term is 3.8 years. For the year ended December 31, 2025, the weighted-average discount rate is 6.6 % . Note 7— Business Combination 2024 Acquisition Objective AI Inc. In November 2024, the Company acquired 100 % of the outstanding equity interests of Objective AI, a search-as-a-service platform specializing in AI-native search integration for digital experiences, for total cash consideration of $ 19.1 million. The acquisition was completed in November 2024 and is included in the Company’s consolidated financial statements for the year ended December 31, 2024. The acquisition of Objective AI was accounted for as a business combination under ASC Topic 805, Business Combinations. Accordingly the purchase consideration was allocated as follows (in thousands): Cash and cash equivalents $ 4,779 Intangible assets 12,000 Other net, tangible assets acquired and liabilities assumed ( 512 ) Goodwill 2,845 Total purchase consideration $ 19,112 The identifiable intangible assets acquired consisted primarily of developed technology and customer relationships, with estimated useful lives of three years and six months , respectively. The Company engaged an independent third-party valuation specialist to assist in determining the fair value of the intangible assets. The fair value measurements of the intangible assets were based primarily on significant unobservable inputs and this represents a Level 3 measurement. Goodwill recognized in the acquisition was primarily attributable to the assembled workforce and expected synergies from integrating Objective AI’s technology and capabilities into the Company’s platform. The goodwill is not deductible for income tax purposes. The Company finalized the valuation of the assets acquired and liabilities assumed during 2024, and the purchase price allocation is considered final. 2025 Acquisitions Bubty B.V. On June 27, 2025, Lifted acquired 100 % of the equity interests of Bubty, a Netherlands-based platform supporting enterprise management of contingent workforce solutions, for total purchase price consideration of $ 20.4 million. This acquisition advances the Company's strategic objectives by equipping Lifted with enhanced workforce management capabilities and a platform for clients managing global talent. 77 UPWORK INC. Notes to Consolidated Financial Statements—Continued The acquisition of Bubty was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. Accordingly, the estimated allocation of the purchase price is as follows (in thousands): Cash and cash equivalents $ 77 Trade and client receivables 71 Intangible assets 18,600 Total assets $ 18,748 Accounts payable, accrued expenses and other liabilities $ 930 Deferred tax liability 3,614 Total liabilities $ 4,544 Net assets $ 14,204 Goodwill 6,206 Total purchase price consideration $ 20,410 The excess of the purchase consideration over the fair value of net assets acquired has been recorded as goodwill. The goodwill is primarily attributable to the expected synergies from integrating Bubty’s workforce management technology and operations with Lifted, and the value of the assembled workforce, which do not qualify for separate recognition as identifiable intangible assets. The goodwill is not deductible for income tax purposes. The Company engaged an independent third-party valuation specialist to assist in the determination of the fair value of intangible assets acquired. All key estimates, assumptions, and forecasts were either provided by or reviewed by management. While the third-party specialist provided significant input into the valuation, the final conclusions reflect the judgment of management. The fair value measurements of the intangible assets were based primarily on significant unobservable inputs, and this represents a Level 3 measurement. As of the acquisition date, the estimated fair value and expected useful lives of the identifiable intangible assets acquired were as follows (dollars in thousands): Fair Value Expected Useful life Developed technology $ 18,600 5 years 78 UPWORK INC. Notes to Consolidated Financial Statements—Continued Ascen Inc. On August 18, 2025, Lifted acquired 100 % of the equity interests of Ascen, a tech-enabled employer of record company specifically designed for the contingent labor space, for total purchase price consideration of $ 40.8 million. This acquisition supports the Company’s strategic objective to enhance its enterprise offerings by enabling clients of Lifted to engage workers classified as employees for U.S. tax purposes. The acquisition of Ascen was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. Accordingly, the estimated allocation of the purchase price is as follows (in thousands): Cash and cash equivalents $ 2,688 Trade and client receivables 12,420 Intangible assets 15,000 Other current assets (1) 2,116 Total assets $ 32,224 Accounts payable, accrued expenses and other liabilities (1) $ 9,080 Deferred tax liability (1) 4,306 Total liabilities $ 13,386 Net assets $ 18,838 Goodwill (1) 21,922 Total purchase price consideration (1) $ 40,760 (1) During the three months ended December 31, 2025, certain estimates related to the fair value of the assets acquired and liabilities assumed were refined, resulting in a measurement period purchase accounting adjustment, with the related impacts to goodwill. The excess of the purchase consideration over the fair value of net assets acquired has been recorded as goodwill. The goodwill is primarily attributable to the expected synergies from Lifted’s ownership of Ascen and the Company’s expansion into employer of record and staffing solutions, which do not qualify for separate recognition as identifiable intangible assets. The goodwill is not deductible for income tax purposes. The Company engaged an independent third-party valuation specialist to assist in the determination of the fair value of intangible assets acquired. All key estimates, assumptions, and forecasts were either provided by or reviewed by management. While the third-party specialist provided significant input into the valuation, the final conclusions reflect the judgment of management. The fair value measurements of the intangible assets were based primarily on significant unobservable inputs, and this represents a Level 3 measurement. As of the acquisition date, the estimated fair value and expected useful lives of the identifiable intangible assets acquired were as follows (dollars in thousands): Fair Value Expected Useful life Customer relationship $ 10,000 3 years Developed technology $ 5,000 5 years Total intangibles $ 15,000 The purchase price allocations are preliminary and remain subject to change as the Company finalizes the valuation of intangible assets and related tax matters. The final purchase price allocations may result in adjustments to the fair values initially assigned, including adjustments to goodwill. The Company expects to finalize the purchase price allocations for the acquisitions of both Bubty and Ascen within the measurement period, which will not extend beyond one year from the respective acquisition dates, in accordance with ASC 805. During the three months ended December 31, 2025, the Company decreased goodwill by $ 1.3 million related to the Ascen acquisition based on new information obtained about facts and circumstances that existed as of the acquisition date, resulting in a reduction to the preliminary purchase price allocation. The Company incurred approximately $ 4.4 million of transaction-related expenses in connection with these acquisitions for the nine months ended September 30, 2025, all of which were recorded in general and 79 UPWORK INC. Notes to Consolidated Financial Statements—Continued administrative expenses in the consolidated statements of operations and comprehensive income. No additional transaction-related expenses were incurred during the three months ended December 31, 2025. The Company has not presented unaudited supplemental pro forma financial information for the business acquisitions described above, as management determined that such information was not material to the Company’s consolidated results of operations for the periods presented, assuming the acquisitions had occurred as of the beginning of the comparable prior reporting period. As of December 31, 2025, acquisition-related compensation includes aggregate founders’ holdback amounts of $ 18.2 million to be paid over a three-year period from the date of the respective deal close, subject to the relevant founder's continued employment or service, as applicable. This represents compensation for post-combination services because the payments are subject to the relevant founder's continuous employment or service, as applicable, to the relevant vesting dates. The Company expects to recognize related compensation expense over the service period as amounts are earned. Note 8— Goodwill and Net Intangible Assets Goodwill The following table summarizes the change in the carrying value amount of goodwill for the year ended December 31,2025. Balance at December 31, 2024 $ 121,064 Increase in goodwill related to business combinations 29,407 Other adjustments (1) $ ( 1,279 ) Balance at December 31, 2025 $ 149,192 (1) Includes measurement-period purchase accounting adjustments for Ascen recorded in the three months ended December 31, 2025. See “Note 7—Business Combination” for additional information. Net Intangible Assets The Company’s intangible assets include identifiable, finite-lived intangible assets such as developed technology and customer relationships, acquired as part of business combinations in 2024 and 2025, as well as an assembled workforce acquired in 2023. The following table summarizes the components of net intangible assets as of December 31, 2025 and 2024: 2025 2024 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 34,600 $ 6,203 $ 28,397 $ 11,000 $ 305 $ 10,695 Assembled workforce 3,188 3,188 — 3,188 1,727 1,461 Customer relationships 11,000 2,236 8,764 1,000 167 833 Total $ 48,788 $ 11,627 $ 37,161 $ 15,188 $ 2,199 $ 12,989 For the years ended December 31, 2025 and 2024, amortization expense of intangible assets was $ 9.4 million and $ 2.1 million, respectively. For the year ended December 31, 2023, amortization expense of intangible assets was immaterial . As of December 31, 2025, the weighted average amortization periods for the finite-lived intangible assets are as follows: Developed technology 3.9 years Customer relationships 2.8 years As of December 31, 2025, the estimated annual amortization expense for finite-lived intangible assets over the remaining useful life is as follows (in thousands): 80 UPWORK INC. Notes to Consolidated Financial Statements—Continued (In thousands) Year Ended December 31, Estimated Amortization Expense 2026 $ 11,720 2027 11,414 2028 6,818 2029 4,720 2030 2,489 Total 37,161 Note 9— Commitments and Contingencies Letters of Credit In conjunction with the Company’s operating lease agreements, as of December 31, 2025 and 2024, the Company had irrevocable letters of credit outstanding in the aggregate amount of $ 0.3 million and $ 0.6 million, respectively. The letters of credit are collateralized by restricted cash in the same amount. No amounts had been drawn against these letters of credit as of December 31, 2025 and 2024. Contingencies The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Potential contingencies may include various claims and litigation or non-income tax matters that arise from time to time in the normal course of business. Due to uncertainties inherent in such contingencies, the Company can give no assurance that it will prevail in any such matters, which could subject the Company to significant liability or damages. Any claims, litigation, or other contingencies could have an adverse effect on the Company’s business, financial position, results of operations or cash flows in or following the period that claims, litigation or other contingencies are resolved. As of December 31, 2025 and 2024, the Company was not a party to any material legal proceedings or claims, nor is the Company aware of any pending or threatened litigation or claims, including non-income tax matters, that could reasonably be expected to have a material adverse effect on its business, operating results, cash flows, or financial condition. Accordingly, the amounts accrued for contingencies for which the Company believes a loss is probable were not material as of and for the years ended December 31, 2025 and 2024. Indemnification The Company has indemnification agreements with its officers, directors, and certain key employees to indemnify them while they are serving in good faith in their respective positions. In the ordinary course of business, the Company and its operating subsidiaries enter into contractual arrangements under which they agree to provide indemnification of varying scope and terms to clients, business partners, vendors, and other parties, including, but not limited to, losses arising out of the Company’s or its operating subsidiaries’ breach of such agreements, claims related to potential data or information security breaches, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from their products and services or their acts or omissions. In addition, subject to the terms of the applicable agreement, as part of the Enterprise Solutions and certain other premium offerings, the Company and its operating subsidiaries indemnify clients that subscribe to worker classification services for losses arising from worker misclassification. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the facts and circumstances involved in each particular provision. 81 UPWORK INC. Notes to Consolidated Financial Statements—Continued Note 10— Debt The following table presents the carrying value of the Company’s debt obligations as of December 31, 2025 and 2024: (In thousands) 2025 2024 Convertible senior notes—interest accrues from August 2021 and is payable semiannually in arrears on February 15 and August 15 of each year, beginning February 2022, maturing August 2026; interest at 0.25 % per annum $ 360,998 $ 360,998 Total debt 360,998 360,998 Less: Unamortized debt issuance costs ( 1,228 ) ( 3,070 ) Balance $ 359,770 $ 357,928 Debt, current $ 359,770 $ — Debt, noncurrent $ — $ 357,928 Weighted-average interest rate 0.76 % 0.76 % Convertible Senior Notes Due 2026 In August 2021, the Company issued 0.25 % convertible senior notes due 2026. The Notes were issued pursuant to and are subject to the terms and conditions of an indenture between the Company and Computershare Trust Company, National Association (as successor in interest to Wells Fargo Bank, National Association), as trustee, which is referred to as the Indenture. The Notes were offered and sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. In March 2023, the Company repurchased a portion of the outstanding Notes in privately negotiated transactions. As a result, the Company recognized a gain on the early extinguishment of debt of $ 38.9 million during the year ended December 31, 2023, which is included in Other income, net in the Company’s consolidated statement of operations and comprehensive income. As of each of December 31, 2025 and 2024, $ 361.0 million aggregate principal amount of the Notes remained outstanding. The Notes are senior, unsecured obligations of the Company and bear interest at a rate of 0.25 % per year. Interest began to accrue on August 10, 2021, and is payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2022, and the principal amount of the Notes will not accrete. The Notes will mature on August 15, 2026, unless earlier redeemed, repurchased, or converted in accordance with the terms of the Notes. Holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder (i) on or after May 15, 2026, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date, and (ii) prior to the close of business on the business day immediately preceding May 15, 2026, only upon satisfaction of certain conditions and during certain periods specified as follows: • during any calendar quarter commencing after the calendar quarter ending on December 31, 2021, if the last reported sale price of the Company’s common stock is greater than or equal to 130 % of the conversion price for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter of the conversion price on each applicable trading day; • during the five consecutive business day period after any five consecutive trading day period, which is referred to as the Measurement Period, in which the trading price (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; • if the Company calls such Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and • upon the occurrence of specified corporate events described in the Indenture. Upon conversion, the Notes may be settled in shares of the Company’s common stock, cash or a combination of cash and shares of the common stock, at the election of the Company. The Notes have an initial conversion rate of 15.1338 shares of common stock per $1,000 principal amount of Notes, which is subject to adjustment in certain circumstances. This is equivalent to an initial conversion price of approximately $ 66.08 per share of the Company’s common stock. The conversion rate is subject to customary adjustments under certain circumstances in accordance 82 UPWORK INC. Notes to Consolidated Financial Statements—Continued with the terms of the Indenture. In addition, if certain corporate events that constitute a make-whole fundamental change (as defined in the Indenture) occur or if the Company issues a notice of redemption with respect to the Notes prior to the maturity date, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Company may redeem for cash all or any portion of the Notes (subject to a partial redemption limitation), at the Company’s option, on or after August 20, 2024, if the last reported sale price per share of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the Notes, which means that the Company is not required to redeem or retire the Notes periodically. Upon the occurrence of a fundamental change (as defined in the Indenture), subject to certain conditions, holders have the right to require the Company to repurchase for cash all or a portion of their Notes at a price equal to 100 % of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest thereon, if any, until, but excluding, the fundamental change repurchase date. The Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company’s existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries. For each of the years ended December 31, 2025 and 2024, interest expense was $ 0.9 million and amortization of the issuance costs was $ 1.8 million related to the Notes, respectively. As of December 31, 2025 and 2024, the if-converted value of the Notes did not exceed the outstanding principal amount. As of December 31, 2025 and 2024, the total estimated fair value of the Notes was $ 352.5 million and $ 333.5 million, respectively, and was determined based on a market approach using actual bids and offers of the Notes in an over-the-counter market on the last trading day of the period. The Company considers these assumptions to be Level II inputs in accordance with the fair value hierarchy described in “Note 4—Fair Value Measurements.” Capped Calls In connection with the issuance of the Notes, the Company entered into privately negotiated capped call transactions, which are referred to as the Capped Calls, with various financial institutions. Subject to customary anti-dilution adjustments substantially similar to those applicable to the Notes, the Capped Calls cover the number of shares of the Company’s common stock initially underlying the Notes. By entering into the Capped Calls, the Company expects to reduce the potential dilution to its common stock (or, in the event a conversion of the Notes is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the Notes its common stock price per share exceeds the conversion price of the Notes, with such reduction subject to a cap based on the cap price. If, however, the market price per share of common stock, as measured under the terms of the Capped Calls, exceeds the cap price of the Capped Calls, there would be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that the then-market price per share of common stock exceeds the cap price of the Capped Calls. The initial cap price of the Capped Calls is $ 92.74 per share of common stock, which represents a premium of 100 % over the last reported sale price of the common stock of $ 46.37 per share on August 5, 2021, the date of issuance of the Notes, and is subject to certain customary adjustments under the terms of the Capped Calls; provided that the cap price will not be reduced to an amount less than the strike price of $ 66.08 per share. The Capped Calls are separate transactions and are not part of the terms of the Notes. The Capped Calls meet the criteria for classification as equity and, as such, are not remeasured each reporting period and are included as a reduction to additional paid-in-capital within stockholders’ equity. Note 11— Preferred and Common Stock Preferred Stock As of December 31, 2025 and 2024, the Company was authorized to issue up to 10,000,000 shares of undesignated preferred stock, $ 0.0001 par value per share. The Company did not have any outstanding shares of preferred stock as of December 31, 2025 and 2024. 83 UPWORK INC. Notes to Consolidated Financial Statements—Continued Common Stock Holders of common stock are entitled to one vote per share and are entitled to receive dividends, if any, on a pro rata basis whenever funds are legally available and when, as, and if declared by the Company’s board of directors. As of December 31, 2025 and 2024, the Company was authorized to issue 490,000,000 shares of common stock. As of December 31, 2025 and 2024, the Company had reserved shares of common stock for future issuance as follows: 2025 2024 Options issued and outstanding 2,210,912 2,392,899 RSUs and PSUs issued and outstanding 8,892,471 8,841,716 Warrant to purchase common stock 150,000 233,000 Remaining shares reserved for future issuances under 2018 Equity Incentive Plan 30,043,138 27,152,973 Remaining shares reserved for future issuances under 2018 Employee Stock Purchase Plan 5,365,078 4,694,949 Common stock issuable in connection with convertible senior notes 5,463,045 5,463,045 Total 52,124,644 48,778,582 Share Repurchase Program In November 2023, the Company’s board of directors authorized a share repurchase program for the repurchase of up to $ 100.0 million of shares of the Company’s outstanding common stock, which is referred to as the 2023 Share Repurchase Authorization. During the year ended December 31, 2024, the Company repurchased and subsequently retired 8.1 million shares of its common stock under the 2023 Share Repurchase Authorization for an aggregate amount of $ 100.0 million at an average price of $ 12.38 per share, including fees associated with the repurchases and excluding excise tax. As of December 31, 2024, the Company had no remaining balance available for repurchases under the 2023 Share Repurchase Authorization. In October 2024, the Company’s board of directors authorized a share repurchase program for the repurchase of up to $ 100.0 million of shares of the Company’s outstanding common stock, which is referred to as the 2024 Share Repurchase Authorization. The Company repurchased and subsequently retired 7.2 million shares of its common stock under the 2024 Share Repurchase Authorization between February 2025 and September 2025, for an aggregate amount of $ 100.0 million at an average price of $ 13.83 per share, including fees associated with the repurchases and excluding excise tax. As of December 31, 2025, the Company had no remaining balance available for repurchases under the 2024 Share Repurchase Authorization. In September 2025, the Company’s board of directors authorized a share repurchase program for the repurchase of up to $ 100.0 million of shares of the Company’s outstanding common stock, which is referred to as the 2025 Share Repurchase Authorization. The Company repurchased and subsequently retired 2.1 million shares of its common stock under the 2025 Share Repurchase Authorization between September 2025 and December 2025, for an aggregate amount of $ 36.0 million at an average price of $ 17.33 per share. As of December 31, 2025, the Company had $ 64.0 million available for repurchases under the 2025 Share Repurchase Authorization. Repurchases of the Company’s common stock under the 2025 Share Repurchase Authorization may be made from time to time on the open market (including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended), in privately negotiated transactions, or by other methods, at the Company’s discretion, and in accordance with applicable securities laws and other restrictions. The 2025 Share Repurchase Authorization does not have an expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason. The 2025 Share Repurchase Authorization does not obligate the Company to repurchase any dollar amount or number of shares, and the timing and amount of any repurchases will depend on market and business conditions. 84 UPWORK INC. Notes to Consolidated Financial Statements—Continued Common Stock Warrant In 2018, the Company established The Upwork Foundation initiative. The program includes a donor-advised fund created through the Tides Foundation. In 2018, the Company issued a warrant to purchase 500,000 shares of its common stock at an exercise price of $ 0.01 per share to the Tides Foundation, which is referred to as the Tides Foundation Warrant. The vesting and exercisability provisions of the warrant became effective upon the Company’s initial public offering, which is referred to as the IPO, in October 2018. This warrant is exercisable as to 1/10th of the shares on each anniversary of the IPO, with proceeds from the sale of such shares to be donated in accordance with the Company’s directive. During 2025, the holder of the warrant exercised 83,000 of the then-vested and exercisable shares. During 2024, the holder of the warrant exercised 67,000 of the then-vested and exercisable shares. During 2023, this warrant was exercised as to all 50,000 of the then-vested and exercisable shares. In lieu of a cash payment, the holder of the warrant surrendered shares of common stock to cover the exercise price. In each of the years ended December 31, 2025, 2024, and 2023, the Company recorded $ 0.8 million of expense related to this warrant, which is included in general and administrative expense in the Company’s consolidated statement of operations and comprehensive income. Note 12— Stock-Based Compensation Equity Incentive Plans 2014 Equity Incentive Plan In 2014, the Company’s board of directors and stockholders each adopted the 2014 Equity Incentive Plan, which is referred to as the 2014 EIP. The total number of shares of common stock reserved and available for grant and issuance pursuant to such plan was originally 12,462,985 plus (i) shares that were then subject to outstanding option grants under the oDesk Corporation 2004 Stock Plan, the Elance 1999 Stock Option Plan, and the Elance 2009 Stock Option Plan, which are referred to collectively as the Prior Plans, but subsequently ceased to be subject to an award for any reason other than exercise of a stock option, (ii) shares that had been reserved but not subject to any outstanding awards under the Prior Plans and (iii) shares issued under the Prior Plans that were repurchased, forfeited, or used to pay employee withholding or exercise price obligations. Under the terms of the 2014 EIP, incentive stock options could be granted at prices not less than 100 % of the fair value of the Company’s common stock on the date of grant unless determined in writing by the Company’s board of directors. The options granted under the 2014 EIP generally vest over a four-year period from the original date of grant and expire ten years from the original grant date. As of 2024, no further awards may be granted under the 2014 EIP. 2018 Equity Incentive Plan In 2018, the Company’s board of directors and stockholders each adopted the 2018 Equity Incentive Plan, which is referred to as the 2018 EIP, which became effective on the date immediately prior to the date of the IPO. A total of 10,701,505 shares of common stock were initially reserved for issuance pursuant to future awards under the 2018 EIP. On January 1 of each year through 2028, shares available for issuance are increased based on the provisions of the 2018 EIP. Any shares subject to outstanding awards under the 2014 EIP that are canceled or repurchased subsequent to the 2018 EIP’s effective date are returned to the pool of shares reserved for issuance under the 2018 EIP. Awards granted under the 2018 EIP may be (i) incentive stock options, (ii) nonqualified stock options, (iii) RSUs, (iv) restricted stock awards, or (v) stock appreciation rights, as determined by the Company’s board of directors or compensation committee at the time of grant. Pursuant to the terms of the 2018 EIP, the number of shares available for grant was increased by 6,767,422 shares in January 2025. Option Awards The fair value of options with service- and performance-based conditions is determined using the Black-Scholes valuation model as of the grant date using the following assumptions: Dividend Yield —The dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to do so. Expected Term —The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. For awards containing only service conditions, the Company determines the expected term using the simplified method as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior at the time of grant. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the 85 UPWORK INC. Notes to Consolidated Financial Statements—Continued options. For performance-based awards, the Company uses relevant data, including past exercise patterns, if available, to determine the expected term. Risk-Free Interest Rate —The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term. Expected Volatility —Since the Company did not have a sufficient trading history of its common stock at the time of grant, the expected volatility is derived from the average historical stock volatilities of several unrelated public companies within the Company’s industry that the Company considers to be comparable to its business over a period equivalent to the expected term of the stock option grants. Fair Value of Common Stock —Given the absence of a public trading market prior to the IPO, the Company’s board of directors considered numerous objective and subjective factors to determine the fair value of its common stock at each grant date. These factors included, but were not limited to: (i) independent contemporaneous third-party valuations of common stock; (ii) the prices for the Company’s redeemable convertible preferred stock sold to outside investors; (iii) the rights and preferences of redeemable convertible preferred stock relative to common stock; (iv) the lack of marketability of its common stock; (v) developments in the business; and (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions. Subsequent to the IPO, the fair value of common stock is based on the closing price of the Company’s common stock, as reported on The Nasdaq Global Select Market on the date of grant. The following table summarizes activity under the Company’s stock option plans: Number of Shares Underlying Outstanding Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Balances at December 31, 2024 2,392,899 $ 26.08 4.75 $ 10,391 Exercised ( 181,987 ) 4.12 Balances at December 31, 2025 2,210,912 27.89 4.01 10,632 Vested and exercisable as of December 31, 2025 710,912 4.86 1.81 10,632 Vested and expected to vest as of December 31, 2025 2,210,912 27.89 4.01 10,632 In 2021, the compensation committee of the Company’s board of directors approved a stock option grant, which is referred to as the CEO Award, exercisable for up to 1,500,000 shares of the Company’s common stock to Hayden Brown, the Company’s President and Chief Executive Officer, under the 2018 EIP. The CEO Award is subject to a service-based vesting requirement, which is referred to as the Service Condition, and a performance-based vesting requirement, which is referred to as the Market Condition. In order for any shares subject to the CEO Award to be exercisable, both the Service Condition and the Market Condition must be satisfied with respect to such shares. The CEO Award vests with respect to the Service Condition in sixteen equal quarterly installments following the grant date, subject to Ms. Brown’s continuous service to the Company as Chief Executive Officer, Executive Chairperson, or any C-level officer position. The CEO Award vests with respect to the Market Condition upon the achievement of certain volume weighted-average common stock price targets measured over any consecutive 90-day period between the grant date and April 18, 2026. The 90-day volume weighted-average common stock price targets, and 86 UPWORK INC. Notes to Consolidated Financial Statements—Continued the number of shares of the CEO Award that become vested with respect to the Market Condition upon the achievement of each such target, are reflected in the following table: Stock Price Number of Shares Vested $ 60 100,000 $ 70 200,000 $ 80 300,000 $ 90 400,000 $ 100 500,000 As of December 31, 2025, none of the Market Condition stock price thresholds had been met, and no shares subject to the CEO Award had been earned or vested. Stock-based compensation expense associated with the CEO Award will be recognized over the longer of the expected achievement period for the Market Condition and the Service Condition. The Market Condition period and the valuation of each tranche of the CEO Award were determined using a Monte Carlo simulation. In the event the Market Condition is met prior to the expected achievement period, any then-unrecognized compensation expense associated with the shares that have vested with respect to both the Market Condition and the Service Condition will be recognized immediately in the Company’s consolidated statements of operations and comprehensive income. For the year ended December 31, 2025, stock-based compensation expense related to the CEO award was immaterial and was recognized in the three months ended March 31, 2025. For the years ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense related to the CEO Award of $ 1.3 million and $ 5.1 million, respectively. Stock-based compensation expense for the CEO Award is recorded as a component of general and administrative expense in the Company’s consolidated statement of operations and comprehensive income. The Company estimates the expected term based on a future exercise assumption. The weighted-average derived service period for the CEO Award is 2.1 years. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes. The expected volatility is derived from the average historical stock volatility of the Company over a period equivalent to the expected term of the CEO Award. The following assumptions were used to estimate the fair value of the CEO Award: Dividend yield — % Risk-free interest rates 1.7 % Expected volatility 65 % For the years ended December 31, 2025, 2024, and 2023, the intrinsic value of options exercised was $ 2.4 million, $ 8.0 million, and $ 5.4 million, respectively. The aggregate intrinsic value represents the difference between the exercise price of the options and the closing price of the Company’s common stock on The Nasdaq Global Select Market on the day prior to the date of exercise. The Company did not grant any stock option awards during the years ended December 31, 2025 and 2024. As of December 31, 2025, no unrecognized stock-based compensation expense remained. RSU and PSU Awards The following table summarizes the RSU and PSU activity and related information under the 2018 EIP: 87 UPWORK INC. Notes to Consolidated Financial Statements—Continued Number Outstanding Weighted-Average Grant Date Fair Value Unvested balance - January 1, 2025 (1) 8,019,048 $ 13.08 Granted 6,123,930 15.07 Vested ( 3,826,502 ) 14.15 Forfeited/canceled ( 1,424,005 ) 13.25 Unvested balance - December 31, 2025 8,892,471 $ 13.96 (1) The unvested balance as of January 1, 2025 has been updated to reflect target performance attainment for the outstanding PSU awards. RSUs. The fair value of RSUs awarded to employees is determined based on the closing price of the Company’s common stock, as reported on The Nasdaq Global Select Market on the date of grant. For the years ended December 31, 2025, 2024, and 2023, the weighted-average grant-date fair value of RSUs granted was $ 14.95 , $ 11.90 , and $ 11.73 , respectively. For the years ended December 31, 2025, 2024, and 2023, the fair value of RSUs vested was $ 52.0 million, $ 66.2 million, and $ 61.9 million, respectively. As of December 31, 2025, the Company had $ 91.3 million of unrecognized stock-based compensation expense related to outstanding RSUs to employees that is expected to be recognized over a weighted-average period of 2.3 years. PSUs. For all PSU awards granted under the 2018 EIP, the number of PSUs that become earned and eligible to vest is based on the Company’s achievement of performance conditions established at the time of grant by the compensation committee of the Company’s board of directors, which is referred to as the compensation committee, relating to one or more performance periods, which is referred to as the PSU Performance Condition. Following the completion of the applicable performance period, the compensation committee certifies the Company’s achievement of the applicable PSU Performance Condition, and the dates on which such certifications occur are referred to as Certification Dates. In order for any PSUs to be earned and vest, recipients must remain in continuous service with the Company through the applicable Certification Date, which is referred to as the PSU Service Condition. The Company classifies all PSU awards as equity awards. Stock-based compensation expense related to PSUs is recognized as a component of operating expenses in the Company’s consolidated statements of operations and comprehensive income and is recognized over the longer of the expected achievement period of the applicable PSU Performance Condition or the applicable PSU Service Condition. The grant-date fair value of PSU awards is determined using valuation techniques appropriate for the specific award terms, including valuation models that incorporate the impact of market-based conditions, as applicable. At each reporting date prior to certification, the Company reassesses the number of PSUs that are probable of vesting, and any changes are reflected in stock-based compensation expense in the period of change. 2025 PSU Awards In March 2025, the compensation committee approved the grant of PSU awards to certain members of the Company’s leadership team under the 2018 EIP, which awards are referred to as the 2025 PSU Awards. These awards were granted on March 18, 2025. Up to fifty percent of the maximum number of shares subject to the 2025 PSU Awards are eligible to vest based on the Company’s achievement of certain financial performance metrics over a two-year performance period consisting of the Company’s fiscal years ending December 31, 2025 and 2026, and up to the remaining fifty percent of the maximum number of shares subject to the 2025 PSU Awards are eligible to vest based on the Company’s achievement of certain financial performance targets over a three-year performance period consisting of the Company’s fiscal years ending December 31, 2025, 2026, and 2027. The performance targets consist of adjusted EBITDA margin and relative total shareholder return compound annual growth rate targets established by the compensation committee at the time of grant. Stock-based compensation expense related to the 2025 PSU Awards is recognized over the longer of the expected achievement period for the PSU Performance Condition and the PSU Service Condition, which is approximately 23 months and 35 months for the portions of the awards eligible to vest based on performance for the performance periods ending December 31, 2026 and December 31, 2027, respectively. 88 UPWORK INC. Notes to Consolidated Financial Statements—Continued 2024 PSU Awards In March 2024, the compensation committee approved the grant of PSU awards to certain members of the Company’s leadership team under the 2018 EIP, which are referred to as the 2024 PSU Awards. These awards were granted on March 18, 2024. Up to fifty percent of the maximum number of shares subject to the 2024 PSU Awards are eligible to vest based on the Company’s achievement of certain financial performance targets in the fiscal year ending December 31, 2025, and up to the remaining fifty percent of the maximum number of shares subject to the 2024 PSU Awards are eligible to vest based on the Company’s achievement of certain financial performance targets in the fiscal year ending December 31, 2026. The performance targets consist of year-over-year revenue growth and adjusted EBITDA margin targets established by the compensation committee at the time of grant. Stock-based compensation expense related to the 2024 PSU Awards is recognized over the longer of the expected achievement period for the PSU Performance Condition and the PSU Service Condition, which is approximately 23 months and 35 months for the portions of the awards eligible to vest based on performance for the performance periods ending December 31, 2025 and December 31, 2026, respectively. 2023 PSU Awards In February 2023, the compensation committee approved the grant of PSU awards to certain members of the Company’s leadership team under the 2018 EIP, which are referred to as the 2023 PSU Awards. These awards were granted on February 18, 2023. The number of shares subject to the 2023 PSU Awards that were earned by the recipients, which are referred to as 2023 Earned PSUs, was determined based on the Company’s revenue achievement during the year ended December 31, 2023. PSUs earned based on achievement of the PSU Performance Condition are subject to a time-based vesting requirement, pursuant to which 25 % vested on the one-year anniversary of the grant date and the remaining balance vests in equal quarterly installments over the subsequent four-year service period, subject to continued service. Stock-based compensation expense related to the 2023 PSU Awards is recognized over the longer of the expected achievement period for the PSU Performance Condition and the PSU Service Condition associated with the time-based vesting requirement. For the years ended December 31, 2025, 2024, and 2023, the weighted-average grant-date fair value of PSUs granted was $ 15.66 , $ 12.06 , and $ 11.72 , respectively. During the years ended December 31, 2025, 2024, and 2023, the Company recorded stock-based compensation expense related to PSUs of $ 15.5 million, $ 3.1 million, and $ 2.4 million, respectively. As of December 31, 2025, unrecognized stock-based compensation cost was $ 23.3 million, which is expected to be recognized over a weighted-average period of 1.6 years. 2018 Employee Stock Purchase Plan In 2018, the Company’s board of directors and stockholders each adopted the 2018 ESPP. A total of 1,700,000 shares of common stock was initially reserved for issuance under the 2018 ESPP. On January 1 of each year, shares available for issuance are increased based on the provisions of the 2018 ESPP, up to an aggregate maximum of 20,400,000 shares issued under the 2018 ESPP, subject to adjustment for certain company capital changes. The 2018 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount of up to 15 % through payroll deductions of their eligible compensation, subject to any plan limitations. Except for the initial offering period, the 2018 ESPP provides for 24-month offering periods beginning November 15 and May 15 of each year, and each offering period consists of four 6-month purchase periods. Pursuant to the terms of the 2018 ESPP, in January 2025, the number of shares of common stock available for issuance was increased by 1,082,787 shares. 89 UPWORK INC. Notes to Consolidated Financial Statements—Continued For the years ended December 31, 2025, 2024, and 2023, the assumptions used to determine the fair value of the shares to be awarded was estimated on the grant date using the Black-Scholes valuation model with the following assumptions: 2025 2024 2023 Dividend yield — % — % — % Expected term (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Risk-free interest rates 3.6 % - 4.3 % 4.3 % - 5.4 % 4.0 % - 5.4 % Expected volatility 49 % - 58 % 44 % - 64 % 58 % - 74 % On each purchase date, eligible employees may purchase the Company’s common stock at a price per share equal to 85 % of the lesser of (1) the fair market value of the Company’s common stock on the offering date or (2) the fair market value of the Company’s common stock on the purchase date. In the event the price is lower on the last day of any purchase period, that price is used as the purchase price for that purchase period. Additionally, in the event the fair market value of the Company’s common stock on the first day of a subsequent offering period is less than the fair market value of the Company’s common stock on the offering date of the current offering period, the offering period resets, and the new lower price becomes the new offering price for a new 24 month offering period. During the year ended December 31, 2025, the Company issued 412,658 shares of common stock under the 2018 ESPP. As of December 31, 2025, there was $ 3.0 million of unrecognized stock-based compensation expense that is expected to be recognized over the remaining term of the respective offering periods. Stock-Based Compensation The following table summarizes the components of stock-based compensation expense recognized in the consolidated statements of operations and comprehensive income for the years ended December 31, 2025, 2024, and 2023: (In thousands) 2025 2024 2023 Cost of revenue $ 760 $ 1,586 $ 1,900 Research and development 23,023 29,923 28,006 Sales and marketing 6,347 11,670 14,030 General and administrative 35,260 25,212 30,259 Total $ 65,390 $ 68,391 $ 74,195 For the years ended December 31, 2025 and 2024, the Company recorded $ 10.1 million and $ 12.8 million, respectively, of tax benefit on total stock-based compensation expense. The amounts are reflected in income taxes (provision) benefit in the consolidated statement of operations and comprehensive income. Tax benefits on total stock-based compensation for the year ended December 31, 2023 was not material. Stock-Based Compensation to Employees Stock-based compensation expense related to employees for the year ended December 31, 2025 was $ 68.4 million and $ 1.8 million related to RSU and PSU grants and the 2018 ESPP, respectively. Stock-based compensation expense related to employees for the year ended December 31, 2025 for stock options was immaterial and no unrecognized stock-based compensation expense related to employee stock options remained as of December 31, 2025. Stock-based compensation expense related to employees for the year ended December 31, 2024 was $ 1.3 million, $ 66.2 million, and $ 2.6 million related to stock options, RSU and PSU grants, and the 2018 ESPP, respectively. Stock-based compensation expense related to employees for the year ended December 31, 2023 was $ 5.1 million, $ 65.1 million, and $ 5.0 million related to stock options, RSUs, and the 2018 ESPP, respectively. 90 UPWORK INC. Notes to Consolidated Financial Statements—Continued Note 13— Net Income per Share The following table sets forth the computation of the Company’s basic and diluted net income per share for the years ended December 31, 2025, 2024, and 2023: (In thousands, except share and per share data) 2025 2024 2023 Numerator: Basic: net income $ 115,425 $ 215,586 $ 46,887 Gain on early extinguishment of debt, net of tax — ( 38,525 ) Interest expense related to convertible senior notes, net of tax 2,069 2,239 389 Diluted: net income $ 117,494 $ 217,825 $ 8,751 Denominator: Weighted-average shares used to compute net income per share, basic and diluted Basic 132,485,498 133,620,612 134,774,189 Options to purchase common stock 517,864 1,211,092 1,401,107 Common stock issuable upon vesting of restricted stock units and performance stock units 1,967,220 2,437,873 — Common stock issuable upon exercise of common stock warrants 149,905 232,813 299,741 Common stock issuable in connection with employee stock purchase plan 76,071 186,594 16,270 Common stock issuable in connection with convertible senior notes 5,463,045 5,463,045 771,923 Diluted 140,659,603 143,152,029 137,263,230 Net income per share: Basic $ 0.87 $ 1.61 $ 0.35 Diluted $ 0.84 $ 1.52 $ 0.06 For the years ended December 31, 2025, 2024, and 2023, the following potentially dilutive shares were excluded from the computation of diluted net income per share because including them would have been anti-dilutive: 2025 2024 2023 Options to purchase common stock 1,500,000 1,500,000 1,859,807 Common stock issuable upon vesting of RSUs and PSUs 6,853,777 6,403,843 10,348,892 Common stock issuable in connection with employee stock purchase plan 661,620 557,444 1,110,018 Common stock issuable in connection with convertible senior notes — — 5,463,045 Total 9,015,397 8,461,287 18,781,762 Note 14— Income Taxes For the years ended December 31, 2025, 2024, and 2023, income before income taxes consisted of the following: (In thousands) 2025 2024 2023 Domestic $ 152,596 $ 89,556 $ 48,662 Foreign 580 871 215 Total income before income taxes $ 153,176 $ 90,427 $ 48,877 For the years ended December 31, 2025, 2024, and 2023, the components of the income tax benefit (provision) were as follows: 91 UPWORK INC. Notes to Consolidated Financial Statements—Continued (In thousands) 2025 2024 2023 Current: Federal $ ( 10,366 ) $ ( 1,394 ) $ ( 978 ) State ( 3,245 ) ( 2,593 ) ( 902 ) Foreign ( 5,647 ) ( 112 ) ( 110 ) Total current $ ( 19,258 ) $ ( 4,099 ) $ ( 1,990 ) Deferred: Federal $ ( 9,773 ) $ 110,923 $ — State ( 12,334 ) 18,335 — Foreign 3,614 — — Total deferred $ ( 18,493 ) $ 129,258 $ — Income tax benefit (provision) $ ( 37,751 ) $ 125,159 $ ( 1,990 ) For the years ended December 31, 2025, 2024, and 2023, the components of the income taxes paid (net of refunds) were as follows: (In thousands) 2025 2024 2023 U.S. Federal $ 10,300 $ 1,816 $ 1,300 U.S. State and Local Illinois — 339 181 Pennsylvania — — 179 Florida — 303 — New York — 614 — New York City — 542 — Other 2,955 918 317 Foreign 234 58 7 Total $ 13,489 $ 4,590 $ 1,984 The Company had an effective tax rate of 24.6 %, ( 138.4 )%, and 4.1 % for the years ended December 31, 2025, 2024, and 2023, respectively. The reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2025, 2024, and 2023 were as follows: 92 UPWORK INC. Notes to Consolidated Financial Statements—Continued 2025 2024 2023 in millions (except for percentages) Amount % Amount % Amount % U.S. federal statutory rate $ 32.20 21.0 % $ 19.00 21.0 % $ 10.30 21.0 % State and local income taxes, net of federal income tax effect (1) 14.90 9.7 % ( 16.70 ) ( 18.5 ) % ( 0.10 ) ( 0.2 ) % Foreign tax effects Netherlands Acquisition integration 1.50 1.0 % — — % — — % Other foreign jurisdictions 0.40 0.2 % — — % — — % Effect of cross-border tax laws Foreign-derived intangible income ( 11.20 ) ( 7.3 ) % ( 3.40 ) ( 3.8 ) % ( 2.70 ) ( 5.6 ) % Tax credits Research & development credit ( 4.90 ) ( 3.2 ) % ( 5.80 ) ( 6.4 ) % ( 5.00 ) ( 10.3 ) % Changes in valuation allowances — — % ( 122.70 ) ( 135.7 ) % ( 14.70 ) ( 30.1 ) % Nontaxable or nondeductible items Stock based and non-deductible employee compensation 3.50 2.3 % 2.60 2.9 % 8.60 17.7 % Other 1.30 0.9 % 0.20 0.2 % ( 0.40 ) ( 0.8 ) % Changes in unrecognized tax benefits 1.25 0.8 % 1.64 1.8 % 1.19 2.5 % Other adjustments Other ( 1.20 ) ( 0.8 ) — — % 4.80 9.9 % Effective tax rate $ 37.75 24.6 % $ ( 125.16 ) ( 138.4 ) % $ 1.99 4.1 % (1) State taxes in California made up the majority (greater than 50%) of the tax effect in this category for 2025 and 2024. State taxes in Illinois, Pennsylvania, and Texas made up the majority (greater than 50%) of the tax effect in this category for 2023. Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2025 and 2024, the significant components of the Company’s deferred tax assets and liabilities were as follows: (In thousands) 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 7,035 $ 10,799 Stock-based compensation 8,386 8,056 Operating lease liability 2,646 2,561 Accrued liabilities, reserves and other 7,950 7,080 Acquired intangible assets 1,637 — Capitalized research and development 96,888 78,606 Tax Credits 8,778 25,882 Gross deferred tax assets 133,320 132,984 Valuation allowance ( 15,911 ) — Total deferred tax assets 117,409 132,984 Deferred tax liabilities: Prepaid expenses — ( 250 ) Operating lease asset ( 1,165 ) ( 1,316 ) Acquired intangibles ( 4,749 ) ( 2,639 ) Total deferred tax liabilities ( 5,914 ) ( 4,205 ) Net deferred tax assets $ 111,495 $ 128,779 The change in valuation allowance for deferred tax assets was as follows for the periods presented: 93 UPWORK INC. Notes to Consolidated Financial Statements—Continued (In thousands) Year Ended December 31, Balance at Beginning of Year Additions Charged to Costs & Expenses Additions Charged to Other Accounts Deductions Balance at End of Year 2025 $ — $ 15,916 $ ( 5 ) $ — $ 15,911 2024 140,339 ( 140,339 ) — — — 2023 157,353 ( 16,262 ) ( 752 ) — 140,339 The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that some or all of its deferred tax assets will not be realized. This assessment is based on the weight of all available positive and negative evidence, including cumulative pre-tax income or losses, anticipated future earnings, the impact of permanent differences, and items recorded in other comprehensive income or losses. As of December 31, 2024, the Company released its U.S. federal and state valuation allowance after concluding that it was more likely than not that its deferred tax assets would be realized. This conclusion was supported by the achievement of cumulative U.S. pre-tax income over the prior three-year period, adjusted for permanent differences and other comprehensive losses, which provided objective and verifiable evidence of sustained profitability. The Company recorded a valuation allowance of $ 15.9 million as of December 31, 2025 against its California deferred tax assets due to the uncertainty regarding realizability of these deferred tax assets as they have not met “more likely than not” realization criteria. The valuation allowance increase during 2025 was primarily driven by additional California research and development tax credit generated during the year, following the full release of the Company’s valuation allowance in 2024. The Company expects research and development tax credit generation to exceed its ability to utilize the credits in future years. The Company will continue to monitor the need for a valuation allowance against its deferred tax assets on a quarterly basis. The Company had federal net operating loss, which is referred to as NOL, carryforwards of approximately $ 2.0 million and $ 18.9 million as of December 31, 2025 and 2024, respectively. The federal NOL carryforwards of $ 2.0 million generated after December 31, 2017 can be carried forward indefinitely with utilization in any year limited to 80% of the Company’s taxable income or any limitation under Section 382. The Company has California NOL carryforwards of approximately $ 90.9 million and $ 91.0 million as of December 31, 2025 and 2024, respectively. California NOLs will begin to expire in 2032 if not utilized. The Company had federal research and development credits of approximately $ 4.4 million and $ 31.1 million as of December 31, 2025 and 2024, respectively. The federal research and development credits will begin to expire in 2045 if not utilized. The Company has California research and development credits of approximately $ 20.4 million and $ 16.7 million as of December 31, 2025 and 2024, respectively. California research and development credits have an infinite carryforward period. The Tax Reform Act of 1986 and similar California legislation impose substantial restrictions on the utilization of NOLs and tax credit carryforwards in the event that there is a change in ownership as provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. Such a limitation could result in the expiration of the NOL carryforwards and tax credits before utilization, which could result in increased future tax liabilities. Uncertain Tax Positions As of December 31, 2025, the Company’s total amount of unrecognized tax benefits was $ 22.8 million, of which $ 13.5 million would impact the Company’s effective tax rate, if recognized. For the years ended December 31, 2025, 2024, and 2023, the activity related to the unrecognized tax benefits were as follows: (In thousands) 2025 2024 2023 Gross unrecognized tax benefits—beginning balance $ 19,966 $ 18,157 $ 16,573 Increase related to tax positions taken during prior year 655 112 342 Decrease related to tax positions taken during prior year ( 28 ) ( 19 ) ( 21 ) Increase related to tax positions taken during current year 2,161 1,716 1,263 Gross unrecognized tax benefits—ending balance $ 22,754 $ 19,966 $ 18,157 94 UPWORK INC. Notes to Consolidated Financial Statements—Continued The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the provision for income taxes in the period that such determination is made. As of December 31, 2025, the Company did not currently recognize any penalties or interest charges relating to uncertain tax positions. The Company does not anticipate the recorded reserves to change significantly in the next 12 months. The Company is subject to taxation in the United States and various other state and foreign jurisdictions. Due to certain tax attribute carryforwards, the tax years 2001 to 2024 remain open to examination by the major taxing jurisdictions in which the Company is subject to tax. As of December 31, 2025, the Company was not under examination by the Internal Revenue Service. Due to differing interpretations of tax laws and regulations, tax authorities may dispute the Company’s tax filing positions. The Company periodically evaluates its exposures associated with its tax filing positions and believes that adequate amounts have been reserved for adjustments that may result from tax examinations. On July 4, 2025, Public Law 119-21 was enacted, introducing changes to U.S. tax law, including 100% bonus depreciation and the expensing of domestic research costs. In accordance with ASC 740, Income Taxes, the effects of enacted tax law changes must be recognized in the period in which the legislation is enacted. Certain provisions became effective in the third quarter of 2025, and these impacts have been reflected in the Company’s 2025 results. Note 15— Segment Information Operating segments are defined as components of an entity for which separate financial information is available and that is regularly provided to the CODM in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. For information about how the Company derives revenue, as well as the Company’s accounting policies, refer to “Note 2—Basis of Presentation and Summary of Significant Accounting Policies.” The CODM uses consolidated net income to assess performance, evaluate cost optimization, and allocate resources, including personnel-related and financial or capital resources, in the annual budget and forecasting process, as well as budget-to-actual variances on a monthly basis. As such, the Company has determined that it operates as one operating and reportable segment. The following tables set forth significant expense categories and other specified amounts included in consolidated net income that are otherwise regularly provided to the CODM for the years ended December 31, 2025, 2024, and 2023: 2025 2024 2023 Revenue $ 787,784 $ 769,325 $ 689,136 Cost of revenue (1) 161,605 163,560 164,088 Research and development (1) 151,411 167,211 146,442 Sales and marketing (1) 135,829 166,331 206,614 General and administrative (1)(2) 105,243 97,903 85,881 Provision for transaction losses 8,140 6,728 12,977 Stock-based compensation expense (3) 65,390 68,391 74,195 Depreciation and amortization 25,710 14,813 9,449 Interest income ( 27,437 ) ( 27,963 ) ( 24,424 ) Interest expense 3,152 2,761 3,218 Gain on early extinguishment of convertible senior notes — — ( 38,945 ) Restructuring charges (3) — 18,433 — Income tax (benefit) provision 37,751 ( 125,159 ) 1,990 Other segment items (3)(4) 5,565 730 764 Segment net income $ 115,425 $ 215,586 $ 46,887 95 UPWORK INC. Notes to Consolidated Financial Statements—Continued (1) Years 2025, 2024, and 2023 exclude stock-based compensation and depreciation and amortization included in cost of revenue, research and development, sales and marketing, and general and administrative expenses, as these amounts are regularly provided to the CODM. Additionally, year 2024 excludes restructuring charges. (2) Years 2025, 2024, and 2023 exclude expenses related to the Tides Foundation Warrant. (3) During the year ended December 31, 2024, the Company incurred $ 19.2 million in costs related to the execution of the Restructuring Plan. Of this amount, $ 18.4 million is included in Restructuring charges while the remaining amount is allocated between Stock-based compensation expense and Other segment items. (4) During each of the years ended December 31, 2025, 2024, and 2023, the Company incurred $ 0.8 million of expenses related to the Tides Foundation Warrant. Substantially all of the Company’s long-lived assets, including operating lease right-of-use assets, were located in the United States as of December 31, 2025 and 2024. Note 16— 401(k) Plan The Company offers the Upwork Retirement Savings Plan, which is referred to as the Retirement Plan, a defined contribution plan that allows eligible employees to defer a portion of their pre-tax salary, subject to the statutory annual limits. The Retirement Plan provides for a discretionary employer cash matching contribution. The Company makes matching cash contributions equal to 50 % of each dollar contributed, subject to a maximum contribution of $ 5,000 annually per participant. The Company’s total expense for the matching contributions was $ 3.0 million, $ 3.9 million, and $ 3.7 million for the years ended December 31, 2025, 2024, and 2023, respectively. Note 17— Restructuring Charges In October 2024, the Company announced the Restructuring Plan, which was intended to continue the Company’s profitable trajectory, increase efficiency, and accelerate innovation for its customers. The Restructuring Plan included various cost-reduction measures, including workforce reductions, reductions in operating expenses, as well as decreases in capital expenditures. As part of the Restructuring Plan, the Company reduced its total workforce by approximately 21 %. The workforce reductions and substantially all related actions were completed by December 31, 2024. Total restructuring charges of $ 19.2 million were recorded during the fourth quarter of 2024 and were recognized within the respective functional line items in the Company's consolidated statement of operations and comprehensive income, as summarized in the table below for the year ended December 31, 2024: (in thousands) Employee severance and benefit costs Contract termination costs Other charges Total Restructuring Charges Cost of revenue $ 139 $ 198 $ — $ 337 Research and development 3,904 4,249 — 8,153 Sales and marketing 5,262 1,872 — 7,134 General and administrative 1,699 559 1,043 3,301 Other income, net — — 261 261 Total $ 11,004 $ 6,878 $ 1,304 $ 19,186 Contract termination costs included expenses related to the reduction in force of the Company’s contracted workforce impacted by the Restructuring Plan, as well as vendor contract terminations. Other charges included costs such as lease termination costs and disposal of certain fixed assets. No restructuring charges were recorded for the years ended December 31, 2025 and 2023. 96 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure. None.