Upwork (UPWK) 10-Q 26 Oct 22 2022 Q3 Quarterly report Financial data

Cover Page

Cover Page	9 Months Ended
	Sep. 30, 2022 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-38678
Entity Registrant Name	UPWORK INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4337682
Entity Address, Address Line One	475 Brannan Street, Suite 430
Entity Address, City or Town	San Francisco,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94107
City Area Code	650
Local Phone Number	316-7500
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	UPWK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)	131,342,482
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001627475
Current Fiscal Year End Date	--12-31

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 156,423	$ 187,205
Marketable securities	519,383	497,566
Funds held in escrow, including funds in transit	169,966	160,813
Trade and client receivables – net of allowance of $16,099 and $3,410 as of September 30, 2022 and December 31, 2021, respectively	67,070	66,826
Prepaid expenses and other current assets	16,860	17,243
Total current assets	929,702	929,653
Property and equipment, net	21,487	21,329
Goodwill	118,219	118,219
Operating lease asset	8,387	10,682
Other assets, noncurrent	1,431	1,178
Total assets	1,079,226	1,081,061
Current liabilities
Accounts payable	5,354	4,996
Escrow funds payable	169,966	160,813
Accrued expenses and other current liabilities	51,781	45,742
Deferred revenue	24,910	22,083
Total current liabilities	252,011	233,634
Debt, noncurrent	563,520	561,299
Operating lease liability, noncurrent	12,619	16,753
Other liabilities, noncurrent	8,493	9,858
Total liabilities	836,643	821,544
Commitments and contingencies (Note 6)
Stockholders’ equity
Common stock, $0.0001 par value; 490,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 131,342,482 and 129,130,478 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	13	13
Additional paid-in capital	571,636	511,096
Accumulated other comprehensive loss	(4,617)	(528)
Accumulated deficit	(324,449)	(251,064)
Total stockholders’ equity	242,583	259,517
Total liabilities and stockholders’ equity	$ 1,079,226	$ 1,081,061

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 16,099	$ 3,410
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	490,000,000	490,000,000
Common stock, shares issued (in shares)	131,342,482	129,130,478
Common stock, shares outstanding (in shares)	131,342,482	129,130,478

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenue	$ 158,641	$ 128,141	$ 456,876	$ 365,941
Cost of revenue	40,470	34,933	119,243	98,457
Gross profit	118,171	93,208	337,633	267,484
Operating expenses
Research and development	38,898	30,873	112,889	85,610
Sales and marketing	63,171	43,192	184,096	128,613
General and administrative	31,407	26,083	93,872	81,969
Provision for transaction losses	10,137	1,377	18,918	3,701
Total operating expenses	143,613	101,525	409,775	299,893
Loss from operations	(25,442)	(8,317)	(72,142)	(32,409)
Interest expense	1,117	746	3,362	1,055
Other (income) expense, net	(1,772)	222	(2,215)	161
Loss before income taxes	(24,787)	(9,285)	(73,289)	(33,625)
Income tax provision	(40)	(26)	(96)	(59)
Net loss	$ (24,827)	$ (9,311)	$ (73,385)	$ (33,684)
Net loss per share, basic (in dollars per share)	$ (0.19)	$ (0.07)	$ (0.56)	$ (0.27)
Net loss per share, diluted (in dollars per share)	$ (0.19)	$ (0.07)	$ (0.56)	$ (0.27)
Weighted-average shares used to compute net loss per share, basic (in shares)	130,830,411	127,914,696	130,082,683	126,651,490
Weighted-average shares used to compute net loss per share, diluted (in shares)	130,830,411	127,914,696	130,082,683	126,651,490
Other comprehensive loss, net of tax:
Net unrealized holding gain (loss) on marketable securities, net	$ 166	$ (5)	$ (4,089)	$ (30)
Total comprehensive loss	$ (24,661)	$ (9,316)	$ (77,474)	$ (33,714)

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2020		124,795,222
Beginning balance at Dec. 31, 2020	$ 299,310	$ 12	$ 494,103	$ 19	$ (194,824)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		1,899,902
Issuance of common stock upon exercise of stock options	6,636	$ 1	6,635
Stock-based compensation expense	38,743		38,743
Issuance of common stock for settlement of RSUs (in shares)		1,302,963
Tides Foundation common stock warrant expense	563		563
Issuance of common stock in connection with employee stock purchase plan (in shares)		235,458
Issuance of common stock in connection with employee stock purchase plan	2,688		2,688
Purchases of capped calls related to convertible senior notes	(49,393)		(49,393)
Unrealized gain (loss) on marketable securities	(30)			(30)
Net loss	(33,684)				(33,684)
Ending balance (in shares) at Sep. 30, 2021		128,233,545
Ending balance at Sep. 30, 2021	264,833	$ 13	493,339	(11)	(228,508)
Beginning balance (in shares) at Jun. 30, 2021		127,616,789
Beginning balance at Jun. 30, 2021	308,528	$ 13	527,718	(6)	(219,197)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		224,785
Issuance of common stock upon exercise of stock options	909		909
Stock-based compensation expense	13,917		13,917
Issuance of common stock for settlement of RSUs (in shares)		391,971
Tides Foundation common stock warrant expense	188		188
Purchases of capped calls related to convertible senior notes	(49,393)		(49,393)
Unrealized gain (loss) on marketable securities	(5)			(5)
Net loss	(9,311)				(9,311)
Ending balance (in shares) at Sep. 30, 2021		128,233,545
Ending balance at Sep. 30, 2021	$ 264,833	$ 13	493,339	(11)	(228,508)
Beginning balance (in shares) at Dec. 31, 2021	129,130,478	129,130,478
Beginning balance at Dec. 31, 2021	$ 259,517	$ 13	511,096	(528)	(251,064)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		352,336
Issuance of common stock upon exercise of stock options	1,335		1,335
Stock-based compensation expense	56,180		56,180
Issuance of common stock for settlement of RSUs (in shares)		1,698,043
Tides Foundation common stock warrant expense	563		563
Issuance of common stock in connection with employee stock purchase plan (in shares)		161,625
Issuance of common stock in connection with employee stock purchase plan	2,462		2,462
Unrealized gain (loss) on marketable securities	(4,089)			(4,089)
Net loss	$ (73,385)				(73,385)
Ending balance (in shares) at Sep. 30, 2022	131,342,482	131,342,482
Ending balance at Sep. 30, 2022	$ 242,583	$ 13	571,636	(4,617)	(324,449)
Beginning balance (in shares) at Jun. 30, 2022		130,530,889
Beginning balance at Jun. 30, 2022	246,319	$ 13	550,711	(4,783)	(299,622)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options (in shares)		81,115
Issuance of common stock upon exercise of stock options	291		291
Stock-based compensation expense	20,446		20,446
Issuance of common stock for settlement of RSUs (in shares)		730,478
Tides Foundation common stock warrant expense	188		188
Unrealized gain (loss) on marketable securities	166			166
Net loss	$ (24,827)				(24,827)
Ending balance (in shares) at Sep. 30, 2022	131,342,482	131,342,482
Ending balance at Sep. 30, 2022	$ 242,583	$ 13	$ 571,636	$ (4,617)	$ (324,449)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (73,385)	$ (33,684)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Provision for transaction losses	18,412	3,004
Depreciation and amortization	6,007	8,187
Amortization of debt issuance costs	2,221	441
Amortization of premium of purchases of marketable securities, net	485	103
Amortization of operating lease asset	2,295	2,712
Tides Foundation common stock warrant expense	563	563
Stock-based compensation expense	56,119	38,666
Impairment expense	0	7,389
Changes in operating assets and liabilities:
Trade and client receivables	(17,764)	(13,967)
Prepaid expenses and other assets	380	(2,163)
Operating lease liability	(3,994)	114
Accounts payable	278	(3,188)
Accrued expenses and other liabilities	2,202	9,987
Deferred revenue	4,285	5,120
Net cash provided by (used in) operating activities	(1,896)	23,284
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(398,259)	(108,828)
Proceeds from maturities of marketable securities	371,879	87,500
Purchases of property and equipment	(893)	(565)
Internal-use software and platform development costs	(5,160)	(4,221)
Net cash used in investing activities	(32,433)	(26,114)
CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in escrow funds payable	9,153	37,649
Proceeds from exercises of stock options	1,335	6,636
Proceeds from employee stock purchase plan	2,462	2,688
Repayment of debt	0	(10,750)
Proceeds from issuance of convertible senior notes	0	575,000
Payment of debt issuance costs	0	(14,855)
Purchases of capped calls related to convertible senior notes	0	(49,393)
Net cash provided by financing activities	12,950	546,975
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(21,379)	544,145
Cash, cash equivalents, and restricted cash—beginning of period	352,058	232,463
Cash, cash equivalents, and restricted cash—end of period	330,679	776,608
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	1,520	347
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ACTIVITIES:
Property and equipment purchased but not yet paid	107	251
Internal-use software and platform development costs incurred but not yet paid	$ 75	$ 118

Description of Business

Description of Business	9 Months Ended
	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business Upwork Inc., which is referred to as the Company or Upwork, operates a work marketplace that connects businesses, which are referred to as clients, with independent talent. Independent talent on the Company’s work marketplace, which are referred to as talent, and, together with clients, as users, include independent professionals and agencies of varying sizes and are an increasingly sought-after, critical, and expanding segment of the global workforce. The Company is currently headquartered in San Francisco, California. Unless otherwise expressly stated or the context otherwise requires, the terms “Upwork” and the “Company” in these notes to the condensed consolidated financial statements refer to Upwork and its wholly-owned subsidiaries.

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation and Summary of Significant Accounting Policies	Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed 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 applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which is referred to as the Annual Report, filed with the SEC on February 15, 2022. The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date but does not include all disclosures including notes required by U.S. GAAP. The condensed consolidated financial statements include the accounts of Upwork and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, changes in stockholders’ equity and cash flows for the interim periods, but do not purport to be indicative of the results of operations or financial condition to be anticipated for the full year ending December 31, 2022. Prior period amounts have been reclassified to conform with the current period presentation. Use of Estimates The preparation of the condensed 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: the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; standalone selling price of material rights and the period of time over which to defer and recognize the consideration allocated to the material rights; allowance for doubtful accounts; 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. Risks and Uncertainties Due to Russia’s invasion of Ukraine, which began in February 2022, and the resulting sanctions and other actions against Russia and Belarus, there has been uncertainty and disruption in the global economy. In March 2022, the Company suspended business operations in Russia and Belarus, announcing that contracts with talent or clients in Russia or Belarus would be required to wind down by May 1, 2022. Although the Russian war against Ukraine did not have a material adverse impact on the Company’s revenue or other financial results for the three and nine months ended September 30, 2022, at this time the Company is unable to fully assess the aggregate impact the Russian war against Ukraine will have on its business due to various uncertainties, which include, but are not limited to, the duration of the war, the ability of talent based in Ukraine to continue working, the war’s effect on the economy, its impact to the businesses of the Company’s clients, and actions that may be taken by governmental authorities related to the war. Summary of Significant Accounting Policies The significant accounting policies applied in the Company’s audited consolidated financial statements, as disclosed in the Annual Report, are applied consistently in these unaudited interim condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted The Company has reviewed the accounting pronouncements issued during the nine months ended September 30, 2022 and concluded they were either not applicable or not expected to have a material impact on the Company’s condensed consolidated financial statements.

Revenue

Revenue	9 Months Ended
	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Revenue	Revenue Disaggregation of Revenue See “Note 9 —Segment and Geographical Information” for the Company’s revenue disaggregated by type of service and geographic area. Remaining Performance Obligations As of September 30, 2022, the Company had approximately $32.7 million of remaining performance obligations. The Company’s remaining performance obligations primarily consist of transaction price that has been allocated to unexercised material rights related to the Company’s arrangements with talent subject to tiered service fees. The remaining transaction price allocated to other performance obligations is immaterial. As of September 30, 2022, the Company expects to recognize approximately $24.9 million over the next 12 months, with the remaining balance recognized thereafter. 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. 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: (In thousands) September 30, 2022 December 31, 2021 Trade and client receivables, net of allowance $ 67,070 $ 66,826 Contract liabilities Deferred revenue 24,910 22,083 Deferred revenue (component of other liabilities, noncurrent) 7,807 6,349 During the three and nine months ended September 30, 2022, changes in the contract liabilities balances were a result of normal business activity and deferral, and subsequent recognition, of revenue related to arrangements with talent subject to tiered service fees and related allocation of transaction price to material rights. Revenue recognized during the three and nine months ended September 30, 2022 that was included in deferred revenue as of June 30, 2022 and December 31, 2021 wa s $7.0 million and $16.6 million, re spectively. Revenue recognized during the three and nine months ended September 30, 2021 that was included in deferred revenue as of June 30, 2021 and December 31, 2020 was $6.6 million and $14.0 million, respectively.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Fair Value Measurements	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 September 30, 2022 and December 31, 2021. The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy: (In thousands) September 30, 2022 Amortized Unrealized Unrealized Fair Cash and Marketable Cash $ 27,725 $ — $ — $ 27,725 $ 27,725 $ — Level I Money market funds 92,163 — — 92,163 92,163 — Treasury bills 188,803 8 (388) 188,423 34,901 153,522 U.S. government securities 120,652 — (2,647) 118,005 — 118,005 Total Level I 401,618 8 (3,035) 398,591 127,064 271,527 Level II Commercial paper 60,773 — — 60,773 — 60,773 Corporate bonds 115,170 2 (1,191) 113,981 1,634 112,347 Commercial deposits 32,130 — — 32,130 — 32,130 Asset-backed securities 28,658 — (338) 28,320 — 28,320 Yankee bonds 8,863 — (43) 8,820 — 8,820 Agency bonds 2,475 1 — 2,476 — 2,476 Supranational bonds 2,997 — (7) 2,990 — 2,990 Total Level II 251,066 3 (1,579) 249,490 1,634 247,856 Total $ 680,409 $ 11 $ (4,614) $ 675,806 $ 156,423 $ 519,383 (In thousands) December 31, 2021 Amortized Unrealized Unrealized Fair Cash and Marketable Cash $ 16,596 $ — $ — $ 16,596 $ 16,596 $ — Level I Money market funds 108,204 — — 108,204 108,204 — Treasury bills 89,992 1 — 89,993 15,000 74,993 U.S. government securities 94,839 — (285) 94,554 — 94,554 Total Level I 293,035 1 (285) 292,751 123,204 169,547 Level II Commercial paper 171,918 — — 171,918 29,544 142,374 Corporate bonds 183,303 1 (217) 183,087 17,861 165,226 Asset-backed securities 13,749 — (11) 13,738 — 13,738 Yankee bonds 6,693 — (12) 6,681 — 6,681 Total Level II 375,663 1 (240) 375,424 47,405 328,019 Total $ 685,294 $ 2 $ (525) $ 684,771 $ 187,205 $ 497,566 Unrealized Investment Losses The following table summarizes, for all debt securities classified as available for sale in an unrealized loss position as of September 30, 2022, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position. Unrealized losses as of December 31, 2021 were immaterial. (In thousands) Less Than 12 Months 12 Months or Longer Total Duration of unrealized losses Fair Value Unrealized loss Fair Value Unrealized loss Fair Value Unrealized loss Money market funds $ 92,163 $ — $ — $ — $ 92,163 $ — Commercial paper 60,773 — — — 60,773 — Treasury bills 141,722 (388) — — 141,722 (388) U.S. government securities 108,317 (2,343) 9,688 (304) 118,005 (2,647) Corporate bonds 101,508 (1,006) 8,940 (185) 110,448 (1,191) Asset-backed securities 27,381 (328) 939 (10) 28,320 (338) Yankee bonds 8,820 (43) — — 8,820 (43) Commercial deposits 2,397 — — — 2,397 — Supranational bonds 2,990 (7) — — 2,990 (7) Total $ 546,071 $ (4,115) $ 19,567 $ (499) $ 565,638 $ (4,614) For available-for-sale marketable debt securities with unrealized loss positions, the Company does not intend to sell these securities, and it is not more likely than not that the Company will be required to sell the securities. As of September 30, 2022 and December 31, 2021, the decline in fair value of these securities was due to increases in interest rates and not due to credit related factors. As of September 30, 2022 and 2021, the Company considered any decreases in market value to be temporary in nature and

Balance Sheet Components

Balance Sheet Components	9 Months Ended
	Sep. 30, 2022
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	Balance Sheet Components Cash and Cash Equivalents, Restricted Cash, and Funds Held In Escrow, Including Funds In Transit The following table reconciles cash and cash equivalents, restricted cash, and funds held in escrow that are restricted as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows as of September 30, 2022 and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Cash and cash equivalents $ 156,423 $ 187,205 Restricted cash 4,290 4,040 Funds held in escrow, including funds in transit 169,966 160,813 Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows $ 330,679 $ 352,058 Property and Equipment, Net Property and equipment, net consisted of the following: (In thousands) September 30, 2022 December 31, 2021 Computer equipment and software $ 6,370 $ 5,493 Internal-use software and platform development 30,926 25,738 Leasehold improvements 11,644 11,644 Office furniture and fixtures 3,365 3,365 Total property and equipment 52,305 46,240 Less: accumulated depreciation (30,818) (24,911) Property and equipment, net $ 21,487 $ 21,329 For each of the three months ended September 30, 2022 and 2021, depreciation expense related to property and equipment was $0.8 million. For the nine months ended September 30, 2022 and 2021, depreciation expense related to property and equipment was $2.4 million and $2.8 million, respectively. For the three months ended September 30, 2022 and 2021, the Company capitalized $2.3 million and $0.7 million of internal-use software and platform development costs, respectively. For the nine months ended September 30, 2022 and 2021, the Company capitalized $5.2 million and $4.1 million of internal-use software and platform development costs, respectively. For the three months ended September 30, 2022 and 2021, amortization expense related to the capitalized internal-use software and platform development costs was $1.2 million and $1.6 million, respectively. For the nine months ended September 30, 2022 and 2021, amortization expense related to the capitalized internal-use software and platform development costs was $3.6 million and $4.7 million, respectively. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: (In thousands) September 30, 2022 December 31, 2021 Accrued compensation and related benefits $ 13,703 $ 23,047 Accrued vendor expenses 13,295 7,728 Operating lease liability, current 6,455 6,315 Accrued indirect taxes 12,470 4,137 Accrued payment processing fees 2,446 2,085 Accrued talent costs 1,886 1,417 Other 1,526 1,013 Total accrued expenses and other current liabilities $ 51,781 $ 45,742

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Letters of Credit In conjunction with the Company’s operating lease agreements, as of September 30, 2022 and December 31, 2021, the Company had three irrevocable letters of credit outstanding in the aggregate amount of $0.8 million. 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 September 30, 2022 and December 31, 2021. 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 September 30, 2022 and December 31, 2021, 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 September 30, 2022 and December 31, 2021. 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 enters into contractual arrangements under which it agrees 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 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 the Company’s products and services or its acts or omissions. In addition, subject to the terms of the applicable agreement, as part of the Company’s Upwork Enterprise and certain other premium offerings, the Company indemnifies 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

Debt

Debt	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Debt	Debt The following table presents the carrying value of the Company’s debt obligations as of September 30, 2022 and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Convertible senior notes $ 575,000 $ 575,000 Less: unamortized debt issuance costs (11,480) (13,701) Balance 563,520 561,299 Debt, current — — Debt, noncurrent $ 563,520 $ 561,299 Weighted-average interest rate 0.77 % 0.76 % Convertible Senior Notes Due 2026 On August 10, 2021, the Company issued, at par value, $575.0 million aggregate principal amount of 0.25% convertible senior notes due 2026, which are referred to as the Notes. The issuance included the full exercise of an option granted by the Company to the initial purchasers of the Notes to purchase an additional $75.0 million aggregate principal amount of Notes. The Notes were issued pursuant to and are subject to the terms and conditions of an indenture, which is referred to as the Indenture, between the Company and Wells Fargo Bank, National Association, as trustee. 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. The Notes are senior, unsecured obligations of the Company and bear interest at a rate of 0.25% per year. Interest will accrue from 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 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. The net proceeds from the issuance of the Notes were approximately $560.1 million, after deducting debt issuance costs. The total debt issuance costs incurred and recorded by the Company amounted to $14.9 million, which were recorded as a reduction to the face amount of the Notes and will be amortized to interest expense on a straight-line basis, which produces a materially consistent amount as the effective interest method over the contractual term of the Notes. For the three months ended September 30, 2022, interest expense was $0.4 million and amortization of the issuance costs was $0.7 million related to the Notes. For the nine months ended September 30, 2022, interest expense was $1.1 million and amortization of the issuance costs was $2.2 million related to the Notes. For the three and nine months ended September 30, 2021, interest expense related to the Notes and amortization of the issuance costs was $0.6 million. As of September 30, 2022, the if-converted value of the Notes did not exceed the outstanding principal amount. As of September 30, 2022, the total estimated fair value of the Notes was $425.0 million 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 pricing of the Notes on August 5, 2021 and in connection with the full exercise by the initial purchasers on August 9, 2021 of their option to purchase additional Notes, the Company used approximately $49.4 million of the net proceeds from the issuance of the Notes to enter 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, 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.

Net Loss per Share

Net Loss per Share	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Net Loss per Share	Net Loss per Share The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented: Three Months Ended Nine Months Ended (In thousands, except share and per share data) 2022 2021 2022 2021 Numerator: Net loss $ (24,827) $ (9,311) $ (73,385) $ (33,684) Denominator: Weighted-average shares used to compute net loss per share, basic and diluted 130,830,411 127,914,696 130,082,683 126,651,490 Net loss per share, basic and diluted $ (0.19) $ (0.07) $ (0.56) $ (0.27) The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive: As of September 30, 2022 2021 Options to purchase common stock 3,911,482 4,402,667 Common stock issuable upon exercise of common stock warrants 350,000 400,000 Common stock issuable upon vesting of restricted stock units 8,573,146 4,663,447 Common stock issuable in connection with employee stock purchase plan 1,070,071 262,029 Common stock issuable in connection with convertible senior notes 8,701,935 8,701,935 Total 22,606,634 18,430,078

Segment and Geographical Inform

Segment and Geographical Information	9 Months Ended
	Sep. 30, 2022
Segment Reporting [Abstract]
Segment and Geographical Information	Segment and Geographical InformationThe Company operates as one operating and reportable segment for purposes of allocating resources and evaluating financial performance. The following table sets forth total revenue by type of service for the periods presented: Three Months Ended Nine Months Ended (In thousands) 2022 2021 2022 2021 Marketplace Basic, Plus, Client Marketplace (1) and other $ 132,647 $ 108,893 $ 383,343 $ 312,569 Enterprise 12,496 8,890 35,550 24,344 Managed services 13,498 10,358 37,983 29,028 Total revenue $ 158,641 $ 128,141 $ 456,876 $ 365,941 (1) In April 2022, the Company combined its Upwork Basic and Plus client offerings into a new Client Marketplace offering. The Company generates its revenue from talent and clients. The following table sets forth total revenue by geographic area based on the billing address of its talent and clients for the periods presented: Three Months Ended Nine Months Ended (In thousands) 2022 2021 2022 2021 Talent United States $ 21,607 $ 18,429 $ 64,286 $ 55,308 India 11,337 11,109 34,764 31,430 Philippines 9,981 8,602 29,668 23,668 Rest of world 39,296 37,046 121,865 107,112 Total talent 82,221 75,186 250,583 217,518 Clients United States 56,897 39,661 153,369 110,275 Rest of world 19,523 13,294 52,924 38,148 Total clients 76,420 52,955 206,293 148,423 Total revenue $ 158,641 $ 128,141 $ 456,876 $ 365,941 Substantially all of the Company’s long-lived assets were located in the United States as of September 30, 2022 and December 31, 2021.

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed 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 applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which is referred to as the Annual Report, filed with the SEC on February 15, 2022. The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date but does not include all disclosures including notes required by U.S. GAAP. The condensed consolidated financial statements include the accounts of Upwork and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, changes in stockholders’ equity and cash flows for the interim periods, but do not purport to be indicative of the results of operations or financial condition to be anticipated for the full year ending December 31, 2022. Prior period amounts have been reclassified to conform with the current period presentation.
Use of Estimates	Use of Estimates The preparation of the condensed 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: the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; standalone selling price of material rights and the period of time over which to defer and recognize the consideration allocated to the material rights; allowance for doubtful accounts; 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
Summary of Significant Accounting Policies and Recent Accounting Pronouncements Not Yet Adopted	Summary of Significant Accounting Policies The significant accounting policies applied in the Company’s audited consolidated financial statements, as disclosed in the Annual Report, are applied consistently in these unaudited interim condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted The Company has reviewed the accounting pronouncements issued during the nine months ended September 30, 2022 and concluded they were either not applicable or not expected to have a material impact on the Company’s condensed consolidated financial statements.
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.

Revenue (Tables)

Revenue (Tables)	9 Months Ended
	Sep. 30, 2022
Revenue from Contract with Customer [Abstract]
Contract with Customer, Asset and Liability	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: (In thousands) September 30, 2022 December 31, 2021 Trade and client receivables, net of allowance $ 67,070 $ 66,826 Contract liabilities Deferred revenue 24,910 22,083 Deferred revenue (component of other liabilities, noncurrent) 7,807 6,349

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Financial Assets Measured at Fair Value	The following tables set forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy: (In thousands) September 30, 2022 Amortized Unrealized Unrealized Fair Cash and Marketable Cash $ 27,725 $ — $ — $ 27,725 $ 27,725 $ — Level I Money market funds 92,163 — — 92,163 92,163 — Treasury bills 188,803 8 (388) 188,423 34,901 153,522 U.S. government securities 120,652 — (2,647) 118,005 — 118,005 Total Level I 401,618 8 (3,035) 398,591 127,064 271,527 Level II Commercial paper 60,773 — — 60,773 — 60,773 Corporate bonds 115,170 2 (1,191) 113,981 1,634 112,347 Commercial deposits 32,130 — — 32,130 — 32,130 Asset-backed securities 28,658 — (338) 28,320 — 28,320 Yankee bonds 8,863 — (43) 8,820 — 8,820 Agency bonds 2,475 1 — 2,476 — 2,476 Supranational bonds 2,997 — (7) 2,990 — 2,990 Total Level II 251,066 3 (1,579) 249,490 1,634 247,856 Total $ 680,409 $ 11 $ (4,614) $ 675,806 $ 156,423 $ 519,383 (In thousands) December 31, 2021 Amortized Unrealized Unrealized Fair Cash and Marketable Cash $ 16,596 $ — $ — $ 16,596 $ 16,596 $ — Level I Money market funds 108,204 — — 108,204 108,204 — Treasury bills 89,992 1 — 89,993 15,000 74,993 U.S. government securities 94,839 — (285) 94,554 — 94,554 Total Level I 293,035 1 (285) 292,751 123,204 169,547 Level II Commercial paper 171,918 — — 171,918 29,544 142,374 Corporate bonds 183,303 1 (217) 183,087 17,861 165,226 Asset-backed securities 13,749 — (11) 13,738 — 13,738 Yankee bonds 6,693 — (12) 6,681 — 6,681 Total Level II 375,663 1 (240) 375,424 47,405 328,019 Total $ 685,294 $ 2 $ (525) $ 684,771 $ 187,205 $ 497,566
Unrealized Gain (Loss) on Investments	The following table summarizes, for all debt securities classified as available for sale in an unrealized loss position as of September 30, 2022, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position. Unrealized losses as of December 31, 2021 were immaterial. (In thousands) Less Than 12 Months 12 Months or Longer Total Duration of unrealized losses Fair Value Unrealized loss Fair Value Unrealized loss Fair Value Unrealized loss Money market funds $ 92,163 $ — $ — $ — $ 92,163 $ — Commercial paper 60,773 — — — 60,773 — Treasury bills 141,722 (388) — — 141,722 (388) U.S. government securities 108,317 (2,343) 9,688 (304) 118,005 (2,647) Corporate bonds 101,508 (1,006) 8,940 (185) 110,448 (1,191) Asset-backed securities 27,381 (328) 939 (10) 28,320 (338) Yankee bonds 8,820 (43) — — 8,820 (43) Commercial deposits 2,397 — — — 2,397 — Supranational bonds 2,990 (7) — — 2,990 (7) Total $ 546,071 $ (4,115) $ 19,567 $ (499) $ 565,638 $ (4,614)

Balance Sheet Components (Table

Balance Sheet Components (Tables)	9 Months Ended
	Sep. 30, 2022
Balance Sheet Related Disclosures [Abstract]
Cash and Cash Equivalents	The following table reconciles cash and cash equivalents, restricted cash, and funds held in escrow that are restricted as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows as of September 30, 2022 and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Cash and cash equivalents $ 156,423 $ 187,205 Restricted cash 4,290 4,040 Funds held in escrow, including funds in transit 169,966 160,813 Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows $ 330,679 $ 352,058
Property and Equipment, Net	Property and equipment, net consisted of the following: (In thousands) September 30, 2022 December 31, 2021 Computer equipment and software $ 6,370 $ 5,493 Internal-use software and platform development 30,926 25,738 Leasehold improvements 11,644 11,644 Office furniture and fixtures 3,365 3,365 Total property and equipment 52,305 46,240 Less: accumulated depreciation (30,818) (24,911) Property and equipment, net $ 21,487 $ 21,329
Accrued Expenses and Other Current Liabilities	Accrued expenses and other current liabilities consisted of the following: (In thousands) September 30, 2022 December 31, 2021 Accrued compensation and related benefits $ 13,703 $ 23,047 Accrued vendor expenses 13,295 7,728 Operating lease liability, current 6,455 6,315 Accrued indirect taxes 12,470 4,137 Accrued payment processing fees 2,446 2,085 Accrued talent costs 1,886 1,417 Other 1,526 1,013 Total accrued expenses and other current liabilities $ 51,781 $ 45,742

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Summary of Carrying Value of Debt	The following table presents the carrying value of the Company’s debt obligations as of September 30, 2022 and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Convertible senior notes $ 575,000 $ 575,000 Less: unamortized debt issuance costs (11,480) (13,701) Balance 563,520 561,299 Debt, current — — Debt, noncurrent $ 563,520 $ 561,299 Weighted-average interest rate 0.77 % 0.76 %

Net Loss per Share (Tables)

Net Loss per Share (Tables)	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders	The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented: Three Months Ended Nine Months Ended (In thousands, except share and per share data) 2022 2021 2022 2021 Numerator: Net loss $ (24,827) $ (9,311) $ (73,385) $ (33,684) Denominator: Weighted-average shares used to compute net loss per share, basic and diluted 130,830,411 127,914,696 130,082,683 126,651,490 Net loss per share, basic and diluted $ (0.19) $ (0.07) $ (0.56) $ (0.27)
Schedule of Potentially Dilutive Shares Excluded from Computation of Diluted Net Loss Per Share Attributable to Common Stockholders	The following potentially dilutive shares were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive: As of September 30, 2022 2021 Options to purchase common stock 3,911,482 4,402,667 Common stock issuable upon exercise of common stock warrants 350,000 400,000 Common stock issuable upon vesting of restricted stock units 8,573,146 4,663,447 Common stock issuable in connection with employee stock purchase plan 1,070,071 262,029 Common stock issuable in connection with convertible senior notes 8,701,935 8,701,935 Total 22,606,634 18,430,078

Segment and Geographical Info_2

Segment and Geographical Information (Tables)	9 Months Ended
	Sep. 30, 2022
Segment Reporting [Abstract]
Revenue by Type of Service	The following table sets forth total revenue by type of service for the periods presented: Three Months Ended Nine Months Ended (In thousands) 2022 2021 2022 2021 Marketplace Basic, Plus, Client Marketplace (1) and other $ 132,647 $ 108,893 $ 383,343 $ 312,569 Enterprise 12,496 8,890 35,550 24,344 Managed services 13,498 10,358 37,983 29,028 Total revenue $ 158,641 $ 128,141 $ 456,876 $ 365,941 (1) In April 2022, the Company combined its Upwork Basic and Plus client offerings into a new Client Marketplace offering.
Revenue by Geographic Area Based on Billing Address of Freelancers and Clients	The following table sets forth total revenue by geographic area based on the billing address of its talent and clients for the periods presented: Three Months Ended Nine Months Ended (In thousands) 2022 2021 2022 2021 Talent United States $ 21,607 $ 18,429 $ 64,286 $ 55,308 India 11,337 11,109 34,764 31,430 Philippines 9,981 8,602 29,668 23,668 Rest of world 39,296 37,046 121,865 107,112 Total talent 82,221 75,186 250,583 217,518 Clients United States 56,897 39,661 153,369 110,275 Rest of world 19,523 13,294 52,924 38,148 Total clients 76,420 52,955 206,293 148,423 Total revenue $ 158,641 $ 128,141 $ 456,876 $ 365,941

Revenue - Additional Informatio

Revenue - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 32.7		$ 32.7
Deferred revenue recognized	7	$ 6.6	16.6	$ 14
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 24.9		$ 24.9
Remaining performance obligation recognized thereafter	12 months		12 months

Revenue - Contract Balances (De

Revenue - Contract Balances (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Trade and client receivables, net of allowance	$ 67,070	$ 66,826
Contract liabilities
Deferred revenue	24,910	22,083
Deferred revenue (component of other liabilities, noncurrent)	$ 7,807	$ 6,349

Fair Value Measurements and Mar

Fair Value Measurements and Marketable Securities - Financial Assets Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	$ 680,409	$ 685,294
Unrealized Gain	11	2
Unrealized Loss	(4,614)	(525)
Fair Value	675,806	684,771
Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	156,423	187,205
Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	519,383	497,566
Level I
Assets, Fair Value Disclosure [Abstract]
Cash	27,725	16,596
Amortized Cost	401,618	293,035
Unrealized Gain	8	1
Unrealized Loss	(3,035)	(285)
Fair Value	398,591	292,751
Level I | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	127,064	123,204
Level I | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	271,527	169,547
Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	251,066	375,663
Unrealized Gain	3	1
Unrealized Loss	(1,579)	(240)
Fair Value	249,490	375,424
Level II | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	1,634	47,405
Level II | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	247,856	328,019
Money market funds | Level I
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	92,163	108,204
Unrealized Gain	0	0
Unrealized Loss	0	0
Fair Value	92,163	108,204
Money market funds | Level I | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	92,163	108,204
Money market funds | Level I | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	0	0
Treasury bills | Level I
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	188,803	89,992
Unrealized Gain	8	1
Unrealized Loss	(388)	0
Fair Value	188,423	89,993
Treasury bills | Level I | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	34,901	15,000
Treasury bills | Level I | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	153,522	74,993
U.S. government securities | Level I
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	120,652	94,839
Unrealized Gain	0	0
Unrealized Loss	(2,647)	(285)
Fair Value	118,005	94,554
U.S. government securities | Level I | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0	0
U.S. government securities | Level I | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	118,005	94,554
Commercial paper | Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	60,773	171,918
Unrealized Gain	0	0
Unrealized Loss	0	0
Fair Value	60,773	171,918
Commercial paper | Level II | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0	29,544
Commercial paper | Level II | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	60,773	142,374
Corporate bonds | Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	115,170	183,303
Unrealized Gain	2	1
Unrealized Loss	(1,191)	(217)
Fair Value	113,981	183,087
Corporate bonds | Level II | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	1,634	17,861
Corporate bonds | Level II | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	112,347	165,226
Commercial deposits | Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	32,130
Unrealized Gain	0
Unrealized Loss	0
Fair Value	32,130
Commercial deposits | Level II | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0
Commercial deposits | Level II | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	32,130
Asset-backed securities | Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	28,658	13,749
Unrealized Gain	0	0
Unrealized Loss	(338)	(11)
Fair Value	28,320	13,738
Asset-backed securities | Level II | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0	0
Asset-backed securities | Level II | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	28,320	13,738
Yankee bonds | Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	8,863	6,693
Unrealized Gain	0	0
Unrealized Loss	(43)	(12)
Fair Value	8,820	6,681
Yankee bonds | Level II | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0	0
Yankee bonds | Level II | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	8,820	$ 6,681
Agency bonds | Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	2,475
Unrealized Gain	1
Unrealized Loss	0
Fair Value	2,476
Agency bonds | Level II | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0
Agency bonds | Level II | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	2,476
Supranational bonds | Level II
Assets, Fair Value Disclosure [Abstract]
Amortized Cost	2,997
Unrealized Gain	0
Unrealized Loss	(7)
Fair Value	2,990
Supranational bonds | Level II | Cash and Cash Equivalents
Assets, Fair Value Disclosure [Abstract]
Fair Value	0
Supranational bonds | Level II | Marketable Securities
Assets, Fair Value Disclosure [Abstract]
Fair Value	$ 2,990

Fair Value Measurements - Unrea

Fair Value Measurements - Unrealized Gain (Loss) On Investments (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Fair Value
Less Than 12 Months	$ 546,071
12 Months or Longer	19,567
Total	565,638
Unrealized loss
Less Than 12 Months	(4,115)
12 Months or Longer	(499)
Total	(4,614)
Money market funds
Fair Value
Less Than 12 Months	92,163
12 Months or Longer	0
Total	92,163
Unrealized loss
Less Than 12 Months	0
12 Months or Longer	0
Total	0
Commercial paper
Fair Value
Less Than 12 Months	60,773
12 Months or Longer	0
Total	60,773
Unrealized loss
Less Than 12 Months	0
12 Months or Longer	0
Total	0
Treasury bills
Fair Value
Less Than 12 Months	141,722
12 Months or Longer	0
Total	141,722
Unrealized loss
Less Than 12 Months	(388)
12 Months or Longer	0
Total	(388)
U.S. government securities
Fair Value
Less Than 12 Months	108,317
12 Months or Longer	9,688
Total	118,005
Unrealized loss
Less Than 12 Months	(2,343)
12 Months or Longer	(304)
Total	(2,647)
Corporate bonds
Fair Value
Less Than 12 Months	101,508
12 Months or Longer	8,940
Total	110,448
Unrealized loss
Less Than 12 Months	(1,006)
12 Months or Longer	(185)
Total	(1,191)
Asset-backed securities
Fair Value
Less Than 12 Months	27,381
12 Months or Longer	939
Total	28,320
Unrealized loss
Less Than 12 Months	(328)
12 Months or Longer	(10)
Total	(338)
Yankee bonds
Fair Value
Less Than 12 Months	8,820
12 Months or Longer	0
Total	8,820
Unrealized loss
Less Than 12 Months	(43)
12 Months or Longer	0
Total	(43)
Commercial deposits
Fair Value
Less Than 12 Months	2,397
12 Months or Longer	0
Total	2,397
Unrealized loss
Less Than 12 Months	0
12 Months or Longer	0
Total	0
Supranational bonds
Fair Value
Less Than 12 Months	2,990
12 Months or Longer	0
Total	2,990
Unrealized loss
Less Than 12 Months	(7)
12 Months or Longer	0
Total	$ (7)

Balance Sheet Components - Cash

Balance Sheet Components - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Balance Sheet Related Disclosures [Abstract]
Cash and cash equivalents	$ 156,423	$ 187,205
Restricted cash	4,290	4,040
Funds held in escrow, including funds in transit	169,966	160,813
Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows	$ 330,679	$ 352,058	$ 776,608	$ 232,463

Balance Sheet Components - Prop

Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 52,305		$ 52,305		$ 46,240
Less: accumulated depreciation	(30,818)		(30,818)		(24,911)
Property and equipment, net	21,487		21,487		21,329
Depreciation expense	800	$ 800	2,400	$ 2,800
Capitalized internal-use software and platform development costs	2,300	700	5,200	4,100
Amortization of internal-use software and platform development costs	1,200	$ 1,600	3,600	$ 4,700
Computer equipment and software
Property, Plant and Equipment [Line Items]
Total property and equipment	6,370		6,370		5,493
Internal-use software and platform development
Property, Plant and Equipment [Line Items]
Total property and equipment	30,926		30,926		25,738
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	11,644		11,644		11,644
Office furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 3,365		$ 3,365		$ 3,365

Balance Sheet Components - Accr

Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Balance Sheet Related Disclosures [Abstract]
Accrued compensation and related benefits	$ 13,703	$ 23,047
Accrued vendor expenses	13,295	7,728
Operating lease liability, current	6,455	6,315
Accrued indirect taxes	12,470	4,137
Accrued payment processing fees	2,446	2,085
Accrued talent costs	1,886	1,417
Other	1,526	1,013
Total accrued expenses and other current liabilities	$ 51,781	$ 45,742

Commitments and Contingencies (

Commitments and Contingencies (Details)	Sep. 30, 2022 USD ($) letter	Dec. 31, 2021 USD ($) letter
Commitments and Contingencies Disclosure [Abstract]
Letters of credit held | letter	3	3
Line of credit facility, maximum borrowing capacity (up to)	$ 800,000	$ 800,000
Long-term line of credit	$ 0	$ 0

Debt - Summary of Carrying Valu

Debt - Summary of Carrying Value of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
Total debt	$ 575,000	$ 575,000
Less: unamortized debt issuance costs	(11,480)	(13,701)
Balance	563,520	561,299
Debt, current	0	0
Debt, noncurrent	$ 563,520	$ 561,299
Weighted-average interest rate	0.77%	0.76%

Debt - Convertible Senior Notes

Debt - Convertible Senior Notes Due 2026 (Details)						3 Months Ended		9 Months Ended
	Aug. 10, 2021 USD ($) $ / shares	Aug. 10, 2021 USD ($) $ / shares	Aug. 10, 2021 USD ($) tradingDay $ / shares	Aug. 10, 2021 USD ($) businessDay $ / shares	Aug. 10, 2021 USD ($) segment $ / shares	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Debt Instrument [Line Items]
Debt instrument, face amount	$ 575,000,000	$ 575,000,000	$ 575,000,000	$ 575,000,000	$ 575,000,000
Debt, interest rate	0.25%	0.25%	0.25%	0.25%	0.25%
Additional aggregate amount to be purchased	$ 75,000,000	$ 75,000,000	$ 75,000,000	$ 75,000,000	$ 75,000,000
Convertible debt, threshold percentage of stock price trigger	130%
Convertible debt, threshold trading days			20		20
Convertible debt, consecutive trading days | tradingDay			30
Convertible debt, business period | businessDay				5
Convertible debt, measurement period | businessDay				5
Convertible debt, measurement period percentage	98%
Convertible debt, conversion rate	1.50%
Convertible debt, conversion price (in dollars per share) | $ / shares	$ 66.08	$ 66.08	$ 66.08	$ 66.08	$ 66.08
Redemption price, percentage of principal amount redeemed	100%
Proceeds from issuance of convertible senior notes		$ 560,100,000						$ 0	$ 575,000,000
Debt issuance costs, gross	$ 14,900,000	$ 14,900,000	$ 14,900,000	$ 14,900,000	$ 14,900,000
Interest expense, debt, excluding amortization						$ 400,000		1,100,000
Amortization of debt issuance costs						700,000		2,221,000	441,000
Interest expense, debt							$ 600,000		$ 600,000
Level II
Debt Instrument [Line Items]
Estimated fair value of debt						$ 425,000,000		$ 425,000,000

Debt - Capped Calls (Details)

Debt - Capped Calls (Details) - USD ($) $ / shares in Units, $ in Thousands			9 Months Ended
	Aug. 09, 2021	Aug. 05, 2021	Sep. 30, 2022	Sep. 30, 2021
Debt Instrument [Line Items]
Purchases of capped calls related to convertible senior notes			$ 0	$ 49,393
Call Option
Debt Instrument [Line Items]
Strike price (in dollars per share)	$ 92.74	$ 66.08
Premium over last reported sale price, percentage		100%
Price per share of stock transaction (in dollars per share)		$ 46.37

Net Loss per Share - Summary of

Net Loss per Share - Summary of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator:
Net loss	$ (24,827)	$ (9,311)	$ (73,385)	$ (33,684)
Denominator:
Weighted-average shares used to compute net loss per share, basic (in shares)	130,830,411	127,914,696	130,082,683	126,651,490
Weighted-average shares used to compute net loss per share, diluted (in shares)	130,830,411	127,914,696	130,082,683	126,651,490
Net loss per share, basic (in dollars per share)	$ (0.19)	$ (0.07)	$ (0.56)	$ (0.27)
Net loss per share, diluted (in dollars per share)	$ (0.19)	$ (0.07)	$ (0.56)	$ (0.27)

Net Loss per Share - Schedule o

Net Loss per Share - Schedule of Potentially Dilutive Securities (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	22,606,634	18,430,078
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	3,911,482	4,402,667
Common stock issuable upon exercise of common stock warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	350,000	400,000
Common stock issuable upon vesting of restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	8,573,146	4,663,447
Common stock issuable in connection with employee stock purchase plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	1,070,071	262,029
Common stock issuable in connection with convertible senior notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from computation of diluted net loss per share attributable to common stockholders (in shares)	8,701,935	8,701,935

Segment and Geographical Info_3

Segment and Geographical Information - Additional Information (Details)	9 Months Ended
	Sep. 30, 2022 segment
Segment Reporting [Abstract]
Number of operating segments	1
Number of reportable segments	1

Segment and Geographical Info_4

Segment and Geographical Information - Revenue by Type of Service (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Total revenue	$ 158,641	$ 128,141	$ 456,876	$ 365,941
Basic, Plus, Client Marketplace and other
Disaggregation of Revenue [Line Items]
Total revenue	132,647	108,893	383,343	312,569
Enterprise
Disaggregation of Revenue [Line Items]
Total revenue	12,496	8,890	35,550	24,344
Managed services
Disaggregation of Revenue [Line Items]
Total revenue	$ 13,498	$ 10,358	$ 37,983	$ 29,028

Segment and Geographical Info_5

Segment and Geographical Information - Revenue by Geographic Area Based on Billing Address of Freelancers and Clients (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 158,641	$ 128,141	$ 456,876	$ 365,941
Talent
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	82,221	75,186	250,583	217,518
Talent | United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	21,607	18,429	64,286	55,308
Talent | India
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	11,337	11,109	34,764	31,430
Talent | Philippines
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	9,981	8,602	29,668	23,668
Talent | Rest of world
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	39,296	37,046	121,865	107,112
Clients
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	76,420	52,955	206,293	148,423
Clients | United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	56,897	39,661	153,369	110,275
Clients | Rest of world
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 19,523	$ 13,294	$ 52,924	$ 38,148