Upwork, the Palo Alto-based freelance talent marketplace, is leveraging artificial intelligence (AI) and strategic acquisitions to fuel a “breakout quarter,” according to CFO Erica Gessert. The company reported a 47% year-over-year increase in net income to $32.7 million and record revenue of $195 million for Q2 , with adjusted EBITDA surging 40% to $57.1 million. Gessert attributes much of this success to the integration of AI technologies from recent acquisitions, which have enhanced the platform’s offerings and driven growth.
The company’s M&A strategy has been pivotal, with four acquisitions in the past three years, including Objective AI in 2024 and workforce management firm Bubty in Q2. Upwork also plans to acquire Ascen, a solution for contingent W-2 workers, to bolster its AI-driven services.
Gessert, who joined Upwork in April 2023 after roles at PayPal and Sprint, emphasized that profitability has provided the “optionality” for these deals without relying on capital markets. Free cash flow soared 85% to $65.6 million, supporting further growth initiatives.
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AI-related services are a key driver, with a 30% rise in gross services volume and a 38% increase in clients posting AI-related jobs in Q2. Upwork’s new “Lifted” platform, a wholly owned AI-powered subsidiary supported by recent acquisitions, aims to help enterprises manage extended workforces efficiently.
Gessert noted that AI is also being explored internally to streamline processes, reflecting the broader acceleration of AI adoption across industries. Upwork’s finance team oversees end-to-end M&A processes, ensuring smooth integration of tools, processes, and talent to avoid technical debt and support long-term growth.
While Upwork plans to continue leveraging its balance sheet for future deals, Gessert said another acquisition in 2025 is unlikely to allow time for proper integration. By balancing profitability and growth, Upwork aims to maintain its macro-agnostic strategy, positioning it to capitalize on the booming demand for AI and freelance talent.
