Key Highlights

● Upwork launched an app inside Claude on June 17 and an MCP server on August 10.

● Second-quarter Revenue was $191.7 million, down 2%, with active clients at 763,000.

● Third-quarter revenue is guided to $176 million to $184 million.

● The company repurchased 8.3 million shares for $109.7 million in the first half.

Upwork Inc. (NASDAQ:UPWK) operates a work marketplace connecting businesses with independent talent, and in 2026 it has leaned into a new channel: artificial intelligence platforms. The company has placed apps inside ChatGPT and Claude and launched a Model Context Protocol server, positioning its marketplace where businesses increasingly begin projects. On Thursday, investors may consider whether these partnerships can offset a shrinking client base, which the company's latest results show. Both integrations aim to meet customers in the tools where they already plan projects. The company has framed the connectors as a way to turn AI-generated plans into outcomes by routing the parts that need human expertise to its talent network, a pitch that depends on customers continuing to value that handoff.

Latest Company Context

Upwork's June 17 announcement introduced an Upwork app inside Anthropic's Claude to help businesses scope work and find expert human talent, following an April app for ChatGPT. On August 10 it also launched an MCP server so users can hire or find work from within AI tools. In second-quarter results the same day, revenue was $191.7 million, down 2%, gross services Volume was $966.4 million, down 4%, and active clients fell to 763,000. GAAP Net Income was $25.4 million and adjusted EBITDA was $64.1 million, a 33% margin. Enterprise revenue rose 2% to $24.8 million while marketplace revenue fell 2% to $166.9 million, and Lifted's employer-of-record offering saw volume rise 29%.

Key Business Drivers

Management pointed to pockets of growth: gross services volume from AI-related work rose over 22%, Business Plus volume rose 174%, and gross services volume per active client reached a record $5,230. Guidance for the third quarter calls for revenue of $176 million to $184 million, and for 2026 revenue of $730 million to $750 million with adjusted EBITDA of $225 million to $235 million. The company returned $109.7 million through repurchases of 8.3 million shares in the first half, with $254.3 million of authorisation remaining at June 30. Other developments included a board refresh in June and, per a July report, the chief financial officer taking medical leave with the chief executive serving as interim.

What Investors Should Watch

Investors may watch whether the Claude and ChatGPT integrations produce measurable client acquisition, since the company has not quantified their contribution. Third-quarter results, active client trends, the pace of AI-related work volume, and the stability of the finance Leadership may all matter. The company's presentation at the Goldman Sachs Communacopia conference in September may have offered further commentary. Margins, cash flow, which declined year on year in the second quarter, and buyback pace are additional variables, as are competing AI agents that could reduce Demand for human freelancers. Operating Cash Flow was $46.9 million versus $72.5 million a year earlier, and free cash flow was $35.9 million versus $65.6 million.

Betting on Human Expertise Inside AI Tools

Upwork's Partnership strategy reflects a bet that human expertise will remain valuable as AI tools proliferate, and that being embedded in those tools can lower Acquisition costs. Early results show higher spend per client but fewer clients, so the case remains unproven. The third-quarter revenue range implies a further step down from the second quarter, which investors may weigh against the company's cost discipline and its record spend per client. The wider debate is whether AI tools will expand or erode demand for freelance work, and the partnerships place Upwork on both sides of that question.