업워크(UPWK) 2026년 3분기 실적 발표 컨퍼런스 콜: EBITDA 마진 34.4%, AI GSV 55% 증가

핵심 요약

• 업워크(Upwork)는 2026년 3분기 총 서비스 볼륨(GSV) 9억 1,400만 달러 및 매출 1억 8,600만 달러를 기록하며 모두 경영진 가이던스 상단을 상회했습니다.
• 조정 EBITDA는 6,380만 달러를 기록하며 34.4%의 이익률을 나타냈습니다. 잉여현금흐름은 5,390만 달러로 조정 EBITDA 대비 전환율 84%를 기록했습니다.
• 마켓플레이스 테이크 레이트는 비즈니스 플러스(Business Plus), 커넥츠(Connects), 구독, 광고 및 기타 수익화 제품에 힘입어 전년 동기 대비 110bp 상승한 20.0%를 기록했습니다.
• 비즈니스 플러스 GSV는 전년 동기 대비 132% 증가했고 매출은 120% 증가했습니다. 해당 제품은 전체 GSV의 8%를 차지하며 기존 목표치인 5%를 상회했습니다.
• AI 기술을 갖춘 프리랜서로부터 발생한 GSV는 55% 증가한 1억 1,200만 달러를 기록했습니다. 업워크의 MCP 서버를 통해 시작된 작업은 10월에 전월 대비 150% 이상 성장했습니다.
• 업워크는 리프티드(Lifted)의 글로벌 EOR(Employer-of-Record, 법적 고용주) 역량을 확장하기 위해 워크모션(WorkMotion)을 인수했습니다. 경영진은 워크모션을 포함해 2026년 리프티드 GSV가 30% 이상 성장할 것으로 예상합니다.

주요 재무 데이터

사업 및 운영 실적

비즈니스 플러스 및 고가치 마켓플레이스 활동

업워크는 더 큰 규모의 고객과 더 복잡한 프로젝트로의 전환을 지속했습니다. 최소 10만 달러 이상 규모의 계약은 전년 동기 대비 7% 증가했습니다.

비즈니스 플러스는 주요 성장 동력으로 유지되었습니다. 3분기 활성 비즈니스 플러스 고객의 40%가 이 제품을 통해 업워크에서 첫 지출을 발생시켰습니다. 경영진은 고품질 인재 접근성, 팀 단위 채용, 통합 청구서 발급, Net-30 대금 결제 조건 적용 자격 등을 도입 이유로 꼽았습니다.

프리랜서 플러스 구독 매출은 전년 동기 대비 25% 증가했으며, 커넥츠 매출도 성장을 이어갔습니다. 경영진은 마켓플레이스 테이크 레이트의 상승 추세가 유지되고 있으나, 리프티드와 워크모션의 기여도가 커짐에 따라 사업 믹스 변화로 회사 전체 테이크 레이트는 하락할 것이라고 밝혔습니다.

AI 수요 및 신규 고객 확보 채널

프로필에 AI 기술을 등록한 프리랜서가 창출한 GSV는 55% 증가한 1억 1,200만 달러를 기록했습니다. 경영진은 클라이언트가 공고에 AI를 명시하기보다 프리랜서가 AI를 사용할 것으로 전제하는 경우가 늘어남에 따라, 이 방식이 기존 AI 관련 GSV 지표보다 더 정확한 측정 방식이라고 설명했습니다. AI 전략 및 컨설팅 카테고리는 전년 동기 대비 40% 이상 성장했습니다.

지난 8월 출시된 업워크의 MCP 서버는 클라이언트와 프리랜서가 클로드(Claude) 및 챗GPT(ChatGPT)와 같은 AI 툴 내에서 마켓플레이스 기능을 사용할 수 있게 해줍니다. 이 서버는 3분기 동안 수백만 건의 호출을 기록했습니다. MCP를 통한 커넥츠 사용량은 연간 환산 매출 기준 300만 달러를 넘어섰으며, MCP를 통해 시작된 작업의 GSV는 10월에 전월 대비 150% 이상 증가했습니다.

업워크 나우(Upwork Now)가 공개 베타 버전으로 전환되었습니다. 이 서비스는 온라인 상태이며 즉시 일할 준비가 된 프리랜서에 대한 실시간 접근을 제공합니다. 경영진은 현재 이 서비스의 수익 구조가 기존 마켓플레이스 모델과 일치하며, 시급한 수요를 포착하고 프로젝트 착수를 가속화할 수 있다고 설명했습니다.

리프티드 및 워크모션

업워크는 3분기 동안 헬스케어, 유통, 기술 분야에서 3개의 순신규 엔터프라이즈 고객을 확보했습니다. 경영진은 엔터프라이즈 영업 주기가 일반적으로 6개월에서 12개월 소요된다고 언급했으나, 리프티드 파이프라인은 계속 확장되고 있습니다.

워크모션 인수로 기존 미국 및 캐나다 역량을 보완하는 글로벌 EOR 인프라가 리프티드에 추가되었습니다. 경영진에 따르면 워크모션의 매출은 연간 약 20% 성장하고 있습니다. 업워크는 인수 보유 기간이 몇 달에 불과한 점을 반영해 4분기 워크모션 매출을 약 400만 달러로 예상하고 있습니다.

경영진 가이던스

연간 매출 전망에는 4분기 워크모션의 매출 약 400만 달러가 포함되지만, 이익률이 낮은 매니지드 서비스 프로젝트가 플랫폼을 이전함에 따라 일부 상쇄됩니다. 업워크는 해당 고객을 리프티드 EOR 서비스로 이전하는 방안을 논의 중입니다.

경영진은 4분기 마켓플레이스 테이크 레이트가 상승할 것으로 전망하지만, 리프티드의 비중 확대로 인해 전체 테이크 레이트는 전분기 대비 하락할 것으로 보고 있습니다. 또한 4분기 이익률에는 지출 시점, 워크모션 통합 비용, 하반기 추가 마케팅 비용 1,000만 달러 중 잔여 금액이 반영되어 있습니다.

업워크는 4분기 실적 발표와 함께 공식 2027년 가이던스를 제시할 예정입니다. 경영진은 현재 2027년 상반기까지 마켓플레이스 역풍이 지속되다가 하반기에는 성장세가 개선될 것으로 예상하고 있습니다. 또한 리프티드의 기여도 확대 및 워크모션 통합으로 인해 2027년 조정 EBITDA 이익률이 약 3~4%포인트 희석될 수 있다고 지적했습니다.

리스크 및 주목할 점

• 저가치 작업이 마켓플레이스에서 이탈하는 현상이 지속되고 있으며, 경영진은 이러한 압력이 2027년 상반기까지 이어질 것으로 예상합니다.
• 검색 활동이 구글 등 웹 채널에서 AI 어시스턴트로 이동함에 따라 기존의 디지털 고객 확보 방식이 압박을 받고 있습니다.
• 경영진은 GSV 가시성과 예측 가능성이 제한적이라고 언급하며, 매출 및 이익률 집행에 무게를 두고 있습니다.
• 리프티드의 확장과 워크모션 통합으로 인해 사업 믹스가 변화되어 전체 테이크 레이트 상승세가 둔화되고 2027년 조정 EBITDA 이익률이 감소할 것으로 예상됩니다.
• 마케팅 및 인수 통합 비용을 포함해 3분기 비용 일부가 4분기로 이월되었습니다.

애널리스트 Q&A 주요 내용

• 워크모션 전략: 경영진은 이번 인수를 통해 리프티드의 글로벌 법인 확장이 1~2년 앞당겨지고, 서비스 비용을 절감하면서 수주 성공률을 높일 수 있을 것이라고 밝혔습니다.
• 마켓플레이스 궤적: 3분기 추세는 저가치 활동 감소 및 기존 검색 기반 고객 확보 차질을 포함해 2분기와 유사하게 유지되었습니다. 경영진은 기저 효과 완화 및 리프티드 확장에 힘입어 2027년 말로 갈수록 성장률이 개선될 것으로 기대하고 있습니다.
• AI 수익 모델: 기존 테이크 레이트, 커넥츠 및 광고 모델이 MCP 활동에 적용됩니다. 경영진은 대용량 AI 사용 사례가 계속 등장할 경우 별도의 가격 체계를 도입할 가능성도 보고 있습니다.
• 비즈니스 플러스 개발: 업워크는 더 큰 규모의 중견·중소기업(SMB)을 위한 기능을 추가할 계획이며 다양한 고객 니즈에 대응하기 위해 추가 제품 티어를 도입할 수도 있습니다.
• 마케팅 집행: 업워크는 3분기 동안 계획했던 하반기 추가 마케팅 지출 1,000만 달러 중 500만 달러를 집행했습니다. 경영진은 비디오, 인플루언서 및 해외 고객 확보 채널에서 높은 투자 대비 수익을 기록했다고 보고했습니다.
• CFO 교체: 에리카 게서트 CFO가 1월 1일 자로 사임하고 당분간 고문으로 남을 예정입니다. 피터 산본 최고비즈니스책임자가 후임으로 취임합니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Thank you for standing by, and welcome to Upwork's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Denise Garcia, Investor Relations. Please go ahead.

Denise Garcia

Thank you, and welcome to Upwork's discussion of its third quarter 2026 financial results. Joining me today is Hayden Brown, Upwork's President and Chief Executive Officer; Erica Gessert, Chief Financial Officer; and Peter Sanborn, Chief Business Officer. Following our prepared remarks, we'll be happy to take your questions.

But first, I'll review the safe harbor statement. During this call, we may make statements related to our business that are forward-looking statements under federal securities laws. Forward-looking statements include all statements other than those of historical fact. These statements are not guarantees of future performance, but rather are subject to a variety of risks, uncertainties and assumptions. Our actual results could differ materially from expectations reflected in any forward-looking statements. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and on our Investor Relations website as well as the risks and other important factors discussed in today's earnings press release. Additional information is also available in our quarterly report on Form 10-Q for the quarter ended September 30, 2026, when filed. In addition, references will be made to certain non-GAAP financial measures. Adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating expense, non-GAAP diluted EPS and free cash flow are non-GAAP financial measures, and all other financial measures are GAAP unless cited as non-GAAP. Information regarding non-GAAP financial measures, including reconciliations to their most directly comparable GAAP financial measures can be found in the press release that was issued this afternoon on our Investor Relations website at investors.upwork.com. Unless otherwise noted, reported figures are rounded and comparisons of the third quarter of 2026 are to the third quarter of 2025. With that, I'll now turn the call over to Hayden.

Hayden Brown

Good afternoon, everyone, and welcome to Upwork's Third Quarter 2026 Earnings Call. In the third quarter, Upwork executed against our plan as our platform continued its rotation toward higher value, more complex work and larger clients. We generated $914 million in GSV and $186 million in revenue, both above the high end of our guidance range. Adjusted EBITDA reached $63.8 million, exceeding the high end of our guidance. We have built a strong durable profitability engine, which will be critical to our ongoing value creation in 2027 and beyond. As we navigate through the evolution of work on our platform, our strategic growth pillars across enterprise, SMB and AI continue to gain momentum.

Let's walk through our performance across each of these core growth pillars. Starting with enterprise. Since June, we have accelerated the pace of customer migrations from legacy Upwork Enterprise onto the Lifted platform. This transition is key to unlocking deeper expansion across our existing client portfolio, while new customer demand also continues to build. In Q3 alone, we signed 3 net new enterprise logos across health care, retail and tech while expanding our entire pipeline. We're seeing strong customer uptake of Lifted's direct employment EOR offering in the U.S. and Canada and offering a global solution for employment in every market has always been our goal. With that end, today, we announced the acquisition of WorkMotion, a global employer of record provider. This dramatically accelerates our road map of delivering comprehensive contingent employment solutions to our customers on a global scale. Lifted's growth strategy was already delivering results and adding WorkMotion to the portfolio allows us to further improve win rates and lower Lifted's cost to serve. Inclusive of WorkMotion, we now expect Lifted GSV to exceed 30% year-over-year growth in 2026, setting the stage for sustained strong momentum into 2027 and beyond.

Turning to SMB. Our focus on quality over quantity continues to yield excellent results. The rapid adoption of Business Plus is driving higher spend among new and existing clients, and it's strongly attracting and converting new clients specifically. 40% of active Business Plus clients in Q3 had their first Upwork spend using this product. Business Plus is entering its second full year in market. And in Q3, it delivered 120% year-over-year revenue growth. It continues to perform well ahead of plan with GSV increasing 132% year-over-year. Business Plus now accounts for 8% of total GSV, exceeding the 5% goal we set late last year. GSV per active client reached another record high of $5,418, up 8% year-over-year. This marks our ninth consecutive quarter of sequential growth on this metric, driven by increased engagement with existing clients and the ongoing shift toward higher-value work. We also saw contracts of $100,000 or more increased 7% year-over-year in Q3. As a result, GSV per contract in Q3 was our highest ever, growing 9% year-over-year.

On the AI front, GSV from AI skilled talent increased 55% to $112 million in the third quarter. As clients put AI to work, they're increasingly turning to Upwork for the expertise to implement it, integrate it into their operations and get more value from AI. AI is also changing how customers find us. As we discussed last quarter, traditional search is being disrupted as more people turn to AI assistant for answers, recommendations and actions. We have been adapting our acquisition strategies to these changes, investing in AI-driven discovery and new channels of client demand. We also see an opportunity that goes beyond search. A new model of collaboration between people and AI is taking shape. AI is doing more, but human expertise continues to be important. Productive collaboration between people and AI is the future of work, and we are building Upwork to power it at scale. We're doing this through both our MCP server, which we launched in August and Upwork Now, which we announced in public beta today. Our MCP server is already gaining meaningful traction by opening up a variety of new use cases. AI agents can now tap into Upwork's marketplace directly to take actions like drafting a job post or searching for talent. Clients can do the same from inside any AI tool like Claude or ChatGPT. Talent can submit proposals, work or messages to their Upwork clients without leaving the AI tools they love. MCP implementations are an important new source of demand. GSV from work started through our MCP server grew more than 150% month-over-month in October. Upwork now adds real-time access to human expertise for any AI agent or client. Upwork now connects them with Upwork freelancers who are currently online and ready to start work immediately. Customers can now access the human expert they need the moment they need them within Upwork or from within their own AI tools. In early testing and release, customer feedback has been enthusiastic about the ease, speed and value of our MCP and Upwork Now. Upwork is powering a new way of bringing human expertise together with AI-powered work. We're capitalizing on our tremendous assets of talent, technology and trust to become essential infrastructure, enabling human and AI collaboration.

Today, we also announced that Erica Gessert will step down as CFO on January 1 and remain with the company in an advisory role for several months. Erica has been an exceptional business partner and financial leader for Upwork, and the Board and I are deeply grateful for her contributions. She helped us deliver record revenue and profitability, expand margins, strengthen cash generation and manage our capital allocation strategy. And she also developed an exceptional finance team, which is why Peter Sanborn, currently our Chief Business Officer, will be Upwork's next CFO. Since joining Upwork in 2024, Peter has helped shape our strategy and identify new opportunities for growth. He has also led our corporate development, partnership and Frontier AI product efforts, including bringing Upwork into tools like ChatGPT and Claude, so businesses can connect with our talent directly where they're already working. During Erica's lead earlier this year, Peter worked closely with me and our finance organization as we managed a challenging demand environment while maintaining our focus on profitability and growth investment. That experience gave the Board and me even greater confidence in his ability to take on this role. Please join me in congratulating Peter and thanking Erica on what is now her last earnings call for all that she has done for Upwork. And with that, I'll turn it over to Erica.

Erica Gessert

Thanks, Hayden, and hello, everyone. Before diving into the financial results, I want to say how professionally and personally rewarding it has been to serve as Upwork's CFO. I've been reflecting on what we have accomplished these past few years, and I'm incredibly proud of what we've built. In particular, the levers with monetization strategies and Business Plus as well as the cost optimization muscle that we have built into this business creates tremendous stability and optionality for revenue and for margins. This is a great business with very strong future prospects. I'm also especially grateful for the opportunity to have worked with this talented team. To my colleagues across Upwork and particularly to our finance and business development organizations, thank you for your passion, your dedication and teamwork. I also want to sincerely thank Hayden and the Board for your trust and partnership. I'm excited to pass the mantle to Peter, who is an incredible leader, and I look forward to supporting a smooth transition to him and to watching Upwork achieve even greater success in the future.

With that, let's turn to our financial results. In the third quarter, Upwork executed well as we managed through our ongoing platform transformation. We delivered top line results above the high end of our guidance range and continue to operate with discipline. At Upwork, we have proven that we can produce strong, highly profitable business results in a wide range of operating environments, and you will see us continue to do this as we move forward. Active client count in the quarter was 717,000, reflecting our strategy to focus on acquiring and serving higher-value customers with more complex work. Our MCP server is opening up new demand channels for us by bringing Upwork into AI tools. And while still early, traffic is growing rapidly with millions of server calls from clients and talent occurring during the quarter. Notably, we saw Connects usage through the MCP server grow rapidly, reaching a more than $3 million annual revenue run rate during the quarter. This is an important proof point that reflects the durability of our monetization model as we explore new channels for acquisition and engagement with customers.

Revenue for Q3 was $186 million. Our marketplace take rate expanded to 20.0%, up 110 basis points year-over-year, driven by the ongoing adoption of our higher-margin products. Ads and monetization streams represent a key strategic capability that produce incremental revenue streams even in a softer GSV environment. Our Connects revenue continues to grow and Freelancer Plus subscription revenue was up 25% year-over-year. Non-GAAP operating expenses were $84 million or 45% of revenue compared to 50% of revenue in the third quarter of 2025. Adjusted EBITDA was $63.8 million, representing an adjusted EBITDA margin of 34.4%, driven by our disciplined execution and operational efficiencies. While there was some timing of expenses between Q3 and Q4, our active cost management and disciplined operational focus continue to deliver strong results and will benefit us into 2027 and beyond. We generated robust free cash flow in Q3 of $53.9 million with free cash flow to adjusted EBITDA conversion of 84% at the high end of our long-term average of 80% to 85%.

Turning to our guidance for the fourth quarter and full year 2026. For the full year 2026, we now expect revenue in the range of $742 million to $750 million. This guidance includes an approximately $4 million revenue contribution from WorkMotion in the fourth quarter, which is offset by a lower margin managed services project transitioning off platform. We are actively engaged in discussions with the same client to transition them to Lifted EOR services. This is a clear proof point for the Lifted strategy, which is enabling us to replace legacy projects with higher margin, more durable solutions. We are raising our full year 2026 adjusted EBITDA outlook to $236 million to $240 million, which represents an adjusted EBITDA margin of 32% at the midpoint. The disciplined cost management muscle we have built in this business will enable us to produce strong profitability even if we continue to see low-value account rotation impacting top line growth in 2027. We expect full year 2026 non-GAAP diluted EPS to be between $1.45 and $1.47. Our guidance assumes stock-based compensation of approximately $50 million to $53 million for the full year 2026, and we expect stock-based compensation to continue to step down next year.

For the fourth quarter, we expect to generate revenue in the range of $169 million to $177 million. Consistent with the strength in our ads and monetization products, marketplace take rate is expected to continue to advance in Q4, while business mix with Lifted will cause overall take rate to decline sequentially. We expect adjusted EBITDA in the range of $51 million to $55 million, which represents an adjusted EBITDA margin of 31% at the midpoint. We expect Q4 non-GAAP diluted EPS to be between $0.30 and $0.32.

In closing, Upwork delivered another quarter of solid execution against our plan as we guide our business through a fundamental shift away from traditional digital demand channels and the broad rotation of work with AI. We are managing a major business mix shift. And while we are enduring headwinds in our business, the strategic growth pillars we identified many quarters ago are showing promise. The strength we are seeing in Enterprise, Business Plus and the higher value of customers entering our platform validate our strategy. The early but strong adoption of our MCP server-enabled demand channels offer new opportunities for customer acquisition and retention. At the same time, our robust free cash flow profile provides balance sheet flexibility to fund high-return growth initiatives, execute strategic acquisitions like WorkMotion and consistently return capital to shareholders. Our confidence in Upwork's ability to grow and serve customers as they engage in the future of work remains steadfast, and we will continue to execute with strength and efficiency in the new world of work. With that, we'll now take your questions.

Operator

[Operator Instructions] Our first question comes from the line of Josh Chan of UBS.

질의응답

Joshua Chan

Best wishes for you, Erica going forward. Yes. I guess I wanted to ask about WorkMotion. I guess, could you talk a little bit more about the intent, the strategy around that? And then maybe also the financials of the company on an annual basis just because of the spend amount?

Hayden Brown

Josh, the Lifted road map has always anticipated the build-out of international entities globally to support employing folks directly in market. And so what we saw with WorkMotion was an incredible opportunity to accelerate the Lifted road map around entity expansion globally as well as bring in-house just a really fantastic company that's strong. It's a market leader in its space. It's growing more than 20% year-over-year. And so this really gives us yet another proof point around how we're going to grow the Lifted business next year. As we both land and expand with our customers, the value prop around these global entities is something that we've already been seeing and hearing that they're very interested in. We've been serving that in the U.S. and Canada with Ascen, which we bought last year. But now with WorkMotion, we can really meet this customer need globally. And I think that's just a really great outlook for us on the Lifted side.

Erica Gessert

Yes. And just to add to your question on the financials from WorkMotion. So like I said, we're going to recognize about $4 million of revenue in the fourth quarter from WorkMotion. We only get a couple of months of recognition. So this is a nice growing company. And actually, it's growing about 20% a year on the top line. And that's before any of the synergies that we expect to get from this business that Hayden just described. So this is a really great business. Super excited about what it can do to really advance the sales motion on Lifted.

Joshua Chan

Okay. Okay. I appreciate the color there. And then maybe could you give us some color on the marketplace side of things? I guess how did traffic trend through the quarter and into October? Anything that could kind of advise on the trajectory into year-end and maybe into '27? Thanks for the color.

Hayden Brown

I'll start, Josh, by just elaborating on kind of trends in marketplace generally, and then I'll turn it over to Erica to talk about kind of the outlook there. But really, what we saw in Q3 was a continuation of the trends from Q2. So no real changes. Clearly, we are continuing to see lower-value work roll off the platform, and that's happening at the expected rate. We're also seeing our demand channels change with how digital acquisition based on Google and other kind of web to AI shifts are happening. That is an ongoing theme. And we talked about that last quarter. I'd say there's really no changes in those trends this quarter. And I'd say those things both really emphasize or reinforce why we're so focused on building out the new demand channels like the MCP server, which we launched in August and Upwork Now, which we are announcing in public beta today. Like all of these things are really setting us up to capture more of that demand as it's moving into AI and really kind of move up funnel to meet these bigger customers with their more complex work needs in their favorite AI tools.

Erica Gessert

Yes. And so just on 2027, Josh, obviously, we -- we'll give guidance on 2027 when we report our fourth quarter in February when Peter takes over. But today, I can just give you some contours around how we're thinking about the year and some of the building blocks. So really just all in on the year, we expect our total growth rates to continue to be headwind with some of the headwinds we're seeing right now in the first half of 2027. And we do expect some improvement in the back half. And I want to tell you why -- I'll break down why we have some confidence there. So first on the marketplace, as Hayden articulated, we're seeing the pressure that the team expressed last quarter really in 2 places, right? It's in the digital search traffic pressures with all the Google changes that are happening. And then, of course, the kind of AI-related pressure as low-volume work starts is rotating off the platform. We see that continuing in the first half. As we lap kind of some of the current pressures from a growth rate point of view, we do expect that and just the effect of a slightly smaller base in the marketplace to kind of improve some of the growth rate trends there. But overall, I guess the other piece of the puzzle here is that we do see on the revenue front, some of our highest growth is in kind of high take rate products like ads and monetization and Business Plus with 132% GSV growth year-over-year in Q3. And we're also -- the focus on client quality is also really enabling us to continue to see the march of value as new customers enter the platform go up steadily. Then on the enterprise side, WorkMotion is a great addition, like I said, growing 20% a year. We do expect Lifted to grow very well next year and improve growth rates year-over-year. So all in, the balance of between marketplace and Lifted, we expect to see exit 2027 with improving growth rates.

Hayden Brown

The one thing I'll add to that, Josh, is because of the more limited visibility and predictability of the GSV environment, specifically at this time, which we expect will be similar next year, we are very focused on delivering our revenue and margin targets. This is where we have a lot of levers to drive our outcomes, a lot of ways to manage our performance in both the short and long term. And so I'd say revenue margin is just a huge focus for us as we head into 2027.

Operator

Our next question comes from the line of Bernie McTernan of Needham & Company.

Stefanos Crist

This is Stefanos Crist calling in for Bernie. I wanted to ask about the step down in EBITDA margin for the 4Q guide. Could you just walk us through the puts and takes there?

Erica Gessert

Yes. Thanks, Stefano. So there is some timing of expenses between Q3 and Q4. We -- there's a little bit of timing as WorkMotion comes in and we start to embark on some of the kind of temporal integration costs that we'll be doing as we kind of advance that strategy. There's a little bit of timing as well from kind of the marketing spend that we're spending in Q3. We talked about $10 million of spend incremental, and we spent about $5 million of that in Q3. So overall, we continue to expect very strong margins as we enter into 2027 and feel really confident about that.

Stefanos Crist

Got it. And then on AI work GSV, I think there's pretty sharp acceleration there. It was 55% this quarter versus I think 22% last quarter. Can you just talk about what's driving that? What jobs are performing well there and maybe there are jobs that aren't performing well as well?

Hayden Brown

Yes. I'd say one of the important notes there is we really have started to sunset our prior metric around AI-related GSV because what we noticed, and we talked about this a little bit on the Q2 call, is that previously, what we were measuring and reporting was clients explicitly stating that they had AI needs in their job posts. And as a matter of fact, those needs have become much more de facto and infused in all of the work and actually not stated as explicitly by clients because now they just assume talent will be using AI skills to execute their work. So this quarter, the metric we shared with you is, we believe, a better proxy for AI-related work happening in our platform. And that is the percentage of GSV coming from talent who have AI skills specifically on their profiles as key skills that they're using to deliver work. And so that's a little bit of a difference in terms of the metric. It better encapsulates some of these trends. And I'd say more generally to your question about were there changes, there was nothing super notable. We've continued to see just massive increases in demand over the year for all of these AI-related skills and talent, and that's just been undercurrent that's kind of permeating the business completely at this point.

Operator

Our next question comes from the line of Eric Sheridan of Goldman Sachs.

Eric Sheridan

Erica, wishing you the best going forward, and thanks for all the conversations and insights over the years. I wanted to build on the AI strategy. With the launch of the MCP server and with the launch of Upwork Now, how -- or how initiatives like that will broadly either open up the aperture for growth for the business or broadly change a possibility of unit economics for the platform when you think out over a multiyear time horizon.

Hayden Brown

These are really important strategies for us, Eric, because we can all see that the landscape is changing, both in terms of what work looks like and this notion that now humans and AI are working together across more and more types of work, and that's just going to continue to be the norm. And the fact that as businesses are contemplating work and starting work, increasingly, they're doing it online inside of these AI tools and channels rather than offline in a meeting or in a discussion, they're actually bringing this work online. And so for us, this is super important because from the MCP server standpoint, this lets us sit inside of and be operational within any AI tool that's using our MCP. And so clients don't have to leave these work environments to actually invoke and hire Upwork talent and collaborate and get work done. And that's critical. It's actually moving even faster in real time with the Upwork now launched, which really enables people and human expertise to be tapped at the same velocity that AI agents typically move. So this is key in terms of opening up demand channels for us that are really representing not just a shift of work from other digital platforms into AI, but also a shift of work from offline discussions and execution into online tools that now give us actually an increased chance of participating in those workflows, which is super exciting. The other thing I'd say generally about our AI strategies is we're very focused in terms of the unit economics piece on extending the really great foundations we have around both our talent asset, trust and safety, payments and also, to your point, our ads and monetization prowess, this all actually translates really well into these AI tools. And I think a perfect proof point on that this quarter was what we saw with the MCP server, which is it's only been live for a couple of months since August. And already, because freelancers are very active in submitting proposals and using their Connects, which they pay for, through this MCP server, we're seeing it generate an incremental run rate of $3 million already, and that is only poised to grow as adoption continues to scale. So we're really in a good position being able to translate and deploy all of our take rate and ads and other monetization strategies into these new channels without missing a beat.

Operator

[Operator Instructions] Our next question comes from the line of Carter Parlette of Citizens Bank.

Carter Parlette

This is Carter Parlette on for Matt Condon. For the first one, Business Plus has been one of your fastest-growing offerings. What features are resonating most with customers today? And how do you see these products evolving as you target larger SMBs moving forward?

Hayden Brown

Carter, the thing that clients really love with Business Plus is the access to our highest quality talent. That's probably the #1 thing that customers report. They get that unique access to this offering. And certainly, that's a very powerful value prop. They also really -- different clients, again, because they're bigger and they're larger businesses, their operational and hiring practices often include multiple teams, multiple departments, collaboration around using Upwork as a critical tool. And so in Business Plus, we actually give them what features we call like team-based hiring and multiplayer mode, basically ways for them to operate as a larger entity and get the value out of Upwork. There are also eligibility for net 30 payments terms and consolidated invoicing. Some of those things are also attractive for certain types of customers. And I'd say all of this really points the way for us to continue to enhance this offering over time and give these larger customers more and more of the capabilities and tools that are specific to bigger businesses operating at scale with more large and complex work needs. So there is definitely a path forward to continue to both expand the Business Plus offering and enhance its value further as well as over time, potentially add more tiers. There's certainly a lot of different client types that we serve, and they have heterogeneous needs and sometimes those may actually create new opportunities for new products that specifically target their needs. So we're excited about both the progress and the trajectory for Business Plus and more broadly, our ability to continue to diversify our products and monetize them really healthily because we have such a large diverse customer base.

Carter Parlette

That's helpful. Shifting gears here to Lifted. You previously highlighted some strong pipeline growth. Can you just provide an update on how that pipeline is progressing?

Hayden Brown

Lifted pipeline has actually continued to expand in the quarter. We feel fantastic about the momentum there. We did close 3 new logos, and I think that's really just starting to show the momentum we've been building since we initiated our sales and marketing efforts on this product earlier in the year. As you'll recall, there are typically pretty long kind of sales life cycles for these customers. Often, it's a 6- to 12-month sale process. So we feel very good that we are where we wanted to be right now and starting to close both new customers and executing the migration plan that we have for customers moving from the legacy Upwork Enterprise business over to Lifted because this is really not just a technology change or a platform upgrade, it is a major sales opportunity for us in terms of engaging these customers around the new ways we can serve them, the broader kind of share of wallet that we can participate in, in terms of their entire contingent spend budgets, which typically are in the $100 million mark or more. So we feel fantastic that this has been moving so well this year. And frankly, it's been in response to the success and the customer demand that we've seen in our pipeline for these direct employment offerings, not just in the U.S. and Canada, where we do that with Ascen, but also more globally that really gave us conviction in moving forward with the purchase of WorkMotion because this accelerates our road map pretty significantly. We were on plan to build out some of these entities over the next 1 to 2 years. But now overnight, we're bringing in not just the entities, but a fantastic business and team that will continue to scale under our Lifted portfolio. So we feel great about the progress and the trajectory of the business.

Operator

[Operator Instructions] Our next question comes from the line of John Byun of Jefferies.

Sang-Jin Byun

This is John Byun on behalf of Brent Thill. Two questions. On the AI project, I appreciate the new metric that you disclosed with AI skills. But I'm wondering if there were any highlights from large categories that are specifically AI-related projects, whether it's building AI apps or implementation? And then second question is on Upwork Now. Wondering how you think about monetization or how the economics might work out? Is there any difference between that in the marketplace or other type of projects, realizing you mentioned there was a cost -- no cost option for them.

Hayden Brown

Yes. I mean we're seeing fantastic growth in the AI areas, strategy, consulting, things like that. I think they're up more than 40% year-over-year. And I'd say that's in keeping with the strong growth we've seen in these areas for many quarters now. To your question around the economic model or opportunities there, I think the nice thing about our business is our monetization vehicles really let us both scale take rate across all types of projects, but also have more surgical ways of monetizing places where we either have more or less relative supply or demand. And that's really what we've done with everything from our Connects to dynamic pricing to value-added services, variable fees, et cetera. So I wouldn't call out that there is a specific pricing opportunity to AI as a category, but rather that we're approaching it with the rigor and discipline around how we monetize across the business based on really driving marketplace health first and foremost and, of course, margin capture and revenue generation where we see the opportunities to really do so. So we'll continue doing what we've been doing.

Sang-Jin Byun

Okay. Great. Just one quick clarification, actually. The question on monetization was related to the new Upwork Now product. I don't know if there's more you can share on how that might look going forward.

Hayden Brown

Absolutely. So Upwork Now, again, because it's basically -- think of it, John, as just real-time access to vetted ready-to-work talent from within either any AI tool that you might be using or if you come to the website or a mobile app, you can access the talent that way. So this is really just a compression or an acceleration of the speed to start or the speed to start working and billing for both clients and talent. So while the economic model is no different than our current model, it basically just represents an opportunity to capture needs that are very fast switch that, again, maybe we wouldn't capture if there was a more lengthy hiring process or in other cases, bring forward spend and billing from customers who would have gone started anyway, but with this product, they can go much faster.

Operator

Our next question comes from the line of Ron Josey of Citi.

Ronald Josey

Hey Hayden. Erica, congrats. We'll miss you. I wanted to ask a little bit -- 2 questions actually, Hayden. One is just on the marketplace take rate. You just talked about the higher-margin revenue, but you talked about ad monetization, Connects all seeing greater adoption despite GSV trends. I just wanted to understand a little bit more about the drivers there of what the team is doing to really highlight those tools in terms of what that might mean for take rate going forward. And then on sales and marketing, numbers came in below what we were expecting on that one line item. But I thought last quarter, we talked about maybe shifting some marketing spend to newer channels around social and video. And I just want to hear a little bit more about the progress towards that social/video. I think you talked about influencers as well.

Hayden Brown

Ron, we are, I would say, monetizing the business through the number of vehicles that we knew from the beginning of this year that we'd be scaling out. So you'll probably recall a few quarters ago, we talked about this last year, we did a lot of testing and learning and kind of experimentation around different vehicles such as variable fees on the talent side, such as actually expanding the range of fees we also charge on the client side based on different supply and demand dynamics there. And so it's really been all of that experimentation that really was last year and into early this year that then let us spend this year kind of scaling out and further refining a number of those different ads and monetization products that were already in place. So that's really been the story around take rate this year. And again, we have still a lot of room to continue down that path. I'd say even as we're launching things like the MCP, while today, we monetize it in the exact same way that we monetize other activity on Upwork, we start to see customers with such high usage levels that, that actually might be a SKU or a product that we can price in a different way because their desire for usage is much higher than what a traditional non-AI use case might look like. And I'm just sharing that as an example of how now we're starting to see some new opportunities that I think will guide some of our asset monetization strategies going into 2027. To your question around sales and marketing, we feel fantastic about the way we've been able to execute through a very tricky environment in terms of channel shifts. And to the points we made last quarter about expanding our back half marketing spend by $10 million. We did deploy $5 million this quarter. The ROI on that actually continues to be extremely strong. And we are seeing good performance in some of these slightly more nascent channels like the ones we've talked about, video, influencer, et cetera, that are newer. We are also seeing good performance internationally. We've always had a super robust U.S. acquisition program and certainly a good footprint globally, but this has been a time where we've actually been able to find some great returns with international acquisition as well. So we'll continue with that work in Q4 and continue to operate within these very strong guardrails we have around ROI. That is unchanged. But we are finding good places to acquire these customers. And I think, again, these AI integrations and AI referrals will be yet another layer on that as we head into next year.

Erica Gessert

I would just add on take rate. The bias for take rate in the marketplace is up. And if you think about, of course, one of our highest growth products, Business Plus growing 120% revenue year-over-year in Q3 and really continuing to advance and grow really well. As we enter 2027, we do expect the marketplace take rate to continue to be very strong in advance. And at the same time, some of the business mix that comes in with Lifted growing and the addition of WorkMotion, we'll expect a little bit of moderation in take rate as we go into Q4 and kind of business mix overall in 2027. Likewise, some of those effects actually from an EBITDA margin point of view in 2027, we have been doing incredible work with continuous improvement on cost optimization and other things. And we will expect some mitigation to margin next year, about 3 to 4 points dilution with Lifted kind of taking on a bigger proportion and the WorkMotion integration costs. But overall, we're really excited about our ability to provide revenue and margin stability with some of these products.

Operator

Thank you. As there are no further questions in queue, that does conclude Upwork's Third Quarter 2026 Earnings Call. Thank you for participating. You may now disconnect.