Erica Gesserit (2:29)

You know we have our investor day was really timed perfectly for us. The reason our stock went up 13% after our earnings report was we, you know, at the beginning, at the end of 2024, we told our investors that we would, you know, take a year and really reinvest in our company and rebuild upwork. And we said that we would return to GSB and revenue growth in 2026. Well, we did that two quarters early. In Q3 of 2025, we report G3 growth of 2%. We reported revenue growth of 4%. And what we told them then was that our, our results are going up and to the right right now. And that is because of really three investment areas. One is AI, one is SMB, expanding our relationships with SMB and one is the outsized opportunity that we have with large enterprise. But you know, with AI is really one of the big stories for us because I don't know how well you follow upwork but you know, we have had a bit of an overhang over our stock on the opposite side of the spectrum thinking that we were going to be, you know, you know, hurt by AI. Whereas we are truly a beneficiary of AI. We now see about annualized volume of $300 million in GSB from the category on our platform and that is accelerating. In Q3 it was over 50% growth per year.

Bloomberg News Anchor (3:44)

So I want to remind everybody, Upwork is a hiring platform. You can go there to find talent in development and IT services, design and creat of sales and marketing, admin and customer support. It's this two sided market.

Erica Gesserit (3:55)

So that's right.

Bloomberg News Anchor (3:56)

You have a good view on what exactly the type of job that companies are hiring for and then also the availability of that labor. What does that picture and that balance look like right now?

Erica Gesserit (4:07)

Yeah, you know, the last few years have been, as we all know, tough on the, on the job market. And you know, most companies in our industry were down double digits over the past few years in terms of both volume and revenue. Upwork was relatively flat for the past couple of years. So we, you know, we were, we were gaining share against staffing companies, even other online marketplaces, but still relatively flat. And it's really these investments that we've made in AI, we're actually seeing both the category itself increase and that is really, like I say, accelerating. So this is, this is AI work on the platform, but also the investments on the front end. So if you think about the hiring process and how that works. Yeah, there's a lot of friction to it. Right. You know, a client comes onto our website, they post a job, they have to write it up, they have to search for talent, the talent has to write a job proposal. Well, now AI does all of that for both our clients and our talent and it's making them Find each other faster and, and you know, and kind of fulfill these jobs and get them done.

Carol Massar (5:04)

Those matches work like what percentage of the time or where is it that it's like not, not good?

Erica Gesserit (5:10)

Well, no, so, so what the AI is doing is it's writing the job post, it's writing the job proposal and of course that, you know, there can be editing. Yeah, but, but now we do have a, and we also, one of our, one of our most successful very recent launches is uma, which is our, you know, our companion on our site is now recruiting talent. So, so the client asks for a certain type of talent. UMA goes out within our 18 million strong talent base and identifies the right talent for that job. Now we're seeing fill rates much higher using that, using the AI recruiter than with a human recruiter.

Carol Massar (5:42)

Why?

Erica Gesserit (5:43)

Well, you know, I think we have one of the best data sets honestly on the planet. And if you think about what these, what this AI is actually really good, that it's good at spinning lots and lots of data. Right. And so we've been building, our platform is over 10 years old and we've been building this data set of what types of jobs match with which talent, whether client is price sensitive or maybe they're quality sensitive. And so the recruiter, the AI recruiter is much better at scanning across all of this data than a human can be.

Bloomberg News Anchor (6:16)

Are you seeing demand stay stable, decrease or increase from the side of your platform that is looking for the workers?

Erica Gesserit (6:26)

Yeah, so client demand, and I think, you know, what we are seeing is client demand has been where we have seen the biggest impact from. I would say the job market and the economy writ large.

Bloomberg News Anchor (6:36)

Meaning like if the economy's softer, then demand will go down from the client side.

Erica Gesserit (6:40)

Yes. And if you think about that, if you think about our online marketplace is primarily SMB customers. Right. And so small and medium sized business, small and medium sized business. So if you think about what's going on there, when inflation is high, you know, you know this hits consumer wallets, it also hits SMB leaders and, and then also when interest rates are high, they have lower access to capital. Right. And so we do see the demand environment in terms of just pure volume of SMB hires, you know, relatively flat in this, in this, you know, right now. But what we are seeing is, you know, we are one of the few places where these SMB customers can actually access a very high quality talent and afford, you know, in an affordable and quickly. And so as they're trying to implement AI work within their Businesses, you know, contingent. This contingent marketplace that we offer is one of the best places they can find.

Carol Massar (7:32)

What's your take on AI and the impact it's going to have on the labor force?

Erica Gesserit (7:36)

So, you know, we have amazing data on this. And what we are seeing is, is that AI is not going to replace humans. What's going to, you know, humans with AI will replace humans without AI, Right. And so we're seeing AI replace very simple tasks, but not the larger, more complex work because these AI agents are not that agentic, right? They have no judgment. They cannot complete complex tasks. So what we've seen, what we've seen over the years is jobs that are $300 and lower. Those have gone down on our platform. So about two years ago, we had about 5% of our work was job $300 and lower. Now it's about 3 and a half percent. But at the same time, the AI jobs on our platform, clients who engage in AI work spend about three times what our normal kind of platform work does. And so we see that growing and growing because that work is more complex. It requires humans and humans using AI agents, but it requires humans in the loop.

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Erica Gesserit (9:07)

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Erica Gesserit (9:51)

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