UPWORK, INCUPWK
UPWORK, INC Fair Value Disclosure
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 December 31, 2025 and 2024. The following tables summarize the Company’s available-for-sale marketable
securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant investment category reported as cash and cash equivalents or marketable securities as of December 31, 2025 and 2024.
(In thousands) December 31, 2025 | Amortized Cost | Unrealized Gain | Unrealized Loss | Fair Value | Cash Equivalents | Marketable Securities | ||||||||||||||||||||||||||||||||
| Level I | ||||||||||||||||||||||||||||||||||||||
| Money market funds | $ | 73,519 | $ | — | $ | — | $ | 73,519 | $ | 73,519 | $ | — | ||||||||||||||||||||||||||
| Treasury bills | 257,425 | 88 | — | 257,513 | 39,697 | 217,816 | ||||||||||||||||||||||||||||||||
| U.S. government securities | 37,642 | 122 | — | 37,764 | — | 37,764 | ||||||||||||||||||||||||||||||||
| Total Level I | 368,586 | 210 | — | 368,796 | 113,216 | 255,580 | ||||||||||||||||||||||||||||||||
| Level II | ||||||||||||||||||||||||||||||||||||||
| Corporate bonds | 117,532 | 561 | (1) | 118,092 | — | 118,092 | ||||||||||||||||||||||||||||||||
| Foreign government and agency securities | 4,738 | 15 | — | 4,753 | — | 4,753 | ||||||||||||||||||||||||||||||||
| Total Level II | 122,270 | 576 | (1) | 122,845 | — | 122,845 | ||||||||||||||||||||||||||||||||
| Total | $ | 490,856 | $ | 786 | $ | (1) | $ | 491,641 | $ | 113,216 | $ | 378,425 | ||||||||||||||||||||||||||
(In thousands) December 31, 2024 | Amortized Cost | Unrealized Gain | Unrealized Loss | Fair Value | Cash Equivalents | Marketable Securities | |||||||||||||||||||||||||||||
| Level I | |||||||||||||||||||||||||||||||||||
| Money market funds | $ | 193,481 | $ | — | $ | — | $ | 193,481 | $ | 193,481 | $ | — | |||||||||||||||||||||||
| Treasury bills | 131,022 | 40 | — | 131,062 | — | 131,062 | |||||||||||||||||||||||||||||
| U.S. government securities | 32,625 | 22 | (33) | 32,614 | — | 32,614 | |||||||||||||||||||||||||||||
| Total Level I | 357,128 | 62 | (33) | 357,157 | 193,481 | 163,676 | |||||||||||||||||||||||||||||
| Level II | |||||||||||||||||||||||||||||||||||
| Commercial paper | 16,233 | — | — | 16,233 | — | 16,233 | |||||||||||||||||||||||||||||
| Corporate bonds | 126,395 | 431 | (144) | 126,682 | — | 126,682 | |||||||||||||||||||||||||||||
| Commercial deposits | 4,121 | — | — | 4,121 | — | 4,121 | |||||||||||||||||||||||||||||
| Asset-backed securities | 592 | 2 | — | 594 | — | 594 | |||||||||||||||||||||||||||||
| Foreign government and agency securities | 5,036 | 14 | (12) | 5,038 | — | 5,038 | |||||||||||||||||||||||||||||
| Total Level II | 152,377 | 447 | (156) | 152,668 | — | 152,668 | |||||||||||||||||||||||||||||
| Total | $ | 509,505 | $ | 509 | $ | (189) | $ | 509,825 | $ | 193,481 | $ | 316,344 | |||||||||||||||||||||||
Additionally, the Company deposits funds held in escrow in interest-bearing and non-interest-bearing cash accounts. The interest earned on the interest-bearing accounts is included in Revenue in the Company’s consolidated statement of operations and comprehensive income. As of December 31, 2025 and 2024, the fair value of the Company’s funds held on behalf of customers and held in interest-bearing cash accounts was measured using Level I inputs.
The Company’s non-financial assets acquired pursuant to its acquisitions of Bubty B.V., which is referred to as Bubty, Ascen Inc., which is referred to as Ascen, and Objective AI, Inc., which is referred to as Objective AI, including intangible assets and goodwill, are measured at estimated fair value on a non-recurring basis. For additional information, refer to “Note 7—Business Combination.”
The following table summarizes the remaining contractual maturities of our cash equivalents and marketable securities as of December 31, 2025:
| (In thousands) | Amortized Cost | Fair Value | ||||||||||||
| Due within one year | $ | 334,915 | $ | 335,007 | ||||||||||
| Due after one year through five years | 155,941 | 156,634 | ||||||||||||
| Total | $ | 490,856 | $ | 491,641 | ||||||||||
For available-for-sale marketable debt securities with unrealized loss positions, the Company does not intend to sell these securities, nor does it anticipate that it will need to or be required to sell the securities. As of December 31, 2025 and 2024, the decline in fair value of these securities was attributable to changes in interest rates and not due to credit related factors. As of December 31, 2025 and 2024, the Company considered any decreases in market value to be temporary in nature and did not consider any of the Company’s marketable securities to be other-than-temporarily impaired. The Company did not record any impairment charges with respect to its marketable securities during the years ended December 31, 2025, 2024, and 2023.
During the years ended December 31, 2025, 2024, and 2023, interest income was $27.4 million, $28.0 million, and $24.4 million, respectively, and is included in other income, net in the Company’s consolidated statement of operations and comprehensive income.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 15, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 7, 2019 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.