UPWORK, INCUPWK

UPWORK, INC Segments Disclosure

10-KFiled Feb 13, 20262 min read
Segment Information
Operating segments are defined as components of an entity for which separate financial information is available and that is regularly provided to the CODM in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. For information about how the Company derives revenue, as well as the Company’s accounting policies, refer to “Note 2—Basis of Presentation and Summary of Significant Accounting Policies.”
The CODM uses consolidated net income to assess performance, evaluate cost optimization, and allocate resources, including personnel-related and financial or capital resources, in the annual budget and forecasting process, as well as budget-to-actual variances on a monthly basis. As such, the Company has determined that it operates as one operating and reportable segment.
The following tables set forth significant expense categories and other specified amounts included in consolidated net income that are otherwise regularly provided to the CODM for the years ended December 31, 2025, 2024, and 2023:
202520242023
Revenue
$787,784 $769,325 $689,136 
Cost of revenue (1)
161,605 163,560 164,088 
Research and development (1)
151,411 167,211 146,442 
Sales and marketing (1)
135,829 166,331 206,614 
General and administrative (1)(2)
105,243 97,903 85,881 
Provision for transaction losses8,140 6,728 12,977 
Stock-based compensation expense (3)
65,390 68,391 74,195 
Depreciation and amortization25,710 14,813 9,449 
Interest income
(27,437)(27,963)(24,424)
Interest expense
3,152 2,761 3,218 
Gain on early extinguishment of convertible senior notes— — (38,945)
Restructuring charges (3)
— 18,433 — 
Income tax (benefit) provision
37,751 (125,159)1,990 
Other segment items (3)(4)
5,565 730 764 
Segment net income
$115,425 $215,586 $46,887 
(1) Years 2025, 2024, and 2023 exclude stock-based compensation and depreciation and amortization included in cost of revenue, research and development, sales and marketing, and general and administrative expenses, as these amounts are regularly provided to the CODM. Additionally, year 2024 excludes restructuring charges.
(2) Years 2025, 2024, and 2023 exclude expenses related to the Tides Foundation Warrant.
(3) During the year ended December 31, 2024, the Company incurred $19.2 million in costs related to the execution of the Restructuring Plan. Of this amount, $18.4 million is included in Restructuring charges while the remaining amount is allocated between Stock-based compensation expense and Other segment items.
(4) During each of the years ended December 31, 2025, 2024, and 2023, the Company incurred $0.8 million of expenses related to the Tides Foundation Warrant.
Substantially all of the Company’s long-lived assets, including operating lease right-of-use assets, were located in the United States as of December 31, 2025 and 2024.
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About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

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