Upwork (UPWK) risk factors, FY2025 10-K

Upwork's FY2025 10-K, filed Feb 13, 2026, lists 47 risk factors in 7 groups. Against the prior year's 43: 8 new, 4 dropped, 21 substantially reworded.

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Risk factors listed
477 groups
New this year
8vs 43 last year
Dropped
4since the prior 10-K
Substantially reworded
21of those kept
Section length
18k wordsItem 1A

What the changes say

  • Upwork highlights new risks around AI integrations, customer circumvention of its platforms, and international competition.
  • Tax loss carryforwards decreased and share repurchases continued.

What changed since the prior 10-K

New

  • New

    may be perceived as not being secure, our reputation may be harmed, demand for our offerings may be reduced, our operations may be disrupted, we may incur significant legal costs, fines, or liabilities, and our business could be adversely affected

    Failing to maintain our brands, experiencing system errors, or running afoul of regulations could harm our business.

  • NewRisks Related to our Business Operations, Execution, and Growth

    Customers circumvent our platforms and other workforce solutions, which adversely impacts our business

    Customers may circumvent our platforms to avoid fees, especially during macroeconomic downturns, reducing our revenue.

  • NewRisks Related to our Business Operations, Execution, and Growth

    Issues relating to artificial intelligence and machine learning could adversely affect our business, operating results, and financial condition

    Incorporating AI and machine learning introduces risks of inaccurate outputs, IP infringement, and regulatory scrutiny.

  • NewRisks Related to Our Industry, Offerings, and Services

    Internationally, we compete against localized competitors that have greater brand recognition in other countries and a stronger understanding of local or regional culture and commerce. Some competitors also offer their products and services in local languages and currencies that we do not offer

    We face localized international competitors with better brand recognition, local language support, and cultural familiarity.

  • NewRisks Related to Legal and Regulatory Matters

    work are remote, which may make it more difficult to control use of confidential materials, increasing the risk that our source code or other confidential or trade secret information may be exposed

    Remote work environments increase the risk of exposing source code and confidential trade secrets.

  • NewRisks Related to Finance, Accounting, and Tax Matters

    costs of compliance. The impact and burden of these regulations and proposed regulations on our business and the businesses of our customers is uncertain and may have a negative impact on our business

    Tax authorities may challenge our intercompany transfer pricing methodologies, resulting in additional tax liabilities.

  • NewRisks Related to Finance, Accounting, and Tax Matters

    limitation under Section 382 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code. The California state NOL carryforward amounts will begin to expire in 2032 if not utilized

    Ownership changes subject our net operating loss carryforwards to Section 382 limitations under the Internal Revenue Code.

  • NewRisks Related to Ownership of Our Common Stock

    We cannot guarantee that the 2025 Share Repurchase Authorization will be fully consummated or that share repurchases will enhance long-term stockholder value. Share repurchases could also increase the volatility of the trading price of our common stock and diminish our cash reserves

    Our 2025 Share Repurchase Authorization may not be fully consummated and could increase stock price volatility and reduce cash reserves.

Dropped

  • DroppedRisks Related to our Business Operations, Execution, and Growth

    Customers circumvent our work marketplace, which adversely impacts our business

  • DroppedRisks Related to Legal and Regulatory Matters

    Our clients are generally responsible for properly classifying the talent they engage through our work marketplace. Some clients opt to classify talent as employees for certain work, while talent in many other cases are classified as independent contractors

  • DroppedRisks Related to Legal and Regulatory Matters

    intellectual property is vulnerable to unauthorized access through employee or third-party error or actions, theft, cybersecurity incidents, private or public economic espionage, and other security breaches and incidents

  • DroppedRisks Related to Finance, Accounting, and Tax Matters

    inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business

Reworded

  • 88% rewrittenRisks Related to Our Industry, Offerings, and Services

    In addition, well-established internet companies, social media platforms, and businesses that operate driving, delivery, and other commoditized marketplaces, have entered or may decide to enter our market segment

    Expanded competition disclosures to include social media platforms and delivery marketplaces entering our market segment.

    Was: In addition, well-established internet companies, such as Google, LinkedIn, and Amazon, social media platforms, such as Meta, and businesses that operate driving, delivery, and other commoditized marketplaces, such as Uber Technologies, have entered or may decide to enter our market segment

  • 86% rewrittenRisks Related to Legal and Regulatory Matters

    Failure to protect our intellectual property could adversely affect our business

    Updated IP protection language to refer to platforms and workforce solutions instead of work marketplace.

  • 82% rewrittenRisks Related to Finance, Accounting, and Tax Matters

    Our ability to use our net operating loss carryforwards and certain other tax attributes is limited

    Updated federal and state net operating loss carryforward figures as of December 31, 2025, to $2.0 million and $90.9 million.

  • 79% rewrittenRisks Related to Our Industry, Offerings, and Services

    If internet search engines’ methodologies or other channels that we utilize to direct traffic to our websites are modified to our disadvantage, or our search result page rankings decline for other reasons, our customer growth could decline

    Pluralized references from website to websites regarding internet search engine traffic and mobile applications.

    Was: If internet search engines’ methodologies or other channels that we utilize to direct traffic to our website are modified to our disadvantage, or our search result page rankings decline for other reasons, our customer growth could decline

  • 65% rewrittenRisks Related to Finance, Accounting, and Tax Matters

    The applicability of sales, use, and other tax laws or regulations on our business could subject us or our customers to additional tax liability and related interest and penalties, and adversely impact our business

    Reordered factors affecting potential tax liabilities and penalties.

  • 59% rewrittenRisks Related to Ownership of Our Common Stock

    The stock price of our common stock has been and may continue to be volatile, and you could lose all or part of your investment

    Added tariffs and trade wars as potential market and industry conditions affecting stock price volatility.

  • 50% rewrittenRisks Related to Legal and Regulatory Matters

    Litigation could have a material adverse impact on our operating results and financial condition

    Retained existing litigation uncertainty disclosures without substantive changes.

  • 48% rewrittenRisks Related to Legal and Regulatory Matters

    Our business is subject to extensive government regulation and oversight. Any failure to comply with the extensive, complex, overlapping, and frequently changing laws and regulations, both in the United States and internationally, could adversely impact our business, operating results, and financial condition

    Retained existing government regulation and worker classification disclosures without substantive changes.

  • 47% rewrittenRisks Related to our Business Operations, Execution, and Growth

    The size of our community of customers, both talent and clients, is critical to our success. Our ability to achieve significant future revenue growth depends, in large part, upon our ability to attract and retain customers

  • 43% rewrittenRisks Related to Our Industry, Offerings, and Services

    If we are not able to develop and release new offerings and services or successful enhancements to our existing offerings and services, our business could be adversely affected

  • 43% rewrittenRisks Related to Our Industry, Offerings, and Services

    If we fail to maintain and enhance our brands and reputation, our business and financial condition may be adversely affected

    Was: If we fail to maintain and enhance our brand and reputation, our business and financial condition may be adversely affected

  • 37% rewrittenGeneral Risks

    Adverse or changing economic conditions may negatively impact our business

  • 35% rewrittenRisks Related to Finance, Accounting, and Tax Matters

    We may require additional capital to fund our business and support our growth, and any inability to generate or obtain such capital may adversely affect our business, operating results, and financial condition

  • 32% rewrittenRisks Related to Finance, Accounting, and Tax Matters

    We have a history of net losses, may increase our operating expenses in the future, and may not be able to sustain profitability

  • 30% rewrittenRisks Related to Our Industry, Offerings, and Services

    Our ability to attract and retain customers depends in part on the quality of our customer support, and any failure to offer high-quality support could adversely impact our business, operating results, and financial condition

  • 28% rewrittenRisks Related to Legal and Regulatory Matters

    Privacy and Data Protection

  • 26% rewrittenRisks Related to our Business Operations, Execution, and Growth

    We have experienced growth in recent periods and expect to invest in our growth in the future. If we are unable to maintain similar levels of growth or manage future growth, our business, operating results, and financial condition could be adversely affected

    Was: We have experienced growth in recent periods and expect to invest in our growth in the future. If we are unable to maintain similar levels of growth, our business, operating results, and financial condition could be adversely affected

  • 26% rewrittenRisks Related to Finance, Accounting, and Tax Matters

    Our operating results and performance metrics may fluctuate from period to period, which makes our future results difficult to predict

  • 25% rewrittenRisks Related to Our Industry, Offerings, and Services

    Our customer growth and engagement on mobile devices depend upon third parties maintaining open application marketplaces and effective operation with mobile operating systems, networks, and standards that we do not control

  • 23% rewrittenRisks Related to Our Industry, Offerings, and Services

    We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results, and financial condition

  • 22% rewrittenRisks Related to Legal and Regulatory Matters

    We are vulnerable to intellectual property infringement claims and challenges to our intellectual property rights brought against us by third parties

All 47 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01may be perceived as not being secure, our reputation may be harmed, demand for our offerings may be reduced, our operations may be disrupted, we may incur significant legal costs, fines, or liabilities, and our business could be adversely affectedNew

Risks Related to our Business Operations, Execution, and Growth

  1. 02Our growth depends on our ability to attract and retain a community of talent and clients, and the failure to maintain or grow our community of active customers in a cost-effective manner or at all could adversely impact our business, operating results, and financial condition
  2. 03The size of our community of customers, both talent and clients, is critical to our success. Our ability to achieve significant future revenue growth depends, in large part, upon our ability to attract and retain customers47% rewritten
  3. 04We have experienced growth in recent periods and expect to invest in our growth in the future. If we are unable to maintain similar levels of growth or manage future growth, our business, operating results, and financial condition could be adversely affected26% rewritten
  4. 05We continue to evolve our business strategy, offerings and pricing models, and changes that we make can adversely affect our business and make it difficult to evaluate our future prospects
  5. 06If we are unable to maintain our banking and payment partner relationships on favorable terms, or at all, our business could be adversely affected
  6. 07In addition, we may be forced to cease doing business with certain partners if payment laws, regulations, or rules change or are interpreted to make it difficult or impossible for us to comply
  7. 08Our business depends in part on the success of our strategic relationships with third parties and their continued performance
  8. 09We face payment and fraud risks that could adversely impact our business
  9. 10Customers circumvent our platforms and other workforce solutions, which adversely impacts our businessNew
  10. 11Issues relating to artificial intelligence and machine learning could adversely affect our business, operating results, and financial conditionNew
  11. 12We are subject to disputes with or between our customers
  12. 13We face risks related to our international community of customers, which could increase as we seek to expand our international footprint
  13. 14Acquisitions, investments, and other strategic transactions could result in operating difficulties and harm our business

Risks Related to Our Industry, Offerings, and Services

  1. 15If the market for independent talent and the services they offer does not grow, our business, operating results, and financial condition could be adversely affected
  2. 16If we are not able to develop and release new offerings and services or successful enhancements to our existing offerings and services, our business could be adversely affected43% rewritten
  3. 17If internet search engines’ methodologies or other channels that we utilize to direct traffic to our websites are modified to our disadvantage, or our search result page rankings decline for other reasons, our customer growth could decline79% rewritten
  4. 18We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results, and financial condition23% rewritten
  5. 19In addition, well-established internet companies, social media platforms, and businesses that operate driving, delivery, and other commoditized marketplaces, have entered or may decide to enter our market segment88% rewritten
  6. 20Internationally, we compete against localized competitors that have greater brand recognition in other countries and a stronger understanding of local or regional culture and commerce. Some competitors also offer their products and services in local languages and currencies that we do not offerNew
  7. 21If we fail to maintain and enhance our brands and reputation, our business and financial condition may be adversely affected43% rewritten
  8. 22Business or system errors, defects, or disruptions could diminish demand, adversely impact our business, operating results, and financial condition, and subject us to liability
  9. 23Our ability to attract and retain customers depends in part on the quality of our customer support, and any failure to offer high-quality support could adversely impact our business, operating results, and financial condition30% rewritten
  10. 24Our customer growth and engagement on mobile devices depend upon third parties maintaining open application marketplaces and effective operation with mobile operating systems, networks, and standards that we do not control25% rewritten

Risks Related to Legal and Regulatory Matters

  1. 25Our business is subject to extensive government regulation and oversight. Any failure to comply with the extensive, complex, overlapping, and frequently changing laws and regulations, both in the United States and internationally, could adversely impact our business, operating results, and financial condition48% rewritten
  2. 26Privacy and Data Protection28% rewritten
  3. 27Anti-Corruption, Anti-Money Laundering, and Sanctions
  4. 28We are vulnerable to intellectual property infringement claims and challenges to our intellectual property rights brought against us by third parties22% rewritten
  5. 29Failure to protect our intellectual property could adversely affect our business86% rewritten
  6. 30work are remote, which may make it more difficult to control use of confidential materials, increasing the risk that our source code or other confidential or trade secret information may be exposedNew
  7. 31The use of open source software could restrict our ability to market or operate our platforms and could negatively affect our business
  8. 32Litigation could have a material adverse impact on our operating results and financial condition50% rewritten
  9. 33If we are deemed to be an investment company under the Investment Company Act of 1940, our results of operations could be harmed

Risks Related to Finance, Accounting, and Tax Matters

  1. 34We have a history of net losses, may increase our operating expenses in the future, and may not be able to sustain profitability32% rewritten
  2. 35Our operating results and performance metrics may fluctuate from period to period, which makes our future results difficult to predict26% rewritten
  3. 36The applicability of sales, use, and other tax laws or regulations on our business could subject us or our customers to additional tax liability and related interest and penalties, and adversely impact our business65% rewritten
  4. 37costs of compliance. The impact and burden of these regulations and proposed regulations on our business and the businesses of our customers is uncertain and may have a negative impact on our businessNew
  5. 38If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired
  6. 39Our ability to use our net operating loss carryforwards and certain other tax attributes is limited82% rewritten
  7. 40limitation under Section 382 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code. The California state NOL carryforward amounts will begin to expire in 2032 if not utilizedNew
  8. 41We may require additional capital to fund our business and support our growth, and any inability to generate or obtain such capital may adversely affect our business, operating results, and financial condition35% rewritten

Risks Related to Ownership of Our Common Stock

  1. 42The stock price of our common stock has been and may continue to be volatile, and you could lose all or part of your investment59% rewritten
  2. 43We cannot guarantee that the 2025 Share Repurchase Authorization will be fully consummated or that share repurchases will enhance long-term stockholder value. Share repurchases could also increase the volatility of the trading price of our common stock and diminish our cash reservesNew
  3. 44We do not intend to pay dividends for the foreseeable future

Risks Related to Our Convertible Senior Notes

  1. 45Our indebtedness could limit the cash flow available for our operations and expose us to risks that could adversely affect our business, operating results, and financial condition
  2. 46The capped call transactions may affect the value of our common stock

General Risks

  1. 47Adverse or changing economic conditions may negatively impact our business37% rewritten

Other Upwork 10-Ks

  • FY2024 10-K risk factors
    43 risks

    Upwork faces critical risks regarding customer acquisition, talent retention, macroeconomic uncertainty, and global regulatory compliance.

    Filed Feb 13, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.