Upwork or Fiverr? Picking the Winner in the Freelance Race

Yahoo

2 days ago

The freelance economy is evolving fast, and two platforms — Upwork Inc. UPWK and Fiverr International FVRR — are leading the charge. Both companies are moving beyond their marketplace roots, leaning into AI, services and enterprise clients to drive growth in a shifting macro environment. But their paths and strategies differ in meaningful ways.
Fiverr is building out high-margin services and AI tools to enhance seller performance and move upmarket, while Upwork is positioning itself as an AI-first platform serving enterprise clients and capturing demand for AI talent.
Over the past three months, Upwork shares have moved up 4.4%, underperforming Fiverr.
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As both stocks look to redefine their roles in the future of work, let's find out which one is better placed to deliver long-term value.
Upwork kicked off 2025 on a strong note, delivering record first-quarter results.While revenues were up just 1% year over year to $193 million, UPWK reported record-high adjusted EBITDA of $56 million and a healthy margin of 29%. Net income reached $37.7 million — another quarterly best for the company.Gross services volume per active client rose year over year for the first time in six quarters and climbed for the third straight quarter. Product enhancements, including better search recommendations and customer experience updates, helped drive marketplace outperformance.
Upwork is making a bold shift to become an AI-native platform, and leading that effort is Uma, its in-house 'Mindful AI.' Uma helps users save time by writing proposals, screening candidates and simplifying hiring, and its working engagement with Uma jumped 52% in the last reported quarter, with proposal-writing usage up 58%. These tools are already improving hiring rates, conversions and freelancer earnings. To strengthen its AI edge, Upwork is combining internal innovation with smart acquisitions like Headroom and Objective AI.
Another advantage is Upwork's access to talent. As businesses rush to adopt AI, many are hitting a wall — 63% of employers say they lack skilled people. Upwork fills that gap, offering access to more than 80,000 AI specialists. Freelancers on the platform are already working on real-world projects — training AI for social media giants, building healthcare tools and helping law firms automate legal workflows. For investors, this growing role in the AI ecosystem positions Upwork not just as a job marketplace but as a key enabler of the next wave of digital transformation.
The company remains committed to returning value to shareholders. In the first quarter of 2025, it repurchased $2.3 million worth of shares. As of the quarter-end, $67 million remained under its existing share repurchase authorization.
For the full year, the company reaffirmed its revenue target of $740-$760 million but raised its adjusted EBITDA guidance to $190-$200 million and EPS forecast to $1.14-$1.18. The Zacks Consensus Estimate for UPWK's 2025 and 2026 EPS implies year-over-year growth of 9.6% and 16.7%, respectively. See how the estimates have been revised over the past 90 days.
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Fiverr's first-quarter 2025 revenues rose 15% year over year to $107.2 million, while the adjusted EBITDA margin widened to 18%. Management expects full-year revenues at $425-$438 million (up 9-12% year over year). Adjusted EBITDA margins are anticipated to hit 20% in 2025, with long-term goals of achieving 25% by 2027. Adding to investors' confidence, the board has authorized $100 million for share buybacks.
Looking at the revenue mix, the classic marketplace revenue slipped 0.8% to $77.7 million, which is a bit concerning. Beyond marketplace transaction fees, Fiverr has been aggressively building out its service revenues, which include offerings like Fiverr Ads, Seller Plus and AutoDS. This segment grew a whopping 94% year over year in the first quarter to $29.5 million, representing 27.5% of total revenues. Management expects it to cross 30% for the full year.
The company is steadily moving beyond its roots as a gig marketplace, evolving into a full-service work platform tailored to larger clients and powered by smarter tools. Central to this transformation are Fiverr Pro, which is helping the company move upmarket and win larger enterprise clients, and Fiverr Go, its new AI-powered tool designed to enhance buyer-seller interactions and drive higher conversions.
With features such as Dynamic Matching, Project Management and dedicated Customer Success Managers, Fiverr Pro is expanding the addressable market. The payoff is real — a global book publisher scaled from a $15,000 trial to a $200,000 contract, and a large e-learning firm shifted its entire YouTube workflow to Fiverr after beating agency turnaround times and costs.
The other growth engine is Fiverr Go, a generative-AI layer that turns every seller profile into a round-the-clock digital assistant. More than 6,000 top freelancers have activated the tool, and 200,000 buyers have tried it. Sellers who enabled the AI-powered 'Personal Assistant' saw an immediate 56% increase in one-hour conversion rates and a 10% boost over a 14-day period.
All in all, Fiverr is gradually shifting from a gig marketplace to a more full-featured work platform, with a growing emphasis on services, enterprise use cases and AI tools. While execution risks remain, the company's evolving model could support more sustainable growth over time.
The Zacks Consensus Estimate for FVRR implies EPS growth of 18.5% in 2025, although growth is expected to flatten in 2026. See how the estimates have been revised over the past 90 days.
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Both Fiverr and Upwork are shaking up the freelance world, but Upwork looks like the smarter bet today.
Upwork isn't just embracing AI — it's building an AI-native platform. From Uma, its in-house assistant, to acquisitions like Headroom and Objective AI, it's positioning itself at the center of enterprise AI transformation. Its access to 80,000+ AI specialists further strengthens its value proposition as businesses rush to close the talent gap.
Fiverr has momentum, particularly in high-margin services and enterprise traction. But its shift upmarket has come at the cost of a shrinking active buyer base, raising concerns about GMV growth and long-term engagement. Competition is intensifying, and Fiverr's Zacks Rank #3 (Hold) reflects the need for more proof of durable progress.
Fiverr is worth watching, but Upwork's AI focus, operational strength and upward EPS revisions make it the more compelling choice for investors. UPWK stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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