Upwork stock falls following mixed Q2 results and lowered guidance

Upwork shares fell over 12% on Tuesday following the release of mixed second-quarter financial results. While the company reported sales of approximately $191.7 million, which exceeded analyst estimates, earnings per share of $0.20 missed the Wall Street target of $0.21.

The company reported a 1.7% year-over-year decline in sales and a 4% decrease in active clients, which fell to 763,000. In response to these trends, Upwork lowered its full-year sales guidance to a range of $730 million to $750 million, down from its previous projection of $760 million to $790 million. It also reduced its non-GAAP earnings per share guidance.

CEO Hayden Brown attributed the downward revisions to a lack of labor market improvement and pressures from artificial intelligence automation. Following the report, Royal Bank of Canada lowered its price target for Upwork from $9.00 to $8.00, maintaining a ‘sector perform’ rating.