After it posted its first earnings report as a public company, shares of Upwork (UPWK 1.77%), an operator of the largest online freelance marketplace in the world, fell 11% as of 11:10 a.m. EST on Thursday.
Here's a review of the headline numbers from the period:
- Revenue grew 23% to $64.1 million. For perspective, Wall Street was expecting $62.44 million in total revenue, so this was a solid beat.
- Non-GAAP net loss was $1.4 million, or $0.04 per share. That figure was a bit worse than the consensus estimate among the analyst community of a loss of $0.03 per share.
Turning to guidance, here's what management is projecting will happen in the upcoming quarter and full year:
- Revenue is expected to land between $64.5 million and $66 million. For context, Wall Street was expecting $63.9 million in revenue.
- Full-year 2018 revenue is expected to come in between $250.5 million and $252.0 million. That's comfortably ahead of the $248.2 million in total revenue that market watchers were expecting.
Shares appear to be taking a beating today in response to the small miss on the bottom line.
This was Upwork's first chance as a public company to establish a positive tone with Wall Street. Since Upwork's stock performed very well on its first day of trading, it is understandable why traders were expecting to be positively surprised on both the top and bottom lines. Today's downward move makes sense, since the company's actual results were mixed.
The double-digit drop today should serve as a nice reminder to investors on why it can make sense to wait a quarter or two before buying shares of any newly public company.
Personally, I continue to believe that Upwork is a great company to keep an eye on, but I'm not in any rush to become a shareholder myself. Approaching this stock with a wait-and-see mindset makes the most sense to me.