Shares of Upwork (NASDAQ:UPWK) declined 22.5% in November, according to data from S&P Global Market Intelligence, after the freelancer-centric marketplace announced solid third-quarter 2019 results, but followed that up by lowering its full-year outlook.
To be sure, Upwork stock plunged 14.7% on Nov. 7, 2019, alone, the first trading day after its quarterly update hit the wires.
More specifically on the former, Upwork's quarterly revenue climbed 23% year over year to $78.8 million, including a 25% increase in marketplace segment revenue to $70.7 million, and 10.3% growth in managed services sales to $8.1 million. On the bottom line, that translated to non-GAAP (adjusted) net income of $1.8 million, or $0.02 per share, swinging from an adjusted net loss of $0.04 per share in the same year-ago period. Analysts, on average, were anticipating a loss of $0.05 per share on slightly lower revenue.
"Our enterprise strategy is setting us up to address a sizable market opportunity and is showing signs of success," stated Upwork CEO Stephane Kasriel. "We've made investments in enterprise sales, marketing, and product to better address the needs of staffing buyers and results show it."
But Kasriel added that, given encouraging trends underlying its enterprise business, "now is the time to increase investing in sales to drive long-term, profitable growth."
In the meantime, Upwork narrowed its full-year 2019 outlook to call for revenue of $301 million to $301.5 million (compared to $300 million to $304 million previously), and for adjusted EBITDA margins of 1% to 1.5% of revenue (down from 1% to 2% before).
If that guidance revision wasn't enough to raise the ire of investors, on Monday Upwork announced Kasriel has informed the company's board of directors that he will step down from his post at the end of this year. As such -- and while Kasriel will remain on Upwork's board through its 2020 annual meeting of stockholders -- the board appointed Hayden Brown, Upwork's current chief marketing & product officer, to succeed Kasriel as CEO starting Jan. 1, 2020.
After coupling this executive turnover with Upwork's modest revenue and earnings headwinds as it looks to cement its status as one of the market's most compelling growth stocks, it's no surprise to see the stock pulling back in response.