Upwork (UPWK -14.95%) stock is losing ground on Tuesday following the release of the company's second-quarter results. The company's share price was down 12.2% as of 12:30 p.m. ET. At the same point in the daily session, the S&P 500 and the Nasdaq Composite had fallen 0.2% and 0.4%, respectively.
After the market closed yesterday, Upwork published its Q2 numbers. Results in the period were mixed, with earnings coming in below expectations despite a sales beat. Making matters worse, the gig-economy marketplace company lowered its full-year guidance.
Image source: Getty Images.
Upwork's mixed Q2 results weren't enough to excite investors
Upwork reported sales of roughly $191.7 million in the second quarter, beating the average analyst estimate by roughly $1.7 million. On the other hand, earnings per share of $0.20 in the period missed the average Wall Street target by $0.01. Sales were still down 1.7% year over year in the quarter, and active clients on the company's platform declined roughly 4% year over year to 763,000. A 5% increase in gross service volume (GSV) per customer to $5,230 helped offset the client decline, but the business is facing persistent headwinds.
NASDAQ: UPWK
Key Data Points
What's next for Upwork?
With its Q2 report, Upwork lowered its full-year sales guidance to between $730 million and $750 million -- down from previous guidance for sales between $760 million and $790 million. Management also now expects non-GAAP (adjusted) earnings per share to be between $1.38 and $1.43 -- down from its previous target for earnings per share between $1.50 and $1.55.
Upwork CEO Hayden Brown called out automation driven by artificial intelligence technologies as a key reason for the downward revisions and also cited the lack of improvements in the labor market. The company's Q2 report delivered no indication that AI-related pressures are easing, and the trend could continue to depress the stock.
