The guidance indicates a revenue decline.
Freelance-work platform Upwork (NASDAQ:UPWK) plummeted 18% on Thursday, even though (NASDAQ:UPWK) upped forward guidance and surpassed consensus projections when it reported Q2 earnings after the closing bell on Wednesday.
The company raised its full-year revenue prediction on Wednesday night from $590 million to $600 million to $612 million to $617 million.
The increased projection would imply a 22% year-over-year increase at a midpoint of $614.5M. However, this is still lower than the 35% rise predicted for 2021 and the company’s Q2 revenue gain of 26%. UPWORK’s stock has lagged the market by around 67% in the past year.
Meanwhile, the company’s Q2 operating expenses increased 29.4% to $139.09M, led by an increase in sales and marketing expenses of over 38% Y/Y to $63.28M. This could negatively influence UPWK’s future profitability if costs grow faster than revenues. Due to the termination of all contracts with talent and clients in Russia and Belarus as a result of the commencement of the Ukraine War, Upwork (NASDAQ:UPWK) witnessed a more significant impact on income in Q2 than in Q1.
However, the business expects the impact of the war on revenue in Q3 and Q4 to be slightly smaller than in Q2. However, Upwork (NASDAQ:UPWK) also reported a decline in client acquisition and retention, particularly in Europe and among small and medium-sized businesses (SMBs).
Analysts decreased their price targets for the company as a result of Wednesday’s results report. For instance, JMP Securities decreased its price target from $45 to $33 while maintaining its Outperform rating.
Goldman Sachs, meanwhile, reaffirmed its Buy recommendation on the company but dropped its price objective from $31 to $30.MKM Partners also reduced its UPWK price target from $31 to $28 while maintaining its Buy rating. On average, Wall Street analysts recommend purchasing Upwork (NASDAQ:UPWK) shares.
Formerly known as Elance-oDesk, Upwork Global Inc.(NASDAQ:UPWK) is an American freelancing platform with headquarters in Santa Clara and San Francisco, California. Elance-oDesk was founded in 2013 following Elance Inc. and oDesk Corp merging. In 2015, the united firm changed its name to Upwork(NASDAQ:UPWK). Over twelve million freelancers and five million clients were registered on Upwork in 2017. In 2017, over three million job postings totaling around USD 1 billion.
Upwork(NASDAQ:UPWK) was included in TIME’s list of the 100 Most Influential Companies of the Year 2022 in March of that year.
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