---
title: "Upwork Cuts Profit Forecast, Warns of Near-Term AI Headwinds"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/295564658.md"
description: "Upwork reported Q2 earnings that beat estimates but lowered full-year 2026 guidance for both EPS and revenue, citing near-term headwinds from AI automation, weaker new-client additions, and labor market pressures. Despite a 4% YoY decline in Gross Services Volume, higher-margin initiatives grew 15%, and AI-related GSV rose 22%. The company also secured a $150 million credit facility and repurchased shares. Shares fell over 12% following the announcement."
datetime: "2026-08-11T17:07:28.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/295564658.md)
  - [en](https://longbridge.com/en/news/295564658.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/295564658.md)
generator: "portal-rs"
---

# Upwork Cuts Profit Forecast, Warns of Near-Term AI Headwinds

**Upwork Inc.** (NASDAQ:UPWK) shares are trading lower on Tuesday after it reported second-quarter earnings after Monday’s market close, although the results failed to impress investors.

Adjusted EPS was 41 cents, beating the 34 cents consensus estimate. Revenue totaled $191.66 million, topping the $189.96 million analyst forecast but declining from $194.94 million in the year-ago quarter.

## Earnings Snapshot

Gross Services Volume (GSV) decreased 4% year-over-year to $966 million, reflecting pressure from AI automation, weaker new-client additions and a soft labor market.

However, revenue from higher-margin initiatives grew 15% year-over-year, driven by Ads, Dynamic Pricing, Connects and Business Plus, lifting the take rate to 19.8%.

Active clients totaled 763,000, while GSV per active client hit a record $5,230, up 5% year over year and marking the eighth straight quarter of sequential growth.

Average spend per contract also reached a record high, extending its year-over-year growth streak to six quarters.

Business Plus GSV jumped 174% year over year, while AI strategy and consulting GSV increased 51%. GSV from explicitly AI-related jobs rose 22% year over year and 5% sequentially, reaching an annualized run rate of about $330 million.

Adjusted gross margin stood at 77% as the company continued to manage infrastructure and support costs.

Free cash flow was $35.9 million despite restructuring-related payments. Upwork also secured a new $150 million revolving credit facility, with a $50 million accordion, to support debt repayment, capital allocation, potential M&A and share buybacks.

The company repurchased about 164,000 shares in the second quarter and 8.3 million shares year to date.

## Outlook

For full-year 2026, the company lowered adjusted EPS guidance to $1.38-$1.43 from $1.50-$1.55, below the $1.55 estimate. Revenue guidance was cut to $730 million-$750 million from $760 million-$790 million, versus the $776.3 million consensus.

Its restructuring plan targets $70 million in annualized cost savings, with about $40 million expected in 2026.

Upwork expects third-quarter adjusted EPS of $0.31-$0.33, below the $0.41 analyst estimate, with revenue projected at $176 million-$184 million versus the $193.7 million consensus.

Management said AI remains a near-term drag on some work categories but is also creating new demand for AI talent and human-AI teams.

 **Read Also: Job Seekers Are Using AI to Apply Everywhere, Recruiters Are Using AI to Filter Them—Greenhouse CEO Calls It a ‘Doom Loop’** 

**UPWK Price Action:** Upwork shares were down 12.36% to $8.61 at the time of publication on Tuesday, according to Benzinga Pro data.

### Related Stocks

- [UPWK.US](https://longbridge.com/en/quote/UPWK.US.md)

## Related News & Research

- [736,397 Shares in Upwork Inc. $UPWK Acquired by Bank of New York Mellon Corp](https://longbridge.com/en/news/298099756.md)
- [Upwork Talent Is Now Everywhere AI Works | UPWK Stock News](https://longbridge.com/en/news/295439778.md)
- [An NEA partner says not every AI task needs frontier intelligence](https://longbridge.com/en/news/298434703.md)
- [AI agents keep finding ways to bend the rules. Here are some of the wildest.](https://longbridge.com/en/news/298138114.md)
- [Anthropic's AI fluency chief says the best AI users know when to do the work themselves](https://longbridge.com/en/news/298433044.md)

---
> **Disclaimer: This article is for reference only and does not constitute any investment advice.**