Upwork Cuts Revenue Outlook as AI Pressures Demand, Shares Fall After Q1 Results

Upwork (NASDAQ: UPWK) reported first-quarter 2026 revenue of $195.5 million, up 1.4% from a year earlier and in line with Wall Street estimates, but issued second-quarter revenue guidance of $190 million, 6.9% below consensus. The company posted non-GAAP earnings of $0.35 a share, 29% above analyst expectations. Shares traded at $8.48 after the report, down from $10.61 before earnings, as investors weighed weaker demand against improved profitability. Management cited faster adoption of AI automation for low-value tasks, especially contracts below $500, and geopolitical and macroeconomic pressures on higher-value work. CEO Hayden Brown said AI adoption reduced low-end client activity, while inflation and tariffs made small businesses more cautious. Upwork said it is adding AI-powered features and human-supervised agents while cutting costs. CFO Erica Gessert said a restructuring announced May 15, 2026, is expected to generate about $40 million in savings in 2026.