Upwork Stock Is Surging Wednesday: What's Behind The Move?

Upwork Inc UPWK shares are trading higher Wednesday morning after the company reported preliminary financial results and announced organizational changes.

What Happened: Upwork said it expects to report third-quarter revenue of approximately $194 million, above the company’s prior guidance range of $179 million to $184 million.

The company also expects to report third-quarter adjusted EBITDA of approximately $43 million, up from the previous guidance of $36 million to $39 million.

“We are pleased to announce preliminary results for the third quarter that exceed the top end of our guidance. These results demonstrate our commitment to execution on both top and bottom lines, driven by disciplined cost management and continuous improvement in operational efficiency,” said Erica Gessert, CFO of Upwork. 

Upwork said it will report its full financial results for the third quarter after the market close on Nov. 6.

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Upwork also announced a series of changes aimed at streamlining its organizational structure, increasing efficiency and accelerating innovation.

The company said it will reduce its total workforce by 21% as it flattens its team structures and leverages more automation. The workforce reduction is expected to generate approximately $60 million in annualized cost savings.

Upwork also announced plans to optimize its research and development spend and rebalance product and engineering resources to help teams better serve customers. The company plans to drive a focus on profitability through a lower cost to acquire and serve customers.

Ernesto Lamaina, who has been working for Upwork for a year and previously served as CEO of Adia, has been appointed as Upwork’s general manager of Enterprise. Lamaina will lead the execution and expansion of the company’s enterprise strategy.

“We are confident that these actions will further our rapid progress toward our profitability goals, fuel our outperformance of hiring and staffing industry peers, and strengthen our ability to win in a dynamic macro environment,” said Hayden Brown, president and CEO of Upwork. 

UPWK Price Action: Upwork shares were up 23.8% at $12.45 at the time of publication, according to Benzinga Pro.

Photo: Isabela bela from Pixabay.