Upwork Inc. (Upwork (UPWK)) shares are taking a beating in Thursday's after-hours session after the company reported first-quarter results that showed weakness on the top line and offered a softer revenue outlook.

For the first quarter, Upwork reported revenue of $195.48 million, just shy of the $195.90 million analysts were expecting. On the earnings front, the company delivered adjusted earnings of 35 cents per share, beating the consensus estimate of 27 cents per share. Revenue grew 1% year-over-year, and the company ended the quarter with 784,000 active clients. Gross services volume per active client was $5,138, up 5% from a year ago. Upwork generated $23 million in cash from operations and $12.90 million in free cash flow during the quarter.

“This was a dynamic first quarter, where we delivered strong profitability while navigating a challenging demand environment,” said Hayden Brown, president and CEO of Upwork. “With momentum in our AI, SMB, and Enterprise growth pillars, we are confident in our strategy and are taking the necessary steps today to further sharpen our execution.”

During the quarter, Upwork repurchased 8.1 million shares of its common stock. As of March 31, the company had $256.10 million remaining on its buyback authorization. Upwork ended the quarter with $328.40 million in total cash and cash equivalents. The company also announced it secured a commitment letter to add a $150 million revolving credit facility, which is expected to be finalized in the coming weeks.

In addition to the financial results, Upwork announced a restructuring plan that includes a workforce reduction of approximately 24%. The restructuring is expected to be substantially complete in the fourth quarter of 2026.

Looking ahead, Upwork's guidance painted a mixed picture. For the second quarter, the company expects revenue between $187 million and $193 million, well below the $204.17 million analysts were looking for. For the full year, Upwork lowered its revenue outlook from a range of $835 million to $850 million to a new range of $760 million to $790 million, versus estimates of $842.32 million. On the bright side, the company raised its full-year adjusted earnings guidance from $1.43 to $1.48 per share to a new range of $1.50 to $1.55 per share, above the consensus estimate of $1.45 per share.

Investors focused on the revenue miss and softer outlook, sending shares down 17.26% in after-hours trading to $8.78 at the time of publication.