Upwork Inc. (NASDAQ:UPWK) shares fell on Tuesday after the company beat Wall Street's second-quarter earnings and revenue estimates but lowered its full-year 2026 outlook. Adjusted EPS came in at 41 cents versus a 34-cent consensus estimate, while revenue of $191.66 million topped the $189.96 million forecast but declined from $194.94 million a year earlier. Gross services volume fell 4% year over year to $966 million amid pressure from AI automation, weaker new-client additions and a soft labor market. Active clients totaled 763,000, while GSV per active client reached a record $5,230, up 5% from a year earlier and marking the eighth straight quarter of sequential growth. Higher-margin initiatives including Ads, Dynamic Pricing, Connects and Business Plus lifted take rate to 19.8%, with revenue from those initiatives rising 15% year over year. Business Plus GSV climbed 174%, AI strategy and consulting GSV rose 51%, and explicitly AI-related jobs GSV increased 22% from a year earlier and 5% sequentially to an annualized run rate of about $330 million. Upwork cut its full-year 2026 adjusted EPS guidance to $1.38-$1.43 from $1.50-$1.55 and reduced revenue guidance to $730 million-$750 million from $760 million-$790 million. It forecast third-quarter adjusted EPS of $0.31-$0.33 on revenue of $176 million-$184 million, both below analyst expectations. Shares were down 12.36% to $8.61 at the time of publication on Tuesday.