Fiverr Announces Second Quarter 2024 Results

Fiverr International Ltd. reported solid Q2 2024 financial results, showcasing resilience amid macroeconomic volatility. Key achievements include revenue exceeding guidance midpoints, strong Adjusted EBITDA, and robust free cash flow. Fiverr expanded its product portfolio with a new profession-based catalog and the acquisition of subscription software business AutoDS. This strategic move aims to enhance their value proposition and growth potential. The company remains focused on optimizing capital allocation, completing a $100 million buyback, and reiterating its full-year guidance. Fiverr continues to innovate in AI technology, integrating Neo to enhance search and order experiences, and positioning itself as a pivotal partner for businesses of all sizes.

• Solid Q2 execution: Revenue came in above the midpoint of our guidance despite macro volatility as we continued to expand customer wallet share and drive take rate increase. We also delivered strong Adjusted EBITDA, near the top end of our guidance, and strong free cash flow as we continued to execute with strong discipline and efficiency.
• Expanding product portfolio to create strong growth catalysts: Our Summer Product Release includes the launch of a brand new profession-based catalog along with capabilities to hire talent for long-term engagement, making a major stride in expanding our direct addressable market. We also folded in a subscription-based software business through the acquisition of AutoDS, deepening our value proposition to the creator community and adding a durable revenue stream to our business with significant synergy and growth potential.
• Optimizing capital allocation strategy to deliver shareholder value: We are committed to setting clear capital allocation priorities and creating a tangible path for delivering shareholder value. We have successfully completed the $100 million buyback program announced in April. We aim to drive a steady and measurable increase in free cash flow combined with a dynamic capital return program for the next three years.
• Reiterating full year guidance: Our strategy to move upmarket and push into complex services continues to unlock long-term growth opportunities for our marketplace businesses. This is complemented by our expansion into the long-term freelancer hiring space and the addition of subscription-based software to our product portfolio. As such, we are raising the bottom end of our full-year guidance for both revenue and Adjusted EBITDA to reflect recent updates.

NEW YORK, July 31, 2024– Fiverr International Ltd. (NYSE: FVRR), the company that is changing how the world works together, today reported financial results for the second quarter 2024. Additional operating results and management commentary can be found in the Company’s shareholder letter, which is posted to its investor relations website at investors.fiverr.com.

“It has been an incredible past six months at Fiverr on many fronts as we navigated the dynamic macro environment and delivered profitable growth through executional excellence and focused operational discipline. In addition, we also made remarkable strides in our product evolution with the introduction of profession-based catalog and hourly contracts,” said Micha Kaufman, founder and CEO of Fiverr. “With these offerings, we look forward to becoming a more substantial partner with businesses of all sizes, for their need to engage with the flexible workforce, and significantly expand our direct addressable market. We also continue to be at the forefront of AI technology as we deepen the integration of Neo across search and order experiences on Fiverr. I’m very excited for what is still to come as we continue to innovate towards the future of work.”

“We delivered solid results for Q2 and reiterated our full year guidance. While the SMB and freelancer hiring space remain volatile, we continue to execute with consistency and efficiency. At the same time, we are expanding our product portfolio through both organic and inorganic investments to create additional growth catalysts,” said Ofer Katz, President and CFO of Fiverr. “We also aim to optimize our capital allocation strategy to deliver shareholder value. With strong free cash flow generation and a strong balance sheet to support capital return programs, we are paving a measurable and tangible path for steady growth in free cash flow for the next three years.”

Second Quarter 2024 Financial Highlights

• Revenue in the second quarter of 2024 was $94.7 million, compared to $89.4 million in the second quarter of 2023, an increase of 6% year over year.
• Active buyers¹ as of June 30, 2024 was 3.9 million, compared to 4.2 million as of June 30, 2023, a decline of 8% year over year.
• Spend per buyer¹ as of June 30, 2024 reached $290, compared to $265 as of June 30, 2023, an increase of 10% year over year.
• Take rate¹ for the period ended June 30, 2024 was 33.0%, up from 30.7% for the period ended June 30, 2023, an increase of 230 basis points year over year.
• GAAP gross margin in the second quarter of 2024 was 83.1%, an increase of 60 basis points from 82.5% in the second quarter of 2023. Non-GAAP gross margin¹ in the second quarter of 2024 was 84.4%, an increase of 20 basis points from 84.2% in the second quarter of 2023.
• GAAP net income in the second quarter of 2024 was $3.3 million, or $0.09 basic and $0.08 diluted net income per share, compared to $0.01 basic and diluted net income per share, in the second quarter of 2023.
• Non-GAAP net income¹ in the second quarter of 2024 was $23.8 million, or $0.63 basic non-GAAP net income per share¹ and $0.58 diluted non-GAAP net income per share¹, compared to $20.0 million non-GAAP net income, or $0.53 basic non-GAAP net income per share¹ and $0.49 diluted non-GAAP net income per share¹, in the second quarter of 2023.
• Net cash provided by operating activities in the second quarter of 2024 was $21.0 million, compared to $18.7 million in the second quarter of 2023, an increase of 11.9%.
• Free cash flow in the second quarter of 2024 was $20.7 million, compared to $18.4 million in the second quarter of 2023, an increase of 12.5%.
• Adjusted EBITDA¹ in the second quarter of 2024 was $17.8 million, compared to $15.3 million in the second quarter of 2023. Adjusted EBITDA margin¹ was 18.9% in the second quarter of 2024, compared to 17.1% in the second quarter of 2023.

Financial Outlook

Our Q3’24 outlook and updated full year 2024 guidance reflects the recent trends on our marketplace.

Conference Call and Webcast Details

Fiverr’s management will host a conference call to discuss its financial results on Wednesday, July 31, 2024, at 8:30 a.m. Eastern Time. A live webcast of the call can be accessed from Fiverr’s Investor Relations website. An archived version will be available on the website after the call. To participate in the Conference Call, please register at the link here.

About Fiverr

Fiverr’s mission is to change how the world works together. We exist to democratize access to talent and to provide talent with access to opportunities so anyone can grow their business, brand, or dreams. From small businesses to Fortune 500, around 4 million customers worldwide worked with freelance talent on Fiverr in the past year, ensuring their workforces remain flexible, adaptive, and agile. With Fiverr Business Solutions, large companies can find the right talent and tools, tailored to their needs to help them thrive and grow. On Fiverr, you can find over 700 skills, ranging from programming to 3D design, digital marketing to content creation, from video animation to architecture.

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