Earnings call transcript: Fiverr Q4 2024 sees revenue beat, stock rises

Fiverr International Ltd (NYSE:FVRR) reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of 0.64, compared to the forecast of 0.61. The company also exceeded revenue forecasts, reporting $103.7 million against an anticipated $101.37 million. In pre-market trading, Fiverr’s stock price rose by 4.81%, reflecting a positive market reaction to the earnings beat and strong revenue performance. According to InvestingPro analysis, Fiverr currently appears undervalued, with additional upside potential based on its Fair Value assessment. The company maintains a "GOOD" overall financial health score, supported by strong fundamentals including a perfect Piotroski Score of 9.

Key Takeaways

• Fiverr’s Q4 2024 revenue of $103.7 million marked a 13% year-over-year increase.
• The company launched FiverrGo, an AI-driven platform, to enhance its service offerings.
• Fiverr’s stock rose 4.81% in pre-market trading following the earnings report.
• Marketplace revenue for the full year 2024 reached $303.1 million.
• Fiverr anticipates 8-12% revenue growth in 2025, with a focus on AI and platform development.

Company Performance

Fiverr demonstrated robust performance in Q4 2024, with significant year-over-year revenue growth of 13%. The company’s strategic initiatives, including the launch of FiverrGo and expansion of agency products, have contributed to its strong market position. Fiverr continues to lead in the freelancer economy, with a focus on leveraging AI to enhance its platform and services.

Financial Highlights

• Revenue: $103.7 million in Q4 2024, up 13% year-over-year.
• Full Year 2024 Marketplace Revenue: $303.1 million.
• Full Year 2024 Services Revenue: $88.4 million, a 62% increase year-over-year.
• Q4 Adjusted EBITDA: $20.7 million, representing a 20% margin.
• Marketplace take rate: 27.6%.

Earnings vs. Forecast

Fiverr’s Q4 2024 EPS of 0.64 exceeded the forecast of 0.61, marking a positive surprise of approximately 4.9%. The revenue beat was also notable, with actual figures surpassing forecasts by about 2.3%. This performance reflects Fiverr’s ability to capitalize on its strategic initiatives and market demand, continuing its trend of exceeding expectations.

Market Reaction

In response to the earnings report, Fiverr’s stock price increased by 4.81% in pre-market trading, reaching $34.65. This rise comes after a previous close of $33.06, demonstrating investor confidence in the company’s growth prospects. The stock’s movement is significant, considering its 52-week range, with a high of $36.11 and a low of $18.83. InvestingPro data shows the stock has gained over 27% in the past six months, with a beta of 1.69 indicating higher volatility than the broader market.

Outlook & Guidance

Fiverr projects 2025 revenue between $422 million and $438 million, indicating an 8-12% growth. The company expects its services revenue to constitute 30% of total revenue, driven by continued investment in AI and platform development. Fiverr’s guidance reflects optimism about future marketplace growth, contingent on improved macroeconomic conditions. Seven analysts have recently revised their earnings estimates upward, while the company maintains a strong current ratio of 2.99, suggesting robust liquidity to fund its growth initiatives.

Executive Commentary

CEO Michal Kaufman emphasized Fiverr’s commitment to empowering freelancers, stating, "We grow only when they grow and we succeed only if they succeed." He highlighted FiverrGo as a pivotal development, describing it as "Gen AI with human accountability." Kaufman also expressed excitement about the future of work, noting that FiverrGo could "turn any individual into a powerhouse."

Risks and Challenges

• Macro (BCBA:BMAm) headwinds continue to affect freelancer hiring demand.
• Competition in the freelancer economy remains intense.
• Potential for slower adoption of new AI tools among users.
• Economic uncertainties could impact buyer spending patterns.
• Currency fluctuations pose a risk, though currently not materially affecting guidance.

Q&A

During the earnings call, analysts inquired about the potential impact of FiverrGo on conversion rates and the company’s strategy for AI tool integration. Executives reassured investors of their commitment to enhancing the platform without replacing freelancers. The discussion also covered Fiverr’s ongoing investment in AI and the anticipated benefits of these innovations.

Full transcript - Fiverr International Ltd (FVRR) Q4 2024:

Conference Operator: Good day and thank you for standing by. Welcome to the Fiverr Q4 Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised today’s conference is being recorded. I’d now like to hand the conference over to your first speaker today, Jing Jin Chin.

Please go ahead.

Jing Jin Chin, Investor Relations, Fiverr: Thank you, operator, and good morning, everyone. Thank you for joining us on Fiverr’s earnings conference call for the fourth quarter that ended 12/31/2024. Joining me on the call today are Michal Kaufman, Founder and CEO and Ofer Katz, President and CFO. Before we start, I’d like to remind you that during this call, we may make forward looking statements and that these statements are based on our current expectations and assumptions as of today, and fiber assumes no obligation to update or revise them. A discussion of some of the important risk factors that could cause actual results to differ materially from any forward looking statements can be found under the Risk Factors section in fiber’s most recent Form 20 F and other filings with the SEC.

During this call, we’ll be referring to some key performance metrics and non GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin and free cash flow. Further explanation and a reconciliation of each of the non GAAP financial measures to the most directly comparable GAAP measures is provided in the earnings release we issued today in our shareholder letter, each of which is available on our website at investors.fiber.com. And now, I’ll turn the call over to Mihai.

Michal Kaufman, Founder and CEO, Fiverr: Thank you, Jinjin. Good morning, everyone, and thank you for joining us. As we close another year, I’ve honestly never been more excited by what we’ve achieved and how it’s positioning us for 2025. We delivered incredible execution throughout 2024, topped off by an outstanding Q4 with 13% revenue growth and a 20% adjusted EBITDA margin. This puts us firmly in the elite group of companies hitting the rule of 30, no small feat, especially at a time when our entire industry is facing macro headwinds.

We executed with discipline, just as we said we would and made steady progress towards our three year targets. We maintain a high velocity of innovation and continue to solidify our position as a leader in the freelancer economy. Our strategy is straightforward. On the one hand, pursuing quality of revenue and upmarket opportunities in the market based segment. On the other hand, expanding our offerings and diversifying revenue in the services segment.

This has clearly paid off, allowing us to drive double digit growth under macro headwinds. All of this momentum provides us with a very strong setup for twenty twenty five, where we believe we can continue to deliver rule of 30. At the center of our success is our freelancer community. For the past fifteen years, fiber has always stayed true to our mission of empowering talent around the world to grow and succeed. We grow only when they grow and we succeed only if they succeed.

We pride ourselves on being the most talent focused freelancing platform with the biggest and most robust global community. To give you some idea of the scale of things, in 2024 alone, we hosted about 100 community events in every corner of the world with an aggregated of over 100,000 registrations into these events. Our public forum actively facilitates over 10,000 discussions with nearly 1,000,000 interruptions among our community members. Hundreds of thousands of freelancers see Fiverr as the go to platform to build and grow their careers. It is through this scale and intimacy with our community that we know it hasn’t been the easiest time for freelancers and creators.

The high interest rates and inflation are putting pressure on their day to day life and the rapid advancement of artificial intelligence feels like barbarians at the gate, threatening to exploit their creative assets and creative rights. It is under those premises that we announced two groundbreaking initiatives to demonstrate our continued commitment to our talent community. First is the launch of FiverrGo. FiverrGo is an open platform for personalized AI tools that include the personalized AI assistant and the AI creation model. Different from other AI platforms that often exploit human creativity without proper attribution or compensation, FiberGo is uniquely designed to reshape this power dynamic by giving creators full control over their creative process and rights.

It also enables freelancers to build personalized AI models without the need to collect training datasets or understand AI engineering. Thanks to fiber’s unparalleled foundation of over 6,500,000,000 interactions and nearly 150,000,000 transactions on the marketplace. And most importantly, it allows freelancers to become a one person production house, making more money while focusing on the things that matter. By giving freelancers control over configuration, pricing and creative rights and leveling the playing field of implementing AI technology, FiberGo ensures that creators remain at the center of the creative economy. It decisively turned the power dynamic between humans and AI towards the human side.

It’s a refreshing and unique approach to GenAI, just like how our service as a product model provides a unique mechanism that fundamentally changed the dynamics of freelancing fifteen years ago. For customers, FiberGo is also fundamentally different from other AI platforms. It is Gen AI with human accountability. AI results often feel unreliable, generic and very hard to edit. What is good enough for a simple question and answer on Chargebee does not cut it for business mission critical tasks.

In fact, many customers come to fiber today with AI generated content because they miss the confidence that comes from another human eye and talent helping them perfect the results for their needs. FiberGo eliminates all of this friction and frustration. Every delivery on FiberGo is backed by the full faith of the creator behind it with an included revision as the freelancer defines. This means that the quality and service you get from FiberGo is no different from a direct order from the freelancers themselves, except for a faster, easier and more delightful experience. The personalized AI assistant on Fiber Go can communicate with potential clients when the freelancer is away or busy, handle routine tasks and provide actionable business insights effectively becoming the creator’s business partner.

It often feels smarter than an average human assistant because it’s equipped with all the history of how the freelancer works as well as knowledge of trends and best practices on the fiber marketplace. And we didn’t stop there. To take the future of work to the next level, we’ve also announced an open developer platform on FiberGo to allow AI specialists and model developers to build generative AI applications across any discipline. We provide them with an ecosystem to collaborate with domain experts on fiber and the ability to leverage fiber’s massive data assets, so that these applications can solve real world problems. And most important of all, fiber provides them an avenue to generate revenue from those applications through our marketplace.

We are envisioning a very exciting future of work here as Fiber Go can turn any individual into a powerhouse and supercharge their earnings potential. The second initiative we announced along with FiverrGo is a brand new freelancer equity program, an industry first initiative designed to give top performing freelancers equity shares of Fiverr. We have been wanting to do this for a while and we are extremely happy to finally make it happen. Just as FiberGo empowers freelancers to scale like never before, the freelancer equity program ensures that our freelancer community does not just help us shape the future of work, they own a piece of it. I’m very excited about these bold moves.

As freelancers increasingly become the backbone of our economy and as AI technology promises transformative shifts to the way people work, I firmly believe that fiber is uniquely positioned to lead the innovation and drive the industry forward. With the depth and breadth of data we have, the expansive scale of categories, buyers and sellers we cover and the deep technological expertise we have built over the years, we can empower a robust ecosystem of humans and AI that deliver beautiful results for customers while supercharging freelancers earning power. Finally, I would like to take this opportunity to thank our incredible team for building what very few teams in the world can build with passion, velocity and determination. All of this could not have happened without this world class team. With that, I’ll turn the call over to Ofer.

Ofer Katz, President and CFO, Fiverr: Thank you, Michae, and good morning, everyone. I’m pleased to report an exceptional quarter with both top and bottom line exceeding expectations. Revenue for the fourth quarter was $103,700,000 up 13% year over year representing an acceleration from 8% year over year growth in Q3. Adjusted EBITDA for Q4 was $20,700,000 representing an adjusted EBITDA margin of 20%, an improvement of two forty basis points from a year earlier. While we have yet to see meaningful improvements on the macro front in terms of incentive sentiment of freelancer hiring demand, we are able to deliver growth catalyst through strong execution and expansion of value added products.

At the same time, we continue to optimize the quality of revenue for the marketplace, expanding our penetration into larger buyer and more complex projects with fiber pro and dynamic matching. All in all, I’m very happy with how we delivered strong results in Q4 and throughout 2024, and I believe we are kicking off 2025 with a solid financial position and strong business momentum. In order to give more clarity on different parts of our business, starting this quarter, we will provide you with a quarterly and annual revenue breakdown between marketplace revenue and services revenue. Marketplace revenue represent the transaction commission paid by buyer and seller based on order completed on our marketplace. We generate services revenue from subscription products such as Seller Plus and Opera (NASDAQ:OPRA) DS, advertising services primarily via fiber ad and other services such as financial or learning tools, all of which are optional value added services to our customers.

For the full year 2024, marketplace revenue was $303,100,000 driven by $3,600,000 annual active buyers, dollars $3.00 2 annual spend per buyer and 27.6% marketplace take rate. While the overall active buyer are not growing due to mark off headwinds, it is worth noting that buyers with annual spend of over $10,000 continue to show resilient growth. We are also seeing larger and more complex projects show robust growth with GMV from a project of over $500 growing 8% year over year in 2024 compared to 2023. Going into 2025, given that marketplace revenue is largely tied to GMV volume, and we have yet to see signs of macro improvement, we expect that growth of this revenue segment will continue to be muted. That said, we believe macro served as a growth catalyst for this revenue segment down the road.

Given that macro rebound is a matter of when, not if, when it does rebound, we expect our marketplace will be one of the first areas to experience the uplift. Services revenue was $88,400,000 representing year over year growth of 62% driven by continued strength in FiberAd, Seller plus and AutoDS. Services revenue represent 23% of our total revenue in 2024, up from 15% in 2023. As we continue to expand the adoption of these services and as we launch new monetization products such as fiber Go, fiber Pro subscriptions and seller team accounts, we believe there is a lot of growth runway for services revenue ahead of us. For 2025, we expect services revenue to continue growing at a healthy double digit rate with contribution to total revenue reaching over 30%.

Now on to guidance. For the full year 2025, we expect revenue to be in the range of $422,000,000 to $438,000,000 representing year over year growth of 8% to 12%. Adjusted EBITDA is expected to be in the range of $82,000,000 to $90,000,000 representing an adjusted EBITDA margin of 20% at the midpoint. For the first quarter of twenty twenty five, revenue is expected to be $103,500,000 to $108,500,000 representing year over year growth of 11% to 16%. Adjusted EBITDA is expected to be $18,000,000 to $20,000,000 representing an adjusted EBITDA margin of 18% at the midpoint.

We believe revenue growth will be higher in the first half of the year compared to the second half due to the lapping of fiber ad expansion, the launch of the Kickstart program and the inclusion of AutoDS in the second half of last year. We believe adjusted EBITDA margin and margin improvement will be lower in the first half of twenty twenty five compared to the second half as we accelerate the investment and development pace of Fiber Go. Overall, I believe we are firmly on track to achieve the three years target we set last year for both adjusted EBITDA margin and free cash flow. To close, I’m very excited to kick off 2025. I believe it’s going to be another strong year of growth and innovation.

With that, we’ll now turn the call over to the operator for questions.

Conference Operator: Thank you. Thank you. We’ll now take the first question. This is from the line of Eric Sheridan from Goldman Sachs. Please go ahead.

Eric Sheridan, Analyst, Goldman Sachs: Thanks so much for taking the questions. Maybe two if I could. In terms of the new initiatives in five or go, really interesting stuff in terms of the presentation yesterday. How should we think about those types of tools and the platform evolution helping conversion over the medium to long term, possibly resulting in better top of the funnel dynamics from a growth perspective and then also conversion as well? And then in terms of what you laid out yesterday during the presentation, how much of it could put pressure on margins in 2025 in terms of incremental investments to sort of accomplish those goals around five or go or how much of that on the investment side is more behind you than ahead of you?

Thank you so much.

Michal Kaufman, Founder and CEO, Fiverr: Hey, Eric. Good morning. Thanks for the question. So for FiberGo, FiberGo is actually a tool for conversion. That’s the entire idea.

As we know that customers these days expect instant responses and instant results. And as a result of that, we designed those two tools, the AI personal assistant, which is able to answer customer questions immediately even if the freelancer is away or busy. We know that the first three minutes after a customer writes to a freelancer are the most crucial time for conversion. And this is why we designed this tool. And this tool is essentially encapsulating the entire knowledge of the freelancer and basing itself on it, being able to address any possible question and bring it to conversion.

And actually, it’s fresh from yesterday, but

Ofer Katz, President and CFO, Fiverr: we have

Michal Kaufman, Founder and CEO, Fiverr: many thousands of assistants running on the system, converting customers already, which is an amazing time. When we think about the creation model, the creation model allows customers to get the confidence that this is the freelancer, this is the style that they’re looking for. Because now, instead of asking a freelancer for samples, waiting for it, causing the freelancer to essentially work for free, they can get those samples right away. Now the quality of these samples is just mind blowing. The level of accuracy that these samples produce are exact match with the style of the freelancer, which gives the customer the confidence that if they played and liked it, this is the type of freelancer that they should engage with.

So essentially, conversion was one of the most important factors when designing these tools.

Ofer Katz, President and CFO, Fiverr: And then Eric, on the second part of the question. So obviously, we have invested in this product in the last few months and we’ll continue to invest in the next few months. But having said that, I think the guidance, the peak for the improvement in EBITDA throughout the year, take into consideration those investments already.

Ron Josey, Analyst, Citi: Thank you.

Conference Operator: Thank you. We’ll now take our next question. This is from Ron Josey from Citi. Please go ahead.

Ron Josey, Analyst, Citi: Great. Thanks for taking the questions. Just a quick follow-up on the five or go, I understand the value of the conversion to the creation model, conversion rate to the system to creation model. I wonder if you can talk to us more about category expansion. I know we’re launching with around 60 categories today.

Do you think this goes to all categories over time? That’s question one. And then question two, just on the newer cohorts. I believe in the letter we talked about them being bigger on average spend per buyer in their first year. I want to understand what’s driving this specifically, is this dynamic matching, which I think is pretty impressive.

And then any insights on year two for these newer cohorts as they are higher value, higher spend cohorts? Thank you.

Michal Kaufman, Founder and CEO, Fiverr: Thank you, Ron. Good morning. So as to fiber go, I’ll say the following. First, GenAI still cannot handle every possible category. There’s no technology for it.

And some of these technologies we’re developing ourselves. The fact that we’re able to ship this basically from day one in 60 categories in my mind is mind blowing Because you need to understand that the level of accuracy that these models need to have is something that no one has seen before. They need to stay super true to the actual creator, the actual freelancer, the talent. And one of the things that we’re doing, and obviously we will continue to shift more and more categories and we do this in very high velocity. So what we also introduce is the developer ecosystem.

Now what we’re doing with this is actually we’re opening up the Go platform to outside developers. Think about it as

Ofer Katz, President and CFO, Fiverr: an app

Michal Kaufman, Founder and CEO, Fiverr: store in essence. So what we’re doing is we’re allowing them to develop models, APIs, workflows, but then train those models on probably the biggest transactional data set in existence today that we hold, so that they can actually help us build models that freelancers can join can enjoy from. And we believe that by doing so and giving those developers, incentives to do so because every time they’re up, it’s going to be used for a transaction, they’re going to make money out of it. This will allow us to accelerate the pace of the development of newer models for more categories. Why 60 categories?

Why not 600? Why not 6,000? This is exactly how we’re thinking about this. So I think that the developer network can push us forward much faster, but not only for simple tasks because we know that it is possible to create not just smart agents, but a GenTek AI, which can handle very complex types of transactions that sometimes require multiple sets of talent, which we all have on our platform. This is I don’t think that the market still realizes the magnitude and the potential of this program.

We’re so excited about this and we were able to cool this off in an incredible time and we have high expectations from it.

Ofer Katz, President and CFO, Fiverr: And then, Ron, on the second part of the question on the biggest center buyer and the advisor behind the scenes. So I think there are multiple elements, and we mentioned that several times before. As we go upmarket, I think the first one is quality. The release of Pro a while ago has matured and we see more and more business contributing by this segment. And then we are able to attract better quality sellers.

We launched agency products a few weeks ago that are scaling up. So generally speaking, in terms of quality, I think that the professional part of the business is growing. So that’s one. Second, in terms of the product, so complex projects are being handled by the dynamic matching that we have released that demonstrate pretty well. Just as an indication, conversion rate is higher, three or 4x higher than the marketplace.

And then lastly, on the acquisition strategy, so growing up market means that we focus on high value buying. And we indicate in the shareholders letter that buyers that spend more than $10,000 are growing by 2% last year, which is one indication. Second is that high value buyers those who spend more than $500 on market sales grew by 7.9% last year. So going upmarket and acquisitions strategy is definitely one of the driver. And then, lastly, when we look into the category breakdown, we see more and more programming and tech contributing to the overall GMV.

And programming and tech usually are bigger projects, longer projects. And I think products like the hourly that we have released a few months ago also contribute to this success. So just to summarize, a combination of quality projects, complex project, acquisition strategy and programming the tech contributing more.

Ron Josey, Analyst, Citi: Thank you.

Conference Operator: Thank you. We’ll now take the next question. This is from Jason Helfstein from Oppenheimer. Please go ahead.

Jason Helfstein, Analyst, Oppenheimer: Thanks for taking the question. So kind of a bit more on fiber go. So I guess is your conclusion that no matter how sophisticated AI gets that it will struggle to bring unique or creative enough results for what effectively your buyers want And that’s why there still needs to be a human driving the creative decision, even if the AI tools make the human more efficient. And that the idea that your buyer is just people would, if the price is right, would rather pay somebody else to figure it out for them? I mean obviously you’ve been thinking about this for a long time, right?

We’ve been talking about AI for, I don’t know, two years now almost. It’s just like with all the iterations, is this ultimately the conclusion and kind of what’s driving the FiberGo strategy?

Michal Kaufman, Founder and CEO, Fiverr: Good morning, Jason. So from our experience with AI, what we come to learn is that a little bit of creation process using AI is very random and take you through figuring out what are the best tools because there’s thousands of different options around AI, and each one operates slightly differently. And you need to master each one of them, and you need to become a prompt engineer. And then editing is extremely, extremely hard. Plus, you don’t get the feedback that comes from working with a human being that can actually look at the creation from a human eye and give you a sense if this is actually capturing what you’re trying to do.

Because of these reasons and without compromising on the power of AI, because we love AI, we love the technology, we just think that there’s a different way to design it. There’s this entire debate about human versus AI. It’s not the right question. The question is who’s in the center. And we think that in order to continue motivating people to create, they should be rewarded for it.

Right now, the way AI is designed, it’s just sucking up whatever everyone writes, designs without giving any reward. And our fear is that in the long run, this would demotivate people from creating, which for humanity is going to be very bad news. So there is a different way to design AI, and the way we’ve done it doesn’t compromise to anything on its power. It’s the opposite. It allows us or allows freelancers to design their own model in a way that rewards them but remains extremely accurate to their style, allowing customers to get the results they expect to get because they see the portfolio of their freelancer like this style, the style of writing or design or singing or narration, and they can get exactly this.

So we think that that combination and that confidence that comes from the fact that the creator itself is always there. So if whatever AI churns out is 95%, great. There is a human being to help you cross the finish line.

Ofer Katz, President and CFO, Fiverr: That is the

Michal Kaufman, Founder and CEO, Fiverr: premise under which we developed Fiber Go. And we think that this introduces a new approach. And who knows, maybe other companies will follow this. And I think it’s important because it will keep people in the center and continue motivating them to create.

Jason Helfstein, Analyst, Oppenheimer: Appreciate the color. Thank you.

Conference Operator: Thank you. We’ll now take the next question. This is from the line of Doug Anmer from JPMorgan. Please go ahead.

Doug Anmer, Analyst, JPMorgan: Thanks guys for taking the question. One for Micha and one for Ofer. First Micha, just on fiber go, you talked about model creation and AI assistance really being the first pieces. Maybe you can talk more about just how you envision AI agents working in fiber ecosystem over time? And then over just on the double digit revenue growth at the midpoint of the ’25 guide, does that suggest a return to marketplace growth?

And more importantly, what are the factors you need to see there for that to happen? Thanks.

Michal Kaufman, Founder and CEO, Fiverr: Good morning, Doug. Thanks for the question. So when we think about AI agents, if you look at the AI personal assistant, the very basic functionality that it provides is really handling routine tasks for the freelancers, allowing the talent to actually have more time to create, think and recharge when needed. And this is done in a very sophisticated way because the assistance is reached with capabilities such as being able to convince the customers of the qualities of the freelancers by showcasing them during the conversation, their portfolio, schedule consulting meetings in real time within the conversation. And actually, the assistant is aware of the presence of the freelancer, meaning is the freelancer online right now or not, and can invite the freelancer in real time if they think that the best scenario of the conversation is to hand it over to the freelancer.

These are unique capabilities that we’ve developed that I don’t know anyone who has done it before that will allow the assistant to work as a partner with the freelancer. But this is just the first step because as the assistant learns the freelancer better over time, it will start providing with business insights for the freelancer in order to grow the business. As an example, the assistant can do a research to figure out how to optimize the service page or the profile to be better positioned in search results. It might suggest to the freelancer to add certain keywords or descriptions or portfolio in order to maximize their potential. In addition, as I’ve said, through the developer ecosystem, we think that we can create endless amount of different agents for GenAI so that we can actually reach this future of AgenTek AI, where you have agents that can actually do some complex stuff for you in an automated manner.

And obviously, those capabilities are going to be also included in the AI personal assistant.

Ofer Katz, President and CFO, Fiverr: And then Doug, for the second part of the question about the growth in 2025. So I think as you probably noticed, we have break the revenue into two different segments, the marketplace and the services. And I think while the marketplace is tied up with macro and GMV, where we haven’t seen yet any sign or strong sign of improvement. The services revenue line is where we are innovating and building many products to drive sustainable growth as we’ve seen last year. So in terms of 2024, ’20 ’3 percent of the revenue is driven by services and we anticipate that in 2025, this portion will grow all the way to 30%.

We believe that this two line revenue approach works well. And when the macro rebound, we’ll see the marketplace go back to growth on top of the growth in the service engine. In terms of 2025, so the guidance applied for double digit revenue growth at the midpoint and based on a flat small decline in GMV or marketplace revenue, where we think that the center buyer is going to grow and compensate on active buyer declines throughout the year, while the revenue part of the business is going to grow rapidly as we release more product and as we see the existing product contributing more to the top line.

Ofer Katz, President and CFO, Fiverr: Great. Thank you both.

Conference Operator: Thank you. We’ll take our next question. This is from Bernie MacTernan from Needham and Company. Please go ahead.

Bernie MacTernan, Analyst, Needham and Company: Great. Thanks for taking the questions. Mihael, you mentioned to an earlier question incentivizing developers in fiber go. Would your take rate be different in fiber go? Just trying to get a sense if you’re paying the developer or maybe they’re paying you to be on the platform.

And then on investments this year, just want to see if it’s mostly sales and marketing we should be expecting or something else? And then lastly, just as you think about the ’25 guide, was there any impact of FX contemplated in the guide? Thank you.

Michal Kaufman, Founder and CEO, Fiverr: Good morning, Bernie. For now, the take rates remain the same for Go. And as we wrote it out and as we see usage, we will figure out what to do or what’s the right thing to do. For now, we treat it as a normal transaction with the same take rate. There are components where the technology itself is actually paid for, meaning that it’s an additional subscription line that comes to us from providing these tools, these AI tools to our community.

But once we have more history with it, we’re going to be able to know what’s the best strategy around it. For now, I think that it creates it incentivizes sellers to have those models up. And I think that the contribution to their conversion is going to be noticeable, which will make the entire market base more efficient. And because it gives instant results and evolve AI, I think that this will also allow us to influence top of funnel even more, which is one of the areas where we’ll focus on.

Ofer Katz, President and CFO, Fiverr: And the in terms of the investment and the ForEx, so there is no material change in the way we invest throughout the year. I think there is some heavy lifting at the beginning of the year on the release of Go as you probably have seen a very exciting product that we have released yesterday. I think we’ll continue to invest in certain marketing in the most and best efficient as we have done before with our strong CRY. And lastly, on the Forex exchange, as the prices on fiber are based on U. S.

Dollar, there is no impact on the top line in terms of Forex. And we are well hedged in terms of the OpEx to cover for any material impact on the EBITDA as well.

Bernie MacTernan, Analyst, Needham and Company: Great. Thank you. Appreciate the color.

Conference Operator: Thank you. We’ll now take the next question. This is from Marvin Fong from BTIG. Please go ahead.

Jing Jin Chin, Investor Relations, Fiverr0: Good morning. Thanks for taking my questions and congratulations on the launch of Go. It’s a pretty exciting product. I’d actually like to drill down a little bit on what Offer was saying. It seems like if services is going to be 30% of your revenue, then you’re looking for very strong growth, something by my math around 45% next year.

I was just curious how much of that should we or could you break down how you think about the contribution from your value added services for fiscal twenty twenty five between ad products? And in particular, how much is the subscription revenue from FiverrGo impacting that outlook? And then just separately on the marketplace take rate, should we view that as being a stable in fiscal twenty twenty five? Are there any levers that you can pull to change that? Thanks a lot.

Ofer Katz, President and CFO, Fiverr: So, on the second part of the

Ofer Katz, President and CFO, Fiverr: question, yes, there are leverage we can pull, but the guidance must assume any such any change in the marketplace take place. In terms of the services revenue, I think we haven’t broke it beyond the services itself. There are multiple products that contribute to this line item all the way from seller plus, which is subscription to promoted gigs, which is ad advertising and the marketplace. We have a Kickstarter that goes to subscription. We have also the ad that applies for subscription as well.

And we have the Go that we just launched that we have some subscription as well. So, this is kind of the breakdown between subscription and ad services that apply for the 30% revenue.

Michal Kaufman, Founder and CEO, Fiverr: Got it. Thanks a lot, Alfred.

Conference Operator: Thank you. We’ll take our next question. This is from Andrew Boone from Citizens. Please go ahead.

Ron Josey, Analyst, Citi: Thanks so much for taking my questions. I wanted to ask on the services side. There’s certain characteristics that investors use in terms of like metafiling for the percentage of advertising as a percentage of GMV. Can you guys talk about that? Like how do we think about advertising and whether there’s a potential peak for what you guys are able to monetize the platform the advertising is?

And then secondly, as we think about fiber go and AI creating more of the actual work, can you help us understand kind of theoretically, how do you think about that as a deflationary aspect as technology is doing more of the work versus the freelancer? How do we think about that? And then clearly, you’re starting to monetize that product. As fiber go continues to improve, how do we think about fiber’s ability to take more of that aspect as your own software and AI models are helping freelancers do more? Thanks so much.

Ofer Katz, President and CFO, Fiverr: Sandy, first off of the question, the percentage of advertising or the room to expand, but definitely a lot of runway ahead of us. This product is just evolving over time. There is a lot of real estate that we haven’t monetized and ARPU improvement, which are undertaking. So, feel very confident and expect this product to extend.

Michal Kaufman, Founder and CEO, Fiverr: And on a question on Go, first of all, it’s very early to tell. But the idea of fiber Go is really that the talent that actually creates their model is basing this model on their entire world of creating. They need to continue creating to fine tune this model and create new models. There is no incentive for them to give it for a very cheap price. Plus, it is always connected with human work that is included in the order, where they define the price and the scope of editing that they add to anything that is generated.

So while it remains to be seen how they’re going to price it, what we think should happen is that because their work is involvement and their investment in the model is included that this would not put a meaningful pressure on pricing. Thank you.

Conference Operator: Thank you. We’ll now take our next question. This is from Josh Chan from UBS. Please go ahead.

Michal Kaufman, Founder and CEO, Fiverr: Hi, Mikhail. Thanks for taking my questions. I guess my first question is on the lag between SMB and the results of fiber. I guess as you are aware, some of the SMB sentiment has improved somewhat in the recent months. And so I was just wondering your thoughts about how that ultimately translates into fiber from a timing perspective.

And then my second question is on services revenue. Is there any notable seasonality within services? I’m not sure if AutoDS has a major Q4 weighting, but just some color on how services kind of waits through the year would be helpful. Thank you.

Ofer Katz, President and CFO, Fiverr: I think we have noted earlier, we haven’t identified or seen any sign that suggests a trend. There are some fluctuations throughout the week, but I think it’s too early for us to call for our trend of improvement in the S and P segment. And then on the seasonality, so the answer is pretty flat or straight line behavior over the year. There is no significant seasonality that we cannot.

Michal Kaufman, Founder and CEO, Fiverr: Great. Thank you.

Conference Operator: Thank you. We’ll now take our last question today. And this is from Rohit Kulkarni from ROTH. Please go ahead.

Jing Jin Chin, Investor Relations, Fiverr1: Hey, thanks for taking my questions. A couple, in this up market demand, clearly, strategy is working. Perhaps any more color you can provide on what are the categories of products and projects that you’re getting that are unlocking new verticals for you? And over the near term, any learnings from the last eighteen months that you can help kind of accelerate some of the growth that you’re seeing in upmarket demand? And second would be just on this freelancer equity program.

Any sounds very interesting and to incentivize freelancers, but perhaps talk about the genesis behind it, why now? And what do you hope to achieve from that? Thanks.

Ofer Katz, President and CFO, Fiverr: On the first part, as I mentioned earlier, I think that programming attack is getting a bigger piece of the cake. And I think this is driven by acquisition quality, but also product like dynamic matching, which is doing really well, as I mentioned earlier on the call.

Michal Kaufman, Founder and CEO, Fiverr: As to the question on the Freelancer Equity program, we’re very excited about this program and we’ve been wanting to do this for a while. This program is designed for top performers on the platform. And in our mind, those who are extremely loyal and are building meaningful businesses with us and helping us shape the future of work should have the option to own a piece of it. And obviously, we’re going to have the details of the plan announced in our F3 filing soon. It’s an industry first as a public company And we’re very excited about this and we know that our freelancers are extremely excited about it.

Conference Operator: Thank you. And there are no further questions. I will now hand back to the speakers for any closing comments.

Michal Kaufman, Founder and CEO, Fiverr: Thank you, everyone, for joining the call today. And thank you, Sarah, for moderating the call. I wish all of you a great day and hope to

Ofer Katz, President and CFO, Fiverr: see you soon.

Conference Operator: Thank you. This concludes today’s conference call. Thank you for participating and you may now disconnect.

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