Fiverr’s fourth-quarter earnings outcomes, launched Wednesday (Feb. 19), confirmed traction within the firm’s providers enterprise, which incorporates subscription-based revenues, cementing freelancers’ relationships with consumers over a number of months.
Nonetheless, a muted macro surroundings persists, as famous throughout an earnings name, seemingly trumping better-than-expected steerage.
A shareholder letter detailed that income got here in greater than had been guided for the fourth quarter, at $103.7 million, up 13.3%; steerage had appeared for a 9% to 12% acquire. Companies income soared by greater than 102% yr over yr to $30.1 million.
Income development within the present quarter is anticipated to speed up to a spread of 11% to 16% yr over yr, per the letter.
Traders despatched the shares decrease, nonetheless, by 7% in the beginning of buying and selling Wednesday, as EBITDA steerage was beneath estimates. And energetic consumers — the Fiverr purchasers that buy providers and contract with freelancers — had been down from final yr’s 4 million, now standing at 3.6 million. Spend per purchaser was up 9% yr on yr to $302, based on the letter.
“We’re additionally seeing extra new consumers coming with extra complicated undertaking wants in additional complicated classes,” the letter mentioned. “For instance, 11% of recent consumers in 2024 got here from the Programming and Tech vertical, in comparison with 7% 5 years in the past, and they’re spending rather more than new consumers in different verticals.”
Income Diversification
Fiverr CEO Micha Kaufman mentioned on the earnings name that the corporate’s newest outcomes had been “no small feat, particularly at a time when our complete trade is going through macro headwinds” and the place diversification of the enterprise throughout the providers phase has pushed development.
“A whole lot of hundreds of freelancers see Fiverr because the go-to platform to construct and develop their careers,” Kaufman mentioned in the course of the name.
With a nod to the evolving synthetic intelligence panorama, Kaufman pointed to the Tuesday (Feb. 18) launch of Fiverr Go, the corporate’s platform for AI instruments that he mentioned enable freelancers to develop into a “one-person manufacturing home.”
“The customized AI assistant on Fiverr Go can talk with potential purchasers when the freelancer is away or busy, deal with routine duties and supply actionable enterprise insights — successfully changing into the creator’s enterprise associate.”
Chief Monetary Officer Ofer Katz mentioned on the decision: “Whereas now we have but to see significant enhancements on the macro entrance by way of incentive sentiment of freelancer hiring demand, we’re capable of ship development catalyst by way of robust execution and enlargement of value-added merchandise… I consider we are kicking off 2025 with a stable monetary place and powerful enterprise momentum.”
“We’re additionally seeing bigger and extra complicated initiatives present strong development with GMV from a undertaking of over $500 rising 8% yr over yr in 2024 in comparison with 2023,” he mentioned in the course of the name. “Going into 2025, provided that market income is basically tied to GMV quantity, and now we have but to see indicators of macro enchancment, we count on that development of this income phase will proceed to be muted… Provided that macro rebound is a matter of when, not if, when it does rebound, we count on our market can be one of many first areas to expertise the uplift.”
Companies income will proceed to develop at a “wholesome double-digit fee” throughout 2025, he mentioned.
