FVRR - Earnings call 3 2023 | Fiverr International Ltd.

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Operator

Good day, and thank you for standing by. Welcome to the Fiverr Q3 Fiscal 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brian Lang, Investor Relations Manager. Please go ahead.

Brian Lang

good and operator, you, morning, everyone. Thank for for the you joining September us call conference earnings Fiverr's third XXXX. on XX, Thank quarter ended that

Founder Katz, on CEO; me the today Micha Joining call and and President Kaufman, Ofer CFO. are and

revise and to discussion to current of to that materially can some A Before most could you this XX-F other cause as expectations risk forward-looking from statements recent and and factors them. that important risk Fiverr's make update and the filings are statements of today, remind the forward-looking section under that actual we differ assumptions be may with in would these we Form Fiverr based during factors the results obligation I found statements any start, or SEC. assumes like no call, on of our

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

Micha Kaufman

margin in and per EBITDA strong a base of our us was market you, to end our our we of to growth push allowed factors drove Thank drive up for market strong stabilize came you guidance grow Both spikes continue strong revenue Brian. continues at COVID the Good adjusted The number morning, quarter spend EBITDA at as range. cohorts another growth top and performance. pace. accelerate thank buyer us. A from has the QX revenue everyone, joining the and to and our expansion. core

our of rate in over contributed to healthy Finally, value-added XX%. growth services our take

our are reflected with focus, is global discipline, resilience underscore our business and delivery external the the executed we in as was and making These model team of to changes. with extremely of which All us thrive continued adjusted of well This, and of progress EBITDA together power spaces. the the this results expense margin. of to strong to solidify freelancing the allows our adapt mark Fiverr position strength leader the

know, As ago. through you attack month all Israel horrific a went a

atop has been priority first help and families employees, community their Fiverr Our deadly in our impacted. to support those the that

front while being will up, As on are some the their of ensuring they employees are our lines. we they what called are need, families get

quickly As execute continue and core level our so a we consistency, to and focus in already laid strategy highest pace we strengthen this place. push up our out to Since year we company, are to that's focus adopting hybrid base accelerate that to at our and our thanks operation market of operate the market.

are a also project can recruiting is Fiverr expert there our forward such streamlines continue existing Fiverr with among of the into for matched What further, and those just scoped far from experience improve as talent It's that substantial customer are working a when and with talent barriers pinpoints finding the freelancers. partially But to the the Neo, products a we why leveraging Neo address our global issues. Freon help and a quite down will cutting-edge to that We more the the is Pro done when needs have been To more the The more brain Fiverr requires an informed we the more [ best experience engines so only accurately talent, power. technology choices, Enterprise is existing to make Neo production buyers step we time decision. recruiter like data scope customers incorporating convenience knocking human the projects complex unique personalized to our unmatched Fiverr ] coordination their planning imagine LLM service and wild. a a only impact and multiple quality allow the to serve many anywhere a processing will and delivery. customers and speed. of define and results that vision pulled see the show scope prevent to access of customers short matching have the as provide before express natural project much language, This Fiverr as on Neo in from We list advance provide faster is database. with service or We algorithm between client the created positive their project headache a such on access in know that which We and fulfilling choices freelance shopping and synthesize the more and uneasiness the needs Fiverr's model else. match project customers to projects. great already difficulty transaction entire from thousands often early gets so utilizing

the side, through more suite help higher-end When customer through difficult function of accommodate expert. market say, need carry business, a our out use to typical domain they market-based a a business order. targeting well-defined media we a a On are scope, expert to comes product without the a expanding and funnel the that sometimes wallet cases our social Fiverr expanding to product execute share solutions sometimes customers, are specific

Fiverr project engagement engage project in. otherwise freelance of an looking app. a Sometimes continuously cases, can need of for mobile This tools. they at an are enterprise time. both freelancing the the and of evolving of us creating project. address map, and to that complexity and open-ended with scope the enterprise, be beginning This talent ongoing payment they allows building an complex milestones goals larger ongoing extended detailed to where update tasks with clients budget of businesses pool stuck with have Freelance In a period a the say, is for management for comes manage road vaguely Through scope Fiverr might

to newly larger projects. seeing service. We've the its separate for are service many last range management partner planning offering the Since among utilizing capabilities project significantly Pro, businesses. fulfill help is business the great of who popular introduced project include and up we've utilizing traction planning management well. and we use further Fiverr year, scoping expanded planning project need The a customers to launch offering to services option project staffing, found and project project seen in most with cater Finally, we customers the as capabilities, wider a end customers to the full have that

this the their developments over flywheel level There to can see, of that our on to you able I'll tremendous cater we been taking Fiverr and As in year. at of expand our will years, and business a these to customer next opportunities should the financial to a to potential new share lot products are of turn ahead. customers call with is who marketplace we With base exciting build needs. their with the grow us that highlights. that, build our walk Leveraging there the us you be range and for the have through years services wallet wider and our Ofer now

Ofer Katz

$XX.X as in our morning, strong results cohort, everyone. Thank of well We value-added growth by of another our efforts quarter guidance was at as you, were EBITA million seller resilience our the margin. our or EBITDA driven $XX.X and delivered upmarket year-over-year in representing growth Both end recent Micha, services. XX.X% good Revenue of a million, range. of adjusted the top XX.X%. was Adjusted

quarter row, efficiencies. our improving For have second to achieved operational thanks also in the ongoing profitability, our a we GAAP efforts in

well set at strategy this we demonstrated the execution impact the as strong our the year, the team of of as the business of our strength All the of beginning model. of

active QX. year-over-year a buyer were to annual increase from $X.X million per as improved Our buyer up at $X $XXX, X% and spend

drive solution our meaningful to to per as buyer the premium ]. towards onboard higher This [ use more effort progress buyer higher Fiverr. evolve business continues customers continues helped to Fiverr make accelerated pace of Our budget base to increase we quality, marketplace, demographies certified spend our and our as partners to

and continue performance in maintain efficiency to economics We marketing. strong unit our

On over years, slightly Xx. TROI our longer-term CAC X and over for X healthy X quarter, months. Xx to This very remains exits value stable over performance remains years basis, marketing at at for a our lifetime

invest value as on our and push We focus and we our efforts forward to buyers. as possible higher expect efficiently as continue investment upmarket to

as rate Our QX representing increased sellers. improved seller points take and of Gigs to we monetization XX.X%, Promoted basis of expansion a XXX year-over-year

a Gigs, year our to ago. continue introduction Promoted launched We expand model and our placement while ad for the sellers from we that X-tier pricing optimize benefited of

Seller the of end We Plus doubled than to reached that from report are more subscribers XX,XXX now excited last. have

to for their take help to improving our the rate grow able are value them additional to freelancers, that we businesses. develop Our tools provide and we continue signifies

and has primarily created the after onset in in Now the we in sellers guidance. turning some marketplace, quarter. the weeks already headwind buyers experienced our this volatility In region. the immediate to This revenue volatility of to wall, countries a from

While of remainder we this risk that. it subsided, risk for remains, the incorporated has some of and of have volatility again our increasing into the outlook the

X% our for growth representing to full XXXX, guidance such, the million, we As range of to $XXX X%. in of year-over-year year of a revenue maintaining are the million $XXX

the range at quarter raising guidance to million, uncertainty for increased of $XX.X million, to the are adjusted margin the to midpoint. of fourth XX.X% EBITDA XX%, million representing a growth $XX.X to This an revenue adjusted EBITDA be year. reflecting implies the We X% of $XX million $XX the remainder representing year-over-year of

as million, business continue market-leading EBITDA midpoint few now conditions strongest that, confident and remain said, intact. fourth We of just the in XX% the business a call a expect $XX.X million adjusted turn to past have to focus through navigated how over the quarter. we series our ability at and thesis an long-term our we'll EBITDA margin to adjusted for are With operator strong questions. of the with representing our for disciplined we years, macro the position of executing guidance in of the That $XX.X

Operator

of [Operator question the first Josey from line Our from Citi. Instructions] Ron Great. comes

Ronald Josey

to all you over my all thinking And if remiss say first about of events. given the team I'd wasn't and the out thing we're the of be mouth there

despite just love more neo all really going we talked operations would hear on subsided things perspective, that revenue start. how you insights all. Fiverr Neo Any there an cannot just from this, again, speed. And And about headwind be are rollouts then continue to helpful. the to since you perspective. think so And Ofer, about gain a from would the

bit if you're seeing Micha, the map of would to us what can so and road the you wins about some early about talk a just And little great. there more be

Micha Kaufman

X. So all, we've the have Israel point, in is the And seen X since out think I is of subsided. region, business for what volatility called data some this in October example, we have weakness at that October the sellers X seen in first seen weeks what an we of events as since first their mostly

as this with So now, pretty see of right how on that region. we being uncertainty evolve element things stabilized depending but in some will factor

more neo, seeing very In are that is we're with able of a a what Fiverr and very from the product, accurate we usage repeat we're to very trying but of terms pleased that we're wanted young which XXX,XXX do levels, engagement experience and Obviously, satisfaction rollout. users we're very, to seeing is the provide higher basically And product. product. beginning matches, over happy the have their of with and which we're what the

is as we build lot what And a technologies. this we're a hybrid there's of doing of learning product. So really

us. are them developed of Some being by

we're have partnered the which the companies developing this with most to putting Some leading the of shelf, off that are And maximum. LLM, us. are

large a this and technology customers. to performance them own lot our these think our but to a we're of find is optimized provide And positive. experience extremely getting for developing again, are scale systems a I not lot yet the that we feedback high of smooth of very ways from

Operator

comes the JPMorgan. question Douglas Anmuth of next line Our from from

Douglas Anmuth

course, of while of want you at questions. Two all Ron's just thoughts Fiverr. to And I about echo thinking

expand you about seeing the that on if the compared about and think you're availability marketplace? progress us kind Pro good and there you and And how Plus, of differently? talk customers platform quantify can you you of Any that secondly, the using really Just as you take increased just there's perhaps make in understand then is to are especially Seller more rate. there. to spending And Promoted around some Fiverr continue can to way a the how help continue Gigs to opportunity way headroom

Micha Kaufman

embedded Fiverr Pro is way number tackle to need different of built for needs. the we've a is One Essentially, really the talent.

So with have portfolio experience clients people existing and the notable and of more that work it. that have better a comes

So our using are product quality by clients that this centric. are, definition,

using it. reason is why they're that of So one the

added we've of but value offering However, before, that, features. that top a love features as think on And comes extending that -- these a we well. I spoken about we're being keep customer we've of pro this number with they

So do on to you, team projects. the to to you done to of getting someone project have ability run management, have the more if for require ability to project budget manager work sophisticated to platform, the to a projects actually the there's types the a an those option manage do

are So they're or experienced They also freelancers are product and using by and customers need this definition, larger more therefore, those that spending retaining better. needs. agencies, more of

As for second question the rate. on take

So and In been it's adding Plus took said for another. them. headroom years steadily essentially, product opening and ago continue growing the mentioned Ofer of see the we And we've think one is public. get one how we the to And do basically, exactly what question it in that statement, X I has company is really is growth. since which had we we going that the we've since this launched is what to said every Listings has to is Promoted Seller then, been happen. growing. rate take is we

we investing the more more the these that gains opportunity these to continue do it, we So from that there essentially, remains offerings. and we we And the message products. see expanding believe is better get

Operator

question Jason of the Helfstein Oppenheimer. line Our next from comes from

Jason Helfstein

everyone support of is roll sending like, I thinking and One factors, over of the us X right? I guess, Can you again, just help mean, And got off. you've COVID there. understand, kind

with of SMBs. is a up the moving -- then business. that? SMB the you making seeing the of mean, seen the us market. you've I we'd non-SMB there some is just maybe side? kind understand the third mean, of on all at And we're do progress is if in you're just second economy weakness general help The kind I love in just And some the are broke point, the you of where But kind out bottom think we way

Micha Kaufman

in And worse, numbers entertaining less. but or we're if acquired see the cohorts, increasing is this said acquiring better. up it their very is a ago, pretty the market that factors. What strategy, we economy, many now office. has correct in we enter we've great the of being growth being not not that is of At different around back new change cohorts list you meaning to as to these than to is any out. the we we why different you follow becoming the ago. customers is we're as are quarters lapped becoming -- and general it impacts a also macro cores COVID haven't which that much those you're Meaning, that going we today are who environment a acquire with of weakness and The macro been called challenged which SMBs us the seeing investing think work, steady, steps result people major as I the you remote making pretty a will year this can had call follow seen era are And effect portion. point,

they And more in Now which is point us where then much is much, XX% lifetime to purchase their behavior spend first when they the different. their about join massive.

also these of is average. has it's per with what to it our buyer with But spend and we're customers. Some multiple find thanks engage which we Fiverr doing how Pro, a than

to fact step tremendous seeing haven't well. a when come. It in as the believe in we will any forward, market make spend the And opportunities just really growth. that seen per those for start we buyer is the far. to we're so us allowed have yet we that that change has this So recovering, and trends material we're will reiterating But

Operator

the from Goldman comes Sheridan Sachs. question of next line Eric from Our

Eric Sheridan

business on When you balance following a of of in year you growth, margins do to basis. of lot key about in very environment continuing think it you looking rising the demand about signals of solid side. very environment margin a stimulate produce turning need incrementals to signals going what be on and maybe of elements thinking made for investing to terms some one investments it on you're back the as about to the side Jason. versus Maybe to forward, progress think incremental margins of turn on in demand cost How on and stable that on growth and a to the consistent you see investments investments the possibly the this made

Micha Kaufman

So essentially, reiterate a again, business. I our want to approach as

businesses see to strategy to again, in you keep Right time more of of anyone, resisting shareholders to the have. going the cap that the macro, why for And can the of Right essentially, us which over profile growth We long in ratios LTV good that. such that simple, dynamics when now ROI. on we've a as the long-term the down which we less mind it's we is now, sustainable growth theoretically of in very the and option. way right profitability businesses And small short doubled our And efficiency sentiment the value. been the cohorts right? manage is can and and well and we're this because machine XX. don't that why actually more the now, are not which and extremely company, optimizing a actually and maximizing spend businesses, on is temptation even businesses, the it doubling works. seems not see and term, that the path to would shareholder a bear businesses I pushing growing can though is is where very down So doing we're the up marketing the It's we we're growth midsized get efficient that serve for invest we And think the you of rule smaller micro of that on hurt, putting growth there. that in

Ofer Katz

And what are to continue ahead I margin day. I of just us, getting was have to we And we think think think to Micha path. day sunny a and that improve said, EBITDA margin there. I this long-term and augment rainy a proven is a in plan that the There

Operator

Our next question Matt Farrell comes from Sandler. line Piper the of from

Matthew Farrell

getting would The second Could the question high first end you us end to of provide provide QX know happen assumptions wider than range that just but you to I you're for parts hear my given is for to range is, get uncertainty guidance not commentary of strategic hinted range? would quarter, through the to seeing. the what quantitative or priorities think the a about to walk to and next love much you of one, the the And you normally of any low the the XXXX the business. how of various and year, you're going on across some kind

Ofer Katz

I of the part seeing first think we've next the the in guide weeks. guidance, quarter. few we the weeks on assumption that the will this And first the volatility the retain in on -- been the few of into risk based on we noted that volatility

So And adjusted seeing headwind the plan that what way. create that, we been based might on based sure the increase volatility of the are and investors other the that that we get operating might will full range has accordingly. it of be picture to on make it be the kind uncertainty,

strategic next -- In of I'll uncertainty let way early profile XXXX. has numbers we still about And to the the even to go we year. And through because obviously of go. terms Micha we XXXX wider speak a

Micha Kaufman

specific well. a on priorities paying to when things next of would off years throughout doing have been I been XXXX, what for say lot comes few the that we've there's it year. And So a

comments, focus. for on upmarket continuing move is of target previous us. this at center So strategic least changes, environment going a is macro a And my the until macro given and

out AI us get The faster. better makes other as to integration, customers more but to they're a can move one call product I faster, lives do what the and that and efficient, in both internally trying of our team is make our it how also

we're On landscape as as the catalog so professionalism changes. extremely same pretty important is areas of new note, much expansion the many seeing appear

and skills International is important. the expansion expand to add to the so we is categories and And continuing catalog the that ensure one. another catalog necessary

an has been we're I been have playbook we've that generally And in been doubling faster the growing we've XXXX of where we're down, or organically successful opportunities, think consistently much both would playbooks And that very front. developing seeing the regions growth and think average market looking just investment. lastly, ongoing inorganically. and for -- the paying the Team than been base. I off, call I is growth excellence

Operator

question comes the of Our Kunal from next Madhukar line UBS. from

Kunal Madhukar

the Promoted rate far and how Neo, Two, the on your market rate, a volatility you And up towards of focus understand, to in as you side, if can given in take terms take or increasing impacts I do relates you Seller One could. global us on think so it adoption that the going revenue the help are of Plus? then Gigs company.

kind supply demand is areas? And the the areas? across seller the or of just the so And specific specific it Or in side, on is volatile similarly, is in globe? affected globe is it across

Micha Kaufman

if question understand So rates. about I take the

is I it exceptions. after been we've earlier, is said quarter quarter there as no still upside. And As with proving sustainable

and Seller called programs, Promoted Gigs keep after are growing out Plus, they quarter. You quarter growing both and

Neo, correct. them of like East, in shrinking by well.In think with of as global Gigs don't obviously, And So the before, and is ways essentially, I'm seeing that some of being I seen our the obviously, technologies. as the and question Ukraine and revenue, a or and we've it second Middle now the what's become company, about that see result connection impacted there's volatility activities, same sure on or volatile. new a we're don't we're regions integrating but new to product terms Promoted within we not solutions And the

very time. of sometimes periods And short it's

this slightly been This called out. is most has it's subsided. And of why that said sometimes it we longer. And we

putting this a of by into is hard to forecast definition, events. would It are dynamic how evolve, anything. is and since bit why wars cautious However, we're really this

Operator

JMP Securities. Boone from the comes next Our of from line Andrew question

Andrew Boone

it almost rates, point trailing X understood X up quarters. a that's and XX-month I last in the take metric, On stepped that

figures significant you the as in up there 'XX? have is anything disclose but plateauing a rate in can And at up XQ then terms Or the last we in from catches so forward? the think that the we'll months just how here, of to do step we're we couple do trailing as it guys And it's take we how play and do of quarters? see over that XX XQ? about that increase Meaning, going

Ofer Katz

we I programs -- are Seller rate the is in Promoted think over mentioned a and more Those more the we by Plus. double that mentioned of is we which of than Gigs Seller few driven the remarks, take now. for had end roster. prepared number different Micha Plus are the subscribers, earlier that quarters X than that expanding subscribers XX,XXX have

So good this thing retention. I very the on a program, think both of

On a promoted run expand there the different to Plus I Gigs on Seller think now mobile. Seller We different different those X further pricing. we is the Plus, that because Promoted deals, And open gigs is offerings, X room. and of programs into plan just the

So marketplace there and the is growing, monetize the it again is which few why skills the retention more value assist in and the more there's and expand assets their adoption plan for we to is quarters. to monetize to better rate and and seller steady time, next to over us

Andrew Boone

marketing brand specifically. to wanted I about ask then And

how macro You guys do given that has new trended component marketing the about launch marketing how campaign, just and environment. brand more of we difficult and think just as U.S. a sales a

Micha Kaufman

accurate between many not competitive. brand an We're performance mostly providing marketing. for breakdown we, reasons, and So

what long-term we're hand-in-hand with where However, doing around just one as is we're this the that invest. performance. in world, investment and goes evidence the not to area definitely an It's in continuing a U.S.,

the performance new it's between in of a brand on color. that brand and and down the that market, -- little depending that why interest to us. we defines the this gives new So bit I brand the supports Trends performance. we really this hope how us, supports areas the of funnel for performance. is supports And categories break enter,

Operator

Marvin BTIG. from Fong from comes the of question next Our line

Marvin Fong

down Question, of in guess, big you how to take -- tougher is Andrew XX this But do here instance, the of So on and sort we I the on we Or any their rate, be times, on trailing that quarter bidding perhaps of kind of pile services jump of value-added things would doubling just kind see economic is up it was of interesting. Do single of business. much Promoted should for thoughts Gigs, there on any this for observed, investing cyclicality in perhaps the months. that? think prices freelancers are like nature?

Micha Kaufman

positive, the simple the makes times. I money continue It time. many So in positive. it's it I'll hope we impact from answer. bad times it's a And this they using is over since answer. positive they economical it's as It more of And for matter it. long it as disconnected very, addresses because that, Promoted have will is -- ROI is in ways, it Gigs times. an The doesn't program launched sellers. give if very good or

Marvin Fong

but guess, you And this my a speak you be would then to give just of know interested related lob characterization AI guess about -- measurable talk the GMV? whole, maybe AI become that question taken of you've anything less business? follow-up, that as let's just specific, kind of I'll a us won't of pretty I call. I categories in And Could on last these lot great. And that call growth Any a I thing part launched are year? it, in, the a to here. the Has

Micha Kaufman

the It and next our in can product. the on also introduce. has categories that impact address work both AI things think impact year fact pretty of how impact about also how this we did I an we incredible positive in -- allows the efficiency So that us we do to

specific the So these category But buyer breakdown. seeing what again, growing. categories, categories think these into continue side, we're I we're we've introduced not getting on

of the as really and them the the could of subsided year customers be of we're some in that right lot looking developing and and that surrounded a with beginning now, height it's our well. the AI, that think developed are I AI for killer applications

seeing types skills market continue on are growth, but So pop these new we up in to that that, investing the Fiverr where areas continue not the ensure side to base. the that but we be addressed of are definitely catalog just going

Marvin Fong

to I just said the didn't to as on shift short doing be guys just AI. about want side from sell are guess you less talk when mean clear, [indiscernible] Yes, I've I AI, had I questions

all that. So had. for thanks I That's

Operator

of line final question from Our from comes ROTH MKM. the Kulkarni Rohit

Rohit Kulkarni

a And resilience of that direction. guess, the a Part kudos big your subscriptions, they're skinning Internet for marketplaces the you advertising cap demonstrated One, are team a and as take kind developed. Two times. level these to in questions. again, and big I and here. with you've just of clearly through well picture of the picture, there But rate different in probably pun

to We penetration of seen XX%, subscription users. XX% active have up

We hear goes take what penetration are the the volume where more XX% this multiple marketplace in of would to you that have rate puts I love of kind And advertising much global looking to subscription significant perhaps and because that on takes metrics of questions back to at of up around guess penetration kind now your and on into Fiverr's internally are evolve having those marketplace. Fiverr? call. seen right to advertising of at thoughts

now last is question. over important it over And doing to or differently what how months tactically X, months? next then versus it the one so? X So you then is buyers that's right probably platform grow on you're speaking, the for that And the tactically X

Micha Kaufman

the is I question, compared they component the than know of higher far that products are first the where expectation and say comparison bases lower that promoted you evolved from on when than able this the rate is important much the make Meaning the you in in unreasonable. ours. your growing. to that follow transactional would being majority of to be to their than take of the you match promoted promoted much where the And higher tiny would component these market would is also component, marketplaces continue makeup following: far, you take are to ours. would their rate is if component as is then It being notice if that transactional is of revenues, that First, that other is to the So the still

that, for between they've so So those said ratio as -- more grow to explanation room this growing has obviously offerings having X the far. there's been some the

growth. buyers terms company, we platform, are of are on growing growth delivering on said, of as importance focused I've our and In a the we

it Now the quantity lot there's of do market the pretty to to. and environment means for believe quality. is And we providing everything dramatically in we're across quality. doesn't segments opportunity going tremendous less us. and I've of the continue a economy said, we will the as our And when want indicator we more think It And quantity increasing as would market. more, the said, do on see this the and per in with very economy, that to that. spend buyer is is we're spend look our an has you on if in this Again, that product per that at shift, the this balance of don't I to customers. all environment, the focused like much growth to focus quality you marketing the mean But we're that opportunities and on far and buyer, optimizing see

Operator

I would the conference now over remarks. back to closing like turn for management to

Brian Lang

joined Have much everyone call all Thank for who the better great today's us call you, and I'm and more to peaceful of moderating a wishing today. JP, times. day.

Operator

for call. Thank participating. you conference today's concludes This

You may disconnect. now

Fiverr International (FVRR) 9 Nov 232023 Q3 Earnings call transcript