Fiverr Active Buyers Surge 17 Percent

Fiverr reported earnings results that showed continued traction in its core freelancer marketplace, while management pointed to new artificial intelligence (AI)-powered products and international expansion as key drivers moving forward.

In terms of headline numbers, revenues of $29.5 million beat consensus by just under $1 million, and were up 42.6 percent. Non-GAAP EPS of 8 cents was better than analyst expectations by about three pennies.

Drilling down into the data, active buyers were up 17 percent to 2.4 million.

In supplemental materials released by the company through a shareholder’s letter, the take rate was 26.7 percent and up 100 basis points year on year. Spend per buyer was up 17 percent to $170.

Repeat buyers were 58 percent of revenue on the core freelancer marketplace.

High-value buyers, defined as those with annual spend per buyer above $500, continued to grow, said the company, and now represent more than 53 percent of core marketplace revenues.

The company said it added 100 new categories across 2019.

In remarks on the Wednesday (Feb. 19) earnings call with analysts, CEO Micha Kaufman said the company has launched its first two localized sites, for the German and Spanish markets.

“We are also going to start optimizing localized marketing to become more efficient and effective in driving local adoption. Localization is a long-term investment for us, and we are super-excited about the potential market opportunities beyond the U.S. user base,” the executive said.

He added that the majority of the company’s 2.4 million active buyers are entrepreneurs and very small companies, with 15 employees or fewer.

“There are over 30 million SMBs in the U.S. alone, so we are barely scratching the surface,” said Kaufman.

The company also intends to move “upmarket” to reach the next tier of users, which for Fiverr means companies of as many as 500 users.

Future technology roadmaps for Fiverr include investing in personalization and recommendation engines. Management said on the earnings call that the firm has made progress on promoted listings, with a beta rollout slated for April of this year.

“Optimizing the system of promoted listings is a journey and it will take a few good quarters to get it right,” Kaufman told analysts.

Delving into the take rate itself, CFO Ofer Katz said that of the 26.7 percent figure, 25 percent is charged on marketplace transactions, and the remainder comes from Fiverr Learn and ClearVoice.

Management also said on the conference call that the content marketing platform is growing at a faster rate than overall company growth.

Kaufman also pointed to other initiatives and offerings such as Logo Maker that “enables a more of a do-it-yourself through the usage of our AI, so it takes human design. But it gives access to this design through AI, which allows customers to customize these logos for their needs really quickly.”

In a nod to market dynamics, “the global freelancing market is huge, and we are still in the early days of this market transformation,” Fiverr’s shareholder letter said. “The vast majority of freelancing still happens offline.”