Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $107.9 million, representing an 8% year-over-year growth [10] - Adjusted EBITDA for Q3 was $24.2 million, with an adjusted EBITDA margin of 22%, an improvement of 260 basis points from the previous year [10] - Free cash flow totaled $29.1 million in Q3, indicating strong cash flow generation [10] Business Line Data and Key Metrics Changes - Market-based revenue was $73.6 million, driven by 3.3 million active buyers and a spend per buyer of $330, with a market-based take rate of 27.6% [11] - Service revenue reached $34.3 million, showing a year-over-year growth of 40% and accounting for 32% of total revenue in Q3 [11] - Dynamic matching GMV grew 22% year over year, with 15% of job reads having a budget over $1,000 and an average order value of $2,200 [5] - Managed services GMV grew 65% year over year, with an average product size of $17,000 [5] Market Data and Key Metrics Changes - The programming and tech vertical grew 14% year over year in Q3, reflecting strong demand for AI-related services [6] - The overall market environment remains uneven, with mixed trends in labor markets and hiring recovery [7] Company Strategy and Development Direction - The company is focusing on up-market expansion and AI enablement as part of its growth strategy [7] - A strategic restructuring was announced to streamline operations and enhance focus on AI integration [7] - The transformation is anchored on four key pillars: strengthening go-to-market execution, building a next-gen AI-powered buyer experience, evolving matching technology, and investing in talent [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth strategy despite macroeconomic uncertainties, emphasizing long-term trends that are macro-agnostic [7] - The company aims to reach a long-term adjusted EBITDA margin of 25% by 2026 [13] Other Important Information - The company expects full-year 2025 revenue to be in the range of $428-$436 million, representing a year-over-year growth of 9%-11% [12] - Q4 2025 revenue is expected to be between $104.3 million and $112.3 million, reflecting a year-over-year growth of 1%-8% [13] Q&A Session Summary Question: How is the company reimagining the marketplace to be AI-first? - The CEO highlighted that AI allows for better matching of experts to projects, enhancing customer satisfaction and project complexity [16][18] Question: What are the key assumptions for Q4 revenue guidance? - The company indicated that service revenue will continue to grow, while marketplace revenue will depend on GMV trends, which may see a slight decline [19][20] Question: How does the reorganization affect the SMB opportunity? - The management does not assume a return of SMB demand in the near term, focusing instead on larger projects and clients [23][25] Question: What key investments are needed for 2026 to transform into an AI-first company? - Investments will focus on talent acquisition, infrastructure improvements, and enhancing market-based experiences [28][30] Question: What is the confidence level for returning to growth in the marketplace business in 2026? - The management expressed confidence that AI-driven products will lead to growth, with larger projects becoming a significant portion of the business [35][36] Question: How are other major categories benefiting from AI? - The programming and tech category is growing rapidly, along with digital marketing and video, as customers become more educated and precise in their needs [45][47]

Core Insights - Fiverr International Ltd. reported strong financial results for Q3 2025, highlighting a commitment to AI transformation and operational efficiency, with the highest-ever Adjusted EBITDA and margin for a quarter [2][6]. Financial Performance - Q3 2025 revenue reached $107.9 million, an increase of 8.3% year-over-year from $99.6 million in Q3 2024 [7]. - Marketplace revenue was $73.6 million, down 2.0% from $75.1 million in Q3 2024 [7]. - Services revenue grew significantly to $34.3 million, a 39.6% increase from $24.6 million in Q3 2024 [7]. - Adjusted EBITDA for Q3 2025 was $24.2 million, compared to $19.7 million in Q3 2024, with an Adjusted EBITDA margin of 22.4%, up from 19.7% [7][21]. Key Metrics - Annual active buyers as of September 30, 2025, were 3.3 million, down 11.7% from 3.7 million a year earlier [7]. - Annual spend per buyer increased to $330, up 11.7% from $295 in the previous year [7]. - The marketplace take rate for the twelve months ended September 30, 2025, was 27.6%, a slight decrease from 27.8% [7]. Future Outlook - The company provided guidance for Q4 2025 revenue between $104.3 million and $112.3 million, reflecting year-over-year growth of 1% to 8% [5]. - Full-year 2025 revenue is expected to be between $428 million and $436 million, indicating a growth of 9% to 11% [5]. - Continued investments in AI and upmarket services are anticipated to drive future growth [6][7].

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $108.6 million, representing a 15% year-over-year growth [14] - Adjusted EBITDA for Q2 was $21.4 million, with an adjusted EBITDA margin of 20%, an improvement of 80 basis points from the previous year [14] - Free cash flow totaled $25 million, up 21% year-over-year [14] Business Line Data and Key Metrics Changes - Marketplace revenue was $74.7 million, driven by 3.4 million active buyers and a spend per buyer of $318 [15] - Services revenue reached $34 million, representing a year-over-year growth of 8431% [16] - Over 50% of GMV on the Marketplace came from transactions over $200, indicating a shift towards larger, more complex projects [16] Market Data and Key Metrics Changes - Strong demand for AI-related services was noted, with categories such as AI agents and workflow automation experiencing five to tenfold growth over the past six months [6][75] - The company is seeing robust growth in key verticals such as programming and tech, digital marketing, and video animation [5][64] Company Strategy and Development Direction - The company is focused on leveraging AI to enhance its marketplace, with plans to integrate Fiverr's talent network into AI-driven workflows [9] - Fiverr aims to expand its value-added services and maintain a balanced approach between growth and profitability [15] - The company is committed to reaching a 25% adjusted EBITDA margin by 2027 and achieving a 40% CAGR in free cash generation for the three years ending in 2027 [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the structural tailwinds within the marketplace segment, particularly around AI and upmarket adoption, which are expected to offset broader economic headwinds [16] - The company reiterated its revenue and adjusted EBITDA guidance for the full year 2025, expecting revenue to be in the range of $425 million to $438 million [17] Other Important Information - The company is actively exploring strategic partnerships to enhance its AI capabilities and improve customer experiences [58] - Fiverr Go, an AI assistant for freelancers, has shown strong engagement and conversion uplift [12] Q&A Session Summary Question: What key investments are needed to unlock continued scaling of service revenue? - Management expects service revenue to continue growing at a healthy double-digit rate, driven by value-added services and synergies between AutoDS and Fiverr [23] Question: Can you elaborate on the managed services offering and the progress in upmarket strategy? - Managed services are part of the upmarket strategy, with over 50% of business coming from transactions over $200, indicating a shift towards more sophisticated customer needs [28] Question: How is the balance of supply and demand in the marketplace? - The company is in a good position regarding supply and demand, with AI-native freelancers enhancing service offerings [36] Question: What is the outlook for marketplace growth? - Management believes that efforts around AI and upmarket strategies will lead to growth, even without macroeconomic improvements [38] Question: How does AI impact entry-level jobs and demand for Fiverr services? - AI is elevating the capabilities of entry-level workers, allowing them to perform more complex tasks, which benefits Fiverr's service offerings [42] Question: Can you provide insights on the mix of recurring versus transactional revenue in services? - Services revenue is primarily from promoted gigs, Seller Plus, and AutoDS, with ongoing momentum in all areas [46] Question: What is the visibility on marketplace growth and the mix shift between complex and simple services? - Management is optimistic that the mix shift towards complex services will eventually lead to marketplace growth, despite current macroeconomic conditions [54]

Company Overview and Financial Performance - Fiverr's mission is to change how the world works together[11] - In 2024, Fiverr's revenue reached $391.5 million, with an adjusted EBITDA margin of 19% and GMV of $1.1 billion[12] - This is a significant increase from 2019, where revenue was $107.1 million, with an adjusted EBITDA margin of 16.8% and GMV of $293.5 million[12] Market Opportunity and Business Model - Fiverr estimates a $247 billion U S addressable market across creative, technical, and professional services[27] - The company operates with a marketplace take rate of 27.7% as of Q1 2025[96] - 68% of revenue in 2024 came from repeat buyers[63] Growth Strategies and Future Outlook - Strategic priorities include going upmarket, expanding services, and investing in AI to drive double-digit revenue growth in 2025[55] - The company is targeting a 25% adjusted EBITDA margin by 2027[78] - Fiverr aims to generate $300 million in cumulative free cash flow between 2025 and 2027, representing a 14% free cash flow CAGR from 2024 to 2027[78] Q1 2025 Financial Results - Marketplace revenue for Q1 2025 was $77.7 million with 3.536 million annual active buyers[96] - Services revenue for Q1 2025 was $29.5 million[96]

Core Insights - The freelance economy is rapidly evolving, with Upwork Inc. (UPWK) and Fiverr International (FVRR) at the forefront, each adopting distinct strategies to leverage AI and cater to enterprise clients [1][5] Upwork Overview - Upwork reported record first-quarter results for 2025, with revenues of $193 million, a 1% year-over-year increase, and adjusted EBITDA of $56 million, reflecting a 29% margin [6] - The company is transitioning to an AI-native platform, utilizing its in-house AI assistant, Uma, which has seen a 52% increase in user engagement and a 58% rise in proposal-writing usage [7] - Upwork has access to over 80,000 AI specialists, addressing the talent gap as 63% of employers report a lack of skilled personnel [8] - For 2025, Upwork reaffirmed its revenue target of $740-$760 million and raised its adjusted EBITDA guidance to $190-$200 million, with EPS forecasted at $1.14-$1.18 [10] Fiverr Overview - Fiverr's first-quarter 2025 revenues increased by 15% year-over-year to $107.2 million, with an adjusted EBITDA margin of 18% [11] - The classic marketplace revenue declined by 0.8% to $77.7 million, while service revenues surged by 94% to $29.5 million, now representing 27.5% of total revenues [12] - Fiverr is evolving into a full-service work platform, focusing on larger clients and enhanced tools like Fiverr Pro and Fiverr Go, which are designed to improve buyer-seller interactions [13][15] - The company anticipates full-year revenues between $425-$438 million, with adjusted EBITDA margins expected to reach 20% in 2025 [11] Comparative Analysis - Upwork is positioned as a leader in AI integration within the freelance market, while Fiverr is gaining traction in high-margin services but faces challenges with a shrinking active buyer base [19][20] - Upwork's focus on AI and operational strength makes it a more compelling investment choice, currently rated as a Zacks Rank 1 (Strong Buy), compared to Fiverr's Zacks Rank 3 (Hold) [21]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $107.2 million, up 15% year over year, accelerating from 30% year over year growth in Q4 2024 [15] - Adjusted EBITDA for Q1 was $19.4 million, representing an adjusted EBITDA margin of 18%, an improvement of 100 basis points from a year earlier [15] - Free cash flow totaled $27.4 million, up 31.6% year over year [15] Business Line Data and Key Metrics Changes - Marketplace revenue reached $77.7 million, driven by 3.5 million active buyers and a take rate of 27.7% [16] - Services revenue was $29.5 million, representing year over year growth of 94%, and accounted for 27.5% of total revenue in Q1 [18] Market Data and Key Metrics Changes - The overall demand for freelancing has been stable, with no direct exposure to tariffs [6] - The company has seen strong engagement for Fiverr Go, with over 6,000 sellers activated and over 200,000 buyers interacting with the product [11] Company Strategy and Development Direction - The company’s strategic priorities for 2025 include strengthening the marketplace by going upmarket, expanding value-added services, and investing in AI [7] - Fiverr Pro has been a key focus, with enhancements to product offerings aimed at driving buyer conversion and maximizing customer leads [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business for the remainder of the year, citing a stable demand environment and successful execution of strategic initiatives [6][19] - The company raised its full-year 2025 revenue guidance to a range of $425 million to $438 million, reflecting a year-over-year growth of 9% to 12% [19] Other Important Information - The Board authorized an additional $100 million for the stock repurchase program, indicating strong confidence in long-term opportunities [16] - The company is on track to reach a 25% adjusted EBITDA target by 2027 and aims for a 14% CAGR in free cash generation for the three years ending in 2027 [20] Q&A Session Summary Question: Insights on Fiverr Go and broader demand environment - Management highlighted that Fiverr Go is designed to enhance customer satisfaction and conversion, with strong initial results and plans for scaling across more categories [24][25] - The demand for freelancing remains stable, with Q1 showing better opportunities than in the past two years [29] Question: Dynamics for buyers using Fiverr Go - Buyers appreciate the always-on nature of Fiverr Go, which provides instant responses and enhances their confidence in decision-making [39] Question: Sustainability of services revenue growth - Management confirmed that services revenue growth is sustainable and expected to increase as a percentage of total revenue [46] Question: Impact of macroeconomic volatility on freelancing - Management noted that enterprises are increasingly seeking freelancers to complement their internal teams, especially during times of market volatility [54] Question: Sales and marketing opportunities in Q1 - The company capitalized on various opportunities across geographies and channels, which contributed to strong performance in Q1 [84] Question: Incentives for Fiverr Pro customers - Customers are incentivized to engage with Fiverr Pro through exclusive access to high-tier sellers and additional services that enhance their experience [85]