Fiverr International Ltd. Q3 FY2024 earnings call

• Successfully executed strategy to go upmarket, expand value-added services, and deliver AI-powered experiences, leading to higher quality buyer base, robust spend per buyer growth, and strong take rate expansion. • Built towards a comprehensive work platform with AI assistants, new search experience with Neo, Dynamic Matching, and infrastructure for distributing software tools. • Fiverr Pro is a premium offering driving better conversion, engagement, and retention among high lifetime value buyers. • AutoDS acquisition contributed to take rate expansion, and tools like Promoted Gigs and Seller Plus enhance value-added services.

In the third quarter, revenue was $99.6 million, up 8% year-over-year. Adjusted EBITDA was $19.7 million with an adjusted EBITDA margin of 19.7%. Spend per buyer was $296 in Q3, representing 9% year-over-year growth. Take rate for Q3 was 33.9%, a year-over-year improvement of 260 basis points. The revenue contribution is driven by various factors including growth in value-added services and expansion in the top-of-funnel high-value buyers.

• Raised full-year 2024 revenue guidance to $388 million to $390 million, representing 7% to 8% year-over-year growth. • Adjusted EBITDA for full-year 2024 is expected to be in the range of $73 million to $75 million. • Q4 2024 revenue guidance is $100.2 million to $102.2 million, representing 9% to 12% year-over-year growth. • Adjusted EBITDA for Q4 is expected to be $19.5 million to $21.5 million.

• Macro conditions with the entire professional staffing industry down double-digit year-over-year and overall SMB sentiment historically low. • Potential fluctuations in trends due to seasonality and upcoming elections which might create volatility in performance.

Q: Ron Josey asked about demand trends stabilization and product strategy to retain buyers.

A: Micha Kaufman said there was slight stabilization post June, July, August, and products built are eliminating offline work frictions to retain and grow higher spend buyers.

Q: Bernie McTernan asked about revenue acceleration and dynamic matching metrics.

A: Micha Kaufman said growth is offsetting macro negatives, and dynamic matching shows positive early signs with focus on eliminating offline work inefficiencies.

Q: Doug Anmuth asked about AutoDS contribution and loyalty programs.

A: Micha Kaufman said AutoDS is contributing to take rate and loyalty programs encourage engagement and retention.

Q: Jason Helfstein asked about long-term take rate.

A: Ofer Katz said take rate has room to expand with existing and new product expansions.

Q: Brad Erickson asked about marketing spend and AutoDS cost.

A: Micha Kaufman said marketing is focused on high-value buyers, and Ofer Katz mentioned AutoDS deal details are not disclosed but has cash flow components.

Q: Marvin Fong asked about impact of new products and Q4 seasonality.

A: Micha Kaufman said new products are catering to specific needs and Ofer Katz said they have visibility to guide based on previous quarter and pipeline.

Q: Rohit Kulkarni asked about hiring plans and take rate expansion.

A: Micha Kaufman said hiring is disciplined, and take rate expansion is result of consistent work.

Q: Josh Chan asked about take rate guidance and AutoDS seasonality.

A: Micha Kaufman said take rate guidance is from product growth including AutoDS, and AutoDS has seasonality but contribution is small.

Q: Andrew Boone asked about Fiverr's vision and COVID cohorts.

A: Micha Kaufman said vision has competitive aspects and newer cohorts are performing better than COVID cohorts due to focus on high-value buyers.