- Delivered strong results in Q3’22. A strong focus and
our continued financial discipline allowed us to deliver revenue at
the high end of expectations and Adjusted EBITDA above
expectations.
- Accelerated pace to long-term Adjusted EBITDA margin.
Since we streamlined our workforce in July, we continued to
scrutinize operating costs in terms of both marketing discipline
and operational efficiency. Our Adjusted EBITDA margin of 7.9%
represented a 250 bps expansion from the previous quarter and
demonstrated our commitment to accelerating our pace to our
long-term Adjusted EBITDA margin target of 25%.
- Continued expansion of Promoted Gigs and Seller Plus.
Promoted Gigs continued to expand audiences and coverage; while
Seller Plus introduced two-tier pricing in order to widen the
adoption. Both programs contributed to the continued expansion of
take rate to 30%.
- Fiverr Business expands benefits to include project
management. The newly introduced Project Partner among Fiverr
Business buyers is the latest value-added service that enables
seamless experience and execution of large projects on our
marketplace.
Fiverr International Ltd. (NYSE: FVRR), the company that is
revolutionizing how the world works together, today reported
financial results for the third quarter of 2022. Complete operating
results and management commentary can be found in the Company’s
shareholder letter, which is posted to its investor relations
website at investors.fiverr.com.
“I am proud that our business has remained strong in a slowing
macro economy. Our focus on driving the flywheel of our marketplace
and investing in going upmarket is paying off as over 4.2 million
businesses continue to make Fiverr the go-to place for digital
services,” said Micha Kaufman, founder and CEO of Fiverr. “The
secular trend of moving toward freelancing, and the opportunity of
using technology to upend the old-school industry remains intact.
And with our scale, differentiated solution, efficient go-to-market
strategy and strong financial profile, I believe no one is better
positioned than us to lead the change in the future of work.”
Ofer Katz, Fiverr’s President and CFO, added, “We delivered
strong results in Q3, with improved efficiency across top-of-funnel
and operationally. Our decision to realign our focus and cost
structure earlier in the year put Fiverr’s Adjusted EBITDA on an
accelerated growth trajectory. Our Adjusted EBITDA is indicative of
the strong cash flow we generate, and together with a healthy
balance sheet, we are in a strong financial position to navigate
near term macroeconomic volatility and continue focusing on
long-term value creation.”
Third Quarter 2022 Financial Highlights
- Revenue in the third quarter of 2022 was $82.5 million, an
increase of 11% year over year.
- Active buyers as of September 30, 2022 grew to 4.2 million,
compared to 4.1 million as of September 30, 2021, an increase of 3%
year over year.
- Spend per buyer as of September 30, 2022 reached $262, compared
to $234 as of September 30, 2021, an increase of 12% year over
year.
- Take rate for the period ended September 30, 2022 was 30%, up
from 28.4% for the period ended September 30, 2021, an increase of
160 basis points year over year.
- GAAP gross margin in the third quarter of 2022 was 81.1%, a
decrease of 220 basis points from 83.3% in the third quarter of
2021. Non-GAAP gross margin1 in the third quarter of 2022 was
82.8%, a decrease of 160 basis points from 84.4% in the third
quarter of 2021.
- GAAP net loss in the third quarter of 2022 was ($11.4) million,
or ($0.31) basic and diluted net loss per share, compared to
($14.3) million, or ($0.39) basic and diluted net loss per share,
in the third quarter of 2021. Non-GAAP net income1 in the third
quarter of 2022 was $8.6 million, or $0.23 basic non-GAAP net
income per share and $0.21 diluted non-GAAP net income per share,
compared to $0.21 basic non-GAAP net income per share and $0.19
diluted non-GAAP net income per share, in the third quarter of
2021.
- Adjusted EBITDA1 in the third quarter of 2022 was $6.6 million,
compared to $7.3 million in the third quarter of 2021. Adjusted
EBITDA margin1 was 7.9% in the third quarter of 2022, compared to
9.8% in the third quarter of 2021.
Financial Outlook
Our Q4’22 outlook and full year 2022 guidance reflects the
recent trends on our marketplace and is largely consistent with our
prior expectations.
Q4 2022
FY 2022
Revenue
$79.8 - $85.8 million
$334.0 - $340.0
million
y/y growth
0%-8% y/y growth
12%-14% y/y growth
Adjusted EBITDA(1)
$7.0 - $8.0 million
$22.0 - $23.0 million
______________________
1This is a non-GAAP financial measure. See “Key Performance
Metrics and Non-GAAP Financial Measures” and reconciliation tables
at the end of this release for additional information regarding the
non-GAAP metrics used in this release.
Conference Call and Webcast Details
Fiverr’s management will host a conference call to discuss its
financial results on Wednesday, November 9, 2022, at 8:30 a.m.
Eastern Time. A live webcast of the call can be accessed from
Fiverr’s Investor Relations website. An archived version will be
available on the website after the call. Investors and analysts can
participate in the conference call by dialing +1 (844) 200-6205, or
+1 (929) 526-1599 for callers outside the United States, and enter
the passcode, 988418.
About Fiverr
Fiverr’s mission is to revolutionize how the world works
together. We exist to democratize access to talent and to provide
talent with access to opportunities so anyone can grow their
business, brand, or dreams. From small businesses to Fortune 500,
over 4 million customers worldwide worked with freelance talent on
Fiverr in the past year, ensuring their workforces remain flexible,
adaptive, and agile. With Fiverr’s Talent Cloud, companies can
easily scale their teams from a talent pool of skilled
professionals from over 160 countries across more than 550
categories, ranging from programming to 3D design, digital
marketing to content creation, from video animation to
architecture.
Don’t get left behind - come be a part of the future of work by
visiting fiverr.com, read our blog, and follow us on Twitter,
Instagram, and Facebook.
CONSOLIDATED BALANCE
SHEETS
(in thousands)
September 30,
December 31,
2022
2021
(Unaudited)
(Audited)
Assets Current assets: Cash and cash equivalents
$
152,936
$
71,151
Restricted cash
-
2,919
Marketable securities
222,630
118,150
User funds
145,297
127,713
Bank deposits
95,000
134,000
Restricted deposit
1,172
35
Other receivables
18,545
14,250
Total current assets
635,580
468,218
Marketable securities
169,291
317,524
Property and equipment, net
6,034
6,555
Operating lease right of use asset, net
9,893
11,727
Intangible assets, net
16,305
49,221
Goodwill
77,270
77,270
Other non-current assets
2,072
1,055
Total assets
$
916,445
$
931,570
Liabilities and Shareholders' Equity Current
liabilities: Trade payables
$
5,814
$
8,699
User accounts
134,965
118,616
Deferred revenue
11,616
12,145
Other account payables and accrued expenses
58,011
44,260
Operating lease liabilities, net
3,014
3,055
Current maturities of long-term loan
-
2,269
Total current liabilities
213,420
189,044
Long-term liabilities: Convertible notes
452,131
372,076
Operating lease liabilities
7,143
10,483
Long-term loan and other non-current liabilities
1,019
13,099
Total long-term liabilities
460,293
395,658
Total liabilities
$
673,713
$
584,702
Shareholders' equity: Share capital and additional
paid-in capital
545,752
585,548
Accumulated deficit
(286,740
)
(237,585
)
Accumulated other comprehensive income (loss)
(16,280
)
(1,095
)
Total shareholders' equity
242,732
346,868
Total liabilities and shareholders' equity
$
916,445
$
931,570
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except share and
per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
(Unaudited)
(Unaudited)
Revenue
$
82,541
$
74,324
$
254,236
$
217,907
Cost of revenue
15,631
12,436
50,134
36,510
Gross profit
66,910
61,888
204,102
181,397
Operating expenses: Research and development
22,938
20,490
71,235
57,469
Sales and marketing
41,959
38,298
134,151
119,121
General and administrative
14,489
12,395
43,399
36,271
Impairment of intangible assets
-
-
27,629
-
Total operating expenses
79,386
71,183
276,414
212,861
Operating loss
(12,476
)
(9,295
)
(72,312
)
(31,464
)
Financial income (expenses), net
1,162
(4,959
)
2,233
(13,877
)
Loss before income taxes
(11,314
)
(14,254
)
(70,079
)
(45,341
)
Income taxes
(36
)
(95
)
(109
)
(151
)
Net loss attributable to ordinary shareholders
$
(11,350
)
$
(14,349
)
$
(70,188
)
$
(45,492
)
Basic and diluted net loss per share attributable to ordinary
shareholders
$
(0.31
)
$
(0.39
)
$
(1.91
)
$
(1.27
)
Basic and diluted weighted average ordinary shares
37,205,489
36,512,243
36,843,383
35,959,243
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
(Unaudited)
(Unaudited)
Operating Activities Net loss
(11,350
)
(14,349
)
(70,188
)
(45,492
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
1,938
1,413
8,190
4,104
Loss from disposal of property and equipment
(9
)
(32
)
(21
)
(32
)
Amortization of premium and discount of marketable securities, net
1,368
2,135
5,052
5,616
Amortization of discount and issuance costs of convertible notes
632
5,040
1,894
14,917
Shared-based compensation
17,612
15,104
54,729
38,761
Net Gain from exchange rate fluctuations
12
26
183
328
Impairment of intangible assets
-
-
27,629
-
Changes in assets and liabilities: User funds
(2,722
)
(5,133
)
(17,584
)
(28,762
)
Operating lease ROU assets and liabilities, net
(117
)
86
(1,547
)
(171
)
Other receivables
(2,402
)
(1,064
)
(4,837
)
(2,331
)
Trade payables
1,873
362
(2,884
)
615
Deferred revenue
(675
)
738
(529
)
3,133
User accounts
2,523
4,448
16,349
26,144
Account payable, accrued expenses and other
(1,994
)
968
9,184
13,704
Revaluation of contingent consideration
(945
)
-
(4,787
)
-
Payment of contingent consideration
-
-
(504
)
(507
)
Non-current liabilities
(38
)
-
178
(235
)
Net cash provided by operating activities
5,706
9,742
20,507
29,792
Investing Activities Investment in marketable
securities
-
(69,107
)
(90,007
)
(235,938
)
Proceeds from sale of marketable securities
34,175
65,325
117,521
144,320
Bank and restricted deposits
15,000
(5,000
)
37,863
(44,000
)
Acquisition of business, net of cash acquired
-
-
-
(9,288
)
Acquisition of intangible asset
-
-
(175
)
-
Purchase of property and equipment
(280
)
(654
)
(1,111
)
(1,354
)
Capitalization of internal-use software and other
(116
)
(250
)
(1,019
)
(572
)
Other non-current assets
(100
)
-
(1,178
)
-
Net cash provided by (used in) investing activities
48,679
(9,686
)
61,894
(146,832
)
Financing Activities Payment of deferred issuance
costs related to follow on offering
-
-
-
(381
)
Payment of convertible notes deferred issuance costs
-
-
-
(34
)
Payment of contingent consideration
-
-
(1,105
)
(1,105
)
Proceeds from exercise of share options
597
915
2,308
7,266
Tax withholding in connection with employees' options exercises and
vested RSUs
(156
)
(1,732
)
(2,286
)
(10,361
)
Repayment of long-term loan
-
(143
)
(2,269
)
(416
)
Net cash provided by (used in) financing activities
441
(960
)
(3,352
)
(5,031
)
Effect of exchange rate fluctuations on cash and cash
equivalents
(12
)
(177
)
(183
)
(318
)
Increase/(Decrease) in cash, cash equivalents and restricted
cash
54,814
(1,081
)
78,866
(122,389
)
Cash, cash equivalents and restricted cash at the beginning of
period
98,122
146,722
74,070
268,030
Cash and cash equivalents at the end of period
152,936
145,641
152,936
145,641
KEY PERFORMANCE METRICS
Three Months Ended
September 30,
2022
2021
Annual active buyers (in thousands)
4,249
4,121
Annual spend per buyer ($)
$
262
$
234
RECONCILIATION OF GAAP TO
NON-GAAP GROSS PROFIT
(in thousands, except gross
margin data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
(Unaudited)
(Unaudited)
GAAP gross profit
$
66,910
$
61,888
$
204,102
$
181,397
Add: Share-based compensation and other
477
372
1,955
989
Depreciation and amortization
922
454
4,895
1,331
Non-GAAP gross profit
$
68,309
$
62,714
$
210,952
$
183,717
Non-GAAP gross margin
82.8
%
84.4
%
83.0
%
84.3
%
RECONCILIATION OF GAAP NET
LOSS TO NON-GAAP NET INCOME AND NET INCOME PER SHARE
(in thousands, except share and
per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
(Unaudited)
(Unaudited)
GAAP net loss attributable to ordinary shareholders
$
(11,350
)
$
(14,349
)
$
(70,188
)
$
(45,492
)
Add: Depreciation and amortization
$
1,938
$
1,413
$
8,190
$
4,104
Share-based compensation
17,612
15,104
54,729
38,761
Impairment of intangible assets
-
-
27,629
-
Contingent consideration revaluation, acquisition related costs and
other
(520
)
55
(3,210
)
2,576
Convertible notes amortization of discount and issuance costs
632
5,040
1,894
14,917
Exchange rate (gain)/loss, net
316
400
(932
)
377
Non-GAAP net income
$
8,628
$
7,663
$
18,112
$
15,243
Weighted average number of ordinary shares - basic
37,205,489
36,512,243
36,843,383
35,959,243
Non-GAAP basic net income per share attributable to ordinary
shareholders
$
0.23
$
0.21
$
0.49
$
0.42
Weighted average number of ordinary shares - diluted
40,731,833
40,779,521
40,708,818
40,625,294
Non-GAAP diluted net income per share attributable to ordinary
shareholders
$
0.21
$
0.19
$
0.44
$
0.38
RECONCILIATION OF GAAP NET
LOSS TO ADJUSTED EBITDA
(in thousands, except adjusted
EBITDA margin data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
GAAP net loss
$
(11,350
)
$
(14,349
)
$
(70,188
)
$
(45,492
)
Add: Financial (income) expenses, net
$
(1,162
)
$
4,959
$
(2,233
)
$
13,877
Income taxes
36
95
109
151
Depreciation and amortization
1,938
1,413
8,190
4,104
Share-based compensation
17,612
15,104
54,729
38,761
Impairment of intangible assets
-
-
27,629
-
Contingent consideration revaluation, acquisition related costs and
other
(520
)
55
(3,210
)
2,576
Adjusted EBITDA
$
6,554
$
7,277
$
15,026
$
13,977
Adjusted EBITDA margin
7.9
%
9.8
%
5.9
%
6.4
%
RECONCILIATION OF GAAP TO
NON-GAAP OPERATING EXPENSES
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2022
2021
2022
2021
GAAP research and development
$
22,938
20,490
$
71,235
57,469
Less: Share-based compensation
5,811
5,247
18,537
14,258
Depreciation and amortization
200
205
603
582
Non-GAAP research and development
$
16,927
$
15,038
$
52,095
$
42,629
GAAP sales and marketing
$
41,959
$
38,298
$
134,151
$
119,121
Less: Share-based compensation
4,151
3,765
13,156
9,810
Depreciation and amortization
713
695
2,394
2,020
Contingent consideration revaluation, acquisition related costs and
other
-
402
-
1,097
Non-GAAP sales and marketing
$
37,095
$
33,436
$
118,601
$
106,194
GAAP general and administrative
$
14,489
$
12,395
$
43,399
$
36,271
Less: Share-based compensation
7,173
5,720
21,081
13,704
Depreciation and amortization
103
59
298
171
Contingent consideration revaluation, acquisition related costs and
other
(520
)
(347
)
(3,210
)
1,479
Non-GAAP general and administrative
$
7,733
$
6,963
$
25,230
$
20,917
Key Performance
Metrics and Non-GAAP Financial Measures
This release includes certain key performance metrics and
financial measures not based on GAAP, including Adjusted EBITDA,
Adjusted EBITDA margin, Non-GAAP gross profit, Non-GAAP gross
margin, Non-GAAP operating expenses, Non-GAAP net income (loss) and
Non-GAAP net income (loss) per share as well as operating metrics,
including GMV, active buyers, spend per buyer and take rate. Some
amounts in this release may not total due to rounding. All
percentages have been calculated using unrounded amounts.
We define GMV or Gross Merchandise Value as the total value of
transactions ordered through our platform, excluding value added
tax, goods and services tax, service chargebacks and refunds.
Active buyers on any given date is defined as buyers who have
ordered a Gig or other services on our platform within the last
12-month period, irrespective of cancellations. Spend per buyer on
any given date is calculated by dividing our GMV within the last
12-month period by the number of active buyers as of such date.
Take rate is revenue for any such period divided by GMV for the
same period.
Management and our board of directors use these metrics as
supplemental measures of our performance that is not required by,
or presented in accordance with GAAP because they assist us in
comparing our operating performance on a consistent basis, as they
remove the impact of items not directly resulting from our core
operations. We also use these metrics for planning purposes,
including the preparation of our internal annual operating budget
and financial projections, to evaluate the performance and
effectiveness of our strategic initiatives and capital expenditures
and to evaluate our capacity to expand our business.
Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP gross profit,
Non-GAAP gross margin, Non-GAAP operating expenses, Non-GAAP net
income (loss) and Non-GAAP net income (loss) per share as well as
operating metrics, including GMV, active buyers, spend per buyer
and take rate should not be considered in isolation, as an
alternative to, or superior to net loss, revenue, cash flows or
other performance measure derived in accordance with GAAP. These
metrics are frequently used by analysts, investors and other
interested parties to evaluate companies in our industry.
Management believes that the presentation of non-GAAP metrics is an
appropriate measure of operating performance because they eliminate
the impact of expenses that do not relate directly to the
performance of our underlying business.
These non-GAAP metrics should not be construed as an inference
that our future results will be unaffected by unusual or other
items. Additionally, Adjusted EBITDA and other non-GAAP metrics
used herein are not intended to be a measure of free cash flow for
management's discretionary use, as they do not reflect our tax
payments and certain other cash costs that may recur in the future,
including, among other things, cash requirements for costs to
replace assets being depreciated and amortized. Management
compensates for these limitations by relying on our GAAP results in
addition to using Adjusted EBITDA and other non-GAAP metrics as
supplemental measures of our performance. Our measure of Adjusted
EBITDA and other non-GAAP metrics used herein is not necessarily
comparable to similarly titled captions of other companies due to
different methods of calculation.
See the tables above regarding reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP
measures.
We are not able to provide a reconciliation of Adjusted EBITDA
guidance for the fourth quarter of 2022, and the fiscal year ending
December 31, 2022 to net loss, the comparable GAAP measure, because
certain items that are excluded from Adjusted EBITDA cannot be
reasonably predicted or are not in our control. In particular, we
are unable to forecast the timing or magnitude of share based
compensation, amortization of intangible assets, impairment of
intangible assets, income or loss on revaluation of contingent
consideration, other acquisition-related costs, convertible notes
amortization of discount and issuance costs and exchange rate
income or loss, as applicable without unreasonable efforts, and
these items could significantly impact, either individually or in
the aggregate, GAAP measures in the future.
Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements contained in this release that do not relate to
matters of historical fact should be considered forward-looking
statements, including, without limitation, statements regarding our
expected financial performance and operational performance for the
fourth quarter of 2022, the fiscal year ending December 31, 2022,
our expected future Adjusted EBITDA margin, our business plans and
strategy, as well as statements that include the words “expect,”
“intend,” “plan,” “believe,” “project,” “forecast,” “estimate,”
“may,” “should,” “anticipate” and similar statements of a future or
forward-looking nature. These forward-looking statements are based
on management’s current expectations. These statements are neither
promises nor guarantees, but involve known and unknown risks,
uncertainties and other important factors that may cause actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements, including, but not
limited to: our ability to successfully implement our business plan
during a global economic downturn that may impact the demand for
our services or have a material adverse impact on our and our
business partners’ financial condition and results of operations;
our ability to attract and retain a large community of buyers and
freelancers; our ability to achieve profitability; our ability to
maintain and enhance our brand; our dependence on the continued
growth and expansion of the market for freelancers and the services
they offer; our ability to maintain user engagement on our website
and to maintain and improve the quality of our platform; our
dependence on the interoperability of our platform with mobile
operating systems that we do not control; our ability and the
ability of third parties to protect our users’ personal or other
data from a security breach and to comply with laws and regulations
relating to consumer data privacy and data protection; our ability
to detect errors, defects or disruptions in our platform; our
ability to comply with the terms of underlying licenses of open
source software components on our platform; our ability to expand
into markets outside the United States and our ability to manage
the business and economic risks of international expansion and
operations; our ability to achieve desired operating margins; our
compliance with a wide variety of U.S. and international laws and
regulations; our ability to protect our intellectual property
rights and to successfully halt the operations of copycat websites
or misappropriation of data; our reliance on Amazon Web Services;
our ability to mitigate payment and fraud risks; our dependence on
relationships with payment partners, banks and disbursement
partners; our dependence on our senior management and our ability
to attract new talent; the impact of currency exchange rate
fluctuations on our results of operations; impacts resulting from
inflationary pressures and geopolitical turmoil, including the war
in Ukraine; and the other important factors discussed under the
caption “Risk Factors” in our annual report on Form 20-F filed with
the U.S. Securities and Exchange Commission (“SEC”) on February 17,
2022, as such factors may be updated from time to time in our other
filings with the SEC, which are accessible on the SEC’s website at
www.sec.gov. In addition, we operate in a very competitive and
rapidly changing environment. New risks emerge from time to time.
It is not possible for our management to predict all risks, nor can
we assess the impact of all factors on its business or the extent
to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements that we may make. In light of these
risks, uncertainties and assumptions, the forward-looking events
and circumstances discussed in this release are inherently
uncertain and may not occur, and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. Accordingly, you should not rely upon
forward-looking statements as predictions of future events. In
addition, the forward-looking statements made in this release
relate only to events or information as of the date on which the
statements are made in this release. Except as required by law, we
undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made or to reflect the occurrence of unanticipated events.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221108006168/en/
Investor Relations: Jinjin Qian investors@fiverr.com
Press: Siobhan Aalders press@fiverr.com
Fiverr (NYSE:FVRR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Fiverr (NYSE:FVRR)
Historical Stock Chart
From Jul 2023 to Jul 2024