Fiverr Announces First Quarter 2020 Results

Fiverr International Ltd. (NYSE: FVRR), the company that is changing how the world works together, today reported financial results for the first quarter of 2020 ended March 31, 2020. Complete operating results and management commentary can be found by accessing the Company’s shareholder letter posted to its investor relations website at investors.fiverr.com.

“I am immensely proud of the team at Fiverr and what they have achieved in the first quarter, especially under the backdrop of a global pandemic that has impacted the world in the last few months.” said Fiverr founder and CEO Micha Kaufman. “Together, we delivered a number of COVID-19 related initiatives to help our community, introduced Promoted Gigs ahead of schedule, launched full localization in Germany, Spain and France, and our marketing strategy continued to power strong growth with agility and efficiency. Our growth and financial results reflect the strength and resilience of our marketplace even in a challenging global environment.”

Ofer Katz, Fiverr CFO, added, “We are very happy with Q1 results with strong topline growth, strong gross margin and significant improvement in EBITDA. Built on these achievements, the visibility inherent to our business model, and the tailwind we experienced in recent weeks, we are providing strong guidance for the second quarter of 2020 and revised our full year outlook upward from prior guidance.”

First Quarter 2020 Financial Highlights

• Revenue in the first quarter of 2020 was $34.2 million, an increase of 44% year over year.
• Active buyers as of March 31, 2020 grew to 2.5 million, compared to 2.1 million as of March 31, 2019, an increase of 17% year over year.
• Spend per buyer as of March 31, 2020 reached $177, compared to $150 as of March 31, 2019, an increase of 18% year over year.
• Take rate for the year ended March 31, 2020 was 27.1%, up from 26.2% for the year ended March 31, 2019, an increase of 90 basis points year over year.
• GAAP gross margin in the first quarter of 2020 was 80.0%, an increase of 80 basis points from 79.2% in the first quarter of 2019. Non-GAAP gross margin in the first quarter of 2020 was 81.6%, an increase of 60 basis points from 81.0% in the first quarter of 2019.
• GAAP net loss in the first quarter of 2020 was ($6.2) million, or ($0.19) per share, compared to ($8.3) million, or ($1.26) per share, in the first quarter of 2019. Non-GAAP net loss in the first quarter of 2020 was ($2.6) million, or ($0.08) per share, compared to ($5.2) million, or ($0.20) per share, in the first quarter of 2019.
• Adjusted EBITDA¹ in the first quarter of 2020 improved to ($2.9) million, compared to ($5.4) million in the first quarter of 2019. Adjusted EBITDA margin was (8.4%) in the first quarter of 2020, an improvement of 1,430 basis points from (22.7%) in the first quarter of 2019.

Recent Business Highlights

• Our business has continued to gain significant momentum since we released our shareholder letter on April 8. The accelerating growth trends were observed across all annual cohorts and across all verticals in April.
• During Q1’20, we launched over 30 new categories and added depth in certain popular areas such as online lessons and offline-to-online services.
• We successfully launched Promoted Gigs on April 5 and reactions from our seller community has been overwhelmingly positive with over 80% adoption rate and nearly 100% retention rate. We are seeing strong click-through rates and conversion rates from buyers on those ad placements as well.
• We launched our French website, fr.fiverr.com, and rolled out localized user generated content powered by machine translation on all non-English websites. Year to date, revenue from non-English speaking countries contributed to 32% of total revenue, up from approximately 30% in 2019.

Financial Outlook

Given the strong momentum we have seen in recent weeks, we are raising our full year 2020 revenue and EBITDA expectations from prior guidance. However, given these unprecedented times and impact of COVID-19 on economies globally, we will update business trends as they evolve. We are also accelerating our timing to profitability and target turning EBITDA positive in the second half of 2021. We expect that our strong cash position, together with revenue growth momentum and path to profitability, will allow us to continue to make long-term investments to drive growth. Our outlook for the second quarter and full year 2020 is as follows: