- Strong growth continued in Q2 2019 with revenue of $25.9
million, up 41% year over year
- Active buyers were 2.2 million, up 14% year over year
- Spend per buyer was $157, up 16% year over year
- Take rate was 26.4%, an increase of 170 basis points year over
year
- Significant improvement in operating leverage
- FY19 revenue is expected to grow 34%-37% year over year
Fiverr International Ltd. (NYSE: FVRR), the company that is
changing how the world works together, today reported financial
results for the second quarter ended June 30, 2019. 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.
“We are pleased to report strong results in our first quarter as
a public company, highlighted by 41% year over year revenue growth
along with solid growth in active buyers and spend per buyer,” said
Fiverr CEO Micha Kaufman. “Over the coming quarters and years, we
plan to execute on our strategy to drive sustainable growth, while
making steady progress on our path to profitability. Our results
demonstrate the power of our business model and we are heading into
the second half of the year with strong momentum, backed by
positive market trends for freelancers globally. We believe that
Fiverr’s technology and value to buyers and sellers allow us to
address a significant market opportunity and we have only begun to
scratch the surface of what we can accomplish.”
Ofer Katz, CFO of Fiverr, added, “We continued to grow our
active buyer base through consistent cohort behavior, efficient
performance marketing, and ongoing product improvement. The strong
growth in spend per buyer highlights our continued success in going
upmarket, and we continued to enjoy a robust take rate with
improving monetization. I’m very happy with our results this
quarter and even more excited for the expected growth ahead in the
second half of 2019 and for the coming years.”
Key Second Quarter 2019 Financial Results
- Revenue in the second quarter of 2019 was $25.9 million, an
increase of 41% year over year.
- Active buyers as of June 30, 2019 were 2.2 million, compared to
1.9 million as of June 30, 2018, an increase of 14% year over
year.
- Spend per buyer as of June 30, 2019 was $157, compared to $135
as of June 30, 2018, an increase of 16% year over year.
- Take rate for the twelve months ended June 30, 2019 was 26.4%,
compared to 24.7% for the twelve months ended June 30, 2018, an
increase of 170 basis points year over year.
- GAAP gross margin in the second quarter of 2019 was 79.5%, an
increase of 110 basis points from 78.4% in the second quarter of
2018.
- Non-GAAP gross margin in the second quarter of 2019 was 81.4%,
an increase of 150 basis points from 79.9% in the second quarter of
2018.
- GAAP net loss in the second quarter of 2019 was ($9.4) million,
or ($0.88) per share, compared to ($6.7) million, or ($1.03) per
share, in the second quarter of 2018. Non-GAAP net loss in the
second quarter of 2019 was ($4.9) million, or ($0.19) per share,
compared to ($5.7) million, or ($0.25) per share, in the second
quarter of 2018.
- Adjusted EBITDA in the second quarter of 2019 was ($4.9)
million, compared to ($5.6) million in the second quarter of 2018.
Adjusted EBITDA margin was (19.0%) in the second quarter of 2019,
an increase of 1,130 basis points from (30.3%) in the second
quarter of 2018.
Recent Business Highlights
- Continued category expansion and launched Fiverr’s first
industry dedicated store for gaming related digital services.
- Introduced Fiverr Studios late in July, a transformative
product that enables freelancers to collaborate and provide complex
offerings with cross-category deliverables.
- Executed on international expansion, with the launch of a
German language homepage, fiverr.de, and a number of digital and
out-of-home marketing campaigns that were adapted to the German
market, contributing to Germany growing significantly faster than
our overall marketplace.
Financial Outlook
Fiverr expects to capitalize on the significant growth of the
freelance economy and continue to deliver strong results throughout
2019 based on expanding to new categories, growing active buyers
and spend per buyer, achieving high efficiency on our marketing
initiatives and benefitting from high visibility driven by
consistent cohort spend behavior.
Q3 2019
FY 2019
Revenue
$25.5 - $26.5 million
$101.5 - $103.5 million
Year over year growth
30% - 35%
34% - 37%
Adjusted EBITDA(1)
($6.0) - ($5.0) million
($21.5) - ($20.5) million
(1) Adjusted EBITDA is a non-GAAP financial measure. See “Key
Performance Metrics and Non-GAAP Financial Measure” for additional
information.
Conference Call and Webcast Details
Fiverr’s management will host a conference call to discuss its
financial results today, Thursday, August 8, 2019 at 8:30a.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 (866) 270-1533, or
(412) 317-0797 for callers outside the United States, and mention
the passcode, “Fiverr.” A telephonic replay of the conference call
will be available until Thursday, August 15, 2019, beginning one
hour after the end of the conference call. To listen to the replay
please dial (877) 344-7529, or (412) 317-0088 for callers outside
the United States, and enter passcode 0132812.
About Fiverr
Fiverr's mission is to change how the world works together. The
Fiverr platform connects businesses of all sizes with freelancers
offering digital services in more than 250 categories, across 8
verticals including graphic design, digital marketing, programming,
video and animation. Since inception, the platform has served over
5.5 million businesses and has facilitated over 50 million
transactions. Fiverr's global community of freelancers spans across
more than 160 countries. We invite you to visit us at fiverr.com,
read our blog and follow us on Facebook, Twitter and Instagram.
Fiverr International Ltd.
CONSOLIDATED BALANCE
SHEETS
(In thousands)
June 30,
December 31,
2019
2018
(Unaudited)
(Audited)
Assets Current assets: Cash and cash equivalents
$
29,112
$
55,955
User funds
50,003
39,736
Bank deposits
20,000
-
Restricted deposit
310
327
Marketable securities
109,417
-
Other receivables
2,997
776
Total current assets
211,839
96,794
Property and equipment, net
5,309
5,143
Intangible assets, net
7,917
4,065
Goodwill
11,240
1,381
Restricted deposit
3,182
3,191
Other non-current assets
463
456
Total assets
$
239,950
$
111,030
Liabilities and Shareholders' Equity Current
liabilities: Trade payables
$
4,518
$
3,364
User accounts
50,003
39,736
Other account payables and accrued expenses
20,120
10,231
Current maturities of long-term loan
483
445
Total current liabilities
75,124
53,776
Long-term loan and other non-current liabilities
5,302
3,280
Shareholders' equity: Share capital and additional
paid-in capital
301,100
178,164
Accumulated deficit
(141,892
)
(123,592
)
Accumulated other comprehensive income (loss)
316
(598
)
Total shareholders' equity
159,524
53,974
Total liabilities and shareholders' equity
$
239,950
$
111,030
Fiverr International Ltd.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except loss per
share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
(Unaudited) (Unaudited) Revenue
$
25,912
$
18,399
$
49,675
$
35,145
Cost of revenue
5,305
3,978
10,241
7,811
Gross profit
20,607
14,421
39,434
27,334
Operating expenses: Research and development
8,457
6,436
16,073
12,569
Sales and marketing
15,852
11,690
31,228
25,388
General and administrative
5,621
2,888
9,977
12,440
Total operating expenses
29,930
21,014
57,278
50,397
Operating loss
(9,323
)
(6,593
)
(17,844
)
(23,063
)
Financial income (expenses), net
(10
)
(92
)
204
125
Loss before income taxes
(9,333
)
(6,685
)
(17,640
)
(22,938
)
Income taxes
(20
)
-
(26
)
-
Net loss
(9,353
)
(6,685
)
(17,666
)
(22,938
)
Deemed dividend to protected ordinary shareholders
-
-
(632
)
-
Net loss attributable to ordinary shareholders
(9,353
)
(6,685
)
(18,298
)
(22,938
)
Basic and diluted net loss per share attributable to ordinary
shareholders
$
(0.88
)
$
(1.03
)
$
(2.06
)
$
(3.54
)
Basic and diluted weighted average ordinary shares
10,664
6,494
8,868
6,482
Fiverr International Ltd.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
(Unaudited) (Unaudited) Operating
Activities Net loss
$
(9,353
)
$
(6,685
)
$
(17,666
)
$
(22,938
)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization
910
554
1,717
1,055
Stock-based compensation
2,216
366
3,962
7,618
Net loss (gain) from exchange rate fluctuations
116
44
63
(51
)
Changes in assets and liabilities: User funds
(1,942
)
-
(10,267
)
-
Other receivables
(44
)
(436
)
(1,291
)
(733
)
Trade payables
365
(1,671
)
876
(48
)
User accounts
1,942
267
10,267
6,518
Other account payables and accrued expenses
2,599
1,806
4,093
3,336
Non-current liabilities
(163
)
103
(105
)
184
Net cash used in operating activities
(3,354
)
(5,652
)
(8,351
)
(5,059
)
Investing Activities Acquisition of
business, net of cash acquired
-
-
(9,967
)
(2,676
)
Purchase of property and equipment
(282
)
(240
)
(459
)
(372
)
Capitalization of internal-use software
(221
)
(193
)
(324
)
(456
)
Other receivables and non-current assets
-
54
(122
)
(258
)
Bank deposits
(10,000
)
-
(20,000
)
-
Restricted deposit
-
(25
)
-
(60
)
Investment in marketable securities
(109,391
)
-
(109,391
)
-
Net cash used in investing activities
(119,894
)
(404
)
(140,263
)
(3,822
)
Financing Activities Proceeds from
exercise of options
485
73
541
150
Proceeds from initial public offering, net
117,362
-
117,362
-
Proceeds from issuance of protected ordinary shares, net
-
-
4,340
-
Payment of deferred issuance costs related to initial public
offering
-
-
(405
)
-
Repayment of long-term loan
(116
)
(106
)
(228
)
(216
)
Net cash provided by (used in) financing activities
117,731
(33
)
121,610
(66
)
Effect of exchange rate fluctuations on cash and cash
equivalents
(7
)
(149
)
161
(121
)
Decrease in cash and cash equivalents
(5,524
)
(6,238
)
(26,843
)
(9,068
)
Cash and cash equivalents at the beginning of period
34,636
25,036
55,955
27,866
Cash and cash equivalents at the end of period
$
29,112
$
18,798
$
29,112
$
18,798
Fiverr International Ltd.
KEY PERFORMANCE
METRICS
Twelve Months Ended
June 30,
2019
2018
(Unaudited) Annual active buyers (in thousands)
2,175
1,908
Annual spend per buyer ($)
$
157
$
135
Fiverr International Ltd.
RECONCILIATION OF GAAP TO
NON-GAAP GROSS PROFIT
(In thousands, except margin
data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
GAAP gross profit
$
20,607
$
14,421
$
39,434
$
27,334
Add: Share-based compensation
28
3
50
5
Depreciation and amortization
450
274
856
529
Non-GAAP gross profit
$
21,085
$
14,698
$
40,340
$
27,868
Non-GAAP gross margin
81.4
%
79.9
%
81.2
%
79.3
%
Fiverr International Ltd.
RECONCILIATION OF GAAP NET
LOSS TO ADJUSTED EBITDA
(In thousands, except margin
data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
GAAP net loss
$
(9,353
)
$
(6,685
)
$
(17,666
)
$
(22,938
)
Add: Financial expenses (income), net
10
92
(204
)
(125
)
Income taxes
20
-
26
-
Depreciation and amortization
910
554
1,717
1,055
Share-based compensation
2,216
366
3,962
7,618
Other initial public offering related expenses
416
-
416
-
Contingent consideration revaluation and acquisition related costs
868
94
1,446
1,373
Adjusted EBITDA
$
(4,913
)
$
(5,579
)
$
(10,303
)
$
(13,017
)
Adjusted EBITDA margin
(19.0
%)
(30.3
%)
(20.7
%)
(37.0
%)
Fiverr International Ltd.
RECONCILIATION OF GAAP TO
NON-GAAP NET LOSS AND NET LOSS PER SHARE
(In thousands, except loss per
share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
GAAP net loss attributable to ordinary shareholders
$
(9,353
)
$
(6,685
)
$
(18,298
)
$
(22,938
)
Add: Deemed dividend to protected ordinary shareholders
-
-
632
-
Depreciation and amortization
910
554
1,717
1,055
Share-based compensation
2,216
366
3,962
7,618
Other initial public offering related expenses
416
-
416
-
Contingent consideration revaluation and acquisition related costs
868
94
1,446
1,373
Non-GAAP net loss
(4,943
)
(5,671
)
(10,125
)
(12,892
)
GAAP weighted average number of ordinary shares outstanding - basic
and diluted
10,664
6,494
8,868
6,482
Add: Additional weighted average shares giving effect to exchange
of protected ordinary shares at the beginning of the period
15,960
16,144
17,266
16,134
Non-GAAP basic and diluted weighted average ordinary shares
26,624
22,638
26,134
22,616
Non-GAAP basic and diluted net loss per share attributable to
ordinary shareholders
$
(0.19
)
$
(0.25
)
$
(0.39
)
$
(0.57
)
Note: Non-GAAP basic and diluted net loss
per ordinary share for the three and six months ended June 30, 2019
were calculated based on ordinary shares outstanding after
accounting for the exchange of Fiverr's then outstanding protected
ordinary shares into 18.7 million ordinary shares as though such
event had occurred at the beginning of the periods. In the same
calculation for the three and six months ended June 30, 2018, we
accounted for the exchange of Fiverr’s then outstanding protected
ordinary shares into 16.1 million ordinary shares at the beginning
of the periods.
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 net loss and Non-GAAP net loss per share as well
as operating metrics, including GMV, spend per buyer, active buyers
and take rate.
We define GMV or Gross Merchandise Value as the total value of
transactions through our platforms, 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 on Fiverr 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 to evaluate our
capacity to and capital expenditures and expand our business.
Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP gross profit,
Non-GAAP gross margin, Non-GAAP net loss and Non-GAAP net loss per
share as well as operating metrics, including GMV, 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 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.
We are not able to provide a reconciliation of Adjusted EBITDA
guidance for the third quarter of 2019 or the fiscal year 2019 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, the gain or loss on disposal of property and
equipment, gain or loss on revaluation of contingent consideration,
and impairment of intangible assets, as applicable without
unreasonable efforts, and these items could significantly impact,
either individually or in the aggregate, net loss in the
future.
See the tables of above regarding reconciliations of these
non-GAAP measures to the most directly comparable GAAP measure.
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
second quarter of 2019, the third quarter of 2019, and the fiscal
year ended December 31, 2019, 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 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; 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; and the
other important factors discussed under the caption “Risk Factors”
in our final prospectus under Rule 424(b) filed with the U.S.
Securities and Exchange Commission (“SEC”) on June 12, 2019 in
connection with our initial public offering 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/20190808005225/en/
Investor Relations: Jinjin Qian investors@fiverr.com
Press: Siobhan Aalders press@fiverr.com
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