- Consistent execution throughout 2019 drove a strong finish to
the year with Q4 revenue growth of 43% y/y, exceeding the top end
of our guidance and accelerating for the second consecutive
quarter
- Both active buyers and spend per buyer accelerated to 17% y/y
during the fourth quarter along with continued improvement in take
rate to 26.7%
- Rolled out two localized websites in German and Spanish - the
first time we enabled our buyers to complete a transaction in a
non-English environment
- Successfully launched Fiverr Logo Maker that brings the power
of artificial intelligence to Fiverr’s best creative talents
- Celebrated the 300 category milestone and opened new industry
stores in Influencer, Real Estate and Podcasting
- Initiating strong guidance for 2020 with 30-32% revenue growth
and continued progress towards profitability
Fiverr International Ltd. (NYSE: FVRR), the company that is
changing how the world works together, today reported financial
results for the fourth quarter and full year ended December 31,
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.
“2019 was a landmark year for Fiverr as we completed a
successful IPO, expanded the Fiverr ecosystem with new products,
increased our international reach, and most importantly, continued
our extraordinary growth momentum and march towards profitability,”
said Fiverr CEO Micha Kaufman. “As global businesses continue to
embrace the digital workforce as part of their growth strategy, we
believe our Service-as-a-Product model and unique product offerings
are helping to accelerate that change.”
Ofer Katz, Fiverr CFO, added, “The fourth quarter marked another
quarter of growth across all of our key metrics driven by
consistent cohort behavior and improved marketing efficiency.
Fiverr’s strong growth across all metrics proves our strategy of
going upmarket, product innovation and pursuing investments across
the globe are succeeding and we look forward to another great year
ahead.”
Fourth Quarter 2019 Financial Highlights
- Revenue in the fourth quarter of 2019 was $29.5 million, an
increase of 43% year over year.
- Active buyers as of December 31, 2019 grew to 2.4 million,
compared to 2.0 million as of December 31, 2018, an increase of 17%
year over year.
- Spend per buyer as of December 31, 2019 reached $170, compared
to $145 as of December 31, 2018, an increase of 17% year over
year.
- Take rate for the year ended December 31, 2019 was 26.7%, up
from 25.7% for the year ended December 31, 2018, an increase of 100
basis points year over year.
- GAAP gross margin in the fourth quarter of 2019 was 79.3%, a
decrease of 130 basis points from 80.6% in the fourth quarter of
2018. Non-GAAP gross margin in the fourth quarter of 2019 was
80.8%, a decrease of 130 basis points from 82.1% in the fourth
quarter of 2018.
- GAAP net loss in the fourth quarter of 2019 was ($7.4) million,
or ($0.23) per share, compared to ($5.9) million, or ($0.84) per
share, in the fourth quarter of 2018. Non-GAAP net loss in the
fourth quarter of 2019 was ($2.7) million, or ($0.08) per share,
compared to ($3.9) million, or ($0.16) per share, in the fourth
quarter of 2018.
- Adjusted EBITDA1 in the fourth quarter of 2019 improved to
($3.3) million, compared to ($4.1) million in the fourth quarter of
2018. Adjusted EBITDA margin was (11.3%) in the fourth quarter of
2019, an improvement of 840 basis points from (19.7%) in the fourth
quarter of 2018.
Full Year 2019 Financial Highlights
- Revenue in 2019 was $107.1 million, an increase of 42% from
2018.
- Active buyers as of December 31, 2019 grew to 2.4 million,
compared to 2.0 million as of December 31, 2018, an increase of 17%
year over year.
- Spend per buyer as of December 31, 2019 reached $170, compared
to $145 as of December 31, 2018, an increase of 17% year over
year.
- Take rate for the year ended December 31, 2019 was 26.7%,
compared to 25.7% for the year ended December 31, 2018, an increase
of 100 basis points year over year.
- GAAP gross margin in 2019 was 79.2%, a decrease of 10 basis
points from 79.3% in 2018. Non-GAAP gross margin in 2019 was 81.0%,
an increase of 20 basis points from 80.8% in 2018.
- GAAP net loss in 2019 was ($33.5) million, or ($1.67) per
share, compared to ($36.1) million, or ($5.42) per share, in 2018.
Non-GAAP net loss in 2019 was ($16.8) million, or ($0.58) per
share, compared to ($20.6) million, or ($0.89) per share, in
2018.
- Adjusted EBITDA in 2019 improved to ($18.0) million, compared
to ($21.0) million in 2018. Adjusted EBITDA margin was (16.8%) in
2019, an improvement of 1,100 basis points from (27.8%) in
2018.
Recent Business Highlights
- Enhanced our comprehensive product ecosystem through constant
innovation, with Fiverr Logo Maker the latest addition to our
product family
- Completed significant infrastructure upgrades to support
extensive multilingual capabilities and successfully launched our
localized websites in German and Spanish
- Expanded our Service-as-a-Product catalog with over 100 new
categories and 7 new industry stores introduced in 2019
Financial Outlook
Our initial outlook for 2020 reflects continued growth and
momentum of our business while making continued progress toward
profitability. During 2020 we intend to continue to grow our buyer
base, move upmarket, launch new categories and industry stores,
innovate with new products and services, and further expand to new
geographies and languages.
Q1 2020
FY 2020
Revenue
$32.0 - $33.0 million
$139 -$141 million
Year over year growth
35% - 39%
30% - 32%
Adjusted EBITDA
($5.5) - ($4.5) million
($15.0) - ($13.0) million
1Adjusted EBITDA is a non-GAAP financial
measure. See “Key Performance Metrics and Non-GAAP Financial
Measure” for additional information regarding this and other
non-GAAP metrics used in this release.
Conference Call and Webcast Details
Fiverr will host a conference call to discuss its financial
results on Wednesday, February 19, 2020 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 (866) 360-3590, or (412) 317-5278
for callers outside the United States, and mention the passcode,
“Fiverr.” A telephonic replay of the conference call will be
available until Wednesday, February 26, 2020, 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 replay code 10138270.
About Fiverr
Fiverr's mission is to change how the world works together. The
Fiverr platform connects businesses of all sizes with skilled
freelancers offering digital services in more than 300 categories,
across 8 verticals including graphic design, digital marketing,
programming, video and animation. In 2019, over 2.4 million
customers bought a wide range of services from freelancers working
in over 160 countries. We invite you to visit us at fiverr.com,
read our blog and follow us on Facebook, Twitter and Instagram.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31,
December 31,
2019
2018
(Unaudited)
(Audited)
Assets Current assets: Cash and cash equivalents
$
24,171
$
55,955
User funds
55,945
39,736
Bank deposits
15,000
-
Restricted deposit
324
327
Marketable securities
88,559
-
Other receivables
3,117
776
Total current assets
187,116
96,794
Marketable securities
21,805
-
Property and equipment, net
5,321
5,143
Intangible assets, net
7,188
4,065
Goodwill
11,240
1,381
Restricted deposit
3,168
3,191
Other non-current assets
522
456
Total assets
$
236,360
$
111,030
Liabilities and Shareholders' Equity Current
liabilities: Trade payables
$
3,749
$
3,364
User accounts
53,013
39,736
Deferred revenue
3,248
-
Other account payables and accrued expenses
21,426
10,231
Current maturities of long-term loan
503
445
Total current liabilities
81,939
53,776
Long-term loan and other non-current liabilities
5,612
3,280
Total liabilities
87,551
57,056
Shareholders' equity: Share capital and additional
paid-in capital
306,334
178,164
Accumulated deficit
(157,763
)
(123,592
)
Accumulated other comprehensive income (loss)
238
(598
)
Total shareholders' equity
148,809
53,974
Total liabilities and shareholders' equity
$
236,360
$
111,030
CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except loss per share data)
Three Months Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
(Audited)
Revenue
$
29,531
$
20,705
$
107,073
$
75,503
Cost of revenue
6,120
4,018
22,224
15,621
Gross profit
23,411
16,687
84,849
59,882
Operating expenses: Research and development
9,322
6,855
34,483
26,035
Sales and marketing
15,663
11,681
62,750
49,720
General and administrative
6,495
4,233
22,366
20,596
Total operating expenses
31,480
22,769
119,599
96,351
Operating loss
(8,069
)
(6,082
)
(34,750
)
(36,469
)
Financial income, net
684
199
1,371
408
Loss before income taxes
(7,385
)
(5,883
)
(33,379
)
(36,061
)
Income taxes
(54
)
-
(160
)
-
Net loss
$
(7,439
)
$
(5,883
)
$
(33,539
)
$
(36,061
)
Deemed dividend to protected ordinary shareholders
-
-
(632
)
-
Net loss attributable to ordinary shareholders
$
(7,439
)
$
(5,883
)
$
(34,171
)
$
(36,061
)
Basic and diluted net loss per share attributable to ordinary
shareholders
$
(0.23
)
$
(0.84
)
$
(1.67
)
$
(5.42
)
Basic and diluted weighted average ordinary shares
31,900
7,017
20,504
6,648
CONSOLIDATED STATEMENTS OF
CASH FLOWS (In thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
(Audited)
Operating Activities Net loss
$
(7,439
)
$
(5,883
)
$
(33,539
)
$
(36,061
)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization
893
609
3,571
2,250
Amortization of discount on marketable securities
(430
)
-
(988
)
-
Shared-based compensation
2,337
1,293
8,899
11,648
Loss from disposal of property plant and equipment, net
-
26
-
26
Net loss (gain) from exchange rate fluctuations
(67
)
(101
)
65
(77
)
Changes in assets and liabilities: User funds
(1,245
)
(39,736
)
(16,209
)
(39,736
)
Other receivables
(232
)
546
(1,583
)
(143
)
Trade payables
1,750
(211
)
240
808
User accounts
(1,687
)
(953
)
13,277
7,542
Deferred revenue
3,248
-
3,248
-
Other account payables and accrued expenses
(372
)
(80
)
8,677
1,937
Non-current liabilities
336
(64
)
398
130
Net cash used in operating activities
(2,908
)
(44,554
)
(13,944
)
(51,676
)
Investing Activities Acquisition of business, net of
cash acquired
-
-
(9,967
)
(2,676
)
Purchase of property and equipment
(181
)
(160
)
(1,016
)
(767
)
Capitalization of internal-use software
(216
)
(184
)
(739
)
(830
)
Other receivables and non-current assets
(29
)
(27
)
(40
)
(142
)
Bank deposits
5,000
30,000
(15,000
)
30,000
Restricted deposit
-
542
-
482
Investment in marketable securities
(69,954
)
-
(214,306
)
-
Proceeds from sale of marketable securities
69,993
-
104,990
-
Net cash provided by (used in) investing activities
4,613
30,171
(136,078
)
26,067
Financing Activities Proceeds from exercise of
options
200
570
773
1,240
Proceeds from initial public offering, net
(452
)
-
113,350
-
Proceeds from issuance of protected ordinary shares, net
-
53,069
4,340
53,069
Repayment of long-term loan
(123
)
(94
)
(470
)
(421
)
Net cash provided by (used in) financing activities
(375
)
53,545
117,993
53,888
Effect of exchange rate fluctuations on cash and cash
equivalents
100
(23
)
245
(190
)
Increase (decrease) in cash and cash equivalents
1,430
39,139
(31,784
)
28,089
Cash and cash equivalents at the beginning of period
22,741
16,816
55,955
27,866
Cash and cash equivalents at the end of period
$
24,171
$
55,955
$
24,171
$
55,955
KEY PERFORMANCE METRICS
(Unaudited)
Year Ended
December 31,
2019
2018
(Unaudited)
Annual active buyers (in thousands)
2,352
2,019
Annual spend per buyer ($)
$
170
$
145
RECONCILIATION OF GAAP TO
NON-GAAP GROSS PROFIT (In thousands, except gross margin
data)
Three Months Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
GAAP gross profit
$
23,411
$
16,687
$
84,849
$
59,882
Add: Share-based compensation
49
5
142
12
Depreciation and amortization
393
308
1,728
1,119
Non-GAAP gross profit
$
23,853
$
17,000
$
86,719
$
61,013
Non-GAAP gross margin
80.8
%
82.1
%
81.0
%
80.8
%
RECONCILIATION OF GAAP TO
NON-GAAP NET LOSS AND NET LOSS PER SHARE (In thousands, except loss
per share data)
Three Months Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
GAAP net loss attributable to ordinary shareholders
$
(7,439
)
$
(5,883
)
$
(34,171
)
$
(36,061
)
Add: Deemed dividend to protected ordinary shareholders
-
-
632
-
Depreciation and amortization
893
609
3,571
2,250
Share-based compensation
2,337
1,293
8,899
11,648
Other initial public offering related expenses
-
-
416
-
Contingent consideration revaluation and acquisition related costs
1,509
96
3,873
1,564
Non-GAAP net loss
$
(2,700
)
$
(3,885
)
$
(16,780
)
$
(20,599
)
GAAP weighted average number of ordinary shares outstanding - basic
and diluted
31,900
7,017
20,504
6,648
Add: Additional weighted average shares giving effect to exchange
of protected ordinary shares at the beginning of the period
-
17,520
8,597
16,483
Non-GAAP basic and diluted weighted average ordinary shares
31,900
24,537
29,101
23,131
Non-GAAP basic and diluted net loss per share attributable to
ordinary shareholders
$
(0.08
)
$
(0.16
)
$
(0.58
)
$
(0.89
)
Note: Non-GAAP basic and diluted net loss per ordinary share for
the year ended December 31, 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 months and
year ended December 31, 2018, we accounted for the exchange of
Fiverr’s then outstanding protected ordinary shares into 17.5 and
16.5 million ordinary shares, respectively, at the beginning of the
periods.
RECONCILIATION OF GAAP NET
LOSS TO ADJUSTED EBITDA (in thousands, except adjusted EBITDA
margin data)
Three Months Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
GAAP net loss
$
(7,439
)
$
(5,883
)
$
(33,539
)
$
(36,061
)
Add: Financial income, net
(684
)
(199
)
(1,371
)
(408
)
Income taxes
54
-
160
-
Depreciation and amortization
893
609
3,571
2,250
Share-based compensation
2,337
1,293
8,899
11,648
Other initial public offering related expenses
-
-
416
-
Contingent consideration revaluation and acquisition related costs
1,509
96
3,873
1,564
Adjusted EBITDA
$
(3,330
)
$
(4,084
)
$
(17,991
)
$
(21,007
)
Adjusted EBITDA margin
(11.3
%)
(19.7
%)
(16.8
%)
(27.8
%)
RECONCILIATION OF GAAP TO
NON-GAAP OPERATING EXPENSES (In thousands)
Three Months Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
(Unaudited)
(Unaudited)
GAAP research and development
$
9,322
$
6,855
$
34,483
$
26,035
Less: Share-based compensation
811
198
3,197
731
Depreciation and amortization
126
95
454
411
Acquisition related costs
-
48
106
750
Non-GAAP research and development
$
8,385
$
6,514
$
30,726
$
24,143
GAAP sales and marketing
$
15,663
$
11,681
$
62,750
$
49,720
Less: Share-based compensation
488
126
1,853
1,480
Depreciation and amortization
325
155
1,212
555
Acquisition related costs
363
48
1,436
749
Non-GAAP sales and marketing
$
14,487
$
11,352
$
58,249
$
46,936
GAAP general and administrative
$
6,495
$
4,233
$
22,366
$
20,596
Less: Share-based compensation
989
964
3,707
9,425
Depreciation and amortization
49
51
177
165
Other initial public offering related expenses
-
-
416
-
Contingent consideration revaluation and acquisition related costs
1,146
-
2,331
65
Non-GAAP general and administrative
$
4,311
$
3,218
$
15,735
$
10,941
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 loss and Non-GAAP
net loss per share as well as operating metrics, including GMV,
spend per buyer, active buyers 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 through our platforms, excluding value added tax,
goods and services tax, service chargebacks and refunds. We define
active buyers on any given date 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 expand our business.
Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP gross profit,
Non-GAAP gross margin, Non-GAAP operating expenses, 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 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.
We are not able to provide a reconciliation of Adjusted EBITDA
guidance for the first quarter of 2020 or the fiscal year 2020 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, and gain or loss on revaluation of contingent
consideration, 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 above regarding reconciliations of these non-GAAP
measures to the most directly comparable GAAP measures.
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
first quarter of 2020 and the fiscal year ended December 31, 2020,
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.
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