- Accelerated growth in Q3’20: Strong momentum continued
into Q3 with 88% y/y topline growth - we continue to execute and
drive results as the global shift towards digital transformation
and remote work accelerates
- Continued momentum of buyer growth: Active buyers grew
37% y/y with net adds of over 310K as strong trends from both
organic and paid channels continued
- Promoted Gigs expansion: Promoted Gigs is now available
in 60 categories with open enrollment - monthly active sellers in
the program grew to 5,000+ in Q3’20 from just under 200 in
Q2’20
- Launching new purchase experience: We are launching new
features to allow buyers to break large projects into milestones
and make recurring purchases
- Brand evolution: Launched new logo and a new brand
language together with a new brand campaign as we embark on the
next stage of changing how the world works together
- Raising FY20 guidance: Revenue is now expected to grow
74-75% for FY20, with increasing Adjusted EBITDA profitability
Fiverr International Ltd. (NYSE: FVRR), the company that is
changing how the world works together, today reported financial
results for the third quarter of 2020 ended September 30, 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.
“The third quarter represented another quarter of record-setting
growth. The strong momentum seen in Q2 carried into Q3 and we
delivered accelerated topline growth of 88% y/y and Adjusted EBITDA
margin of 8.0% in Q3’20. We continue to see sustainable trends in
businesses upping their investments into digital transformation and
their increasing willingness to adopt a remote and flexible
workforce,” said Fiverr founder and CEO Micha Kaufman. “I’m also
incredibly excited and proud to launch our new brand and new brand
campaign. Fiverr is staying true to our ethos, our culture and our
promise to our community, while looking forward to embarking on the
next chapter as a leader in the future of work.”
Ofer Katz, Fiverr’s CFO, added, “Fiverr continues to accelerate
and deliver strong financial results amidst the COVID-19 pandemic.
Underlying the strong revenue growth is our continued strong cohort
behavior across both pre- and post-COVID cohorts, as well as
continued efficiency in driving new buyers to our platform. We
expanded our Adjusted EBITDA profitability during the quarter,
while at the same time stepped on the gas in investing in the
future growth of our company.”
Third Quarter 2020 Financial Highlights
- Revenue in the third quarter of 2020 was $52.3 million, an
increase of 88% year over year.
- Active buyers as of September 30, 2020, grew to 3.1 million,
compared to 2.3 million as of September 30, 2019, an increase of
37% year over year.
- Spend per buyer as of September 30, 2020, reached $195,
compared to $163 as of September 30, 2019, an increase of 20% year
over year.
- Take rate for the twelve months ended September 30, 2020, was
27.0%, up from 26.6% for the twelve months ended September 30,
2019, an increase of 40 basis points year over year.
- GAAP gross margin in the third quarter of 2020 was 83.4%, an
increase of 440 basis points from 79.0% in the third quarter of
2019. Non-GAAP gross margin in the third quarter of 2020 was 84.4%,
an increase of 360 basis points from 80.8% in the third quarter of
2019.
- GAAP net loss in the third quarter of 2020 was ($0.5) million,
or ($0.01) net loss per share, compared to a net loss of ($8.4)
million, or ($0.26) net loss per share, in the third quarter of
2019. Non-GAAP net income in the third quarter of 2020 was $4.7
million, or $0.13 and $0.12 basic and diluted net income per share,
respectively, compared to a loss of ($4.0) million, or ($0.12)
basic and diluted net loss per share, in the third quarter of
2019.
- Adjusted EBITDA1 in the third quarter of 2020 improved to $4.2
million, compared to ($4.4) million in the third quarter of 2019.
Adjusted EBITDA margin was 8.0% in the third quarter of 2020, an
improvement of 2,360 basis points from (15.6%) in the third quarter
of 2019.
Financial Outlook
We are introducing Q4’20 guidance and raising our full-year
guidance. Given these unprecedented times and the dynamic impact of
COVID-19 on economies globally, we will provide investors with
updated business trends as they evolve.
Q4 2020
FY 2020
Revenue
$52.4 - $53.4 million
$186.0 - $187.0 million
Year over year growth
77 - 81%
74 - 75%
Adjusted EBITDA
$4.0 - $4.5 million
$8.5 - $9.0 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, October 28, 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, November 4, 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 10148051.
About Fiverr
Fiverr’s mission is to change how the world works together. For
over 10 years, the Fiverr platform has been at the forefront of the
future of work connecting businesses of all sizes with skilled
freelancers offering digital services in more than 400 categories,
across 8 verticals including graphic design, digital marketing,
programming, video and animation. In the twelve months ended
September 30, 2020, over 3 million customers bought a wide range of
services from freelancers across more than 160 countries. We invite
you to become part of the future of work by visiting us at
fiverr.com, read our blog and follow us on Facebook, Twitter and
Instagram.
CONSOLIDATED BALANCE
SHEETS
(In thousands)
September 30,
December 31,
2020
2019
(Unaudited) (Audited) Assets Current assets:
Cash and cash equivalents
$
105,964
$
24,171
Marketable securities
68,441
88,559
User funds
93,153
55,945
Bank deposits
40,000
15,000
Restricted deposit
324
324
Other receivables
4,066
3,117
Total current assets
311,948
187,116
Marketable securities
80,553
21,805
Property and equipment, net
5,724
5,321
Intangible assets, net
6,700
7,188
Goodwill
11,240
11,240
Restricted deposit
3,168
3,168
Other non-current assets
454
522
Total assets
$
419,787
$
236,360
Liabilities and Shareholders' Equity Current
liabilities: Trade payables
$
6,100
$
3,749
User accounts
87,374
53,013
Deferred revenue
5,837
3,248
Other account payables and accrued expenses
26,972
21,426
Current maturities of long-term loan
518
503
Total current liabilities
126,801
81,939
Long-term loan and other non-current liabilities
4,154
5,612
Total liabilities
130,955
87,551
Shareholders' equity: Share capital and additional
paid-in capital
452,550
306,334
Accumulated deficit
(164,496
)
(157,763
)
Accumulated other comprehensive income
778
238
Total shareholders' equity
288,832
148,809
Total liabilities and shareholders' equity
$
419,787
$
236,360
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share
and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2020
2019
2020
2019
(Unaudited) (Unaudited) Revenue
$
52,345
$
27,867
$
133,625
$
77,542
Cost of revenue
8,708
5,863
23,485
16,104
Gross profit
43,637
22,004
110,140
61,438
Operating expenses: Research and development
11,642
9,088
32,149
25,161
Sales and marketing
25,548
15,859
66,976
47,087
General and administrative
7,430
5,894
19,051
15,871
Total operating expenses
44,620
30,841
118,176
88,119
Operating loss
(983
)
(8,837
)
(8,036
)
(26,681
)
Financial income, net
570
483
1,392
687
Loss before income taxes
(413
)
(8,354
)
(6,644
)
(25,994
)
Income taxes
(41
)
(80
)
(89
)
(106
)
Net loss
(454
)
(8,434
)
(6,733
)
(26,100
)
Deemed dividend to protected ordinary shareholders
-
-
-
(632
)
Net loss attributable to ordinary shareholders
(454
)
(8,434
)
(6,733
)
(26,732
)
Basic and diluted net loss per share attributable to ordinary
shareholders
$
(0.01
)
$
(0.26
)
$
(0.21
)
$
(1.61
)
Basic and diluted weighted average ordinary shares
35,278,996
31,867,065
32,382,183
16,647,150
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2020
2019
2020
2019
(Unaudited) (Unaudited) Operating Activities
Net loss
$
(454
)
$
(8,434
)
$
(6,733
)
$
(26,100
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization
1,130
961
3,111
2,678
Amortization of discount on marketable securities
495
(558
)
158
(558
)
Shared-based compensation
3,756
2,600
9,580
6,562
Net income (loss) from exchange rate fluctuations
(302
)
69
(89
)
132
Changes in assets and liabilities: User funds
(8,543
)
(4,697
)
(37,208
)
(14,964
)
Other receivables
(444
)
(60
)
(331
)
(1,351
)
Trade payables
97
(2,386
)
2,277
(1,510
)
User accounts
7,441
4,697
34,361
14,964
Deferred revenue
754
-
2,560
-
Other account payables and accrued expenses
2,886
4,956
6,468
9,049
Payment of contingent consideration
-
-
(1,960
)
-
Non-current liabilities
1
167
163
62
Net cash provided by (used in) operating activities
6,817
(2,685
)
12,357
(11,036
)
Investing Activities Acquisition of business, net
-
-
-
(9,967
)
Acquisition of intangible asset, net
(1,230
)
-
(1,230
)
-
Purchase of property and equipment
(516
)
(376
)
(1,053
)
(835
)
Capitalization of internal-use software
(199
)
(199
)
(650
)
(523
)
Other receivables and non-current assets
17
111
71
(11
)
Bank deposits
(10,000
)
-
(25,000
)
(20,000
)
Investment in marketable securities
(24,125
)
(34,961
)
(195,947
)
(144,352
)
Proceeds from sale of marketable securities
6,851
34,997
157,390
34,997
Net cash used in investing activities
(29,202
)
(428
)
(66,419
)
(140,691
)
Financing Activities Proceeds from exercise of
options
1,841
32
6,493
573
Proceeds from initial public offering, net
-
(3,155
)
-
113,802
Proceeds from issuance of protected ordinary shares, net
-
-
-
4,340
Proceeds from follow on offering, net
(777
)
-
129,893
-
Payment of contingent consideration
-
-
(2,040
)
-
Repayment of long-term loan
(128
)
(119
)
(372
)
(347
)
Tax withholding in connection with employees' options exercises
(473
)
-
1,783
-
Net cash provided by (used in) financing activities
463
(3,242
)
135,757
118,368
Effect of exchange rate fluctuations on cash and cash
equivalents
344
(16
)
98
145
Increase (decrease) in cash and cash equivalents
(21,578
)
(6,371
)
81,793
(33,214
)
Cash and cash equivalents at the beginning of period
127,542
29,112
24,171
55,955
Cash and cash equivalents at the end of period
$
105,964
$
22,741
$
105,964
$
22,741
KEY PERFORMANCE
METRICS
Twelve Months Ended September 30,
2020
2019
(Unaudited) Annual active buyers (in thousands)
3,108
2,265
Annual spend per buyer ($)
$
195
$
163
RECONCILIATION OF GAAP TO
NON-GAAP GROSS PROFIT
(In thousands, except gross
margin data)
Three Months Ended Nine Months Ended
September 30, September 30,
2020
2019
2020
2019
(Unaudited) (Unaudited) GAAP gross profit
$
43,637
$
22,004
$
110,140
$
61,438
Add: Share-based compensation
55
43
212
93
Depreciation and amortization
483
479
1,456
1,335
Non-GAAP gross profit
$
44,175
$
22,526
$
111,808
$
62,866
Non-GAAP gross margin
84.4
%
80.8
%
83.7
%
81.1
%
RECONCILIATION OF GAAP TO
NON-GAAP NET INCOME (LOSS) AND NET INCOME (LOSS) PER SHARE
(In thousands, except share
and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2020
2019
2020
2019
(Unaudited) (Unaudited) GAAP net loss attributable to
ordinary shareholders
$
(454
)
$
(8,434
)
$
(6,733
)
$
(26,732
)
Add: Deemed dividend to protected ordinary shareholders
-
-
-
632
Depreciation and amortization
1,130
961
3,111
2,678
Share-based compensation
3,756
2,600
9,580
6,562
Other initial public offering related expenses
-
-
-
416
Contingent consideration revaluation and acquisition related costs
302
918
(164
)
2,364
Non-GAAP net income (loss)
4,734
(3,955
)
5,794
(14,080
)
GAAP basic weighted average number of ordinary shares outstanding
35,278,996
31,867,065
32,382,183
16,647,150
Add: Additional weighted average shares giving effect to exchange
of protected ordinary shares at the beginning of the period
-
-
-
11,426,301
Non-GAAP basic weighted average number of ordinary shares
outstanding
35,278,996
31,867,065
32,382,183
28,073,451
Non-GAAP basic net income (loss) per share attributable to ordinary
shareholders
$
0.13
$
(0.12
)
$
0.18
$
(0.50
)
Non-GAAP diluted weighted average number of ordinary shares
outstanding
38,417,934
31,867,065
34,916,206
28,073,451
Non-GAAP diluted net income (loss) per share attributable to
ordinary shareholders
$
0.12
$
(0.12
)
$
0.17
$
(0.50
)
Note: Non-GAAP basic and diluted net loss per
share attributable to ordinary shareholders for the nine months
ended September 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.
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,
2020
2019
2020
2019
(Unaudited) (Unaudited) GAAP net loss
$
(454
)
$
(8,434
)
$
(6,733
)
$
(26,100
)
Add: Financial income, net
(570
)
(483
)
(1,392
)
(687
)
Income taxes
41
80
89
106
Depreciation and amortization
1,130
961
3,111
2,678
Share-based compensation
3,756
2,600
9,580
6,562
Other initial public offering related expenses
-
-
-
416
Contingent consideration revaluation and acquisition related costs
302
918
(164
)
2,364
Adjusted EBITDA
$
4,205
$
(4,358
)
$
4,491
$
(14,661
)
Adjusted EBITDA margin
8.0
%
(15.6
%)
3.4
%
(18.9
%)
RECONCILIATION OF GAAP TO
NON-GAAP OPERATING EXPENSES
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2020
2019
2020
2019
(Unaudited) (Unaudited) GAAP research and development
$
11,642
$
9,088
$
32,149
$
25,161
Less: Share-based compensation
1,267
850
3,511
2,386
Depreciation and amortization
149
116
395
328
Acquisition related costs
-
12
-
106
Non-GAAP research and development
$
10,226
$
8,110
$
28,243
$
22,341
GAAP sales and marketing
$
25,548
$
15,859
$
66,976
$
47,087
Less: Share-based compensation
809
642
1,888
1,365
Depreciation and amortization
444
323
1,112
887
Acquisition related costs
-
375
121
1,073
Non-GAAP sales and marketing
$
24,295
$
14,519
$
63,855
$
43,762
GAAP general and administrative
$
7,430
$
5,894
$
19,051
$
15,871
Less: Share-based compensation
1,625
1,065
3,969
2,718
Depreciation and amortization
54
43
148
128
Other initial public offering related expenses
-
-
-
416
Contingent consideration revaluation and acquisition related costs
302
531
(285
)
1,185
Non-GAAP general and administrative
$
5,449
$
4,255
$
15,219
$
11,424
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, 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 ordered through our platform, 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 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 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, 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.
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 non-GAAP
financial measures guidance for the fourth quarter of 2020, and the
fiscal year ending December 31, 2020 to the comparable GAAP
measures, because certain items that are excluded from non-GAAP
financial measures 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 income or loss on revaluation of contingent
consideration, 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 2020 and the fiscal year ending December 31,
2020, our expected future Adjusted EBITDA profitability, 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 to
successfully implement our business plan during a global economic
downturn caused by the COVID-19 pandemic 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 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 annual report on Form 20-F
filed with the U.S. Securities and Exchange Commission (“SEC”) on
March 31, 2020 and our final prospectus filed with the SEC pursuant
to Rule 424(b)(4) on May 29, 2020, in each case 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/20201027006263/en/
Investor Relations: Jinjin Qian investors@fiverr.com
Press: Siobhan Aalders press@fiverr.com
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Fiverr (NYSE:FVRR)
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From May 2023 to May 2024