Fiverr Announces Fourth Quarter and Full Year 2020 Results

Strong finish to 2020: We concluded a phenomenal year with accelerating growth in Q4 – revenue grew 89% y/y and active buyers grew 45% y/y

Reached 500+ categories: Fiverr added 30 new categories in Q4 and now offers digital services in more than 500 categories

Fiverr’s first ever Super Bowl commercial: The commercial follows a successful new brand evolution last year and introduces Fiverr to the world on one of the biggest stages

Initiating strong guidance for 2021: Fiverr expects continued business momentum and is initiating strong guidance for 2021 with 46-50% revenue growth and continued improvement on adjusted EBITDA margin

Momentum in 2020 continues in 2021: We expect the elevated engagement levels shown in 2020 to last well beyond the pandemic

NEW YORK–(BUSINESS WIRE)–Fiverr International Ltd. (NYSE: FVRR), the company that is changing how the world works together, today reported financial results for the fourth quarter of 2020. 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.

“2020 was a landmark year for our business with 77% year over year revenue growth driven largely by bringing more freelancers and businesses together during a critical time of global change,” said Micha Kaufman, founder and CEO of Fiverr. “We are carrying that momentum into the new year and I’m thrilled about what lies ahead for us in 2021. We started this year with our first Super Bowl campaign, which allowed us to reach millions of people in a way that was unprecedented for our brand. In the year ahead, we also expect to continue to roll out significant products, features and capabilities and continue to help lead and power the global trend towards digital transformation and remote work.”

Ofer Katz, Fiverr’s CFO, added, “Our marketplace significantly scaled during 2020 and we achieved the important milestone of turning EBITDA positive as well. We believe the strong momentum is carrying into 2021 and the increased awareness and adoption of digital freelancing services will continue to provide tailwinds for our business. We are excited about the year ahead as reflected by our strong financial outlook for 2021.”

Fourth Quarter 2020 Financial Highlights

Revenue in the fourth quarter of 2020 was $55.9 million, an increase of 89% year over year.

Active buyers as of December 31, 2020 grew to 3.4 million, compared to 2.4 million as of December 31, 2019, an increase of 45% year over year.

Spend per buyer as of December 31, 2020 reached $205, compared to $170 as of December 31, 2019, an increase of 20% year over year.

Take rate for the year ended December 31, 2020 was 27.1%, up from 26.7% for the year ended December 31, 2019, an increase of 40 basis points year over year.

GAAP gross margin in the fourth quarter of 2020 was 82.6%, an increase of 330 basis points from 79.3% in the fourth quarter of 2019. Non-GAAP gross margin in the fourth quarter of 2020 was 83.9%, an increase of 310 basis points from 80.8% in the fourth quarter of 2019.

GAAP net loss in the fourth quarter of 2020 was ($8.1) million, or ($0.23) net loss per share, compared to ($7.4) million, or ($0.23) net loss per share, in the fourth quarter of 2019. Non-GAAP net income in the fourth quarter of 2020 was $4.8 million, or $0.13 and $0.12 basic and diluted net income per share, respectively, compared to ($2.7) million, or ($0.08) loss per share, in the fourth quarter of 2019.

Adjusted EBITDA1 in the fourth quarter of 2020 improved to $4.6 million, compared to ($3.3) million in the fourth quarter of 2019. Adjusted EBITDA margin was 8.3% in the fourth quarter of 2020, an improvement of 1,960 basis points from (11.3%) in the fourth quarter of 2019.

Full Year 2020 Financial Highlights

Revenue in 2020 was $189.5 million, an increase of 77% year over year.

GAAP gross margin in 2020 was 82.5%, an increase of 330 basis points from 79.2% in 2019. Non-GAAP gross margin in 2020 was 83.7%, an increase of 270 basis points from 81.0% in 2019.

GAAP net loss in 2020 was ($14.8) million, or ($0.46) net loss per share, compared to a net loss of ($33.5) million, or ($1.67) net loss per share, in 2019. Non-GAAP net income in 2020 was $10.4 million, or $0.32 and $0.29 basic and diluted net income per share, respectively, compared to a loss of ($16.8) million, or ($0.58) basic and diluted net loss per share, in 2019.

Adjusted EBITDA in 2020 improved to $9.1 million, compared to ($18.0) million in 2019. Adjusted EBITDA margin was 4.8% in 2020, an improvement of 2,160 basis points from (16.8%) in 2019.

Financial Outlook

We are introducing strong Q1’21 and full-year 2021 guidance, as business momentum in 2020 continues into 2021. The Super Bowl commercial is expected to result in a one-time expense of $8 million in Q1’21 and we expect to continue gaining operating leverage throughout the year. Given the uncertainty of the ongoing impact and unprecedented conditions surrounding the COVID-19 pandemic on economies globally, we will provide investors with updated business trends as they evolve.

 

Q1 2021

FY 2021

Revenue

$63.0 – $65.0 million

$277.0 – $284.0 million

Year over year growth

84-90%

46-50%

Adjusted EBITDA

($4.0) – ($3.0) million

$16.0 – $21.0 million

1 Adjusted 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 Thursday, February 18, 2021, 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 Thursday, February 25, 2021, 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 10150856.

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 500 categories, across 8 verticals including graphic design, digital marketing, programming, video and animation. In the twelve months ended December 31, 2020, over 3.4 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)

 

December 31,

December 31,

2020

2019

 

Assets

Current assets:

Cash and cash equivalents

$

268,030

 

$

24,171

 

Marketable securities

 

129,372

 

 

88,559

 

User funds

 

97,984

 

 

55,945

 

Bank deposits

 

90,000

 

 

15,000

 

Restricted deposit

 

346

 

 

324

 

Other receivables

 

5,418

 

 

3,117

 

Total current assets

 

591,150

 

 

187,116

 

 

Marketable securities

 

228,048

 

 

21,805

 

Operating lease right of use asset

 

15,611

 

 

–

 

Property and equipment, net

 

6,265

 

 

5,321

 

Intangible assets, net

 

5,884

 

 

7,188

 

Goodwill

 

11,240

 

 

11,240

 

Restricted deposit

 

2,589

 

 

3,168

 

Other non-current assets

 

415

 

 

522

 

Total assets

$

861,202

 

$

236,360

 

 

Liabilities and Shareholders’ Equity

Current liabilities:

Trade payables

$

3,622

 

$

3,749

 

User accounts

 

92,027

 

 

53,013

 

Deferred revenue

 

5,957

 

 

3,248

 

Other account payables and accrued expenses

 

40,396

 

 

21,426

 

Operating lease liabilities

 

3,307

 

 

–

 

Current maturities of long-term loan

 

560

 

 

503

 

Total current liabilities

 

145,869

 

 

81,939

 

 

 

Convertible notes

 

352,034

 

 

–

 

Operating lease liabilities

 

13,861

 

 

–

 

Long-term loan and other non-current liabilities

 

4,035

 

 

5,612

 

Total liabilities

 

369,930

 

 

5,612

 

 

Total liabilities

$

515,799

 

$

87,551

 

 

Shareholders’ equity:

Share capital and additional paid-in capital

 

517,444

 

 

306,334

 

Accumulated deficit

 

(172,573

)

 

(157,763

)

Accumulated other comprehensive income

 

532

 

 

238

 

Total shareholders’ equity

 

345,403

 

 

148,809

 

Total liabilities and shareholders’ equity

$

861,202

 

$

236,360

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

 

Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

 

Revenue

$

55,885

 

$

29,531

 

$

189,510

 

$

107,073

 

Cost of revenue

 

9,703

 

 

6,120

 

 

33,188

 

 

22,224

 

Gross profit

 

46,182

 

 

23,411

 

 

156,322

 

 

84,849

 

 

Operating expenses:

Research and development

 

13,570

 

 

9,322

 

 

45,719

 

 

34,483

 

Sales and marketing

 

27,403

 

 

15,663

 

 

94,379

 

 

62,750

 

General and administrative

 

8,983

 

 

6,495

 

 

28,034

 

 

22,366

 

Total operating expenses

 

49,956

 

 

31,480

 

 

168,132

 

 

119,599

 

Operating loss

 

(3,774

)

 

(8,069

)

 

(11,810

)

 

(34,750

)

Financial income (expenses), net

 

(4,192

)

 

684

 

 

(2,800

)

 

1,371

 

Loss before income taxes

 

(7,966

)

 

(7,385

)

 

(14,610

)

 

(33,379

)

Income taxes

 

(111

)

 

(54

)

 

(200

)

 

(160

)

Net loss

$

(8,077

)

$

(7,439

)

$

(14,810

)

$

(33,539

)

Deemed dividend to protected ordinary shareholders

 

–

 

 

–

 

 

–

 

 

(632

)

Net loss attributable to ordinary shareholders

$

(8,077

)

$

(7,439

)

$

(14,810

)

$

(34,171

)

Basic and diluted net loss per share attributable to ordinary shareholders

$

(0.23

)

$

(0.23

)

$

(0.46

)

$

(1.67

)

Basic and diluted weighted average ordinary shares

 

35,643,919

 

 

31,900,413

 

 

32,323,636

 

 

20,503,893

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

Three Months Ended

Year Ended

December 31,

December 31,

2020

2019

2020

2019

 

Operating Activities

Net loss

$

(8,077

)

$

(7,439

)

$

(14,810

)

$

(33,539

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

 

1,227

 

 

893

 

 

4,338

 

 

3,571

 

Amortization of discount of marketable securities

 

933

 

 

(430

)

 

1,091

 

 

(988

)

Shared-based compensation

 

6,235

 

 

2,337

 

 

15,815

 

 

8,899

 

Net income (loss) from exchange rate fluctuations

 

(987

)

 

(67

)

 

(1,076

)

 

65

 

Changes in assets and liabilities:

User funds

 

(4,831

)

 

(1,245

)

 

(42,039

)

 

(16,209

)

Operating lease ROU assets and liabilities, net

 

1,068

 

 

–

 

 

1,068

 

 

–

 

Amortization of discount and issuance costs of convertible notes

 

4,036

 

 

–

 

 

4,036

 

 

–

 

Other receivables

 

(1,446

)

 

(232

)

 

(1,777

)

 

(1,583

)

Trade payables

 

(2,404

)

 

1,750

 

 

(127

)

 

240

 

User accounts

 

4,653

 

 

(1,687

)

 

39,014

 

 

13,277

 

Deferred revenue

 

120

 

 

3,248

 

 

2,680

 

 

3,248

 

Other account payables and accrued expenses

 

4,206

 

 

(372

)

 

10,674

 

 

8,677

 

Payment of contingent consideration

 

–

 

 

–

 

 

(1,960

)

 

–

 

Non-current liabilities

 

45

 

 

336

 

 

208

 

 

398

 

Net cash provided by (used in) operating activities

 

4,778

 

 

(2,908

)

 

17,135

 

 

(13,944

)

 

Investing Activities

Acquisition of business, net

 

–

 

 

–

 

 

–

 

 

(9,967

)

Acquisition of intangible asset

 

–

 

 

–

 

 

(1,230

)

 

–

 

Purchase of property and equipment

 

(1,041

)

 

(181

)

 

(2,094

)

 

(1,016

)

Capitalization of internal-use software

 

(64

)

 

(216

)

 

(711

)

 

(739

)

Other receivables and non-current assets

 

39

 

 

(29

)

 

107

 

 

(40

)

Bank and Restricted deposits

 

(49,443

)

 

5,000

 

 

(74,443

)

 

(15,000

)

Investment in marketable securities

 

(235,229

)

 

(69,954

)

 

(431,176

)

 

(214,306

)

Proceeds from sale of marketable securities

 

25,800