Fiverr Announces First Quarter 2021 Results

Massive start to 2021: We kicked off the year with one of the highest Q1 revenue figures reported in our history, with revenue growth accelerating to 100% y/y

Outperformance across the business: Our key performance metrics outperformed y/y driven by ongoing trends and execution with active buyers increasing 56% y/y to 3.8 million and continued expansion in both spend per buyer (SPB) and take rate

New data vertical: We launched our ninth vertical to expand our catalog into data related services and deepen our penetration in this fast growing industry

Fiverr Business: Buyers purchase more frequently and more expensive Gigs on Fiverr Business compared to the marketplace, and on average spend three times more on the Fiverr platform

Subscriptions and Milestones expansion: Subscriptions is now available in 25 categories, tripling from 8 in Q4’20, and Milestones are now open to all Fiverr community members

Significantly increasing FY’21 guidance: Fiverr expects business momentum to continue and is upgrading guidance for 2021 from 46-50% to 59-63% revenue growth

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 first quarter of 2021. 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.

“We continue to capitalize and execute on the ongoing digital transformation as we delivered one of the strongest quarters in Fiverr’s history with outstanding results across the board, supported by continued execution on our strategy,” said Micha Kaufman, Founder and CEO of Fiverr. “Fiverr’s business momentum remains strong and resilient as we continue to scale at accelerating levels while leading companies through this new world of work.”

Ofer Katz, Fiverr’s President and CFO, added, “We are thrilled with the Q1 results we delivered, we kicked the year off with 100% y/y revenue growth and continued focus, discipline and execution in the business. As a result of our continued momentum and the visibility built into our business model, we are providing strong guidance for the second quarter of 2021 and significantly upgrading our full-year 2021 guidance upwards.”

First Quarter 2021 Financial Highlights

Revenue in the first quarter of 2021 was $68.3 million, an increase of 100% year over year.

Active buyers as of March 31, 2021 grew to 3.8 million, compared to 2.5 million as of March 31, 2020, an increase of 56% year over year.

Spend per buyer as of March 31, 2021 reached $216, compared to $177 as of March 31, 2020, an increase of 22% year over year.

Take rate for the quarter ended March 31, 2021 was 27.2%, up from 27.1% for the quarter ended March 31, 2020, an increase of 10 basis points year over year.

GAAP gross margin in the first quarter of 2021 was 83.1%, an increase of 310 basis points from 80.0% in the first quarter of 2020. Non-GAAP gross margin in the first quarter of 2021 was 84.1%, an increase of 250 basis points from 81.6% in the first quarter of 2020.

GAAP net loss in the first quarter of 2021 was ($17.8) million, or ($0.49) basic and diluted net loss per share, compared to ($6.2) million, or ($0.19) basic and diluted net loss per share, in the first quarter of 2020. Non-GAAP net loss in the first quarter of 2021 was ($0.3) million, or ($0.01) basic and diluted net loss per share, compared to ($2.6) million, or ($0.08) basic and diluted net loss per share, in the first quarter of 2020.

Adjusted EBITDA1 in the first quarter of 2021 improved to ($0.7) million, compared to ($2.9) million in the first quarter of 2020. Adjusted EBITDA margin was (1.0)% in the first quarter of 2021, an improvement of 740 basis points from (8.4%) in the first quarter of 2020.

Financial Outlook

We are introducing strong Q2’21 guidance and upgrading our full-year 2021 guidance, as business momentum continues in 2021. 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.

 

Q2 2021

FY 2021

Revenue

$73.0-$75.0 million

$302.0-$308.0 million

Year over year growth

55-59%

59-63%

Adjusted EBITDA

$5.0-$7.0 million

$19.5-$24.5

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, May 6, 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, May 13, 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 10153698.

About Fiverr

Fiverr’s mission is to change how the world works together. Since 2010, 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 9 verticals including graphic design, digital marketing, programming, video and animation. In the twelve months ended March 31, 2021, over 3.8 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)

March 31,

December 31,

2021

2020

(Unaudited)

(Audited)

Assets

Current assets:

Cash and cash equivalents

$

183,355

 

$

268,030

 

Marketable securities

 

160,540

 

 

129,372

 

User funds

 

120,327

 

 

97,984

 

Bank deposits

 

90,000

 

 

90,000

 

Restricted deposit

 

346

 

 

346

 

Other receivables

 

6,549

 

 

5,418

 

Total current assets

 

561,117

 

 

591,150

 

 

Marketable securities

 

280,382

 

 

228,048

 

Property and equipment, net

 

6,176

 

 

6,265

 

Operating lease right of use asset

 

14,875

 

 

15,611

 

Intangible assets, net

 

10,520

 

 

5,884

 

Goodwill

 

15,844

 

 

11,240

 

Restricted deposit

 

2,589

 

 

2,589

 

Other non-current assets

 

1,044

 

 

415

 

Total assets

$

892,547

 

$

861,202

 

 

Liabilities and Shareholders’ Equity

Current liabilities:

Trade payables

$

4,728

 

$

3,622

 

User accounts

 

112,320

 

 

92,027

 

Deferred revenue

 

8,254

 

 

5,957

 

Other account payables and accrued expenses

 

50,206

 

 

40,396

 

Operating lease liabilities, net

 

3,255

 

 

3,307

 

Current maturities of long-term loan

 

530

 

 

560

 

Total current liabilities

 

179,293

 

 

145,869

 

 

Long-term liabilities:

Convertible notes

 

356,950

 

 

352,034

 

Operating lease liabilities

 

12,648

 

 

13,861

 

Long-term loan and other non-current liabilities

 

2,370

 

 

4,035

 

Total long-term liabilities

 

371,968

 

 

369,930

 

Total liabilities

$

551,261

 

$

515,799

 

 

Shareholders’ equity:

Share capital and additional paid-in capital

 

532,466

 

 

517,444

 

Accumulated deficit

 

(190,417

)

 

(172,573

)

Accumulated other comprehensive income (loss)

 

(763

)

 

532

 

Total shareholders’ equity

 

341,286

 

 

345,403

 

Total liabilities and shareholders’ equity

$

892,547

 

$

861,202

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

 

Three Months Ended

March 31,

2021

2020

(Unaudited)

Revenue

$

68,320

 

$

34,150

 

Cost of revenue

 

11,546

 

 

6,820

 

Gross profit

 

56,774

 

 

27,330

 

 

Operating expenses:

Research and development

 

16,873

 

 

9,974

 

Sales and marketing

 

42,639

 

 

18,221

 

General and administrative

 

11,087

 

 

5,590

 

Total operating expenses

 

70,599

 

 

33,785

 

Operating loss

 

(13,825

)

 

(6,455

)

Financial income (expenses), net

 

(3,974

)

 

331

 

Loss before income taxes

 

(17,799

)

 

(6,124

)

Income taxes

 

(45

)

 

(31

)

Net loss attributable to ordinary shareholders

$

(17,844

)

$

(6,155

)

Basic and diluted net loss per share attributable to ordinary shareholders

$

(0.49

)

$

(0.19

)

Basic and diluted weighted average ordinary shares

 

36,057,885

 

 

32,076,421

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

Three Months Ended

March 31,

2021

2020

(Unaudited)

Operating Activities

Net loss

$

(17,844

)

$

(6,155

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

 

1,318

 

 

965

 

Amortization of discount of marketable securities

 

1,823

 

 

(271

)

Amortization of discount and issuance costs of convertible notes

 

4,904

 

 

–

 

Shared-based compensation

 

10,483

 

 

2,762

 

Net income (loss) from exchange rate fluctuations

 

(91

)

 

194

 

Changes in assets and liabilities:

User funds

 

(22,343

)

 

(7,928

)

Operating lease ROU assets and liabilities, net

 

(529

)

 

–

 

Other receivables

 

(708

)

 

448

 

Trade payables

 

1,090

 

 

(584

)

Deferred revenue

 

2,274

 

 

1,010

 

User accounts

 

20,293

 

 

7,138

 

Other account payables and accrued expenses

 

4,106

 

 

2,725

 

Non-current liabilities

 

(241

)

 

(2

)

Net cash provided by operating activities

 

4,535

 

 

302

 

 

Investing Activities

Investment in marketable securities

 

(125,998

)

 

(36,786

)

Proceeds from sale of marketable securities

 

39,930

 

 

37,088

 

Acquisition of business, net of cash acquired

 

(8,878

)

 

–

 

Purchase of property and equipment

 

(311

)

 

(131

)

Capitalization of internal-use software

 

(142

)

 

(285

)

Other receivables and non-current assets

 

–

 

 

52

 

Net cash used in investing activities

 

(95,399

)

 

(62

)

 

Financing Activities

Payment of deferred issuance costs related to follow on offering

 

(376

)

 

–

 

Payment of convertible notes deferred issuance costs

 

(34

)

 

–

 

Proceeds from exercise of share options

 

4,788

 

 

1,948

 

Tax withholding in connection with employees’ options exercises and vested RSUs

 

2,322

 

 

2,272

 

Repayment of long-term loan

 

(134

)

 

(120

)

Net cash provided by financing activities

 

6,566

 

 

4,100

 

 

Effect of exchange rate fluctuations on cash and cash equivalents

 

(377

)

 

(301

)

Increase (decrease) in cash and cash equivalents

 

(84,675

)

 

4,039

 

Cash and cash equivalents at the beginning of period

 

268,030

 

 

24,171

 

Cash and cash equivalents at the end of period

$

183,355

 

$

28,210

 

KEY PERFORMANCE METRICS

 

Three Months Ended

March 31,

2021

2020

 

Annual active buyers (in thousands)

 

3,812

 

2,450

Annual spend per buyer ($)

$

216

$

177

RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT

(In thousands, except gross margin data)

 

Three Months Ended

March 31,

2021

2020

(Unaudited)

GAAP gross profit

$

56,774

 

$

27,330

 

Add:

Share-based compensation

 

279

 

 

70

 

Depreciation and amortization

 

437

 

 

474

 

Non-GAAP gross profit

$

57,490

 

$

27,874

 

Non-GAAP gross margin

 

84.1

%

 

81.6

%

RECONCILIATION OF GAAP TO NON-GAAP NET LOSS AND NET LOSS PER SHARE

(In thousands, except share and per share data)

 

Three Months Ended

March 31,

2021

2020

(Unaudited)

GAAP net loss attributable to ordinary shareholders

$

(17,844

)

$

(6,155

)

Add:

Depreciation and amortization

$

1,318

 

$

965

 

Share-based compensation

 

10,483

 

 

2,762

 

Contingent consideration revaluation, acquisition related costs and other

 

1,320

 

 

(129

)

Convertible notes amortization of discount and issuance costs

 

4,904

 

 

–

 

Exchange rate income (loss), net

 

(455

)

 

–

 

Non-GAAP net loss

$

(274

)

$

(2,557

)

Weighted average number of ordinary shares – basic and diluted

 

36,057,885

 

 

32,076,421

 

Non-GAAP basic and diluted net loss per share attributable to ordinary shareholders

$

(0.01

)

$

(0.08

)

RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA

(In thousands, except adjusted EBITDA margin data)

 

Three Months Ended

March 31,

2021

2020

(Unaudited)

GAAP net loss

$

(17,844

)

$

(6,155

)

Add:

Financial expense (income), net

$

3,974

 

$

(331

)

Income taxes

 

45

 

 

31

 

Depreciation and amortization

 

1,318

 

 

965