Fiverr Surpasses Expectations, Raises Full-Year Outlook; Stock Surges

Online marketplace Fiverr reported third-quarter revenue of $90.9 million, exceeding analyst expectations of approximately $83.8 million, though this represents a 15.8% decrease from the same period last year. The company's adjusted diluted earnings per share (Non-GAAP) reached 43 cents, surpassing the consensus estimate of 30 cents, despite a 44% drop from the previous year. Adjusted EBITDA was $14.5 million, above the company's own forecast of $8 million to $12 million, with a margin of 16% compared to 22.4% a year ago. Under GAAP, net profit was $1.3 million, or 3 cents per share, down from $5.5 million last year.

Following the positive results, Fiverr's stock jumped 11.5% to $9.01 in after-hours trading. The company now forecasts full-year revenue between $374 million and $380 million, a 12%-13% decrease, an improvement from its previous guidance of $356 million to $372 million. For the fourth quarter, Fiverr anticipates revenues of $80 million to $86 million, higher than the analyst consensus of $77 million. The company also raised its adjusted EBITDA forecast for the full year to $61 million to $65 million, up from $52 million to $62 million.

"Stronger-than-expected performance in the services segment allowed us to surpass our previous quarterly forecasts and update our full-year 2026 outlook upward," stated Esti Levi-Dadon, Fiverr's CFO. She added that the company maintains a disciplined approach to capital allocation due to its strong balance sheet and significant cash reserves.

Revenue from the services segment grew 3.4% to $35.5 million, driven largely by AutoDS, an online store management platform acquired in 2024. In contrast, the core freelance marketplace saw revenues decline by 24.7% to $55.4 million, with active buyers decreasing from 3.3 million to 2.4 million year-over-year. However, remaining buyers are spending more, with an average annual spend of $373 compared to $330 previously, and the platform's take rate increased to 28.2%.

Fiverr's Founder and CEO, Micha Kaufman, noted the shift in search behavior towards AI-driven discovery and automated workflows, impacting the freelance marketplace. The company is adapting by focusing on higher-value projects and has launched Mira, an AI agent to assist clients in defining project scope, and integrated its services with AI models like Claude and ChatGPT. Kaufman highlighted that projects of $1,000 or more constituted 16% of orders in the past year, demonstrating the success of their focus on complex, high-value projects.

Looking ahead, Fiverr anticipates a significant decline in traffic to its freelance marketplace in 2027 due to the transition from traditional search engines to generative AI. While expenses are expected to decrease, they may not fully offset the impact on demand, potentially leading to a decline in adjusted EBITDA margins. The company plans to release its full 2027 forecast with its fourth-quarter report, with analysts projecting revenues of approximately $314 million for 2027, a decrease of about 14%. The company also announced the departure of Chief Business Officer Jingjing Qian, who chose not to relocate to Israel, with Levi-Dadon taking on broader operational responsibilities alongside Kaufman.