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Fiverr’s Q2 2020 financial results soar, driven by coronavirus freelance activity and other factors

08/06/2020 By

Amid the workforce disruption of the coronavirus crisis, Fiverr’s Q2 2020 revenue grew by 82% over revenue in Q2 2019, and the company achieved positive adjusted EBITDA for the first time, said the online freelancer services marketplace and ecosystem in announcing its latest financial results Wednesday.

Management attributed the results to pandemic-driven changes in the market, strategies already in place, and nimble and adjusted execution. It certainly did not hurt that the company raised over $130 million in cash from its “follow-on offering” in late May to propel its growth.

At the close of NYSE trading yesterday, Fiverr’s share price was $122.87, up from $103.85 on Aug. 4. Since the first days of April, when Fiverr shares were trading in the $23 to $25 range, the share price has increased by more than 400%. At the $122.87 share price, the company market cap was $4.3 billion. At the time of publication today, Fiverr shares were trading in a range of $123.39 to $121.73.

Some highlights from the quarter, included the following:

Revenue 82% increase to $47.2 million from $29.9 million in Q2 2019. Across consecutive quarters, Q2 2020 revenue represented a 46.6% increase over Q1 2020 revenue of $34.2 million.
Active Buyers Grew to 2.8 million as of the end Q2 2020, compared to 2.2 million as of the end Q2 2020, an increase of 28% year over year. That also represented a net gain of approximately 300,000 compared to Q2 2020.
Spend per Buyer $184 at the end of Q2 2020, compared to $157 at the end of Q2 2019, an increase of 18% year over year. Spend per buyer increased from $177 at the end of Q2 2019.
GAAP Net Loss ($0.1) million compared to ($9.4) million in Q2 2019.
Adjusted EBITDA $3.1 million, in Q2 2020 compared to ($4.9) million in Q2 2019.


Total operating expenses in Q2 2020 increased to $39.8 million, or 32.9% over Q2 2019 (less than half of the percentage increase in revenue over the same period). Sales and marketing expenses, the largest expense category, increased to $23.2 million in Q2 2020, up 46.4% over Q2 2019. Q2 2020 sales and marketing expense increased $27.5% over Q1 2020 ($18.2 million) — in other words an increase of $5 million from quarter to quarter.

“When COVID-19 hit,” said CEO Micha Kaufman in a Wednesday morning earnings call, “we leaned in on performance marketing opportunities, investing more dollars with better ROI and marketing efficiency, and acquiring higher lifetime value buyers. Strong trends of both organic and paid channels resulted in a record level of net adds of active buyers on our marketplace.”

Kaufman also said: “The outstanding Q2 results benefited from several strategies we have put in place. We stepped up the localization efforts at the beginning of the year, and since then have launched five non-English speaking websites and started to ramp local PR and performance marketing investments.”

The launch of two of the five localized websites were accelerated after the coronavirus pandemic impact and opportunity became clear in April.

The company reported in its press release that it accomplished the following in Q2 2020:

  • Two new localized sites: Launched two additional non-English websites in Italian and Dutch as part of the continuing expansion into European countries
  • Promoted Gigs expansion: Promoted Gigs made available to many more sellers, in 15 categories, and on both search and category pages
  • Introduced Fiverr Business: a dedicated environment for business buyers to transact and collaborate on Fiverr — marking a key investment in going upmarket

From what was said on the earnings call, it seemed that Fiverr Business was a capability that enabled teams in an organization to collaborate and use Fiverr as a customer entity (versus only individuals with their own individual Fiverr accounts).

Looking ahead, Fiverr increased its Q3 and full-year revenue and EBITDA guidance as follows:

Q3 2020 FY 2020
Revenue $48.0 – $49.0 million $177.5 – $179.5 million
Revenue Growth % 72 – 76% (period/period) 66 – 68% (period/period)
Adjusted EBITDA $2 million – $3 million $4.5 million – $6.5 million

Fiverr CFO Ofer Katz noted on the earnings call that “while we believe we will remain profitable at this revenue level, our priority continues to be driving revenue growth. Therefore, we intend to continue to invest in our product development roadmap and marketing initiatives, and by being profitable, we can make those investments on a more aggressive timeline.”

In other words, it appears that Fiverr is primed to respond to opportunities that arise in the new world of work shaped by COVID-19.