Fiverr Exceeds Q3 Expectations, Stock Soars on Growth and Profitability
The online marketplace for freelance services, Fiverr International Ltd (FVRR), delivered a strong third-quarter fiscal 2024 performance, exceeding analysts’ expectations for both revenue and earnings. The company reported sales growth of 8% year-on-year, reaching $99.63 million, surpassing the analyst consensus estimate of $96.42 million. Furthermore, Fiverr reported an adjusted EPS of $0.64, comfortably beating the analyst consensus estimate of $0.59.
This positive news sent the FVRR stock price soaring on Wednesday. The strong performance can be attributed to continued growth in active buyers and increased spending per buyer. As of September 30, 2024, Fiverr had 3.8 million active buyers, compared to 4.2 million last year. However, the company saw a notable 9% year-over-year increase in spend per buyer, reaching $296.
Beyond revenue growth, Fiverr demonstrated significant progress in its profitability initiatives. The take rate, representing the percentage of revenue Fiverr keeps from each transaction, expanded by 260 basis points to 33.9%. While the adjusted gross margin declined by 120 basis points to 84.0%, the adjusted EBITDA margin expanded by a significant 180 basis points to 19.7%. This positive development indicates Fiverr’s commitment to improving its bottom line.
Fiverr’s Positive Outlook Fuels Optimism
Fiverr’s strong performance in Q3 has fueled investor optimism, with the company projecting a positive outlook for the remainder of the fiscal year. For the fourth quarter of fiscal 2024, Fiverr expects revenue to land between $100.2 million and $102.2 million, slightly exceeding the consensus estimate of $100.64 million. The company also forecasts adjusted EBITDA to be in the range of $19.5 million to $21.5 million.
Fiverr’s projected revenue for the full fiscal year 2024 has been revised upwards to $388.0 million–$390.0 million, compared to the previous guidance of $383.0 million–$387.0 million. This revised outlook exceeds the analyst consensus estimate of $385.13 million. Fiverr also expects its adjusted EBITDA to reach $73.0 million–$75.0 million, an improvement from the prior guidance of $69.0 million–$73.0 million.
“The strong results and our continued progress on profitability improvements put us well on track to achieve our three-year targets for Adjusted EBITDA and free cash flow,” said Ofer Katz, President and CFO of Fiverr.
FVRR Stock Performance
The market reacted favorably to Fiverr’s strong earnings announcement, with FVRR stock gaining 16.40% to close at $29.17 on Wednesday. Over the past 12 months, the stock has seen a remarkable 19% increase in value. The stock’s positive performance reflects investor confidence in Fiverr’s growth trajectory and its ability to deliver sustained profitability.
