Fiverr International Q2 Earnings Call Highlights

Fiverr International Q2 Earnings Call Highlights
FVRR

Fiverr InternationalFVRRreported second-quarter revenue of $97.8 million, down 10% from a year earlier, as the company said accelerating adoption of artificial intelligence is compressing demand for lower-value transactional freelance work

Founder and CEO Micha Kaufman described the quarter as transitional, saying Fiverr is shifting from a transaction-oriented marketplace toward a platform focused on higher-value, longer-duration projects that combine AI tools with human expertise, judgment and accountability

“AI is automating simple tasks,” Kaufman said. “Fiverr is moving toward larger, longer duration projects where AI deployment meets human judgment, strategic partnership, and accountability.”

Marketplace pressure offsets higher-value growth

Marketplace revenue totaled $63.1 million in the second quarter, declining 15.5% year over year. Fiverr reported 2.7 million active buyers, a 22% decline from the prior-year period, while spend per buyer increased 15.6% to $368. The marketplace take rate was 28%

Chief Financial Officer Esti Levy Dadon said the active-buyer decline was primarily driven by the compression of low-value transactional work, which remains the majority of Fiverr’s marketplace activity. Transaction volume fell by at least 10% year over year across most project categories below $1,000 on a trailing-12-month basis, she said. Writing and translation recorded the steepest decline, at more than 24%.

At the same time, projects valued at $1,000 or more accounted for 15% of completed projects’ gross order amount on a trailing-12-month basis. Clients completing projects above $1,000 grew 13% year over year, Kaufman said. Programming and tech projects above that threshold increased 34%, while graphics and design grew 25%

Management also pointed to growing demand for AI-related services. Kaufman said demand for AI user-generated-content video ads rose 265%, while AI video ads increased 63%. Search volume for AI voice agents climbed 49%, AI mobile app development rose 92%, and AI website development increased 39%

According to Kaufman, businesses are increasingly seeking freelancers for complex AI integrations and workflow automation rather than basic chatbot deployment. He said the company’s target market is outcome-based project work, including projects that can involve multiple specialists, rather than staffing placement

Traffic headwinds prompt lower outlook

Fiverr said it experienced a noticeable slowdown in marketplace traffic and demand in recent weeks, a trend that continued into the third quarter and is expected to persist for the foreseeable future

Kaufman said recent large-language-model updates and the integration of AI-generated summaries into search experiences are contributing to the traffic pressure. In particular, he said Google’s integration of Gemini into search exposes more users to LLM experiences and can reduce clicks to paid and organic links

“Traffic used to come only from search, then it became LLMs as well, and now it’s becoming hybrids of LLMs and traditional search,” Kaufman said. “That essentially lowers the volume of traffic.”

He added that Fiverr is investing in generative engine optimization and pursuing multiple acquisition channels. The company was among the early advertising partners on ChatGPT, he said, although he characterized the opportunity as still in its early stages. Fiverr also launched a discovery campaign in June aimed at e-commerce merchants scaling TikTok shops, including Amazon FBA and Shopify merchants.

Services revenue rose 2% year over year to $34.6 million and represented 35% of total revenue. Levy Dadon said services growth slowed from the first quarter and is expected to continue decelerating in the second half, with the company exiting 2026 at a double-digit decline in services revenue. She cited softening demand from influencer campaigns and dropshipping, as well as weakness in Fiverr Ads, Seller Plus and AutoDS.

Company highlights matching and fulfillment investments

Fiverr is deploying technology intended to improve matching quality and project outcomes for higher-value orders. Kaufman said the company’s proprietary Knowledge Graph analyzes the client, talent, project scope and order details

Early tests of live talent skill extraction resolved as much as 58% of conversation skill mismatches across more than 450 mismatch events A graph neural network model for dynamic matching produced a 7% reduction in cancellation rates in initial tests compared with Fiverr’s existing model

The company also launched the first phase of a standardized fulfillment layer in production. Kaufman said it evaluates transactional quality with a verified 91% precision rate across more than 84% of completed projects in initial testing. Fiverr’s semantic onboarding models and corporate know-your-customer initiatives have also moved into production, with development testing showing an 8% lift in new-customer conversion.

Management said these initiatives will require time to meaningfully affect financial results. The company now expects the financial impact of its transformation to take at least six quarters to materialize, beginning in the current period

Profitability, cash flow and guidance

Second-quarter adjusted EBITDA was $17.5 million, down 18.3% year over year, with an adjusted EBITDA margin of 17.9%, down 180 basis points. Levy Dadon said margin pressure was partly limited by discretionary-spending controls, internal AI efficiencies and balanced marketing spending

Fiverr ended the quarter with $308.5 million in cash and investments and generated $13.6 million in free cash flow. The company said it expects full-year free cash flow to be lower than in each of the prior two years, though management emphasized continued profitability, cash generation and cost discipline

Levy Dadon said Fiverr intends to protect research and development spending needed for the transformation while adjusting marketing and discretionary costs as conditions warrant. She said the company is not currently planning inorganic investment, though it will remain opportunistic while prioritizing internal platform investment and financial flexibility

About Fiverr InternationalFVRR

Fiverr International Ltd. operates an online marketplace that connects businesses and individuals with freelance talent across a wide range of professional services. Through its platform, Fiverr enables clients to procure work such as graphic design, digital marketing, writing and translation, video and animation, programming and tech, and business services. By offering a streamlined interface for ordering and delivering gig-based work, the company seeks to simplify the procurement of specialized skills on a project-by-project basis.

Founded in 2010 and headquartered in Tel Aviv, Israel, Fiverr serves clients and freelancers around the globe, with a particularly strong presence in North America and Europe

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