Fiverr International Ltd. (NYSE: FVRR) reported fourth-quarter revenue rose 4.2% year over year to $83.1 million during what the company called a challenging macroeconomic environment. In comparison, revenue had grown by 11.1% year over year in the third quarter. However, Fiverr noted the number of active buyers on its talent platform in the fourth quarter increased 1% year over year to 4.3 million. Gross margin also improved.
“2022 was a unique year,” founder and CEO Micha Kaufman said in a conference call with analysts. “In response to a shifting macro environment resulting in headwinds to the overall freelance demand, we quickly pivoted the company to tighten our focus on efficiency and profitability.”
In addition to the increase in active buyers, Kaufman said the number of “large-wallet customers” — those with annual spend of $10,000 or more — rose by 29% year over year in the fourth quarter.
“The tech industry is also at a unique time with a significant amount of layoffs among tech and knowledge workers,” he said. “Many have turned to freelancing as a temporary or permanent career choice.”
Kaufman also noted the number of active sellers on the company’s platform reached an all-time high in 2022.
He also touched on AI tools such as ChatGPT, saying they would have a positive impact on Fiverr’s business. Kaufman noted the innovation always creates more jobs, not fewer. He also foresees the tools making its talent community more productive. In addition, AI technology will help Fiverr improve its overall search, browsing and matching experience, he said.
Guidance
First-quarter revenue is expected to be between $86.5 million and $88.5 million, representing year-over-year growth of between 0% and 2%, Fiverr President and CFO Ofer Katz said during the call with analysts.
Full-year 2023 revenue is expected to be in the range of $350 million to $365 million, representing year-over-year growth of between 4% and 8%.
“Our Q1 and full-year guidance reflects the current macro dynamics as well as the visibility we have on our historical cohorts and acquisition funnels in the current environment,” Katz said. “We believe the first quarter will be the most challenging in terms of revenue growth rate, due to the comparison to Q122 when growth was minimally impacted by macro headwinds.”
The company expects year-over-year revenue growth rates to increase over the course of 2023, and it expects to exit the year with double-digit revenue growth rate at the midpoint.
Share price and market cap
Shares in Fiverr were up 19.25% to $45.04 as of 12:07 p.m. Eastern time today; they were 72.20% above their 52-week low, according to FT.com. The company had a market cap of $1.40 billion.