Earnings Call Transcript - FVRR Q1 2026

Operator, Operator

Good morning, and welcome to the Fiverr First Quarter 2026 Earnings Conference Call. Please note that this conference is being recorded. I would now like to turn the conference over to Ms. Emily Greenstein. Thank you, and over to you.

Emily Greenstein, Head of Investor Relations

Thank you, operator, and good morning, everyone. Thank you for joining us on Fiverr's earnings conference call for the first quarter that ended March 31, 2026. Joining me on the call today are Micha Kaufman, Founder and CEO; and Esti Levy Dadon, CFO. Before we start, I would like to remind you that during this call, we may make forward-looking statements and that these statements are based on our current expectations and assumptions as of today, and Fiverr assumes no obligation to update or revise them. A discussion of some of the important risk factors that could cause actual results to differ materially from any forward-looking statements can be found under the Risk Factors section in Fiverr's most recent Form 20-F and other filings with the SEC. During this call, we'll be referring to some key performance metrics and non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin and free cash flow. Further explanation and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP measures is provided in the earnings release we issued today and our shareholder letter, each of which is available on our website at investors.fiverr.com. And now I will turn the call over to Micha.

Micha Kaufman, Founder & CEO

Thank you, Emily. Good morning, everyone, and thank you for joining us. Let me start with the headline. Q1 was a solid quarter of execution with both revenue and adjusted EBITDA coming in at the high end of our guidance range. Esti will walk through the details shortly, but the underlying message is this: we are focused on executing the strategic transformation while being methodical in managing the existing business across both top and bottom lines. Maintaining financial discipline and transparency throughout this transformation is critical, and we are committed to doing that consistently and credibly. Let me now turn to the transformation — as we mentioned last quarter, we are in the early stages of a multiyear journey to reposition Fiverr from a transaction-oriented marketplace into a trusted work platform for complex high-value outcomes. This is not a cosmetic shift. It is a fundamental evolution of how work is matched, delivered and orchestrated on our platform. Our North Star is clear: to become the most trusted platform for completing high-value, high-trust work. This means enabling businesses and talent and increasingly AI-driven workflows to collaborate effectively on complex outcomes. Two months into the transformation, the early signals across all pillars of this transformation are consistent with our plan. First, we are strengthening the high-end talent flywheel and expanding into more complex, higher-value projects. Projects over $1,000 continue to grow at a strong double-digit rate with clients completing $1,000-plus projects, up 18% year-over-year. We are also seeing increasing participation from talent delivering these engagements. What's important here is not just the growth. It's the nature of the work. We are seeing businesses come to Fiverr not for isolated tasks, but for multiphase mission-critical projects. For example, one, a global health care company is working with talent on Fiverr to produce over 30 multilingual animated assets for a product launch with ongoing spend across multiple engagements. Two, a C2C sports platform in New Zealand built a full mobile application through multiple development phases on Fiverr. Three, a European entrepreneur is building an AI-enabled invoicing SaaS platform to comply with regional regulatory standards. These are not one-off gigs. They are sustained high-value engagements that require coordination, iteration and trust. This is exactly the segment we are targeting and exactly where the market is moving towards more strategic outcome-based engagements. Second, we are investing heavily in matching infrastructure and experience. This is our main differentiator and the key to driving trust and quality, which are the core primitives of the market. Our research and internal data confirm this. The primary differentiator in hiring platforms is not price. It is talent, quality and trust. Historically, Fiverr has won on ease of use and speed. Winning upmarket means extending that advantage into quality and trust, and that is exactly what our infrastructure investments are designed to deliver. That is why we are rebuilding our matching infrastructure from the ground up. We are moving from keyword-based matching to context-aware, outcome-driven matching powered by a knowledge graph that captures not just who the talent is, but what they have delivered in what context and with what results. At the same time, we are shifting ranking from optimizing for conversion to optimizing for expected project success and buyer satisfaction. The data is already moving. Recent tests in Fiverr Pro show mismatch rates down nearly 10%, and we are consistently seeing higher value engagements, leading to stronger repeat behavior. These are the early proof points of a durable trust mode. Third, we are evolving Fiverr into a comprehensive work platform. Today, most high-value projects on Fiverr run on infrastructure built for a different era of the platform. We are addressing this by building an end-to-end fulfillment layer that includes visibility into project progress, early detection of risk, structured feedback loops and active orchestration by Fiverr. This is a fundamental shift in responsibility and perception of responsibility. We are becoming an active partner for our clients and talent, not just a passive connector. Over time, this infrastructure will also allow Fiverr to integrate seamlessly into agentic workflows, where AI handles coordination and humans provide judgment and accountability. Fourth, we are expanding our go-to-market capabilities to scale more aggressively into high-value work. We are now building three new growth engines. First, a talent-led growth engine, driving high-quality demand directly to high-performing freelancers. Second, an industry-led growth engine, building tailored experiences for specific industries such as e-commerce and early-stage start-up companies. And third, partner-led distribution, embedding Fiverr directly into workflows and platforms where high-value demand already exists. These initiatives expand beyond traditional performance marketing and are designed to create scalable, durable growth engines aligned with our upmarket strategy. Finally, we are improving execution across the organization. We are optimizing production workflows through better telemetry, identifying bottlenecks and increasing discipline in delivery. At the same time, we are rebuilding how work is executed with AI agents at the center and human judgment where it matters most. This approach enables faster decision-making, reduces handoffs, improves product quality and drives efficiency across the organization. Mastering this as a company will also allow us to generate a reusable blueprint for our customers and talent to replicate and enjoy. Stepping back, the fundamental dynamics of this market are moving in our direction. AI is increasing, not reducing, the complexity of matching the right talent to the right work. The demand for trusted outcome-based platforms is not a future possibility. It is already showing up in our data, in our customer examples and in the infrastructure we are building. Fiverr has a differentiated model, a compounding data advantage built on real transaction outcomes and an end-to-end platform that no point solution can easily replicate. We are executing with urgency and discipline, and we are confident in where this leads. With that, I'll turn it over to Esti for the financial details.

Esti Levy Dadon, Chief Financial Officer

Thank you, Micha, and good morning, everyone. We delivered a strong first quarter with both top and bottom lines exceeding the midpoint of our guidance. Revenue was $105.5 million, down 1.6% year-over-year, reflecting continued growth in high-value work, offset by headwinds in low-value transactional activity on the marketplace alongside a continued growth of service revenue. Adjusted EBITDA was $22.6 million, up 16.3% year-over-year and representing an adjusted EBITDA margin of 21%. This is an improvement of 330 basis points from a year earlier as we continue to execute with strong financial discipline. Turning to our revenue segments. Q1 marketplace revenue was $67.1 million, driven by 2.9 million active buyers, $356 in spend per buyer and a 27.7% marketplace take rate. The continued momentum in our upmarket strategy and shift towards more complex engagement is clearly showing in our cohort behavior with spend per buyer growth of 15% year-over-year. Projects over $1,000 grew at a strong double-digit rate, driven by 18% growth in clients completing these engagements. This growth is coming from both new adoption and repeat behavior as buyers expand into larger use cases, along with increased usage of dynamic matching and managed services. Looking ahead, macro conditions remain largely unchanged. Based on current trends, we expect marketplace growth for the remainder of the year and on a full year basis to track broadly in line with Q1 performance. Service revenue in Q1 was $38.4 million, up 30% year-over-year and accounted for 36% of total revenue. Services revenue came in slightly higher than expected as AutoDS ran a successful campaign at the start of the year, pulling certain user sign-ups and revenue forward from Q2 to Q1. Overall, our expectation for services revenue for this year remain largely unchanged with growth moderation in Q2 and continuing into the second half of the year. As Micha mentioned, 2026 is a transformational year for us as we make critical foundational investments to strengthen our high-end talent flywheel. Our decisions are centered on improving marketplace quality and trust, prioritizing high-value work and driving more focused execution with strong financial discipline. On capital allocation, we continue to take a disciplined and balanced approach. Our strong balance sheet allows us to invest in growth, return capital to shareholders and remain opportunistic on M&A. We generated $21 million in free cash flow in Q1, and we expect to continue executing our buyback program in a thoughtful manner. As of March 31, 2026, we had $59.5 million remaining under the current authorization. Now on to guidance. For the full year 2026, we expect revenue to be in the range of $380 million to $420 million, representing a year-over-year growth of negative 12% to negative 3%. We are raising our full year adjusted EBITDA guidance and now expect it to be in the range of $64 million to $80 million, representing an adjusted EBITDA margin of 18% at the midpoint. For the second quarter of 2026, revenue is expected to be between $95 million to $103 million, representing year-over-year growth of negative 13% to negative 5%. Adjusted EBITDA is expected to be between $16 million to $20 million, representing an adjusted EBITDA margin of 18% at the midpoint. Our revenue outlook reflects solid execution in Q1 and the continued uncertainty in the market conditions. Our adjusted EBITDA guidance reflects the strength of our core marketplace profitability and our continued commitment in maintaining disciplined margin profile while investing in the transformation. As we look at the rest of the year, we are staying focused on our core priorities, driving progress in higher-value work, improving trust and quality and building scalable growth engines. We believe these are the right indicators to evaluate the business as we transition to the next phase. With that, we will now turn the call over to the operator for questions.

Operator, Operator

We have the first question from the line of Eric Sheridan from Goldman Sachs.

Eric Sheridan, Analyst (Goldman Sachs)

Maybe two, if I could. One, just coming back to the transformation strategy. I want to know a little bit more about the duration of sort of completion of what you call sort of the infrastructure layer and putting the pieces in place, and how we should be thinking about when you exit that phase of the transformation and some of the execution shifts more predominantly to go-to-market or what the mix is of building blocks relative to execution on the transformation strategy — that would be one. And then the second one would just be, you talked a little bit about partners and evolving the go-to-market strategy. I want to know if you could go a little bit deeper in terms of what those types of partners might look like and what market opportunity they might open up that maybe you're under-indexed to today?

Micha Kaufman, Founder & CEO

Essentially, the transformation is an ongoing process, and since we just started it mid last quarter, we are anticipating to see results over the remainder of the year with more emphasis, because it takes time between the things that we develop and release until they show up in the numbers, to see this more in the second half of the year and definitely towards the end of the year. And as we said, we will continue to be transparent on what we're seeing and the progress there. As for the transformation, my belief is that the entire market is in a transformational moment where every business needs to adapt to a new reality where AI plays a critical game, not just in making products better and more efficient, but also being able to connect with agentic realities where agents are actually using the platform. This is not limited to this year; I think that this is going to be a transformation that every business out there will have to implement in the coming years. It's very similar in my mind to the digital transformation when businesses went from offline to online and now are seeing a new reality. Now we are already seeing some initial signals that we called out in the opening remarks of areas where that transformation has started, and we started rolling out experiments and new products and how they influence a higher quality matching and focus on better conversion and better retention around high-end talent and larger scopes. So over the next few quarters, we will continue to report on what we're seeing. The progress, and obviously, the more history we have in doing this, the results should accumulate. And as we said, this is going to be a turnaround year where the next years are going to be years of growth. In terms of the other question regarding partners and go-to-market strategy: again, we very much focus on this idea of human-in-the-loop partners where the requirement for a skilled talent network to make judgment calls on AI's work and on calibrating models and checking integrity and ensuring accuracy is paramount, and I think that this is an area where Fiverr can play a major role. That together with agents that we're developing to automate some of this work to make sure that the experts are actually focusing only on things that humans need to focus on is a very important and critical role in what we're doing. It is still early, there's a lot of AI automation use cases. We're running successful pilots with some initial customers, and we see that there's a lot of demand for Fiverr to become a fulfillment partner for SMBs to adopt automation. So again, early in the process, but we will have more things to call out in future quarters.

Operator, Operator

We have the next question from the line of Jason Helfstein from Oppenheimer.

Jason Helfstein, Analyst (Oppenheimer)

Kind of like a two-part question, but on the same theme, so obviously, you've had a front row seat to this whole evolution of how agents are evolving the business. As you're seeing even these more cutting-edge frontier models coming out, how is that further evolving your view on how both you will leverage this technology and how your customers will leverage it? And then there's also been discussion among investors that AI agents are lowering the barriers to new business creation. There's more new domains coming online, I think a record number of apps being submitted to the app stores. I guess how do you think about that, like is that a positive for Fiverr or a negative for Fiverr? Can you leverage that? Just broadly bring those topics together.

Micha Kaufman, Founder & CEO

So essentially, the way we're thinking about how agents are becoming a part of what we're doing: agents are very much learning from skilled people on how to run workflows much faster, much more efficiently, 24/7. But at the same time, a lot of what agents are doing requires ongoing judgment. And it's much like everything else with AI. Everybody has access to the same AI, which means that also everybody has access to the same agents that are available out there. Just having access to this technology doesn't give you a competitive edge; it just flattens everything and maybe elevates the floor. But on top of what agents are doing, how you create skills for agents and how you create workflows that combine multiple skills and multiple agents — that is an art. That is what a lot of companies are actually focusing on and providing: their expert skills onto agents. In the case of businesses, not all businesses have the talent to actually train an agent and oversee what the agent is doing, providing judgment and calibration and fine-tuning. We see this on Fiverr. The implementation of agents across our system internally requires a tremendous amount of calibration to overcome hallucinations, inaccuracies or just moderate execution. So definitely, the role of an expert, of an employee, of a freelancer is changing, but it highlights the uniqueness of what they can build and bring to the table to provide an advantage. Now, when we think about lowering the barriers, or agents lowering the barriers for business creation, this is amazing news for us. I've seen lately staggering numbers on the launches of new products in recent months. I believe April was the highest month with over 19,000 new announcements on product and company releases. On the one hand, the signal-to-noise is extremely complex because it makes everybody a builder, but building something gives you nothing. It's all about the deployment, getting noticed, validating and then scaling. These tasks are largely unresolved yet by AI. Can AI help in this? Yes. But generically speaking, because it provides the same help for everybody else, again, flattening everything. What gives you that competitive edge when you create something or you almost create something and you want to improve it and then you want to deploy it and then you want to scale it? This is where experts come in. Now the reason why I believe that this is not yet fully showing up in the numbers is this is a transformative period. I remember the digital transformation from 2000. It took time for businesses to understand that if you don't have a website, you're going to be out of business over time. The same goes with AI, and the same goes with experts that need to come with AI to make your AI or your execution better than your competitors. I think that we're in the early innings. It's going to take some time. But all in all, I actually think that this is really a great upside for us. And when I look at the marketplace, we see AI consulting and business formation all grow really strong double digits. Also AI-related categories continue to be super strong: AI development up 118% year-over-year, marketing automation also growing really strong double digits. I can go into more detail, but I'll stop here.

Jason Helfstein, Analyst (Oppenheimer)

I guess it hasn't automated us doing this earnings process yet, but maybe someday.

Operator, Operator

We have the next question from the line of Ron Josey from Citi.

Ronald (Ron) Josey, Analyst (Citi)

Automation is the future, right? Can't wait. I wanted to ask a little bit more — two questions. First is on just attracting the talent to the marketplace as we go more upmarket and towards these multiphase projects. We're clearly seeing continued strength on spend per buyer. We're seeing that growth reaccelerate. So talk to us just about the talent on the marketplace as we go more upmarket and these multiphase projects. And then one of the things that struck me, matching is a key part of the marketplace. I think I heard the team talk about mismatch rates being down 10%. So during this transformation era, talk to us just about the ability to continue to execute on some of the key tenets of the marketplace like dynamic matching and the results that you're seeing.

Micha Kaufman, Founder & CEO

On the first question, talent is super important. As we know from research, quality is core and the ability to match quality and drive quality perception is super critical, and this is very much in the center of this transformation for us. Getting access to talent has never been an issue. We have had an abundance of talent. What we're more adamant about now is really understanding on the meta-skill level what it means to be a talent for a specific type of customer and outcome, and creating this skill graph is super critical. In other words, we're becoming more selective about talent. But by improving the algorithm and improving the matching, we can anticipate better outcomes and better happiness, and as a result, we also anticipate better retention among our customers. Those are the key things. So when we call out the reduction in mismatch, this is key because this actually means — and it's like hiring for any job, right? Some people that you hire turn out to be amazing, some you later figure out that there is something that was missed, which makes the match not optimal. We don't want to tolerate this. We actually think that if there's one huge advantage based on data that we've accumulated over 16 years, billions of interactions and tens of millions of transactions, it's being able to take that data and actually make matching better than anything that was done before. This is a reason to win; this is a reason to exist. So we're putting a lot of pressure there and seeing the amount of actual matches that were mismatched in hindsight get down is a very positive signal. We're far from done. We're just starting right now. And obviously, over time, as we accumulate deeper signals, we will continue sharing it with you.

Operator, Operator

We have the next question from the line of Bernie McTernan from Needham.

Stefanos Crist (calling for Bernie McTernan), Analyst (Needham)

This is Stefanos Crist calling in for Bernie. I wanted to follow up on Ron's question on the matching. Could you maybe give us any more details on what a baseline mismatch rate is or maybe what the revenue impact is of that 10% reduction? And then I also wanted to ask on the AutoDS pull forward, could you talk about what went right with that campaign? And is the pull forward just a dynamic of annual subscriptions? Or is there anything else?

Micha Kaufman, Founder & CEO

In terms of matching, we haven't publicly shared any specific baseline mismatch numbers, but with this transformation, we're really focusing on trust and quality as core primitives. To us, mismatch is about making sure that we have a deep understanding of the factors that will drive a strong match between a customer with their specific circumstances and needs and the very specific skill and validated experience of a talent to do that task. As we restructure and refocus, we will be able to provide more specific color as we really focus on those KPIs. This nuanced understanding is super important. It's not just driving revenue today; it is driving the flywheel and driving the repeat rate. Now on AutoDS: essentially, we had a very strong influencer campaign and we found great timing to do it. In Q1 we were kind of focusing this on Q2, but we were able to execute it slightly earlier. It pulled certain sign-ups and revenue forward into Q1. It was an opportunity for us to move something from Q2 to Q1 and execute it earlier. It's not something that we plan to replicate exactly, but it did perform well and that's why it was highlighted.

Operator, Operator

We have the next question from the line of Doug Anmuth from JPMorgan.

Douglas Anmuth, Analyst (JPMorgan)

I have two. Micha, can you just talk about where you are in terms of hiring AI-native personnel within your own company and how you're thinking about that? And then Esti, can you just help us bridge the EBITDA margins from the 21% in Q1 to the 18% or so for the full year?

Micha Kaufman, Founder & CEO

In terms of hiring AI-native personnel, we're on track. We continue to do this, and the competition for talent is pretty strong, but we've added excellent people to the team. What's interesting is that when you find the right people, it's different than before in terms of the amount of people you need — these AI-native people are highly productive. They often have a founder or entrepreneurial mentality and can be 10x contributors. Much of what they do is build systems, agents and workflows and connect them to the rest of the company, continuously evolving, tweaking, calibrating and validating. It's remarkable work, and it points to the future where companies can be leaner but multiply their output through these key hires. Talent strategy is important for all companies and is top of mind for us.

Esti Levy Dadon, Chief Financial Officer

As for the 18% full year margin guide, that reflects the hiring and the investments that we're doing in the transformation, and that expense picks up over time during the year. It's consistent with our expectations at the beginning of the year. Overall, we're committed to executing the transformation with strong financial discipline, and we plan to do that together with higher profitability and continued healthy cash flow generation.

Operator, Operator

We have the next question from the line of Brad Erickson from RBC Capital Markets.

Bradley (Brad) Erickson, Analyst (RBC Capital Markets)

I guess all this transformation talk — larger buyers, et cetera — do you think about adjusting the economics or take rates or pricing or how you merchandise your services at all to serve that type of customer? And then along those same lines, what would you say you want to be signaling here this morning on overall marketing intensity as you pursue this different customer profile than you have historically?

Micha Kaufman, Founder & CEO

As for the first question, there's nothing to call out at the moment. We look at economics and business models all the time, but I don't have anything specific to announce now. Regarding marketing and the customer profile: we highlighted some use cases in the prepared remarks, and these types of higher-value examples are increasing as a portion of the business. As they grow, they will drive growth. As we create more efficient, higher trust and higher quality solutions, the plan is to become more efficient and allow us to invest more aggressively in marketing to feed the flywheel as it grows. That's the plan. We said at the beginning of the year that we're building for growth over the next couple of years, and the foundational work we're doing is intended to enable that.

Operator, Operator

We have the next question from the line of Matt Condon from Citizens Bank.

Matthew (Matt) Condon, Analyst (Citizens Bank)

My first question is on the green shoots you're seeing in success moving into more complex projects. Can you talk about what you're seeing today as far as the product launches or go-to-market that's really driving that success in the transactions of $1,000-plus growing? And then my second question is you talked in the letter a lot about this comprehensive work platform — can you talk about the specific products that you are really focused on today that are enabling that end-to-end platform?

Micha Kaufman, Founder & CEO

The truth is we're only two months into the transformation, so what we've progressed so far is not big product launches yet. What we've been doing is dealing with the fundamentals of the business: the infrastructure, the data infrastructure, the matching algorithm and quality improvements. It's not really about new product launches, but about enhancing everything we do. In some cases, we are rewriting solutions. We called out job post as an example, dynamic matching and managed services, and those are driving larger engagements on Fiverr. More broadly, we're seeing a clear shift in how customers use the platform. These products are fundamentally changing Fiverr from a place to complete isolated tasks into a platform to execute multiphase high-value projects. Two months in, it's not about shiny launches; it's about going back to basics and ensuring we provide an unmatched level of service and quality. That's the focus, and we're starting to see signals in the numbers.

Operator, Operator

Does that answer your question, Matt?

Matthew (Matt) Condon, Analyst (Citizens Bank)

Yes, that's great. I just had another question on the comprehensive work platform — the end-to-end platform you're launching — what are the capabilities that you really need to launch to enable this end-to-end service?

Micha Kaufman, Founder & CEO

Sorry for skipping this earlier. On the product front, we are investing in an end-to-end fulfillment layer, which we think is key to increasing Fiverr's value as an active partner in ensuring customers and talent are engaging efficiently. If there's anything in the process that we need to identify to course correct, we're there. This is important because as you move to more bespoke, complex projects, being part of the transaction and ensuring scope clarity, understanding progress and creating transparency is critical. Identifying early if things are on track or deviating is essential. This new layer is about changing the perception of Fiverr into a high-end solution for high-scope talent. It's built on core pillars: superior matching and the brain behind it, product enhancements, go-to-market engagement and operational excellence. Operational excellence includes determining where human-in-the-loop is required and where Fiverr can provide technology and human support. The learnings we're developing internally on efficient execution will be translated into tools we provide to customers and talent.

Operator, Operator

We have a last question from the line of Josh Chan from UBS.

Joshua (Josh) Chan, Analyst (UBS)

With your move upmarket, what's the profile of the customer that you're ultimately targeting? You mentioned projects above $1,000, so is that the benchmark of what you're targeting? And then secondly, on free cash flow, could you talk about whether the Q1 level of free cash flow is roughly sustainable for the rest of the year and then your willingness to more aggressively buy back the stock at these levels?

Micha Kaufman, Founder & CEO

In terms of focus, we're still largely focused on SMBs, probably larger than micro businesses but still SMBs. There's significant untapped demand among midsized businesses and larger use cases. As every business builds new tech stacks that include agents, APIs and other components, these use cases require validation to check accuracy, integrity, compliance and security. Those needs require a mix of technology and human-in-the-loop work, and Fiverr is a good fit for those services. Projects of $1,000 and above are a useful proxy to identify spend capacity and willingness to invest in digital services; they provide a reference point to help identify seriousness and willingness to invest in a business. Within our marketplace, transaction sizes range from tens to hundreds of thousands of dollars, but $1,000-plus is a helpful reference.

Esti Levy Dadon, Chief Financial Officer

As for cash flow, we generated $21 million of free cash flow in Q1, and we plan to continue to generate strong cash flow and to be consistent and disciplined on capital allocation. Our capital allocation priorities remain the same: first and foremost, investing in the business and continuing to fund the transformation while generating cash flow. Now, as for buybacks, we have authorization of $59.5 million, and we will use it and act on that thoughtfully over time.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the conference back to the management for any closing remarks.

Micha Kaufman, Founder & CEO

Thank you, Marin, for moderating the call today. And for everyone joining, wishing you a great day and looking forward to speaking soon.

Operator, Operator

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.