Fiverr International Ltd 20-F for FY2025
Fiverr International Ltd. (FVRR)
20-F
2026-03-12
For: 2025-12-31
View Original
Added on
April 08, 2026
About this 20-F
Fiverr International Ltd filed this 20-F on March 12, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $430.91M
- up 10.1% from $391.48M a year earlier
- Net income
- $20.98M
- up 15.0% from net income of $18.25M a year earlier
- Diluted EPS
- $0.56
- up 16.7% from $0.48 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
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(Mark One)
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31 , 2025
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
OR
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of event requiring this shell company report
Commission file number 001-38929
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English)
(Translation of Registrant’s name into English)
State of Israel
(Jurisdiction of incorporation or organization)
(Jurisdiction of incorporation or organization)
Fiverr International Ltd.
8 Eliezer Kaplan St ,
Tel Aviv 6473409 , Israel
(Address of principal executive offices)
(Address of principal executive offices)
Chief Executive Officer
Telephone: +
Email: investors@fiverr.com
Fiverr International Ltd.
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered, pursuant to Section 12(b) of the Act
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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The
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Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of the period covered by the annual report. 36,093,139 ordinary shares.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐ No ☒
Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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☐ Accelerated filer
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☐ Non-accelerated filer
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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☒
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☐ International Financial Reporting Standards as issued by the International Accounting Standards Board
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☐ Other
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If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
CONTENTS
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F-1 |
3
ABOUT THIS
ANNUAL REPORT
Except where the context otherwise requires or where otherwise indicated in this Annual
Report, the terms “Fiverr,” the “Company,” “we,” “us,” “our,” “our Company”
and “our business” refer to Fiverr International Ltd., together with its consolidated subsidiaries as a consolidated entity.
All references in this Annual Report to “Israeli currency” and “NIS”
refer to New Israeli Shekels, the terms “dollar,” “USD” or “$” refer to U.S. dollars and the terms
“€” or “euro” refer to the currency introduced at the start of the third stage of European economic and
monetary union pursuant to the treaty establishing the European Community, as amended.
PRESENTATION
OF FINANCIAL AND OTHER INFORMATION
Our financial statements have been prepared in accordance with generally accepted accounting
principles in the United States (GAAP). We present our consolidated financial statements in U.S. dollars.
Our fiscal year ends on December 31 of each year. References to fiscal 2023 and 2023
are references to the fiscal year ended December 31, 2023, references to fiscal 2024 and 2024 are references to the fiscal year ended
December 31, 2024, and references to fiscal 2025 and 2025 are references to the fiscal year ended December 31, 2025. Some amounts in this
Annual Report may not total due to rounding. All percentages have been calculated using unrounded amounts.
Throughout this Annual Report, we provide a number of key performance indicators used
by our management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail
in Item 5. “Operating and Financial Review and Prospects—Key
Financial and Operating Metrics.” We define certain terms used in this Annual Report as follows:
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“Annual active buyers” as of any given date means buyers who have ordered a Gig on our marketplace within the last 12-month
period, irrespective of cancellations. |
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“Buyers” means users who purchase digital services. |
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“Gig” or “Gigs” means the services offered on the Fiverr marketplace. |
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“Marketplace Gross Merchandise Value” or “GMV” means the total value of transactions ordered through
our marketplace, excluding value added tax, goods and services tax, service chargebacks and refunds. |
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“Sellers” or “freelancers” means users who offer Gigs or digital services. |
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“Annual spend per buyer” as of any given date is calculated by dividing our GMV within the last 12-month period by the
number of annual active buyers as of such date. |
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“Marketplace take rate” for a given period means marketplace revenue for such period divided by GMV for such period.
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When we refer in this Annual Report to the marketplace we refer to transactions conducted
between buyers and freelancers on Fiverr.com. When we refer to the platform we refer to the marketplace and our additional services. For
further information see Item 5. “Operating and Financial Review and Prospects.”
Market and Industry Data
Unless otherwise indicated, information in this Annual Report concerning economic conditions,
our industry, our markets and our competitive position is based on a variety of sources, including information from other independent
industry analysts and publications, as well as our own estimates and research.
Our estimates are derived from publicly available information released by third-party
sources, as well as data from our internal research, which we believe to be reasonable. None of the independent industry publications
used in this Annual Report were prepared on our behalf.
Trademarks
We have proprietary rights to trademarks used in this Annual Report that are important
to our business, many of which are registered under applicable intellectual property laws. Solely for convenience, trademarks and trade
names referred to in this Annual Report may appear without the “®” or “™” symbols, but such references
are not intended to indicate, in any way, that we will not assert, to the fullest extent possible under applicable law, our rights or
the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’
trademarks, trade names or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Each
trademark, trade name or service mark of any other company appearing in this Annual Report is the property of its respective holder.
4
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report also contains estimates and forward-looking statements, principally
in the sections entitled Item 3.D. “Key Information—Risk Factors,” Item 4. “Information
on the Company,” and Item 5. “Operating and Financial Review and Prospects.” In
some cases, these forward-looking statements can be identified by words or phrases such as “may,” “might,” “will,”
“could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,”
“seek,” “believe,” “estimate,” “predict,” “potential,” “continue,”
“contemplate,” “possible” or similar words. Statements regarding our future results of operations and financial
position, industry outlook, buyer cohort behavior, expected trends and financial performance indicators, macroeconomic conditions, growth
strategy and plans and objectives of management for future operations, including, among others, expansion in new and existing markets
and expected transition of the business, are forward-looking statements.
Our estimates and forward-looking statements are mainly based on our current expectations
and estimates of future events and trends which affect or may affect our business, operations and industry. Although we believe that these
estimates and forward-looking statements are based upon reasonable assumptions, they are subject to numerous risks and uncertainties,
including without limitation those described under the sections in this Annual Report entitled Item 3.D. “Key
Information—Risk Factors,” Item 4. “Information on the Company,” and Item 5. “Operating
and Financial Review and Prospects” and elsewhere in this Annual Report.
Our estimates and forward-looking statements may be influenced by factors including:
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our growth mainly depends on our ability to attract and retain a large community of buyers and freelancers, and the loss of our buyers
and freelancers, or failure to attract new buyers and freelancers, due to AI technologies or otherwise, could materially and adversely
affect our business; |
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we have incurred net losses in the past and we may not be able to generate sufficient revenue to maintain profitability or positive
net cash flow generated by operating activities; |
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We face significant competition from AI technologies and online and offline platforms and competitors, which may cause us to suffer
from a weakened market position that could materially and adversely affect our results of operations; |
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Adverse macroeconomic conditions can materially adversely affect the Company’s business, results of operations and financial
condition, due to impacts on consumer and business spending and demand for our services; |
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if we fail to maintain and enhance our brand, our business, results of operations and prospects may be materially and adversely affected;
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if the market for freelancers and the services they offer is not sustained or develops more slowly than we expect, our growth may
slow or stall; |
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if traffic to our websites declines for any reason, our growth may slow or stall; |
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if we fail to maintain and improve the quality of our platform, we may not be able to attract and retain buyers and freelancers;
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we or our third-party partners may experience a security breach, including unauthorized parties obtaining access to our users’
personal or other data, or any other data privacy or data protection compliance issue; |
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changes in laws or regulations relating to data privacy, data protection, or cybersecurity or any actual or perceived failure by
us to comply with such laws and regulations or our privacy policies, could materially and adversely affect our business; |
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currency exchange rate fluctuations affect our results of operations, as reported in our financial statements;
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5
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evolving privacy laws and regulations related to cross-border data transfer restrictions and data localization requirements may limit
the use and adoption of our services, expose us to liability or otherwise adversely affect our business; |
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our business may suffer if we do not successfully manage our current and potential future growth; |
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our user growth and engagement on mobile devices are dependent on decisions and developments in the mobile device industry over which
the Company has no control; |
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changes to, or limitations on, our pricing model, including our marketplace take rate and fees for other services, could reduce marketplace
activity, harm our brand, and materially adversely affect our business, financial condition and results of operations; |
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errors, defects or disruptions in our platform could diminish our brand, subject us to liability, and materially and adversely affect
our business, prospects, financial condition and results of operations; |
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our platform contains open source software components, and failure to comply with the terms of the underlying licenses could restrict
our ability to market or operate our platform; |
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expansion into markets outside the United States is important to the growth of our business, and if we do not manage the business
and economic risks of international expansion effectively, it could materially and adversely affect our business and results of operations;
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if we are unable to maintain and expand our scale of operations and generate a sufficient amount of revenue to offset the associated
fixed and variable costs, our results of operations may be materially and adversely affected; |
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our operating results may fluctuate from quarter to quarter, which makes our future results difficult to predict; |
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our business is subject to a variety of laws and regulations, both in the United States and internationally, many of which are evolving;
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any actual or perceived failure to comply with evolving regulatory frameworks around the development and use of AI could adversely
affect our business, results of operations, and financial condition; and |
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competition for highly skilled technical and other personnel is intense, and as a result we may fail to attract, recruit, retain
and develop qualified employees, which could materially and adversely impact our business, financial condition and results of operations.
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Many important factors, in addition to the factors described above and in other sections
of this Annual Report, could adversely impact our business and financial performance. Moreover, we operate in an evolving environment.
New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties,
nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from estimates or forward-looking statements. We qualify all of our estimates and forward-looking statements
by these cautionary statements.
The estimates and forward-looking statements contained in this Annual Report speak only
as of the date of this Annual Report. Except as required by applicable law, we undertake no obligation to publicly update or revise any
estimates or forward-looking statements whether as a result of new information, future events or otherwise, or to reflect the occurrence
of unanticipated events.
6
PART I
Item
1. Identity of Directors, Senior Management and Advisers
Not applicable.
Item 2. Offer
Statistics and Expected Timetable
Not applicable.
Item 3. Key Information
| A. |
[Reserved] |
| B. |
Capitalization and Indebtedness |
Not applicable.
| C. |
Reasons for the Offer and Use of Proceeds |
Not applicable.
| D. |
Risk Factors |
You should carefully consider the risks described below before making
an investment decision. Our business, financial condition or results of operations could be materially and adversely affected by any of
these risks. The trading price and value of our ordinary shares could decline due to any of these risks, and you may lose all or part
of your investment. This Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks
faced by us as described below and elsewhere in this Annual Report.
Risks relating to our business and industry
Our growth mainly depends on our ability to attract and retain a large community of
buyers and freelancers, and the loss of our buyers and freelancers, or failure to attract new buyers and freelancers, due to AI technologies
or otherwise, could materially and adversely affect our business.
The size of our community of users, including both buyers and freelancers, is critical
to our success. While we have experienced strong growth in the number of annual active buyers on our platform since inception, in the
past couple of years the number of annual active buyers has been declining, including as a result of AI technologies reducing demand for
simple and low-skilled services on our marketplace, and future growth could be volatile and differ significantly from one year to another.
Many factors impact buyer growth, and we cannot accurately predict or guarantee annual active buyer growth rates in the future. Freelancers
have many different ways of marketing their services and securing buyers, including meeting and contacting prospective buyers through
other platforms, advertising to prospective buyers online or offline through other methods, signing up for online or offline third-party
agencies or staffing firms or finding employment full-time or part-time through an agency or directly with a business. Buyers have similarly
diverse options to find freelancers, such as engaging freelancers directly, finding freelancers through other online or offline platforms
or through staffing firms and agencies or hiring temporary, full-time, or part-time employees, or otherwise use AI technologies instead
of simple and low-skilled services offered on our marketplace. Any decrease in the attractiveness of our platform relative to these other
options available to buyers and freelancers could lead to decreased engagement on our platform, which could result in a drop in revenue
on our platform. In addition, a drop in engagement from buyers, including due to the use of AI technologies, a general decrease in spending
or otherwise as a result of a global recession, could lead to diminished network effects and decrease the attractiveness of our platform
to freelancers. If we fail to attract new freelancers or our existing freelancers decrease their use of or cease using our platform, the
quality or types of services provided by freelancers that use our platform are not satisfactory to buyers, or freelancers increase their
fees for services beyond the level that buyers are willing to pay, buyers may decrease their use of, or cease using, our platform.
Key factors in attracting and retaining buyers include our ability to go upmarket by
offering complex high-skilled services in the marketplace, grow our brand awareness, attract and retain high-quality freelancers and increase
the quantity and quality of services posted on our marketplace. A key factor in attracting and retaining freelancers, in turn, is maintaining
and increasing the number of buyers using our platform. Thus, achieving growth in our community of buyers and freelancers will require
us to prioritize strategic initiatives by investing in the development and expansion of our business, including AI-driven capabilities,
product enhancements, marketplace efficiency and user experience, as well as to increasingly engage in sophisticated and costly sales
and marketing efforts that may not result in growth or additional users. We may also need to modify our pricing model to attract and retain
such users.
7
Users can generally decide to cease using our platform at any time. Users may stop using
our platform and related services if the quality of the user experience on our platform, including our support capabilities in the event
of a problem, does not meet their expectations or keep pace with the quality of the user experience generally offered by competitive products
and services, including AI technologies. Users may also choose to cease using our platform if they perceive that our pricing model is
not in line with the value they derive from our platform or for other reasons. In addition, expenditures by buyers may be cyclical and
be affected by adverse changes in overall economic conditions or budgeting patterns. If we fail to attract new users or fail to maintain
existing users, our revenue may grow more slowly than expected and our business could be materially and adversely affected.
We have incurred net losses in the past and may not be able to generate sufficient revenue
to maintain profitability or positive net cash flow generated by operating activities.
During 2025, we incurred $1.2 million operating loss, achieved net income of $21.0 million
and had operating net cash flow of $104.6 million. We may not be able to generate sufficient revenue to sustain profitability, or positive
net cash flow generated by operating activities. We expect to continue investing in the development and expansion of our business, including
AI-driven capabilities, product enhancements, marketplace efficiency and user experience. Our operating expenses may fluctuate over time,
including decreasing or increasing in absolute dollars, as we manage our cost structure, reallocate resources and prioritize strategic
initiatives. If our revenue declines or fails to grow at a rate sufficient to offset increases in our operating expenses, or interest
rates decrease, we may not be able to sustain profitability or to maintain positive cash flow from operating activities on a consistent
basis.
We face significant competition from AI technologies and online and offline platforms
and competitors, which may cause us to suffer from a weakened market position that could materially and adversely affect our results of
operations.
The rapid advancement in AI technologies presents challenges for our industry as the
evolving AI landscape has reduced the demand for simple and low-skilled services on our marketplace. This trend is expected to continue
and may accelerate as AI technologies become more sophisticated and widely adopted. If we are unable to successfully adapt our business
model to address these developments, for example by incorporating AI technologies and related services into our product offerings or focus
on higher-value, more complex services that cannot be easily replicated by AI in a timely manner, our revenue could materially decline.
In addition, successful execution of our strategy depends on our ability to attract
and retain users, expand the market for our platform, maintain a technological edge and provide value to our users. We face competition
from a number of online and offline platforms and competitors that offer freelance services as part of their broader services portfolio.
Our main competitors fall into the following categories:
| ● |
software companies focused on providing technological solutions driven by AI; |
| ● |
traditional contingent workforce and staffing service providers and other outsourcing providers; |
| ● |
online freelancer platforms that serve a diverse range of skill categories; |
| ● |
other online and offline providers of products and services that allow freelancers to find work or to advertise their services, including
personal and professional social networks, employment marketplaces, recruiting websites, job boards, classified ads and other traditional
means of finding work; |
| ● |
software and business services companies focused on talent acquisition, management or staffing management products and services;
and |
| ● |
businesses that provide specialized, professional services, including consulting, accounting, marketing and information technology
services. |
Internationally, we compete in most countries against online and offline channels and
products and services with a local presence. These local competitors might have greater brand recognition than we have in their local
country and a stronger understanding of the local culture and commerce. They may also offer their products and services in local languages
that we do not currently offer. As our business grows internationally, we may increasingly compete with these local and regional companies.
8
In addition, well-established internet companies, social networking websites and career-related
internet portals have entered or may decide to target the market for freelance services, and some of these companies have launched products
and services that directly compete with our platform. These or other powerful companies that have extensive and loyal user bases in the
geographic markets where we operate may decide to directly target our users, thereby intensifying competition in the freelance services
market. Although professional social networking businesses with online recruitment functions historically have not had significant market
positions in the market for freelance services, these businesses may dedicate resources to expand their operations and as a result, become
a significant competitive threat in the future. Social networks may benefit from access to large pools of potential purchasers of freelance
services and a broad range of user information that freelancers could leverage to tailor their services.
Current competitors may also consolidate or be acquired by an existing or prospective
competitor, which could result in the emergence of a stronger competitor, leading to a potential loss of our market share. There can be
no assurances that we will maintain our strong position among freelance services marketplaces, particularly if our key competitors consolidate
or if large search engines, social media companies or other online platforms successfully leverage their large user bases to penetrate
our markets. In addition, competitors that have not typically participated online may establish an online presence on their own or with
our existing competitors, which may create new competitors or strengthen our existing competitors.
Many of our current and potential competitors, both online and offline, enjoy substantial
competitive advantages, such as greater name recognition, longer operating histories, greater financial, technical and other resources,
and, in some cases, the ability to rapidly combine online platforms with traditional staffing and contingent worker solutions. These companies
may use these advantages to offer solutions similar to our platform at a lower price, develop different products and services to compete
with our platform, spend more on advertising and brand marketing, invest more in research and development, or respond more quickly and
effectively than we do to new or changing opportunities, technologies, standards, regulatory conditions or user preferences or requirements.
As a result, our users may decide to shift from utilizing our platform to utilizing our competitors’ products, services and solutions.
Adverse macroeconomic conditions can materially adversely affect the Company’s
business, results of operations and financial condition, due to impacts on consumer and business spending and demand for our services.
Adverse macroeconomic conditions, including inflation, slower growth or recession, changes
to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment, currency fluctuations, increased geopolitical
risks, have affected the U.S. and global economy during 2025 and can adversely impact consumer and businesses confidence and spending
and materially adversely affect demand for the digital services offered on the Company’s platform.
The present conditions and state of the U.S. and global economies make it difficult
to predict whether, when and to what extent a recession has occurred or will occur in the near future. In the event of an occurring or
worsening recession, as the case may be, in which the U.S. economy contracts, our business may be negatively impacted, accordingly due
to less spending and reduced demand for our services. The Company has taken significant actions to shore up its resources and means in
order to weather a potential downturn in the economy; however, should a recession occur, or worsen in the future, one may expect either
scenario to have an adverse effect on the business of the Company.
In addition, there is current uncertainty about the future relationship between the United States and other
countries with respect to trade policies, taxes, government regulations, and tariffs and we cannot predict whether, and to what extent,
U.S. trade policies will change in the future, including as a result of changes by the U.S. administration.
If we fail to maintain and enhance our brand, our business, results of operations and
prospects may be materially and adversely affected.
We believe that maintaining and enhancing our brand are of significant importance to
the success of our business. A well-recognized brand is critical to increasing the number and the level of engagement of freelancers and,
in turn, enhancing our attractiveness to buyers. Successful promotion of our brand and our platform depends on, among other things, the
effectiveness of our marketing efforts, our ability to provide a reliable, trustworthy and useful platform, the perceived value of our
platform and our ability to provide quality support. In order to maintain and enhance our brand, we will need to continuously invest in
marketing programs that may not be successful in achieving meaningful awareness levels. Brand promotion activities may not yield increased
revenue, and even if they do, the increased revenue may not offset the expenses we incur in building and maintaining our brand. We have
conducted and may continue to conduct various marketing and brand promotion activities. We cannot assure you, however, that these activities
will be successful or that we will be able to achieve the brand awareness we expect. In addition, our competitors may increase the intensity
of their marketing campaigns, which may force us to increase our advertising spend to maintain our brand awareness.
9
In addition, any negative publicity relating to our platform, regardless of its veracity,
could harm our brand. In particular, in recent years, increasing attention has been given to corporate activities related to environmental,
social and governance (ESG) matters including increasing attention on climate change and diversity, equity and inclusion matters, from
stakeholders with varied views on these topics. Companies and brands that do not adapt to or comply with expectations, standards, and
regulations on ESG matters as they continue to evolve, are perceived to have not responded appropriately in relation to ESG issues, or
are alleged not to achieve the ESG standards, targets or commitments that they publicly state (often referred to as “greenwashing”),
may suffer from reputational damage. Regulation (including emerging regulation) may require additional ESG public disclosures, and this
may increase the risk of such damage. In addition, any unfavorable media coverage or negative publicity about our industry or Company
and any errors, defects, disruptions, security vulnerabilities, abuse of our system, or other performance problems with our products and
platforms may also cause us reputational damage. If our brand is harmed due to negative publicity we may not be able to grow or maintain
our freelancer base, and our business, prospects, financial condition and results of operations could be materially and adversely affected.
In addition, recent developments in certain jurisdictions have included increased political and regulatory scrutiny of ESG initiatives,
with some regulators or other stakeholders actively opposing or seeking to restrict the consideration of ESG factors in investment and
business decisions. Addressing stakeholder expectations and regulatory requirements globally, which at times may be conflicting, may entail
costs, and any failure to successfully navigate such expectations may adversely impact our reputation, our business, financial condition
and results of operations.
Further, activities of users, customers or suppliers or the content of our freelancers'
shops could damage our brand, subject us to liability, and harm our business and financial results. Activities of users that are deemed
to be hostile, offensive or inappropriate to other users, including users acting under false or inauthentic identities, could damage our
brand or harm our ability to expand our user base. We do not monitor or review the appropriateness of the content generated by users or
have control over the activities in which our users engage. While we have adopted policies regarding illegal or offensive use of our platform
by our users and retain authority to remove user generated content that violates our policies, users could nonetheless engage in these
activities. Users and suppliers using the platform may also operate businesses in regulated industries, which are subject to additional
scrutiny, increasing the potential liability we could incur. The safeguards we have in place may not be sufficient to avoid harm to our
brand, especially if such hostile, offensive or inappropriate use was high profile.
If the market for freelancers and the services they offer is not sustained or develops
more slowly than we expect, our growth may slow or stall.
The market for freelancers and the services they offer is rapidly evolving. Our future
success will depend in large part on the continued growth and expansion of this market and the willingness of businesses and individuals
to engage freelancers to provide services. It is difficult to predict the size or rate of expansion of this market, or the extent to which
technological or other developments will impact the overall demand for freelancers. Further, many businesses and individuals may be unwilling
to engage freelancers for a variety of reasons, including perceived negative connotations with outsourcing work, or security or quality
concerns. If the market for freelancers and the services they offer does not grow, or there is a reduction or change in demand for freelancer
services as a result of macroeconomic conditions, technological advancement, labor market fluctuation or otherwise, our marketplace business
could continue to decline.
If traffic to our websites declines for any reason, our growth may slow or stall.
Our ability to maintain the number of visitors directed to our websites is not entirely
within our control. We depend in part on various internet search engines and other channels, including AI-driven chat-based assistants
and generative search experiences, to direct a significant number of users to our website. Search engine companies change their natural
search engine algorithms periodically, and our ranking in natural searches may be adversely affected by those changes, as has occurred
from time to time. Search engine companies may also determine that we are not in compliance with their guidelines and may consequently
penalize us in their algorithms as a result. If search engines change or penalize us with their algorithms, terms of service, display
or featuring of search results, we may be unable to cost-effectively drive users to our platform. Also, an increasing share of users now
begins their queries with large language model (LLM) powered assistants rather than traditional web search engines, which may reduce referrals
to our websites and overall traffic. Generative engines and LLM platforms do not consistently provide links or attribution and may answer
user queries directly, which can diminish our visibility and click-through rates. The emerging practice of generative engine optimization
(GEO) is nascent, costly, and unpredictable, and we may be less effective than competitors at optimizing content for LLM ingestion and
retrieval or at structuring our content to be favored by AI assistants. If providers of LLMs or AI assistants modify their models, ranking
or retrieval methodologies, attribution practices, or commercial terms, or otherwise deprioritize our content, we may lose exposure and
traffic from those channels. We also rely on third-party distribution, data access, and APIs to make our content discoverable in AI ecosystems;
limitations or restrictions could further reduce traffic. Additionally, our competitors’ search engine optimization efforts and
GEO efforts may result in their websites receiving a higher search result page ranking than ours or being favored in AI-generated answers.
This could decrease user engagement on our website and adversely affect the growth in our user base, and our business, prospects, financial
condition and results of operations could be materially and adversely affected.
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If we fail to maintain and improve the quality of our platform, we may not be able to
attract and retain buyers and freelancers.
The markets in which we operate are characterized by constant change and innovation.
In order to continue and evolve rapidly and in order to satisfy both buyers and freelancers, we need to continue to improve their user
experience as well as innovate and introduce features and services that users find useful and that cause them to use our platform more
frequently. This includes improving our technology to optimize search results, tailoring our database to additional geographic and market
segments and improving the user-friendliness of our platform and our ability to provide high-quality support. Our users depend on our
support organization to resolve issues relating to our platform. Our ability to provide effective support is largely dependent on our
ability to attract and retain employees who are well versed in our platform. As we continue to grow our international user base, our support
organization will face additional challenges, including those associated with continuing to deliver support in languages other than English.
Any failure to maintain high-quality support, or a market perception that we do not maintain high-quality support, could harm our reputation
or adversely affect our ability to market the benefits of our platform to existing and prospective users.
In addition, we need to adapt, expand and improve our platform and user interfaces to
keep up with changing user preferences. We invest substantial resources in researching and developing new features and enhancing our platform
by incorporating these new features, improving functionality and adding other improvements to meet our users’ evolving demands.
The success of any enhancements or improvements to our platform or any new features depends on several factors, including timely completion,
adequate quality testing, integration with technologies on our platform and third-party partners’ technologies and overall market
acceptance. Because further development of our platform is complex, challenging and dependent upon an array of factors, the timetable
for the release of new features and enhancements to our platform is difficult to predict, and we may not offer new features as rapidly
as users of our platform require or expect. For example, with the growing propensity of our users to use mobile devices as their main
devices, we will need to continue modifying and updating our mobile apps to successfully manage the transition of our users to mobile
devices. Additionally, the time, money, energy and other resources we dedicate to developing new features or enhancements to our platform
may be greater than the short-term, and potentially the total, returns from these new offerings.
It is difficult to predict the problems we may encounter in introducing new features
to our platform, and we may need to devote significant resources to the creation, support and maintenance of these features. We provide
no assurances that our initiatives to improve our user experience will be successful. We also cannot predict whether any new features
will be well received by users, or whether improving our platform will be successful or sufficient to offset the costs incurred to offer
these new features. If we are unable to improve or maintain the quality of our platform, our business, prospects, financial condition
and results of operations could be materially and adversely affected.
We or our third-party partners may experience a security breach, including unauthorized
parties obtaining access to our users’ personal or other data, or any other data privacy or data protection compliance issue.
Our business involves the collection, storage, processing and transmission of users’
proprietary, confidential and personal data as well as the use of third-party partners who store, process and transmit users’ proprietary,
confidential and personal data. We also maintain certain other proprietary and confidential data relating to our business and personal
data of our personnel and job applicants. We face evolving cybersecurity risks that threaten the confidentiality, integrity, and availability
of our information technology systems and confidential data, including from diverse threat actors, such as state-sponsored organizations,
opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including
ransomware), malfeasance by insiders, human or technological error, and as a result of bugs, misconfigurations or exploited vulnerabilities
in software or hardware. Remote and hybrid working arrangements at our Company (and at many third-party providers) also increase cybersecurity
risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate
and home networks. Additionally, any integration of AI in our or any third party’s operations, products or services is expected
to pose new or unknown cybersecurity risks and challenges. Any security breach or incident that we experience could result in unauthorized
access to, misuse of, or unauthorized acquisition of our or our users’ data, the loss, corruption, or alteration of this data, interruptions
in our operations, or damage to our computers or systems or those of our users. We have experienced such cybersecurity incidents in the
past and may experience incidents in the future. Furthermore, cyberattacks and security incidents are expected to accelerate in both frequency
and impact as the use of AI increases and attackers become increasingly sophisticated and utilize tools and techniques that are designed
to circumvent controls, avoid detection, and remove or obfuscate forensic evidence.
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Any such incidents could expose us to claims, litigation (including class actions),
regulatory or other governmental investigations, enforcement actions, administrative fines, significant liability, a diminished ability
to retain or attract new customers, or disruption to our business. An increasing number of online services have disclosed breaches of
their security, some of which have involved sophisticated and highly targeted attacks on portions of their services. Because the techniques
used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not foreseeable or
recognized until launched against a target, we and our third-party partners may be unable to anticipate these techniques or implement
adequate preventative measures. If an actual or perceived breach of our or our third-party partners’ security occurs, public perception
of the effectiveness of our security measures and brand could be harmed, and we could lose users. Any compromise of our or our third-party
partners’ security could result in a violation of applicable security, privacy or data protection, consumer and other laws, regulatory
or other governmental investigations, enforcement actions and legal and financial exposure, including potential contractual liability.
Any such compromise could also result in damage to our brand and a loss of confidence in our security and privacy or data protection measures.
Our and our third-party partners’ systems may be vulnerable to computer viruses
and other malicious software, physical or electronic break-ins, or weakness resulting from intentional or unintentional actions by us,
our third-party partners or our service providers, as well as similar disruptions that could make all or portions of our website or apps
unavailable for periods of time. While we currently employ various antivirus and computer protection software in our operations, we cannot
assure that such protections will in all cases successfully prevent hacking or the transmission of any computer virus or malware, which
could result in significant damage to our hardware and software systems and databases, disruptions to our business activities, including
to our e-mail and other communications systems, breaches of security and the inadvertent disclosure of personal, confidential or sensitive
data, interruptions in access to our website through the use of “denial of service” or similar attacks and other material
adverse effects on our operations.
Further, we may need to expend significant resources to protect against, and to address
issues created by, security breaches and other incidents. Security breaches and other security incidents, including any breaches of our
security measures or those of parties with which we have commercial relationships (e.g., third-party service providers who provide development
or other services to us) that result in the unauthorized access of users’ confidential, proprietary or personal data, or the belief
that any of these have occurred, could damage our reputation and expose us to a risk of loss or litigation and possible liability. Significant
unavailability of our platform due to attacks could cause users to cease using our platform and materially and adversely affect our business,
prospects, financial condition and results of operations. Although we maintain cybersecurity liability insurance, we cannot be certain
that our coverage will be adequate for liabilities actually incurred or will continue to be available to us on reasonable terms, or at
all.
Data security breaches could also expose us to liability under various laws and regulations
across jurisdictions and increase the risk of litigation (including class actions) and governmental or regulatory investigation. Many
jurisdictions have or are considering enacting privacy or data protection laws or regulations relating to the collection, use, storage,
transfer, disclosure and/or other processing of personal data. Such laws and regulations may include data residency or data localization
requirements (which generally require that certain types of data collected within a certain country be stored and processed within that
country), data export restrictions or international transfer laws (which prohibit or impose conditions upon the transfer of such data
from one country to another), requirements that companies implement privacy or data protection and security policies, or requirements
that companies grant individuals certain rights, such as the right to access, correct and delete personal data stored or maintained by
such companies, be informed of security breaches that affect their personal data or provide consent to use their personal data for other
purposes. We may need to notify governmental authorities and affected individuals with respect to data security breaches. For example,
laws in the EU and UK and all 50 U.S. states may require businesses to provide notice to individuals whose personal information has been
disclosed as a result of a data security breach. Complying with such numerous and complex regulations in the event of a data security
breach would be expensive and difficult, and failure to comply with these regulations could subject us to regulatory scrutiny and additional
liability. We may also be contractually required to notify customers or other counterparties of a security incident, including a data
security breach. Regardless of our contractual protections, any actual or perceived data security breach, or breach of our contractual
obligations, could harm our reputation and brand, expose us to potential liability or require us to expend significant resources on data
security and in responding to any such actual or perceived breach. Additionally, while we have implemented various measures intended to
enable us to comply with applicable privacy or data protection laws, regulations and contractual obligations, these measures may not always
be effective and do not guarantee compliance. There can be no assurance that our cybersecurity risk management program and processes,
including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our information technology
systems and confidential data. In addition, privacy or data protection laws and regulations may be modified, interpreted and applied in
an inconsistent manner from one jurisdiction to another, and may conflict with one another, other requirements or legal obligations, or
our practices. Further, the existence and need to comply in certain markets could impact our ability to offer our platform in those markets
(without taking additional compliance steps). Cultural norms around privacy or data protection also vary from country to country and can
drive a need to localize or customize certain features of our platform in order to address varied privacy or data protection concerns,
which can add cost and time to our development of new features and platform enhancements.
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Changes in laws or regulations relating to data privacy, data protection, or cybersecurity
or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could materially and adversely
affect our business.
We receive, collect, store, process, transfer and use personal data and other user data,
including, but not limited to, our customers, users, employees, partners and vendors such as, name and contact details, identification
information, address, payment card information, tax information, details about orders and transactions, and biometric information for
verification. The effectiveness of our technology, including our AI and platforms, and our ability to offer our platform to users rely
on the collection, storage and use of this data concerning freelancers and other users, including personally identifying or other sensitive
data. We have legal and contractual obligations regarding the protection of confidentiality and appropriate use and protection of certain
data, including personal information. We are subject to numerous federal, state, local and international laws, directives and regulations
regarding privacy, data protection and data security and the collection, storing, sharing, use, processing, transfer, disclosure and protection
of personal information and other data, the scope of which are changing, are subject to differing interpretations, and may be inconsistent
among jurisdictions or conflict with other legal and regulatory requirements. We are also subject to the terms of our privacy policies
and certain contractual obligations to third parties related to privacy, data protection and data security. We are committed to complying
with our policies and applicable laws, regulations, contractual obligations and other legal obligations relating to privacy, data protection
and data security to the extent possible. However, the regulatory framework for privacy, data protection and data security worldwide is
changing constantly and is likely to remain uncertain and complex for the foreseeable future, and therefore it is possible that these
or other actual or alleged obligations may be interpreted and applied in a manner that we do not anticipate or that is inconsistent from
one jurisdiction to another, including across the various jurisdictions in which we operate remotely, and may conflict with other legal
obligations or our practices.
For example, in the European Economic Area, or the EEA, and the UK, we are subject to
the EU General Data Protection Regulation, or EU GDPR, and to the United Kingdom General Data Protection Regulation and Data Protection
Act 2018, together the UK GDPR (the EU GDPR and UK GDPR together referred to as the “GDPR”). The GDPR imposes stringent data
protection compliance requirements and provides for significant penalties for noncompliance in the EEA and UK. The GDPR creates compliance
obligations applicable to our business and users, which could cause us to change our business practices, and increases penalties for noncompliance.
Since we are subject to the supervision of relevant data protection authorities under both the EU GDPR and the UK GDPR, we could be fined
under each of those regimes independently in respect of the same breach (including possible fines of up to the greater of €20 million
/ £17.5 million and 4% of our global annual turnover for the preceding financial year for the most serious violations, as well as
the right to compensation for financial or non-financial damages claimed by any individuals under Article 82 of the GDPR and requirements
to change our processing operations). In addition to fines, a breach of the GDPR may result in regulatory investigations, reputational
damage, orders to cease/change our data processing activities, enforcement actions, assessment notices (for a compulsory audit) and/or
civil claims (including class actions). We have implemented measures designed to comply in all material respects with the GDPR, and we
continue to monitor and enhance our compliance program as regulatory guidance and expectations evolve, but this is an ongoing compliance
process. We are also subject to evolving EU and United Kingdom (UK) privacy laws on cookies, tracking technologies and e-marketing. Recent
European court and regulator decisions are driving increased attention to cookies and tracking technologies. If the trend of increasing
enforcement by regulators of the strict approach to opt-in consent for all but essential use cases, as seen in recent guidance and decisions
continues, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities,
divert the attention of our technology personnel, adversely affect our margins, and subject us to additional liabilities. In light of
the complex and evolving nature of EU, EU Member State and UK privacy laws on cookies and tracking technologies, there can be no assurances
that we will be successful in our efforts to comply with such laws; violations of such laws could result in regulatory investigations,
fines, orders to cease/change our use of such technologies, as well as civil claims including class actions, and reputational damage.
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Additionally, a number of U.S states have adopted privacy and security laws. These laws
create a patchwork of legislation and regulation that impose heightened transparency obligations about data collection, use, and sharing
practices, add restrictions on the “sale” or transfer of personal information to third parties for purposes such as advertising
or analytics, create new data privacy rights for consumers including the ability to limit the use of personal information for advertising,
and carry significant enforcement penalties for non-compliance, including monetary and injunctive relief. This patchwork may also give
rise to conflicts or differing views of personal privacy rights. For example, certain state laws may be more stringent or broader in scope,
or offer greater individual rights, with respect to personal data than federal, international or other state laws, and such laws may differ
from each other, all of which may complicate compliance efforts. In particular, we are subject to U.S. data privacy laws that regulate
the processing of biometric information. There has been an increase in class actions filed under laws such as the Illinois Biometric Information
Privacy Act (“BIPA”). BIPA and similar biometric privacy laws may provide for a private right of action and statutory damages
on a per-violation basis and often impose stringent requirements. If one or more of our products, technologies, team members, third-party
service providers, or customers or users were alleged or determined to have violated any biometric privacy law, we could be subject to
enforcement actions, litigation, fines, penalties, adverse publicity, and loss of customers or users
Moreover, U.S. and other state laws, as well as other legal and regulatory developments
across jurisdictions are making it easier for individuals protected by those laws to opt-out of having their personal data processed and
disclosed to third parties through various opt-out mechanisms, and more generally, provide them more control of their data, which could
result in an increase to our operational costs to ensure compliance with such legal and regulatory changes. In recent years, there has
also been an increase in attention to and regulation of data protection and data privacy across the globe, including in the United States
with the increasingly active approach of the Federal Trade Commission, or the FTC, to enforcing data privacy under the FTC Act Section
5 of the Unfair and Deceptive Acts framework.
In addition, failure to comply with the Israeli Privacy Protection Law, 1981, or the
Israeli Privacy Law, and its regulations as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to enforcement
actions, civil claims (including class actions), fines and penalties. Amendment 13 of the Israeli Privacy Law, which entered into effect
in August 2025, increases monetary sanctions significantly, that in certain cases may reach millions of NIS, for breaching the Israeli
Privacy Law and expands the Israeli Privacy Protection Authority investigation and enforcement authority.
Further, failure or perceived failure by us to comply with our posted privacy policies,
our privacy-related obligations to users or other third parties, or any other legal obligations or regulatory requirements relating to
privacy, data protection or information security may result in governmental investigations or enforcement actions, litigation, claims
or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose
trust in us, and otherwise materially and adversely affect our reputation and business. Furthermore, the costs of compliance with, and
other burdens imposed by, the laws, regulations and policies that are applicable to the businesses of our users may limit the adoption
and use of, and reduce the overall demand for, our platform. Additionally, if third parties we work with violate applicable laws, regulations
or agreements, such violations may put our users’ data at risk, could result in governmental investigations or enforcement actions,
fines, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability,
cause our users to lose trust in us and otherwise materially and adversely affect our reputation and business. Further, public scrutiny
of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business,
industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact
additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks.
Additionally, certain actions of our users that are deemed to be a misuse or unauthorized
disclosure of another user’s personal data could negatively affect our reputation and brand and impose liability on us. While we
have adopted policies regarding the misuse or unauthorized disclosure of personal data obtained through our services by our users and
retain authority to put a hold on or permanently disable user accounts, users could nonetheless misuse or disclose another user’s
personal data. The safeguards we have in place may not be sufficient to avoid liability on our part or avoid harm to our reputation and
brand, especially if such misuse or unauthorized disclosure of personal data was high profile, which could adversely affect our ability
to expand our user base, and our business and financial results.
14
If we were found in violation of any applicable privacy or data protection laws or regulations,
our business may be materially and adversely affected and we would likely have to change our personal data processing activities, internal
procedures or even our business practices and potentially the services and features available through our platform. In addition, these
laws and regulations could impose significant costs on us and could make it more difficult for us to use our current technology to promote
certain Gigs and connect freelancers with buyers. In addition, if a breach of data security were to occur, or other violation of privacy
or data protection laws and regulations were to be alleged, solutions may be perceived as less desirable and our business, prospects,
financial condition and results of operations could be materially and adversely affected. Finally, any court ruling or other governmental
action that imposes liability on providers of online services for the activities of their users and other third parties could harm our
business. In such circumstances, we may also be subject to liability under applicable law in a way which may not be fully mitigated by
the user terms of service we require our users to agree to. Any liability attributed to us could adversely affect our brand, reputation,
our ability to expand our user base and our financial position.
Currency exchange rate fluctuations affect
our results of operations, as reported in our financial statements.
We report our financial results in U.S. dollars. We collect our revenue primarily in
U.S. dollars. A portion of the cost of revenue, research and development, sales and marketing and general and administrative expenses
of our Israeli operations are incurred in NIS. As a result, we are exposed to exchange rate risks that may materially and adversely affect
our financial results. If the NIS appreciates against the U.S. dollar or if the value of the NIS declines against the U.S. dollar at a
time when the rate of inflation in the cost of Israeli goods and services exceeds the rate of decline in the relative value of the NIS,
then the U.S. dollar cost of our operations in Israel would increase and our results of operations could be materially and adversely affected.
Although we enter into hedging transactions from time to time, our Israeli operations also could be materially and adversely affected
if we are unable to effectively hedge against currency fluctuations in the future. We cannot predict any future trends in the rate of
inflation in Israel or the rate of appreciation (if any) of the NIS against the U.S. dollar. The Israeli annual rate of inflation amounted
to 2.6%, 3.2% and 3.0% for the years ended December 31, 2025, 2024 and 2023, respectively. During the year ended December 31, 2025, the
NIS appreciated in relation to the U.S. dollar by 12.5%, while during the years ended December 31, 2024, and 2023, the NIS depreciated
in relation to the U.S. dollar by 0.6% and 3.1%, respectively.
Evolving privacy laws and regulations related to cross-border data transfer restrictions
and data localization requirements may limit the use and adoption of our services, expose us to liability or otherwise adversely affect
our business.
Certain data privacy legislation restricts the cross-border transfer of personal data,
and some countries introduced data localization into their laws. Specifically, the GDPR and other European and UK data protection laws
generally prohibit the transfer of personal data from Europe, including the EEA, UK and Switzerland, to third party countries, unless
the transfer is to a country deemed to provide adequate protection (such as Israel, which was affirmed by the UK in December, 2020, and
re-affirmed by the EU Commission on January 15, 2024, confirming the adequacy of the level of protection of personal data in Israel as
an “adequate” country) or the parties to the transfer have implemented specific safeguards to protect the transferred personal
data. Where we transfer personal data outside the EEA to a country that is not deemed to be “adequate,” we rely on transfer
mechanisms available under applicable privacy law.
In addition, recent legal developments and regulatory guidance have created complexity
and uncertainty regarding such transfers of personal data, particularly to the United States. These developments may require us to review
and amend the legal mechanisms by which we make and/or receive personal data transfers to/in the U.S. and create uncertainty and increase
the risk around our international data transfers and operations. As enforcement supervisory authorities issue further guidance on personal
data export mechanisms, including circumstances where certain data transfer mechanisms cannot be used, and/or start taking enforcement
action, we could suffer additional costs, complaints and/or regulatory investigations or fines. If we are otherwise unable to transfer
personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services,
the geographical location or segregation of our relevant systems and operations and could adversely affect our financial results.
Our business may suffer if we do not successfully manage our current and potential future
growth.
We have grown significantly in scale since inception, and we intend to continue to expand
the scope and geographic reach of our platform. Potential future growth will likely place significant demands on our management and operations.
Our success in managing our growth will depend, to a significant degree, on the ability of our executive officers and other members of
senior management to operate effectively, and on our ability to improve and develop our financial and management information systems,
controls and procedures. In addition, we will likely have to successfully adapt our existing systems and introduce new systems, expand,
train and manage our employees and improve and expand our marketing capabilities.
If we are unable to properly and prudently manage our operations as they grow or if
the quality of our platform or support deteriorates due to mismanagement, our brand name and reputation could be severely harmed, and
our business, prospects, financial condition and results of operations could be materially and adversely affected.
Our user growth and engagement on mobile devices are dependent on decisions and developments
in the mobile device industry over which the Company has no control.
A growing portion of our users access our platform through mobile devices. The Company’s
ability to maintain and grow its business will be impaired if mobile connected devices, mobile operating systems, networks, standards
and content distribution channels, which run by operating system providers and app stores, develop in ways that prevent the Company’s
products and services from being delivered to their users.
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Parties that control operating systems, such as Apple or Google frequently introduce
new technology, and from time to time, they may introduce new operating systems or modify existing ones. Further, the Company and its
customers are also subject to the policies, practices, guidelines, certifications and terms of service of such parties’ platforms
on which we and our customers create, run and monetize applications and content. These policies, guidelines and terms of service govern
the promotion, distribution, content and operation generally of applications and content available through such parties. The parties that
control the operating systems have broad discretion to change and interpret their terms of service, guidelines and policies, and those
changes may have an adverse effect on us or our customers’ ability to use our services. A party that controls the operating system
may also change its fee structure, add fees associated with access to and use of its platform or app store, alter how customers are able
to advertise and monetize on their platform, change how the personal or other information of its users is made available to application
developers on their platform, limit the use of personal information and other data for advertising purposes or restrict how users can
share information on their platform or across other platforms. If any parties that control operating systems, including either Android
or iOS, stop providing us with access to their platform or infrastructure, fail to provide reliable access, cease operations, modify or
introduce new systems or otherwise terminate services, the delay caused by qualifying and switching to other operating systems could be
time consuming and costly and could materially and adversely affect our business, financial condition and results of operations. Any limitation
on or discontinuation of us or our customers’ access to any mobile operating system platform or app store could materially and adversely
affect our business, financial condition, results of operations or otherwise require us to change the way we conduct business.
Network carriers, such as Verizon, AT&T, Sprint, as well as other domestic and global
operators, may also affect the ability of users to download apps or access specified content on mobile devices.
Additionally, there is no guarantee that popular mobile devices will continue to support
our platform or that mobile device users will use our platform rather than competing products. In order to deliver a high-quality mobile
user experience, it is important that our platform is designed effectively and works well with a range of mobile technologies, systems,
networks and standards that we do not control. We may not be successful in developing relationships with key participants in the mobile
industry or in developing features that operate effectively with these technologies, systems, networks or standards. In the event that
it is more difficult for our users to access and use our platform on their mobile devices, our users find our mobile offering does not
effectively meet their needs, our competitors develop products and services that are perceived to operate more effectively on mobile devices,
our users choose not to access or use our platform on their mobile devices or our users use mobile products that do not offer access to
our platform, our user growth and user engagement could be adversely impacted.
Changes to our pricing model, including our marketplace take rate and fees for other
services, could reduce marketplace activity, harm our brand, and materially adversely affect our business, financial condition and results
of operations.
We currently primarily derive our revenue from marketplace commission and other services.
If we are unable to maintain a large community of users or we are unable to respond successfully to technological or industry developments,
or if for any other reason the perceived value of our platform to freelancers or buyers is adversely affected, we may be forced to lower
our marketplace take rate. Our marketplace take rate may also fluctuate from period to period.
In recent years, we implemented changes to our pricing model, including our marketplace
take rate. As a result, we have only limited experience with our current pricing model, which makes it difficult to evaluate our business
and future prospects and to plan for and model future growth. Our historical revenue growth should not be considered indicative of our
future performance. We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies
in rapidly changing industries, including difficulties in our ability to achieve market acceptance of our platform and attract and retain
users, as well as increasing competition and increasing expenses as we continue to grow our business. As a result, we may from time to
time decide to make further changes to our pricing model due to a variety of factors, including changes in the market for our platform
and competitors introducing new products and services. We may not be successful in addressing these and other challenges we may face in
the future and changes to our pricing model may, among other things, result in user dissatisfaction and could lead to a loss of users
on our platform.
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Errors, defects or disruptions in our platform could diminish our brand, subject us
to liability, and materially and adversely affect our business, prospects, financial condition and results of operations.
Any errors, defects, or disruptions in our platform, or other performance problems with
our platform could harm our brand and may damage the businesses of our users. Our online systems, including our website and mobile apps,
could contain undetected errors, or “bugs,” that could adversely affect their performance. Additionally, we regularly update
and enhance our website, platform and our other online systems and introduce new versions of our software products and apps. These updates
may contain undetected errors when first introduced or released, which may cause disruptions in our services and may, as a result, cause
us to lose market share, and our brand, business, prospects, financial condition and results of operations could be materially and adversely
affected.
In addition, we use both internally and third-party developed AI, generative, machine
learning, and automated decision-making technologies, including proprietary AI and machine learning algorithms and models, throughout
our business, and are constantly working on expanding our AI capabilities, internally and through collaborations with vendors, including
through improvements to our existing AI technologies, as well as through development of new products and features. For example, we use
AI technologies as part of our product offering, and to improve our internal workflows and development velocity. We also are developing
and deploying agentic AI systems that operate with greater autonomy, which presents additional risks, including unintended or unauthorized
actions and increased difficulty predicting, supervising, and controlling agentic behavior. If we are unable to put mechanisms in place
to prevent inaccurate or misleading content or other discriminatory or unexpected results or behaviors from our AI technologies our brand,
business, prospects, financial condition and results of operations could be materially and adversely affected.
Our platform contains open-source software components, and failure to comply with the
terms of the underlying licenses could restrict our ability to market or operate our platform.
We use open-source software in connection with our technology and services. Some open-source
software licenses require those who distribute open-source software as part of their software to publicly disclose all or part of the
source code (including proprietary code) to such software and/or make available any derivative works of the open-source code on unfavorable
terms or at no cost. The use of such open-source code may ultimately require us to replace certain code used on our platform or discontinue
certain aspects of our platform. From time to time, we may face claims from third parties claiming infringement of their intellectual
property rights or demanding the release or license of the open-source software or derivative works that we developed using such software
(which could include our proprietary source code) or otherwise seeking to enforce the terms of the applicable open-source license. These
claims could result in litigation and could require us to pay substantial damages, publicly release the affected portions of our source
code, be limited in or cease using the implicated software unless and until we can re-engineer such software to avoid infringement or
change the use of, or remove, the implicated open-source software.
In addition to risks related to license requirements, use of certain open-source software
can lead to greater risks than use of third-party commercial software, as the original developers of open-source code generally do not
provide warranties (with respect to, for example, non-infringement or functionality) or indemnities or other contractual protections.
Our use of open-source software may also present additional security risks because the source code for open source software is publicly
available, which may make it easier for hackers and other third parties to determine how to breach our website and systems that rely on
open source software. Any of these risks could be difficult to eliminate or manage.
Expansion into markets outside the United States is important to the growth of our business,
and if we do not manage the business and economic risks of international expansion effectively, it could materially and adversely affect
our business and results of operations.
We may continue to expand our international operations, which may include opening offices
in new jurisdictions and providing our platform in additional languages. Any new markets or countries into which we attempt to advertise
our platform may not be receptive. For example, we may not be able to expand further in some markets if we are not able to satisfy certain
government requirements. In addition, our ability to manage our business and conduct our operations internationally requires considerable
management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment
of multiple languages, cultures, customs, legal and regulatory systems, alternative dispute systems and commercial markets. International
expansion has required, and will continue to require, investment of significant funds and other resources. Operating internationally subjects
us to new risks and may increase risks that we currently face, including risks associated with:
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recruiting and retaining talented and capable employees and contractors outside of Israel and the United States, and maintaining
our Company culture across all of our offices; |
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recruiting and retaining contractors in Ukraine, which is currently affected by the war with Russia; |
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providing our platform and operating our business across a significant distance, in different languages and among different cultures,
including the potential need to modify our platform and features to ensure that they are culturally appropriate and relevant in different
countries; |
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compliance with applicable international laws and regulations, including laws and regulations with respect to privacy, data protection,
consumer protection and unsolicited email, and the risk of penalties to our users and individual members of management or employees if
our practices are deemed to be out of compliance; |
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operating in jurisdictions that do not protect intellectual property rights to the same extent as does the United States; |
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compliance by us and our business partners with anti-corruption laws, import and export control laws, tariffs, trade barriers, economic
sanctions and other regulatory limitations on our ability to provide our platform in certain international markets; |
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political and economic instability; |
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fluctuations in currency exchange rates; |
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double taxation of our international earnings and potentially adverse tax consequences due to changes in the income and other tax
laws of Israel, the United States or the international jurisdictions in which we operate; and |
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higher costs of doing business internationally, including increased accounting, travel, infrastructure and legal compliance costs.
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Compliance with laws and regulations applicable to our global operations could substantially
increase our cost of doing business in international jurisdictions. We may be unable to keep current with changes in laws and regulations
as they change. Although we are in the process of implementing policies and procedures designed to support compliance with these laws
and regulations, there can be no assurance that we will always be in compliance or that all of our employees, contractors, partners and
agents will comply at all times. Any violations could result in enforcement actions, fines, civil and criminal penalties, damages, injunctions,
or reputational harm. If we are unable to comply with these laws and regulations or manage the complexity of our global operations successfully,
our business, results of operations and financial condition could be materially and adversely affected.
If we are unable to maintain and expand our scale of operations and generate a sufficient
amount of revenue to offset the associated fixed and variable costs, our results of operations may be materially and adversely affected.
Online businesses like ours tend to involve certain fixed costs, and our ability to
achieve desired operating margins depends largely on our success in maintaining a scale of operations and generating a sufficient amount
of revenue to offset these fixed costs and other variable costs. Our fixed costs typically include compensation of employees, data storage
and related expenses and office rental expenses. Our variable costs typically include sales and marketing expenses and payment processing
fees. As we have established the technology and network infrastructure to support our platform, the incremental cost associated with sellers
adding new services is relatively insignificant. However, if we are unable to maintain economies of scale our operating margin may decrease
and our business, prospects, financial condition and results of operations could be materially and adversely affected.
Our operating results may fluctuate from quarter to quarter, which makes our future
results difficult to predict.
Our quarterly operating results have fluctuated in the past and may fluctuate in the
future. You should take into account the risks and uncertainties frequently encountered by companies in rapidly evolving markets. Our
operating results in any given quarter can be influenced by numerous factors, many of which are unpredictable or are outside of our control,
including:
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our ability to maintain and grow our community of users; |
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the demand for and types of skills and services that are offered on our platform by freelancers; |
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spending patterns of buyers, including whether those buyers who use our platform frequently, or for larger services, reduce their
spend or stop using our platform; |
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seasonal spending patterns by buyers or work patterns by freelancers and seasonality in the labor market; |
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fluctuations in the prices that freelancers charge buyers on our platform; |
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changes to our pricing model; |
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our ability to introduce new features and services and enhance our existing platform and our ability to generate significant revenue
from new features and services; |
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our ability to respond to competitive developments, including pricing changes and the introduction of new products and services by
our competitors; |
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the impact of outages of our platform and associated reputational harm; |
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changes to financial accounting standards and the interpretation of those standards that may affect the way we recognize and report
our financial results; |
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increases in, and timing of, operating expenses that we may incur to grow and expand our business and to remain competitive;
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costs related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant
amortization costs and possible impairments; |
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security or data privacy breaches and associated remediation costs; |
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litigation, adverse judgments, settlements, or other litigation-related costs; |
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changes in the common law, statutory, legislative, or regulatory environment, such as with respect to privacy and data protection,
wage and hour regulations, worker classification (including classification of independent contractors or similar service providers and
classification of employees as exempt or non-exempt), internet regulation, payment processing, global trade, or tax requirements;
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fluctuations in currency exchange rates, inflation and interest rates; |
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general economic and political conditions and government regulations in the countries where we currently have significant numbers
of users, or where we currently operate or may expand in the future; |
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catastrophic or geopolitical events in countries where we currently have significant numbers of users, or where we currently operate,
which could lead to power and Internet shortages, that could prevent users from the ability to use our platform; |
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geopolitical risks, including armed conflicts, regional instability and international tensions; and |
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pandemics, epidemics or global health emergencies. |
The impact of one or more of the foregoing and other factors may cause our operating
results to vary significantly. As such, we believe that quarter-to-quarter comparisons of our operating results may not be meaningful
and should not be relied upon as an indication of future performance. If we fail to meet or exceed the expectations of investors or securities
analysts, the trading price of our ordinary shares could fall substantially, and we could face costly lawsuits, including securities class
action suits.
Our business is subject to a variety of laws and regulations, both in the United States
and internationally, many of which are evolving.
We are subject to a wide variety of laws and regulations. Laws, regulations and standards
governing issues such as worker classification, employment, payments, worker confidentiality obligations, intellectual property, consumer
protection, ESG issues, taxation, privacy, data security, and user safety are often complex and subject to varying interpretations, in
many cases due to their lack of specificity and, as a result, their application in practice may change or develop over time through judicial
decisions or as new guidance or interpretations are provided by regulatory and governing bodies, such as federal and state administrative
agencies. Many of these laws and regulations were adopted prior to the advent of the internet and mobile and related technologies and,
as a result, do not contemplate or address the unique issues of the internet and related technologies. Other laws and regulations may
be adopted in response to internet, mobile and related technologies. New and existing laws and regulations (or changes in interpretation
of existing laws and regulations) may also be adopted, implemented, or interpreted to apply to us and other online services marketplaces.
As our platform’s geographical scope expands, regulatory agencies or courts may claim that we, or our users, are subject to additional
requirements or that we are prohibited from conducting our business in or with certain jurisdictions. It is also possible that certain
provisions in agreements with our service providers or between buyers and freelancers may be found to be unenforceable or not compliant
with applicable law.
The adoption or modification of laws or regulations relating to the internet or other
areas of our business could limit or otherwise adversely affect the manner in which we currently conduct our business. On November 16,
2022, the Digital Services Act, or the DSA, came into force in the EU. The majority of the substantive provisions of the DSA have taken
effect on February 17, 2024, and govern, among other things, our potential liability for illegal services or content on our platform,
obligations around traceability of business users, and require enhanced transparency measures, including in relation to any recommendation
systems (including the main parameters used by such systems and any available options for recipients to modify or influence them). In
particular, if we present information about services in a way that would lead an average consumer to understand the service is provided
by us directly, rather than by a third-party merchant, we may be liable directly under consumer protection law. Further, the DSA contains
general requirements that user interfaces may not deceive or manipulate users which are yet to be clarified further by guidance. The DSA
may increase our compliance costs, require changes to our user interfaces, processes, operations, and business practices which may adversely
affect our ability to attract, retain and provide our services to users, and may otherwise adversely affect our business, operations and
financial condition. In particular our obligations to diligence the services offered on our platform could require significant additional
resources. Failure to comply with the DSA can result in fines of up to 6% of total annual worldwide turnover and recipients of services
have the right to seek compensation from providers in respect of damage or loss suffered due to infringement by the platform to comply
with the DSA. Similarly, in the UK, the Online Safety Act 2023, or the OSA, establishes an extensive regulatory framework for user-to-user
services and imposes obligations to protect users from illegal content which, if applicable, may increase compliance costs and may otherwise
adversely affect our business, operations and financial condition. Failure to comply with the OSA can result in fines of up to 10% of
total annual worldwide turnover or £18 million (whichever is greater).
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The Network and Information Systems Directive II, or NIS2, came into force in January
2023, and building on the original Network and Information Systems Directive, or NIS1, aims to improve the cyber security and resilience
capability of organizations that contribute towards critical national infrastructure by imposing obligations including cybersecurity risk
management, incident reporting, management responsibilities and registration requirements on in-scope entities. EU Member States were
required to adopt NIS2 into national law by October 17, 2024. Once fully in force, national laws implementing NIS2 may require us to modify
our cybersecurity practices and policies, and we could incur substantial costs as a result.
Recent financial, political and other events may increase the level of regulatory scrutiny
on larger companies, technology companies in general and, in particular, companies engaged in dealings with independent contractors or
payments. Regulatory agencies may enact new laws or promulgate new regulations that are adverse to our business, or they may view matters
or interpret laws and regulations differently than they have in the past or in a manner adverse to our business. Such regulatory scrutiny
or action may create different or conflicting obligations on us from one jurisdiction to another. In particular, we have received letters
from certain jurisdictions indicating that we may be required to register and pay taxes based on having certain minimum contacts in such
jurisdictions. We may become subject to taxation in additional jurisdictions in the future.
Any actual or perceived failure to comply with evolving regulatory frameworks around
the development and use of AI could adversely affect our business, results of operations, and financial condition.
We leverage new technologies and platforms to improve business effectiveness, including
use of AI technologies. The AI regulatory landscape is rapidly evolving, and we are or may become subject to numerous state, federal and
foreign laws, requirements and regulations governing the use of AI. Implementation standards and enforcement practices are likely to remain
uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their
requirements may have on our business.
In the United States and internationally, AI is the subject of evolving review by various
governmental and regulatory agencies, and changes in laws, rules, directives and regulations governing the use of AI may adversely affect
the ability of our business to use or rely on AI. For example, California and other states have implemented, or are in the process of
implementing, laws, rules, and regulations that impose obligations on the use of automated decision making.
In Europe, on August 1, 2024, the EU Artificial Intelligence Act, or the EU AI Act,
entered into force and established a comprehensive, risk-based governance framework for AI in the EU market. The majority of the substantive
requirements under the EU AI Act will apply from August 2, 2026. The EU AI Act applies to companies that develop, use and/or provide AI
in the EU and – depending on the AI use case – includes requirements around transparency, conformity assessments and monitoring,
risk assessments, human oversight, security, accuracy, general purpose AI and foundation models, and proposes fines for breach of up to
35 million EUR, or up to 7% of worldwide annual turnover (whichever is higher). In addition, the revised EU Product Liability Directive
came into force in December 2024, to be implemented into EU Member State national law by December 2026. This Directive extends the EU’s
existing strict product liability regime to AI technologies and AI-enabled products and facilitates civil claims in respect of harm caused
by AI. Once fully applicable, the EU AI Act and the EU Product Liability Directive will have a material impact on the way AI is regulated
in the EU, and together with developing guidance and/or decisions in this area, likely to affect our use of AI and our ability to provide
and to improve our services, require additional compliance measures and changes to our operations and processes, result in increased compliance
costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition.
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Additionally, the cost to comply with such laws, regulations, or decisions and/or guidance
interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations
regarding our use of AI technologies). We may need to expend resources to adjust our products or services in certain jurisdictions if
the laws, regulations, or decisions are not consistent across jurisdictions.
Competition for highly skilled technical and other personnel is intense, and as a result
we may fail to attract, recruit, retain and develop qualified employees, which could materially and adversely impact our business, financial
condition and results of operations.
We compete in a market marked by rapidly changing technologies and an evolving competitive
landscape. In order for us to successfully compete and grow, we must attract, recruit, retain and develop personnel with requisite qualifications
to provide expertise across the entire spectrum of our intellectual capital and business needs.
Our principal research and development as well as significant elements of our marketing
and general and administrative activities are conducted at our headquarters in Israel, where we face significant competition. We also
engage a talented team in the United States and Ukraine to benefit from the significant pool of talent that is available in such markets,
where we have also witnessed increased competition in those markets. Many of the companies with which we compete for qualified personnel
have significant resources, and we may not succeed in recruiting additional experienced or professional personnel, retaining personnel
or effectively replacing current personnel who may depart with qualified or effective successors. In addition, our employees may be increasingly
targeted for recruitment by competitors and other companies in the technology industry, which may make it more difficult for us to retain
employees and may increase retention costs. Training of new employees with no prior relevant experience could be time-consuming and require
a significant amount of resources.
In addition, as a result of the intense competition for qualified human resources, the
high-tech market has also experienced and may continue to experience significant wage inflation. Accordingly, our efforts to attract,
retain and develop personnel may also result in significant additional expenses, which could adversely affect our profitability. Furthermore,
in making employment decisions, particularly in the high-technology industry, job candidates often consider the value of the equity they
are to receive in connection with their employment. Employees may be more likely to leave us if the shares they own or the shares underlying
their equity incentive awards have significantly decreased in value.
Moreover, we believe our success has depended, and our future success depends, on the
efforts of our senior management, including Micha Kaufman, our Founder and Chief Executive Officer. There can be no assurance that the
services of any of these individuals will continue to be available to us in the future. We do not carry any key man life insurance policies
on any of our executive officers.
While we utilize non-competition agreements with our employees as a means of improving
our employee retention, those agreements may not be effective towards that goal. These agreements prohibit our employees, if they cease
working for us, from competing directly with us or working for our competitors for a limited period. We may be unable to enforce these
agreements under Israeli law, and it may be difficult for us to restrict our competitors from benefiting from the expertise our former
employees developed while working for us.
In light of the foregoing, there can be no assurance that qualified employees will remain
in our employ or that we will be able to attract and retain qualified personnel in the future. Failure to retain or attract qualified
personnel could have a material adverse effect on our business, financial condition and results of operations.
Our 2025 reduction in workforce may lead to workforce attrition and operational disruptions.
In 2025, we reduced our workforce by approximately 30%. This reduction in workforce
may yield unintended consequences and costs, such as the loss of institutional knowledge and expertise, employee attrition beyond our
intended reductions in force, a reduction in morale among our remaining employees, greater-than-anticipated costs incurred in connection
with the reduction in workforce and the risk that we may not achieve the benefits from the restructuring to the extent or as quickly as
we anticipate, all of which may have a material adverse effect on our results of operations or financial condition. Additionally, this
reduction in workforce may hurt our employer brand and make it more difficult to hire employees in the future.
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If we fail to protect our intellectual property rights, our business, prospects, financial
condition and results of operations could be materially and adversely affected.
We rely on a combination of confidentiality clauses, contractual commitments, trade
secret protection, copyrights, trademarks and other legal rights to protect our intellectual property and know-how. To date, we have not
sought patent protection for our platform or any portion of it. Third parties may obtain, copy, reverse engineer or use without our authorization
our intellectual property, which includes trademarks related to our brand, platform, registered domain names, trade secrets and other
intellectual property rights and licenses. If we cannot adequately protect and defend our intellectual property, we may not remain competitive,
and our business, operating results and financial condition may be adversely affected.
We enter into confidentiality and proprietary rights agreements with our employees,
consultants and business partners, and we control access to and distribution of our proprietary information. No assurance can be given
that these agreements will be effective in controlling access to our proprietary information or in effectively securing ownership of intellectual
property developed by our current or former employees and contractors. Further, our competitors could also independently develop technologies
like ours, and our intellectual property rights may not be broad enough for us to prevent competitors from selling products and services
incorporating those technologies.
In order to protect our brand, we register and defend our trademarks and expend resources
to prevent others from using the same or substantially similar marks. Despite these efforts, we may not always be successful in registering
and preventing misappropriation of our own marks or preventing registration of confusingly similar marks, and we may suffer dilution of
or other harm to our brand.
From time to time, we may discover that third parties are infringing, misappropriating
or otherwise violating our intellectual property rights. However, policing unauthorized use of our intellectual property and misappropriation
of our technology is difficult, and we may therefore not always be aware of such unauthorized use or misappropriation. Despite our efforts
to protect our intellectual property rights, unauthorized third parties may attempt to use, copy or otherwise obtain and market or distribute
our intellectual property rights or technology or otherwise develop solutions with the same or similar functionality as our platform.
If competitors infringe, misappropriate or otherwise misuse our intellectual property rights and we are not adequately protected, or if
such competitors are able to develop solutions with the same or similar functionality as our platform without infringing our intellectual
property, our competitive position could be harmed and our legal costs could increase, and our business, prospects, financial condition
and results of operations could be materially and adversely affected.
We may not be able to successfully halt the operations of copycat websites or misappropriation
of our data.
From time to time, third parties may misappropriate our data, through website scraping,
robots, web crawlers or other tools or means and aggregate this data on their websites with data from other companies. In addition, “copycat”
websites may attempt to imitate the functionality of our website.
If we become aware of such activities, we would employ technological and/or legal measures,
including initiating lawsuits, in an attempt to halt their operations. However, we may not be able to detect all such activities in a
timely manner and, even if we could, technological and legal measures may be insufficient. Regardless of whether we can successfully enforce
our rights against these websites or third parties, any measures that we may take could require us to expend significant financial or
other resources.
We may become subject to claims for remuneration or royalties for assigned service invention
rights by our employees, which could result in litigation and adversely affect our business.
A significant portion of our intellectual property has been developed by our employees
in the course of their employment for us. Under the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee
in the course and as a result of or arising from his or her employment with a company are regarded as “service inventions,”
which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights.
The Patent Law also provides that if there is no such agreement between an employer and an employee, the Israeli Compensation and Royalties
Committee, or the Committee, a body constituted under the Patent Law, shall determine whether the employee is entitled to remuneration
for his or her inventions. Case law clarifies that the right to receive consideration for “service inventions” can be waived
by the employee and that in certain circumstances, such waiver does not necessarily have to be explicit. The Committee will examine, on
a case-by-case basis, the general contractual framework between the parties, using interpretation rules of the general Israeli contract
laws. Further, the Committee has not yet determined one specific formula for calculating this remuneration, but rather uses the criteria
specified in the Patent Law. Although we generally enter into assignment-of-invention agreements with our employees pursuant to which
such individuals assign to us all rights to any inventions created in the scope of their employment or engagement with us, we may face
claims demanding remuneration in consideration for assigned inventions. As a consequence of such claims, we could be required to pay additional
remuneration or royalties to our current and/or former employees, or be forced to litigate such claims, which could negatively affect
our business.
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We may be vulnerable to intellectual property infringement claims brought against us
by others.
We may be subject to legal proceedings and claims from time to time relating to the
intellectual property of others in the ordinary course of our business. We rely to some extent on third-party intellectual property, such
as licenses to use software to operate our business and certain other copyrighted works. A successful infringement claim against us could
result in monetary liability or a material disruption in our business. Although we require our employees not to infringe others’
intellectual property, we cannot be certain that our platform and brand names do not or will not infringe on valid patents, trademarks,
copyrights or other intellectual property rights held by third parties. Additionally, third parties may assert that we are directly or
secondarily liable because a user of ours offered or sold products or services, or engaged in other conduct that infringes, misappropriates,
or otherwise violates their intellectual property or other proprietary rights.
We may incur substantial expenses in defending against third party infringement claims,
regardless of their merit. Additionally, due to diversion of management time, expenses required to defend against any claim and the potential
liability associated with any lawsuit, any significant litigation could significantly harm our business, financial condition and results
of operations. If we were found to have infringed on the intellectual property rights of a third party, we could be liable to that party
for license fees, royalty payments, lost profits or other damages, and the owner of the intellectual property may be able to obtain injunctive
relief to prevent us from using the technology, software or brand name in the future. If the amount of these payments were significant,
if we were prevented from incorporating certain technology or software into our platform or if we were prevented from using our brand
names, our business, prospects, financial condition and results of operations could be materially and adversely affected.
Buyers and freelancers may circumvent our platform.
Our business depends on buyers and freelancers transacting through our platform. Despite
our efforts to prevent them from doing so, users may circumvent our platform and engage with or pay each other through other means to
avoid the marketplace fees that we charge on our platform. In addition, our efforts to reduce circumvention by buyers and freelancers
may be costly or disruptive to implement and may fail to have the intended effect or have an adverse effect on our brand or user experience.
Additionally, such efforts may reduce the attractiveness of our platform, divert the attention of management or otherwise harm our business.
Additionally, freelancers, after utilizing our platform to build their reputation and
brand and grow their clientele base, could choose to market their services and skills and transact with buyers outside of our platform.
We rely on Amazon Web Services to operate our platform, and any disruption of service
from Amazon Web Services or material change to our arrangement with Amazon Web Services could adversely affect our business.
The operation of our platform depends on certain third-party service providers. In particular,
we currently host our platform, serve our users and support our operations using Amazon Web Services, or AWS, a provider of cloud infrastructure
services. We do not have control over the operations of the facilities of AWS that we use. AWS’ facilities are vulnerable to damage
or interruption from earthquakes, hurricanes, floods, fires, cyber security attacks, terrorist attacks, power losses, telecommunications
failures and similar events. In the event that AWS’ or any other third-party provider’s systems or service abilities are hindered
by any of the events discussed above, our ability to operate our platform may be impaired, resulting in missing financial targets for
a particular period. A decision to close the facilities without adequate notice, or other unanticipated problems, could result in lengthy
interruptions to our platform. All of the aforementioned risks may be augmented if our or our partners’ business continuity and
disaster recovery plans prove to be inadequate. The facilities also could be subject to break-ins, computer viruses, sabotage, intentional
acts of vandalism and other misconduct. Our platform’s continuing and uninterrupted performance is critical to our success. Users
may become dissatisfied by any system failure that interrupts our ability to provide our platform to them. We may not be able to easily
switch our AWS operations to another cloud or other data center provider if there are disruptions or interference with our use of AWS,
and, even if we do switch our operations, other cloud and data center providers are subject to the same risks. Sustained or repeated system
failures would reduce the attractiveness of our platform to users, thereby reducing revenue. Moreover, negative publicity arising from
these types of disruptions could damage our reputation and may adversely impact the use of our platform. We may not carry sufficient business
interruption insurance to compensate us for losses that may occur as a result of any events that cause interruptions in our service.
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AWS does not have an obligation to renew its agreements with us on commercially reasonable
terms, or at all. If we are unable to renew our agreements on commercially reasonable terms, our agreements are prematurely terminated,
or we add additional infrastructure providers, we may experience costs or downtime in connection with the transfer to, or the addition
of, new data center providers. If AWS or other infrastructure providers increase the cost of their services, we may have to increase the
fees to use our platform, and our business, prospects, financial condition and results of operations could be materially and adversely
affected.
Our reliance on third parties in connection with our dropshipping platform exposes us
to significant risks that could adversely affect our business operations.
The fulfillment of orders on our dropshipping platform is heavily dependent on third-party
suppliers and logistics providers. These partners are responsible for sourcing products and ensuring their timely delivery to the buyers
of our users. Any disruption in their operations can directly impact our ability to fulfill orders, leading to delays, cancellations,
and customer dissatisfaction. Several factors could contribute to fulfillment issues, including supply chain disruptions, inventory shortages,
shipping delays, and logistical challenges. If our suppliers face production or distribution problems, or if logistics providers encounter
transportation or delivery obstacles, our service quality could be compromised.
Additionally, if any of our partners decide to cease working with us or prioritize other
clients, we may struggle to find alternative solutions quickly.
Moreover, we rely on these partners to adhere to legal and regulatory standards related
to product quality and safety. Any failure on their part to comply with these standards could result in legal liabilities for us and damage
our reputation.
If we are unable to effectively manage our relationships with third-parties, or if these
partners fail to perform as expected, it could significantly affect our business operations.
We face payment and fraud risks that could materially and adversely affect our business.
Requirements on our platform relating to user authentication and fraud detection are
complex. If our security measures do not succeed, our business may be adversely affected. In addition, bad actors around the world use
increasingly sophisticated methods to engage in illegal activities involving personal data, such as unauthorized use of another’s
identity or payment information, unauthorized acquisition or use of credit or debit card details and other fraudulent use of another’s
identity or information. This could result in any of the following, each of which could adversely affect our business:
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we may be held liable for the unauthorized use of an account holder’s credit card or bank account number and required by card
issuers or banks to pay a chargeback or return fee, and if our chargeback or return rate becomes excessive, credit card networks may also
require us to pay fines or other fees; |
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we may be subject to additional risk and liability exposure, including negligence, fraud or other claims, if employees or third-party
service providers misappropriate user information for their own gain or facilitate the fraudulent use of such information; |
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bad actors may use our platform, including our payment processing and disbursement methods, to engage in unlawful or fraudulent conduct,
such as money laundering, terrorist financing, fraudulent sale of services, breaches of security, leakage of data, piracy or misuse of
software and other copyrighted or trademarked content, and other misconduct; |
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users of our platform who are subjected or exposed to the unlawful or improper conduct of other users or other third parties, including
law enforcement, may seek to hold us responsible for the conduct of other users and may lose confidence in our platform, decrease or cease
to use our platform, seek to obtain damages and costs, or impose fines and penalties; |
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if, for example, freelancers misstate their qualifications or location, provide misinformation, perform services they are not qualified
or authorized to provide, or produce insufficient or defective work product or work product with a viral or other harmful effect, users
or other third parties may seek to hold us responsible for the freelancers’ acts or omissions and may lose confidence in our platform,
decrease or cease use of our platform, or seek to obtain damages and costs; and |
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we may suffer reputational damage as a result of the occurrence of any of the above. |
Despite measures we have taken to detect and reduce the risk of this kind of conduct,
we do not have control over users of our platform and cannot ensure that any of our measures will stop illegal or improper uses of our
platform. We have received in the past, and may receive in the future, complaints from users and other third parties concerning misuse
of our platform. We also may be required to bring claims against users and other third parties for their misuse of our platform. Even
if these claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve
them, could divert the resources of our management and materially and adversely affect our business, prospects, financial condition and
results of operations.
We may be subject to escrow, payment services and money transmitter regulations that
may materially and adversely affect our business.
We rely on third parties to collect funds from buyers, remit payments to sellers and
hold funds in connection with user balances. Although we believe that by working with a third party, our operations comply with existing
U.S. federal and state and applicable international laws and regulatory requirements related to escrow, money transmission and the handling
or moving of money, existing laws or regulations may change, and interpretations of existing laws and regulations may also change.
As a result, we could be required to be licensed as an escrow agent or a money transmitter
(or other similar licensee) in certain states in the U.S. or other jurisdictions or may choose to obtain such a license even if not required.
Such a decision could also require us to register as a money services business under applicable laws and regulations. It is also possible
that we could become subject to regulatory enforcement or other proceedings in those states or other jurisdictions with escrow, money
transmission or other similar statutes or regulatory requirements related to the handling or moving of money, which could in turn have
a significant impact on our business, even if we were to ultimately prevail in such proceedings. We may also be required to become licensed
as a payment institution (or other similar license) under the European Payment Services Directive or other international laws and regulations.
Any developments in the laws or regulations related to escrow, money transmission or the handling or moving of money or increased scrutiny
of our business may lead to additional compliance costs and administrative overhead.
The application of laws and regulations related to escrow, money transmission and the
handling or moving of money is complex and uncertain, particularly as they relate to new and evolving business models. If we are or have
at any point in time been in violation of one or more escrow or money transmitter or other similar statutes or regulatory requirements
related to the handling or moving of money in any jurisdiction, we may be subject to the imposition of fines, users in the relevant jurisdiction
may be unable to use our platform, we may be subject to civil liability or criminal liability and our business, prospects, financial condition
and results of operations could be materially and adversely affected.
If we are unable to maintain our payment partners and bank relationships, or if our
disbursement partners encounter business difficulties, our business could be materially and adversely affected.
Our payment partners consist of payment processors and disbursement partners. We rely
on banks and card processors to provide clearing, processing and settlement functions for the secure and timely funding of all transactions
on our platform. We also rely on a network of disbursement partners to hold and disburse funds to users.
Our payment partners are critical to our business. In order to maintain these relationships,
we have in the past been, and may in the future be, forced to agree to terms that are unfavorable to us. If we are unable to maintain
our agreements with current payment partners on favorable terms, or we are unable to enter into new agreements with new payment partners
on favorable terms, our ability to collect, hold and disburse funds and our revenue and business may be materially and adversely affected.
This could occur for a number of reasons, including the following:
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our payment partners may be unable to effectively accommodate changing service needs, such as those which could result from rapid
growth or higher volume and the fact that some of our payment partners have a limited operating history; |
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our payment partners could choose to terminate or not renew their agreements with us or only be willing to renew on different or
less advantageous terms; |
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our payment partners could reduce the services provided to us, cease doing business with us, or cease doing business altogether;
|
| ● |
our payment partners could be subject to delays, limitations or closures of their own businesses, networks or systems, causing them
to be unable to process payments or disburse funds for certain periods of time; or |
| ● |
we may be forced to cease doing business with payment processors if card association operating rules, certification requirements
and laws, regulations or rules governing electronic funds transfers to which we are subject to change or are interpreted to make it difficult
or impossible for us to comply. |
Having an international community of users exposes us to risks that may materially and
adversely affect our business, prospects, financial condition and results of operations.
Our users have a global footprint that subjects us to the risks of being found to do
business internationally. We have users located in over 160 countries, including some emerging markets where we have limited experience,
where challenges can be significantly different from those we have faced in more developed markets and where business practices may create
greater internal control risks. Because our platform is generally accessible by users worldwide, one or more jurisdictions may claim that
we or our users are required to comply with their laws. Laws outside of the United States and Israel regulating internet, digital services,
payments, escrow, privacy and data protection, AI, taxation, terms of service, website accessibility, consumer protection, intellectual
property ownership, services intermediaries, labor and employment, worker classification, background checks and recruiting and staffing
companies, among others, which could be interpreted to apply to us, are often less favorable to us than those in the United States and
Israel, giving greater rights to competitors, users and other third parties.
Compliance with international laws and regulations may be more costly than expected,
may require us to change our business practices or may restrict our service offerings, and the imposition of any such laws or regulations
on us, our users or third parties that we or our users utilize to provide services may adversely affect our business, prospects, financial
condition and results of operations. In addition, we may be subject to multiple overlapping legal or regulatory regimes that impose conflicting
requirements and enhanced legal risks.
Analysis of, and compliance with, global laws and regulations may substantially increase
our cost of doing business. We may be unable to keep current with changes in laws and regulations as they develop.
Although we are in the process of implementing policies and procedures designed to analyze
whether these laws apply and, if applicable, ensure compliance with these laws and regulations, there can be no assurance that we will
always be in compliance or that all of our employees, contractors, partners, users and agents will comply at all times. Any violations
could result in enforcement actions, fines, civil and criminal penalties, interest, costs and fees (including but not limited to legal
fees), injunctions, loss of intellectual property rights or reputational harm. If we are unable to comply with these laws and regulations
or manage the complexity of global operations and supporting an international user base successfully, our business, prospects, financial
condition and results of operations could be materially and adversely affected.
In addition, since we operate on a global basis, political, economic and security conditions
in countries in which we operate or have users may limit our ability to provide our services. Specifically, the war between Russia and
Ukraine and the war between Israel and its neighboring countries and regions may affect our business and operations in those regions.
Our business model may subject us to disputes between users of our platform.
Our business model involves connecting buyers and freelancers that contract directly
through our platform. Buyers and freelancers are free to negotiate any specific terms they choose through custom offers sent from the
conversation page. It is possible that disputes may arise between buyers and freelancers with regard to the terms of their order, service
standards, payment, confidentiality, work product and intellectual property ownership and infringement. If either party believes the terms
of their agreement were not met, our terms of service provide a mechanism for the parties to request assistance from us in resolving the
dispute through our resolution center and customer support team. Whether or not buyers and freelancers decide to seek assistance from
us, if these disputes are not resolved amicably, the parties might escalate to formal proceedings, such as by filing claims with a court.
Given our role in facilitating and supporting these arrangements, it is possible that
claims will be brought against us directly as a result of these disputes, or that freelancers or buyers may bring us into any claims filed
against each other. We include language in our terms of service disclaiming responsibility or liability for any disputes between users;
however, we cannot guarantee that these terms will, in all circumstances, be effective in preventing or limiting our involvement in user
disputes.
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Additionally, from time to time, we are the subject of user complaints filed on forums
such as the Better Business Bureau. We attempt to respond to all such complaints, although their mere presence may result in damage to
our reputation. Even if these claims do not result in litigation or are resolved in our favor, these claims, and the time and resources
necessary to resolve them, could divert the resources of our management.
We may not be able to successfully execute future acquisitions or efficiently manage
any acquired business.
We have acquired and may in the future acquire certain complementary businesses or technologies.
For example, during 2025 we acquired Yaballe Ltd. and the business of Bernstein, Dreyer & Mikulic GbR and during 2024 we acquired
AutoDS Ltd. and Praetolia Ltd. The success of any acquisition will depend upon several factors, including our ability to: identify and
cost-effectively acquire businesses; integrate acquired user data, operations, products and technologies into our organization effectively;
retain and motivate key personnel; and effectively retain acquired users. From time to time, we may also determine to divest or wind down
previously acquired businesses that no longer align with our strategic priorities or resource allocation plans; for example, in 2025 we
sold two businesses that we had acquired in 2020 and 2021.
Any such acquisition may require a significant commitment of management time, capital
investment and other resources. We may not be successful in identifying and negotiating acquisitions on terms favorable to us. Any such
acquisition could involve us taking on debt or give rise to new liabilities. In addition, we cannot be certain that any acquisition, if
completed, will be successfully integrated into our existing operations. Similarly, divestitures of previously acquired businesses may
result in separation costs, the loss of anticipated synergies, and other financial impacts, and may divert management attention. If we
are unable to effectively integrate an acquired business, our business, financial condition and results of operations may be materially
and adversely affected. In addition, if we use our equity securities as consideration for acquisitions, we may dilute the value of the
ordinary shares.
There may be adverse tax, legal and other consequences if the employment status of freelancers
that use our platform is challenged.
There is often uncertainty in the application of worker classification laws and, consequently,
there is risk that freelancers could be deemed to be misclassified under applicable law. The tests governing whether a service provider
is an independent contractor, or an employee, are typically highly fact sensitive and vary by governing law. Laws and regulations that
govern the status and misclassification of independent contractors are also subject to change and to divergent interpretations by various
authorities, which can create uncertainty and unpredictability. A misclassification determination or allegation creates potential exposure
with respect to users of our platform, including but not limited to: monetary exposure arising from or relating to failure to withhold
and remit taxes, unpaid wages and wage and hour laws and requirements (such as those pertaining to minimum wage and overtime); liquidated
damages; civil penalties and fines; claims for employee benefits, social security, workers’ compensation and unemployment; claims
of discrimination, harassment and retaliation under civil rights laws; claims under laws pertaining to unionizing, collective bargaining
and other concerted activity; and other claims, charges, or other proceedings under laws and regulations applicable to employers and employees,
including risks relating to allegations of joint employer liability. Such claims could result in monetary damages or other liability,
and any adverse determination, including potentially the requirement for us to indemnify a user, could also harm our brand, which could
materially and adversely affect our business, prospects, financial condition and results of operations.
The application of indirect taxes, other tax laws or regulation could adversely affect
our business and results of operations.
The application of indirect taxes, such as sales tax, use tax, value-added tax, gross
receipts tax, and digital services tax, to our business is an evolving issue that requires ongoing judgment to evaluate our applicable
tax obligations. As a result, amounts recorded may be subject to adjustments by the relevant tax authorities. In many cases, the ultimate
tax determination is uncertain because it is not clear how new and existing statutes might apply to our business. One or more states,
the U.S. federal government or other countries may seek to impose additional reporting, record-keeping or indirect tax collection obligations
on businesses like ours that facilitate e-commerce. For example, state and local taxing authorities in the United States and taxing authorities
in other countries have identified e-commerce platforms as a means to calculate, collect and remit indirect taxes for transactions taking
place over the internet. Multiple U.S. states have enacted related legislation, and other states are now considering such legislation.
Tax collection responsibility and the additional costs associated with indirect tax collection, remittance and audit requirements, in
addition to reporting requirements, could create additional tax exposure for us and additional burdens for users on our websites and mobile
platforms.
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We may face lawsuits or incur liability as a result of content published or made available
through our platform.
The nature of our business exposes us to claims related to defamation, infringement,
misappropriation or other violations of third-party intellectual property rights, rights of publicity and privacy and personal injury
torts. The law relating to the liability of providers of online products or services for activities of their users remains somewhat unsettled,
both within the United States and internationally. This risk is enhanced in certain jurisdictions outside the United States where our
protection from liability for third-party actions may be unclear and where we may be less protected under local laws than we are in the
United States. If a claim is brought against us due to the actions of our users, we could incur significant costs investigating and defending
such claims and, if we are found liable, significant damages.
Our business activities subject us to litigation risk that could materially and adversely
affect us by subjecting us to significant money damages and other remedies, causing unfavorable publicity or increasing our litigation
expense.
We are, from time to time, the subject of complaints or litigation, including user claims,
contract claims, employee allegations of improper termination and discrimination and claims related to violations of applicable government
laws regarding religious freedom, advertising and intellectual property. Any such claim could be expensive to defend and may divert time,
money and other valuable resources away from our operations and management, and, thereby, hurt our business. Additionally, a substantial
judgment against us could materially and adversely affect our business, prospects, financial condition and results of operations.
Our insurance may not provide adequate levels of coverage against claims.
We believe that we maintain insurance customary for businesses of our size and type.
However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure.
Moreover, any loss incurred could exceed policy limits and policy payments made to us may not be made on a timely basis.
We may be materially and adversely affected by natural disasters and other catastrophic
events that could disrupt our business operations, and our business continuity and disaster recovery plans may not adequately protect
us from a serious disaster.
A significant natural disaster, such as an earthquake, blizzard, hurricane, fire or
flood, the outbreak of a pandemic, such as COVID-19, or other catastrophic events, such as a power loss or telecommunications failure,
could have a material adverse impact on our business, financial condition and operating results. In the event of a natural disaster or
other catastrophic event, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in
development of our platform, lengthy interruptions in service, breaches of data security and loss of critical data, all of which could
have an adverse effect on our future operating results. Broadly accepted scientific projections predict that the frequency and/or intensity
of certain natural disasters are likely to increase in the future due to climate change, which may increase the magnitude of this risk.
In addition, natural disasters and other catastrophic events could affect the ability of sellers on our platform to perform Gigs on a
timely basis. If a natural disaster or other catastrophic event occurs in a region from which we derive a significant portion of our revenue,
users in that region may delay or forego the use of our platform, which may adversely impact our operating results. All of the aforementioned
risks may be augmented if our or our partners’ business continuity and disaster recovery plans prove to be inadequate.
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Our investment portfolio and other funds may be adversely affected by market conditions
and interest rates.
We maintain substantial balances of liquid investments, for purposes of financing our
operations and acquisitions. Our marketable securities totaled $117.7 million as of December 31, 2025. The performance of the capital
markets affects the values of funds that are held in marketable securities. These assets are subject to market fluctuations and various
developments, including, without limitation, rating agency downgrades that may impair their value. We generally buy and hold our portfolio
positions, while minimizing credit risk by setting limits for minimum credit rating and maximum concentration per issuer. Our investments
consist primarily of government and corporate debentures, which are primarily fixed-income securities.
Although we believe that we generally adhere to conservative investment guidelines,
the continuing turmoil in the financial markets, record high inflation rates and geopolitical instability, may result in impairments of
the carrying value of our investment assets. In addition, as our investment portfolio is invested primarily in fixed-income securities
it is affected by changes in interest rates. Interest rates are highly sensitive to many factors, including governmental monetary policies
and domestic and international economic and political conditions. Any significant decline in our financial income or the value of our
investments as a result of the changes in interest rates and interest rate expectations of the financial markets, deterioration in the
credit rating of the securities in which we have invested, or general market conditions, could have an adverse effect on our results of
operations and financial condition. We classify our investments as available-for-sale. Changes in the fair value of investments classified
as available-for-sale are not recognized as income during the period, but rather are recognized as other comprehensive income (loss),
or OCI, which is a separate component of equity until realized. Realized losses in our investments portfolio may adversely affect our
financial position and results.
In addition, we regularly maintain cash, cash equivalents and bank deposits at financial
institutions in the United States, Israel and other multinational institutions. Our funds at these institutions exceed insured limits
and some are not insured at all. Although we spread our cash, cash equivalents and bank deposits among several financial institutions
in order to reduce the risks associated with maintaining all of our balances at one financial institution, in the event of failure of
any financial institution where we maintain our cash and cash equivalents or bank deposits, there can be no assurance that we would be
able to access uninsured funds in such financial institution in a timely manner or at all. Any inability to access or delay in accessing
these funds could adversely affect our business and financial position.
The enactment of legislation implementing changes in taxation of international business
activities, the adoption of other corporate tax reform policies, or changes in tax legislation or policies could impact our future financial
position and results of operations.
Corporate tax reform, base-erosion efforts and tax transparency continue to be high
priorities in many tax jurisdictions where we have business operations. As a result, policies regarding corporate income and other taxes
in numerous jurisdictions are under heightened scrutiny and tax reform legislation is being proposed or enacted in a number of jurisdictions.
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For example, there is growing pressure in many jurisdictions and from multinational
organizations such as the Organization for Economic Cooperation and Development, or the OECD, and the EU to amend existing international
taxation rules in order to align the tax regimes with current global business practices. Specifically, in October 2015, the OECD published
its final package of measures for reform of the international tax rules as a product of its Base Erosion and Profit Shifting, or BEPS
initiative, which was endorsed by the G20 finance ministers. Many of the initiatives in the BEPS package required and resulted in specific
amendments to the domestic tax legislation of various jurisdictions and to existing tax treaties. We continuously monitor these developments.
Although many of the BEPS measures have already been implemented or are currently being implemented globally (including, in certain cases,
through adoption of the OECD’s “multilateral convention” (to which Israel is also a party) to effect changes to tax
treaties which entered into force on July 1, 2018 and through the EU’s “Anti Tax Avoidance” Directives), it is still
difficult in some cases to assess to what extent these changes will impact our tax liabilities in the jurisdictions in which we conduct
our business or to what extent they may impact the way in which we conduct our business or our effective tax rate due to the unpredictability
and interdependency of these potential changes. In January 2019 the OECD announced further work in continuation of the BEPS project, focusing
on two “pillars”. On October 8, 2021, 136 countries approved a statement known as the OECD BEPS Inclusive Framework, which
builds upon the OECD’s continuation of the BEPS project. The first pillar is focused on the allocation of taxing rights between
countries for in-scope large multinational enterprises (with revenue in excess of Euro 20 billion and profitability of at least 10%) that
sell goods and services into countries with little or no local physical presence. We do not expect to be within the scope of the first
Pillar. The second pillar, which includes two interlocking rules: (1) the Income Inclusion Rule, and (2) the Undertaxed Payment Rule,
that together comprise the Global Anti-Base Erosion, or the GloBE rules, is focused on developing a global minimum tax rate of at least
15% applicable to in-scope multinational enterprises (with revenue in excess of Euro 750 million). Israel is one of the 136 jurisdictions
that has agreed to the OECD/G20 Inclusive Framework on BEPS, including the second pillar framework. Israel has enacted domestic legislation,
effective January 1, 2026, implementing a Qualified Domestic Minimum Top-Up Tax (QDMTT), designed to ensure a minimum effective tax rate
of 15% on Israeli constituent entities of in-scope multinational enterprise groups, generally calculated in accordance with the Global
Anti-Base Erosion (GloBE). As of the date of this report, the IIR and the UTPR have not been enacted under Israeli law. While we do not
currently expect to be within the scope of the second pillar (which generally applies to multinational enterprise groups with consolidated
annual revenue more than Euro 750 million), we may become subject to these rules in the future if we meet the applicable thresholds. In
addition, various jurisdictions in which we operate have adopted, or are in the process of adopting, other elements of the second pillar
(including the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR)). We continue to monitor these developments. The adoption
and implementation of the second pillar and other tax reform and tax transparency initiatives may increase audit activity and disputes
with tax authorities in the jurisdictions in which we operate and could affect our tax liabilities and effective tax rate. We cannot predict
the timing, manner or extent of application of these rules to us, or their impact, if any, on our business, results of operations, cash
flows, or financial condition. Given these developments, it is generally expected that tax authorities in various jurisdictions in which
we operate may increase their audit activity and may seek to challenge some of the tax positions we have adopted. It is difficult to assess
if and to what extent such challenges, if raised, might impact our effective tax rate.
As progress on BEPS 2.0 advanced from 2019 into 2020, the world has been impacted by
the COVID-19 pandemic and countries have begun to seek new sources of revenue. As a result, there is a proliferation of new Digital Services
Taxes, or DSTs, and similar taxes on the digital economy as the interest in these sources of revenue has overtaken progress toward development
of fundamental reforms to the international tax architecture under BEPS 2.0 on a consensus basis. These new taxes include DSTs of the
type originally proposed plus, in certain jurisdictions, greatly expanded DSTs that apply to virtually all digital transactions, including
on multi-sided interfaces allowing users to connect. These taxes differ between jurisdictions in terms of thresholds, applicable tax rate
and scope.
Further, there have been changes to tax laws in the United States (such as the United
States Inflation Reduction Act of 2022, which, among other changes, introduced a 15% corporate minimum tax on certain United States corporations
and a 1% excise tax on certain stock redemptions by United States corporations, which apply to certain stock redemptions by a foreign
corporation funded by certain United States affiliates, and the One Big Beautiful Bill Act, enacted on July 4, 2025 (“OBBBA”),
which significantly changed the U.S. tax landscape by implementing revisions to key business tax provisions. The effect of these tax laws
on our operations and tax liabilities is unclear and could be material. Interpretations of existing legislation or the promulgation of
new legislation could create the potential for added volatility in our provision for income taxes and might have an adverse impact on
our future income tax provision and tax rate.
Risks relating to our ordinary shares
We may need to raise additional funds to finance our future capital needs, which may
dilute the value of our outstanding ordinary shares or prevent us from growing our business.
We may need to raise additional funds to finance our existing and future capital needs,
including developing new services and technologies, and to fund ongoing operating expenses. If we raise additional funds through the sale
of equity securities, these transactions may dilute the value of our outstanding ordinary shares. We may also decide to issue securities,
including protected securities, that have rights, preferences and privileges senior to our ordinary shares. Any debt financing would increase
our level of indebtedness and could negatively affect our liquidity and restrict our operations. We also can provide no assurances that
the funds we raise will be sufficient to finance any future capital requirements. We may be unable to raise additional funds on terms
favorable to us or at all. In addition, declines in the global economy, difficulties in the financial services sector and credit market,
continuing geopolitical uncertainties and other macroeconomic factors all may affect the spending behavior of potential investors. If
financing is not available or is not available on acceptable terms, we may be unable to fund our future needs. This may prevent us from
increasing our market share, capitalizing on new business opportunities or remaining competitive in our industry, which could materially
and adversely affect our business, prospects, financial condition and results of operations.
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We are a foreign private issuer and, as a result, we are not subject to U.S. proxy rules
and are subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic
public company.
We report under the Securities Exchange Act of 1934, or the Exchange Act, as a non-U.S.
company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from
certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange
Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (2)
the sections of the Exchange Act requiring major shareholders to file public reports of their share ownership and trading activities and
liability for major shareholders, directors and officers who profit from trades made in a short period of time and (3) the rules under
the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified
information, although we are subject to Israeli laws and regulations with regard to certain of these matters and furnish comparable quarterly
information on Form 6-K. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days
after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on
Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers are required to
file their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation
FD, which is intended to prevent issuers from making selective disclosures of material information. As a result of all of the above, our
shareholders may not have the same protections afforded to shareholders of a company that is not a foreign private issuer.
We may lose our foreign private issuer status in the future, which could result in significant
additional costs and expenses.
As discussed above, we are a foreign private issuer, and therefore, we are not required
to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private
issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly,
the next determination will be made with respect to us on June 30, 2026. We may lose our foreign private issuer status in the future,
if (1) more than 50% of our outstanding voting securities are owned by U.S. residents and (2) a majority of our directors or executive
officers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid loss of foreign private issuer
status. Additionally, in June 2025, the SEC issued a concept release soliciting public comment on potential changes to the definition
of a foreign private issuer. If the SEC amends the conditions to being a foreign private issuer and we cannot meet the new conditions,
or if the SEC substantially reduces the accommodations accorded to foreign private issuers, then even if we maintain our status as a foreign
private issuer, we may be subject to more stringent requirements. Either of those outcomes could significantly increase our compliance
costs and require substantial changes to our practices.
If we lose our foreign private issuer status, we will be required to file with the SEC
periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available
to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors
and principal shareholders will become subject to the short-swing profit recovery provisions of Section 16 of the Exchange Act. In addition,
we will lose our ability to rely upon exemptions from certain corporate governance requirements under the listing rules of the New York
Stock Exchange, or the NYSE. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional
legal, accounting and other expenses that we will not incur as a foreign private issuer.
As we are a “foreign private issuer” and follow certain home country corporate
governance practices, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all
NYSE corporate governance requirements.
As a foreign private issuer, we have the option to follow certain home country corporate
governance practices rather than those of the NYSE, provided that we disclose the requirements we are not following and describe the home
country practices we are following. We rely on this “foreign private issuer exemption” with respect to the NYSE rules for
shareholder meeting quorums. We may in the future elect to follow home country practices with regard to other matters. As a result, our
shareholders may not have the same protections afforded to shareholders of companies that are subject to all NYSE corporate governance
requirements.
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The market price of our ordinary shares has been and could in the future be negatively
affected by future sales of our ordinary shares.
As of December 31, 2025, there were 36,093,139 ordinary shares outstanding. Sales by
us or our shareholders of a substantial number of ordinary shares in the public market, or the perception that these sales might occur,
could cause the market price of our ordinary shares to decline or could impair our ability to raise capital through a future sale of,
or pay for acquisitions using, our equity securities. Of our issued and outstanding shares, all of our ordinary shares are freely transferable,
except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933, or the
Securities Act.
As of December 31, 2025, we had 4,080,503 ordinary shares available for future grant
under our share option plans and 4,472,059 ordinary shares were subject to share options and restricted share units that were granted
by us. Of this amount, 2,162,314 options were vested and exercisable as of December 31, 2025. In addition, as of December 31, 2025, we
had 1,564,027 shares available for sale under our 2020 Employee Share Purchase Plan.
There can be no assurance that we will not be classified as a passive foreign investment
company, which could result in adverse U.S. federal income tax consequences to U.S. Holders of our ordinary shares.
We would be classified as a passive foreign investment company, or PFIC, for any taxable
year if, after the application of certain look-through rules, either: (i) 75% or more of our gross income for such year is “passive
income” (as defined in the relevant provisions of the Internal Revenue Code of 1986, as amended, or the Code), or the income test;
or (ii) 50% or more of the value of our assets (generally determined on the basis of a quarterly average) during such year is attributable
to assets that produce or are held for the production of passive income, or the asset test. For these purposes, cash and other assets
readily convertible into cash or that do or could generate passive income are categorized as passive assets, and the value of goodwill
and other unbooked intangible assets is generally taken into account. Passive income generally includes, among other things, rents, dividends,
interest, royalties, gains from the disposition of passive assets and gains from commodities and securities transactions. In making this
determination, we will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any
other corporation of which we own, directly or indirectly, at least 25% (by value) of the stock. The legislative history of the relevant
Code provisions indicates that the total value of a publicly-traded foreign corporation’s assets generally will be treated as equal
to the sum of the aggregate value of its outstanding stock plus its liabilities for purposes of the asset test, and publicly-traded foreign
corporations often employ such market capitalization method to value their assets. However, the Internal Revenue Service, or the IRS,
has not issued guidance conclusively addressing how to value a publicly-traded foreign corporation’s assets for PFIC purposes. The
trading value of our ordinary shares has in the past and is likely to continue to fluctuate. Considering the volatile market conditions,
we believe it may be appropriate to employ alternative methods to determine the value of our assets other than the market capitalization
method. After considering the total value of our assets determined under an alternative valuation method that takes into account, in addition
to the trading value of our ordinary shares, a control premium, we believe that we were not a PFIC for the taxable year ended December
31, 2025. However, if the market capitalization method were determined to be the only appropriate method of valuing our assets, there
is a significant risk that we would be treated as a PFIC for the taxable year ended December 31, 2025. There can be no certainty that
the IRS will not challenge our position and determine that based on the IRS’s interpretation of the asset test, we were a PFIC for
the taxable year ended December 31, 2025. In addition, PFIC status is a factual determination that must be made annually after the close
of each taxable year. The trading value of our ordinary shares is likely to continue to fluctuate, which may affect the determination
of whether we will be considered a PFIC. In addition, we have a substantial balance of cash and other liquid investments, which are passive
assets for purposes of the PFIC determination. Whether we are treated as a PFIC in the current taxable year or in future taxable years
will depend in part on how, and how quickly, we spend or otherwise utilize these passive assets. Accordingly, as our market capitalization
and the composition of our income, assets, and operations are subject to change, we cannot assure you that we will not be considered a
PFIC for any taxable year. In addition, it is possible that the IRS may take a contrary position with respect to our determination in
any particular year. Certain adverse U.S. federal income tax consequences could apply to a U.S. Holder (as defined in Item 10.E. “Taxation—Taxation
and government programs—United States federal income taxation”) if we are treated as a PFIC for any taxable year during
which such U.S. Holder holds our ordinary shares, regardless of whether we continue to be a PFIC in subsequent taxable years. We are not
providing any U.S. tax opinion to any U.S. Holder concerning our potential PFIC status, and U.S. Holders should consult their tax advisors
about the potential application of the PFIC rules to their investment in our ordinary shares. For further discussion, see Item 10.E. “Taxation—
Taxation and government programs—United States federal income taxation—Passive Foreign Investment Company considerations.”
32
Provisions of Israeli law and our amended and restated articles of association may delay,
prevent or make undesirable an acquisition of all or a significant portion of our shares or assets.
Provisions of Israeli law and our amended and restated articles of association could
have the effect of delaying or preventing a change in control and may make it more difficult for a third-party to acquire us or our shareholders
to elect different individuals to our board of directors, even if doing so would be considered to be beneficial by some of our shareholders,
and may limit the price that investors may be willing to pay in the future for our ordinary shares. Among other things:
| ● |
Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares
in a company are purchased; |
| ● |
Israeli corporate law does not provide for shareholder action by written consent, thereby requiring all shareholder actions to be
taken at a general meeting of shareholders; |
| ● |
our amended and restated articles of association divide our directors into three classes, each of which is elected once every three
years; |
| ● |
our amended and restated articles of association generally require a vote of the holders of a majority of our outstanding ordinary
shares entitled to vote present and voting on the matter at a general meeting of shareholders (referred to as simple majority), and the
amendment of a limited number of provisions, such as the provision dividing our directors into three classes, requires a vote of the holders
of at least 65% of the total voting power of our shareholders; |
| ● |
our amended and restated articles of association do not permit a director to be removed except by a vote of the holders of at least
65% of the total voting power of our shareholders and any amendment to such provision requires the approval of at least 65% of the total
voting power of our shareholders; and |
| ● |
our amended and restated articles of association provide that director vacancies may be filled by our board of directors. |
Further, Israeli tax considerations may make potential transactions undesirable to us
or to some of our shareholders whose country of residence does not have a tax treaty with Israel granting tax relief to such shareholders
from Israeli tax. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent
on the fulfilment of numerous conditions, including a holding period of two years from the date of the transaction during which certain
sales and dispositions of shares of the participating companies are restricted.
We do not expect to pay any dividends in the foreseeable future.
We have never declared or paid any dividends on our ordinary shares. We do not anticipate
paying any dividends in the foreseeable future. We currently intend to retain future earnings, if any, to finance operations and expand
our business.
Our board of directors has sole discretion whether to pay dividends. If our board of
directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements
and surplus, general financial condition, contractual restrictions and other factors that our directors may deem relevant. The Israeli
Companies Law, 5759-1999, or the Companies Law, imposes restrictions on our ability to declare and pay dividends.
Payment of dividends may also be subject to Israeli withholding taxes. See Item 10.E. “Taxation—Taxation
and government programs—Israeli tax considerations and government programs” for more information.
We incur increased costs as a result of operating as a public company, and our management
is required to devote substantial time to new compliance initiatives and corporate governance practices.
As a public company we incur significant legal, accounting and other expenses that we
did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing
requirements of the New York Stock Exchange and other applicable securities rules and regulations impose various requirements on public
companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
Our management and other personnel continue to devote a substantial amount of time to these compliance initiatives. Moreover, these rules
and regulations will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and
costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director
and officer liability insurance, and could also make it more difficult for us to attract and retain qualified members of our board of
directors.
33
We continue to evaluate these rules and regulations and cannot predict or estimate the
amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations,
in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is
provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs
necessitated by ongoing revisions to disclosure and governance practices.
We are required to comply with the SEC’s rules implementing Sections 302 and 404
of the Sarbanes-Oxley Act, which require management to certify financial and other information in our annual reports and provide an annual
management report on the effectiveness of control over financial reporting. Additionally, as we qualify as a large accelerated filer,
we must include an attestation report on internal control over financial reporting issued by our independent registered public accounting
firm.
To maintain the effectiveness of our disclosure controls and procedures and our internal
control over financial reporting, we expect that we will need to continue enhancing existing, and implement new, financial reporting and
management systems, procedures and controls to manage our business effectively and support our growth in the future. The process of evaluating
our internal control over financial reporting requires an investment of substantial time and resources, including by our chief financial
officer and other members of our senior management. As a result, this process may divert internal resources and take a significant amount
of time and effort to complete. Additionally, as part of management assessments of the effectiveness of our internal control over financial
reporting required by Section 404(a), our management may conclude that our internal control over financial reporting is not effective
due to our failure to cure any identified material weakness or otherwise, which would require us to employ remedial actions to implement
effective controls. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with
the requirements of Section 404(a) or 404(b) in a timely manner or to assert that our internal control over financial reporting is effective,
or if our independent registered public accounting firm is unable to express an opinion or issues an adverse opinion in its attestation
as to the effectiveness of our internal control over financial reporting required by Section 404 (b), investors may lose confidence in
the accuracy and completeness of our financial reports and the trading price of our ordinary shares could be negatively affected. We could
also become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities,
which could require additional financial and management resources.
Irrespective of compliance with Sections 404(a) and 404(b), any failure of our internal
control could have a material adverse effect on our stated results of operations and harm our reputation. In order to implement changes
to our internal control over financial reporting triggered by a failure of those controls, we could experience higher than anticipated
operating expenses, as well as higher independent auditor fees during and after the implementation of these changes.
Risks relating to our incorporation and location in Israel
Conditions in Israel, including Israel’s conflicts with its neighboring countries,
as well as political and economic instability, may adversely affect our operations and limit our ability to market our products, which
would lead to a decrease in revenues.
We are incorporated under Israeli law, and many of our employees, including our senior
members of our management team, operate from our headquarters located in Israel. In addition, our officers and directors are residents
of Israel. Accordingly, our business and operations are directly affected by economic, political, geopolitical, and military conditions
in Israel.
Following the October 7, 2023, attacks by Hamas terrorists in Israel's southern border,
Israel declared war against Hamas and since then, Israel has been involved in military conflicts with Hamas, Hezbollah, a terrorist organization
based in Lebanon, and Iran, both directly and through proxies like the Houthi movement in Yemen and armed groups in Iraq and other terrorist
organizations. Additionally, following the fall of the Assad regime in Syria, Israel has conducted limited military operations targeting
the Syrian army, Iranian military assets and infrastructure linked to Hezbollah and other Iran-supported groups. Iran itself directly
entered the conflict, launching ballistic missile attacks against Israel in April 2024 and October 2024. In June 2025, following intelligence
assessments indicating imminent attacks, Israel conducted strikes against Iranian military and nuclear infrastructure together with the
United States, which led to Iranian counterattacks before a ceasefire was reached after 12 days of hostilities. Although certain ceasefire
agreements have been reached with Hamas, Lebanon (with respect to Hezbollah), and Iran, direct hostilities with Iran and some Iranian
proxies have since resumed and remain active as of March 2026. There is no assurance that ceasefire agreements will be reached, as military
activity and hostilities continue to exist at varying levels of intensity, and the situation remains volatile, with the escalation into
a broader regional conflict involving additional terrorist organizations and other countries in the Persian Gulf. Also, the fall of the
Assad regime in Syria may create geopolitical instability in the region. The intensity and duration of Israel’s war and hostilities
against Hamas, Hezbollah, Iran, and other neighboring countries and regions is difficult to predict, as are economic implications on our
business and operations and on Israel's economy in general.
34
While our facilities have not been damaged during the current war, the hostilities with
Hamas, Hezbollah, Iran and its proxies and others have caused and may continue to cause damage to private and public facilities, infrastructure,
utilities, and telecommunication networks, and potentially disrupting our operations and supply chains. In addition, Israeli organizations,
government agencies and companies have been subject to extensive cyber attacks. This could lead to increased costs, risks to employee
safety, and challenges to business continuity, with potential financial losses.
The continuation of the war has also led to a deterioration of certain indicators of
Israel’s economic standing, for instance, a downgrade in Israel’s credit rating by rating agencies (such as by Moody’s,
S&P Global, and Fitch).
In connection with the ongoing war, several hundred thousand Israeli military reservists
were drafted to perform immediate military service, and military reservists are expected to perform long reserve duty service in the coming
years. As of the date of this annual report, only several of our employees are called to active military duty. The absence of our employees
due to their military service in the current or future wars or other armed conflicts may materially and adversely affect our ability to
conduct our operations.
Our commercial insurance does not cover losses that may occur as a result of events
associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of certain direct damages
that are caused by terrorist attacks or acts of war, we cannot assure you that such government coverage will be maintained or that it
will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business.
The global perception of Israel and Israeli companies, influenced by actions by international
judicial bodies, may lead to increased sanctions and other negative measures against Israel, as well as Israeli companies and academic
institutions. There is also a growing movement among countries, activists, and organizations to boycott Israeli goods, services and academic
research or restrict business with Israel, which could affect business operations. If these efforts become widespread, along with any
future rulings from international tribunals against Israel, they could significantly and negatively impact business operations.
Prior to the October 2023 war, the Israeli government pursued changes to Israel’s
judicial system and has recently renewed its efforts to effect such changes. In response to the foregoing developments, certain individuals,
organizations, and institutions, both within and outside of Israel, voiced concerns that such proposed changes, if adopted, may negatively
impact the business environment in Israel. Such proposed changes may also lead to political instability or civil unrest. If such changes
to Israel’s judicial system are pursued by the government and approved by the parliament, this may have an adverse effect.
The tax benefits that are available to us require us to continue to meet various conditions
and may be terminated or reduced in the future, which could increase our costs and taxes.
We are eligible for certain tax benefits provided to a “Preferred Technology Enterprise”
under the Israeli Law for the Encouragement of Capital Investments, 5719-1959, or the Investment Law. In order to remain eligible for
the tax benefits provided to a “Preferred Technology Enterprise” we must continue to meet certain conditions stipulated in
the Investment Law and its regulations, as amended. If these tax benefits are reduced, cancelled or discontinued, our Israeli taxable
income from the Preferred Technology Enterprise would be subject to regular Israeli corporate tax rates. The standard corporate tax rate
for Israeli companies in 2025 was 23%.
See Item 10.E. “Taxation—Taxation
and government programs—Israeli tax considerations and government programs—Law for the Encouragement of Capital Investments,
5719-1959.”
35
It may be difficult to enforce a U.S. judgment against us, our officers and directors
named in this Annual Report in Israel or the United States, or to assert U.S. securities laws claims in Israel or serve process on our
officers and directors.
Not all of our directors or officers are residents of the United States and most of
their and our assets are located outside the United States. Service of process upon us or our non-U.S. resident directors and officers
may be difficult to obtain within the United States. We have been informed by our legal counsel in Israel that it may be difficult to
assert claims under U.S. securities laws in original actions instituted in Israel or obtain a judgment based on the civil liability provisions
of U.S. federal securities laws. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws against us or
our non-U.S. officers and directors because Israel may not be the most appropriate forum to bring such a claim. In addition, even if an
Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found
to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain
matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters described
above. Additionally, Israeli courts might not enforce judgments obtained in the United States against us or our non-U.S. directors and
executive officers, which may make it difficult to collect on judgments rendered against us or our non-U.S. officers and directors.
Moreover, an Israeli court will not enforce a non-Israeli judgment if it was given in
a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases), if its enforcement
is likely to prejudice the sovereignty or security of the State of Israel, if it was obtained by fraud or in the absence of due process,
if it is at variance with another valid judgment that was given in the same matter between the same parties, or if a suit in the same
matter between the same parties was pending before a court or tribunal in Israel at the time the foreign action was brought.
Your rights and responsibilities as our shareholder are governed by Israeli law, which
may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.
We are incorporated under Israeli law. The rights and responsibilities of holders of
our ordinary shares are governed by our amended and restated articles of association and the Companies Law. These rights and responsibilities
differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, pursuant to
the Companies Law each shareholder of an Israeli company has to act in good faith and in a customary manner in exercising his or her rights
and fulfilling his or her obligations toward the company and other shareholders and to refrain from abusing his or her power in the company,
including, among other things, in voting at the general meeting of shareholders on amendments to a company’s articles of association,
increases in a company’s authorized share capital, mergers and certain transactions requiring shareholders’ approval under
the Companies Law. In addition, a controlling shareholder of an Israeli company or a shareholder who knows that it possesses the power
to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment of a director or officer in
the company or has other powers toward the company has a duty of fairness toward the company. However, Israeli law does not define the
substance of this duty of fairness. There is little case law available to assist in understanding the implications of these provisions
that govern shareholder behavior.
We may be exposed to liabilities under the U.S. Foreign Corrupt Practices Act and other
U.S. and foreign anti-corruption anti-money laundering, export control, sanctions and other trade laws and regulations, and any determination
that we violated these laws could have a material adverse effect on our business.
We are subject to export control and import laws and regulations, including the U.S.
Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S.
Treasury Department’s Office of Foreign Assets Control. We are also subject to the U.S. Foreign Corrupt Practices Act of 1977, as
amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the United Kingdom
Bribery Act 2010, the Proceeds of Crime Act 2002, Chapter 9 (sub-chapter 5) of the Israeli Penal Law, 1977, the Israeli Prohibition on
Money Laundering Law—2000 and possibly other anti-bribery and anti-money laundering laws in countries outside of the United States
in which we conduct our activities. Compliance with these laws has been the subject of increasing focus and activity by regulatory authorities,
both in the United States and elsewhere, in recent years. Anti-corruption laws are interpreted broadly and prohibit companies and their
employees and third-party intermediaries from authorizing, promising, offering, providing, soliciting or accepting, directly or indirectly,
improper payments or benefits to or from any person whether in the public or private sector.
Further, we have taken steps to terminate accounts in sanctioned countries and have
implemented various control mechanisms designed to prevent unauthorized dealings with sanctioned countries. Although we endeavor to conduct
our business in accordance with applicable laws and regulations, we cannot guarantee compliance.
36
Noncompliance with anti-corruption, anti-money laundering, export control, sanctions
and other trade laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement
actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment
from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage and other collateral consequences.
If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible
civil or criminal litigation, our business, results of operations and financial condition could be materially harmed. Responding to any
action will likely result in a materially significant diversion of management’s attention and resources and significant defense
and compliance costs and other professional fees. In addition, regulatory authorities may seek to hold us liable for successor liability
for violations committed by companies in which we invest or that we acquire. As a general matter, enforcement actions and sanctions could
harm our business, results of operations and financial condition.
General risk factors
Our share price may be volatile, and you may lose all or part of your investment.
The market price of our ordinary shares could be highly volatile and may fluctuate substantially
as a result of many factors, including:
| ● |
actual or anticipated fluctuations in our results of operations; |
| ● |
variance in our financial performance from the expectations of market analysts; |
| ● |
announcements by us or our competitors of significant business developments, changes in service provider relationships, acquisitions
or expansion plans; |
| ● |
short selling activities; |
| ● |
changes in our marketplace take rate; |
| ● |
our involvement in litigation; |
| ● |
our sale of ordinary shares or other securities in the future; |
| ● |
market conditions in our industry; |
| ● |
changes in key personnel; |
| ● |
the trading volume of our ordinary shares; |
| ● |
changes in the estimation of the future size and growth rate of our markets; and |
| ● |
general economic and market conditions, including geopolitical risks, armed conflicts, regional instability and international tension.
|
In addition, the stock markets have experienced extreme price and volume fluctuations.
Broad market and industry factors may materially harm the market price of our ordinary shares, regardless of our operating performance.
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has
often been instituted against that company. If we were involved in any similar litigation, we could incur substantial costs and our management’s
attention and resources could be diverted.
An active trading market for our ordinary shares may not be sustained to provide adequate
liquidity.
An active trading market may not be sustained for our ordinary shares. The lack of an
active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable.
An inactive market may also impair our ability to raise capital by selling ordinary shares and may impair our ability to acquire other
companies by using our shares as consideration.
If we do not meet the expectations of equity research analysts, if they do not publish
research or reports about our business or if they issue unfavorable commentary or downgrade our ordinary shares, the price of our ordinary
shares could decline.
The trading market for our ordinary shares relies in part on the research and reports
that equity research analysts publish about us and our business. The analysts’ estimates are based upon their own opinions and are
often different from our estimates or expectations. If our results of operations are below the estimates or expectations of public market
analysts and investors, the price of our ordinary shares could decline. Moreover, the price of our ordinary shares could decline if one
or more securities analysts downgrade our ordinary shares or if those analysts issue other unfavorable commentary or cease publishing
reports about us or our business.
37
Item 4. Information on
the Company.
| A. |
History and Development of the Company |
Our legal name is Fiverr International Ltd., and our commercial name is FIVERR.
We were incorporated in Israel under the Companies Law in April 2010, and our principal
executive office is located at 8 Eliezer Kaplan St., Tel Aviv 6473409, Israel. We are registered with the Israeli Registrar of Companies.
Our registration number is 51-444087-4.
Our agent for service of process in the United States is C T Corporation System and
its address is 28 Liberty Street, New York, New York 10005.
For a description of our principal capital expenditures and divestitures for the three
years ended December 31, 2025, and for those currently in progress, see Item 5. “Operating and
Financial Review and Prospects.”
The SEC maintains an Internet site that contains reports, proxy and information statements,
and other information regarding issuers, such as we, that file electronically, with the SEC at www.sec.gov.
Our website address is www.fiverr.com, and our telephone number is +972-72-2280910.
Information contained on, or that can be accessed through our website does not constitute a part of this Annual Report and is not incorporated
by reference herein. We have included our website address in this Annual Report solely for informational purposes.
| B. |
Business Overview |
Our mission is to change how the world works together. We started with the simple idea
that people should be able to buy and sell digital services in the same fashion as physical goods on an e-commerce platform. On that basis,
we set out to design a digital services marketplace that is built with a comprehensive SKU-like services catalog and an efficient search,
find and order process that mirrors a typical e-commerce transaction. We call this the Service-as-a-Product, or the SaaP model. Our approach
fundamentally transforms the traditional freelancer staffing model into a customer centric, product led marketplace model with scale and
efficiency.
We believe our model has significantly reduced friction and uncertainties for both buyers
and sellers. At the foundation of our platform lies an expansive catalog with hundreds of categories of productized service listings,
which we coined as Gigs. Each Gig has a clearly defined scope, duration and price, along with buyer-generated reviews. In addition to
the digital service catalog, we have also built a comprehensive talent database, which not only includes sellers’ basic information
such as where they are and the language they speak, but also intangible data on the level of their skills and the quality of their deliverables.
Using either our search or navigation tools, buyers can easily compare and find talent with their service listings. In turn they can purchase
and fulfill their digital needs, ranging from simple services such as logo design and blog post writing, to complex services like video
creation, website development and social media marketing.
Our business is built at the cross-section of multiple secular trends. In an era where
technology is changing every part of the economy, the majority of freelancing is still conducted offline in an opaque, old-schooled fashion.
First, the shift from offline to online provides broader access to opportunities and a much more transparent, seamless experience to both
talent and businesses. Second, as millennials become a major part of the labor force, talent is increasingly looking for purpose and flexibility.
They want to choose where they work, when they work and what they do for work. As a result, how to build and engage a remote and flexible
workforce is becoming a critical part of talent strategy for any businesses. Third, the rapid advancement of technology, from social media
and cloud computing to the latest wave of Generative AI, are creating new skills and demand for talent with new skills. Fiverr provides
our customers with differentiated value propositions so that they can fulfill their digital service needs with unmatched speed and convenience.
As a marketplace, we succeed when our buyers and sellers succeed. Our buyers include
businesses of all sizes, and our sellers are a diverse group of freelancers and agencies from over 160 countries. Over the years, we have
expanded the offerings on our platform to not only enable buyers and sellers to transact on our marketplace, but also provide them with
a number of value-added services to help them grow their business. In recent years, we have leaned in on investments in going upmarket
and expanding service revenues as key growth drivers for our business. Fiverr Pro has over the years developed into a premium business
solution that caters to larger customers on our marketplace, providing them with a premium catalog, tailored hiring services, as well
as advanced tools such as team accounts. We have also developed multiple value-added products for our buyers and sellers to grow their
business and be more successful, including Fiverr Ads, which allows sellers to advertise their services on our platform. Seller Plus,
a subscription program that equips sellers with advanced tools, as well as AutoDS, an e-commerce solution that allows dropshipping customers
to track orders across channels, automate fulfillment and ultimately grow their e-commerce businesses. In the year ended December 31,
2025, we generated services revenue of $133.4 million, representing approximately 31% of our total revenue.
38
Technology is at the core of everything we do. Our proprietary machine learning algorithms,
together with our dataset on profiling, transaction and user behavior, which rapidly grows with increasing buyer and seller engagement,
enable us to personalize our user experience, improve quality and provide a more robust ecosystem. We are focused on constant innovation
and have designed our platform such that we can continuously enhance the value we deliver to our buyers and sellers.
We have achieved significant growth and scale since inception. In the years ended December
31, 2025, 2024 and 2023, our revenue was $430.9 million, $391.5 million and $361.4 million, respectively, a 10.1% and 8.3% increase, respectively,
and we generated net income of $21.0 million, $18.2 million and $3.7 million, respectively. Geographically, the substantial majority of
our revenue is generated from buyers in English speaking countries. As we expand our platform to include additional languages, we expect
to deepen our penetration into Western Europe, Asia Pacific and Latin America, and the geographic mix of our revenue could therefore change
over time. For a description of the principal markets in which we compete, including a breakdown of total revenues see Item 5. “Operating
and Financial Review and Prospects - Our Business Model”.
Our platform
Since inception, our vision has been to fundamentally transform the traditional freelancer
hiring model into an e-commerce-like experience — seamless, efficient and frictionless. To achieve our vision, the marketplace is
built with a comprehensive SKU-like services catalog and an efficient search, find and order process that mirrors a typical e-commerce
transaction. We believe that our model reduces friction and uncertainties for our buyers while enabling our sellers to reach a global
audience, enjoy more flexibility and choice of work, and make more money. The key elements of our platform include:
Service-as-a-Product model. We
operate a differentiated SaaP platform that allows sellers to offer services embedded with features that can be standardized and cataloged.
Our marketplace enables digital services to be bought and sold in the same fashion as physical goods on an e-commerce platform, with predictable
pricing, easy searches, standardized contracts, easy payment processes and streamlined delivery of the service. Upon purchasing a Gig
on Fiverr, a buyer knows the scope, duration and price.
Comprehensive and diverse catalog. At
the foundation of our marketplace is an expansive catalog of services that currently spans over hundreds of digital service categories.
We believe that our catalog coverage is broader than many of our competitors, and we are focused on continuously growing this catalog.
Today, buyers can purchase digital services ranging from simple services such as logo design and blog post writing, to complex services
such as video creation, website development and social media marketing, all easily and with just a few clicks. We believe that this approach
is fundamentally different from either traditional offline or online long-term temporary employment solutions. Each transaction on Fiverr
is listed with a clearly defined scope, timeline and price, eliminating the frictions and inefficiency inherent in traditional solutions.
Technology and data assets. We
are a technology company. Our platform is powered by our machine learning technology and expansive data assets. Using our extensive data
assets and our AI technologies, we are able to continuously optimize our product search capabilities, personalize our user experience,
refine our matching algorithm and monitor our service quality. For example, Fiverr Logo Maker leverages our AI technology to allow graphic
designers on our platform to monetize their existing designs, deliver their work faster and serve more customers, while allowing buyers
to rapidly personalize and customize original, handmade designs created by sellers. By better predicting a buyer’s future needs,
our algorithms improve user satisfaction, which in turn increases repeat or cross category buying activities.
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Tools and infrastructure. We
built a comprehensive suite of communication and collaboration functions that our buyers and sellers utilize to communicate throughout
the entire transaction lifecycle. We also provide a robust end to end technology infrastructure and tools to help our sellers manage key
functions of their business on our platform, such as proposals and contracts, invoicing and payments, project management and marketing.
We also invest in building an infrastructure for international expansion that allows us to roll out six non-English websites and provide
multilingual support to our users.
Fiverr Pro. We launched
Fiverr Pro, our premium business solution that caters to larger customers, to provide a suite of advanced tools that highlight collaboration,
management, and sourcing.
Value-added services. We
offer an ecosystem of value-added services that empowers our buyers and sellers to grow their business and be more successful. For example,
Fiverr Ads is an advertising tool that allows sellers to promote their services on our platform. Seller Plus is a subscription program
that equips sellers with advanced tools such as advanced analytics, advanced marketing capabilities, priority in customer support and
access to success managers. AutoDS is an end-to-end dropshipping automation tool that allows our customers to track orders across channels,
automate fulfillment and ultimately grow their e-commerce businesses. To support and strengthen AutoDS, we have also integrated Yaballe,
an AI-powered lifecycle platform that automates the entire operation for dropshippers, into our expanding e-commerce ecosystem. In addition,
we offer advanced financial tools such as faster withdrawal, local currency payout and cash advance to a select number of sellers.
Who we serve
Our buyers
Our buyers include individuals and businesses of all sizes and from various industries.
In the year ended December 31, 2025, we served 3.1 million annual active buyers from over 160 countries across the globe.
Our value proposition to buyers
Value for money. We provide what we believe
to be the best value for money for our buyers by alleviating frictions and inefficiencies in the value chain. Our expansive digital services
catalog enables us to offer sophisticated browsing and filtering functions. We believe that this results in a lower time-to-hire for buyers
compared to traditional offline hiring platforms, saving buyers valuable time.
Access to an expansive catalog of digital services. Our
catalog of digital services has hundreds of categories and continues to grow and evolve. Our freelancers set prices from $5 to thousands
of dollars, depending on the scope and perceived quality of each individual Gig. We continue to develop both the breadth and depth of
our catalog in order to provide our buyers with access to the services they need.
Access to a diverse pool of freelancers. We
provide instant access to hundreds of thousands of freelancers with a broad set of skills. Using Fiverr, buyers can easily connect with
these freelancers and get a broad range of digitally delivered services executed quickly and efficiently.
Transparency and certainty of price, scope of work
and quality. Our SaaP model enables transparency and certainty when it comes to cost, duration and scope. Our buyer-driven
rating system provides a transparent quality rating mechanism for every Gig, helping buyers make informed purchasing decisions. This system
ensures that our buyers have added peace of mind with every purchase.
Trusted brand for customer service. We
are relentlessly focused on providing quality customer service as we seek to drive repeat purchase behavior. Our dispute resolution technology
enables us to flag issues in a timely manner and to guide users to a solution, whether that solution is our self-service support portal
or intervention by our customer support team.
Our sellers
Our sellers are a diverse group of freelancers who we believe value the flexibility
and financial opportunity our platform provides. They range from individuals who use our platform to earn their full-time living to those
who augment their income, as well as agencies who grow their business on the platform.
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Our value proposition to sellers
Maximize project pipeline. Sellers on our
marketplace do not need to bid to win a project. Instead, they list the service on our marketplace with a well-defined scope, duration
and price, and our proprietary technology directly matches them with buyers who are looking for the service they provide. As a result,
sellers can list their Gigs on our marketplace and focus on the work they love doing while maximizing their earnings potential.
Flexibility and control. People increasingly
want to choose where they work, when they work and what they do for work. Our platform embraces habitual changes in the workforce and
provides freelancers with the ability to find work and offer their services from anywhere in the world at any point in time.
Frictionless payment processing. Getting
paid on time after project completion has historically been an uncertain and time-consuming process for sellers. We eliminate this friction
by working with third-party agents to collect the funds from the buyer at the time of purchase and timely release them to the seller upon
project completion.
Credentialed storefront. We enable our
sellers to professionally showcase their services to buyers, establish a track record, develop a buyer base and build a professional reputation
on our platform. Our online seller forum and offline community events provide additional channels for our sellers to further enhance their
skills and build their personal brand and digital storefront with us.
Business support infrastructure. We provide
access to a robust set of technology tools for our sellers that enable them to manage all of the administrative aspects of their business,
such as providing standardized contracts, invoicing and payment, financial reporting, marketing and real-time performance feedback. This
infrastructure allows our sellers to track their performance and manage their business efficiently.
Success management and support. We provide
our sellers with a comprehensive suite of onboarding resources, and our online help desk and offline customer care team provide 24/7 support
to ensure sellers succeed in all stages of their freelance journey. We take care of the entire buyer engagement, business development
and marketing process for our sellers so they simply need to list their services on our marketplace and focus on the work they love to
maximize their earnings potential. For those sellers new to the business, we help them gain access to buyers so that they can quickly
start developing their reputation. For the more experienced and professional sellers, we provide them with offerings such as Fiverr Ads
and Seller Plus to help them grow their business on Fiverr.
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Our products
Buyer experience
We present our buyers with an e-commerce experience that is designed for streamlined
browsing, searching and purchasing.
Home. Buyer’s homepage provides a
personalized gateway for buyers to find talent and manage existing projects. Over the years, especially since we started investing in
Fiverr Pro and the introduction of LLM-based algorithms, we have expanded the ways in which buyers can express their needs and find talent
that is tailored to them, including job postings with AI-assisted briefs and end-to-end project management services.
Search and discovery. Our SaaP model provides
buyers access to an extensive catalog of services that they can compare and filter across parameters including service details, reviews
and price. Each service includes the details of the service provided, the price, delivery timeframe and reviews from previous
buyers, allowing buyers to make informed decisions based on their needs, budgets and tastes. Our search, browse and recommendation algorithms
are designed to match each buyer’s search with the most relevant service and seller results. With each buyer interaction, our platform
and machine learning algorithms enable us to offer more personalized recommendation carousels that are presented in relevant places along
the buyer journey.
Personalized options. We believe many of
our buyers are motivated by more than simply price and convenience; we believe they also value uniqueness and authenticity. On our marketplace,
buyers enjoy a personalized experience and direct interactions with our sellers. As part of our Gig concept, buyers purchase ‘Packages’
associated with each Gig. Packages are tiered as Basic, Standard and Premium, each with varying levels of service, such as different word
counts for a translation, video lengths for a video edit, or number of revisions for a logo design. We facilitate further customization
through custom orders. A buyer can request a custom order through our platform with his or her unique requirements. Sellers, in turn,
can respond to the order request with custom offers, which are exclusive proposals, with the exact description of the service, price and
time expected to deliver the service. For certain categories and Gigs, we also allow buyers to make recurring purchases through the subscriptions
feature, or to break down a large project into multiple purchases through the milestones feature.
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Communication and collaboration. Communication
between buyers and sellers is essential to the success of our marketplace. Our messenger tool enables buyers to easily communicate with
sellers. Buyers are able to describe their requirements and preferences during the pre-order process and the communication channels for
process management and coordination remain open over the lifecycle of the Gig. As part of deliverable acceptance, buyers may utilize our
“Request Revisions” feature to further refine the deliverable, if desired.
Support and intervention. Our user support
function is available throughout the buyer journey to provide clarification, help, education and support. Our resolution center helps
buyers to resolve disputes online, and our 24/7 ticketing system is available should a buyer encounter a more complex problem. In addition
to the on-demand help and support, we have developed a set of intervention algorithms, which leverage our data and knowledge, to automatically
flag potential issues to our customer support team so they can intervene and offer guidance, education and support to our buyers.
Quality control. We have developed several
quality assurance policies to enhance the reliability and integrity of our marketplace. Our algorithms assess each freelancer and Gig
on our platform and assign a quality score based on a number of factors, such as buyer rating, cancellation rates and response time. The
quality score is considered in our matching algorithms and is integral to the positioning of a seller’s Gig on our website. In addition,
help tools are available for both buyers and sellers alike for when issues need to be raised to our customer support team. We constantly
monitor activity on our platform to ensure compliance with our terms of service, as we seek to create a consistent and reliable user experience
for our buyers.
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Fiverr Pro. Fiverr Pro is a premium section
of the marketplace where buyers can enjoy collaboration and administrative tools tailored for larger organizations. In addition, Fiverr
Pro buyers can access a carefully curated freelancer catalog that is fully vetted by industry experts. For enterprise customers, Fiverr
Pro allows customers to source and manage both on-demand and long-term freelancers in a consolidated manner, with integrated compliance
and reporting tools.
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Seller experience
We offer a set of tools for sellers to build their Gigs, develop their brand, establish
a reputation and create their work portfolio. Sellers can manage their business from any browser or from our mobile apps.
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Seller onboarding. We
have developed an automated onboarding process designed to educate and guide new sellers through the creation of their seller profile
(their storefront), Gigs (the services they sell) and portfolio (a collection of their work samples). Once a seller is onboarded,
each Gig they offer becomes a part of the Fiverr catalog.
Business management. To allow sellers to
focus on doing what they love, we provide a comprehensive suite of tools that help them manage administrative aspects of their business,
such as workflow prioritization, invoicing and payment processing. Additional communication tools further enhance a seller’s ability
to communicate with buyers as well as to collaborate on Gigs with other sellers. Our seller dashboard provides a unified work management
interface that consolidates key information from our seller tools and performance metrics, allowing sellers to more effectively manage
their business.
Analytics. Our suite of tools provides
sellers with detailed analytics on their operations, facilitating greater transparency and insight into business and performance indicators,
including Gig revenue, order pipeline, and ratings. Gig specific analytics allow sellers to better understand their past performance in
order to improve their future performance. Sellers are also provided with real-time feedback on their performance in timeliness of delivery,
responsiveness and completion rates via our seller dashboard. In addition, Seller Plus subscribers now get access to advanced
analytics features such as traffic and keyword analytics. As such, our analytics capabilities give sellers increased visibility into their
performance and a better understanding of what is important to buyers so that they have the feedback to continuously improve.
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Advertising. To help sellers increase visibility
and grow their business on Fiverr, we built an advertising tool, Fiverr Ads, that allows sellers to bid and win prime locations on our
website through an auction mechanism. Fiverr Ads are cost-per-click, so sellers are charged only when their ads are viewed and clicked
by the buyer. Sellers decide a daily budget and the maximum bid per click, and we also provide automatic bidding tools to help sellers
optimize their bid price and maximize their exposure with minimum efforts on their part.
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Seller Plus. Seller Plus is a subscription-based
loyalty program which provides sellers with additional tools to help accelerate their business on our marketplace. Seller Plus subscribers
have access to a dedicated customer success manager, advanced analytics features, faster payment clearance, customer engagement tools,
and other exclusive benefits.
Learning and education. We offer a vertically
integrated learning environment designed to enhance seller proficiency and service quality across our marketplace. Through our proprietary
education center, we provide freelancers with comprehensive resources focused on business development, gig optimization, and professional
growth within the Fiverr ecosystem. This internal knowledge base is designed to reduce onboarding friction and maximize the lifetime value
of our seller community.
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Our technology
To help our buyers and sellers transact on our platform, we have built a modular and
scalable technology platform that supports our business while protecting operational integrity and performance. Technology is at the core
of everything we do and is a key business asset and enabler. We continuously invest in our technology and believe that our focus on innovation
gives us a competitive advantage.
The core pillars that support the foundation of our platform are:
Digital services as products. At the core
of our platform lies the challenge of productizing digital services and making them available on our e-commerce platform. Our proprietary
technology allows for turning non-SKU digital services into structured Gigs, enabling continuous and nimble category expansion. We are
also developing depth for each category by developing attributes and experiences specific to each service category. Our innovative catalog
of productized services allows us to create an e-commerce-like experience with digital services that include search, browse, compare and
purchase functions.
Scalable, modular and modern technology platform. Our
platform is built as a collection of modules that can be individually modified or added without redeploying the entire code base. This
approach allows each of our product teams to develop autonomously, giving us the flexibility to constantly develop new features, expand
capacity, adopt new technologies and integrate new libraries, which facilitate the continuous enhancement of our platform.
Advanced data science capabilities. Our
rich set of proprietary algorithms that power our real time personalized recommendations, ranking and matching help us match each buyer
with the most relevant Gigs based on their business needs and preferences. We leverage predictive AI technologies to recommend Gigs to
buyers based on their purchase history and other activity on our marketplace. Our algorithm has been designed to handle rapid and continuous
growth in search queries. Further, it is also utilized to improve the liquidity between supply and demand on our marketplace, ensuring
that seller capacity and buyer demands are in balance. We are data-centric and rely on data from disciplined A/B testing, buyer and seller
studies and other sources to inform all of our decisions on new platform enhancements. Our search algorithm uses our large data set from
our Gigs, transactions and users to optimize Gig matches and user experience for our buyers.
Clear and simple cross-platform user experience. We
utilize modern front-end technologies and design concepts to offer our users a simple and intuitive user interface. We continuously strive
to simplify the user experience and enhance the efficiency of purchasing Gigs on our platform. We strive to offer a consistent experience
across all major devices and operating systems. Our mobile app is a great example of our focus on user experience, design and implementation.
It is highly rated by our users in both the Apple App Store and the Google Play Store. We constantly try to optimize and simplify the
user experience at each stage of a transaction.
Reliability. We use third-party cloud-based
services to host our platform, striving to run on the latest and most modern cloud technologies. Our research and development capabilities
paired with our development tools allow us to develop and deploy new products reliably without disruptions to our live instance. We have
also embedded extensive monitoring and alerting infrastructure into our platform to maintain reliability and platform performance.
Security. Information security is one of
the key pillars of our business. We protect our users’ data and our Company through a combination of security procedures and technology
tools, and we are committed to ensuring that our platform remains secure. We monitor our cloud infrastructure for malicious activity and
unauthorized access, while analyzing and responding to threats. We utilize various safeguards and protection tools, managed by our in-house
team and external consultants. In addition, we conduct regular tests and scans to detect and mitigate possible known internal or external
weaknesses in our systems.
Go-to-market
We primarily grow our buyer base through performance marketing and brand investments
using a bottom up approach. Our goal is to target individuals and teams who work in various business functions at companies of different
sizes across different industries. Our unique SaaP model eliminates uncertainties and frictions and allows more autonomous purchasing
decisions. As a result, we are able to convert buyer traffic coming from various channels in a highly effective and efficient manner.
In addition, by providing our buyers with a highly satisfactory experience, they continuously return to our platform and drive referrals.
Looking ahead, we expect to continue strengthening our go-to-market capabilities as we go upmarket, including building scalable, repeatable
growth engines that focus on driving high-skilled and complex services, and expanding into AI-native distribution environments. The more
buyers come to our platform, the more opportunities we can create for talent, which in turn drives more and better talent to our marketplace,
and enables our buyers to have access to a broader and higher quality talent pool. This strong flywheel of our two-sided marketplace establishes
a key competitive moat for our business.
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Our brand awareness and the virality of our solution has enabled us to acquire the majority
of our new buyers through organic channels. That is complemented by highly effective performance marketing and brand investments across
a variety of channels. We aim to acquire new buyers through the most efficient channels with the highest return on investment. Once they
join, our goal is to demonstrate the value of our platform to our users in order to continuously increase each user’s lifetime value.
We actively work to expand our wallet share by encouraging cross category purchasing, suggesting services appropriate for the respective
business lifecycle, and constantly improving how we match our buyers needs with our sellers offerings.
Intellectual property
We design, test and update our website and apps regularly, and we have developed our
proprietary solutions in-house. We have developed our infrastructure to be highly agile and scalable, allowing us to efficiently expand
our platform and enter new market segments, without compromising quality. Our continued success depends upon our ability to protect our
core technology and intellectual property. We rely on a combination of confidentiality clauses, contractual commitments, trade secret
protections, copyrights, trademarks and other legal rights to protect our intellectual property and know-how. We enter into confidentiality
and proprietary rights agreements with our employees, consultants and business partners, and we control access to and distribution of
our proprietary information.
The Fiverr brand is central to our business strategy, and we believe that maintaining,
protecting and enhancing the Fiverr brand is important to expanding our business. We hold numerous registered trademarks in the United
States and in foreign jurisdictions, including the EU, the UK, Australia, Brazil, Canada and Israel, that we consider material to the
marketing of our products, including the trademarks Fiverr and Gig.
Our in-house know-how is an important element of our intellectual property. The development
and management of our platform requires sophisticated coordination among many specialized employees. We believe that duplication of this
coordination by competitors or individuals seeking to copy our platform offerings would be difficult. The risk of a competitor effectively
replicating the functionality of our platform is further mitigated by the fact that our service offerings are cloud-based such that most
of the core technology operating on our systems is never exposed to a user or to our competitors. To protect our technology, we implement
multiple layers of security. Access to our platform, other than to obtain basic information, requires system usernames and passwords.
We also add additional layers of security such as IP address filtering.
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt
to copy or obtain and use our technology to develop products and services with the same functionality as our platform. Policing unauthorized
use of our technology is difficult. Our competitors could also independently develop technologies like ours, and our intellectual property
rights may not be broad enough for us to prevent competitors from selling products and services incorporating those technologies.
Competition
The market for freelancers and the buyers who engage them is highly competitive, rapidly
evolving, fragmented and subject to changing technology, shifting needs and frequent introductions of new products and services. We compete
with a number of online and offline platforms and services to attract and retain users, although we believe that none of our competitors
operate an e-commerce business model at a similar scale as our platform. Our main competitors fall into the following categories:
| ● |
traditional contingent workforce and staffing service providers and other outsourcing providers; |
| ● |
online freelancer platforms that serve a diverse range of skill categories; |
| ● |
other online and offline providers of products and services that allow freelancers to find work or to advertise their services, including
personal and professional social networks, employment marketplaces, recruiting websites, job boards, classified ads and other traditional
means of finding work; |
| ● |
software and business services companies focused on talent acquisition, management, invoicing, or staffing management products and
services; |
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| ● |
businesses that provide specialized, professional services, including consulting, accounting, marketing and information technology
services; and |
| ● |
software companies focused on providing technological solutions driven by AI. |
Seasonality
Our business is subject to seasonality in two aspects. First, the activities on our
marketplace fluctuate with the holiday schedules across the world. We typically see businesses and freelancers engage with each other
more during workdays and work hours, and less during the holiday season. Second, we typically invest more marketing dollars in the first
quarter compared to the rest of the year, in order to capture more buyers and their needs at the beginning of the year. This results in
higher sales and marketing expenses as a percentage of revenue in the first quarter, which moderates for the rest of the year.
Sustainability Practices
Fiverr was built with a defined purpose from day one to change how the world works together.
We believe that our success can only be built alongside the success of our stakeholders, including our community, employees and shareholders.
We are committed to building a long-term sustainable business that aligns our mission and business strategy with positive impacts to people,
communities and our planet.
Fiverr’s sustainability approach and plan falls under the purview of our board
of directors. Oversight of the Company’s risks, strategies, policies, programs and practices related to sustainability matters is
conducted by our nominating, environmental, social and governance committee, and our EVP and General Counsel and Chief Business Officer
lead the day-to-day management of sustainability matters.
During 2025, we continued with our four core pillars that outline some of the specific
ways we are making positive change in the world and the key issues that we believe are important to our business and stakeholders.
| ● |
Creating fair economic and social opportunities: fostering a level playing field and providing economic and business opportunities
for talent across the world; |
| ● |
Marketplace integrity and ethics: holding high standards for quality and integrity in our marketplace; |
| ● |
Empowering our people: building an inclusive workforce and company culture; and |
| ● |
Climate change: reducing the carbon footprint by enabling remote work and driving responsible resource use. |
Our 2024 Impact Report details the progress we have achieved and our initiatives under
each of the pillars above. We continue to enhance our sustainability program year over year and we have developed sustainability-related
key performance indicators and metrics for our reporting and to track our progress.
For more information on our sustainability-related activities, please visit our website
at investors.fiverr.com/sustainability. Neither the Impact Report nor the contents of our website are incorporated into this Annual Report.
We expect to continue to evolve our sustainability strategy in the future as our sustainability program matures.
Government legislation and regulation
Actions of our users
In many jurisdictions, including the United States and countries in Europe, laws relating
to the liability of providers of online services for activities of their users and other third parties are currently being tested by a
number of claims, including actions based on defamation, breach of data protection and privacy rights and other torts, unfair competition,
copyright and trademark infringement and other theories based on the nature and content of the materials searched, the ads posted, or
the content uploaded by users. Any court ruling or other governmental action that imposes liability on providers of online services for
the activities of their users and other third parties could harm our business. In addition, rising concern about the use of the Internet
for illegal conduct, such as the unauthorized dissemination of national security information, money laundering or supporting terrorist
activities may in the future produce legislation or other governmental action that could require changes to our products or services,
restrict or impose additional costs upon the conduct of our business or cause users to abandon material aspects of our service.
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Data protection and cybersecurity
We hold certain personal data of our users, including their name, username, email address,
IP address, device identifiers, address, telephone number, photo, transactional data, consumption habits (such as purchase history), taxpayer
information and forms, profession and education, location, authentication information (including copy of identification documents), social
media account log in details and additional information regarding the use of Fiverr’s platform (such as published portfolio, Gig
information, purchases, ratings and additional information the user decides to upload and share with us or other users of our platform),
and may hold certain personal data of the visitors to our users’ websites. In addition, we hold certain personal data of our employees,
job applicants and contractors. We operate in accordance with the terms of our privacy policies, which describe our practices concerning
the collection, use, transmission and disclosure of personal data. As a “database owner”, we are required to comply with the
Israeli Privacy Law, its regulations, and the guidelines issued by the Israeli Privacy Protection Authority (PPA). These provisions govern
the collection, use, retention, security, disclosure, transfer, and other processing of personal information. Our obligations include
notifying data subjects about personal data collection and usage, obtaining informed consent, restrictions on cross-border data transfers
(including transfers outside of Israel and the handling of personal information transferred from the European Economic Area, or the “EEA”,
and stored in databases located in Israel, or other personal information stored together with such data), conditions and restrictions
regarding direct mail, data subject rights, and meeting data security requirements. The Israeli Privacy Protection Regulations (Data Security)
2017 govern how personal data is processed, stored, and secured. The PPA may conduct periodic inspections on many different business sectors
without any suspicion of a breach of the Israeli Privacy Law. In case the PPA reveals irregularities with respect to our compliance, we
may need to take certain remedial actions to rectify such irregularities, which may increase our costs. In addition, in case of noncompliance
with Israeli Privacy Law we may be exposed to administrative fines, civil claims (including class actions) and in certain cases criminal
liability. Material amendments to the Israeli Privacy Law, approved by the Israeli Parliament in August 2024 and effective as of August
2025 (“Amendment 13”), expand the PPA's authority to investigate and impose significantly higher monetary sanctions, and introduce
additional obligations regarding the processing of personal data. Failure to comply with the Israeli Privacy Law, its regulations, or
PPA guidelines may expose us to administrative fines (which, in some cases may reach millions of NIS), civil claims (including class actions)
and in certain cases criminal liability.
Numerous U.S. and foreign laws and regulations govern how we collect, use, disclose
and otherwise process personal information, and certain of these laws and regulations have extraterritorial effect. Where the local data
protection and privacy laws of a jurisdiction apply, we may be required to register our operations in that jurisdiction or make changes
to our business so that personal information is only collected and processed in accordance with applicable local law. We may require additional
legal review and resources to ensure compliance with any applicable privacy or data protections, laws and regulations. In addition, in
many jurisdictions there is new legislation that may affect our business and require additional legal review. Compliance with these laws
is constantly evolving, resource intensive and time consuming, and companies that do not comply with these laws may face significant liabilities.
A number of new U.S. state data privacy laws, as well as current and future legislative
proposals pending before the U.S. Congress and various state legislative bodies concerning data protection could affect us. For example,
numerous U.S. states have adopted or are considering data privacy and security laws. This patchwork may give rise to conflicts or differing
views of personal privacy rights. For example, certain state laws may be more stringent or broader in scope, or offer greater individual
rights, with respect to personal data than federal, international or other state laws, and such laws may differ from each other, all of
which may complicate compliance efforts. Additionally, our use of cookies and other tracking technologies exposes us to risk of claims
under laws such as the California Invasion of Privacy Act, or CIPA, and the Electronic Communications
Privacy Act, or ECPA. We have previously been, and may in the future be, subject to these claims and face statutory damages, class action
lawsuits, and reputational harm as a result.
We are subject to the GDPR. We are a “Controller” with respect to the personal
data of our users that we collect and are therefore subject to a number of key legal obligations under the GDPR. These include the necessity
to have a lawful basis for collecting, using, and processing personal data, requirements in light of the transparency principle
to tell our users how we may use their personal data, increased controls on profiling users, increased rights for users to access control
and delete their personal data, and mandatory data breach notification requirements. Case law and regulatory guidance have supplemented
these requirements in numerous areas, particularly around international data transfers, imposing additional compliance costs and enforcement
risk. In addition, there are significantly increased administrative fines of the greater of €20 million / £17.5 million and
4% of global turnover (as well as the right to compensation for financial or non-financial damages claimed by any individuals under Article
82 of the GDPR). Since we are under the supervision of relevant data protection authorities in both the EEA and the UK, we may be fined
under both the EU GDPR and UK GDPR for the same breach. Compliance with these laws is constantly evolving, resource intensive and time
consuming, and companies that do not comply with these laws may face significant liabilities. The European Commission’s Digital
Omnibus Proposal, published in November 2025, includes proposed amendments to certain EU laws and regulations, including (among others)
the GDPR. However, the proposal remains at an early stage of the EU legislative process.
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In the EU and UK, under national laws derived from the European ePrivacy Directive (Directive
2002/58/EC as amended by Directive 2009/136/EC), companies must, among other things, obtain consent to store information or access information
already stored, on a user’s terminal equipment (e.g., computer or mobile device). These requirements predominantly regulate the
use by companies of cookies and comparable technologies. Prior to providing such consent, users must receive clear and comprehensive information,
both in accordance with the more stringent requirements under the GDPR. Certain exemptions to these requirements on which we rely are
available for technical storage or access for the sole purpose of carrying out the transmission of a communication over an electronic
communications network or as strictly necessary to provide a service explicitly requested by the user.
In recent years, U.S. and European lawmakers and regulators have expressed concern over
the use of third-party cookies and similar technologies for online behavioral advertising, and laws in this area are also under reform.
In the EU and UK, informed consent is required for the placement of certain cookies on a user’s device and for direct electronic
marketing, and the GDPR also imposes additional conditions in order to satisfy such consent, such as a prohibition on pre-checked consents
and on bundled consents thereby requiring users to affirmatively consent for a given purpose through separate tick boxes. Compliance with
these laws is constantly evolving, resource intensive and time consuming, and companies that do not comply with these laws may face significant
liabilities.
On December 16, 2020, the EU published a new cybersecurity strategy which aims at adapting
online and offline security requirements in response to growing interconnectedness and digitalization. In December 2022, the Directive
(EU) 2022/2555 of the European Parliament and of the Council of December 14, 2022, on measures for a high common level of cybersecurity
across the Union, amending Regulation (EU) No 910/2014 and Directive (EU) 2018/1972, and repealing Directive (EU) 2016/1148 (NIS 2) was
published in the official journal of the EU. EU Member States were required to adopt the NIS 2 into national law by October 17, 2024,
which may require us to modify our cybersecurity practices and policies, and we could incur substantial costs as a result.
On August 1, 2024, the EU AI Act entered into force. It establishes a comprehensive,
risk-based governance framework for AI in the EU market. While the majority of its obligations are expected to take effect by August 2026,
provisions regulating prohibited AI practices and AI literacy came into effect on February 2, 2025, and provisions pertaining to general
purpose AI models on August 2, 2025. The EU AI Act includes requirements around transparency, conformity assessments and monitoring, risk
assessments, human oversight, security, accuracy, general purposes AI and foundation models, and proposes fines for breach of up to the
higher of EUR35,000,000 or 7% of worldwide annual turnover. In December 2024, the EU Product Liability Directive came into force and EU
Member States must implement it into national law by December 2026. This Directive extends the EU’s existing strict product liability
regime to AI technologies and AI enabled products, and facilitates civil claims in respect of harm caused by AI. Once fully applicable,
the EU AI Act, the EU Product Liability Directive and developing guidance and/or decisions in this area is likely to affect our use of
AI and our ability to provide and to improve our services, and may require additional compliance measures and changes to our operations
and processes, resulting in increased compliance costs, potential increases in civil claims against us, and could adversely affect our
business, operations and financial condition. The European Commission’s Digital Omnibus Proposal, published in November 2025, includes
proposed amendments to certain EU laws and regulations, including (among others) the EU AI Act. However, the proposal remains at an early
stage of the EU legislative process.
Further, California enacted laws and regulations related to AI safety protocols, reporting
and transparency, among other AI-related topics. Other states in the U.S. have also passed AI-focused legislation, such as Colorado's
Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI systems to implement certain safeguards
against algorithmic discrimination, and Utah's Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability
measures for the use of generative AI in certain consumer interactions. Such additional laws and regulations may impact our ability to
develop, use, procure and commercialize AI technologies in the future.
53
Digital Market and Consumer Protection
On November 16, 2022, the DSA entered into force. Most provisions of the DSA became
applicable on February 17, 2024. The DSA focuses on creating a safer digital space, protecting fundamental rights of all users of digital
services, and establishing a level playing field for businesses and consumers with regards to online platforms. The majority of the substantive
provisions of the DSA govern, among other things, our potential liability for illegal services or content on our platform, obligations
around traceability of business users, and require enhanced transparency measures, including in relation to any recommendation systems
(including the main parameters used by such systems and any available options for recipients to modify or influence them). As further
guidance on the DSA is issued, it may require us to further modify our practices and policies, and we could incur substantial costs as
a result. In addition, failure to comply with the DSA can result in fines of up to 6% of total annual worldwide turnover and recipients
of services have the right to seek compensation from providers in respect of damage or loss suffered due to infringement by the provider
to comply with the DSA. Similarly, in the UK, the Online Safety Act 2023 establishes an extensive regulatory framework for user-to-user
services and imposes obligations to protect users from illegal content which, if applicable, may increase compliance costs and may otherwise
adversely affect our business, operations and financial condition, and failure to comply with the UK regime can result in fines of up
to 10% of total annual worldwide turnover or £18 million (whichever is greater).
| C. | Organizational Structure |
|
The legal name of our Company is Fiverr International Ltd. and we are organized under
the laws of the State of Israel. We have thirteen wholly owned subsidiaries, as listed in Exhibit 8.1 to this Annual Report and is incorporated
by reference into this Annual Report.
| D. | Property, Plant and Equipment | |
Our principal facilities are located in Tel Aviv, Israel and consist of approximately
5,000 square meters (approximately 53,800 square feet) of leased office space. These facilities currently accommodate our principal executive
offices, research and development, marketing, design, business development, finance, information technology, user support and other administrative
activities. The lease for these facilities expires in December 2026.
We also lease offices in New York City and Orlando in the United States. We believe
that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space
will be available to accommodate any expansion of our operations.
Item 4A. Unresolved Staff
Comments
None.
54
Item 5. Operating and
Financial Review and Prospects
You should read the following discussion together with the consolidated
financial statements and related notes included elsewhere in this Annual Report. The statements in this discussion regarding industry
outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this
discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including,
but not limited to, the risks and uncertainties described in “Risk factors” and “Special note regarding forward-looking
statements.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.
Overview
Our mission is to change how the world works together. We started with the simple idea
that people should be able to buy and sell digital services in the same fashion as physical goods on an e-commerce platform. On that basis,
we set out to design a digital services marketplace that is built with a comprehensive SKU-like services catalog and an efficient search,
find and order process that mirrors a typical e-commerce transaction. We call this the Service-as-a-Product, or the SaaP model. Our approach
fundamentally transforms the traditional freelancer staffing model into a customer centric, product led marketplace model with scale and
efficiency.
We believe our model reduces friction and uncertainties for both buyers and sellers.
At the foundation of our platform lies an expansive catalog with hundreds of categories of productized service listings, which we coined
as Gigs. Each Gig has a clearly defined scope, duration and price, along with buyer generated reviews. Using either our search or navigation
tools, buyers can easily compare and find talent and their service listings, and in turn purchase and fulfill their digital service needs,
ranging from simple services such as logo design and blog post writing, to complex services such as video creation and social media marketing.
In addition to enabling marketplace activities, we have also over the years expanded
the offerings on our platform to include a number of value-added services to help our buyers and sellers to grow their business. This
includes subscription products such as Seller Plus and AutoDS, advertising services such as Fiverr Ads, as well as other services such
as financial and learning and development tools. We have also been investing in upmarket initiatives to attract more customers from bigger
organizations with bigger spending budgets to spend on the platform. We have built Fiverr Pro, our flagship upmarket product, to enable
these larger customers to access a fully-vetted talent pool, white-glove matching services, end-to-end project management services, as
well as a suite of team collaboration, budget management, compliance and reporting tools.
In 2025, we have seen increasingly diverging trends on our marketplace business. On
one hand, the growth of artificial intelligence has created many new AI-related service categories and significantly expanded our customers’
needs for high-skilled and complex services. On the other hand, the adoption of AI tools in the broader market has also created headwinds
for simple and low-skilled services on our marketplace. This, together with the continued weakness in SMB sentiment and hiring demand,
has resulted in contraction in our marketplace GMV and active buyers in 2025. To lean into the growing opportunity of high-skilled, complex
services and reaccelerate growth, in late 2025, we initiated a focused transformation to scale trust, quality, and AI-native capabilities
across our platform, anchored around four pillars: upgrades in matching infrastructure, product experience, go-to-market execution, and
operational excellence.
We have reached a significant scale since founding in 2010. For the year ended December
31, 2025, our marketplace enabled a total transaction value, or marketplace GMV, of $1,073.0 million with an annual active buyer base
of 3.1 million. Our revenue for the year ended December 31, 2025, was $430.9 million, including $297.5 million of marketplace revenue
and $133.4 services revenue.
Our business model
Our revenue primarily comprises two components: marketplace revenue and service revenue.
We generate marketplace revenue through transaction commissions paid by buyers and sellers based on orders completed on our marketplace.
We generate services revenue from subscription products such as Seller Plus and AutoDS, advertising services primarily via Fiverr Ads,
and other services such as financial or learning tools, all of which are optional value-added services to our customers.
55
For the years ended December 31, 2025, 2024 and 2023, our revenue was $430.9 million,
$391.5 million and $361.4 million, respectively. Historically, our revenue growth has been driven by the growth of marketplace GMV as
a result of growth in annual active buyers and annual spend per buyer, as well as the growth in value-added services. Since 2024, the
macroeconomic conditions including high inflation, high interest and volatile geopolitical environment have resulted in weak small to
medium sized businesses, or SMB, sentiment and weak hiring demand across our industry. We have also seen the increasing adoption of AI
technologies drives diverging trend between high- and low-skilled services. As a result, for the year ended December 31, 2025, marketplace
GMV was $1,073.0 million, down 2.2% and marketplace revenue was $297.5 million, down 1.8%, compared to the year ended December 31, 2024.
Our marketplace take rate, defined by marketplace revenue divided by marketplace GMV was 27.7%, compared to 27.6% in 2024. The slight
increase in marketplace take rate was due to slight adjustments in fee structure on our marketplace. We believe we are able to command
our marketplace take rate because of the value we provide to our buyers and sellers in an otherwise fragmented, unstandardized and high-friction
industry. We believe our marketplace take rate is sustainable and reflects our competitive advantage against our competitors.
We have grown services revenue significantly over the past few years, including the
expansion of Fiverr Ads, Seller Plus and AutoDS. For the year ended December 31, 2025, services revenue was $133.4 million, representing
year-over-year growth of 50.9%. In 2025, services revenue represented 31.0% of our total revenue, up from 22.6% in 2024. The large, loyal
buyer and seller base that we have built since 2010 provides a huge opportunity for us to expand the tools and services that we can sell
to them beyond marketplace activities, in order to help them grow their business and become more successful. These value-added services
in turn further deepen our customer relationship, build more loyalty around Fiverr’s overall platform, and strengthen our marketplace
flywheel. We believe services revenue will increasingly become a bigger portion of our overall revenue mix and will serve as a strong
growth driver for our business.
Large and strong buyer base
Since founded in 2010, we have built a strong and loyal buyer base. As of December 31,
2025, the number of annual active buyers on our marketplace was 3.1 million. We are increasingly focused on growing buyers with bigger
spending capacity and expanding our wallet share among them. At the same time, the number of active buyers on our platform is impacted
by the continued weakness in SMB sentiment and hiring demand, and the decline in low-skilled, simple services. These factors have resulted
in smaller cohorts in recent years in terms of number of new buyers, but higher quality cohorts in terms of average annual spend per buyer.
We believe this upmarket strategy is beneficial to our business in the long run.
We experience significant repeat business because buyers return to our platform as we
offer a variety of freelance digital services that address different businesses’ needs. For example, a buyer can purchase design
content for a brochure and later return to our platform for market research, an entirely different service category. At the same time,
this buyer may recommend our platform to a colleague in another department who may use our platform for video editing services.
Repeat buyers generally increase spend on our platform over time. For the years ended
December 31, 2025, and 2024, repeat buyers contributed 68% of our revenue on our marketplace. We believe the repeat purchase activity
from existing buyers reflects the underlying strength of our business and provides us with revenue visibility and predictability.
56
Consistent cohort behavior
Our business has historically benefited from strong cohort revenue consistency. To track
our growth and the underlying dynamics of our business, we closely monitor and analyze the behavior of our annual buyer cohorts. We define
an annual buyer cohort based on the year when the buyer’s first purchase on our platform was made. Historically, we have observed
consistency across our annual buyer cohorts. As shown in the figure below, the biggest fluctuation in spend of each cohort happens in
the first two years and then starts to stabilize and contribute to a consistent stream of revenue for future years. The consistent behavior
of our cohorts is driven first by repeat spending by our buyers as well as by the overall size of our buyer base, which normalizes the
fluctuation of individual buyer behavior. We experienced elevated spending levels across our cohorts in 2020 and 2021, as COVID-19 led
to more usage of remote and freelancer workforce. The cohort behavior has since been largely normalized.
Marketplace revenue composition by annual cohort 2010-2025
Buyer acquisition strategy
We continue to attract buyers through a variety of channels. The majority of our new
buyers in both 2025 and 2024 came from organic and direct sources, meaning buyers who reach our platform via non-paid search results,
referrals by existing users, word-of-mouth, direct visits to our website by typing our URL into their browser, or our mobile app. We supplement
these organic and direct sources of growth by investing in performance marketing programs. We view our ability to efficiently acquire
buyers at scale as a differentiated competitive advantage and continuously seek to diversify our user acquisition investments through
a variety of channels in a disciplined manner.
We measure the efficiency of our buyer acquisition strategy by Time to Return On Investment,
or tROI, which represents the number of months required for us to recover performance marketing investments during a particular period
of time from the revenue generated by the new buyers acquired during that period. We aim to achieve quarterly tROI of one year or less.
Historically, over the past eight quarters ending December 31, 2025, we have been able to consistently achieve tROI of six months or less.
The second measure for our paid marketing efficiency is LTV/CAC, which is measured by
the cumulative revenue to performance marketing investment ratio. Historically on average, we have been able to achieve a three-year LTV/CAC
ratio of over 3x for cohorts joined in 2022 or earlier. Moreover, the older cohorts continued to generate a consistent revenue to our
platform beyond the first three years. This consistent repeat purchase behavior underscores the loyalty and retention of our buyer base
and allows us to drive more of our revenue from our existing buyer base over the years.
Growth in annual spend per buyer
We view the acquisition of a new buyer as a starting point for building a long-term
relationship between the buyer and our marketplace. Once a buyer joins our platform, we aim to expand the relationship and increase engagement
and spending activities from that buyer over time. Our focus on increasing the lifetime value of our buyers on our marketplace is reflected
in three areas. First, we continue to build out our marketplace to facilitate more services and more complex projects, and higher quality
sellers in order to provide a comprehensive solution for our buyers’ digital service needs. Second, our proprietary machine learning
technology and expansive data sets allow us to personalize experiences for both buyers and sellers. For example, it enables us to anticipate
buyers’ future needs based on their buying behavior and provide category and service recommendations. Third, we continue to go upmarket
in our marketing strategies to acquire higher lifetime value buyers at the top of the funnel.
We measure our buyer engagement using annual spend per buyer. Our annual spend per buyer
as of December 31, 2025, was $342, up 13.3% from $302 as of December 31, 2024. For the year ended December 31, 2025, buyers who spent
over $500 accounted for 66% of our marketplace revenue, up from 65% for the year ended December 31, 2024.
These annual spend per buyer growth trends demonstrate our success in expanding upmarket
by offering a broader set of digital services, increasing engagement and lifetime value of our buyers, and growing the number of higher
value Gigs and higher quality sellers on our platform through targeted marketing efforts.
57
Key financial and operating metrics
We monitor the following key financial and operating metrics to evaluate the growth
of our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.
| ● |
“Annual active buyers” means buyers who have ordered a Gig on the marketplace
within the last 12-month period, irrespective of cancellations. An increase or decrease in the number of annual active buyers is a key
indicator of our ability to attract and engage buyers. |
| ● |
“Annual spend per buyer” is calculated by dividing our GMV within the last
12-month period by the number of annual active buyers as of such date. Annual spend per buyer is a key indicator of our buyers’
purchasing patterns and is impacted by an increase in our number of annual active buyers, buyers purchasing from more than one category,
an increase in average price per purchase and our ability to acquire buyers with a higher lifetime value. |
The following table sets forth our key performance indicators as
of December 31, 2025, 2024 and 2023:
|
As of December 31, |
||||||||||||
|
2025 |
2024 |
2023 |
||||||||||
|
Annual active buyers (in thousands) |
3,135 |
3,630 |
4,027 |
|||||||||
|
Annual spend per buyer |
$ |
342 |
$ |
302 |
$ |
278 |
||||||
Components of our results of operations
Revenue. Starting with the year ended December
31, 2024, we have begun categorizing our revenues into marketplace revenue and services revenue to enhance transparency in our financial
reporting. Marketplace revenue includes transaction commissions paid by buyers and sellers
based on orders completed on our marketplace. Service revenue is revenue from optional value-added services that we provide to our buyers
and sellers, including Fiverr Ads, Seller Plus, AutoDS and other services such as financial or learning tools.
Geographic Breakdown of Revenues. The following
table sets forth the geographic breakdown of revenues for the periods indicated:
|
2025 |
2024 |
2023 |
||||||||||
|
(in thousands) |
||||||||||||
|
U.S. |
$ |
205,390 |
$ |
191,705 |
$ |
178,450 |
||||||
|
Europe |
120,840 |
104,319 |
95,593 |
|||||||||
|
Asia Pacific |
64,865 |
60,912 |
54,400 |
|||||||||
|
Rest of the world |
34,480 |
30,959 |
29,664 |
|||||||||
|
Israel |
5,334 |
3,586 |
3,268 |
|||||||||
|
Total |
$ |
430,909 |
$ |
391,481 |
$ |
361,375 |
||||||
The following table summarizes disaggregated revenue by marketplace revenue and services
revenue for the years ended:
|
2025 |
2024 |
2023 |
||||||||||
|
(in thousands) |
||||||||||||
|
Marketplace Revenue |
$ |
297,489 |
$ |
303,069 |
$ |
306,981 |
||||||
|
Services Revenue |
133,420 |
88,412 |
54,394 |
|||||||||
|
Total |
$ |
430,909 |
$ |
391,481 |
$ |
361,375 |
||||||
Cost of revenue. Cost of revenue primarily consists
of payment processing fees, server hosting costs, customer support personnel, contractors services, amortization of acquired intangible
assets and capitalized internal-use software. Cost of revenue also includes personnel related costs and associated overhead, including
share-based compensation. Cost of revenue may fluctuate from period to period based on factors such as payment processing rates, hosting
and infrastructure usage, product and contractor utilization, and employee-related expenses.
Gross profit and gross margin. Our gross
profit and gross margin may fluctuate from period to period. Such fluctuations may be influenced by our revenue, processing fees, timing
and amount of investments in technology infrastructure, including AI capabilities. Gross margin may also be impacted by continued investments
in customer support and trust and safety operations, as well as amortization expense associated with capitalized internal-use software
and acquired intangible assets.
58
Research and development. Research and
development expenses primarily consist of personnel-related costs for our research and development teams, including salaries, benefits,
share-based compensation and associated overhead, as well as costs related to product development initiatives, professional services and
business technology services. Research and development costs are expensed as incurred, except to the extent that such costs are associated
with internal-use software that qualifies for capitalization. Research and development expenses may fluctuate from period to period given
our strategic priorities. We believe continued investments in research and development are important to support our strategic objectives
and long-term growth.
Sales and marketing. Sales and marketing
expenses primarily consist of personnel-related costs for employees engaged in sales, marketing, advertising and promotional activities,
including salaries, benefits, share-based compensation and associated overhead. Sales and marketing expenses also include performance
marketing costs, such as user acquisition costs, branding costs, marketing campaigns and other media advertisements costs, as well as
amortization of acquired intangible assets. Sales and marketing expenses are expensed as incurred. We expect to continue to invest in
our sales and marketing capabilities in the future to drive revenue growth and to continue to increase our brand awareness. Sales and
marketing expenses, both in absolute dollars and as a percentage of revenue, may fluctuate from period to period. The level of these expenses
will depend on factors such as timing, effectiveness and optimization of our marketing investments, customer acquisition costs, and changes
in the scope and scale of our sales and marketing initiatives.
General and administrative. General and
administrative primarily consist of personnel-related costs for executive, finance, legal, human resources and other administrative functions,
including salaries, benefits, share-based compensation and associated overhead. General and administrative expenses also include legal,
accounting and other professional service fees, changes in the fair value of contingent consideration (earn-outs), chargeback expenses
and costs associated with fraud risk reduction, expenses related to allowance for doubtful accounts in the event of uncollectible account
receivables balances and others. General and administrative expenses are expensed as incurred. General and administrative expenses may
fluctuate from period to period we manage our cost structure, reallocate resources and prioritize corporate initiatives. The level of
these expenses will depend on the timing of professional services, compliance requirements and other corporate initiatives associated
with operating as a publicly traded company.
Financial income and other, net. Financial
income and other, net primarily include interest earned on cash and cash equivalents, deposits and marketable securities. In addition,
amortization of discount and issuance costs of our Convertible Notes, exchange rate gains (losses) due to foreign exchange fluctuations,
gain from sale of a subsidiary, and other financial expenses in connection with bank charges.
Tax benefit (taxes on income). The tax
benefit (taxes on income) relates to our activities in Israel, the United States, and other jurisdictions where we operate. Tax benefit
primarily consists of the appreciation of deferred tax assets resulting from the release of the valuation allowance. Taxes on income include
amounts we either pay or accrue as a result of our global operations. As of December 31, 2025, we utilized approximately $4.2 million
of our carryforwards net operating loss for Israeli tax purposes. Additional $12.6 million is expected to be utilized over the term of
3 years.
As of December 31, 2025, we had net operating loss carryforwards for Federal U.S. tax
purposes in the amount of approximately $23.1 million, some of which are expected to be subject to certain limitations under Internal
Revenue Code, or IRC, Section 382 following changes in control that occurred upon acquisition of ClearVoice. For more information regarding
the tax benefits available to us, see Item 10.E. “Taxation.”
A.
Operating Results
For a discussion of our results of operations for the year ended December 31, 2023,
including a year-to-year comparison between 2024 and 2023, and a discussion of our liquidity and capital resources for the year ended
December 31, 2023, refer to Item 5. “Operating and Financial Review and Prospects” in
our Annual Report on Form 20-F for the year ended December 31, 2024.
59
The following tables set forth our results of operations in U.S. dollars and as a percentage
of revenue for the periods indicated:
|
Year ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
(in thousands) |
||||||||
|
Revenue |
$ |
430,909 |
$ |
391,481 |
||||
|
Cost of revenue |
79,416 |
70,566 |
||||||
|
Gross profit |
351,493 |
320,915 |
||||||
|
Operating expenses: |
||||||||
|
Research and development |
90,664 |
90,241 |
||||||
|
Sales and marketing |
176,675 |
171,678 |
||||||
|
General and administrative |
85,331 |
74,814 |
||||||
|
Total operating expenses |
352,670 |
336,733 |
||||||
|
Operating loss |
(1,177 |
) |
(15,818 |
) | ||||
|
Financial income and other, net |
24,593 |
27,706 |
||||||
|
Income before taxes on income |
23,416 |
11,888 |
||||||
|
Tax benefit (taxes on income) |
(2,433 |
) |
6,358 |
|||||
|
Net Income |
$ |
20,983 |
$ |
18,246 |
||||
|
Year ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
(as a% of revenue) |
||||||||
|
Revenue |
100.0 |
% |
100.0 |
% | ||||
|
Cost of revenue |
18.4 |
18.0 |
||||||
|
Gross profit |
81.6 |
82.0 |
||||||
|
Operating expenses: |
||||||||
|
Research and development |
21.0 |
23.1 |
||||||
|
Sales and marketing |
41.0 |
43.8 |
||||||
|
General and administrative |
19.8 |
19.1 |
||||||
|
Total operating expenses |
81.8 |
86.0 |
||||||
|
Operating loss |
(0.2 |
) |
(4.0 |
) | ||||
|
Financial income and other, net |
5.7 |
7.0 |
||||||
|
Income before taxes on income |
5.5 |
3.0 |
||||||
|
Tax benefit (taxes on income) |
(0.6 |
) |
1.6 |
|||||
|
Net income |
4.9 |
% |
4.6 |
% | ||||
Year ended December 31, 2025, compared to year ended December 31,
2024
Revenue
Revenue increased by $39.4 million, or 10.1%, to $430.9 million for the year ended December
31, 2025, from $391.5 million for the year ended December 31, 2024. The increase was mainly due to a $45.0 million increase in services
revenue driven by our expansion of value-added services including advertising, subscriptions and software offerings. For the year ended
December 31, 2025, services revenue was $133.4 million, representing a year-over-year growth of 50.9%. For the year ended December 31,
2025, services revenue represents 31.0% of our total revenue, up from 22.6% compared to the year ended December 31, 2024. For the year
ended December 31, 2025, marketplace revenue was $297.5 million, down 1.8% compared to the year ended December 31, 2024. The decrease
in marketplace revenue was primarily driven by a decline in GMV. Recently, the macroeconomic conditions including high inflation, high
interest and volatile geopolitical environment have resulted in weak small to medium sized businesses, or SMB, sentiment and weak hiring
demand across our industry. The growing adoption of artificial intelligence have also led to diverging trends between high-skilled, complex
services and low-skilled, simple services on our marketplace. As a result, for the twelve-month period ended December 31, 2025, marketplace
GMV was $1,073.0 million, down 2.2% year-over-year. The decrease in GMV was driven by a 13.6% year-over-year decrease in annual active
buyers, which was partially offset by a 13.3% increase in annual spend per buyer. Our marketplace take rate for the twelve months period
ended December 31, 2025, was 27.7%, compared to 27.6% for the year ended December 31, 2024. The slight increase in marketplace take
rate was due to slight adjustments in fee structure on our marketplace.
60
Cost of revenue
Cost of revenue increased by $8.8 million, or 12.5%, to $79.4 million for the year ended
December 31, 2025, from $70.6 million for the year ended December 31, 2024. The increase was primarily attributable to a $4.1 million
in amortization expenses associated with acquired intangible assets and capitalized internal-use software, an increase of $3.6 million
in contractors services, an increase of $1.6 million in hosting costs, an increase of $0.6 million due to payments of processing fees
and an increase of $0.3 million in business technology services. These increases were partially offset by a decrease of $0.9 million in
shared-based compensation expenses and a decrease of $0.5 million in employee-related costs.
Research and development
Research and development costs increased by $0.5 million, or 0.5%, to $90.7 million
for the year ended December 31, 2025, from $90.2 million for the year ended December 31, 2024. The increase was primarily attributable
to an increase of $2.6 million in contractors’ services, an increase of $2.2 million in restructuring costs, an increase of $1.9
million in employee related costs, an increase of $1.8 million in business technology services, an increase of $0.4 million in depreciation
and amortization, an increase of $0.4 million in facilities maintenance and related operational costs and an increase of $0.3 million
in hosting costs. This was partially offset by a decrease of $9.1 million in shared-based compensation expenses.
Sales and marketing
Sales and marketing expenses increased by $5.0 million, or 2.9%, to $176.7 million for
the year ended December 31, 2025, from $171.7 million for the year ended December 31, 2024. The increase was primarily attributable to
a $14.3 million in marketing campaigns and brand activities, an increase of $2.4 million due to impairment of definite-lived intangible
assets primarily associated with discontinue certain activities of the asset group related to the Working Not Working acquisition and
an increase of $1.4 million in contractors’ services. This was partially offset by a decrease of $7.5 million in share-based compensation
expenses and a decrease of $5.6 million in employee-related costs.
General and administrative
General and administrative expenses increased by $10.5 million, or 14.1%, to $85.3 million
for the year ended December 31, 2025, from $74.8 million for the year ended December 31, 2024. The increase was primarily attributable
to a $12.3 million increase related to changes in the fair value of contingent consideration (earn-outs) and acquisition-related costs,
an increase of $0.9 million in seller protection expenses, user compensation, fraud prevention-related costs and other related expenses,
including associated credit risk costs, an increase of $0.8 million in facilities maintenance and related operational costs, an increase
of $0.5 million in contractors services, an increase of $0.5 million in accounting and legal expenses and an increase of $0.4 million
in employee-related costs. This was partially offset by a decrease of $4.9 million in share-based compensation expenses.
Financial income and other, net
Financial income and other, net, amounted to $24.6 million for the year ended December
31, 2025, compared to financial income and other, net, amounted to $27.7 million for the year ended December 31, 2024. The change was
mainly driven by a decrease of $3.9 million in interest income earned from our cash and investment portfolio and a decrease of $0.4 million
due to foreign exchange fluctuations and bank fees. This was partially offset by an increase of $0.8 million due to gain from sale of
a subsidiary and an increase of $0.4 million due to amortization of discount and issuance costs of convertible notes.
Tax benefit (taxes on income)
Taxes on income increased by $8.8 million for the year ended December 31, 2025. The
increase was primarily driven by an $11.3 million net change in deferred taxes, mainly attributable to a $10.1 million decrease in the
valuation allowance release and other changes. This increase was partially offset by a $1.8 million decrease in current taxes and a $0.7
million decrease related to uncertain tax positions.
61
B.
Liquidity and Capital Resources
Since our inception we have funded our operations through sale of equity securities
in private and public offerings, issuance of convertible notes, cash generated from operating activities and, to a lesser extent, through
exercised options.
As of December 31, 2025, and 2024 we had $282.9 million and $689.3 million, respectively,
in cash, cash equivalents, bank deposits and marketable securities. In addition, we had restricted deposits related to the office space
lease agreement of $3.4 million and $1.3 million as of December 31, 2025, and 2024, respectively. Marketable securities totaled to $117.7
million and $411.0 million as of December 31, 2025, and 2024, respectively and consisted of treasury, corporate and municipal bonds.
Our primary liquidity needs are to fund working capital, capital expenditures, share
repurchases, strategic acquisitions and other general corporate purposes. We assess our liquidity, in part, through an analysis of our
working capital current assets less current liabilities, together with other sources of liquidity. Working capital was $231.8 million
as of December 31, 2025, compared to $71.1 million as of December 31, 2024. The increase in working capital as of December 31, 2025, compared
to December 31, 2024, was primarily attributable to the generation of $104.6 million net cash provided by operating activity during the
year ended December 31, 2025. In addition, lower share repurchase activity compared to the year ended December 31, 2024, contributed to
higher period-end cash balances.
On April 1, 2024, our board of directors approved a “distribution”, as defined
in the Israeli Companies Law, 1999, by way of repurchase (buyback) of the Company’s ordinary shares in a total amount of up to $100
million. Accordingly, during 2024, we repurchased ordinary shares of the Company for approximately $100 million in cash.
On March 10, 2025, our board of directors approved another “distribution”
by way of repurchase (buyback) of the Company’s ordinary shares in a total amount of up to $100 million. Accordingly, during 2025,
we repurchased ordinary shares of the Company for approximately $32.5 million in cash. For more information regarding the repurchase,
see Item 16.E. “Purchases of Equity Securities by the Issuer and Affiliated Purchasers.”
We believe that our existing cash, cash equivalents, bank deposits, marketable securities
and cash generated from operating activities will be sufficient to fund our working capital, capital expenditures and contractual obligations
for at least the next 12 months. Our future financing requirements will depend on various factors including our growth rate, the timing
and extent of investments in product development and marketing activities and, potential strategic transactions.
Our capital expenditures for fiscal years 2025, 2024 and 2023 amounted to $1.3 million,
$1.4 million and $1.1 million, respectively. Our capital expenditures consist primarily of investments in leasehold improvements for our
office space, purchases of furniture, computers and related equipment and internal-use software costs. We may also seek to invest in or
acquire complementary businesses or technologies.
We are a party to contractual obligations involving commitments to make payments to
third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations
are reflected on the consolidated balance sheet as of December 31, 2025, while others are considered future commitments. Our contractual
obligations primarily consist of purchase obligations, lease payments and earn-out payments. For information regarding our other contractual
obligations, refer to Note 11, 12 and 13 within our audited consolidated financial statements included in Item 18 of this Annual Report.
The following table presents the summary consolidated cash flow information for the periods presented.
|
Year ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
(in thousands) |
||||||||
|
Net cash provided by operating activities |
$ |
104,589 |
$ |
83,068 |
||||
|
Net cash provided by (used in) investing activities |
$ |
378,607 |
$ |
(28,818 |
) | |||
|
Net cash used in financing activities |
$ |
(491,797 |
) |
$ |
(104,222 |
) | ||
62
Net cash provided by operating activities
Net cash provided by operating activities has primarily resulted from cash collections
from revenue and interest income earned on our cash and investment portfolio, cash inflows from operating activities are primarily affected
by the timing of revenue collections and interest rates. Our primary uses of cash from operating activities have been selling and marketing
expenses, personnel and related overhead costs, and other costs related to the provision of our business.
Net cash provided by operating activities was $104.6 million for the year ended December
31, 2025, an increase of $21.5 million compared to $83.1 million for the year ended December 31, 2024. The change primarily resulted from
an increase of $2.7 million in net income in 2025, an increase of $15.5 million in working capital changes derived mainly from deferred
tax assets, other receivables, deferred revenue, accrued expenses and other liabilities, an increase of $10.5 million in revaluation and
payment of earn-out, an increase of $6.4 million in one time escrow payment related to contingent consideration, an increase of $4.2 million
in depreciation and amortization, and increase of $3.6 million in amortization of premium and accretion of discount on marketable securities
and an increase of $2.4 million in impairment of intangible assets. This was partially offset by a decrease of $22.6 million in share-based
compensation, a decrease of $0.8 million in gain from sale of a subsidiary and a decrease of $0.4 million in amortization of discount
and issuance costs of convertible notes.
Net cash provided by (used in) investing activities
Net cash provided by investing activities was $378.6 million for the year ended December
31, 2025, a change of $407.4 million compared to ($28.8) million cash used in for the year ended December 31, 2024. The change primarily
resulted from an increase of $224.6 million proceeds from maturities and investments in marketable securities, an increase of $160.9 million
in bank deposits, an increase of $19.6 million in acquisitions of business activity, an increase of $1.1 million due to acquisition of
intangible assets, an increase of $0.8 million in sale of subsidiary, an increase of $0.3 million in other receivables and non-current
assets and an increase of $0.1 million related to purchase of property and equipment and capitalization of internal-use software.
Net cash used in financing activities
Net cash used in financing activities was ($491.8) million for the year ended December
31, 2025, a change of $387.6 million from ($104.2) million cash used in for the year ended December 31, 2024. The change primarily resulted
from an increase of $460.0 million in repayment of convertible notes at maturity and an increase of $1.1 million in proceeds from withholding
tax related to employees’ exercises of share options and RSUs. This was partially offset by a decrease of $67.6 million in repurchases
of ordinary shares, a decrease of $4.0 million related to repayment of debt to previous shareholders of the acquired business and a decrease
of $1.9 million related to payment of earn-out.
Description of Convertible Notes and Capped Call Transaction Financing
On October 13, 2020, we closed a private offering of $460.0 million principal amount
of 0% coupon rate Convertible Senior Notes due 2025, or the Convertible Notes. The Convertible Notes were issued pursuant to an indenture,
dated October 13, 2020, or the Indenture, between us and U.S. Bank National Association, as trustee. On November 3, 2025, the Convertible
Notes were repaid after reaching maturity.
C.
Research and Development, Patents and Licenses, Etc.
Our research and development activities are primarily located in Israel, with additional
employees and contractors engaged in research and development activities for us in the US and Europe.
Research and development expenses are primarily comprised of costs of our research and
development personnel and other development-related expenses. Research and development personnel focus primarily on enhancing our technology,
improving our products, and developing new products and solutions. We invest in research and development in order to enhance and expand
our product and service offerings, tailor our marketing offering, and expand our registered user base. Our development strategy is focused
on identifying updates and enhanced features for our existing offerings, developing new offerings that are tailored to our registered
users’ needs and often arise out of their suggestions, and improving the performance of our platform.
In 2025, research and development costs accounted for approximately 21.0% of our total
revenue. Research and development costs are expensed as incurred, except to the extent that such costs are associated with internal-use
software that qualifies for capitalization. We believe continued investments in research and development are important to attain our strategic
objectives and long-term growth.
63
D.
Trend Information.
Adverse macroeconomic conditions, including recent inflation, slower growth, changes
to fiscal and monetary policy, higher interest rates, and currency fluctuations have impacted companies in Israel and around the world,
and as the future market conditions and possible recession remain highly uncertain, we cannot predict severity of a possible recession
and its effects on our customers and their spending habits. See also Item 3.D. “Risk Factors”
– Adverse macroeconomic conditions can materially adversely affect the Company’s business, results of operations and financial
condition, due to impacts on consumer and business spending and demand for our services.”
E.
Critical Accounting Estimates
Application of critical accounting estimates
Our significant accounting estimates and their effect on our financial condition and
results of operations are more fully described in our audited consolidated financial statements included elsewhere in this Annual Report.
We have prepared our financial statements in conformity with GAAP, which requires management to make estimates and assumptions that affect
the amounts reported in our consolidated financial statements and accompanying notes. These estimates are prepared using our best judgment,
after considering past and current events and economic conditions. While management believes the factors evaluated provide a meaningful
basis for establishing and applying sound accounting policies, management cannot guarantee that the estimates will always be consistent
with actual results. In addition, certain information relied upon by us in preparing such estimates includes internally generated financial
and operating information, external market information, when available, and when necessary, information obtained from consultations with
third-parties. Actual results may differ from these estimates. See Item 3.D. “Risk Factors”
for a discussion of the possible risks that may affect these estimates.
We believe that the accounting estimates discussed below are critical to our financial
results and to the understanding of our past and future performance, as these policies relate to the more significant areas involving
management’s estimates and assumptions. We consider an accounting estimate to be critical if: (1) it requires us to make assumptions
because information was not available at the time or it included matters that were highly uncertain at the time we were making our estimate
and (2) changes in the estimate could have a material impact on our financial condition or results of operations. The critical accounting
estimates that we believe have the most significant impact on our consolidated financial statements are discussed below.
Business combinations
We account for business combinations in accordance with ASC 805, “Business Combination”
and we allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired
based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable
assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management
makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible
assets include, but are not limited to, future expected cash flows from customer relationships, acquired technology and acquired trademarks
from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions
believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.
Earn-out incurred in a business combination is included as part of the acquisition price
and recorded at a probability weighted assessment of the fair value as of the acquisition date. The fair value of earn-out is recorded
as a liability in our consolidated balance sheets and was estimated at the acquisition date using a Monte Carlo simulation and included
volatility and projected financial information. These assumptions are forward looking and could be affected by future economic and market
conditions. Subsequent to the acquisition date, at each reporting period until the contingencies are resolved, the earn-out is remeasured
at current fair value with changes recorded in our consolidated statements of operations. The fair value of the earn-out is sensitive
to changes in key assumptions, and modifications to those inputs could materially impact the amount recorded.
64
Item 6. Directors, Senior Management
and Employees
A.
Directors and Senior Management
The following table presents information about our current senior management and directors
as of March 1, 2026:
|
Name |
|
Position |
|
Senior Management |
|
|
|
Micha Kaufman |
|
Founder, Chief Executive Officer, Chairperson of the Board |
|
Ofer Katz |
|
President |
|
Esti Levy Dadon |
Chief Financial Officer | |
|
Jinjin Qian |
Chief Business Officer | |
|
Matti Yahav |
|
Chief Marketing Officer |
|
Sharon Steiner |
|
Chief Human Resources Officer |
|
Yossi Levin |
|
Chief Technology Officer |
|
|
|
|
|
Directors |
|
|
|
Adam Fisher |
|
Director |
|
Yael Garten |
|
Director |
|
Ron Gutler |
|
Director |
|
Gili Iohan |
|
Director |
|
Jonathan Kolber |
|
Director |
|
Nir Zohar |
|
Director |
Senior Management
Micha Kaufman, our Founder, has served as our
Chief Executive Officer and as a member of our board of directors since our inception and currently also serves as Chairperson of our
board of directors. Prior to founding Fiverr, Mr. Kaufman founded and led several technology ventures. Mr. Kaufman has served as a member
of the Advisory Board of Cerca Partners LP, a venture capital firm, since November 2016. Mr. Kaufman holds an LL.B degree from Haifa University
in Israel.
Ofer Katz has served as our President since
February 2021, as our Chief Financial Officer from July 2017 to February 2026 and as our Chief Financial Officer under a consulting contract
from February 2011 to June 2017. Mr. Katz also serves as a Founder and a General Partner of Cerca Partners LP, a venture capital firm.
Prior to joining us, Mr. Katz founded Nextage Ltd., a financial services firm, in 2001 where he served as Chief Executive Officer from
2001 to 2016 and currently serves as Co-Chief Executive Officer. As Chief Executive Officer of Nextage, Mr. Katz served as acting Chief
Financial Officer to a number of companies including Wix.com Ltd., Adallom Technologies Ltd. (acquired by Microsoft Corporation), Wilocity
(acquired by Qualcomm Incorporated) and Onavo (acquired by Facebook, Inc.). Mr. Katz holds a B.A. from Tel Aviv University in Israel.
Esti Levy Dadon has served as our Chief Financial
Officer since March 2026, as our EVP Finance from 2022 to February 2026, VP Finance from 2020 to 2022 and Director of Finance from 2016
to 2020. Prior to joining Fiverr Ms. Levy Dadon served as Senior Manager at Kost Forer Gabbay & Kasierer, a Member of EY Global. Ms.
Levy Dadon holds a B.A. in Accounting and Business Management, and a M.B.A in Finance Management from The College of Management Academic
Studies.
Jinjin Qian has served as our Chief Business
Officer since March 2026, as our EVP Strategic Finance from January 2022 to February 2026, and VP Strategic Finance from October 2018
to December 2021. Prior to joining Fiverr Ms. Qian served as Director Investment Banking at Oppenheimer & Co. and Vice President,
Internet Equity Research at Needham. Ms. Qian started her career as a private equity investment professional at H&Q Asia Pacific where
she focused on growth stage investments. Ms. Qian holds a Master of Finance from Stanford Graduate School of Business and B.S. and B.A.
in Mathematics and Economics & Business from Lafayette College.
Matti Yahav has served as our Chief Marketing
Officer since November 2023. Mr. Yahav brings with him over 20 years of marketing experience to Fiverr. Prior to joining Fiverr, Mr. Yahav
was the Chief Commercial Officer at HoneyBook between June 2022 and October 2023. Between January 2015 and May 2022, Mr. Yahav spent over
seven years on the Global Management Team at SodaStream Ltd. (acquired by Pepsi), five of which were as CMO. Before that, he held multiple
marketing roles at Nestle, between January 2008 to June 2014. Mr. Yahav holds a Bachelor of Arts in Economics and Business from The Academic
College of Tel-Aviv, Yaffo and master’s degree in business administration from Tel-Aviv University in Israel.
65
Sharon Steiner has served as our Chief Human
Resources Officer since January 2020. Ms. Steiner joined us as a Human Resources Director in May 2012 and was promoted to our VP Human
Resources in August 2014. Prior to joining us Ms. Steiner served in various human resources roles, including at Amdocs Ltd., KarmelSonix,
Marvell Technology Group Ltd. and IBM Corporation. Ms. Steiner holds a B.A. from Haifa University in Israel.
Yossi Levin has served as our Chief Technology
Officer since February 2025. Prior to joining us, Mr. Levin served as the Global Head of Engineering at NICE Actimize between February
2018 and January 2025, responsible for driving the organization’s research, development and innovation. Prior to that, Mr. Levin
was the Vice President of Engineering and Platform for LivePerson between June 2011 and January 2018. Before that Mr. Levin held multiple
Engineering leadership roles in Amdocs. Mr. Levin holds a Bachelor of Arts in Computer Science from The Academic College of Tel-Aviv,
Yaffo and master’s degree in business administration from the Technion.
During April 2025, Hila Klein stepped down from the role of Chief Operating Officer.
Directors
Adam Fisher has served as a member of our board
of directors since January 2011. Since 2007, Mr. Fisher has served as a Partner at Bessemer Venture Partners, a venture capital firm,
and he is the founder of the firm’s investment practice in Tel Aviv, Israel. From 1998 to 2007, Mr. Fisher was a Partner at Jerusalem
Venture Partners, a venture capital firm based in Israel. Mr. Fisher currently serves as a member of the board of directors of several
Bessemer Venture Partners portfolio companies and previously served on the board of directors of Wix.com Ltd. from 2007 to 2016. Mr. Fisher
holds a B.S.F.S. from Georgetown University.
Yael Garten has served as a member of our board
of directors since October 2023. She brings extensive experience in data science, machine learning, and converting data into actionable
product and business strategy. She is VP of Product - AI Platforms at LinkedIn Corporation from August 2025, and serves on the Levi Strauss
& Co. board of directors since 2020 and is a member of its audit committee and nominating, governance and corporate citizenship committee.
Dr. Garten was the AI/ML Director of Data Science and Engineering at Apple from 2017 to 2023. Prior to that, from 2011 to 2017 she worked
in a number of positions at LinkedIn Corporation, including Director of Data Science from 2015 until 2017. Before joining LinkedIn, Dr.
Garten was a Research Scientist and Text Mining Lead at the Stanford University School of Medicine. She holds a PhD in Biomedical Informatics
from the Stanford University School of Medicine, an M.Sc. in Bioinformatics from the Weizmann Institute of Science, Israel, and a B.Sc.
in Computational Biology from Bar-Ilan University, Israel.
Ron Gutler has served as a member of our board
of directors since April 2019 and as a Lead Independent Director since May 2021. From May 2002 through February 2013, Mr. Gutler served
as the Chairperson of NICE Systems Ltd., a public company specializing in voice recognition, data security and surveillance. Between 2000
and 2011, Mr. Gutler served as the Chairperson of G.J.E. 121 Promoting Investments Ltd., a real estate company. Mr. Gutler is a former
Managing Director and Partner of Bankers Trust Company, which is currently part of Deutsche Bank. Mr. Gutler currently serves on the board
of directors of Wix.com Ltd. and several private companies. Mr. Gutler previously served on the board of directors of CyberArk Software
Ltd., until February 2026, and WalkMe Ltd., until September 2024. Mr. Gutler holds a B.A. and an M.B.A. from the Hebrew University of
Jerusalem.
Gili Iohan has served as a member of our board
of directors since April 2019. Ms. Iohan is currently a Partner at ION Crossover Partners, an Israeli based cross-over fund. Ms. Iohan
previously served as Chief Financial Officer of Varonis Systems, Inc., responsible for the company’s finance, accounting and back-office
operations, from 2005 to April 2017. Prior to that, she was a Partner for six years at Nextage Ltd., a financial services advisory firm.
Ms. Iohan currently serves on the board of directors of Varonis Systems, Inc., Monday.com Ltd. and several private companies. Ms.Iohan
previously served on the board of directors of SimilarWeb Ltd., until 2024. Ms. Iohan holds a B.A. and an M.B.A. from Tel Aviv University
in Israel.
Jonathan Kolber has served as a member of our
board of directors since June 2019. Mr. Kolber currently serves as a Chairman of ION Asset Management and CEO of Anfield Ltd., his personal
owned investment company. From 2007 until 2021, Mr. Kolber served as a General Partner at Viola Growth, a technology growth capital fund.
Prior to that, he served as Chief Executive Officer of Koor Industries Ltd., an industrial holding company, from 1998 to 2006. Mr. Kolber
also currently serves as a member of the board of directors of several private companies and charitable organizations. Mr. Kolber holds
a B.A. from Harvard University.
66
Nir Zohar has served as a member of our board
of directors since January 2014. Mr. Zohar has served as President of Wix.com Ltd. since 2013 and as Chief Operating Officer of Wix.com
Ltd. from 2008 to 2025. Prior to that, Mr. Zohar served as the Budget and Production Manager of M.B. Contact Ltd., a private Israeli event
production company, between 2005 and 2007.
There are no family relationships among any of our senior management or directors.
There are no arrangements or understandings with major shareholders, customers, suppliers
or others, pursuant to which any person referred to above was selected as a director or member of senior management.
B.
Compensation
Compensation of directors and office holders
Directors. Under the Companies Law, the compensation
of our directors requires the approval of our compensation committee, the subsequent approval of the board of directors and, unless exempted
under regulations promulgated under the Companies Law, the approval of the shareholders at a general meeting. Nonetheless, according to
the Companies Law, the compensation committee and the board of directors, may in special circumstances approve compensation of directors,
that is inconsistent with our stated compensation policy, provided the provisions that must be included in the compensation policy according
to the Companies Law have been considered by the compensation committee and the board of directors, and provided that the shareholders’
approval will be obtained, subject to the following requirements:
| ● |
at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest
in such matter, present and voting at such meeting, have voted in favor of the compensation package, excluding abstentions; or |
| ● |
the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter, who
vote against the compensation package does not exceed two percent (2%) of the aggregate voting rights in the Company. |
Office holders other than the Chief Executive Officer.
The Companies Law requires the approval of the compensation of a public company’s office holders, as defined in the Companies
Law (for additional information on the approval of the compensation of the chief executive officer see below) in the following order:
(i) the compensation committee, (ii) the company’s board of directors, and (iii) if such compensation arrangement is inconsistent
with the company’s stated compensation policy, the company’s shareholders (by a special majority vote as described above with
respect to the approval of the compensation of directors). However, if the shareholders of the company do not approve a compensation arrangement
with an office holder that is inconsistent with the company’s stated compensation policy, the compensation committee and the board
of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed
reasons for their decision.
An amendment to an existing arrangement with an office holder, who is not the chief
executive officer, or a director requires only the approval of the compensation committee, if the compensation committee determines that
the amendment is not material in comparison to the existing arrangement. However, according to regulations promulgated under the Companies
Law, an amendment to an existing arrangement with an office holder (who is not a director) who is subordinate to the chief executive officer
shall not require the approval of the compensation committee if (i) the amendment is approved by the chief executive officer, provided
that the company’s compensation policy provides that a non-material amendment to the terms of service of an office holder (other
than the chief executive officer) may be approved by the chief executive officer and (ii) the engagement terms are consistent with the
company’s compensation policy.
Chief Executive Officer. Under the Companies
Law, the compensation of a public company’s chief executive officer is required to be approved by: (i) the company’s compensation
committee; (ii) the company’s board of directors, and (iii) the company’s shareholders (by a special majority vote, as described
above with respect to the approval of the compensation of directors). However, if the shareholders of the company do not approve the compensation
arrangement with the chief executive officer, the compensation committee and the board of directors may override the shareholders’
decision if each of the compensation committee and the board of directors provide detailed reasons for their decision. The approval of
each of the compensation committee and the board of directors should be in accordance with the company’s stated compensation policy;
however, in special circumstances, they may approve compensation terms of a chief executive officer that are inconsistent with such policy
provided that they have considered the provisions that must be included in the compensation policy according to the Companies Law, and
that shareholders’ approval was obtained (by a special majority vote, as described above with respect to the approval of the compensation
of directors). In addition, the compensation committee may waive the shareholder approval requirement with regards to the approval of
the engagement terms of a candidate for the chief executive officer position, if they determine that (i) the compensation arrangement
is consistent with the company’s stated compensation policy; (ii) the chief executive officer did not have a prior business relationship
with the company or with a controlling shareholder of the company; and that (iii) conditioning the approval of the engagement on a shareholders’
vote would impede the company’s ability to employ the candidate to the chief executive officer position. In the event that the chief
executive officer also serves as a member of the board of directors, his or her compensation terms as chief executive officer will be
approved in accordance with the rules applicable to approval of compensation of directors.
67
Compensation of our office holders
The aggregate compensation paid by us and our subsidiaries to our office holders and
directors, including share-based compensation, for the year ended December 31, 2025, was approximately $29.8 million. This amount includes
$1.15 million of amounts set aside or accrued to provide pension, severance, retirement or similar benefits or expenses, but does not
include business travel, relocation, professional and business association dues and expenses reimbursed to office holders.
During the year ended December 31, 2025, our directors and officers were granted 681,118
restricted share units (not including 57,068 restricted share units granted for the achievement of performance targets for fiscal year
2025, which were only granted in 2026, but for which we recorded share-based compensation for the year ended December 31, 2025) under
our 2019 Share Incentive Plan, or the 2019 Plan. In addition, our office holders are also eligible to participate from time to time (at
their discretion) in our 2020 Employee Share Purchase Plan, or the ESPP, in accordance with the terms and limitations of the plan.
The following is a summary of the salary expenses and social benefit costs of our five
most highly compensated office holders in 2025, or the Covered Executives. All amounts reported reflect the cost to the Company as recognized
in our financial statements for the year ended December 31, 2025. U.S. dollar amounts indicated for compensation of our Covered Executives
are in thousands of dollars.
Mr. Micha Kaufman, Founder, Chief Executive Officer and Chairperson of the Board. Compensation
expenses recorded in 2025 of $500 in salary expenses and $139 in social benefits costs.
Mr. Ofer Katz, President and Chief Financial Officer. Compensation expenses recorded
in 2025 of $472 in salary expenses and $123 in social benefits costs.
Mr. Matti Yahav, Chief Marketing Officer. Compensation expenses recorded in 2025 of
$301 in salary expenses and $103 in social benefits costs.
Ms. Sharon Steiner, Chief Human Resources Officer. Compensation expenses recorded in
2025 of $317 in salary expenses and $114 in social benefits costs.
Mr. Yossi Levin, Chief Technology Officer. Compensation expenses recorded in 2025 of
$319 in salary expenses and $103 in social benefits costs.
The salary expenses summarized above include the gross salary paid to the Covered Executives,
and the benefit costs include the social benefits paid by us on behalf of the Covered Executives, convalescence pay, contributions made
by the Company to an insurance policy or a pension fund, work disability insurance, severance, educational fund and payments for social
security.
In accordance with the Company’s compensation policy, we also paid cash bonuses
to our Covered Executives as approved by the compensation committee and the board of directors. The 2025 cash bonus expenses, including
social benefits costs, for Mr. Micha Kaufman, Mr. Ofer Katz, Mr. Matti Yahav, Ms. Sharon Steiner and Mr. Yossi Levin, as provided for
in our 2025 financial statements (but due during 2026), were $886, $476, $161, $187 and $197, respectively.
We recorded equity-based compensation expenses in our financial statements for the year
ended December 31, 2025, for options and restricted share units granted (and restricted share units accounted for the achievement of performance
targets for fiscal year 2025, which were only granted in 2026) to Mr. Micha Kaufman, Mr. Ofer Katz, Mr. Matti Yahav, Ms. Sharon Steiner
and Mr. Yossi Levin of $11,231, $6,105, $1,622, $2,129 and $894, respectively.
68
The relevant amounts underlying the equity awards granted to our officers during 2025,
will continue to be expensed in our financial statements over a four-year period during the years 2026-2029 on account of the 2025 grants
in similar annualized amounts. Assumptions and key variables used in the calculation of such amounts are described in Note 16 to our audited
consolidated financial statements included in Item 18 of this Annual Report. All equity-based compensation grants to our Covered Executives
were made in accordance with the parameters of our Company’s compensation policy and were approved by the Company’s compensation
committee and board of directors.
We pay each of our non-employee directors who (i) either joined our board of directors
following our initial public offering or otherwise will join our board of directors in the future, or (ii) serves or will serve in the
future on a board of directors committee, each (i) and (ii) an Eligible Director, the following compensation:
Cash Compensation
An annual cash retainer with respect to each twelve months of service in an amount of:
|
Lead
Independent Director or Chairperson |
Member |
|||||||
|
Board of Directors |
$ |
50,000 |
$ |
35,000 |
||||
Additional fees with respect to each twelve months of service on the board of directors’
committees in the amounts of:
|
Lead
Independent Director or Chairperson |
Member |
|||||||
|
Audit Committee |
$ |
20,000 |
$ |
10,000 |
||||
|
Compensation Committee |
$ |
15,000 |
$ |
7,500 |
||||
|
Nominating and ESG Committee |
$ |
8,000 |
$ |
4,000 |
||||
|
Other Committee as Authorized by the Board of Directors |
$ |
8,000 |
$ |
4,000 |
||||
Payment to the committee chairpersons is in lieu of (and not in addition) to the payments
granted for committee membership. In case of service of less than a twelve-month period, the annual fee shall be prorated with respect
to the actual period of service.
Equity Based Compensation
Welcome Grant – Each newly appointed
or elected non-executive director of the Company shall be granted restricted share units with a grant date value of $300,000. Such welcome
grant will vest on a quarterly basis over a period of one year. The commencement of the vesting shall begin on the election or appointment
day.
Annual Grant –
Each Eligible Director shall be granted restricted share units with a grant date value of $225,000 upon each annual anniversary of his
or her initial election or appointment (provided that the director is still in office), or the Eligibility Date. Such annual grant will
vest on a quarterly basis over a period of one year. The commencement of the vesting shall begin on the Eligibility Date.
The welcome grant and the annual grants will also be subject to
the following terms and conditions: (i) Acceleration: The equity awards shall be accelerated
in the event of a Merger/Sale (as defined in the 2019 Plan); (ii) Intended Tax Type of Award:
Equity grants to directors who are Israeli residents and qualify for a “102 award” pursuant to Section 102 of the Israeli
Income Tax Ordinance [New Version]-1961, as amended, and the regulations promulgated thereunder, shall be classified as 102 Awards (as
defined in the 2019 Plan), capital gain track equity (and non-102 qualified grants to directors who are Israeli residents will be classified
as 3(9) Awards, as defined in the 2019 Plan); and (iii) General: The equity grants shall
otherwise be subject to the terms and conditions of the 2019 Plan, or any effective equity plan at that time, and the award agreement
in the form generally used by the Company at the time it was executed.
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Employment agreements with office holders
We have entered into written employment agreements with each of our office holders.
These agreements provide for notice periods of varying duration for termination of the agreement by us or by the relevant office holder,
during which time the office holder will continue to receive base salary and benefits. These agreements also contain customary provisions
regarding non-competition, confidentiality of information and assignment of inventions. However, the enforceability of the non-competition
provisions may be limited under applicable law.
Share option plans
2011 Share Option Plan
The 2011 Plan was adopted by our board of directors on March 31, 2011, amended and restated
in April 2013 and further amended on August 14, 2018, and on January 25, 2019. The 2011 Plan provided for the grant of options to our
employees, directors, office holders, service providers and consultants. Our United States Sub Plan to the 2011 Plan, as was adopted under
our 2011 Plan governed option awards granted to our United States employees or service providers, including those who are deemed to be
residents of the United States for tax purposes.
We no longer grant any awards under the 2011 Plan as it was superseded by the 2019 Plan,
although previously granted awards remain outstanding. Ordinary shares subject to outstanding options granted under the 2011 Plan that
expire or become unexercisable without having been exercised in full will become available again for future grant under the 2019 Plan.
As of December 31, 2025, a total of 569,073 options to purchase ordinary shares were outstanding under the 2011 Plan, with a weighted
average exercise price of $11.72 per share. Our board of directors, or a duly authorized committee of our board of directors, administers
the 2011 Plan.
2019 Share Incentive Plan
We maintain the 2019 Plan, under which we may grant equity-based incentive awards to
attract, motivate and retain the talent for which we compete. The 2019 Plan is administered by our board of directors and provides for
the grant of stock options (including incentive stock options and nonqualified stock options), ordinary shares, restricted shares, restricted
share units and other share based awards.
The maximum number of ordinary shares available for issuance under the 2019 Plan is
equal to the sum of (i) 560,807 shares, (ii) any shares subject to awards under the 2011 Plan which will expire or become unexercisable
without having been exercised, and (iii) an annual increase on the first day of each year beginning in 2020 and ending in and including
2029, equal to the lesser of (A) 14,259,677 shares, (B) 5% of the outstanding shares on the last day of the immediately preceding calendar
year on a fully diluted basis and (C) such amount as determined by our board of directors if so determined, prior to January 1 of a calendar
year; provided, however, that no more than 14,820,484 shares may be issued upon the exercise of incentive stock options, or ISOs. As of
December 31, 2025, a total of 1,802,949 options to purchase ordinary shares, with a weighted average exercise price of $79.78 per share
and 2,100,080 restricted share units were outstanding under the 2019 Plan. As of December 31, 2025, 4,080,503 ordinary shares were available
for future issuance under the 2019 Plan.
The 2019 Plan provides for granting awards under various tax regimes, including, without
limitation, in compliance with Section 102 of the Israeli Income Tax Ordinance (New Version), 5721-1961, or the Ordinance, and Section
3(i) of the Ordinance and for awards granted to our United States employees or service providers, including those who are deemed to be
residents of the United States for tax purposes, Section 422 of the Code and Section 409A of the Code.
Section 102 of the Ordinance allows employees, directors and officers who are not controlling
shareholders and are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options,
subject to the terms and conditions set forth in the Ordinance. Our non-employee service providers and controlling shareholders may only
be granted options under section 3(i) of the Ordinance, which does not provide for similar tax benefits.
Options granted under the 2019 Plan to our employees who are U.S. residents may qualify
as “incentive stock options” within the meaning of Section 422 of the Code, or may be non-qualified stock options.
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Employee Share Purchase Plan
In August 2020, we adopted our 2020 Employee Share Purchase Plan, or the ESPP, to enable
eligible employees of the Company and certain of its designated subsidiaries to use payroll deductions to purchase the Company’s
ordinary shares and thereby acquire an ownership interest in the Company. The ESPP is comprised of two distinct components: (1) the component
intended to qualify for favorable U.S. federal tax treatment under Section 423 of the Internal Revenue Code, or the Section 423 Component,
and (2) the component not intended to be tax qualified under Section 423 of the Internal Revenue Code to facilitate participation for
employees who are not eligible to benefit from favorable U.S. federal tax treatment and, to the extent applicable, to provide flexibility
to comply with non U.S. law and other considerations, or the Non-Section 423 Component.
The maximum aggregate number of ordinary shares that may be purchased initially under
the ESPP is 410,000 shares, or the ESPP Share Pool, subject to adjustment as provided for in the ESPP. In addition, on the first day of
each calendar year beginning on January 1, 2022 and ending on and including January 1, 2030, the ESPP Share Pool shall be increased by
that number of ordinary shares equal to the lesser of (a) 1% of the ordinary shares outstanding on the final day of the immediately preceding
calendar year on a fully diluted basis and (b) such smaller number of ordinary shares as determined by the board of directors. In no event
will more than 5,500,000 ordinary shares be available for issuance under the Section 423 Component. As of December 31, 2025, the ESPP
Share Pool consisted of 1,564,027 ordinary shares.
The compensation committee of our board of directors is the administrator of the ESPP
and has the authority to interpret the terms of the ESPP and determine eligibility of participants in accordance with the terms of the
ESPP and applicable law.
Eligible employees become participants in the ESPP by enrolling and authorizing payroll
deductions by the deadline established by the plan administrator prior to the relevant offering date. Employee payroll deductions will
be used to purchase shares on the last day of each purchase period (or such other date as set forth in the offering document). The plan
administrator may amend, suspend or terminate the ESPP at any time. However, shareholder approval of any amendment to the ESPP must be
obtained for any amendment which increases the aggregate number or changes the type of shares that may be sold pursuant to rights under
the ESPP or changes the corporations or classes of corporations whose employees are eligible to participate in the ESPP.
C.
Board Practices
Corporate governance practices
As an Israeli company, we are subject to various corporate governance requirements under
the Companies Law. However, pursuant to regulations promulgated under the Companies Law, companies with shares traded on certain U.S.
stock exchanges, including the New York Stock Exchange, may, subject to certain conditions, “opt out” from the Companies Law
requirements to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation
committee of the board of directors (other than the gender diversification rule under the Companies Law, which requires the appointment
of a director from the other gender if at the time of appointment of a director all members of the board of directors are of the same
gender). In accordance with these regulations, we elected to “opt out” from such requirements of the Companies Law. Under
these regulations, the exemptions from such Companies Law requirements will continue to be available to us so long as: (i) we do not have
a “controlling shareholder” (as such term is defined under the Companies Law), (ii) our shares are traded on certain U.S.
stock exchanges, including the New York Stock Exchange, and (iii) we comply with the director independence requirements and the audit
committee and compensation committee composition requirements under U.S. laws (including applicable New York Stock Exchange rules) applicable
to U.S. domestic issuers.
Our board of directors has adopted corporate governance guidelines which serve as a
flexible framework which our board of directors and its committees operate within, subject to the requirements of applicable law and regulations.
Under these guidelines, it is our policy that the positions of chairperson of the board of directors and chief executive officer may be
held by the same person (subject to approval by our shareholders pursuant to the Companies Law, as described below). Under such circumstances,
the guidelines also provide that the board of directors may designate an independent director to serve as lead independent director. The
lead independent director’s responsibilities include, but are not limited to, presiding over all meetings of the board of directors
at which the chairperson of the board of directors is not present, or may be perceived to be in conflict, including any executive sessions
of the independent directors, approving board of directors meeting schedules and agendas, acting as the liaison between the independent
directors and the chief executive officer and chairperson of the board of directors, being available for consultation and direct communication
with shareholders, as appropriate, ensuring the board of directors focuses on key issues and tasks facing the Company, and presiding over
the board of directors’ annual self-assessment process. According to the guidelines, where the chairperson of the board of directors
is an independent director, the chairperson of the board of directors will also serve as the lead independent director. In May 2021, our
board of directors appointed Ron Gutler as our lead independent director. We comply with the rules of the New York Stock Exchange requiring
that a majority of our directors are independent. Our board of directors has determined that all directors, other than Micha Kaufman,
our Founder, chief executive officer and chairperson of the board of directors, are independent under such rules.
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Board of directors
Under the Companies Law and our amended and restated articles of association, our business
and affairs are managed under the direction of our board of directors. Our board of directors may exercise all powers and may take all
actions that are not specifically granted to our shareholders or to executive management. Our chief executive officer (referred to as
a “general manager” under the Companies Law) is responsible for our day-to-day management. Our chief executive officer is
appointed by, and serves at the discretion of, our board of directors. All other executive officers are appointed by the chief executive
officer and are subject to the terms of any applicable employment or consulting agreement that we may enter into with them.
Under our amended and restated articles of association, our directors are divided into
three classes with staggered three-year terms. Each class of directors consists, as nearly as possible, of one-third of the total number
of directors constituting the entire board of directors. At each annual general meeting of our shareholders, the election or re-election
of directors following the expiration of the term of office of the directors of that class will be for a term of office that expires on
the third annual general meeting following such election or re-election, such that each year the term of office of only one class of directors
will expire.
Our directors are divided among the three classes as follows:
| ● |
the Class I directors are Jonathan Kolber and Yael Garten and their terms expire at our annual general meeting of shareholders to
be held in 2026; |
| ● |
the Class II directors are Adam Fisher and Nir Zohar, and their terms expire at our annual meeting of shareholders to be held in
2027; and |
| ● |
the Class III directors are Micha Kaufman, Ron Gutler and Gili Iohan, and their terms expire at our annual meeting of shareholders
to be held in 2028. |
Each of the directors shall be elected by a vote of the holders of a majority of the
voting power present and voting at that meeting (excluding abstentions), provided that a plurality voting mechanism is effected in the
event of a contested election. Each director will hold office until the annual general meeting of our shareholders for the year in which
his or her term expires, unless the tenure of such director expires earlier pursuant to the Companies Law or unless he or she is removed
from office (under the conditions described below).
Under our amended and restated articles of association, the approval of the holders
of at least 65% of the total voting power of our shareholders is generally required to remove any of our directors from office, and any
amendment to this provision shall require the approval of at least 65% of the total voting power of our shareholders. In addition, vacancies
on our board of directors may only be filled by a vote of a simple majority of the directors then in office. A director so appointed will
hold office until the next annual general meeting of our shareholders for the class in respect of which the vacancy was created, or in
the case of a vacancy due to the number of directors being less than the maximum number of directors stated in the articles, until the
next annual general meeting of our shareholders for the class he or she has been assigned by our board of directors.
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Chairperson of the board
Our amended and restated articles of association provide that the chairperson of the
board of directors is appointed by the members of the board of directors. The chief executive officer (referred to as a “general
manager” under the Companies Law) or a relative of the chief executive officer may not serve as the chairperson of the board of
directors, and the chairperson of the board of directors or a relative of the chairperson may not be vested with authorities of the chief
executive officer without shareholder approval consisting of a majority vote of the shares present and voting at a shareholders meeting,
under the following requirements:
| ● |
at least a majority of the shares of non-controlling shareholders and shareholders that do not have a personal interest in the approval
voted at the meeting in favor (disregarding abstentions); or |
| ● |
the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such appointment
voting against such appointment does not exceed two percent (2%) of the aggregate voting rights in the company. |
In addition, a person subordinated, directly or indirectly, to the chief executive officer
may not serve as the chairperson of the board of directors; the chairperson of the board of directors may not be vested with authorities
that are granted to those subordinated to the chief executive officer; and the chairperson of the board of directors may not serve in
any other position in the company or a controlled company, but he or she may serve as a director or chairperson of the board of directors
of a subsidiary.
At our 2024 annual general meeting, our shareholders voted for the appointment of our
chief executive officer, Micha Kaufman, to serve also as our chairperson of the board of directors for a period of three years.
External directors
Under the Companies Law, companies incorporated under the laws of the State of Israel
that are “public companies,” including companies with shares listed on the New York Stock Exchange, are required to appoint
at least two external directors. Pursuant to regulations promulgated under the Companies Law, companies with shares traded on certain
U.S. stock exchanges, including the New York Stock Exchange, may, subject to certain conditions, “opt out” from the Companies
Law requirements to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation
committee of the board of directors. In accordance with these regulations, we elected to “opt out” from the Companies Law
requirement to appoint external directors and related Companies Law rules concerning the composition of the audit committee and compensation
committee of the board of directors.
Audit committee
Companies Law requirements
Under the Companies Law, the board of directors of a public company must appoint an
audit committee. The audit committee must be comprised of at least three directors.
Listing requirements
Under the New York Stock Exchange corporate governance rules, we are required to maintain
an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting
or related financial management expertise.
Our audit committee consists of Ron Gutler, Gili Iohan and Nir Zohar. Mr. Gutler serves
as the chairperson of the audit committee. All members of our audit committee meet the requirements for financial literacy under the applicable
rules and regulations of the SEC and the New York Stock Exchange corporate governance rules. Our board of directors has determined that
Mr. Gutler is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by
the New York Stock Exchange corporate governance rules.
Our board of directors has determined that each member of our audit committee is “independent”
as such term is defined in Rule 10A-3(b)(1) under the Exchange Act, which is different from the general test for independence of board
and committee members.
Audit committee role
Our board of directors has adopted an audit committee charter setting forth the responsibilities
of the audit committee, which are also consistent with the Companies Law, the SEC rules and the New York Stock Exchange corporate governance
rules. The responsibilities of the audit committee include:
| ● |
retaining and terminating our independent auditors, subject to the ratification of the board of directors, and in the case of retention,
to that of the shareholders; |
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| ● |
pre-approving of audit and non-audit services and related fees and terms, to be provided by the independent auditors; |
| ● |
overseeing the accounting and financial reporting processes of our Company, the audits of our financial statements, the effectiveness
of our internal control over financial reporting and making such reports as may be required of an audit committee under the rules and
regulations promulgated under the Exchange Act; |
| ● |
overseeing the Company policies with respect to risk assessment and risk management, including with respect to financial, privacy
and data protection, information security and cybersecurity related risks, and review contingent liabilities and risks that may be material
to the Company; |
| ● |
reviewing with management and our independent auditor our annual, semi-annual and quarterly financial statements prior to publication
or filing (or submission, as the case may be) to the SEC; |
| ● |
recommending to the board of directors the retention and termination of the internal auditor, and the internal auditor’s engagement
fees and terms, in accordance with the Companies Law, as well as reviewing and approving the yearly or periodic work plan proposed by
the internal auditor; |
| ● |
reviewing with our general counsel and/or external counsel, as deemed necessary, legal and regulatory matters that could have a material
impact on the financial statements; |
| ● |
receiving reports of suspected irregularities in our business administration, inter alia, by members of the Company’s management,
legal counsel, the independent or internal auditor, and suggesting corrective measures to the board of directors; |
| ● |
reviewing policies and procedures with respect to transactions (other than transactions related to the compensation or terms of services)
between the Company and officers and directors, or affiliates of officers or directors, or transactions that are not in the ordinary course
of the Company’s business and deciding whether to approve such acts and transactions if so required under the Companies Law; and
|
| ● |
establishing and overseeing procedures and policies for the handling of employees’ complaints as to the management of our business
and the protection to be provided to such employees. |
Compensation committee
Companies Law requirements
Under the Companies Law, the board of directors of a public company must appoint a compensation
committee, which must be comprised of at least three directors.
Listing requirements
Under the New York Stock Exchange corporate governance rules, we are required to maintain
a compensation committee consisting of at least two independent directors.
Our compensation committee consists of Ron Gutler, Gili Iohan and Nir Zohar. Mr. Gutler
serves as chairperson of the compensation committee. Our board of directors has determined that each member of our compensation committee
is independent under the New York Stock Exchange rules, including the additional independence requirements applicable to the members of
a compensation committee.
Compensation committee role
In accordance with the Companies Law, the roles of the compensation committee are, among
others, as follows:
| ● |
recommending to the board of directors with respect to the approval of the compensation policy for office holders and, once every
three years, regarding any extensions to a compensation policy that was adopted for a period of more than three years; |
| ● |
reviewing the implementation of the compensation policy and periodically recommending to the board of directors with respect to any
amendments or updates of the compensation policy; |
| ● |
resolving whether or not to approve arrangements with respect to the terms of office and employment of office holders; and
|
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| ● |
exempting, under certain circumstances, a transaction with our chief executive officer from the approval of the general meeting of
our shareholders. |
Our board of directors has adopted a compensation committee charter setting forth the
responsibilities of the committee consistent with the New York Stock Exchange rules, which include among others:
| ● |
recommending to our board of directors for its approval a compensation policy in accordance with the requirements of the Companies
Law as well as other compensation policies, incentive-based compensation plans and equity-based compensation plans, and overseeing the
development and implementation of such policies and recommending to our board of directors any amendments or modifications the committee
deems appropriate, including as required under the Companies Law; |
| ● |
reviewing and approving the granting of options and other incentive awards to the chief executive officer and other office holders,
including reviewing and approving annual performance goals and objectives relevant to the compensation of our chief executive officer
and other office holders, including evaluating their performance in light of such goals and objectives; |
| ● |
overseeing and periodically reviewing with management our strategies, policies and practices with respect to human capital management
and management development, including with respect to matters such as equity, inclusion and belonging; workplace environment and culture;
employee engagement and effectiveness; and talent recruitment, development, and retention; |
| ● |
approving and exempting certain transactions regarding office holders’ compensation pursuant to the Companies Law; |
| ● |
administering our equity-based compensation plans, including without limitation, approving the adoption of such plans, amending and
interpreting such plans and the awards and agreements issued pursuant thereto, and making awards to eligible persons under the plans and
determining the terms of such awards; and |
| ● |
administering and overseeing the Company’s compliance with the compensation recovery policy required by the SEC and NYSE rules.
|
Compensation policy under the Companies Law
In general, under the Companies Law, a public company must have a compensation policy
approved by the board of directors after receiving and considering the recommendations of the compensation committee. In addition, our
compensation policy must be approved at least once every three years, first, by our board of directors, upon recommendation of our compensation
committee, and second, by a simple majority of the ordinary shares present, in person or by proxy, and voting at a shareholders meeting,
provided that either:
| ● |
such majority includes at least a majority of the shares held by shareholders who are not controlling shareholders and shareholders
who do not have a personal interest in such compensation policy and who are present, in person or by proxy, and voting (excluding abstentions);
or |
| ● |
the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation
policy and who vote against the policy does not exceed two percent (2%) of the aggregate voting rights in the company. |
Under special circumstances, the board of directors may approve the compensation policy
despite the objection of the shareholders on the condition that the compensation committee and then the board of directors decide, on
the basis of detailed grounds and after discussing again the compensation policy, that approval of the compensation policy, despite the
objection of shareholders, is for the benefit of the company.
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The compensation policy must serve as the basis for decisions concerning the financial
terms of employment or engagement of office holders, including exculpation, insurance, indemnification or any monetary payment or obligation
of payment in respect of employment or engagement. The compensation policy must be determined and later reevaluated according to certain
factors, including: the advancement of the company’s objectives, business plan and long-term strategy; the creation of appropriate
incentives for office holders, while considering, among other things, the company’s risk management policy; the size and the nature
of the company’s operations; and with respect to variable compensation, the contribution of the office holder towards the achievement
of the company’s long-term goals and the maximization of its profits, all with a long-term objective and according to the position
of the office holder. The compensation policy must furthermore consider the following additional factors:
| ● |
the education, skills, experience, expertise and accomplishments of the relevant office holder; |
| ● |
the office holder’s position, responsibilities and prior compensation agreements with him or her; |
| ● |
the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the
company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost
to the average and median salary of such employees of the company, as well as the impact of disparities between them on the work relationships
in the company; |
| ● |
if the terms of employment include variable components—the possibility of reducing variable components at the discretion of
the board of directors and the possibility of setting a limit on the value of non-cash variable equity-based components; and |
| ● |
if the terms of employment include severance compensation—the term of employment or office of the office holder, the terms
of his or her compensation during such period, the company’s performance during such period, his or her individual contribution
to the achievement of the company goals and the maximization of its profits and the circumstances under which he or she is leaving the
company. |
The compensation policy must also include, among other features:
| ● |
with regards to variable components: |
| ● |
with the exception of office holders who report directly to the chief executive officer, determining the variable components on long-term
performance basis and on measurable criteria; however, the company may determine that an immaterial part of the variable components of
the compensation package of an office holder shall be awarded based on non-measurable criteria, if such amount is not higher than three
monthly salaries per annum, while taking into account such office holder’s contribution to the company; |
| ● |
the ratio between variable and fixed components, as well as the limit of the values of variable components at the time of their payment,
or in the case of equity-based compensation, at the time of grant; |
| ● |
a condition under which the office holder will return to the company, according to conditions to be set forth in the compensation
policy, any amounts paid as part of his or her terms of employment, if such amounts were paid based on information later discovered to
be wrong, and such information was restated in the company’s financial statements; |
| ● |
the minimum holding or vesting period of variable equity-based components to be set in the terms of office or employment, as applicable,
while taking into consideration long-term incentives; and |
| ● |
a limit to retirement grants. |
Our compensation policy is designed to promote retention and motivation of directors
and office holders, incentivize superior individual excellence, align the interests of our directors and officer holders with our long-term
performance and provide a risk management tool. To that end, a portion of our officer holders’ compensation package is targeted
to reflect our short and long-term goals, as well as the officer holder’s individual performance. On the other hand, our compensation
policy includes measures designed to reduce the officer holder’s incentives to take excessive risks that may harm us in the long-term,
such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total
compensation of an officer holder and minimum vesting periods for equity-based compensation.
Our compensation policy also addresses our officer holders’ individual characteristics
(such as his or her respective position, education, scope of responsibilities and contribution to the attainment of our goals) as the
basis for compensation variation among our officer holders and considers the internal ratios between compensation of our officer holders
and directors and other employees. Pursuant to our compensation policy, the compensation that may be granted to an officer holder may
include: base salary, annual bonuses and other cash bonuses (such as a signing bonus and special bonuses with respect to any special achievements,
such as outstanding personal achievement, outstanding personal effort or outstanding company performance), equity-based compensation,
benefits and retirement and termination of service arrangements. All cash bonuses are limited to a maximum amount linked to the officer
holder’s base salary.
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An annual cash bonus may be awarded to officer holders upon the attainment of pre-set
periodic objectives and individual targets. The annual cash bonus that may be granted to our officer holders other than our chief executive
officer will be based on performance objectives and a discretionary evaluation of the officer holder’s overall performance by our
chief executive officer and subject to minimum thresholds. The annual cash bonus that may be granted to officer holders other than our
chief executive officer may alternatively be based entirely on a discretionary evaluation. Furthermore, our chief executive officer will
be entitled to approve performance objectives for officer holders who report to him.
The measurable performance objectives of our chief executive officer will be determined
annually by our compensation committee and board of directors. A non-material portion of the chief executive officer’s annual cash
bonus may be based on a discretionary evaluation of the chief executive officer’s overall performance by the compensation committee
and the board of directors, based on quantitative and qualitative criteria.
The equity-based compensation under our compensation policy for our officer holders
(including members of our board of directors) is designed in a manner consistent with the underlying objectives in determining the base
salary and the annual cash bonus, with its main objectives being to enhance the alignment between the officer holders’ interests
with our long-term interests and those of our shareholders and to strengthen the retention and the motivation of officer holders in the
long term. Our compensation policy provides for officer holder compensation in the form of share options or other equity-based awards,
such as restricted shares, restricted share units and performance stock units, in accordance with our share incentive plan then in place.
All equity-based incentives granted to officer holders shall be subject to vesting periods in order to promote long-term retention of
the awarded officer holders. The equity-based compensation shall be granted from time to time and be individually determined and awarded
according to the performance, educational background, prior business experience, qualifications, role and the personal responsibilities
of the officer holder.
In addition, our compensation policy contains compensation recovery provisions which
allow us under certain conditions to recover bonuses paid in excess, enable our chief executive officer to approve an immaterial change
in the terms of employment of an officer holder who reports directly to him (provided that the changes of the terms of employment are
in accordance with our compensation policy) and allow us to exculpate, indemnify and insure our officer holders and directors to the maximum
extent permitted by Israeli law, subject to certain limitations set forth therein.
Our compensation policy also provides for compensation to the members of our board of
directors either (i) in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses
of an External Director) of 2000, as amended by the Companies Regulations (Relief for Public Companies Traded in Stock Exchange Outside
of Israel) of 2000, as such regulations may be amended from time to time, or (ii) in accordance with the amounts determined in our compensation
policy.
Our compensation policy was approved by our board of directors in October 2024, in accordance
with the provisions of the Companies Law, despite it not being approved by the requisite vote of our shareholders, at the annual general
meeting of the shareholders held on September 18, 2024. Pursuant to the Companies Law, our board of directors approved the compensation
policy due to special circumstances, based on detailed grounds after the compensation committee and the board of directors reviewed the
compensation policy once again and decided that its approval was for the benefit of the Company. As required by the Companies Law, the
compensation policy is required to be re-approved at least once in every three years.
Nominating, and ESG committee
Our nominating and ESG committee consists of Ron Gutler, Gili Iohan and Nir Zohar. Mr.
Gutler serves as chairperson of the nominating and ESG committee. Our board of directors has adopted a nominating and ESG committee charter
setting forth the responsibilities, which include:
| ● |
overseeing and assisting our board in reviewing and recommending nominees for election as directors; |
| ● |
establishing procedures for and overseeing annual performance evaluation of management and our board of directors; |
77
| ● |
establishing and maintaining effective corporate governance policies and practices, including, but not limited to, ESG policies,
programs and strategies, and developing and recommending to our board of directors a set of corporate governance guidelines applicable
to our Company; and |
| ● |
overseeing the Company’s risks, strategies, policies, programs and practices related to environmental, social and governance
matters. |
Internal auditor
Under the Companies Law, the board of directors of a public company must appoint an
internal auditor based on the recommendation of the audit committee. The role of the internal auditor is, among other things, to examine
whether a company’s actions comply with applicable law and orderly business procedure. Under the Companies Law, the internal auditor
cannot be an interested party or an office holder or a relative of an interested party or an office holder, nor may the internal auditor
be the company’s independent auditor or its representative. An “interested party” is defined in the Companies Law as:
(i) a holder of 5% or more of the issued share capital or voting power in a company, (ii) any person or entity who has the right to designate
one or more directors or to designate the chief executive officer of the company, or (iii) any person who serves as a director or as a
chief executive officer of the company. As of December 31, 2025, Ms. Sharon Cohen, CPA from Deloitte IL & Co, a firm in the Deloitte
Global Network is acting as our internal auditor.
Fiduciary Duties and Approval of related party transactions under Israeli law
Fiduciary duties of directors and office holders
The Companies Law codifies the fiduciary duties that office holders owe to a company.
An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager,
any other person assuming the responsibilities of any of these positions regardless of such person’s title, a director and any other
manager directly subordinate to the general manager. Each person listed in the table under Item 6.A“Directors
and Senior Management” is an office holder under the Companies Law.
An office holder’s fiduciary duties consist of a duty of care and a duty of loyalty.
The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would
have acted under the same circumstances. The duty of loyalty requires that an office holder will act in good faith and in the best interests
of the company.
Disclosure of personal interests of an office holder and approval
of certain transactions
The Companies Law requires that an office holder promptly disclose to the board of directors
any personal interest that he or she may have and all related material information known to him or her concerning any existing or proposed
transaction with the company. A personal interest includes an interest of any person in an act or transaction of a company, including
a personal interest of one’s relative or of a corporate body in which such person or a relative of such person is a 5% or greater
shareholder, director or general manager or in which he or she has the right to appoint at least one director or the general manager,
but excluding a personal interest stemming solely from one’s ownership of shares in the company. A personal interest includes the
personal interest of a person for whom the office holder holds a voting proxy or the personal interest of the office holder with respect
to his or her vote on behalf of a person for whom he or she holds a proxy even if such shareholder has no personal interest in the matter.
If it is determined that an office holder has a personal interest in a non-extraordinary transaction, meaning any transaction that is
in the ordinary course of business, on market terms or that is not likely to have a material impact on the company’s profitability,
assets or liabilities, approval by the board of directors is required for the transaction, unless the company’s articles of association
provide for a different method of approval. Any such transaction that is adverse to the company’s interests may not be approved
by the board of directors.
Approval first by the company’s audit committee and subsequently by the board
of directors is required for an extraordinary transaction (meaning, any transaction that is not in the ordinary course of business, not
on market terms or that is likely to have a material impact on the company’s profitability, assets or liabilities) in which an office
holder has a personal interest.
A director and any other office holder who has a personal interest in a transaction
which is considered at a meeting of the board of directors or the audit committee may generally (unless it is with respect to a transaction
which is not an extraordinary transaction) not be present at such a meeting or vote on that matter unless a majority of the directors
or members of the audit committee, as applicable, have a personal interest in the matter. If a majority of the members of the audit committee
or the board of directors have a personal interest in the approval of such a transaction then all of the directors may participate in
deliberations of the audit committee or board of directors, as applicable, with respect to such transaction and vote on the approval thereof
and, in such case, shareholder approval is also required.
78
Certain disclosure and approval requirements apply under Israeli law to certain transactions
with controlling shareholders, certain transactions in which a controlling shareholder has a personal interest and certain arrangements
regarding the terms of service or employment of a controlling shareholder.
For a description of the approvals required under Israeli law for compensation arrangements
of officers and directors, see above under Item 6.B “Compensation — Compensation of directors
and office holders.”
Shareholders’ duties
Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in
a customary manner toward the company and other shareholders and to refrain from abusing his or her power with respect to the company,
including, among other things, in voting at a general meeting and at shareholders’ class meetings with respect to the following
matters:
| ● |
an amendment to the company’s articles of association; |
| ● |
an increase of the company’s authorized share capital; |
| ● |
a merger; or |
| ● |
interested party transactions that require shareholders’ approval. |
In addition, a shareholder has a general duty to refrain from discriminating against
other shareholders.
Certain shareholders also have a duty of fairness toward the company. These shareholders
include any controlling shareholder, any shareholder who knows that it has the power to determine the outcome of a shareholders’
vote and any shareholder who has the power to appoint or to prevent the appointment of an office holder of the company or exercise any
other rights available to it under the company’s articles of association with respect to the company. The Companies Law does not
define the substance of this duty of fairness, except to state that the remedies generally available upon a breach of contract will also
apply in the event of a breach of the duty of fairness.
Exculpation, insurance and indemnification of office holders
Under the Companies Law, a company may not exculpate an office holder from liability
for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole
or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation
is included in its articles of association. Our amended and restated articles of association include such a provision. An Israeli company
may not exculpate a director from liability arising out of a prohibited dividend or distribution to shareholders.
An Israeli company may indemnify an office holder in respect of the following liabilities
and expenses incurred for acts performed as an office holder, either in advance of an event or following an event, provided a provision
authorizing such indemnification is contained in its articles of association:
| ● |
financial liability imposed on him or her in favor of another person pursuant to a judgment, settlement or arbitrator’s award
approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then
such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s
activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors
as reasonable under the circumstances, and such undertaking shall detail the above-mentioned events and amount or criteria; |
| ● |
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder (1) as a result of an investigation
or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i)
no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such
as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding
or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent
and (2) in connection with a monetary sanction; |
79
| ● |
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings
instituted against him or her by the company, on its behalf or by a third-party or in connection with criminal proceedings in which the
office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent; and |
| ● |
expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative
proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder
by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law, 1968, or the Israeli Securities Law.
|
An Israeli company may insure an office holder against the following liabilities incurred
for acts performed as an office holder if and to the extent provided in the company’s articles of association:
| ● |
a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis
to believe that the act would not prejudice the company; |
| ● |
a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office
holder; |
| ● |
a financial liability imposed on the office holder in favor of a third-party; |
| ● |
a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding;
and |
| ● |
expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative
proceeding instituted against him or her pursuant to certain provisions of the Israeli Securities Law. |
An Israeli company may not indemnify or insure an office holder against any of the following:
| ● |
a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe
that the act would not prejudice the company; |
| ● |
a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the
office holder; |
| ● |
an act or omission committed with intent to derive illegal personal benefit; or |
| ● |
a fine, monetary sanction or forfeit levied against the office holder. |
Under the Companies Law, exculpation, indemnification and insurance of office holders
must be approved by the compensation committee and the board of directors (and, with respect to directors and the chief executive officer,
by shareholders). However, under regulations promulgated under the Companies Law, the insurance of office holders shall not require shareholder
approval and may be approved by only the compensation committee, if the engagement terms are determined in accordance with the company’s
compensation policy, that compensation policy was approved by the shareholders by the same special majority required to approve a compensation
policy, provided that the insurance policy is on market terms and the insurance policy is not likely to materially impact the company’s
profitability, assets or obligations. On September 18, 2024, our annual general meeting approved a framework of terms and conditions for
the extension, renewal and entering into an insurance policy for directors’ and officers’ liability for a period of three
years.
Our amended and restated articles of association allow us to indemnify and insure our
office holders for any liability imposed on them as a consequence of an act (including any omission) which was performed by virtue of
being an office holder. Our office holders are currently covered by a directors’ and officers’ liability insurance policy.
We have entered into agreements with each of our directors and officer holders exculpating
them, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a breach of duty of care, and
undertaking to indemnify them to the fullest extent permitted by law. This indemnification is limited to events determined as foreseeable
by the board of directors based on our activities, and to an amount or according to criteria determined by the board of directors as reasonable
under the circumstances.
80
The maximum indemnification amount set forth in such agreements is limited to an amount
equal to the higher of (i) $350 million, (ii) 25% of our total shareholders’ equity as reflected in our most recent consolidated
financial statements prior to the date on which the indemnity payment is made, and (iii) ten percent (10%) of the Company Total Market
Cap (which shall mean the average closing price of our ordinary shares over the 30 trading days prior to the actual payment of indemnification
multiplied by the total number of our issued and outstanding shares as of the date of actual payment, other than indemnification for an
offering of securities to the public, including by a shareholder in a secondary offering, in which case the maximum indemnification amount
is limited to the gross proceeds raised by us and/or any selling shareholder in such public offering. The maximum amount set forth in
such agreements is in addition to any amount paid (if paid) under insurance and/or by a third-party pursuant to an indemnification arrangement.
In the opinion of the SEC, indemnification of directors and office holders for liabilities
arising under the Securities Act is against public policy and therefore unenforceable.
D.
Employees
We believe that our corporate culture and our relationship with our employees contribute
to our success. Our employees are continuously innovating, and our structure rewards productivity. Set forth below is a chart showing
the number of people we employed at the times indicated:
|
As of December 31, |
||||||||||||
|
2025(*) |
|
2024(*) |
2023(*) |
|||||||||
|
Total Employees |
528 |
762 |
775 |
|||||||||
|
Located in Israel |
459 |
637 |
623 |
|||||||||
|
Located in the United States |
62 |
118 |
144 |
|||||||||
|
Located in Europe |
7 |
7 |
8 |
|||||||||
|
In Research and Development |
246 |
369 |
332 |
|||||||||
|
In Marketing |
96 |
157 |
204 |
|||||||||
|
In General and Administration |
103 |
109 |
111 |
|||||||||
|
In Customer Care |
83 |
127 |
128 |
|||||||||
(*) The numbers of employees set forth in this table do not include contractors.
As of December 31, 2025, we had 528 employees compared with 762 employees we had on
December 31, 2024, reflecting an approximate 30% reduction. The decrease primarily resulted from restructuring initiatives undertaken
in September 2025 as part of the Company’s focus on AI initiatives, which involved a reduction in force across various departments
to streamline our organization, sharpen our product focus, upgrade our technology infrastructure, and accelerate our evolution into an
AI-first company.
In regard to our Israeli employees, Israeli labor laws govern the length of the workday,
minimum wages for employees, procedures for hiring and dismissing employees, determination of severance pay, annual leave, sick days,
advance notice of termination of employment, equal opportunity and anti-discrimination laws and other conditions of employment. Subject
to certain exceptions, Israeli law generally requires severance pay upon the retirement, death or dismissal of an employee, and requires
us and our employees to make payments to the National Insurance Institute, which is similar to the U.S. Social Security Administration.
Our employees have pension plans that comply with the applicable Israeli legal requirements and we make monthly contributions to severance
pay funds for all employees, which cover potential severance pay obligations.
None of our employees is represented by a labor union or work under any collective bargaining
agreements. Extension orders issued by the Israeli Ministry of Economy and Industry apply to us and affect matters such as cost-of-living
adjustments to salaries, length of working hours and week, recuperation pay, travel expenses and pension rights.
We have never experienced labor-related work stoppages or strikes and believe that our
relations with our employees are satisfactory.
81
E.
Share Ownership
For information regarding the share ownership of directors and officers, see Item 7.A.
“Major Shareholders and Related Party Transactions—Major Shareholders.” For
information as to our equity incentive plans, see Item 6.B. “Directors, Senior Management and Employees—Compensation—Share
Option Plans.”
F.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation.
None.
Item 7. Major Shareholders
and Related Party Transactions
A.
Major Shareholders
The following table sets forth information with respect to the beneficial ownership
of our shares as of March 1, 2026, by:
| ● |
each person or entity known by us to own beneficially more than 5% of our outstanding shares; |
| ● |
each of our directors and senior management individually; and |
| ● |
all of our senior management and directors as a group. |
The beneficial ownership of ordinary shares is determined in accordance with the SEC
rules and generally includes any ordinary shares over which a person exercises sole or shared voting or investment power. For purposes
of the table below, we deem shares subject to options that are currently exercisable or exercisable within 60 days of March 1, 2026, and
restricted share units that shall vest within 60 days of March 1, 2026, to be outstanding and to be beneficially owned by the person holding
the options or restricted share units for the purposes of computing the percentage ownership of that person but we do not treat them as
outstanding for the purpose of computing the percentage ownership of any other person. The percentage of shares beneficially owned is
based on 35,950,728 ordinary shares outstanding as of March 1, 2026.
All of our shareholders, including the shareholders listed below, have the same voting
rights attached to their ordinary shares. Unless otherwise noted below, each shareholder’s address is 8 Eliezer Kaplan St., Tel
Aviv 6473409, Israel.
82
A description of any material relationship that our principal shareholders have had
with us or any of our affiliates since January 1, 2025, is included under Item 7.B. “Major Shareholders
and Related Party Transactions—Certain relationships and related party transactions.”
|
Name of beneficial owner |
Number |
% |
||||||
|
Principal Shareholders |
||||||||
|
Ameriprise Financial, Inc.(1)
|
2,690,204 |
7.5 |
% | |||||
|
Directors and Senior Management |
||||||||
|
Micha Kaufman(2)
|
3,271,503 |
8.8 |
% | |||||
|
Ofer Katz(3) |
544,057 |
1.5 |
% | |||||
|
Esti Levy Dadon |
* |
* |
||||||
|
Jinjin Qian |
* |
* |
||||||
|
Matti Yahav |
* |
* |
||||||
|
Sharon Steiner |
* |
* |
||||||
|
Yossi Levin |
* |
* |
||||||
|
Adam Fisher |
* |
* |
||||||
|
Yael Garten |
* |
* |
||||||
|
Ron Gutler |
* |
* |
||||||
|
Gili Iohan |
* |
* |
||||||
|
Jonathan Kolber(4)
|
2,088,143 |
5.8 |
% | |||||
|
Nir Zohar |
* |
* |
||||||
|
All office holders and directors as a group (13 persons) |
6,653,933 |
17.6 |
% | |||||
* less than 1%
| (1) |
Based solely on a Schedule 13G filed on November 14, 2025, Ameriprise Financial, Inc. has shared voting power over 2,266,168 ordinary
shares, and shared dispositive power over 2,690,204 ordinary shares. Columbia Management Investment Advisers, LLC, a subsidiary of Ameriprise
Financial, Inc., has shared voting power over 2,266,111 ordinary shares, and shared dispositive power over 2,512,995 ordinary shares.
The address of Ameriprise Financial, Inc. is 145 Ameriprise Financial Center, Minneapolis, MN 55474 and the address of Columbia Management
Investment Advisers, LLC is 290 Congress Street, Boston, MA 02210. |
| (2) |
Based on information available to us, Mr. Kaufman holds 2,082,552 ordinary shares directly and 1,188,951 ordinary shares underlying
options that are currently exercisable within 60 days of March 1, 2026, at a weighted-average exercise price of $71.7, which expire between
2026 and 2030. |
| (3) |
Based on information available to us, Mr. Katz holds 289,203 ordinary shares directly and 254,854 ordinary shares underlying options
that are currently exercisable within 60 days of March 1, 2026, at a weighted-average exercise price of $89.95, which expire between 2027
and 2030. |
| (4) |
Based on information reported on a Schedule 13G/A filed on July 31, 2025 and information available to us, Mr. Kolber’s holdings
represent (a) 264,366 ordinary shares held by Mr. Kolber directly, (b) 1,639,665 ordinary shares held by Anfield Ltd., over which Mr.
Kolber has sole voting power, and (c) 184,112 ordinary shares held by Artemis Asset Holding Limited, on behalf of the Jonathan Kolber
Bare Trust, of which Mr. Kolber is the sole beneficiary. Mr. Kolber may be deemed to have beneficial ownership of all of these ordinary
shares, and his business address is 12 Abba Even Blvd, Herzliya, Israel 4672530. |
To our knowledge, other than with respect to the holdings of Wellington Management Group
LLP and the Goldman Sachs Group, Inc. and other holdings as reflected in our other filings with the SEC and this Annual Report, there
has been no significant change in the percentage ownership held by any major shareholder since January 1, 2023. The major shareholders
listed above do not have voting rights with respect to their ordinary shares that are different from the voting rights of other holders
of our ordinary shares.
As the majority of our shares are held in book-entry form, we are not aware of the identity
of all of our shareholders. As of March 1, 2026, we had 74,201 ordinary shares held by 11 U.S. resident shareholders of record, not including
Cede & Co., the nominee of The Depository Trust Company.
B.
Related Party Transactions
Our policy is to enter into transactions with related parties on terms that, on the
whole, are no more or less favorable than those available from unaffiliated third parties. Based on our experience in the business sectors
in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described
below met this policy standard at the time they occurred.
83
The following is a description of our related party transactions, as defined under Item
7.B of Form 20-F, since January 1, 2025.
Agreements with directors and officer holders
Employment agreements. We entered into employment
agreements with each of our office holders. The agreements provide for the terms of each individual’s employment or service with
the Company, as applicable.
Options and restricted share units. Since our
inception, we have granted options to purchase our ordinary shares and restricted share units to our office holders and certain of our
directors. We describe our share option plans under Item 6.B. “Directors, Senior Management and
Employees—Compensation—Share Option Plans.”
Exculpation, indemnification and insurance.
Our amended and restated articles of association permit us to exculpate, indemnify and insure our office holders to the fullest extent
permitted by the Companies Law. We have entered into agreements with certain of our office holders, exculpating them from a breach of
their duty of care to us to the fullest extent permitted by law and undertaking to indemnify them to the fullest extent permitted by law,
subject to certain exceptions, including with respect to liabilities resulting from the IPO to the extent that these liabilities are not
covered by insurance. See Item 6.C. “Directors, Senior Management and Employees—Board Practices—Exculpation,
insurance and indemnification of office holders.”
Lease Agreement with Wix.Com Ltd.
In October 2025, we entered into a sub-lease agreement with Wix.com Ltd. for the sub-lease
of 7,989 square meters (85,993 square foot) of campus space starting as of January 1, 2027. In addition to the campus space, Wix.com Ltd.
will provide us with ancillary services. The agreement is for an initial term of 5 years with an option for additional 5 years. Each party
will have the option to terminate the agreement with a 12 months written prior notice, provided that termination before January 1, 2030,
will be subject to an early termination fee. The total fees to be paid to Wix.com Ltd. as part of the sub-lease agreement are 1,269,277
NIS per month linked to the Israeli Consumer Price Index (except for the portion of the fees paid for improvements to the sub-leased premises)
with a 2.75% increase in October 2027 and an additional 2% increase in October 2032 (subject to the extension of the sub-lease agreement).
In addition, we will reimburse Wix.com Ltd. on the ancillary services on a cost basis or based on our and their employee ratio in the
campus, as applicable. Nir Zohar, our board member, is the President of Wix.com Ltd. and Ron Gutler, our lead independent director, is
a director at Wix.com Ltd.
C.
Interests of Experts and Counsel
None.
Item 8. Financial Information
A.
Consolidated Statements and Other Financial Information
Consolidated Financial Statements
See Item 18. “Financial Statements.”
Legal and Arbitration Proceedings
From time to time, we may be involved in various claims and legal proceedings related
to claims arising out of our operations. We are not currently a party to any material legal proceedings, including any such proceedings
that are pending or threatened, of which we are aware.
Dividend Policy
We have never declared or paid any dividends on our ordinary shares. We do not anticipate
paying any dividends in the foreseeable future. We currently intend to retain future earnings, if any, to finance operations and expand
our business. Our board of directors has sole discretion whether to pay dividends. If our board of directors decides to pay dividends,
the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial
condition, contractual restrictions and other factors that our directors may deem relevant.
The Companies Law imposes restrictions on our ability to declare and pay dividends.
Payment of dividends may be subject to Israeli withholding taxes. See Item 10.E. “Taxation—Taxation
and government programs—Israeli tax considerations and government programs” for additional information.
84
B.
Significant Changes
None.
Item 9.
The Offer and Listing
A.
Offer and Listing Details
Our ordinary shares commenced trading on the New York Stock Exchange on June 13, 2019,
under the trading symbol “FVRR.” Prior to this, no public market existed for our ordinary shares.
B.
Plan of Distribution
Not applicable.
C.
Markets
Our ordinary shares commenced trading on the New York Stock Exchange on June 13, 2019,
under the symbol “FVRR.”
D.
Selling Shareholders
Not Applicable
E.
Dilution
Not applicable.
F.
Expenses of the Issue
Not applicable.
Item 10. Additional Information
A.
Share Capital
Not applicable.
B.
Memorandum and Articles of Association
A copy of our amended and restated articles of association is attached as Exhibit 1.1
to this Annual Report. Other than as set forth below, the information called for by this Item is attached as Exhibit 2.1 to this Annual
Report and is incorporated by reference into this Annual Report.
Share Capital
As of December 31, 2025, we had 36,093,139 ordinary shares outstanding.
Exchange controls
There are currently no Israeli currency control restrictions on remittances of dividends
on our ordinary shares, proceeds from the sale of the ordinary shares or interest or other payments to non-residents of Israel, except
for shareholders who are subjects of countries that are, or have been, in a state of war with Israel.
Shareholder meetings
Under Israeli law, we are required to hold an annual general meeting of our shareholders
once every calendar year that must be held no later than 15 months after the date of the previous annual general meeting. All meetings
other than the annual general meeting of shareholders are referred to in our amended and restated articles of association as special general
meetings. Our board of directors may call special general meetings whenever it sees fit, at such time and place, within or outside of
Israel, as it may determine. In addition, the Companies Law provides that our board of directors is required to convene a special general
meeting upon the written request of (a) any two or more of our directors or such number of directors equal to one-quarter of the directors
then at office; and/or (b) as a company listed on an exchange in the U.S., one or more shareholders holding, in the aggregate, (i) 10%
or more of our outstanding issued shares and 1% or more of our outstanding voting power or (ii) 10% or more of our outstanding voting
power.
85
Under the Companies Law, one or more shareholders holding at least 1% of the voting
rights at the general meeting of shareholders may request that the board of directors include a matter in the agenda of a general meeting
of shareholders to be convened in the future, provided that it is appropriate to discuss such a matter at the general meeting. Notwithstanding
the foregoing, as a company listed on an exchange outside of Israel, a matter relating to the appointment or removal of a director may
only be requested by one or more shareholders holding at least 5% of the voting rights at the general meeting of the shareholders.
Subject to the provisions of the Companies Law and the regulations promulgated thereunder,
shareholders entitled to participate and vote at general meetings are the shareholders of record on a date to be decided by the board
of directors, which, as a company listed on an exchange outside Israel, may be between four and 60 days prior to the date of the meeting.
Furthermore, the Companies Law requires that resolutions regarding the following matters must be passed at a general meeting of our shareholders:
| ● |
amendments to our articles of association; |
| ● |
appointment, termination or the terms of service of our auditors; |
| ● |
appointment of external directors (if applicable); |
| ● |
approval of certain related party transactions; |
| ● |
increases or reductions of our authorized share capital; |
| ● |
a merger; and |
| ● |
the exercise of our board of director’s powers by a general meeting, if our board of directors is unable to exercise its powers
and the exercise of any of its powers is required for our proper management. |
The Companies Law requires that a notice of any annual general meeting or special
general meeting be provided to shareholders at least 21 days prior to the meeting and if the agenda of the meeting includes, among other
things, the appointment or removal of directors, the approval of transactions with office holders or interested or related parties or
the approval of a merger, notice must be provided at least 35 days prior to the meeting. Under the Companies Law and our amended and restated
articles of association, shareholders are not permitted to take action by way of written consent in lieu of a meeting.
Borrowing powers
Pursuant to the Companies Law and our amended and restated articles of association,
our board of directors may exercise all powers and take all actions that are not required under law or under our amended and restated
articles of association to be exercised or taken by our shareholders, including the power to borrow money for Company purposes.
C.
Material Contracts
The following is a summary of each material contract, other than material contracts
entered into in the ordinary course of business, to which we are or have been a party, for the two years immediately preceding the date
of this Annual Report:
| ● |
Form of Indemnification Agreement (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 20-F (File
No. 001-38929) filed with the SEC on February 17, 2022). See Item 6. “Directors, Senior Management
and Employees” for more information about this document. |
| ● |
Compensation Policy for Directors and Officers (incorporated by reference to Exhibit 99.2 to the Company’s Form 6-K (File No.
001-38929) filed with the SEC on October 27, 2023). See Item 6. “Directors, Senior Management and
Employees” for more information about this document. |
| ● |
2011 Share Option Plan, as amended and restated (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement
on Form F-1 (File No. 333-231533) filed with the SEC on May 16, 2019). See Item 6. “Directors,
Senior Management and Employees” for more information about this document. |
| ● |
Amendment No. 2 to 2011 Share Option Plan (incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement
on Form F-1 (File No. 333-231533) filed with the SEC on May 16, 2019). See Item 6. “Directors,
Senior Management and Employees” for more information about this document. |
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| ● |
Amendment No. 3 to 2011 Share Option Plan (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement
on Form F-1 (File No. 333-231533) filed with the SEC on May 16, 2019). See Item 6. “Directors,
Senior Management and Employees” for more information about this document. |
| ● |
United States Sub-Plan to the 2011 Share Option Plan, as amended and restated (incorporated by reference to Exhibit 10.6 to the Company’s
Registration Statement on Form F-1 (File No. 333-231533) filed with the SEC on May 16, 2019). See Item 6. “Directors,
Senior Management and Employees” for more information about this document. |
| ● |
Amendment No. 2 to the United States Sub-Plan to the 2011 Share Option Plan (incorporated by reference to Exhibit 10.7 to the Company’s
Registration Statement on Form F-1 (File No. 333-231533) filed with the SEC on May 16, 2019). See Item 6. “Directors,
Senior Management and Employees” for more information about this document. |
| ● |
2019 Share Incentive Plan (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form F-1 (File
No. 333-231533) filed with the SEC on June 3, 2019). See Item 6. “Directors, Senior Management
and Employees” for more information about this document. |
| ● |
2020 Employee Share Purchase Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form
S-8 (File No. 333- 248580) filed with the SEC on September 3, 2020). See Item 6. “Directors, Senior
Management and Employees” for more information about this document. |
| ● |
2020 Employee Share Purchase Plan Israeli Appendix. See Item 6. “Directors, Senior Management
and Employees” for more information about this document. |
D.
Exchange Controls
There are currently no Israeli currency control restrictions on remittances of dividends
on our ordinary shares, proceeds from the sale of the ordinary shares or interest or other payments to non-residents of Israel, except
for shareholders who are subjects of countries that are, or have been, in a state of war with Israel.
E.
Taxation
Taxation and government programs
The following description is not intended to constitute a complete analysis of all tax
consequences relating to the acquisition, ownership and disposition of our ordinary shares. You should consult your own tax advisor concerning
the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local,
foreign or other taxing jurisdiction.
Israeli tax considerations and government programs
The following is a brief summary of the material Israeli tax laws applicable to us,
and certain Israeli Government programs that benefit us. This section also contains a discussion of material Israeli tax consequences
concerning the ownership and disposition of our ordinary shares. This summary does not discuss all the aspects of Israeli tax law that
may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of investors subject
to special treatment under Israeli law. Examples of such investors include residents of Israel or traders in securities who are subject
to special tax regimes not covered in this discussion. To the extent that the discussion is based on new tax legislation that has not
yet been subject to judicial or administrative interpretation, we cannot assure you that the appropriate tax authorities or the courts
will accept the views expressed in this discussion. The discussion below is subject to change, including due to amendments under Israeli
law or changes to the applicable judicial or administrative interpretations of Israeli law, any such changes could affect the tax consequences
described below.
General corporate tax structure in Israel
Israeli companies are generally subject to corporate tax. The ordinary corporate tax
rate is 23% (as of 2025). However, the effective tax rate payable by a company that derives income from an Approved Enterprise, a Preferred
Enterprise, a Beneficiary Enterprise or a Technology Enterprise (as discussed below) may be considerably less. Capital gains derived by
an Israeli company are generally subject to the ordinary corporate tax rate.
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Law for the Encouragement of Industry (Taxes), 5729-1969
The Law for the Encouragement of Industry (Taxes), 5729-1969, generally referred to
as the Industry Encouragement Law, provides several tax benefits for “Industrial Companies.” We believe that we currently
qualify as an Industrial Company within the meaning of the Industry Encouragement Law.
The Industry Encouragement Law defines an “Industrial Company” as an Israeli
resident-company, of which 90% or more of its income in any tax year, other than income from certain government loans, is derived from
an “Industrial Enterprise” owned by it and located in Israel or in the “Area”, in accordance with the definition
under section 3A of the Israeli Income Tax Ordinance (New Version) 1961, or the Ordinance. An “Industrial Enterprise” is defined
as an enterprise which is held by an Industrial Company whose principal activity in a given tax year is industrial production.
The following corporate tax benefits, among others, are available to Industrial Companies:
| ● |
amortization of the cost of purchased patent, rights to use a patent, and know how, which are used for the development or advancement
of the Industrial Enterprise, over an eight-year period, commencing on the year in which such rights were first exercised; |
| ● |
under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies; and |
| ● |
expenses related to a public offering are deductible in equal amounts over three years commencing on the year of the offering.
|
Eligibility for benefits under the Industry Encouragement Law is not contingent upon
approval of any governmental authority.
There can be no assurance that we will continue to qualify as an Industrial Company
or that the benefits described above will be available in the future.
Tax benefits and grants for research and development
Israeli tax law allows, under certain conditions, a tax deduction
for expenditures, including capital expenditures, in scientific research in the fields of industry, agriculture, transportation or energy,
for the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:
| ● |
The expenditures are approved by the relevant Israeli government ministry, and the Israeli Innovation Authority; |
| ● |
The research and development must be for the promotion of the company; and |
| ● |
The research and development are carried out by or on behalf of the company seeking such tax deduction. |
The amount of such deductible expenses is reduced by the sum of any funds received
through government grants for the finance of such scientific research and development projects. No deduction under these research and
development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation
rules of the Ordinance. Expenditures that are unqualified under the conditions above are deductible in equal amounts over three years.
Every tax year, we apply to the National Authority for Technological Innovation,
previously known as the Israeli Office of the Chief Scientist, to which we refer to as IIA, for approval to allow a tax deduction for
all or most of research and development expenses during the year incurred. There can be no assurance that such application will be accepted.
Law for the Encouragement of Capital Investments, 5719-1959
The Law for the Encouragement of Capital Investments, 5719-1959, generally referred
to as the Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets).
The Investment Law was significantly amended effective as of January 1, 2011, or the
2011 Amendment, and as of January 1, 2017, or the 2017 Amendment. The 2011 Amendment introduced new benefits to replace those granted
in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment. The 2017 Amendment introduces new benefits
for Technological Enterprises, alongside the existing tax benefits.
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Tax benefits under the 2011 amendment
The 2011 Amendment cancelled the availability of the benefits granted under the Investment
Law prior to 2011 and, instead, introduced new benefits for income generated by a “Preferred Company” through its “Preferred
Enterprise” (as such terms are defined in the Investment Law) as of January 1, 2011. The definition of a Preferred Company includes
a company incorporated in Israel that is not fully owned by a governmental entity, and that has, among other things, Preferred Enterprise
status and is controlled and managed from Israel. Pursuant to the 2011 Amendment, a Preferred Company was entitled to a reduced corporate
tax rate of 16% and 7.5% (zone A), respectively, in 2017 and thereafter.
Dividends distributed to Israeli shareholders from income which is attributed to a “Preferred
Enterprise” are generally subject to withholding tax at source at the rate of 20% (in the case of non-Israeli shareholders - subject
to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate, 20% or such lower rate
as may be provided under the provisions of any applicable double tax treaty). However, if such dividends are paid to an Israeli company,
no tax is required to be withheld (although, if such dividends are subsequently distributed to individuals or a non-Israeli company, the
aforesaid will apply).
New tax benefits under the 2017 amendment that became effective
on January 1, 2017
The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published
on December 29, 2016, and is effective as of January 1, 2017. The 2017 Amendment provides new tax benefits for two types of “Technology
Enterprises,” as described below, and is in addition to the other existing tax beneficial programs under the Investment Law.
The 2017 Amendment provides that a technology company satisfying certain conditions
will qualify as a “Preferred Technology Enterprise” and will thereby enjoy a reduced corporate tax rate of 12% on income that
qualifies as “Preferred Technology Income”, as defined in the Investment Law. The tax rate is further reduced to 7.5% for
a Preferred Technology Enterprise located in development zone “A”. In addition, a Preferred Technology Company will enjoy
a reduced corporate tax rate of 12% on capital gain derived from the sale of certain “Benefitted Intangible Assets” (as defined
in the Investment Law) to a related foreign company if the Benefitted Intangible Assets were acquired from a foreign company on or after
January 1, 2017 for at least NIS 200 million, and the sale receives prior approval from the IIA.
The 2017 Amendment further provides that a technology company satisfying certain conditions
(group turnover of at least NIS 10 billion) will qualify as a “Special Preferred Technology Enterprise” and will thereby enjoy
a reduced corporate tax rate of 6% on “Preferred Technology Income” regardless of the company’s geographic location
within Israel. In addition, a Special Preferred Technology Enterprise will enjoy a reduced corporate tax rate of 6% on capital gain derived
from the sale of certain “Benefitted Intangible Assets” to a related foreign company if the Benefitted Intangible Assets were
either developed by the Special Preferred Enterprise or acquired from a foreign company on or after January 1, 2017, and the sale received
prior approval from IIA. A Special Preferred Technology Enterprise that acquires Benefitted Intangible Assets from a foreign company for
more than NIS 500 million will be eligible for these benefits for at least ten years, subject to certain approvals as specified in the
Investment Law.
Dividends distributed to Israeli shareholders by a Preferred Technology Enterprise or
a Special Preferred Technology Enterprise, paid out of Preferred Technology Income, are generally subject to withholding tax at source
at the rate of 20% (in the case of non-Israeli shareholders - subject to the receipt in advance of a valid certificate from the Israel
Tax Authority allowing for a reduced tax rate, 20% or such lower rate as may be provided in an applicable tax treaty). However, if such
dividends are paid to an Israeli company, no tax is required to be withheld (although, if such dividends are subsequently distributed
to individuals or a non-Israeli company, the aforesaid will apply). If such dividends are distributed to a foreign company that holds
solely or together with other foreign companies 90% or more in the Israeli company and other conditions are met, the withholding tax rate
will be 4%.
We evaluated the impact of the 2017 Amendment, and we generally meet the condition for
tax benefits as a “Preferred Technological Enterprise.
Law for Encouragement of Knowledge-Intensive Industry (Temporary Order) — 2023
The Law for Encouragement of Knowledge-Intensive Industry (Temporary Order) —
2023, generally referred to as the “Angels Law”, offers several incentives to promote investments in Israeli high-tech companies.
Notably, it allows a five-year amortization period for the acquisition cost of an Israeli high-tech company. To qualify for this tax benefit,
the following conditions must be met: (a) the acquiring entity must be an Israeli company with a Preferred Technological Enterprise (“PTE”)
status, (b) the target company must be an Israeli company that is either a PTE or a research and
development company, as defined by the Angels Law.
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In 2024, the Company acquired AutoDS Ltd., an Israeli company that provides a leading
all-in-one drop shipping tool for ecommerce sellers, and in 2025, the Company acquired Yaballe Ltd., an Israeli company that provides
an AI-powered lifecycle platform automating the entire operation for dropshippers. The Company expects that it and each of AutoDS Ltd.
and Yaballe Ltd. will meet the necessary criteria to benefit from the tax incentives under the Angels Law.
Taxation of our shareholders
Capital gains taxes applicable to Israeli resident
shareholders. Capital gain accrued by Israeli individual residents on the sale of our ordinary shares will be taxed at the rate
of 25%. However, if such shareholder is a “Significant Shareholder” (i.e., a person who holds, directly or indirectly, alone
or together with another person who collaborates with such person on a permanent basis, 10% or more of any of the company’s “means
of control” (including, among other things, the right to receive profits of the company, voting rights, the right to receive the
company’s liquidation proceeds and the right to appoint a director)) at the time of sale or at any time during the preceding 12-month
period, the applicable tax rate is 30%.
Individual shareholders dealing in securities in Israel are taxed at their marginal
tax rates applicable to business income (up to 47% in 2025, including, Surtax, if any, as described below) unless the benefiting provisions
of an applicable treaty apply.
Capital gains taxes applicable to non-Israeli resident
shareholders. A non-Israeli resident who derives capital gains from the sale of shares in an Israeli resident company that were
purchased after the company was listed for trading on a stock exchange outside of Israel, will be exempt from Israeli tax so long as the
gain from the sale of such shares was not attributed to a permanent establishment that the non-resident maintains in Israel. However,
non-Israeli corporations will not be entitled to the foregoing exemption if Israeli residents: (i) have a controlling interest of more
than 25% in such non-Israeli corporation or (ii) are the beneficiaries of, or are entitled to, 25% or more of the revenues or profits
of such non-Israeli corporation, whether directly or indirectly. In addition, such exemption is not applicable to a person whose gains
from selling or otherwise disposing of the shares are deemed to be business income.
Additionally, a sale of securities by a non-Israeli resident may be exempt from Israeli
capital gains tax under the provisions of an applicable tax treaty. For example, under the Convention Between the Government of the United
States of America and the Government of the State of Israel with respect to Taxes on Income, as amended, or the U.S. Israel Tax Treaty,
the sale, exchange or other disposition of shares by a shareholder who is a United States resident (for purposes of the treaty) holding
the shares as a capital asset and is entitled to claim the benefits afforded to such a resident by the U.S. Israel Tax Treaty, or a Treaty
U.S. Resident, is generally exempt from Israeli capital gains tax unless: (i) the capital gain arising from such sale, exchange or disposition
is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or disposition is attributed to
royalties; (iii) the capital gain arising from the such sale, exchange or disposition is attributed to a permanent establishment in Israel,
under certain terms; (iv) such Treaty U.S. Resident holds, directly or indirectly, shares representing 10% or more of the voting capital
during any part of the 12 month period preceding the disposition, subject to certain conditions; or (v) such Treaty U.S. Resident is an
individual and was present in Israel for 183 days or more during the relevant taxable year.
In some instances where our shareholders may be liable for Israeli tax on the sale of
their ordinary shares, the payment of the consideration may be subject to the withholding of Israeli tax at source. Shareholders may be
required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale
(i.e., resident certificate or other documentation). Specifically, in transactions involving a sale of all of the shares of an Israeli
resident company, in the form of a merger or otherwise, the Israel Tax Authority may require from shareholders who are not liable for
Israeli tax to sign declarations in forms specified by this authority or obtain a specific exemption from the Israel Tax Authority to
confirm their status as non-Israeli resident, and, in the absence of such declarations or exemptions, may require the purchaser of the
shares to withhold taxes at source.
A detailed return, including a computation of the tax due, must be filed and an advance
payment must be paid on January 31 and July 30 of each tax year for sales of securities traded on a stock exchange made within the previous
six months. However, if all tax due was withheld at the source according to applicable provisions of the Ordinance and the regulations
promulgated thereunder, the return does not need to be filed provided that (i) such income was not generated from business conducted in
Israel by the taxpayer, (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is required
to be filed and an advance payment does not need to be made, and (iii) the taxpayer is not obligated to pay Surtax (as further explained
below). Capital gains are also reportable on an annual income tax return.
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Taxation of non-Israeli shareholders on receipt of
dividends. Non-Israeli residents (either individuals or corporations) are generally subject to Israeli income tax on the receipt
of dividends paid on our ordinary shares at the rate of 25%, which tax will be withheld at source, unless relief is provided in a treaty
between Israel and the shareholder’s country of residence (subject to the receipt in advance of a valid certificate from the Israel
Tax Authority allowing for a reduced tax rate). With respect to a person who is a “Significant Shareholder” at the time of
receiving the dividend or at any time during the preceding twelve months, the applicable tax rate is 30%. Such dividends are generally
subject to Israeli withholding tax at a rate of 25% so long as the shares are registered with a nominee company (whether the recipient
is a Significant Shareholder or not) and, subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing
for a reduced tax rate, 15% if the dividend is distributed from income attributed to an Approved Enterprise or a Beneficiary Enterprise
and 20% if the dividend is distributed from income attributed to a Preferred Enterprise or Preferred Technology Enterprise or such lower
rate as may be provided in an applicable tax treaty. For example, under the United States Israel Tax Treaty, the maximum rate of tax withheld
at source in Israel on dividends paid to a holder of our ordinary shares who is a Treaty U.S. Resident is 25%. However, generally, the
maximum rate of withholding tax on dividends, not generated by a Preferred Enterprise or Beneficiary Enterprise, that are paid to a United
States corporation holding 10% or more of the outstanding voting capital throughout the tax year in which the dividend is distributed
as well as during the previous tax year, is 12.5%, provided that not more than 25% of the gross income for such preceding year consists
of certain types of dividends and interest. Notwithstanding the foregoing, dividends distributed from income attributed to an Approved
Enterprise, Beneficiary Enterprise or Preferred Enterprise are not entitled to such reduction under the tax treaty but are subject to
a withholding tax rate of 15% for a shareholder that is a U.S. corporation, provided that the conditions related to 10% or more holding
and to our gross income for the previous year (as set forth in the previous sentence) is met. If the dividend is attributable partly to
income derived from an Approved Enterprise, Benefited Enterprise or Preferred Enterprise, and partly to other sources of income, the withholding
rate will be a blended rate reflecting the relative portions of the two types of income. We cannot assure you that we will designate the
profits that we may distribute in a way that will reduce shareholders’ tax liability.
A non-Israeli resident who receives dividends from which tax was withheld is generally
exempt from the obligation to file tax returns in Israel with respect to such income, provided that (i) such income was not generated
from business conducted in Israel by the taxpayer, (ii) the taxpayer has no other taxable sources of income in Israel with respect to
which a tax return is required to be filed, and (iii) the taxpayer is not obligated to pay Surtax (as further explained below).
Surtax. Subject to the provisions of an applicable
tax treaty, individuals subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) are also
subject to an additional tax at a rate of 3% on annual income (including, but not limited to, dividends, interest and capital gain) exceeding
NIS 721,560 for 2025, which amount is generally linked to the annual change in the Israeli consumer price index (with the exception that
based on Israeli new legislation such amount, and certain other statutory amounts will not be linked to the Israeli consumer price index
for the years 2025-2027). According to new legislation effective as of January 1, 2025, an additional 2% Surtax is imposed on Capital-Sourced
Income (defined as income from any source other than employment income, business income or income from “personal effort”),
provided that the Individual’s Capital Sourced Income exceeds the specified threshold of NIS 721,560. This new additional surtax
applies, among other things, to income from capital gains, dividends, interest, rental income, or the sale of real property.
Estate and Gift Tax. Israeli
law presently does not impose estate or gift taxes.
United States federal income taxation
The following is a description of the material U.S. federal income tax consequences
of the acquisition, ownership and disposition of our ordinary shares. This description addresses only the U.S. federal income tax consequences
to U.S. Holders (as defined below) that hold our ordinary shares as capital assets within the meaning of Section 1221 of the Internal
Revenue Code of 1986, as amended, or the Code, and that have the U.S. dollar as their functional currency. This discussion is based upon
the Code, applicable U.S. Treasury regulations, administrative pronouncements and judicial decisions, in each case as in effect on the
date hereof, all of which are subject to change (possibly with retroactive effect). No ruling will be requested from the Internal Revenue
Service, or the IRS, regarding the tax consequences of the acquisition, ownership or disposition of the ordinary shares, and there can
be no assurance that the IRS will agree with the discussion set out below. This summary does not address any U.S. tax consequences other
than U.S. federal income tax consequences (e.g., the estate and gift tax or the Medicare tax on net investment income) and does not address
any state, local or non-U.S. tax consequences.
91
This description does not address tax considerations applicable to holders that may
be subject to special tax rules, including, without limitation:
| ● |
banks, financial institutions or insurance companies; |
| ● |
real estate investment trusts or regulated investment companies; |
| ● |
dealers or brokers; |
| ● |
traders that elect to mark to market; |
| ● |
tax exempt entities or organizations; |
| ● |
holders subject to alternative minimum tax; |
| ● |
“individual retirement accounts” and other tax deferred accounts; |
| ● |
certain former citizens or long term residents of the United States; |
| ● |
persons that are resident or ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States;
|
| ● |
persons that acquired our ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation for
the performance of services; |
| ● |
persons holding our ordinary shares as part of a “hedging,” “integrated” or “conversion” transaction
or as a position in a “straddle” for U.S. federal income tax purposes; |
| ● |
partnerships or other pass through entities and persons holding the ordinary shares through partnerships or other pass through entities;
|
| ● |
persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar; |
| ● |
persons holding ordinary shares in connection with a trade or business outside the United States; or |
| ● |
holders that own directly, indirectly or through attribution 10% or more of the total voting power or value of all of our outstanding
shares. |
For purposes of this description, a “U.S. Holder” is a beneficial owner
of our ordinary shares that, for U.S. federal income tax purposes, is:
| ● |
an individual who is a citizen or resident of the United States; |
| ● |
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the
laws of the United States or any state thereof, including the District of Columbia; |
| ● |
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
| ● |
a trust if such trust has validly elected to be treated as a United States person for U.S. federal income tax purposes or if (1)
a court within the United States is able to exercise primary supervision over its administration and (2) one or more United States persons
have the authority to control all of the substantial decisions of such trust. |
If a partnership (or any other entity or arrangement treated as a partnership for
U.S. federal income tax purposes) holds our ordinary shares, the tax treatment of a partner in such partnership will generally depend
on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax advisor as to
the particular U.S. federal income tax consequences of acquiring, owning and disposing of our ordinary shares in its particular circumstance.
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You should consult your tax advisor with respect to the U.S. federal, state, local
and foreign tax consequences of acquiring, owning and disposing of our ordinary shares.
Passive Foreign Investment Company considerations
There can be no assurance that we will not be classified as a passive foreign investment
company, or PFIC, which could result in adverse U.S. federal income tax consequences to U.S. Holders of our ordinary shares.
If a non-U.S. company is classified as a PFIC in any taxable year, a U.S. Holder
of such PFIC’s shares will be subject to special rules generally intended to reduce or eliminate any benefits from the deferral
of U.S. federal income tax that such U.S. Holder could derive from investing in a non-U.S. company that does not distribute all of its
earnings on a current basis.
In general, a non-U.S. corporation will be classified as a PFIC for any taxable year
if at least (i) 75% of its gross income is classified as “passive income” or (ii) 50% of its gross assets (generally determined
on the basis of a quarterly average) produce or are held for the production of passive income, or the asset test. For these purposes,
cash and other assets readily convertible into cash or that do or could generate passive income are considered passive assets and the
value of goodwill and other unbooked intangible assets is generally taken into account. Passive income generally includes, among other
things, rents, dividends, interest, royalties, gains from disposition of passive assets and gains from commodities and securities transactions.
In making this determination, the non-U.S. corporation is treated as earning its proportionate share of any income and owning its proportionate
share of any assets of any corporation in which it directly or indirectly holds 25% or more (by value) of the stock.
The legislative history of the relevant Code provisions indicates that the total
value of a publicly-traded foreign corporation’s assets generally will be treated as equal to the sum of the aggregate value of
its outstanding stock plus its liabilities for purposes of the asset test, and publicly-traded foreign corporations often employ such
market capitalization method to value their assets. However, the IRS has not issued guidance conclusively addressing how to value a publicly-traded
foreign corporation’s assets for PFIC purposes. The trading value of our ordinary shares has in the past, and is likely to continue
to fluctuate. Considering the volatile market conditions, we believe it may be appropriate to employ alternative methods to determine
the value of our assets other than the market capitalization method. After considering the total value of our assets determined under
an alternative valuation method that takes into account, in addition to the trading value of our ordinary shares, a control premium, we
believe that we were not a PFIC for the taxable year ended December 31, 2025. However, if the market capitalization method were determined
to be the only appropriate method of valuing our assets, there is a significant risk that we would be treated as a PFIC for the taxable
year ended December 31, 2025. There can be no certainty that the IRS will not challenge our position and determine that based on the IRS’s
interpretation of the asset test, we were a PFIC for the taxable year ended December 31, 2025.
Because PFIC status is based on our income, assets and activities for the entire
taxable year, which are subject to change, it is not possible to determine whether we will be characterized as a PFIC for our current
taxable year or future taxable years until after the close of the applicable taxable year.
In addition, we have a substantial balance of cash and other liquid investments,
which are passive assets for purposes of the PFIC determination. Whether we are treated as a PFIC in the current taxable year or in future
taxable years will depend in part on how, and how quickly, we spend or otherwise utilize these passive assets. Furthermore, the application
of the PFIC rules is subject to uncertainty and the IRS or a court may disagree with our determinations, including the manner in which
we determine the value of our assets and the percentage of our assets that are passive assets under the PFIC rules. Therefore, there can
be no assurance regarding our PFIC status for our prior taxable year, our current taxable year or for any future taxable year.
Under the PFIC rules, if we were considered a PFIC at any time that you hold our
ordinary shares, we would continue to be treated as a PFIC with respect to your investment in all succeeding years during which you own
our ordinary shares (regardless of whether we continue to meet the tests described above) unless (i) we have ceased to be a PFIC and (ii)
you have made a “deemed sale” election under the PFIC rules. If such election is made, you will be deemed to have sold your
ordinary shares at their fair market value on the last day of the last taxable year in which we were a PFIC, and any gain from the deemed
sale would be subject to the rules described in the following paragraph. After the deemed sale election, so long as we do not become a
PFIC in a subsequent taxable year, the ordinary shares with respect to which such election was made will not be treated as shares in a
PFIC. You should consult your own tax advisor as to the possibility and consequences of making a deemed sale election.
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If we are considered a PFIC at any time that you hold ordinary shares, unless (i)
we have ceased to be a PFIC and you have previously made the deemed sale election described above or (ii) you make one of the elections
described below, any gain recognized by you on a sale or other disposition of the ordinary shares, as well as the amount of any “excess
distribution” (defined below) received by you, would be allocated ratably over your holding period for the ordinary shares. The
amounts allocated to the taxable year of the sale or other disposition (or the taxable year of receipt, in the case of an excess distribution)
and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject
to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would
be imposed. For purposes of these rules, an excess distribution is the amount by which any distribution received by you on your ordinary
shares in a taxable year exceeds 125% of the average of the annual distributions on the ordinary shares during the preceding three taxable
years or your holding period, whichever is shorter. Distributions below the 125% threshold are treated as dividends taxable in the year
of receipt and are not subject to prior highest tax rates or the interest charge.
If we are treated as a PFIC with respect to you for any taxable year, you will be
deemed to own shares in any entities in which we own equity that are also PFICs, or lower tier PFICs, and you may be subject to the tax
consequences described above with respect to the shares of such lower tier PFIC you would be deemed to own.
Mark to market elections
If we are a PFIC for any taxable year during which you hold ordinary shares, then in
lieu of being subject to the tax and interest charge rules discussed above, you may make an election to include gain on the ordinary shares
as ordinary income under a mark to market method, provided that such ordinary shares are “marketable.” The ordinary shares
will be marketable if they are “regularly traded” on a qualified exchange or other market, as defined in applicable U.S. Treasury
regulations, such as the New York Stock Exchange (or on a foreign stock exchange that meets certain conditions). For these purposes, the
ordinary shares will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities,
on at least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded.
However, because a mark to market election cannot be made for any lower tier PFICs that we may own, you will generally continue to be
subject to the PFIC rules discussed above with respect to your indirect interest in any investments we own that are treated as an equity
interest in a PFIC for U.S. federal income tax purposes. As a result, it is possible that any mark to market election with respect to
the ordinary shares will be of limited benefit.
If you make an effective mark to market election, in each year that we are a PFIC, you
will include in ordinary income the excess of the fair market value of your ordinary shares at the end of the year over your adjusted
tax basis in the ordinary shares. You will be entitled to deduct as an ordinary loss in each such year the excess of your adjusted tax
basis in the ordinary shares over their fair market value at the end of the year, but only to the extent of the net amount previously
included in income as a result of the mark to market election. If you make an effective mark to market election, in each year that we
are a PFIC, any gain that you recognize upon the sale or other disposition of your ordinary shares will be treated as ordinary income
and any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of the
mark to market election.
Your adjusted tax basis in the ordinary shares will be increased by the amount of any
income inclusion and decreased by the amount of any deductions under the mark to market rules discussed above. If you make an effective
mark to market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless
the ordinary shares are no longer regularly traded on a qualified exchange or the IRS consents to the revocation of the election. You
should consult your tax advisor about the availability of the mark to market election, and whether making the election would be advisable
in your particular circumstances.
Qualified electing fund elections
In certain circumstances, a U.S. equity holder in a PFIC may avoid the adverse tax and
interest charge regime described above by making a “qualified electing fund” election to include in income its share of the
corporation’s income on a current basis. However, you may make a qualified electing fund election with respect to the ordinary shares
only if we agree to furnish you annually with a PFIC annual information statement as specified in the applicable U.S. Treasury regulations.
We do not intend to provide the information necessary for you to make a qualified electing fund election if we are classified as a PFIC.
Therefore, you should assume that you will not receive such information from us and would therefore be unable to make a qualified electing
fund election with respect to any of our ordinary shares were we to be or become a PFIC.
94
Tax reporting
If you own ordinary shares during any year in which we are a PFIC, you generally will
be required to file an IRS Form 8621 with respect to us, generally with your federal income tax return for that year. If we are a PFIC
for a given taxable year, then you should consult your tax advisor concerning your annual filing requirements.
You should consult your tax advisor regarding whether we are a PFIC as well as the potential
U.S. federal income tax consequences of holding and disposing of our ordinary shares if we are or become classified as a PFIC, including
the possibility of making a mark to market election in your particular circumstances.
Distributions
Subject to the discussion under “Passive Foreign
Investment Company considerations” above, the gross amount of any distribution made to you with respect to our ordinary shares,
before reduction for any Israeli taxes withheld therefrom, generally will be includible in your income as dividend income on the date
on which the dividends are actually or constructively received, to the extent such distribution is paid out of our current or accumulated
earnings and profits as determined under U.S. federal income tax principles. To the extent that the amount of any distribution by us exceeds
our current and accumulated earnings and profits as determined under U.S. federal income tax principles, it will be treated first as a
tax free return of your adjusted tax basis in our ordinary shares and thereafter as capital gain. However, we do not expect to maintain
calculations of our earnings and profits under U.S. federal income tax principles and, therefore, you should expect that the entire amount
of any distribution generally will be reported as dividend income to you. If you are a non corporate U.S. Holder you may qualify for the
lower rates of taxation with respect to dividends on ordinary shares applicable to long term capital gains (i.e., gains from the sale
of capital assets held for more than one year), provided that we are not a PFIC (as discussed above under “Passive
Foreign Investment Company considerations”) with respect to you in our taxable year in which the dividend was paid or in
the prior taxable year and certain other conditions are met, including certain holding period requirements and the absence of certain
risk reduction transactions. However, such dividends will not be eligible for the dividends received deduction generally allowed to corporate
U.S. Holders.
The amount of any distribution paid in a currency other than U.S. dollars, or a foreign
currency, including the amount of any withholding tax thereon, will be included in the gross income of a U.S. holder in an amount equal
to the U.S. dollar value of the foreign currency calculated by reference to the exchange rate in effect on the date of receipt, regardless
of whether the foreign currency is converted into U.S. dollars on the date of receipt. If the foreign currency is converted into U.S.
dollars on the date of receipt, a U.S. holder generally should not be required to recognize foreign currency gain or loss in respect of
the distribution. If the foreign currency received in the distribution is not converted into U.S. dollars on the date of receipt, a U.S.
holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any gain or loss on a subsequent
conversion or other disposition of the foreign currency will be treated as ordinary income or loss.
Dividends paid to you with respect to our ordinary shares generally will be treated
as foreign source income that is “passive category income”, which may be relevant in calculating your foreign tax credit limitation.
Subject to certain conditions and limitations, Israeli tax withheld on dividends may be credited against your U.S. federal income tax
liability or, at your election, be deducted from your U.S. federal taxable income. An election to deduct creditable foreign taxes instead
of claiming foreign tax credits applies to all such foreign taxes paid or accrued in the taxable year. Final U.S. Treasury regulations
have imposed additional requirements that must be met for a foreign tax to be creditable. However, a notice from the IRS indicates that
the U.S. Department of the Treasury and the IRS are considering proposing amendments to such regulations and allows, subject to certain
conditions, taxpayers to defer the application of many aspects of such regulations until a notice or other guidance withdrawing or modifying
the temporary relief is issued (or any later date specified in such notice or other guidance). The rules relating to the determination
of the foreign tax credit are complex, and you should consult your tax advisor to determine whether and to what extent you will be entitled
to this credit.
Sale, exchange or other disposition of ordinary shares
Subject to the discussion under “Passive Foreign
Investment Company considerations” above, you generally will recognize gain or loss on the sale, exchange or other disposition
of our ordinary shares equal to the difference between the amount realized on such sale, exchange or other disposition and your adjusted
tax basis in our ordinary shares, and such gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, capital
gain from the sale, exchange or other disposition of ordinary shares is generally eligible for a preferential rate of taxation applicable
to capital gains, if your holding period for such ordinary shares exceeds one year (i.e., such gain is long term capital gain). The deductibility
of capital losses for U.S. federal income tax purposes is subject to limitations under the Code. Any such gain or loss that a U.S. Holder
recognizes generally will be treated as U.S. source income or loss for foreign tax credit limitation purposes.
95
Backup withholding tax and information reporting requirements
Distributions on and proceeds paid from the sale or other taxable disposition of the
ordinary shares may be subject to information reporting to the IRS. In addition, a U.S. Holder may be subject to backup withholding on
cash payments received in connection with dividend payments and proceeds from the sale or other taxable disposition of ordinary shares
made within the United States or through certain U.S. related financial intermediaries.
Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct
taxpayer identification number, provides other required certification and otherwise complies with the applicable requirements of the backup
withholding rules or who is otherwise exempt from backup withholding (and, when required, demonstrates such exemption). Backup withholding
is not an additional tax. Rather, any amount withheld under the backup withholding rules will be creditable or refundable against the
U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
Foreign asset reporting
Certain U.S. Holders are required to report their holdings of certain foreign financial
assets, including equity of foreign entities, if the aggregate value of all of these assets exceeds certain threshold amounts, by filing
IRS Form 8938 with their federal income tax return. Our ordinary shares are expected to constitute foreign financial assets subject to
these requirements unless the ordinary shares are held in an account at certain financial institutions. U.S. Holders are urged to consult
their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of our ordinary
shares and the significant penalties for non-compliance.
The above description is not intended to constitute a complete analysis of all tax consequences
relating to acquisition, ownership and disposition of our ordinary shares. You should consult your tax advisor concerning the tax consequences
of your particular situation.
F.
Dividends and Paying Agents
Not applicable.
G.
Statement by Experts
Not applicable.
H.
Documents on Display
We are subject to the informational requirements of the Exchange Act. Accordingly, we
are required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K.
As a foreign private issuer, we are exempt under the Exchange Act from, among other
things, the rules prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are
exempt from the short swing profit recovery provisions contained in Section 16 of the Exchange Act (“Section 16”). In addition,
we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly
as U.S. companies whose securities are registered under the Exchange Act. We are required to make certain filings with the SEC, including
as of March 2026, Section 16 reports. The SEC maintains an internet website that contains reports, proxy statements and other information
about issuers, like us, that file electronically with the SEC. The address of that site is www.sec.gov.
I.
Subsidiary Information
Not applicable.
J.
Annual Report to Securities Holders
Not applicable.
96
Item 11. Quantitative and Qualitative
Disclosures About Market Risk
We are exposed to market risk in the ordinary course of our business. Market risk represents
the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure
is primarily a result of foreign currency exchange rates and interest rates, which are discussed in detail below.
Foreign currency risk
The U.S. dollar is our functional currency. Substantially all of our revenue was denominated
in U.S. dollars for the years ended 2025 and 2024, however certain expenses comprising our cost of revenue and operating expenses were
denominated in NIS, mainly payroll and rent. We also have expenses in other currencies, in particular the EUR and GBP, although to a much
lesser extent.
A decrease of 5% in the U.S. dollar/NIS exchange rate would have increased our cost
of revenue and operating expenses by approximately 1.1% and 1.2% for the years ended December 31, 2025, and 2024, respectively. If the
NIS fluctuates significantly against the U.S. dollar, it may have a negative impact on our results of operations.
During the years 2025 and 2024, we entered into forward, put and call option contracts
to hedge certain forecasted payroll payments denominated in NIS, against exchange rate fluctuations of the U.S. dollar.
We had outstanding contracts that were designated as hedging instruments in cash flow
hedges, in the aggregate notional amount of $28.0 million and $54.0 million as of December 31, 2025, and December 31, 2024, respectively.
The fair value of the outstanding contracts amounted to an asset of $3.6 million and $1.4 million as of December 31, 2025, and 2024, respectively.
These assets were recorded under other receivables. Gains of $6.2 million and $0.2 million were reclassified from accumulated other comprehensive
income during the years ended December 31, 2025, and 2024, respectively. Such gains were reclassified from accumulated other comprehensive
income when the related expenses were incurred.
Interest rate risk
Our investments are subject to market risk due to changes in interest rates, which may
affect our interest income and fair market value of our investments. To minimize this risk, we maintain our portfolio in a variety of
high-grade securities, including treasury, corporate and municipal bonds. The primary objectives of our investment activities are to support
liquidity, preserve principal and to maximize income without significantly increasing risk.
Item 12. Description of Securities
Other than Equity Securities
Not applicable.
97
PART II
Item 13. Defaults, Dividend
Arrearages and Delinquencies
None.
Item 14. Material Modifications
to the Rights of Security Holders and Use of Proceeds
None.
Item 15. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s reports
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
forms and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial
officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation
of our chief executive officer and chief financial officer, has evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of December 31, 2025. Based upon that evaluation, our chief executive officer and chief financial officer concluded
that, as of December 31, 2025, our disclosure controls and procedures were effective to accomplish their objectives at the reasonable
assurance level.
Management’s Annual Report on Internal Control over Financial
Reporting
Our management is responsible for establishing and maintaining adequate internal control
over our financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Our management conducted an assessment
of the effectiveness of our internal control over financial reporting based on the criteria set forth in “Internal Control - Integrated
Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our
management concluded that, as of December 31, 2025, our internal control over financial reporting was effective.
Attestation Report of the Registered Public Accounting Firm
Our independent registered public accounting firm, Kost Forer Gabbay & Kasierer,
a member of EY Global, has audited the consolidated financial statements included in this Annual Report on Form 20-F, and as part of its
audit, has issued its attestation report regarding the effectiveness of our internal control over financial reporting as of December 31,
2025. The report of Kost Forer Gabbay & Kasierer is included with our consolidated financial statements included elsewhere in this
Annual Report and is incorporated herein by reference.
Changes in Internal Control over Financial Reporting
There were no changes in our internal controls over financial reporting (as such term
is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act) that occurred during the period covered by this Annual
Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 16. [Reserved]
Item 16A. Audit Committee Financial
Expert
Our board of directors has determined that Mr. Gutler, Ms. Iohan
and Mr. Zohar each satisfy the “independence” requirements set forth in Rule 10A-3 under the Exchange Act. Our board of directors
has also determined that Mr. Gutler is an “audit committee financial expert” as defined in Item 16A of Form 20-F under the
Exchange Act.
Item 16B. Code of Ethics
We have adopted a Code of Ethics and Conduct that applies to all our employees, officers
and directors, including our principal executive, principal financial and principal accounting officer. Our Code of Ethics and Conduct
addresses, among other things, competition and fair dealing, conflicts of interest, financial matters and external reporting, Company
funds and assets, confidentiality and corporate opportunity requirements and the process for reporting violations of the Code of Ethics
and Conduct, employee misconduct, conflicts of interest or other violations. Our Code of Ethics and Conduct is intended to meet the definition
of “code of ethics” under Item 16B of 20-F under the Exchange Act.
98
We will disclose on our website any amendment to, or waiver from, a provision of our
Code of Ethics and Conduct that applies to our directors or senior management within five business days of the amendment or waiver, to
the extent required under the rules of the SEC or the NYSE. Our Code of Ethics and Conduct is available on our website at investors.fiverr.com.
The information contained on or through our website, or any other website referred to herein, is not incorporated by reference into this
Annual Report. We granted no waivers under Code of Ethics and Conduct in 2025.
Item 16C. Principal Accountant
Fees and Services
The table below sets out the total amount of services rendered to us by Kost Forer Gabbay
& Kasierer, a member of EY Global, for services performed in the years ended December 31, 2025 and 2024, and breaks down these amounts
by category of service:
|
2025 |
2024 |
|||||||
|
(in thousands) |
||||||||
|
Audit Fees |
$ |
845 |
$ |
770 |
||||
|
Tax Fees |
488 |
437 |
||||||
|
Audit Related Fees |
92 | 160 | ||||||
|
Total |
$ |
1,425 |
$ |
1,367 |
||||
Audit Fees
Audit fees for the years ended December 31, 2025, and 2024 include fees for the audit
of our annual financial statements. This category also includes services that the independent accountant generally provides, such as consents
and assistance with statutory and regulatory filings or engagements and review of documents filed with the SEC.
Tax Fees
Tax fees for the years ended December 31, 2025, and 2024 were related to ongoing tax
advisory, tax compliance and tax planning services.
Audit-related fees
Audit-related fees for the years ended December 31, 2025, and 2024 relate to assurance
and associated services that are performed by the independent auditor, which include due diligence investigations and audit services related.
Pre-Approval Policies and Procedures
The advance approval of the audit committee or members thereof, to whom approval authority
has been delegated, is required for all audit and non-audit services provided by our auditors.
All services provided by our auditors are approved in advance by either the audit committee
or members thereof, to whom authority has been delegated, in accordance with the audit committee’s pre-approval policy.
Item 16D. Exemptions from the
Listing Standards for Audit Committees
Not applicable.
99
Item 16E. Purchases of Equity
Securities by the Issuer and Affiliated Purchasers
During 2025, we repurchased 1,475,564 ordinary shares for an aggregate purchase price
of $32.5 million under our repurchase program authorized by our board of directors and announced in March 2025. The table below provides
detailed information.
|
Period |
(a) Total Number of Shares (or Units) Purchased (1) |
(b) Average Price Paid per Share (or Unit) |
(c) Total Number of Shares (or Units) Purchased as Part of Publicly
Announced Plans or Programs |
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units)
that May Yet Be Purchased Under the Plans or Programs |
||||||||||||
|
July 1 – July 31 |
75,772 |
$ |
24.07 |
75,772 |
$ |
98,176,400 |
||||||||||
|
August 1 - August 31 |
938,851 |
$ |
22.02 |
938,851 |
$ |
77,500,021 |
||||||||||
|
November 1- November 30 |
460,491 |
$ |
21.70 |
460,491 |
$ |
67,498,681 |
||||||||||
|
Total |
1,475,564 |
$ |
22.03 |
1,475,564 |
$ |
67,498,681 |
||||||||||
(1) All ordinary shares were purchased pursuant to our publicly announced “distribution”,
as defined in the Israeli Companies Law, 1999, by way of repurchase (buyback) of the Company’s ordinary shares in a total amount
of up to $100,000,000 that our board of directors authorized in March 2025.
Item 16F. Change in Registrant’s
Certifying Accountant
None.
Item 16G. Corporate Governance
We are a “foreign private issuer” (as such term is defined in Rule 3b-4
under the Exchange Act) and our ordinary shares are listed on the New York Stock Exchange (NYSE). We believe the following to be the significant
differences between our corporate governance practices and those applicable to U.S. companies under the NYSE listing standards. Under
the NYSE rules, listed companies that are foreign private issuers are permitted to follow home country practice in lieu of the corporate
governance provisions specified by the NYSE with limited exceptions. We rely on this “home country practice exemption” with
respect to the quorum requirement for shareholder meetings. As permitted under the Companies Law, pursuant to our amended and restated
articles of association, the quorum required for an ordinary meeting of shareholders consists of at least two shareholders present in
person, by proxy or by other voting instrument in accordance with the Companies Law, who hold at least 25% of the voting power of our
shares (and in an adjourned meeting, with some exceptions, any number of shareholders), instead of 331/3%
of the issued share capital required under the NYSE corporate governance rules.
We otherwise comply with and intend to continue to comply with the rules generally applicable
to U.S. domestic companies listed on the NYSE. We may in the future, however, decide to use other foreign private issuer exemptions with
respect to some or all of the other NYSE listing rules. Following our home country governance practices may provide less protection than
is accorded to investors under the NYSE listing rules applicable to domestic issuers.
Item 16H. Mine Safety Disclosure
Not applicable.
Item 16I. Disclosure Regarding
Foreign Jurisdictions that Prevent Inspections
Not applicable.
100
Item 16J. Insider Trading Policies
Item 16K. Cybersecurity
Cybersecurity Risk Management and Strategy
We have held an ISO/IEC 27001 certification since 2019, completing a full recertification across all operations in 2025. We have also had ISO 27701 certification since 2021, with a full recertification across all operations completed in 2024. Both of these certifications demonstrate our commitment to better protect our platform and user data. Our commitment also extends to maintaining a PCI DSS (Payment Card Industry Data Security Standards) certification for payment transaction security, risk assessments, training for employees, and other safeguards and controls.
Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels, and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Key elements of our cybersecurity risk management program include but are not limited to the following:
| ● |
risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information;
|
| ● |
a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;
|
| ● |
the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;
|
| ● |
cybersecurity awareness training of our employees, including incident response personnel and senior management. This cybersecurity training includes real-time problem-solving challenges in a safe environment that mimic cybersecurity incidents;
|
| ● |
a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and
|
| ● |
|
Cybersecurity Governance
The audit committee receives regular reports from our Chief Information Security Officer (CISO) on our cybersecurity risks. In addition, our CISO updates the audit committee, where he deems appropriate, regarding cybersecurity incidents he considers to be significant.
101
Our cybersecurity steering committee meets on a regular basis and includes our CTO, VP Cloud Engineering, CISO, Data Protection Officer (DPO) and executives of our legal, product, R&D and finance. The cybersecurity steering committee reviews any incidents that have occurred, vulnerabilities identified, and ongoing risks as presented in our risk map.
Our management team and cybersecurity steering committee take steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
PART III
Item 17. Financial Statements
We have provided financial statements pursuant to Item 18.
Item 18. Financial Statements
The audited consolidated financial statements as required under Item 18 are attached hereto starting on page F-1 of this Annual Report. The audit report of Kost Forer Gabbay & Kasierer, a member of EY Global, an independent registered public accounting firm, is included herein preceding the audited consolidated financial statements.
102
Item 19. Exhibits
The following are filed as exhibits hereto:
|
Incorporation by Reference
|
||||||
|
Exhibit No.
|
Description
|
Form
|
File No.
|
Exhibit No.
|
Filing Date
|
Filed /
Furnished |
|
6-K
|
001-38929
|
99.1
|
10/27/2023
|
|
||
|
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|
20-F
|
001-38929
|
2.1
|
2/19/2025
|
|||
|
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|
|
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|
|
20-F
|
001-38929
|
4.1
|
2/17/2022
|
|
||
|
|
|
|
|
|
|
|
|
20-F
|
001-38929
|
4.2
|
2/19/2025
|
|||
|
|
|
|
|
|
|
|
|
F-1
|
333-231533
|
10.3
|
5/16/2019
|
|
||
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|
|
|
F-1
|
333-231533
|
10.4
|
5/16/2019
|
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||
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F-1
|
333-231533
|
10.5
|
5/16/2019
|
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||
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F-1
|
333-231533
|
10.6
|
5/16/2019
|
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||
|
|
|
|
|
|
|
|
|
F-1
|
333-231533
|
10.7
|
5/16/2019
|
|
||
|
|
|
|
|
|
|
|
|
F-1/A
|
333-231533
|
10.8
|
6/3/2019
|
|
||
|
|
|
|
|
|
|
|
|
S-8
|
333-248580
|
99.1
|
9/3/2020
|
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||
|
|
|
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|
|
|
|
|
20-F
|
001-38929
|
4.10
|
2/18/21
|
|
||
|
|
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|
|
*
|
||
|
|
|
|
|
|
|
|
|
20-F
|
001-38929
|
11.1
|
2/19/2025
|
|||
|
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*
|
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*
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**
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**
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*
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||
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20-F
|
001-38929
|
97.1
|
2/22/2024
|
|
103
|
101.INS
|
Inline XBRL Instance Document – the instance document appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
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*
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101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
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*
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101.CAL
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Inline XBRL Taxonomy Extension Calculation Linkbase Document.
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*
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|
|
|
101.DEF
|
Inline XBRL Taxonomy Definition Linkbase Document.
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
|
|
|
*
|
| * |
Filed herewith.
|
| ** |
Furnished herewith.
|
| † |
Indicates management contract or compensatory plan or arrangement.
|
Certain agreements filed as exhibits to this Annual Report contain representations and warranties that the parties thereto made to each other. These representations and warranties have been made solely for the benefit of the other parties to such agreements and may have been qualified by certain information that has been disclosed to the other parties to such agreements and that may not be reflected in such agreements. In addition, these representations and warranties may be intended as a way of allocating risks among parties if the statements contained therein prove to be incorrect, rather than as actual statements of fact. Accordingly, there can be no reliance on any such representations and warranties as characterizations of the actual state of facts. Moreover, information concerning the subject matter of any such representations and warranties may have changed since the date of such agreements.
104
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
|
|
FIVERR INTERNATIONAL LTD.
|
|
|
|
|
|
|
|
|
Date: March 12, 2026
|
By:
|
/s/ Micha Kaufman
|
|
|
|
Name:
|
Micha Kaufman
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
|
|
Date: March 12, 2026
|
By:
|
/s/ Esti Levy Dadon
|
|
|
|
Name:
|
Esti Levy Dadon
|
|
|
|
Title:
|
Chief Financial Officer
|
|
105
Fiverr International Ltd. and subsidiaries
Consolidated financial statements
In U.S. dollars
Index
|
|
Page
|
|
Reports of Independent Registered Public Accounting Firm (PCAOB ID
|
F-2
|
|
F-5
|
|
|
F-6
|
|
|
F-7
|
|
|
F-8
|
|
|
F-9
|
|
|
F-10- F-43
|
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Fiverr International Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Fiverr International Ltd. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 12, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
F - 2
Revenue recognition
|
Description of the Matter
|
As disclosed in Note 2u to the consolidated financial statements, the Company's revenue is primarily derived from marketplace commissions paid by buyers and sellers. The Company’s revenue recognition process involves several applications responsible for the initiation, processing and recording of transactions, and the calculation of revenue is in accordance with the Company’s accounting policy. The processing and recognition of revenue are highly automated and involve capturing and processing significant volumes of transactional data.
|
|
Auditing the Company’s marketplace commission revenue was challenging and complex due to the high volume of individually-low-monetary-value transactions and the reliance on multiple applications, some of which are custom-made for the Company’s business, as well as multiple data sources associated with the revenue recognition process. Given the complex, automated systems used to capture, process, and ultimately record revenue, performing audit procedures related to marketplace commission revenue required a high degree of auditor judgment and extensive audit effort.
|
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s revenue recognition process within the Company's core platform as it relates to marketplace commission revenue. For example, with the assistance of IT professionals, we tested the controls over the initiation and recognition of transactions. We also tested controls related to key application interfaces between the Company’s self-developed systems, including controls over the relevant applications and data, changes to the relevant systems and interfaces, and the configuration of the relevant applications.
|
|
|
Our substantive audit procedures included testing the completeness and accuracy of the underlying data within the Company’s accounting system, performing, with the assistance of our IT professionals, a recalculation of marketplace commission revenue recorded through the Company's core platform, and comparing the results to the Company’s recorded revenues. We also performed, on a sample basis, transaction testing by agreeing the amounts recognized in the accounting system to third-party documentation.
|
/s/ Kost Forer Gabbay & Kasierer
A Member of EY Global
We have served as the Company’s auditor since 2011.
Tel-Aviv, Israel
March 12, 2026
F - 3
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Fiverr International Ltd.
Opinion on Internal Control Over Financial Reporting
We have audited Fiverr International Ltd. and subsidiaries’ internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Fiverr International Ltd. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated March 12, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Kost Forer Gabbay & Kasierer
A Member of EY Global
Tel-Aviv, Israel
March 12, 2026
F - 4
Fiverr International Ltd. and subsidiaries
Consolidated balance sheets
U.S. dollars (in thousands, except share and per share data)
|
|
December 31,
|
|||||||
|
|
2025
|
2024
|
||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
||||
|
Marketable securities
|
|
|
||||||
|
User funds
|
|
|
||||||
|
Short-term bank deposits
|
|
|
||||||
|
Restricted deposit
|
|
|
||||||
|
Other receivables
|
|
|
||||||
|
Total current assets
|
|
|
||||||
|
Long-term assets:
|
||||||||
|
Marketable securities
|
|
|
||||||
|
Property and equipment, net
|
|
|
||||||
|
Operating lease right-of-use assets
|
|
|
||||||
|
Deferred tax assets, net
|
|
|
||||||
|
Intangible assets, net
|
|
|
||||||
|
Goodwill
|
|
|
||||||
|
Other non-current assets
|
|
|
||||||
|
Total long-term assets
|
|
|
||||||
|
Total assets
|
$
|
|
$
|
|
||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Trade payables
|
$
|
|
$
|
|
||||
|
User accounts
|
|
|
||||||
|
Deferred revenue
|
|
|
||||||
|
Other account payables and accrued expenses
|
|
|
||||||
|
Operating lease liabilities
|
|
|
||||||
|
Convertible notes, net
|
|
|
||||||
|
Total current liabilities
|
|
|
||||||
|
Long-term liabilities:
|
||||||||
|
Operating lease liabilities
|
|
|
||||||
|
Other non-current liabilities
|
|
|
||||||
|
Total long-term liabilities
|
|
|
||||||
|
Total liabilities
|
$
|
|
$
|
|
||||
|
Commitments and contingencies (see note 13)
|
||||||||
|
Shareholders’ equity:
|
||||||||
|
Ordinary shares of
and 2024; Issued and outstanding:
December 31, 2025 and 2024, respectively.
|
|
|
||||||
|
Additional paid-in capital
|
|
|
||||||
|
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
|
Accumulated other comprehensive income
|
|
|
||||||
|
Total shareholders’ equity
|
|
|
||||||
|
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
||||
The accompanying notes are an integral part of the consolidated financial statements
F - 5
Fiverr International Ltd. and subsidiaries
Consolidated statements of income
U.S. dollars (in thousands, except share and per share data)
|
|
Year ended December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Revenue
|
$
|
|
$
|
|
$
|
|
||||||
|
Cost of revenue
|
|
|
|
|||||||||
|
Gross profit
|
|
|
|
|||||||||
|
Operating expenses:
|
||||||||||||
|
Research and development
|
|
|
|
|||||||||
|
Sales and marketing
|
|
|
|
|||||||||
|
General and administrative
|
|
|
|
|||||||||
|
Total operating expenses
|
|
|
|
|||||||||
|
Operating loss
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Financial income and other, net
|
|
|
|
|||||||||
|
Income before taxes on income
|
|
|
|
|||||||||
|
Tax benefit (taxes on income)
|
(
|
)
|
|
(
|
)
|
|||||||
|
Net income
|
$
|
|
$
|
|
$
|
|
||||||
|
Basic net income per share attributable to ordinary shareholders
|
$
|
|
$
|
|
$
|
|
||||||
|
Basic weighted average ordinary shares
|
|
|
|
|||||||||
|
Diluted net income per share attributable to ordinary shareholders
|
$
|
|
$
|
|
$
|
|
||||||
|
Diluted weighted average ordinary shares
|
|
|
|
|||||||||
The accompanying notes are an integral part of the consolidated financial statements
F - 6
Fiverr International Ltd. and subsidiaries
Consolidated statements of comprehensive income
U.S. dollars (in thousands, except share and per share data)
|
|
Year ended
December 31, |
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Net income
|
$
|
|
$
|
|
$
|
|
||||||
|
Marketable securities:
|
||||||||||||
|
Unrealized gain (loss)
|
(
|
)
|
|
|
||||||||
|
Derivatives:
|
||||||||||||
|
Unrealized income (loss)
|
|
|
(
|
)
|
||||||||
|
Amounts reclassified from accumulated other comprehensive income
|
(
|
)
|
(
|
)
|
|
|||||||
|
Other comprehensive income, net of taxes of $
|
|
|
|
|||||||||
|
Comprehensive income
|
$
|
|
$
|
|
$
|
|
||||||
The accompanying notes are an integral part of the consolidated financial statements
F - 7
Fiverr International Ltd. and subsidiaries
Consolidated statements of shareholders’ equity
U.S. dollars (in thousands, except share and per share data)
|
|
Number of
ordinary shares and protected ordinary shares |
Additional
paid-in capital |
Accumulated
deficit |
Accumulated
other comprehensive income (loss) |
Total
shareholders’ equity |
|||||||||||||||
|
Balance as of December 31, 2022
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||
|
Share-based compensation
|
-
|
|
|
|
|
|||||||||||||||
|
Exercise of share options, vested RSUs and ESPP
|
|
|
|
|
|
|||||||||||||||
|
Net income
|
-
|
|
|
|
|
|||||||||||||||
|
Other comprehensive income, net
|
-
|
|
|
|
|
|||||||||||||||
|
Balance as of December 31, 2023
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||
|
Share-based compensation
|
-
|
|
|
|
|
|||||||||||||||
|
Exercise of share options, vested RSUs and ESPP
|
|
|
|
|
|
|||||||||||||||
|
Repurchases of ordinary shares
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
||||||||||||
|
Equity award assumed for acquisition
|
-
|
|
|
|
|
|||||||||||||||
|
Deferred Tax Asset related to Capped Call Transaction
|
-
|
|
|
|
|
|||||||||||||||
|
Net income
|
-
|
|
|
|
|
|||||||||||||||
|
Other comprehensive income, net
|
-
|
|
|
|
|
|||||||||||||||
|
Balance as of December 31, 2024
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||
|
Share-based compensation
|
-
|
|
|
|
|
|||||||||||||||
|
Exercise of share options, vested RSUs, ESPP and Issuance of ordinary shares related to acquisition
|
|
|
|
|
|
|||||||||||||||
|
Repurchases of ordinary shares
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
||||||||||||
|
Net income
|
-
|
|
|
|
|
|||||||||||||||
|
Other comprehensive income, net
|
-
|
|
|
|
|
|||||||||||||||
|
Balance as of December 31, 2025
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||
The accompanying notes are an integral part of the consolidated financial statements
F - 8
Fiverr International Ltd. and subsidiaries
Consolidated statements of cash flows
Consolidated statements of cash flows
U.S. dollars (in thousands, except share and per share data)
|
Year ended
|
||||||||||||
|
|
December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Cash flows from operating activities:
|
||||||||||||
|
Net Income
|
$
|
|
$
|
|
$
|
|
||||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
|
Depreciation and amortization
|
|
|
|
|||||||||
|
Amortization of premium and accretion of discount on marketable securities, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Amortization of discount and issuance costs of convertible notes
|
|
|
|
|||||||||
|
Share-based compensation
|
|
|
|
|||||||||
|
Exchange rate fluctuations and other items, net
|
(
|
)
|
|
|
||||||||
|
Gain from sale of subsidiary
|
(
|
)
|
|
|
||||||||
|
Impairment of intangible assets
|
|
|
|
|||||||||
|
Impairment of lease ROU asset
|
|
|
|
|||||||||
|
Revaluation of earn-outs
|
|
|
(
|
)
|
||||||||
|
Changes in assets and liabilities:
|
||||||||||||
|
User funds
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Operating lease ROU assets and liabilities
|
|
(
|
)
|
(
|
)
|
|||||||
|
Other receivables
|
|
|
(
|
)
|
||||||||
|
Deferred tax assets, net
|
(
|
)
|
(
|
)
|
|
|||||||
|
Trade payables
|
|
(
|
)
|
(
|
)
|
|||||||
|
Deferred revenue
|
(
|
)
|
|
(
|
)
|
|||||||
|
User accounts
|
|
(
|
)
|
|
||||||||
|
Payment of earn-out
|
(
|
)
|
(
|
)
|
|
|||||||
|
Escrow Payment for contingent consideration
|
(
|
)
|
(
|
)
|
|
|||||||
|
Account payables, accrued expenses and other
|
|
|
|
|||||||||
|
Non-current liabilities
|
|
|
|
|||||||||
|
Net cash provided by operating activities
|
|
|
|
|||||||||
|
Investing activities:
|
||||||||||||
|
Investment in marketable securities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Proceeds from maturities of marketable securities
|
|
|
|
|||||||||
|
Investment in short-term bank deposits
|
(
|
)
|
(
|
)
|
|
|||||||
|
Proceeds from short-term bank deposits
|
|
|
|
|||||||||
|
Acquisition of business, net of cash acquired
|
(
|
)
|
(
|
)
|
|
|||||||
|
Gain from sale of subsidiary
|
|
|
|
|||||||||
|
Acquisition of intangible asset
|
|
(
|
)
|
|
||||||||
|
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Capitalization of internal-use software
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Other receivables and non-current assets
|
|
(
|
)
|
|
||||||||
|
Net cash provided by (used in) investing activities
|
|
(
|
)
|
|
||||||||
|
Financing activities:
|
||||||||||||
|
Repurchases of ordinary shares
|
(
|
)
|
(
|
)
|
|
|||||||
|
Proceeds from exercise of share options
|
|
|
|
|||||||||
|
Payment of earn-out
|
(
|
)
|
(
|
)
|
|
|||||||
|
Proceeds from (payments of) withholding tax related to employees’ exercises of share options and RSUs, net
|
(
|
)
|
|
|
||||||||
|
Repayment of debt to previous shareholder of the acquired business
|
|
(
|
)
|
|
||||||||
|
Repayment of convertible notes at maturity
|
(
|
)
|
|
|
||||||||
|
Net cash provided by (used in) financing activities
|
(
|
)
|
(
|
)
|
|
|||||||
|
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
(
|
)
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(
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)
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Increase (decrease) in cash and cash equivalents
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(
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)
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(
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)
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Cash and cash equivalents at the beginning of the year
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Cash and cash equivalents at the end of the year
|
$
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$
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$
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Supplemental non-cash disclosure:
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Non-cash contingent consideration (Earn-out)
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Issuance of shares under employee share purchase plan |
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Lease liabilities arising from obtaining right-of-use assets
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Supplemental cash flow disclosure:
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Cash paid for income taxes
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$
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$
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$
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Cash paid for interest
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$
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$
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$
|
|
||||||
The accompanying notes are an integral part of the consolidated financial statements
F - 9
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Note 1: - General
Fiverr International Ltd. was incorporated on April 29, 2010, under the laws of Israel, and commenced operations on the same date.
Fiverr International Ltd. and its subsidiaries (the “Company”) operates a global online marketplace that enables sellers to offer digital services and buyers to purchase them The Company’s platform features an extensive catalog of digital services that spans over hundreds of categories. Buyers can purchase digital services ranging from simple services such as logo design and blog post writing, to complex services such as video creation, website development and social media marketing. Also, the Company offers value-added services including subscription products, advertising solutions and financial tools designed to support marketplace users and enhance their business activities.
Commencing June 13, 2019, the ordinary shares of the Company are traded on the New York Stock Exchange.
Note 2: - Significant accounting policies
The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”). The significant accounting policies followed in the preparation of the consolidated financial statements, are as follows:
| a. |
Use of estimates:
|
The preparation of consolidated financial statements, in conformity with generally accepted accounting principles, U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
The accounting estimates that require management’s subjective judgments include but are not limited to revenue recognition, the valuation of deferred tax assets and uncertain tax positions, share-based compensation, purchase price allocation (PPA) including determination of fair value, useful lives, impairment of goodwill and intangible assets and the fair value of contingent consideration (earn-out) and contingent liabilities. The Company evaluates its estimates and judgments on an ongoing basis and revises them when necessary. Actual results may differ from the original or revised estimates.
| b. |
Principles of consolidation:
|
The consolidated financial statements include the accounts of the Company. Intercompany transactions and balances were eliminated upon consolidation.
| c. |
Functional currency:
|
The functional currency of the Company is the U.S. dollar, as it is the currency of the primary economic environment in which the Company is operating. Foreign currency transactions and balances have been re-measured to U.S. dollars in accordance with Accounting Standard Codification (“ASC”) Topic 830, “Foreign Currency Matters.” All transaction gains and losses from re- measurement of monetary balance sheet items denominated in foreign currencies are recorded under financial income (expenses), net within the consolidated statements of income.
| d. |
Cash and cash equivalents:
|
The Company considers all investments with an original maturity of three months or less at the time of purchase to be cash equivalents including amounts related to payment processing companies.
| e. |
Marketable securities:
|
The Company accounts for marketable securities in accordance with ASC Topic 320, “Investments – Debt Securities”. The Company’s investments in marketable securities consist of high-grade treasury, corporate and municipal bonds.
Investments in marketable securities are classified as available for sale at the time of purchase. Available for sale securities are carried at fair value based on quoted market prices, with unrealized gains and losses, reported in accumulated other comprehensive income (loss) in shareholders’ equity. Realized gains and losses including interest and amortization of discount arising from the acquisition of marketable securities were recorded under financial income and other, net.
F - 10
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
The Company classifies its marketable securities as either short-term or long-term based on each instrument’s underlying contractual maturity date as well as the intended time of realization. Marketable securities with maturities of 12 months or less are classified as short-term and marketable securities with maturities greater than 12 months are classified as long-term.
On each reporting period the Company determines whether a decline in fair value below the amortized cost basis of an available for sale debt security is due to credit related factors or noncredit related factors. A credit related impairment would be recognized as an allowance on the balance sheet with a corresponding adjustment to earnings, however, if the Company would intend to sell an impaired available-for-sale debt security or more likely than not would be required to sell such a security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis.
The Company has not recorded credit losses for the years ended December 31, 2025, 2024 and 2023.
| f. |
Bank deposits:
|
Deposits with maturities of more than three months but less than one year are classified as short term. Such deposits are presented at their cost.
| g. |
Restricted deposit:
|
Restricted deposit is restricted as to withdrawal or use with maturities of up to one year and are used as security for the rental of premises. Restricted deposits are presented at their cost.
| h. |
Long-lived assets:
|
The Company’s long-lived assets to be held and used are comprised of property and equipment, and Right-Of-Use (“ROU”) asset (Note 2t).
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.
Computers and peripheral equipment are amortized at an annual rate of 33 %, office furniture and equipment is amortized at annual rate ranges from 7 %-15 % and leasehold and improvements amortized over the
| i. |
Intangible assets, net:
|
Intangible assets that are considered to have definite useful life are amortized using the straight-line basis over their estimated weighted average useful lives as follows:
|
Technology
|
||
|
Capitalized internal-use software
|
|
|
|
Customer Relationships
|
|
|
|
Creative Relationships
|
|
|
|
Users’ Relationships
|
|
|
|
Trademark
|
|
|
|
Courses
|
|
F - 11
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| j. |
Internal-use software:
|
Costs incurred to develop internal-use software are capitalized and amortized over the estimated useful life of the software, which is generally three years. In accordance with ASC Topic, 350-40, “Internal-Use Software”, the Company capitalizes costs related to upgrades and enhancements when it is probable the expenditures will result in additional functionality. Costs incurred in the preliminary stages of development are expensed as incurred. Capitalization begins when the preliminary project stage is completed, and it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use. Maintenance costs are expensed as incurred.
The Company periodically reviews internal-use software costs to determine whether the projects will be completed, placed in service, removed from service, or replaced by other internally developed or third-party software. If an asset is determined not to provide any future economic benefit after conducting an impairment test, the asset is retired, and any unamortized cost is expensed.
Capitalized internal-use software costs are recorded under intangible assets, net.
| k. |
Impairment of long-lived assets and intangible assets with definite useful life:
|
Long lived assets that are considered to have definite useful life are tested for impairment in accordance with ASC Topic 360, “Property, Plant and Equipment” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company’s evaluation of recoverability is performed at the lowest level to which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and represent an asset group. Recoverability of this asset group is measured by a comparison of the aggregate undiscounted projections of future cash flows the asset group is expected to generate to the carrying amounts of the asset group. If such evaluation indicates that the carrying amount of the asset group is not recoverable, an impairment is measured by the amount which the carrying amount of the asset group exceeds their fair value.
During the year ended December 31, 2023, the Company recorded an impairment of a ROU asset in the amount of $211 .
During the year ended December 31, 2025, the Company recorded an impairment of definite-lived intangible assets of $2,400 , primarily related to the decision to discontinue certain activities associated with Working Not Working acquisition. The Company evaluated this change and determined that it does not represent a strategic shift that will have a major effect on the Company's operations and financial results and therefore it did not meet the criteria for classification as discontinued operations.
| l. |
Business combinations:
|
The results of an acquired business in a business combination are included in the Company’s consolidated financial statements from the date of acquisition according to the guidance of ASC Topic 805, “Business Combinations.” The Company allocates the purchase price, which is the sum of the consideration provided and may consist of assets and liabilities incurred, including contingent consideration obligations and equity or a combination of them, to the identifiable assets and liabilities of the acquired business at their fair values as of the acquisition date. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill.
The estimated fair values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating performance and cash flows of the acquired business, the nature of the business acquired and the specific characteristics of the identified intangible assets. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions, and competition.
Contingent consideration incurred in a business combination is included as part of the acquisition price and recorded at a probability weighted assessment of the fair value as of the acquisition date. The fair value of the contingent consideration, which was initially recorded as asset or liability, is re-measured at each reporting period, with any adjustments in fair value recognized in earnings under general and administrative expenses.
Acquisition related costs incurred by the Company are not included as a component of consideration transferred but are accounted for as an expense in the period in which the costs are incurred.
F - 12
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| m. |
Goodwill:
|
Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed. Under ASC Topic 350, “Intangible—Goodwill and other,” goodwill is not amortized, but rather is subject to impairment test. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, a quantitative impairment test is performed. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the quantitative goodwill impairment test.
The Company operates as one reporting segment, and this segment comprises its only reporting unit.
The Company elected to perform an annual impairment test of goodwill as of October 1st of each year, or more frequently if impairment indicators are present.
No goodwill impairment was recorded for the years ended December 31, 2025, 2024 and 2023.
| n. |
Derivatives and hedging:
|
Derivatives are recognized at fair value as either assets or liabilities in the consolidated balance sheets in accordance with ASC Topic 815, “Derivatives and Hedging.” The gain or loss of derivatives which are designated and qualify as hedging instruments in a cash flow hedge, is recorded under accumulated other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The gain or loss in connection with forecasted transactions not probable of occurring is recorded under financial income (expenses), net.
Derivatives are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.
The Company entered into foreign currency cash flow hedges using forward, put and call option contracts to hedge certain forecasted payroll and other related payments denominated in NIS, to hedge against exchange rate fluctuations of the U.S. dollar. The Company recorded the cash flows associated with these derivatives under operating activities.
| o. |
Fair value of financial instruments:
|
The Company measures and discloses the fair value of financial assets and liabilities in accordance with ASC Topic 820, “Fair Value Measurement.” Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Observable inputs that are based on inputs not quoted on active markets but corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available.
| p. |
Concentrations of credit risks:
|
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investment in marketable securities, bank deposits, restricted deposit and derivatives, which are placed in major banks in Israel, Germany and the U.S.
User funds are held by a payment service provider which, pursuant to the agreement, was engaged to hold the user funds on behalf of buyers and sellers in an account segregated from the payment service provider’s operating bank account.
Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures. The Company performs ongoing credit evaluations of its trade receivables and establishes an allowance for expected losses as necessary.
The Company does not have off-balance sheet concentration of credit risks.
F - 13
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| q. |
Convertible notes:
|
The Company accounts for convertible notes pursuant to ASC 470 as a single liability measured at its amortized cost as long as it was not issued at a substantial premium and no other features require bifurcation and recognition as derivatives pursuant to ASC 815. The debt host is then measured at its amortized cost using the effective interest method.
| r. |
Employee related obligations:
|
The Company accounts for employee related obligations in accordance with ASC Topic 715, “Compensation—retirement benefits.” The Israeli Severance Pay Law, 1963 (“Severance Pay Law”), specifies that employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month salary for each year of employment, or a portion thereof. The Company’s liability for severance pay is covered by the provisions of Section 14 of the Severance Pay Law (“Section 14”). Under Section 14 employees are entitled to monthly deposits, at a rate of 8.33 % of their monthly salary, contributed on their behalf to their insurance funds. Payments made in accordance with Section 14 release the Company from any future severance payments in respect of those employees.
As a result, the Company does not recognize any asset or liability in connection with severance pay. Severance costs amounted to $5,766 , $5,038 and $4,734 for the years ended December 31, 2025, 2024 and 2023, respectively.
The Company’s U.S. Subsidiaries have a 401(K) defined contribution plan covering certain employees in the U.S. The expenses recorded by the U.S. subsidiaries for matching contributions for the years ended December 31, 2025, 2024 and 2023 were immaterial.
| s. |
User funds and user accounts:
|
The Company has an arrangement with an existing payment service provider to hold funds on behalf of buyers and sellers (“users”). User funds consist of buyers’ prepayments that would be earned when an order is completed, credits issued upon cancellations and seller fees that have not yet been withdrawn. User accounts represent the corresponding liability to the users.
The Company does not have ownership over the funds and does not have the right to direct the funds to be used at will or for its own benefit other than those funds related to transaction commissions owed to the Company after control has been obtained by the customers.
| t. |
Leases:
|
The Company determines if an arrangement meets the definition of a lease at the inception of the lease.
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease agreement. ROU asset is measured based on the discounted present value of the remaining lease payments, initial direct costs incurred and prepaid lease payments, excluding lease incentives. The lease liability is measured based on the discounted present value of the remaining lease payments. The discounted present value of remaining lease payments is computed using IBR based on the information available at the inception of the lease. The Company’s IBR was estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset was located.
Lease term may include options to extend or terminate the lease when it is reasonably certain that the Company would exercise that option. The Company elected the practical expedient for lease agreements with a term of twelve months or less and does not recognize ROU assets and lease liabilities in respect of those agreements.
Payments under the Company’s lease agreements are primarily fixed, however, certain lease agreements contain variable costs such as common area maintenance, real estate taxes, and insurance are not included in the lease liability and are recognized as they are incurred.
Certain lease agreements include rental payments that are adjusted periodically for the consumer price index ("CPI"). The ROU and lease liability were calculated using the CPI as of the commencement date and will not be subsequently adjusted, unless the liability is reassessed for other reasons.
The Company subleases a specific section or certain square footage, for a fixed term, of its office space to one or more subtenants (third parties) while retaining the remaining space for its own use. The sublease agreement may include renewal options, allowing the subtenant to extend the sublease term based on mutually agreed-upon conditions. Sublease income is recognized over the term of the agreement. The Company recognizes sublease income as an offset to lease expenses.
The Company elected the practical expedient to not separate lease and non-lease components for its leases.
F - 14
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| u. |
Revenue recognition:
|
The Company’s revenue is generated from marketplace revenue and other value-added service revenue that the Company provides to its users to help them grow their business and empower their work.
Revenue is recognized in accordance with ASC No. 606 “Revenue from Contractors with Customers”. The Company recognizes revenue by applying the following steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.
A contract with a customer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct services to be transferred (“performance obligations”), the Company can determine the transaction price for the services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the services that will be transferred to the customer.
Marketplace revenue:
The Company’s marketplace enables businesses, or buyers, to connect and engage with freelancers, or sellers, globally. The Company earns various fees for enabling orders and providing other services to cover administrative fees. These fees include transaction commissions based on the transaction value and foreign transaction fees.
Fiverr sellers receive the benefit of marketplace activities, including listing their freelance services for purchase, engaging with customers via communication and collaboration tools provided by the marketplace, as well as the security and convenience of payment processing on the platform. Fiverr buyers enjoy the access to a global talent tool, as well as the communication and collaboration tools, and payment processing benefits similar to sellers. For these benefits, Fiverr sellers and buyers pay a commission for each completed transaction.
The Company’s customers are the users on its platform. Users accept the Company’s terms of service upon registration to the platform. Gross order amount including transaction commission is collected from the buyer upfront by a third-party payment provider. The prepaid amounts from buyers are simultaneously recorded as an asset under user funds with a corresponding liability to buyers under user accounts and deferred revenue until the order is completed or canceled.
The Company’s marketplace revenue is primarily comprised of one distinct performance obligation which is to arrange services to be provided on its marketplace platform by the sellers to the buyers.
The Company earns transaction commissions that are based on the total value of transactions ordered through the platform once the buyer obtains control of the service, which occurs at a point in time upon the completion of each order.
Revenue is recognized in the amount of consideration to which the Company expects to be entitled, in exchange for satisfying the related performance obligations by transferring control to the customer, excluding amounts collected on behalf of other third parties and indirect taxes.
Revenue is recognized on a net basis since the Company has concluded that it acts as an agent on its platform, mainly since it does not take responsibility for the sellers’ services and therefore it is not responsible for fulfilling the promise to provide the service and does not have discretion in price establishment. Therefore, the Company does not obtain control of the services before they are transferred to the customer.
The Company also charges foreign transaction fees for buyers who choose to pay in their local currencies. Foreign transaction fees are variable consideration and are recognized as earned for each transaction processed, which is when the Company has the contractual right to bill for the services.
The Company recognizes revenue from unused user accounts balances once the likelihood of the users exercising their unused accounts balances becomes remote and the Company is not required to remit such unused account balances to a third party in accordance with applicable unclaimed property laws. The amounts recognized for the year ended December 31, 2025, 2024 and 2023 were immaterial.
F - 15
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Service revenue:
Services revenue is derived from optional services offered to the Company’s customers, which primarily include advertising services, subscription services, and others.
Advertising services: Fiverr Ads allows sellers to advertise their services on the Company’s platform. Sellers bid and win prime locations on the platform through an auction mechanism which is based on cost-per-click. Sellers are charged only when their ads are viewed and clicked by the buyer, at which time revenue is recognized.
Subscription services: Revenue from subscriptions primarily include revenue from seller tools and dropshipping automation tools. The Company charges monthly or annual subscription fees to users for subscription services. These subscription fees are fixed consideration and are recognized over the period of the subscription on a straight-line basis.
Other services: Other services include revenues from additional products and services provided to our community such as faster withdrawal, local currency payout, cash advance, software talent platform and fees earned on user funds. The Company earns fees on user funds while they are held by a payment service provider. The fee is considered variable consideration and is recognized when it is earned from the payment service provider.
Contract liabilities:
The Company’s contract liabilities mainly consist of deferred revenues and primarily include payments from marketplace activities and other services received in advance for services of the Company’s performance under the contract for which control has not been yet obtained by the customers. Deferred revenues balance amounted to $18,567 and $20,090 , for the years ended 2025 and 2024, respectively. The change in the deferred revenues balances during the period primarily consisted of increases due to payments received in advance of performance, which were offset by decreases due to revenues recognized in the period. As part of a business combination, the Company acquired contract liabilities related to deferred revenues, which contributed to the overall increase in the balance. During the year ended December 31, 2025, the company recognized all of the revenue that was included in the deferred revenues balance at the beginning of the period.
Practical expedients:
The Company elected to use the practical expedient and recognize the incremental costs of obtaining contracts as an expense since the amortization period of the assets that the Company otherwise would have recognized is one year or less. The Company also does not disclose the value of unsatisfied performance obligations since the original expected duration of the contracts is one year or less. Additionally, the Company has elected to apply the practical expedient such that it does not evaluate payment terms of one year or less for the existence of a significant financing component.
Disaggregated revenue:
See note 19 for the Company’s revenue disaggregated by type of service and geographic area
| v. |
Cost of revenue:
|
Cost of revenue primarily consists of expenses related to payment processing fees, server hosting fees, costs of customer support personnel, contractors services, amortization expenses associated with acquired intangible assets and capitalized internal-use software. Cost of revenue also consists of personnel and the related overhead costs, including share-based compensation.
F - 16
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| w. |
Research and development expenses:
|
Research and development expenses primarily consist of costs of the Company’s research and development personnel, related overhead costs, including share-based compensation, development related activities expenses including new initiatives, professional services and other business technology services. Research and development costs are expensed as incurred, except to the extent that such costs are associated with internal-use software that qualifies for capitalization.
| x. |
Sales and marketing expenses:
|
Sales and marketing expenses primarily consist of costs of the Company’s marketing personnel and the related overhead costs, including share-based compensation for employees engaged in sales, marketing, advertising and promotional activities. A significant component is performance marketing investments such as user acquisition costs, branding costs, marketing campaigns and other media advertisements costs, and amortization of acquired intangible assets. Sales and marketing expenses are expensed as incurred.
Advertising costs were $132,022 , $122,020 and $112,796 for the years ended December 31, 2025, 2024 and 2023, respectively.
| y. |
General and administrative expenses:
|
General and administrative expenses primarily include overhead related costs, including share-based compensation of the Company’s executive, finance, legal, human resources and other administrative personnel. General and administrative expenses also include legal, accounting and other professional service fees, changes in the fair value of contingent consideration (earn-outs), chargeback expenses and costs associated with fraud risk reduction, expenses related to allowance for doubtful accounts in the event of uncollectible account receivables balances and others. General and administrative expenses are expensed as incurred.
| z. |
Restructuring costs:
|
On September 14, 2025, the board of directors of the Company approved a re-organization plan that includes, among other things, downsizing approximately 30 % of the Company's workforce (the "Plan") as part of the Company’s focus on AI initiatives. The Plan was to streamline the organization, sharpen the product focus, upgrade the technology infrastructure, and accelerate the evolution into an AI-first company.
The restructuring expenses, sum up to $3,424 , recognized in the consolidated statements of income for the year ended December 31, 2025, primarily consisting of one-time incremental employee termination benefits.
As of December 31, 2025, $384 related to restructuring expenses were included in “Other account payables and accrued expenses” in the consolidated balance sheet, and were subsequently paid in 2026.
The Company does not expect to incur additional costs related to the Plan.
F - 17
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| aa. |
Share based compensation:
|
The Company accounts for share-based compensation in accordance with ASC Topic 718, “Compensation—Stock Compensation.” Share based awards are mainly granted to employees and members of the Company’s board of directors and measured at fair value at each grant date. The Company calculates the fair value of share options and Employee Share Purchase Plans (“ESPP”) on the date of grant using the Black-Scholes option-pricing model and the expense is recognized over the requisite service period for awards expected to vest using the straight-line method. The Company recognizes the fair value of Restricted Share Units (“RSUs”) on the grant date based on the market value of the underlying share and the expense is recognized over the requisite service period for awards using the straight-line method. The Company recognizes the fair value of the Performance Share Units (“PSUs”) on the grant date based on the market value of the underlying share and the expense is recognized based both on the implicit service period of the award and the achievement of specified performance targets. Expense for awards with performance conditions is estimated and adjusted on a quarterly basis based upon the assessment of the probability that the performance condition will be met and is recognized on a graded vesting basis, using the accelerated method.
The requisite service period for share options is generally four years . The Company recognizes forfeitures as they occur.
The Black-Scholes option-pricing model requires the Company to make a number of assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends. The Company evaluates the assumptions used to value share options and ESPP upon each grant date.
Expected volatility for ESPP was calculated based upon the Company’s share prices.
Expected term of options granted was calculated based on the simplified method, which uses the midpoint between the vesting date and the contractual term, as the Company does not have sufficient historical data to develop an estimate based on participant behavior.
The risk-free interest rate was based on the U.S. treasury bonds yield with an equivalent term.
The Company has not paid dividends and has no foreseeable plans to pay dividends.
| ab. |
Income taxes: |
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), using the liability method, whereby deferred tax assets and liabilities account balances are determined based on the differences between financial reporting and the tax basis for assets and liabilities and for carry-forward tax losses, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company recognizes a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value, and if it is more likely than not that some portion of the entire deferred tax asset will not be realized.
Deferred tax liabilities are classified as long-term liabilities in the consolidated balance sheets.
The Company recognizes uncertain tax positions based on its estimate of whether, and the extent to which, additional taxes will be due. These liabilities are established utilizing a two-step approach when the Company believes that certain positions might be challenged despite its belief that its tax return positions are fully supportable. The first step requires the Company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit. The second step is based on the largest amount of benefit, which is more likely than not to be realized on ultimate settlement.
Any interest and penalties related to unrecognized tax benefits are recorded as income tax expense. The Company adjusts these liabilities in light of changing facts and circumstances, such as the outcome of a tax audit or changes in the tax law.
F - 18
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| ac. |
Segment reporting: |
The Company identifies operating segments in accordance with ASC Topic 280, “Segment Reporting” as components of an entity for which discrete financial information is available and is regularly reviewed by the chief operating decision maker (“CODM”), or decision-making group, in making decisions regarding resource allocation and evaluating financial performance. The Chief Executive Officer is our chief operating decision maker who evaluates performance and makes operating decisions about allocating resources based on consolidated financial data. The CODM uses consolidated net income to measure segment profit or loss, to allocate resources and assess performance. Further, the CODM reviews and utilizes functional expenses (cost of revenues, sales and marketing, research and development, and general and administrative) at the consolidated level to manage the Company’s operations, evaluate return on total assets in deciding whether to invest in the development and expansion of our consolidated operations or into strategic transactions, such as acquisitions and capital repurchases. As such, the Company has determined that it is one operating and reportable segment.
| ad. |
Basic and diluted net income per share: |
The Company computes basic net income per share in accordance with ASC Topic 260, “Earnings per Share” by dividing the net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted net income per share is computed by taking into account the potential dilution that could occur upon the exercise of share options and ESPP and vesting of RSUs and PSUs granted under share-based compensation plans using the treasury stock method and the potential dilution that could occur upon conversion of the convertible notes (including adding back amortization of issuance costs related to the convertible notes) using the if converted method.
In 2025, 2024 and 2023, the number of potentially dilutive RSUs and PSUs, share options to purchase ordinary shares and potentially dilutive ordinary shares from conversion of convertible notes that were excluded from the computation due to the anti-dilutive effect amounted to 3,206,697 , 5,835,398 and 5,792,535 respectively.
ae. Repurchases of Ordinary shares:
The Company presents the cost to repurchases as a reduction of shareholders' equity.
af. Contingencies:
The Company accrues for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. The Company does not accrue for contingent losses that, in its judgment, are considered to be reasonably possible, but not probable; however, it discloses the range of such reasonably possible losses.
ag. Recently adopted accounting pronouncements:
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements, refer to note 2ab.
F - 19
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
ah. Recently not yet adopted accounting pronouncements:
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), to modernize the accounting guidance for the costs to develop software for internal use. The standard applies to costs incurred to develop or obtain software for internal use. ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. Under the new standard, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The new standard also supersedes the guidance related to costs incurred to develop a website. ASU 2025-06 guidance is effective for annual periods beginning after December 15, 2027. The guidance can be applied on a prospective basis, a modified basis for in-process projects or on a retrospective basis. The Company is currently evaluating the impact of the adoption of this standard.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The standard amends ASC 326-20 to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The standard should be applied prospectively, and is effective for annual periods, including interim reporting periods, beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard.
In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. This ASU requires to disclose disaggregated information about certain income statement expense line items. Entities are required to disclose purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses. Specified expenses, gains or losses that are already disclosed under existing US GAAP are required to be included in the disaggregated income statement expense line-item disclosures, and any remaining amounts need to be described qualitatively. Separate disclosures of total selling expenses and an entity’s definition of those expenses are also required. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.
In November 2025, the FASB issued ASU 2025-09 to amend the guidance in Derivatives and Hedging (Topic 815). The update provides targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating the impact on its financial statement disclosures.
F - 20
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Note 3: - Certain transactions
| a. |
Praetolia Limited acquisition:
|
In April 2024, the Company acquired all the outstanding shares of Praetolia Limited, a software talent platform for total consideration of $10,248 in cash.
In addition, the agreement stipulated contingent payments which are not included in the total consideration to the shareholders of Praetolia Limited in an aggregate amount of up to $8,000 subject to service and certain performance conditions of Praetolia Limited, out of which the Company recorded a liability in the amount of $1,153 as of December 31, 2025.
The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired, and liabilities assumed in the business combination be recognized at their fair values as of the acquisition date.
The table below summarizes the fair value of the acquired assets and assumed liabilities and the goodwill as of the acquisition date:
|
|
Fair value
|
Amortization
period
|
|||
|
Cash and cash equivalents
|
$
|
|
|
||
|
Assets acquired (1)
|
|
|
|||
|
Identified intangible assets (2):
|
|||||
|
Talent Relationships
|
|
|
|||
|
Customer Relationships
|
|
|
|||
|
Other Customer Relationships
|
|
|
|||
|
Goodwill
|
|
|
|||
|
Total assets acquired
|
|
|
|||
|
Total assumed liabilities (3)
|
(
|
)
|
|
||
|
Net assets acquired
|
$
|
|
|
||
| (1) |
Assets acquired include trade receivables and other receivables.
|
| (2) |
Information regarding the identifiable intangible assets acquired is as follows:
|
Fair value of talent relationships was determined by using the With-and-Without Method.
Fair value of customer relationships was determined by using the Multi-period Excess Earning Method.
| (3) |
Total assumed liabilities includes trade payable, deferred income tax liabilities, net and other liabilities assumed.
|
Goodwill generated from the above business combination is attributed to synergies between the Company's and the acquired businesses’ services, and is not deductible for income tax purposes.
The Company incurred approximately $119 in acquisition expenses for the year ended December 31, 2024 recorded under general and administrative expenses.
The results of operations of Praetolia Limited were included in the Company’s consolidated financial statements commencing the date of acquisition and are not material.
Pro forma results of operations related to this acquisition have not been presented because they are not material to the Company’s consolidated statements of income.
F - 21
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| b. |
AutoDS Ltd. acquisition:
|
In July 2024, the Company acquired all of the outstanding shares of AutoDS Ltd. (“AutoDS”), a leading platform of end-to-end solution for dropshippers for a total consideration of $55,658 .
The agreement stipulated an earn-out consideration of up to $36,000 , in both cash and shares based on obtaining certain financial results in the three years following the acquisition. The earn-out consideration was measured at fair value utilizing a Monte Carlo simulation depending on the achievement objective. The earn-out consideration fair value as of the acquisition date was $14,116 . Changes in the earn-out consideration fair value are recorded in the consolidated statements of income under general and administrative expenses.
The following table summarizes the fair value of the consideration transferred to AutoDS shareholders as of the acquisition date:
|
Fair value
|
||||
|
Cash paid
|
$
|
|
||
|
Fair value of earn-out
|
|
|||
|
Accrued payment
|
|
|||
|
Fair value of unvested options
|
|
|||
|
Total fair value of consideration transferred
|
$
|
|
||
In addition to the purchase consideration and pursuant to hold-back agreements with certain AutoDS employees, the Company transferred $12,168 in cash which will be released to the employees over three years from the acquisition date. The payouts of the hold-back are subject to continued employment, and therefore recognized as compensation expense over the requisite service period. For the year ended December 31, 2025 and 2024 the Company recorded compensation expenses in the amount of $4,056 and $1,711 , respectively under sales and marketing expenses.
The table below summarizes the fair value of the acquired assets and assumed liabilities and the goodwill as of the acquisition date:
|
|
Fair value
|
Amortization
period
|
|||
|
Cash and cash equivalents
|
|
||||
|
Assets acquired (4)
|
|
||||
|
Identified intangible assets (5):
|
|||||
|
Users’ Relationships
|
|
|
|||
|
Technology
|
|
|
|||
|
Trademark
|
|
|
|||
|
Goodwill
|
|
|
|||
|
Total assets acquired
|
|
|
|||
|
Total assumed liabilities (6)
|
(
|
)
|
|
||
|
Net assets acquired
|
$
|
|
|
||
| (4) |
Assets acquired include deposits, trade receivable and other identifiable assets acquired.
|
| (5) |
Information regarding the identifiable intangible assets acquired is as follows:
|
Fair value of users' relationships was determined by using the With-and-Without Method.
Fair value of technology was determined by using the income approach method.
Fair value of trademark was determined by using the relief from royalty method.
F - 22
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| (6) |
Total assumed liabilities includes trade payable, deferred revenue, deferred income tax liabilities, net and other liabilities assumed.
|
Goodwill generated from the above business combination is attributed to synergies between the Company's and the acquired businesses’ services and is not deductible for income tax purposes.
The Company incurred approximately $357 in acquisition expenses for the year ended December 31, 2024 recorded under general and administrative expenses.
The results of operations of AutoDS were consolidated in the Company’s financial statements commencing the date of acquisition and are not material.
Pro forma results of operations related to this acquisition have not been presented because they are not material to the Company’s consolidated statements of income.
| c. |
Yaballe Ltd. acquisition:
|
In October 2025, the Company acquired all of the outstanding shares of Yaballe Ltd. (“Yaballe”), a leading data-driven dropshipping automation platform for dropshippers for a total consideration of $12,598 .
The agreement stipulated an earn-out consideration of up to additional $17,260 , in cash based on obtaining certain financial results in the three years following the acquisition. The earn-out consideration was measured at fair value utilizing a Monte Carlo simulation depending on the achievement objective. The earn-out consideration fair value as of the acquisition date was $1,536 . Changes in the earn-out consideration fair value are recorded in the consolidated statements of income under general and administrative expenses.
The following table summarizes the preliminary fair value of the consideration transferred to Yaballe shareholders as of the acquisition date:
|
Fair value
|
||||
|
Cash paid
|
$
|
|
||
|
Fair value of earn-out
|
|
|||
|
Contingent liability
|
|
|||
|
Total fair value of consideration transferred
|
$
|
|
||
In addition to the purchase consideration and pursuant to hold-back agreements with Yaballe shareholders, the Company transferred $3,500 in cash which will be released to the shareholders over three years from the acquisition date. The payouts of the hold-back are subject to continued employment, and therefore recognized as compensation expense over the requisite service period. For the year ended December 31, 2025 the Company recorded compensation expenses in the amount of $121 and $122 under sales and marketing and research and development expenses, respectively.
F - 23
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
The table below summarizes the preliminary fair value of the acquired assets and assumed liabilities and the goodwill as of the acquisition date:
|
|
Fair value
|
Amortization
period
|
|||
|
Cash and cash equivalents
|
|
||||
|
Assets acquired (7)
|
|
||||
|
Identified intangible assets (8):
|
|||||
|
Users’ Relationships
|
|
|
|||
|
Technology
|
|
|
|||
|
Trademark
|
|
|
|||
|
Goodwill
|
|
|
|||
|
Total assets acquired
|
|
|
|||
|
Total assumed liabilities (9)
|
(
|
)
|
|
||
|
Net assets acquired
|
$
|
|
|
||
| (7) |
Assets acquired include deposits, trade receivable and other identifiable assets acquired.
|
| (8) |
Information regarding the identifiable intangible assets acquired is as follows:
|
Fair value of users' relationships was determined by using the multi-period excess earning method.
Fair value of technology was determined by using the relief from royalty method.
Fair value of trademark was determined by using the relief from royalty method.
| (9) |
Total assumed liabilities includes trade payable, deferred revenue, other account payables, deferred income tax liabilities, net and other liabilities assumed.
|
Goodwill generated from the above business combination is attributed to synergies between the Company's and the acquired businesses’ services and is not deductible for income tax purposes.
The Company incurred approximately $203 in acquisition expenses for the year ended December 31, 2025 recorded under general and administrative expenses.
The results of operations of Yaballe were consolidated in the Company’s financial statements commencing the date of acquisition and are not material.
Pro forma results of operations related to this acquisition have not been presented because they are not material to the Company’s consolidated statements of income.
F - 24
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| d. |
Bernstein, Dreyer & Mikulic GbR.:
|
In December 2025, the Company acquired the business of Bernstein, Dreyer & Mikulic GbR., an online mentorship and consulting agency for a total consideration of $11,711 .
The following table summarizes the preliminary fair value of the consideration transferred to Bernstein, Dreyer & Mikulic GbR. shareholders as of the acquisition date:
|
Fair value
|
||||
|
Cash paid
|
$
|
|
||
|
Fair value of earn-out
|
|
|||
|
Total fair value of consideration transferred
|
$
|
|
||
The agreement stipulated an earn-out consideration of up to additional $5,334 , in cash based on obtaining certain financial results in the three years following the acquisition. Additionally, the earn-out portion of the CEO of Bernstein, Dreyer & Mikulic GbR. is subject to continued employment, and therefore recognized as compensation expense over the requisite service period.
In addition to the purchase consideration and pursuant to a hold-back agreement with the CEO of Bernstein, Dreyer & Mikulic GbR., the Company transferred $2,246 in cash which will be released to the employee over three years from the acquisition date. The payouts of the hold-back are subject to continued employment, and therefore recognized as compensation expense over the requisite service period. For the year ended December 31, 2025, the Company recorded compensation expenses in the amount of $62 under sales and marketing expenses.
The table below summarizes the preliminary fair value of the acquired assets and assumed liabilities and the goodwill as of the acquisition date:
|
|
Fair value
|
Amortization
period
|
|||
|
Assets acquired (10)
|
|
||||
|
Identified intangible assets (11):
|
|||||
|
Customer Relationships
|
|
|
|||
|
Trademark
|
|
|
|||
|
Goodwill
|
|
|
|||
|
Total assets acquired
|
|
|
|||
|
Total assumed liabilities (12)
|
(
|
)
|
|
||
|
Net assets acquired
|
$
|
|
|
||
| (10) |
Assets acquired include account receivables.
|
F - 25
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| (11) |
Information regarding the identifiable intangible assets acquired is as follows:
|
Fair value of customer relationships was determined by using the multi-period excess earning method.
Fair value of trademark was determined by using the relief from royalty method.
| (12) |
Total assumed liabilities includes deferred revenue.
|
Goodwill generated from the above business combination is attributed to synergies between the Company's and the acquired businesses’ services and is deductible for income tax purposes.
The Company incurred approximately $54 in acquisition expenses for the year ended December 31, 2025 recorded under general and administrative expenses.
The results of operations of Bernstein, Dreyer & Mikulic GbR. were consolidated in the Company’s financial statements commencing the date of acquisition and are not material.
Pro forma results of operations related to this acquisition have not been presented because they are not material to the Company’s consolidated statements of income.
Note 4: - Fair value of financial instruments
The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of:
|
|
December 31, 2025
|
|||||||||||
|
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
|
Cash and cash equivalents:
|
||||||||||||
|
Cash
|
$
|
|
$
|
|
$
|
|
||||||
|
Money market funds
|
|
|
|
|||||||||
|
Deposits
|
|
|
|
|||||||||
|
Short-term Bank deposits
|
|
|
|
|||||||||
|
Restricted deposits
|
|
|
|
|||||||||
|
Marketable securities
|
|
|
|
|||||||||
|
Asset derivatives (included in other receivables)
|
|
|
||||||||||
|
Earn-outs
|
|
(
|
)
|
|||||||||
|
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
F - 26
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
The following table sets forth a summary of the changes in the fair value of the earn-out:
|
|
Fair value
|
|||
|
Fair value as of December 31, 2024
|
$
|
(
|
)
|
|
|
Acquisition of Yaballe Ltd. (Note 3)
|
(
|
)
|
||
|
Acquisition of Bernstein, Dreyer & Mikulic GbR. (Note 3)
|
(
|
)
|
||
|
Cash Payment
|
|
|||
|
Issuance of ordinary shares
|
|
|||
|
Change in fair value
|
(
|
)
|
||
|
Fair value as of December 31, 2025
|
$
|
(
|
)
|
|
The inputs and assumptions that were used in the earn-out valuations of AutoDS, Yaballe Ltd and Bernstein, Dreyer & Mikulic GbR. as of the acquisition date related to volatility ranged from 10 % to 19 %, from 13 % to 54 % and from 10 % to 54 %, respectively.
The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of:
|
|
December 31, 2024
|
|||||||||||
|
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
|
Cash and cash equivalents:
|
||||||||||||
|
Cash
|
$
|
|
$
|
|
$
|
|
||||||
|
Money market funds
|
|
|
|
|||||||||
|
Deposits
|
|
|
|
|||||||||
|
Short-term Bank deposits
|
|
|
|
|||||||||
|
Restricted deposits
|
|
|
|
|||||||||
|
Marketable securities
|
|
|
|
|||||||||
|
Asset derivatives (included in other receivables)
|
|
|
||||||||||
|
Earn-out
|
|
(
|
)
|
|||||||||
|
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
The following table sets forth a summary of the changes in the fair value of the earn-out:
|
|
Fair value
|
|||
|
Fair value as of December 31, 2023
|
$
|
|
||
|
Acquisition of AutoDS (Note 3)
|
(
|
)
|
||
|
Payment
|
|
|||
|
Change in fair value
|
(
|
)
|
||
|
Fair value as of December 31, 2024
|
$
|
(
|
)
|
|
The fair value of other financial instruments included in working capital and other non-current assets and liabilities approximate their carrying value.
F - 27
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Note 5: - Other receivables
Other receivables consisted of the following as of:
|
|
December 31,
|
|||||||
|
|
2025
|
2024
|
||||||
|
Trade receivables
|
$
|
|
$
|
|
||||
|
Interest receivables
|
|
|
||||||
|
Hold-back payments related to acquisitions
|
|
|
||||||
|
Prepaid expenses
|
|
|
||||||
|
Hedging outstanding contracts
|
|
|
||||||
|
Tax advances
|
|
|
||||||
|
Other current assets
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
Note 6: - Marketable securities
As of December 31, 2025, the amortized cost, unrealized holding gains and losses and fair value of marketable securities were as follows:
|
|
Amortized
|
Unrealized
|
Unrealized
|
|||||||||||||
|
|
Cost
|
gains
|
losses
|
Fair Value
|
||||||||||||
|
U.S. Treasury and other U.S. government agencies
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Corporate bonds
|
|
|
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
As of December 31, 2024, the amortized cost, unrealized holding gains and losses and fair value of marketable securities were as follows:
|
|
Amortized
|
Unrealized
|
Unrealized
|
|||||||||||||
|
|
Cost
|
gains
|
losses
|
Fair Value
|
||||||||||||
|
U.S. Treasury and other U.S. government agencies
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
|
Corporate bonds
|
|
|
(
|
)
|
|
|||||||||||
|
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
The following table summarizes the amortized cost, unrealized holding gains and losses and fair value of marketable securities by contractual maturity as of December 31, 2025:
|
|
Amortized
|
Unrealized
|
Unrealized
|
|||||||||||||
|
|
Cost
|
gains
|
losses
|
Fair Value
|
||||||||||||
|
Due within one year
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Due after one year through two years
|
|
|
|
|
||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
From the total of $0 and $265 unrealized losses as of December 31, 2025 and 2024, $0 and $250 were in continuous unrealized loss for more than 12 months, respectively. The unrealized losses are mainly driven by the higher interest rate environment and the recent interest rate hikes by global central banks during 2024-2025, which was due mainly to elevated inflation rates, therefore negatively impacted the fair value of securities in the Company’s portfolio.
As of December 31, 2025 and 2024, interest receivable amounted to $1,185 and $3,492 , respectively, and is included within other receivables in the consolidated balance sheets.
F - 28
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Note 7: - Property and equipment, net
Property and equipment, net consisted of the following as of:
|
|
December 31,
|
|||||||
|
|
2025
|
2024
|
||||||
|
Leasehold improvements
|
$
|
|
$
|
|
||||
|
Computers and peripheral equipment
|
|
|
||||||
|
Office furniture and equipment
|
|
|
||||||
|
|
|
|
||||||
|
Less—accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
|
Total
|
$
|
|
$
|
|
||||
Depreciation expenses were $1,660 , $1,778 and $1,879 for the years ended December 31, 2025, 2024 and 2023, respectively.
Note 8: - Intangible assets, net
Acquired intangible assets consisted of the following as of December 31, 2025:
|
|
Gross Carrying
|
Accumulated
|
Net Carrying
|
|||||||||
|
|
Amount
|
Amortization
|
Amount
|
|||||||||
|
|
||||||||||||
|
Technology
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
|
Capitalized internal-use software
|
|
(
|
)
|
|
||||||||
|
Customer Relationships
|
|
(
|
)
|
|
||||||||
|
Creatives Relationships
|
|
(
|
)
|
|
||||||||
|
Talents Relationships
|
|
(
|
)
|
|
||||||||
|
Trade Name
|
|
(
|
)
|
|
||||||||
|
Courses
|
|
(
|
)
|
|
||||||||
|
Total
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Acquired intangible assets consisted of the following as of December 31, 2024:
|
|
Gross Carrying
|
Accumulated
|
Net Carrying
|
|||||||||
|
|
Amount
|
Amortization
|
Amount
|
|||||||||
|
|
||||||||||||
|
Technology
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
|
Capitalized internal-use software
|
|
(
|
)
|
|
||||||||
|
Customer Relationships
|
|
(
|
)
|
|
||||||||
|
Creatives Relationships
|
|
(
|
)
|
|
||||||||
|
Talents Relationships
|
|
(
|
)
|
|
||||||||
|
Trade Name
|
|
(
|
)
|
|
||||||||
|
Courses
|
|
(
|
)
|
|
||||||||
|
Total
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
F - 29
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
In connection with internal-use software, the Company capitalized $713 , $469 and $0 for the years ended December 31, 2025, 2024 and 2023, respectively. The capitalized amount included share-based compensation of $52 , $32 and $0 for the years ended December 31, 2025, 2024 and 2023, respectively.
Amortization expenses amounted to $13,032 , $8,698 and $4,108 for the years ended December 31, 2025, 2024 and 2023, respectively.
The estimated future amortization of intangible assets as of December 31, 2025 was as follows:
|
2026
|
$
|
|
||
|
2027
|
|
|||
|
2028
|
|
|||
|
2029
|
|
|||
|
Total
|
$
|
|
Note 9: - Other non-current assets
Other non-current assets consisted of the following as of:
|
|
December 31,
|
|||||||
|
|
2025
|
2024
|
||||||
|
Hold-back payments related to acquisitions
|
$
|
|
$
|
|
||||
|
Other
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
Note 10: - Derivatives and hedging
The Company had outstanding contracts designated as hedging instruments in the aggregate notional amount of $28,000 and $54,000 as of December 31, 2025 and 2024, respectively.
The fair value of the Company’s outstanding contracts amounted to an asset of $3,625 and $1,413 as of December 31, 2025 and 2024, respectively.
These assets were recorded under other receivables on the consolidated balance sheets.
Gains of $6,227 , $217 and losses of $4,085 were reclassified from accumulated other comprehensive income during the years ended December 31, 2025, 2024 and 2023, respectively.
Such gains and losses were reclassified from accumulated other comprehensive income when the related expenses were incurred. These gains and losses were recorded in the consolidated statements of income as follows:
|
|
December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Cost of revenue
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||
|
Research and development
|
(
|
)
|
(
|
)
|
|
|||||||
|
Sales and marketing
|
(
|
)
|
(
|
)
|
|
|||||||
|
General and administrative
|
(
|
)
|
(
|
)
|
|
|||||||
|
Total
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||
In addition, for the year ended December 31, 2023, losses of $395 were reclassified from other comprehensive income to financial income and other in connection with forecasted transactions not probable of occurring.
F - 30
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Note 11: - Other account payables and accrued expenses
Other account payable and accrued expenses consisted of the following as of:
|
|
December 31,
|
|||||||
|
|
2025
|
2024
|
||||||
|
Accrued expenses
|
$
|
|
$
|
|
||||
|
Accrued payroll and government authorities
|
|
|
||||||
|
Earn-out
|
|
|
||||||
|
Proceeds from withholding tax related to employees’ exercises of share options and RSUs, net
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
Note 12: - Leases
The Company leases office spaces under non-cancellable operating lease agreements in Israel and the U.S. The operating lease of the Company’s office space in Israel will expire in December 2026. In addition, a subsidiary of the Company entered into an operating lease agreement for office space in Israel, which will expire in December 2027 and includes a one-year renewal option. The operating lease for the office space in the U.S expires in April 2027 and has no renewal option. The Company subleases a portion of its Israel office space.
The components of operating lease cost recorded under operating expenses were as follows for the years ended:
|
|
December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Fixed cost and variable cost that depend on an index
|
$
|
|
$
|
|
$
|
|
||||||
|
Impairment of lease ROU asset
|
|
|
|
|||||||||
|
Short term lease cost
|
|
|
|
|||||||||
|
Sublease income
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Total
|
$
|
|
$
|
|
$
|
|
||||||
Weighted average discount rate for the years ended December 31, 2025 and 2024 were 3.77 % and 3.07 %.
Weighted average remaining lease term for the years ended December 31, 2025 and 2024 were 1.55 years and 2.06 years, respectively.
Cash payments related to operating lease liabilities for the years ended December 31, 2025, 2024 and 2023, were $3,337 , $3,331 , and $3,374 , respectively
The minimum lease payments for the Company’s ROU assets over the remaining lease periods as of December 31, 2025, were as follows:
|
2026
|
$
|
|
||
|
2027
|
|
|||
|
2028
|
|
|||
|
Total undiscounted lease payments
|
|
|||
|
Less: imputed interest
|
(
|
)
|
||
|
Present value of lease liabilities
|
$
|
|
As of December 31, 2025, the Company has an operating lease that has not yet commenced, with a lease obligation of approximately $24,426 for new offices. The operating lease will commence on January 1, 2027, with a lease term of five years , including an option for a five-year extension.
F - 31
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Note 13: - Commitments and contingencies
From time to time, the Company may be involved in various claims and legal proceedings.
The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated the Company would accrue a liability for the estimated loss.
As of December 31, 2025 and 2024, the Company is not involved in any material claims or legal proceedings that would require an accrual of liability for the estimated loss.
Note 14: - Convertible notes
| a. |
Convertible notes
|
In October 2020, the Company issued $460,000 aggregate principal amount, 0 % coupon rate of convertible notes that were due on November 1, 2025 (inclusive of an additional $60,000 aggregate principal amount of such notes pursuant to the exercise in full of the over allotment option of the initial purchasers). The convertible notes are convertible based upon an initial conversion rate of 4.6823 of the Company’s ordinary shares, per share per $1 principal amount of convertible notes (equivalent to a conversion price of approximately $213.57 per ordinary share). The conversion rate is subject to adjustment upon the occurrence of certain specified events. The convertible notes are senior unsecured obligations of the Company. The convertible notes mature on November 1, 2025 , unless earlier repurchased, redeemed or converted.
On or after May 15, 2025 until the close of business on the third scheduled trading day immediately preceding the maturity date, a holder may convert its convertible notes at any time, regardless of the foregoing circumstances.
Upon conversion, the Company can pay or deliver cash, ordinary shares or a combination of cash and ordinary shares, at the Company’s election.
The Company may, at any time and from time to time, redeem for cash all or any portion of the convertible notes, at the Company’s option, if the last reported sale price of the Company`s ordinary shares has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which it delivers notice of redemption at a redemption price equal to 100 % of the principal amount of the convertible notes to be redeemed.
Upon the occurrence of a fundamental change as defined in the indenture, holders may require the Company to repurchase for cash all or any portion of their convertible notes at a fundamental change repurchase price equal to 100% of the principal amount of the convertible notes to be repurchased (plus accrued and unpaid special interest payable under certain circumstances set forth in the terms of the convertible notes (if any) to, but excluding, the fundamental change repurchase date. In addition, in connection with a make-whole fundamental change as defined in the indenture or following the Company’s delivery of a notice of redemption, the company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its convertible notes in connection with such a corporate event or redemption, as the case may be. Issuance costs attributable to the debt and equity components prior to the adoption of ASU 2020-06 were $9,969 and $2,842 , respectively. The effective borrowing rate of the debt component of the convertible notes was 5.1 %. This borrowing rate was based on the Company’s synthetic credit risk rating determined by a third-party appraiser.
On November 3, 2025, the Company redeemed in cash all of its outstanding convertible notes due. The notes were redeemed at an amount equal to the outstanding principal plus accrued and unpaid interest up to the redemption date. Following this transaction, no convertible notes remain outstanding.
F - 32
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
The net carrying amount of convertible notes as of December 31, 2025 and 2024 was as follows:
|
|
December 31,
|
|||||||
|
2025
|
2024
|
|||||||
|
Principal amounts
|
$
|
|
$
|
|
||||
|
Unamortized issuance costs
|
|
|
||||||
|
Net carrying amount
|
$
|
|
$
|
|
||||
Financial expenses related to the convertible notes for the years ended December 31, 2025, 2024 and 2023 were $2,140 , $2,555 and $2,541 , respectively.
| b. |
Capped call
|
In connection with the pricing of the convertible notes and the exercise of the over allotment option, the Company entered into privately negotiated capped call transactions with certain financial institutions. The capped call transactions cover, collectively, the number of the Company’s ordinary shares underlying the convertible notes, subject to anti-dilution adjustments substantially similar to those applicable to the convertible notes. The capped call has an initial strike price of $213.57 per ordinary share, subject to certain adjustments, which corresponds to the approximate initial conversion price of the convertible notes. The cap price of the capped call is initially $305.1 per ordinary share and is subject to certain adjustments under the terms of the capped call.
The capped call transactions were considered to be freestanding instruments as they were entered into separately and apart from the convertible notes and since the conversion or redemption of the convertible notes does not automatically result in the exercise of the capped call. The capped call transactions are indexed to the Company’s own shares and meet the criteria for equity classification. The cost of the capped call transactions was approximately $43,240 recorded as a reduction to additional paid in capital with no subsequent measurement.
During 2025, the Company assessed the capped call transactions in light of changes to their settlement terms. As cash settlement became mandatory, the instruments were subject to fair value measurement through earnings. Following this assessment, the fair value of the capped call transactions was determined to be immaterial.
Note 15: - Other non-current liabilities
Other non-current liabilities consisted of the following as of:
|
|
December 31,
|
|||||||
|
|
2025
|
2024
|
||||||
|
Deferred tax liabilities (refer to note 18)
|
$
|
|
$
|
|
||||
|
Uncertain tax positions (refer to note 18)
|
|
|
||||||
|
Earn-out
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
F - 33
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Note 16: - Shareholders’ equity
| a. |
Share Repurchase Program:
|
During 2024, the Company’s board of directors authorized a share buyback program for the repurchase of up to $100,000 of the Company’s outstanding Ordinary shares. As of December 31, 2024, the Company repurchased 4,139,417 ordinary shares for $99,997 excluding $84 , at an average price of $24.16 . The ordinary shares purchased were cancelled subsequent to their purchase, returned to the unallocated share pool and are no longer outstanding.
During March 2025, the Company’s board of directors authorized a share buyback program for the repurchase of up to $100,000 of the Company’s outstanding Ordinary shares. As of December 31, 2025, the Company repurchased 1,475,564 ordinary shares for $32,499 , excluding $30 broker fees, at an average price of $22.03 per share, respectively. The ordinary shares purchased were cancelled subsequent to their purchase, returned to the unallocated share pool and are no longer outstanding
| b. |
Holders of ordinary shares are entitled to one vote per share and dividends whenever funds are legally available and when, as, and if declared by the Company’s board of directors.
|
| c. |
Share options, RSUs and PSUs:
|
In 2011, the board of directors adopted the 2011 share option plan for employees, officers, directors and consultants (the “2011 Plan”). Each share option granted under the 2011 Plan expires no later than ten years from the date of grant. The vesting period of the share options is generally four years. As of December 31, 2019, the Company is no longer granting any awards under the 2011 Plan.
In 2019, the board of directors adopted the 2019 share incentive plan (the “2019 Plan”) for employees, officers, directors and consultants. The 2019 Plan provides for the grant of share options (including incentive share options and non-qualified share options), ordinary shares, restricted shares, RSUs and other share-based awards.
Each share option granted under the 2019 Plan expires no later than seven years from the date of grant. The vesting period of the share options is generally four years .
As of December 31, 2025, 2,100,080 RSUs and PSUs were outstanding under the 2019 Plan and the total of 4,080,503 ordinary shares were available for future grants under the 2019 Plan.
F - 34
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
The following table summarizes the status of the share options granted under our 2019 Plan and 2011 Plan as of and for the year ended:
|
|
December 31, 2025
|
|||||||||||
|
|
Number of
share options |
Weighted-
average exercise price |
Weighted-
average remaining contractual term (in years) |
|||||||||
|
Outstanding at the beginning of the year
|
|
$
|
|
|
||||||||
|
Granted
|
|
|
-
|
|||||||||
|
Exercised
|
(
|
)
|
|
-
|
||||||||
|
Forfeited
|
(
|
)
|
|
-
|
||||||||
|
Outstanding at the end of the year
|
|
$
|
|
|
||||||||
|
Exercisable at the end of the year
|
|
$
|
|
|
||||||||
The weighted-average grant-date fair value of share options granted was $18.17 per share for the year ended December 31, 2023.
The weighted-average grant-date fair value of share options exercised was $27.20 , $26.15 and $25.09 per share for the years ended December 31, 2025, 2024 and 2023, respectively.
The fair value of these share options was estimated on the grant date based on the following weighted average assumptions for the years ended:
|
|
December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Volatility
|
|
|
|
|
||||||||
|
Expected term in years
|
|
|
|
|||||||||
|
Risk-free interest rate
|
|
|
|
|
||||||||
|
Estimated fair value of underlying ordinary shares
|
|
|
|
|||||||||
|
Dividend yield
|
|
|
|
|
||||||||
F - 35
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Intrinsic value represents the potential amount receivable by the option holders had all option holders exercised their share options as of such date.
The aggregate intrinsic value of the exercised share options was $6,703 , $5,366 and $8,146 for the years ended December 31, 2025, 2024 and 2023, respectively.
The grant-date fair value of vested share options was $10,852 , $19,122 and $20,802 for the years ended December 31, 2025, 2024 and 2023, respectively.
The following table summarizes the status of RSUs and PSUs granted under our 2019 Plan as of and for the year ended:
|
|
December 31, 2025
|
|||||||
|
|
Number of
RSUs and PSUs
|
Weighted-
average
grant date
fair value
|
||||||
|
Outstanding at the beginning of the year
|
|
$
|
|
|||||
|
Granted
|
|
|
||||||
|
Vested
|
(
|
)
|
|
|||||
|
Forfeited
|
(
|
)
|
|
|||||
|
Outstanding at the end of the year
|
|
$
|
|
|||||
| d. |
Employee Share Purchase Plan:
|
In August 2020, the Company adopted the 2020 Employee Share Purchase Plan (the “ESPP”). As of December 31, 2025, a total of 1,564,027 shares were reserved for issuance under the ESPP.
The maximum aggregate number of ordinary shares that may be purchased initially under the ESPP was 410,000 shares, subject to adjustment as provided for in the ESPP. In addition, on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2030, the number of shares available for issuance under the ESPP will be increased by the lesser of 1% of the shares outstanding on the final day of the immediately preceding calendar year, as determined on a fully diluted basis, and such smaller number of shares as determined by the Company’s board of directors. According to the ESPP, eligible employees may use up to 15 % of their salaries to purchase ordinary shares. The price of an ordinary share purchased under the ESPP is equal to 85 % of the lower of the fair market value of the ordinary share on the beginning of each offering period or on the purchase date.
During 2025, 188,855 ordinary shares had been issued pursuant to the ESPP. The ESPP is compensatory and, as such, results in recognition of compensation cost.
F - 36
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
The fair value of ESPP was estimated on the grant date based on the following weighted average assumptions for the years ended:
|
|
December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Volatility
|
|
|
|
|
||||||||
|
Expected term in years
|
|
|
|
|||||||||
|
Risk-free interest rate
|
|
|
|
|||||||||
|
Estimated fair value of underlying ordinary shares
|
|
|
|
|||||||||
|
Dividend yield
|
|
|
|
|||||||||
| e. |
Share-based compensation:
|
Share-based compensation costs are recorded in the consolidated statements of income for the years ended:
|
|
December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Cost of revenue
|
$
|
|
$
|
|
$
|
|
||||||
|
Research and development
|
|
|
|
|||||||||
|
Sales and marketing
|
|
|
|
|||||||||
|
General and administrative
|
|
|
|
|||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
||||||
The total unrecognized share-based compensation cost as of December 31, 2025 was $58,137 , which will be recognized over a weighted-average period of 2.48 years.
F - 37
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Note 17: - Financial income and other
|
|
Year ended December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Bank charges and other financial expenses
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
Amortization of discount of convertible notes
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Derivatives and hedging
|
|
|
(
|
)
|
||||||||
|
Exchange rate gain (loss), net
|
(
|
)
|
(
|
)
|
|
|||||||
|
Sale of subsidiary
|
|
|
|
|||||||||
|
Amortization of premium and accretion of discount on marketable securities, net
|
|
|
|
|||||||||
|
Interest income, net
|
|
|
|
|||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
||||||
Note 18: - Income taxes
Fiverr International Ltd.’s subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity.
| a. |
Corporate tax in Israel:
|
Ordinary taxable income is subject to a corporate tax rate of 23 % for the years 2023-2025. Refer to Note 18g for tax benefits in Israel.
| b. |
Income before income taxes:
|
The following are the domestic and foreign components of the Company’s income before income taxes for the years ended:
|
|
December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Domestic income
|
$
|
|
$
|
|
$
|
|
||||||
|
Foreign loss
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
|
Total
|
$
|
|
$
|
|
$
|
|
||||||
| c. |
Tax benefit (Income taxes) are comprised as follows:
|
|
December 31,
|
||||||||||||
|
2025
|
2024
|
2023
|
||||||||||
|
Current taxes
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
Deferred taxes
|
|
|
|
|||||||||
|
Total
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
|
December 31,
|
||||||||||||
|
2025
|
2024
|
2023
|
||||||||||
|
Domestic
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
|
Foreign
|
|
|
(
|
)
|
(
|
)
|
||||||
|
Total
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
F - 38
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| d. |
Deferred income taxes:
|
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The principal components of the Company’s deferred tax assets are as follows for the years ended:
|
|
December 31,
|
|||||||
|
|
2025
|
2024
|
||||||
|
Deferred tax assets:
|
||||||||
|
Net operating loss carryforwards
|
$
|
|
$
|
|
||||
|
Research and development expenses carryforward
|
|
|
||||||
|
Accrued and other
|
|
|
||||||
|
Share-based compensation
|
|
|
||||||
|
Capital loss due to sale of subsidiary
|
|
|
||||||
|
Capped call transaction
|
|
|
||||||
|
Operating lease liabilities
|
|
|
||||||
|
Acquired Intangible assets
|
|
|
||||||
|
Total deferred tax asset before valuation allowance
|
$
|
|
$
|
|
||||
|
Valuation allowance
|
(
|
)
|
(
|
)
|
||||
|
Total deferred tax asset after valuation allowance
|
$
|
|
$
|
|
||||
|
Deferred tax liabilities:
|
||||||||
|
Operating lease ROU assets
|
(
|
)
|
(
|
)
|
||||
|
Acquired Intangible assets
|
(
|
)
|
(
|
)
|
||||
|
Accrued and other
|
(
|
)
|
(
|
)
|
||||
|
Total deferred tax liability
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
Net deferred taxes
|
$
|
|
$
|
|
||||
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized in each tax jurisdiction. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating losses are utilized. Based on consideration of these factors, as of December 31, 2025, the Company recorded a tax asset of $7,174 reflecting tax benefit in the US mainly due to share based compensation related items and utilization of net operating losses in future years.
F - 39
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
The following table presents the reconciliation between the Company’s theoretical income tax and effective income tax for the year ended December 31, 2025 after the adoption of ASU 2023-09:
|
|
Year ended December 31, 2025
|
|||||||
|
|
Amount
|
Percentage
|
||||||
|
Israel statutory tax rate
|
$
|
(
|
)
|
|
|
|||
|
Foreign tax effects
|
||||||||
|
US:
|
||||||||
|
Change in valuation allowance
|
|
|
|
|||||
|
Valuation allowance on capital loss
|
(
|
)
|
(
|
)
|
||||
|
Capital loss due to sale of subsidiary
|
|
|
|
|||||
|
Non-deductible expenses
|
(
|
)
|
(
|
)
|
||||
|
State taxes
|
(
|
)
|
(
|
)
|
||||
|
Other
|
(
|
)
|
(
|
)
|
||||
|
Other foreign jurisdictions
|
(
|
)
|
(
|
)
|
||||
|
Nontaxable or nondeductible items:
|
||||||||
|
Angel’s Law special deduction
|
|
|
|
|||||
|
Shared based compensation
|
(
|
)
|
(
|
)
|
||||
|
Revaluation of earn-outs
|
(
|
)
|
(
|
)
|
||||
|
Other
|
(
|
)
|
(
|
)
|
||||
|
Effect of technological preferred enterprise status (TPE)
|
|
|
|
|||||
|
Changes in unrecognized tax benefits
|
(
|
)
|
(
|
)
|
||||
|
Other
|
|
|
|
|||||
|
Effective tax rate
|
$
|
(
|
)
|
(
|
)
|
|||
The following table presents the reconciliation between the Company’s theoretical income taxes and effective income taxes for the years ended December 31, 2024 and 2023 prior the adoption of ASU 2023-09:
|
|
Year ended December 31,
|
||||||||
|
|
2024
|
2023
|
|||||||
|
Income before income taxes
|
$
|
|
$
|
|
|||||
|
Statutory tax rate
|
|
|
|
|
|||||
|
Theoretical tax benefit (expense)
|
(
|
)
|
(
|
)
|
|||||
|
Increase (decrease) in effective tax rate due to:
|
|||||||||
|
Change in valuation allowance
|
|
|
|||||||
|
Effect of technological preferred enterprise status (TPE)
|
|
|
|||||||
|
Effect of entities with different tax rates
|
(
|
)
|
(
|
)
|
|||||
|
Non-deductible expenses
|
(
|
)
|
(
|
)
|
|||||
|
Write-off of NOL due to limitation on utilization
|
(
|
)
|
|||||||
|
Uncertain tax provision
|
(
|
)
|
(
|
)
|
|||||
|
Other
|
(
|
)
|
(
|
)
|
|||||
|
Effective income taxes
|
$
|
|
$
|
(
|
)
|
||||
F - 40
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
| e. |
Cash Income Taxes Paid (net of refunds):
|
|
|
December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Israel
|
$
|
|
|
|
||||||||
|
US
|
|
|
|
|||||||||
|
Europe
|
|
|
(
|
)
|
||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
||||||
| f. |
Net operating loss carryforward:
|
As of December 31, 2025, the Company had approximately $12,619 Net Operating Losses (“NOL”) attributed to the Israeli entity to be utilized over a period of 3 years. Also, the Company had approximately $15,751 NOL carryforward attributed to the U.S. subsidiaries federal tax. NOLs for U.S. Federal income tax purposes (“Federal NOLs”) generated in the years ended December 31, 2014 through 2017 will begin to expire in 2035 for federal income tax purposes. Federal NOL’s originating before January 1, 2018, are eligible to offset taxable income, if not otherwise limited under Internal Revenue Code (“IRC”) 382 limitations. Federal NOL’s generated after December 31, 2017, have an infinite carryforward period and are subject to 80% deduction limitation based upon pre-NOL deduction taxable income. All of the federal NOL’s of the Company are expected to be subject to certain limitations under 382 following that change in control that occurred upon acquisition of ClearVoice, Working Not Working, Inc. and CreativeLive. Additionally, the Company had approximately $7,383 NOLs carryforward attributed to the U.S. subsidiaries state income tax. NOLs for U.S. State income tax purposes (“State NOLs”) generated in the years ended December 31, 2013 through 2017 will begin to expire in 2034 for state income tax purposes. State NOL’s originating before January 1, 2018, are eligible to offset taxable income. In some states, State NOL’s generated after December 31, 2017, have an infinite carryforward period.
| g. |
Basis of taxation:
|
Israel:
In December 2016, the Israeli Knesset passed Amendment 73 to the Investment Law which included a number of changes to the Investment Law regimes through regulations approved on May 1, 2017 and that have come into effect from January 1, 2017.
Applicable benefits under the new regime include:
- Introduction of a benefit regime for "Preferred Technology Enterprises" ("PTE") granting a 12% tax rate in central Israel – on qualified income deriving from Benefited Intellectual Property, subject to a number of conditions being fulfilled, including a minimal amount or ratio of annual R&D expenditure and R&D employees, as well as having at least 25% of annual income derived from exports to large markets.
- A withholding tax rate of 20 % for dividends paid from PTE income (with an exemption from such withholding tax applying to dividends paid to an Israeli company). Such rate may be reduced to 4 % on dividends paid to a foreign resident company, subject to certain conditions regarding percentage of foreign ownership of the distributing entity.
The Company evaluated the effect of the adoption of the Amendment 73 and it generally meets the conditions for tax benefits as a “Preferred Technological Enterprise.”
F - 41
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
United States:
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted into law. The legislation represents fundamental and dramatic modifications to the U.S. tax system. The Act contains several key tax provisions that will impact the Company’s U.S. subsidiaries, including the reduction of the maximum U.S. federal corporate income tax rate from 35 % to 21 %, effective January 1, 2018. Other significant changes under the Act include, among others, a one-time repatriation tax on accumulated foreign earnings, a limitation of net operating loss deduction to 80 % of taxable income, and indefinite carryover of post-2017 net operating losses. The Act also repeals the corporate alternative minimum tax for tax years beginning after December 31, 2017. Losses generated prior to January 1, 2018 will still be subject to the 20-year carryforward limitation and the alternative minimum tax. Other potential impacts due to the Act include the repeal of the domestic manufacturing deduction, modification of taxation of controlled foreign corporations, a base erosion anti-abuse tax, modification of interest expense limitation rules, modification of limitation on deductibility of excessive executive compensation, and taxation of global intangible low-taxed income.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. OBBBA amends U.S. tax law, including provisions related to bonus depreciation, research and development and foreign derived intangible income. The Company is currently evaluating the impact of the OBBBA on its consolidated financial statements.
| h. |
Tax benefits under the Law for the Encouragement of Industry (Taxation), 1969:
|
Management believes that the Company currently qualifies as an "industrial company" under the above law and as such, is entitled to certain tax benefits including accelerated depreciation, deduction of public offering expenses in three equal annual installments and amortization of other intangible property rights for tax purposes.
| i. |
Tax assessments:
|
As of December 31, 2025, the Company had open tax years for the periods between 2021 and 2024 in Israel and for the periods between 2020 and 2023 for the U.S. subsidiaries. In Israel, the Company is under the Israeli Tax Authorities audit for the years 2021-2022. The Company has NOL in Israel and the U.S. and R&D credit in the U.S. from prior tax periods which may be subject to examination in future periods. NOLs are subject to tax in future periods.
| j. |
Uncertain tax positions:
|
A reconciliation of the opening and closing amounts of total unrecognized tax positions is as follows:
|
|
December 31,
|
|||||||
|
|
2025
|
2024
|
||||||
|
Opening balance
|
$
|
|
$
|
|
||||
|
Increase related to current year tax positions
|
|
|
||||||
|
Closing balance
|
$
|
|
$
|
|
||||
The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes. As of December 31, 2025 and 2024, the Company accrued $
F - 42
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data)
Note 19: - Segment and geographic information
Revenue attributable to the Company’s domicile and other geographic areas based on the location of the buyers was as follows for the years ended:
|
December 31,
|
||||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
U.S.
|
$
|
|
$
|
|
$
|
|
||||||
|
Europe
|
|
|
|
|||||||||
|
Asia Pacific
|
|
|
|
|||||||||
|
Rest of the world
|
|
|
|
|||||||||
|
Israel
|
|
|
|
|||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
||||||
The following table summarizes disaggregated revenue by marketplace revenue and services revenue for the years ended:
|
|
December 31,
|
|||||||||||
|
|
2025
|
2024
|
2023
|
|||||||||
|
Marketplace Revenue
|
$
|
|
$
|
|
$
|
|
||||||
|
Services Revenue
|
|
|
|
|||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
||||||
Property and equipment, net and ROU assets by geographical areas was as follows:
|
|
December 31,
|
|||||||
|
|
2025
|
2024
|
||||||
|
Israel
|
$
|
|
$
|
|
||||
|
U.S. and other
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
F - 43
Exhibit 8.1
Subsidiaries of the Registrant
|
Legal Name of Subsidiary
|
Jurisdiction of Organization
|
|
|
AutoDS Inc.
|
Delaware, United States
|
|
|
AutoDS Ltd.
|
Israel
|
|
|
ClearVoice, Inc.
|
Delaware, United States
|
|
|
Digis Programming Solutions Limited
|
Cyprus
|
|
|
Do It Programming Solutions (Cyprus) Limited
|
Cyprus
|
|
|
Fiverr Germany GmbH
|
Germany
|
|
|
Fiverr Limited
|
Cyprus
|
|
|
Fiverr, Inc.
|
Delaware, United States
|
|
|
Macea Investments Limited
|
Cyprus
|
|
|
Praetolia Ltd
|
Cyprus
|
|
|
Roksy, Inc.
|
Delaware, United States
|
|
|
Working Not Working, Inc.
|
Delaware, United States
|
|
|
Yaballe Ltd.
|
Israel
|
Exhibit 12.1
CERTIFICATIONS
I, Micha Kaufman, Chief Executive Officer, certify that:
|
1.
|
I have reviewed this annual report on Form 20-F of Fiverr International Ltd.;
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the company as of, and for, the periods presented in this report;
|
|
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
|
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to
materially affect, the company’s internal control over financial reporting; and
|
|
5.
|
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s
board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
|
Date: March 12, 2026
|
By:
|
/s/ Micha Kaufman
|
|
|
Micha Kaufman
|
|||
|
Chief Executive Officer
|
|||
|
(Principal Executive Officer)
|
Exhibit 12.2
CERTIFICATIONS
I, Esti Levy Dadon, Chief Financial Officer, certify that:
|
1.
|
I have reviewed this annual report on Form 20-F of Fiverr International Ltd.;
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the company as of, and for, the periods presented in this report;
|
|
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
|
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to
materially affect, the company’s internal control over financial reporting; and
|
|
5.
|
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s
board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
|
Date: March 12, 2026
|
By:
|
/s/ Esti Levy Dadon
|
|
|
Esti Levy Dadon
|
|||
|
Chief Financial Officer
|
|||
|
(Principal Financial Officer)
|
Exhibit 13.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The certification set forth below is being submitted in connection with the Annual Report on Form 20-F of Fiverr International Ltd. for the year ended December 31, 2025 (the “Report”) for the purpose
of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
I, Micha Kaufman, Chief Executive Officer, certify that to the best of my knowledge:
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date: March 12, 2026
|
By:
|
/s/ Micha Kaufman
|
|
|
Micha Kaufman
|
|||
|
Chief Executive Officer
|
|||
|
(Principal Executive Officer)
|
Exhibit 13.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The certification set forth below is being submitted in connection with the Annual Report on Form 20-F of Fiverr International Ltd. for the year ended December 31, 2025 (the “Report”) for the purpose
of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
I, Esti Levy Dadon, Chief Financial Officer, certify that to the best of my knowledge:
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date: March 12, 2026
|
By:
|
/s/ Esti Levy Dadon
|
|
|
Esti Levy Dadon
|
|||
|
Chief Financial Officer
|
|||
|
(Principal Financial Officer)
|
Exhibit 15.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement (Form F-3 No. 333-285050) of Fiverr International Ltd., and
(2) Registration Statements (Form S-8 Nos. 333-232310, 333-237511, 333-253261, 333-248580, 333-262814, 333-262817, 333-270990, 333-270992, 333-277268, 333-277270, 333-285048
and 333-285049) pertaining to the 2019 Share Incentive Plan, 2011 Share Option Plan and the 2020 Employee Share Purchase Plan of Fiverr International Ltd.;
of our reports dated March 12, 2026, with respect to the consolidated financial statements of Fiverr International Ltd., and the effectiveness of internal control over financial reporting of Fiverr International Ltd.,
included in this Annual Report (Form 20-F) of Fiverr International Ltd. for the year ended December 31, 2025.
|
/s/ Kost Forer Gabbay & Kasierer
A Member of EY Global March 12, 2026
Tel-Aviv, Israel
|