Q2 2022 Fiverr International Ltd Earnings Call
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I'll now hand over to your host changing Kim head of Investor Relations to begin Jim Jim. Please go ahead.
Thank you operator, and good morning, everyone. Thank you for joining us on fiber earnings conference call for the second quarter ended June 32022.
Joining me today on the call is niihau, Kaufman, founder and CEO and Ofer, President and CFO .
Before we start I'd like to remind you that during this call. We may make forward looking statements and that these statements are based on our current expectations and assumptions as of today and fiber assumes no obligation to update or revise a discussion of some of the important risk factors that could cause actual results to differ materially from any forward looking statements.
Can be found under the risk factors section in fiber <unk>, most recent form 20-F, and other filings with the SEC.
During this call, we'll be referring to some non-GAAP financial measures.
A reconciliation of the non-GAAP financial measure to the most directly comparable GAAP measure are provided in the earnings release, we issued today in our shareholder letter each of which is available on our website at investors dot fiber dot com.
And now I'll turn the call over to Neil.
Thank you Ginger and good morning, everyone and thank you for joining us today.
In the second quarter of 2022 fiber delivered revenue of $85 million representing year over year growth of 13%.
We continue to see a rapid consumer and SMB sentiment shift amidst the challenging global macro environment.
Geopolitical volatility spiking inflation and elevated energy prices.
And the spending power of consumers and F&B was impacted more than expected.
This trickled through to the overall demand for <unk> spending we are not immune to these macro trends.
We are encouraged however that fiber continues to serve as the backbone for millions of businesses to connect and engage with freelancers.
Octave buyers were $4 2 million up 6% year over year and spend per buyer was $259 up 14% year over year.
Our market base scaled up significantly during the Covid years.
And most of that gain continues to hold today with.
We see older cohorts.
You need to spend more today versus pre COVID-19 and we continue to attract a significantly larger amount of new buyers to our market base.
Every quarter compared to our pre COVID-19.
Take rate remains strong at 29, 8% up 200 basis points year over year, reflecting the tremendous value we provided to our community of buyers and sellers and the continued expansion of value added products. Our Q2 results also demonstrated our continued.
With discipline and operational efficiency in.
In Q2, we delivered adjusted EBITDA of $4 6 million, representing an adjusted EBITDA margin of five 4%.
Fiber is always run a lean organization, but the macro environment requires us to recalibrate, our growth and profitability profile and investment priorities.
Post the quarter, we made a tough decision to reduce our team by 60 members.
It is not a decision made lightly.
Over the years, we have built an incredible team and an amazing culture at fiber, where we gather super talented and passionate people together to build towards a common mission.
This means we have to part with many teammates we love and value.
We have great people, leaving and other companies will be lucky to have them.
With this we are putting ourselves in a strong financial position to continue delivering growth with positive adjusted EBITDA and heading towards our long term target model.
Ofer will provide more color on that.
Now I want to spend some time discussing the investments we are focusing on to strengthen our core and position us for long term success.
Fibers buyer base consists of $4 2 million people coming from all types of businesses from solar printers, all the way to the largest companies in the world.
We know that there are over 30 million smbs in the U S alone and even more in Europe , and the rest of the world.
Our level of market penetration in the SMB space is impressive, but nowhere near saturation.
There is ample addressable market available to grow into and this remains a top priority for us.
We are doubling down on building deep technology moats for our core market base.
This includes supply.
Quality search and personalization marketing and growth.
Fibers market base is uniquely complex.
We have hundreds of thousands of sellers, who have created millions of it services listing across more than 550 categories.
Each of these sellers listings and categories comes with unique skills attributes pricing in scope.
Understanding the quantity and matching a buyer or seller is highly complicated.
Not only due to the diversity of services, we cover but also because quality is subjective depending on the buyer and there are specific project.
The fact that fiber is an end to end transaction market base gives us not only the ability to truck reviews and ratings, but also powerful data.
To dissect user behavior and user interactions to understand quality and matching.
Do they come back and buy more.
The project deliver on time.
With the communication between the buyer and seller smooth.
How many dialogues and revisions were needed before a successful delivery.
The recently introduced fast response badge is an example of how unlocking metadata can create a meaningful impact on conversion rates.
We have built a lot of deep tech over the years to extract those signals.
And there is so much more to do.
We are also constantly expanding the capabilities of our market base to facilitate larger and more complex projects with longer engagements duration between buyers and sellers.
During the quarter, we rollout project briefing capabilities to allow buyers to describe projects with complex scope in a structured way.
We can then feed the data into the matching engine to provide our best recommendations.
This is designed to allow us to understand post order satisfaction with more context to enrich the data and the Aldo.
This is the magic of fiber.
The second area of investment is our upmarket motion.
Among our buyers we have identified tens of thousands with the spending capacity significantly larger than the average spend on our market base to date.
It is mission critical for us to unlock this potential.
And that is why we created fiber business.
With fiber business, where a lot better at identifying those customers.
Understanding their free on hiring needs listen.
Listening to their pain points and mapping out key product gaps.
In the last 12 months, we started to implement a number of initiatives with fiber business in order to land expand and improve the overall experience for those business buyers.
This include streamlining onboarding flows, creating a talent focused browsing experience.
Stepping up the vetting process and developing new marketing channels.
We have seen early success in those initiatives.
The number of buyers who spend over $10000 per year increased over 60% compared to a year ago.
And fiber business to date already represents over 5% of total market based <unk>.
We have barely scratched the surface.
So much potential ahead of us.
We believe the online freelancing market opportunity is vast.
In the early innings.
As freelancing workflow moved online from offline just as e-commerce over the last two decades.
Unlock this potential.
We believe the fiber market base is ideally positioned to empower this workforce transformation for both businesses and freelancers.
And that is why we created fiber business.
With fiber business, where a lot better at identifying those customers.
Understanding their free on hiring needs listen.
While the global economy goes through cycles, and so the F&B spending the consideration of incorporating a freelance workforce as part of the company's strategy talent planning is only going to become more relevant and more urgent.
Listening to their pain points and mapping out key product gaps.
In the last 12 months, we started to implement a number of initiatives with fiber business in order to land expand and improve the overall experience for those business buyers.
In fact, we see an emerging opportunity for freelancers as a viable alternative to field talent gaps and provide cost savings for businesses that are cutting costs on full time employees.
This include streamlining onboarding flows, creating a talent focused browsing experience.
Stepping up the vetting process and developing new marketing channels.
A recent survey we conducted in partnership with Sensus wide indicate that over 80% of businesses are implementing hiring freezes or layoffs in our own half of them plan to use freelancers to fill these gaps.
Okay.
We have seen early success in those initiatives.
The number of buyers who spend over $10000 per year increased over 60% compared to a year ago.
Fiber will be in a strong position to capture these opportunities when the time comes.
And fiber business to date already represents over 5% of total market based <unk>.
With that let me turn the call over to Ofer, who will share some financial highlights.
We have barely scratched the surface theres so much potential ahead of us.
Thank you and good morning, everyone.
Our Q2 results demonstrated the combination of a challenging macro environment and our ability to deliver strong execution with discipline and efficiency on those such an environment.
We believe the online freelancing market opportunity is vast.
In the early innings.
As freelancing workflow moved online from offline just as e-commerce over the last two decades.
In Q2 revenue was 85 million up 30%.
We believe the fiber market base is ideally positioned to empower this workforce transformation for both businesses and freelancers.
Thank you.
The recent macro headwinds of increasing inflation.
Energy prices rising interest rate and highly uncertain geopolitical.
While the global economy goes through cycles, and so the F&B spending the consideration of incorporating a freelance workforce as part of the company's strategy talent planning is only going to become more relevant and more urgent.
And most significant simplification on consumer SMB and overall GBP is unexpected.
And it is being felt not only in Europe , but also in the U S and the rest of the world.
In fact, we see an emerging opportunity for freelancers as a viable alternative to field talent gaps and provides cost savings for businesses that are cutting costs on full time employees.
Fiber responded quickly to these challenging market landscape.
Clean mining our expenses on executing with the highest level of focus and efficiency.
This led to adjusted EBITDA of $4 6 million above the top end the following guidance with an adjusted EBITDA margin.
A recent survey we conducted in partnership with Sensus wide indicate that over 80% of our businesses are implementing hiring freezes or layoffs in our own half of them plan to use freelancers to fill these gaps.
<unk>, 5.4%.
Inhibition.
Post the quarter as Matt mentioned.
We further examined and recalibrate, our cost structure and investments by the only thing which resulted in a reduction of 60 employees.
Fiber will be in a strong position to capture these opportunities when the time comes.
With that let me turn the call over to Ofer, who will share some financial highlights.
With people did not come from a specific function, but rather across various departments in the company.
Thank you <unk> and good morning, everyone.
The process was legalized some thoughtful to ensure that our long term roadmap remains intact in fact is.
Our Q2 results demonstrate that the combination of a challenging macro environment and our ability to deliver stronger to teach him with discipline and efficiency on those such an environment.
With the completion of the realignment our films and organization, we expect to be able to strengthen our core focus stevia accelerated the pace of execution maximize performance and most important of all maintain a highly motivated coal culture.
In Q2 revenue was 85 million up 30%.
Variable.
The recent macro headwinds of increasing inflation.
Energy price rising interest rate and highly uncertain geopolitical.
Our underlying business is strong.
We'll continue to drive a significant amount of new buyer global marketplace every quarter and we continue.
And most significant simplification on consumer SMB and overall GBP is unexpected.
To date efficiently.
And it is being felt not only in Europe , but also in the U S and the rest of the world.
In just one quarter, our Q2 cohort all of that would generate revenue equivalent to 85% of our performance marketing dollars spend in the quarter.
Fiber responded quickly to these challenging macro landscape.
Streamlining our expenses on executing with the highest level of focus and efficiency.
This highly disciplined data driven marketing approach will ensure that we only invest in areas.
This led to adjusted EBITDA, a full 6 million above the top end of our guidance with an adjusted EBITDA margin.
These efficiency and will put us in a good position.
Clearly this market environment and lean in when opportunities arise.
Five 4%.
We are also making exciting progress with our upmarket initiative from fiber businesses.
<unk> inhibition.
Post the quarter as Mick mentioned.
We further examined and recalibrate, our cost structure and investment priorities, which resulted in a reduction of 60 employees.
Large business volume to product, therefore that encourage bigger project and longer engagement.
All of that is helping us to continue pushing spend per buyer higher at a fast pace, even with the overhang of macro trends.
With people did not come from a specific function, but rather across various departments in the company.
The process was we got us some thoughtful to ensure that our long term roadmap remains intact in fact is.
Take rate continues to be strong.
Sustainable as we grow value added products, such as promoted gigs and seller plus.
With the completion of the realignment our films and organization, we expect to be able to strengthen our core focus stevia.
Going forward, we expect the take rates to remain stable with a modest upside.
The pace of execution maximize performance and most important of all maintain a highly motivated coal culture.
Now, let's turn to guidance.
The third quarter of 2022 revenue is expected to be 85% to $82 5 million.
Our underlying business is strong.
Representing growth of 8% to 11%.
We continue to drive a significant amount of new buyer through our marketplace every quarter and we continue to.
Adjusted EBITDA is expected to be $5 million to $6 million, representing an adjusted EBITDA margin of six 7% at the midpoint.
To date Super efficiently.
In just one quarter, our Q2 cohorts already generate revenue equivalent to 85% of our performance marketing dollars spend in the quarter.
For the full year 2022 we now expect revenue to be in the range of $332 million to $340 million.
This highly disciplined data driven marketing approach will ensure that we only investing.
Presenting a growth of 12% to 14% adjusted EBITDA is expected to be in the range of 19, five to 21 5 million, representing an adjusted EBITDA margin of six 1% at the midpoint.
There is efficiency and will put us in a good position to take our time in this market environment and leaning when opportunities arise.
We are also making exciting progress with our upmarket initiatives on fiber businesses that attracts large business biome to product, therefore that encouraged bigger project and longer engagement.
Our Q3 and updated full.
Guidance reflects the most significant than expected macro headwinds that we saw in our marketplace in June spin.
Specifically, you'll clean activity levels deteriorated modestly from our previous expectation.
All of that is helping us to continue pushing spend per buyer higher at a fast pace, even with the overhang of macro trends.
And the U S started to fill meaningful pressure of Smbs sentiment group multiple shifts in the last two months.
Take rate continues to be strong.
Sustainable as we grow value added products, such as promoted gigs and seller plus.
And the macro trends are expected to impact both existing cohort spending as well as the acquisition of new buyouts.
Going forward, we expect the take rate remained stable with a modest upside.
For the full year of <unk>, the midpoint of our guidance first octave bio.
Now, let's turn to guidance for the third quarter of 2022 revenue is expected to be 85% to $82 5 million representing.
It will be down a few percentage points compared to the last deal and spend per buyer to grow in the low double digits.
With cost reductions and the strengthening focus we expect to deliver a stronger EBITA for the second half of this year, we are committed to continuing operating with discipline and efficiency delivering growth with positive adjusted EBITDA.
Growth.
8% to 11%.
Adjusted EBITDA is expected to be $5 million to $6 million, representing an adjusted EBITDA margin of six 7% at the midpoint.
For the full year 2022 we now expect revenue to be in the range of $332 million to $340 million representing a.
And marching toward our long term EBITDA target of 25%.
Together with our healthy balance sheet I believe <unk> is in a strong financial position to navigate through this market with an unwavering focus on investing and building our long term success with that we'll now turn the call over to the operator for questions.
Growth of 12% to 14%.
Adjusted EBITDA is expected to be in the range of 19, five to 21 5 million, representing an adjusted EBITDA margin of six 1% at the midpoint.
Our Q3.
And updated guidance reflect the most significant than expected macro headwinds that we saw in our marketplace in June spin.
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Specifically, you'll clean activity levels deteriorated modestly from our previous expectation.
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The U S started to fill meaningful pressure as SMB sentiment grew more cautious in the last two months.
Our first question comes from Bernie Mcternan of Needham.
Your line is now open.
And the macro trends are expected to impact both existing cohort spending as well as the acquisition of new buyer.
Great. Thank you good morning, thanks for taking the questions.
Maybe just to start can you talk about the change in strategy for thinking about growth versus profitability on the on the last call and during the quarter I believe the commentary was largely still investing for growth despite the headwinds.
For the full year of <unk>, the midpoint of our guidance represents active buyer.
To be down by few percentage points compared to the last deal and spend per buyer to grow in the low double digits.
But now pulling back on those investments. So can you just talk about.
As you know the change in tone or anything to share there.
With cost reductions and the strengthening focus we expect to deliver stronger EBITA for the second half of this year, we are committed to continuing operating with discipline and efficiency delivering growth with positive adjusted EBITA and marching toward our long term EBIT.
Sure Good morning Bernie.
So essentially as we said in our opening remarks, what we've seen throughout Q2 was a worse than anticipated.
Headwind during the quarter.
And we've seen a more expensive growth.
<unk> of 25%.
Together with our healthy balance sheet I believe <unk> is in a strong financial position to navigate through this market with an unwavering focus on investing and building our long term success.
As a result of that as a result of that macro change in and given the fact that from a technical standpoint, we are in a recession. I mean, we have two consecutive quarters of negative GDP inflation continues to be high and there is pressure.
With that we'll now turn the call over to the operator for questions.
Certainly on small and micro businesses and we felt that.
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And because of that change in environment, we decided that since growth has been more expensive it doesn't it doesn't actually.
Constitutes or justify to grow at any cost and in that situation.
Our first question comes from Bernie Mcternan of Needham.
It is.
We felt that it was the prudent decision.
Your line is now open.
Great. Thank you good morning, Thanks for taking my questions.
To prioritize EBITDA and free cash flow.
Maybe just to start can you talk about the change in strategy for thinking about growth versus profitability on the on the last call and during the quarter I believe the commentary was largely still investing for growth. Despite the headwinds, but now pulling back on those investments. So can you just talk about that.
Accelerate the pace towards our long term target model.
And I think that this would put us in a strong financial position to double down on growth investments when the market condition improves.
So that was the basis for our decision. It doesn't mean that we stop prioritizing growth. It will always be a priority for us, but we don't think that it should come at any cost.
As you know the change in tone or anything to share there.
Sure Good morning Bernie.
So essentially as we said in our opening remarks, what we've seen throughout Q2 was a worse than anticipated.
Understood.
We'll put context around that 85% payback for the <unk> cohort.
<unk> during the quarter.
5% of the performance marketing spend how that trended versus.
And we've seen a more expensive growth.
Other periods of time.
As a result of that as a result of that macro change in and given the fact that from a technically standpoint, we are in a recession. I mean, we have two consecutive quarters of negative GDP inflation continues to be high and there is pressure.
Yes.
This is ofer.
That's only a few guys that threat.
It's totally right.
Michael.
The return.
Last quarter it was <unk>.
Certainly on small and micro businesses and we felt that.
<unk> mined over 90%.
I think the quarter before we closed approximately.
And because of that change in environment, we decided that since growth has been more expensive it doesn't it doesn't actually.
Three months, a one quarter so all the time.
Kind of fluctuation in the return, but if you if you tracked historical numbers. If you go through Q1 17, the multiple uplift and fight.
Constitutes or justify to grow at any cost and in that situation.
It is.
Buybacks, if you go through Q1 'twenty.
We felt that it was the prudent decision.
Q2 'twenty two.
To prioritize EBITDA and free cash flow.
Two years ago the multiple.
Over the three year.
To accelerate the pace towards our long term target model.
And we believe that the cohort that we are able to acquire throughout the previous period.
This would put us in a strong financial position to double down on growth investments when the market condition improves.
But also this period.
Happens to be consistent.
With a very high market.
The fact that the headwinds that we're seeing.
So that was the basis for our decision. It doesn't mean that we stop prioritizing growth. It will always be a priority for us, but we don't think that it should come at any cost.
It really impact the recon.
On the new code.
It has been acquired.
Give us high confidence that.
Understood and is it possible put context around that 85% payback for the <unk> cohort.
Our ability our ability to keep and.
And acquire new cohort.
High lifetime value to cost with a fairly short.
85% of the performance marketing spend how that trended versus.
Investment.
Other periods of time.
Understood and then just one last one for me.
Yeah.
Yes.
The opportunity for strategic partnerships perform another funnel for the company.
This is ofer.
And I think that if you guys track historical record.
It seems like an intriguing.
Opposition, just wondering what youre looking for in a partner how the integration goes between the two products.
The return.
Last quarter it was <unk>.
<unk> mined over 90%.
How big of an opportunity exists to add another funnel for you guys.
Sure.
During the quarter before we flip approximately.
Three months, a one quarter all the time.
We're working on the partnership channel, we believe that at this point it would be too early to sharing news about that.
Kind of fluctuation in the return.
If you if you track historical numbers. If you go through Q1 17, the multiple of buybacks. If we go through Q1 'twenty.
But we're seeing very exciting thing.
Round partnership and we will be happy to share that with the market in the upcoming quarters.
Q2 'twenty.
Two years ago the multiple.
Yeah.
Understood. Thank you Bob.
And over the three year.
And we believe that the cohort that we are able to acquire throughout the previous periods, but also this failure.
Thank you next question comes from Doug Anmuth of Jpmorgan. Your line is now open. Please go ahead.
Happens to be consistent.
With a very high market.
Thanks for taking the questions.
The fact that the headwinds that we're seeing.
A couple on <unk>.
Mix, just trying to understand I guess across categories. Perhaps if there are some things that are that might be holding up a little bit better than others and then.
It really impact the recon.
On the new code.
<unk> has been acquired.
Give us high confidence and so on.
Let me start I know you talked about going up market with fiber business and I recognize it's still early there.
Our ability our ability to keep.
And acquire new cohort.
Just curious in this kind of environment. If you could just talk about the.
High lifetime value to cost with a fairly short return on investment.
The traction that youre getting there and how those businesses might be a little bit differently, perhaps than the smbs.
Understood and then just one last one for me.
Yes.
The opportunity for strategic partnerships perform another funnel for the company.
Yes.
Thank you Debra model.
It seems like an intriguing proposition just wondering what youre looking for in a partner how the integration goes between the two products.
So for the first question question about categories.
Our category mix as being pretty stable, we see small trends.
How big of an opportunity exists to add another funnel for you guys.
And some of the trends indicate that there is a slight less interest in categories that are related to very very.
We're working on the partnership channel, we believe that at this point it would be too early to sharing news about that.
Young businesses.
And they are a period of stark.
And there are categories that are related to more mature businesses that are seeing slight increasing trend, but these are not very significant in over the year and over the years, we've been seeing those trends shift across different months of the year in different years. So we didn't record any.
But we're seeing very exciting thing.
<unk> partnership and we'll be happy to share that with the market in the upcoming quarters.
Understood. Thank you Bob.
Thank you next question comes from Doug Anmuth of Jpmorgan. Your line is now open. Please go ahead.
The thing unusual.
Those categories and I think we've provided some color in the shareholder letter on specific categories again, the mix remains very healthy and stable.
Thanks for taking the questions.
A couple on <unk>.
Mix trying to understand you said.
Yeah.
Cross categories, perhaps if there are some things that are that might be holding up a little bit better than others and then.
On the upmarket.
That we're seeing from fiber business are very very strong it's a <unk>.
I know you talked about going up market with fiber business I recognize it's still early there.
Fast growing product and we continue to double down our investment.
Into fiber business.
Just curious in this kind of environment. If you could just talk about the.
The improvement.
The traction that youre getting there and how those businesses might be behaving a little bit differently, perhaps than the smbs.
That we've done in the fiber business in adding tens of thousands of vetted sellers are top 1% of sellers.
Yes.
Thank you Debra model.
Upgrading the experience the listings and seller pages.
So for the first question question about categories.
Putting talents in the in the forefront.
Our category mix as being pretty stable, we see small trends and some of the trends indicate that there is a slight less interest in categories that are related to very very.
And adding decision indicators all of them.
Contributes.
To the growing activity of our fiber business customers.
We're also building marketing muscle for larger customers.
Young businesses and their period of stark.
And optimizing the funnel for fiber for business.
And there are categories that are related to more mature businesses that are seeing slight increasing trend, but these are not very significant.
And also.
Increasing our mark category coverage.
Within the fiber business. So we're streamlining the onboarding funnel.
And over the year and over the years, we've been seeing those trends shift across different months of the year in different years. So we didn't record anything unusual across those categories and I think we've provided some color in the shareholder letter on specific categories again the mix.
And now we see that attracting more large customers from fiber into fiber business.
We can increase their activity and.
And spend over time and maximize their spend capacity.
With fiber.
Remains very healthy and stable.
So all in all a very good signals and doubling down on fiber business.
On the upmarket the signals that we're seeing from fiber business are very very strong it's a fast growing product and we continue to double down our investment.
Great. Thank you Neil.
Thank you. Thank you. Our next question comes from Brad Erickson with RBC capital markets. Your line is now open.
Into fiber business.
Hi, just a few from me so I guess first when you speak to this SMB weakness just to clarify do you think this is more of a funnel issue and maybe a function of fewer small businesses or is it more of just an existing cohort issue and some of the.
The improvement.
That we've done in the fiber business in adding tens of thousands of vetted sellers are top 1% of sellers.
Upgrading the experienced the listings and seller pages.
Spending headwinds you called out just to clarify first.
Putting talents in the in the forefront.
Okay.
Hey, this is.
And adding decision indicators all of them.
Brad take that.
Sure.
Contributes.
It's an issue across the board talk about the comments that goes both for new equivalent.
To the growing activity of our fiber business customers.
All existing coal, whether it's a very old cohorts or vehicle for us.
We're also building marketing muscle for larger customers.
Optimizing the funnel for fiber for business.
The headwind.
Headwind.
And also.
Goes across all dimensions.
Increasing our mark category coverage.
That's how we say that.
Got it and then I guess the guide maybe seems to reflect active buyers looking to be down again sequentially in Q3.
Within our fiber business. So we're streamlining the onboarding funnel.
And now we see that attracting more large customers from fiber into fiber business.
I'm just curious how we should think about maybe timeframe and getting back to sort of sequential active buyer growth.
We can increase their activity in.
And spend over time and maximize their spend capacity.
With fiber.
So all in all a very good signals and doubling down on fiber business.
Yes, so somewhat.
When you look at the active buyers.
Great. Thank you Neil.
I think that what we've seen.
There are really three things.
Thank you. Thank you. Our next question comes from Brad Erickson with RBC capital markets. Your line is now open.
First is worse than anticipated with markets that created this headwind.
So macro influencing that.
Hi, just a few for me so I guess first when you speak to this SMB weakness just to clarify do you think this is more of a funnel issue and maybe a function of fewer small businesses or is it more of just an existing cohort issue and some of the.
The second is <unk>.
Growth has been more expensive.
Which meant that we need to made to make changes into our growth investment.
And the third is more focus on quality of buyers, which is well reflected in our spend per buyer up 14% year over year.
Spending headwinds you called out just to clarify first.
Okay.
So all in all that's been the factors that I've been influencing active buyers and certainly our focus continues to be on the quality of our buyers over time as we can focus on those of their spending capacity that is much larger than the average spend per buyer on our marketplace.
Hey, this is Brad.
That is.
It's an issue across the board the talk about the comments that goes both for the Oklahoma.
All existing cohort whether it is a very old cohorts of vehicles for us again.
The headwinds.
Goes across all dimensions.
Got it that's great. Thank you.
That's how we say that.
Thank you next question comes from Matt Farrell Piper Sandler Your line is now open.
Got it and then I guess the guide maybe seems to reflect active buyers looking to be down again sequentially in Q3.
Thanks for letting me ask the question.
Just curious how we should think about maybe timeframe and getting back to sort of sequential active buyer growth.
I was wondering if you could help quantify the cost remains cost streamlining efforts in order to look at it from an impact to adjusted EBITDA as we go forward and then you've been able to expand adjust.
Yeah.
Yeah, so what.
When you look at the active buyers.
Adjusted EBITDA margin as we move through 2022, despite the lower revenue levels I just wanted to understand if that's something that we should expect moving forward is continued leverage in the model grew 2023.
I think that what we've seen.
There are really three things.
First is worse than anticipated with market that created this headwind.
And if not.
Macro influencing that.
What could be the factors there. Thank you.
Second is <unk>.
<unk> has been more expensive, which.
So as well.
<unk> meant that we need to made to make changes into our growth investment.
Quantified cost per tonne.
I think we share the specific numbers.
And the third is more focus on quality of buyers, which is well reflected in our spend per buyer up 14% year over year.
But the guidance.
Definitely the flat.
This adjustment.
So all in all that's been the factors that I've been influencing active buyers and certainly our focus continues to be on the quality of our buyers over time as we can focus on those of their spending capacity that is much larger than the average spend per buyer on our marketplace.
A few weeks ago.
But I will not give you a hand look at the.
Adjustment of the revenue.
And bear in mind that we have increased.
The EBIT target or.
The remainder of the year.
This should give you pretty good indication.
The overall.
Got it that's great. Thank you.
And do you expect that.
Margin.
I think it's too early.
Thank you next question comes from Matt <unk> of Piper Sandler Your line is now open.
To discuss the technology.
When I see it.
Both because it's the middle up there, but there is lots of uncertainty.
Sure.
Thanks for letting me ask the question I was wondering if you could help quantify the cost remains cost streamlining efforts in order to look at it from a impact to adjusted EBITDA as we go forward and then you've been able to.
On affiliate fees.
That we experience as we speak yet to be fed.
And I think it's mentioned on the shareholders' letter.
Right.
The prepared remarks, we do plan to accelerate the pace of its long term target.
<unk>.
Adjusted EBITDA margin as we've moved through 2022, despite the lower revenue levels I. Just wanted to understand is that something that we should expect moving forward is continued leverage in the model grew 2023.
Okay.
And maybe.
As a follow up could.
Could you give any more color here I am just kind of the strong growth that youre seeing and promoted gigs and kind of the success there.
And if not.
What could be the factors there. Thank you.
Well as <unk>.
As having here as of late you mentioned in the shareholder letter you guys anymore.
Quantify cost per tonne.
Any more clarity would be great. Thank you.
I don't think we share the specific numbers.
But the guidance.
Yes, So I think we've mentioned in previous quarters.
Definitely the flat.
This adjustment that we do.
Continued expansion of promoted gigs across more categories and more assets within our market base and also with additional cohorts of sellers.
A few weeks ago.
But I will not give you a hand looked at.
The adjustment of the revenue.
And bear in mind that we have increased the.
The EBIT target or.
That can benefit and enjoy from this product. So what we're seeing that growth is just a very healthy steady growth.
For the remainder of the year.
This should give you pretty good indication of the overall cost.
This product.
Three months.
Do you expect that.
And I think it's reflected in the continued expansion in our take rate.
Margin.
I think it's too early.
To discuss the technology on an as needed.
As demonstrated.
Both because it's the middle up there, but there is a lot of uncertainty and volatility.
That we experience as we speak yet to be fed.
Thanks for taking my questions.
And I think it's mentioned on the shareholders.
Thank you thank you Matt.
No.
Our next question comes from Andrew Boone of JMP Securities. Andrew Your line is now open.
The prepared remarks, we do plan to accelerate that.
<unk> long term target.
Great. Good morning, Thanks for taking my questions I'd like to start on June in the letter it talks about U S demand slowing in that month as we think about July and just the guide for Q3.
Okay.
And maybe.
As a follow up.
Could you give any more color here on just the time of the strong growth that youre seeing and promoted gigs and kind of the success there.
<unk> imply a further step down from where you guys were in June are you seeing any stabilization as we get into <unk> or kind of what's the trajectory.
It is having here as of late you mentioned in the shareholder letter and just any more clarity would be great. Thank you.
And then secondly, as we think about more disciplined opex can we just go back and revisit ROI should we expect levels that are consistent as we just kind of the earlier question you mentioned or is there a chance that you guys would step that up and then how do we think about brand spend thanks so much.
Yes, So I think we've mentioned in previous quarters.
<unk>.
Expansion.
<unk> promoted gigs across more categories and more assets within our market base and also with additional cohorts of sellers that can benefit and enjoy from this product. So what we're seeing that growth is just a very healthy steady growth of this product.
Thank you.
So as for what we're seeing in July .
In the past few weeks in July we've seen activity better than June .
Slightly better and definitely stabilizing but it is too soon to call it could trend.
In.
I think it's reflected in the continued expansion in our take rate.
But this is what we've seen from it and I think that that is reflected in the range of our guidance.
As demonstrated.
Yes.
Meaning that on the midpoint.
What we're assuming is that the current situation or level of headwind will continue to be as we're seeing it right now.
Thanks for taking my questions.
Thank you thank you Matt.
Our next question comes from Andrew Boone of JMP Securities. Andrew Your line is now open.
On the lower end of deterioration or a more a stronger headwind in.
And on the upside in.
Great Good morning, and thanks for taking my questions.
An improvement in the current in the current.
Like to start on.
<unk> environment and headwind that we're seeing.
June in the letter it talks about U S demand slowing in that month as we think about July and just the guidance through Q3.
On the second of the second half of <unk>.
On a second.
<unk> imply a further step down from where you guys were in June are you seeing any stabilization as we get into <unk> or kind of what's the trajectory.
The question I think that fee.
The restructuring of the flavor lineup.
Expenses.
And then secondly, as we think about more disciplined opex can we just go back and revisit TR and why should we expect levels have been consistent as we just kind of the earlier question you mentioned or is there a chance that you guys would step that up and then how do we think about brand spend thanks so much.
We discussed earlier.
<unk> brought us to the position of coopervision.
Corporation and the company will win.
Even before.
To get to be fed.
<unk>.
We kind of plan the company father.
Thank you.
To make sure that we meet.
So as for what we're seeing in July .
The EBITA EBITA target.
In the past few weeks in July we've seen activity better than June .
Two two <unk>.
The accelerated path.
Through long term.
Slightly better and definitely stabilizing but it is too soon to call it could trend.
In terms of brand spend we keep spending on brand previously.
But this is what we've seen from it then I think that that is reflected in the range of our guidance.
We always nonaccrual this investment.
PPC, we Havent Preston.
Meaning that on the midpoint.
Our agenda is positive.
What we're assuming is that the current situation or level of headwind will continue to be as we're seeing it right now.
Investments, we used to believe and we continue to believe to make sure that the marketing.
Being expensive.
In a very efficient manner.
On the lower end of deterioration or a more a stronger headwind in.
Thank you.
And on the upside in.
An improvement in the current in the current.
Thank you Andrew our next question comes from Eric Sheridan of Goldman Sachs. Eric Your line is now open.
<unk> environment and headwinds that we're seeing.
Thanks, so much for taking the questions maybe two if I can.
On the second the second half.
Can you help us understand a little bit better how fiber business as an initiative will ramp over the next couple of years, putting in place the pieces to go to market and then the time it might take to sort of execute on the go to market strategy. So we can better understand a little bit about the revenue cadence around fiber business can build over the next.
If I kind of top of the call.
I think that the.
The restructuring of the flavor lineup.
Expenses.
We discussed earlier.
Ooh proposition of superstition.
Operation and the company will win.
Few years that'll be number one.
Even before.
To maybe just philosophically.
To get to be fed.
You did.
I think there is this debate among investors about.
We kind of turned the company father.
Workers continue to look for the balance of their life and now employers might be looking for cost flexibility in their business model. How you think the opportunity set might shift.
To make sure that we meet.
The EBITA EBITA targets.
Two to secure.
The accelerated.
And create different opportunities or challenges for you as a platform. When you look at this environment over the next maybe 12 months or so thanks so much.
Through long term.
In terms of brand spend.
Spending on Brian previously.
Yes.
We always monitor this investment compared to PPC, we haven't.
Thank you Eric.
Our agenda is positive.
For our fiber business fiber business is really a transformational move for fiber and we anticipated and we said that when we launched fiber business that this is going to be a motion that will start being.
The investments we used to be lean and we continue to believe to make sure that the marketing.
Being expensive.
In a very efficient model.
Very impactful within two or three years, and it's a multiyear investment.
Thank you.
If the size of it right now, we havent been reporting it separately or guiding for it.
Thank you Andrew our next question comes from Eric Sheridan of Goldman Sachs. Eric Your line is now open.
But as we've said many times it is growing faster than the market based and we're very happy with what we're seeing there. It allows us to engage with customers that have a much larger spend capacity and maximize their spend capacity with our product and we've done so by.
Thanks, so much for taking the questions maybe two if I can.
Can you help us understand a little bit better how fiber business as an initiative will ramp over the next couple of years, putting in place the pieces to go to market and then the time it might take to sort of execute on our go to market strategy. So we can better understand a little bit about the revenue cadence around fiber business can build over the next.
Improving our catalog and the quality of supply.
Few years that'll be number one.
And adding functionality to the product.
To maybe just philosophically.
That is four by larger customers and we see tremendous success by doing so by optimizing the funnels of entry into fiber business, we optimized the move of those.
I think there's this debate among investors about.
Workers continue to look for the balance of their life and now employers might be looking for cost flexibility in their business model. How you think the opportunity set might shift.
Right customers from fiber into fiber business.
And create different opportunities or challenges for you as a platform. When you look at this environment over the next maybe 12 months or so thanks so much.
We can also use the fiber business is a channel of acquisition.
Thanks to the improvements in the funnel.
Yeah.
Thank you Eric.
Okay.
For our fiber business fiber business is really a transformational move for fiber and we anticipated and we said that when we launch fiber business that this is going to be a motion that will start being.
Ken Eric Sorry can you repeat the second question. Please.
Just curious on the broader environment Youre seeing because I think theres sort of a push and pull between workers that still want flexibility and you increasingly could find employers want cost flexibility of how even though there might be some headwinds you're seeing from the macro environment, maybe there's a broader theme around aligning fleck.
Very impactful within two or three years, and it's a multiyear investment.
At the size of it right now, we havent been reporting it separately or guiding for it.
But as we've said many times it is growing faster than the market based on we're very happy with what we're seeing there. It allows us to engage with customers that have a much larger spend capacity and maximize their spend capacity with our product and we've done so by.
<unk> ability with your platform that could offset some of it. So I was just kind of curious philosophically how you thought about the evolution of the long term secular theme versus some of the macro headwinds. Thanks.
Thanks, Eric.
So definitely when we think about the way we market fiber and that has been in our brand for many years. It is all about flexibility and ive spoken in previous quarters about the fact that companies need more control.
Improving our catalog and the quality of supply and.
And adding functionality to the product.
That is thoughts for by larger customers and we see tremendous success by doing so by optimizing the funnels of entry into fiber business. We.
Over the balance between fixed expenses and variable expenses and using talent from the fiber market base give that flexibility.
Optimized the move of those.
Allows you to hire people per project.
Right customers from fiber into fiber business.
And.
That allows you to also scale up or down as needed.
We can also use the fiber business is a channel of acquisition.
And I think that if anything.
And that is thanks to the improvements in the funnel.
<unk> work or the work from home for a certain amount of time opened up the eyes of all employee all employers to the auction of actually enjoying from the fact that not all of all of their employees need to be on location and not all of them need to be full timers. So we're definitely.
Okay.
Ken Eric Sorry can you repeat the second question. Please.
Just curious on the broader environment Youre seeing because I think theres sort of a push and pull between.
Or is that still one flexibility and you increasingly could find employers want cost flexibility and how even though there might be some headwinds you're seeing from the macro environment, maybe there's a broader theme around aligning flexibility with your platform.
Seeing that and we think that in the current environment, where a lot of companies are also doing cost reductions in our thinking about how to lower their fixed expenses.
Using variable expenses or flexible talent as a way to close talent gaps.
Could offset some of it. So I was just kind of curious philosophically how you thought about the evolution of the long term secular theme versus some of the macro headwinds.
And make sure that their performance doesn't decrease.
While their cost structure it needs to improve over time.
Thank you.
Thanks, Eric.
So definitely when we think about that.
Thank you. Our next question comes from Jason <unk> of Oppenheimer. Jason Your line is now open.
We market fiber and that has been in our brand for many years.
It is all about flexibility and ive spoken in previous quarters about the fact that companies need more control.
Thanks.
So maybe talk a bit more of how you're thinking about the puts and takes as we kind of enter what's probably going to be a worsening environment for lease.
Over the balance between fixed expenses and variable expenses and using talent from the fiber market base give dr flexibility.
I don't know a few quarters or so so as you think about like buyer spending cost to attracting new buyer.
It allows you to hire people per project.
And.
That allows you to also scale up or.
Seller pricing like what they choose to pricing take rate how do you think of kind of those all fluctuate as you go into.
Or down as needed.
And I think that if anything.
Remote work or the work from home for a certain amount of time opened up.
While we gain environment and kind of what you can do that maybe gave us fiber and then the second question.
Eyes of all employee all employers to the auction of actually enjoying from the fact that not all of all of their employees need to be on location and not all of them need to be full timers. So we're definitely seeing that and we think that in the current environment, where a lot of companies are also doing cost reductions.
Can you rank what features or capabilities drive conversion and you talked a little in the letter.
Where do you think you have upside or the ability to rollout new features or geographies in the next 12 to 18 months.
And our thinking about how to lower their fixed expenses, they're using variable expenses or flexible talent as a way to close talent gaps.
Thank you Jason good morning.
So on the on the puts and takes.
I think that what we're seeing right now is definitely pressure.
And make sure that their performance doesn't decrease while their cost structure it needs to improve over time.
The one on small and micro businesses to be more cautious on how they.
In their budget.
Thank you.
I think that if we look at.
Our public data from public search engine.
Thank you. Our next question comes from Jason <unk> of Oppenheimer. Jason Your line is now open.
We're seeing that there is a decrease in searches in public searches.
Thanks.
For keywords that are related with our industry.
Two questions. So maybe talk a bit more of how you're thinking about the puts and takes as we enter what's probably going to be a worsening environment for lease.
Because of that that decreases.
Shrinks the top of funnel, which makes the acquisition.
I don't know a few quarters or so so as you think about <unk>.
Or adding new customers more expensive.
Higher spending cost to attract a new buyer.
If that continues to be the case, then we will continue to opt based on our current strategy, which is to optimize our EBITDA and maximize our free cash flow so that when the market improves we can invest.
Seller pricing like what they choose to pricing thousand take rate, how do you think of kind of those.
Those all fluctuate as you go into.
We gain environment and kind of what you can do that maybe favors fiber and then the second question.
That.
Free cash flow.
Again and double down on growth.
Can you rank what features or capabilities drive conversion and you talked a little in the letter where you think you have upside or the ability to rollout new features or geographies in the next 12 to 18 months.
In terms of.
Features that drive conversion.
No, it's all about being able to do the right segmentation.
A R.
Both customers and talent.
And do great matching.
It sounds very simple in reality is extremely complex and we've been talking about our technology and how we create our technology moat to make Dr Magic happen.
Thank you Jason good morning.
So on the on the puts and takes I think that what we're seeing right now is definitely pressure.
Most of the one on small and micro businesses to be more cautious on how they spend their budget.
It's not getting simpler.
The more we go upmarket and the more we entertain larger types of customers that matching becomes more challenging but with a larger reward.
I think that if we look at.
This is why we continue to invest in our <unk>.
Public data from public search engine.
We're seeing that there is a decrease in searches in public searches.
Search technology recommendation technology.
Word marching segmentation.
For keywords that are related with our industry.
And there's also opportunities to do that from the top of the funnel and that's why we continue to invest in search engine optimization and so forth.
Because of that that decreases.
Shrinks the top of funnel, which makes the acquisition.
Or adding new customers more expensive.
We're seeing good results on conversion improvement.
If that continues to be the case, then we will continue to opt based on our current strategy, which is to optimize our EBITDA and maximize our free cash flow so that when the market improves we can invest.
More we use the meta data that we collect being a transactional database to improve our algorithm to better our matching it and the higher the satisfaction of our customers.
Which means that we can maximize their spend with us over time.
That.
Free cash flow.
Again and double down on growth.
In terms of.
Features that drive conversion.
No, it's all about being able to do the right segmentation of our.
Perfect. Thank you we have a follow up question from Brad Erickson of RBC capital markets. Your line is now open.
Both customers and talent.
Yes. Thanks, just a quick follow up just on how quickly things changed after your guided in May kind of like last year. I guess, just curious is there any aspect of that hyper seasonality. We saw last year that may be going on here alongside just pure macro just just curious thanks.
And do great matching.
It sounds very simple in reality is extremely complex and we've been talking about our technology and how we create our technology moats to make Dr Magic happen.
It's not getting simpler.
The more we go upmarket and the more we entertain larger types of customers that matching becomes more challenging but with a larger reward.
We haven't seen any unusual seasonality obviously, there is and you can see that from leisure you see you see much more travel than usual.
And this is why we continue to invest in our <unk>.
You see people, taking long extended vacations, but we haven't seen we haven't seen that impacting as much as the macro environment.
Search technology recommendation technology.
<unk> matching segmentation.
We believe that this is this is the macro environment being worse than anticipated by the way not just anticipated by us.
And there is also opportunities to do that from the top of the funnel and that's why we continue to invest in search engine optimization and so forth.
Think that in general as I said technically.
We're seeing good results on conversion improvement the more we use the method data that we collect being a transactional database to improve our algorithm to better our matching it and the higher the satisfaction of our customers.
Default the recession.
And inflation continues to be very high and I think that fiber is just more sensitive because it's still.
More focused on small and micro businesses and they are the first two.
Which means that we can maximize their spend with us over time.
To respond to it much like they were the first to jump up during during Covid.
So triple digit growth they are now being more cautious and this is why we're feeling it a little bit more and we're responding to it.
Perfect. Thank you we have a follow up question from Brad Erickson of RBC capital markets. Brad Your line is now open.
Okay.
Got it thanks.
Yes, Thanks, just a quick follow up.
Just on how quickly things changed after your guided in May kind of like last year. I guess, just curious is there any aspect of that hyper seasonality. We saw last year that may be going on here alongside just pure macro just just curious thanks.
Thank you. Our next question comes from Daniel <unk> of <unk> investments Daniel Your line is now open.
Yes.
Okay.
Yes, hi, Thanks for taking my question two questions first of all in your last quarter, you said that a lot of the marketing expenses were pre loaded in the first quarter. So is that do you see that.
We haven't seen any unusual seasonality obviously, there is and you can see that from leisure.
You see much more trouble than usual.
Giving benefits going forward for the next three quarters and second question in terms of macro.
You see people, taking long extended vacations, but we haven't seen we haven't seen that impacting as much as the macro environment.
How are you guys doing with the other languages like Spanish German is that is that a source of growth for you and how are you expanding in other markets. Besides English.
We believe that this is this is the macro environment being worse than anticipated by the way not just anticipated by us.
Thank you.
Okay.
I think that in general as I said technically.
Good morning, Danielle Thank you.
On the marketing expense in the first quarter.
Default the recession.
And inflation continues to be very high and I think that fiber is just more sensitive because it still.
From a seasonality standpoint, Q1 is our strongest quarter and this is why we invest more in that quarter because of that investment is extremely efficient and that creates a new baseline for us for the rest of the year.
More focused on small and micro businesses and they are the first two.
And that is why we made that comment on Q1 that has been the case ever since we started the company.
To respond to it much like they were the first to jump up during during Covid.
So triple digit growth they are now being more cautious and this is why we're feeling it a little bit more and we're responding to it.
Okay. Thanks.
Thank you Daniel.
Okay.
Comes from Matt Schindler with Bank of America. Your line is now open.
Got it thanks.
Hi.
Yes, hi, guys.
Thank you. Our next question comes from Daniel <unk> of <unk> investments Daniel Your line is now open.
Just a couple of things one on the upmarket approach are you seeing that as more of an approach to get and the higher spend per buyer.
Yes.
Okay.
Yes, hi, Thanks for taking my question two questions first of all in your last quarter, you said that a lot of the marketing expenses were pre loaded in the first quarter. So is that do you see that.
We're seeing larger enterprise do more purchases of similar size things call it $50 logo.
People buy.
Traditionally small businesses by on your service or are you or initial market developing into.
Giving benefits going forward for the next three quarters and second question in terms of macro.
How are you guys doing with other languages like Spanish German is that is that a source of growth for you and how are you expanding into other markets. Besides English.
Larger enterprise purchasing bigger projects longer term projects through your system or is it still staying with the same basic world that you have been at the overnight.
Thank you.
Largely.
Okay.
Good morning, Danielle Thank you.
Okay.
Hey, good morning, Matt Thanks for the question.
On the marketing expense in the first quarter.
So I would say on your FERC first question the answer is probably both.
From a seasonality standpoint, Q1 is our strongest quarter and this is why we.
We're definitely creating a catalog where.
We invest more in that quarter because of that investment is extremely efficient and that creates a new baseline for us for the rest of the year.
Larger customers.
Can achieve more.
And acquired more complex types of projects.
And that is why we made that comment on Q1 that has been the case ever since we started the company.
If that is what they desire, but it is also build to offer best in class vetted supply to allow for the small projects to be done very effectively but we think that the profile of customers.
Okay. Thanks.
Thank you Daniel.
<unk> comes from Matt Schindler with Bank of America. Your line is now open.
Is such where their spending capacity is higher their needs are higher sometimes it monitors states in more frequent.
Yes, hi, guys.
Just a couple of things one on the upmarket approach are you seeing that as more of an approach to get and the higher spend per buyer.
<unk> that are not necessarily very large and sometimes less frequent and much larger types of projects depending on their complexity.
Seeing larger enterprise do more purchases of similar size call.
And we did not within fiber business also the ability to use <unk>.
Call it $50 logo.
People buy traditionally small businesses by on your service or are you.
Individual.
Talent, but also agencies that have higher capacity.
Initial market developing into.
<unk> multiple.
Larger enterprise purchasing.
Multiple talents to.
Bigger projects longer term projects through your system or is it still staying with the same basic world that you have been at the overnight.
To accommodate for more complex projects.
Does this move put you on a more of a collision course you've been.
Largely.
Kind of free from any substantive competition in these kind of fast quick catalog projects that you have been traditionally doing these.
Okay.
Hey, good morning, Matt Thanks for the question.
So I would say on your FERC first question the answer is probably both.
Again, the $50 logo.
Definitely creating a catalog where.
That area, you have owned and been free from competition as you get into the larger.
Larger customers.
<unk> achieved more than.
Projects, there or what other players, particularly upward which is.
And acquired more complex types of projects.
Tried to come down to your world and not really done very well and now are you going into it.
If that is what they desire, but it is also build to offer best in class vetted supply to allow for the small projects to be done very effectively but we think that the profile.
So when you think about the roots of where fiber started we started from the SMB world.
Customers.
Is such where they're adding capacity is higher their needs are higher sometimes it monitors states in more frequent.
Maybe focus on micro and small types of businesses. If you look at our carton.
User base, we have four 2 million.
Purchases that are not necessarily very large and sometimes less frequent and much larger types of projects depending on their complexity.
Buyers on our platform.
Of them are from the U S.
On a tour of $2 1 million out of 31 7 million in that market. There is endless space to grow into now as we move now we're not moving into the enterprise space, we're moving more into the mid market more into the mid size.
And we did not within fiber business also the ability to use.
Not just individual.
But also agencies that have higher capacity.
And multiple.
Multiple talents.
And sometimes as large it doesn't it doesn't mean that we don't have enterprise customers, but we are not marketing for them.
To accommodate for more complex projects.
Does this move put you on a more of a collision course had been.
In that space, there's tremendous space to grow into and I don't think that the.
Kind of free from any substantive competition in these kind of fast quick catalog projects that you have been traditionally doing these.
The majority of competition is going to be there and again I think that the majority of activity anyway happens offline oppens from direct connections with Thailand or direct connections with agencies and we have the ability to actually move that from the offline to the online without much interruption.
Again, the $50 logo.
That area, you have owned and been free from competition as you get into the larger.
Projects, there or what other players, particularly upward which is.
So I don't think that this will increase our competition.
Tried to come down to your world and not really done very well and now are you going into it.
Got as much.
Okay.
Great. Thank you.
So when you think about the roots of where fiber started we started from the SMB World would maybe focus on micro and small types of businesses. If you look at our carton.
At this time, we currently have no further questions I'll hand that kind of it's micha Kaufman CEO for any closing remarks.
Thank you Charlie and thank you everyone for joining the call today have a great rest of the day and we'll see you at the upcoming investor events.
User base, we have four 2 million.
Active buyers on our platform half of them are from the U S.
Ladies and gentlemen, this concludes today's call. Thank you so much for joining you may disconnect your lines.
Call it two or $2 1 million out of 31 7 million in that market. There is endless space to grow into.
Now as we move now we're not moving into the enterprise space.
We're moving more into the mid market.
More into the mid size.
Sometimes as large it doesn't it doesn't mean that we don't have enterprise customers, but we are not marketing for them in.
In that space, there's tremendous space to grow into and I don't think that the the majority of competition is going to be there and again I think that the majority of activity anyway happens offline oppens from direct connections with Thailand or direct connections with agencies and we have.
The ability to actually move that from the offline to the online without much interruption.
I don't think that this will increase our competition.
Not as much.
Yes.
Great. Thank you.
At this time, we currently have no further questions I'll hand back over to Micha Kaufman CEO for any closing remarks.
Thank you Charlie and thank you everyone for joining the call today have a great rest of the day and we'll see you at the upcoming investor events.
Okay.
Ladies and gentlemen, this concludes today's call. Thank you so much for joining you may disconnect your lines.