Q2 2024 Fiverr International Ltd Earnings Call
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Operator: Good morning, and thank you for standing by. Welcome to the Fiverr Second Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode.
Operator: Good morning, and thank you for standing by. Welcome to the Fiverr 2nd quarter 2024 earnings conference call.
Speaker Change: Good morning, and thank you for standing by welcome to the to the fiber second quarter 'twenty 'twenty four earnings conference call. At this time, all participants are in listen only mode.
Operator: At this time, all participants are in listen on the mode. After the speaker's presentation, there will be the question-and-answer session. To ask a question during the session, you need to press star 1-1 on your telephone keypad. You wouldn't hear an automated message advising your hand is raised. To withdraw a question, please press star 1-1 again.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw a question, please press star 1 1 again.
Speaker Change: After the speaker's presentation, there will be the question and answer session.
Speaker Change: Just a question during the session you need to press Star one bond on the telephone keypad, you will get an automatic Massachusetts bothering you handed way.
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Operator: Please be advised that today's conference has been recorded.
Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Jinjin Qian. Please go ahead.
Speaker Change: Please be advised that today's conference is being recorded.
Operator: I would now like to hand the conference over to our first speaker today, Jinjin Qian. Please go ahead.
Speaker Change: I would now like to hand, the conference over to your first speaker today Jean Charles.
Speaker Change: Please go ahead.
Jinjin Qian: Thank you, operator, and good morning, everyone.
Jinjin Qian: Thank you operator and good morning everyone. Thank you for joining us on Fiverr's earnings conference call for the second quarter that ended June 30th, 2024. Joining me on the call today are Micha Kaufman, founder and CEO, and Ofer Katz, 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 Fiverr 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 statement can be found under the risk factor section in Fiverr's most recent Form 20-F and other filings with the FDA.
Jean Charles: Thank you operator, and good morning, everyone. Thank you for joining us on fibers earnings conference call for the second quarter that ended June 30th 2024.
Jinjin Qian: Thank you for joining us on Fiverr's earnings conference call for the second quarter that ended June 30th, 2024. Joining me on the call today are Micha Kaufman, founder and CEO, and Ofer Katz, president and CFO.
Speaker Change: Joining me on the call today are me, how Kaufman founder and CEO and Ofer Katz, President and CFO.
Jinjin Qian: Before we start, I'd like to remind you that during the session, this call we may make forward-looking statements and that these statements are based on our current expectations and assumptions as of today, and Fiverr assumes no obligation to update or revise them. A discussion of some of the important risk factors that could cause actual results to differ materially from any forward-looking statements can be found under the risk factor section in Fiverr's most recent Form 20-F and other filings with the SEC. During this call, we'll be referring to some key performance metrics and non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, and free cash flow.
Speaker Change: 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 Fiverr assumes no obligation to update or revise them.
Speaker Change: 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 most recent form 20-F, and other filings with the SEC.
Jinjin Qian: During this call, we'll be referring to some key performance metrics and non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, and free cash. Further explanation and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP measures is provided in the earnings release we issued today and in our shareholder letter, each of which is available on our website at investors.fiverr.com. And now, I'll turn the call over to Micha.
Speaker Change: During this call we'll be referring to some key performance metrics are non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin and free cash flow.
Jinjin Qian: Further explanation and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP measures is provided in the earnings release we issue today, and I'll share how to go later.
Speaker Change: Further explanation and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP measure is provided in earnings release, we issued today in our shareholder letter each of which is available on our website at investors <unk> com.
Jinjin Qian: Each of which is available on our website at investor.hiver.com.
Micha Kaufman: And now I'll turn the call over to Micha. Thank you, Ginger. Good morning, everyone, and thank you for joining us. Our Q2 results demonstrate continued strong execution and the resilience of our business. Both revenue and adjusted EBITDA came in above the midpoint of our guidance as we continue to expand customer wallet share and improve monetization. We are committed to driving profitable growth and delivering shareholder value in a fluid environment.
Speaker Change: And now I'll turn the call over it with me Huh.
Micha Kaufman: Thank you, Jinjin. Good morning, everyone, and thank you for joining us. Our Q2 results demonstrate continued strong execution and the resilience of our business. Both revenue and adjusted EBITDA came in above the midpoint of our guidance as we continue to expand customer wallet share and improve monetization. We are committed to driving profitable growth and delivering shareholder value in a fluid environment. I'm pleased to report that we have completed the $100 million buyback program announced in April.
Speaker Change: Thank you Ginger and good morning, everyone and thank you for joining us.
Speaker Change: Our Q2 results demonstrate continued strong execution and the resilience of our business.
Speaker Change: Both the revenue and adjusted EBITDA came in above the midpoint of our guidance.
Speaker Change: We continue to expand customer wallet share and improve monetization.
Speaker Change: We are committed to driving profitable growth and delivering shareholder value in a fluid environment I.
Micha Kaufman: I'm pleased to report that we have completed the 100 million buyback program announced in April. We remain highly confident about the long-term opportunity of our business and believe our strong cash flow and strong balance sheet allow us to invest in our business while returning capital to our shareholders. I'm very excited to be here today. It has been an incredibly busy and fulfilling few months at Fiverr, culminating in the announcement of our summer product release last week. I want to thank our entire team for their hard work. The level of energy and dedication, especially in the last few weeks, reminded me of Fiverr's early days when we were just a small startup.
Speaker Change: I am pleased to report that we have completed the 100 million buyback program announced in April.
Micha Kaufman: We remain highly confident about the long-term opportunities of our business and believe our strong cash flow and strong balance allow us to invest in our business while returning capital to our shareholders. I'm very excited to be here today.
Speaker Change: We remain highly confident about the long term opportunity of our business and believe our strong cash flow and strong balance sheet allow us to invest in our business, while returning capital to our shareholders.
Speaker Change: I'm very excited to be here today.
Micha Kaufman: It has been an incredibly busy and fulfilling few months at Fiverr, culminating in the announcement of our summer product release last week. I want to thank our entire team for their hard work. The level of energy and dedication, especially in the last few weeks, has reminded me of Fiverr's early days when we were just a small startup. Fittingly, we are starting up a number of new ventures as we look to take our business to the next level.
Speaker Change: It has been an incredibly busy and fulfilling few months at fiber, culminating in the announcement of our summer product release last week.
Speaker Change: I want to thank our entire team for their hard work.
Speaker Change: The level of energy and dedication, especially in the last few weeks reminded me of fibers early days when we were just a small startup.
Micha Kaufman: Fittingly, we are starting up a number of new ventures as we look to take our business to the next level. First is the expansion of Fiverr to enable freelance hiring capabilities. With introduction of profession-based catalog and the ability to initiate time-based transactions and contracts, we are enabling businesses to hire long-term freelancers who opt as part of the team with ongoing tasks and goals. This is not an area we competed historically, but as we increasingly go up market and lean into complex service categories, it becomes essential to round up our offering. We believe it will significantly expand our direct addressable market, allowing us to open up top of funnel specifically for traffic with long-term hiring intentions.
Speaker Change: Fittingly, we are starting up a number of new ventures, as we look to take our business to the next level.
Micha Kaufman: First is the expansion of Fiverr to enable freelance hiring capability. With the introduction of a profession-based catalog and the ability to initiate time-based transactions and contracts, we are enabling businesses to hire long-term freelancers who act as part of the team with ongoing tasks and goals. This is not an area we competed in historically.
Speaker Change: First is the expansion of fiber to enable freelance hiring capabilities.
Speaker Change: With the introduction of profession based catalog and the ability to initiate time based transactions and contracts, we are enabling businesses to higher long term freelancers.
Speaker Change: As part of the team with ongoing tasks and goals.
Speaker Change: This is not an area. We competed historically, but as we increasingly go upmarket and lean into complex service categories. It becomes essential to round up our offerings.
Micha Kaufman: But as we increasingly go up market and lean into complex service categories, it becomes essential to round out our offer. We believe it will significantly expand our direct addressable market, allowing us to open up the top of the funnel specifically for traffic with long-term hiring in. It will allow us to capture more of our customers' overall freelance hiring budget. The expansion of Fiverr to a multi-solution platform that enables long-term hiring is also an important message to our community. In an environment where AI seems to have the potential to upend many professions, the line between human services and AI-generated services is blurring.
Speaker Change: We believe it will significantly expand our direct addressable market, allowing us to open up top of funnel specifically for traffic with long term hiring intentions.
Micha Kaufman: It will allow us to capture more of our customers' overall freelance hiring budget. The expansion of Fiverr to a multi-solution platform that enables long-term hiring is also an important message to our community. In an environment where AI seems to have the potential of upending many professions, the line between human services and AI-generated services is blurring. The profession's-based catalog puts talent at the center of the market-based experience. To our buyer community, it underscores our value per position in connecting them with the best human talent around the world for authentic creative work. To our talent community, the mission of Fiverr since day one has always been to bring them opportunities and empower their success, and the commitment has not changed in the face of AI.
Speaker Change: It will allow us to capture more of our customers' overall freelance hiring budget.
Speaker Change: The expansion of fiber to a multi solution platform that enables long term hiring is also an important message to our community.
Speaker Change: In an environment, where AI seems to have the potential of up and many professions. The line between human services and the AI generated services at blurring.
Micha Kaufman: The Professions-Based Catalog puts talent at the center of the market-based experience. To our buyer community, it underscores our value proposition in connecting them with the best human talent around the world for authentic creative work. To our talent community, the mission of Fiverr since day one has always been to bring them opportunities and empower their success, and the commitment has not changed in the face of AI. It is our passion and responsibility to help talent navigate the changing landscape, discover their skills, and translate them into a career.
Speaker Change: The professions based catalog puts.
Speaker Change: <unk> talent at the center of the market based experience.
Speaker Change: So our buyer community it underscores our value proposition in connecting them with the best human talent around the world for authentic creative work.
Speaker Change: So our talent community the mission of fiber since day, one has always been to bring them opportunities and empower their success and our commitment of no change in the face of AI.
Micha Kaufman: It is our passion and responsibility to help talent navigate the changing landscape, discover their skills, and translate them into a career.
Speaker Change: It is our passion and responsibility to help talent navigate the changing landscape discovered their skills and translate them into a career.
Micha Kaufman: Earlier this month, we unveiled our first-ever breakthrough achievement recognition to celebrate three answers who have achieved significant earning milestones on Fiverr. It is extremely rewarding and inspiring to see people making one million or even five million throughout our platform by just doing what they love. Whether you're a musician or scriptwriter or Shopify expert, and no matter where you come from, it is all possible on Fiverr.
Micha Kaufman: Earlier this month, we unveiled our first ever Breakthrough Achievement Recognition to celebrate freelancers who have achieved significant earning milestones on Fiverr. It is extremely rewarding and inspiring to see people making $1 million or even $5 million on our platform by just doing what they love. Whether you're a musician or a scriptwriter or a Shopify expert, and no matter where you come from, it is all possible on Fiverr.
Speaker Change: Earlier this month, we unveiled our first ever breakthrough achievement recognition to celebrate freelancers, who have achieved significant earning milestones on fiber. It is extremely rewarding and inspiring to see people, making $1 million or even 5 million throughout our platform.
Speaker Change: Form by just doing what they love.
Speaker Change: Whether you're a musician or script writer or shopify expert and no matter, where you come from it is all possible on fiber.
Micha Kaufman: The second theme of our summer product release is deepening the integration of Neo Fiverr's AI tool throughout the market-based experience. As GNI applications quickly shift consumers' internet behavior and expectations, we want to stay ahead of the curve to build a more personal experience on Fiverr. At the same time, tests and data in the past six months have shown that not everyone prefers the outright shot boat experience when it comes to show up. So, our strategy for NIO is to incorporate it as an assistance throughout the funnel to help customers when friction arises. For search, NIO provides the guidance you need to navigate Fiverr's massive catalog of services and talent.
Micha Kaufman: The second theme of our summer product release is deepening the integration of NEO, Fiverr's AI tool, throughout the market-based experience. As Gen AI applications quickly shift consumers' internet behavior and expectations, we want to stay ahead of the curve to build a more personable experience on Fiverr. At the same time, tests and data in the past six months have shown that not everyone prefers the outright chatbot experience when it comes to shopping.
Speaker Change: The second theme of our summer product release is deepening the integration of neo fibers AI tool throughout the market base experience.
Speaker Change: As Jin AI applications quickly shift consumers internet behavior and expectations, we want to stay ahead of the curve.
Speaker Change: To build a more personal experience on fiber.
Speaker Change: At the same time tests and data in the past six months of shown that not everyone prepares the outright chatbot experience when it comes to shopping.
Micha Kaufman: So our strategy for NEO is to incorporate it as an assistant throughout the funnel to help customers when friction arises. For search, NEO provides the guidance you need to navigate Fiverr's massive catalog of services and talent. And it is trained to understand customers' past transactions and preferences to provide the most relevant recommendations. When it comes to project briefing, having NEO is like having a strategist by your side.
Speaker Change: So our strategy for neo is to incorporate it as an assistant throughout the funnel to help customers win friction arises.
Neil: For search Neil provides the guidance you need to navigate fibers massive catalog of services and talent.
Micha Kaufman: And it is trained to understand customers' past transactions and preference to provide the most relevant recommendations. When it comes to project briefs briefing, having NIO is like having a strategy by your side. It transforms customers' ideas into a structured brief document that not only looks good, but also delivers better business results. NIO can also help customers write more detailed reviews faster by generating content based on transactions and providing language assistance. We are in the early innings of unleashing the full potential of AI in our market base, and we believe it will be a multi-year tailwind for us to drive product innovation and growth.
Neil: It is trained to understand customers' Pos transactions in preference to provide the most relevant recommendations.
Neil: When it comes to project briefing, having Neil is like having a strategy by your side.
Micha Kaufman: It transforms customers' ideas into a structured, brief document that not only looks good but also delivers better business results. NEO can also help customers write more detailed reviews faster by generating content based on transactions and providing language. We are in the early innings of unleashing the full potential of AI in our marketplace, and we believe it will be a multi-year tailwind for us to drive product innovation and growth. Lastly, I want to say a few words on the acquisition of Autodesk. For us, the deal is strategic for a number of reasons. Fiverr was founded on the belief that everyone should have the opportunity to find financial independence.
Neil: It transforms customers' ideas into a structured brief document that not only looks good but also delivers better business results.
Neil: Neil can also help customers rights more detailed reviews faster by generating content based on transactions and providing language assistance.
Speaker Change: We are in the early innings of unleashing the full potential of AI in our market base.
Neil: And we believe it will be a multiyear tailwind for us to drive product innovation and growth.
Micha Kaufman: Lastly, I want to say a few words on the acquisition of AutoDS. For us, the deal is strategic for a number of reasons. Fiverr was founded on the belief that everyone should have the opportunity to find financial independence. The creator economy is the epitome of this community. And competitively, we have a strong foothold in this segment. We are passionate about continuing to support and empower this community. Like the Fiverr millionaires that I mentioned earlier, there is something emotionally gratifying in witnessing and contributing to their amazing stories. Secondly, while dropshipping is not exactly a new business, with a rise of fast fashion e-commerce sites like Temu and Shane, and the continued strengths of social media, we are seeing dropshipping-related categories experiencing tremendous growth on Fiverr.
Neil: Lastly, I want to say a few words on the acquisition of <unk>.
Neil: For us the deal is strategic for a number of reasons.
Speaker Change: Fiber was founded on the belief that everyone should have the opportunity to find financial independence.
Micha Kaufman: The creator economy is the epitome of this community, and competitively, we have a strong foothold in this segment. We are passionate about continuing to support and empower this community. Like the Fiverr millionaires that I've mentioned earlier, there is something emotionally gratifying in witnessing and contributing to their amazing story. Secondly, while dropshipping is not exactly a new business, with the rise of fast fashion e-commerce sites like Temu and Shane and the continued strength of social media, we are seeing dropshipping-related categories experiencing tremendous growth.
Speaker Change: The creator economy is the epitome of this community.
Neil: And competitively we have a strong foothold in the segment.
Neil: We are passionate about continuing to support and empower this community.
Neil: Like the fiber millionaire that Ive mentioned earlier, there is something emotional gratifying in witnessing and contributing to their amazing stories.
Neil: Secondly, while drop shipping is not exactly a new business with the rise of fast fashion E Commerce sites like <unk> and Shane and the continued strength of social media, we are seeing drop shipping related categories experiencing tremendous growth on fiber.
Micha Kaufman: That includes Shopify development, e-commerce management, video ads, and UGC videos to name us you. We believe the deal can create many synergetic opportunities for us to lean into growth. Lastly, in alignment with our expansion to a platform play, we are taking the opportunity to fold in a new subscription-based revenue stream with strong synergy and growth potential. This will add to our value-added product portfolio, which includes promoted gigs and Seller Plus, and further strengthen our business overall financial profile.
Micha Kaufman: That includes Shopify development, e-commerce management, video ads, and user-generated content videos, to name a few. We believe the deal can create many synergetic opportunities for us to lean into growth. Lastly, in alignment with our expansion to a platform play, we are taking the opportunity to fold in a new subscription-based revenue stream with strong synergy and growth potential. This will add to our value-added product portfolio, which includes promoted gigs and seller plus, and further strengthen our business' overall financial profile.
Neil: That includes Shopify development E Commerce management video ads and UGC videos to name a few.
Neil: We believe the deal can create many synergetic opportunities for us to lean into growth.
Neil: Lastly, and in alignment with our expansion to a platform play we are taking the opportunity to fold in new subscription based revenue stream with strong synergy and growth potential.
Neil: This will add to our value added product portfolio, which includes promoted gigs and filler plus and further strengthen our business overall financial profile.
Micha Kaufman: To wrap up, we are expanding our business from a simple marketplace to a complete freelance talent platform for businesses of all sizes. We are also diversifying our business model to capture customers' freelance spending and provide them with multiple value-added products and software solutions. We continue to operate at the highest level of discipline to drive consistent margin expansion and free cash flow generation. We are committed to profitable growth, robust free cash flow, and a disciplined capital allocation strategy that aims to deliver long-term shareholder value.
Ofer Katz: To wrap up, we are expanding our business from a simple marketplace to a complete freelance talent platform for businesses of all sizes. We are also diversifying our business model to capture customers' freelance spending and provide them with multiple value-added products and software solutions. We continue to operate at the highest level of discipline to drive consistent margin expansion and free cash flow generation. We are committed to profitable growth, robust free cash flow, and a disciplined capital allocation strategy that aims to deliver long-term shareholder value. With that, I'll turn the call over to Ofer, who will share some financial information. Thank you, Micha, and good morning, everyone.
Neil: To wrap up.
Neil: We are expanding our business from a simple market base to a complete freelance talent platform for businesses of all sizes.
Neil: We are also diversifying our business model to capture customers free <unk> spending and provide them with multiple value added products and software solutions.
Neil: We continue to operate at the highest level of discipline to drive consistent margin expansion and free cash flow generation.
Neil: We are committed to profitable growth robust free cash flow and a disciplined capital allocation strategy.
Neil: <unk> aims to deliver long term shareholder value.
Ofer Katz: With that, I'll turn the call over to Ofer, who will share some financial highlights. Thank you, Micha, and good morning, everyone. We deliver another strong quarter as a result. Revenue for Q2 was 94.7 million, up 6% year-over-year, above the midpoint of our guidance. Adjusted EBITAR was 17.8 million, near the top end of our guidance and representing an adjusted EBITAR margin of 18.9%. Importantly, adjusted EBITAR margin increased by 180 basis points year over year, which underscores our commitment to driving steady, measurable operating leverage. We remain confident in our ability to achieve a 25% long-term adjusted EBITAR margin in the next three years.
Neil: With that I'll turn the call over to Ofer, who will share some financial highlights.
Ofer Katz: Thank you Carl and good morning, everyone.
Ofer Katz: We delivered another strong quarter as a result. Revenue for Q2 was $94.7 million. Up 6% year-over-year and above the midpoint of our guidance. Adjusted EBITDA was $17.8 million, near the top end of our guidance, representing an adjusted EBITDA margin of 18.9%. Importantly, the adjusted EBITDA margin increased by 180 basis points year-over-year, which underscores our commitment to driving steady, measurable operating levels. We remain confident in our ability to achieve a 25% long-term adjusted EBITDA margin in the next three years. We also continue to generate impressive cash flow. Operating cash flow was $21 million, up 11.9% year-over-year.
Ofer Katz: We delivered another strong quarter of results.
Ofer Katz: Revenue for Q2 was $94 7 million.
Ofer Katz: Up 6% year over year above the midpoint of our guidance.
Ofer Katz: Adjusted EBITDA was $17 8 million near the top end of our guidance and representing an adjusted EBITDA margin of 18, 9%.
Ofer Katz: Importantly, adjusted EBITDA margin increased by 180 basis point people review.
Ofer Katz: Which underscore our commitment.
Ofer Katz: Men to driving steady measurable operating leverage.
Ofer Katz: We remain confident in our ability to achieve a 25% long term adjusted EBITA margin in the next three years.
Ofer Katz: We also continue to generate impressive cash flow. Operating cash flow was 21 million, up 11.9% year-over-year. Free cash flow was 20.7 million, representing a 12.5% year-over-year increase and a free cash flow margin of 21.8%. This results in a strong balance sheet, which we intend to use to increase shareholders' value through a prudent capital allocation strategy. As Micha mentioned, we have completed 100 million share buyback, which was authorized in April. And we are committed to optimizing our capital allocation strategy to deliver shareholders' value. Over the next three years, we expect to continue growing free cash flow generation with a kegum in the mid-teens.
Ofer Katz: We also continue to generate impressive cash flow.
Neil: Operating cash flow was 21 million up 11, 9% <unk>.
Ofer Katz: Free cash flow was $20.7 million, representing a 12.5% zero value increase and a free cash flow margin of 21.8%. This results in a strong balance sheet, which we intend to use to increase shareholders' value through a prudent capital allocation strategy. As Micha mentioned, we have completed the 100 million share buyback which was authorized in April, and we are committed to optimizing our capital allocation strategy to deliver shareholder value. Over the next three years, we expect to continue growing free cash flow generation, with a Kagan in the meeting. There are multiple ways we can get there. But, as I often say, we always model based on what we know.
Neil: Free cash flow was $20 7 million, representing a 12, 5% fueled by this increase in free cash flow margin of 21, 8%.
Neil: This results in a strong balance sheet, which we intend to use to improve shareholders value.
Neil: Through a prudent capital allocation strategy.
Neil: As we have mentioned.
Neil: We have completed the 100 million share buyback.
Neil: Which was authorized in April.
Neil: And we are committed to optimizing our capital allocation strategy to deliver shareholders value.
Neil: Over the next three years, we expect to continue growing free cash flow generation.
Neil: With a CAGR in the mid teens.
Ofer Katz: There are multiple ways we can get them, but as I often say, we always model based on what we know. Based on our line of sight today, we expect to achieve this through steady revenue growth, continued margin extension, strong free cash flow generation, accompanied by active share accounts management. And packing our Q2 results, we continue to see our strategy of going up market, work really well, with spent a buyer showing our robust growth of 10% year-over-year. We also see AI continuing to have a net positive impact on our business. It is important to know that we are starting to see a stabilizing and improving trend in simple services.
Speaker Change: There are multiple ways, we can get them.
Speaker Change: But as I, often say, we always model based on what we know.
Ofer Katz: Based on our line of sight today, we expect to achieve this through steady revenue growth, continued margin extension, and strong free cash flow generation, accompanied by an Active Share Accounts Manager.
Speaker Change: Based on our line of sight to date.
Speaker Change: We expect to achieve this through steady revenue growth.
Speaker Change: Continued margin expansion.
Speaker Change: Strong free cash flow generation.
Speaker Change: Accompanied by active share counts management.
Ofer Katz: Unpacking our Q2 results, we continue to see our strategy of going up market work really well, with Spencer Buyer showing robust growth of 10% year-over-year. We also see AI continuing to have a net positive impact on our business. It is important to know that we are starting to see stabilizing and improving trends in simple services. As we mentioned in prior quarters, we believe the low-end transactions within the simple service categories were getting impacted the most.
Speaker Change: And backing our Q2 results.
Speaker Change: We continue to see our tragedy of going up market work really well with spend per buyer showing a robust growth of 10% the overview.
Speaker Change: We also see AI continuing to have a net positive impact.
Speaker Change: And our business. It is important to know that we are starting to see stabilizing and improving trend in simple services.
Ofer Katz: As we mentioned in prior quarters, we believe the low-end transaction within the simple service categories was getting impacted the most. As the mid-ship within those categories improved towards the higher end, we believe the overall durability of those categories shall improve over time. There are also certain metrics in Q2 that didn't perform as strongly as we had anticipated. Active buyer was 3.9 million, down 8% of the river, and overall GMV decelerating Q2. Both were impacted by a slowdown in traffic started in June, as the sand we saw in the earlier part of the full forward rather than sustainable turn of trend.
Speaker Change: As we mentioned in prior quarters, we believe the low end transaction within the simple service categories, we're getting impacted the most.
Ofer Katz: As the mix shift within those categories improves towards the higher end, we believe the overall durability of those categories will improve over time as well. However, there are also certain metrics in Q2 that didn't perform as strongly as we had anticipated. Active buyer was 3.9 million, down 8% year-over-year, and overall GMV decelerating in Q2. Both were impacted by a slowdown in traffic that started in June. The trend we saw in the earlier part of the year proved to be more of a pull forward rather than a sustainable turn.
Speaker Change: As the mix shift within those categories improve towards the higher end, we believe that overall the ability of those categories shall improve over time as well.
Speaker Change: There are also certain metrics in Q2 that didn't perform as strongly as.
Speaker Change: As we had anticipated.
Speaker Change: Active buyer was $3 9 million down 8% fewer Vivian.
Speaker Change: And overall GMB decelerate in Q2.
Speaker Change: Both were impacted by a slowdown in traffic starting in June as.
Speaker Change: As the strength, we saw in the earlier part of the year.
Speaker Change: Proved to be more of a pull forward rather than sustainable 10 upfront.
Ofer Katz: These trends serve as a reminder for us that we are still in the middle of a macro cycle, where higher inflation and interest rates impact the immediate cash flow of small businesses, erode their confidence in spending as they try to preserve more cash and delay large projects for potential rainy days ahead.
Ofer Katz: Dear friends, this serves as a reminder for us. But we are still in the middle of the macro cycle. Higher inflation and interest rates impact the immediate cash flow of small businesses and erode their confidence in spending as they try to preserve more cash and delay large projects for potential rainy days.
Speaker Change: This trend.
Speaker Change: As a reminder for us.
Speaker Change: Fill in the middle of macro cycle.
Speaker Change: While the higher inflation and interest rates.
Speaker Change: The immediate cash flow of small businesses.
Speaker Change: All the confidence in spending as they try to preserve more cash and delayed large projects for potential rainy days ahead.
Ofer Katz: As we enter into the second half of this year, we are expanding on a product portfolio both organically and inorganically to create additional growth catalysts, as Micha cover extensively in his remarks. Our seller monetization program, such as Promoted Gates and Seller Plus, continue to show strong growth momentum, and the addition of Auto DS will further strengthen our overall take rate. We believe this efforts will keep us on track to deliver the targets we set at the beginning of the year. For the full year 2024, we are raising the bottom end of our guidance and now expect revenue to be in the range of 383 to 387 million, representing even the real growth of 6 to 7%.
Ofer Katz: As we enter into the second half of this year, we are expanding our product portfolio both organically and inorganically to create additional growth catalysts, as Micha covered extensively in his remarks. Our seller monetization programs, such as Promoted Gigs and SellerPlus, continue to show strong growth momentum, and the addition of AutoDS will further strengthen our overall takeover. We believe this effort will keep us on track to deliver the targets we set at the beginning of the year. For the full year 2024,
Speaker Change: As we enter into the second half of this deal.
Mirror: We are expanding our product portfolio, both organically and inorganically to create additional growth catalysts as mirror covered extensively in his remarks.
Speaker Change: Our fellow monetization program, such as promoted gave them seller plus.
Speaker Change: Continued to show strong growth momentum.
Mirror: And the addition of <unk> will further strengthen our overall take rate.
Speaker Change: We believe these efforts will keep us on track to deliver the targets we set at the beginning of <unk>.
Speaker Change: For the full year 2024.
Ofer Katz: We are raising the bottom end of our guidance and now expect revenue to be in the range of $383 to $387 million, representing euro-over-euro growth of 6 to 7 percent. We are seeing the volatility in June continuing into July, and we anticipate Q3 revenue growth to be relatively volatile. We expect Q4 revenue growth to improve as the continued product development and the addition of the auto DS create additional growth. In terms of underlying drivers, we now expect active buyers to decline slightly, more than we previously anticipated, and spender buyers to continue growing at a robust pace.
Ofer Katz: We are seeing the volatility in June continuing to July, and we anticipate Q3 revenue growth to be relatively muted. We expect Q4 revenue growth to improve as the continued product development and the addition of the auto DS creates additional growth catalysts. In terms of underlying drivers, we now expect active buyers to decline slightly, more than will previously anticipated, and spend the buyers to continue growing at our bus base. We now expect the take rate to increase by approximately 250 basis points as we continue to expand our value-added product portfolio. For adjusted EBITDA, we expect full year 2024 to be in the range of 69 to 73 million, representing an adjusted EBITDA margin at 18.4% at the midpoint.
Ofer Katz: We now expect the take rate to increase by approximately 250 basis points as we continue to expand our value-added product portfolio. For adjusted EBITDA, we expect full year 2024 to be in the range of $69 to $73 million, representing an adjusted EBITDA margin of 18.4% at the mid.
Speaker Change: 18, 4% at the midpoint.
Ofer Katz: We are confident that we can continue making steady and consistent progress on our adjusted EBITDA margin to reach 25% by the end of 2027.
Operator: We are confident that we can continue making steady and consistent progress on our adjusted EBITDA margin to reach 25% by the end of 2027. With that, we now turn the call over to the operator for questions. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 11 again.
Speaker Change: We are confidence that we can continue making steady and consistent progress on our adjusted EBITA margin to reach 25% by the end of 2027.
Operator: With that, we now turn the call over to the operator for questions. Thank you. The EBITDA participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for a name to be announced. To withdraw a question, please press star 11 again.
Speaker Change: With that we'll now turn the call over to the operator for questions.
Speaker Change: Thank you.
Speaker Change: Participants as a reminder, if you wish to ask a question. Please press star one on your telephone keypad and wait for a name to be announced can we draw a question. Please press star one again.
Operator: Please stand by while we compile the Q&A roll studies. We'll take a few moments. Now we're going to take the first question, and it comes from the line of Ron Josey from Citi. Your line is open.
Operator: At least then, Bob will compile the Q&A role that this will take a few moments.
Speaker Change: And Bob will compile the Q&A narrow studies will take a few moments.
Lynne Oferan: And now we're going to take the first question, and it comes from Lynne Oferan, Josie from CT. Your line is open. Please ask a question.
Speaker Change: And now we will go and take the first question and it comes from the line of Ron Josey from Citi. Your line is open. Please ask your question.
Lynne Oferan: All right. Thanks for taking the question, guys. So I want to ask about the product and maybe a little bit more about just broader visibility. So, on the product, well, I think it's really fascinating to expand into a broader marketplace with a hiring platform.
Micha Kaufman: Please ask your question. All right, thanks for taking the time to ask the question, guys. So I want to ask about the product and then maybe a little bit more about just broader visibility. So on the product, look, I think it's really fascinating, the expansion to a broader marketplace with the hiring platform. And specifically, you know, Micha, I wanted to hear a little bit more about the benefits of NIO as it relates to conversion rates and then insights on overall launch plans to have it fully integrated into it.
Ronald Josey: Alright, Thanks for taking my question guys I wanted to ask about the product and then maybe a little bit more about just broader visibility.
Speaker Change: So on the product look I think it's really fascinating to expansion to a broader marketplace with a hiring platform and so specifically.
Lynne Oferan: And so specifically, you know, one of the few a little bit more about the benefits of NEO as it relates to conversion rates and then insights on overall launch plans to have it fully integrated. And as we also think about the product, I'd love to hear more from a professional base catalog, just how you see demand and supply evolving on the marketplace over time as you bring everything together and become more of that hiring and marketplace platform.
Ronald Josey: I wanted to hear a little bit more about the benefits of neo as it relates to conversion rates and then insight on overall launch plans to have it fully integrated in it and as we also think about the product we'd love to hear more from our professionals based catalog just how you see demand and supply evolving on the marketplace over time as you bring every.
Speaker Change: Together and become more of that that hiring and marketplace platform and then and then just a little more details on the macro volatility the pull forward early in the year and then June July comments.
Micha Kaufman: And then just a little more details on the macro volatility, the pull forward early in the year, and then June, July comments. You know, was this just a change that happened in June, July? And as interest rates maybe come down and any insights on maybe when we might see some stability here. Thank you. Good morning, Rowan. Thanks for the questions. I'll try to take them by order. So the first one, I think about the product release and specifically about NEO. Essentially, I think is absolutely my opening comments; the possibility of actually using AI to make our products better is pretty much endless.
Speaker Change: Was this just a.
Speaker Change: A change that happened in June July.
Speaker Change: And as interest rates, maybe come down any any insights on maybe when we might see some stability here. Thank you.
Micha Kaufman: And as we also think about the product, we'd love to hear more from a professional-based catalog, just how you see demand and supply evolving on the marketplace over time as you bring everything together and become more of that hiring and marketplace platform. And then just a little more details on the macro volatility, the pull forward early in the year and then June and July comments. You know, was this just a change that happened in June and July and as interest rates maybe come down? And any insights on maybe when we might see some stability here? Thank you. Good morning, Ron. Thanks for the questions. I'll try to take them in order.
Speaker Change: Good morning, Ron Thanks for the questions.
Speaker Change: Try to take them by order.
Speaker Change: The first one was I think about the product release and specifically about Neil.
Micha Kaufman: So the first one was, I think, about the product release and specifically about NIO. So, essentially... I think, as I've said in my opening comments, the possibility of actually using AI to make our product better is pretty much endless, and we're in the very early stages of doing that. And the experimentation that we've done with Neo as a personal assistant within the inbox, which was the first version of doing it, taught us a lot about how our customers are actually using it and how it improves conversion in briefings.
Speaker Change: So essentially.
Micha Kaufman: Now it allows buyers to complete, and it leads to higher conversion as a result. And so the idea here is that we're graduating NEO to get out of the inbox and essentially being integrated into all of our experiences. Right now, it's being rolled out gradually because we want to test its accuracy and performance. But essentially, you can find it as a personal assistant throughout the experience. So it allows customers to search better, to be more accurate about their needs and, as a result, get much higher quality masks, but it also has awareness about where it exists.
Speaker Change: I think as I've said in my opening comments, the possibility of actually using AI to make our product better.
Micha Kaufman: And we're in the very early stages of doing that. And the experimentation that we've done with NEO as a personal assistant within the inbox, which was the first version of doing it, taught us a lot about how our customers are actually using it and how it improved the conversion in briefing. It allows buyers to complete, and it leads to higher conversion as a result. And so the idea here is that we're graduating NEO to get out of the inbox and essentially being integrated in all of our experience. Right now, it's being rolled out gradually because we want to test its accuracy and performance.
Speaker Change: It's pretty much endless and we're in the very early stages of doing that and the experimentation that we've done with neo is a personal assistant within the inbox, which is which was the first version of doing it.
Speaker Change: Thanks, a lot about how.
Speaker Change: Our customers are actually using it and how it improved the conversion in briefing.
Speaker Change: A lot of buyers to to complete.
Speaker Change: And it leads to higher conversion as a result.
Speaker Change: And so the idea here is that were graduating Neil to get out of the inbox and essentially being integrated in all of our experience right now is being rolled out gradually because we wanted to test its accuracy and performance.
Micha Kaufman: But essentially, you can find it as a personal assistant throughout the experience. So it allows customers to search better to be more accurate about their needs. And as a result, gets much higher quality match. But it also has awareness about where it exists. So if you're looking at a specific page, you can ask it questions about that page. So it helps people make decisions and get to what they're looking for better. The same goes with the integration in briefing. If customers have a brief pre-made, then they can just upload it. And we help make that brief even better.
Speaker Change: But essentially you can find it as a personal assistant throughout the experience. So it allows customers to search better.
Speaker Change: To be more accurate about their needs and as a result gets much higher quality match.
Speaker Change: But it also has awareness about where it exists.
Micha Kaufman: So if you're looking at a specific page, you can ask it questions about that. It helps people make decisions and get to what they're looking for better. The same goes with the integration in Brief. If customers have a brief pre-made, then they can just upload it.
Speaker Change: So if youre looking at a specific page you can ask any question about that page.
Speaker Change: So it helps people make decisions and get what they're looking for better.
Speaker Change: The same goes with the integration in briefing.
Speaker Change: If customers have a brief pre pre made then they can just uploaded and we help make that brief even better but if they don't then that technology that is behind Neo obviously helps them right a better more accurate brief and again as a result of that get matched with a much more specific.
Micha Kaufman: And we help make that brief even better. But if they don't, then the technology that is behind NEO actually helps them write a better, more accurate brief. And again, as a result of that, get matched with a much more specific cohort of potential and talent that can do the job. So, essentially, it's a big part of our summer release. We're very happy with how it's progressing. As a new technology, as we scale it up, it takes a little bit of time, but we're in the process of gradually opening this up for more customers.
Micha Kaufman: But if they don't, then the technology that is behind NEO actually helps them write a better, more accurate brief. And again, as a result of that, gets much with a much more specific cohort of potential. Talen that can do the job. So essentially, it's a big part of our summer release. We're very happy on how it's progressing as a new technology as we scale it up. It takes a little bit of time.
Speaker Change: Vic.
Micha Kaufman: Or in the process of gradually opening this up for more customers.
Micha Kaufman: The second question was about the profession-based catalog. So essentially, one of the things that happen in this idea of graduating from a marketplace to a platform is that historically, Fiverr was just a marketplace for predefined services, but those services are being offered by professionals. We've noticed that a lot of our customers, when they search for something, they do not necessarily search for a specific service. But they do search for a specific talent.
Micha Kaufman: Second question was about a profession-based catalog. So essentially, one of the things that happens in this idea of graduating for a market base to a platform is the history of the Fiverr was just a market base for predefined services. But those services are being offered by professionals. And we've noticed that a lot of the, a lot of our customers, when they search for something, they do not necessarily search for a specific service, but they do search for a specific talent. And as a result of that, we created a new catalog that is very much focused on talent, skills, and professions, rather than specific services.
Micha Kaufman: And as a result of that, we created a new catalog that is very much focused on talent, skills, and professions rather than specific services. And again, it allows customers to be more naturally matched with our talent. If you connect this with new contracting forms, like the possibility of paying based on an hourly rate, or upgrades, it enhances the platform and the possibilities of customers to actually engage with talent. I think your last question was about what we're seeing with macro.
Micha Kaufman: And again, it allows customers to be more naturally matched with our talent. If you connect this with new contracting forms, like the possibility of paying based on hourly rates, then not complete or upgrade enhances the platform and the possibilities of customers to actually engage with talent.
Speaker Change: <unk> not complete.
Speaker Change: Or upgrades enhances the platform and the possibilities of customers to actually engage with talent.
Micha Kaufman: I think your last question was about what we're seeing with macro. I think, as offer mentioned, we've seen some volatility during June. You know, first macro environment continues to be challenging in terms of SMB. And the sentiment of hiring. And I think that there's a few stats that are worth calling out here. So we have the small business index that continues to linger at the lowest levels in a decade. You have the job openings that are down 7% year over year. And in the tech sector, specifically, they're down 17% year over year. And you have professional staffing that is trapped through staffing hours.
Speaker Change: I think your last question.
Speaker Change: Was about what we're seeing with with macro.
Micha Kaufman: I think, as Ofer mentioned, we've seen some volatility during June. The macro environment continues to be challenging in terms of SMBs and the sentiment for hiring. And I think that there are a few stats that are worth calling out here. So we have the Small Business Index, that continues to linger at the lowest levels in a day.
Speaker Change: I think as <unk> mentioned.
Speaker Change: We've seen some some volatility during June.
Speaker Change: First macro environment continues to be challenging in terms of SMB.
Speaker Change: And the sentiment of of hiring and I think that there is there is there is a few stocks that are worth calling out here.
Speaker Change: So we have the small business index that continues to linger at the lowest levels in a decade.
Micha Kaufman: You have job openings that are down 7% year-over-year, and in the tech sector, specifically, they're down 17% year-over-year. And you have professional staffing that is trucked in through staffing hours that is also down 7% year-over-year, which is slightly worse than it was a year ago. So, all in all, when you think about the hiring space, the hiring space is not seeing its brightest moment right now. In addition to that, what we've seen during June was some slowness in top-of-funnel traffic for us across the platform. So, I think that's from, from, you know, the matrix perspective.
Speaker Change: You have the job opening that are down 7% year over year and in the tech sector, specifically dirt down 17% year over year.
Speaker Change: And you have professional staffing that is trucked through staffing hours that is also down 7% year over year, which is slightly worse than it was a.
Micha Kaufman: That is also down 7% year over year, which is slightly worse than it was a year. ago. So all in all, when you think about the hiring space, the hiring space is not seeing its brightest moment right now. In addition to that, what we've seen during June was some slow, slowness in top of funnel traffic across the platform. So I think that from you know, matrix perspective, you know, it's more visible in terms of impact on active buyers and less than spent for buyer. And central buyer has been growing pretty aggressively, double digits. And the efforts that we're doing in going up markets continues to pay off.
Speaker Change: A year ago.
Speaker Change: So all in all when you think about the hiring.
Speaker Change: The hiring space is not.
Speaker Change: Seeing.
Speaker Change: Its brightest moments right now.
Speaker Change: In addition to that.
Speaker Change: We've seen during June.
Speaker Change: Some slow slowness in top of funnel traffic.
Speaker Change: <unk> across the platform.
Speaker Change: So so I think Thats for me.
Speaker Change: Matrix.
Micha Kaufman: You know, it's more visible in terms of impact on active buyers and less on spent per buyer. And spent per buyer has been growing pretty aggressively, double digits, and the efforts that we're doing and going up market continue to pay off. From a category perspective, we're seeing some more volatility among larger projects, which is something new, and I think that this tells us more than anything else that what we're seeing is something that we can't call a steady trend. Right now, the market is a bit volatile. Some of it is seasonality.
Speaker Change: Perspective.
Speaker Change: It's more visible in terms of impact on active buyers and less on spend per buyer and federal buyer has been growing.
Speaker Change: Pretty aggressively double digits.
Speaker Change: And the efforts that we're doing and going up market continues to pay off.
Micha Kaufman: And from a category perspective, we're seeing some more volatility among larger projects, which is something new. And I think that this tells more than anything else that what we're seeing is something that we can't call a steady trend. Right now, the market is a little bit volatile. Some of it is seasonality. Some of it is AI in some categories. Some of it is just macro. But in reality, we see, among larger projects, we've seen some more volatility. At the same time, we're seeing some more stability on simple projects, which is slightly different than what we've seen in the first few months.
Speaker Change: And.
Speaker Change: From a category perspective, we're seeing some more volatility among larger projects.
Speaker Change: Which is something new and I think that this tells more than anything else that what we're seeing is.
Speaker Change: Something that we can't call a steady trends.
Speaker Change: Right now the market is a bit volatile some of it is seasonality some of it is in some categories.
Micha Kaufman: Some of it is AI in some categories. Some of it is just macro, but in reality, we see among larger projects, we've seen some more volatility. At the same time, we're seeing some more stability on simple projects, slightly different than what we've seen in the first few months. So we're just calling out those thoughts. It's hard to call them a trend.
Speaker Change: Some of it is just macro but in reality, we see.
Speaker Change: Larger projects, we've seen some more volatility at the same time, we're seeing some more stability on simple project.
Speaker Change: It is slightly different than what we've seen in the first few months. So we're just calling out those.
Micha Kaufman: So we're just calling out those, those, those stocks. It's hard to call them a trend at this point. Thank you, Micha. Very helpful. Thank you.
Speaker Change: Those those stocks.
Speaker Change: It's hard to call them a trend at this point.
Operator: Thank you, Micha, very helpful. Thank you. Now we're going to take our next question, and the question comes from the line of Bernie McTernan from Needham & Company.
Speaker Change: Thank you very helpful.
Speaker Change: Thank you.
Operator: Now we're going to take our next question.
Speaker Change: Thank you now we'll go and take our next question.
Bernard McTernan: And the question comes from line of Bernie McTernan from Need Some Uncompany. Your line is open. Please ask your question.
Speaker Change: And the question comes from the line of.
Operator: Your line is open; please ask your question. Great. Thanks for taking the questions.
Speaker Change: Danny Mctiernan from Needham and company. Your line is open please ask your question.
Micha Kaufman: Maybe just to start, I'd love to dive into AutoDS a little bit more and just learn maybe what capabilities the acquisitions bring that you didn't have before for its customers and, probably most importantly, how they are supposed to impact the financials in the second half of the year. And then, based on the commentary of the take rate being up 250 basis points this year, it implies GMV being down year over year in the second half of the year.
Bernard McTernan: Great. Thanks for taking the questions. Maybe just a start. I'd love to dive into Auto DS a little bit more and just learn. Maybe what capabilities that the acquisitions bring that you didn't have before? For its customers and probably most importantly, how it's supposed to impact the financials in the second half of the year. And then I think based on the commentary of the take rate being up to 250 basis points this year, it implies GMV down year over year in the second half of the year. So just wanted to make sure I was triangulating that right.
Bernard Jerome McTernan: Thanks for taking the questions maybe just to start I would love to dive into <unk>, a little bit more and just learn more.
Bernard Jerome McTernan: What capabilities the acquisitions bring that you didn't have before for its customers and probably most importantly, how it impacts the financials in the second half of the year and then I think based on the commentary of the take rate being up to 250 basis points. This year. It implies GMB down year over year in the second half of the year.
Micha Kaufman: So just wanted to make sure I was triangulating that right. And then, I know it's early, but how should we be expecting, in your view, a reacceleration in 25 or not, or just given the comments of the 27 targets involving strong revenue growth? Good morning, Bernie. Thanks for the questions. So, Otto Diaz.
Speaker Change: So just wanted to make sure I was triangulating that right and then.
Bernard McTernan: And then, you know, I know it's early, but, you know, how to think about, you know, if we should be expecting in your view of reacceleration in 25 or not. They're just, you know, given the comments of the 27 targets involving strong revenue growth. Just maybe the puts and takes and getting there in terms of your thoughts in terms of the ability to continue to expand the take rate. How M&A could play in that but also importantly GMV growth.
Speaker Change: I know, it's early but how to think about it.
Speaker Change: If we should be expecting in your view, a reacceleration in 'twenty, five or not or just.
Speaker Change: Given given the comments of the 27 targets involving strong revenue growth just maybe the puts and takes in getting there in terms of your thoughts in terms of the ability to continue to expand the take rate.
Speaker Change: How M&A could play in that but also importantly GMB growth.
Micha Kaufman: Good morning, Bernie. Thanks for the questions. So auto DS essentially, I think as we said in the opening comment, dropshipping is the category that has been on fiber for many, many years. And we've been witnessing growth in this category. I've been saying in previous quarters that fiber has identified the number of faster growing categories in which we intend to double down. And in some cases, it's double down organically. And in some cases, there's an opportunity for inorganic growth as well. So we had a very sizable community of people that are either dropshipping or offer services related to dropshippers.
Speaker Change: Good morning, Bernie Thanks for the questions.
Speaker Change: <unk>.
Micha Kaufman: Essentially, I think, as we said in the opening comments, drug shipping is a category that has been on Fiverr for many, many years, and we've been witnessing a lot of growth in this category. I've been saying in previous quarters that Fiverr has identified the number of faster growing categories in which we intend to double down. And in some cases, it's doubled down organically. And in some cases, there is an opportunity for inorganic growth as well.
Speaker Change: So auto Dias.
Speaker Change: Essentially.
Speaker Change: I think as we said in the opening comments.
Speaker Change: Drop shipping as a category.
Speaker Change: Thats been on Fiverr for many many years and we've been witnessing revenue growth in this category I've been I've been saying in previous quarters.
Speaker Change: That fiber has identified the number of faster growing categories in which we intend to double down.
Speaker Change: And in some cases, it's double down organically and in some cases, there is an opportunity for inorganic growth as well. So we had a very sizable community of people that are either drop shipping or offer services.
Micha Kaufman: So we had a very sizable community of people that are either dropshipping or offering services related to dropshipping. And what we're doing with the addition of Autodesk is expanding this space also into the software solution. So that allows us to really double down and accelerate. AutoDS is practically, in the software space related to dropshipping, the number one player in the world. It's a fast-growing company. We love the team.
Speaker Change: Related to drop shippers.
Micha Kaufman: And what we're doing with the addition of Auto DS is expanding this space also into the software solution. So that allows us to really double down and accelerate. Auto DS is practically in the software space related to dropshipping, is the number one player in the world. It's a fast growing company. We love the team. It's extremely synergic with with with our business for a number of reasons. It allows us to double down and dropshipping e-commerce social media user generated content and video categories, which is, as I've said, some of the fastest growing categories on Fiber.
Speaker Change: And what we're doing with the addition of <unk> expanding this space also into the software solution.
Speaker Change: So that allows us to really double down and accelerate auto.
Speaker Change: <unk> lead in in the software space related to drop shipping as the number one player in the world.
Micha Kaufman: It's extremely synergistic with our business for a number of reasons. It allows us to double down on dropshipping, e-commerce, social media, user-generated content, and video categories, which are, as I've said, some of the fastest-growing categories on Fiverr. You know, it's a community that we know very well and feel very strongly about.
Speaker Change: It's a fast growing company, we love the team.
Speaker Change: It's extremely synergistic with our business for a number of reasons now it allows us to double down on drop shipping E Commerce, social media and user generated content and video categories.
Speaker Change: We just as I've said some of the fastest growing categories on fiber.
Micha Kaufman: It's a community that we know very well and feel very strongly about. And I think competitively it allows us to extend our offering and grow this further, and also add to the value chain by providing more products for them. It's a community that is in many ways rooted in Fiverr's origin. And we're very passionate to empower them. We talked about this idea of the Fiverr Millionaire Award, and this connects really to self-make people, people that have built their businesses and are able to grow it. And lastly, I think it creates a diversified revenue stream, adding a subscription base, which is another step towards making our business, not just the market.
Micha Kaufman: And I think competitively, it allows us to extend our offering and grow this further and also, you know, add to the value chain by providing more products for them. It's a community that is in many ways rooted in Fiverr's origin, you know, and we're very passionate about empowering them. You know, we talked about this idea of the Fiverr Millionaire Award, and this really connects with self-made people, people that have built their businesses and are able to grow them.
Micha Kaufman: And, you know, lastly, I think it creates a diversified revenue stream, adding a subscription base, which is another step towards making our business not just a market base but also a platform that provides freelancers with software solutions on top of access to opportunities. I think the second part of the question relates to take rate and impact on financialism. I will start by saying that we are happy and proud.
Micha Kaufman: But also a platform that provides three answers with software solution on top of access to opportunities. I think the second part of the question is related to take rate and impact on financial. I will start by saying that we are happy and proud to end Q2. Bob Consendos, both for revenue and Edita. And with the confidence to reiterate the guidance for the year, both on revenue with a slightly increased in the pattern, a pattern range and reiterating the Edita. And I think this takes into consideration the fact that Mithra, you referred to what Mithra said earlier about June and July weakness.
Micha Kaufman: To end Q2, Bob Consenzos, both for revenue. And with the confidence to reiterate, guidance for the year. Both on revenue is slightly increased in the bottom, bottom range, reiterating the EBITDA. And I think this takes into consideration the fact, and Micha I referred to what Micha said earlier about... June and July weekness.
Speaker Change: It is in the <unk>.
Speaker Change: A.
Speaker Change: Bottom range.
Speaker Change: <unk> the EBITA.
Speaker Change: And I think this takes into consideration the fact that metallurgy referred to.
Speaker Change: And as I said earlier about.
Speaker Change: June and July weakness.
Micha Kaufman: Result in weak, weak joining of a new buyer, a active buyer compensated, those by center buyer growing on double digits and take for extension. And I think that looking on a center buyer, a center buyer is as a robust growth, because we're investing in growing up market for some time. It's the maturity of investment with the add-on of the salary list, hourly rate features that we didn't have before, a loyalty program. Those type of features allow us to double down on the community with a bigger wallet and increase the engagement relationship experience to new level.
Speaker Change: Result in a week.
Ofer Katz: We're joining a new buyer, an active buyer, compensated both by a central buyer growing at double digits and State Trade Extension. And I think that looking at Centerbuyer, Centerbuyer is, as robust growth because we are investing in going up market for some time. The majority of investment, with the add-on of the summer release, hourly rate features that we didn't have before, and a loyalty program. Those types of features allow us to double down on the community with a bigger wallet and increase the engagement relationship experience to a new level.
Speaker Change:
Speaker Change: Joining of nubile.
Speaker Change: Goodbye I'm compensated goes by spend per buyer.
Speaker Change: Growing in double digits.
Speaker Change: And take rate expansion and I think that looking on spend per buyer.
Speaker Change: BIA is.
Speaker Change: As a robust robust growth.
Speaker Change: Because we are investing in going up market for some time.
Speaker Change:
Speaker Change: It's the majority of investment.
Speaker Change: With the add on of the summer release.
Speaker Change:
Speaker Change: Our elevate features that we didn't have before a loyalty program.
Speaker Change: Those type of features allow us.
Speaker Change: To double down on the community.
Speaker Change: With a bigger wallet.
Speaker Change:
Speaker Change: And increased engagement.
Speaker Change: Patient experience.
Speaker Change: To.
Micha Kaufman: And the second part that compensates on the active buyer is a take rate. And take rate has expanded over the last few years with new feature that we have added alongside the marketplace. Then I was going all the way back with promoted gigs and them to the Plus. and I think the AutoDS falls into the same bucket, allowing our community to further utilize our offering to make money. And by having said that, we anticipate that the integration of the community will take some time, and then the benefit of the AutoDS will fall into the take rate, with much of the opportunity ahead of us.
Speaker Change: So new level.
Ofer Katz: And the second part that compensates for the active buyer is a take rate, and take rate has expanded over the last few years in the United States. Then I was going all the way back with the promoted gigs and then Cello Classics.
Speaker Change: And the second part that is compensated from the active buyer.
Speaker Change: Is the take rate and take rate has expanded over the last few years.
Speaker Change: With new feature that we have added.
Speaker Change: Alongside the marketplace.
Speaker Change: Going all the way back with the promoted gigs and then sell a plus.
Ofer Katz: And I think Autodesk falls into the same bucket, allowing our community to further utilize our offerings. Thank you. And by having said that, we anticipate that the integration as a community will take some time, and then the benefit of Autodesk will forward to the pay grade with much of the opportunity ahead of us. You asked about 2025 and 2027; I think that we have put some timeline to the 25% EBITDA in 2027.
Speaker Change: And I think the auto DFS falls into the same bucket, allowing our community.
Speaker Change: To further utilize our offerings.
Speaker Change: To make money.
Speaker Change:
Speaker Change: And by having to say that we anticipate that the.
Speaker Change: Integration.
Speaker Change: As the community will take some time and been the benefit <unk> will fall into the <unk>.
Speaker Change: Great.
Speaker Change: Much of the opportunity ahead of us.
Micha Kaufman: You asked about 2025 and 2027. I think that we put some timeline to the 25% EBITDA in 2027. This is based on the assumption that we continue to grow and continue to improve EBITDA. I think that's what we've been doing ever since. There is no step-function or hockey spec. It's just about continue to do what we're doing and make sure that the fundamentals continue to work. Thank you.
Speaker Change: You asked about 2025, and 2027 and I think that.
Speaker Change: We put.
Speaker Change: As some timeline to the 25% EBITA in 2027 and.
Ofer Katz: This is based on the assumption that we continue to grow and continue to improve EBITDA. I think that's what we've been doing ever since. There is no step function; just about continue to do what we are doing and make sure that the fundamentals continue to work.
Speaker Change: This is based on the assumption that we continue to grow.
Speaker Change: And continue to improve EBITA I think that's what we've been doing.
Speaker Change: Ever since.
Speaker Change: There is no step function.
Speaker Change: Or hockey stick.
Speaker Change: About continued to do what we're doing and make sure that from a mental continue.
Speaker Change: To walk.
Speaker Change: Okay. Thank you.
Operator: Thank you, now we're going to take our next question. And the question comes from the line of Jason Helfstein from Oppenheimer & Co. Your line is open.
Operator: Now we're going to take our next question.
Speaker Change: Thank you now we are going to take our next question.
Jason Halstein: And the question comes to line of Jason Halstein from Oppenheimer and Co. Your line is open. Please ask a question.
Speaker Change: And the question comes from the line of Jason <unk> from Oppenheimer and co. Your line is open. Please ask your question.
Operator: Please ask your question. Home and on. So, just one question. Solid Data Take Rates. Hey, Jason, thanks for the question. So essentially, if you think about the two parts of pay grade, there's the transactional portion of it, and then there's the added value services and products that we offer to our community. And the growth that we're seeing is coming from the value-added product. So we haven't cut this
Jason Halstein: Hi, this is Steve Roman on for Jason. So just one question on the tile data take rate. So where do you see the ceiling on take rate over time, kind of long term, as you kind of look towards that 2027 target? The 27 targets you put out today. Thanks.
Speaker Change: Hi, This is Steve Hoffman on for Jason.
Steve Hoffman: Just one question on the consolidated take rate, so where do you see that the ceiling on take rate over time kind of long term as you kind of look towards that 2027 target.
Speaker Change: <unk> thousand seven targets you put out today.
Micha Kaufman: Yeah, Jason. It's sort of the question. So essentially the, if you think about the two parts of take rate, there's the transactional portion of it. And then there's the added value service and products that we offer to our community. The transactional portion of it doesn't really change. And the growth that we're seeing is coming from the value added products. So we haven't caught this for as long as we can continue generating products that our community loves using and things that they're worth spending; we will continue doing that. And we have quite a few in the pipeline.
Jason: Hey, Jason.
Speaker Change: The question.
Speaker Change:
Speaker Change: Essentially the if you think about the two parts of take rate there is the transactional portion of it.
Speaker Change: And then there is the added value service and product that we offer to our community.
Speaker Change: The transactional portion of it Hasnt really changed.
Speaker Change: In the.
Speaker Change: The growth that we're seeing is.
Speaker Change: He is coming from the value added products. So we haven't capped this.
Micha Kaufman: For as long as we can continue generating products that our community loves using, and things that they're worth spending money on, we'll continue doing that, and we have quite a few in the pipeline. And therefore, we haven't cupped it.
Jason: For as long as we can continue generating power.
Jason: Products that our community loves us using in things that they're worth spending.
Jason: We will continue doing that and we have quite a few in the pipeline.
Micha Kaufman: And the transactional portion has pretty much remained the same. So that's how we're thinking. Thank you.
Micha Kaufman: And, and therefore, we haven't we haven't kept it. And in the transactional portion, it's pretty much remained the same. So that's how we're thinking about this.
Jason: And therefore, we haven't we haven't tapped it in.
Jason: The transactional portion.
Jason: Pretty much remained the same.
Jason: So that's how we're thinking about this.
Jason Halstein: Great. Thank you.
Speaker Change: Great. Thank you.
Operator: Now we're going to take our next question, and the next question comes from the line of Doug Anmuth from J.P. Morgan. Your line is open.
Operator: Now we're going to take a next question.
Speaker Change: Thank you now we'll go and take our next question.
Doug Anmuth: And the next question comes to line of duck animus from JP Morgan. Your line is open. Please ask a question.
Speaker Change: And the next question comes from the line of Doug Anmuth from Jpmorgan. Your line is open. Please ask your question.
Doug Anmuth: Great. Thanks much for taking the questions.
Operator: Please ask your question. Great, thanks so much for taking the questions. I just wanted to talk more about the summer product release first, and the hiring of long-term freelancers. Micha, maybe you can just talk about what you've seen here in terms of demand from buyers as you've built this product and kind of the drivers behind it. And then how we should think about monetization.
Douglas Till Anmuth: Alright, thanks, so much for taking the questions.
Doug Anmuth: I just wanted to talk more about the summer product release first, the hiring of long-term freelancers. Maybe you can just talk about what you've seen here in terms of demand from buyers, just that, you know, as you built this product and kind of the drivers behind it. And then how we should think about monetization is it's still project-based or is there, you know, a different revenue structure there.
Douglas Till Anmuth: Just wanted to talk more about the summer product release first the hiring of long term freelancers.
Douglas Till Anmuth: Maybe you can just talk about.
Speaker Change: What <unk> seen here in terms of demand from buyers just as you've built this product in kind of the drivers behind it.
Speaker Change: And then how we should think about monetization is it still project based or is there.
Micha Kaufman: Is it still project-based, or is there a different revenue structure there? And then, Ofer, on the full-year outlook, maybe you can just talk a little bit more about what drives the confidence in the 4Q revenue acceleration. Thanks. Morning, Doug.
Speaker Change: A different revenue structure, there and then ofer just on the.
Micha Kaufman: And then over just on the full year outlook, maybe you can just talk a little bit more about what drives the confidence in the 4Q revenue acceleration. Thanks. Morning, Doug. Thanks for the question. So the summer product, please, you know, as we go up markets and as we become more for our customers, they can envision doing more with us. In some cases, when you think about the predefined catalog of services, in some cases, it's very hard for customers to define their needs in the format of a well-defined service with a beginning in an end. In some cases, when they need to hire talent, all they know is that they need a highly qualified graphic designer for three months because they have a variety of projects.
Speaker Change: Full year outlook, maybe you can just talk a little bit more about what drives the confidence in the <unk> revenue acceleration. Thanks.
Micha Kaufman: Thanks for the question. So this is the summer product release. You know, as we go up market, and as we become more for our customers, they can, they can imagine doing more with us, in some cases.
Speaker Change: Good morning, Doug Thanks for the questions.
Speaker Change: So to the summer product release.
Speaker Change: As we as we go up market and as we become more for our customers. They can they can envision doing more with us.
Speaker Change: In some cases.
Micha Kaufman: When you think about the predefined catalog of services, in some cases, it's very hard for customers to define their needs in the format of a well-defined service with a beginning and an end. For example, in some cases when they need to hire talent, all they know is that they need a highly qualified graphic designer for three months because they have a variety of projects. Some of them are not even aware of what their specifics are, but they know that they have a lot of pressure right now, and they need talent for the next couple of months.
Speaker Change: And when you think about the pre defined catalog of services in some cases, it's very hard for customers to define their need in the format of eight.
Speaker Change: Well defined service with a beginning and an end in some cases when they need to hire talent all.
Speaker Change: All they know is that they need a highly qualified graphic designer for three months because they have a variety of projects some of them. They are not even aware of what the specifics are.
Micha Kaufman: Some of them, they're not even aware of what their specifics are, but they know that they have a lot of pressure right now and they need talent for the next couple of months. When that is the case, the best way of doing that is not necessarily going through the gig or services catalog, but rather to find the right talent and engage in an ongoing arrangement, which is why we created this mechanism. Now it's not competing with the services because when you know exactly what you need and that is well-defined and it has a beginning and an end, it's very easy for our community.
Speaker Change: But they know that they have a lot of pressure right now and they need talent for the next.
Micha Kaufman: When that is the key, the best way of doing that is not necessarily going through the gig or services catalogue but rather finding the right talent and engaging in an ongoing arrangement. Which is why we created this mechanism. Now it's not competing with services because when you know exactly what you need and that it is well-defined, and it has a beginning and an end, it's very easy for our community. They're very accustomed to providing the transparency and clarity of having a predefined scope of work where you know how long it will take and exactly how much it's going to cost.
Speaker Change: Couple of months.
Speaker Change: When that is the case the best way of doing that is not necessarily going through the gig or services catalog, but rather to find the right talent and engaging in ongoing arrangement, which is why we created this this mechanism now it's not competing with the services.
Speaker Change: When you know exactly what you need and that is well defined and it has a beginning and an end it's very easy for our community, they're very accustomed to providing that transparency and clarity of having a pre defined scope of work, where you know how long does it take and exactly how much.
Micha Kaufman: They're very accustomed to providing the transparency and clarity of having a predefined scope of work where you know how long it takes and exactly how much it's going to cost. But these are the more variable tasks, the more variable ongoing projects. So both the community from the supply side and the demand side have been asking for this, and we're happy to get to the maturity of extending our market base into this platform idea that really allows multiple ways of engaging with talent and multiple ways of contracting and paying to talent.
Speaker Change: It's going to cost.
Micha Kaufman: But these are the more variable tasks, the more variable ongoing projects. And so both the community on the supply side and the demand side have been asking for this, and we're happy to get to the maturity of extending our market base into this platform idea that really allows multiple ways of engaging with talent and multiple ways of contracting and paying for talent. So we just launched it, and the community is highly, highly excited about it.
Speaker Change: But these are the more viable tasks that more variable ongoing projects and.
Speaker Change: And so both the community from the supply side and demand side have been asking for this.
Speaker Change: And we're happy to get to the maturity of extending our market base into this platform idea that really allows multiple ways of engaging with talent in multiple ways of contracting and paying two and so we just launched it.
Micha Kaufman: So we just launched it. The community is highly, highly excited about this. Obviously, we're seeing a lot of transactions coming into the system already, but since it's been about a week, there's no numbers that we can talk about at this point.
Speaker Change: The community is highly highly excited about this obviously, we're seeing a lot of transactions coming into the system already.
Micha Kaufman: Obviously, we're seeing a lot of transactions coming into the system already, but since it's been about a week, there's no numbers that we can talk about yet. The second part, Doug. The question was about confidence in the queue for revenue. I think the confidence.
Speaker Change: But but since it's been about a week, there's no numbers that we can talk about this at this point.
Ofer Katz: Yeah, the second part, Doug, the question was about the confidence in Q4 revenue. I think the confidence is based on what we are seeing, products that we have released, and numbers of potential spent by growth and active buy-em. I think that the current guidance implies more muted growth for GMV diesel. And from a certain standpoint, we haven't taken into account any impact from product release. We do think that professional catalog and time-based contracts open up a whole new world. We stop a funnel, traffic. Historically, we haven't competed in this area at all. So there's definitely potential to drive additional DMV, at least in the second half.
Douglas Till Anmuth: The second part Doug.
Douglas Till Anmuth: The question was about the confidence.
Douglas Till Anmuth: In Q4.
Douglas Till Anmuth: Q4 revenue.
Douglas Till Anmuth: I think the confidence.
Ofer Katz: It's based on what we have seen, products that we have released, and the numbers of potential stem cell biogrowth and active biome. I think that, you know, the current guidance implies more muted growth for GMV this year. And from a present standpoint, we haven't taken into account any impact from product release. We do think that professional catalog and time-based... I contract, open up a whole new world of super funnel traffic. Historically, we haven't competed in this area at all.
Speaker Change: Based on what we're seeing.
Douglas Till Anmuth: Products that we have released in numbers.
Douglas Till Anmuth: Essentially spend per buyer growth and active biome.
Speaker Change #103: That the comment on <unk>.
Douglas Till Anmuth: <unk> employs more muted growth for <unk>.
Speaker Change: And from a program standpoint, we haven't taken into account.
Speaker Change: The impact from product release, we do think that professional catalog in time base.
Speaker Change: On our contracts.
Speaker Change: Open up a whole new world.
Speaker Change: With top of funnel.
Speaker Change: Rafi and historically, we haven't competed in the <unk>.
Ofer Katz: So there's definitely a potential to drive additional GMV uplifts in the second half. So, all in all, you know, when we build a model based on what we see, we think that the Adam of the O2DS will be revealed later this year to our audience.
Speaker Change: So there is definitely a potential to drive additional DMV uplift.
Speaker Change: In the second half.
Ofer Katz: So all in all, you know, when we build the model based on what we see, we think that the Adam of the Auto DS later this year to our audience will have a positive impact on top of everything that we are doing internally.
Speaker Change: So all in all.
Speaker Change: When we build a model based on what we see.
Adam: We think that the Adam.
Speaker Change: The <unk> later this year.
Ofer Katz: We have a positive impact on top of everything that we are doing internally, and the sum of all this is a nice exit rate for this. Got it. Thank you both.
Speaker Change: Our audience.
Speaker Change: We'll have a positive impact on top of everything that we're doing internally.
Ofer Katz: From the formal, is a nice exit. Right for this. Thank you both. Thank you.
Speaker Change: Under some some mall is a nice exit.
Speaker Change: Rates will be soon.
Speaker Change: Got it thank you both.
Operator: Now we're going to take our next questions.
Operator: Thank you. Now we're going to take our next question, and it comes from the line of Andrew Boone from GMP Security. So the line is open, please ask your questions. Good morning.
Speaker Change: Thank you.
Speaker Change: Now I will go and take our next question.
Andrew Boone: And it comes to line of Andrew Boone from GMP Security. So line is open; please ask the question.
Speaker Change: And it comes from the line of Andrew Boone from GMP Securities. Your line is open. Please ask your question.
Andrew Boone: Good morning. Thanks much for taking my questions. Micha, you've been fairly clear that AI has been a net positive, but can you talk about what you're seeing on the simple tasks and whether there's a tap, excuse me, a path to underlying stabilization for those categories. And then secondly, as you transition from a marketplace into more of a platform with software solutions, how should we expect that to manifest going forward? It sounds like Auto DS is going to be operating independently. How do you think about the synergies, and then how do you build out more software solutions, and what's the obvious adjacency that you're seeing there.
Operator: Thanks so much for taking my question. Micha, you've been fairly clear that AI has been a net positive, but can you talk about what you're seeing on the simple tasks and whether there's a tap?
Andrew M. Boone: Good morning, Thanks for taking my questions.
Mikhail: Mikhail <unk> been fairly clear that AI has been a net positive but can you talk about what youre seeing on the simple tasks and whether theres a tap.
Operator: To underline stabilization for those categories, and then secondly, as you transition from a marketplace into more of a platform with software solutions, how should we expect that to manifest going forward? It sounds like Autodesk is going to be operating independently. How do you think about the synergies? And then how do you build out more software solutions? What are the obvious adjacencies that you're seeing there? Thanks. Morning, Andrew.
Speaker Change: Give me a path.
Speaker Change #101: <unk> underlying stabilization for those categories and then secondly, as you transition from a marketplace into more of a platform with software solutions, how should we expect that to manifest going forward. It sounds like <unk> is going to be operating independently. How do you think about the synergies and then how do you build out more software solutions.
Speaker Change: What's the obvious adjacencies that you're seeing there. Thanks so much.
Andrew Boone: Thanks so much.
Micha Kaufman: Morning, Andrew. Thanks for the question. So starting with AI. So, essentially, AI continues to be net positive for us. We're seeing, you know, stabilizing and improving trends on simple services. We mentioned in the past that AI is impacting low ticket size job mostly. So we continue to see improving trends on simple overall mix of projects. So the overall mix of projects shifts stores higher and skill. Now, you know, several quarters in, we are actually seeing that in our, we're seeing this in our data. So for example, writing in translation, you know, as a vertical, is the vertical with the biggest exposure to AI impact in due to we're actually seeing traffic in that vertical improved 10 percentage points in terms of your very growth rate compared to Q1.
Speaker Change: Good morning, Andrew Thanks for the questions.
Micha Kaufman: Thanks for the question. So, starting with AI. So essentially, AI continues to be net positive for us. We're seeing stabilizing and improving trends on simple services. We mentioned in the past that AI is impacting low-ticket size jobs mostly, so we continue to see improving trends on simple overall mix of projects. So the overall mix of projects shifts towards higher-end skills. Now, several quarters in, we are actually seeing that in our data. So, for example, writing and translation, you know, as a vertical, is the vertical with the biggest exposure to AI impact.
Speaker Change: So starting with <unk>.
Speaker Change #102: Wood with AI.
Speaker Change: So essentially AI continues to be net positive for us.
Speaker Change: We're seeing.
Speaker Change: Stabilizing and improving trends on simple services, we mentioned in the past that AI is impacting low ticket size job, mostly so we continue to see improving trends on simple overall mix of projects.
Speaker Change: <unk>.
Speaker Change: Overall mix of projects shift stored is higher and skills.
Speaker Change: Now.
Speaker Change: Sure.
Speaker Change: Quarters in <unk>.
Speaker Change: We are actually seeing that in our.
Speaker Change #100: We're seeing this in our data.
Speaker Change: So for example, writing and translation.
Speaker Change: As a vertical.
Speaker Change: Is the vertical with the biggest exposure to AI.
Micha Kaufman: In Q2, we're actually seeing traffic in that vertical improve by 10 percentage points in terms of your growth rate compared to Q1. And on complex services, they're still growing much faster than simple and neutral categories. But the growth rate has moderated recently due to the volatility that we've been speaking about in June and. That said, you know, with us now opening up the professions catalog and hourly contracts, this will open up new funnels and create growth opportunities, especially for complex services categories.
Speaker Change: In Q2, we're actually seeing traffic in that vertical improved 10 percentage points in terms of year over year growth rates compared to Q1.
Micha Kaufman: And on complex services, there's still growing much faster than simple and neutral categories, but the growth rate has moderated recently due to the volatility that we've been speaking about in June and July. That said, you know, with us now opening professions catalog and already contracts, this will open up new funnels and create growth opportunities, especially for complex services categories. And remember that we have over 700 categories. So our exposure to specific categories is relatively low and seasonal trends in categories spend are our regular thing in our line of business. You know, when you when we think about the overall mix complex, even the mid 30s of GMV and simple is about 20%.
Speaker Change: And on complex services, they are still growing much faster than simple and neutral categories, but the growth rate has moderated recently due to the volatility that we've been speaking about in June and July that said.
Speaker Change: <unk>.
Speaker Change: With us now opening professions catalog and R&D contracts. This will open up new funnels and create growth opportunities, especially for complex services.
Micha Kaufman: And remember that we have over 700 categories. So our exposure to specific categories is relatively low, and seasonal trends in category spend are a regular thing in our line of business. Um, you know, when we think about the overall MIG complex, it's in the mid-30s of GMV, and it's simple is about 20%.
Speaker Change: Categories.
Speaker Change: And remember that we have over 700 category. So our exposure to specific categories is relatively low and seasonal trends in categories spend or a regular thing in our line of business.
Speaker Change: When we think about the overall mix complex in the mid <unk>.
Speaker Change: <unk> of <unk> and simple is about 20%.
Micha Kaufman: I would be careful about calling anything we've spoken about on June and in July a trend because it's very hard to see stable things. Things seem to change over the year, and as I've said, there's many reasons why that is, and I would wait before I could actually call it a trend.
Micha Kaufman: I would be careful about calling anything we've spoken about in June and in July a trend, because it's very hard to see stable; things seem to change over the year. And, as I've said, there are many reasons why that is. And I would wait before we can actually call it the second question: transition to platform. Okay, so essentially, you know, when you think about the progression, the way we have developed over the past couple of years.
Speaker Change #104: I would be careful about calling anything we've spoken about on June and in July a trend because it's very it's very hard to see stable things things seems to seems to change over the year and as Ive said theres many reasons.
Speaker Change: Why that is.
Speaker Change: And I would wait before we can actually call it the trend.
Micha Kaufman: The second question was a transition to platform. When you think about the progression, the way we have developed over the past couple of years, we started from being a gig marketplace where there's very well-defined services with timing and price associated with them, and people can just come in in order. Over the years, we've been offering a long list of or a multi-solution building, multi-solution platform where our customers can actually engage in a multitude of ways with the talent on the platform depending on their needs. What we're trying to do is we're trying to fit the solution with the right need.
Speaker Change #105: The second question was.
Speaker Change #106: Transition to platform.
Speaker Change: Okay. So essentially.
Speaker Change: <unk>.
Speaker Change: When you think about the progression the way we have developed over the past couple of years.
Micha Kaufman: We started out as a gig market base where there are very well-defined services with timing and price associated with them, and people can just come in and order. Over the years, we've been offering a long list of or a multi-solution, building a multi-solution platform where our customers can actually engage in a multitude of ways with the talent on the platform depending on their needs. And what we're trying to do is we're trying to fit the solution with the right people.
Speaker Change: We started from being a geek market base, where there is very well defined services with timing and price associated with them and people can just come in.
Speaker Change: In order.
Speaker Change: Over the years, we've been offering a long list of or a multi solution building.
Speaker Change: Building multi solution platform, where our customers can actually engaging in a multitude of ways with the talent on the platform depending on their needs.
Speaker Change: And what we're trying to do is we're trying to fit the solution with the right needs.
Micha Kaufman: So what we've been doing with Fiverr Pro and Fiverr Enterprise, what we've been doing with project management, Success Management, the addition of agency into the platform, Fiverr Pro, now the professionals in the hourly-based contract, all of that complete, a platform with multi-solutions for our customers' needs. On top of that, we have software solutions for specific needs that could be either our sellers or our buyers, depending on on the solution.
Micha Kaufman: What we've been doing with Fiverr Pro and Fiverr Enterprise, what we've been doing with project management, success management, the addition of agencies into the platform, Fiverr Pro, now the professions and the hourly-based contracts. All of that completes a platform with multi-solutions for our customers' needs. On top of that, we have software solutions for specific needs. That could be either the our sellers or our buyers, depending on the solution. Also, the S is a part of this. As I was saying in the beginning, drop shipping is a very lively, well-growing category for us. By adding not just the community, although to the F, but their software solution because this is what they are, they are a platform that solves all the needs of drop shippers.
Speaker Change: So what we've been doing with Gopro in fiber enterprise, where we've been doing with project management success management.
Speaker Change: The addition of agencies into the path for fiber.
Speaker Change: <unk> fiber Pearl.
Speaker Change: Now the professions and the hourly based contracts all of that complete.
Speaker Change: A platform with multi solutions for our for our customers need on top of that we have software solutions for specific needs that could be either.
Speaker Change: The our sellers or are buyers.
Speaker Change: Depending on the on the on the solution.
Micha Kaufman: And Autodesk is a part of this. So as I was saying in the beginning, dropshipping is a very lively, well-growing category for us. By adding not just the community of O2DS but their software solution, because this is what they are, they're a platform that solves all the needs of drug shippers.
Speaker Change: And also the SEC as a part of this.
Speaker Change: As I was saying at the beginning drop shipping.
Speaker Change: Is a very lively.
Speaker Change: Well growing category for us.
Speaker Change: By adding another of the community for both of these but their software solution. Because this is what they are there are platforms.
Speaker Change: Solved all the needs of drop shippers were able to enjoy those synergies.
Micha Kaufman: We're able to enjoy those synergy offering software to our drop shippers and our freelancers. And offer freelancing solutions and creative solutions for drop shippers that have the software but need help in managing their stores and growing their businesses. And this together makes the makes it highly synergistic. Thank you.
Micha Kaufman: We're able to enjoy those synergies, offering software to our drug shapers and our freelancers, and offering freelance solutions and creative solutions for dropshippers that have the software but need help in managing their stores and growing their business. This together makes it highly useful. Thank you. Now we're going to take our next question, and the question comes from the line of Matt Farrell from Piper Sandler.
Speaker Change: Offering software to our drop shippers and our our freelancers.
Speaker Change: And Ofer freelancing solutions and creative solutions for drop shippers.
Speaker Change: Have the software, but need help in managing their stores in growing their businesses.
Speaker Change: And this together makes the mix makes it highly synergetic.
Speaker Change: Thank you.
Matt Farrell: Now we're going to take our next question. And the question comes along of Matt Farrell from Piper Sandler.
Speaker Change: Thank you.
Speaker Change #118: We'll take our next question.
Matthew F. Farrell: And our question comes from the line of Matt <unk> from Piper Sandler. Your line is open. Please ask your question.
Operator: Your line is open. Please ask a question. Thanks, guys. Impressive free cash flow generation in the quarter, and congrats on completing the buyback for the $300 million of free cash flow over the next three quarters. Should we be thinking about all of that being deployed in some way, just given where your balance sheet is today, and is the preference for continued buybacks or more M&A? Matt, should I assume you meant three years?
Matt Farrell: Your line is open; please ask the question.
Matt Farrell: Thanks, guys. Impressive free cash flow generation in the quarter, and congrats on completing the buy back. For the 300 million of free cash flow over the next three quarters.
Speaker Change #117: Thanks, guys impressive free cash flow generation in the quarter and congrats on completing the buyback for the $300 million of free cash flow over the next three quarters.
Ofer Katz: Should we be thinking about all of that being deployed in some way, just given where your balance sheet is today? And is the preference for continued buybacks or more M&A? So, I thought maybe you know something I don't know. But I think we laid off the capital allocation priorities in the shareholders' letter, really extensive. I would name it now, but again, it's pretty extensive details in the shareholders' letters. The way we see the capital allocation goes from investment in products to drive growth. There's something that we've been doing for a while, and we'll continue to do because we think the term is ahead of us.
Speaker Change #120: Should we be thinking about all of that being deployed in some way just given where your balance sheet is today and as the preference for continued buybacks or more M&A.
Speaker Change #112: Net should I assume you meant the three years.
Speaker Change #108: 300 million.
Speaker Change #107: $300 million over the next three years, yes.
Ofer Katz: Thank you. Oh, good. So maybe you know something. I don't know, but, I think we laid out the capital allocation priorities in the shareholders' letter. It will be extensive. I will name it now, but again, there are pretty extensive details in the show of the letter. The way we see capital allocation going from investment in product to drive growth, something that we've been doing for a while, and we'll continue to do because we think the time is ahead of us. There's a lot of them...
Speaker Change #116: Oh good.
Speaker Change #107: Okay.
Speaker Change #111: So if maybe you know something I don't know, but but.
Speaker Change #119: I think we laid off.
Speaker Change #109: The capital allocation.
Speaker Change #109: Our priorities in the shareholders' lithium.
Speaker Change #109: Are extensive.
Speaker Change #107: I will I will name it now, but again thats a pretty extensive.
Speaker Change #107: Michelle let us the way, we see the capital allocation goes from invest in product.
Speaker Change #107: To drive growth.
Speaker Change #113: That's something that we've been doing for a while and will continue to do because we think the Tam is ahead of us there's a lot of.
Ofer Katz: There's a lot of opportunity to capture. The second goes to optimize balance sheet and cash flow generation. I think a quick look into our balance sheet today. So, we have a little bit over 700 million of cash and cash equivalent. And this is after we have completed the $110 million buyback. So, this 700 allows us a lot of flexibility and also makes sure we have enough liquidity to pay off it needed to convert end up next year. And then, if there is an opportunity for the value of the shareholders to do some more share buyback, its price is attractive.
Ofer Katz: The second goes to optimize balance sheets and cash flow generation. I think a quick look at our balance sheet today. So we have a little bit over 700 million of cash and cash equivalents. And this is after we have completed the $110 million buyback. So this 700 million allows us a lot of flexibility and also makes sure we have enough liquidity to pay off if needed, deconvert, end of next year.
Speaker Change #130: <unk> affinity to capture the second goes to optimize the balance sheet and cash flow.
Speaker Change #110: Generation I think a quick look.
Speaker Change #110: Our balance sheet today, so we have.
Speaker Change #110: Little bit over $700 million.
Speaker Change #110: Cash and cash equivalent.
Speaker Change #110: And this is after we have completed the by $110 million buyback.
Speaker Change #110: So this 700 allows us lots of flexibility.
Speaker Change #110: And also making sure we have enough liquidity.
Speaker Change #110: To pay off if needed.
Speaker Change #110: The convert end of next year.
Ofer Katz: And then, if there is an opportunity for the value of the shareholders... To do some more, share buyback. If the price is attractive, we may consider that. And lastly, M&A. We've been opportunistic in the past and plan to continue. SIGFEL, SIGFEL.
Speaker Change #110: And then if there is an opportunity.
Speaker Change #110: For the value of the shareholders.
Speaker Change #110: To do some more share buyback.
Speaker Change #110: If prices are attractive.
Ofer Katz: We may consider that. And lastly, it's M&A. We've been putting in the past and plan to continue and seek for alternatives for us to grow in organic by M&A. You know, you need to take into consideration that on top of the 700 million, we are generating free cash flow over here approximately 80. That as we look forward, the pretty positive and confident from cash point standpoint. And I think we intend to strategize our cash usage with the goal of driving steady and consistent free cash flow share in the next three years. As we mentioned in the prepare the marks with the current line of sight, we believe we can drive KGAR 14% in free cash flow for the next real and a similar project away for free cash flow per show.
Speaker Change #110: We may consider that and lastly, it's M&A.
Speaker Change #110: We've been opportunistic in the past and we plan to continue.
Speaker Change #110: And <unk> four.
Speaker Change #110: Six four.
Speaker Change #110: Oh.
Ofer Katz: Alternatives for us to grow inorganically by M&A. You know, you need to take into consideration that. On top of the $700 million, we are generating free cash flow every year, approximately $80. As we look forward, we're pretty positive and confident from a cash point standpoint. And I think... Swim fast.
Speaker Change #110: Alternative cost to grow inorganic by M&A.
Speaker Change #110: You need to take into consideration that.
Speaker Change #110: On top of the 700 million, we are generating free cash flow of approximately 18.
Speaker Change #110: As we look forward.
Dave: Dave and confidence from.
Dave: Cash borrowing.
Speaker Change #110: Standpoint.
Speaker Change #110: And I think.
Speaker Change #110: We intend.
Ofer Katz: Guys, I will cut you, with the goal of driving steady and consistent free cash flow fair share in the next three years. As we mentioned in the prepared remarks, with the current line of sight, we believe we can drive Kega up 14% in free cash flow for the next three years and a similar trajectory for free cash flow. Thanks. And maybe just one more.
Speaker Change #110: And standardized our cash usage with.
Speaker Change #110: With the goal of driving steady and consistent free cash flow per share.
Speaker Change #110: In the next three years.
Speaker Change #110: As we mentioned in the prepared remarks.
Speaker Change #110: With the current line of sight.
Speaker Change #110: We believe we can drive a CAGR of 14% and free cash flow for the next phase.
Speaker Change #110: And a similar projects that we have for free cash flow per show.
Matt Farrell: Thanks. And maybe just one more.
Micha Kaufman: You mentioned, you know, not competing in the new long-term freelancer category until the recent product announcement. First, is there a way to size how big this opportunity is relative to the part of the market that you've been going after historically? And second, do you have to change your go-to-market strategy at all to compete in this new area with what I would assume to be a different set of competition to some degree? Thanks.
Speaker Change #131: Thanks, and maybe just one more you mentioned not competing in the new long term freelancer category.
Matt Farrell: You mentioned, you know, not competing in the new long-term freelancer category until the recent product announcement. First, is there a way to size how big this opportunity is relative to the part of the market that you've been going after historically. And second, do you have to change or go to market strategy at all to compete in this new area with what I would assume to be a different set of competition, to some degree? Yeah, so I think, you know, when we look at this, as we go up market, this opens up the ability to have a significantly larger ticket size project that are by definition more longer term or resemble more long term freelancer hiring.
Speaker Change #122: Until the recent product announcements.
Speaker Change #128: First is there a way to size how big this opportunity is relative to that part of the market that you've been going after historically and second do you have to change your go to market strategy at all to compete in this new area with what I would assume to be a different set of competition to some degree.
Micha Kaufman: Yeah, so, I think, you know, when we look at this, as we go up market, this opens up the ability to have a significantly larger ticket-size projects that are, by definition, more longer term or resemble more long-term freelancer hiring. And as a result of that, there are a number of implications. One, it allows us to increase the top of the funnel traffic because it allows us to get into more relevant keywords.
Speaker Change #142: Yes so.
Speaker Change #127: So I think.
Speaker Change #115: When we look at this as we go upmarket this opens up the ability.
Speaker Change #115: To have a significantly larger ticket size projects that are by definition more longer term.
Speaker Change #115: Or resemble more long term freelancer hiring and as a result of that.
Micha Kaufman: And as a result of that, you know, has a number of implications. One, it allows to increase the top of funnel traffic because it allows us to get into more relevant keywords as we invest in the profession catalog. It allows us to, it allows us to exist also on keywords that have to do with specific skills and not only on services. And lastly, also on, you know, on, on, on, on conversion, you know, it provides, you know, a way for buyers to search talent and initiate time-based contract. Without, without having full scope and, and, and as a result, get into a more ongoing engagement, these are the types of engagements that Fiverr wasn't a part of.
Speaker Change #110: <unk>.
Speaker Change #110: Yeah.
Speaker Change #133: <unk> has a number of.
Speaker Change #110: Or implications one eight allows to increase the top of funnel traffic because it allows us to get into more relevant keywords.
Speaker Change #110: As we invest in the profession catalog it allows us to it allows us to exist.
Micha Kaufman: As we invest in the professions catalogue, it allows us to exist also on keywords that have to do with specific skills and not only services, and lastly, also on... you know, on on on on conversion. It provides a way for buyers to search talent and initiate time-based contracts without having full scope and, as a result, get into a more ongoing engagement. These are the types of engagements that Fiverr wasn't a part of. When you think about this competitively, and what it does to the market? We still think that the vast majority of opportunity is offline. It doesn't reside in specific marketplaces or platforms, but it is actually pretty scarce, widely spread either in directories or in offline ways of engagement.
Speaker Change #110: So on keywords that have to do with specific skills or not.
Speaker Change #121: Only on on services.
Speaker Change #121: And lastly also on.
Speaker Change #110: On.
Speaker Change #110: On conversion.
Speaker Change #110: Provides.
Speaker Change #110: Away for buyers to search talent and initiate time based contracts.
Speaker Change #110: Without without having full scope and.
Speaker Change #110: As a result get into a more ongoing engagement. These are the types of engagements that fiber wasn't a part of it.
Micha Kaufman: When you think about this competitively and what does it do to the market, we still think that the vast majority of opportunity is offline. It doesn't, it doesn't reside in specific market bases or platforms, but it is actually pretty scarce. The widely spread, either in directories or in offline ways of engagement. And, and we think that this is where the opportunity is in bringing that offline activity to the online. And this is why it is important for us to invest again to create this opportunity for top of funnel relevant keywords to create more opportunity for a for new business traffic.
Speaker Change #110: When you think about this competitively.
Speaker Change #110: What does it do to the market.
Speaker Change #110: We still think that the vast majority of opportunity is offline it doesn't it doesn't.
Speaker Change #126: Resided in specific.
Speaker Change #126: Market basis or platforms, but it is actually pretty scarce.
Speaker Change #126: Widely spread.
Speaker Change #129: During directories or in offline.
Speaker Change #129: Ways of engagement and we think that this is where the opportunity is in bringing that offline activity to the online that this is why it.
Micha Kaufman: And we think that this is where the opportunity is in bringing that offline activity to the online world. And this is why it is important for us to invest again to create this opportunity for top of funnel relevant keywords to create more opportunities for new business traffic coming into Fiverr. Thank you.
Speaker Change #129: It is important for us to invest again to create this opportunity for top of funnel relevant keywords.
Speaker Change #129: To create more opportunity for us for new business traffic coming into fiber.
Micha Kaufman: And we think coming into Fiverr. Thank you.
Speaker Change #138: Thank you.
Marvin Fong: Now we're going to take up an next question. And the question comes to line of modern phone from BTIG. Your line is open.
Operator: Now we're going to take our next question. And the question comes from the line of Marvin Fong from BTIG. Your line is open. Please ask your question. Hi, good morning. Thanks for taking my questions. Just a couple for me.
Speaker Change #123: Now we're going to take over next question.
Speaker Change #123: And the question comes from the line of Marvin Fong from <unk>. Your line is open. Please ask your question.
Marvin Fong: Please ask a question.
Marvin Fong: Hi, good morning. Thanks for taking my questions. Just a couple for me. Just, so curious on the volatility fall in June and continuing the July. I know you said it was kind of across the top of funnel, but could you kind of speak to, you know, the larger businesses on your platform. I think in the past, you've heard things like the TikToks and Delta's of the world. I mean, the larger organizations are also seeing this level of volatility. Or is it isolated to SMD? And then secondly, I know you referenced in your, in your shareholder letter that promoted Gig and Seller Plus continued to do well.
Operator: Just so curious about the volatility you saw in June and continuing into July. I know you said it was kind of across the top of the funnel, but could you kind of speak to, you know, the larger businesses on your platform? I think in the past you've referenced the TikToks and Deltas of the world.
Marvin Milton Fong: Hi, Good morning, Thanks for taking my questions just a couple for me.
Marvin Milton Fong: So curious on the volatility you saw in June and contained in the July I know you said it was kind of across the top of funnel, but could you kind of speak to.
Speaker Change #125: The larger businesses on their platform I think in the past you've referenced like the tick tock and Delta Little World.
Operator: I mean, the larger organizations, are you also seeing this level of volatility, or is it isolated to SMBs? And then, secondly, I know you referenced in your shareholder letter that Promoted Gigs and Seller Plus continue to do well. Just wondering if you could just drill a little deeper on that. I think in the past you've given us some growth rates, but anything more you can share just on your view of that in the context of the choppiness we're seeing, you know, freelancers leading into these types of services to grow their businesses even more, that would be helpful. Thanks so much.
Speaker Change #153: Larger organizations are you also seeing this level of volatility.
Speaker Change #148: Or is it isolated to SMB and then secondly.
Speaker Change #144: I know you referenced in your in your shareholder letter that promote engagement seller plus continuing to do well.
Micha Kaufman: I'm just wondering if you could just drill a little deeper on that. I think in the past, you've given us some growth rates, but anything more you could share just on your view of that in the context of the choppiness we're seeing. You know, if real answer is leading into these type of services to grow the businesses even more, that'd be helpful. Thanks so much. Thanks, Marvin.
Speaker Change #172: I'm just wondering if you could.
Speaker Change #132: Just drill a little deeper in that I think in the past you've given us some growth rates, but anything more you can share just on view of that.
Speaker Change #137: In the context of the Choppiness, we're seeing.
Speaker Change #137: Freelancers leaning into these type of services to grow their businesses, even more that would be helpful. Thanks. So much.
Micha Kaufman: Thanks, Marvin. Awesome. That's a good question.
Micha Kaufman: That's a good question. So when we look at it at our larger customers, that segment is growing faster than the rest. So yes, when we think about macro, macro does influence smaller businesses more. It should be said though, and we called out that, for example, one of the things that we're surprising, that volatility is that categories like programming and technology, which are always growing, were a little bit more volatile during that period of time. And again, I think I, you know, I called out the number of statistics on professional hiring that I think are troubling and are saying that there is an impact of macro.
Marvin Milton Fong: Thanks Marvin.
Micha Kaufman: When we look at our larger customers, that segment is growing faster than the rest. So yes, when we think about macro, macro does influence smaller businesses more. It should be said, though, and we called it out that... For example, one of the things that were surprising about volatility is that categories like programming and technology, which are always growing, were a little bit more volatile during that period of time. And again, I think I, you know, I called out a number of statistics on professional hiring that I think are troubling and are saying that there is an impact of macro. That said, it is mostly a topo funnel, meaning what you see is reduced levels of topo funnel traffic.
Speaker Change #135: So the question so.
Speaker Change #178: When we look at it.
Speaker Change #135: It's our larger customers.
Speaker Change #139: That segment is growing faster than the risks. So yes, when we think about micro macro does influence smaller businesses more.
Speaker Change #136: It should be said, though.
Speaker Change #125: And we called out that.
Speaker Change #152: For example, one of the.
Speaker Change #125: The things that that were surprising that volatility is that categories like programming and technology.
Speaker Change #125: Which are always.
Speaker Change #125: Growing or a little bit more volatile during that period of time and again I think I can.
Speaker Change #125: Called out a number of statistics.
Speaker Change #125: On professional hiring.
Speaker Change #176: That I think are traveling and are saying that there is an impact of macro that said it is mostly top of funnel meaning.
Micha Kaufman: That said, it is mostly top of funnel meaning, but you see is reduced levels of top of funnel traffic. Now, this doesn't necessarily touch our existing customers. Actually, if you think about it, and you look at cohort behavior, actually we're seeing cohorts be better than before. And I called that in previous earnings, and that hasn't changed, meaning that newer cohorts are spending more on their first purchase, first month, first quarter, first year. And we're seeing those trends. And so it's less of a volatility of existing customers, and those larger customers that work with us, in most cases, only extend the scope of work that they do.
Speaker Change #125: What you see is reduced levels of top of funnel traffic now.
Micha Kaufman: This doesn't necessarily touch our existing customers. Actually, if you think about it, and you look at cohort behavior, actually, we're seeing cohorts behave better than before. And I called that in previous earnings. And that hasn't changed, meaning that newer cohorts are spending more on their first purchase, first month, first quarter, first year.
Speaker Change #125: This doesn't necessarily touches our existing customers. Obviously, if you think about it and you look at cohort behavior actually we're seeing cohorts behave better than before.
Micha Kaufman: And we're seeing those trends. So it's, it's less of a volatility of existing customers. And those larger customers that work with us, in most cases, only extend the scope of work that they do. And yes, it is impacting us and will affect us more than I think the second part of your question was about promoted gigs. And that continues to be the case. Sellers are very eager to get in, and obviously, these are, in some cases, programs that are not open to all of them.
Speaker Change #150: I called out in previous earnings Dot.
Speaker Change #150: Hasnt changed meaning that newer cohorts are spending more on their first purchase first month first quarter first year.
Speaker Change #125: And we're seeing those trends.
Speaker Change #125: It's less of a volatility of existing customers in those larger customers that work with us.
Speaker Change #125: In most cases only extend the scope of work that they do.
Micha Kaufman: And, and yes, it is impacting us and be more than that.
Speaker Change #145: And in any asset it is impacting SMB more than dogs.
Micha Kaufman: I think the second part of your question was about promoted gig. Yeah, just like the value added services and stuff. Yeah, they're doing well. And I think I said in the previous earnings when we gave a little bit more color in the form of actual number of growth. I said that there's a very nice road ahead for continued growth in both of these programs. And that continues to be the case. Sellers are very eager to get in. And obviously, these are, in some cases, these are programs that are not open to all of them. The reason why they love using these products is it does create more income.
Speaker Change #143: I think the second.
Speaker Change #156: Part of your question was about promoted gigs.
Speaker Change #146: And filler.
Speaker Change #141: Yes, just like your value added services.
Speaker Change #125: Yes, theyre doing well.
Speaker Change #125: Think I said.
Speaker Change #125: In the previous earnings when we gave a little bit more color in the form of actual number of growth I said that there is a.
Speaker Change #125: There is a very nice road ahead for continued growth in both of these programs and that continues to be the case right.
Speaker Change #125: Centers are very eager to get in and obviously these are.
Speaker Change #125: In some cases these are.
Speaker Change #125: Programs that are not open to all of them.
Micha Kaufman: The reason why they love using these products is that it does create more income, it does create more value, more transparency, and more analytics into their business, so we continue to create more ways for them to enjoy it. For promoted gigs, increasing real estate, in Seller Plus, for part of the summer at least, we talked about starting to build a Kickstarter program that would provide more value to actually newer sellers, meaning... It will help them start selling much faster and help them grow their business. So there's plenty of road ahead, and we're not close to consuming the maximum potential. Thanks a lot, Micha and Ofer. I appreciate it.
Speaker Change #125: Yes.
Speaker Change #125: The reason why they love using these products.
Speaker Change #125: It does create more income it does create more value more transparency more analytics into their business. So we continue to create more ways for them to enjoy it.
Micha Kaufman: It does create more value, more transparency, more analytics into their business. So we continue to create more ways for them to enjoy it. It promoted the increasing real estate in Seller Plus. In part of the summer, we talk about starting to build a Kickstarter program that would provide more value to actually newer sellers, meaning it will help them start selling much faster and help them further. So there's plenty of road ahead, and we're not close to consuming the maximum potential of this program.
Speaker Change #151: In promoted gig increasing real estate in seller plus.
Speaker Change #151: In part of the summer release, we talk about starting to build a kick starter program.
Speaker Change #151: That would provide more value to actually newer sellers, meaning it will help them.
Speaker Change #151: Start selling much faster and help them grow their business. So there is plenty of road ahead, and we're not we're not close to consuming the maximum potential of these programs.
Micha Kaufman: Thanks a lot, Micha and Ofer. Appreciate it. Thank you.
Speaker Change #168: Thanks, a lot behind over I appreciate it thank you.
Speaker Change #155: Thank you.
Operator: Thank you. And the last question for today comes from Lan of Rohit Kulkarni, Roth Capital Partners. Your line is open.
Rohit Rangnath Kulkarni: And then last question for today comes from the line of Rohit Kulkarni Roth Capital Partners. Your line is open. Please ask your question.
Operator: Please ask your question. Hey, thanks for taking my question. A couple of them, I guess, looking ahead, it feels like gap profitability is not too far in the future for you guys. Maybe talk about once you turn gap profitable, how does that change your philosophy of running the business? I see you already have put out a bullish kind of free cash flow generation potential, but it just feels that the model brings us to gap profitability by the end of this year and every quarter going forward. So, we'd love to get your take on that.
Rohit Rangnath Kulkarni: Hey, Brian Thanks for taking my question a couple of them I guess.
Speaker Change #163: Looking ahead, it seems like GAAP profitability is not too far for when the future for.
Speaker Change #165: Or are you guys.
Brian: Maybe talk about once you done GAAP profitable how does that change your.
Speaker Change #149: Kind of philosophy of running the business and you already have.
Speaker Change #147: But our bullish.
Speaker Change #160: Kind of free cash flow generation potential, but just for the.
Martin: Martin brings us to <unk>.
Rohit Kulkarni: It's already by end of this year, and every quarter going forward. So we'd love to get your take on that. And then in terms of this June, July, I know a lot has been asked, and you've shared quite a few things.
Speaker Change #170: Profitability by end of this year and urban corridor going forward. So we'd love to get your take on that and then in <unk>.
Ofer Katz: And then, in terms of the June-July trends, I know a lot has been asked and you've shared quite a few things. Perhaps, again, asking you guys a hard question: what gives you confidence that this volatility does not linger into August and September? Any leading indicators that you would point us towards? Um...
Brian: Terms of burgers during July Brian runoff.
Brian: Mark has been asked in your third quarter few things perhaps.
Ofer Katz: Perhaps in asking if there's a hard question, what gives you confidence that this volatility does not linger into August and September? Any leading indicators that you would point us towards. I'll take the first part on the gap. That's we usually pick and guide on a long term EBITDA and free cash flow less than a gap, but we have turned into gap profitability already. So that's good news. And as we look into the future, we anticipate that the gap between the EBITDA and gap is going to decrease because of the share-based compensation that we are carrying from 2021.
Speaker Change #171: Asking if there is a hard question or what gives you confidence.
Speaker Change #169: Volatility does not linger into August and September.
Speaker Change #158: Leading indicators that you would point us towards.
Speaker Change #147: Hum.
Ofer Katz: I'll take the first thought on the gap, so, as we usually speak and guide, and long-term EBITDA, into GAP profitability already. So that's the good news. And
Speaker Change #167: I'll take the first part on the GAAP, though.
Speaker Change #154: We usually guide.
Speaker Change #147: Guide.
Speaker Change #147: On a long term EBITA.
Speaker Change #147: And free cash flow.
Speaker Change #147: On a GAAP.
Speaker Change #147: But we have done.
Speaker Change #147: Into GAAP profitability already.
Speaker Change #147: So thats a good news.
Speaker Change #147: And.
Ofer Katz: As we look into the future, we anticipate that the gap between the EB time and gap is going to decrease. Because of the share-based compensation that we are carrying forward from 2021, so within 12 months ahead of us, what we anticipate is that the share-based compensation is going to be reduced from 18 percent of revenue as of now to 13 percent, which is pretty much in the range of the industry. And GAP, EBITDA will grow side-by-side with EBITDA. I think we should set the EBITDA target, the long-term target, at 25. We now gave it a timeline of 2027. For free cash flow, follow EBITDA.
Speaker Change #147: As we look into the future.
Speaker Change #147: We anticipate that the gap between the EBITDA and <unk>.
Speaker Change #147: GAAP.
Speaker Change #147:
Speaker Change #147: Going to the.
Speaker Change #147: The decrease.
Speaker Change #147: Because of the share based compensation.
Speaker Change #147: That we are carrying from 'twenty to 'twenty one.
Ofer Katz: So that within a 12 months ahead of us, what we anticipate is that the share based compensation is going to be reduced from 18% of revenue as of now to 13%, which is pretty much in the range of the industry. And gap EBITDA will grow side by side with EBITDA. I think we set the EBITDA target, the long-term target of 25. We now gave it a timeline of 2027, free cash flow, follow EBITDA. And I think that now that we are gap positives, I think we've seen improvement in gap income profitability over the next two quarters.
Speaker Change #147: So that within a 12 months ahead of US what we anticipate is that the share based compensation is going to be reduced from 18% of revenue that's now to 30%.
Speaker Change #147: Which is.
Speaker Change #147: Very much indeed.
Speaker Change #147: In the range of the industry.
Speaker Change #147:
Speaker Change #147: And GAAP.
Speaker Change #147: EBITA will grow <unk>.
Speaker Change #147: Side by side with with EBITDA.
Speaker Change #147: <unk> set the EBIT target long term target of 25%. We now gave it the timeline of 2027.
Speaker Change #147: Free cash flow follow EBITA.
Ofer Katz: And I think that now that we're all positive, I think we'll see improvement in gap income profitability over the next few quarters. And the next question about June and July trends. So it should be said, I've said that it's hard to call them a trend.
Speaker Change #166: And I think that now that bureau depth.
Speaker Change #166: That positive I think we will see improvement.
Speaker Change #147: GAAP.
Speaker Change #147: Income profitability.
Speaker Change #147: Over the next few quarter.
Ofer Katz: And the next question about June and July trends, it should be said that it's hard to call them a trend. There is some volatility, and that volatility is something that the guidance takes into account. How? It does take into account that it's continuing into July and potentially impact on the second half of the year. Hence, you know the updated color around active buyer. At the same time, Stanford buyer, take rate going up, which we think is going to cover it.
Speaker Change #175: And the next question.
Speaker Change #147: June and July trends.
Speaker Change #179: So it should be said.
Speaker Change #147: Okay.
Speaker Change #147: <unk>.
Speaker Change #174: It's hard to call them a trend.
Micha Kaufman: There is some volatility, and that volatility is something that the guidance takes into account. It does take into account that it's continuing into July and potentially will impact the second half of the year. Hence, you know, the updated color around active buyers. At the same time, Spend For Buyer, Paycrate, is going up, which we think is going to cover it. And I mean, volatility might might might be influenced also as you think about how the year will continue to progress on decisions about the interest rate and the outcome of the election in the US. So obviously, we're not prophets, and it's very hard to know.
Speaker Change #147: The recent volatility in and that volatility is something that the guidance take into account.
Speaker Change #147: It does it does take into account that.
Speaker Change #147: It's continuing to into July potentially.
Speaker Change #147: Impact on the second half of the year.
Speaker Change #147: Hence.
Speaker Change #147: The updated color around active buyer.
Speaker Change #147: At the same time spend per buyer take rates going up.
Speaker Change #147: Which we think is going to is going to cover it.
Ofer Katz: And, I mean, volatility might be influenced also, as you think about how the year will progress on decisions about, you know, the interest rate and the outcome of the election in the US. So obviously, we're not profits, and it's very hard to know. But since we've taken into the guidance the possibility of this volatility continuing, but the confidence that we have on the Stanford buyer and take rate, we believe that we're going to cover it.
Speaker Change #147: I mean, the volatility might might.
Speaker Change #147: It might be influenced also as you think about how the year progressed.
Speaker Change #147: On decisions about.
Speaker Change #147: About.
Speaker Change #147: The interest rate.
Speaker Change #147: And the outcome of the election in the U S. So obviously, we're not profits and it's very hard to know.
Micha Kaufman: But since we've taken into account the possibility of this volatility continuing, but the confidence that we have on the spent provider intake rate, we believe that we're going to. Thank you, Rohit. Now I would like to hand the conference over to your speaker, Micha Kaufman, for any closing remarks. Thank you, Nadia, for moderating the call today and thank you everyone for joining us. We're looking forward to seeing you in person very soon during the quarter. Thanks so much, and have a great day. This concludes today's conference call. Thank you for your participation. You may now all disconnect. Have a nice day. Thank you for watching!
Speaker Change #147: But since we've taken into the guidance the possibility of Av.
Speaker Change #147: This volatility continuing but the confidence that we have.
Speaker Change #147: On the spend per buyer in take rate.
Speaker Change #147: We believe that work at our coverage.
Micha Kaufman: Thank you, Rohit.
Rohit: Thank you Rohit.
Micha Kaufman: Now, I would like to hand a conference over to your speaker, Micha Kaufman, for any closing remarks. Thank you, Nadia, for moderating the call today, and thank you, everyone, for joining us. We're looking forward to seeing you in person very soon during the quarter.
Speaker Change #147: Now I would like to hand, the conference over to.
Kauffman: Can you speak on me her kauffman for any closing remarks.
Speaker Change #161: Thank you for moderating the call today and thank you everyone for joining us we're looking forward to seeing you in person.
Speaker Change #162: <unk> during the quarter. Thanks, so much and have a great day.
Operator: Thanks so much, and have a great day.
Operator: This concludes today's conference call. Thank you for your participation. You may now all disconnect. Have a nice day.
Speaker Change #177: This concludes today's conference call. Thank you for your participation you may now all disconnect have a nice day.
Speaker Change #162: [music].