Q4 2024 Fiverr International Ltd Earnings Call
Okay.
Operator: Good day and thank you for standing by. Welcome to the Fiverr Q4 Earnings Conference Call. At this time, all participants are in a listen-only mode.
Speaker Change: Good day and thank you for standing by welcome it to the Q4 earnings Conference call.
Speaker Change: At this time all participants are in a listen only buyers after the speaker's presentation there'll be a question and answer session to.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again.
Speaker Change: To ask a question during the session you will need to press star one on one on your telephone you will then have an automated message advising go hand is raised to withdraw your question. Please press star one one again.
Operator: Please be advised today's conference is being recorded.
Speaker Change: Please be advised today's conference is being recorded.
Operator: I'd now like to hand the conference over to your first speaker today, Jinjin Qian. Please go ahead.
I'd like to hand, the conference I thought your first speaker today, Ginger and Chen. Please go ahead.
Jinjin Qian: Thank you, operator and good morning, everyone. Thank you for joining us on Fiverr's earnings conference call for the fourth quarter that ended December 31st, 2020. Joining me on the call today are Micha Kaufman, founder and CEO, and Ofer Katz, president and CFO.
Speaker Change: Thank you operator, and good morning, everyone. Thank you for joining us on Pfizer's earnings conference call for the fourth quarter that ended December 31 2024.
Speaker Change: Joining me on the call today are Myhill, Kaufman, founder and CEO, and Ofer Katz, President and CFO.
Jinjin Qian: 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. 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.
Speaker Change: Before we start I'd like to remind you that during this call. We may make forward looking statements and that.
Speaker Change: These statements are based on our current expectations 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 and 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 metrics. During this call, we'll be referring to some key performance metrics and non-GAAP financial 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 earnings release we issued today and our shareholder list.
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.
Further exploration and a reconciliation of each of the non-GAAP financial measure to the most directly comparable GAAP measures is provided in earnings release, we issued today in our shareholder letter.
Jinjin Qian: Each of which is available on our website at investors.fiverr.com.
Speaker Change: Each of which is available on our website at investors <unk> com.
Jinjin Qian: And now I'll turn the call over to me.
Neil: And now I'll turn the call over to Neil.
Micha Kaufman: Thank you, Jinjin. Good morning, everyone, and thank you for joining. As we close another year, I've honestly never been more excited by what we've achieved and how it's positioning us for 2020. We delivered incredible execution throughout 2024, capped off by an outstanding Q4 with 13% revenue growth and a 20% adjusted EBITDA. This puts us firmly in the elite group of companies hitting the rule of 30, no small feat, especially at a time when our entire industry is facing macro health. We executed with discipline, just as we said we would. and made steady progress towards our three-year target.
Neil: Thank you Ginger and good morning, everyone and thank you for joining us.
Neil: As we close out another year.
Neil: <unk> never been more excited by what we've achieved and how it is positioning us for 2025.
Neil: We delivered incredible execution throughout 2024 capped off by an outstanding Q4, with 13% revenue growth and a 20% adjusted EBITDA margin.
Neil: This puts us firmly in the elite group of companies hitting the rural 30, no small feat, especially at a time when our entire industry is facing macro headwinds.
Neil: We executed with discipline, just as we said we would.
Neil: <unk> made steady progress towards our three year targets.
Micha Kaufman: We maintain a high velocity of innovation and continue to solidify our position as a leader in the freelancer economy.
Neil: Maintaining a high velocity of innovation and continue to solidify our position as a leader in the freelancer economy.
Micha Kaufman: Strategy is straight forward. On the one hand, pursuing quality of revenue and upmarket opportunities in the market-based segment. On the other hand, expanding our offerings and diversifying revenue in the services sector. This has clearly paid off, allowing us to drive double-digit growth under MADCORP. All of this momentum provides us with a very strong setup for 2025, where we believe we can continue to deliver rule of law. The center of our success is our freelancer community. The past 15 years, Fiverr has always stayed true to our mission of empowering talent around the world to grow and thrive.
Neil: Our strategy is straightforward.
Neil: One hand pursuing quality of revenue and up market opportunities in the market based segment.
Neil: The other hand, expanding our offerings and diversifying revenue in the services segment.
Neil: This has clearly paid off allowing us to drive double digit growth other macro headwinds.
Neil: All of this momentum provides us with a very strong set up for 2025, where we believe we can continue to deliver <unk> 30.
Neil: At the center of our success.
Neil: These are freelancer community.
Neil: 15 years fiber is always stay true to our mission of empowering talent around the world to grow and succeed.
Micha Kaufman: We grow only when they grow, and we succeed only if they succeed. We pride ourselves on being the most talent focused freelancing platform with the biggest and most robust global. To give you some idea of the scale of things, in 2024 alone, we hosted about 100 community events in every corner of the world with an aggregated of over 100,000 registrations into these Our public forum actively facilitates over 10,000 discussions with nearly 1 million interruptions among our community members. Hundreds of thousands of freelancers see Fiverr as the go-to platform to build and grow their career.
We grow only when they grow we succeed only if they succeed.
Neil: We pride ourselves on being the most talented focused screen I think platform with the biggest and most robust global community.
Neil: To give you some idea of the scale of things in 2024 alone. We hosted about 100 community events in every corner of the world with an aggregated of over 100000 registrations into these events.
Neil: Our public forum actively facilitate over 10000 discussions with nearly 1 million interactions among our community members.
Neil: Hundreds of thousands of free answers C fiber and the go to platform to build and grow their careers.
Micha Kaufman: It is through this scale in intimacy with our community that we know it hasn't been the easiest time for freelancers and The high interest rates and inflation are putting pressure on their day-to-day life, and the rapid advancement of artificial intelligence feels like barbarians at the gate, threatening to exploit their creative assets and creative It is under those premises that we announce two groundbreaking initiatives to demonstrate our continued commitment to our talent community. First is the launch of Fiverr. Fiverr Go is an open platform for personalized AI tools that include the personalized AI assistant and the AI creation.
It is through this scale and intimacy with our community.
Neil: We know it hasn't been the easiest time for freelancers and creators.
Neil: The high interest rates and inflation are putting pressure on their day to day life and the rapid advancement of artificial intelligence fuels like barbarians at the gate threatening to exploit their creative assets and creative rights.
Neil: It is under dose premises that we announced two groundbreaking initiatives to demonstrate our continued commitment to our talent community.
Neil: First is the launch of fiber go.
Neil: Fiber to go with an open platform for personalized AI tools that include the personalized AI system.
Neil: In the AI creation model.
Micha Kaufman: Different from other AI platforms that often exploit human creativity without proper attribution or compensation, Fiverr Go is uniquely designed to reshape this power dynamic by giving creators full control over their creative process and writing. It also enables freelancers to build personalized AI models without the need to collect training data sets or understand AI engineering, thanks to Fiverr's unparalleled foundation of over 6.5 billion interactions and nearly 150 million transactions on the market. And most importantly, it allows freelancers to become a one-person production. making more money while focusing on the things that matter. By giving freelancers control over configuration, pricing, and creative rights, and leveling the playing field of implementing AI technology.
Neil: Different from other AI platforms that often exploit human creativity without proper attribution or compensation fiber go is uniquely designed to reshape its power dynamic by giving creators full control over their creative process and rights.
Neil: It also enables freelancers to build personalized AI models without the need to collect training datasets or understand AI engineering. Thanks to fibers unparalleled foundation of over $6 5 billion interactions and nearly 150 million transactions on the Mark.
Neil: Base.
Neil: And most importantly allows freelancers to become a one person production house, making more money, while focusing on the things that matter.
Neil: By giving <unk> control over configuration pricing and creative rights and leveling the playing field of implementing AI technology.
Micha Kaufman: Fiverr Go ensures that creators remain at the center of the creative It decisively turned the power dynamic between humans and AI towards a human. It's a refreshing and unique approach to GenAI, just like how our service as a product model provides a unique mechanism that fundamentally changed the dynamics of freelancing 15 years. For customers, Fiverr Go is also fundamentally different from other AI. It is Gen AI with human accountability. AI results often feel unreliable, generic, and very hard to edit. What is good enough for a simple question and answer on CHA-GPT does not cut it for business mission critical.
Neil: Go insurers that creators remain at the center of the creative economy.
Neil: It decisively turn the power dynamic between humans and AI towards the human side.
Neil: It's a refreshing and unique approach to journey II just like how our services are product model provides a unique mechanism that fundamentally change the dynamics of freelancing 15 years ago.
Neil: For customers fiber to go is also fundamentally different from other AI platforms. It is Jenny I would human accountability.
Neil: AI results, often feel unreliable generic and very hard to add it.
Neil: What is good enough for a simple question and answer on charge equity does not cut it for business mission critical tasks.
Micha Kaufman: In fact, many customers come to Fiverr today with AI-generated content because they miss the confidence that comes from another human eye and talent helping them perfect the results for their needs. Fiverr Go eliminates all of this friction and frustration. Every delivery on Fiverr Go is backed by the full faith of the creator behind it, with an included revision as the freelancer delivers. This means that the quality and service you get from Fiverr Go is no different from a direct order from the freelancers themselves. Except for a faster, easier, and more delightful experience. The personalized AI assistant on Fiverr Go can communicate with potential clients when the freelancer is away or busy, handle routine tasks, and provide actionable business insights, effectively becoming the creator's business It often feels smarter than an average human assistant because it's equipped with all the history of how the freelancer works, as well as knowledge of trends and best practices on the Fiverr market.
Neil: In fact, many customers come to fiber today with AI generated content because they missed the confidence that comes from another human eye and talent, helping them perfect results for their needs.
Neil: Five years ago eliminates all of this friction and frustration.
Neil: Every delivery on fiber and go is backed by the full phase of the creator behind it.
Neil: With an included revision as the free Entre defines.
Neil: This means that the quality and service you get from fiber go is no different from a direct order from the freelancers themselves.
Neil: For a faster easier and more delightful experience.
Neil: The personalized AI assistant on fiber ago can communicate with potential clients. When the free answer is away or busy handle routine tasks and provide actionable business insights effectively becoming the creators business partner.
Neil: It often feels smarter than an average human assistant because it's equipped with all the history of the freelancer works as well as knowledge of trends and best practices on the fiber market base.
Micha Kaufman: And we didn't stop. To take the future of work to the next level, we've also announced an open developer platform on Fiverr Go to allow AI specialists and model developers to build generative AI applications across any We provide them with an ecosystem to collaborate with domain experts on Fiverr and the ability to leverage Fiverr's massive data assets so that these applications can solve real-world problems. And most important of all, Fiverr provides them an avenue to generate revenue from those applications through our marketing. We are envisioning a very exciting future of work here. Fiverr Go can turn any individual into a powerhouse and supercharge their earnings.
Neil: And we didn't stop there.
Neil: To take the future of work to the next level. We've also announced an open developer platform on fiber ago to allow AI specialists and modal developers to build generated AI applications across any discipline.
Neil: We provide them with an ecosystem to collaborate with domain experts on fiber and the ability to leverage fibers massive data assets. So.
Neil: These applications can solve real world problems.
Neil: And most important of all.
Neil: Fiber provides them an avenue to generate revenue from those applications through our market base.
We are envisioning a very exciting future of work here is fiber go can turn any individual into a powerhouse and supercharge their earnings potential.
Micha Kaufman: The second initiative we announced along with Fiverr Go is a brand new freelancer equity program, an industry first initiative designed to give top performing freelancers equity shares of Fiverr. We have been wanting to do this for a while, and we are extremely happy to finally make Just as Fiverr Go empowers freelancers to scale like never before, the Freelancer Equity Program ensures that our freelancer community does not just help us shape the future of work, they own it. I'm very excited about these both. Freelancers increasingly become the backbone of our economy. Since AI technology promises transformative shifts to the way people work, I firmly believe that Fiverr is uniquely positioned to lead the innovation and drive the industry forward.
Neil: The second initiative, we announced along with fiber to go is a brand new free to answer equity program and industry first initiative designed to give top performing freelancers equity shares of fiber.
Neil: We have been working to do this for a while.
Neil: We are extremely happy to finally make it happen.
Neil: Just as fiber go empowers freelancers to scale like never before the freelancer equity program ensures that our freelancer community does not just help us shape the future of work they own a piece of it.
Neil: I'm very excited about these bold moves.
Neil: Freelancers increasingly become the backbone of our economy and as AI technology promises transfer, but it shifts to the way people work.
Firmly believe that fiber is uniquely positioned to lead the innovation and drive the industry forward.
Micha Kaufman: With the depth and breadth of data we have, the expansive scale of categories, buyers and sellers we cover, and the deep technological expertise we have built over the years, we can empower a robust ecosystem of humans and AI that deliver beautiful results for customers while supercharging freelancers' earning power.
Neil: With the depth and breadth of data we have the expansive scale of categories buyers and sellers, we cover and the deep technological expertise we have built over the years, we can empower a robust ecosystem of humans and AI.
Neil: Liver beautiful results for customers, while Supercharging free <unk>, earning power.
Micha Kaufman: Finally, I would like to take this opportunity to thank our incredible team for building what very few teams in the world can build with passion, velocity, and determination. All of this could not have happened without this world-class.
Neil: Finally, I would like to take this opportunity to thank our incredible team for building what very few teams in the world can build with passion velocity and determination.
Neil: All of this could not have happened without this world class team.
Ofer Katz: With that, I'll turn the call over to Ofer.
Speaker Change: With that I'll turn the call over to offer.
Ofer Katz: Thank you, Micha, and good morning, everyone. I am pleased to report an exceptional quarter, with both top and bottom line exceeding expectations. Revenue for the fourth quarter was 103.7 million, up 13% year-over-year, representing an acceleration from 8% year-over-year growth in Q2. Adjusted EBITDA for Q4 was $20.7 million, representing an adjusted EBITDA margin of 20%, an improvement of 240 basis points from my year earlier. While we have yet to see meaningful improvements on the macro front in terms of incentive sentiment of freelancer hiring demand, we are able to deliver growth catalysts through strong execution and expansion of value added products.
Offer: Thank you Levi and good morning, everyone.
Speaker Change: I am pleased to report an exceptional quarter with both top and bottom line exceeding expectations.
Speaker Change: Revenue for the fourth quarter was $103 7 million up.
Speaker Change: 13% the overview.
Speaker Change: I think an acceleration from 8%.
Speaker Change: Both in Q3.
Speaker Change: Adjusted EBITA for Q4 was $30 7 million, representing an adjusted EBITDA margin of 20% an improvement of 240 basis points.
Speaker Change: Hello.
Speaker Change: While we have yet to see meaningful improvement on the macro form in terms of SMB sentiment or freelancer hiring demand.
Speaker Change: Able to deliver a growth catalyst towards trying to execution and expansion of value added products.
Ofer Katz: At the same time, we continue to optimise the quality of revenue for the marketplace, extending our penetration into larger buyers and more complex projects with Fiverr Pro and Dynamics. All in all, I'm very happy with how we delivered strong results in Q4 and throughout 2024, and I believe we are kicking off 2025 with a solid financial position and strong business momentum.
Speaker Change: At the same time, we continue to optimize the quality of revenue for the marketplace expanding our penetration into larger.
Speaker Change: And more complex project with fiber pole and dynamic hedging.
Speaker Change: All in all I'm very happy with how we deliver strong results in Q4 and throughout 2024 and I believe we are kicking off 2025 with a solid financial position.
Speaker Change: Business momentum.
Ofer Katz: In order to give more clarity on different parts of our business, starting this quarter, we will provide you with a quarterly and annual revenue breakdown between marketplace revenue and services revenue. Marketplace revenue represents the transaction commission paid by buyer and seller based on order completed on our marketplace. We generate services revenue from subscription products such as SellerPlus and Autodesk, advertising services primarily via Fiverr Ad and other services such as financial or learning tools, all of which are optional value added services to our customers. For the full year 2024, marketplace revenue was $303.1 million, driven by 3.6 million annual active buyers, $302 annual spend per buyer, and 27.6% marketplace take-home revenue.
Speaker Change: In order to give more clarity on different parts of our business. Starting this quarter. We will provide you with our quarterly and annual revenue breakdown between marketplace revenue and services revenue.
Speaker Change: Marketplace revenue represent that transaction Commission paid.
Speaker Change: Paid by buyer and seller based on order completed on our marketplace.
Speaker Change: We generate services revenue from subscription products, such as <unk>, plus and <unk>.
Speaker Change: The title services.
Speaker Change: Yep fiber AD and other services, such as financial or learning tools, all of which are optional value added services to our customers.
Speaker Change: For the full year 2020 for marketplaces revenue was $303 1 million drill.
Speaker Change: Driven by a $3 6 million annual active buyer.
Speaker Change: $302 annual spend per buyer and 27, 6% marketplace take rates.
Ofer Katz: While the overall active buyers are not growing due to macro headwinds, it is worth noting that buyers with annual spend of over $10,000 continue to show resilient growth. We are also seeing larger and more complex projects. show robust growth with GMV-framed projects. of over $500 growing 8% year-over-year in 2024 compared to 2023.
Speaker Change: While the overall active buyer are not growing due to macro headwinds.
Speaker Change: It's worth noting that by us.
Speaker Change: Up over $10000 continued to show resilient growth.
Speaker Change: We are also seeing larger and more complex projects.
Speaker Change: So or bus growth with <unk> from a project up.
Speaker Change: $500 growing 8%.
Speaker Change: 2024 compared to 2023.
Ofer Katz: Going into 2025. Given that marketplace revenue is largely tied with GMV volume and we have yet to see signs of macro improvements, We expect that growth of this revenue segment will continue to be mutated. That said, we believe macro serves as a growth catalyst for this revenue segment down the road. Given that macro rebound is a matter of when, not if. When it does rebound, we expect our marketplace will be one of the first areas to experience the uptick. Services revenue was $88.4 million, representing year-over-year growth of 62 percent, driven by continued trend in Fiverr Ad, SellerPlus, and Autodeal.
Speaker Change: Going into 2025.
Speaker Change: Given that marketplace revenue is largely tied with G&P volume.
Speaker Change: And we've yet to see sign the microwave prevent.
Speaker Change: We expect this growth of this revenue segment will continue to be muted.
Speaker Change: That said, we believe macro said is the growth catalysts for this revenue segment down the road.
Speaker Change: Given that Mark will rebound is a matter of when not if.
Speaker Change: When it does rebound we expect our marketplace will be one of the first two.
Speaker Change: We experienced the uplift.
Speaker Change: Services revenue was $88 4 million representing growth of 62% driven by continued strength in fiber AD seller plus and <unk>.
Ofer Katz: Services revenue represents 23% of our total revenue in 2024, up from 15% in 2026. As we continue to expand the adoption of these services, and as we launch new monetization products such as Fiverr Go, Fiverr Pro subscriptions and seller team accounts, we believe there is a lot of growth runway for services revenue ahead of us. For 2025, we expect services revenue to continue growing at a healthy double-digit rate. contribution to total revenue reaching over $30,000.
Speaker Change: Services revenue represent 23% of our total revenue and <unk> 24 up from 50% in 2023.
Speaker Change: As we continue to expand the adoption of these services and as we launched new monetization product such as fiber go private.
Speaker Change: <unk> and <unk> accounts, we believe that with a lot of growth runway for services revenue ahead of us.
Speaker Change: Our 2025, we expect services revenue to continue growing at a healthy double digit rate.
Speaker Change: With contribution to total revenue reaching over 70%.
Ofer Katz: Now on to guidance. For the full year of 2025, we expect revenue to be in the range of $422 to $438 million, representing Iro Bar-Ir growth of 8 to 12 percent. Adjusted divita is expected to be in the range of $82 to $90 million, representing an adjusted divita margin of 20% at the meeting. For the first quarter of 2025, revenue is expected to be $103.5 to $108.5 million, representing year-over-year growth of 11% to 16%. Adjusted EBITDA is expected to be $18 to $20 million, representing an adjusted EBITDA margin of 18% at the mid-term. We believe revenue growth will be higher in the first half of the year compared to the second half.
Speaker Change: Now onto guidance.
Speaker Change: For the full year 2025, we expect revenue to be in the range of 422% to $438 million representing growth.
Speaker Change: Growth of 8% to 12%.
Speaker Change: Adjusted EBITDA is expected to be in the range of $80 million to $90 million, representing an adjusted EBITA margin of 20% at the midpoint.
Speaker Change: For the first quarter of 2025.
Speaker Change: Revenue is expected to be 103, five to $108 5 million representing.
Speaker Change: Growth of 11% to 16%.
Speaker Change: Adjusted EBITDA is expected to be $18 million to $20 million, representing an adjusted EBITDA margin of 18% at the midpoint.
Speaker Change: We believe revenue growth will be higher in the first half of the year compared to the second half due.
Ofer Katz: Due to the lapping of Fiverr ad expansion, the launch of the Kickstart program and the inclusion of ProtoDs in the second half of last year. We believe adjusted EBITDA margin and margin improvement will be lower in the first half of 2025 compared to the second half as we accelerate the investment and development pace of Fiverr Gold. Overall, I believe we are firmly on track to achieve the three years target we set last year for both adjusted EBITDA margin and free cash flow.
Speaker Change: Due to the lapping of fiber expansion the launch of the Kickstart programme and the inclusion of <unk> in the second half a block deal.
Speaker Change: We believe adjusted EBITDA margin and margin improvement will be lower in the first half of 2025 compared to the second half as we accelerate investment in development pace of fiber.
Speaker Change: Overall I believe we are firmly on track to achieve the targets. We set last year for both the adjusted EBITA margin and free cash flow.
Ofer Katz: To close, I'm very excited to kick off 2025. I believe it's going to be another strong year of growth and innovation.
Speaker Change: To close I am very excited to kick off a plenty of 25 I believe it's going to be another strong year of growth and innovation.
Operator: With that, we'll now turn the call over to the operator for questions. Thank you. If you would like to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced.
Speaker Change: With that we'll now turn the call over to the operator for questions.
Speaker Change: Thank you.
Speaker Change: Like to ask a question you will need to press star one and one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Operator: To withdraw your question, please press star 1 and 1 again. Thank you.
Eric Sheridan: We'll now take the first question. This is from the line of Eric Sheridan from Goldman Sachs, please go ahead.
Speaker Change: Thank you we will now take the first question.
Speaker Change: This is from the line of Eric Sheridan from Goldman Sachs. Please go ahead.
Eric Sheridan: Thanks so much for taking the questions, maybe two if I could. In terms of the new initiatives in Fiverr Go, really interesting stuff in terms of the presentation yesterday. How should we think about those types of tools and the platform evolution helping conversion over the medium to long term, possibly resulting in better top-of-the-funnel dynamics from a growth perspective and then also conversion as well?
Eric Sheridan: Thanks, so much for taking the questions maybe two if I could in terms of the new initiatives and fiber go.
Eric Sheridan: Really interesting stuff in terms of the presentation yesterday, how should we think about those types of tools in the platform evolution, helping conversion over the medium to long term, possibly resulting in.
Eric Sheridan: Better top of the funnel dynamics from a growth perspective, and then also conversion as well and then in terms of what you laid out yesterday during the presentation how much of it could put pressure on margins in 2025 in terms of incremental investments.
Eric Sheridan: And then in terms of what you laid out yesterday during the presentation, how much of it could put pressure on margins in 2025 in terms of incremental investments to sort of accomplish those goals around Fiverr Go, or how much of that on the investment side is more behind you than ahead of you? Thank you so much.
Eric Sheridan: Just sort of accomplish those goals around fiber go or how much of that on the investment side is more behind you. Then ahead of you. Thank you so much.
Micha Kaufman: Hey, Eric. Good morning. Thanks for the question. So for Fiverr Go, Fiverr Go is actually a tool for conversion. That's the entire idea. Because we know that customers these days expect instant responses and instant results. And as a result of that, we designed those two tools. which is able to answer customer questions immediately even if the freelancer is away or busy. We know that the first three minutes after a customer writes to a freelancer are the most crucial time for conversion. And this is why we designed this tool.
Speaker Change: Hey, Eric Good morning answer the question.
Eric Sheridan: So for fiber to go.
Speaker Change: Actually a twofold conversion that's.
Speaker Change: The entire idea.
Eric Sheridan: Because we know that customers.
Eric Sheridan: These days.
Eric Sheridan: Instant responses and instant results.
Eric Sheridan: In.
Eric Sheridan: As a result of that we design those two tools.
Eric Sheridan: The AI personal assistant, which is able to answered customer question immediately even if the freelancer away Airbnb.
Eric Sheridan: We know that the first three minute after a customer right to a freelancer or the most crucial time at FERC conversion.
Eric Sheridan: This is why we designed this tool.
Micha Kaufman: And this tool is essentially encapsulating the entire knowledge of the free answer and basing itself on it, being able to address any possible question and bring it to conversion and actually It's fresh from yesterday, but we have many thousands of assistants running on the system, converting customers already, which is an amazing.
Eric Sheridan: And this too.
Eric Sheridan: Essentially encapsulating entire knowledge.
Eric Sheridan: All of the freelancer and basing itself.
Eric Sheridan: Being able to address any possible question.
Eric Sheridan: <unk> bring into conversion nationally.
Eric Sheridan: It's fresh from yesterday, but we have many thousands of assistance running on the system converting customers already.
Eric Sheridan: The maintenance time.
Micha Kaufman: When we think about the creation model, the creation model allows customers to get the confidence That this is the freelancer, this is the style that they're looking for. Because now, instead of asking the freelancer for samples, waiting for it, causing the freelancer to essentially work for free. They can get those samples right away. Now the quality of these samples is just mind-blowing, the level of accuracy that these samples Produced by the U.S. Department of State. are in exact match with the following. which gives the customer the confidence that if they play them like this. This is the type of free answer that they should.
Eric Sheridan: When we think about the creation model the creation model allows customers to get the confidence.
Eric Sheridan: This is the freelancer this as a sign that they're looking for because now instead of asking the freelancer for samples.
Eric Sheridan: Waiting for a call.
Eric Sheridan: The freelancers to essentially work for free.
Eric Sheridan: They can get those sample right away.
Eric Sheridan: The quality you need samples.
Eric Sheridan: Mind blowing the level of accuracy that.
Eric Sheridan: The sample.
Eric Sheridan: Produce.
Eric Sheridan: Sure.
Eric Sheridan: March with the style of the freelancer, which gives the customer the confidence.
Eric Sheridan: He played an liked it.
Eric Sheridan: This is the type of freight answered the nature of engagement. So essentially conversion was one of the most important factor.
Micha Kaufman: So essentially, conversion was one of the most important factors when designing.
Eric Sheridan: Designing.
Ofer Katz: And then Eric, on the second part of the question, so obviously we have invested in this product in the last few months. and we'll continue to invest in the next few months, but having said that, I think the guidance Let's speak for the improvement in EBITDA throughout the year. Take into consideration those investments already.
Speaker Change: And then Rick on the second part of the question. So obviously, we have invested in the product in the last few months.
Eric Sheridan: And we will continue to invest.
Eric Sheridan: In the next few months, but having to say that I think the guidance.
Eric Sheridan: The peak for the improvement in <unk>.
Eric Sheridan: EBITDA throughout the year.
Eric Sheridan: Taking into consideration.
Eric Sheridan: Don.
Eric Sheridan: And then one of them.
Ofer Katz: Thank you.
Eric Sheridan: Thank you.
Eric Sheridan: Thank you.
Ron Josey: We'll now take our next question. This is from Ron Josey from City.
Eric Sheridan: We will now take our next question.
Brian Joseph: This is from Brian Joseph from Citi. Please go ahead.
Ron Josey: Please go ahead. Great, thanks for taking the questions. Just a quick follow up on the Fiverr Go, Micha. I understand the value of the conversion, to the conversion and the creation model, the conversion rate to the system and the creation model.
Brian Joseph: Great. Thanks for taking the questions just a quick follow up on the five year ago.
Speaker Change: I understand the value of the converts to the conversion recreation model.
Speaker Change: Conversion ratio assistance curious smile I Wonder if you can talk just more about category expansion I know, we're launching at around 60 categories. Today do you think this goes to all categories overtime. Thats question. One and then question too just on the newer cohorts I believe in the letter we talked about them being bigger on average spend per buyer in their first year wonder understand what's driving the.
Ron Josey: I wonder if you can talk to us more about category expansion. I know we're launching with around 60 categories today. Do you think this goes to all categories over time?
Ron Josey: That's question one. And then question two, just on the newer cohorts, I believe in the letter we talked about them being bigger on average spend per buyer in their first year. I want to understand what's driving this specifically. Is this dynamic matching, which I think is pretty impressive. And then any insights on year two for these newer cohorts as they are higher value, higher spend cohorts?
Speaker Change: This dynamic matching.
Speaker Change: Which I think it's pretty impressive and then any insights on the year to for these newer cohorts is.
Speaker Change: As they are higher value higher spending cohorts. Thank you.
Ron Josey: Thank you.
Micha Kaufman: Thank you, Ron.
Speaker Change: Thank you Ron.
Micha Kaufman: Good morning. So let's do Fiverr go. I'll say the following. First. Jenny I. . Phil Quinotando, every possible kind. There's no technology. And some of these technologies we're developing ourselves. The fact that we're able to ship this basically from day one in 60 categories, in my mind, is mind-boggling. Because you need to understand that the level of accuracy that these models need to have is something that no one has seen before. They need to stay super true to the actual creator, the actual freelancer, the talent. And one of the things that we're doing, and obviously we will continue to ship more and more categories, and we do this in very high velocity.
Speaker Change: Hey.
Speaker Change: So.
Speaker Change: It's two five years ago.
Speaker Change: I will say the following first.
Speaker Change: Ginny I.
Speaker Change: Still cannot handle every possible category.
Speaker Change: There is no technology for it.
Speaker Change: And so the technology, we're developing ourselves.
Speaker Change: The fact that we're able to ship.
Speaker Change: Basically from day, one in 60 category in my mind my ongoing.
Speaker Change: Because you need to understand that the level of accuracy that these models need to.
Speaker Change: Something that no one has seen before.
Speaker Change: Need to stay Super true to the actual creator.
Speaker Change: A freelancer their talent.
Speaker Change: And one of the things that we're doing and obviously, we will continue to shift more and more categories and we do this in very high velocity.
Speaker Change: We also introduced.
Micha Kaufman: He is the developer. Now, what we're doing with it. is actually we're opening up the Go platform. to outside developers. Think about it as an option. in essence. So what we're doing is we're allowing them to develop models. API Workflows. But then train those models. on probably the biggest transactional data set in existence today that we hold. so that they can actually help us. build models that freelancers can join can enjoy. And we believe that by doing so and giving those developers incentives to do so, because every time their op is going to be used for a transaction, they're going to make money out of it.
Speaker Change: The developer ecosystem.
Speaker Change: Now what we're doing with it.
Speaker Change: Is absolutely we're opening up the go platform.
Speaker Change: Two outside developers.
Speaker Change: Think about it as an app store.
Speaker Change: In essence, what we're doing is we're allowed.
Speaker Change: Allowing them to develop models.
Speaker Change: API workflows.
Speaker Change: But then train those models.
Speaker Change: On <unk>.
Speaker Change: Probably the biggest transactional.
Speaker Change: Dataset in existence today that we hold.
Speaker Change: So that they can actually help us.
Speaker Change: Model that free answers can join can enjoy from.
Speaker Change: And we believe that by doing so and giving those developers.
Incentive to do so because every time, they're up isn't going to be used for a transaction, they're going to make money out of it.
Micha Kaufman: This will allow us to accelerate the pace of the development of newer models for more categories. Why 60 categories? Why not 600? Why not 6,000? This is exactly how we're thinking. So I think that the developer network can push us forward much faster, but not only for simple times. Because we know that it is possible to create not just a smart agent, but a genetic AI, which can handle very complex types of transactions that sometimes require multiple sets of talent, which we all have on our platform. I don't think that the market still realizes the magnitude and the potential of this program.
Speaker Change: This will allow us to accelerate piece.
The development of newer model for more category.
Speaker Change: 60 categories, why not 600, why not 6000.
Speaker Change: This is exactly how we're thinking about it.
Speaker Change: So I think that the <unk>.
Speaker Change: Broker network can.
Speaker Change: Could push us forward.
Speaker Change: Much faster.
Speaker Change: Not only for Cymbalta.
Speaker Change: Because we know that is possible to create not just smart agents, but.
Speaker Change: <unk>.
Speaker Change: Which can handle very complex type.
Speaker Change: Transaction.
Speaker Change: Sometimes require multiple sets of talent, which we all have on our platform.
Speaker Change: This is <unk>.
Speaker Change: I don't think that the market will realize it.
Speaker Change: <unk> and the potential of this program. We are so excited about this and we.
Micha Kaufman: We're so excited about this, and we were able to pull this off in an incredible time, and we have high expectations.
Speaker Change: We're able to pull this off and an incredible time.
Speaker Change: <unk>.
Speaker Change: And we have high expectations for it.
Micha Kaufman: And then we're on the second part of the question on the biggest sensor buyer. and the advisors behind the scenes. So I think there are multiple elements. And we mentioned that several times before. As we go up market, I think the first one is quality. the release of pro a while ago has matured and we see more and more business. contributing by this segment. And then we are able to attract better quality sellers. We launched agency products a few weeks ago that are scaling up, so generally speaking in terms of quality. I think that the professional part of the business is growing, so that's one.
Ron: And then Ron on the second half of the question on the biggest spend per buyer.
Speaker Change: Yes.
Speaker Change: Behind the scenes.
Speaker Change: <unk>.
Speaker Change: Multiple element.
Speaker Change: And we mentioned that several times before.
Speaker Change: As we go up market I think the first one is quality.
Speaker Change: The release of <unk>.
Speaker Change: Sure.
Speaker Change: A while ago is mature and we see more and more business.
Speaker Change: It would be a thing by this segment.
Speaker Change: And then we are able to attract.
Speaker Change: Better quality fellow.
Speaker Change: Launch agency product.
Speaker Change: A few weeks ago.
Speaker Change: We're filling up.
Speaker Change: Generally speaking in terms of quality.
Speaker Change: I think that.
Speaker Change: Sure.
Speaker Change: Professional part of the business.
Speaker Change: Is growing so that's one second in terms of the product.
Micha Kaufman: Second, in terms of the product. So complex projects are being handled by the dynamic matching that we have released. that demonstrate pretty well, just as an indication, conversion rate.
Speaker Change: No.
Speaker Change: Product.
Speaker Change: Being handled by the dynamic matching that we.
Speaker Change: We have released.
Speaker Change: That demonstrate.
Speaker Change: Really well.
Speaker Change: Just.
Speaker Change: As an indication.
Micha Kaufman: Thank you. And then lastly, on the acquisition tragedy, so growing the market means that we focus on high-value buying. And we indicate in the shareholder's letter. that buyers that spend more than $10,000 are growing by 2% last year.
Speaker Change: Hey.
Speaker Change: Is high I mean, three or four X high higher than the.
Speaker Change: <unk> in the marketplace.
Speaker Change: And then lastly on the acquisition.
Speaker Change: So I'm going to market means that we focus on high value button.
Speaker Change: Indicating the shareholders.
Speaker Change: That.
Speaker Change: Buyer that spend more than $10000 on growing.
Speaker Change: By 2%.
Micha Kaufman: Thank you very much. We see more and more programming and tech contributing to the overall GMV. and Programming Attack.
We just one indication and second is that high value by those.
Speaker Change: Those who spend more than $500 marketplace grew by seven 9%.
Speaker Change: So going up market and acquisition project.
Speaker Change: It's definitely one of the driver.
Speaker Change: And then.
Speaker Change: Lastly.
Speaker Change: When we look into the breakdown.
Speaker Change: We see more and more programming and that contributing to the deal.
Speaker Change: Overall GMB.
Speaker Change: Welcoming the bank.
Micha Kaufman: Thank you. a few months ago also contributed to this success.
Speaker Change: Usually bigger project.
Speaker Change: Longer project and I think a product like our lead that we have released.
Speaker Change: A few months ago also contribute.
Speaker Change: To this success.
Micha Kaufman: So, just to summarize, a combination of quality projects, complex projects, acquisition strategy, and programming attack contributing. Thank you, Ofer.
Speaker Change: So.
Speaker Change: Yes.
Speaker Change: Just to summarize the combination of quality project.
Speaker Change: Complex project.
Speaker Change: Physician strategy.
Speaker Change: Programming that theyre contributing.
Micha Kaufman: Thank you, Micha.
Speaker Change: Thank you Ofer.
Micha Kaufman: Thank you.
Speaker Change: Thank you.
Jason Helfstein: I'll now take the next question.
Speaker Change: We'll now take the next question.
Jason Helfstein: This is from Jason Helfstein from Oppenheimer.
Speaker Change: From Jason <unk> from Oppenheimer. Please go ahead.
Jason Helfstein: Please go ahead. Thanks for taking the question. So kind of a bit more on Fiverr Go.
Speaker Change: Thanks for taking the question.
Speaker Change: So kind of a bit more on fiber ago. So I guess in your conclusion that no matter how sophisticated AI, yes.
Jason Helfstein: So I guess if your conclusion that no matter how sophisticated AI gets, that it will struggle to bring unique or creative enough results for what effectively your buyers want, and that's why there still needs to be a human driving the creative decision, even if the AI tools make the human more efficient, and that the idea that your buyer is just people would, if the price is right, would rather pay somebody else to figure it out for them. I mean, obviously, you've been thinking about this for a long time, right? We've been talking about AI for, I don't know, two years now almost.
That it will struggle to bring unique or creative enough results for what effectively youre buyers, one and thats why theres still needs to be a human driving creative vision, even if the AI tools make the human more efficient and that the idea that you are buyers just people what if the price is.
Speaker Change: Right would rather pay somebody else to figure it out for them.
Speaker Change: Obviously, you've been thinking about this for a long time right. We've been talking about AI for I don't know two years now.
Speaker Change: And just like with all of the iterations is ultimately the conclusion and kind of what's driving.
Jason Helfstein: It's just like, with all the iterations, is this ultimately the conclusion and kind of what's driving the Fiverr Go strategy?
Speaker Change: The fiber growth strategy.
Speaker Change: Okay.
Micha Kaufman: Good morning, Jason. You know, from our experience with AI, what we've come to learn is that a lot of the creation process using AI is very random. take you through figuring, figuring out what are the best tools, because there's thousands of different options around the eye and each one operates, but the different And you need to master each one of them, and you need to become a prompt engineer.
Speaker Change: Good morning, Jason.
Speaker Change: So.
Speaker Change: From our experience with AI.
Speaker Change: What what we've come to learn.
Speaker Change: That's a little bit of creation process, using AI very run them.
Speaker Change: And.
Speaker Change: Take you through figure figuring out what are the best tool because there are thousands of different options.
Speaker Change: Each one operate.
Speaker Change: <unk> differently.
Speaker Change: You need to master each one of them and you need to become a prompt engineer.
Micha Kaufman: And then editing is extremely, extremely hard.
Speaker Change: And then editing is extremely extremely hard.
Micha Kaufman: Plus, you don't get the feedback that comes from working with a human being that can actually look at the creation from a human eye and give you a sense if this is actually capturing what you're trying to do. Because of these reasons, and without compromising on the power of AI, because... We love AI. We love the technology.
Speaker Change: Plus you don't.
Speaker Change: You won't get the feedback that comes from working with a human being that can actually look at it.
Speaker Change: The creation from a human eye.
Speaker Change: And give you a sense.
Speaker Change: Actually capturing what you are trying to do.
Speaker Change: Because of these reasons and without compromising on the power of AI because.
Speaker Change: We love it we.
Speaker Change: We'll have that technology.
Micha Kaufman: We just think that there's a different way to design it.
Speaker Change: Things are.
Speaker Change: But different way to design it.
Micha Kaufman: You know, there's this entire debate about human versus AI, it's not the right question. The question is, who's in the center? And we think that in order to continue motivating people to create, they should be rewarded for it. Right now, the way AI is designed, it's just sucking up whatever everyone writes, designs, without giving any reward.
Speaker Change: No.
Speaker Change: This entire debate about human versus AI, but it's not the right question.
Speaker Change: The question is who is in the center and we think that in order to continue motivating people to create they should be rewarded for it.
Speaker Change: Right now the way AI is designed it's Jeff.
Speaker Change: Sucking up whatever everyone right designed without giving any reward.
Micha Kaufman: And our fear is that in the long run, this would demotivate people from creating, which for humanity is going to be very bad news. So there is a different way to design AI and the way we've done it doesn't compromise to anything on its power. The opposite. It allows us or allows freelancers to design their own model in a way that rewards them, but remains extremely accurate to their style, allowing customers to get the results they expect to get because they see the portfolio of their freelancer, like the style of writing or design or singing or narration, and they can get exactly this.
Speaker Change: Our fear is that in the long run this would be motivate people can create.
Speaker Change: For humanity is going to be very bad news.
Speaker Change: So there is a different way to design and the way we've done it doesn't compromise.
Speaker Change: Two anything on its power.
Speaker Change: The opposite.
Speaker Change: It allows us or allow freelancers to design their own.
Speaker Change: Their own model in a way that rewards them, but remained extremely accurate they're allowing.
Speaker Change: Allowing customers to get the results they expect to get because they see the portfolio feel free to answer.
Speaker Change: Like the style, the style of writing or design or thinking or or narration.
Speaker Change: And they can get exactly that.
Micha Kaufman: So we think that that combination and that confidence that comes from the fact that the creator itself is always there. So if whatever AI churns out is 95%, great, there is a human being to help you cross the finish line.
So we think that that combination and that confidence is coming from the fact that the creator itself is always there.
Speaker Change: So whatever AI churns out.
Speaker Change: 95%, great. There is a human being to help you cross the finish line.
Micha Kaufman: That is the premise under which we developed Fiverr Go, and we think that this introduces a new approach.
Speaker Change: That is the premise.
Speaker Change: Under which we developed fiber to go.
Speaker Change: And we think that this introduces.
Speaker Change: Our new approach.
Micha Kaufman: And who knows, maybe other companies will follow this, and I think it's important because it will keep people in the center and continue motivating them to create. Appreciate it, caller.
Speaker Change: And who knows maybe other companies will follow this I think is important because.
Speaker Change: Because it will keep people in the center and continue motivating them to create.
Micha Kaufman: Thank you.
Speaker Change: I appreciate the color. Thank you.
Doug Anmuth: We'll now take the next question.
Speaker Change: Thank you.
Speaker Change: We will now take the next question.
Doug Anmuth: This is from the line of Doug Anmuth from J.P. Morgan.
Speaker Change: This is from the line of Doug Anmuth from Jpmorgan. Please go ahead.
Doug Anmuth: Please go ahead. Thanks, guys, for taking the question.
Speaker Change: Thanks, guys for taking the question one for me, calling one for Ofer personally hard just on fiber go you talked about model creation and AI assistance really being the first pieces. Maybe you can talk more about just how you envision AI agents working and fiber ecosystem overtime, and then ofer just on the <unk>.
Micha Kaufman: One for Micha and one for Ofer. First, Micha, just on Fiverr Go, you talked about model creation and AI assistance really being the first pieces. Maybe you can talk more about just how you envision AI agents working in Fiverr ecosystem over time.
Ofer Katz: And then, Ofer, just on the double digit revenue growth at the midpoint of the 25 Guide, does that suggest a return to marketplace growth? And more importantly, what are the factors you need to see there for that to happen? Thanks.
Speaker Change: Digital revenue growth at the midpoint for 25 guide does that suggest a return to marketplace growth and more importantly, one of the factors you need to see there for that to happen.
Ofer Katz: Morning, Doug. Thanks for the question. So when we think about the AI agents. If you look at the AI personal assistant. The very basic functionality that it provides is really handling routine tasks for the freelancers, allowing the talent to actually Thank you. This is done in a very sophisticated way. Because the assistant is. These reach with capabilities, such as being able to convince the customers of the qualities of the freelancers by showcasing them during the conversation, their portfolio, schedule consulting meetings in real time within the conversation. And actually, the assistant is aware. of the presence of the freelancer, meaning is the freelancer online right now or not?
Doug Anmuth: Good morning, Doug Thanks for the question.
Speaker Change: Yes.
Speaker Change: So when we think about.
Speaker Change: AI agent.
Speaker Change: If you look at the AI personal assistant.
Very basic functionality that we provide is really handling routine tasks for the answer, allowing the talent to obsolete.
Speaker Change: Have more time to create.
Speaker Change: King.
Speaker Change: And recharge when needed.
Speaker Change: In.
Speaker Change: This is done in a very sophisticated way.
Speaker Change: Because the assistant.
Speaker Change: <unk> reached with capabilities, such as being able to convince the customers of the qualities of the freelancers by showcasing the enduring the conversation care portfolio.
Speaker Change: Schedule consulting meeting in real time within the organization.
Speaker Change: And actually the assistant.
Aware.
Speaker Change: Of the present.
Speaker Change: The freelancer, meaning these different answer online right now or not.
Ofer Katz: and can invite the freelancer in real time if they think that the best scenario of the conversation is to hand it over to the freelancer. These are unique. capabilities that we've developed that I don't know anyone who has done it before.
Speaker Change: And can invite the free <unk> in real time.
<unk>.
Speaker Change: The best scenario over the conversation to ended over to the pre answer these are unique.
Speaker Change: Capabilities that we've developed that I don't know anyone who have done it before.
Ofer Katz: that will allow the assistant to work as a partner with a freelancer, but this is just the first part. Because as the assistant, learn the free answer better over time. It will start providing business insights for the freelancers in order to grow the business. Here's an example. can do a research. to figure out how to optimize. The service page or the profile. to be better positioned in search results. It might suggest to the freelancer to add certain keywords or descriptions. Thank you.
Speaker Change: That will allow the assistant to working to partner.
Speaker Change: With with a freelancer.
Speaker Change: But this is just the first day.
Speaker Change: As the assistant learn.
Speaker Change: <unk> or better over time.
Speaker Change: It will start providing with business insights for the three months or in order to grow the business.
Speaker Change: As an example.
Speaker Change: The assistant.
Speaker Change: Can do a research.
Speaker Change: To figure out how to optimize that.
The service page or the profile.
Speaker Change: To be better positioned in search results.
Speaker Change: You might suggest to the predecessor to add certain keywords or description.
Speaker Change: Our portfolio.
Speaker Change: In order to maximize their potential.
Ofer Katz: In addition, as I've said, through the developer ecosystem. We think that we can create. Endless amount of different agents. for Gen AI so that we can actually reach this future of agentic AI, where you have agents that can actually do some complex tasks for you in an automated manner. And obviously, those capabilities are going to be also included in the AI version.
Speaker Change: In addition, as I've said through the developer ecosystem.
Speaker Change: We think that we can create.
Speaker Change: Endless amount of different agents.
Speaker Change: Our journey II.
Speaker Change: So that.
Speaker Change: We cannot be reached at.
Speaker Change: Future of Argentic, AI, where you have agents that can actually do.
Speaker Change: Do some complex dot for you in an automated manner.
Speaker Change: Obviously those capabilities are going to be also included in the AI personal hit them.
Ofer Katz: And then, Doug, for the second part of the question about the growth in 2025. I think as you probably noticed, we have break the revenue. into two different segments, the marketplace and the services. And I think while the marketplace is tied up with macro and GMV. Well, we haven't seen yet any sign or strong sign of improvement. The services revenue line is where we are innovating and building many products. to drive sustainable growth, as you've seen last year. So, you know, in terms of 2024, 23% of the revenues driven by services, and we anticipate that in 2025.
Doug Anmuth: And then Doug for the second part of the question.
Speaker Change: The <unk> 25.
So I think as you probably noticed we have.
Speaker Change: Break fee.
Speaker Change: Revenue.
Speaker Change: Into two.
Speaker Change: Two different segment of the marketplace.
Speaker Change: And the services.
Speaker Change: And I think while the marketplace.
Speaker Change: Tied up with micro and <unk>.
Speaker Change: What we haven't seen yet.
Speaker Change: Any sign of strong sign of improvement.
Speaker Change: The services the service.
Revenue line.
Speaker Change: Well we are innovating.
Speaker Change: And building.
Speaker Change: Many product.
Speaker Change: To drive sustainable growth.
Speaker Change: We have seen a lot too so.
Speaker Change: In terms of 2024, 23%.
Speaker Change: The revenue was driven by services and we anticipate that in 2025.
Ofer Katz: This portion will grow all the way to 30. We believe that this two-line... Our revenue approach works well. And when the macro rebound, we'll see the marketplace go back to growth. on top of the growth in the service engine. In terms of 2025, so the guidance applies for double-digit revenue growth at the midpoint. And it's based on. A flat, small decline in GMV or marketplace revenue. Well, we think that the central biome is going to grow and compensate on active biodeclines throughout the year.
Speaker Change: This function will grow all the way to 30.
Speaker Change: We believe that this.
Speaker Change: Two line.
Speaker Change: The new approach.
Speaker Change: Well.
Speaker Change: And when the market will rebound.
Speaker Change: You'll see the marketplace.
Speaker Change: I'll go back to growth.
Speaker Change: On top of the voting.
Speaker Change: In the service.
Speaker Change: Engine.
Speaker Change: In terms of plenty of 25.
Speaker Change: So the guidance.
Speaker Change: <unk> applied for.
Speaker Change: <unk> double digit revenue growth at the midpoint.
Speaker Change: And based on.
Speaker Change: Flat.
Speaker Change: Small decline in <unk> and marketplace revenue.
Speaker Change: Well, we think that the Thunder Bayou.
Speaker Change: Is going to grow and compensate on active buyer declined throughout the year.
Ofer Katz: Thank you. While the revenue part of the business.
Speaker Change: While the revenue.
Speaker Change: Part of the business.
Ofer Katz: Thank you. And as we see, the existing product. Contributing more to the top line.
Speaker Change: Is going to.
To grow.
Speaker Change: Rapidly.
Speaker Change: As we release more product.
And as we see the existing product.
Contributing more to the top line.
Ofer Katz: All right.
Ofer Katz: Thank you both.
Speaker Change: Great. Thank you both.
Ofer Katz: Thank you.
Speaker Change: Thank you.
Bernard McTernan: We'll take our next question. This is from Bernie McTernan from Needham & Company.
Speaker Change: We'll take our next question.
Bernie Mcternan: This is from Bernie Mcternan from Needham <unk> Company. Please go ahead.
Bernard McTernan: Please go ahead. Great, thanks for taking the questions. Micha, you mentioned to an earlier question, incentivizing developers in Fiverr Go. Would your take rate be different in Fiverr Go? Just trying to get a sense if you're the developer or maybe they're paying you to be on the platform.
Speaker Change: Great. Thanks for taking my questions.
Bernie Mcternan: You mentioned earlier question.
Bernie Mcternan: Centralizing developers and five ago would your take rate be different in <unk>, just trying to get incentives.
Bernie Mcternan: The developer may be they're paying you to be on the platform and then on investments. This year just wanted to see if it's mostly sales and marketing and we should be expecting or something else and then lastly, just as you think about the 25 guide was there any impact of FX contemplated in the guide. Thank you.
Bernard McTernan: And then on investments this year, just want to see if it's mostly sales and marketing we should be expecting or something else. And then lastly, just as you think about the 25 guide, was there any impact of FX contemplated in the guide? Thanks.
Micha Kaufman: Morning, Bernie. For now, the take rates remain the same for go. And as we roll it out and as we see usage, we will figure out what to do or what's the right thing to do. For now, we treat it as a normal transaction with the same take rate. There are components where the technology itself is actually paid for, meaning that it's an additional subscription line that comes to us from providing these tools, these AI tools, to our community.
Bernie Mcternan: Good morning Bernie.
Bernie Mcternan: For now the take rate remained the same for go.
Bernie Mcternan: And as we roll it out and as we see usage.
Bernie Mcternan: We will figure out what to do.
Bernie Mcternan: What's the right thing to do for now we treat it as a normal transaction with the same take rate there are components, where the technology itself.
It actually paid for meaning not an additional subscription line.
Bernie Mcternan: That.
Bernie Mcternan: That comes to us.
Bernie Mcternan: From providing deep.
Bernie Mcternan: <unk> tools AI tools.
Bernie Mcternan: Our community.
Micha Kaufman: But once we have... more history with it. We're going to be able to. To know what's the best strategy around it. For now, I think that it creates, it incentivizes sellers to have those models up. And I think that the contribution to their conversion is gonna be noticeable, which will make the entire market base more efficient. And because it gives instance.
Bernie Mcternan: But once we have.
Bernie Mcternan: More history with it.
Bernie Mcternan: We're going to be able to.
To know, what's what the best strategy around it.
Bernie Mcternan: For now I think that it creates.
Bernie Mcternan: Incentivize as sellers too.
Bernie Mcternan: To have those models up.
Bernie Mcternan: And I think that the contribution to their conversion is going to be noticeable which will make the entire market base more efficient.
Bernie Mcternan: And because it gives us instant.
Micha Kaufman: I think that this will also allow us to influence Topo Funnel even more, which is one of the areas where we'll focus.
Bernie Mcternan: Our results and evolve AI I think.
This will also allow us to influence top of funnel, even more which is one of the areas where we're focused on.
Ofer Katz: And in terms of the investment.
Bernie Mcternan: And in terms of the investment.
Ofer Katz: Thank you very much. I think there is some heavy lifting at the beginning of the year.
Andy Cohen: Andy Cohen.
Andy Cohen: So theres no particular.
Andy Cohen: Change.
Andy Cohen: And the way we invest throughout the year.
Andy Cohen: Heavy lifting at the beginning of the deal.
Ofer Katz: on the release of Go, as you probably have seen, a very exciting product that we have released yesterday. I think we will continue to invest in sales and marketing in the future.
Andy Cohen: On the go with you probably obtain a very exciting product that we had yesterday.
Andy Cohen: I think we will continue to invest in marketing.
Andy Cohen: Hum.
Ofer Katz: Thank you. And lastly, on the forex exchange, as the prices on Fiverr are based on U.S. dollars, there's no... There is no impact on the top line in terms of forex, and we are well ahead.
Andy Cohen: And the most efficient that we have.
Andy Cohen: Paul.
Andy Cohen: Thus far in CLI.
Andy Cohen: And lastly on the forward.
Andy Cohen: Exchange.
Andy Cohen: Prices on five hour based on U S dollar.
Andy Cohen: No.
Andy Cohen: So there is no impact on the top line.
Andy Cohen: Alright.
And.
Andy Cohen: We don't hedge.
Ofer Katz: I thank you very much. Great.
Andy Cohen: In terms of the Opex.
Andy Cohen: We'll cover for any material impact on the.
Andy Cohen: B program.
Ofer Katz: Thank you. Appreciate it.
Andy Cohen: Great. Thank you I appreciate the color.
Marvin Fong: Thank you. We'll now take the next question.
Andy Cohen: Thank you.
Andy Cohen: We'll now take the next question.
Marvin Fong: This is from Marvin Fong from BTIG. Please go ahead.
Speaker Change: This is from Marvin Fong from <unk>. Please go ahead.
Marvin Fong: All right. Good morning. Thanks for taking my questions and congratulations on the launch of GO. It's a pretty exciting product. I'd actually like to drill down a little bit on what Ofer was saying. It seems like if services is going to be 30% of your revenue, then you're looking for very strong growth, something, by my math, around 45% next year.
Speaker Change: Hi, Good morning, Thanks for taking my question and congratulations on the launch of <unk>.
Speaker Change: It's a pretty exciting product.
Speaker Change: I'd actually like to drill down a little bit on what offer was saying.
Speaker Change: It seems like if services is going to be 30% of your revenue than youre looking for for very strong growth something by my math around 45% next year I was just curious how much of that should we.
Ofer Katz: I was just curious, you know, how much of that should we, or could you break down how you think about the contribution from your value-added services for fiscal 25 between ad products, and in particular, you know, how much is the subscription revenue from Fiverr go impacting that outlook? And then just separately on the marketplace take rate, should we view that as being a stable in fiscal 2025? Are there any levers that you can pull to change that? Thanks a lot.
Speaker Change: Or could you.
Speaker Change: Take down how you think about the contribution from your value added services for fiscal 'twenty five between AD products and in particular.
Speaker Change: Much of the subscription.
Speaker Change: Revenue from fiber go impacting that outlook.
Speaker Change: And then just separately on the marketplace take rates. So we do view that as being a stable in fiscal 2025 are there any levers that you can pull to change that thanks a lot.
Ofer Katz: So, on the second part of the question, yes, there are leverages we can pull, but the guidance does not assume any such.
Speaker Change: So the second part of the question, Yes, there are leverage would conclude.
Speaker Change: But the guidance.
My perfume and as such.
Ofer Katz: Thank you. to this line item, all the way from Pella Plus, which is the subscription to promoted gigs. which is ad advertising on the marketplace.
Speaker Change: Any change in the marketplace.
In terms of the services revenue I think we havent broke it.
Speaker Change: On the beyond the services itself.
Speaker Change: Multiple products.
The contribute.
Speaker Change: This line item.
Speaker Change: All the way from pellet plant.
Speaker Change: We choose.
Speaker Change: Subscription.
Speaker Change: To promote the gig.
Speaker Change: We do have advertising on the marketplace.
Ofer Katz: We have Keith Sato. That goes through subscription. We had the Auto DX that applies for subscription as well. And we had the GO that we just launched that we had some subscription.
Speaker Change: We have.
Speaker Change: Our kickstart, though.
Speaker Change: That goes through a subscription we.
Speaker Change: We have opened yet.
Speaker Change: Slide four subscription plan.
Speaker Change: And we have to go that we've got launch.
Speaker Change: We've had some subscription.
Ofer Katz: the website. Got it.
Speaker Change: John.
Speaker Change: This is kind of the breakdown between good Ken.
Speaker Change: Et cetera.
Speaker Change: That apply for the 30% revenue.
Ofer Katz: Thanks a lot, Ofer. Thank you.
Speaker Change: Got it thanks a lot.
Andrew Boone: We'll take our next question. This is from Andrew Boone from Citizens.
Speaker Change: Thank you we'll take our next question.
Speaker Change: This is from Andrew Byrne from citizens. Please go ahead.
Andrew Boone: Please go ahead. Thanks so much for taking my questions. I wanted to ask on the services side, there's certain heuristics that investors use in terms of the amount of ceiling for the percentage of advertising as a percentage of GMV. Can you guys talk about that?
Andrew Byrne: Thanks, so much for taking my questions.
Speaker Change: I wanted to ask on the services side.
Speaker Change: As certain <unk> investors here is in terms of thinking about a ceiling for the percentage of advertising as a percentage of GMP.
Speaker Change: Can you guys talk about that like how do we think about advertising and whether there's a potential for what you guys are able to monetize the popcorn be advertising wise and then secondly, as we think about fiber go in AI, creating more of the actual work can you help us understand kind of theoretically how do you think about that is it quite sharing aspect.
Andrew Boone: How do we think about advertising and whether there's a potential peak for what you guys are able to monetize the platform via advertising as? And then secondly, as we think about Fiverr Go and AI creating more of the actual work, can you help us understand kind of theoretically, how do you think about that as a deflationary aspect as technology is doing more of the work versus the freelancer? How do we think about that? And then clearly you're starting to monetize that product. As Fiverr Go continues to improve, how do we think about Fiverr's ability to take more of that aspect as your own software and AI models are helping freelancers do more?
As technology is doing more of the work versus the pre launch or how do we think about that a little clearly you are starting to monetize that product as fiberglass continues to improve how do we think about <unk> ability to take more of that aspect as your own software and AI models are helping freelancers do mark. Thanks, so much.
Andrew Boone: Thanks so much.
Ofer Katz: On the first part of the question, the percentage of advertising or the room to expand, so definitely a lot of runway ahead of us.
Speaker Change: On the first part of the question.
Speaker Change: Yeah.
Speaker Change: Sometimes if advertisement all the.
Speaker Change: Definitely.
Speaker Change: A lot the runway ahead of us.
Ofer Katz: This product is just evolving over time, there's a lot of real estate that we haven't monetized and other improvements which are undertaking, so feel very confident and expect this product to expand.
Speaker Change: The product just evolving over time.
Speaker Change: We havent monetize them and us.
Speaker Change: The improvement.
Speaker Change: Which are undertaking.
Speaker Change: I'm, feeling very confident unexpected product footprint.
Micha Kaufman: And on a question on Go, first of all, it's very early to tell, but The idea of Fiverr, though, is really that. The talent that actually creates their model is basing this model on their entire world of creation. They need to continue creating to fine-tune this model and create new models. There is no incentive for them to give it for a very cheap price. Plus, it is always connected with human work that is included in the order. where they define the price and the scope of editing that they add to anything that is generated. So while it remains to be seen how they're going to price it.
Speaker Change: And on the question on go first of all it is very early to tell but.
Speaker Change: Five years ago is really not.
Speaker Change: The talent that actually creates third model basing this model on their entire world of creating.
Speaker Change: They need to continue creating to fine tune this model and create new models. There is no incentive for them to give it for a very cheap.
Speaker Change: Plus it is always connected with human work that is included in the order.
Speaker Change: Where they define the price and the scope of editing that they add to anything that is generated.
Speaker Change: So while.
Speaker Change: It remains to be seen how they're going to price it.
Micha Kaufman: What we think should happen is that because their work is involvement and their investment in the model is included, that this would not put a meaningful pressure on the market.
Speaker Change: What we think should happen is that because there is involvement and their investment in the model is included but this would not a meaningful pressure on pricing.
Thank you.
Micha Kaufman: Thank you.
Speaker Change: Thank you.
Josh Chan: We'll now take our next question. This is from Josh Chan from UBS.
Speaker Change: We will now take our next question.
Speaker Change: Data from Jeff Chen from UBS. Please go ahead.
Josh Chan: Please go ahead. Hi, Micha, Ofer, thanks for taking my question. I guess my first question is on the lag between SMB and the results of Fiverr. You know, I guess, as you are aware, some of the SMB sentiment has improved somewhat in the recent months.
Speaker Change: Hi, Lee how far.
Speaker Change: Thanks for taking my question I guess my first question is.
Speaker Change: The lag between SMB and the results of fiber I guess as you are aware.
Speaker Change: Some of the SMB sentiment has improved somewhat in the recent months and so I was just wondering your thoughts about how that ultimately translates into fiber from a timing perspective.
Josh Chan: And so I'm just wondering your thoughts about how that ultimately translates into Fiverr from a timing perspective.
Josh Chan: And then my second question is on services revenue. Is there any notable seasonality within services? And I'm not sure if Auto Diaz has a major Q4 waiting, but just some color on how services kind of waits through the year would be helpful. Thank you.
Speaker Change: Then my second question is on service revenue is there any notable seasonality within services that I'm not sure. If auto DFS has has a major Q4 waiting but just some color on how services kind of weights through the year would be it would be helpful. Thank you.
Ofer Katz: I think we have noted earlier, we haven't identified or seen any sign that suggests a trend. There are some fluctuations throughout the week, but I think it's too early for us to call for a trend of improvement in the S&P 70-90.
Speaker Change: I think we have noted.
Speaker Change: We don't we haven't.
Speaker Change: Identify athene.
Speaker Change: Any sign that suggest the trend.
Speaker Change: The outcome.
Speaker Change: Fluctuation throughout the week.
Speaker Change: I think it's too early.
Speaker Change: For us the cortisol trend of improvement.
Speaker Change: <unk> 7 billion.
Ofer Katz: And then on the seasonality, the answer is a pretty flat or straight line behavior over the year. There is no significant seasonality that we can offer.
Speaker Change: And then on the seasonality.
Thank you.
Okay.
Speaker Change: Pretty flat or pipeline behavior over the year.
Speaker Change: No.
Speaker Change: Significant seasonality.
Speaker Change: That weekend.
Ofer Katz: Great. Thank you for coming.
Speaker Change: Great. Thanks for the color.
Rohit Kulkarni: Thank you. We'll now take our last question today.
Speaker Change: Thank you.
Speaker Change: We will now take our last question today.
Rohit Kulkarni: And this is from Rohit Kulkarni from Roth. Please go ahead.
Speaker Change: And this is from Rohit Kulkarni from Roth. Please go ahead.
Rohit Kulkarni: Hey, thanks for taking my questions. A couple. In this upmarket demand, clearly strategy is working.
Oh, Hey, thanks for taking my questions a couple.
Speaker Change: This.
Speaker Change: Up market demand clearly your strategy is working.
Micha Kaufman: Perhaps any more color you can provide on what are the categories of products and projects that you're getting that are unlocking new verticals for you, and over the near term, any learnings from the last 18 months that you can help kind of accelerate some of the growth that you're seeing in upmarket demand.
Speaker Change: So any more color you can provide on.
Speaker Change: What are the categories of.
Speaker Change: No.
Speaker Change: Products and projects that Youre getting.
Speaker Change: Unlocking new verticals for you.
Speaker Change: Over the near term any learnings from the last 18 months that you can help us.
Speaker Change: <unk> accelerated some of the growth that youre seeing an up market demand.
Micha Kaufman: And second would be just on this freelancer equity program. Any sounds very interesting and to incentivize freelancers, but perhaps talk about the genesis behind it. Why? Why now? And what do you hope to achieve from that? Thanks.
Speaker Change: Second would be just on this freelancer equity program.
Speaker Change: Any sounds really interesting and.
Speaker Change: Incentivize.
Speaker Change: Freelancers, but perhaps talk about the Genesis behind it why why now.
Speaker Change: And.
Speaker Change: What do you hope to achieve from that thanks.
Micha Kaufman: On the first part, as I mentioned earlier, I think that the programming at that. It's getting a bigger piece of the cake. I think this is driven by acquisition quality, but also product-like dynamic matching, which is important. which is doing really well, as I mentioned earlier on the call.
Speaker Change: On the first part as I mentioned earlier.
Speaker Change: Programming it back.
Speaker Change: It is.
Speaker Change: Getting a bigger piece.
Speaker Change: The cake.
Speaker Change: And I think.
Speaker Change: This is driven by our acquisition of quality, but also products like dynamic matching which is.
Speaker Change: Which is doing really well.
Speaker Change: As I mentioned earlier on the call.
Micha Kaufman: As to the question on the Freelancer Equity Program, we're very excited about this program. We've been wanting to do this for a while. This program is designed for top performers on the platform. And in our mind, those are extremely loyal and are building meaningful businesses with us. in helping us shape the future of war. should have the option to own a... And obviously, we're going to we're going to have the details of the plan announced in our S3 filing soon. It's an industry first. as a public company and we're very excited about this and we know that our freelancers are excited.
Speaker Change: As to the question on the Freelancer equity program, we're very excited about this program.
Speaker Change: We've been wanting to do this for a while.
Speaker Change: This program is designed for pulp.
Speaker Change: Former on the platform.
Speaker Change: And in our mind that those are extremely loyal and are building meaningful businesses without.
Speaker Change: And helping us shape the future of work.
Speaker Change: Should have the option to own a piece of it.
Speaker Change: And obviously, we're going to we're going to have the details of the plan announced in our re filing soon.
Speaker Change: It's an industry first.
Speaker Change: As a public company.
Speaker Change: <unk>.
Speaker Change: And we're.
Speaker Change: We're very excited about this and we know that our freight answers are extremely excited about it.
Micha Kaufman: Thank you.
Speaker Change: Thank you.
Operator: And there are no further questions, so I will now hand back to the speakers for any closing comments. Thank you, everyone, for joining the call today. And thank you, Sarah, for moderating the call.
Speaker Change: And there are no further questions I will now hand back to the speakers for any closing comments.
Speaker Change: Thank you everyone for joining the call today and thank you Sarah for moderating the call.
Micha Kaufman: I wish all of you a great day. Thank you.
Speaker Change: <unk> a great day.
Speaker Change: Yes.
Operator: This concludes today's conference call. Thank you for participating and you may now disconnect.
Speaker Change: Thank you. This concludes today's conference call. Thank you for participating and you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].