Fiverr (NYSE:FVRR) Posts Better-Than-Expected Sales In Q4, Provides Encouraging Full Year Guidance

Radek Strnad /
2022/02/17 1:52 am EST

Online freelance marketplace Fiverr (NYSE: FVRR) beat analyst expectations in Q4 FY2021 quarter, with revenue up 42.7% year on year to $79.7 million. The company expects that next quarter's revenue would be around $86 million, roughly in line with analyst expectations. Fiverr made a GAAP loss of $19.5 million, down on its loss of $8.07 million, in the same quarter last year.

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Fiverr (FVRR) Q4 FY2021 Highlights:

  • Revenue: $79.7 million vs analyst estimates of $76.8 million (3.81% beat)
  • EPS (non-GAAP): $0.22 vs analyst estimates of $0.11 ($0.11 beat)
  • Revenue guidance for Q1 2022 is $86 million at the midpoint, above analyst estimates of $85.5 million
  • Management's revenue guidance for upcoming financial year 2022 is $376 million at the midpoint, beating analyst estimates by 1.34% and predicting 26.3% growth (vs 68.3% in FY2021)
  • Free cash flow of $7.59 million, down 14% from previous quarter
  • Gross Margin (GAAP): 80.9%, down from 82.6% same quarter last year
  • Annual Active Buyers: 4.2 million, up 800 thousand year on year

“We live in a dynamic and ever evolving work environment in which the world has embraced the vision Fiverr had 12 years ago. This vision continues to drive our innovation and product roadmap as we lead the labor market transformation for customers on both sides of our marketplace,” said Micha Kaufman, founder and CEO of Fiverr.

Based in Tel Aviv, Fiverr (NYSE: FVRR) operates a fixed price global freelance marketplace for digital services.

The iPhone changed the world, ushering in the era of the “always-on” internet and “on-demand” services - anything someone could want is just a few taps away. Likewise, the gig economy sprang up in a similar fashion, with a proliferation of tech-enabled freelance labor marketplaces, which work hand and hand with many on demand services. Individuals can now work on demand too. What began with tech enabled platforms that aggregated riders and drivers has expanded over the past decade to include food delivery, groceries, and now even a plumber or graphic designer are all just a few taps away.

Sales Growth

Fiverr's revenue growth over the last three years has been exceptional, averaging 59.5% annually. The initial impact of the pandemic was positive for Fiverr's revenue, but growth rates subsequently normalized.

Fiverr Total Revenue

This quarter, Fiverr beat analyst estimates and reported an impressive 42.7% year on year revenue growth.

Guidance for the next quarter indicates Fiverr is expecting revenue to grow 25.8% year on year to $86 million, slowing down from the 100% year-over-year increase in revenue the company had recorded in the same quarter last year. For the upcoming financial year management expects revenue to be $376 million at the midpoint, growing 26.3% compared to 68.3% increase in FY2021.

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Usage Growth

As a gig economy marketplace, Fiverr generates revenue growth by a combination of the volume of services users order and how much commission it earns.

Over the last two years the number of Fiverr's active buyers, a key usage metric for the company, grew 36.3% annually to 4.2 million users. This is among the fastest growth of any consumer internet company, indicating that users are excited about the offering.

Fiverr Annual Active Buyers

In Q4 the company added 800 thousand active buyers, translating to a 23.5% growth year on year.

Key Takeaways from Fiverr's Q4 Results

With a market capitalization of $2.77 billion Fiverr is among smaller companies, but its more than $189.3 million in cash and positive free cash flow over the last twelve months put it in a very strong position to invest in growth.

We were impressed by the exceptional revenue growth Fiverr delivered this quarter. And we were also glad to see the user growth. Overall, we think this was a good quarter, that should leave shareholders feeling positive. The company is up 1.41% on the results and currently trades at $76.9 per share.

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The author has no position in any of the stocks mentioned.