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.
Is now the time to buy Fiverr? Access our full analysis of the earnings results here, it's free.
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.
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.
There are others doing even better than Fiverr. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 150% since the IPO last December. You can find it on our platform for free.
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.
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.
Should you invest in Fiverr right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.
One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.
The author has no position in any of the stocks mentioned.