Fiverr reports 100% jump in Q1 revenue as momentum from pandemic stays strong

Remote work trends dictated by the virus pushed businesses online, propelling demand for the company’s freelancers’ services; Fiverr raises revenue growth forecast for 2021

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

An example of an AI-generated branding package created by Fiverr's logo maker. (Courtesy/Fiverr, Titus media)
An example of an AI-generated branding package created by Fiverr's logo maker. (Courtesy/Fiverr, Titus media)

Fiverr, a company that connects businesses with freelancers offering digital services, said Thursday that revenue for the first quarter of the year surged 100% year on year, one of its highest quarterly revenues in its history.

The results come on the heels of “an extraordinary year of growth” in 2020, when revenue for the firm surged 77% year on year.

“Twelve months since the peak of the COVID19 pandemic, our business momentum remains strong and sustainable,” the company said in a letter to shareholders. Remote work trends dictated by the coronavirus pandemic pushed businesses online, and helped propel demand for the company’s services as those businesses sought freelancers to help them digitize their offerings.

Fiverr said revenue for the first quarter surged to $68.3 million, as active buyers of services as of the end of March surged 56%, year on year, to 3.8 million from 2.5 million. Spending per buyer also jumped 22% to $216, the company said. Loss for the quarter widened to $17.8 million vs a loss of $6.2 million a year earlier, as operating expenses surged to $71 million compared to $34 million in the same quarter a year earlier.

Fiverr’s co-founder and CEO, Micha Kaufman. (Courtesy/Yuval Taog)

The company said it expects business momentum to grow, and upgraded its guidance for the year to revenue growth of 59%-63% to $302 million-$308 million, from a previous guidance of 46%-50% growth.

“Fiverr’s business momentum remains strong and resilient as we continue to scale at accelerating levels while leading companies through this new world of work,” Micha Kaufman, founder and CEO of the company, said.

The firm added that it saw “particular strength” in the back half of the first quarter, propelled by its first Super Bowl campaign that reached an airtime audience of nearly 100 million, as well as millions more from continued momentum across social media and digital platforms.

“We believe the investments in our brand equity are highly strategic in building Fiverr into a household name and provide a continuous drive for organic traffic and organic growth in spend,” the company said in its shareholders’ letter.

The Tel Aviv-based firm was founded in 2010 by Shai Wininger and Kaufman. It connects businesses with freelancers offering digital services, such as copyediting or website consulting.

The company went public on the New York Stock Exchange in June 2019 and has reached a market cap of a little over $6.6 billion, after its share surged 313% in the past 12 months. Fiverr shares declined 4.1% to $183.88 at the close on Wednesday, down some 40% from its peak of $323.1 on February 7.

Last month, US Labor Secretary Marty Walsh said he thinks many gig, or freelance, workers should be categorized as employees that need to get health and retirement benefits, a reversal from the policies of the Trump administration. Shares of Uber, Lyft, DoorDash and Fiverr dropped after Walsh’s comments. Treating gig workers as employees would raise costs for these firms.

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