Key Takeaways:
Fiverr International Ltd. reported Q2 revenue of $97.8 million, down 10% from a year earlier, as AI adoption erodes demand for low-value freelance work on its marketplace.
"What we're seeing right now is an accelerated evolution of the freelance economy," Chief Executive Officer Micha Kaufman said. "While AI absorbs high-volume, low-value, transactional tasks, it is also unlocking the need for longer duration projects where AI tools enhance human expertise."
Annual active buyers fell to 2.68 million from 3.43 million, a 22% decline. Annual spend per buyer rose 16% to $368, partially offsetting the volume loss. Marketplace revenue dropped to $63.1 million from $74.7 million, while services revenue edged up to $34.6 million from $34 million. Adjusted EBITDA fell to $17.5 million from $21.4 million, with margin contracting to 17.9% from 19.7%. GAAP net income was $4.5 million, or 12 cents a share, compared with $3.2 million, or 9 cents, a year earlier.
The company guided Q3 revenue of $80 million to $88 million, representing a decline of 18% to 26% from a year earlier. For the full year, Fiverr expects revenue of $356 million to $372 million, down 14% to 17%. Shares fell sharply on the news, extending a year-to-date decline as the freelance marketplace confronts structural disruption from generative AI.
The results signal that AI tools are directly cannibalizing the transactional, low-value work that formed the core of Fiverr's marketplace. Competitors including Upwork Inc. face similar pressures as businesses turn to AI for tasks once outsourced to freelancers. Fiverr's shift toward higher-value, longer-duration projects represents a multi-quarter transformation, Kaufman said, with no near-term event expected to drive a revenue recovery.
This article is for informational purposes only and does not constitute investment advice.
