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Fiverr Announces Fourth Quarter and Full Year 2020 Results

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Fiverr International Ltd. (NYSE: FVRR), the company that is changing how the world works together, today reported financial results for the fourth quarter of 2020. Complete operating results and management commentary can be found in the Company’s shareholder letter which is posted to its investor relations website at investors.fiverr.com.

“2020 was a landmark year for our business with 77% year over year revenue growth driven largely by bringing more freelancers and businesses together during a critical time of global change,” said Micha Kaufman, founder and CEO of Fiverr. “We are carrying that momentum into the new year and I’m thrilled about what lies ahead for us in 2021. We started this year with our first Super Bowl campaign, which allowed us to reach millions of people in a way that was unprecedented for our brand. In the year ahead, we also expect to continue to roll out significant products, features and capabilities and continue to help lead and power the global trend towards digital transformation and remote work.”

Ofer Katz, Fiverr’s CFO, added, “Our marketplace significantly scaled during 2020 and we achieved the important milestone of turning EBITDA positive as well. We believe the strong momentum is carrying into 2021 and the increased awareness and adoption of digital freelancing services will continue to provide tailwinds for our business. We are excited about the year ahead as reflected by our strong financial outlook for 2021.”

Fourth Quarter 2020 Financial Highlights

  • Revenue in the fourth quarter of 2020 was $55.9 million, an increase of 89% year over year.
  • Active buyers as of December 31, 2020 grew to 3.4 million, compared to 2.4 million as of December 31, 2019, an increase of 45% year over year.
  • Spend per buyer as of December 31, 2020 reached $205, compared to $170 as of December 31, 2019, an increase of 20% year over year.
  • Take rate for the year ended December 31, 2020 was 27.1%, up from 26.7% for the year ended December 31, 2019, an increase of 40 basis points year over year.
  • GAAP gross margin in the fourth quarter of 2020 was 82.6%, an increase of 330 basis points from 79.3% in the fourth quarter of 2019. Non-GAAP gross margin in the fourth quarter of 2020 was 83.9%, an increase of 310 basis points from 80.8% in the fourth quarter of 2019.
  • GAAP net loss in the fourth quarter of 2020 was ($8.1) million, or ($0.23) net loss per share, compared to ($7.4) million, or ($0.23) net loss per share, in the fourth quarter of 2019. Non-GAAP net income in the fourth quarter of 2020 was $4.8 million, or $0.13 and $0.12 basic and diluted net income per share, respectively, compared to ($2.7) million, or ($0.08) loss per share, in the fourth quarter of 2019.
  • Adjusted EBITDA1 in the fourth quarter of 2020 improved to $4.6 million, compared to ($3.3) million in the fourth quarter of 2019. Adjusted EBITDA margin was 8.3% in the fourth quarter of 2020, an improvement of 1,960 basis points from (11.3%) in the fourth quarter of 2019.

Full Year 2020 Financial Highlights

  • Revenue in 2020 was $189.5 million, an increase of 77% year over year.
  • GAAP gross margin in 2020 was 82.5%, an increase of 330 basis points from 79.2% in 2019. Non-GAAP gross margin in 2020 was 83.7%, an increase of 270 basis points from 81.0% in 2019.
  • GAAP net loss in 2020 was ($14.8) million, or ($0.46) net loss per share, compared to a net loss of ($33.5) million, or ($1.67) net loss per share, in 2019. Non-GAAP net income in 2020 was $10.4 million, or $0.32 and $0.29 basic and diluted net income per share, respectively, compared to a loss of ($16.8) million, or ($0.58) basic and diluted net loss per share, in 2019.
  • Adjusted EBITDA in 2020 improved to $9.1 million, compared to ($18.0) million in 2019. Adjusted EBITDA margin was 4.8% in 2020, an improvement of 2,160 basis points from (16.8%) in 2019.

Financial Outlook

We are introducing strong Q1’21 and full-year 2021 guidance, as business momentum in 2020 continues into 2021. The Super Bowl commercial is expected to result in a one-time expense of $8 million in Q1'21 and we expect to continue gaining operating leverage throughout the year. Given the uncertainty of the ongoing impact and unprecedented conditions surrounding the COVID-19 pandemic on economies globally, we will provide investors with updated business trends as they evolve.

 

Q1 2021

FY 2021

Revenue

$63.0 - $65.0 million

$277.0 - $284.0 million

Year over year growth

84-90%

46-50%

Adjusted EBITDA

($4.0) - ($3.0) million

$16.0 - $21.0 million

1 Adjusted EBITDA is a non-GAAP financial measure. See “Key Performance Metrics and Non-GAAP Financial Measure” for additional information regarding this and other non-GAAP metrics used in this release.

Conference Call and Webcast Details

Fiverr will host a conference call to discuss its financial results on Thursday, February 18, 2021, at 8:30 a.m. Eastern Time. A live webcast of the call can be accessed from Fiverr’s Investor Relations website. An archived version will be available on the website after the call. Investors and analysts can participate in the conference call by dialing (866) 360-3590, or (412) 317-5278 for callers outside the United States, and mention the passcode, “Fiverr.” A telephonic replay of the conference call will be available until Thursday, February 25, 2021, beginning one hour after the end of the conference call. To listen to the replay please dial (877) 344-7529, or (412) 317-0088 for callers outside the United States, and enter replay code 10150856.

About Fiverr

Fiverr’s mission is to change how the world works together. For over 10 years, the Fiverr platform has been at the forefront of the future of work connecting businesses of all sizes with skilled freelancers offering digital services in more than 500 categories, across 8 verticals including graphic design, digital marketing, programming, video and animation. In the twelve months ended December 31, 2020, over 3.4 million customers bought a wide range of services from freelancers across more than 160 countries. We invite you to become part of the future of work by visiting us at fiverr.com, read our blog and follow us on Facebook, Twitter and Instagram.

CONSOLIDATED BALANCE SHEETS

(in thousands)

 
December 31, December 31,

2020

2019

 
Assets
Current assets:
Cash and cash equivalents

$

268,030

 

$

24,171

 

Marketable securities

 

129,372

 

 

88,559

 

User funds

 

97,984

 

 

55,945

 

Bank deposits

 

90,000

 

 

15,000

 

Restricted deposit

 

346

 

 

324

 

Other receivables

 

5,418

 

 

3,117

 

Total current assets

 

591,150

 

 

187,116

 

 
Marketable securities

 

228,048

 

 

21,805

 

Operating lease right of use asset

 

15,611

 

 

-

 

Property and equipment, net

 

6,265

 

 

5,321

 

Intangible assets, net

 

5,884

 

 

7,188

 

Goodwill

 

11,240

 

 

11,240

 

Restricted deposit

 

2,589

 

 

3,168

 

Other non-current assets

 

415

 

 

522

 

Total assets

$

861,202

 

$

236,360

 

 
Liabilities and Shareholders' Equity
Current liabilities:
Trade payables

$

3,622

 

$

3,749

 

User accounts

 

92,027

 

 

53,013

 

Deferred revenue

 

5,957

 

 

3,248

 

Other account payables and accrued expenses

 

40,396

 

 

21,426

 

Operating lease liabilities

 

3,307

 

 

-

 

Current maturities of long-term loan

 

560

 

 

503

 

Total current liabilities

 

145,869

 

 

81,939

 

 
 
Convertible notes

 

352,034

 

 

-

 

Operating lease liabilities

 

13,861

 

 

-

 

Long-term loan and other non-current liabilities

 

4,035

 

 

5,612

 

Total liabilities

 

369,930

 

 

5,612

 

 
Total liabilities

$

515,799

 

$

87,551

 

 
Shareholders' equity:
Share capital and additional paid-in capital

 

517,444

 

 

306,334

 

Accumulated deficit

 

(172,573

)

 

(157,763

)

Accumulated other comprehensive income

 

532

 

 

238

 

Total shareholders' equity

 

345,403

 

 

148,809

 

Total liabilities and shareholders' equity

$

861,202

 

$

236,360

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

 
Three Months Ended Year Ended
December 31, December 31,

2020

2019

2020

2019

 
Revenue

$

55,885

 

$

29,531

 

$

189,510

 

$

107,073

 

Cost of revenue

 

9,703

 

 

6,120

 

 

33,188

 

 

22,224

 

Gross profit

 

46,182

 

 

23,411

 

 

156,322

 

 

84,849

 

 
Operating expenses:
Research and development

 

13,570

 

 

Fiverr International Ltd.

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