The share price of Israeli freelancer platform Fiverr International Ltd. (NYSE: FVRR) has fallen 77% from the peak it reached a year ago. Then, the company had a market cap of over $11 billion ($323 per share), whereas now its market cap is $2.8 billion ($75.8 per share). The peak came against the background of the company's high growth rate, and the fact that it reached profitability earlier than expected, as the coronavirus pandemic accelerated the switch to online working. Since then, however, investor taste has changed, in the light of macro-economic conditions, and they now prefer stability and a longer history, value companies rather than growth companies.
Today, Fiverr released its financials for the fourth quarter of 2021 and the full year. The results are significantly ahead of the average analysts' estimate, and the company has provided a forecast of continued growth (even if more moderate than in the past) in 2022.
Revenue in the fourth quarter of 2021 was $79.8 million, representing an increase of 43% year over year. On a GAAP basis, Fiverr made a net loss in the quarter of $19.5 million, or $0.53 per share, which compares with a loss of $8.1 million, or $0.23 per share, in the fourth quarter of 2020. On a non-GAAP basis, the company made a net profit of $9.2 million, or $0.25 basic net earnings per share and $0.22 diluted net earnings per share, which compares with $4.8 million, or $0.13 basic net income per share and $0.12 diluted net earnings per share, in the fourth quarter of 2020, that is, an increase of 93.8% in net profit. The analysts had expected earnings per share of just $0.04.
The take rate, that is, the commission that Fiverr takes on each transaction via its platform, was 29.2% in the fourth quarter of 2021, up 210 basis points from 27.1% for the fourth quarter of 2020.
For 2021 as a whole, revenue was $297.7 million, representing an increase of 57% year over year. The net loss on a GAAP basis in 2021 was $65 million, or $1.81 per share, which compares with a net loss of $14.8 million, or $0.46 per share, in 2020. On a non-GAAP basis, the company made a net profit in 2021 of $24.5 million, or $0.68 and $0.60 basic and diluted net income per share, respectively, which compares with a net profit of $10.4 million, or $0.32 and $0.29 basic and diluted net income per share, in 2020.
Adjusted EBITDA in 2021 improved to $22.9 million, compared with $9.1 million in 2020. The adjusted EBITDA margin was 7.7% in 2021, an improvement of 290 basis points from 4.8% in 2020.
At the end of 2021, Fiverr had $644 million cash, versus debt, mostly long-term, of $374 million to holders of convertible bonds issued in 2020.
For the first quarter of 2022, Fiverr projects revenue of $85-87 million, representing growth of 24-27% in comparison with the corresponding quarter of 2021, with EBITDA of $1.5-3.5 million, which compares with negative EBITDA in the corresponding quarter. For 2022 as a whole, the company sees revenue growing 25-27% to $373-379 million, higher than the average analysts' estimate, and EBITDA of $27-33 million, higher than in 2021.
"We live in a dynamic and ever evolving work environment in which the world has embraced the vision Fiverr had 12 years ago," said Fiverr founder and CEO Micha Kaufman. "Our perpetual focus on our community and improving our platform has allowed us to deliver a strong finish to 2021 and exceptional retention trends."
Published by Globes, Israel business news - en.globes.co.il - on February 17, 2022.
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