Gig economy co Fiverr jumps on Q4 results

Micah Kaufmann Photo: Omer Hacohen

Fiverr's guidance for 2020 is higher for revenue and lower for net loss than the market forecasts.

Israeli gig-economy platform company Fiverr International (NYSE: FVRR) finished 2019 with more revenue and a smaller net loss than the analysts' forecasts. The company, which has developed a trading platform that enables freelancers to offer their services to potential customers, held its IPO on the New York Stock Exchange last year, and has an $886 million market cap.

The company's revenue totaled $29.5 million in the fourth quarter, 42.6% more than in the fourth quarter of 2018. Its revenue totaled $107 million in all of 2019, 41.8% more than in 2018.

According to GAAP standards, Fiverr had an $8.1 million operating loss and a $7.4 million net loss in the fourth quarter. The company's operating loss in 2019 as a whole fell 7% to $33.5 million, and its net loss attributable to stockholders was down 5.2% to $34.2 million.

Excluding various accounting items, most importantly stock-based compensation for employees and IPO-related costs, Fiverr finished 2019 with a $16.8 million non-GAAP net loss, $0.58 per share, down from $20.6 million in 2018. The analysts expected a non-GAAP net loss of $0.81 per share.

Adjusted EBITDA in 2019 was minus $18 million, compared with minus $21 million in 2018. Another figure provided by Fiverr is the take rate - the proportion of commission that it takes from each deal between a freelancer and a buyer - in effect Fiverr's net revenue from everything it collects. This rose from 25.7% at the end of 2019 to 26.7% at the end of 2019.

Fiverr projects more revenue in 2020 than the market's forecasts; it expects to finish the year with $139-141 million in revenue, 30-32% more than in 2019, while the analysts predict $136 million in revenue. The company advises that its adjusted EBITDA will remain negative, but will total minus $13-15 million, a smaller negative number than in 2019. Fiverr projects $32-33 million in revenue in the first quarter, higher than the market's forecasts and 35-39% more than in the first quarter of 2019. The company expects adjusted EBITDA of minus 4.5-5.5 million in the first quarter. Last week, Fiverr launched Fiverr Logo Maker, a new artificial intelligence-based product, but is not including it in its guidance at this stage. The company also recently launched websites in German and Spanish, which enlarges its potential market.

"2019 was a landmark year for Fiverr as we completed a successful IPO, expanded the Fiverr ecosystem with new products, increased our international reach, and most importantly, continued our extraordinary growth momentum and march towards profitability," said Fiverr CEO Micha Kaufman.

Fiverr CFO Ofer Katz added, "The fourth quarter marked another quarter of growth across all of our key metrics driven by consistent cohort behavior and improved marketing efficiency. Fiverr’s strong growth across all metrics proves our strategy of going upmarket, product innovation and pursuing investments across the globe are succeeding and we look forward to another great year ahead."

Fiverr held its IPO at $21 a share. Its share price zoomed 90% on its first day of trading. The share later fell back below the IPO price for a while, but has recently recovered. Yesterday's closing price was $28, and the share is currently being traded up 8% to $30 on Wall Street in response to the company's results and guidance.

Published by Globes, Israel business news - en.globes.co.il - on February 19, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Micah Kaufmann Photo: Omer Hacohen
Micah Kaufmann Photo: Omer Hacohen
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