Fiverr International Ltd.

Hello everyone and welcome to the Fiverr First Quarter Fiscal 2022 Earnings Conference Call. My name is Victoria and I will be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star 1 on your telephone keypad. If you wish to withdraw your question, please press star 2. If you have joined us online, please press the red flag icon. When preparing to ask a question, please ensure that your line is unmuted locally. I'll now pass it over to your host, Jinkoo Chan, to begin. Please go ahead.

Thank you, operator, and good morning, everyone. Thank you for joining us on Fiverr's earnings conference call for the first quarter ended March 31st, 2022. Joining me on the call today are Miha Kaufman, founder and CEO, and Alfred Katz, president and CFO. Before we start, I'd like to remind you that during this call, we will make forward-looking statements and that these statements are based on current expectations and assumptions as of today, and Fiverr assumes no obligation to update or revise them. A discussion of some of the important risk factors that could cause actual results to differ materially from any forward-looking statements can be found under the Risk Factors section in Fiverr's most recent Form 20F and other filings for the SEC. During the call, we'll be referring to some non-GAAP financial measures. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures are provided in the earnings release we issued today in our shareholder letter, each of which is available on our website at investors.fiber.com. And now I'll turn the call over to Miha.

Thanks, Jinjin. Good morning, everyone, and thanks for joining us today. The first quarter of 2022 was solid with 27% revenue growth year over year, It was also the first time in any Q1 that we achieved adjusted EBITDA profitability, a quarter when we typically front-load marketing investments. The quarter started with strong momentum in January and February. In March, the macro landscape shifted, and our marketplace is currently seeing the impact. With higher inflation, recovering travel demand, and more in-person activities, Spending patterns are shifting for consumers and therefore business spending. We started to see this shift on our market base in March. It has continued into the second quarter. We are not sure the duration of the shift or the magnitude and are adjusting our guidance range to reflect the uncertainty. Ofer will walk you through that in a moment. We're making progress on our goals for the year and continue to invest in fiber business. While the small business or consumer-driven part of our business is feeling the impact of the macro shift, cyber business is gaining momentum. Growth is robust, with over 50% growth in accounts year-over-year and even higher increase in order value year-over-year. Not only are we seeing strong growth in accounts, but we are also seeing increasing wallet share per account if business accounts add freelancers to their workflows and find more categories to meet their needs. We believe that tight labor market provides us with a tremendous opportunity to help businesses leverage their current employees and augment their team's skill sets. We are focusing our investment in Fiverr business because we believe the opportunity ahead has never been more clear. Over the last two quarters, we have vetted tens of thousands of quality sellers on the marketplace in order to provide Fiverr business customers with the top 1% of talent. We have redesigned the Fiverr business listing page to focus on eight freelancers instead of 48 offerings to streamline and humanize the buyer's decision-making process. And this has led to a meaningful increase in conversion, especially for more expensive service offerings. Business buyers want to know and trust who they are working with and we are now highlighting the freelance along with the offering. We have added features such as a saved freelancer list that organizations can share between teams. This allows easy reference for repeat buying. We are starting to redirect marketing investments to target Fiverr business. We have added customer success managers to facilitate business accounts onboarding and provide high-touch support, if needed, on the marketplace. The needs of small and medium businesses are more sophisticated than individual offerings, and we are listening to our customers and creating a marketplace that works for their needs, for more complex projects, for more departments throughout the organization. Fiverr's upmarket journey is just beginning. Businesses who utilize Fiverr Business can gain an advantage over their competitors. They're able to grow faster by leveraging their employees for essential roles while outsourcing many tasks for freelancers on Fiverr. Managers do not have to go through the process of hiring, which is becoming increasingly difficult in today's labor market. Companies will be able to scale up and down based on their workload without any headcount friction. Profit margins will better grow faster. Teams that know how to leverage the Fiverr Marketplace talent pool will have more creative projects. Becoming embedded in a business human capital infrastructure is not a quick task, but those who are willing to be on the leading edge of human capital procurement should enjoy a first mover advantage over their competitors. It is our mission to enable this. The way human capital is procured is in its early innings, and we are leading the way. One example is an interior designer team in Germany who uses 3D rendering services on Fiverr to increase productivity. Once a design is sketched, it's passed on to a freelancer on Fiverr who will turn a floor plan and product listing into a 3D visualization of a fully furnished room. It is all done with a few clicks to order, a $100 budget, and the customer gets a delivery in three days. Not only does utilizing Fiverr provides the designer with unmatched speed and value, but more importantly, it allows the designer to spend more time with clients. This customer has embedded 40 different Fiverr freelancers into their 3D workflow, and they are constantly placing orders. Another example is a North American event planner that lost most of their work when COVID lockdowns occurred and reduced their workforce. As they're rebuilding, it has become problematic to recruit and retain employees. So the company's human capital strategy is to embed Fiverr freelancers into their project team. They have 150 Fiverr freelancers that they currently work with across numerous categories. As each product requires different skill sets, the breadth of supply on Fiverr provides them with an unparalleled flexibility. We believe the use cases are nearly infinite for embedding Fiverr's freelancers into businesses. Employees who know how to utilize the Fiverr marketplace will have a major productivity tool that allows employers to leverage their internal workforce many times over. The contracts that are available to businesses on Fiverr are being expanded to make usage seamless for larger and longer projects. Milestone payments were recently introduced to facilitate larger projects by enabling progress payments. Subscriptions are quickly being adopted as both buyers and freelancers find recurring relationships beneficial. The new Fiverr business landing page encourages business buyers to contact sellers for more complex projects to ensure the scope of the project matches both parties' expectations. These efforts will meaningfully expand the ticket size on our market base. We've done this type of expansion before. When I started the company, everything on Fiverr was $5. Then we lifted the price cap so sellers can price their services anywhere. Then in 2016, we introduced packages that allow sellers to offer tiered pricing bundles. In both cases, our marketplace experienced a step function leak in the product size and ticket size. We know this playbook very well and we are running it again now. We're also investing towards our vision of a talent cloud, a holistic solution that utilizes talent as a service. Our marketplace today is already serving as a talent cloud solution for small businesses. We know many of our smaller customers leverage Fiverr to do everything from product to marketing to operation. But larger organizations with more sophisticated deliverables require a more comprehensive, holistic solution. Imagine, as a marketing manager, some days you need someone to help you do a simple video editing. Other days, you need a full-fledged TV commercial production. Then there are times you are looking for someone to help you manage content on your social media channel. With Talent Cloud, you don't even need to think about how to allocate and distribute the workflows, but rather just turn to fiber and our system will assemble the team, distribute the workflows and take the project to the finish line. This is the talent as a service we are envisioning. Let our technology do the optimization and customers can focus on growing their businesses. This is an ambitious vision and there is a significant amount of work to do to accomplish our vision. No one has ever done anything like this. I think the technology we are building here is not only cutting edge, but is also going to provide a sustainable competitive advantage for us and the businesses who embrace it. We're also unlocking additional addressable market by creating destructive solutions and significantly increasing freelancer adoption across businesses of all sizes. We believe these investments will meaningfully drive our future growth and ultimately increase long-term shareholder value. I am super proud of everyone on our team with executing towards our vision. Their talent and dedication is inspirational. Our hearts are with our colleagues in Ukraine and their compatriots. I'm also grateful for our community of businesses and freelancers who trust us and help us build the future of work together. With that, let me turn the call over to Ofer, who will share some financial highlights.