This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk01: 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.
spk00: 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.
spk05: 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.
spk04: Thank you, Michael, and good morning, everyone. We deliver strong execution in Q1 amid a volatile macro environment. January and February were as expected. In March, we started to see the impact of the shifting macro landscape within our marketplace, particularly in Europe. Revenue came near at the top end of the guidance at $86.7 million, up 27% year-over-year, driven by 11% growth in active buyer, 17% in center buyer, and a 240 basis point expansion in the take rate. Adjusted EBITDA was $3.9 million, above the top end of our guidance, with an adjusted EBITDA margin of 4.5%. First quarter revenue was a record for us on top of the tremendous growth we had over the past two years. This scale allowed us to be adjusted EBITDA positive in the first quarter for the first time this early in the year when we typically fund load investments. We remain highly efficient with our marketing investment for both trend and performance marketing. Trend marketing is a continuous, long-term investment. When coupled with high level of customer satisfaction, the awareness builds intangible brand equity over time. We are pleased with how the brand investment are materializing. We recently conducted a survey that indicates Pfizer had the strongest freelancer brand in the US and that brand awareness increased 30% from Q1 2021 when we last did the survey. Our performance marketing, The ROI was around four months in Q1, about the same as the previous quarter, and still well within our 12-month target threshold. As we move up market, we are targeting higher lifetime value customers with bigger wallet and better retention potential allows us to lean into performance marketing a bit more. On a longer-term basis, for cohorts that have been with us for five-plus years, we are seeing overall lifetime value to crack of over five times. For cohorts we acquired at the beginning of COVID, we are already seeing lifetime value to crack of nearly three times in just two years. The strong unit economics give us the confidence to continue to invest in performance marketing throughout various macroeconomic conditions. As Micha mentioned, we are going upmarket across the organization. Our product teams are solving more complex problems and providing more intuitive tools. Our operation team is vetting high-quality supplies and ramping customer support, and our upmarket marketing capacity is expanding. In our operating metrics, we see buyers who spend over $500 contribute to 64% of our marketplace, up from 63% last quarter and 59% in Q1 2021. According to our study, companies with 20 to 200 employees on average spend $15,000 a year on freelancers. We believe there is a significant potential to grow buyer spend levels by increasing walletshare from our existing buyers and adding high-value buyers. We also continue to invest in category expansion in order to increase cross-category purchases and expand our pump. I'm pleased that our take rates continue to grind higher with deeper penetration of value-added services. During the quarter, promoted gifts continue to grow and contribute to our take rate expansion as we improve seller targeting capabilities and bidding conversion. The program continues to enjoy strong seller retention as the seller pays only when they get a click to the listing page and the automatic bidding formula sets guardrails to optimize seller ROI. On SellerPlus, we continue to roll additional features into the program, such as buyer insights and buyer request notifications. The growth of those two programs continue to demonstrate our ability to command a strong take rate by building products, expanding our offerings, and providing value to our community. Now, let's turn to our guidance. For the second quarter of 2022, revenue is expected to be 86 to 87.5 million, representing year-over-year growth of 14 to 16%. Adjusted EBITDA is expected to be 3 to 4 million, representing an adjusted EBITDA margin of 4% at midpoint. For the full year of 2022, we now expect revenue to be in the range of 345 to 365 billion, representing year-over-year growth of 16 to 23%. Adjusted EBITDA is expected to be in the range of 10 to 17 million, representing an adjusted EBITDA margin of 3.8% at the midpoint. We have reduced and widened our guidance range to reflect the higher variability in the changing macro landscape as Miha discussed at the start of the call. January and February were solid as expected. In March and April, our business was impacted by a mix of macro factors with Europe being particularly vulnerable. Compared to what we expected at the beginning of the year, in March our European revenue was below trend by low double digits and the US by a few percentage points. In April, Europe revenue was further impacted although more moderately in the U.S. was stable. As a reminder, Europe contributed to just under 30% of our revenue and the U.S. approximately half. Our direct exposure to Russia and Ukraine was less than 1%. The midpoint of our revenue guidance reflects our current expectation of our business based on the trends we are seeing now. The high end of our guidance assumes an improvement in the macro environment that drives a rebound in consumer and business spending. The low end of our guidance contemplates a continued deterioration in Europe and moderates contagion in the rest of the world. At the midpoint, we expect active buyers to grow in the low single digits for the full year and be largely flat in Q2 as we left the large cohorts from the first half of last year. Spencer Bayer is expected to grow in the low to mid-teens year over year for 2022 with a steady sequential cadence. Take rate is expected to be steady with modest upside. The large improvement we saw in 2021 should moderate to less than 100 basis points for full year 2022. On the expense side, we do not expect to materially adjust our investment level for the year as growth continues to be our top priority. We expect to continue investing in personnel for customer support and engineering and expect modestly low gross margin and higher R&D as percentage of revenue for the year. Sales and marketing as a percentage of revenue should improve slightly. While our step-first investment strategy is tempering the progress toward our long-term target model, we remain committed to achieving lower-term adjusted EBITDA margin of 25% as our business scales. With that, we now turn the call over to the operator for questions.
spk01: Thank you. We will now start our Q&A session. If you would like to ask a question, please press Start, followed by 1 on your telephone keypad. If you have joined us online, please press the red flag icon. And now our first question comes from Joe Anmuth at JPMorgan. Please go ahead. Your line is open.
spk07: Thanks for taking the questions. I just wanted to follow up on the comments related to MACRO. Just trying to understand, I guess, how you see this kind of playing out in the business. I mean, it sounds like it's really coming from the buyer side, but also, I guess, how it kind of splits out between small businesses and, you know, some of your very positive comments just around fiber business and as you're going, you know, kind of upmarket and toward bigger businesses as well. Thanks.
spk05: Hey, good morning, Doug. Thanks for the question. So essentially, I think macro environment, largely speaking, was probably covered pretty extensively in this earnings season. I think from what everybody has seen, we've seen some softness in Q2, which is a result of a number of different factors with the opening up in the world to inflation, to some uncertainty around the war in Ukraine and so forth. And all of these have created this macro environment. Now, obviously, as a business, Fiverr is still largely more concentrated in the SMB side of business. SMBs are being affected or respond faster to macro changes than larger businesses. And this is probably shown or demonstrated very well within our product itself, meaning within the market base itself where it's largely more SMBs than larger organizations, you see a faster and probably slightly larger response to macro, whereas in Fiverr business, we're seeing a much moderate or even not seeing any impact. It's actually, as a business, those businesses, the number of accounts are actually growing much faster than the marketplace itself. So that's a good sign. And as we shift more into high-value buyers and into Fiverr business accounts, then we think that those macro trends are going to affect us less over time. We shared some numbers about Fiverr business and the growth in accounts. The same goes with high value buyers, which are growing faster. And we have accounts that are spending, you know, over $10,000 with us growing by 90% year over year. So that portion of the cohort is less affected. And obviously, we've seen smaller businesses being more affected. And by the way, it's not very surprising in You know, in hindsight, now that all of this effect has come in, because we've seen that reaction also throughout the pandemic. At the beginning of the pandemic, SMBs reacted much, much stronger than enterprise, as an example. And obviously, as a business, we've benefited from that. And now we're seeing a slightly opposite reaction. Obviously, we think it's temporary. These are aftershocks of the end of the pandemic and some macroeconomical However, there is an uncertainty, which is why we've created a wider range than usual for our guidance to incorporate extreme cases of either macro continues at the same levels or improving over time.
spk07: And then just to follow up, can you just talk about your kind of the decision and just related to investments, right, to continue along the same path, just given the significant growth opportunities that you see in the business. And is there a point where that could potentially change, you know, through the year or you don't really anticipate that?
spk05: Right now, we don't anticipate a change. We have a very solid plan. It is working. The fundamentals of the business are great. the investment in going up market is the right thing for the long term and we're here for the long term. We haven't changed our goal to be or to continue to be prioritizing growth. And so despite the temporary hiccups of this macro environment, we don't think that it's going to be right to change course right now and lose the potential that we have in the long term. Bear in mind that even within the SMB business, the level of penetration that Fiverr has is, I would assume, less than 5% of the potential in the US alone. There's 30 million SMBs. So the potential of continuing to penetrate the market and then also extending by going into larger businesses is enormous. And again, what we're seeing right now within the business is just a manifestation of what we're seeing in the macro environment. And the fact that we're now about to finally lap or completely lap the effect of the pandemic and the outsized cohorts that we had last year?
spk04: I would like to augment and point to the fundamental of the business all the way from the cohort behavior to the performance marketing efficiency providing a steady four-month TRI so that part of the decision to continue investing is the ability to keep our head in terms of EBITDA, maintain profitability, and build the muscle for going up market as we've done in the last few years.
spk07: Great. Thank you both.
spk01: Perfect. Thank you so much for your question. Our next question comes from Jason Hellstein from Oppenheimer. Please go ahead.
spk02: Thanks. I'll ask too. So just to clarify on the weakness and the outlook, I mean, is there a way to kind of separate how much of it is, again, kind of almost just return to normal, you know, COVID, you know, hangover or the COVID tailwinds going away versus actual macroeconomic weakness that you're seeing in Europe. And then second, I mean, historically you guys have spent a lot of money on marketing and it's driven growth. Just obviously this quarter marketing, you know, you slowed pretty dramatic relative to revenue. Just how are you thinking, I guess, about marketing kind of, in a weaker period of inflation relative to doing things with pricing or other factors that you can kind of drive growth. Thanks.
spk05: Morning, Jason. Thanks. So really, to your question, the weakness comes from mostly macro. And on top of macro, we've seen some higher trends in terms of travel as well, which indicates And usually that's a nice correlation to how we should anticipate business. So we're seeing high demand for travel. The world is opening up. And people want to shop offline and want to travel. So that's impacting. When you look at the fundamentals of business, when you look at cohort behavior, it is stronger than pre-pandemic. It's maybe not as strong as it was a year ago. but it's definitely stronger. We're not back to any pre-pandemic levels, and it continues to be very healthy. So from that perspective, we think that this is really driven by macro environment. Q2, from a seasonal standpoint, has a lot of seasonality baked into it. There is long holidays in the Muslim world, There is international days like Mother's Day that has impact. So it's usually a quarter with high seasonality. And on top of that, with the macro this year and with the fact, again, that we're lapping outsized cohorts from last year and we're being measured on a trailing 12 months, that always looks like that in the numbers when you lap it. But as we're looking at the fundamentals of the business, and the same goes with marketing, by the way, we've been very consistent, and that maybe answers your second question. As we look at the way marketing complements our organic growth, we have been very consistent in that strategy, meaning, A, we've been investing in our brand, and our brand is growing very, very fast. We've seen 30%. increase in unaided and aided brand awareness, which is great. Again, it gives us fuel for the fact that we're being consistent in the investment in brand. The same goes for performance marketing. With the slight change, now performance marketing targets more high-value buyers. those who have a higher lifetime value with us. And that is working very well. And the fact that we can do that smart marketing and drug it also into Fiverr business allows us to build an upmarket business that is very cost effective. So right now, we're on plan. We're happy with the results. Obviously, like everyone else, waiting to understand how this macro environment is going to change and working around that uncertainty to keep the business running and the long-term plans on time and on schedule.
spk01: Thank you. Perfect. Thank you so much for your question. Our next question comes from Matt Farrell at Piper Sandler. Please go ahead.
spk03: Hey, everyone. You've continued to do a nice job with expanding the take rate here, and you provided some commentary on how to think about take rate as we move throughout the year. But as I think about longer term, you know, what is the real long-term target for take rate, and how should we kind of think about where this could go maybe in two or three years out? Thanks.
spk05: Yeah, good morning, and thanks for that question. Yeah, I think on take rates, we always said that we're not going to rest until it's 100%. No, but seriously, I think that we're in a good point in terms of take rates, and I think we've demonstrated that through, it's not extraction of additional take rates from the transactional aspect, but it's actually additional take rates coming from added value services and products And I think that what we've demonstrated over the years and definitely as a public company since we started reporting is that we have a very wide arsenal of different products and offerings that we can introduce that would continue supporting the increase in take rate. One of them is promoted listings or promoted gigs, which is growing incredibly well. So these types of products, as we grow them over time, contribute to take rate, we always said that the contribution is going to be moderate. So we don't, you know, take rate as itself is not the growth KPI, right? But we do think that there's potential to continue increasing it. And so far, I think we've demonstrated that this is possible. Also, when you go up market and you work on much larger types of transactions.
spk03: Thanks. And then is there, on fiber business, could you give some qualitative metrics on maybe about the size and the scale of the business today and maybe as a percentage of GMB or percentage of revenue that's contributing? And maybe to piggyback on that question, any update on how this Stoke talent acquisition integration is contributing to the dynamics here in the near term? Thanks. Sure. Thanks for the question.
spk05: So, yes, so in fiber business, what we said, I think, a quarter or two ago is that it's already contributing more than 5% of the overall revenues. Since it's still a small business and what we said is that this is going to be a multi-year investment, as a transformational part of our business, it's kind of our act two, is a business We don't think that this would be, it would take time and investment until it becomes a double digit percentage contributor to the business. And so we're not reporting it separately. However, we did speak about the fact that accounts are growing 50% year over year and the order or revenue contribution is growing even faster than that. So at some point, as it becomes a more mature and stable business, we may start reporting it separately to give more clarity on that business. On Stoke, again, Stoke was acquired at the beginning of the year. We're in the process of integrating. The first portion of integration is due before end of year. And really the amazing potential there is the fact that as a freelancing management system, we want to connect it to the Fiverr talent pool so that those customers that are using Stoke as a system to manage their existing relationships with freelancers would be able to find additional freelancers through that system. That's phase one, and that should be done before the end of the year. We're working on it very hard. And at the same time, Stoke as a business is growing. Again, still small, but we're seeing customers that are paying on a yearly level more than $120,000 per account. So as a business, we believe it's a very healthy business. We're very happy with our acquisition and look forward to completing the integration and telling you guys more about it.
spk01: Thank you. We will now move on to the next question. And our next question comes from Andrew Boone at JMP Securities. Please go ahead.
spk08: Good morning and thanks for taking my questions. As we look at active buyers for 1Q22, you guys added 30,000 active buyers. Understood that's a net number. But given the slowdown there, it sounds like top of funnel was strong. Can you just help us understand the dynamics of churn and relate that to 2022 as we start to think about you guys moving through coverage cohorts? Thanks so much.
spk04: Yeah, thank you for the question. I think we mentioned on the previous slide On the previous earnings, we anticipate the first half of the year to be slow in terms of new ads because of the impact of the unusual cohort size at the beginning of 2021. Because of the normal behavior of each cohort, stabilizing over the first year before it become consistent and contributing a flat revenue stream over a long period. Because of this behavior, we are getting this kind of a headwind in terms of new net ads. We anticipate that this headwind will elapse at the end of the first half. to accelerate in terms of the new ads at the second half of the year, going forward for the long term.
spk08: Okay, that's helpful. Thanks so much. And then as we think about the marketing spend and the move up market, can you just help us tactically better understand What changes as you guys focus on longer LTV customers? Is there anything we should think about in terms of just greater brand spend there versus performance? How do we think about just the shift within marketing and the strategic move of marketing? Thanks so much.
spk05: I think the point that I was making earlier is that we're able to extend our marketing, most of our marketing work to target higher value, and more established types of businesses. Now, we do have a sales team. Most of it is a result of the acquisitions that we've done, and that sales team is able to offer the majority of our products, including ClearVoice, the content marketing, including Stoke, and including Fiverr Business. So the combination of doing brand marketing, which creates awareness and introduces the different types of products that we have with smart performance marketing that is able to target the right customers in the right channels, including inside sales and success managers, and including our sales team allows us to really go upmarket and maximize the potential. And over time, we're learning how to optimize that process. And that obviously focuses on customers with higher spending capacity, more complicated needs, which allows us to offer them more sophisticated types of offerings that reflect in the size of their spending and the frequency in which they spend and the number of people within those organizations that uses Fiverr. And again, Fiverr business is really in the early innings of itself as a product, but it's already demonstrating the vast changes that we're seeing there in terms of multiples when it comes to spend per buyer and the type of activity that we see in those accounts. So again, first signals for us, super encouraging. We're very happy with this product, and it's really in its early days. We have many exciting tasks on our roadmap for this year for Fiverr business.
spk01: Perfect. Thank you for your question. We will now move on to our next question, which comes from Brad Erickson at RBC Capital Markets. Please go ahead.
spk07: Hi. Thanks. I guess First, just appreciate the monthly commentary you gave over about how things have been tracking sort of pre- and post-war. Curious to get a little more color on just kind of the latest views of linearity. I think some companies have spoken to seeing softer traffic initially after the war began and then maybe a bit of a bounce back thereafter. Is that kind of generally what you've seen, or does the guide reflect maybe a view of a more persistent weakness? And then I have a follow-up.
spk04: This is pretty consistent with what we've been seeing. I think that during the month of March, we've seen a more in-depth celebration. This has been throughout April and been stable since. I think the guidance that we've provided has been wider. to capture the amount of uncertainty in the macroeconomy. On the low end, we anticipate that this will continue. On the high end, we assume that the business, the demand, the overall fraction will be back to what we've seen in the past 10 years, which is normal throughout the second half of the year. But that's the kind of the kind of what we've been seeing, and as a commentary, we've always been guiding based on what we have seen. This has been the case in the past, and this has been the case this time. We are guiding based on what we are seeing on the behavior of existing cohorts and our ability to attack new cohorts and its behavior as well.
spk07: Got it. That's great. Thanks. And then just secondarily, you know, last quarter in the shareholder letter, I think you called out, I don't know, maybe half a dozen or so categories that were especially strong in the business. I wonder if you could give an update there on just how those are generally faring relative to the broader business slowdown you're guiding to basically, are they, are they proving better or worse or, or kind of in line? Thanks.
spk09: Yeah.
spk05: So, so there's a, There are category swings that are normal, and that's a part of seasonality. Right now, gaming is one, game art and game development, content, illustration, video editing, resume, travel listing. Essentially, those trends are not a surprise. they're pretty much aligned with seasonal trends that we're seeing from time to time. And there's rarely any changes within categories that are constant, that are here to stay. And also those swings are relatively small. We're just highlighting them from time to time because we think it's interesting in the larger broader of just understanding supply and demand. But there is no substantial change in the category mix. Again, from time to time, from quarter to quarter, some different highlights around different categories.
spk07: That's helpful. Thanks.
spk01: Perfect. Thank you. Perfect question. Our last question comes from Eric Sheardon at Goldman Sachs. Please go ahead.
spk06: Thanks for taking the question. Maybe two if I can just squeeze them in quickly. I know we've talked a little bit about marketing so far on the call, but in terms of where you're aiming marketing to be successful and continue to ramp into private business, is there a different cadence in the year in marketing? Is there a different element of like more fixed versus variable that we could see in the model going forward? Just want to understand a little bit how the shifts might take place as you move up to stack and align marketing dollars against private business. And I think I've asked this in the past, but when you think about language extension or vertical extension, anything on the roadmap that you think we should be aware of, we see pretty big opportunities for growth going forward by further extension of the platform. Thanks so much.
spk05: Eric, good morning. Thanks for the question. So as to marketing, I think that what we're doing right now is the right thing in terms of seeing how we can extend marketing to go up market with the types of offerings that we have. Right now, we're not planning to do any substantial changes in our marketing strategy or how we do spending and definitely how we think about the efficiency of our marketing. I think that that's in tandem with the work that we're doing on the success management and the inside sales, so to speak, is proving itself to be very efficient. Obviously, we're finding this over time, but right now, we think that that strategy is working very well. We're not planning to change it. In terms of language extension, we're doing a lot of work in the past two years in the area of machine translation infrastructure. search in local languages, local currency, building local communication and awareness. All in all, I'll say that the opportunity to extend our offerings and go deeper into different languages and different countries is there and we're capturing it. So without getting too deep, too much deep into our playbook, It's definitely something that is playing well for us and definitely helping us establish our presence and increase our presence in multiple countries. And again, we think that the same playbook should continue to be applied as we grow.
spk06: Great. Thanks so much.
spk01: Thank you, Eric, for your question. This concludes our Q&A session. I would now like to pass back over to Miha for any final remarks.
spk05: Thank you, Victoria, and thank you, everyone, for joining the call today. Have a great rest of the day. We'll see you at the upcoming investor events and talk to you next quarter. Thank you.
spk01: Perfect. Thank you, everybody, for joining today's call. You may now disconnect.
Disclaimer