Fiverr International Ltd.

Hello, everyone, and welcome to the Fiverr Q2 Fiscal 2022 Earnings Conference Call. My name is Charlie, and I'll be coordinating the call today. You'll have the opportunity to ask a question at the end of the presentation. If you'd like to register a question, please press star followed by one on your telephone keypads. I'll now hand over to your host, Jinjin Kian, Head of Investor Relations, to begin. Jinjin, please go ahead.

Thank you, Operator, and good morning, everyone. Thank you for joining us on Fiverr's Earnings Conference Call for the second quarter ended June 30, 2022. Joining me today on the call is Miha Kaufman, Founder and CEO, and Ofer Katz, President and CFO. Before we start, I'd like to remind you that during this call, we may make forward-looking statements and that these statements are based on our current expectations and assumptions as of today, and Fiverr assumes no obligation to update or revise 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 this 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.fiverr.com. And now, I'll turn the call over to Miha.

Thank you, Jinjin. Good morning, everyone, and thank you for joining us today. In the second quarter of 2022, Fiverr delivered revenue of $85 million, representing year-over-year growth of 13%. We continue to see a rapid consumer and SMB sentiment shift amidst the challenging global macro environment. Geopolitical volatility, spiking inflation, and elevated energy prices meant that spending power of consumers and SMBs was impacted more than expected. This trickled through to the overall demand for freelancer spending. We are not immune to these macro trends. We are encouraged, however, that Fiverr continues to serve as a backbone for millions of businesses to connect and engage with freelancers. Active buyers were 4.2 million, up 6% year over year, and spend per buyer was $259, up 14% year over year. Our market base scaled up significantly during the COVID years, and most of that gain continues to hold today. We see older cohorts continuing to spend more today versus pre-COVID, And we continue to attract a significantly larger amount of new buyers to our marketplace every quarter compared to our pre-COVID. Take rate remains strong at 29.8%, up 200 basis points year over year, reflecting the tremendous value we provide to our community of buyers and sellers and the continued expansion of value-added products. Our Q2 results also demonstrated our continued discipline and operational efficiency. In Q2, we delivered adjusted EBITDA of 4.6 million, representing an adjusted EBITDA margin of 5.4%. Fiverr has always run a lean organization, but the macro environment requires us to recalibrate our growth and profitability profiles in investment priorities. Post quarter, we made a tough decision to reduce our team by 60 members. It is not a decision made lightly. Over the years, we have built an incredible team and an amazing culture at Fiverr, where we gather super talented and passionate people together to build towards a common mission. This means we have to part with many teammates we love and value. We have great people living in other companies we'll be lucky to have them. With this, we are putting ourselves in a strong financial position to continue delivering growth with positive adjusted EBITDA and heading towards our long-term target model. Offer will provide more color on that. Now, I want to spend some time discussing the investments we are focusing on to strengthen our core and position us for long-term success. Fiverr's buyer base consists of 4.2 million people coming from all types of businesses, from solopreneurs all the way to the largest companies in the world. We know that there are over 30 million SMBs in the US alone, and even more in Europe and the rest of the world. Our level of market penetration in the SMB space is impressive, but nowhere near saturation. there is ample addressable market available to grow into, and this remains a top priority for us. We are doubling down on building deep technology modes for our core market base. This includes supply, quality, search, and personalization, marketing, and growth. Fiverr's market base is uniquely complex. We have hundreds of thousands of sellers who have created millions of services listing across more than 550 categories. Each of these sellers, listings, and categories comes with unique skills, attributes, pricing, and scope. Understanding the quality and matching a buyer with a seller is highly complicated, not only due to the diversity of services we cover, but also because quality is subjective depending on the buyer and their specific project. The fact that Fiverr is an end-to-end transaction marketplace gives us not only the ability to track reviews and ratings, but also powerful data to dissect user behavior and user interactions to understand quality and matching. Do they come back and buy more? Did the project deliver on time? Was the communication between the buyer and seller smooth? how many dialogues and revisions were needed before a successful delivery. The recently introduced fast response badge is an example of how unlocking metadata can create a meaningful impact on conversion rates. We have built a lot of deep tech over the years to extract those signals, and there is so much more to do. We are also constantly expanding the capabilities of our marketplace to facilitate larger and more complex projects with longer engagement duration between buyers and sellers. During the quarter, we rolled out project briefing capabilities to allow buyers to describe projects with complex scope in a structured way. We can then feed the data into the matching engine to provide our best recommendations. This is designed to allow us to understand post-order satisfaction with more context to enrich the data and the algo. This is the magic of Fiverr. The second area of investment is our upmarket motion. Among our buyers, we have identified tens of thousands with a spending capacity significantly larger than the average spend on our marketplace today. It is mission critical for us to unlock this potential, and that is why we created Fiverr Business. With Fiverr Business, we are a lot better at identifying those customers, understanding their freelance hiring needs, listening to their pain points, and mapping out key product gaps. In the last 12 months, we started to implement a number of initiatives with Fiverr Business in order to land, expand, and improve the overall experience for those business buyers. This includes streamlining onboarding flows, creating a talent-focused browsing experience, stepping up the vetting process, and developing new marketing channels. We have seen early success in those initiatives. The number of buyers who spend over $10,000 per year increased over 60% compared to a year ago. And Fiverr business today already represents over 5% of total marketplace GMV. We have barely scratched the surface. There's so much potential ahead of us. We believe the online freelancing market opportunity is vast and is in the early innings. As freelancing workflow moves online from offline, just as e-commerce has over the last two decades, we believe the cyber market base is ideally positioned to empower this workforce transformation for both businesses and freelancers. While the global economy goes through cycles, and so does SMB spending, the consideration of incorporating a freelance workforce as part of the company's strategy talent planning is only going to become more relevant and more urgent. In fact, We see an emerging opportunity for freelancers as a viable alternative to fill talent gaps and provide cost-saving for businesses that are cutting costs on full-time employees. A recent survey we conducted in partnership with Censuswide indicates that over 80% of businesses are implementing hiring freezes or layoffs, and around half of them plan to use freelancers to fill these gaps. will be in a strong position to capture these opportunities when the time comes. With that, let me turn the call over to Ofer, who will share some financial highlights.