Fiverr International Ltd.

Thank you all for joining. I would like to welcome you all to the Fiverr Q4 fiscal 2022 earnings conference call. My name is Brika and I'll be your event specialist operating today's call. After the speaker's presentation today, we'll conduct a question and answer session. And if you would like to ask a question at this time, please press star then one on your telephone keypad. If you change your mind and would like to withdraw your question, please press star then two. And for operator assistance at any point, it's star zero. Thank you. I would now like to hand the call over to our host for today, Jinjin. So, Jinjin, you may begin when you're ready.

Thank you, operator, and good morning, everyone. Thank you for joining us on Fiverr's earnings conference call for the fourth quarter that ended December 31st, 2022. Joining me today on the call are 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 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 Factor section in Fiverr's most recent Form 20F and other findings for the SEC. During this call, we'll be referring to some non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margins. A reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP measure is 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. 2022 was a unique year. In response to the shifting macro environment resulting in headwinds to the overall freelance demand, we quickly pivoted the company to tighten our focus on efficiency and profitability. As an entrepreneur, and knowing how huge a long-term opportunity is in front of us, I must admit this wasn't easy. But it was absolutely the right thing to do. Not only does it help us navigate through the macro cycle and maximize long-term shareholder value, but it also brings a new level of energy and velocity across the company. We are more focused on fewer, but more impactful projects, making faster decisions and feeling closer as a team. All these efforts led us to a strong finish in 2022. Revenue for Q4 was $83 million up 4% in line with our expectations. We delivered our strongest quarter ever in terms of adjusted EBITDA above the top end of our guidance and representing an adjusted EBITDA margin of 11%. Active buyers were 4.3 million stable with modest growth while we reduced overall marketing spend and improved marketing leverage. We are driving an increasing amount of business from non-pay traffic with strong brand awareness and continued engagement among existing customers. Repeat customers now represent 63% of our core market-based revenue compared to 59% in 2021. Growth of large wallet customers also continue to be robust Those with an annual spend of $10,000 or more grew 29% year over year, significantly higher than overall buyer growth. In 2023, you should expect us to continue strengthening our core business and operating at an intensified level of focus and efficiency. We will continue accelerating our pace towards long-term adjusted EBITDA target of 25%. Given the current macro environment, we believe this would put us in the best position to optimize our overall growth and profitability profile. The long-term secular trends toward remote work and flexible workforce remain intact, so we believe it's just a matter of time for overall freelance demand to rebound. When that happens, we expect to return to a strong growth trajectory while being a much more profitable company than before. The tech industry is also at a unique time with a significant amount of layoffs among tech and knowledge workers. Many have turned to freelancing as a temporary or permanent career choice. At Fiverr, we are laser focused on making Fiverr the best platform for independent talent to build business and earn a living. Active sellers in 2022 reach an all-time high with a record level of new sellers joining our platform. Fiverr's unique e-commerce platform gives freelancers the freedom and efficiency to take orders from buyers instead of bidding and chasing after job opportunities. We also operate the largest and most comprehensive digital services catalog with over 600 categories at the end of 2022. In recent years, we expanded our product offerings to include promoted gigs, seller plus and cash advanced programs to provide freelancers with a dynamic set of advertising membership and finance tools to build their business. All of these are the reasons why Fiverr organically attract freelancers of all skills and across the world to our platform. and also why we can command an industry-leading take rate of 30%. Now I want to spend a minute talking about AI. With the emergence of AI tools such as ChatGPT, many have questioned whether Fiverr's business will be impacted or even replaced by AI technology in the future. I'm actually very excited about the possibilities of AI. Fiverr will uniquely benefit from AI in these aspects. First, Innovation always creates more jobs, not less. The recent AI tools presented to the world in the past few months have demonstrated a significant step function in the evolutionary progress of technology. However, as much as these tools have incredible power, what really matters is how humans will make use of these tools to create inspiring creative work for other humans to consume. As a result, it will bring many new professionals related to AI that we can't even imagine today. In fact, these talents are already coming to our platform. We made a number of public announcements in January to share the volume of interest we see for AI-related services and have once again demonstrated our swift response to market demand by introducing a series of new categories to address it. Second, AI tools will bring a lot of productivity improvement to our talent community, and Fiverr is uniquely positioned to democratize and distribute these tools to the freelancer community who often lack access and resources to deploy those technologies. Third, digital service is highly fragmented, unstructured, and complicated, so matching buyers and sellers through an e-commerce model is a fairly difficult product challenge. With AI technology, We can unlock the long tail of data we have and drastically improve the overall search, browsing, and matching experience. We are already working on some of these ideas. With the macro headlines dominating the investor community, it is sometimes easy to forget how big the opportunity in front of us is. Nearly 40% of the US workforce are already freelancers of certain capacity today. and that will reach over 50% by 2025. Engaging a dynamic workforce that combines full-time versus independent workers and onsite versus remote is increasingly becoming top of mind question for businesses of all sizes. Fiverr is highly differentiated from other freelance platforms. We have built a two-sided marketplace with the largest selection of digital services a brand that people around the world admire, and a passionate community of over 4 million businesses and hundreds of thousands of freelancers. In short, we have an enviable foundation with scale, competitive modes, and the best-in-class business model. Yet, we are still in the first innings when it comes to unlocking the full potential of Fiverr. To do that, and especially under the current macro, What becomes clear is that we need to give the core marketplace much more attention and take a more focused approach and prioritize fast, flawless execution. We have set three straightforward priorities for 2023. First, improve comparability in the marketplace. With hundreds of thousands of sellers and millions of services listings, we must deliver world-class search and discovery technology to surface exactly the right breadth and depth of inventory tailored to each buyer. Second, create differentiated category experiences. With so many different types of digital services offered on our market base, some visual and others non-visual, we need to provide sellers with robust tools to express their talent and their work. Third, improve engagement and retention. There is tremendous potential to grow our wallet share among our buyers. And to do that, we need to make sure that the Fiverr brand delivers trust and reliability throughout the buying experience. Brand awareness for Fiverr is high, and so is our NPS core. This gives us great strength upon which to build And we need to continue to build our platform as top of mind choice for our buyers when they have a need. We are already working with urgency towards executing these initiatives. In conclusion, we are extremely encouraged by the progress we made last year to strengthen our focus and efficiency within the company. In 2023, we are confident that our nimble, more cost efficient structure can support the work we need to do to win. We expect to attack exciting growth opportunities while driving adjusted EBITDA growth at a faster pace than before. With that, I'll turn the call over to Ofer, who will walk you through our financial highlights.