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spk01: you'll see that. You'll obviously see that in active buyer probably first before spend per buyer. In terms of your question about AI, you're right. It's very hard to understand what categories or how categories might be influenced. I think that there's one principle that I've shared in my opening remarks, which I think is very important, and this is how we view this, which is that AI technology is not going to displace our sellers, but sellers who have better grasp and better usage of AI are going to out-compete those who don't. And this is not really different than any meaningful advancement within technology. And we've seen that in recent years. Every time when there's a cool new technology or device or form factor that sellers need to become professional at, those who become professional first are those who are actually winning. And we're seeing the same here. So I don't think that this is a different case. It's just different professions, which, by the way, is super exciting.
spk00: Our next question comes from with JP Morgan. Your line is open.
spk08: Hey, this is Wes on for Doug. Thanks for taking the questions. You know, active buyers have been relatively stable. Could you maybe just parse out kind of what you're seeing in different cohorts, rather, you know, larger businesses versus small or higher value versus lower value? And then secondly, on margins for the year, you know, how should we think about seasonality of expenses? Would you be pulling back on marketing and things like that? Thanks.
spk09: This is Ofer. I think on the first question, I think I mentioned it earlier on the active buyer. Old buyer or old cohort seems to be very stable throughout the last few months in terms of attendance and spend. On the new cohort, We are focused over the last few years on the acquisition of what we call high value buyer, those who have bigger wallet by definition. And I think, as I mentioned earlier, we see more of this buyer joining the marketplace. Then on the second question, on the margin for the year, If you accumulate the quarter into the yearly guidance, you can realize that we anticipate EBITDA and margin are going to be better throughout the year. This is driven by more efficiency on the scale of the business. If you go back the last few years, I think we are standing behind everything everything we say in terms of leverage and efficiency, and this is the plan for the rest of the year.
spk00: Our next question comes from Matt Farrell with Piper Sandler. Your line is open.
spk04: Thanks, guys. Congrats on the launch of Fiverr Enterprise. I understand it's a longer-term play on moving up market, but what are some of the near-term goals or targets around the adoption of the integration with some of your larger customers?
spk01: Good morning. Thanks for the question, Matt. So essentially, we addressed this a couple of quarters ago, and we said that we were undergoing a process of integrating stoke talent into our product, which has tremendous amount of benefits because putting all of our suite of business solutions, business tools, allows us to actually benefit from the power of the brand, a unified brand. And that allows us to enjoy the brand equity that we have as a company and expand into larger accounts. Now, a lot of these customers are actually customers of one of our different products that might be Fiverr or Fiverr Business. And by creating another tier, the Fiverr Enterprise allows us to actually identify those customers and smoothly transition them from one product to the other, maximizing their potential to use one of our products.
spk09: I will just compliment on Mika, and I think now with the integration, one of the focuses is go-to-market and our ability to create good unit economy that will allow us to expand later on. So those are the KPI for enterprise for the near term.
spk04: And maybe as kind of an adjacent question, you talked about the ability to drive new buyers through partnerships as a new channel of acquisition. Could you just maybe walk us through an example of that from both maybe an economics perspective, but also what a relationship might look like through a partnership? Thanks, guys.
spk01: Yeah, I think these are probably partnerships that we're going to announce later on in the quarter. I can potentially call out at least one of them, which is our partnership with Amazon. Since this was not announced yet, I'm not going to get into the details of that partnership. But obviously, we're excited about the opportunity to cooperate with very large, well-established brands, that can benefit from everything we have to offer. And again, given the fact that we haven't announced, you know, any one of these partnerships yet, I'll have to ask you guys to be a little bit patient until we do. Thank you.
spk00: Our next question comes from Andrew Boone with JMP. Your line is open.
spk06: Good morning and thanks for taking my questions. I wanted to ask about international. It sounded like Germany was seeing strong traction given some of the localization efforts there. More broadly, can you talk about localization on a global basis and where you guys are in the process of taking some of those learnings and applying them to other markets? And then secondly, on brand, really positive stats you guys put out there in terms of leading brand awareness. Can you talk about just the brand investment? Can you help size it for us? And then how much more growth do you guys expect in terms of additional investments to increase brand? Thanks so much.
spk01: Hey, Andrew. Thanks for the question. In terms of international expansion, so this year our focus is UK, Germany, and France. And it's really focused on the efficiency of our platform there. And also, some of it is to address also macro conditions that we're seeing in Europe. Obviously, everywhere we focus and invest, we make our product better. And thus, the activity within those countries is increasing. And I think that focusing on those three countries allows us to create a more tight playbook that allows us to really drive improvement, but also then use everything we learned for other countries as well. In terms of the brand, it's obviously small compared to the performance marketing. We've been very consistent. I don't believe we've ever broken down exactly what is the ratio between performance and brand. And it varies between quarters. But again, it remains consistent and again, smaller, obviously, than our performance. I think that that balance of playing with these two levers allows us to enjoy the best of two worlds and Obviously, they contribute to each other. Overall, the majority of freelancing spend is still offline. So driving awareness and getting buyer from offline to online has lots of room for growth. And if you look at the total addressable market, And just a number, even if you don't go into the mid-market and definitely not to SME or enterprise, just in the SMB market, the number of customers we have, which is pretty large, is still very small in comparison to the total available number of SMBs. So we definitely see a tremendous amount of opportunity there to move the offline activity to the online. And brand is one of the tools to do that.
spk00: Our next question comes from Eric Sheridan with Goldman Sachs. Your line is open.
spk07: Hi, this is Ben Miller on for Eric. Thanks for taking our questions. I was just wondering if you could talk about any quality or productivity gains that you've been able to track among freelancers because of Gen AI tools. And then second, I just wanted to see if you could expand on some of the initiatives you talked about in the letter to drive better matching and conversions.
spk01: Hey, Ben. Thanks for the question. So in terms of productivity, I think that I called out the general principle, which is our sellers are super, super quick to adopt any new technology. And so if, I don't know, ChatGPT allows them to come up with draft ideas for articles, or to summarize complex topics, or anything that might make their work slightly simpler, so they can pick it up from that point and put in, do fact-checking, put creative writing, authentic writing into it, and make it much better, then they use it. But again, this is not, I mean, when Adobe released the new version of Photoshop, Everybody runs to learn it and make the most out of it. AI is not different in that sense. It's more sophisticated in some ways. But it's an incredible tool, and our sellers are among the first, if not the first, to actually take advantage of it. In terms of ways or initiatives... At this point, I'm not going to provide more details, obviously, for many reasons. Some of them are competitive. But we'll be happy to announce them once they're out.
spk00: Our next question comes from Bernie McTernan from Neatham and Company. Your line is open.
spk05: Great. Thank you for taking the questions. Just wondering if you're seeing new or existing customers engage with the new AI service areas and just, I know you're pulling back on some performance marketing spending, but anything you're doing to raise awareness that those tools are available? I know that there's the category on the homepage, but anything you're doing to raise awareness that Fiverr is a place where people can engage with AI tools?
spk01: Yeah, sure. So essentially, by adding specific vertical into our catalog and introducing more categories is definitely the first step. A lot of what we do in communicating with our customers is a second way of doing it. I think there's a lot of education that we put in place in our conversation with our community, both the businesses, and the freelancers, and we definitely promote the usage of anything that can do, that can improve the lives of both our customers and our talented community and make the most out of it. I would say that because of the exposure that this has been receiving, they seem to be educating themselves pretty fast. And obviously, there's also differences between how smaller businesses are adopting it and how larger businesses are adopting it. And I think that this, you know, it also opens up really interesting opportunities with the different segments of customers.
spk00: Our next question comes from Marvin Fong with BTIG. Your line is open.
spk03: Good morning. Thanks for taking my questions and congrats on the nice execution in the quarter. So two questions, I guess similar to the last question. So I know it's early days in AI, but are you seeing that the buyers who are purchasing those services are skewing towards new buyers for you guys? And also, are you noticing any other differences with these buyers, perhaps the spend per buyer different or the makeup between SMB and larger enterprises, just any color there. And then second question, on the active buyer count, I know in the letter you referenced that larger cohorts in the past, just because of the natural churn is sort of depressing smaller cohorts that you're acquiring right now. So I'm just curious, when does that affect kind of normalized and stabilize such that the larger cohorts in the past no longer becomes a significant headwind to your active buyer account. So any color there will be great as well. Thank you.
spk01: Thanks for the questions, Marvin. Well, as to your first question about AI services, I think it's too soon to call any specific trends. Maybe the short answer is probably no to both your questions. Are we seeing differences between new and repeat or the SVB? But again, until we can call out something that seems to be stable or a trend, we'll have to wait. We're obviously tracking it very closely.
spk09: And then, Mervyn, on the second question, on the active buyer count front, we haven't mentioned this headwind throughout this discussion or any of the documents, which is an indication that the lapping period is actually about to be over. So we don't expect any material effect from old cohort, big cohort. to impact the future headcount of bio.
spk00: Okay. Our final question comes from Rohit Kulkarni with Roth Capital Partners. Your line is open.
spk02: Hey, thanks for taking my questions. One is on this comment that you have, very encouraging, new buyers coming from non-paid channels. Maybe peel back that a little bit. Maybe talk about how sustainable that is. Maybe that creates a more long-term halo in how much leverage you can have in your overall marketing spend. And second is, just on the 23 guide, also encouraging that you are narrowing the range, tweaking it higher. I would view that as a sign of better visibility, confidence. Maybe talk about how... The overall past three months and into May have progressed. That gives you greater confidence despite what we are seeing in the market around visibility or around external forces still affecting the drivers in a lot of internet companies as such. So we'd love to hear your comments on both these things. Thanks.
spk01: Sure. Hey, thanks for the questions. So in terms of organic channel, you know, if you look at the organic versus paid, the majority of our new business is coming from organic. And that has been the case, which is great because, and that ties in back to the efficiency of our marketing. Meaning that, you know, despite the fact that we've been increasing our investment in paid marketing, you know, the organic channels continue to grow along with it, which means that the viral co-efficiency of everything we do is high. And I think that if we think about moving into the future, we spoke about strategic partnerships. I think that this could be a source for further further traffic that is not paid, but again, too soon to talk about this. Hopefully, we're going to be able to talk about this in the next couple of quarters.
spk09: And then on the second question regarding guidance, we narrowed the range because we feel more confident as we look forward. Based on the outcome and the fundamentals that we've been seeing throughout the first quarter. When I say fundamental, I mean the cohort behavior, which continues to be very consistent with our expectations, and the top of funnel and the acquisition, which happened to perform very well. So the combination of both give us the confidence looking forward that we can raise at the midpoint or within the guidance of the previous Minister.
spk00: This concludes our Q&A. I'll now hand back to Michal Kofman, CEO, for any final remarks.
spk01: Elliot, thanks for moderating the call today. And for everyone participating, thank you for joining us this morning. And I hope you have a great day and see you soon in one of the next conferences. Thank you.
spk00: Ladies and gentlemen, today's call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines.
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