Freelancer platform Fiverr saw its revenue rise 6% year over year, to $94.7 million, in the second quarter of 2024 despite macroeconomic volatility.
In the company’s Wednesday (July 31) earnings report, Fiverr also announced its acquisition of AutoDS, a subscription-based drop-shipping platform. AutoDS, known for its product research, inventory management and automated fulfillment services, is set to enhance Fiverr’s eCommerce capabilities and introduce a new subscription-based revenue stream.
In addition to the acquisition, Fiverr launched a new profession-based catalog and hourly contracts, broadening its market reach and aligning with its strategy to evolve from a marketplace to a comprehensive platform offering talent access and software solutions.
Fiverr also completed a $100 million share buyback program, focusing on optimizing capital allocation to drive steady growth in free cash flow.
“We delivered solid results for Q2 and reiterated our full-year guidance,” Fiverr founder and CEO Micha Kaufman said during the company’s Wednesday earnings call. “While the SMB and freelancer hiring space remain volatile, we continue to execute with consistency and efficiency. At the same time, we are expanding our product portfolio through both organic and inorganic investments to create additional growth catalysts.”
The company’s active buyers dropped 8% during the quarter, from 4.2 million to 3.9 million. Spending per buyer, however, increased 10%, from $265 to $290.
Kaufman said the acquisition of AutoDS, which manages over 150 million products and serves tens of thousands of subscribers, supports Fiverr’s transition from a marketplace to a platform offering talent and software solutions. As the global drop-shipping market is projected to grow from $285 billion to over $2 trillion by 2033, AutoDS’s automation tools and extensive network will bolster Fiverr’s growth and digital service capabilities.
“Drop-shipping is a category that we’ve been seeing growth,” Kaufman said. “We had a very sizable community of people who either are offering drop-shipping or offer services related to drop-shipping. It allows us to double down and accelerate.”
One of Fiverr’s summer product releases is Neo, an advanced artificial intelligence-driven tool designed to assist customers in accurately defining their projects and matching with freelance talent. It combines technology and algorithms to offer a personalized recruiting experience, providing an alternative to traditional human recruiters.
“For new customers, Neo provides the guidance you need to navigate Fiverr’s massive catalog of services and talent,” a Fiverr shareholder letter said. “For long-time loyalists, Neo is trained to understand your preferences and provide you the most relevant recommendations for your next project.”
“Having Neo is like having a strategist by your side when it comes to product briefing,” the letter added. “It transforms customers’ ideas into a structured brief that not only looks good, but also delivers better business results.”
Kaufman said during the call, “We are in the early innings of releasing the full potential of AI in our marketplace.”
Fiverr experienced a traffic pullback in June and July, particularly in programming and tech, reflecting broader macroeconomic challenges and persistent weakness in small- to medium-sized business (SMB) sentiment. Despite a 7% year-over-year decline in U.S. job openings and a 17% drop in the information sector, AI continues to drive growth for Fiverr, particularly in complex services, and is expected to be a growth driver moving forward, Kaufman said on the call.
“The hiring space is not seeing its brightest moment right now,” Kaufman said, but cautioned, “what we’re seeing is something we can’t call a steady trend.”
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