Fiverr International NYSE: FVRR reported third-quarter results above its prior guidance, supported by its services business and expense controls, while management said marketplace traffic pressures tied to changes in online search are expected to persist into 2027.
Revenue for the quarter ended Sept. 30 was $90.9 million, above the company’s July outlook of $80 million to $88 million. Revenue declined 15.8% from a year earlier, reflecting lower marketplace activity, though growth in services revenue partly offset the decline.
CEO Micha Kaufman said the quarterly outperformance was led by the company’s services business, particularly AutoDS and other e-commerce offerings, alongside disciplined cost management. CFO Esti Levy-Dadon said adjusted EBITDA was $14.5 million, representing a 16% margin. Kaufman cited adjusted EBITDA of $14.9 million in his prepared remarks.
Marketplace Declines Continue as Higher-Value Work Expands
Marketplace revenue totaled $55.4 million, down 24.7% year over year. Fiverr had 2.4 million active buyers during the quarter, while average spend per buyer rose 12.9% to $373. The marketplace take rate was 28.2%.
Levy-Dadon said active buyers declined 25.8% on a trailing-12-month basis, primarily because of compression in lower-value transactional work as well as traffic and demand pressure tied to changes in search.
At the same time, the company continued to shift toward larger projects. Projects valued at $1,000 or more represented 16% of completed-project gross order amount on a trailing-12-month basis, up from 15% in the preceding quarter. Programming and technology, along with graphics and design, were the strongest categories for $1,000-plus projects, with both posting mid-teens year-over-year growth.
Management said growth in those categories slowed during the third quarter because of top-of-funnel issues related to SEO disruption. Levy-Dadon said buyer spending is expected to continue rising, but at a slower pace as broad marketplace traffic headwinds affect transaction activity.
Management Focuses on AI Discovery and Matching
Kaufman said Fiverr is adapting to a shift away from traditional web search toward AI assistants and agent-driven discovery. He said organic clicks are declining across the web and customer-acquisition costs are rising for companies reliant on conventional search.
“It is not a talent problem. It is a funnel problem, and funnels can be rebuilt,” Kaufman said, pointing to the company’s freelancer community and its efforts to improve matching and create new acquisition channels.
Fiverr has launched public APIs, command-line interfaces and MCP integrations, and is now available within Claude and ChatGPT, according to Kaufman. AI-sourced gross merchandise volume from first-time buyers increased approximately 64% from the prior quarter.
Kaufman said traffic coming from large language model channels is lower in volume but higher in quality because customers arrive with more developed intent. He said Fiverr’s economic model remains unchanged for its AI integrations, which the company views as a new top-of-funnel channel.
The company also launched Mira, an AI headhunter designed to turn a buyer brief into a project scope and talent match. Kaufman said a Mira introduction converts at the same rate as a standard Fiverr conversation, while median order value for the headhunter experience is five times larger. Cancellations for first-time Mira matches are about one-quarter lower, he said.
Fiverr plans to expand Mira selectively during 2027, rather than deploy it uniformly across every customer interaction. The company expects the tool eventually to operate across the buyer journey, including initial conversations, order management and mobile experiences.
Services Revenue and Cost Controls Support Results
Services revenue rose 3.4% year over year to $35.5 million and represented 39% of total revenue. The upside was led by AutoDS, where a major e-commerce campaign launched in late August and performed better than expected.
Levy-Dadon said the campaign is a partnership with a large e-commerce player and is expected to continue through the fourth quarter. Kaufman said AutoDS is benefiting from multiple drivers, including its e-commerce software tools, AI content-generation tools for store owners and efficient marketing initiatives.
Non-GAAP operating expenses fell to $62.2 million from $66.7 million a year earlier and $65.3 million in the second quarter. The largest savings came from research and development and sales and marketing, according to Levy-Dadon. She said Fiverr expects to operate with a lean cost structure through the fourth quarter and into 2027, with operating expenses projected to decline year over year next year.
The company ended the quarter with $316.2 million in cash and investments and generated $9.4 million in free cash flow. Levy-Dadon said Fiverr’s capital-allocation priorities are funding its marketplace transformation and preserving strategic and financial flexibility. She added that mergers and acquisitions are not currently under consideration.
Full-Year Outlook Raised, Though 2027 Margin Pressure Expected
Fiverr raised its full-year 2026 revenue outlook to $374 million to $380 million, from its prior range of $356 million to $372 million. The company also increased its adjusted EBITDA forecast to $61 million to $65 million, compared with prior guidance of $52 million to $62 million.
For the fourth quarter, Fiverr expects revenue of $80 million to $86 million and adjusted EBITDA of $6 million to $10 million. The outlook assumes continued strength in e-commerce services but ongoing declines in marketplace traffic.
Management said it expects the movement from search-driven discovery to AI-driven discovery to produce a steeper marketplace traffic decline through 2027. While lower operating expenses should help offset some of that pressure, Levy-Dadon said the company anticipates downward pressure on adjusted EBITDA margin in 2027. Fiverr plans to provide full 2027 guidance with its fourth-quarter results.
Fiverr also disclosed that Jingjin, who had been expected to relocate to Israel for the chief business officer role, stepped down after deciding not to move her family. Kaufman said the company’s search for a successor is well advanced, while he and Levy-Dadon oversee the business directly in the interim.
About Fiverr International (NYSE:FVRR)
Fiverr International Ltd. operates an online marketplace that connects businesses and individual customers with freelancers offering digital services. The platform covers categories such as graphic design, digital marketing, writing and translation, video and animation, programming and technology, music and audio, business services, and consulting.
Fiverr's marketplace is designed to support transactions between buyers and sellers, including service discovery, communication, payments, and delivery.
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