What Happened?
Shares of online freelance marketplace Fiverr (NYSE:FVRR) jumped 24.3% in the morning session after the company reported a "beat and raise" quarter. Third-quarter earnings beat analysts' revenue, EBITDA, and EPS expectations. Efforts to improve value-added services paid off as take rate improved and the average spend per buyer rose 9% from the prior year. Notably, Fiverr introduced an AI-powered matching tool for buyers with complex job requirements. As a result, the number of buyers spending over $10K on Fiverr also increased.
Given these improvements, the company was able to comfortably raise full-year revenue and EBITDA guidance, which put the business on track to meet and perhaps exceed the three-year targets on Adjusted EBITDA and free cash flow provided in the previous quarter. Holding aside expectations, its number of buyers declined, which is a negative. Overall, though, this quarter was solid.
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What The Market Is Telling Us
Fiverr’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. But moves this big are rare even for Fiverr and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 17.9% on the news that the company reported a "beat and raise" quarter. Second quarter earnings results beat analysts' revenue, adjusted EBITDA, and EPS estimates. The company also slightly raised full-year revenue guidance, showing that topline trends are better than just a few months ago. Overall, this was a solid quarter for Fiverr.
Fiverr is up 10.1% since the beginning of the year, and at $28.84 per share, it is trading close to its 52-week high of $30.50 from February 2024. Investors who bought $1,000 worth of Fiverr’s shares 5 years ago would now be looking at an investment worth $1,278.
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