All right. We're gonna go ahead and get going. I'm Douglas Anmuth, JP Morgan Internet analyst. We're pleased to have with us Fiverr's CFO, Esti Levy Dadon, and Chief Business Officer, Jinjin Qian. Fiverr is a global marketplace that connects freelancers and businesses for digital services in more than 750 skilled categories. In the past 12 months, almost 3 million customers bought a wide range of services from freelancers working in over 150 countries.
Esti recently became CFO in March and has been in several finance roles at Fiverr since 2016, most recently as EVP of Finance. Jinjin recently became Chief Business Officer in March and has been in several roles at Fiverr since 2018, most recently as EVP of Strategic Finance. Welcome.
Thanks for having us.
All right. Maybe we'll start kind of big picture. You talk about the U.S. freelance market is nearly $250 billion of TAM, and then including international, it should be much bigger. AI is also reshaping the nature of work as it expands kind of project ambition and compresses task duration. How do you think about the TAM evolving in an AI-enabled economy?
It's an interesting question because, as you said, AI is really changing the nature of work and the skill landscape across the talent. We see the simple jobs on the marketplaces getting less demand, whereas there's explosive demanding AI-related services and complex projects as human is needed for more sophisticated strategic outcome-based work.
I would say from a long-term perspective, there's definitely going to be continued growth in the TAM because, you know, the work is going to become more fragmented as human gets plugged into the agentic workflow. Freelancers offer this tremendous amount of flexibility, elasticity, and also, you know, be helping SMBs stay at the forefront of the technology. We definitely believe there's a significant growth runway for, you know, the role of freelancers and the role of Fiverr.
Okay. Great. When you think about kind of TAM and how that expands and evolves, what are some of the key friction points that remain to unlock this opportunity, particularly as you transition from kind of a transactional marketplace to a more, kind of trusted work platform?
I think there are a few things. One is, the platform was built like, you know, over a decade ago, where it was, really, optimized for simple, like voiceover, you know, blog post writing type of jobs.
As jobs gets more complex, we are going through this transformation to really upgrade the underlying data infrastructure and the matching infrastructure to enable a more sophisticated matching between the skills and the talent. That's one. Second is, you know, as any technology shift, you are gonna see demand of the new skills leads the supply of the skills, especially we're talking about this drastic shift.
We definitely see a lot of, you know, AI-related needs there, where the freelancers are going through this upskilling, you know, adapting to the new and adopting the new workflow, all of that. As a platform, we're helping them to go through this transition as well. You are going to see this, you know, mismatch in timing.
Overall, I think it's a huge opportunity because every time you have supply, you know, skill gaps and shortage, this is where marketplace really plays a role in empowering both sides.
Okay. Great. The company's made some key leadership changes, as well as undergone a fairly significant restructuring over the past several months. Maybe you can just talk about how the changes sharpen accountability, accelerate decision-making as you execute this transformation.
I think we've been kind of going through upmarket for a few years now, and we've seen lots of progress in terms of upselling our existing customer base. That said, we realize that the world is changing, you know, much faster. To really, you know, become more relevant, we have to take a more drastic step and really leaning to the opportunity in a more, you know, aggressive way.
That's kind of why we did the, you know, changes both from, you know, the execution standpoint, also from a strategic pivot perspective to really be more focused into empowering the complex projects and the high-skill talent.
How do you think about kind of the right size for the organization?
I think we're in a pretty good spot right now. Obviously, you know, every organization is going through this AI adoption and becoming AI native. I think there's a lot of opportunities as we see it. You know, I think we kind of did the right transition, and we are always kind of the first to do these transitions in the market and really very focused on transitioning the workflows internally and also getting the talent that we needed to be there. Yeah, very excited.
Yeah, we removed some of the management layers so we can move fast.
What we're seeing now that when the team is focused and smaller, we can actually, you know, move faster.
Execute more.
Got it. Okay. Let's just dig into the kind of transformation more, which you've talked about as kind of multi-year and built around, like, four key pillars.
I think those are matching and product and go-to-market, and then operational.
Excellence. Maybe you can talk about how we should think about progress here over the next several quarters, and if you could kind of give us an update on where you are on each of those.
Sure. We're only two months into this. We're just started.
Yeah.
Already, you know, I think we're already seeing a lot of focus and momentum into this transformation. On the matching side, like I said, it's really focused on the underlying brain of the marketplace, where, you know, we are building a comprehensive knowledge graph to really capture all the data that, as a transactional marketplace, the proprietary data we have.
Historically, you know, we know we're only scratching the surface of unlocking the potential of the data, but now we are extracting the information from those unstructured data to enable the matching algorithms to really increase the conversion and the satisfaction rate from matching both sides. That's on the matching. On the products, you know, we see a lot of success with the Dynamic Matching and Managed Services Product.
We are doing a lot of the upgrade on the product experience from enabling, you know, higher complex jobs to collaboration surfaces, to also enable the talent to be able to onboard and manage their business in a more sophisticated way. 'Cause now when we were talking about high-skill talent, their need is very different from, you know.
The less sophisticated, you know, freelancers. That's on the product. On the go-to-market, we are doing many different things, opening new channels that historically we don't do much, things like account-based marketing. We're doing more social listening. We're being more creative, leaning into more targeted efforts to drive high-value projects to Fiverr compared to a, historically, a more broad-focused, volume-driven business.
Lastly, operation excellence is all about, you know, applying AI across org, from customer support to production, to data. There's a lot of projects there to unlock productivity.
Got it. Okay. Let's dig into a few of those a little more. Just on matching, you kind of talked about transitioning from traditional search to agentic matching. What does that mean? How far along are you in that vision?
It's all about ultra-personalization, right? Think about the traditional search is a pretty average experience, and you optimize based on keywords and impressions. Now, in the agentic workflow, you almost have this one-on-one kind of chat with ChatGPT, where every conversation is contextual. Every conversation is personalized. We're trying to leverage that LLM capability into the matching.
If you think about it, the amount of unlock you can do with a service marketplace is significantly larger with the physical goods because when you're trying to hire someone, it's very subjective. It's very contextual, versus if you're buying iPhone, it's a standardized product. We do see that LLM is a huge enabler for a service marketplace for us to really take it to the next level.
Because the transactions are happening in our platform, we have a lot of data now. Now with agentic, you can actually better, you know, understand and do the right matching because you really know the buyer from past experience, if you had, and the talent definitely from past experience that you have. Together with agentic, the matching is much better.
Okay. On go-to-market, you've talked about expanding into more AI native,
Distribution channels and enterprise partnerships. Maybe you can just talk about how you're thinking about integrations with LLM platforms. Is there anything meaningful coming out of that LLM source traffic, kinda contributing at the top of the funnel today?
Yeah, we are investing a lot into the GEO Technologies, you know, we've seen kind of really encouraging results in the last few months, where, you know, like, there's a lot of know-how into how to impact LLM organic search to really increase the relevancy and increase the brand awareness in the LLM channel. This is 1 area of investment. 2nd is we are one of the 1st, you know, partners to kind of participate in the ChatGPT, like, paid programs. We're also testing. Obviously I think it's very early for OpenAI.
Is in the process of getting built out. Like I said, we want to be kind of ahead of the curve and really be there. From a integration perspective, there's a lot of ongoing dialogue. I think this is a space where it's very dynamic. I would say most players, we haven't seen, like, significant traffic coming from these channels yet.
Just because everything is so new and early. Down the road, definitely it will be a very important kind of, channel.
Okay. All right, let's shift gears a little bit. Marketplace revenue has remained under some pressure, right? Broader softness just in the SMB, with SMB sentiment. Competition has recently called out some slowdown just around tariffs, energy prices, high interest rates. What are you seeing just in terms of macro, you know, kind of year to date?
Yeah, I think definitely both SMB and macro has been under pressure. We kind of called this out last quarter. I think we kind of always see this a little ahead.
players in the market. Nothing kind of new to call out since beginning of the year. I think we've it stayed relatively stable, and we're kind of executing according to the plan laid out from the beginning of the year. Definitely we saw similar trends, you know, kind of earlier.
Mm-hmm. Okay. When you think about, kind of how you're projecting revenue growth, for 2026 or revenue, you know, which is down some. How do we think about, you know, how much is kind of more self-imposed from the transformation that you're undergoing, and, like, deprioritization of low-end work versus some of those, macro characteristics?
I think we're trying to be very disciplined on the transformation.
I think part of the deprioritization is investing less into, kind of the local optimization of the low end, but doesn't mean we're doing things to hurt the existing business. Quite the contrary, we're trying to be very disciplined and let the, you know, what works continue to work.
Drive majority of the company efforts into developing and investing into the future opportunity. When we gave the guidance at the beginning of the year, we kind of factor in kind of a wider range of the guide to factor in the uncertainty in the, in the macro. Overall, you know, I think the guidance methodology and kind of the visibility we have into the year remains pretty consistent to what we did in prior years.
Okay. Let's talk more about AI. Just obviously the impact remains kind of just key debate for investors. How are you seeing clients engage in terms of AI-related work and any color just on how AI-related GMV is trending?
It's trending really healthily. I think, you know, after the initial AI, I would say, craze, I think we're seeing more and more customers realize that the human talent is needed for them to implement AI and really unlock the business impact of AI. We see customers take what they did on, you know, AI platforms and come to Fiverr to find experts to finish, get them to the finish line. Across the board, from AI development to, you know, automation workflows, all of that is, like, very popular, you know, three-digit growth.
High double-digit growth, things like that.
Okay. Are there particular categories or services where you're seeing, you know, overall traction stand out more?
Yeah. I think AI development is kind of one of the bigger categories,
within AI. automation, you know, all the Zapier Make very popular. A lot of the content creation also popular. Marketing, another area.
SEO, GEO, you know, marketing copies and marketing automations, all very popular.
Okay. Just in terms of agents, how do you think about implementing agents on both the buyer side, and then also for freelancers to improve the overall experience?
I think agents are, you know, today it's everywhere. You know, we haven't really done a lot of integrations, but we know both sides are, you know, deeply plugging to all these agent tools. For us, I think agent is what I call in the collaboration product pillars, right? Where it is an important layer to enable workflows and enable our buyers and sellers to work with each other more efficiently.
But it's not the core moat of the marketplace, which lies within the human connections. Then agent could be a useful top-of-the-funnel tools. It could be a useful, you know, retention and monetization tools.
It has to anchor around the core human connection, which is, you know, Fiverr's, you know, core proposition in the AI world.
All right. Let's talk about top line drivers a little bit. We talked a little bit about GMV. We are seeing active buyers decline, offset by strong growth in spend per buyer. I know the transactions above $1,000 grew double digits in 1Q. Maybe you can talk about what that path looks like for high-value work to become a larger portion of GMV.
Yeah, we are already seeing GMV from over $1,000 growing double-digit year-over-year and, you know, the goal is through this transformation they are going to become majority part of the business. From a buyer perspective, I think the metrics will be under pressure in the near term just because from a, you know, buyer count perspective, we're carrying kind of a large population who's kind of focused on the smaller side.
That said, I think as we go through this journey, we will provide more clarity on what we're seeing in terms of the larger buyers and larger projects. That'll hopefully give more color to investors on kind of the trends and the trajectory we're seeing there.
Okay. What are some of the key investments that are required, just when you think about kind of increasing that mix of $1,000 plus jobs, what are the key investments you need to make on your side?
I think it's around the core pillars we talk about. You know, the underlying brain, which is the matching, the experience layer, which is the product, and then the go-to-market, which is how do we scale with strong unit economics. I think these three layers will together get us there.
Okay. Services revenue grew north of 50% last year. We know it's gonna exit at a low single-digit growth rate in 2026. Maybe you can just talk about that path and kind of trajectory through the course of the year.
Yeah, we do expect the services revenue growth rate to come down Q2 and then continue into second half of the year, largely because of the lapping of the acquisitions and also just the lapping of some of the investment we did last year around the modernization programs, which we did a lot of expansion last year. This year this is not going to be the core of the transformation. Yeah, I think overall, really focused on driving GMV re-acceleration and high-value projects, you know, acceleration with the plan.
Okay. Can you just talk about current Seller Plus subscription penetration, how you think about kind of where you are today, how much room there could be as you drive more value for sellers?
It's a really healthy program. I think We had a really nice ramp in the last two years. I would say it's at a good spot.
Where we've got a very core strategic seller pools who are, you know, very active in the program. Now, I think it's kind of into a more relatively mature and stable growth at this stage compared to the previous kind of early expansion period. expect the program continue to be healthy, but it wouldn't kind of ramp at the same rate compared to previous years.
Okay. All right. I guess just as you think about 2026, we know this kind of transformational year, positioning for growth in 2027, I know it's early, but any kind of view on what normalized growth looks like on the other side?
I wish I can give you a golden number. Obviously, you know, you've known us for a long time, and you've known Micha for a long time. I think growth is always top priority, and for us, you know, really driving growth is top of mind, and I think labor market is an area where the TAM is so large, and we're going through this shift. We really believe we have a unique right to win here and kind of really investing into that.
Definitely, you know, not going to be grow at the current rate.
Okay. Let's talk about profitability a little bit. You've guided to 18% EBITDA margins at the midpoint for 2026, the core business at around 20%, and then 2 points of drag just around transformation investments. If you can just talk more about some of those investment areas and kind of how you think about overall margin trajectory.
Yeah. I think in 2026, as you said, this is the transformational year. Investing on all of the pillars that Jinjin said, it's mainly about hiring that will pick up during the year. Generally speaking, the marketplace is healthy, is generating healthy cash flow. Now, as for the future, we plan to invest in the transformation, but also to be very cautious on the bottom line. Not to sacrifice the bottom line in the future, but And invest in the top line, as said, very disciplined.
Okay. You kind of previously targeted 25% margins in 2027, I know that was a little while ago. I guess just any, again, kind of early, any view on just how you think about what the right long-term margin framework is?
25% is still the long-term EBITDA target.
Given the transformation that we're going through, it will takes us more time to get there. It's still definitely the target.
Okay. all right. Just thinking about capital allocation, I think you have about $60 million remaining on the buyback authorization. You know, you have been active in different quarters, recently, but maybe you can talk about kind of thought process there.
From capital allocation perspective, number one priority is growth of the business and investment into the business and being able, you know, to execute a transformation. We believe this would really bring the highest value in the long term. We've been doing buyback in the past. We have an authorization, as you said, $60 million. We'll continue to do that, but on a thoughtful manner. On the M&A side, from capital allocation perspective, we're always opportunistic, but nothing currently to call out. Only if something makes sense to us and support the strategy, we'll go for it.
Okay. Then just on going back to AI for a minute. Just when you think about how AI is changing how companies work, what stands out to you just in terms of some of the limitations around, you know, traditional staffing and hiring models that you're, you know, kind of ultimately much better equipped to handle?
Yeah. I think, you know, we kind of pioneered this outcome-based, project-based hiring many years ago. You know, in some argument, like, we're kind of ahead of the market. Now, with agentic, I think everyone's talked about this outcome-based and which is really fitting to kind of Fiverr's model. If you think about the future agentic workflow, you're gonna have, you know, agents doing 80% of the work and human gets plugged into the 20%. You know, you have agent, and a human comes in, and then agent continues.
The outcome-based, like, model that Fiverr has is much more seamlessly can get plugged into this agentic workflow, where we see the scope of work, we see the price, we see the efficiency and the quality, and that gets us, you know, really aligned with agentic workflow, which is very hard if you think about job board or the traditional hiring process. Yeah. That's definitely.
The data we have is, you know, we kind of build this wealth of transaction data is almost the training data with evaluation with it. Like this is part of what we're investing with this transformation, is to unlock that potential.
Yes. To create the upmarket flywheel, you know, that worked for us for the low transactions, to recreate that in more complex work.
Okay. Got it. Okay, maybe just last one. Anything that you think is maybe misunderstood or kind of underappreciated, either about the company or the opportunity in the industry?
I think there's this general fear about AI's gonna, you know, take over all of our jobs, and you don't need human anymore. I think this is probably overdone, in my opinion, because at the end of the day, for any business to succeed, if everyone have the same access to the same AI models and, you know, human is still the, you know, differentiation. We really hold that view, and we are starting to really see it from the activities on the marketplace. I think this is a part that the market doesn't fully give us credit for.
Okay. All right.
Yeah. Hold on. Thanks.
Cool.
Cool.
Thank you.
Yeah.
Hi. Thanks for the presentation. Thank you to JPMorgan for the forum. I've looked at this sector quite a bit. I have a number of questions, one of which is, we're living now in a siloed world where countries are putting up borders. Seems to me it might make it increase the value of accessing labor markets synthetically through marketplaces like yours, where we can find specialist pools of labor around the world.
I was wondering whether that's, it seems to me that would be probably a net positive rather than a net negative in a siloed world. I was also interested in, that's the first question. The second question was interested in how you add value to your, the labor pools that you address.
Whether you offer them services, benefits, other things that they need.
Particularly in the independent, employment market.
Mm-hmm. Mm-hmm
As well as getting people paid.
Whether you link in with good companies like Wise, Revolut. In order to efficiently pay people in different currencies.
As you're, I would assume, inherently, sort of a multicurrency, multi-country, business model.
Yeah, definitely. I think, I think Douglas said in the introduction, we are global marketplace. We cover almost every corner of the world, over half of our transactions are cross-border. It's not always, you know, from developing developed countries hiring developing. There's the other way around as well, depending on the use cases. We do see a very dynamic cross-border kind of a marketplace.
On the payment side, I think we cover, you know, you know, a basket of currencies, and we really enable both the customers to paying their local dollars and local currency, and also the freelancers to get paid in their local currencies. We provide quite a few range of, like, financial products to help them manage their business better. We've also done a lot of learning and education for the community.
I think community is a big part of how Fiverr is different. We have, you know, local communities in, I think, dozens of cities who runs, like, hundreds of events annually. Especially at a confusing time like now, like, freelancers are very lonely profession, right? They don't really have a company. They don't have teams. Fiverr is kind of their, quote-unquote, "home." Like, we help them navigate the current environment.
We have on the benefits side, I think there's a lot of future opportunities. We do some partnerships in providing, like, insurance benefits. I think this is an opportunity where the whole industry really is going through. There's a lot of opportunity to do more for the freelancers. I think especially in the U.S., I think not much, it's hard to be a freelancer.
Would you consider doing it with, like, a company like Deel, where you bolt on with them? Or, on currency, would you work with Wise or Revolut? Or are you very inclined to try to build rather than partner?
We Deel is not super relevant for us because they do more EOR, like long-term contractors, EOR, like helping right enterprises to set up, like, external offices. Our freelancer engagement are more on-demand, so they actually directly, you know, pay through Fiverr. We don't necessarily need a Deel and 'cause we don't issue kind of a payrolls. Deel is more like a payroll provider.
They're PEO.
Right. Like, we don't Like, for our use cases, we don't necessarily need PEO.
Why not go with a micro PEO for short term?
It's a long question. Right now, we don't do long-term contractors currently. The most use case on Fiverr is very on-demand, project-based, few weeks kind of. Think about Uber. You know, you can plug in, plug out, you know, any week of the day of the week. This is the primary use case.
Thank you.
Yeah.
All right. I think we're gonna wrap up there.
Thanks, Douglas.
thank you, Jinjin. Thank you, Esti.
Thank you for having us.