The term "gig economy" gets thrown around a lot, but it's often not well defined. The term simply refers to a marketplace where employers hire temporary workers for short-term assignments as needed. While companies like Uber, Lyft, and DoorDash are most often associated with the idea, the best example to date has been Upwork, a platform for connecting temporary workers with employers.

However, a lesser-known company that went public last June is creating a marketplace for professional service "gigs," and it's growing like a weed. As remote work became the norm in 2020, Fiverr International (FVRR -0.09%) found itself in the sweet spot between businesses with short-term work that could be done from anywhere, and talented professionals scattered all over the world looking for jobs they could do without leaving home.

The stock is up 940% since the beginning of 2020, and the following five charts tell the story of a company that may keep up its winning ways even if things go back to normal.

Newspaper headline clippings reading "Gig Economy", "Quick Jobs", "Independent Contractors", etc.

Image source: Getty Images.

1. Active buyers

Active buyers -- those who have used the company's services recently -- are flocking to the site, and the trend has only accelerated during the pandemic. Growth in active buyers, which was 13% in 2018 and 16% in 2019, was already 32% by the third quarter of 2020. The company is adding features to maintain the pace, such as promoted gigs and the ability to break large projects into individual milestones. By making it easier to get work done on the platform, buyers will continue coming back for the jobs they need to get completed.

Bar chart with active buyers increasing from 1.8 million in 2017 to 3.1 million in the third quarter of 2020.

Data source: Fiverr. Chart by author. 

2. Average spend per buyer

Not only are there more buyers coming to Fiverr, but they are spending more when they log on. The average spend per buyer has increased every year and continues to climb, despite the increasing number of buyers on the platform. This is a great sign for continued growth. While many companies suffer once they expand beyond an engaged cohort of early adopters, these numbers show that new customers are continuing to embrace the platform to get more and more of their work done.

Bar chart showing average spend per buyer increasing from $119 in 2017 to $195 in the third quarter of 2020.

Data source: Fiverr. Chart by author. 

3. Revenue growth

That combination of more buyers who each spend more every year is producing accelerating revenue growth. Management estimates revenue for the full year 2020 will come in at $192 million. That will be 79% year-over-year growth from 2019. Compare that to the 42% growth for 2019 and it's clear that Fiverr is nowhere near slowing down.

Line chart with annual revenue increasing from $52 million in 2017 to $192 estimated for 2020.

Data source: Fiverr. Chart by author. 

4. Sales and marketing as a percent of revenue

Another metric pointing in the right direction for Fiverr is the percent of revenue the company is spending on sales and marketing. Early in a company's life, the playbook calls for growth at all costs. What makes a great business is when every dollar a company spends acquiring a new customer generates significantly more over the lifetime of the relationship. With a platform like Fiverr, growth should become self-sustaining as more buyers attract more people looking for work, which brings additional buyers, and so on. Fiverr's numbers are headed in the right direction, although still hovering around 59% in 2019. For comparison, Facebook spends 14% of revenue on sales and marketing in 2019.

Line graph showing sales & marketing as a percent of revenue decreasing from 65% in 2017 to 50% in Q3 2020.

Data source: Fiverr. Chart by author. 

5. Adjusted EBITDA margin

The accelerating growth, combined with a lower percent of revenue needed for sales and marketing, is propelling the company to profitability. In fact, adjusted EBITDA, a proxy for cash flow, as a percent of sales has been less negative each year with the second and third quarters of 2020 turning positive. Fiverr is scaling impressively. With expenses climbing slower than revenue, the company's profitability should continue increasing as it grows.  

Line graph showing adjusted EBITDA margin climbing from egative 33% in 2017 to positive 8% in the third quarter of 2020.

Data source: Fiverr. Chart by author. 

Worth a thousand words

It's been said that a picture is worth a thousand words. These five charts show a growing business that accelerated during the pandemic to produce positive EBITDA on an adjusted basis. If workforce trends from 2020 persist, Fiverr is poised to continue its torrid growth.

It's hard to say how fast and how long the company could grow. Management estimates the addressable market at $115 billion. That sounds like an exaggeration, but the total market for freelancing is $815 billion in the U.S. alone.

Investors buying shares now are certainly paying a steep price -- the company currently trades at 48 times sales. However, Fiverr's market cap is only $8.6 billion. If management can tap even a small percent of the addressable market over the next decade, the stock is poised to multiply several times over.