Shares of Fiverr International (FVRR 0.61%) rose as much as 22.5% on Wednesday morning, boosted by a robust earnings report. By noon EST, the freelancer marketplace operator's stock had retreated slightly to a 16.3% gain.
In the third quarter of 2021, Fiverr's sales jumped 42% higher year over year to $74.3 million. Your average analyst would have settled for revenue in the neighborhood of $71.1 million. On the bottom line, adjusted earnings increased from $0.13 to $0.19 per diluted share. Here, the Street expected a net loss of $0.01 per share.
The third-quarter results also exceeded the top ends of Fiverr's guidance ranges across the board.
Furthermore, management issued bullish guidance for the end of the year. Fourth-quarter sales were targeted at approximately $76 million, high above the current consensus analyst estimate near $72.8 million.
The underlying business metrics were equally impressive. Fiverr had 4.1 million active freelancer-hiring buyers by the end of the quarter, representing a 33% increase from the year-ago period. The average spend per buyer also rose by 20%. It's difficult to pull off strong double-digit growth in both of these categories at the same time, and this combo shows that Fiverr can raise its fees without scaring off potential customers.
The company is currently running an ambitious marketing campaign across several important markets, including the U.S., U.K., Germany, and Australia. Beyond that growth-promoting push, its management hopes to build a full-featured ecosystem for freelancers and their customers.
Fiverr is in the early stages of exploring a massive market opportunity, and the business remains strong even as the world starts to overcome the coronavirus pandemic. The gig economy is here to stay, and Fiverr just demonstrated once again how the company is a leader in this emerging sector. It's one of the best buys on the market today, in my view.