Fiverr International (NYSE:FVRR) operates a marketplace that connects sellers (freelancers) with buyers (businesses), making it possible to transact digital services online. In doing so, the company is reshaping the way people work, offering freelancers more flexibility while providing businesses with access to a global pool of talent.

In this Backstage Pass video, recorded on Nov. 10, 2021, Motley Fool contributors Jon Quast and Brian Withers discuss Fiverr's third-quarter earnings. Quast provides insight into why the stock has underperformed the market in 2021. 

Jon Quast: Fiverr reporting third quarter 2021 earnings this morning before the market opened. The market definitely liked it -- as evidence, it was up over 20% at one point, and finished the day up 9%. There was plenty here to like, in fact, it was beats across-the-board. If we go with management's guidance here for $68 million to $72 million going into the quarter, quarter three. Revenue came in at $74.3 million. That is up 42% year-over-year. That is down slightly from second quarter revenue. Just want to throw that out there.

Management had not given profitability guidance other than adjusted EBITDA, that is the adjusted non-GAAP earnings. They guided for only $2.5 million to $3.5 million, came in well above that at $7.3 million. That is up 74% year-over-year. Again, that is still down slightly from second quarter adjusted EBITDA, but beats on both of those counts.

As far as outlook for the rest of the year, they raised their guidance here. So guiding right now for $292.4 million to $295.4 million for the full-year; this would be 54% to 56% year-over-year growth. Keep in mind that in 2020, they grew revenue 77%. This is impressive 2021 growth considering what they did in 2020. This was raised guidance, like I said, and important to point out that before they were guiding for $280 million to $288 million, they raised the bottom end of their guidance by over $12 million, and their third quarter beat was around $6 million beat on the bottom end. This is a bigger raise than just factoring in, we've beaten third quarter, so we'll adjust going forward. No, this is actually a true raise.

Some highlights for the quarter. Their take rate. Remember that Fiverr provides a marketplace, you put your services out there, somebody hires you to do a job. It is facilitating the gig economy. Not all of the money that is flowing through Fiverr's platform goes to Fiverr. It takes a percentage. It's cut known as its take rate: 28.4%. I don't know if that's an all-time high. I think it was. I know that it was better than its take rate last year of 27% and better than the second-quarter take rate of 27.8%.

We're seeing Fiverr's take rate ticking up over time. This is a world-class take rate. You really love to see that. Active buyers, 4.1 million. This is up sequentially from four million last quarter. It is up from 3.1 million, the same quarter last year. You love to see that, because these marketplace businesses, it's hard to get that adoption, but once you get more and more buyers on the platform, it really just gets the whole thing churning. You get more people offering their services because there's more buyers, and vice versa. You really love to see that. Also completed some acquisitions, including the acquisition of CreativeLive. What's interesting is CreativeLive is going to remain the stand-alone business, but they're going to take Fiverr Learn, and roll it into the creative life platform. This is a little bit of differentiation. It's more of an online learning platform where you sign up for courses to learn a new skill. I can see where it's a little bit different from what Fiverr typically offers, so I can see why they want to separate that out into a separate business. But that acquisition is complete as well as acquisition of Stoke Talent.

Concerns: Honestly, this was a very good quarter across-the-board, hard to find anything wrong and so this concern isn't actually a current concern, it's a potential future, something to keep your eye on -- is that take rate sustainable? If it's not, let's assume that competition increases, they have to lower their take rate to stay competitive, it's foreseeable that their business could grow, but revenue actually doesn't because the take rate erodes. So far we see no signs of that happening, but it is up. If it's not the best in the business, it's among the best in the business, so you want to watch that.

Brian Withers: Certainly something to watch Jon. Imagine we're in a time where we actually have a Motley Fool event. You're hanging out with some Fiverr shareholders after the events today, having your favorite beverage, and they go, "John, have you seen the Fiverr stock chart over the last 12 months? It's given me a heart attack." What would you say to those investors?

Jon Quast: It's incredible to think that Fiverr is actually losing to the market over the past year considering its continued wins and adoption. I would say this is [laughs] part and parcel for what the stock market does. You have big gains, and then you have periods of under-performance. But so long as that business is continuing to perform well, just sit tight, sit on your hands and enjoy the ride because sooner or later business results will translate into stock-price.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.