What happened
Shares of Fiverr International (FVRR 2.90%) fell by 20.5% in May, according to data provided by S&P Global Market Intelligence.
This latest decline brings shares of the freelancer platform down 61.4% for the year to date.
Image source: Getty Images.
So what
In May, Fiverr reported top-line growth for its first quarter of 2022, with revenue rising by 27% year over year to $86.7 million. Operating metrics were also healthy: The number of active buyers increased by 11% year over year while spend per buyer also rose 17% year over year.
Despite the positive numbers, investors were probably disappointed with Fiverr's growth when compared to the first quarter of 2021. Back then, the company posted a year-over-year doubling of revenue, with active buyers surging by 56% year over year. The revenue growth for Q1 has also not translated into profitability. Fiverr reported its operating loss for the quarter widened from $13.8 million to $17.2 million, while net loss dipped slightly from $17.8 million to $17 million.
Fiverr also downgraded its revenue forecast for the rest of 2022. The original projection was for 25% to 27% year-over-year growth, but this was revised down to 16% to 23% year over year due to weakness in Europe and the deteriorating economic landscape.
Now what
Despite the slowdown in growth, Fiverr continued to build on its platform and capabilities to attract both buyers and sellers of services. A new listing page was rolled out that featured just eight freelancers per page, down from 48 previously, as research showed that high-value buyers preferred a cleaner interface and more targeted talent listing details to assist with their decision-making. The company has also expanded its catalog by adding more than 25 new categories, including font design, to help to grow its total addressable market.
Fiverr is also testing out other languages to attract talent in other countries. It is testing out a machine translation infrastructure that would use an advanced algorithm that relies on artificial intelligence to translate, aided by human intervention. Assuming this technique works, Fiverr believes it can start to expand into international markets, a significant untapped opportunity for further business growth.
