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Fiverr (FVRR) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Jul 29, 2026

Source: earnings call transcript

Executive summary

Fiverr Q2 FY26 — Navigating AI Headwinds with Upmarket Shift

Fiverr is undergoing a multi-year transformation to shift from a transaction-oriented marketplace to a platform for high-end, high-value projects, driven by accelerating AI adoption automating simple tasks. This transition is expected to take at least six quarters to materially impact financials, requiring intense financial discipline and strategic capital allocation to focus on long-term value creation amidst current demand and traffic headwinds.

Highlights

5

  • Clients completing projects valued at over $1,000 grew 13% year-over-year on a trailing 12-month basis.

  • Clients completing projects over $1,000 in Programming and Tech grew 34% year-over-year.

  • Clients completing projects over $1,000 in Graphics and Design grew 25% year-over-year.

  • Demand for AI user-generated content video ads surged 265%.

  • A new Graph Neural Network model showed a 7% decrease in cancellation rates for dynamic matching in initial tests.

Concerns

5

  • Q2 revenue was $97.8 million, down 10% year-over-year.

  • Adjusted EBITDA was $17.5 million, down 18.3% year-over-year, representing an adjusted EBITDA margin of 17.9% (down 180 bps).

  • Marketplace revenue was $63.1 million, declining 15.5% year-over-year.

  • Active buyers declined 22% year-over-year to 2.7 million.

  • Full-year 2026 revenue guidance was cut to a range of $356 million to $372 million (negative 17% to negative 14% YoY growth).

Guidance & targets

CategoryTargetConfidence
Financial impact of transformation
at least 6 quarters to materialize
high materiality
Medium
Q3 FY26 Revenue
$80 million to $88 million
high materiality
High
Q3 FY26 Revenue Growth
negative 26% to negative 18%
high materiality
High
Q3 FY26 Adjusted EBITDA
$8 million to $12 million
medium materiality
High
Q3 FY26 Adjusted EBITDA Margin
11.9%
medium materiality
High
Full Year 2026 Revenue
$356 million to $372 million
high materiality
High
Full Year 2026 Revenue Growth
negative 17% to negative 14%
high materiality
High
Full Year 2026 Adjusted EBITDA
$52 million to $62 million
medium materiality
High
Full Year 2026 Adjusted EBITDA Margin
15.7%
medium materiality
High
Full Year Free Cash Flow
lower than the previous 2 years
medium materiality
High
Services Revenue Growth
double-digit decline
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Marketplace
The 22% year-over-year decline in active buyers was mainly due to the ongoing compression in low-value transactional work. Transaction volume was down 10% or more year-over-year across the majority of projects under $1,000 on a TTM basis. Spend per buyer increased 15.6% year-over-year, driven by the ongoing mix shift towards $1,000-plus projects.
Active buyers: 2.7 millionSpend per buyer: $368Marketplace take rate: 28%
$63.1 million-15.5%——
Services
Accounted for 35% of total revenue. The deceleration is expected to continue into H2 and exit the year with a double-digit decline, driven by softening demand from influencer campaigns and drop-shipping, as well as weakness in Fiverr Ads and Seller Plus.
$34.6 million2%——

Risks & headwinds

AI adoption impact on low-value work Ongoing

Ongoing compression in high-volume, low-value transactional work; transaction volume down 10%+ YoY for projects <$1,000; Writing and translation down >24% YoY.

Mitigation:Aggressively executing push upmarket towards higher-value work; repositioning Fiverr as a destination for high-end, high-trust work.

Marketplace traffic and demand deceleration Q2 into Q3, expected to continue for the foreseeable future

Clear deceleration in overall marketplace traffic and demand, carried over into Q3.

Mitigation:Focusing on internal AI efficiencies, balanced marketing, and developing new acquisition channels like TikTok campaigns.

Impact of LLM updates and integration Recent weeks

Recent model updates across various LLMs are a contributing factor; Gemini integration into Google Search exposes more people to LLM experiences, lowering traditional search traffic.

Mitigation:Investing in GEO (generative engine optimization) to increase organic traffic from LLM channels; seamless integration into agentic workflows.

Services revenue deceleration H2 FY26

Services revenue grew 2% YoY in Q2, expected to continue decelerating into H2 and exit the year with a double-digit decline.

Mitigation:Focusing on the overall transformation to high-value work, which is expected to eventually benefit all parts of the marketplace.

Increased cost of acquisition Ongoing

Less customer traffic to Google increases advertising density and competition for placements, leading to higher cost of acquisition.

Mitigation:Taking a multichannel approach to marketing; investing in GEO; being early advertising partners on new platforms like ChatGPT.

What to watch in Q3 FY26

Financial impact of transformation

Next quarter
Current at least 6 quarters to materialize
Target Progress towards materializing financial impact

Why it matters

This is the core strategic shift and will determine future revenue and profitability.

We now expect that meaningful financial impacts from our transformation will require at least 6 quarters to materialize.

Find out whether FVRR delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you provide more granularity on the 6-quarter transition period and explain what specific LLM updates are contributing to the observed weakness?

The 6-quarter estimate is primarily influenced by current headwinds in traffic and demand. The impact of LLMs stems not just from the models themselves, but how they are integrated into other client experiences, such as Gemini in Google Search, which exposes more users to LLM experiences and consequently lowers traditional search traffic.

“I think most noticeable is how Gemini is being integrated into the experience of search on Google. And so it exposes more people to LLM experiences, which, by churn, obviously impacts the traffic that we're getting.”

asked by Eric Sheridan · answered by Micha Kaufman

3 min read 7 chapters

Detailed narrative

AI Impact and Upmarket Shift

Fiverr is experiencing an ongoing compression in high-volume, low-value transactional work due to accelerating AI adoption. The company is aggressively executing a push upmarket towards higher-value work, where demand is growing. This strategic shift is expected to take at least six quarters to materially impact financials, requiring intense financial discipline and strategic capital allocation to focus on long-term value creation amidst current demand and traffic headwinds. High-value work (projects >$1,000) currently represents 15% of completed projects' gross order value.

Strategic Pillars for Transformation

The company's multi-year transformation is built on four strategic pillars: pushing upmarket, systematically upgrading matching infrastructure, moving beyond passive matching into an active comprehensive work platform, and expanding growth engines. This involves leveraging proprietary Knowledge Graph to capture nuanced client intent and deploying advanced models for improved matching and fulfillment, aiming to position Fiverr as a destination for high-end, high-trust work.

High-Value Project Growth and Demand Signals

Clients completing projects valued over $1,000 continued to grow 13% year-over-year on a trailing 12-month basis. This growth is particularly strong in Programming and Tech (up 34% YoY) and Graphics and Design (up 25% YoY) for projects over $1,000. The company highlighted examples of multidisciplinary freelance teams working on complex projects like B2B wholesale inventory systems, custom 3D design software rebuilds, and stadium access platforms, indicating a clear demand for long-duration, high-value engagements.

AI Services Vertical Evolution

Fiverr is observing a clear evolution in how clients deploy AI. Demand for AI user-generated content video ads surged 265%, and AI video ads rose 63%. In technical integration, search volume for AI voice agents jumped 49%, AI mobile app development rose 92%, and AI website development grew 39%. This indicates a shift from basic chatbots to complex production setups and personal AI integrations within business workflows.

Matching and Fulfillment Infrastructure Improvements

The company is enhancing its platform with new capabilities. Early tests of live talent skill-extraction resolved 58% of conversation skill mismatches. A newly developed Graph Neural Network model showed a 7% decrease in cancellation rates for dynamic matching in initial tests. Phase 1 of a standardized fulfillment layer is live, evaluating transactional quality with 91% precision across over 84% of completed projects, designed to safeguard project success and integrate with advanced agentic workflows.

Growth Engine Expansion and New Customer Acquisition

Fiverr has moved advanced semantic onboarding models and corporate KYC initiatives into production, which drove an 8% lift in new customer conversion by routing demand to high-performing talent. The company is also opening new, highly targeted acquisition channels, such as a dedicated discovery campaign launched in June targeting e-commerce merchants looking to scale their TikTok shops, aiming to capture higher-value merchants for long-term service journeys.

Services Revenue Deceleration

Services revenue grew 2% year-over-year in Q2, accounting for 35% of total revenue. However, this growth rate is lower than the previous quarter and is expected to decelerate further into the second half of the year, exiting with a double-digit decline. This is attributed to softening demand from influencer campaigns and drop-shipping, as well as weakness in Fiverr Ads and Seller Plus, compounded by lower expectations for overall marketplace growth due to traffic and demand issues.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.