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    FVRR
    Earnings call· Jun 2026(Q2 FY26)

    Fiverr International Q2 FY26 earnings call FVRR

    Jul 29, 2026 Source

    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

    11
    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

    2
    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%——

    Operational metrics

    18
    Adjusted EBITDA
    $17.5 milliondown 18.3% year-over-year
    Q2 FY26

    Margin pressure was limited by proactive steps to maintain a lean organization, including discretionary expense management, internal AI efficiencies, and balanced marketing.

    Adjusted EBITDA Margin
    17.9%down 180 basis points from a year earlier
    Q2 FY26

    Reflects the decline in adjusted EBITDA.

    Cash and Investment Balance
    $308.5 million
    Q2 FY26

    Finished the quarter with a healthy financial position.

    High-Value Work Share of GOV
    15%
    Q2 FY26

    Represents the share of completed projects' gross order amount.

    Clients Completing Projects >$1,000 Growth
    13%year-over-year
    Q2 FY26

    Indicates the continued growth in the high-value segment.

    Clients Completing Projects >$1,000 Growth
    34%year-over-year
    Q2 FY26

    Fastest-growing vertical for high-value projects.

    Clients Completing Projects >$1,000 Growth
    25%year-over-year
    Q2 FY26

    Fastest-growing vertical for high-value projects.

    Demand for AI User-Generated Content Video Ads
    265%
    Q2 FY26

    Surge in demand for AI-related services.

    Demand for AI Video Ads
    63%
    Q2 FY26

    Rise in demand for AI-related services.

    Search Volume for AI Voice Agents
    49%
    Q2 FY26

    Jump in search volume for technical AI integrations.

    AI Mobile App Development Growth
    92%
    Q2 FY26

    Growth in demand for technical AI integrations.

    AI Website Development Growth
    39%
    Q2 FY26

    Growth in demand for technical AI integrations.

    Cancellation Rate Decrease
    7%
    Q2 FY26

    Improvement in matching capabilities compared to the current model.

    Conversation Skill Mismatches Resolved
    58%
    Q2 FY26

    Directly tackling a major pain point for high-value order cancellations.

    Transactional Quality Precision Rate
    91%
    Q2 FY26

    Designed to dynamically safeguard project success and provide real-time telemetry.

    New Customer Conversion Lift
    8%
    Q2 FY26

    Results from development tests for attracting the right kind of demand.

    Transaction Volume Decline (Low-Value)
    10%year-over-year
    Q2 FY26

    Broad-based decline across simple categories in all verticals.

    Transaction Volume Decline (Low-Value)
    24%
    Q2 FY26

    Steepest decline among categories for projects under $1,000.

    Risks & headwinds

    5
    AI adoption impact on low-value workOngoing

    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 decelerationQ2 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 integrationRecent 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 decelerationH2 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 acquisitionOngoing

    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

    5

    Financial impact of transformation

    Next quarter
    Currentat least 6 quarters to materialize
    TargetProgress 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.

    Q&A highlights

    6

    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 read7 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    07

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.