FVRR Q2 Deep Dive: Mixed Growth Amid AI Momentum and Buyer Base Decline

Online freelance marketplace Fiverr (NYSE:FVRR) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 14.8% year on year to $108.6 million. On the other hand, next quarter’s revenue guidance of $107.5 million was less impressive, coming in 1.4% below analysts’ estimates. Its non-GAAP profit of $0.69 per share was 6.7% above analysts’ consensus estimates.

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StockStory’s Take

Fiverr’s second quarter saw revenue and non-GAAP profit both exceed Wall Street expectations, yet the market responded negatively to the results. Management attributed revenue growth primarily to strong demand for AI-related services and increased spend per buyer, even as active buyers declined year over year. CEO Micha Kaufman highlighted that “surging demand for AI-related services and the continued momentum of managed services and dynamic matching products” supported performance, with categories like programming, digital marketing, and animation driving growth. However, management also acknowledged that small and midsize businesses remain cautious in their spending, contributing to the ongoing contraction in Fiverr’s active buyer base.

Looking forward, Fiverr expects continued momentum in its services revenue, driven by ongoing investment in AI-powered tools and deeper integration between its platforms. Management emphasized their focus on upmarket expansion and value-added services for freelancers, with CEO Micha Kaufman stating that “AI is positively impacting every dimension of our business,” from operational efficiencies to new service categories. Despite maintaining full-year revenue guidance, management flagged broader macroeconomic uncertainty and a challenging environment for new buyer acquisition as ongoing risks to sustained growth in the second half of the year.

Key Insights from Management’s Remarks

Management credited the quarter’s performance to rapid adoption of AI-driven offerings, higher-value transactions, and ongoing expansion of managed and value-added services.

• AI services drive demand: Fiverr reported a surge in AI-related project categories, with areas like AI agents, workflow automation, and advanced coding growing five- to tenfold over the past six months. Management sees AI services as a long-term tailwind, as businesses seek expert support to bridge gaps between off-the-shelf AI tools and real-world business needs.
• Upmarket shift accelerates: The company continued to move away from low-value, simple services toward more complex, higher-value projects. Over 50% of gross marketplace value (GMV) now comes from transactions above $200, reflecting heightened demand from larger, more sophisticated business clients. This shift is intended to reduce Fiverr’s exposure to small business volatility.
• Growth in value-added services: The Services segment, including products like Seller Plus and AutoDS, saw significant momentum. New offerings like the AI-powered Shopify Store Builder and deeper integration between AutoDS and Fiverr’s marketplace contributed to this growth, which management expects to continue as more freelancers adopt these tools.
• Freelancer supply remains robust: Management noted that freelancers on Fiverr are typically “AI native,” meaning they are quick to adopt new technologies and adapt their offerings. This helped Fiverr quickly scale supply in new, more complex service categories.
• Macro headwinds persist: Despite category and value-added service growth, management acknowledged that small and midsize business caution and a shrinking active buyer base remain headwinds. CFO Ofer Katz indicated that marketplace revenue trends are expected to remain flat or slightly down in the coming quarters, given ongoing macro uncertainty.

Drivers of Future Performance

Fiverr’s guidance is shaped by continued investment in AI and a strategic focus on higher-value clients, but management remains cautious due to macroeconomic uncertainty and ongoing buyer base challenges.

• AI-driven offerings expand: Management believes that ongoing investment in AI-powered products, such as Fiverr Go and Neo, will drive both buyer and seller engagement. They expect this to unlock new categories and attract more complex projects, supporting higher average transaction values and continued upmarket migration.
• Services revenue as growth catalyst: The company expects the Services segment—including subscription products like Seller Plus and AutoDS—to remain a key engine of double-digit growth. Management sees a long runway for expanding value-added services to freelancers and integrating these tools more deeply with the core marketplace.
• Persistent buyer base decline: Management cautioned that the active buyer base is likely to remain under pressure, especially with small business clients still cautious in their spending. While upmarket initiatives may offset some of this weakness, there is ongoing risk that the overall buyer pool could continue to contract, limiting topline growth.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely watch (1) the pace at which new AI-driven services and value-added offerings are adopted by buyers and freelancers, (2) whether the upmarket shift can compensate for declines in the active buyer base, and (3) progress on strategic partnerships that embed Fiverr’s talent network into broader AI ecosystems. Execution on these fronts and stabilization in buyer trends will be critical markers of Fiverr’s trajectory.

Fiverr currently trades at $21.45, down from $25 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).

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