Fiverr International Ltd.

Q2 revenue was $97.8 million, down 10% year over year. Adjusted EBITDA was $17.5 million, down 18.3% year over year, with adjusted EBITDA margin of 17.9%, down 180 basis points. Marketplace revenue was $63.1 million, down 15.5% year over year, while services revenue was $34.6 million, up 2% year over year. The company ended the quarter with $308.5 million in total cash and investments and generated $13.6 million in free cash flow. For Q3 2026, Fiverr expects revenue of $80 million to $88 million and adjusted EBITDA of $8 million to $12 million; for full-year 2026, it expects revenue of $356 million to $372 million and adjusted EBITDA of $52 million to $62 million. Management said the revised outlook reflects AI-related demand and traffic headwinds, ongoing weakness in AI-exposed categories, and declining services revenue, and said meaningful financial impact from the transformation will take at least six quarters.

Micha Kaufman framed Q2 as a transitional period marked by accelerating AI adoption that is compressing high-volume, low-value work while Fiverr pushes upmarket. He said the company is repositioning from a transaction-oriented marketplace to a trusted end-to-end platform for high-end, high-value projects where human judgment matters more. His tone was confident but measured: he repeatedly emphasized patience, financial discipline, and that the financial results will lag the operational changes for several quarters.

Esti Levy Dadon focused on the numbers, noting Q2 revenue of $97.8 million, adjusted EBITDA of $17.5 million, and a 17.9% margin, with pressure from lower-value transactional work and softer traffic. She said Fiverr finished the quarter with $308.5 million in cash and investments and produced $13.6 million in free cash flow. On capital allocation, she highlighted a balanced framework: fund the transformation, preserve flexibility, and remain open to repurchases, while keeping R&D protected and spending discipline tight, especially on discretionary marketing. She also guided to Q3 revenue of $80 million to $88 million, full-year revenue of $356 million to $372 million, and said full-year free cash flow should be lower than the prior two years.

Analysts pressed management on the six-quarter transition timeline, whether AI model updates and Google-integrated LLM summaries were hurting traffic, and how much more cost cutting was possible if revenue keeps declining. Micha said the duration is mainly driven by external headwinds and that traffic softness is tied to both direct LLM use and hybrid search experiences, especially Google integrating AI summaries. Esti said Fiverr will keep a lean structure, adjust marketing as needed, and protect R&D; she also said free cash flow should track EBITDA. Other questions focused on whether Fiverr is becoming more like staffing, how much of the talent base needs to change, and whether services revenue weakness is tied to Seller Plus and marketplace traffic; management said the business remains outcome-based, not staffing, and that Seller Plus and ads are being hit by traffic headwinds.