Fiverr Stock Swoons on a Disappointing Outlook. Blame Goes to the Vaccines.

Text size

Fiverr stock tumbled sharply after reporting earnings.


Dreamstime


Fiverr

stock slid sharply Thursday, after the marketplace for freelance professional services warned that results for the rest of the year would be reduced by a reopening of the economy as more vaccinated people leave home and return to more normal work and leisure activities.

Fiverr shares dived 20.4% to $183.45 in Thursday morning trading.

In short, Fiverr International (ticker: FVRR) is having a bad reaction to Covid-19 vaccines. Also, your desire to take vacations seems to be interfering with their outlook.

For the second quarter, Fiverr posted revenue of $75.3 million, up 60% from a year ago. It was ahead of both the company’s guidance range of $73 million to $75 million and the Street consensus forecast of $74.8 million. Active buyers were up 43% to 4 million, while spend per buyer jumped 23% to $226. Non-GAAP earnings were 19 cents a share, well ahead of the Street estimate at 10 cents a share. Adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization) was $7.4 million, versus $3.1 million a year ago.


Newsletter Sign-up

Review & Preview

Every weekday evening we highlight the consequential market news of the day and explain what’s likely to matter tomorrow.


But disappointing guidance is weighing on Fiverr’s shares.

CEO Micha Kaufman said the company lowered its guidance “to be prudent,” based on recent trends.

“Most of the world has been confined to home for the past 18 months,” CEO Micha Kaufman said in remarks prepared for the company’s conference call with analysts Thursday. “When Covid restrictions were lifted in the U.S. and Europe around the second half of May, people were in desperate need to get out of home and have some off-screen time. Coinciding with the summer and school holidays, people are taking vacations, which is a really healthy thing to do, and that translates to less time spent online.”

Fiverr projects third-quarter revenue of $68 million to $72 million, below the Street consensus at $80 million, with adjusted Ebitda of $2.5 million to $3.5 million. For the full year, Fiverr now sees revenue ranging from $280 million to $320 million, with adjusted Ebitda of $12 million to $14 million. Previous full-year guidance had called for revenue of $302 million to $308 million with adjusted Ebitda of $19.5 million to $24.5 million.

“Our fundamentals continue to be very strong, far stronger than pre-pandemic,” Kaufman added, “but the reduced online activity translates into more modest new customer cohorts and less activity for those who are taking vacation.”

Write to Eric J. Savitz at eric.savitz@barrons.com

Harry Byrne

Harry Byrne

Related post