Fiverr’s second quarter was marked by a swift and pronounced shift in the company’s business mix, as management acknowledged ongoing declines in low-value, high-volume transactional projects. CEO Micha Kaufman attributed softness to “accelerating AI adoption” that is automating simple freelance tasks and compressing demand, especially in writing and translation services. Management described this as a transformational moment for the marketplace, highlighting that the growth in higher-value projects remains masked by steep volume declines at the low end. Kaufman was candid about the challenges, noting the impact of recent large language model (LLM) updates and integration with search platforms, which significantly reduced marketplace traffic and buyer activity.
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Fiverr (FVRR) Q2 CY2026 Highlights:
- Revenue: $97.78 million vs analyst estimates of $99.47 million (10% year-on-year decline, 1.7% miss)
- Adjusted EPS: $0.50 vs analyst expectations of $0.52 (3.6% miss)
- Adjusted EBITDA: $17.52 million vs analyst estimates of $18.18 million (17.9% margin, 3.6% miss)
- The company dropped its revenue guidance for the full year to $364 million at the midpoint from $400 million, a 9% decrease
- EBITDA guidance for the full year is $57 million at the midpoint, below analyst estimates of $73.43 million
- Operating Margin: 4.5%, up from -1.8% in the same quarter last year
- Active Buyers: 2.7 million, down 700,000 year on year
- Market Capitalization: $346.6 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Fiverr’s Q2 Earnings Call
- Eric Sheridan (Goldman Sachs) asked about the six-quarter transformation timeline and the impact of LLM updates. CEO Micha Kaufman explained that headwinds from AI and declining traffic are driving the extended transition, with market changes accelerating since recent LLM integrations.
- Ronald Josey (Citi) inquired about measurable milestones for the upmarket shift. Kaufman detailed improvements in talent matching and fulfillment infrastructure, noting that success will be tracked by rising conversion rates and reduced cancellations in higher-value projects.
- Jason Helfstein (Oppenheimer) questioned further cost reductions if revenue continues to fall. CFO Esti Levy Dadon highlighted ongoing efforts in discretionary expense controls, especially in marketing, while protecting R&D spending to advance the transformation.
- Nathaniel Schindler (Scotiabank) challenged the resilience of Fiverr’s business model in the face of rapid AI advancement. Kaufman acknowledged the lag between skill compression and the emergence of new service opportunities, but expressed confidence in freelancers’ adaptability and the company’s focus on high-end, outcome-based work.
- Marvin Fong (BTIG) probed whether existing platform services are sufficient for rising project complexity. Kaufman indicated that Fiverr is rebuilding core functionality from the ground up to support more sophisticated client needs, while Dadon noted that declining services revenue is tied to lower marketplace traffic and fewer active sellers.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) the pace of adoption for Fiverr’s upgraded matching and fulfillment systems, (2) whether the mix of high-value projects continues to grow fast enough to offset transactional declines, and (3) signs that marketing and acquisition efforts—such as targeted campaigns for e-commerce merchants—translate into higher buyer conversion and retention. We will also track any stabilization in active buyer numbers as a sign that the business mix shift is taking hold.
Fiverr currently trades at $9.57, down from $11.59 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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