Fiverr's Q2 Earnings: Resilient Growth Supports Upgraded Buy Rating

Fiverr's Q2 earnings season highlights investors punishing companies for maintaining full-year guidance despite beating Q2 earnings. The S&P 500's overbought conditions raise the bar for what constitutes a "good" earnings report. Fiverr's resilient growth supports its deep value, making it a potential buy.

Fiverr International Ltd. (NYSE: FVRR) reported its second-quarter 2025 earnings on July 30, 2025, revealing a mixed bag of results that have drawn mixed reactions from investors. The company's revenue increased by 14.8% year-over-year (YoY) to $108.6 million, while its adjusted EBITDA margin improved by 80 basis points to 19.7% [1]. Despite these positive financial metrics, the stock has faced criticism from investors who believe the company is maintaining its full-year guidance despite beating Q2 earnings.

Fiverr's CEO, Micha Kaufman, highlighted the company's strong execution across its Marketplace and Services segments, particularly in AI-related categories and Managed Services. The Marketplace revenue was $74.7 million, down 2.0% YoY, while the Services segment contributed $34.0 million, a significant 83.8% increase from the previous year [1]. The company's AI-related services continue to see strong demand, with businesses of all sizes turning to freelancers on Fiverr to bridge the gap between AI technology and implementation.

However, the company's stock has been punished by investors who expect more aggressive earnings growth. The S&P 500's overbought conditions have raised the bar for what constitutes a "good" earnings report, and Fiverr's results have not met these elevated expectations. Despite the criticism, Fiverr's resilient growth supports its deep value, making it a potential buy for investors looking for long-term opportunities in the digital services sector.

In the second quarter, Fiverr's annual active buyers decreased by 10.9% YoY to 3.4 million, while the annual spend per buyer increased by 9.8% to $318 [1]. The company's GAAP gross margin decreased to 81.2% from 83.1% in the same period last year, while the non-GAAP gross margin increased slightly to 84.5% [1]. The company's net cash provided by operating activities increased by 20.2% YoY to $25.2 million, and its free cash flow increased by 21.1% YoY to $25.0 million [1].

Fiverr's management remains confident in its execution and committed to delivering its long-term targets for Adjusted EBITDA and free cash flow. The company's Q3 2025 and full-year 2025 revenue guidance reflects the recent trends in its marketplace, with expected growth rates ranging from 5% to 10% for revenue and 9% to 12% for adjusted EBITDA [1].

In conclusion, Fiverr's Q2 earnings report reveals a company that is growing resiliently despite facing criticism from investors who expect more aggressive earnings growth. The company's strong execution in AI-related categories and Managed Services, coupled with its improving adjusted EBITDA margin, supports its deep value and makes it a potential buy for long-term investors.

References:
[1] https://investors.fiverr.com/news-releases/news-release-details/fiverr-announces-second-quarter-2025-results