Fiverr International Ltd. — FY2021 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2021. The filing is an annual Form 20-F, not a standalone Q4 filing; the source text does not provide a separate fourth-quarter income statement or cash-flow statement. Financial statements are prepared under U.S. GAAP in U.S. dollars.
Business context
Fiverr operates a global online marketplace connecting buyers with freelancers and small businesses offering digital services. Its platform spans more than 550 service categories and includes subscription, learning, creative-talent, back-office and freelancer-management products. Fiverr reported 4.2 million active buyers in 2021, up from 3.4 million in 2020, and users in more than 160 countries.
Key financial and operating metrics
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| Revenue | $297.7 million | $189.5 million | +57% |
| GMV | $1,018.7 million | $699.3 million | +46% |
| Take rate | 29.2% | 27.1% | +210 basis points |
| Active buyers | 4.217 million | 3.418 million | +23% |
| Spend per buyer | $242 | $205 | +18% |
| Gross profit | $245.9 million | $156.3 million | +57% |
| Gross margin | 82.6% | 82.5% | +10 basis points |
| Operating loss | $45.3 million | $11.8 million | Loss increased |
| Net loss | $65.0 million | $14.8 million | Loss increased |
| Net loss per share | $1.81 | $0.46 | Loss increased |
| Operating cash flow | $38.0 million | $17.1 million | +122% |
Revenue consisted of approximately 72.9% transaction fees and 27.1% service fees. Repeat buyers contributed 59% of core marketplace revenue, compared with 55% in 2020. Buyers spending more than $500 accounted for 63% of core marketplace revenue, compared with 58% in 2020.
Profitability, expenses and unusual items
- Cost of revenue was $51.7 million, or 17.4% of revenue, compared with $33.2 million, or 17.5%, in 2020.
- Research and development expense increased 73% to $79.3 million, sales and marketing increased 69% to $159.4 million, and general and administrative expense increased 88% to $52.6 million.
- Share-based compensation increased to approximately $55.4 million from $15.8 million in 2020, materially affecting operating expenses and the net loss.
- Financial expense increased to $19.5 million from $2.8 million, primarily because of higher amortization of the discount and issuance costs on the convertible notes.
- Advertising expense was $108.6 million, compared with $68.5 million in 2020.
- Fiverr acquired Working Not Working, CreativeLive and Stoke Talent during 2021. Cash consideration for acquisitions totaled approximately $97.1 million; the acquisitions also generated goodwill and intangible assets and included contingent consideration.
- The company remained unprofitable and stated that it expects net losses for the foreseeable future.
Cash flow, liquidity and debt
| Metric | December 31, 2021 | December 31, 2020 |
|---|---|---|
| Cash, cash equivalents, bank deposits and marketable securities | $641.0 million | $715.5 million |
| Marketable securities | $435.7 million | $357.4 million |
| Working capital | $279.2 million | $445.3 million |
| Convertible notes carrying amount | $372.1 million | $352.0 million |
| Total liabilities | $584.7 million | $515.8 million |
| Shareholders’ equity | $346.9 million | $345.4 million |
- Operating activities generated $38.0 million of cash.
- Investing activities used $229.5 million, including $97.1 million for acquisitions and net purchases of marketable securities.
- Financing activities used $2.4 million, compared with $551.8 million provided in 2020, when Fiverr issued ordinary shares and convertible notes.
- Cash, cash equivalents and restricted cash declined to $74.1 million from $268.0 million, while substantial liquidity remained in bank deposits and marketable securities.
- Fiverr believes its liquidity and capital resources are sufficient to meet business needs for at least the next 12 months.
- The company has $460.0 million principal amount of 0% senior unsecured convertible notes due November 2025, with an initial conversion price of approximately $213.57 per share. The notes’ carrying amount was $372.1 million at year-end and estimated fair value was approximately $427.5 million.
- The company received Israeli court approval to repurchase or otherwise utilize mechanisms related to up to $143.0 million of the convertible notes and associated capped calls through June 6, 2022, subject to board authorization and extensions.
Material changes versus 2020
- Strong marketplace expansion continued, with GMV, revenue, active buyers and spend per buyer all increasing materially.
- Take rate improved to 29.2%, supported by the core marketplace and value-added products.
- Operating leverage did not offset investment: operating expenses grew faster than revenue, and the operating margin deteriorated from negative 6.2% to negative 15.2%.
- Net loss widened substantially, partly due to increased share-based compensation, acquisition-related costs and convertible-note amortization.
- Operating cash flow improved despite the larger net loss, primarily because of non-cash share-based compensation and convertible-note amortization.
- Liquidity declined because of acquisitions, investments in longer-term marketable securities and reduced financing inflows.
- Goodwill increased to $77.3 million from $11.2 million and intangible assets increased to $49.2 million from $5.9 million, primarily reflecting the 2021 acquisitions.
- Employees increased to 787 from 545, including growth in research and development, marketing and customer care.
Guidance, outlook, commentary and risks
The filing does not provide numerical fiscal 2022 guidance. Management describes continued investment in product development, international expansion, marketing, buyer acquisition, higher-value services and value-added products. It expects research and development, sales and marketing and general and administrative expenses to increase in absolute dollars, while stating that research and development expense is expected to decline as a percentage of revenue over time.
- Management views the business as resilient and believes substantial growth potential remains because online penetration of the broader freelancing market is still low.
- COVID-19 creates uncertainty regarding demand, consumer and business spending, employee productivity, payment and disbursement partners, cybersecurity and financial markets.
- Competition is significant across freelance marketplaces, staffing providers, social and professional networks, recruiting platforms and specialized service providers.
- Key operating risks include attracting and retaining buyers and freelancers, maintaining brand and platform quality, user circumvention, fraud, payment processing failures, cloud-service disruptions and cybersecurity incidents.
- Privacy, data protection, cross-border data transfers, worker classification, payments, tax, anti-corruption and other regulatory requirements may increase costs or restrict operations.
- International operations expose Fiverr to currency, political, economic and security risks, including risks relating to Israel, Ukraine and other jurisdictions.
- Fiverr relies substantially on Amazon Web Services and third-party payment and disbursement providers.
- The company reports no material legal proceedings requiring accrual as of December 31, 2021.
- Internal control over financial reporting and disclosure controls were assessed as effective, and the auditor issued unqualified opinions.
- Fiverr does not expect to pay dividends in the foreseeable future.
Important facts for investors to verify
- Assess whether revenue and GMV growth can continue as post-pandemic demand normalizes and marketing investment increases.
- Monitor the path to profitability, particularly sales and marketing efficiency, share-based compensation and acquisition-related expenses.
- Reconcile reported liquidity by distinguishing unrestricted cash from user funds, restricted cash, bank deposits and marketable securities.
- Review the cash and potential dilution implications of the $460.0 million convertible notes, capped-call transactions and possible repurchases or conversions.
- Evaluate the integration and performance of Working Not Working, CreativeLive and Stoke Talent, including goodwill, intangible assets and contingent consideration.
- Review exposure to privacy, worker-classification, payment-services and international tax regulation.
- Confirm that the annual metrics cited in the filing are not being interpreted as Q4-specific results; the source text does not provide a separate Q4 financial presentation.