The AI Effect: Fiverr significantly reduces annual forecast
Fiverr's second-quarter results met previous forecasts but fell slightly short of analyst expectations. CEO Micha Kaufman noted an acceleration in AI adoption, leading to a "noticeable slowdown in overall demand and traffic." The company is significantly lowering its annual guidance and shifting focus toward complex, high-value projects.
Market shifts driven by the integration of artificial intelligence (AI) are reflected in the financial reports of the software company Fiverr. Results for the second quarter of 2026 were in line with the company's previous forecast range but fell slightly short of analyst expectations.
Fiverr is significantly reducing its annual forecast. While previously expecting a 3%-12% revenue decline compared to the previous year, with a target of 380-420 million dollars for 2026, the forecast has been lowered to 356-372 million dollars—a 14%-17% decrease compared to 2025. The EBITDA forecast (profit excluding interest, taxes, depreciation, and amortization) has also been reduced from 64-80 million dollars to 52-62 million dollars, compared to 91.6 million dollars in 2025.
In a letter to investors, Fiverr founder and CEO Micha Kaufman described the second quarter as a transition period. He noted that Fiverr's customers are accelerating AI adoption, and in recent weeks, the company has identified "a noticeable slowdown in overall demand and traffic, a trend that continued in the third quarter," attributing this to developments in large language models (LLM). Fiverr is addressing this challenge through an "aggressive implementation of our strategy towards upmarket," focusing on complex, high-value projects.
Fiverr, which developed a marketplace connecting freelancers with employers, is among the companies hit by negative sentiment regarding software firms due to the perceived impact of AI. Since the beginning of the year, Fiverr's stock has lost 41% of its value, reaching a market capitalization of 417 million dollars, and shares fell further in pre-market trading on Wall Street following the report.
Layoffs and Restructuring
Last September, Fiverr announced the layoff of about a third of its employees and a return to a startup-like state to adapt to market changes. This week, it was revealed that Fiverr will not move to the Wix campus in Glilot.
During the second quarter, revenue totaled 97.8 million dollars, a 10% decrease from the same quarter last year. For the first half of the year, revenue declined by 5.8% to 203 million dollars.
According to GAAP, net profit attributable to shareholders grew by 40% to 4.5 million dollars for the quarter, totaling 13 million dollars year-to-date. On a non-GAAP basis, net profit was 50 cents per share, two cents below analyst forecasts. Quarterly EBITDA reached 17.5 million dollars, an 18% decrease.
In the first half, Fiverr generated 35 million dollars from current operations, with cash and investments totaling approximately 309 million dollars at the end of the period.
"The market is changing faster than expected"
Micha Kaufman stated:
"The second quarter results reflect a market that is changing faster than expected, influenced by the rapid adoption of artificial intelligence. Accordingly, we are focusing on projects with higher value that require quality talent: while AI takes on a significant portion of simple, low-value transactions, it also creates demand for large, complex, and long-term projects where there is a real need for human expertise, workflow management, and greater accountability for deliverables."
"This is a transformative process that will continue over several quarters, and we are focused on disciplined and consistent execution while building Fiverr as the most reliable platform for high-value projects," he added.
CFO Esti Levi-Dadon added that the results reflect the initial stages of a significant transformation. "We updated the company's forecast to reflect these ongoing trends and the time required for our transformation initiatives to show in our financial results," she said. "We continue to operate as an efficient and focused organization, maintaining budget discipline to preserve profitability. Our balance sheet provides the flexibility needed to stabilize our core marketplace activity and invest in our upmarket transition."
