Fiverr raises forecast after strong Q1, despite AI-driven customer decline
Freelance platform posts $25M profit and 15% revenue growth as new contracts boost momentum.
Fiverr, a software company that connects freelancers with businesses, is starting 2025 with accelerated growth and improved net profitability. The company, traded on the Nasdaq, is currently valued at around $1 billion, with its stock rising 5% in early trading.
This improvement is driven in part by new large-scale contracts in areas such as content writing, app development, video production, and digital marketing. As a result, Fiverr has raised its annual revenue forecast.
The company reported first-quarter 2025 revenue of $107.2 million, a 15% increase compared to the same period last year. This growth comes despite a continued decline in the number of active buyers, which dropped to 3.5 million from 4 million a year earlier.
Fiverr attributes this buyer churn largely to the rise in AI tools that automate services traditionally offered on its platform, such as translation and copywriting. In response, the company launched its own AI-powered tools in February, designed to help freelancers close contracts more efficiently.
These tools act as virtual assistants, answering client questions automatically and providing AI-generated work samples, thereby saving time and effort for freelancers. Fiverr announced today that over 6,000 sellers have used the tools, and more than 200,000 buyers have interacted with the agents.
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While the AI tools have yet to impact financial results, Fiverr expects second-quarter revenue of $105–109 million, maintaining the current quarter's growth trajectory. For the full year, the company slightly raised its guidance, forecasting annual revenue of $425–438 million.
Although gross margin showed slight erosion, Fiverr reported a net profit of $25 million for the quarter, up from $21 million in the same period last year. Operating cash flow reached $28.3 million, a 33% increase from Q1 2024.
