Fiverr International Ltd

NYSE:FVRR

Earnings Call Transcript 2024-Q3

[Operator]

Good day, and thank you for standing by. Welcome to Fiverr Third Quarter 2024 earnings conference call. [Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to hand the conference over to your first speaker today, Jinjin Qian, EVP, Strategic Finance. Please go ahead.

[Jinjin Qian, executive]

Thank you, operator, and good morning everyone. Thank you for joining us on Fiverr's earnings conference call for the third quarter that ended September 30, 2024. Joining me on the call today are Micha Kaufman, Founder and CEO, and Ofer Katz, President and CFO.

Before we start, I would like to remind you that during this call we may make forward-looking statements and that these statements are based on our current expectations and assumptions as of today and Fiverr assumes no obligation to update or revise them.

A discussion of some of the important risk factors that could cause actual results to differ materially from any forward-looking statements can be found under the Risk Factors section in Fiverr's most recent Form 20-F and other filings with the SEC.

During this call, we'll be referring to some key performance metrics and non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin and free cash flow. Further explanation and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP measures is provided in the earnings release we issued today and our shareholder letter, each of which is available on our website at investors.fiverr.com.

And now, I will turn the call over to Micha.

[Micha Kaufman, executive]

Thank you, Jinjin. Good morning everyone, and thank you for joining us.

We delivered a tremendous third quarter with both revenue and adjusted EBITDA exceeding the high end of our guidance range. By successfully executing our strategy to go upmarket, expand value-added services, and deliver innovative AI-powered experience, we are able to grow a higher quality buyer base, drive robust growth in spend per buyer, and strong expansion in take rate.

All of these efforts are clearly paying off, allowing us to accelerate our revenue growth this quarter. This is not an easy task considering that the entire professional staffing industry is down double digits year-over-year and overall SMB sentiment still lingers around historically low levels.

The fact that we are able to accelerate our growth under such macro conditions underscores the strength of our vision and strategy, and our impeccable ability to execute them.

We also continued to deliver steady improvement in adjusted EBITDA and strong cash flow generation. Last quarter, we laid out a 3-year target plan for adjusted EBITDA and free cash flow. With strong execution in Q3, I'm confident that we are well on track to deliver these targets. Our strong financial position allows us to aggressively invest in products and technology to drive growth while at the same time returning capital to shareholders and driving shareholder value.

Fiverr's strategy has always been to relentlessly focus on creating customer value and building the most beautiful, innovative, and simple-to-use products to transform the way people work. One thing that became clearer to me in the last year is that with the emergence of GenAI and the promise of AGI, the next generation of products we build must empower our community to fully leverage artificial intelligence. It also became clear to me that in the future, the best work will be done by humans and AI technology together, not humans alone or AI alone.

With that in mind, the role of Fiverr must broaden from a talent marketplace to a comprehensive work platform where incredible work happens. This means that every business that comes to Fiverr will have a world-class AI assistant to help them get things done, from ideation, scoping and briefing to project management and workflow automation. It means that they can seamlessly leverage both human talent and machine intelligence to create the most beautiful results. Fiverr has a long history of pioneering the industry with innovative products, and this is what we will do with AI as well. We are already starting to put a few pieces together to build towards this long-term vision.

On the buyer side, we are building a new search experience that not only includes more dynamic catalogs but also incorporates Neo, an AI-powered smart matching tool, to help customers match with more contextual information. We launched Dynamic Matching to allow buyers to put together comprehensive briefs with a powerful AI assistant and then get matched with the most relevant freelancer with a tailored proposal. These products allow businesses to fulfill much more complex projects on Fiverr without losing the speed, simplicity and convenience that they love Fiverr for.

Even in the few weeks since we launched these products, we have already seen an enthusiastic reception from our community and promising performance. The projects that come through these products are several times larger than a typical project on Fiverr, and we believe it has a lot more potential down the road as the awareness and trust of these products grow on the platform.

On the talent side, we are building the infrastructure to allow us to more efficiently distribute software tools that integrate with the work that is done on the platform. Some of the tools are built in-house, such as Promoted Gigs and Seller Plus. Some of these tools are through acquisitions such as AutoDS, and we believe there will be a lot of opportunities down the road to expand these value-added services through partnerships as well.

Lastly, I want to say a few words about Fiverr Pro. As you know, Fiverr Pro is a premium offering we launched to grow our penetration into larger businesses with larger freelancing budgets. We started by providing businesses with collaboration tools, white- 5 glove services and a fully vetted catalog in order to drive better conversion, engagement and retention among buyers with the highest lifetime value. Now, with our product expansion into Professions, Dynamic Matching, and Hourly Contracts and services such as project management, we are further leaning into these buyers to capture their budgets on long-term freelancer engagement.

Many of you have asked us what our right to win is in this segment of the addressable market. I want to point you to 2 things. First, we have a very large top-of-the-funnel, which allows us to acquire enterprise customers in a super-efficient manner. Most Fortune 500 companies already have employees who are on Fiverr and using our services. This bottom-up approach allows us to scale with very light sales and accounts teams.

Second is our technology stack. The speed, simplicity and convenience of Fiverr is fundamentally different from a typical staffing solution. From onboarding to compliance to payments and reporting, Fiverr is so much easier compared to a self-serve solution, and so much more cost efficient compared to a managed solution. And as I mentioned before, it is going to get even better as we implement AI capabilities further into our platform.

To close, I'm super excited about the many opportunities that are ahead of us. With the strong results in Q3, we are looking forward to wrapping up 2024 on a high note and can't wait to kick off another year of growth and innovation.

With that, I'll turn the call over to Ofer, who will share some financial highlights.

[Ofer Katz, executive]

Thank you, Micha, and good morning, everyone.

I'm pleased to report an exceptional quarter with both top and bottom lines exceeding expectations. Revenue for the third quarter was $99.6 million, up 8% year-over-year, representing an acceleration from 6% year-over-year growth in Q2. Adjusted EBITDA for Q3 was $19.7 million, representing an adjusted EBITDA margin of 19.7%, an improvement of 180 basis points from a year earlier. We continue to demonstrate our ability to deliver both growth and profitability improvement despite the macro uncertainty and our commitment to execute with the highest level of consistency, efficiency and focus.

Unpacking the strong results for Q3, we continue to see our efforts of going upmarket and expanding value-added products work well. Spend per buyer was $296 in Q3, representing year-over-year growth of 9%. More buyers are coming to Fiverr for larger and more complex projects. While the active buyer growth was muted, we see continued growth in buyers who spend over $10,000 annually.

On the macro level, we have seen some level of stabilization in trends since the volatility we experienced in June and July, however, the overall SMB sentiment remains weak, and the overall hiring environment continues to be challenging. We expect GMV will still take some time to recover, in the meantime, we believe our strategy to lean into products to drive wallet expansion, and our work to unlock new addressable markets continues to be the right strategy to generate growth catalysts.

Take rate for Q3 was 33.9%, representing a year-over-year improvement of 260 basis points. The continued strength of Promoted Gigs, the growth of Seller Plus programs with the newly launched Kickstart Program, as well as the strong growth momentum at AutoDS, all contributed to the take rate upside this quarter.

As a reminder, Fiverr's take rate consists of 2 distinctive components. First is marketplace commission of approximately 26%. And second is value-added services of an additional approximate 8% take rate.

The marketplace commission is directly tied with GMV on the marketplace and has 7 been relatively stable over the years. The expansion of value-added products has driven the vast majority of our take rate expansion. As Micha mentioned, Fiverr is increasingly building towards a comprehensive work platform that provides not only access to talent but also a suite of software and AI tools. Take rate expansion continues to be an important growth catalyst for us as we further expand our value-added product portfolio.

The strong Q3 results also translated into strong cash flow generation. Free cash flow was $10.6 million. Free cash flow excluding one-time escrow payment for contingent consideration was $22.7 million, representing 22.8% of revenue. Together with a balance sheet of over $650 million, we have ample cash to continue investing in product and growth while supporting other capital allocation priorities including optimizing capital structure, buyback and M&A.

With regard to the outstanding $460 million convertible note, our objective is to preserve maximum flexibility in this dynamic economic environment. We are confident in managing that liability through our strong balance sheet, but we will make that decision as we get closer to maturity. Given the strong execution of Q3, we are raising our full-year guidance for both revenue and adjusted EBITDA. For the full year 2024, we now expect revenue to be in the range of $388 million to $390 million, representing year-over-year growth of 7% to 8%.

In terms of underlying drivers, we expect spend per buyer to continue growing at a robust pace, offset by the decline in active buyers. We now expect the take rate to increase by approximately 330 basis points year-over-year, higher than we had previously anticipated. For adjusted EBITDA, we expect full year 2024 to be in the range of $73 million to $75 million, representing an adjusted EBITDA margin of 19% at the midpoint.

The updated full-year guidance implies Q4 revenue guidance to be in the range of$100.2 million to $102.2 million, representing year-over-year growth of 9% to 12%. Adjusted EBITDA for Q4 is expected to be $19.5 million to $21.5 million, representing adjusted EBITDA margin of 20.2% at the midpoint.

I'm very proud of the exceptional results we delivered in Q3, and believe the strong momentum in Q3 will largely carry forward into Q4. I'm even more excited about what's yet to come in 2025, including an action-packed Winter Release that's coming up 8 shortly, as well as many pipeline projects that Micha has alluded to in his remarks.

With that, we'll now turn the call over to the operator for questions.

[Operator]

[Operator Instructions] We'll take our first question from the line of Ron Josey from Citi.

[Ronald Josey, analyst]

I wanted to follow up on 2 things. First is in the letter, you talked about demand trends stabilizing here, but then obviously, the broader macro continues to have some challenges. And I think you highlighted hiring and SMB sort of challenges.

So just talk to us a little bit more about what you meant by stabilization, Micha? I was wondering if maybe that's a newer thing post rates coming down? Or just any insights on stabilization? And then maybe a bigger question on the buyer base. I was wondering with all these new products like new professions catalog, Dynamic Matching, and just launched Hourly Contracts that -- as we attract these newer buyers, I wanted to hear more about the product strategy to keep those buyers, call it, on the platform and how you think about your product catalog to continue driving greater overall higher-quality buyers on the platform?

[Micha Kaufman, executive]

Thank you, Ron. Thanks for the questions. As to the first question, if you recall, in previous earnings, we've mentioned that we've seen some specific volatility around June, July, August. And I think what we're calling right now is that we've seen September and the beginning of October to be slightly more stable. So there has been some improvement at the top of funnel, but nothing we can call a trend at this point. And just as a reminder, we're just a few days away from election. There's a lot of seasonality coming in, things that might create fluctuations in trend. So I wouldn't say that this we're not calling a new trend. We just called out the fact that after June, July, and August, we've seen some more stabilization and slightly better top of funnel on that.

Second question was about the buyer base and the products that we're building. Look, I think when we think about the types of things that we want to address as we're moving upmarket and we're entertaining larger customers with higher budgets for freelancing, we know that the things that they usually enjoy is mostly working with agencies offline. And we know that even though the fact that people are accustomed to doing it, they're used to working offline. There are a lot of weak points in doing so. Speed is one, convenience is another, clarity of pricing of delivery of the project itself. So everything that we're building right now are really tools that are eliminating all the things that customers dislike about working with freelancers or agencies offline and simplifying them and building beautifully simple products for our customers.

And if you look at that strategy and how this has been working out for us in the past year or 2, you see that those customers are growing. They're growing faster than the overall customer. They're spending more with us. They're sticking for a longer period of time. Their retention is better. Their spend is better. Their frequency is better. And that is why we're investing in these products.

And don't forget, I mean, we are one of the -- if not the first company that has done a very aggressive move into AI, not just on the catalog side of opening tens of different categories, but how we integrated AI in making our products much more -- or much easier to use and much more robust to do a lot of the work that was previously had to do manually.

So, I think that with the removal of all of these frictions, our anticipation is that part - that portion of the business will continue to grow very nicely as it has been growing in recent quarters.

[Operator]

Our next question comes from the line of Bernie McTernan from Needham & Company.

[Bernard McTernan, analyst]

Two for me. First, just with the guidance for revenue [Technical Difficulty] in 4Q, how should we think about the puts and takes between take rate and GMV growth? And is [Technical Difficulty] having an impact on the revenue acceleration? And then secondly, just on dynamic matching. I know it's only been launched for a few weeks, but can you talk about some of the metrics that you're using to gauge success of the product? And does it have any impact on advertising or [Technical Difficulty] platform?

[Micha Kaufman, executive]

You were cutting off a little bit, but I think I got most of the questions. So, in terms of guidance acceleration, look, macro hasn't changed, which means that we're working against a very negative market. If you look at the measures or the trends of SMB sentiment or you look at the professional staffing market, they're down double-digit percentage. So, we're already offsetting -- in our profile, we're offsetting pretty massively on the macro conditions.

Our view on GMV, we've reiterated it. We've talked about this. I think that within this market, other than just offsetting on these negative trends, we're improving our products and building new products that are creating value for our customers. And those products are working extremely well.

Customers are retained and happy to pay for these products because they're adding value for them. And so, when you look at the makeup of what allowed us to grow, it's the combination of somewhat better top of funnel. It's the tools that we either introduced in the past, like Promoted Gigs and Seller tools. It's new tools like the addition of AutoDS and it's higher spend per buyer because of all of our going upmarket product.

So, we feel that as long as the macro would not significantly change, what we're doing now with the offset is the right thing. Obviously, we're pushing ourselves to even perform better. And I think we are, and I think the numbers show it. But the strategy remained very stable, very consistent. We're not zig-zagging. We're delivering on the same things that we said we're going to do. And I'm happy to see that those developments are actually paying off for us.

[Operator]

Do you have any follow-up question, Bernie?

[Micha Kaufman, executive]

No, I think he had a second -- I didn't get.

[Bernard McTernan, analyst]

On dynamic matching, I know it's only been a few weeks, but can you just talk about some of the metrics you're using to gauge success of the product? And then does it have any impact on advertising or take rate? Just really want to know if it could be take rate dilutive if there's less of a need to advertise if all the sellers are fully matched.

[Micha Kaufman, executive]

So first, as you said, it's very early. What we're seeing from early signs are extremely positive signs. I think that the beauty about this product is it allows customers to be more nuanced, specific and detailed about the types of projects that they need. And it allows them to actually come up and voice much more complex projects within this product. And we're using AI technology to help them create more extensive briefs and then get matched with very, very specific type of talent, which saves them the trouble of actually going through and filtering talent and get tailored proposals.

Now I don't think that because of the nature of these products, I don't foresee definitely not an immediate impact on advertising. And the reality is we haven't seen that. I think that this product by itself is a little bit more relevant for very, very customized types of projects, whereas our catalog allows our customers to have a ready-made offering that they can just click and buy. So I don't see this influencing and the reality is that the Promoted Gigs continues to grow, and we're very happy with it.

[Operator]

Our next question comes from the line of Doug Anmuth from JPMorgan.

[Douglas Anmuth, analyst]

Can you guys talk about what you're seeing early on with AutoDS and just how we should think about contribution there? And then also, if you could talk a little bit more on the Business Rewards program, how that's increasing spending among some of your larger buyers? And then any impact that you're seeing thus far on loyalty as well?

[Micha Kaufman, executive]

So, on AutoDS, I mean, we're very happy with the acquisition. I think, as I mentioned, it is contributing to the take rate component. And actually, they had a better quarter than anticipated. Look, it's still a small business. So, in contribution to the larger picture of Fiverr, it's still small, which is why we're not reporting it separately.

But we're happy with the performance. And it's a great addition to the already in-house tools that we've built. I've mentioned them, I mentioned Promoted Listings. I've mentioned Seller Plus. Our loyalty programs are really tied in from both sides, from sellers and buyers into a place where we're enabling more engagement, both for our sellers and our buyers in a way that pays off. And we know that the repeat and sometimes working with the same seller, same buyer is a highly common thing on Fiverr. And these are the types of things that we want to encourage.

So we're very happy to see how these programs are shaping up because it's actually rewarding those who are doing it and mostly influencing engagement, which is really important. So retention and engagement are the 2 metrics of how we measure the success of these programs.

[Operator]

Our next question comes from the line of Jason Helfstein from Oppenheimer.

[Jason Helfstein, analyst]

Can you talk about where you see take rates going long term? Obviously, it's quite strong. The main driver really is, I guess, mix shift. It's not like this is all headline increases. But just, I guess, where do you see long-term take rates playing out based on where you kind of see the mix of the business over time?

[Ofer Katz, executive]

Hey Jason, this is Ofer. I think that -- I'm kind of thinking how to address this question because on one hand, we are very satisfied with the growth, the pattern of take rate over the last few years, starting with the basic 26% on the transaction growing all the way up to 30-plus percent with value-added services.

But in reality, we do see more room to expand both on existing product. We just launched the Kickstart subscription program for new seller, which is going really well, but there is more in the pipe. So I think that during this period of volatility and macro headwind, take rate expansion is a key driver for growth.

I think that in the future, as we believe where the market is open and macro turn around and start to expand, I think that the contribution of take rate is still going to be massive, but percentage-wise, it's going to be slower. But for the time being, again, with the existing program expansion, but also new program in the pipe, I think there is a good reason to believe that take rate is going to go higher and modestly over the next few quarters.

[Operator]

Our next question comes from the line of Bradley Erickson from RBC Capital Markets.

[Bradley Erickson, analyst]

First question is, you mentioned the stabilization at the top of the funnel, but clearly some crosscurrents going on with SMBs and hiring trends and everything. What do you guys need to sort of see to put marketing dollars back to work in the model? Like do you need to see kind of over improvement in the macro? Or is there anything that's maybe a bit more like in your control that might cause you to lean in on the marketing spend? And then I have a follow-up.

[Micha Kaufman, executive]

Thanks for the question. So essentially, the macro is putting more pressure on SMEs than it is on larger businesses. And therefore, acquiring SMBs is mostly a function of macro. Because right now, with the current situation from a LTV to CAC, it doesn't make much more sense to continue investing more than we are.

At the same time, when you look at larger businesses, midsized businesses to enterprise businesses, and you see the improvement that we've done both on the going upmarket, but also on their spend on the platform, it does make sense to invest more and we are. And we are - and we focused our efforts there on high-value buyers.

And so I think the good news on our end and I think I said that before, and it continues to be the case, the top of our funnel contains every type of customer that we need. Yes, there's a little bit of a lesser demand or traffic coming from very small businesses because they're not having the best time of their lives right now as a business. But we contain everything from small businesses all the way to enterprise businesses, which is good news because it means we don't need to massively invest in having a sales force or having account management to entertain those customers.

I think that when that sentiment is going to change, I've called out 2 sentiments. One is the SMB sentiment, which is not looking well. And the other is professional staffing. And both of these indexes are going down. Offsetting these indexes by just pouring money into the market from our experience is not the most effective, which is why we're not doing it.

I think that if we have signs, even the smallest signs that this is changing the way we do marketing, the marketing automation, the sophistication of our marketing would allow us to respond to it extremely fast. But I think that I've outlined those -- these are the main components for when we can spend more.

[Bradley Erickson, analyst]

Yes. That's great. That makes sense. And then just a housekeeping question, but one that we are getting from investors. Just curious if you can quantify how much you paid for AutoDS. I look at the balance sheet, the goodwill and intangibles ticked up pretty a bit, I guess. I wonder if that's maybe a good way to think about it or any other color you can give there?

[Micha Kaufman, executive]

I think that we're not disclosing this deal. We probably have seen, but there are some items on the financial statement that indicates that there is some cash flow component. Bear in mind that we did purchase some -- we did some actual hire earlier this year. So the amount is kind of compounded of those 2 deals. So I think it's a few dozens of millions of dollars. So you can see that in the financial statement.

[Operator]

Our next question comes from the line of Marvin Fong from BTIG.

[Marvin Fong, analyst]

Congrats on the quarter. Two questions for me. So I would like to just drill down a little bit deeper on going upmarket. You mentioned in the shareholder letter, things like Dynamic Matching professions and Hourly Contracts. Just wondering if you could give us some sense of which of those items you feel is having the most impact. And I'm especially interested in hourly contracts. It seems like unlocking a major portion of the market. Could you provide any color on what you're seeing in terms of early start on how much of your mix is going to hourly contracts? And then I have a follow-up.

[Micha Kaufman, executive]

Marvin, thanks for the question. So essentially, I think you mentioned yourself, these are extremely new products. And as I've said, what we're seeing there gives us very high confidence that these are going to be very successful products. And the reason is they're dealing with very specific types of needs that Fiverr didn't deal with before. And it was important because, as I've said, most customers work with agencies or freelancers offline, and they are used to work in a certain way. And I think that some of these behaviors, we didn't capture well.

So as an example, if you think about the market-based model, where there's predefined prepackaged, pre-priced services that are very easy to purchase, if you have a very long ongoing relationship with a freelancer, where it's mostly open-ended because there's -- it's not like a project that has an A to Z that is very clear, start and an end, but it's mostly on an ongoing basis. This is where our lead models come in. And this gives the additional flexibility.

Again, these products are super new. What we're seeing there is they're really catering to the types of projects and services that are selling for many thousands of dollars, okay? And are, by definition, longer in duration. So it's doing exactly what they were designed to do, while they're not competing with the other offerings that we have because we're tailoring each of our offering into a specific use case so that for the customers, it's very easy to understand which of our solutions is the best one for them.

[Marvin Fong, analyst]

Got you. And totally understand these are very new products. I appreciate that answer. My second question is just on the guidance. And I think you mentioned earlier, this is a pretty seasonal quarter. Correct me if I'm wrong, but typically a pretty seasonally strong quarter, the fourth quarter. So as we stand here at the end of October, do you feel like you have that visibility into that seasonal ramp? Or is it still too early to say and still waiting on seeing that develop and how that kind of plays into your guidance?

[Ofer Katz, executive]

I would make the question more interesting by adding the election at the U.S. that makes this quarter even more interesting. So that despite -- or on top of the seasonality and end of year with the last 2 weeks kind of shy in terms of buyer attendance and priorities. I would say that we feel we have enough confidence to guide and beyond. We actually increased guidance or improved guidance for the quarter. And this is based on the exit point of last quarter, together with stability of top of funnel and the strong pipeline and the value-added services. So to address the simple question is yes, we feel we have enough confidence to guide against those trends.

[Operator]

Our next question comes from the line of Rohit Kulkarni from ROTH Capital Partners.

[Rohit Kulkarni, analyst]

A couple of questions. One is just on kind of the cost side of the equation. Can you talk about what your hiring plans look like? How have they trended over the last 6 months? And any color that you can provide in terms of what end markets you're feeling about and how that translates into your hiring plans? And then second is just take rate, is something that investors kind of want to get their arms around. But over the last 6 months, there seems to be like a nice step-up in how take rate has expanded. Perhaps talk about -- there are some coincidental factors in terms of how you have expanded upmarket and that has been successful. To the extent you can provide any more color around what may have led to that kind of slight step-up in the expansion and how sustainable that is? Perhaps it's about going upmarket, perhaps it's AI or anything else, that would be helpful.

[Micha Kaufman, executive]

On the cost side, what I would say is hiring are done in a very disciplined manner. And we've been very disciplined on cost. But we're not shy from hiring where we have needs to further invest in product and in growth. I think we've done it in a very responsible manner.

The other question about take rate. So I would say there aren't any surprises here. And again, I'm very proud of the fact that as management, this company has been very consistent in the way in which we've built the business. And actually -- look, if you look at 2024, it's a pretty impressive year. But despite the fact that we had very, very high pressure on the macro side, SMBs and professional hiring, we've been able to offset a lot of it and continue growing. We've been growing the bottom line, our profitability profile even faster than we said we will because we had the opportunity. We've done buyback to increase and give more value to our shareholders. We built products that allowed us to go up market very efficiently, which we have and they're driving the platform higher.

We were very fast to respond to the opportunity of AI and made it a net positive for us and a force of growth and ability to continue investing in great products. And we've offered great products and solutions to both our sellers and buyers, and they love them, and this is why they embrace them more, which allows us to increase the volume of people that are using these tools and also increase the exposure of these offerings across our products. There is no magic. It's just consistent hard work that pays off.

So to your question, do we think that there is anything coincidental? Or if we think that there's any reason to think that this would not be the trend moving forward? The answer is no. Because as I've said, it's a result of very methodical, hard and consistent work.

[Operator]

Do you have any follow-up questions, Rohit?

[Rohit Kulkarni, analyst]

If I could squeak in a couple -- one more in terms of capital allocations and debt and buybacks, any latest -- any updates on the convertible notes as well as the status of any additional share buyback authorization?

[Ofer Katz, executive]

I will start by saying that we are lucky or smart to have sufficient cash to fulfill all obligations, including the convertible note if time by the end of next year. We are -- we have the flexibility to decide throughout this period and to react to market condition and any opportunity. But again, we have sufficient cash to stand against those, that liability. I think in terms of share back authorization, we did some share back this year. I think we'll -- we are on top of this topic to make sure that we do our best and prioritize the shareholders' value on the long-term. So there's nothing to update as of now. But I recommend that you guys stay tuned to see how we react against the shareholders' value.

[Operator]

We'll take our last question today from Josh Chan of UBS.

[Joshua Chan, analyst]

I've got 2 questions. One is on the take rate guidance going up. I guess, could you talk about what factors drove you to be able to raise your take rate guidance? And what kind of surprised you in that regard?

And then secondly, just on AutoDS, does that business happen to have a very seasonal dynamic in Q4 with the holidays? I'm just wondering whether revenue contribution is stronger in Q4 than other quarters.

[Micha Kaufman, executive]

Good morning, Josh. Thanks for the question. Take rate guidance, again, not massive surprises. It's just working. And it's -- maybe it's working a little bit better. I called out the fact that AutoDS had a slightly better quarter than initially anticipated, which had some contribution. But the same goes for our other take rate driving products. So that is why we have the confidence and that's why we guided the way we did.

In terms of AutoDS, look, every business, including Fiverr is -- has seasonality factor. And there is a seasonality factor in Q4 for Fiverr as well in Q1. And the same goes for any other of our businesses. We're not guiding specifically to any one of our businesses. Again, it's a small contributor at this point. We're happy with how it's growing, and it gives us nice contribution, but it's still small. We're not guiding specifically. It's a SaaS business, right, which is in many ways different than a lot of our businesses, which is one of the reasons why we like it, and it allows us to extend and proliferate our different offerings. And as Ofer said, it's just -- we're guiding based on how we're seeing the previous quarter ending, this one starting. And that's it. I don't have that much more color to.

[Operator]

We have another question from Andrew Boone from JMP Securities.

[Andrew Boone, analyst]

Micha, in the prepared remarks, you talked about the vision of expanding Fiverr beyond the marketplace and adding more tools for freelancers and I guess, users of the platform overall. Can you just expound upon the vision of what you might be willing to offer? What does that start to look like?

And then in the letter, new cohorts were called out as outperforming COVID cohorts. Can you guys just help us understand kind of COVID cohorts given their size and the importance of what that's been historically for the business, kind of how those are trending? Are you guys seeing stabilization there as we continue to move away from COVID or is macro kind of overwhelming that?

[Micha Kaufman, executive]

Yes. I think -- Andrew, thanks for the question. There isn't that much more I can talk about division. And this is because of competitive reasons and because of the fact that we do want to keep some nice surprises for our community and for the market. But I think I've alluded enough in where we make our investments and how we think about our products and how we think about this combined opportunity for intelligent machines to work with extremely talented people. And I think that around that space, there's a lot to do, and we are. And I'm super excited. And I'm not going to jump the gun and talk about this more, but I will say that we'll be happy to share news as soon as we have some interesting things to demonstrate.

In terms of COVID cohorts, yes, I mean, yes, they're larger in size, obviously, and we know that. These cohorts are pretty stable at this point. There are a few years into maturity now. And I think it's worth calling out that the efforts that we're doing to focus on high-value buyers. We do see that cohorts of the last 2 years are performing better than COVID cohorts. So it's not just the fact that there is a maturation phase into these COVID cohorts. It's the fact that newer cohorts are different in quality because we focused more on high value, which also is something that you see on the spend per buyer that is growing very nicely.

[Operator]

We have reached the end of the question-and-answer session. Thank you all very much for your questions. I'll now turn the conference back to Micha for closing comments.

[Micha Kaufman, executive]

Thank you, Amber. You've been wonderful in running this call. I appreciate that. And I appreciate everyone for dialing in and giving us some great questions. Looking forward to talking to you very soon. Have a great day.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.