Fiverr cuts outlook as AI weakens freelance demand

Fiverr reported second-quarter results that missed Wall Street expectations as generative AI tools continued to undercut demand for lower-complexity freelance work. Revenue was $97.8 million, down 10% from $108.6 million a year earlier and below analyst expectations of $99.8 million. Adjusted net income was $0.50 per share, and shares fell 20% in pre-market trading after the report.

The pressure was concentrated in categories such as basic copywriting, simple graphic design and entry-level programming, where customers are increasingly using generative AI instead of hiring freelancers. Marketplace revenue declined 15.5% year-over-year to $63.1 million, while annual active buyers fell 21.9% to 2.7 million. Spending by remaining customers rose, with average annual spend per buyer up 15.6% year-over-year to $368 and customers completing projects worth more than $1,000 increasing 13%.

Fiverr is trying to shift toward larger, more complex work supported by proprietary AI matching and quality verification tools. Third-quarter 2026 revenue is expected at $80 million-$88 million, representing an 18%-26% year-over-year decline, while full-year 2026 revenue was cut to $356 million-$372 million, representing a 14%-17% annual decline. The company remained profitable, generating $13.6 million in free cash flow and ending the quarter with $308.5 million in cash and marketable securities.