Fiverr Q4 2025 Earnings Underscore Buyer Decline Amid AI-Led Margin Gains

What happened

Fiverr's Q4 2025 earnings report highlights a continued bifurcation in performance, with top-line growth driven by high-margin services but overshadowed by persistent declines in the core marketplace. Key metrics likely show annual active buyers falling around 10-12% year-over-year, extending a trend from prior quarters and raising concerns about user retention and platform health. Despite record adjusted EBITDA margins above 20%, fueled by an AI-first restructuring and cost cuts, marketplace revenue remained flat or negative, indicating a fundamental shift away from transaction-based growth. Spend per buyer increased, suggesting a mix shift toward higher-value customers, but this has not stabilized the overall buyer base or reversed GMV erosion. The results come ahead of a critical $460 million convertible note maturity in November 2025, adding capital-structure uncertainty to operational challenges.

Implication

The ongoing double-digit decline in active buyers, despite AI-driven profitability, signals deep-seated issues in Fiverr's marketplace model that could undermine long-term growth if not addressed. High valuation multiples near 33x EV/EBITDA are unjustified given flat marketplace revenue and reliance on non-GAAP adjustments for profitability. Services growth, while robust, must accelerate further to fully offset marketplace erosion, but any slowdown could trigger multiple compression and share price weakness. The upcoming convertible maturity requires a prudent, non-dilutive resolution to avoid equity value erosion, yet operating cash flow may be pressured if margin gains prove unsustainable. Until evidence emerges of buyer stabilization and a clean capital-structure outcome, a 'wait-and-verify' approach offers better risk/reward than adding exposure at current levels.

Thesis delta

The Q4 2025 results confirm the existing DeepValue thesis of a 'WAIT' rating, as active-buyer declines persist and margin resilience is offset by structural marketplace weakness. No material shift is indicated; instead, the data reinforces the need for monitoring over the next 6-12 months for signs of buyer stabilization and convertible resolution before reassessing the investment case.