Fiverr International Ltd (FVRR) 2025 Q4 法說會逐字稿

Thank you, operator, and good morning, everyone. Thank you for joining us on Fiverr's earnings conference call for the fourth quarter that ended December 31, 2025. 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.

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

Let me start simply. 2025 was an execution year, and we delivered. Revenue grew 10%, accelerating from 8% in 2024. Adjusted EBITDA reached $92 million, up 23% year-over-year, with a 21% margin. We met the revenue and profitability targets we set at the beginning of the year while continuing to generate strong cash flow. Importantly, we achieved this while repositioning the business for where the market is headed.

Products like Dynamic Matching and Managed Services are enabling us to expand into larger, more complex projects and drive sustained wallet-share growth. Spend per buyer increased 13% year-over-year, accelerating from 9% in 2024. Buyers spending over $10,000 annually grew 7%, and GMV from projects over $1,000 increased 23%. These are not just product milestones. They reflect a broader shift in how businesses engage with talent.

As many of you saw in the shareholder letter we published this morning, following the restructuring we undertook a few months ago, we have since developed and begun executing a comprehensive, multi-year plan to transform Fiverr from a transaction-oriented marketplace into a trusted work platform. One that enables businesses, AI models, and agents to collaborate with talent on complex, high-value outcomes through intelligent matching, integrated workflows, end-to-end orchestration and fulfilment, and durable trust.

Before I go deeper into that transformation, it's important to step back and understand the broader environment that led us here, and why we believe this is the moment to act decisively. There is a prevailing narrative that AI eliminates labor. That framing is incomplete.

What AI actually does to work is: One, it compresses task duration. What took weeks now takes days. Two, it expands project ambition. When execution becomes cheaper, scope grows, and the number of projects grows exponentially. Three, it democratizes capability. Individuals can operate with domain expertise beyond their original knowledge base.

The result is not less work, it is more ambitious work. Human talent remains essential. What changes is where value resides. In context, judgment, orchestration, trust, and ownership of outcomes. There will be displacement in lower-value, transactional work. We are already seeing that dynamic.

At the same time, demand for higher-value, specialized work is accelerating at a healthy double-digit rate. As work becomes more nuanced and complex, matching talent becomes harder, not easier. That makes Fiverr's core mission of connecting businesses with the right human talent more relevant than ever.

Looking ahead, much of the workflow will become human-in-the-loop. Hiring decisions will increasingly be influenced, and in some cases initiated, by AI agents. In that environment, traditional resume-driven hiring models become inefficient and unreliable. Precision matching, contextual data, and outcome history become critical.

So what does this mean for Fiverr? First, we see a significant opportunity. Today, projects over $1,000 represent less than 15% of marketplace GMV, yet they are growing 23% year-over-year. With focused execution, we believe this segment will become a materially larger contributor to our business. We are prioritizing two categories of high-value work.

The first is complex, orchestrated engagements requiring collaboration between businesses, talent, and Fiverr. For example, through Managed Services, we support a Georgia-based automotive technology company with ongoing multilingual UGC production for the Canadian market, coordinating multiple creators each month. This reflects growing demand for scalable, always-on creative production powered by global talent.

The second is AI-native work building the AI-enabled economy. For example, we are partnering with AI model safety companies to provide domain experts who help identify vulnerabilities in foundation models. In another partnership, we are enabling enterprises to build AI workflow automation through white-labeled solutions that allow them to deploy AI agents quickly and cost-effectively.

In one case, we streamlined a historical case discovery workflow across Salesforce and Jira, reducing knowledge gaps and improving support efficiency. What would have required two weeks of internal implementation was delivered in 1.5 days at a cost of $6,000, reducing deployment time by roughly 90%.

These examples illustrate where the market is moving and where Fiverr is leaning in. Fiverr has a strong right to win in this AI-enabled talent economy. First, the future of work is human-in-the-loop. Scarcity lies in high-quality human expertise, not AI agents. Fiverr operates one of the largest global talent networks and has deep experience managing liquidity, quality, and engagement at scale.

Second, our end-to-end transaction model is built around outcomes. That structure integrates naturally into AI-enabled workflows and eliminates much of the friction inherent in traditional hiring systems.

Third, our data is a durable advantage. Over 16 years, we have captured not only millions of transactions, but the contextual relationships between buyers and sellers, what was delivered, in what context, and with what results. That depth of data enables precision matching in increasingly complex environments.

Capturing this opportunity is why we are making foundational investments across data infrastructure, backend systems, and product experience, accelerating Fiverr's evolution into a fully AI-native talent platform. While we have made steady progress over the years, the velocity of AI innovation requires us to move faster and more decisively.

A few months ago, we initiated a company-wide restructuring to accelerate this shift. We have since developed a multi-year execution plan built around four pillars:

The first is Matching. Building advanced semantic and reasoning layers powered by proprietary data to enable AI-native talent matching.

The second is Product. Transforming the experience across matching, fulfillment, collaboration, and talent management.

The third is Go-to-Market. Expanding into enterprise and AI-native distribution channels with scalable growth engines.

The fourth is Operational Excellence. Becoming an AI-native organization across engineering, product, and operations.

We expect tangible impact within four to six quarters, including a stronger high-value work flywheel and proven AI-native growth loops. These milestones will position us for meaningful revenue expansion in the years ahead. Let me be clear, this is the moment to lean in.

AI is not shrinking the market for human talent. It is reshaping access and expanding ambition. Platforms that own the intelligent matching layer between business demand and human capability will capture significant value. Fiverr has the assets, infrastructure, and strategic clarity to lead in that environment. 2026 will be a transformational year, positioning us for accelerated growth in 2027 and beyond.

Before I turn it over to Ofer, I want to acknowledge that today marks his final earnings call as CFO. Ofer will continue as President, focusing on strategic investments and M&A as we execute this next chapter.

Esti, after 10 years at Fiverr and four years as EVP Finance, will assume the CFO role. Her deep institutional knowledge and disciplined financial leadership provide important continuity as we execute through this transformation.

Jinjin, after seven years leading IR and Strategy, will step into the newly created Chief Business Officer role, overseeing revenue, talent, fulfillment, and business operations. As part of this transition, she will be relocating with her husband and two young children from San Francisco to Tel Aviv to take on this expanded responsibility.

I'm excited about our expanded leadership team that will strengthen our ability to execute with focus and velocity as we move forward.

With that, I'll turn it over to Ofer for the financial details.

Thank you, Micha, and good morning, everyone. I'm excited about the transformation we are undertaking and very happy to welcome Esti and Jinjin into their expanded leadership roles. The work ahead is ambitious, but across the management team and the broader organization, there is strong alignment, clarity, and conviction on the direction we are taking.

Most importantly, there is a shared sense of purpose that ties us back to Fiverr's founding 16 years ago. That shared sense of purpose brings tremendous focus, energy, and confidence as we enter 2026.

With that, let's turn to financial highlights. As we wrap up 2025, we delivered fourth-quarter revenue of $107.2 million, up 3% year-over-year, while achieving record adjusted EBITDA and adjusted EBITDA margin. Adjusted EBITDA for Q4 was $26.5 million, representing an adjusted EBITDA margin of 25%, an improvement of 470 basis points from a year earlier.

We continue to generate healthy cash flow, with $21.8 million of free cash flow in Q4'25. We had a convertible note with a principal amount of $460 million, which was fully repaid during Q4'25. We continue to execute a disciplined, thoughtful capital allocation strategy, and our strong balance sheet allows us to invest in growth, return capital to shareholders, and remain opportunistic on the M&A front.

Diving into our Q4 results. In Q4, Marketplace revenue was $71.5 million, driven by 3.1 million active buyers, $342 in spend per buyer, and a 27.7% marketplace take rate.

Growth in this segment continues to be influenced by broader softness in SMB sentiment and muted freelance hiring demand. More importantly, we continue to see diverse trends on the marketplace between low-end transactions and high-value work. GMV from transactions over $1000 grew 22.8% year-over-year in Q4 and continues to accelerate.

Looking ahead, we expect elevated volatility in Marketplace revenue this year compared to last year, as the transformational work we are doing intentionally deprioritizes efforts to optimize low-end transactions, which today represent the majority of the marketplace.

As we make progress towards strengthening our flywheel for high-value and AI-native work, we expect these focus areas to become a larger portion of our overall business, which will lead to re-acceleration of this segment.

Services revenue in Q4 was $35.6 million, representing year-over-year growth of 18% and accounting for 33% of our total revenue in Q4. The upside was driven by the continued strength in Fiverr Ads, subscriptions, and e-commerce solutions.

For 2026, we expect more moderate growth in Services revenue, as the impact from the AutoDS acquisition normalizes and the pace of expansion for Fiverr Ads and Seller Plus moderates compared to 2025.

As Micha mentioned, 2026 will be a transformational year, with critical foundational investments across data infrastructure, matching technology and product experiences to strengthen our high-end talent flywheel. It is important to note that we are committed to executing this plan with strong financial discipline.

The structural profitability of our core marketplace remains strong and is expected to stay north of 20%, as we retain significant control to maintain the health and profitability of the business.

At the same time, we will use a portion of the cash generated to fund the transformation work ahead. We expect that to impact adjusted EBITDA by approximately 200 basis points in 2026. On capital allocation, we maintain a disciplined approach and expect to continue executing our buyback program in a balanced manner. As of December 31, 2025, we have $67.5 million left on the current authorization.

Now, onto guidance. For the full year 2026, we expect revenue to be in the range of $380 million to $420 million, representing year-over-year growth of negitative-12% to negative 3%. Adjusted EBITDA is expected to be in the range of $60 million to $80 million, representing an adjusted EBITDA margin of 18% at the midpoint.

For the first quarter of 2026, revenue is expected to be between $100 million and $108 million, representing year-over-year growth of negative 7% to 1%.

Adjusted EBITDA is expected to be $19 million to $23 million, representing an adjusted EBITDA margin of 20% at the midpoint. The wider-than-normal revenue guidance for the full year and the first quarter reflects the elevated uncertainty as we execute our transformational plan focused on high-value work, alongside evolving market conditions.

On the adjusted EBITDA side, the updated guidance for this year reflects the revenue trends we see, as well as the impact from investments into foundational work. That said, we do not expect structural changes to the core business unit economics, and we expect our ability to drive intrinsic leverage for the marketplace business model remains intact.

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

We will now begin the question-and-answer session. (Operator Instructions)

Ronald Josey, Citi.

Great, thanks for taking the question and the insights on the call. You talked about an execution plan around matching product go-to-market and operations and given the progress I think that we've seen around managed services and dynamic matching, just talk to us about how you see these investments in those four core areas sort of unfold?

Meaning do you have more work to do on the product before we start investing in the enterprise go to market. Any insights there would be helpful as we think about this, multi-quarter transition. And then we cut over the balance sheet, we ended the year with approximately $300 million in cash. I know we've mentioned M&A a few times on the call and Ofer in your new role. Talk to us about what you're looking for maybe an M&A or just overall capital allocation. Thank you.

So essentially the way we're thinking about the investment is really to deprioritize low-end and low value transactions and focus most of our investment in high-end, high skilled, larger scope projects, a segment that is currently under 15% of our revenues. And we and think it should and it will contribute much more to bring us back to GMV growth. That's what 2026 is all about. It's about making that turn, so that 2027 and beyond will be growth years.

Now, bear in mind that the nature of the transactions that are happening on our platform are changing. And we're running a platform that has been built over 16 years. Some parts of it need to be rebuilt. Some parts of it need to be reinvested in and aligned into this new reality.

As I've said in my opening comments, the matching portion of it has to deal with the more nuanced needs of businesses today. So we need to calibrate this and make sure that we maximize the usage of our very deep data asset in order to do this.

The same goes for product, when we think about the entire matching and fulfillment management, we need to understand that larger projects require more sophisticated, fulfillment and collaboration and matching capabilities, also understanding that on the demand side, we may not just see companies and human beings, but also AI agents that can actually take care or find benefit from using our platform.

When we think about go-to market, again, in this case, we are expanding our go-to-market flywheel. So first of all is the high value projects of work and then there's the aspect of AI native use cases and I've given a few examples in my opening comments in our -- letter to shareholders where we see more and more businesses and foundational companies that are building more -- more AI models and more agents.

And all of them require human in the loop to continue calibrating, ensuring their security, their integrity, and overall, being able to make them customer ready, and we're seeing more businesses that are coming to fiber because we probably have the largest and widest scale talent in the world on our platform.

And so adjusting for all of these new needs will help us accelerate that portion or that segment of the market which we feel is the most durable and more most sustainable to ensure that we can continue growing for many years ahead.

Ron, on the M&A front, I will start by saying that we have $300 million, but the amount of cash is growing and expected to grow throughout the quarters. And then, we continue to be highly disciplined in the way we utilize this cash, looking for tuck-ins and then larger transactions at the same time --

Of course, we are looking to grow in the market.

And the M&A support this high-end and flywheel as Micha mentioned

Eric Sheridan, Goldman Sachs.

Thanks so much for taking the question. Just want to come back to the theme of deprioritization of the lower end as you realign the platform. How should we think that manifests itself in financials as we move deeper into the year?

Are there any elements of things that will impact the OpEx line as you sort of pare back investments in the lower end of the market or elements where there could be more volatility than usual as we think about either the first half versus second half dynamic as you sort of reposition the business for the longer-term. Thanks so much.

So when we think about the deprioritization is really to ensure that the majority of our resources are directed in growing the segment that as we demonstrated, of grown significantly -- significantly over last year and to make sure that it becomes a much larger portion of our market.

As a reminder, when you look at the low skills. And small scope, a lot of that is being replaced with AI solutions. And still, that is a large portion, that contributes to fiber growth. In that segment we are seeing a decline, and we've been talking about this and we don't foresee that decline is going to slow down. The assumption is that with the newer developments around AI, this will continue to be the case.

And so that centralization in our business has to change and therefore we're shifting those resources into ensuring that the high-end portion of our business that has been growing will become a larger portion of our overall GNV contribution.

That is extremely important and we want to make sure that we put every available resource towards that. But we're very committed to execute this transformation with very high degree of financial discipline. So we're going to protect the core business to continue generating healthy cash flow. And we talked about the structural profitability of core business to stay north of 20%.

I hope this, answers your question.

That's helpful. Thank you.

Bernie McTernan, Needham & Company.

Maybe just two for me. How should we expect the margin profile of the company to look, after, Fiverr for its, done or complete or some progress on? Is this going to be a higher margin company or lower margin company than before? And then how does Fiverr Go fit into this? Are you seeing Fiverr go help higher value transactions already or just interested in terms of if this is still a key product going forward? Thank you.

I think on the margin profile, we are going to see some lower margin in terms of EBITDA in the short term, but we anticipate the long-term EBITDA to go back to the '25 long-term EBITDA shortly after. In terms of gross margin, I think it is going to remain the same. It is all about the profile of investment, and that is putting a little bit more into R&D, which is why we anticipate some pressure on the margin. --

Bernie, on your question about Go, essentially, a lot of what we built into Go has already been integrated into several aspects of our product. And when we talk about the investment that we are doing in the product side, that is one of the pillars of this year. A lot of what we have taken from Go and how it can help buyers and sellers communicate more effectively, scope their work, the nuanced understanding of exactly what they need and what is the most suitable talent for the task, is going to be integrated further into the product.

So we are not focusing on Go as a product by itself, but actually taking the assets that we have developed for that project and integrating them into the customer experience.

Jason Helfstein, Oppenheimer.

This is Chad on for Jason. You know, it seems like taking one step back for kind of two steps forward. You are cutting a lot of cost out of the business with the restructuring. Is that having a bigger impact on revenue in 2026 than maybe you previously thought?

And then how should we think about OpEx growth in 2026? Do you have to invest more in the business? Or, you know, that is it. Thank you.

Thanks for the question, Chad. So on the first question, the answer is no. The revenue is not impacted by restructuring. It reflects the ongoing trends on the marketplace, meaning lower end versus higher end, lower end seeing a decrease, higher end seeing an increase. And, again, going back to our strategy, the entire idea is to double down on high end and to make it grow faster and make it become a more meaningful contributor to our GMV growth. We have been talking about this for a couple of quarters.

What we have seen is an elevated sense of urgency to move faster, which is why a lot of the strategic, the multiyear strategic plan that we have is all about that. And we said that once the high end is going to become a more meaningful contributor to GMV, GMV will go back to growth.

And, again, we are seeing this with double-digit percentage growth in transactions over $1,000, and so we are doubling down on that. So, again, the reflection is just ongoing trends of what we are seeing in the low-skill versus high end.

Then on the second part -- on the OpEx. In fact, we think that the core business will continue to deliver a 20%-plus margin. The portion of what we will reinvest into the business on the transformational work.

The impact of that is going to be around 2-percentage-points. And I think it is -- also worth noting that due to recent appreciation of Israeli shekel to US dollar, FX has added over $10 million of headwind on EBITDA guidance for the year.

Marvin Fong, BTIG.

Great. Thanks for taking my questions, and congrats to Jinjin and Esti. My first question talked about returning to growth in 2027. And I just wanted to understand that commentary a bit better. So are you expecting the high-value work to reach a majority of the marketplace by 2027, even in maybe a single quarter of 2027? Or when do you actually expect the majority of the marketplace to be high-end work? And then I have a follow-up.

Thanks for the question. So there is a GMV mix shift. High-value growth will continue to grow and become a bigger portion of total marketplace, and this will lead to GMV inflection. And as we said both in the letter to shareholders and in the opening comments, that change is also going to allow us potentially, over the year, to start giving the market the signals that we are seeing.

Right now, the metrics that we are reporting are going to remain intact, but over time, we want to put more emphasis on what is strategic and what we feel is going to drive the sustainable growth of the business over the coming years.

We have not guided specifically for that, and we are not talking about percentage. And mathematically, even before it gets to the majority, it will drive GMV growth. But this is the plan, and we expect to see signals over the coming quarters to let us know that the investment there is actually accelerating the growth of that segment.

Okay. That is great. Thank you for that. And then my second question, I would just like to double click more. I think you mentioned, or we have been talking about go-to-market and distribution channels. And so I would like to talk about both enterprise a little bit more. Is there anything structurally you are doing to either the offering or the way you intake enterprises or approach enterprises that is going to change maybe a more formalized enterprise segment?

And then in the shareholder letter, you talked about one of the measurable signs of progress would be at least one AI-native distribution channel contributing to GMV. I just would love to understand, is that a specific partnership you are developing there, or you just kind of expect the growth of those channels for at least one of them, presumably ChatGPT or Gemini, to just naturally become a large distribution channel for you.

Thank you. The reason why we didn't call out, specifics was deliberate. But it's the expectation is based on existing, proof of concepts that we're having with AI model, companies and enterprises. And we believe that when the products can deliver their needs at scale, this could be a very strong contributor for the growth.

And so when we think -- we think about in the same aspect on our enterprise and we've given some qualitative examples. Again, both in the shareholder letter and in the opening remarks, and I've called out the example of the partnership that we have with an AI model safety company to provide domain experts who help identify vulnerabilities in foundational models.

And in another partnership, enabling enterprise to build AI workflow automation through white label solutions that allow them to deploy AI agents quickly and cost effectively. And again, this is all a part of the fact that AI enables many more businesses to build more and to build more ambitiously.

Along with that building, there's a lot of support that they need. There's a lot of calibration and fine tuning. There's very specific types of expertise that are required to take those products and those solutions and make sure that their integrity is high. They're coming to us with it, and we believe that we can create meaningful flywheel around these opportunities.

Nat Schindler, Scotia Bank.

You help me understand, I'm a little confused. I understand deprioritizing the lower end of the market. But I'm trying to figure out is there any products you're not going to actually even be selling any services from your service business that you're just not going to sell to them anymore because I'm trying to understand why you think revenue will get worse as the year progresses.

So your revenue declines exceed as you go forward or go down as you go forward. I understand investing it might take a little while to turn the -- to really build the enterprise business further. But I'm trying to understand what you're seeing In quarters two, three, and four that make them worse than quarter one on revenue.

Essentially, we're not killing any of our products. It's what we're mostly deprioritizing is the continuing optimization of these products in favor of developing the types of product experiences. And the underlying technologies and infrastructure to address the higher end project.

So this initial of itself should not be a driver for decline, and it's not about the types of services or products that we're discontinuing because we're not discontinuing anything. We're just making sure that after the restructure we have the vast majority of our resources to invest in the higher end and higher skilled types of services for the larger types of customers that are spending more with us and accelerate the growth that we're seeing there even further.

Okay. I still am a little unclear on them what signal you're reading that things are going to decline more in the back half of the year than in the front half?

So we've seen some decline in simple services across the board. There are areas where we're seeing slightly higher decrease than others. For example, within programming, we're seeing the simple side of programming like things like simple website building. Accelerating the decline. As a result of vibe coding and simplistic types of coding related solutions.

But on the same side, we are seeing areas where we're seeing growth, like digital marketing is one of them where we're seeing nice growth in services. So the idea is not to discontinue anything. And by the way, we've called out these changes over the past few quarters as an example, writing in translation was heavily impacted by AI down 20% over a year.

And we've seen this for a while. We, we've seen the same under the vertical music and audio is also impacted, but slightly less in the 10s range, primarily because voiceover is a meaningful portion of the music and audio, vertical. So there's anecdotal, areas.

Again, what we're the decline that we're seeing there is mostly in the very simplistic, low skill related types of services. And this is not our focus now. That transformation is going to continue happening, and that's fine.

The function that we're focusing on is the one of a kind way for us to deal with high-end, high value transactions, utilizing all the data that we've collected over the past 16 years and the incredible talent bench that we have with us today.

Joshua Chan, UBS.

Hey. Good morning, Micha, Ofer. Apologies for that. I guess, maybe following up on the prior question a little. I guess if you take your full-year guidance, it is less than 4 times your Q1 revenue guidance. And so I guess what is the conceptually why does the rest of the year kind of step down from Q1? What are you seeing that is worse?

And then my second question is, is there a way for you to frame for us what free cash flow can be in 2026, you know, maybe from a conversion perspective versus EBITDA, something like that? Thank you.

I think on the first part, I think the combination of the trends we are seeing in Q4, together with the confirmation that has been discussed. Are creating some uncertainty in terms of 2026, and those circumstances are guiding for a wider -- a wider range.

And on the second one, the free cash flow, it largely follows EBITDA. And we, we've guided for a midpoint EBITDA of 18%. 20%-plus on the on the core business and 200 basis points impact from the investment that that we're doing the restructuring.

Matt Condon, Citizens.

Thank you so much for taking my questions. My first one is just on, you know, we think you said in the shareholder letter, you are building the marketplace for more recurring work. Can you just talk about the products and functionalities that you need to launch to enable this recurring nature of work?

And then I wanted to ask a follow-up on an earlier question is just given where the stock is trading, just can you talk about the prioritization of buybacks versus M&A? Thank you so much.

Thanks for the question. So, essentially, it is all about putting trust and quality at the forefront. And we are meaningfully upgrading our data infrastructure, matching algo, and product in order to achieve that. And those are the most important components of being able to optimize for recurring work, and also the fact that we are modernizing our platform allows the usage, as I have said, of not just human customers, but also agents within the platform.

A lot of it is about how we build this infrastructure and how we ensure the quality and the happiness of the entire fulfillment cycle, which has been one of our biggest moats. The fact that the work happens on the platform, is being documented, and being tracked allows us to understand the right path or route in which work is done to be able to actively intervene in cases where it is less than great. All of these are indicators from our data for recurring usage of our platform.

The second one was on buyback. We have a continued disciplined and balanced capital allocation, invest in growth while continuing to utilize our buyback authorization to return capital to shareholders. As of December, there is $67.5 million left on our authorization. And as Ofer mentioned earlier, we will continue to be opportunistic on M&A. Thank you very much.

Brad Erickson, RBC.

Thanks. This is Audrey on for Brad. First, new business formations have been growing pretty solidly, but that does not seem to be lining up with parts of your business. Is that just because there is really no connection there, or what is the disconnect you would say if there is one?

And then second, in the new world of changes to the top of funnel, how big should S&M be as a percentage of revenue or marketplace GMV relative to where it has been in the past? Any reasons why it should be structurally higher or lower? Thanks.

Thank you for the question. Business formation only impacts a small part of our catalogue that is focused on the very early-stage companies, so I would not read too much into that aspect or the correlation between the two.

I think as regarding the second part, we do not anticipate any change. -- (technical difficulty)

Rohit Kulkarni, Roth Capital Partners.

Hey, thanks. A couple of questions. One is just on this doubling down on high-value things that you will be doing going forward, where do you see the heaviest lift next 12 to 18 months? Is it you need to attract more supply who is capable of doing these high-value things? Do you think you already have the supply, or is this a function of building the product and then getting more and more high-value buyers?

And then as you do this transition into more high-value and better match, is there a scenario where the services revenue or the attached rate of services to market has a different algorithm given higher value gigs may not need as much ads or there may not be any need for as many subscriptions to sellers who are trying to get signed up for more long-term contracts as such? So how do you feel longer term that mix between the core marketplace and value-added services could look like versus where we are today? Thanks.

Thanks for the questions. So on the first one, it is really very much around the data infrastructure, the matching algorithm that prioritizes quality and trust, and it is really all about the customer satisfaction and retention.

In terms of talent, it differs between categories, and it changes over time because we see more and more types of skills coming in demand. In most cases, it is very easy for us, because we have been doing this for 16 years, to make sure that we have the right talent. We have not seen any pockets of shortage in talent, but in any case, we are always equipped to fill any shortage in a very short amount of time.

As to go-to-market, we see that as an opportunity, expanding channels from existing channels into AI-native channels, building the enterprise partnerships as we have talked earlier in the call, in targeted growth loops for specific use cases.

As to your second part of the question, services revenue will continue to be a growth driver for us this year. That said, the pace of growth will be more moderated this year because most of the efforts this year will be foundational to improve the marketplace moat and enable the high-end flywheel.

That said, service revenue has a long long-term growth runway as we enable every aspect of the talent's need, and there are lots of service expansion opportunities down the road.

This concludes our question-and-answer session. I would like to turn the conference back over to Micha Kaufman for any closing remarks.

Thanks, Megan, for, moderating the call today and for everyone who has joined us this morning. Have a great day.