AI upheaval hits Fiverr hard, sends stock tumbling over 35% this year
2025 financials and 2026 forecast reveal tangible threat to transaction-based business model.
Unlike many software companies whose shares have collapsed in the SaaS market panic but whose financial deterioration remains largely a future concern, Israeli company Fiverr is showing clear signs of strain today. Its 2025 financial reports, and especially its weak forecast for 2026, reveal the tangible threat posed by artificial intelligence to Fiverr’s business model. Unlike subscription-based software companies, Fiverr earns revenue as a share of payments made on its freelance platform, making it particularly vulnerable to AI automation.
The market has responded accordingly. Fiverr’s stock has fallen more than 35% since the start of the year. Following the publication of its financial results on Wednesday, which included the announcement that veteran CFO Ofer Katz would step down, the stock continued to slide, leaving the company valued at $445 million, barely above its cash holdings and 31.5% below its 2019 IPO price of $650 million.
Fiverr operates a platform connecting freelancers with employers. The AI revolution has already made many of its popular services redundant, from translation and basic graphic design to coding tasks. Co-founder and CEO Micha Kaufman has been vocal about the disruptive effect of AI on legacy software and freelance marketplaces, but investors remain unconvinced that Fiverr is adapting quickly enough.
Last September, Kaufman announced Fiverr’s return to “startup mode,” marked by layoffs of 25% of its workforce, roughly 250 of its 1,000 employees. In an internal memo, Kaufman wrote:
“We are launching such a transformation to turn Fiverr into an AI-first company that's leaner, faster, with a modern AI-focused tech infrastructure, a smaller team, each with substantially greater productivity, and far fewer management layers.”
Alongside its annual report, Fiverr announced that long-time CFO Ofer Katz would retire from his position, transitioning to President responsible for strategic development and M&A opportunities. Katz, founder of the venture capital fund Cerca, has been with Fiverr since its founding. He will be replaced by Esti Levy Dadon, who has spent a decade in senior roles at the company. Fiverr says these personnel changes are designed to accelerate decision-making and improve transparency.
The company will also relocate its offices from Kaplan Street in Tel Aviv to a sublease on the campus of Israeli company Wix, another “AI victim” in the software space. Although Fiverr has introduced AI tools aimed at enhancing freelancer productivity, these initiatives are overshadowed by its weak 2026 guidance.
Unlike other software firms, including Monday, which remains symbolic of the broader SaaS crisis but still expects growth, Fiverr is forecasting revenue decline next year. Its guidance ranges from $380 million to $420 million for 2026, compared with $430 million in 2025, implying a 3% to 12% drop even in the most optimistic scenario. Analysts had anticipated a forecast closer to $450 million.
Despite these warnings, Fiverr finished 2025 with 10% revenue growth and net profit of $21 million, up 17% from 2024. Adjusted operating profit is expected to drop to $60-$80 million in 2026, down from $91.6 million in 2025. The company cites both internal business uncertainty and external market conditions for this decline, despite global economic growth and anticipated interest rate cuts.
Fiverr is focusing on higher-end clients and larger organizations to mitigate the impact of smaller businesses adopting AI tools more rapidly. Still, the revenue mix shows erosion: platform revenue declined 2% to $297 million in 2025. On a quarterly basis, while overall revenue increased 3% in Q4, platform revenue fell 3% to $71.5 million, and active buyers dropped from 3.6 million to 3.1 million. Offsetting this decline, average spend per buyer rose 13% to $342, and revenue from services provided to freelancers, including advertising, jumped 18%, now representing one-third of total revenue. Fiverr’s strong cash flow, $103 million, up 26% from 2024, is a notable bright spot amid the turbulence.
