The changes in the market due to the emergence of AI are reflected in the second quarter 2026 financial results of software company Fiverr (NYSE: FVRR). The results were in line with guidance that the company previously provided, but slightly lower than analysts' forecasts. The stock is down about 19% in pre-market trading on Wall Street.
However, Fiverr has significantly cut annual guidance. While it previously expected a 3%-12% decline in revenue from 2025 and was supposed to end 2026 with revenue of $380-420 million, now the forecast drops to $356-372 million, meaning a 14%-17% decline in revenue from 2025. EBITDA forecast also drops, from $64-80 million to $52-62 million, compared with EBITDA of $91.6 million in 2025.
In a letter to investors, Fiverr founder and CEO Micha Kaufman described the second quarter as transitional. He said Fiverr customers are accelerating their adoption of AI, and in recent weeks the company has begun to identify "a significant slowdown in overall demand and traffic, a trend that has continued in the third quarter," which they attribute to developments in large language models (LLMs). Fiverr is trying to address this challenge by "aggressively implementing our strategy toward the upmarket," meaning complex projects that have greater value for the client.
Fiverr has developed a trading platform to connect freelancers with employers. The company is one of the most prominent victims of the negative sentiment towards software companies, because it is perceived as being harmed by AI, which is also reflected in the reports it published today. Since the beginning of the year, Fiverr share price has fallen 41% to a market cap of $417 million, and following publication of the results, the stock is down 17.5% in pre-market trading.
33% of employees were laid off
Last September, Fiverr announced the layoff of about a third of its employees and a return to startup status as a way of dealing with the changes in the market. This week, it was revealed by "Globes" that Fiverr will not move to the Wix campus in Glilot.
Kaufman said: "Our second quarter results reflect a market that is changing faster than expected, driven by rapid AI adoption. As a result, we are focused on repositioning toward higher-value work. While AI absorbs high-volume, low-value, transactional tasks, it is also unlocking the need for longer duration projects where AI tools enhance human expertise, workflow management, and accountability. This is a multi-quarter transformation, and our priority is to execute with discipline as we build Fiverr into a trusted destination for higher-value work."
Fiverr CFO Esti Levy-Dadon added, "Our second quarter performance reflects the early stages of a significant transition, as we manage an accelerated shift in how rapid AI adoption impacts low-value, transactional work. We have adjusted our guidance to reflect these ongoing dynamics and the time required for our transformation initiatives to materialize in the financial results. Importantly, we continue to run a lean organization, focused on cost discipline to maintain profitability. Our balance sheet will provide the necessary flexibility as we stabilize the core marketplace, invest in our upmarket transition, and evaluate capital allocation opportunities with a focus on long-term value creation."
Published by Globes, Israel business news - en.globes.co.il - on July 29, 2026.
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