Fiverr International Ltd. (FVRR) Q1 2022 Earnings Report, Transcript and Summary

Hello, everyone, and welcome to the Fiverr First Quarter Fiscal 2022 Earnings Conference Call. My name is Victoria, and I will be coordinating your call today. [Operator Instructions] I'll now pass it over to your host Jinjin Qian to begin. Please go ahead.

Thank you, operator, and good morning everyone. Thank you for joining us on Fiverr’s earnings conference call for the first quarter ended March 31, 2022. 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 non-GAAP financial measures. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures are 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

Thanks Jinjin. Good morning everyone and thanks for joining us today. The first quarter of 2022 was solid with 27% revenue growth year-over-year. It was also the first time in any Q1 that we achieved Adjusted EBITDA profitability, a quarter when we typically front load marketing investments. The quarter started with strong momentum in January and February. In March, the macro landscape shifted, and our marketplace is currently seeing the impact. With higher inflation, recovering travel demand and more in-person activities, spending patterns are shifting for consumers, and therefore business spending. We started to see this shift on our marketplace in March and it has continued into the second quarter. We are not sure the duration of the shift or the magnitude and are adjusting our guidance range to reflect the uncertainty. Ofer will walk you through that in a moment. We are making progress on our goals for the year and continue to invest in Fiverr Business. While the small business or consumer-driven part of our business is feeling the impact of the macro shift, Fiverr Business is gaining momentum. Growth is robust, with over 50% growth in accounts year-over-year and an even higher increase in order value year-over-year. Not only are we seeing strong growth in accounts, but we are also seeing increasing wallet share per account as business accounts add freelancers to their workflows and find more categories to meet their needs. We believe the tight labor market provides us with a tremendous opportunity to help businesses leverage their current employees and augment their teams’ skill sets. We are focusing our investment in Fiverr Business because we believe the opportunity ahead has never been more clear. Over the last two quarters, we have vetted tens of thousands of quality sellers on our marketplace in order to provide Fiverr Business customers with the top 1% of talent. We have redesigned the Fiverr Business listing page to focus on eight freelancers instead of 48 offerings to streamline and humanize the buyer’s decision making process. And this has led to a meaningful increase in conversion, especially for more expensive service offerings. Business buyers want to know and trust who they are working with, and we are now highlighting the freelancer along with the offering. We have added features such as a Saved Freelancer List that organizations can share between teams; this allows easy reference for repeat buying. We are starting to redirect marketing investments to target Fiverr Business. We have added Customer Success Managers to facilitate Business account onboarding and provide high-touch support if needed on the marketplace. The needs of small and medium businesses are more sophisticated than individual offerings. And we are listening to our customers and creating a marketplace that works for their needs, for more complex projects, for more departments throughout an organization. Fiverr’s upmarket journey is just beginning. Businesses who utilize Fiverr Business can gain an advantage over their competitors. They are able to grow faster by leveraging their employees for essential roles while outsourcing many tasks to freelancers on Fiverr. Managers do not have to go through the process of hiring, which is becoming increasingly difficult in today’s labor market. Companies will be able to scale up and down based on their workload without any headcount friction; profit margins will be better, growth faster. Teams that know how to leverage the Fiverr marketplace talent pool will have more creative projects. Becoming embedded in a business's human capital infrastructure is not a quick task, but those who are willing to be on the leading edge of human capital procurement should enjoy a first mover advantage over their competitors. It is our mission to enable this. The way human capital is procured is in its early innings and we are leading the way. One example is an interior designer team in Germany who uses 3D rendering services on Fiverr to increase productivity. Once a design is sketched, it’s passed onto a freelancer on Fiverr who will turn a floor plan and product listings into a 3D visualization of a fully furnished room. It is all done with a few clicks to order, a $100 budget, and the customer gets a delivery in 3 days. Not only does utilizing Fiverr provide the designer with unmatched speed and value, but more importantly it allows the designer to spend more time with clients. This customer has embedded 40 different Fiverr freelancers into their 3D workflow, and they are constantly placing orders. Another example is a North American event planner that lost most of their work when COVID lockdowns occurred and reduced their workforce. As they are rebuilding, it has become problematic to recruit and retain employees, so the company’s human capital strategy is to embed Fiverr freelancers into their project teams. They have 150 Fiverr freelancers that they currently work with across numerous categories. As each project requires different skill sets, the breadth of supply on Fiverr provides them with an unparalleled flexibility. We believe the use cases are nearly infinite for embedding Fiverr’s freelancers into businesses. Employees who know how to utilize the Fiverr marketplace will have a major productivity tool that allows employers to leverage their internal workforce many times over. The contracts that are available to businesses on Fiverr are being expanded to make usage seamless for larger and longer projects. Milestone payments were recently introduced to facilitate larger projects by enabling progress payments. Subscriptions are quickly being adopted as both buyers and freelancers find recurring relationships beneficial. The new Fiverr Business landing page encourages business buyers to contact sellers for more complex projects to ensure the scope of the project matches both parties' expectations. These efforts will meaningfully expand the ticket size on our marketplace. We’ve done this type of expansion before. When I started the company, everything on Fiverr was $5, then we lifted the price cap so sellers can price their services anywhere. Then in 2016 we introduced Packages that allow sellers to offer tiered pricing bundles. In both cases, our marketplace experienced a step function leap in the project size and ticket size. We know this playbook very well, and we are running it again now. We are also investing towards our vision of a Talent Cloud, a holistic solution that utilizes talent-as-a-service. Our marketplace today is already serving as a Talent Cloud solution for small businesses. We know many of our smaller customers leverage Fiverr to do everything from product to marketing to operations. But larger organizations with more sophisticated deliverables require a more comprehensive, holistic solution. Imagine as a marketing manager, some days you need someone to help you do a simple video editing, other days, you need a full-fledged TV commercial production, then there are times you are looking for someone to help you manage content on your social media channel. With Talent Cloud, you don’t even need to think about how to allocate and distribute the workflows, but rather just turn to Fiverr, and our system will assemble the team, distribute the workflows, and take the project to the finish line. This is the talent-as-a-service we are envisioning, let our technology do the optimization and customers can focus on growing their businesses. This is an ambitious vision and there is a significant amount of work to do to accomplish our vision. No one has ever done anything like this. I think the technology we are building here is not only cutting edge, but is also going to provide a sustainable competitive advantage for us and the businesses who embrace it. We are also unlocking additional addressable markets by creating disruptive solutions and significantly increasing freelancer adoption across businesses of all sizes. We believe these investments will meaningfully drive our future growth and ultimately increase long term shareholder value. I’m super proud of everyone on our team who is executing towards our vision - their talent and dedication is inspirational. Our hearts are with our colleagues in the Ukraine and their compatriots. I'm also grateful for our community of businesses and freelancers who trust us and help us build the future of work together. With that, let me turn the call over to Ofer who will share some financial highlights

Thank you Micha and good morning everyone. We delivered strong execution in Q1 amid a volatile macro environment. January and February were as expected. In March we started to see the impact of the shifting macro landscape within our marketplace, particularly in Europe. Revenue came in near the top end of guidance at $86.7 million, up 27% year-over-year, driven by 11% growth in active buyers, 17% in spend per buyer, and a 240 basis points expansion in the take rate. Adjusted EBITDA was $3.9 million, above the top end of our guidance, with an adjusted EBITDA margin of 4.5%. First quarter revenue was a record for us, on top of the tremendous growth we had over the past two years. This scale allowed us to be adjusted EBITDA positive in a first quarter for the first time this early in the year when we typically front load investments. We remain highly efficient with our marketing investments for both brand and performance marketing. Brand marketing is a continuous, long-term investment; when coupled with high levels of customer satisfaction, the awareness builds intangible brand equity over time. We are pleased with how the brand investments are materializing. We recently conducted a survey that indicated Fiverr had the strongest freelancer brand in the U.S. and that brand awareness increased 30% from Q1 2021 when we last did the survey. Our performance marketing, tROI was around 4 months in Q1, about the same as the previous quarter and still well within our 12-month target threshold. As we move upmarket, we are targeting higher lifetime value customers with bigger wallets and better retention potential which allows us to lean into performance marketing a bit more. On a longer-term basis, for cohorts that have been with us for 5 plus years, we are seeing overall life time value to CAC of over 5 times. For cohorts we acquired at the beginning of COVID, we are already seeing life time value to CAC of nearly 3 times, in just two years. The strong unit economics gives us the confidence to continue to invest in performance marketing throughout various macroeconomic conditions. As Micha mentioned, we are going upmarket across the organization. Our product teams are solving more complex problems and providing more intuitive tools, our operations team is vetting high quality supply and ramping customer support, and our upmarket marketing capability is expanding. In our operating metrics we see buyers who spend over $500 contribute to 64% of our marketplace, up from 63% last quarter and 59% in 1Q '21. According to our study, companies with 20 to 200 employees on average spend $15,000 a year on freelancers. We believe there is a significant potential to grow buyers' spend levels by increasing wallet share from our existing buyers and adding high-value buyers. We also continue to invest in category expansion in order to increase cross category purchases and expand our TAM. We are pleased that our take rate continued to grind higher with deeper penetration of value added services. During the quarter, Promoted Gigs continued to grow and contribute to our take rate expansion, as we improved sellers' targeting capabilities and bidding conversion. The program continues to enjoy strong seller retention, as the sellers pay only when they get a click to their listing page and the automatic bidding formula sets guard rails to optimize seller ROI. On Seller Plus, we continue to roll additional features into the program such as buyer insights and buyer request notifications. The growth of these two programs continues to demonstrate our ability to command a strong take rate by building products, expanding our offerings, and providing value to our community. Now, let’s turn to our guidance. For the second quarter of 2022, revenue is expected to be $86 million to $87.5 million, representing year over year growth of 14% to 16%. Adjusted EBITDA is expected to be $3 million to $4 million, representing an adjusted EBITDA margin of 4% at the midpoint. For the full year of 2022, we now expect revenue to be in the range of $345 million to $365 million, representing year-over-year growth of 16% to 23%. Adjusted EBITDA is expected to be in the range of $10 million to $17 million, representing an adjusted EBITDA margin of 3.8% at the midpoint. We have reduced and widened our guidance range to reflect the higher variability in the changing macro landscape as Micha discussed at the start of the call. January and February were solid as expected. In March and April, our business was impacted by a mix of macro factors, with Europe being particularly vulnerable. Compared to what we expected at the beginning of the year, in March our European revenue was below trend by low double-digits and the U.S. by a few percentage points. In April, Europe revenue was further impacted although more moderately and the U.S. was stable. As a reminder, Europe contributed to just under 30% of our revenue and the U.S. approximately half. Our direct exposure to Russia and Ukraine was less than 1%. The midpoint of our revenue guidance reflects our current expectation of our business based on the trends we are seeing now. The high-end of our guidance assumes an improvement in the macro environment that drives a rebound in consumer and business spending. The low end of our guidance contemplates a continued deterioration in Europe and moderate contagion to the rest of the world. At the midpoint, we expect active buyers to grow in the low single digits for the full year and be largely flat in Q2 as we lap the large cohorts from the first half of last year. Spend per buyer is expected to grow in the low-to-mid teens year-over-year for 2022 with a steady sequential cadence. Take rate is expected to be steady with modest upside. The large improvements we saw in 2021 should moderate to less than 100 basis points for full year 2022. On the expense side, we do not expect to materially adjust our investment levels for the year as growth continues to be our top priority. We expect to continue investing in personnel for customer support and engineering and expect modestly lower gross margin and higher R&D as a percentage of revenue for the year. Sales and marketing as a percent of revenue should improve slightly. While our steadfast investment strategy is tempering the progress towards our long-term target model, we remain committed to achieving long-term adjusted EBITDA margins of 25% as our business scales. With that, we’ll now turn the call over to the operator for questions.

[Operator Instructions] And our first question comes from Doug Anmuth at JPMorgan.

I just wanted to follow up on the comments related to macro. Just trying to understand, I guess, how you see this kind of playing out in the business. I mean it sounds like it's really coming from the buyer side. But also, I guess, how it kind of splits out between small businesses and some of your very positive comments just around Fiverr Business and as you're going kind of upmarket and toward bigger businesses as well?

Good morning, Doug. Thanks for the question. So essentially, I think macro environment largely speaking, was probably covered pretty extensively in this earnings season. I think from what everybody have seen, we've seen some softness in Q2 which is a result of a number of different factors with the opening up in the world to inflation, to some uncertainty around the war in Ukraine and so forth. And all of these have created this macro environment. Now obviously, as a business, Fiverr is still largely more concentrated in the SMB side of business. SMBs are being affected or respond faster to macro changes than larger businesses. And this is probably shown or demonstrated very well within our product itself, meaning within the market -- the marketplace itself where it's largely more SMBs than larger organizations, you see it faster and probably a slightly larger response to macro, whereas in Fiverr Business, we're seeing a much moderate or even not seeing any impact. It's actually as a business, those businesses, the number of accounts are actually growing much faster than the marketplace itself. So that's a good sign. And as we shift more into high-value buyers and into Fiverr Business accounts, then we think that those macro trends are going to affect us less over time. We shared some numbers about the Fiverr Business and the growth in accounts. The same goes with high-value buyers, which are growing faster. And we have accounts that are spending over $10,000 with us, growing by 90% year-over-year. So that portion of the cohort is less affected. And obviously, we've seen smaller businesses being more affected. And by the way, it's not very surprising in in hindsight now that all of this effect has come in because we've seen that reaction also throughout the pandemic at the beginning of the pandemic, SMBs reacted much, much stronger than enterprise as an example. And obviously, as a business, we've benefited from that. And now we're seeing it at the opposite reaction. Obviously, we think it's temporary. These are aftershocks of the end of the pandemic and some macroeconomical impact. However, there is an uncertainty, which is why we've created a wider range than usual for our guidance to incorporate extreme cases of either macro continues at the same levels or improving over time.

And then just a follow-up. Can you just talk about your kind of the decision and just related to investments, right, to continue along the same path just given the significant growth opportunities that you see in the business? And is there a point where that could potentially change through the year or you don't really anticipate that?

Right now, we don't anticipate a change. We have a very solid plan. It is working. The fundamentals of the business are great. The investment in going upmarket is the right thing for the long term, and we're here for the long term. We haven't changed our goal to be -- or to continue to be prioritizing growth. And so despite the temporary hiccups of this macro environment, we don't think that it's going to be right to change course right now and lose the potential that we have in the long term. Bear in mind that even within the SMB business, the level of penetration that Fiverr has is I would assume less than 5% of the potential in the U.S. alone. There's 30 million SMBs. So the potential of continuing to penetrate the market and then also extending by going into larger businesses is enormous. And again, what we're seeing right now within the business is just a manifestation of what we're seeing in the macro environment. And the fact that we're now about to finally lap or completely lap the effect of the pandemic and the outsized cohorts that we had last year.

I would like to augment and point to the fundamental of the business all the way from the cohort behavior to the performance marketing efficiency, providing steady 4 months tROI tROI. So that part of the decision to continue investing is the ability to keep our heads in terms of EBITDA, maintain profitability and build the muscle for going up market as we've done in the last few years.

Our next question comes from Jason Helfstein from Oppenheimer.

I'll ask two. So just to clarify on the weakness in the outlook. I mean, is there a way to kind of separate how much of it is, again, kind of almost just return to normal COVID hangover or the COVID tailwinds going away versus actual macroeconomic weakness that you're seeing in Europe? And then second, I mean, historically, you guys have spent a lot of money on marketing and it's driven growth. Just obviously, this quarter marketing, you slowed pretty dramatic relative to revenue. Just how are you thinking, I guess, about marketing kind of weaker period of inflation relative to doing things with pricing or other factors that you can kind of drive growth?

Jason, thanks. So really, question, the weakness comes from mostly macro. And on top of macro, we've seen some higher trends in terms of travel as well, which indicates and usually, that's a nice correlation to how we should anticipate business. So we're seeing high demand for travel the world is opening up and people want to shop offline and no travel. So that's impacting. When you look at the fundamentals of the business, when you look at cohort behavior, it is stronger than pre-pandemic. It's maybe not as strong as it was a year ago, but it's definitely stronger. We're not back to any pre-pandemic levels, and it continues to be very healthy. So from that perspective, we think that this is really driven by macro environment. Q2, from a seasonal standpoint has a lot of seasonality baked into it. There is long holidays in the Muslim world. There is international days like Mother's Day that has impact. So it's usually a quarter with high seasonality. And on top of that, with the macro this year and with the fact, again, that we're lapping outsized cohorts from last year and were being measured on a trailing 12 months, that always looks like that in the numbers when you lap it. But as we're looking at the fundamentals of the business, and the same goes with marketing, by the way. We've been very consistent, and that maybe answers your second question. As we look at the way marketing complements our organic growth, we have been very consistent in that strategy, meaning we've been investing in our brand. And our brand is growing very, very fast. We've seen 30% increase in unaided and aided brand awareness, which is great. And it's -- again, it gives us fuel for the fact that we're being consistent in the investment in brand. The same goes for performance marketing with the slight change now performance marketing targets more high-value buyers, those who have a higher lifetime value with us. And that is working very well. And the fact that we can do that smart marketing and drug it also into Fiverr Business allows us to build an upmarket business that is very cost effective. So right now, we're on plan, we're happy with the results. Obviously, like everyone else, waiting to understand how this macro environment is going to change in working around that uncertainty to keep the business running and the long-term plans on time and on schedule.

Our next question comes from Matt Farrell of Piper Sandler.

You've continued to do a nice job with expanding the take rate here, and you provided some commentary to how to think about take rate as we move throughout the year. But as I think about longer term, what is the real long-term target for take rate? And how should we kind of think about where this could go maybe in 2 or 3 years out?

Yes, thanks for the question. Yes, I think on take rates, we always said that we're not going to rest until it's 100%. No. But seriously, I think that we're in a good point in terms of take rates. And I think we've demonstrated that through -- it's not extraction of additional take rate from the transactional aspect, but it's actually additional take rate coming from added value services and products. And I think that what we've demonstrated over the years, and definitely, as a public company since we started reporting is that we have a very wide arsenal of different products and offerings that we can introduce that would continue supporting the increase in take rate. One of them is Promoted Listings or Promoted Gigs, which is growing incredibly well. So these types of products, as we grow them over time, contribute to take rate. We always said that the contribution is going to be moderate. So we don't -- take rate as itself is not a growth KPI, right? But we do think that there is potential to continue increasing it. And so far, I think we've demonstrated that this is possible also when you go up market and you work on much larger types of transactions.

And then is there -- on Fiverr Business, could you give some qualitative metrics on -- maybe about the size and the scale of the business today and maybe as a percentage of GMV or percentage of revenue that's contributing? And maybe to piggyback on that question, any update on how the Stoke Talent acquisition integration is contributing to the dynamics here in the near term?

Sure. Thanks for the question. So yes, so in Fiverr Business, what we said, I think a quarter or 2 ago, is that it's already contributing more than 5% of the overall revenues. Since it's still a small business and what we said is that this is going to be a multiyear investment, as a transformational part of our business. It's kind of our Act 2. It's a business -- we don't think that this would be -- it would take time and investment until it becomes a double-digit percentage contributor to the business. And so we're not reporting it separately. However, we did speak about the fact that accounts are growing 50% year-over-year and the order or revenue contribution is growing even faster than that. So at some point, if it becomes a more mature and stable business, we may start reporting it separately to give more clarity on that business. On Stoke, again, Stoke was acquired at the beginning of the year. We're in the process of integrating -- the first portion of integration is due before end of the year. And really the amazing potential there is the fact that as a freelancing management system, we want to connect it to the Fiverr talent pool so that those customers that are using Stoke as a system to manage their existing relationships with freelancers would be able to find additional finances through that system. So that's Phase 1, and that should be done before the end of the year. We're working on it very hard. And at the same time, Stoke as a business is growing, again, still small, but we're seeing customers that are paying on a yearly level more than $120,000 per account. So as a business, we believe it's a very healthy business. We're very happy with that acquisition and look forward to completing the integration and telling you guys more about it.

We will now move on to the next question. And our next question comes from Andrew Boone at JMP Securities.

As we look at active buyers for 1Q '22, you guys added 30,000 active buyers, I understood that's a net number. But given the slowdown there, it sounds like top of funnel was strong. Can you just help us understand the dynamics of churn and relate that to 2022 as we start to think about you guys moving through covered cohorts?

Thanks so much. Yes. Thank you for the question. I think we mentioned on the previous earnings that we anticipate the first half of the year to be slow in terms of new adds because of the impact of the unusual cohort size at the beginning of 2021. Because of the normal behavior of each cohort, stabilizing over the first year, become consistent at cost using a flat revenue stream over a long period. Because of this behavior, we are getting this kind of headwind in terms of new net adds. We anticipate that this headwind will last at the end of the first half. And yes, to accelerate in terms of the new adds at the second half of the year moving -- going forward for the long term.

Okay. That's helpful. And then as we think about the marketing spend and the move upmarket, can you just help us tactically better understand what changes as you guys focus on longer LTV customers? Is there anything we should think about in terms of just greater brand spend there versus performance? How do we think about just the shift within marketing and the strategic move up market?

I think the point that I was making earlier is that we're able to extend our marketing -- most of our marketing work to target higher value and more established types of businesses. Now we do have a sales team. Most of it is a result of the acquisitions that we've done, and that sales team is able to offer the majority of our products, including ClearVoice, the content marketing, including Stoke and including Fiverr Business. So the combination of doing brand marketing, which creates awareness and introduces the different types of products that we have with smart performance marketing that is able to target the right customers in the right channels, including inside sales and success managers and including our sales team allows us to really go up market and maximize the potential. And over time, we're learning how to optimize that process and that obviously focuses on customers with higher spending capacity, more complicated needs which allows us to offer them more sophisticated types of offerings that reflect in the size of their spending and the frequency in which they spend and the number of people within those organizations that uses Fiverr. And again, Fiverr Business is really in the early innings of itself as a product, but it's already demonstrating the vast changes that we're seeing there in terms of multiples when it comes to spend per buyer, and the type of activity that we see in those accounts. So again, first signals for us, super encouraging. We're very happy with this product, and it's really in its early days we have many exciting tasks on our road map for this year for Fiverr Business.

We will now move on to our next question, which comes from Brad Erickson at RBC Capital Markets.

I guess first, just I appreciate the monthly commentary you gave over about how things have been tracking sort of pre and post war. Curious to get a little more color on just kind of the latest views of linearity. I think some companies have spoken to seeing softer traffic initially after the war began and then maybe a bit of a bounce back thereafter. Is that kind of generally what you've seen? Or does the guide reflects maybe a view of a more persistent weakness? And then I have a follow-up.

This is pretty consistent with what we've been seeing. I think that during the month of March, we've seen more in that elevation. This has been softened throughout April and been stable since. I think the guidance that we're providing that we paid provided has been widened to capture the amount of uncertainty in the macro economy. On the low end, we anticipate that this soften will continue. On the high end, we assume that the business, the demand, the overall traction will be back to what we've seen in the past 10 years, which is normal seasonality throughout the second half of the year. But that's the kind of the kind of what we've been seeing. And as a commentary, we've always been guiding, but based on what we are seeing, this has been the case in the past. This has been the case this time. Now we are guiding based on what we are seeing on the behavior of existing cohorts and our ability to attract new cohort and its behavior on.

Got it. That's great. And then just secondarily, last quarter in the shareholder letter, I think you called out, I don't know, maybe half a dozen or so categories that were especially strong in the business. I wonder if you could give an update there on just how those are generally faring relative to the broader business slowdown you're guiding to, basically, are they proving better or worse or kind of in line?

Yes. So there's -- there are categories swings that are normal, and that's a part of seasonality. So if -- right now, gaming is one, game art and game development, content illustration, video editing, resume, travel listing. So there is -- essentially, those trends are not a surprise. They're pretty much aligned with seasonal trends that we're seeing from time to time and shift. There's rarely any changes within categories that are constant that are here to stay. And also those swings are relatively small. It's just we're just highlighting them from time to time as we think it's interesting in the larger, broader of just understanding supply and demand. But there is no substantial change in the category mix, again, from time to time, from quarter-to-quarter, some different highlights around different categories.

Our last question comes from Eric Sheridan at Goldman Sachs.

Maybe 2, if I can just squeeze them in quickly. In terms of -- I know we've talked a little bit about marketing so far on the call. But in terms of where you're aiming marketing to be successful and continue to ramp into power business, is there a different cadence in the year in marketing? Or is it a different element of like more fixed versus variable that we could see in the model going forward? Just want to understand a little bit how the ships might take place as you move up to stack online marketing dollars against business. And I think I've asked this in the past, but when you think about language extension or vertical extension, anything on the road map you think we should be aware of where you see pretty big opportunities for growth going forward by further extension of the platform.

Eric, thanks for the question. So as to marketing, I think that what we're doing right now is the right thing in terms of seeing how we can extend marketing to go upmarket with the types of offerings that we have. Right now, we're not planning to do any potential changes in our marketing strategy or how we do spending and definitely how we think about the efficiency of our marketing. And I think that, that in tandem with the work that we're doing on the success management and the inside sales, so to speak, is proving itself to be very efficient. Obviously, we're refining this over time. But right now, we think that, that strategy is working very well, and we're not planning to change it. In terms of language extension, we're doing a lot of work in the past 2 years in the area of machine translation infrastructure, search in local languages, local currency, building local communication awareness. All in all, I'll say that the opportunity to extend our offerings and go deeper into different languages in different countries is there, and we're capturing it. So without getting too deep too much deep into our playbook, it's definitely something that is playing well for us. And definitely, helping us establish our presence and increase our presence in multiple countries. And again, we think that the same playbook should be -- should continue to be applied as we grow.

This concludes our Q&A session. I would now like to pass back over to Micha for any final remarks.

Thank you, Victoria, and thank you, everyone, for joining the call today. Have a great rest of the day. We'll see you at the upcoming investor events and talk to you next quarter. Thank you.

Perfect. Thank you, everybody, for joining today's call. You may now disconnect.