Actually, in some cases, agencies are able to provide these types of project solutions. And there is a number of additional ways for customers to satisfy their more complex needs, which we’re going to get to in our next earnings once we have the summer release behind us. So unfortunately, with some of that information, we’ll have to wait a little while. The second was take rate, maybe Ofer, you want to answer…
Ofer Katz: Yes. In terms of take rate, this question have been asked since we went public about the sustainability of take rates. And we always said pretty much the same. We feel very confident with the take rate as it is now. It is based on two layers: one is transaction [indiscernible]; and the second part is value-added services. The reason for the expansion is additional services that we offer both on the seller side and buyer side. We mentioned at the shareholders’ letter of the Promoted Gigs and Seller Plus contribution, 55% and 75%, and we believe there is a room for both products to grow beyond. And we also think that there are other products in the pipe that might contribute on top. So confidence is high. And we think that there is a room for us to extend take rate modestly over the next few quarters.
Andrew Boone: Thank you.
Operator: Thank you. We will now take the next question from the line of Jason Helfstein from Oppenheimer. Please go ahead.
Jason Helfstein: Thanks. Two questions. One, just on the spend per buyer. Is there a way to kind of say like how much of the improvement was due to improvement in SMB spend versus kind of moving upmarket to mix? And then second. I mean, you talked about how you are seeing clear momentum around AI categories and demand. I mean, can you maybe give the offsetting factors? Like, give us a sense of like where you’re seeing kind of like headwinds or negative pressure from AI that may be cutting into certain categories that are just not as important? And are you able to kind of distill that from like other macro factors that could also be affecting those categories? Thank you.
Micha Kaufman: Good morning, Jason. So on the spend per buyer, it is more driven by the investment that we’re doing in going upmarkets, which shouldn’t be a surprise. When we think about customer acquisition in general, we’ve been focusing on high-value buyers, those who are spending more with us. And that cohort continues to grow. Second thing is that, we know that core behavior continues to improve in the sense that the customers that we acquire spend materially more in their first transaction with us and then in subsequent transactions. So all of that is what is mostly contributing to spend per buyer. We haven’t seen any macro changes. Meaning, macro is not getting better. And by the way, again, I don’t think it should be a surprise to anyone.
If you think about the macro conditions, they haven’t changed thus far. But definitely, the investment that we’re doing in those better, higher quality cohorts is paying off and the spend per buyer is a good reflection of it. The second part of your question about the clear momentum that we’re seeing with AI. So we mentioned in the previous earnings the fact that the negative impact that we’re seeing from AI is mostly around the very simple types of services. Those are normally services that would sell for $10, $15, which is — I mean, we are moving. I mean, the majority of contribution is coming from more complex services anyway. And as I said, we continue to see AI as a net positive. So it’s contributing more than the offsetting factors of simple products.
It happens across several categories in several verticals, but there’s nothing specific to call out. Even if you look at the areas that you might think that AI would influence significantly like translation. But what you’re seeing is actually the very simple services around transition are being affected, the more complex types of services are not. I mean, if you would publish a book and then want to translate it into a different language that you don’t command, I would doubt that you would let AI translate it and go publish the outcome without actually verifying it. So these are…
Jason Helfstein: You’d get a lot more interesting book by the way.
Micha Kaufman: I mean, yes. I mean, the outcome might be surprising with all the hallucinations that AI [Multiple Speakers]
Jason Helfstein: But the point is like things like logo, for example, right, which again, going back to the very early history of the company, that was — I think this is like a low ARPU type thing. Even in that is an area that you’re still actually seeing people using this and not. Like, it’s not like logos have gotten [indiscernible]
Micha Kaufman: Correct. Again, I mean, if you’re a serious business that takes your design, your brand seriously, you would take an expert to actually work. And I’m sure many experts actually use AI tools in their process of work, but they don’t rely on blindly letting AI run the work for them, but it is more of the modern tech that they use in order to amplify their creative process.
Jason Helfstein: I appreciate the color. Thank you.
Micha Kaufman: Thank you, Jason.
Operator: Thank you. We will now take the next question from the line of Matt Farrell from Piper Sandler. Please go ahead.
Matt Farrell: Thanks for taking my question, guys. As you continue to prioritize the move upmarket, can you just remind us of the go-to-market strategy for the larger wallet clients? And as we progress along this move, how should we think about the need for a sales force as you move forward? Thanks.
Micha Kaufman: Good morning, Matt. Thanks for the question. So when — we’ve talked about this in previous quarters as well. When you look at the top of funnel traffic that comes to Fiverr, it contains all the customers that we need to go upmarket. And in most cases, it’s just identifying who those customers are and then making sure that we drive them to the best experience within the product. And in our case, it’s the types of solutions that are offered by the Fiverr Business Solutions suite with Pro leading that suite. And to increase that, we have introduced a number of additional programs, the partnership program certified in enterprise, which allows us to really entertain all the range of different customers as we go upmarket.
But as I’ve said, in most cases, I mean, the sales team here on the enterprise side is extremely small and we’re able to continue adding a lot of big logos into our products. The majority is coming from the funnel that comes to Fiverr. And as we become better at identifying those customers and pairing them with the right solutions, the better the conversion and the engagement that we’re getting with these customers.
Matt Farrell: Thanks and congrats on the share repurchase authorization. Just given that it’s your first program and the strength of your balance sheet, how should we be thinking about the pace of buybacks as you kind of start to implement the program? Thanks.
