Bay Street News

Fiverr Announces Second Quarter 2024 Results

NEW YORK, July 31, 2024 (GLOBE NEWSWIRE) — Fiverr International Ltd. (NYSE: FVRR), the company that is changing how the world works together, today reported financial results for the second quarter 2024. Additional operating results and management commentary can be found in the Company’s shareholder letter, which is posted to its investor relations website at investors.fiverr.com.

“It has been an incredible past six months at Fiverr on many fronts as we navigated the dynamic macro environment and delivered profitable growth through executional excellence and focused operational discipline. In addition, we also made remarkable strides in our product evolution with the introduction of profession-based catalog and hourly contracts,” said Micha Kaufman, founder and CEO of Fiverr. “With these offerings, we look forward to becoming a more substantial partner with businesses of all sizes, for their need to engage with the flexible workforce, and significantly expand our direct addressable market. We also continue to be at the forefront of AI technology as we deepen the integration of Neo across search and order experiences on Fiverr. I’m very excited for what is still to come as we continue to innovate towards the future of work.”

“We delivered solid results for Q2 and reiterated our full year guidance. While the SMB and freelancer hiring space remain volatile, we continue to execute with consistency and efficiency. At the same time, we are expanding our product portfolio through both organic and inorganic investments to create additional growth catalysts,” said Ofer Katz, President and CFO of Fiverr. “We also aim to optimize our capital allocation strategy to deliver shareholder value. With strong free cash flow generation and a strong balance sheet to support capital return programs, we are paving a measurable and tangible path for steady growth in free cash flow for the next three years.”

Second Quarter 2024 Financial Highlights

Financial Outlook

Our Q3’24 outlook and updated full year 2024 guidance reflects the recent trends on our marketplace.

  Q3 2024 FY 2024
Revenue $95.0 – $97.0 million $383.0 – $387.0 million
y/y growth 3% – 5% y/y growth 6% – 7% y/y growth
Adjusted EBITDA(1) $17.0 – $19.0 million $69.0 – $73.0 million


Conference Call and Webcast Details

Fiverr’s management will host a conference call to discuss its financial results on Wednesday, July 31, 2024, at 8:30 a.m. Eastern Time. A live webcast of the call can be accessed from Fiverr’s Investor Relations website. An archived version will be available on the website after the call. To participate in the Conference Call, please register at the link here.

About Fiverr

Fiverr’s mission is to change how the world works together. We exist to democratize access to talent and to provide talent with access to opportunities so anyone can grow their business, brand, or dreams. From small businesses to Fortune 500, around 4 million customers worldwide worked with freelance talent on Fiverr in the past year, ensuring their workforces remain flexible, adaptive, and agile. With Fiverr Business Solutions, large companies can find the right talent and tools, tailored to their needs to help them thrive and grow. On Fiverr, you can find over 700 skills, ranging from programming to 3D design, digital marketing to content creation, from video animation to architecture.

Don’t get left behind – come be a part of the future of work by visiting fiverr.com, read our blog, and follow us on X, Instagram, and Facebook.

Investor Relations:
Jinjin Qian
investors@fiverr.com

Press:
Siobhan Aalders
press@fiverr.com

Source: Fiverr International Ltd.

CONSOLIDATED BALANCE SHEETS
(in thousands)
   
           
    June 30,   December 31,  
    2024   2023  
    (Unaudited)   (Audited)  
Assets          
Current assets:          
Cash and cash equivalents   $ 188,729     $ 183,674    
Marketable securities     182,609       147,806    
User funds     156,294       151,602    
Bank deposits     115,862       85,893    
Restricted deposit     1,203       1,284    
Other receivables     29,366       24,217    
Total current assets     674,063       594,476    
           
Long-term assets:          
Marketable securities     216,911       328,332    
Property and equipment, net     4,526       4,735    
Operating lease right of use asset     6,393       6,720    
Intangible assets, net     13,755       10,722    
Goodwill     81,992       77,270    
Other non-current assets     1,254       1,349    
Total long-term assets     324,831       429,128    
           
TOTAL ASSETS   $ 998,894     $ 1,023,604    
           
Liabilities and Shareholders’ Equity          
Current liabilities:          
Trade payables   $ 5,368     $ 5,494    
User accounts     145,494       142,203    
Deferred revenue     12,165       11,047    
Other account payables and accrued expenses     47,074       44,110    
Operating lease liabilities     2,575       2,571    
Total current liabilities     212,676       205,425    
           
Long-term liabilities:          
Convertible notes     456,580       455,305    
Operating lease liabilities     3,882       4,482    
Other non-current liabilities     4,111       2,618    
Total long-term liabilities     464,573       462,405    
           
TOTAL LIABILITIES   $ 677,249     $ 667,830    
           
Shareholders’ equity:          
Share capital and additional paid-in capital     681,887       640,846    
Accumulated deficit     (357,404 )     (284,358 )  
Accumulated other comprehensive income (loss)     (2,838 )     (714 )  
Total shareholders’ equity     321,645       355,774    
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 998,894     $ 1,023,604    
           

 

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
                   
    Three Months Ended   Six Months Ended  
    June 30,   June 30,  
     2024     2023     2024     2023   
    (Unaudited)   (Unaudited)  
Revenue   $ 94,663     $ 89,385     $ 188,187     $ 177,341    
Cost of revenue     16,024       15,632       31,472       31,298    
Gross profit     78,639       73,753       156,715       146,043    
                   
Operating expenses:                  
Research and development     21,855       23,289       45,488       45,176    
Sales and marketing     41,324       38,870       83,476       80,920    
General and administrative     17,764       15,604       34,215       31,103    
Total operating expenses     80,943       77,763       163,179       157,199    
Operating loss     (2,304 )     (4,010 )     (6,464 )     (11,156 )  
Financial income, net     8,502       4,487       15,163       7,571    
Income (loss) before income taxes     6,198       477       8,699       (3,585 )  
Income taxes     (2,931 )     (250 )     (4,644 )     (460 )  
Net income (loss) attributable to ordinary shareholders   $ 3,267     $ 227     $ 4,055     $ (4,045 )  
Basic net income (loss) per share attributable to ordinary shareholders   $ 0.09     $ 0.01     $ 0.11     $ (0.11 )  
Basic weighted average ordinary shares     38,089,060       37,906,971       38,422,605       37,677,180    
Diluted net income (loss) per share attributable to ordinary shareholders   $ 0.08     $ 0.01     $ 0.10     $ (0.11 )  
Diluted weighted average ordinary shares     38,755,863       41,192,132       39,180,421       37,677,180    
                   

 

          CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
                 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
     2024     2023     2024     2023 
    (Unaudited)   (Unaudited)
Operating Activities                
Net income (loss)   $ 3,267     $ 227     $ 4,055     $ (4,045 )
Adjustments to reconcile net loss to net cash provided by operating activities:                
Depreciation and amortization     1,606       1,654       2,756       3,379  
Exchange rate fluctuations and other items, net     55       (95 )     166       (6 )
Amortization of premium and accretion of discount of marketable securities, net     (1,154 )     378       (2,248 )     1,234  
Amortization of discount and issuance costs of convertible notes     638       635       1,275       1,269  
Shared-based compensation     18,438       17,630       37,458       34,349  
Changes in assets and liabilities:                
User funds     6,928       1,950       (4,692 )     (13,956 )
Operating lease ROU assets and liabilities     (177 )     (164 )     (275 )     (412 )
Other receivables     (2,197 )     (1,773 )     (5,173 )     (2,747 )
Trade payables     248       (2,569 )     (580 )     (6,354 )
Deferred revenue     (777 )     (788 )     1,118       831  
User accounts     (6,632 )     (1,608 )     3,291       13,355  
Account payable, accrued expenses and other     (131 )     3,141       4,134       4,699  
Non-current liabilities     859       117       882       642  
Net cash provided by operating activities     20,971       18,735       42,167       32,238  
                 
Investing Activities                
Investment in marketable securities           (118,450 )     (30,734 )     (181,008 )
Proceeds from maturities of marketable securities     68,512       108,621       108,597       162,921  
Investment in short-term bank deposits     (9,000 )           (36,238 )      
Proceeds from short-term bank deposits     2,974       58,781       6,351       58,751  
Acquisition of business, net of cash acquired     (9,163 )           (9,163 )      
Purchase of property and equipment     (309 )     (367 )     (687 )     (695 )
Capitalization of internal-use software and other           (8 )     (20 )     (13 )
Net cash provided by investing activities     53,014       48,577       38,106       39,956  
                 
Financing Activities                
Repurchases of common stock     (77,101 )           (77,101 )      
Proceeds from exercise of share options     1,388       433       1,830       2,183  
Tax withholding in connection with employees’ options exercises and vested RSUs     441       (387 )     220       (56 )
Net cash provided by (used in) financing activities     (75,272 )     46       (75,051 )     2,127  
                 
Effect of exchange rate fluctuations on cash and cash equivalents     (58 )     100       (167 )     37  
                 
Increase (decrease) in cash, cash equivalents and restricted cash     (1,345 )     67,458       5,055       74,358  
Cash, cash equivalents and restricted cash at the beginning of period     190,074       94,789       183,674       87,889  
Cash and cash equivalents at the end of period   $ 188,729     $ 162,247     $ 188,729     $ 162,247  
                 

 

KEY PERFORMANCE METRICS
           
    Twelve Months Ended  
    June 30,  
    2024   2023  
       
Annual active buyers (in thousands)   3,888   4,222  
Annual spend per buyer ($)   290   265  
           

 

 RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT
(in thousands, except gross margin data)
          
                               
    Q2’23   Q3’23   Q4’23   Q1’24   Q2’24   FY 2022   FY 2023  
  (Unaudited)   (Unaudited)   (Unaudited)  
GAAP gross profit   $ 73,753     $ 77,457     $ 76,029     $ 78,076     $ 78,639     $ 271,418     $ 299,529    
Add:                              
Share-based compensation     619       632       633       678       499       2,520       2,497    
Depreciation and amortization     885       731       709       613       791       6,065       3,253    
Non-GAAP gross profit   $ 75,257     $ 78,820     $ 77,371     $ 79,367     $ 79,929     $ 280,003     $ 305,279    
Non-GAAP gross margin     84.2 %     85.2 %     84.6 %     84.9 %     84.4 %     83.0 %     84.5 %  
                               
                               
                               
                               
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME AND NET INCOME PER SHARE
(in thousands, except share and per share data)
                               
    Q2’23   Q3’23   Q4’23   Q1’24   Q2’24   FY 2022   FY 2023  
  (Unaudited)   (Unaudited)   (Unaudited)  
GAAP net income (loss) attributable to ordinary shareholders   $ 227     $ 3,025     $ 4,701     $ 788     $ 3,267     $ (71,487 )   $ 3,681    
Add:                              
Depreciation and amortization     1,654       1,321       1,287       1,150       1,606       10,185       5,987    
Share-based compensation     17,630       17,557       16,792       19,020       18,438       71,755       68,698    
Impairment of intangible assets                                   27,629          
Contingent consideration revaluation, acquisition related costs and other                 (359 )     9       109       (10,613 )     (359 )  
Convertible notes amortization of discount and issuance costs     635       635       637       637       638       2,527       2,541    
Taxes on income related to non-GAAP adjustments                             (71 )              
Exchange rate (gain)/loss, net     (108 )     98       42       128       (156 )     (1,141 )     (131 )  
Non-GAAP net income   $ 20,038     $ 22,636     $ 23,100     $ 21,732     $ 23,831     $ 28,855     $ 80,417    
Weighted average number of ordinary shares – basic     37,906,971       38,164,996       38,501,155       38,756,151       38,089,060       36,856,140       38,066,203    
Non-GAAP basic net income per share attributable to ordinary shareholders   $ 0.53     $ 0.59     $ 0.60     $ 0.56     $ 0.63     $ 0.78     $ 2.11    
                               
Weighted average number of ordinary shares – diluted     41,192,132       41,389,621       41,440,827       41,758,840       40,909,724       40,662,057       41,304,907    
Non-GAAP diluted net income per share attributable to ordinary shareholders   $ 0.49     $ 0.55     $ 0.56     $ 0.52     $ 0.58     $ 0.71     $ 1.95    
                               
                               
                               
                               
RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA
(in thousands, except adjusted EBITDA margin data)
                               
    Q2’23   Q3’23   Q4’23   Q1’24   Q2’24   FY 2022   FY 2023  
  (Unaudited)   (Unaudited)   (Unaudited)  
GAAP net income (loss)   $ 227     $ 3,025     $ 4,701     $ 788     $ 3,267     $ (71,487 )   $ 3,681    
Add:                              
Financial expenses (income), net     (4,487 )     (5,678 )     (6,914 )     (6,661 )     (8,502 )     (3,624 )     (20,163 )  
Income taxes     250       308       605       1,713       2,931       577       1,373    
Depreciation and amortization     1,654       1,321       1,287       1,150       1,606       10,185       5,987    
Share-based compensation     17,630       17,557       16,792       19,020       18,438       71,755       68,698    
Impairment of intangible assets                                   27,629          
Contingent consideration revaluation, acquisition related costs and other                 (359 )     9       109       (10,613 )     (359 )  
Adjusted EBITDA   $ 15,274     $ 16,533     $ 16,112     $ 16,019     $ 17,849     $ 24,422     $ 59,217    
Adjusted EBITDA margin     17.1 %     17.9 %     17.6 %     17.1 %     18.9 %     7.2 %     16.4 %  
                               
                               
                               
                               
RECONCILIATION OF GAAP TO NON-GAAP OPERATING EXPENSES
(In thousands)
                               
    Q2’23   Q3’23   Q4’23   Q1’24   Q2’24   FY 2022   FY 2023  
  (Unaudited)   (Unaudited)   (Unaudited)  
GAAP research and development   $ 23,289     $ 23,490     $ 22,054     $ 23,633     $ 21,855     $ 92,563     $ 90,720    
Less:                              
Share-based compensation     6,463       6,227       5,836       6,836       5,897       23,828       24,310    
Depreciation and amortization     203       196       191       201       193       801       799    
Non-GAAP research and development   $ 16,623     $ 17,067     $ 16,027     $ 16,596     $ 15,765     $ 67,934     $ 65,611    
                               
GAAP sales and marketing   $ 38,870     $ 40,521     $ 39,767     $ 42,152     $ 41,324     $ 174,599     $ 161,208    
Less:                              
Share-based compensation     3,477       3,392       3,166       3,436       3,389       17,196       13,304    
Depreciation and amortization     476       314       309       264       553       2,889       1,601    
Acquisition related costs                                   (24 )        
Non-GAAP sales and marketing   $ 34,917     $ 36,815     $ 36,292     $ 38,452     $ 37,382     $ 154,538     $ 146,303    
                               
GAAP general and administrative   $ 15,604     $ 15,791     $ 15,816     $ 16,451     $ 17,764     $ 51,161     $ 62,710    
Less:                              
Share-based compensation     7,071       7,306       7,157       8,070       8,653       28,211       28,587    
Depreciation and amortization     90       80       78       72       69       430       334    
Contingent consideration revaluation, acquisition related costs and other                 (359 )     9       109       (10,589 )     (359 )  
Non-GAAP general and administrative   $ 8,443     $ 8,405     $ 8,940     $ 8,300     $ 8,933     $ 33,109     $ 34,148    
                               
                               
                               
                               
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(In thousands)
                               
    Q2’23   Q3’23   Q4’23   Q1’24   Q2’24   FY 2022   FY 2023  
  (Unaudited)   (Unaudited)   (Unaudited)  
Net cash provided by operating activities   $ 18,735     $ 23,399     $ 27,549     $ 21,196     $ 20,971     $ 30,112     $ 83,186    
Purchase of property and equipment     (367 )     (223 )     (135 )     (378 )     (309 )     (1,198 )     (1,053 )  
Capitalization of internal-use software     (8 )     (44 )     (3 )     (20 )           (1,000 )     (60 )  
Free cash flow   $ 18,360     $ 23,132     $ 27,411     $ 20,798     $ 20,662     $ 27,914     $ 82,073    
                               


Key Performance Metrics and Non-GAAP Financial Measures

This release includes certain key performance metrics and financial measures not based on GAAP, including Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net income (loss), non-GAAP net income (loss) per share and free cash flow, as well as operating metrics, including GMV, active buyers, spend per buyer and take rate. Some amounts in this release may not total due to rounding. All percentages have been calculated using unrounded amounts.

We define each of our non-GAAP measures of financial performance, as the respective GAAP balances shown in the above tables, adjusted for, as applicable, depreciation and amortization, share-based compensation expenses, contingent consideration revaluation, acquisition related costs and other, income taxes, amortization of discount and issuance costs of convertible note, financial (income) expenses, net. Non-GAAP gross profit margin represents non-GAAP gross profit expressed as a percentage of revenue. We define non-GAAP net income (loss) per share as non-GAAP net income (loss) divided by GAAP weighted-average number of ordinary shares basic and diluted. We use free cash flow as a liquidity measure and define it as a net cash provided by operating activities less capital expenditures.

We define GMV or Gross Merchandise Value as the total value of transactions ordered through our platform, excluding value added tax, goods and services tax, service chargebacks and refunds. Active buyers on any given date is defined as buyers who have ordered a Gig or other services on our platform within the last 12-month period, irrespective of cancellations. Spend per buyer on any given date is calculated by dividing our GMV within the last 12-month period by the number of active buyers as of such date. Take rate is revenue for any such period divided by GMV for the same period.

Management and our board of directors use certain metrics as supplemental measures of our performance that is not required by, or presented in accordance with GAAP because they assist us in comparing our operating performance on a consistent basis, as they remove the impact of items not directly resulting from our core operations. We also use these metrics for planning purposes, including the preparation of our internal annual operating budget and financial projections, to evaluate the performance and effectiveness of our strategic initiatives and capital expenditures and to evaluate our capacity to expand our business. In addition, we believe that free cash flow, which we use as a liquidity measure, is useful in evaluating our business because free cash flow reflects the cash surplus available or used to fund the expansion of our business after the payment of capital expenditures relating to the necessary components of ongoing operations. Capital expenditures consist primarily of property and equipment purchases and capitalized software costs.

Free cash flow should not be used as an alternative to, or superior to, cash from operating activities. In addition, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net income (loss) and non-GAAP net income (loss) per share as well as operating metrics, including GMV, active buyers, spend per buyer and take rate should not be considered in isolation, as an alternative to, or superior to net income (loss), revenue, cash flows or other performance measure derived in accordance with GAAP. These metrics are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Management believes that the presentation of non-GAAP metrics is an appropriate measure of operating performance because they eliminate the impact of expenses that do not relate directly to the performance of our underlying business.

These non-GAAP metrics should not be construed as an inference that our future results will be unaffected by unusual or other items. Additionally, Adjusted EBITDA and other non-GAAP metrics used herein are not intended to be a measure of free cash flow for management’s discretionary use, as they do not reflect our tax payments and certain other cash costs that may recur in the future, including, among other things, cash requirements for costs to replace assets being depreciated and amortized. Management compensates for these limitations by relying on our GAAP results in addition to using Adjusted EBITDA and other non-GAAP metrics as supplemental measures of our performance. Our measure of Adjusted EBITDA, free cash flow and other non-GAAP metrics used herein is not necessarily comparable to similarly titled captions of other companies due to different methods of calculation.

See the tables above regarding reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.

We are not able to provide a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin guidance for the third quarter of 2024 and the fiscal year ending December 31, 2024, and long term to net income (loss), the nearest comparable GAAP measure, because certain items that are excluded from Adjusted EBITDA and Adjusted EBITDA margin cannot be reasonably predicted or are not in our control. In particular, in the case of Adjusted EBITDA and Adjusted EBITDA margin, we are unable to forecast the timing or magnitude of share based compensation, amortization of intangible assets, impairment of intangible assets, income or loss on revaluation of contingent consideration, other acquisition-related costs, convertible notes amortization of discount and issuance costs and exchange rate income or loss, in each case, as applicable without unreasonable efforts, and these items could significantly impact, either individually or in the aggregate, GAAP measures in the future.

Forward Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our expected financial performance and operational performance including our long term free cash flow per share expectations, our business plans and strategy, our expectations regarding the integration of AutoDS, the growth of our business, AI services and developments, our product portfolio, our stock repurchase plan and expected shareholder value, our customer relationships and experiences, as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate” and similar statements of a future or forward-looking nature. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: risks related to the acquistion of AutoDS and our ability to successfully integrate AutoDS into our business, political, economic and military instability in Israel, including related to the war in Israel; our ability to successfully implement our business plan within adverse economic conditions that may impact the demand for our services or have a material adverse impact on our business, financial condition and results of operations; our ability to attract and retain a large community of buyers and freelancers; our ability to generate sufficient revenue to achieve or maintain profitability; our ability to maintain and enhance our brand; our dependence on the continued growth and expansion of the market for freelancers and the services they offer; our dependence on traffic to our website; our ability to maintain user engagement on our website and to maintain and improve the quality of our platform; our operations within a competitive market; our ability and the ability of third parties to protect our users’ personal or other data from a security breach and to comply with laws and regulations relating to data privacy, data protection and cybersecurity; our ability to manage our current and potential future growth; our dependence on decisions and developments in the mobile device industry, over which we do not have control; our ability to detect errors, defects or disruptions in our platform; our ability to comply with the terms of underlying licenses of open source software components on our platform; our ability to expand into markets outside the United States and our ability to manage the business and economic risks of international expansion and operations; our ability to achieve desired operating margins; our ability to comply with a wide variety of U.S. and international laws and regulations; our ability to attract, recruit, retain and develop qualified employees; our reliance on Amazon Web Services; our ability to mitigate payment and fraud risks; our dependence on relationships with payment partners, banks and disbursement partners; and the other important factors discussed under the caption “Risk Factors” in our annual report on Form 20-F filed with the U.S. Securities and Exchange Commission (“SEC”) on February 22, 2024, as such factors may be updated from time to time in our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. In addition, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements that we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. In addition, the forward-looking statements made in this release relate only to events or information as of the date on which the statements are made in this release. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
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1 This is a non-GAAP financial measure or Key Performance Metric. See “Key Performance Metrics and Non-GAAP Financial Measures” and reconciliation tables at the end of this release for additional information regarding the non-GAAP metrics and Key Performance Metrics used in this release.


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