Sustained momentum in both top line and bottom
line performance
Delivering consecutive quarters of positive
free cash flow and non-GAAP operating profit
Similarweb Ltd. (NYSE: SMWB) ("Similarweb" or the "Company"), a
leading digital data and analytics company powering critical
business decisions, today announced financial results for its first
quarter ended March 31, 2024. The Company published a letter to
shareholders from management discussing these results, which can be
accessed at the link:
https://ir.similarweb.com/financials/quarterly-results, located on
the Company's investor relations website.
“Demand for our solutions from customers who value Similarweb
Digital Data to make critical business decisions, supported 16%
growth in customers and 12% growth in revenue, relative to Q1
2023,” said Or Offer, Co-Founder and CEO of Similarweb. “We
delivered strong momentum on the bottom line, with a third
consecutive quarter of non-GAAP operating profit, and a second
consecutive quarter of positive free cash flow. Our recent
acquisition of Admetricks and the launch of SAM, our AI-powered
Sales Assistant Module demonstrates our continued investment in the
enhancement of our unique data and solutions."
First Quarter 2024 Financial
Highlights
- Total revenue was $59.0 million, an increase of 12% compared to
$52.8 million for the first quarter of 2023.
- GAAP operating loss was $(2.7) million or (5)% of revenue,
compared to $(13.1) million or (25)% of revenue for the first
quarter of 2023.
- GAAP net loss per share was $(0.03), compared to $(0.15) for
the first quarter of 2023.
- Non-GAAP operating profit was $2.8 million or 5% of revenue,
compared to non-GAAP operating loss of $(7.2) million or (14)% of
revenue for the first quarter of 2023.
- Non-GAAP operating profit per share was $0.04, compared to
non-GAAP operating loss of $(0.09) for the first quarter of
2023.
Recent Business
Highlights
- Generated $9.7 million of free cash flow, reflecting a record
16% free cash flow margin.
- Grew number of customers to 4,844 as of March 31, 2024, an
increase of 16% compared to March 31, 2023.
- Grew number of customers with ARR of $100,000 or more to 378,
an increase of 10% compared to March 31, 2023.
- Customers with ARR of $100,000 or more contributed 58% of the
total ARR as of March 31, 2024, compared to 55% as of March 31,
2023.
- Dollar-based net retention rate for customers with ARR of
$100,000 or more was 107% in the first quarter of 2024, consistent
with the fourth quarter of 2023.
- Overall dollar-based net retention rate was 98% in the first
quarter of 2024, consistent with the fourth quarter of 2023.
- Multi-year subscriptions now comprise 42% of our overall ARR as
of March 31, 2024, as compared to 40% as of March 31, 2023.
- Remaining performance obligations increased 23% year-over-year,
to $213.6 million as of March 31, 2024, as compared to $174.0
million as of March 31, 2023.
- Announced the acquisition of Admetricks, a leading digital ad
intelligence provider based in Santiago, Chile.
Financial Outlook
“We remain focused on generating profitable growth as
demonstrated in the first quarter with accelerating top line growth
as well as continued positive free cash flow and non-GAAP operating
profit,” said Jason Schwartz, Chief Financial Officer of
Similarweb. “We are maintaining our revenue outlook and improving
our outlook for non-GAAP operating profit for the full year 2024.
We remain disciplined to support our goal of positive free cash
flow and non-GAAP operating profit on a quarterly basis in 2024,
while continuing to invest to support the realization of
Similarweb's potential.”
- Q2 2024 Guidance
- Total revenue estimated between $60.0 million and $60.5
million, representing approximately 12% growth year over year at
the mid-point of the range.
- Non-GAAP operating profit estimated between $1.5 million and
$2.0 million.
- FY 2024 Guidance
- Total revenue estimated between $242.0 million and $246.0
million, representing approximately 12% growth year over year at
the mid-point of the range.
- Non-GAAP operating profit estimated between $7.0 million and
$9.0 million.
The Company’s second quarter and full year 2024 financial
outlook is based upon a number of assumptions that are subject to
change and many of which are outside the Company’s control. Actual
results may vary from these assumptions, and the Company’s
expectations may change. There can be no assurance that the Company
will achieve these results.
The Company does not provide guidance for operating loss and
gross margin, the most directly comparable GAAP measures to
non-GAAP operating loss and non-GAAP gross margin, respectively,
and similarly cannot provide a reconciliation of these measures to
their closest GAAP equivalents without unreasonable effort due to
the unavailability of reliable estimates for certain items. These
items are not within the Company’s control and may vary greatly
between periods and could significantly impact future financial
results.
Conference Call
Information
The financial results and business highlights will be discussed
on a conference call and webcast scheduled at 8:30 a.m. Eastern
Time on Wednesday, May 8, 2024. A live webcast of the call can be
accessed from Similarweb’s Investor Relations website at
https://ir.similarweb.com. An archived webcast of the conference
call will also be made available on the Similarweb website
following the call. The live call may also be accessed via
telephone at (888) 645-4404 toll-free and at (862) 298-0702
internationally.
About Similarweb: Similarweb powers the data-driven
decisions that help businesses win their market by revealing what
is happening online. Similarweb provides businesses with the
essential digital data & analytics needed to build strategy,
optimize customer acquisition and increase monetization. We enable
our users to become the first to discover and capture the best
business opportunities and to stay alert and react instantly to
emerging threats to their business. Similarweb products are easy to
use and integrated into users’ workflow, powered by the most
advanced technology, and based on what we believe to be the most
comprehensive digital data on the planet.
Learn more: Similarweb | Similarweb Digital Data
Free Tools: Analyze any website or app | Verify your website |
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Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, including statements relating to
our guidance for the second quarter and full year of 2024 described
under "Financial Outlook". Forward-looking statements include all
statements that are not historical facts. Such statements may be
preceded by the words “intends,” “may,” “will,” “plans,” “expects,”
“anticipates,” “projects,” “predicts,” “estimates,” “aims,”
“believes,” “hopes,” “potential” or similar words. These
forward-looking statements reflect our current views regarding our
intentions, products, services, plans, expectations, strategies and
prospects, which are based on information currently available to us
and assumptions we have made. Actual results may differ materially
from those described in such forward-looking statements and are
subject to a number of known and unknown risks, uncertainties,
other factors and assumptions that are beyond our control. Such
risks and uncertainties include, without limitation, risks and
uncertainties associated with: (i) our expectations regarding our
revenue, expenses and other operating results; (ii) our ability to
acquire new customers and successfully retain existing customers;
(iii) our ability to increase usage of our solutions and upsell and
cross-sell additional solutions; (iv) our ability to achieve or
sustain profitability; (v) anticipated trends, growth rates, rising
interest rates, rising global inflation and current macroeconomic
conditions, challenges in our business and in the markets in which
we operate, and the impact of Israel's war with Hamas and other
terrorist organizations on geopolitical and macroeconomic
conditions or on our company and business; (vi) future investments
in our business, our anticipated capital expenditures and our
estimates regarding our capital requirements; (vii) the costs and
success of our sales and marketing efforts and our ability to
promote our brand; (viii) our reliance on key personnel and our
ability to identify, recruit and retain skilled personnel; (ix) our
ability to effectively manage our growth, including continued
international expansion; (x) our reliance on certain third party
platforms and sources for the collection of data necessary for our
solutions; (xi) our ability to protect our intellectual property
rights and any costs associated therewith; (xii) our ability to
identify and complete acquisitions that complement and expand our
reach and platform; (xiii) our ability to comply or remain in
compliance with laws and regulations that currently apply or become
applicable to our business, including in Israel, the United States,
the European Union, the United Kingdom and other jurisdictions
where we elect to do business; (xiv) our ability to compete
effectively with existing competitors and new market entrants; and
(xv) the growth rates of the markets in which we compete.
These risks and uncertainties are more fully described in our
filings with the Securities and Exchange Commission, including in
the section entitled “Risk Factors” in our Form 20-F filed with the
Securities and Exchange Commission on February 28, 2024, and
subsequent reports that we file with the Securities and Exchange
Commission. Moreover, 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 we may make. In light of these risks, uncertainties and
assumptions, we cannot guarantee future results, levels of
activity, performance, achievements, or events and circumstances
reflected in the forward-looking statements will occur.
Forward-looking statements represent our beliefs and assumptions
only as of the date of this press release. Except as required by
law, we undertake no duty to update any forward-looking statements
contained in this release as a result of new information, future
events, changes in expectations or otherwise.
Non-GAAP Financial Measures
This press release contains certain financial measures that are
expressed on a non-GAAP basis. We use these non-GAAP financial
measures internally to facilitate analysis of our financial and
business trends and for internal planning and forecasting purposes.
We believe these non-GAAP financial measures, when taken
collectively, may be helpful to investors because they provide
consistency and comparability with past financial performance by
excluding certain items that may not be indicative of our business,
results of operations, or outlook. However, non-GAAP financial
measures have limitations as an analytical tool and are presented
for supplemental informational purposes only. They should not be
considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. Free cash flow
represents net cash provided by (used in) operating activities less
capital expenditures and capitalized internal-use software costs.
Normalized free cash flow represents free cash flow less capital
investments related to the Company's new headquarters, payments
received in connection with these capital investments and deferred
payments related to business combinations. Non-GAAP operating
income (loss), non-GAAP gross profit, non-GAAP gross margin,
non-GAAP operating margin, non-GAAP research and development
expenses, non-GAAP sales and marketing expenses and non-GAAP
general and administrative expenses represent the comparable GAAP
financial figure operating income (loss) or expense, less
share-based compensation, adjustments and payments related to
business combinations, amortization of intangible assets and
certain other non-recurring items, as applicable and indicated in
the below tables.
Other Metrics
Customer acquisition costs (CAC) represent the portion of sales
and marketing expenses allocated to acquire new customers. Customer
retention costs (CRC) represent the portion of sales and marketing
expenses allocated to retain existing customers and to increase
existing customers’ subscriptions. Annual recurring revenue (ARR)
represents the annualized subscription revenue we would
contractually expect to receive from customers assuming no
increases or reductions in their subscriptions. CAC payback period
is the estimated time in months to recover CAC in terms of
incremental gross profit that newly acquired customers generate.
Net retention rate (NRR) represents the comparison of our ARR from
the same set of customers as of a certain point in time, relative
to the same point in time in the previous year ago period,
expressed as a percentage.
Similarweb Ltd.
Consolidated Balance Sheets
U.S. dollars in thousands (except
share and per share data)
December 31,
March 31,
2023
2024
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
71,732
$
54,890
Restricted deposits
10,020
10,188
Accounts receivable, net
47,869
41,257
Deferred contract costs
11,165
11,085
Prepaid expenses and other current
assets
5,599
6,410
Total current assets
146,385
123,830
Property and equipment, net
28,630
27,620
Deferred contract costs, non-current
9,845
9,512
Operating lease right-of-use assets
36,007
36,828
Goodwill and Intangible assets, net
17,652
21,192
Other non-current assets
494
461
Total assets
$
239,013
$
219,443
Liabilities and Shareholders'
equity
Current liabilities:
Borrowings under Credit Facility
$
25,000
$
—
Accounts payable
8,422
5,968
Payroll and benefit related
liabilities
20,437
15,757
Deferred revenue
99,968
107,643
Other payables and accrued expenses
23,263
25,853
Operating lease liabilities
7,095
6,412
Total current liabilities
184,185
161,633
Deferred revenue, non-current
878
723
Operating lease liabilities,
non-current
35,329
34,562
Other long-term liabilities
3,074
3,420
Total liabilities
223,466
200,338
Shareholders' equity
Ordinary Shares, NIS 0.01 par value
500,000,000 shares authorized as of December 31, 2023 and March 31,
2024 (unaudited), 78,653,046 and 80,314,588 shares issued as of
December 31, 2023 and March 31, 2024 (unaudited), 78,650,878 and
80,312,420 outstanding as of December 31, 2023 and March 31, 2024
(unaudited), respectively;
216
221
Additional paid-in capital
367,558
374,361
Accumulated other comprehensive income
872
355
Accumulated deficit
(353,099
)
(355,832
)
Total shareholders' equity
15,547
19,105
Total liabilities and shareholders'
equity
$
239,013
$
219,443
Similarweb Ltd.
Consolidated Statements of Comprehensive Income
(Loss)
U.S. dollars in thousands (except
share and per share data)
Three Months Ended March
31,
2023
2024
(Unaudited)
Revenue
$
52,750
$
58,982
Cost of revenue
12,076
12,696
Gross profit
40,674
46,286
Operating expenses:
Research and development
14,351
13,539
Sales and marketing
28,666
25,240
General and administrative
10,737
10,191
Total operating expenses
53,754
48,970
Loss from operations
(13,080
)
(2,684
)
Finance income, net
1,355
455
Loss before income taxes
(11,725
)
(2,229
)
Provision for income taxes
109
504
Net loss
$
(11,834
)
$
(2,733
)
Net loss per share attributable to
ordinary shareholders, basic and diluted
$
(0.15
)
$
(0.03
)
Weighted-average shares used in computing
net loss per share attributable to ordinary shareholders, basic and
diluted
76,862,020
79,361,522
Net loss
$
(11,834
)
$
(2,733
)
Other comprehensive loss, net of
tax
Change in unrealized loss on cashflow
hedges
(277
)
(517
)
Total other comprehensive loss, net of
tax
(277
)
(517
)
Total comprehensive loss
$
(12,111
)
$
(3,250
)
Share-based compensation costs
included above:
U.S. dollars in thousands
Three Months Ended March
31,
2023
2024
(Unaudited)
Cost of revenue
$
155
$
167
Research and development
1,390
1,444
Sales and marketing
1,374
1,185
General and administrative
1,490
1,331
Total
$
4,409
$
4,127
Similarweb Ltd.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
Three Months Ended March
31,
2023
2024
(Unaudited)
Cash flows from operating
activities:
Net loss
$
(11,834
)
$
(2,733
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
2,540
2,520
Finance expense
207
236
Unrealized (gain) loss from hedging future
transactions
(27
)
31
Share-based compensation
4,409
4,127
Loss (gain) from sale of equipment
2
(4
)
Changes in operating assets and
liabilities:
Change in operating lease right-of-use
assets and liabilities, net
(1,225
)
(2,271
)
Decrease in accounts receivable, net
644
6,993
Decrease in deferred contract costs
1,449
413
Decrease (increase) in other current
assets
250
(1,324
)
Decrease in other non-current assets
431
33
Decrease in accounts payable
(1,059
)
(2,463
)
Increase in deferred revenue
7,243
6,988
(Decrease) increase in other non-current
liabilities
(94
)
194
Decrease in other liabilities and accrued
expenses
(2,610
)
(2,676
)
Net cash provided by operating
activities
326
10,064
Cash flows from investing
activities:
Purchase of property and equipment,
net
(1,132
)
(364
)
Capitalized internal-use software
costs
(433
)
—
Increase in restricted deposits
(44
)
(168
)
Payment for business combinations, net of
cash acquired
—
(3,809
)
Net cash used in investing activities
(1,609
)
(4,341
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
1,392
2,671
Repayment of Credit Facility
—
(25,000
)
Payments of contingent consideration,
net
(2,363
)
—
Net cash used in financing activities
(971
)
(22,329
)
Effect of exchange rates on cash and cash
equivalents
(207
)
(236
)
Net decrease in cash and cash
equivalents
(2,461
)
(16,842
)
Cash and cash equivalents, beginning of
period
77,810
71,732
Cash and cash equivalents, end of
period
$
75,349
$
54,890
Supplemental disclosure of cash flow
information:
Interest paid (received), net
$
6
$
(235
)
Taxes paid
$
55
$
831
Supplemental disclosure of non-cash
financing activities:
Additions to operating lease right-of-use
assets and liabilities
$
170
$
2,398
Deferred proceeds from exercise of share
options included in other current assets
$
16
$
20
Deferred costs of property and equipment
incurred during the period included in accounts payable
$
121
$
142
Deferred payments in relation to business
combinations held in escrow
$
1,269
$
—
Schedule A: Business
combinations
Working capital (deficit), net (excluding
cash and cash equivalents)
$
—
$
(217
)
Property, plant and equipment
—
18
Goodwill and other intangible assets
—
4,660
Deferred taxes, net
—
(152
)
—
4,309
Less non-cash:
Deferred cash payments
—
(500
)
Total
$
—
$
3,809
Reconciliation of Non-GAAP
Financial Measures to the Most Directly Comparable GAAP Financial
Measures
Reconciliation of GAAP gross
profit to non-GAAP gross profit
Three Months Ended March
31,
2023
2024
(In thousands)
GAAP gross profit
$
40,674
$
46,286
Add:
Share-based compensation expenses
155
167
Retention payments related to business
combinations
88
—
Amortization of intangible assets related
to business combinations
1,168
1,087
Non-GAAP gross profit
$
42,085
$
47,540
Non-GAAP gross margin
80
%
81
%
Reconciliation of Loss from
operations (GAAP) to Non-GAAP operating (loss) income
Three Months Ended March
31,
2023
2024
(In thousands)
Loss from operations
$
(13,080
)
$
(2,684
)
Add:
Share-based compensation expenses
4,409
4,127
Retention payments related to business
combinations
282
228
Amortization of intangible assets related
to business combinations
1,202
1,121
Non-recurring expenses related to
termination of lease agreement and others
13
—
Non-GAAP operating (loss)
income
$
(7,174
)
$
2,792
Non-GAAP operating margin
(14
)%
5
%
Reconciliation of GAAP
operating expenses to non-GAAP operating expenses
Three Months Ended March
31,
2023
2024
(In thousands)
GAAP research and development
$
14,351
$
13,539
Less:
Share-based compensation expenses
1,390
1,444
Non-GAAP research and
development
$
12,961
$
12,095
Non-GAAP research and development
margin
25
%
21
%
GAAP sales and marketing
$
28,666
$
25,240
Less:
Share-based compensation expenses
1,374
1,185
Retention payments related to business
combinations
194
228
Amortization of intangible assets related
to business combinations
34
34
Non-recurring expenses related to
termination of lease agreement and others
13
—
Non-GAAP sales and marketing
$
27,051
$
23,793
Non-GAAP sales and marketing
margin
51
%
40
%
GAAP general and administrative
$
10,737
$
10,191
Less:
Share-based compensation expenses
1,490
1,331
Non-GAAP general and
administrative
$
9,247
$
8,860
Non-GAAP general and administrative
margin
18
%
15
%
Reconciliation of Net cash
provided by operating activities (GAAP) to Free cash flow and
Normalized free cash flow
Three Months Ended March
31,
2023
2024
(In thousands)
Net cash provided by operating
activities
$
326
$
10,064
Purchases of property and equipment,
net
(1,132
)
(364
)
Capitalized internal use software
costs
(433
)
—
Free cash flow
$
(1,239
)
$
9,700
Purchases of property and equipment
related to the new headquarters
1,048
—
Payments received from escrow in relation
to contingent consideration
(380
)
—
Normalized free cash flow
$
(571
)
$
9,700
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507429014/en/
Press Contact: David Carr
Similarweb press@similarweb.com
Investor Contact: Rami
Myerson Similarweb rami.myerson@similarweb.com
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