Achieved company record gross profit and gross
margin
Achieved Non-GAAP operating profit for the
first time
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 third
quarter ended September 30, 2023. 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.
“We delivered another quarter of revenue growth in a challenging
demand environment, and we achieved non-GAAP profitability for the
first time, which is a tremendous accomplishment for us as a team,”
said Or Offer, Co-Founder and CEO of Similarweb. “During the
quarter, we launched the latest generation of our platform,
Similarweb 3.0, which brings more actionable insights to more
customers than ever before, especially in our Research and
Marketing solutions, and we are excited about the traction we are
seeing.”
Third Quarter 2023 Financial
Highlights
- Total revenue was $54.8 million, an increase of 10% compared to
$50.0 million for the third quarter of 2022.
- GAAP operating loss was $(4.9) million or (9)% of revenue,
compared to $(20.6) million or (41)% of revenue for the third
quarter of 2022.
- GAAP net loss per share was $(0.06), compared to $(0.28) for
the third quarter of 2022.
- Non-GAAP operating profit (loss) was $1.1 million or 2% of
revenue, compared to $(13.3) million or (27)% of revenue for the
third quarter of 2022.
- Non-GAAP operating earnings (loss) per share was $0.01,
compared to $(0.18) for the third quarter of 2022.
- Cash and cash equivalents totalled $67.4 million as of
September 30, 2023, compared to $77.8 million as of December 31,
2022.
- Net cash used in operating activities was $(4.8) million,
compared to $(21.7) million for the third quarter of 2022.
- Free cash flow was $(4.9) million, compared to $(29.5) million
for the third quarter of 2022.
- Normalized free cash flow was $(4.6) million, compared to
$(25.1) million for the third quarter of 2022.
Recent Business
Highlights
- Grew number of customers to 4,371 as of September 30, 2023, an
increase of 12% compared to September 30, 2022.
- Annual revenue per customer was approximately $50,580 in the
third quarter of 2023, as compared to $51,570 in the third quarter
of 2022.
- Grew number of customers with ARR of $100,000 or more to 355,
an increase of 10% compared to September 30, 2022.
- Customers with ARR of $100,000 or more contributed 55% of the
total ARR as of September 30, 2023, compared to 53% as of September
30, 2022.
- Dollar-based net retention rate for customers with ARR of
$100,000 or more was 108% in the third quarter of 2023 as compared
to 123% in the third quarter of 2022.
- Overall dollar-based net retention rate was 99% in the third
quarter of 2023 as compared to 112% in the third quarter of
2022.
- Multi-year subscriptions now comprise 43% of our overall ARR as
of September 30, 2023, as compared to 37% as of September 30,
2022.
- Remaining performance obligations increased 6% year-over-year,
to $167.7 million as of September 30, 2023, as compared to $158.0
million as of September 30, 2022.
Financial Outlook
“We achieved record gross margin and our first ever profitable
quarter on a Non-GAAP operating basis,” said Jason Schwartz, Chief
Financial Officer of Similarweb. “This reflects our ongoing efforts
to improve our operating efficiency, which enables the conditions
for profitable growth and sustainable positive free cash flow.”
- Total revenue estimated between $55.5 million and $56.0
million, representing approximately 9% growth year over year at the
mid-point of the range.
- Non-GAAP operating profit estimated between $0.5 million and
$1.0 million.
- Total revenue estimated between $216.8 million and $217.3
million, representing approximately 12% growth year over year at
the mid-point of the range.
- Non-GAAP operating loss estimated between $(8.6) million and
$(9.1) million.
- We expect to reach sustained positive free cash flow in the
fourth quarter of 2023.
The Company’s fourth quarter and full year 2023 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, November 8, 2023. 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 (877) 407-0726 toll-free and at (201) 689-7806
internationally.
About Similarweb
Similarweb powers businesses to win their market with the best
Digital Data. Similarweb reveals what is happening online and
provides businesses with the essential digital data & analytics
needed to build strategy, optimize customer acquisition and
increase monetization. We empower our users to be the first to
discover and capture the best business opportunities and stay alert
to 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 the
most comprehensive and accurate digital data on the planet.
Learn more: Similarweb | Similarweb Digital Data
Free Tools: Analyze any website or app | Verify your website |
Browser extension
Follow us: Blog | LinkedIn | YouTube | Instagram | X
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 fourth quarter and full year of 2023 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 March 23, 2023, 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 above 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,
September 30,
2022
2023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
77,810
$
67,412
Restricted deposits
9,814
9,946
Accounts receivable, net
38,141
34,720
Deferred contract costs
9,789
8,681
Prepaid expenses and other current
assets
6,628
6,898
Total current assets
142,182
127,657
Property and equipment, net
31,823
29,741
Deferred contract costs, non-current
8,348
5,862
Operating lease right-of-use assets
40,823
36,309
Intangible assets, net
9,561
5,956
Goodwill
12,867
12,867
Other non-current assets
441
33
Total assets
$
246,045
$
218,425
Liabilities and Shareholders'
equity
Current liabilities:
Borrowings under Credit Facility
$
25,000
$
25,000
Accounts payable
7,144
11,400
Payroll and benefit related
liabilities
18,512
13,342
Deferred revenue
93,195
89,818
Other payables and accrued expenses
27,990
23,617
Operating lease liabilities
9,091
6,785
Total current liabilities
180,932
169,962
Deferred revenue, non-current
974
394
Operating lease liabilities,
non-current
40,075
33,929
Other long-term liabilities
2,113
1,958
Total liabilities
224,094
206,243
Shareholders' equity
Ordinary Shares, NIS 0.01 par value
500,000,000 shares authorized as of December 31, 2022 and September
30, 2023 (unaudited), 76,435,940 and 78,273,972 shares issued as of
December 31, 2022 and September 30, 2023 (unaudited), 76,433,772
and 78,271,804 outstanding as of December 31, 2022 and September
30, 2023 (unaudited), respectively;
210
214
Additional paid-in capital
345,834
362,391
Accumulated other comprehensive loss
(367
)
(732
)
Accumulated deficit
(323,726
)
(349,691
)
Total shareholders' equity
21,951
12,182
Total liabilities and shareholders'
equity
$
246,045
218,425
Similarweb Ltd.
Consolidated Statements of Comprehensive Income
(Loss)
U.S. dollars in thousands (except
share and per share data)
Nine Months Ended September
30,
Three Months Ended September
30,
2022
2023
2022
2023
(Unaudited)
(Unaudited)
Revenue
$
141,888
$
161,264
$
50,022
$
54,833
Cost of revenue
40,848
35,231
13,749
10,580
Gross profit
101,040
126,033
36,273
44,253
Operating expenses:
Research and development
45,927
42,452
15,156
14,199
Sales and marketing
92,539
79,362
30,051
24,274
General and administrative
35,836
31,941
11,681
10,665
Total operating expenses
174,302
153,755
56,888
49,138
Loss from operations
(73,262
)
(27,722
)
(20,615
)
(4,885
)
Finance income (expenses), net
4,796
3,026
(627
)
1,061
Loss before income taxes
(68,466
)
(24,696
)
(21,242
)
(3,824
)
Provision (benefit) for income taxes
197
1,269
(249
)
1,014
Net loss
$
(68,663
)
$
(25,965
)
$
(20,993
)
$
(4,838
)
Net loss per share attributable to
ordinary shareholders, basic and diluted
$
(0.91
)
$
(0.33
)
$
(0.28
)
$
(0.06
)
Weighted-average shares used in computing
net loss per share attributable to ordinary shareholders, basic and
diluted
75,557,954
77,521,361
75,975,356
78,121,824
Net loss
$
(68,663
)
$
(25,965
)
$
(20,993
)
$
(4,838
)
Other comprehensive (loss) income, net
of tax
Change in unrealized (loss) gain on
cashflow hedges
(1,119
)
(365
)
209
(133
)
Total other comprehensive (loss) income,
net of tax
(1,119
)
(365
)
209
(133
)
Total comprehensive loss
$
(69,782
)
$
(26,330
)
$
(20,784
)
$
(4,971
)
Share-based compensation costs included
above:
U.S. dollars in thousands
Nine Months Ended September
30,
Three Months Ended September
30,
2022
2023
2022
2023
(Unaudited)
(Unaudited)
Cost of revenue
$
463
$
482
$
143
$
155
Research and development
4,094
4,303
1,463
1,453
Sales and marketing
4,908
4,051
1,747
1,321
General and administrative
3,950
4,849
1,496
1,658
Total
$
13,415
$
13,685
$
4,849
$
4,587
Similarweb Ltd.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
Nine Months Ended September
30,
Three Months Ended September
30,
2022
2023
2022
2023
(Unaudited)
(Unaudited)
Cash flows from operating
activities:
Net loss
$
(68,663
)
$
(25,965
)
$
(20,993
)
$
(4,838
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
8,112
7,688
2,354
2,576
Finance expense
1,419
1,752
282
883
Unrealized loss from hedging future
transactions
473
26
126
22
Share-based compensation
13,415
13,685
4,849
4,587
Gain from sale of equipment
(132
)
(1
)
(5
)
(2
)
Changes in operating assets and
liabilities:
Change in operating lease right-of-use
assets and liabilities, net
5,269
(3,938
)
3,174
(1,523
)
Decrease (increase) in accounts
receivable, net
6,198
3,421
1,865
(2,212
)
(Increase) decrease in deferred contract
costs
(2,129
)
3,594
229
1,004
Decrease (increase) in other current
assets
886
(1,587
)
1,265
(707
)
(Increase) decrease in other non-current
assets
(131
)
408
(46
)
(9
)
(Decrease) increase in accounts
payable
(2,840
)
4,309
(4,242
)
3,966
Increase (decrease) in deferred
revenue
5,433
(3,957
)
(6,900
)
(6,898
)
(Decrease) increase in other non-current
liabilities
(561
)
(155
)
(133
)
164
Decrease in other liabilities and accrued
expenses
(554
)
(6,051
)
(3,494
)
(1,805
)
Net cash used in operating activities
(33,805
)
(6,771
)
(21,669
)
(4,792
)
Cash flows from investing
activities:
Purchase of property and equipment,
net
(26,325
)
(1,377
)
(6,705
)
(62
)
Capitalized internal-use software
costs
(2,495
)
(788
)
(1,120
)
(81
)
Decrease (increase) in restricted
deposits
1,153
(132
)
1,047
(45
)
Payment in relation to business
combinations
(3,787
)
—
—
—
Cash received in relation to business
combinations
294
—
294
—
Net cash used in investing activities
(31,160
)
(2,297
)
(6,484
)
(188
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
1,904
2,125
143
295
Proceeds from employee share purchase
plan
1,234
660
—
—
Borrowings under Credit Facility
25,000
—
25,000
—
Payments of contingent consideration,
net
—
(2,363
)
—
—
Net cash provided by financing
activities
28,138
422
25,143
295
Effect of exchange rates on cash and cash
equivalents
(1,419
)
(1,752
)
(282
)
(883
)
Net decrease in cash and cash
equivalents
(38,246
)
(10,398
)
(3,292
)
(5,568
)
Cash and cash equivalents, beginning of
period
128,879
77,810
93,925
72,980
Cash and cash equivalents, end of
period
$
90,633
$
67,412
$
90,633
$
67,412
Supplemental disclosure of cash flow
information:
Interest received, net
$
(16
)
$
(89
)
$
—
$
(49
)
Taxes paid
$
417
$
1,857
$
176
$
244
Supplemental disclosure of non-cash
financing activities:
Additions to operating lease right-of-use
assets and liabilities
$
9,435
$
1,048
$
457
$
268
Deferred proceeds from exercise of share
options included in other current assets
$
—
$
54
$
—
$
12
Deferred costs of property and equipment
incurred during the period included in accounts payable
$
770
$
63
$
(2,684
)
$
22
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)
$
(657
)
$
—
Cash refund to be received resulting from
adjustment to working capital
193
—
Property, plant and equipment
43
—
Goodwill and other intangible assets
4,361
—
Deferred taxes, net
(153
)
—
$
3,787
$
—
Reconciliation of Non-GAAP
Financial Measures to the Most Directly Comparable GAAP Financial
Measures
Reconciliation of GAAP gross profit to
non-GAAP gross profit
Nine Months Ended September
30,
Three Months Ended September
30,
2022
2023
2022
2023
(In thousands)
(In thousands)
GAAP gross profit
$
101,040
$
126,033
$
36,273
$
44,253
Add:
Share-based compensation expenses
463
482
143
155
Retention payments related to business
combinations
1,656
306
511
—
Amortization of intangible assets related
to business combinations
3,319
3,504
1,168
1,169
Non-recurring expenses related to
termination of lease agreement and others
35
—
—
—
Non-GAAP gross profit
$
106,513
$
130,325
$
38,095
$
45,577
Non-GAAP gross margin
75
%
81
%
76
%
83
%
Reconciliation of Loss from operations
(GAAP) to Non-GAAP operating (loss) income
Nine Months Ended September
30,
Three Months Ended September
30,
2022
2023
2022
2023
(In thousands)
(In thousands)
Loss from operations
$
(73,262
)
$
(27,722
)
$
(20,615
)
$
(4,885
)
Add:
Share-based compensation expenses
13,415
13,685
4,849
4,587
Retention payments related to business
combinations
1,991
851
737
164
Amortization of intangible assets related
to business combinations
3,371
3,605
1,201
1,202
Adjustment of fair value of contingent
consideration related to business combinations
744
—
62
—
Non-recurring expenses related to
termination of lease agreement and others
977
17
418
4
Capital gain related to sale of operating
equipment
(127
)
—
—
—
Non-GAAP operating (loss)
income
$
(52,891
)
$
(9,564
)
$
(13,348
)
$
1,072
Non-GAAP operating margin
(37
)%
(6
)%
(27
)%
2
%
Reconciliation of GAAP operating
expenses to non-GAAP operating expenses
Nine Months Ended September
30,
Three Months Ended September
30,
2022
2023
2022
2023
(In thousands)
(In thousands)
GAAP research and development
$
45,927
$
42,452
$
15,156
$
14,199
Less:
Share-based compensation expenses
4,094
4,303
1,463
1,453
Non-recurring expenses related to
termination of lease agreement and others
87
—
—
—
Non-GAAP research and
development
$
41,746
$
38,149
$
13,693
$
12,746
Non-GAAP research and development
margin
29
%
24
%
27
%
23
%
GAAP sales and marketing
$
92,539
$
79,362
$
30,051
$
24,274
Less:
Share-based compensation expenses
4,908
4,051
1,747
1,321
Retention payments related to business
combinations
335
545
226
164
Amortization of intangible assets related
to business combinations
52
101
33
33
Non-recurring expenses related to
termination of lease agreement and others
799
17
418
4
Non-GAAP sales and marketing
$
86,445
$
74,648
$
27,627
$
22,752
Non-GAAP sales and marketing
margin
61
%
46
%
55
%
41
%
GAAP general and administrative
$
35,836
$
31,941
$
11,681
$
10,665
Less:
Share-based compensation expenses
3,950
4,849
1,496
1,658
Adjustment of fair value of contingent
consideration related to business combinations
744
—
62
—
Non-recurring expenses related to
termination of lease agreement and others
56
—
—
—
Capital gain related to sale of operating
equipment
(127
)
—
—
—
Non-GAAP general and
administrative
$
31,213
$
27,092
$
10,123
$
9,007
Non-GAAP general and administrative
margin
22
%
17
%
20
%
16
%
Reconciliation of Net cash used in
operating activities (GAAP) to Free cash flow and Normalized free
cash flow
Nine Months Ended September
30,
Three Months Ended September
30,
2022
2023
2022
2023
(In thousands)
(In thousands)
Net cash used in operating activities
$
(33,805
)
$
(6,771
)
$
(21,669
)
$
(4,792
)
Purchases of property and equipment,
net
(26,325
)
(1,377
)
(6,705
)
(62
)
Capitalized internal use software
costs
(2,495
)
(788
)
(1,120
)
(81
)
Free cash flow
$
(62,625
)
$
(8,936
)
$
(29,494
)
$
(4,935
)
Purchases of property and equipment
related to the new headquarters
25,440
1,127
7,161
27
Payments received in connection with
purchases of property and equipment
(11,192
)
—
(3,174
)
—
Payments received from escrow in relation
to contingent consideration
—
(380
)
—
—
Deferred payments in relation to business
combinations
413
260
413
260
Normalized free cash flow
$
(47,964
)
$
(7,929
)
$
(25,094
)
$
(4,648
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107435065/en/
Press Contact: David Carr
Similarweb press@similarweb.com
Investor Contact: Raymond
"RJ" Jones Similarweb raymond.jones@similarweb.com
Similarweb (NYSE:SMWB)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Similarweb (NYSE:SMWB)
Gráfica de Acción Histórica
De May 2023 a May 2024