Revenue growth accelerated for the third
consecutive quarter
Fourth consecutive quarter of non-GAAP
operating profit
Raising guidance for 2024 revenue 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
second quarter ended June 30, 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.
“We delivered another strong quarter with accelerating revenue
and customer growth, record profitability and solid free cash flow,
providing us with the confidence to raise our 2024 revenue and
profit guidance,” stated Or Offer, Co-Founder and CEO of
Similarweb. “Revenue growth in the second quarter accelerated to
13%, the third consecutive quarter of accelerating growth. We
believe revenue growth will continue to accelerate in the second
half of 2024 and have reflected this in our outlook. We increased
our customer base by 17% to more than 5,000 customers, including
our first eight-figure ARR customer.” Offer concluded, “We are just
beginning to tap into the vast potential of our data and the
addressable markets we serve.”
Second Quarter 2024 Financial
Highlights
- Total revenue was $60.6 million, an increase of 13% compared to
$53.7 million for the second quarter of 2023.
- GAAP operating loss was $(1.0) million or (2)% of revenue,
compared to $(9.8) million or (18)% of revenue for the second
quarter of 2023.
- GAAP net loss per share was $(0.01), compared to $(0.12) for
the second quarter of 2023.
- Non-GAAP operating profit was $5.3 million or 9% of revenue,
compared to non-GAAP operating loss of $(3.5) million or (6)% of
revenue for the second quarter of 2023.
- Non-GAAP operating profit per share was $0.07, compared to
non-GAAP operating loss per share of $(0.04) for the second quarter
of 2023.
- Cash and cash equivalents totalled $61.8 million as of June 30,
2024, compared to $71.7 million as of December 31, 2023.
- Net cash provided by (used in) operating activities was $7.3
million, compared to $(2.3) million for the second quarter of
2023.
- Free cash flow was $6.3 million, compared to $(2.8) million for
the second quarter of 2023.
Recent Business
Highlights
- Grew number of customers to 5,034 as of June 30, 2024, an
increase of 17% compared to June 30, 2023.
- Grew number of customers with ARR of $100,000 or more to 383,
an increase of 8% compared to June 30, 2023.
- Secured the first 8-figure ARR customer after signing a large
contract with an existing customer.
- Customers with ARR of $100,000 or more contributed 60% of the
total ARR as of June 30, 2024, compared to 55% as of June 30,
2023.
- Dollar-based net retention rate for customers with ARR of
$100,000 or more was 109% in the second quarter of 2024, an
increase from the first quarter of 2024.
- Overall dollar-based net retention rate was 99% in the second
quarter of 2024, an increase from the first quarter of 2024.
- 44% of our overall ARR is contracted under multi-year
subscriptions as of June 30, 2024, as compared to 42% as of June
30, 2023.
- Remaining performance obligations increased 24% year-over-year,
to $216.6 million as of June 30, 2024, as compared to $174.8
million as of June 30, 2023.
- Acquired 42matters AG, a leading app intelligence provider
based in Zurich, Switzerland, on July 1, 2024.
- Extended the $75 million SVB Credit Facility for an additional
2-year term through December 31, 2026.
Financial Outlook
"Revenue growth continued to accelerate this quarter, driven by
new customer acquisition and improving retention,” stated Jason
Schwartz, Chief Financial Officer of Similarweb. “Our operational
performance this quarter highlights our commitment to disciplined
execution." He further noted, “We achieved a fourth consecutive
quarter of operating profit and generated $16 million in free cash
flow in the first half of 2024. Given these results, which exceeded
our expectations, we are raising our revenue and non-GAAP operating
profit outlook for the full year 2024." Schwartz emphasized the
company's progress, saying, “We are making significant strides
towards our long-term profit and free cash flow targets.”
- Q3 2024 Guidance
- Total revenue estimated between $62.5 million and $63.0
million, representing approximately 15% growth year over year at
the mid-point of the range.
- Non-GAAP operating profit estimated between $2.8 million and
$3.2 million.
- FY 2024 Guidance
- Total revenue estimated between $246.0 million and $248.0
million.
- Non-GAAP operating profit estimated between $13.0 million and
$15.0 million.
The Company’s third 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, August 7, 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) 437-3179 toll-free and at (862) 298-0702
internationally.
About Similarweb
Similarweb powers businesses to win their markets with Digital
Data. By providing essential web and app data, analytics, and
insights, we empower our users to discover business opportunities,
identify competitive threats, optimize strategy, acquire the right
customers, and increase monetization. Similarweb products are
integrated into users’ workflow, powered by advanced technology,
and based on leading comprehensive Digital Data.
Learn more: Similarweb | Similarweb Digital Data Free
Tools: Analyze any website or app | Verify your website |
Browser extension Follow us: Blog | LinkedIn | YouTube |
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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 third 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 and potential hostilities with Iran or
Lebanon 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,
June 30,
2023
2024
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
71,732
$
61,791
Restricted deposits
10,020
10,309
Accounts receivable, net
47,869
38,631
Deferred contract costs
11,165
10,962
Prepaid expenses and other current
assets
5,599
7,704
Total current assets
146,385
129,397
Property and equipment, net
28,630
27,141
Deferred contract costs, non-current
9,845
9,465
Operating lease right-of-use assets
36,007
35,815
Goodwill and Intangible assets, net
17,652
19,989
Other non-current assets
494
447
Total assets
$
239,013
$
222,254
Liabilities and shareholders'
equity
Current liabilities:
Borrowings under Credit Facility
$
25,000
$
—
Accounts payable
8,422
5,037
Payroll and benefit related
liabilities
20,437
16,755
Deferred revenue
99,968
108,000
Other payables and accrued expenses
23,263
24,760
Operating lease liabilities
7,095
6,834
Total current liabilities
184,185
161,386
Deferred revenue, non-current
878
694
Operating lease liabilities,
non-current
35,329
32,885
Other long-term liabilities
3,074
3,846
Total liabilities
223,466
198,811
Shareholders' equity
Ordinary Shares, NIS 0.01 par value
500,000,000 shares authorized as of December 31, 2023 and June 30,
2024 (unaudited), 78,653,046 and 80,921,451 shares issued as of
December 31, 2023 and June 30, 2024 (unaudited), 78,650,878 and
80,919,283 outstanding as of December 31, 2023 and June 30, 2024
(unaudited), respectively;
216
222
Additional paid-in capital
367,558
379,799
Accumulated other comprehensive income
(loss)
872
(8
)
Accumulated deficit
(353,099
)
(356,570
)
Total shareholders' equity
15,547
23,443
Total liabilities and shareholders'
equity
$
239,013
$
222,254
Similarweb Ltd. Consolidated Statements of Comprehensive Income
(Loss) U.S. dollars in thousands (except share and per
share data)
Six Months Ended June
30,
Three Months Ended June
30,
2023
2024
2023
2024
(Unaudited)
(Unaudited)
Revenue
$
106,431
$
119,619
$
53,681
$
60,637
Cost of revenue
24,651
25,240
12,575
12,544
Gross profit
81,780
94,379
41,106
48,093
Operating expenses:
Research and development
28,253
25,778
13,902
12,239
Sales and marketing
55,088
51,097
26,422
25,857
General and administrative
21,276
21,141
10,539
10,950
Total operating expenses
104,617
98,016
50,863
49,046
Loss from operations
(22,837
)
(3,637
)
(9,757
)
(953
)
Finance income, net
1,965
1,278
610
823
Loss before income taxes
(20,872
)
(2,359
)
(9,147
)
(130
)
Provision for income taxes
255
1,112
146
608
Net loss
$
(21,127
)
$
(3,471
)
$
(9,293
)
$
(738
)
Net loss per share attributable to
ordinary shareholders, basic and diluted
$
(0.27
)
$
(0.04
)
$
(0.12
)
$
(0.01
)
Weighted-average shares used in computing
net loss per share attributable to ordinary shareholders, basic and
diluted
77,222,490
79,969,425
77,579,279
80,570,892
Net loss
$
(21,127
)
$
(3,471
)
$
(9,293
)
$
(738
)
Other comprehensive loss, net of
tax
Change in unrealized (loss) gain on
cashflow hedges
(232
)
(880
)
45
(363
)
Total other comprehensive (loss) income,
net of tax
(232
)
(880
)
45
(363
)
Total comprehensive loss
$
(21,359
)
$
(4,351
)
$
(9,248
)
$
(1,101
)
Share-based compensation costs
included above: U.S. dollars in thousands
Six Months Ended June
30,
Three months Ended June
30,
2023
2024
2023
2024
(Unaudited)
(Unaudited)
Cost of revenue
$
327
$
390
$
172
$
223
Research and development
2,850
2,802
1,460
1,357
Sales and marketing
2,730
1,991
1,356
806
General and administrative
3,191
3,402
1,701
2,072
Total
$
9,098
$
8,585
$
4,689
$
4,458
Similarweb Ltd. Consolidated Statements of Cash Flows U.S.
dollars in thousands
Six Months Ended June
30,
Three Months Ended June
30,
2023
2024
2023
2024
(Unaudited)
(Unaudited)
Cash flows from operating
activities:
Net loss
$
(21,127
)
$
(3,471
)
$
(9,293
)
$
(738
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
5,112
5,139
2,572
2,619
Finance expense
869
466
662
230
Unrealized loss from hedging future
transactions
4
60
31
29
Share-based compensation
9,098
8,585
4,689
4,458
Loss (gain) from sale of equipment
1
(7
)
(1
)
(3
)
Changes in operating assets and
liabilities:
Change in operating lease right-of-use
assets and liabilities, net
(2,415
)
(2,513
)
(1,190
)
(242
)
Decrease in accounts receivable, net
5,633
9,619
4,989
2,626
Decrease in deferred contract costs
2,590
583
1,141
170
Increase in other current assets
(880
)
(2,917
)
(1,130
)
(1,593
)
Decrease (increase) in other non-current
assets
417
47
(14
)
14
Increase (decrease) in accounts
payable
343
(3,258
)
1,402
(799
)
Increase (decrease) in deferred
revenue
2,941
7,316
(4,302
)
328
(Decrease) increase in other non-current
liabilities
(319
)
620
(225
)
426
Decrease in other liabilities and accrued
expenses
(4,246
)
(2,857
)
(1,636
)
(181
)
Net cash (used in) provided by operating
activities
(1,979
)
17,412
(2,305
)
7,344
Cash flows from investing
activities:
Purchase of property and equipment,
net
(1,315
)
(908
)
(183
)
(540
)
Capitalized internal-use software
costs
(707
)
(469
)
(274
)
(469
)
Increase in restricted deposits
(87
)
(289
)
(43
)
(121
)
Payment for business combinations, net of
cash acquired
—
(3,833
)
—
(24
)
Net cash used in investing activities
(2,109
)
(5,499
)
(500
)
(1,154
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
1,830
3,057
438
386
Proceeds from employee share purchase
plan
660
555
660
555
Repayment of Credit Facility
—
(25,000
)
—
—
Payments of contingent consideration,
net
(2,363
)
—
—
—
Net cash provided by (used in) financing
activities
127
(21,388
)
1,098
941
Effect of exchange rates on cash and cash
equivalents
(869
)
(466
)
(662
)
(230
)
Net (decrease) increase in cash and cash
equivalents
(4,830
)
(9,941
)
(2,369
)
6,901
Cash and cash equivalents, beginning of
period
77,810
71,732
75,349
54,890
Cash and cash equivalents, end of
period
$
72,980
$
61,791
$
72,980
$
61,791
Supplemental disclosure of cash flow
information:
Interest received, net
$
(40
)
$
(557
)
$
(46
)
$
(322
)
Taxes paid
$
1,613
$
848
$
1,557
$
16
Supplemental disclosure of non-cash
financing activities:
Additions to operating lease right-of-use
assets and liabilities
$
780
$
4,453
$
610
$
2,055
Share-based compensation included in
capitalized internal-use software
$
33
$
33
$
33
$
33
Deferred proceeds from exercise of share
options included in other current assets
$
42
$
27
$
26
$
27
Deferred costs of property and equipment
incurred during the period included in accounts payable
$
41
$
6
$
(80
)
$
6
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
—
4,684
Deferred taxes, net
—
(152
)
$
—
$
4,333
Less non-cash:
Deferred cash payments
$
—
$
(500
)
Total
$
—
$
3,833
Reconciliation of Non-GAAP
Financial Measures to the Most Directly Comparable GAAP Financial
Measures Reconciliation of GAAP gross profit to non-GAAP
gross profit
Six Months Ended June
30,
Three months Ended June
30,
2023
2024
2023
2024
(In thousands)
(In thousands)
GAAP gross profit
$
81,780
$
94,379
$
41,106
$
48,093
Add:
Share-based compensation expenses
327
390
172
223
Retention payments related to business
combinations
306
25
218
25
Amortization of intangible assets related
to business combinations
2,335
2,224
1,167
1,138
Non-GAAP gross profit
$
84,748
$
97,018
$
42,663
$
49,479
Non-GAAP gross margin
80
%
81
%
79
%
82
%
Reconciliation of Loss from
operations (GAAP) to Non-GAAP operating (loss) income
Six Months Ended June
30,
Three months Ended June
30,
2023
2024
2023
2024
(In thousands)
(In thousands)
Loss from operations
$
(22,837
)
$
(3,637
)
$
(9,757
)
$
(953
)
Add:
Share-based compensation expenses
9,098
8,585
4,689
4,458
Retention payments related to business
combinations
687
819
405
591
Amortization of intangible assets related
to business combinations
2,403
2,347
1,201
1,227
Non-recurring expenses related to
termination of lease agreement and others
13
—
—
—
Non-GAAP operating (loss)
income
$
(10,636
)
$
8,114
$
(3,462
)
$
5,323
Non-GAAP operating margin
(10
)%
7
%
(6
)%
9
%
Reconciliation of GAAP
operating expenses to non-GAAP operating expenses
Six Months Ended June
30,
Three months Ended June
30,
2023
2024
2023
2024
(In thousands)
(In thousands)
GAAP research and development
$
28,253
$
25,778
$
13,902
$
12,239
Less:
Share-based compensation expenses
2,850
2,802
1,460
1,357
Retention payments related to business
combinations
—
16
—
16
Non-GAAP research and
development
$
25,403
$
22,960
$
12,442
$
10,866
Non-GAAP research and development
margin
24
%
19
%
23
%
18
%
GAAP sales and marketing
$
55,088
$
51,097
$
26,422
$
25,857
Less:
Share-based compensation expenses
2,730
1,991
1,356
806
Retention payments related to business
combinations
381
778
187
550
Amortization of intangible assets related
to business combinations
68
123
34
89
Non-recurring expenses related to
termination of lease agreement and others
13
—
—
—
Non-GAAP sales and marketing
$
51,896
$
48,205
$
24,845
$
24,412
Non-GAAP sales and marketing
margin
49
%
40
%
46
%
40
%
GAAP general and administrative
$
21,276
$
21,141
$
10,539
$
10,950
Less:
Share-based compensation expenses
3,191
3,402
1,701
2,072
Non-GAAP general and
administrative
$
18,085
$
17,739
$
8,838
$
8,878
Non-GAAP general and administrative
margin
17
%
15
%
16
%
15
%
Reconciliation of Net cash
(used in) provided by operating activities (GAAP) to Free cash flow
and Normalized free cash flow
Six Months Ended June
30,
Three months Ended June
30,
2023
2024
2023
2024
(In thousands)
(In thousands)
Net cash (used in) provided by operating
activities
$
(1,979
)
$
17,412
$
(2,305
)
$
7,344
Purchases of property and equipment,
net
(1,315
)
(908
)
(183
)
(540
)
Capitalized internal use software
costs
(707
)
(469
)
(274
)
(469
)
Free cash flow
$
(4,001
)
$
16,035
$
(2,762
)
$
6,335
Purchases of property and equipment
related to the new headquarters
1,100
—
52
—
Payments received from escrow in relation
to contingent consideration
(380
)
—
—
—
Normalized free cash flow
$
(3,281
)
$
16,035
$
(2,710
)
$
6,335
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806324330/en/
Press Contact: David Carr
Similarweb press@similarweb.com Investor
Contact: Rami Myerson Similarweb
rami.myerson@similarweb.com
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