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TEL AVIV, ISRAEL -- November 7, 2023 -- 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.”

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.

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 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 the most comprehensive digital data on the planet.

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.

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.

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.


	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


	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)


	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	$	—


	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)