Press Releases

Similarweb Announces Second Quarter 2022 Results

Second quarter 2022 revenue grew 46% year-over-year to $47.6 million

NRR for $100K+ ARR customers remains strong at 127%

Remaining performance obligations increased 53% year-over-year to $160.5 million

TEL AVIV, Israel--(BUSINESS WIRE)-- Similarweb Ltd. (NYSE: SMWB) ("Similarweb" or the "Company"), a leading digital intelligence company, today announced financial results for its second quarter ended June 30, 2022. 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 performed well in the second quarter as our momentum drove results,” said Or Offer, Founder and CEO of Similarweb. “In times of uncertainty, our customers seek out the critical insights that we provide, which help them win in their markets. We believe we are well-positioned to lead in these challenging times, and we remain focused on helping our customers successfully navigate through what lies ahead."

Second Quarter 2022 Financial Highlights

• Total revenue was $47.6 million, an increase of 46% compared to $32.5 million for the second quarter of 2021.
• GAAP operating loss was $(26.5) million, compared to $(14.9) million for the second quarter of 2021.
• GAAP net loss per share was $(0.29), compared to $(0.33) for the second quarter of 2021.
• Non-GAAP operating loss was $(19.8) million, compared to $(10.8) million for the second quarter of 2021.
• Non-GAAP operating loss per share was $(0.26), compared to $(0.23) for the second quarter of 2021.
• Cash and cash equivalents totaled $93.9 million as of June 30, 2022, compared to $128.9 million as of December 31, 2021.
• Net cash used in operating activities was $(13.1) million, compared to $(2.6) for the second quarter of 2021.
• Free cash flow was $(28.9) million, compared to $(3.3) million for the second quarter of 2021.
• Normalized free cash flow was $(18.9) million, compared to $(3.3) million for the second quarter of 2021.

Recent Business Highlights

• Grew number of customers to 3,849 as of June 30, 2022, an increase of 25% compared to June 30, 2021.
• Grew average annual revenue per customer to approximately $50,700 in the second quarter of 2022, an increase of 16% compared to the second quarter of 2021.
• Grew number of customers with ARR of $100,000 or more to 309 as of June 30, 2022, an increase of 40% compared to June 30, 2021.
• Customers with ARR of $100,000 or more contributed 53% of the total ARR as of June 30, 2022, compared to 49% as of June 30, 2021.
• Dollar-based net retention rate for customers with ARR of $100,000 or more increased to 127% in the second quarter of 2022 as compared to 118% in the second quarter of 2021.
• Overall dollar-based net retention rate increased to 115% in the second quarter of 2022 as compared to 106% in the second quarter of 2021.
• Multi-year subscriptions now comprise 36% of our overall ARR as of June 30, 2022, as compared to 28% as of June 30, 2021.
• Remaining performance obligations increased 53% year-over-year, to $160.5 million as of June 30, 2022, as compared to $105.0 million as of June 30, 2021.

Financial Outlook

“We are pleased with our results,” said Jason Schwartz, Chief Financial Officer of Similarweb. “Our disciplined execution in this challenging environment of rising global macroeconomic uncertainty continues to drive our performance. We are maintaining our revenue outlook and improving our operating loss outlook for the full year 2022.”

• Q3 2022 Guidance
  • Total revenue between $48.8 million and $49.2 million, representing 38% growth year-over-year at the mid-point of the range.
  • Non-GAAP gross margin anticipated in the range of 74% to 75%.
  • Non-GAAP operating loss between $(20.9) million and $(21.5) million.
• FY 2022 Guidance
  • Total revenue between $196.0 million and $197.0 million, representing 43% growth year-over-year at the mid-point of the range.
  • Non-GAAP gross margin anticipated in the range of 75% to 76%, reflecting continued investment to further expand our data moats through the previously reported acquisitions of Embee Mobile and SimilarTech, and the data licensing agreement with data.ai (formerly App Annie).
  • Non-GAAP operating loss between $(80) million and $(81) million, which reflects increased investment in research and development and in our go-to-market which is designed to support our continued growth plans, as well as improved operating efficiency.

The Company’s third quarter and full year 2022 financial outlook is based upon a number of assumptions and trends observed from prior quarters 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 to these measures to their closest GAAP equivalents without unreasonable effort due to the unavailability of reliable estimates for certain items, such as share-based compensation. 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 10, 2022. 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: As a trusted platform for understanding online behavior, millions of people rely on Similarweb insights to strengthen their knowledge of the digital world. We empower anyone — from the curious individual to the enterprise business leader — to make smarter decisions by understanding why things happen across the digital ecosystem.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the 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 2022 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 variety of assumptions, uncertainties, risks and factors that are beyond our control. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) challenges associated with forecasting our revenue given our recent growth and rapid technological development, (ii) our history of net losses and desire to increase operating expenses, thereby limiting our ability to achieve profitability, (iii) challenges related to effectively managing our growth, including as result of macroeconomic factors, (iv) intense competition in the market and services categories in which we participate, (v) potential reductions in participation in our contributory network and/or increase in the volume of opt-out requests from individuals with respect to our collection of their data, or a decrease in our direct measurement dataset, which could lead to a deterioration in the depth, breadth or accuracy of our data, (vi) our inability to attract new customers and expand subscriptions of current customers, (vii) changes in laws, regulations, and public perception concerning data privacy or change in the patterns of enforcement of existing laws and regulations, (viii) our inability to introduce new features or solutions and make enhancements to our existing solutions, (ix) real or perceived errors, failures, vulnerabilities or bugs in our platform, (x) potential security breaches to our systems or to the systems of our third-party service providers, (xi) our inability to obtain and maintain comprehensive and reliable data to generate our insights, (xii) changes in laws and regulations related to the Internet or changes in the internet infrastructure itself that may diminish the demand for our solutions, (xiii) failure to effectively develop and expand our direct sales capabilities, which could harm our ability to increase the number of organizations using our platform and achieve broader market acceptance for our solutions and (ix) the impact that global events, such as ongoing COVID-19 pandemic, including variants of COVID-19 or other public health crises and the Russian military operations in Ukraine, and any related economic downturn could have on our or our customers' businesses, financial condition and results of operations.

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 25, 2022, 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 and payments received in connection with these capital investments. Non-GAAP operating income (loss), non-GAAP gross profit, 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.
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Similarweb Ltd.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20220809005934/en/

Press:
Richard Krueger
Similarweb
press@similarweb.com

Investors:
Raymond "RJ" Jones
Similarweb
ir@similarweb.com

Source: Similarweb Ltd.

Released August 9, 2022