Delivers positive free cash for the first time
since IPO
Non-GAAP operating profit margin of 8%
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
fourth quarter ended December 31, 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 finished the year with 13% annual revenue growth,
successfully navigated through a challenging demand environment,
and in the fourth quarter we achieved positive free cash flow for
the first time as a public company, which is a tremendous
accomplishment for us as a team,” said Or Offer, Co-Founder and CEO
of Similarweb. “During the quarter, we experienced significant new
demand from our largest strategic accounts who are coming to us for
unique digital data that they can leverage in their work with
generative AI." Offer added, "This is an important development for
us as we enter 2024 seeking profitable growth."
Fourth Quarter 2023 Financial
Highlights
- Total revenue was $56.8 million, an increase of 11% compared to
$51.3 million for the fourth quarter of 2022.
- GAAP operating loss was $(1.1) million or (2)% of revenue,
compared to $(14.6) million or (28)% of revenue for the fourth
quarter of 2022.
- GAAP net loss per share was $(0.04), compared to $(0.20) for
the fourth quarter of 2022.
- Non-GAAP operating profit (loss) was $4.7 million or 8% of
revenue, compared to $(10.9) million or (21)% of revenue for the
fourth quarter of 2022.
- Non-GAAP operating earnings (loss) per share was $0.06,
compared to $(0.14) for the fourth quarter of 2022.
- Cash and cash equivalents totalled $71.7 million as of December
31, 2023, compared to $77.8 million as of December 31, 2022.
- Net cash provided by (used in) operating activities was $3.7
million, compared to $(12.3) million for the fourth quarter of
2022.
- Free cash flow was $3.5 million, compared to $(14.6) million
for the fourth quarter of 2022.
- Normalized free cash flow was $3.5 million, compared to $(13.8)
million for the fourth quarter of 2022.
Fiscal Year 2023 Financial
Highlights
- Total revenue was $218.0 million, an increase of 13% compared
to $193.2 million for fiscal year 2022.
- GAAP operating loss was $(28.8) million or (13)% of revenue,
compared to $(87.9) million or (45)% of revenue for fiscal year
2022.
- GAAP net loss per share was $(0.38), compared to $(1.10) for
fiscal year 2022.
- Non-GAAP operating loss was $(4.8) million or (2)% of revenue,
compared to $(63.8) million or (33)% of revenue for fiscal year
2022.
- Non-GAAP operating loss per share was $(0.06), compared to
$(0.84) for fiscal year 2022.
Recent Business
Highlights
- Grew number of customers to 4,712 as of December 31, 2023, an
increase of 16% compared to December 31, 2022.
- Annual revenue per customer was approximately $50,000 in the
fourth quarter of 2023, as compared to $51,600 in the fourth
quarter of 2022.
- Grew number of customers with ARR of $100,000 or more to 365,
an increase of 8% compared to December 31, 2022.
- Customers with ARR of $100,000 or more contributed 57% of the
total ARR as of December 31, 2023, compared to 55% as of December
31, 2022.
- Dollar-based net retention rate for customers with ARR of
$100,000 or more was 107% in the fourth quarter of 2023 as compared
to 120% in the fourth quarter of 2022.
- Overall dollar-based net retention rate was 98% in the fourth
quarter of 2023 as compared to 109% in the fourth quarter of
2022.
- Multi-year subscriptions now comprise 42% of our overall ARR as
of December 31, 2023, as compared to 39% as of December 31,
2022.
- Remaining performance obligations increased 14% year-over-year,
to $195.2 million as of December 31, 2023, as compared to $171.0
million as of December 31, 2022.
Financial Outlook
“We accomplished our goal of generating positive free cash flow
in the fourth quarter and delivered a second consecutive quarter of
non-GAAP operating profit,” said Jason Schwartz, Chief Financial
Officer of Similarweb. “We remain focused on driving operating
efficiency in order to achieve profitable growth and sustainable
positive free cash flow quarterly in 2024.”
- Total revenue estimated between $58.5 million and $59.0
million, representing approximately 11% growth year over year at
the mid-point of the range.
- Non-GAAP operating profit estimated between $1.0 million and
$1.5 million.
- 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 $6.0 million and
$8.0 million.
The Company’s first 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, February 14, 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 (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 what we believe to be the most
comprehensive digital data on the planet.
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 first 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 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,
December 31,
2022
2023
Assets
Current assets:
Cash and cash equivalents
$
77,810
$
71,732
Restricted deposits
9,814
10,020
Accounts receivable, net
38,141
47,869
Deferred contract costs
9,789
11,165
Prepaid expenses and other current
assets
6,628
5,599
Total current assets
142,182
146,385
Property and equipment, net
31,823
28,630
Deferred contract costs, non-current
8,348
9,845
Operating lease right-of-use assets
40,823
36,007
Intangible assets, net
9,561
4,785
Goodwill
12,867
12,867
Other non-current assets
441
494
Total assets
$
246,045
$
239,013
Liabilities and Shareholders'
equity
Current liabilities:
Borrowings under Credit Facility
$
25,000
$
25,000
Accounts payable
7,144
8,422
Payroll and benefit related
liabilities
18,512
20,437
Deferred revenue
93,195
99,968
Other payables and accrued expenses
27,990
23,263
Operating lease liabilities
9,091
7,095
Total current liabilities
180,932
184,185
Deferred revenue, non-current
974
878
Operating lease liabilities,
non-current
40,075
35,329
Other long-term liabilities
2,113
3,074
Total liabilities
224,094
223,466
Shareholders' equity
Ordinary Shares, NIS 0.01 par value
500,000,000 shares authorized as of December 31, 2022 and December
31, 2023, 76,435,940 and 78,653,046 shares issued as of December
31, 2022 and December 31, 2023, 76,433,772 and 78,650,878
outstanding as of December 31, 2022 and December 31, 2023,
respectively;
210
216
Additional paid-in capital
345,834
367,558
Accumulated other comprehensive (loss)
income
(367
)
872
Accumulated deficit
(323,726
)
(353,099
)
Total shareholders' equity
21,951
15,547
Total liabilities and shareholders'
equity
$
246,045
239,013
Similarweb Ltd.
Consolidated Statements of Comprehensive Income
(Loss)
U.S. dollars in thousands (except
share and per share data)
Year Ended December
31,
Three Months Ended December
31,
2022
2023
2022
2023
Revenue
$
193,234
$
218,019
$
51,346
$
56,755
Cost of revenue
53,274
47,090
12,426
11,859
Gross profit
139,960
170,929
38,920
44,896
Operating expenses:
Research and development
59,904
56,158
13,977
13,706
Sales and marketing
122,635
101,198
30,096
21,836
General and administrative
45,277
42,380
9,441
10,439
Total operating expenses
227,816
199,736
53,514
45,981
Loss from operations
(87,856
)
(28,807
)
(14,594
)
(1,085
)
Other income, net
290
—
290
—
Finance income (expenses), net
4,421
941
(375
)
(2,085
)
Loss before income taxes
(83,145
)
(27,866
)
(14,679
)
(3,170
)
Provision (benefit) for income taxes
516
1,507
319
238
Net loss
$
(83,661
)
$
(29,373
)
$
(14,998
)
$
(3,408
)
Net loss per share attributable to
ordinary shareholders, basic and diluted
$
(1.10
)
$
(0.38
)
$
(0.20
)
$
(0.04
)
Weighted-average shares used in computing
net loss per share attributable to ordinary shareholders, basic and
diluted
75,718,623
77,752,960
76,197,984
78,443,438
Net loss
$
(83,661
)
$
(29,373
)
$
(14,998
)
$
(3,408
)
Other comprehensive (loss) income, net
of tax
Change in unrealized (loss) gain on
cashflow hedges
(527
)
1,239
592
1,604
Total other comprehensive (loss) income,
net of tax
(527
)
1,239
592
1,604
Total comprehensive loss
$
(84,188
)
$
(28,134
)
$
(14,406
)
$
(1,804
)
Share-based compensation costs included above:
U.S. dollars in thousands
Year Ended December
31,
Three Months Ended December
31,
2022
2023
2022
2023
(In thousands)
(In thousands)
Cost of revenue
$
599
$
635
$
136
$
153
Research and development
5,287
5,782
1,193
1,479
Sales and marketing
5,995
5,196
1,087
1,145
General and administrative
5,106
6,514
1,156
1,665
Total
$
16,987
$
18,127
$
3,572
$
4,442
Similarweb Ltd.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
Year Ended December
31,
Three Months Ended December
31,
2022
2023
2022
2023
Cash flows from operating
activities:
Net loss
$
(83,661
)
$
(29,373
)
$
(14,998
)
$
(3,408
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
10,584
10,258
2,472
2,570
Finance expense (income)
1,112
1,646
(307
)
(106
)
Unrealized gain from hedging future
transactions
(20
)
(52
)
(493
)
(78
)
Share-based compensation
16,987
18,127
3,572
4,442
Gain (loss) from sale of equipment
(142
)
—
(10
)
1
Changes in operating assets and
liabilities:
Change in operating lease right-of-use
assets and liabilities, net
5,744
(1,926
)
475
2,012
Increase in accounts receivable, net
(6,882
)
(9,728
)
(13,080
)
(13,149
)
(Increase) decrease in deferred contract
costs
(459
)
(2,873
)
1,670
(6,467
)
Decrease in other current assets
1,342
617
456
2,204
Decrease (increase) in other non-current
assets
372
(53
)
503
(461
)
(Decrease) increase in accounts
payable
(4,284
)
1,255
(1,444
)
(3,054
)
Increase in deferred revenue
15,055
6,677
9,622
10,634
(Decrease) increase in other non-current
liabilities
(1,497
)
961
(936
)
1,116
(Decrease) increase in other liabilities
and accrued expenses
(316
)
1,426
238
7,477
Net cash (used in) provided by operating
activities
(46,065
)
(3,038
)
(12,260
)
3,733
Cash flows from investing
activities:
Purchase of property and equipment,
net
(28,257
)
(1,559
)
(1,932
)
(182
)
Capitalized internal-use software
costs
(2,919
)
(821
)
(424
)
(33
)
Decrease (increase) in restricted
deposits
1,660
(206
)
507
(74
)
Payment in relation to business
combinations
(3,787
)
—
—
—
Cash received in relation to business
combinations
294
—
—
—
Net cash used in investing activities
(33,009
)
(2,586
)
(1,849
)
(289
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
2,034
2,296
130
171
Proceeds from employee share purchase
plan
2,083
1,259
849
599
Borrowings under Credit Facility
25,000
—
—
—
Payments of contingent consideration,
net
—
(2,363
)
—
—
Net cash provided by financing
activities
29,117
1,192
979
770
Effect of exchange rates on cash and cash
equivalents
(1,112
)
(1,646
)
307
106
Net (decrease) increase in cash and cash
equivalents
(51,069
)
(6,078
)
(12,823
)
4,320
Cash and cash equivalents, beginning of
period
128,879
77,810
90,633
67,412
Cash and cash equivalents, end of
period
$
77,810
$
71,732
$
77,810
$
71,732
Supplemental disclosure of cash flow
information:
Interest received, net
$
(18
)
$
(203
)
$
(2
)
$
(114
)
Taxes paid
$
485
$
1,883
$
68
$
26
Supplemental disclosure of non-cash
financing activities:
Initial public offering costs incurred
during the period included in accounts payable and accrued
expenses
$
(120
)
$
—
$
(120
)
$
—
Additions to operating lease right-of-use
assets and liabilities
$
9,485
$
2,597
$
50
$
1,549
Deferred proceeds from exercise of share
options included in other current assets
$
—
$
11
$
—
$
(43
)
Deferred costs of property and equipment
incurred during the period included in accounts payable
$
116
$
139
$
(654
)
$
76
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
Year Ended December
31,
Three Months Ended December
31,
2022
2023
2022
2023
(In thousands)
(In thousands)
GAAP gross profit
$
139,960
$
170,929
$
38,920
$
44,896
Add:
Share-based compensation expenses
599
635
136
153
Retention payments related to business
combinations
1,785
306
129
—
Amortization of intangible assets related
to business combinations
4,487
4,641
1,168
1,137
Non-recurring expenses related to
termination of lease agreement and others
35
—
—
—
Non-GAAP gross profit
$
146,866
$
176,511
$
40,353
$
46,186
Non-GAAP gross margin
76
%
81
%
79
%
81
%
Reconciliation of Loss from operations (GAAP) to Non-GAAP
operating (loss) income
Year Ended December
31,
Three Months Ended December
31,
2022
2023
2022
2023
(In thousands)
(In thousands)
Loss from operations
$
(87,856
)
$
(28,807
)
$
(14,594
)
$
(1,085
)
Add:
Share-based compensation expenses
16,987
18,127
3,572
4,442
Retention payments related to business
combinations
2,342
1,072
351
221
Amortization of intangible assets related
to business combinations
4,573
4,776
1,202
1,171
Adjustment of fair value of contingent
consideration related to business combinations
(884
)
—
(1,628
)
—
Non-recurring expenses related to
termination of lease agreement and others
1,174
17
197
—
Capital gain related to sale of operating
equipment
(127
)
—
—
—
Non-GAAP operating (loss)
income
$
(63,791
)
$
(4,815
)
$
(10,900
)
$
4,749
Non-GAAP operating margin
(33
)%
(2
)%
(21
)%
8
%
Reconciliation of GAAP operating expenses to non-GAAP
operating expenses
Year Ended December
31,
Three Months Ended December
31,
2022
2023
2022
2023
(In thousands)
(In thousands)
GAAP research and development
$
59,904
$
56,158
$
13,977
$
13,706
Less:
Share-based compensation expenses
5,287
5,782
1,193
1,479
Non-recurring expenses related to
termination of lease agreement and others
87
—
—
—
Non-GAAP research and
development
$
54,530
$
50,376
$
12,784
$
12,227
Non-GAAP research and development
margin
28
%
23
%
25
%
22
%
GAAP sales and marketing
$
122,635
$
101,198
$
30,096
$
21,836
Less:
Share-based compensation expenses
5,995
5,196
1,087
1,145
Retention payments related to business
combinations
557
766
222
221
Amortization of intangible assets related
to business combinations
86
135
34
34
Non-recurring expenses related to
termination of lease agreement and others
996
17
197
—
Non-GAAP sales and marketing
$
115,001
$
95,084
$
28,556
$
20,436
Non-GAAP sales and marketing
margin
60
%
44
%
56
%
36
%
GAAP general and administrative
$
45,277
$
42,380
$
9,441
$
10,439
Less:
Share-based compensation expenses
5,106
6,514
1,156
1,665
Adjustment of fair value of contingent
consideration related to business combinations
(884
)
—
(1,628
)
—
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
$
41,126
$
35,866
$
9,913
$
8,774
Non-GAAP general and administrative
margin
21
%
16
%
19
%
15
%
Reconciliation of Net cash (used in) provided by operating
activities (GAAP) to Free cash flow and Normalized free cash
flow
Year Ended December
31,
Three Months Ended December
31,
2022
2023
2022
2023
(In thousands)
(In thousands)
Net cash (used in) provided by operating
activities
$
(46,065
)
$
(3,038
)
$
(12,260
)
$
3,733
Purchases of property and equipment,
net
(28,257
)
(1,559
)
(1,932
)
(182
)
Capitalized internal use software
costs
(2,919
)
(821
)
(424
)
(33
)
Free cash flow
$
(77,241
)
$
(5,418
)
$
(14,616
)
$
3,518
Purchases of property and equipment
related to the new headquarters
27,221
1,156
1,781
29
Payments received in connection with
purchases of property and equipment
(12,124
)
—
(932
)
—
Payments received from escrow in relation
to contingent consideration
—
(380
)
—
—
Deferred payments in relation to business
combinations
413
260
—
—
Normalized free cash flow
$
(61,731
)
$
(4,382
)
$
(13,767
)
$
3,547
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240213903352/en/
Press Contact: David Carr
Similarweb press@similarweb.com
Investor Contact: Raymond
"RJ" Jones Similarweb raymond.jones@similarweb.com
Similarweb (NYSE:SMWB)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
Similarweb (NYSE:SMWB)
Historical Stock Chart
Von Mai 2023 bis Mai 2024