Core Insights - The article discusses potential investment opportunities in SMWB, indicating a possible long position in the stock within the next 72 hours [1]. Group 1 - The analyst has no current stock or derivative positions in the companies mentioned but may initiate a beneficial long position soon [1]. - The article expresses the author's personal opinions and is not influenced by any compensation from the companies discussed [1]. Group 2 - The article does not provide specific performance guarantees or investment recommendations, emphasizing that past performance does not ensure future results [2]. - It clarifies that the views expressed may not represent the overall stance of Seeking Alpha, and the analysts involved may not be licensed or certified [2].

Taxation and Regulatory Risks - The company may be classified as a passive foreign investment company (PFIC) if 75% or more of its gross income is passive income, which could lead to adverse U.S. federal income tax consequences for U.S. holders of its ordinary shares [228]. - The company does not believe it was classified as a PFIC for the taxable year ended December 31, 2024, but this determination must be made annually and could change based on income and asset composition [228]. - Changes in tax laws or regulations could increase the costs of the company's solutions and harm its business, potentially requiring the company or its customers to pay additional taxes or fines [231]. - The company may face substantial tax liabilities if required to collect sales or other related taxes in jurisdictions where it has not historically done so [235]. - The company's financial statements may not reflect adequate reserves for potential tax liabilities arising from challenges by taxing authorities [237]. - The application of U.S. federal, state, local, and non-U.S. tax laws to services provided electronically is unclear and evolving, which could adversely affect the company's results of operations [232]. - The enactment of legislation implementing changes in taxation of international business activities could impact the company's future financial position and results of operations [238]. Shareholder and Market Dynamics - As of December 31, 2024, there were 82,618,511 ordinary shares outstanding, with 44.6% beneficially owned by insiders [245]. - The company had 6,408,897 shares available for future grants under its 2021 Plan, increasing to 10,539,823 shares as of January 1, 2025 [250]. - The company does not anticipate paying any dividends in the foreseeable future, intending to retain future earnings to finance operations and expand its business [258]. - The concentration of share ownership with insiders may limit the ability of other shareholders to influence corporate matters [245]. - Future sales of ordinary shares in the public market could cause the market price to decline, impacting the company's ability to raise capital [246]. - The company may lose its "foreign private issuer" status, resulting in significant additional costs and expenses related to compliance with U.S. reporting requirements [256]. Geopolitical and Operational Risks - The ongoing military conflicts in Israel may adversely affect the company's operations and limit its ability to market products, potentially leading to decreased revenues [263]. - The war declared against Hamas has contributed to a deterioration of Israel's economic standing, including credit rating downgrades by agencies such as Moody's and S&P Global [266]. - Several hundred thousand Israeli military reservists were drafted, potentially disrupting operations and adversely affecting business results [267]. - Absences of employees from Israeli suppliers due to military service may impact the ability to deliver products and services [268]. - Ongoing hostilities and cyberattacks could lead to increased costs and risks to employee safety, potentially resulting in financial losses [269]. - The global perception of Israel may lead to increased sanctions and a boycott of Israeli goods, affecting business operations [270]. - Proposed changes to Israel's judicial system could negatively impact the business environment and lead to political instability [271]. - The company has a significant operational presence in Israel, which is affected by geopolitical tensions, potentially disrupting operations and impacting financial performance [287]. - Approximately 50 employees are engaged in Ukraine, primarily in software development, and ongoing military conflict may disrupt development efforts and increase costs [288]. - The company faces risks from sanctions against Russia, which could adversely affect operations and revenue generation in affected regions [290]. Financial Performance and Conditions - The company's share price may be volatile, influenced by factors such as market conditions, operating performance, and changes in financial estimates by analysts [241]. - A hypothetical 10% change in foreign currency exchange rates could impact the company's net loss by $10.0 million and $9.8 million for the years ended December 31, 2023, and 2024, respectively [492]. - As of December 31, 2023, the company had cash and cash equivalents of $81.8 million, which are subject to interest rate risk but are not expected to materially impact financial statements [493]. - The company had no outstanding borrowings under the SVB LSA as of December 31, 2024, and a hypothetical 10% change in interest rates would not have materially impacted financial statements [494]. - The company does not believe inflation has materially affected historical results, but significant inflationary pressures could adversely impact financial condition and operations [495]. Corporate Governance and Compliance - The company is classified as an "emerging growth company," allowing it to delay adopting new accounting standards until they apply to private companies [251]. - The company qualifies as an "emerging growth company" and has elected to use an extended transition period for complying with new accounting standards, which may affect comparability with other public companies [496]. - The company is incorporated under Israeli law, which may differ from U.S. corporate governance practices, affecting shareholder rights [274]. - Provisions of Israeli law may delay or prevent acquisitions, impacting shareholder value and control changes [275]. Strategic Growth and Acquisitions - The company acquired two companies in 2024 and two more in Q1 2025 to enhance its platform and optimize products [282]. - Future acquisitions may divert management attention and pose integration challenges, potentially harming financial performance [283]. - The company may face litigation risks that could adversely affect its reputation and financial condition [285].

1 INVESTOR PRESENTATION Q4 2024 INVESTOR PRESENTATION Q3 2024 Q4 2024 1 NOTES REGARDING THIS PRESENTATION This presentation 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. Forward-looking statements include statements relating to the expected performance of our business, future financial results, strategy, long-term growth and overall future prospects, ...

Financial Data and Key Metrics Changes - Revenue for the year reached nearly $250 million, up 15% year-over-year, with Q4 revenue increasing by 16% year-over-year [6][16] - Overall Net Revenue Retention (NRR) was 101%, while NRR for customers with over $100,000 Annual Recurring Revenue (ARR) was 112%, up from 111% in Q3 and 107% last year [6][16] - The customer base grew by 17% year-over-year, ending with over 5,500 ARR customers [7] Business Line Data and Key Metrics Changes - Revenue from $100,000 ARR customers increased and represented 61% of overall ARR, with the number of such customers growing to 405, an 11% year-over-year increase [17] - The average ARR per customer increased by 7% year-over-year to approximately $376,000 [17] - 49% of ARR is contracted under multiyear contracts, up from 42% last year, indicating improved retention rates [18] Market Data and Key Metrics Changes - Remaining Performance Obligations (RPO) totaled $246 million at the end of Q4, up 26% year-over-year, with an expectation to recognize approximately 69% of total RPO as revenue over the next 12 months [19] - The company experienced foreign exchange (FX) headwinds impacting growth, particularly in Q4, with around 50% of revenue coming from outside the U.S. [32][41] Company Strategy and Development Direction - The company plans to ramp up investments in R&D and go-to-market teams to capitalize on opportunities presented by the AI revolution [13][14] - Investments will focus on enhancing data collection and measurement for the new Gen AI world, as well as developing additional products and solutions [13][14] - The company aims to maintain profitability while pursuing growth, with expectations of a significant increase in growth rates in the latter half of 2025 [33][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for their data and the potential for growth, despite some softness in Q4 execution due to managerial changes and hiring processes [70][86] - The guidance for 2025 reflects a revenue range of $285 million to $288 million, representing 15% year-over-year growth at the midpoint [21] - Management anticipates a strong back-end growth acceleration in 2025, with expectations for improved performance as new hires ramp up [72] Other Important Information - The company signed 15 customer contracts in Q4, each with a 7-digit contract value, indicating strong demand and customer trust [7][90] - The company is integrating new data sets from recent acquisitions, which may temporarily impact gross margins but is expected to improve over the year [56] Q&A Session Summary Question: Can you provide more color on the incremental spend? - Management indicated that the majority of the spend is for accelerating the go-to-market strategy, with some investment in R&D and addressing FX pressures [25] Question: How did revenue results in Q4 perform versus expectations? - Management noted that Q4 was a good quarter, with acceleration in larger customer growth and some FX pressure impacting results [39][41] Question: Can you expand on the AI investments being made? - Management highlighted two fronts for investment: integrating AI for better insights and collecting granular data for brands to understand consumer behavior influenced by chatbots [45][48] Question: How soft was the execution in Q4? - Management described Q4 as "okay" but noted areas of softness due to managerial changes and low performance, with improvements expected in Q1 [86] Question: Can you provide more details on the 15 customer contracts? - Management stated that the majority of the 15 contracts were expansions, indicating increased customer investment and trust in the company's data [90]

Financial Performance - Similarweb reported a quarterly loss of $0.03 per share, matching the Zacks Consensus Estimate, compared to break-even earnings per share a year ago, resulting in an earnings surprise of -200% [1] - The company posted revenues of $65.59 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.17%, and showing an increase from year-ago revenues of $56.76 million [2] Stock Performance - Similarweb shares have increased approximately 20.5% since the beginning of the year, outperforming the S&P 500's gain of 3.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.04 on revenues of $67.18 million, and for the current fiscal year, it is $0.23 on revenues of $286.7 million [7] Industry Outlook - The Internet - Content industry, to which Similarweb belongs, is currently ranked in the top 12% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Similarweb's stock performance [5][6]

Disclosure and Author Information - The author has no stock, option, or derivative positions in any mentioned companies and no plans to initiate such positions within the next 72 hours [1] - The article expresses the author's own opinions and is not receiving compensation other than from Seeking Alpha [1] - The author has no business relationship with any company whose stock is mentioned in the article [1] - Seeking Alpha's analysts are third-party authors, including both professional and individual investors, who may not be licensed or certified by any institute or regulatory body [2] - Seeking Alpha is not a licensed securities dealer, broker, or US investment adviser or investment bank [2]

Core Viewpoint - Goldman Sachs analyst Adam Hotchkiss initiated coverage on Similarweb Ltd (SMWB) with a Buy rating and a price target of $16, citing potential for sustainable mid-to-high teens growth and improving margins due to recent initiatives [1][2]. Financial Performance - Hotchkiss projected fourth-quarter revenue of $65.4 million and adjusted earnings per share of 5 cents [4]. - The price target implies approximately 29 times EV/FCF based on current estimates [3]. Valuation and Market Position - Similarweb's shares are currently trading at a multiple of 4.5 times, which is a discount compared to software peers growing at 10-20% annually, which trade at around 6.6 times [2]. - The 4.5 times multiple reflects a premium to Similarweb's three-year historical trading average, driven by recent revenue acceleration and improving profitability [3]. Market Reaction - Similarweb stock is up 6.86% at $13.02 as of the last check [5].

Group 1 - The company Similarweb (NYSE: SMWB) has been given a buy rating due to its strong competitive advantage over peers, which is attributed to its ability to source and synthesize data effectively [1] - The investment approach focuses on identifying undervalued companies with long-term growth potential, emphasizing the importance of buying quality companies at a discount to their intrinsic value [1]

Financial Data and Key Metrics Changes - Revenue growth accelerated to 18% year-over-year in Q3, with total revenue reaching $64.7 million [6][20] - Total customer count grew by 21% year-over-year, and net revenue retention (NRR) increased by 2 percentage points to 101% overall and 111% for customers with over $100,000 ARR [6][21] - Remaining performance obligations (RPO) totaled $212 million, up 27% year-over-year, with an expectation to recognize approximately 76% as revenue over the next 12 months [20] Business Line Data and Key Metrics Changes - Core product, Web Intelligence, continues to perform well, with increased demand in SEO capabilities following the acquisition of Rank Ranger [30] - Sales Intelligence tool showed strong demand, particularly with the introduction of AI-driven sales assistant features [31] - Advisory services also experienced high demand from large brands seeking sophisticated digital insights [31] Market Data and Key Metrics Changes - The company is witnessing a shift in customer behavior towards chatbots for information gathering, indicating a growing need for digital data insights [44] - Increased engagement with major tech companies for licensing digital data to train large language models (LLMs) reflects the evolving market landscape [36] Company Strategy and Development Direction - The company aims to capitalize on the AI revolution by integrating AI into its products and internal processes, enhancing efficiency and customer engagement [10][15] - A focus on expanding the sales force to capture new customer opportunities and improve upselling to existing clients is evident [52] - The strategic hiring of a new Chief Revenue Officer is expected to drive improvements in go-to-market strategies [8][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing improved customer retention and the potential for further revenue growth [21][24] - The company is optimistic about the opportunities presented by the generative AI market and the increasing demand for its digital data solutions [10][18] Other Important Information - The company raised its revenue guidance for Q4 2024, expecting total revenue between $64.7 million and $65.7 million, reflecting a 15% year-over-year growth at the midpoint [23] - Non-GAAP operating profit for Q4 is expected to be between $1.5 million and $2.5 million, with a narrowed full-year guidance of $14 million to $15 million [24] Q&A Session Summary Question: What drove the stronger new customer growth? - Management attributed the growth to improved marketing efforts and increased brand awareness, alongside internal improvements [26] Question: Insights into revenue growth models for 2025? - Full guidance for 2025 will be provided at the beginning of the year, but current momentum is a positive indicator for future growth [27] Question: How has the product mix shifted? - The core product, Web Intelligence, and Sales Intelligence tools are seeing increased demand, particularly with AI capabilities [30][31] Question: Explanation of revenue volatility between Q3 and Q4? - Revenue fluctuations are attributed to the timing of bookings and revenue recognition processes [32][40] Question: What makes Similarweb data unique for LLM training? - The data is essential for providing up-to-date insights and trends, which are critical for training effective chatbots [36][38] Question: Expectations for net revenue retention trajectory? - Management is optimistic about retention rates improving, supported by multi-year contracts and successful upselling strategies [46] Question: Journey to large 8-figure deals? - Long-term relationships with clients have evolved into significant contracts, showcasing the trust built over years [49][50] Question: Focus areas for sales force expansion? - The company aims to enhance inbound demand capture and target enterprise clients for greater market penetration [52] Question: Performance of new head of sales? - The new Chief Revenue Officer is making significant contributions to the go-to-market strategy and overall sales performance [55]

Group 1 - Similarweb reported quarterly earnings of $0.01 per share, missing the Zacks Consensus Estimate of $0.04 per share, representing an earnings surprise of -75% [1] - The company posted revenues of $64.71 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.87%, compared to year-ago revenues of $54.83 million [2] - Similarweb shares have increased approximately 96.6% since the beginning of the year, outperforming the S&P 500's gain of 25.8% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.04 on $65.03 million in revenues, and $0.18 on $247.38 million in revenues for the current fiscal year [7] - The Zacks Industry Rank for Internet - Content is currently in the top 35% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]