[Similarweb Fourth Quarter and Fiscal Year 2024 Results](index=1&type=section&id=Similarweb%20Fourth%20Quarter%20and%20Fiscal%20Year%202024%20Results) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company achieved accelerated revenue growth and its first full year of positive non-GAAP operating profit and free cash flow - Revenue growth accelerated to **15% in 2024** from 13% in 2023[1](index=1&type=chunk)[2](index=2&type=chunk) - Achieved the **first full year of positive non-GAAP operating profit and free cash flow**[1](index=1&type=chunk)[2](index=2&type=chunk) - The company plans to increase investment in sales and R&D for 2025 to capitalize on the AI revolution[2](index=2&type=chunk) [Fourth Quarter 2024 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%202024%20Financial%20Highlights) Revenue grew 16% year-over-year to $65.6 million, while non-GAAP operating profit and free cash flow decreased Q4 2024 Key Financial Metrics | Metric | Q4 2024 | Q4 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $65.6M | $56.8M | +16% | | GAAP Operating Loss | $(3.6)M | $(1.1)M | Increased Loss | | GAAP Net Loss per Share | $(0.07) | $(0.04) | Increased Loss | | Non-GAAP Operating Profit | $2.6M | $4.7M | -45% | | Non-GAAP Operating Profit per Share (basic) | $0.03 | $0.06 | -50% | | Free Cash Flow | $2.7M | $3.5M | -23% | [Fiscal Year 2024 Financial Highlights](index=2&type=section&id=Fiscal%20Year%202024%20Financial%20Highlights) Full-year revenue increased by 15% to $249.9 million with a significant turnaround to profitability on a non-GAAP basis Fiscal Year 2024 Key Financial Metrics | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $249.9M | $218.0M | +15% | | GAAP Operating Loss | $(9.7)M | $(28.8)M | Reduced Loss | | GAAP Net Loss per Share | $(0.14) | $(0.38) | Reduced Loss | | Non-GAAP Operating Profit/(Loss) | $15.0M | $(4.8)M | Turnaround to Profit | | Non-GAAP Operating Profit per Share (basic) | $0.19 | $(0.06) | Turnaround to Profit | | Free Cash Flow | $27.4M | $(5.4)M | Turnaround to Positive | [Recent Business Highlights](index=3&type=section&id=Recent%20Business%20Highlights) The company saw strong customer growth, improved retention rates, and an increased commitment to multi-year contracts - Total customer count grew **17% year-over-year** to 5,534[8](index=8&type=chunk) - The number of customers with ARR of $100,000 or more grew **11%** to 405, and they now account for **61% of total ARR**[8](index=8&type=chunk) Key Retention and Contract Metrics (as of Q4 2024) | Metric | Q4 2024 | Q4 2023 | Change | | :--- | :--- | :--- | :--- | | Overall NRR | 101% | 98% | +3 p.p. | | NRR for customers with ARR >$100k | 112% | 107% | +5 p.p. | | ARR from multi-year subscriptions | 49% | 42% | +7 p.p. | | Remaining Performance Obligations (RPO) | $246.0M | $195.2M | +26% | [Financial Outlook](index=3&type=section&id=Financial%20Outlook) The company projects approximately 15% revenue growth for fiscal year 2025 while maintaining non-GAAP operating profitability [Q1 2025 Guidance](index=4&type=section&id=Q1%202025%20Guidance) The company anticipates revenue between $66.0 million and $66.5 million with a slight non-GAAP operating loss for Q1 2025 Q1 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $66.0M - $66.5M | | Non-GAAP Operating Loss | $(1.5)M - $(1.0)M | [FY 2025 Guidance](index=3&type=section&id=FY%202025%20Guidance) Full-year 2025 revenue is guided to grow 15% at the midpoint, with non-GAAP operating profit between $1.0 million and $4.0 million Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $285.0M - $288.0M | | Non-GAAP Operating Profit | $1.0M - $4.0M | [Consolidated Financial Statements](index=9&type=section&id=Consolidated%20Financial%20Statements) The statements show improved profitability with a reduced net loss and a significant turnaround in cash from operations for fiscal year 2024 [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased slightly to $242.9 million, while total liabilities decreased, strengthening the company's equity position Balance Sheet Summary (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $63,869 | $71,732 | | Total current assets | $141,356 | $146,385 | | Total assets | $242,911 | $239,013 | | **Liabilities & Equity** | | | | Deferred revenue (current) | $108,232 | $99,968 | | Total current liabilities | $177,192 | $184,185 | | Total liabilities | $215,403 | $223,466 | | Total shareholders' equity | $27,508 | $15,547 | [Consolidated Statements of Comprehensive Income (Loss)](index=11&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Revenue grew to $249.9 million in 2024, and the GAAP net loss significantly narrowed to $(11.5) million from the prior year Income Statement Summary (in thousands) | Account | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Revenue | $249,913 | $218,019 | | Gross Profit | $195,099 | $170,929 | | Loss from operations | $(9,664) | $(28,807) | | Net loss | $(11,457) | $(29,373) | | Net loss per share, basic and diluted | $(0.14) | $(0.38) | [Consolidated Statements of Cash Flows](index=13&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was $30.2 million in 2024, a substantial positive shift from a cash use in 2023 Cash Flow Summary (in thousands) | Account | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $30,174 | $(3,038) | | Net cash used in investing activities | $(18,700) | $(2,586) | | Net cash (used in) provided by financing activities | $(18,837) | $1,192 | | Net decrease in cash and cash equivalents | $(7,863) | $(6,078) | | Cash and cash equivalents, end of period | $63,869 | $71,732 | [Reconciliation of GAAP to Non-GAAP Measures](index=16&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section details adjustments for non-recurring items, reconciling the GAAP operating loss to a non-GAAP profit for FY 2024 [Reconciliation of Operating (Loss) Profit](index=16&type=section&id=Reconciliation%20of%20Loss%20from%20operations%20(GAAP)%20to%20Non-GAAP%20operating%20(loss)%20profit) The FY 2024 GAAP operating loss of $(9.7) million was adjusted to a $15.0 million non-GAAP profit, mainly via non-cash expenses FY 2024 Operating Profit Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | Loss from operations (GAAP) | $(9,664) | | Add: Share-based compensation expenses | $17,615 | | Add: Retention payments related to business combinations | $1,886 | | Add: Amortization of intangible assets | $4,862 | | Add: Secondary offering costs | $350 | | **Non-GAAP operating profit** | **$15,049** | [Reconciliation of Free Cash Flow](index=18&type=section&id=Reconciliation%20of%20Net%20cash%20(used%20in)%20provided%20by%20operating%20activities%20(GAAP)%20to%20Free%20cash%20flow%20and%20Normalized%20free%20cash%20flow) Net cash from operations of $30.2 million was adjusted to a free cash flow of $27.4 million for fiscal year 2024 FY 2024 Free Cash Flow Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | Net cash provided by operating activities (GAAP) | $30,174 | | Less: Purchases of property and equipment, net | $(1,430) | | Less: Capitalized internal use software costs | $(1,304) | | **Free cash flow** | **$27,440** | | Add: Deferred payments in relation to business combinations | $265 | | **Normalized free cash flow** | **$27,705** |

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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]

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]

Financial Performance - Total revenue for Q3 2024 was $64.7 million, an 18% increase from $54.8 million in Q3 2023[4] - Non-GAAP operating profit was $4.4 million, representing 7% of revenue, compared to $1.1 million or 2% of revenue in Q3 2023[4] - Free cash flow reached $8.7 million, a significant improvement from $(4.9) million in Q3 2023[6] - Revenue for the nine months ended September 30, 2023, was $161,264 thousand, an increase from $184,326 thousand in 2024, representing a growth of 14.5%[24] - Gross profit for the nine months ended September 30, 2023, was $126,033 thousand, compared to $144,843 thousand in 2024, indicating a gross margin of 78.2%[24] - Net loss for the nine months ended September 30, 2023, was $(25,965) thousand, improving to $(6,037) thousand in 2024, a reduction of 76.8%[24] - The company reported a non-GAAP gross profit of $130,325 thousand for the nine months ended September 30, 2023, increasing to $148,841 thousand in 2024, with a non-GAAP gross margin of 81%[32] - The company expects to achieve a non-GAAP operating income of $12,480,000 for the three months ended September 30, 2024, compared to a loss in the same period of 2023[33] Customer Growth - Customer base grew by 21% year-over-year to over 5,300 annual customers[2] - Dollar-based net retention rate (NRR) for customers with ARR of $100,000 or more was 111%, up from 108% in Q3 2023[6] - Customers with ARR of $100,000 or more contributed 60% of total ARR, up from 55% a year ago[6] Guidance and Projections - Q4 2024 revenue guidance is estimated between $64.7 million and $65.7 million, indicating approximately 15% growth year-over-year at the mid-point[10] - Full year 2024 revenue guidance is estimated between $249.0 million and $250.0 million[10] - The company anticipates continued growth in user data and market expansion, as indicated by the positive projections for free cash flow and operating income in 2024[37] Cash Flow and Liquidity - Cash and cash equivalents totaled $60.1 million as of September 30, 2024, down from $71.7 million at the end of 2023[6] - Cash flows from operating activities showed a net cash provided of $26,756 thousand for the three months ended September 30, 2024, compared to $(6,771) thousand in 2023[29] - Cash and cash equivalents at the end of the period were $67,412 thousand for the nine months ended September 30, 2023, decreasing to $60,131 thousand in 2024[29] Operating Expenses - Operating expenses for the nine months ended September 30, 2023, totaled $153,755 thousand, slightly decreasing to $150,947 thousand in 2024, reflecting a reduction of 1.2%[24] - Research and development expenses for the nine months ended September 30, 2023, were $42,452 thousand, slightly decreasing to $40,238 thousand in 2024, a decline of 5.2%[24] - The company incurred share-based compensation costs totaling $13,685 thousand for the nine months ended September 30, 2023, compared to $13,092 thousand in 2024[26] - The amortization of intangible assets related to business combinations was $3,605,000 for the nine months ended September 30, 2023, contributing to the overall operating expenses[33] Other Financial Metrics - The company achieved a free cash flow of $(8,936,000) for the nine months ended September 30, 2023, but projected a positive free cash flow of $24,765,000 for the same period in 2024[37] - Non-GAAP sales and marketing expenses for the nine months ended September 30, 2023, were $74,648,000, with a non-GAAP sales and marketing margin of 46%[34] - The GAAP general and administrative expenses for the nine months ended September 30, 2023, were $31,941,000, with a non-GAAP general and administrative margin of 17%[34] - For the nine months ended September 30, 2023, the company reported a GAAP loss from operations of $27,722,000, while the non-GAAP operating loss was $9,564,000, reflecting a non-GAAP operating margin of -6%[33]

Shares of Similarweb Ltd SMWB have climbed almost 77% year to date.The company's revenue growth is accelerating, "driven by returning demand and abating down sell activity," according to Needham.Analyst Scott Berg initiated coverage with a Buy rating and price target of $11.The Similarweb Thesis: Apart from revenue growth, the company's operating model is driving "rapidly improving profitability," Berg said in the initiation note.Check out other analyst stock ratings."We believe Similarweb is an early leade ...

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Core Viewpoint - The article emphasizes the importance of timing and sustainability in stock trends for successful short-term investing, highlighting the need for strong fundamentals and positive earnings revisions to maintain momentum [1][2]. Group 1: Stock Performance - Similarweb (SMWB) has shown a solid price increase of 14.5% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - Over the last four weeks, SMWB's price has increased by 36.9%, suggesting that the upward trend is still intact [5]. - SMWB is currently trading at 83.4% of its 52-week high-low range, indicating a potential breakout opportunity [5]. Group 2: Fundamental Strength - SMWB holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for investors to identify stocks like SMWB that are on an uptrend supported by strong fundamentals [3]. - The article suggests exploring over 45 Zacks Premium Screens tailored to different investing styles to find potential winning stocks [8].