Financial Performance - Q3 2025 revenue reached $71.8 million[7] - Q3 2025 saw year-over-year revenue growth of 11%[7] - Annualized Q3 2025 revenue is $287 million[7] - Remaining Performance Obligations (RPO) totaled $267.6 million, with 68% expected to be recognized in the next 12 months[7] - Q3 2025 non-GAAP gross margin was 81%[7] - The company projects FY25 revenues between $285 million and $288 million, representing a 15% year-over-year growth at the midpoint[71] Customer Base and Retention - Dollar-based net retention rate (NRR) for Q3 2025 was 105%[7] - 63% of total ARR comes from customers with over $100K+ ARR[7] - 81% of ARR is from multi-year subscriptions[7] Market and Strategy - The company estimates its addressable market to be $55 billion[32]

Group 1 - Similarweb Ltd. announced the appointment of Ran Vered as Chief Financial Officer, effective December 21, 2025 [1] - Ran Vered has over two decades of finance experience and a proven track record in driving growth, efficiency, and strategic transformation [1] - Prior to joining Similarweb, Mr. Vered served as CFO of Lusha, a high-growth SAAS Sales Intelligence enterprise software for B2B data [1]

Group 1 - The core thesis for SimilarWeb (NYSE: SMWB) is that its fundamentals remain healthy, with signs of revenue growth gaining momentum supported by go-to-market strategies and product development [1] - The investment approach emphasizes a blend of value investing principles and a focus on long-term growth, aiming to buy quality companies at a discount to their intrinsic value [1] Group 2 - No stock, option, or similar derivative positions are held in any of the companies mentioned, and there are no plans to initiate such positions within the next 72 hours [2] - The article expresses personal opinions and is not receiving compensation from any company mentioned [2]

Financial Data and Key Metrics Changes - Revenue increased by 17% year over year to $71 million, exceeding expectations [5][13] - Customer base grew by 18% year over year to almost 6,000 ARR customers [5][13] - Non-GAAP operating profit was reported at 3%, marking a significant improvement in operating margins by 4,500 basis points from -42% in 2022 [16] - Normalized free cash flow of $4 million was generated in the quarter, representing a 5% free cash flow margin [16] Business Line Data and Key Metrics Changes - Revenues from GenAI data and new solutions accounted for approximately 8% of second quarter revenues and are experiencing growth [6][8] - The company launched several new products, including AI traffic and AI brand visibility, which are gaining traction among customers [6][10] Market Data and Key Metrics Changes - The company reported a net revenue retention (NRR) of 100%, with the renewal rate in the second quarter being the highest in three years [14] - NRR for customers over $100,000 decreased by 100 basis points year over year to 108% due to significant upsells from large contracts booked during 2024 [14] Company Strategy and Development Direction - The company is focused on three high-impact opportunities in GenAI intelligence, AI agents, and generative AI data [6][7] - The investment in go-to-market strategies is ramping up, with a 50% year-over-year increase in the number of salespeople booking deals [11] - The company aims to maintain profitable growth while achieving long-term profit and free cash flow targets [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about converting evaluation contracts into ARR contracts in 2025 [14][30] - The company is confident in its ability to build a strong pipeline and convert prospects into paid customers, particularly in the GenAI and LLM sectors [30][32] Other Important Information - Remaining performance obligations (RPO) totaled $274 million at the end of Q2, up 26% year over year, with an expectation to recognize approximately 68% as revenue over the next twelve months [15] - The company reiterated its revenue guidance for 2025, expecting total revenue in the range of $285 million to $288 million, representing 15% year-over-year growth at the midpoint [17] Q&A Session Summary Question: Can you talk about the large customer and how that potentially played out for you? - The process involves delivering a one-time bulk of data for testing, followed by long-term commitments if the data proves effective [21] Question: How do I think about the NRR number inflecting going forward? - The NRR has been affected by large expansion deals from 2024, and as these are worked through, improvements are expected [24] Question: What do you think it will take for GenAI and LLM evaluations to convert into paid customers? - The sales cycle involves testing and validating the data, with confidence in the pipeline for conversions [30] Question: Can you share what customer conversations around the new AI products look like? - There is significant interest in GenAI products, which are currently the fastest-growing in the portfolio [36] Question: How is the company thinking about pricing for data licensing contracts? - Data licensing deals typically start at seven figures, with room for expansion based on various datasets [56]

Q2 2025 Financial Highlights - Q2 2025 revenue reached $71.0 million[8], showing a year-over-year growth of 17%[8] - The company's annualized revenue, calculated as Q2 2025 revenue multiplied by 4, is $284 million[8] - Remaining Performance Obligations (RPO) totaled $273.8 million[8], with 68%[8] expected to be recognized over the next 12 months[8] - Non-GAAP gross margin for Q2 2025 was 81%[8] - The dollar-based net retention rate (NRR) for Q2 2025 was 108%[8] - 63%[8] of the total ARR comes from customers with over $100K+ ARR[8] - 57%[8] of ARR is from multi-year subscriptions[8] Business Model and Market Opportunity - The company estimates its addressable market to be $55 billion[42] - The company's sales and marketing spend is approximately 45% to 50% for customer acquisition and 50% to 55% for customer retention[75]

Financial Performance - Total revenue for Q2 2025 was $71.0 million, a 17% increase from $60.6 million in Q2 2024[3] - Non-GAAP operating profit was $2.4 million, representing 3% of revenue, down from 9% in Q2 2024[3] - Non-GAAP net income was $1.1 million, or 2% of revenue, compared to 7% in Q2 2024[5] - FY 2025 total revenue guidance is estimated between $285.0 million and $288.0 million, representing approximately 15% growth year-over-year[9] - Q3 2025 total revenue guidance is estimated between $71.5 million and $72.0 million[9] - Total revenue for the six months ended June 30, 2025, increased to $138,053, up from $119,619 in the same period of 2024, representing a growth of approximately 15.5%[24] - Gross profit for the six months ended June 30, 2025, was $109,815, compared to $94,379 for the same period in 2024, reflecting an increase of about 16.4%[24] - Non-GAAP gross profit for the six months ended June 30, 2025, was $111,172, compared to $97,018 for the same period in 2024, reflecting an increase of approximately 14.6%[31] Customer Metrics - Customer base grew by 18% to 5,951 as of June 30, 2025[5] - Customers with annual recurring revenue (ARR) of $100,000 or more increased by 13% to 433, contributing 63% of total ARR[5] - Dollar-based net retention rate (NRR) for customers with ARR of $100,000 or more was 108% in Q2 2025, down from 109% in Q2 2024[5] Expenses and Losses - Operating expenses for the six months ended June 30, 2025, rose to $125,990, up from $98,016 in 2024, indicating a significant increase of approximately 28.5%[24] - Net loss for the six months ended June 30, 2025, was $21,108, compared to a net loss of $3,471 in the same period of 2024, marking an increase in losses of about 508%[24] - The company reported a significant increase in research and development expenses, which rose to $36,328 for the six months ended June 30, 2025, compared to $25,778 in 2024, an increase of about 40.8%[24] Cash and Assets - Cash and cash equivalents at the end of the period on June 30, 2025, were $59,341, a decrease from $63,869 at the beginning of the period[29] - Total current assets increased to $141,356 as of December 31, 2024, compared to $131,649 as of June 30, 2025, showing a growth of approximately 7.3%[22] - Total liabilities decreased to $215,403 as of December 31, 2024, from $221,821 as of June 30, 2025, indicating a reduction of about 2.9%[22] Research and Development - The company expects to continue its focus on research and development, with GAAP R&D expenses projected to increase to $36,328 for the six months ended June 30, 2025[33]

Group 1 - The analyst downgraded Similarweb (NYSE: SMWB) to a hold rating in November due to concerns that the valuation had become too rich despite positive views on the fundamentals [1] - The investment approach focuses on identifying undervalued companies with long-term growth potential, blending value investing principles with a long-term growth focus [1] - The strategy emphasizes buying quality companies at a discount to their intrinsic value and holding them for the long term to allow for compounding of earnings and shareholder returns [1]

Financial Data and Key Metrics Changes - Revenue increased by 14% to $67 million compared to the previous year [6][14] - Customer base grew by 19% year over year to over 5,700 ARR customers [6] - Non-GAAP operating loss was reported at 2% due to increased investments in sales and R&D [15][16] - Generated $5 million of normalized free cash flow, marking the sixth consecutive quarter of positive free cash flow [16] Business Line Data and Key Metrics Changes - The growth in revenue was driven by a 19% increase in customers, particularly in the below $100,000 ARR cohort [14] - NRR for customers over $100,000 increased by 400 basis points year over year to 111% [14] - 52% of ARR is now contracted under multiyear contracts, up from 42% last year [15] Market Data and Key Metrics Changes - Remaining performance obligations (RPO) totaled $253 million at the end of Q1, an 18% increase year over year [15] - The company continues to monitor global macroeconomic developments, with no material impact from tariffs observed so far [17] Company Strategy and Development Direction - The company is focused on becoming an AI-first organization, with new product launches indicating positive returns on investments made in sales and R&D [10][13] - The launch of App Intelligence allows the company to provide data on over 4 million mobile apps, enhancing its digital visibility offerings [9] - The company aims to drive enterprise motion and expand its offerings to existing customers, leveraging its diverse product portfolio [73] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profit and cash flow targets, citing improved operating margins over the past three years [16] - For the full year 2025, the company maintains its revenue guidance of $285 million to $288 million, representing a 15% year-over-year growth at the midpoint [17] - Management is optimistic about the commercial pipeline for new AI products and the overall demand for digital data [11][12] Other Important Information - The company completed an accelerated recruitment of new salespeople, with expectations for improved productivity by Q3 [8] - The integration of AI chatbot traffic data into the platform has generated strong customer interest and engagement [22][24] Q&A Session Summary Question: Quality of new hires and productivity ramp - Management is pleased with the quality of new hires and has established metrics to track their productivity [20][21] Question: Customer interest in AI chatbot data - Customers have shown excitement about the new AI chatbot data, which provides unique insights into traffic generated by chatbots [22][24] Question: Visibility on revenue growth in the second half - Management indicated that the ramp-up of new sales hires varies by role, with inside sales showing quicker productivity [28] Question: Impact of SearchMonitor acquisition - The acquisition is not expected to materially impact revenue but is seen as a strategic addition to enhance product offerings [30] Question: Trends among larger clients - Management noted a slight decline in NRR due to tougher comps from previous upsells but remains optimistic about ongoing demand [35][36] Question: Changes in guidance philosophy - Management confirmed that there have been no significant changes to guidance philosophy despite market uncertainties [32][33] Question: Expansion activity and customer growth - Management reported healthy pipeline activity and noted that expansion with existing customers remains strong [87][89] Question: AI product sales strategy - The company is targeting a broader audience for AI products, with excitement across various customer roles [47] Question: Timeline for new sales hires to show results - New sales hires are expected to ramp up productivity by Q3, with management prepared to adjust if necessary [66][68]

Financial Data and Key Metrics Changes - Revenue increased by 14% to $67 million, exceeding expectations [5][13] - Customer base grew by 19% year-over-year to over 5,700 ARR customers [5] - Non-GAAP operating loss was 2% due to increased investments in sales and R&D [14] - Generated $5 million of normalized free cash flow, marking the sixth consecutive quarter of positive free cash flow [15] Business Line Data and Key Metrics Changes - The growth in revenue was driven by a 19% increase in customers, particularly in the below $100,000 ARR cohort [13] - NRR for over $100,000 customers increased by 400 basis points year-over-year to 111% [13] - 52% of ARR is contracted under multiyear contracts, up from 42% last year, indicating improved customer retention [14] Market Data and Key Metrics Changes - Remaining performance obligations (RPO) totaled $253 million at the end of Q1, up 18% year-over-year [14] - The company continues to monitor global macroeconomic developments, with no material impact from tariffs observed so far [16] Company Strategy and Development Direction - The company is focused on becoming an AI-first organization, with new product launches aimed at maximizing ROI for customers [12][10] - Investments in sales and R&D are expected to yield higher margins and faster growth moving forward [12] - The launch of App Intelligence and AI Chatbots traffic intelligence is part of the strategy to provide comprehensive digital visibility [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to achieve profit and cash flow targets, despite current investments [15] - The company maintains its revenue guidance for 2025, expecting total revenue in the range of $285 million to $288 million, representing 15% year-over-year growth [16] - Management is optimistic about the commercial pipeline for new AI products and the overall customer reaction to recent launches [10][12] Other Important Information - The company has completed an accelerated recruitment of new salespeople, with over 80% expected to be fully ramped by Q3 [6] - The integration of AI chatbot traffic data into the platform has generated strong customer interest and engagement [22][24] Q&A Session Summary Question: Inquiry about the quality of new hires and productivity ramp - Management expressed satisfaction with the quality of new hires and outlined metrics for measuring productivity [20][21] Question: Early indications of customer interest in AI chatbot traffic data - Customers have shown excitement and engagement with the new AI chatbot traffic data, indicating a strong demand for insights [22][24] Question: Visibility on deals supporting revenue reacceleration - Management discussed the diverse roles within the sales team and the varying sales cycles for different customer segments [29][30] Question: Impact of SearchMonitor acquisition on guidance - The acquisition is not expected to materially impact guidance, as it is a small business [31] Question: Trends in larger clients and NRR - A slight decline in NRR was attributed to last year's significant upsell activity, with ongoing engagement from large clients [36][38] Question: Changes in guidance philosophy - Management confirmed that there have been no significant changes to guidance philosophy despite market uncertainties [33] Question: Execution priorities for the year - The focus is on driving enterprise motion and expanding existing customer relationships [73] Question: Engagement and pipeline for AI chatbot traffic product - The product is currently in beta, with positive customer engagement and plans for monetization in the near future [83]

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Similarweb shares have lost about 43.2% since the beginning of the year versus the S&P 500's decline of -0.6%. What's Next for Similarweb? While Similarweb has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? Similarweb (SMWB) came out with a ...