Financial Performance - Q4 2024 revenue reached $65.6 million, representing a 16% year-over-year growth[8] - The company's Q4 2024 annualized revenue is $262 million (Q4 2024 Revenue * 4)[8] - Q4 2024 non-GAAP gross margin was 78%[8] - The company achieved a non-GAAP operating profit of $2.6 million in Q4 2024[64] - The company's non-GAAP normalized free cash flow was $2.7 million in Q4 2024[64] - For the full year 2024, revenue reached $250 million, a 15% increase compared to the $218 million in FY 2023[42] Customer Base and Retention - The company had 5,534 total ARR customers in Q4 2024, a 17% increase year-over-year[45] - Dollar-based net retention rate (NRR) for $100K+ ARR customers was 112% in Q4 2024[8] - 61% of total ARR comes from customers with $100K+ ARR[8] Business Model - Remaining Performance Obligation (RPO) is $246.0 million, with 69% expected to be recognized over the next 12 months[8] - 49% of ARR is from multi-year subscriptions[8]

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]

[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** |

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]

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 ...