Similarweb(SMWB) - 2022 Q3 - Quarterly Report

Q3 2022 Earnings Release This report details Similarweb's Q3 2022 financial and business performance, strategic adjustments, and updated financial outlook Financial & Business Highlights Similarweb achieved strong Q3 2022 revenue growth and customer expansion, improving non-GAAP operating margin despite a GAAP loss Q3 2022 Financial Highlights This section presents key financial metrics for Q3 2022, including revenue, operating loss, and net loss per share Q3 2022 Key Financial Metrics (in millions) | Metric | Q3 2022 | Q3 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $50.0M | $35.6M | +41% | | GAAP Operating Loss | $(20.6)M | $(16.7)M | - | | GAAP Operating Margin | (41)% | (47)% | +6 p.p. | | Non-GAAP Operating Loss | $(13.3)M | $(13.9)M | - | | Non-GAAP Operating Margin | (27)% | (39)% | +12 p.p. | | GAAP Net Loss per Share | $(0.28) | $(0.23) | - | | Non-GAAP Operating Loss per Share | $(0.18) | $(0.19) | - | Recent Business Highlights This section highlights recent business achievements, including growth in remaining performance obligations and key customer metrics - Remaining performance obligations (RPO) grew 39% year-over-year to $158.0 million, indicating a strong backlog of contracted revenue[5] Key Customer Metrics as of September 30, 2022 | Metric | Q3 2022 | Q3 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Number of Customers | 3,911 | - | +21% | | Average Annual Revenue per Customer | ~$51,570 | - | +15% | | Customers with ARR > $100k | 322 | - | +31% | | Overall Dollar-Based Net Retention Rate | 112% | 110% | +2 p.p. | | NRR for Customers with ARR > $100k | 123% | 122% | +1 p.p. | Corporate Updates & Outlook Similarweb reduced its workforce by 10% to accelerate cash flow profitability and updated its full-year 2022 financial guidance Organizational Changes This section details the company's strategic workforce reduction aimed at accelerating cash flow profitability - The company has reduced its headcount by approximately 10% of its global workforce[6] - This measure is part of a plan to accelerate the path to cash flow profitability during 2023 by balancing resources and enhancing flexibility[6] Financial Outlook This section provides the company's financial guidance for Q4 and the full year 2022, including revenue and non-GAAP operating loss Q4 2022 Guidance (in millions) | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $50.5M - $50.9M | | YoY Growth (Mid-point) | 26% | | Non-GAAP Operating Loss | $(14.5)M - $(15.0)M | Full Year 2022 Guidance (in millions) | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $192.4M - $192.8M | | YoY Growth (Mid-point) | 40% | | Non-GAAP Operating Loss | $(67.4)M - $(67.9)M | Financial Statements This section presents the consolidated financial statements, detailing balance sheet changes, income statement performance, and cash flow activities Consolidated Balance Sheets This section presents the consolidated balance sheets, showing assets, liabilities, and equity at period end Balance Sheet Summary (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $90,633 | $128,879 | | Total current assets | $143,292 | $187,687 | | Total assets | $251,570 | $226,999 | | Total current liabilities | $174,334 | $134,147 | | Total liabilities | $219,885 | $142,085 | | Total shareholders' equity | $31,685 | $84,914 | Consolidated Statements of Comprehensive Income (Loss) This section details the consolidated statements of comprehensive income (loss), including revenues, expenses, and net loss Q3 Income Statement Summary (in thousands) | Account | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Revenues | $50,022 | $35,597 | | Gross profit | $36,273 | $27,802 | | Total operating expenses | $56,888 | $44,523 | | Loss from operations | $(20,615) | $(16,721) | | Net loss | $(20,993) | $(17,334) | | Net loss per share | $(0.28) | $(0.23) | Consolidated Statements of Cash Flows This section outlines the consolidated statements of cash flows, categorizing cash movements from operating, investing, and financing activities Q3 Cash Flow Summary (in thousands) | Activity | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(21,669) | $(16,592) | | Net cash used in investing activities | $(6,484) | $(261) | | Net cash provided by financing activities | $25,143 | $(1,173) | | Net decrease in cash | $(3,292) | $(17,914) | | Cash and cash equivalents, end of period | $90,633 | $159,052 | Non-GAAP Reconciliations This section provides detailed reconciliations of GAAP to non-GAAP financial measures, adjusting for share-based compensation and other non-cash items Reconciliation of Gross Profit This section reconciles GAAP gross profit to non-GAAP gross profit, detailing adjustments for non-cash items - Non-GAAP gross profit for Q3 2022 was $38.1 million (76% margin), after adjusting for share-based compensation, retention payments, and amortization of intangibles[28] Reconciliation of Operating Loss This section reconciles GAAP operating loss to non-GAAP operating loss, detailing specific adjustments Q3 2022 GAAP to Non-GAAP Operating Loss Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | Loss from operations (GAAP) | $(20,615) | | Share-based compensation | $4,849 | | Retention payments (business combinations) | $737 | | Amortization of intangibles (business combinations) | $1,201 | | Other adjustments | $480 | | Non-GAAP operating loss | $(13,348) | Reconciliation of Operating Expenses This section reconciles GAAP operating expenses to non-GAAP operating expenses by removing specific non-cash and business combination-related costs - GAAP operating expenses are reconciled to non-GAAP by removing items such as share-based compensation and business combination-related costs from R&D, Sales & Marketing, and G&A[30] Reconciliation of Free Cash Flow This section reconciles net cash used in operating activities to free cash flow and normalized free cash flow Q3 2022 Free Cash Flow Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | Net cash used in operating activities | $(21,669) | | Purchases of property and equipment, net | $(6,705) | | Capitalized internal use software costs | $(1,120) | | Free cash flow | $(29,494) | | Adjustments for new HQ and business combinations | $4,400 | | Normalized free cash flow | $(25,094) | Other Information This section includes forward-looking statements and definitions for non-GAAP financial measures and key business metrics - The report contains forward-looking statements regarding guidance and future performance, which are subject to various risks and uncertainties, including macroeconomic conditions and competition[12][13] - The company defines non-GAAP measures (e.g., Free Cash Flow, Non-GAAP Operating Loss) and other metrics (e.g., ARR, NRR) used to evaluate business performance[16][17][18]