Similarweb(US:SMWB)2022-08-10 16:08Financial Data and Key Metrics Changes - Revenue grew 46% year-over-year to $47.6 million in Q2 2022, exceeding the outlook of $45.9 million [10][16] - Non-GAAP operating loss was $19.8 million, better than the guidance range of $23 million [18] - Dollar-based net retention rate increased to 115% from 106% year-over-year [17] - Remaining performance obligations (RPOs) rose 53% year-over-year to $160 million, with 87% expected to be realized in the next 12 months [17] Business Line Data and Key Metrics Changes - Customer base grew 25% year-over-year to over 3,800, with average account spend increasing 16% to approximately $51,000 annually [10] - Over 53% of annual recurring revenue comes from customers spending more than $100,000 per year [11] - 36% of customer relationships consist of multiyear contracts, indicating a growing trend in long-term commitments [11] Market Data and Key Metrics Changes - The U.S. market represented 50% of revenue, showing strong performance with a 55% increase [40] - European markets showed mixed results, with Germany performing well while the U.K. and France faced challenges [40] Company Strategy and Development Direction - The company is focusing on operational efficiency and disciplined execution to achieve profitable growth [21] - Recent acquisitions, such as Rank Ranger, are aimed at enhancing capabilities and expanding product offerings [13] - The company is in the process of building its Investor Intelligence solution, expected to launch in the latter half of the year [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a softness in the market, particularly in Europe, affecting deal closure times [24] - The company anticipates total revenue for Q3 2022 to be between $48.8 million and $49.2 million, with full-year revenue guidance of $196 million to $197 million [19] - Management remains optimistic about the demand for data-driven insights during uncertain economic times [45] Other Important Information - The company is actively optimizing its marketing organization and has made adjustments to hiring plans in response to market conditions [42][37] - The company ended the quarter with approximately $94 million in cash, supplemented by a $75 million undrawn credit facility, providing a strong liquidity position [68] Q&A Session Summary Question: Observations on macro environment impact - Management noted a slowdown in deal closures, particularly in Europe, and acknowledged longer sales cycles due to budget reallocations and job changes [24] Question: Free cash flow expectations - Management indicated that normalized free cash flow should not exceed $50 million for the year, with significant renewals expected in Q4 and Q1 [25] Question: Gross margin outlook - Management expressed optimism about improving gross margins in the future, with a focus on operational efficiency [30] Question: Geographic performance and guidance - Management confirmed that while Europe faces challenges, regions like Japan and the U.S. are performing well, and guidance reflects these regional dynamics [39] Question: Demand for specific products - Management reported strong initial demand for the App Intelligence product, with positive customer feedback, while also noting challenges in closing deals due to market dynamics [61] Question: Cash balance and future guidance - Management reassured that the company has sufficient liquidity and is focused on achieving sustainable free cash flow while balancing growth [68]