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01/10 15:44
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A reveal strong revenue growth, increased customer base, and improved operating margins. The introduction of new products, especially in AI, and a significant increase in multiyear contracts enhance revenue durability. While there were some unclear management responses, the overall sentiment from analysts was positive, particularly due to the robust pipeline and profitability improvements. The full-year guidance and strong free cash flow further support a positive outlook, likely leading to a stock price increase in the short term.
Revenue $71 million in Q2 2025, a 17% increase year-over-year. Growth driven by 18% increase in customer base and big tech customers licensing digital data for Gen AI applications and LLMs. Also benefited from onetime fees for customer evaluations completed earlier than expected.
Customer Base Almost 6,000 ARR customers at quarter end, an 18% increase year-over-year. Growth attributed to interest in Gen AI data and solutions.
Net Revenue Retention (NRR) Overall NRR increased by 100 basis points year-over-year to 100%. NRR for over $100,000 customers decreased by 100 basis points year-over-year to 108%, reflecting significant upsells of large contracts booked during 2024.
Multiyear Contracts 57% of ARR contracted under multiyear contracts, up from 44% last year, demonstrating revenue durability and data importance to customers.
Remaining Performance Obligations (RPO) $274 million at the end of Q2 2025, a 26% increase year-over-year. Approximately 68% of total RPO expected to be recognized as revenue over the next 12 months.
Operating Profit Non-GAAP operating profit of 3% in Q2 2025. Operating margins improved by 4,500 basis points over 3 years, from -42% in Q2 2022 to 3% in Q2 2025, due to disciplined execution.
Free Cash Flow $4 million of normalized free cash flow in Q2 2025, a 5% free cash flow margin. This marks the seventh consecutive quarter of positive free cash flow.
Similarweb Gen AI Intelligence: Launched AI traffic in April to analyze website traffic from Gen AI sources and expanded product line in June with AI brand visibility for insights into AI chatbot platform mentions.
AI Agents: Rolled out to help customers maximize data value, with usage growing 60% month-over-month since launch.
Generative AI and LLM data: Supplying digital data for LLM and generative AI applications, including a multimillion-dollar ARR contract renewal and expansion with a big tech customer.
Similarweb Ad Intelligence: Launched to provide insights into digital ad spend and paid marketing, leveraging Admetricks acquisition.
Mobile App Intelligence and Shopper Intelligence: Introduced additional models to enhance customer tools and data for online market success.
Customer Base Growth: Increased by 18% year-over-year to nearly 6,000 ARR customers.
Big Tech Customer Expansion: Signed and expanded multimillion-dollar ARR contracts for Gen AI and LLM data.
Revenue Growth: Achieved $71 million in Q2 revenue, a 17% year-over-year increase.
Profitability: Returned to positive operating profit and reported seventh consecutive quarter of positive free cash flow.
Sales Productivity: Number of salespeople booking deals increased by 50% year-over-year.
Multiyear Contracts: 57% of ARR is under multiyear contracts, up from 44% last year, demonstrating revenue durability.
RPO Growth: Remaining performance obligations totaled $274 million, up 26% year-over-year.
Market Conditions: The company faces risks from market conditions, including potential challenges in converting evaluation contracts into ARR contracts during the second half of 2025.
Customer Retention and Upselling: While the overall NRR increased, the NRR for customers spending over $100,000 decreased by 100 basis points year-over-year, reflecting challenges in maintaining upsell momentum for large contracts.
Revenue Dependency: A significant portion of revenue growth is tied to big tech customers and their use of digital data for Gen AI applications and LLMs, which could pose risks if these customers reduce spending or shift priorities.
Economic Uncertainty: The company’s reliance on multiyear contracts (57% of ARR) could expose it to risks if economic conditions lead to contract renegotiations or cancellations.
Operational Execution: The company’s ability to maintain profitability and free cash flow depends on disciplined execution, which could be impacted by unforeseen operational challenges.
Revenue Guidance for 2025: Maintaining revenue guidance for the full year 2025, expecting total revenue in the range of $285 million to $288 million, representing 15% year-over-year growth at the midpoint of the range.
Profit Guidance for 2025: Non-GAAP operating profit for the full year 2025 is expected to be between $5 million and $7 million, an increase from the previous expectation.
Q3 2025 Revenue Guidance: Total revenue expected in the range of $71.5 million to $72 million.
Q3 2025 Profit Guidance: Non-GAAP operating profit expected to be in the range of $1.5 million to $2 million.
Revenue Recognition from RPO: Approximately 68% of total remaining performance obligations (RPO) of $274 million is expected to be recognized as revenue over the next 12 months.
Free Cash Flow Guidance: Plan to continue generating positive free cash flow on a quarterly basis going forward.
The selected topic was not discussed during the call.
The earnings call provided mixed signals. Financial performance and guidance are stable, with positive free cash flow and disciplined cost management. However, the lack of a revenue beat and raise, unclear management responses, and a wider than usual Q4 guidance range introduce uncertainty. The Q&A reveals some execution challenges and vague responses, but also highlights potential growth in LLM data deals. Overall, the sentiment is balanced, with neither strong positive nor negative factors dominating, leading to a neutral prediction for stock price movement.
The earnings call summary and Q&A reveal strong revenue growth, increased customer base, and improved operating margins. The introduction of new products, especially in AI, and a significant increase in multiyear contracts enhance revenue durability. While there were some unclear management responses, the overall sentiment from analysts was positive, particularly due to the robust pipeline and profitability improvements. The full-year guidance and strong free cash flow further support a positive outlook, likely leading to a stock price increase in the short term.
The earnings call reveals strong financial performance with a 14% YoY revenue increase, positive free cash flow, and improved operating margins. Despite competitive pressures and regulatory concerns, the company maintains a positive outlook with 15% revenue growth guidance. The Q&A indicates positive sentiment towards new hires and AI products, but some ambiguity in revenue acceleration visibility. The strong financials and optimistic guidance suggest a positive stock reaction, potentially enhanced by customer excitement over AI developments.
The earnings call highlighted strong financial performance with a 18% YoY revenue increase, positive free cash flow, and improved guidance. Despite competitive pressures and regulatory challenges, the company shows strong customer growth and product demand. The Q&A session revealed analysts' confidence in the company's strategy and growth trajectory, particularly in AI integration and customer retention. The lack of clear guidance on Q4 revenue volatility slightly tempers optimism, but overall, the financial health and strategic initiatives suggest a positive stock price movement in the near term.
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