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01/10 15:46
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Revenue Revenue increased by 11% year-over-year to $72 million. The growth was driven by a 15% increase in the customer base and increased revenues from new products launched in 2025, including App Intelligence and Gen AI Intelligence.
Customer Base Customer base grew 15% year-over-year to more than 6,000 ARR customers at quarter end. This growth contributed to the overall revenue increase.
Free Cash Flow Reported an eighth consecutive quarter of positive free cash flow, generating $3 million in Q3 with a 4% free cash flow margin. Over the past 8 quarters, $43 million of free cash flow was generated. This reflects efficient operations and a focus on profitable growth.
ARR from Gen AI Intelligence ARR from Gen AI Intelligence product grew rapidly to more than $1 million since its launch in April. This growth highlights strong customer interest in Gen AI data and solutions.
ARR from App Intelligence ARR from App Intelligence increased rapidly to above $10 million by the end of Q3. This growth is attributed to the strong adoption of the Similarweb App Intelligence launched in March.
Multiyear Contracts 58% of ARR is contracted under multiyear contracts, up from 45% last year. This demonstrates the durability of revenues and the importance of the company's data to its customers.
Remaining Performance Obligations (RPO) RPO totaled $268 million at the end of Q3, up 26% year-over-year. 68% of total RPO is expected to be recognized as revenue over the next 12 months.
Net Revenue Retention (NRR) Overall NRR was 98% across all customers and 105% for customers with over $100,000 of ARR. The decline in NRR reflects strong expansion activity in 2024, particularly from large contracts booked during the second and third quarters of last year.
Gen AI Intelligence: Launched Web Intelligence 4.0 in October, integrating Gen AI capabilities. ARR from this product has grown to over $1 million since its launch in April.
Data Selling for LLMs: Supplying unique digital data to companies building LLMs and generative AI applications.
AI Agent: Rolled out AI agents to automate workflows and extract insights. 27% of Sales Intelligence customers use AI meeting prep and AI outreach agents.
Similarweb MCP Server: Launched in September to deliver digital market intelligence data into AI agents and workflows, supporting tools like Claude, Copilot, and OpenAI Agent Builder.
Similarweb App Intelligence: Launched in March, now used by over 580 customers with ARR exceeding $10 million. Covers over 4 million iOS and Android apps across 58 countries.
Customer Base Growth: Customer base grew by 15% year-over-year to over 6,000 ARR customers.
Multiyear Contracts: 58% of ARR is under multiyear contracts, up from 45% last year, indicating revenue durability.
Free Cash Flow: Reported eighth consecutive quarter of positive free cash flow, generating $43 million over the past 8 quarters.
Sales Team Expansion: Increased sales team by 30% compared to Q3 last year, leading to improved yield.
Profit Guidance: Raised non-GAAP operating profit guidance for 2025 to $8.5 million-$9.5 million, reflecting disciplined execution.
New CFO Appointment: Ran Vered to join as CFO in December, bringing over 20 years of finance experience and a track record in growth and strategic transformation.
Revenue growth dependency: Revenue growth is heavily reliant on new product launches and customer acquisition, which may not sustain long-term growth if market conditions or customer interest change.
Customer retention: Net Revenue Retention (NRR) has declined to 98% overall, indicating challenges in retaining customers, especially smaller ones, which could impact recurring revenue.
Competitive pressures: The company faces competitive pressures in the AI and digital intelligence markets, which could affect its ability to maintain or grow market share.
Economic uncertainties: Economic uncertainties could impact customer budgets and spending on digital intelligence solutions, potentially affecting revenue growth.
Operational execution: The company’s ability to scale its go-to-market investments and maintain operational efficiency is critical, and any missteps could impact profitability and growth.
Dependence on key personnel: The transition to a new CFO introduces risks related to leadership continuity and strategic execution.
Revenue Guidance for FY 2025: The company is reiterating its 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.
Non-GAAP Operating Profit Guidance for FY 2025: The company is raising its non-GAAP operating profit guidance to between $8.5 million and $9.5 million, an increase from previous expectations and significantly higher than the guidance provided at the beginning of the year.
Free Cash Flow: The company plans to continue generating positive free cash flow on a quarterly basis going forward.
Remaining Performance Obligations (RPO): RPO totaled $268 million at the end of Q3, up 26% year-over-year. The company expects to recognize 68% of total RPO as revenue over the next 12 months.
Customer Growth and ARR: ARR from Gen AI Intelligence product has grown rapidly to more than $1 million since its launch in April. ARR from App Intelligence has increased to above $10 million. The company has also seen a 15% year-over-year growth in its customer base, reaching over 6,000 ARR customers.
Product Launches and Market Trends: The company launched Web Intelligence 4.0 in October, integrating Gen AI capabilities. It also introduced the Similarweb MCP server in September to deliver digital market intelligence data directly into AI agents and workflows. These initiatives are expected to drive future growth.
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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