First quarter 2022 revenue grew 51%
year-over-year to $44.3 million
NRR for $100K+ ARR customers increased to
127%
Remaining performance obligations increased 68%
year-over-year to $159.1 million
Similarweb Ltd. (NYSE: SMWB) ("Similarweb" or the "Company"), a
leading digital intelligence company, today announced financial
results for its first quarter ended March 31, 2022. The Company
published a letter to shareholders from management discussing these
results, which can be accessed at the link:
https://ir.similarweb.com/financials/quarterly-results, located on
the Company's investor relations website.
“We are strong out of the gate in 2022 with another
record-breaking quarter,” said Or Offer, Founder and CEO of
Similarweb. “Our customers are benefiting tremendously from the
critical insights we provide that help them win in their markets
and accelerate their growth. Our momentum continues to build and we
are extremely excited about what lies ahead".
First Quarter 2022 Financial
Highlights
- Total revenue was $44.3 million, an increase of 51% compared to
$29.4 million for the first quarter of 2021.
- GAAP operating loss was $(26.2) million, compared to $(11.6)
million for the first quarter of 2021.
- GAAP net loss per share was $(0.34), compared to $(0.78) for
the first quarter of 2021.
- Non-GAAP operating loss was $(19.8) million, compared to $(8.7)
million for the first quarter of 2021.
- Non-GAAP operating loss per share was $(0.26), compared to
$(0.56) for the first quarter of 2021.
- Cash and cash equivalents totaled $125.0 million as of March
31, 2022, compared to $128.9 million as of December 31, 2021.
- Free cash flow was $(4.3) million, compared to $1.9 million for
the first quarter of 2021.
- Normalized free cash flow was $(4.0) million, compared to $1.9
million for the first quarter of 2021.
Recent Business
Highlights
- Grew number of customers to 3,664 as of March 31, 2022, an
increase of 27% compared to March 31, 2021.
- Grew average annual revenue per customer to approximately
$49,500 in the first quarter of 2022, an increase of 18% compared
to the first quarter of 2021.
- Grew number of customers with ARR of $100,000 or more to 297,
an increase of 48% compared to March 31, 2021.
- Customers with ARR of $100,000 or more contributed 53% of the
total ARR as of March 31, 2022, compared to 49% as of March 31,
2021.
- Dollar-based net retention rate for customers with ARR of
$100,000 or more increased to 127% as compared to 115% in the first
quarter of 2021.
- Overall dollar-based net retention rate increased to 115% as
compared to 103% in the first quarter of 2021.
- Multi-year deals now comprise 35% of our overall ARR, compared
to 26% as of March 31, 2021.
- Remaining performance obligations increased 68% year over year,
to $159.1 million as of March 31, 2022, as compared to $94.9
million as of March 31, 2021.
Financial Outlook
“We are excited about our strong start and record-breaking
quarter” said Jason Schwartz, Chief Financial Officer of
Similarweb. “Our investments across the business contributed
momentum that fuels our growth. We are raising our outlook for the
full year 2022”.
- Q2 2022 Guidance
- Total revenue between $45.5 million and $45.9 million,
representing 41% growth year over year at the mid-point of the
range.
- Non-GAAP operating loss between $(23.0) million and $(23.5)
million. This includes Non-GAAP gross margin anticipated in the
range of 73% to 74%.
- FY 2022 Guidance
- Total revenue between $196.0 million and $197.0 million,
representing 43% growth year over year at the mid-point of the
range.
- Non-GAAP operating loss between ($82) million and ($83)
million, which includes Non-GAAP gross margin anticipated in the
range of 75% to 76%, reflecting continued investment to further
expand our data moats through the previously reported acquisitions
of Embee Mobile and SimilarTech, and the data licensing agreement
with data.ai (formerly App Annie), as well as increased investment
in research and development and in our go-to-market which is
designed to support our continued growth plans.
The Company’s second quarter and full year 2022 financial
outlook is based upon a number of assumptions that are subject to
change and many of which are outside the Company’s control. Actual
results may vary from these assumptions, and the Company’s
expectations may change. There can be no assurance that the Company
will achieve these results.
The Company does not provide guidance for operating loss and
gross margin, the most directly comparable GAAP measures to
non-GAAP operating loss and non-GAAP gross margin, respectively,
and similarly cannot provide a reconciliation to these measures to
their closest GAAP equivalents without unreasonable effort due to
the unavailability of reliable estimates for certain items. These
items are not within the Company’s control and may vary greatly
between periods and could significantly impact future financial
results.
Conference Call
Information
The financial results and business highlights will be discussed
on a conference call and webcast scheduled at 8:30 a.m. Eastern
Time on Wednesday, May 11, 2022. A live webcast of the call can be
accessed from Similarweb’s Investor Relations website at
https://ir.similarweb.com. An archived webcast of the conference
call will also be made available on the Similarweb website
following the call. The live call may also be accessed via
telephone at (877) 407-0726 toll-free and at (201) 689-7806
internationally.
About Similarweb: As a trusted platform for understanding
online behavior, millions of people rely on Similarweb insights to
strengthen their knowledge of the digital world. We empower anyone
— from the curious individual to the enterprise business leader —
to make smarter decisions by understanding why things happen across
the digital ecosystem.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Section 27A of the Securities Act of 1933, as
amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, including statements relating to
our guidance for the second quarter and full year of 2022 described
under "Financial Outlook". . Forward-looking statements include all
statements that are not historical facts. Such statements may be
preceded by the words “intends,” “may,” “will,” “plans,” “expects,”
“anticipates,” “projects,” “predicts,” “estimates,” “aims,”
“believes,” “hopes,” “potential” or similar words. These
forward-looking statements reflect our current views regarding our
intentions, products, services, plans, expectations, strategies and
prospects, which are based on information currently available to us
and assumptions we have made. Actual results may differ materially
from those described in such forward-looking statements and are
subject to a variety of assumptions, uncertainties, risks and
factors that are beyond our control. Such risks and uncertainties
include, without limitation, risks and uncertainties associated
with (i) challenges associated with forecasting our revenue given
our recent growth and rapid technological development, (ii) our
history of net losses and desire to increase operating expenses,
thereby limiting our ability to achieve profitability, (iii)
challenges related to effectively managing our growth, (iv) intense
competition in the market and services categories in which we
participate, (v) potential reductions in participation in our
contributory network and/or increase in the volume of opt-out
requests from individuals with respect to our collection of their
data, or a decrease in our direct measurement dataset, which could
lead to a deterioration in the depth, breadth or accuracy of our
data, (vi) our inability to attract new customers and expand
subscriptions of current customers, (vii) changes in laws,
regulations, and public perception concerning data privacy or
change in the patterns of enforcement of existing laws and
regulations, (viii) our inability to introduce new features or
solutions and make enhancements to our existing solutions, (ix)
real or perceived errors, failures, vulnerabilities or bugs in our
platform, (x) potential security breaches to our systems or to the
systems of our third-party service providers, (xi) our inability to
obtain and maintain comprehensive and reliable data to generate our
insights, (xii) changes in laws and regulations related to the
Internet or changes in the Internet infrastructure itself that may
diminish the demand for our solutions, (xiii) failure to
effectively develop and expand our direct sales capabilities, which
could harm our ability to increase the number of organizations
using our platform and achieve broader market acceptance for our
solutions and (xiv) the impact that global events, such as ongoing
COVID-19 pandemic, including variants of COVID-19 or other public
health crises and the Russian military operations in Ukraine, and
any related economic downturn could have on our or our customers'
businesses, financial condition and results of operations.
These risks and uncertainties are more fully described in our
filings with the Securities and Exchange Commission, including in
the section entitled “Risk Factors” in our Form 20-F filed with the
Securities and Exchange Commission on March 25, 2022, and
subsequent reports that we file with the Securities and Exchange
Commission. Moreover, we operate in a very competitive and rapidly
changing environment. New risks emerge from time to time. It is not
possible for our management to predict all risks, nor can we assess
the impact of all factors on our business or the extent to which
any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements we may make. In light of these risks, uncertainties and
assumptions, we cannot guarantee future results, levels of
activity, performance, achievements, or events and circumstances
reflected in the forward-looking statements will occur.
Forward-looking statements represent our beliefs and assumptions
only as of the date of this press release. Except as required by
law, we undertake no duty to update any forward-looking statements
contained in this release as a result of new information, future
events, changes in expectations or otherwise.
Non-GAAP Financial Measures
This press release contains certain financial measures that are
expressed on a non-GAAP basis. We use these non-GAAP financial
measures internally to facilitate analysis of our financial and
business trends and for internal planning and forecasting purposes.
We believe these non-GAAP financial measures, when taken
collectively, may be helpful to investors because they provide
consistency and comparability with past financial performance by
excluding certain items that may not be indicative of our business,
results of operations, or outlook. However, non-GAAP financial
measures have limitations as an analytical tool and are presented
for supplemental informational purposes only. They should not be
considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. Free cash flow
represents net cash provided by (used in) operating activities less
capital expenditures and capitalized internal-use software costs.
Normalized free cash flow represents free cash flow less capital
investments related to the Company's new headquarters and payments
received in connection with these capital investments. Non-GAAP
operating income (loss), non-GAAP gross profit, Non-GAAP research
and development expenses, non-GAAP sales and marketing expenses and
non-GAAP general and administrative expenses represents the
comparable GAAP financial figure operating income (loss) or
expense, less share-based compensation, adjustments and payments
related to business combinations, amortization of intangible assets
and certain other non-recurring items, as applicable and indicated
in the above tables..
Other Metrics
Customer acquisition costs (CAC) represent the portion of sales
and marketing expenses allocated to acquire new customers. Customer
retention costs (CRC) represent the portion of sales and marketing
expenses allocated to retain existing customers and to increase
existing customers’ subscriptions. Annual recurring revenue (ARR)
represents the annualized subscription revenue we would
contractually expect to receive from customers assuming no
increases or reductions in their subscriptions. CAC payback period
is the estimated time in months to recover CAC in terms of
incremental gross profit that newly acquired customers generate.
Net retention rate (NRR) represents the comparison of our ARR from
the same set of customers as of a certain point in time, relative
to the same point in time in the previous year ago period,
expressed as a percentage.
Similarweb Ltd. Consolidated Balance Sheet
U.S. dollars in thousands (except share and per share data)
December 31,
March 31,
2021
2022
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
128,879
$
125,019
Restricted deposits
11,474
11,462
Accounts receivable, net
31,017
30,531
Deferred contract costs
8,470
9,512
Prepaid expenses and other current
assets
7,847
10,986
Total current assets
187,687
187,510
Property and equipment, net
6,356
20,054
Deferred contract costs, non-current
9,208
9,933
Operating lease right-of-use assets
—
40,760
Intangible assets, net
11,617
10,576
Goodwill
11,318
11,318
Other non-current assets
813
813
Total assets
$
226,999
$
280,964
Liabilities and shareholders' (deficit)
equity
Current liabilities:
Accounts payable
$
11,303
$
27,020
Payroll and benefit related
liabilities
17,969
20,264
Deferred revenues
76,676
89,656
Other payables and accrued expenses
28,199
28,394
Operating lease liabilities
—
504
Total current liabilities
134,147
165,838
Deferred revenues, non-current
2,074
1,612
Operating lease liabilities,
non-current
—
46,032
Deferred rent
2,602
—
Other long-term liabilities
3,262
3,200
Total liabilities
142,085
216,682
Shareholders' (deficit) equity
Ordinary Shares, NIS 0.01 par value
500,000,000 shares authorized as of December 31, 2021 and March 31,
2022 (unaudited), 74,847,609 and 75,397,202 shares issued as of
December 31, 2021 and March 31, 2022 (unaudited), 74,845,441 and
75,395,034 outstanding as of December 31, 2021 and March 31, 2022
(unaudited), respectively;
205
207
Additional paid-in capital
324,614
329,503
Accumulated other comprehensive income
160
246
Accumulated deficit
(240,065
)
(265,674
)
Total shareholders' equity
84,914
64,282
Total liabilities and shareholders'
equity
$
226,999
$
280,964
Similarweb Ltd. Consolidated Statement of Comprehensive
Income (Loss)
U.S. dollars in thousands (except
share and per share data)
Three Months Ended March
31,
2021
2022
(Unaudited)
Revenues
$
29,413
$
44,280
Cost of revenues
6,273
13,095
Gross profit
23,140
31,185
Operating expenses:
Research and development
8,984
14,713
Sales and marketing
19,600
30,342
General and administrative
6,107
12,311
Total operating expenses
34,691
57,366
Loss from operations
(11,551
)
(26,181
)
Finance (expenses) income, net
(347
)
822
Loss before income taxes
(11,898
)
(25,359
)
Income taxes
216
250
Net loss
$
(12,114
)
$
(25,609
)
Net loss per share attributable to
ordinary shareholders, basic and diluted
$
(0.78
)
$
(0.34
)
Weighted-average shares used in computing
net loss per share attributable to ordinary shareholders, basic and
diluted
15,467,710
75,035,966
Net loss
(12,114
)
(25,609
)
Other comprehensive income (loss), net
of tax
Change in unrealized gain (loss) on
cashflow hedges
(260
)
86
Total other comprehensive income (loss),
net of tax
(260
)
86
Total comprehensive loss
$
(12,374
)
$
(25,523
)
Share based compensation costs included
above:
U.S. dollars in thousands
Three Months Ended March
31,
2021
2022
(in thousands)
Cost of revenues
$
30
$
146
Research and development
1,365
1,209
Sales and marketing
626
1,373
General and administrative
861
1,075
Total
$
2,882
$
3,803
Similarweb Ltd. Consolidated Statement of Cash
Flows
U.S. dollars in thousands
Three Months Ended March
31,
2021
2022
(Unaudited)
Cash flows from operating
activities:
Net loss
$
(12,114
)
$
(25,609
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
520
3,049
Finance expense
149
231
Unrealized (gain) loss from hedging future
transactions
(75
)
4
Share-based compensation
2,882
3,803
Provision for accrued interest on Credit
Facility
(53
)
—
Changes in operating assets and
liabilities:
Operating lease right-of-use assets and
liabilities, net
—
3,177
Decrease in accounts receivable, net
925
486
Increase in deferred contract costs
(1,118
)
(1,767
)
(Decrease) increase in prepaid expenses
and other current assets
(240
)
1,104
Increase in other non-current assets
(900
)
—
Increase in accounts payable
1,989
1,494
Increase in deferred revenue
9,448
12,518
Decrease in deferred rent
(121
)
—
Increase (decrease) in other long-term
liabilities
140
(62
)
Increase in other payables and accrued
expenses
897
2,486
Net cash provided by operating
activities
2,329
914
Cash flows from investing
activities:
Purchases of property and equipment,
net
(451
)
(4,784
)
Capitalized internal-use software
costs
—
(380
)
(Increase) decrease in restricted
deposits
(488
)
12
Decrease in short-term investments
9,975
—
Net cash provided by (used in) investing
activities
9,036
(5,152
)
Cash flows from financing
activities:
Payment of deferred offering costs
(387
)
—
Proceeds from exercise of share
options
338
609
Borrowings under Credit Facility
30,000
—
Repayment of Credit Facility
(26,800
)
—
Net cash provided by financing
activities
3,151
609
Effect of exchange rates on cash and cash
equivalents
(149
)
(231
)
Net increase (decrease) in cash and cash
equivalents
14,367
(3,860
)
Cash and cash equivalents, beginning of
period
23,943
128,879
Cash and cash equivalents, end of
period
$
38,310
$
125,019
Supplemental disclosure of cash flow
information:
Interest paid
$
391
$
(17
)
Taxes paid
$
134
$
60
Supplemental disclosure of non-cash
operating, investing and financing activities:
Offering costs incurred during the period
included in accounts payable and accrued expenses
$
971
$
—
Additions to operating lease right-of-use
assets and liabilities
$
—
$
4,279
Deferred proceeds from exercise of share
options included in other current assets
$
—
$
479
Deferred costs of property and equipment
incurred during the period included in accounts payable
$
—
$
10,542
Reconciliation of Non-GAAP
Financial Measures to the Most Directly Comparable GAAP Financial
Measures
Reconciliation of GAAP gross profit to
non-GAAP gross profit
Three Months Ended March
31,
2021
2022
(In thousands)
GAAP gross profit
$
23,140
$
31,185
Add:
Share-based compensation expenses
30
146
Retention payments related to business
combinations
—
690
Amortization of intangible assets related
to business combinations
1,041
Non-recurring expenses related to
termination of lease agreement and others
9
Non-GAAP gross profit
$
23,170
$
33,071
Non-GAAP gross margin
79
%
75
%
Reconciliation of Loss from operations
(GAAP) to Non-GAAP operating loss
Three Months Ended March
31,
2021
2022
(In thousands)
Loss from operations
$
(11,551
)
$
(26,181
)
Add:
Share-based compensation expenses
2,882
3,803
Adjustment of fair value of contingent
consideration related to business combinations
—
552
Retention payments related to business
combinations
—
712
Amortization of intangible assets related
to business combinations
—
1,041
Non-recurring expenses related to
termination of lease agreement and others
—
318
Non-GAAP operating loss
$
(8,669
)
$
(19,755
)
Non-GAAP operating margin
(29
) %
(45
) %
Reconciliation of GAAP operating
expenses to non-GAAP operating expenses
Three Months Ended March
31,
2021
2022
(In thousands)
GAAP research and development
$
8,984
$
14,713
Less:
Share-based compensation expenses
1,365
1,209
Non-recurring expenses related to
termination of lease agreement and others
—
23
Non-GAAP research and
development
$
7,619
$
13,481
GAAP sales and marketing
$
19,600
$
30,342
Less:
Share-based compensation expenses
626
1,373
Retention payments related to business
combinations
—
22
Non-recurring expenses related to
termination of lease agreement and others
—
271
Non-GAAP sales and marketing
$
18,974
$
28,676
GAAP general and administrative
$
6,107
$
12,311
Less:
Share-based compensation expenses
861
1,075
Adjustment of fair value of contingent
consideration related to business combinations
—
552
Non-recurring expenses related to
termination of lease agreement and others
—
15
Non-GAAP general and
administrative
$
5,246
$
10,669
Reconciliation of Net cash used in
operating activities (GAAP) to Free cash flow and normalized free
cash flow
Three Months Ended March
31,
2021
2022
(In thousands)
Net cash provided by operating
activities
$
2,329
$
914
Purchases of property and equipment,
net
(451
)
(4,784
)
Capitalized internal use software
costs
—
(380
)
Free cash flow
$
1,878
$
(4,250
)
Purchases of property and equipment
related to the new headquarters
—
4,456
Payments received in connection with
purchases of property and equipment
—
(4,169
)
Normalized free cash flow
$
1,878
$
(3,963
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510006185/en/
Press Contact: Richard
Krueger Similarweb press@similarweb.com | Investor Contact: Raymond "RJ" Jones
Similarweb ir@similarweb.com
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