Second quarter 2022 revenue grew 46%
year-over-year to $47.6 million
NRR for $100K+ ARR customers remains strong at
127%
Remaining performance obligations increased 53%
year-over-year to $160.5 million
Similarweb Ltd. (NYSE: SMWB) ("Similarweb" or the "Company"), a
leading digital intelligence company, today announced financial
results for its second quarter ended June 30, 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 performed well in the second quarter as our momentum drove
results,” said Or Offer, Founder and CEO of Similarweb. “In times
of uncertainty, our customers seek out the critical insights that
we provide, which help them win in their markets. We believe we are
well-positioned to lead in these challenging times, and we remain
focused on helping our customers successfully navigate through what
lies ahead."
Second Quarter 2022 Financial
Highlights
- Total revenue was $47.6 million, an increase of 46% compared to
$32.5 million for the second quarter of 2021.
- GAAP operating loss was $(26.5) million, compared to $(14.9)
million for the second quarter of 2021.
- GAAP net loss per share was $(0.29), compared to $(0.33) for
the second quarter of 2021.
- Non-GAAP operating loss was $(19.8) million, compared to
$(10.8) million for the second quarter of 2021.
- Non-GAAP operating loss per share was $(0.26), compared to
$(0.23) for the second quarter of 2021.
- Cash and cash equivalents totaled $93.9 million as of June 30,
2022, compared to $128.9 million as of December 31, 2021.
- Net cash used in operating activities was $(13.1) million,
compared to $(2.6) for the second quarter of 2021.
- Free cash flow was $(28.9) million, compared to $(3.3) million
for the second quarter of 2021.
- Normalized free cash flow was $(18.9) million, compared to
$(3.3) million for the second quarter of 2021.
Recent Business
Highlights
- Grew number of customers to 3,849 as of June 30, 2022, an
increase of 25% compared to June 30, 2021.
- Grew average annual revenue per customer to approximately
$50,700 in the second quarter of 2022, an increase of 16% compared
to the second quarter of 2021.
- Grew number of customers with ARR of $100,000 or more to 309 as
of June 30, 2022, an increase of 40% compared to June 30,
2021.
- Customers with ARR of $100,000 or more contributed 53% of the
total ARR as of June 30, 2022, compared to 49% as of June 30,
2021.
- Dollar-based net retention rate for customers with ARR of
$100,000 or more increased to 127% in the second quarter of 2022 as
compared to 118% in the second quarter of 2021.
- Overall dollar-based net retention rate increased to 115% in
the second quarter of 2022 as compared to 106% in the second
quarter of 2021.
- Multi-year subscriptions now comprise 36% of our overall ARR as
of June 30, 2022, as compared to 28% as of June 30, 2021.
- Remaining performance obligations increased 53% year-over-year,
to $160.5 million as of June 30, 2022, as compared to $105.0
million as of June 30, 2021.
Financial Outlook
“We are pleased with our results,” said Jason Schwartz, Chief
Financial Officer of Similarweb. “Our disciplined execution in this
challenging environment of rising global macroeconomic uncertainty
continues to drive our performance. We are maintaining our revenue
outlook and improving our operating loss outlook for the full year
2022.”
- Q3 2022 Guidance
- Total revenue between $48.8 million and $49.2 million,
representing 38% growth year-over-year at the mid-point of the
range.
- Non-GAAP gross margin anticipated in the range of 74% to
75%.
- Non-GAAP operating loss between $(20.9) million and $(21.5)
million.
- 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 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).
- Non-GAAP operating loss between $(80) million and $(81)
million, which reflects increased investment in research and
development and in our go-to-market which is designed to support
our continued growth plans, as well as improved operating
efficiency.
The Company’s third quarter and full year 2022 financial outlook
is based upon a number of assumptions and trends observed from
prior quarters 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, such as
share-based compensation. 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, August 10, 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 third 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, including as
result of macroeconomic factors, (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 (ix) 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 represent 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
Sheets U.S. dollars in thousands (except share and per
share data)
December 31,
June 30,
2021
2022
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
128,879
$
93,925
Restricted deposits
11,474
11,368
Accounts receivable, net
31,017
26,915
Deferred contract costs
8,470
10,153
Prepaid expenses and other current
assets
7,847
9,569
Total current assets
187,687
151,930
Property and equipment, net
6,356
27,388
Deferred contract costs, non-current
9,208
9,883
Operating lease right-of-use assets
—
44,149
Intangible assets, net
11,617
11,964
Goodwill
11,318
13,366
Other non-current assets
813
898
Total assets
$
226,999
$
259,578
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable
$
11,303
$
17,580
Payroll and benefit related
liabilities
17,969
20,548
Deferred revenues
76,676
90,180
Other payables and accrued expenses
28,199
30,498
Operating lease liabilities
—
8,880
Total current liabilities
134,147
167,686
Deferred revenues, non-current
2,074
1,267
Operating lease liabilities,
non-current
—
39,964
Deferred rent
2,602
—
Other long-term liabilities
3,262
3,184
Total liabilities
142,085
212,101
Shareholders' equity
Ordinary Shares, NIS 0.01 par value
500,000,000 shares authorized as of December 31, 2021 and June 30,
2022 (unaudited); 74,847,609 and 75,929,758 shares issued as of
December 31, 2021 and June 30, 2022 (unaudited); 74,845,441 and
75,927,590 outstanding as of December 31, 2021 and June 30, 2022
(unaudited), respectively
205
208
Additional paid-in capital
324,614
336,172
Accumulated other comprehensive income
160
(1,168
)
Accumulated deficit
(240,065
)
(287,735
)
Total shareholders' equity
84,914
47,477
Total liabilities and shareholders'
equity
$
226,999
$
259,578
Similarweb
Ltd. Consolidated Statements of
Comprehensive Income (Loss) U.S. dollars in thousands
(except share and per share data)
Six months Ended June
30,
Three Months Ended June
30,
2021
2022
2021
2022
(Unaudited)
(Unaudited)
Revenues
$
61,920
$
91,866
$
32,507
$
47,586
Cost of revenues
13,266
27,099
6,993
14,004
Gross profit
48,654
64,767
25,514
33,582
Operating expenses:
Research and development
18,678
30,771
9,694
16,058
Sales and marketing
41,712
62,488
22,112
32,146
General and administrative
14,747
24,155
8,640
11,844
Total operating expenses
75,137
117,414
40,446
60,048
Loss from operations
(26,483
)
(52,647
)
(14,932
)
(26,466
)
Finance (expenses) income, net
(864
)
5,423
(517
)
4,601
Loss before income taxes
(27,347
)
(47,224
)
(15,449
)
(21,865
)
Provision for income taxes
488
446
272
196
Net loss
$
(27,835
)
$
(47,670
)
$
(15,721
)
$
(22,061
)
Net loss per share attributable to
ordinary shareholders, basic and diluted
$
(0.88
)
$
(0.63
)
$
(0.33
)
$
(0.29
)
Weighted-average shares used in computing
net loss per share attributable to ordinary shareholders, basic and
diluted
31,452,977
75,350,079
47,265,792
75,661,037
Net loss
(27,835
)
(47,670
)
(15,721
)
(22,061
)
Other comprehensive (loss)
Change in unrealized (loss) gain on
cashflow hedges
(69
)
(1,328
)
191
(1,414
)
Total other comprehensive (loss) income,
net of tax
(69
)
(1,328
)
191
(1,414
)
Total comprehensive loss
$
(27,904
)
$
(48,998
)
$
(15,530
)
$
(23,475
)
Share-based compensation costs included above:
U.S. dollars in thousands
Six months Ended
June 30,
Three Months Ended
June 30,
2021
2022
2021
2022
(in thousands)
(in thousands)
Cost of revenues
$
66
$
320
$
36
$
174
Research and development
2,041
2,631
676
1,422
Sales and marketing
1,338
3,161
712
1,788
General and administrative
1,682
2,454
821
1,379
Total
$
5,127
$
8,566
$
2,245
$
4,763
Similarweb
Ltd. Consolidated Statements of
Cash Flows U.S. dollars in thousands
Six months Ended June
30,
Three Months Ended June
30,
2021
2022
2021
2022
(Unaudited)
(Unaudited)
Cash flows from operating
activities:
Net loss
$
(27,835
)
$
(47,670
)
$
(15,721
)
$
(22,061
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,055
5,758
535
2,709
Finance (income) expense
(92
)
1,137
(241
)
906
Unrealized (gain) loss from hedging future
transactions
(22
)
347
53
343
Share-based compensation
5,127
8,566
2,245
4,763
Gain on sale of equipment
—
(127
)
—
(127
)
Provision for accrued interest on Credit
Facility
(53
)
—
—
—
Changes in operating assets and
liabilities:
Operating lease right-of-use assets and
liabilities, net
—
2,095
—
(1,082
)
Decrease in accounts receivable, net
5,414
4,333
4,489
3,847
Increase in deferred contract costs
(2,525
)
(2,358
)
(1,407
)
(591
)
(Increase) decrease in prepaid expenses
and other current assets
(216
)
(379
)
24
(1,483
)
Decrease (increase) in other non-current
assets
70
(85
)
1,357
(85
)
Increase (decrease) in accounts
payable
3,951
1,402
1,962
(92
)
Increase (decrease) in deferred
revenue
11,836
12,333
2,388
(185
)
Decrease in deferred rent
(227
)
—
(106
)
—
Increase (decrease) in other long-term
liabilities
356
(428
)
215
(366
)
Increase in other payables and accrued
expenses
2,497
2,940
1,601
454
Net cash used in operating activities
(664
)
(12,136
)
(2,606
)
(13,050
)
Cash flows from investing
activities:
Purchases of property and equipment,
net
(1,020
)
(19,620
)
(569
)
(14,836
)
Capitalized internal-use software
costs
(113
)
(1,375
)
(113
)
(995
)
(Increase) decrease in restricted
deposits
(511
)
106
(23
)
94
Decrease in short-term investments
30,000
—
20,025
—
Payment in relation to business
combinations (Schedule A)
(500
)
(3,787
)
(500
)
(3,787
)
Acquisitions of intangible assets
(300
)
—
(300
)
—
Net cash provided by (used in) investing
activities
27,556
(24,676
)
18,520
(19,524
)
Cash flows from financing
activities:
Proceeds from exercise of share
options
428
2,995
90
2,386
Borrowings under Credit Facility
30,000
—
—
—
Repayment of Credit Facility
(56,800
)
—
(30,000
)
—
Proceeds from initial public offering, net
of underwriting fees and commissions and other issuance costs
152,411
—
152,411
—
Net cash provided by financing
activities
126,039
2,995
122,501
2,386
Effect of exchange rates on cash and cash
equivalents
92
(1,137
)
241
(906
)
Net increase (decrease) in cash and cash
equivalents
153,023
(34,954
)
138,656
(31,094
)
Cash and cash equivalents, beginning of
period
23,943
128,879
38,310
125,019
Cash and cash equivalents, end of
period
$
176,966
$
93,925
$
176,966
$
93,925
Supplemental disclosure of cash flow
information:
Interest paid (received)
$
528
$
(16
)
$
137
$
1
Taxes paid
$
254
$
241
$
120
$
181
Supplemental disclosure of non-cash
operating, investing and financing activities:
Offering costs incurred during the period
included in accounts payable and accrued expenses
$
1,745
$
—
$
1,745
$
—
Additions to operating lease right-of-use
assets and liabilities
$
—
$
8,978
$
—
$
4,699
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
$
—
$
3,454
$
—
$
(7,088
)
Schedule A : Business
combinations
Working capital (deficit), net (excluding
cash and cash equivalents )
(668
)
Property, plant and equipment
43
Goodwill and other intangible assets
4,565
Deferred taxes, net
(153
)
$
3,787
Reconciliation of Non-GAAP Financial
Measures to the Most Directly Comparable GAAP Financial
Measures
Reconciliation of GAAP gross profit to non-GAAP gross
profit
Six months Ended
June 30,
Three Months Ended
June 30,
2021
2022
2021
2022
(In thousands)
(In thousands)
GAAP gross profit
$
48,654
$
64,767
$
25,514
$
33,582
Add:
Share-based compensation expenses
66
320
36
174
Retention payments related to business
combinations
—
1,145
—
455
Amortization of intangible assets related
to business combinations
—
2,151
—
1,110
Non-recurring expenses related to
termination of lease agreement and others
—
35
—
26
Non-GAAP gross profit
48,720
68,418
25,550
35,347
Non-GAAP gross margin
79
%
74
%
79
%
74
%
Reconciliation of Loss from operations (GAAP) to Non-GAAP
operating loss
Six months Ended June
30,
Three Months Ended June
30,
2021
2022
2021
2022
(In thousands)
(In thousands)
Loss from operations
$
(26,483
)
$
(52,647
)
$
(14,932
)
$
(26,466
)
Add:
Share-based compensation expenses
5,127
8,566
2,245
4,763
Retention payments related to business
combinations
696
1,254
696
542
Amortization of intangible assets related
to business combinations
—
2,170
—
1,129
Adjustment of fair value of contingent
consideration related to business combinations
—
682
—
130
Non-recurring expenses related to
termination of lease agreement and others
—
559
—
241
Non-recurring fees related to initial
public offering
1,214
—
1,214
$
—
Capital gain related to sale of operating
equipment
—
(127
)
—
(127
)
Non-GAAP operating loss
$
(19,446
)
$
(39,543
)
$
(10,777
)
$
(19,788
)
Non-GAAP operating margin
(31
) %
(43
) %
(33
) %
(42
) %
Reconciliation of GAAP operating expenses to non-GAAP
operating expenses
Six months Ended
June 30,
Three Months Ended
June 30,
2021
2022
2021
2022
(In thousands)
(In thousands)
GAAP research and development
$
18,678
$
30,771
$
9,694
$
16,058
Less:
Share-based compensation expenses
2,041
2,631
676
1,422
Retention payments related to business
combinations
696
—
696
—
Non-recurring expenses related to
termination of lease agreement and others
—
87
—
64
Non-GAAP research and
development
$
15,941
$
28,053
$
8,322
$
14,572
GAAP sales and marketing
$
41,712
$
62,488
$
22,112
$
32,146
Less:
Share-based compensation expenses
1,338
3,161
712
1,788
Retention payments related to business
combinations
—
109
—
87
Amortization of intangible assets related
to business combinations
—
19
—
19
Non-recurring expenses related to
termination of lease agreement and others
—
381
—
110
Non-GAAP sales and marketing
$
40,374
$
58,818
$
21,400
$
30,142
GAAP general and administrative
$
14,747
$
24,155
$
8,640
$
11,844
Less:
Share-based compensation expenses
1,682
2,454
821
1,379
Adjustment of fair value of contingent
consideration related to business combinations
—
682
—
130
Non-recurring fees related to initial
public offering
1,214
—
1,214
—
Non-recurring expenses related to
termination of lease agreement and others
—
56
—
41
Capital gain related to sale of operating
equipment
—
(127
)
—
(127
)
Non-GAAP general and
administrative
$
11,851
$
21,090
$
6,605
$
10,421
Reconciliation of Net cash used in operating activities
(GAAP) to Free cash flow and Normalized free cash flow
Six months Ended June
30,
Three Months Ended June
30,
2021
2022
2021
2022
(In thousands)
(In thousands)
Net cash used in operating activities
$
(664
)
$
(12,136
)
$
(2,606
)
$
(13,050
)
Purchases of property and equipment,
net
(1,020
)
(19,620
)
(569
)
(14,836
)
Capitalized internal use software
costs
(113
)
(1,375
)
(113
)
(995
)
Free cash flow
$
(1,797
)
$
(33,131
)
$
(3,288
)
$
(28,881
)
Purchases of property and equipment
related to the new headquarters
—
18,279
—
13,823
Payments received in connection with
purchases of property and equipment
—
(8,017
)
—
(3,848
)
Normalized free cash flow
$
(1,797
)
$
(22,869
)
$
(3,288
)
$
(18,906
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220809005934/en/
Press: Richard Krueger
Similarweb press@similarweb.com
Investors: Raymond "RJ"
Jones Similarweb ir@similarweb.com
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