SimilarWeb Ltd. Q4 FY2024 earnings call

• Revenue for 2024 was nearly $250M, up 15% Y/Y; Q4 revenue up 16% Y/Y.
• NRR was 101%, with over $100k ARR customers having an NRR of 112%.
• Customer base grew 17% Y/Y to over 5,500 ARR customers.
• Signed 15 7-digit contract value customers in Q4.
• Secured 2 new customer relationships in the financial sector: S&P Global and Bloomberg.
• Delivered first full year of non-GAAP operating profit and free cash flow; achieved Rule of 26 performance in 2024.
• Invested in R&D and go-to-market teams to capitalize on AI opportunities.
• Had over 10M monthly visitors to website and over 120M users in 2024.

Revenue for the year of nearly $250 million was up 15% year-over-year and for Q4 was up 16% year-over-year. Revenue from the $100,000 ARR customer segment was 61% of overall ARR. The customer base grew 17% year-over-year, ending with more than 5,500 ARR customers. Overall NRR was 101%, and for the over $100,000 ARR customer, the NRR was 112%. In Q4, 15 customer contracts each of 7-digit contract value were signed.

• 2025 full-year revenue expected in the range of $285 million to $288 million, representing 15% year-over-year growth at the midpoint.
• Q1 2025 revenue expected in the range of $66 million to $66.5 million.
• 2025 operating profit expected between $1 million and $4 million; Q1 2025 non-GAAP operating loss expected $1 million to $1.5 million.
• Increased spending on go-to-market and R&D due to AI opportunities.

• FX headwinds impacting revenue and guidance.
• Execution softness in Q4 due to managerial changes and low performance in some areas.

Q: Surinder Thind asks about incremental spend, how much towards go-to-market and R&D, cadence of hiring.

A: Or says majority for go-to-market, some R&D, and FX impact; mentions cadence related to ramping up.

Q: Ryan MacWilliams asks about Q4 revenue vs expectations, FX impact.

A: Jason says FX headwinds built into guide, around 1-2% run rate; pleased with Q4 performance.

Q: Arjun Bhatia asks about AI investments, product side changes.

A: Or expands on investing in data collection, forecasting, and platform changes for Gen AI.

Q: Luke Horton asks about gross margin decline, Bloomberg deal.

A: Jason says due to Gen AI data investment and new data sets; Or explains Bloomberg deal is a small part of capabilities.

Q: Jason Helfstein asks about payback on investments, target margins.

A: Or says confident in demand, focusing on growth while maintaining profitability, expecting payback in second half of 2025.

Q: Scott Berg asks about Q4 execution softness, timing of normalized sales cadence.

A: Or says improvement with new CRO, hiring, and seeing better performance in Q1; Jason confirms acceleration in back end of year.

Q: Adam Hotchkiss asks about brands navigating consumer behavior shifts, LLM monetization.

A: Or talks about brands needing data on chatbot impact; LLM market is small, but they need Similarweb's data.

Q: Patrick Walravens asks about Q4 execution softness, reason for investment.

A: Or says Q4 was okay, softness due to managerial changes, now improving with new hires.

Q: Ashley Kim asks about 7-figure customer contracts, growth vs new lands, AI related.

A: Or says majority were expansions, multiyear book of business at 50%, ramping up sales team.