Similarweb Ltd. Q3 FY2025 earnings call

• Revenue increased 11% YOY to $72 million, customer base grew 15% YOY to over 6,000 ARR customers. • Eighth quarter of positive free cash flow, reiterating 2025 revenue guidance and raising profit guidance. • Gen AI data and solutions revenue expanding rapidly, with Gen AI Intelligence ARR over $1M since April launch. • App Intelligence ARR over $10M with over 580 customers using it. • Launched Similarweb MCP server in September to deliver data into AI agents/workflows. • Sales team expanded with 30% more sellers than Q3 2024, improving yield. • New CFO Ran Vered to join in December.

Revenue increased by 11% year-over-year to $72 million. Customer base grew 15% year-over-year to more than 6,000 ARR customers at quarter end. 58% of ARR is contracted under multiyear contracts, up from 45% last year. Generated $3 million of normalized free cash flow in the quarter, a 4% free cash flow margin and an eighth consecutive quarter of positive free cash flow. Remaining performance obligations (RPO) totaled $268 million at the end of Q3, up 26% year-over-year. NRR was 98% across all customers and 105% for customers with over $100,000 of ARR, with GRR improving sequentially.

• Reiterating 2025 revenue guidance of $285 million to $288 million, representing 15% YOY growth at midpoint. • Raising non-GAAP operating profit guidance to between $8.5 million and $9.5 million.

• Uncertainties that may cause actual results to differ from expectations as per forward-looking statements.

Q: Talk about gross revenue retention A: NRR trend affected by expansion from onetime tests converting to ARR deals Q: Evolution of LLM training data partnerships A: Long process, but confident most engagements will convert to ARR deals Q: App Intelligence customer origin A: Majority cross-sell from existing customer base Q: Sequential revenue add A: Execution good, some deals big and hard to forecast Q: ARPU decline A: Impacted by customer count addition, expected to fluctuate Q: Sales rep ramp A: Improvement in go-to-market, higher salespeople closing deals Q: Revenue guidance and beat A: Focus on margin optimization, disciplined execution Q: Margin and cost drivers A: Combination of AI tailwind, optimizing go-to-market, and letting go of less successful sales reps Q: Gen AI customer conversations A: Excitement about Gen AI opportunities, interest from model generators and corporates Q: Customer mix and competition A: No mix shift between SMB and enterprise; confident in Gen AI leadership with unique data and client relationships Q: 4Q revenue guidance band A: Due to strong pipeline and big deals, keeping range to reflect materialization Q: RPO and contract duration A: Strong multiyear commitments, 58% of ARR under multiyear contracts Q: Sales and marketing expense A: Ramp-up of salespeople with overhire, then optimizing to retain successful ones Q: Big deals and next year guidance A: Big deals in Gen AI data for LLM companies; next year guidance to be given in next quarter