FORM 6-K
___________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2023
Commission File Number: 001-40394
___________________________
Similarweb Ltd.
(Translation of registrant’s name into English)
___________________________
33 Yitzhak Rabin Rd.,
Givatayim 5348303, Israel
(Address of principal executive offices)
___________________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [ X ] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]













EXHIBIT INDEX

On August 9, 2023, Similarweb Ltd. will hold a conference call regarding its financial results for the second quarter ended June 30, 2023. A copy of the related press release is furnished as Exhibit 99.1 hereto.

Exhibit 99.1, other than the portions of Exhibit 99.1 under the caption "Financial Outlook", is hereby expressly incorporated by reference into the registrant’s registration statements on Form S-8 filed with the Securities and Exchange Commission on March 23, 2023 (File no. 333-270793), on April 15, 2022 (File no. 333-264307) and on May 20, 2021 (File No. 333-256324).



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Similarweb Ltd.
Date: August 8, 2023By:/s/ Jason Schwartz
Jason Schwartz
Chief Financial Officer

Exhibit 99.1

SIMILARWEB ANNOUNCES SECOND QUARTER 2023 RESULTS
Non-GAAP operating margin improved by more than 35 percentage points

TEL AVIV, ISRAEL -- August 8, 2023 -- Similarweb Ltd. (NYSE: SMWB) ("Similarweb" or the "Company"), a leading digital data and analytics company powering critical business decisions, today announced financial results for its second quarter ended June 30, 2023. 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 delivered another quarter of revenue growth and expanded our operating margin significantly compared to last year at this time,” said Or Offer, Co-Founder and CEO of Similarweb. “We now help over 4,300 businesses win their market. Our customers tell us that our unique data and actionable insights are critical to their success.” Offer added, “We recently announced a new milestone for the Company with the launch of SimilarAskTM in beta release. SimilarAsk is the first digital intelligence generative AI assistant of its kind that answers questions by accessing Similarweb Digital Data, which we believe unlocks tremendous value potential for us."

Second Quarter 2023 Financial Highlights
•Total revenue was $53.7 million, an increase of 13% compared to $47.6 million for the second quarter of 2022.
•GAAP operating loss was $(9.8) million or (18)% of revenue, compared to $(26.5) million or (55.6)% of revenue for the second quarter of 2022.
•GAAP net loss per share was $(0.12), compared to $(0.29) for the second quarter of 2022.
•Non-GAAP operating loss was $(3.5) million or (6)% of revenue, compared to $(19.8) million or (42)% of revenue for the second quarter of 2022.
•Non-GAAP operating loss per share was $(0.04), compared to $(0.26) for the second quarter of 2022.
Exhibit 99.1
•Cash and cash equivalents totalled $73.0 million as of June 30, 2023, compared to $77.8 million as of December 31, 2022.
•Net cash used in operating activities was $(2.3) million, compared to $(13.1) million for the second quarter of 2022.
•Free cash flow was $(2.8) million, compared to $(28.9) million for the second quarter of 2022.
•Normalized free cash flow was $(2.7) million, compared to $(18.9) million for the second quarter of 2022.
Recent Business Highlights
•Grew number of customers to 4,301 as of June 30, 2023, an increase of 12% compared to June 30, 2022.
•Annual revenue per customer was approximately $50,600 in the second quarter of 2023, as compared to $50,700 in the second quarter of 2022.
•Grew number of customers with ARR of $100,000 or more to 356, an increase of 15% compared to June 30, 2022.
•Customers with ARR of $100,000 or more contributed 55% of the total ARR as of June 30, 2023, compared to 53% as of June 30, 2022.
•Dollar-based net retention rate for customers with ARR of $100,000 or more was 109% in the second quarter of 2023 as compared to 127% in the second quarter of 2022.
•Overall dollar-based net retention rate was 101% in the second quarter of 2023 as compared to 115% in the second quarter of 2022.
•Multi-year subscriptions now comprise 42% of our overall ARR as of June 30, 2023, as compared to 36% as of June 30, 2022.
•Remaining performance obligations increased 9% year-over-year, to $174.8 million as of June 30, 2023, as compared to $160.5 million as of June 30, 2022.

Exhibit 99.1
Financial Outlook
“We made progress towards our goal of generating sustained positive free cash flow quarterly by the fourth quarter of 2023,” said Jason Schwartz, Chief Financial Officer of Similarweb. “We continue to focus relentlessly on improving our operating efficiency in this challenging demand environment.”
•Q3 2023 Guidance
◦Total revenue estimated between $54.1 million and $54.5 million, representing approximately 9% growth year over year at the mid-point of the range.
◦Non-GAAP operating loss estimated between $(2.8) million and $(3.2) million.
•FY 2023 Guidance
◦Total revenue estimated between $216.0 million and $218.0 million, representing approximately 12% growth year over year at the mid-point of the range.
◦Non-GAAP operating loss estimated between $(16.0) million and $(17.0) million.
◦We expect to reach sustained positive free cash flow in the fourth quarter of 2023.

The Company’s third quarter and full year 2023 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 of 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.


Exhibit 99.1

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 9, 2023. 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 (888) 428-7458 toll-free and at (862) 298-0702 internationally.

About Similarweb: As a trusted platform for understanding online behavior, millions of people rely on Similarweb Digital Data and 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 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 2023 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 number of known and unknown risks, uncertainties, other factors and assumptions that are beyond our control. Such risks and uncertainties include, without limitation, risks and uncertainties associated with: (i) our expectations regarding our revenue, expenses and other operating results; (ii) our ability to acquire new customers and successfully retain existing customers; (iii) our ability to increase usage of our solutions and upsell and cross-sell additional solutions; (iv) our ability to achieve or sustain profitability; (v) anticipated trends, growth rates, rising interest rates, rising global inflation and current macroeconomic conditions, and challenges in our business and in the markets in which we operate; (vi) future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; (vii) the costs and success of our sales and marketing efforts and our ability to promote our brand; (viii) our reliance on key personnel and our ability to identify, recruit and retain skilled personnel; (ix) our ability to effectively manage our growth, including continued international expansion; (x) our reliance
Exhibit 99.1
on certain third party platforms and sources for the collection of data necessary for our solutions; (xi) our ability to protect our intellectual property rights and any costs associated therewith; (xii) our ability to identify and complete acquisitions that complement and expand our reach and platform; (xiii) our ability to comply or remain in compliance with laws and regulations that currently apply or become applicable to our business, including in Israel, the United States, the European Union, the United Kingdom and other jurisdictions where we elect to do business; (xiv) our ability to compete effectively with existing competitors and new market entrants; and (xv) the growth rates of the markets in which we compete.

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 23, 2023, 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.



Exhibit 99.1
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, payments received in connection with these capital investments and deferred payments related to business combinations. Non-GAAP operating income (loss), non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating margin, 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.

Exhibit 99.1


Press Contact:
David Carr
Similarweb
press@similarweb.com

Investor Contact:
Raymond "RJ" Jones
Similarweb
raymond.jones@similarweb.com
Exhibit 99.1
Similarweb Ltd.
Consolidated Balance Sheets
U.S. dollars in thousands (except share and per share data)
December 31,June 30,
20222023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$77,810 $72,980 
Restricted deposits9,814 9,901 
Accounts receivable, net38,141 32,508 
Deferred contract costs9,789 8,997 
Prepaid expenses and other current assets6,628 6,179 
Total current assets142,182 130,565 
Property and equipment, net31,823 30,944 
Deferred contract costs, non-current8,348 6,550 
Operating lease right-of-use assets40,823 37,901 
Intangible assets, net9,561 7,158 
Goodwill12,867 12,867 
Other non-current assets441 24 
Total assets$246,045 $226,009 
Liabilities and Shareholders' equity
Current liabilities:
Borrowings under Credit Facility$25,000 $25,000 
Accounts payable7,144 7,412 
Payroll and benefit related liabilities18,512 15,564 
Deferred revenue93,195 96,778 
Other payables and accrued expenses27,990 23,045 
Operating lease liabilities9,091 7,749 
Total current liabilities180,932 175,548 
Deferred revenue, non-current974 332 
Operating lease liabilities, non-current40,075 36,080 
Other long-term liabilities2,113 1,794 
Total liabilities224,094 213,754 
Shareholders' equity
 Ordinary Shares, NIS 0.01 par value 500,000,000 shares authorized as of December 31, 2022 and June 30, 2023 (unaudited), 76,435,940 and 77,969,669 shares issued as of December 31, 2022 and June 30, 2023 (unaudited), 76,433,772 and 77,967,501 outstanding as of December 31, 2022 and June 30, 2023 (unaudited), respectively;
210 214 
Additional paid-in capital345,834 357,493 
Accumulated other comprehensive income (loss)(367)(599)
Accumulated deficit(323,726)(344,853)
Total shareholders' equity21,951 12,255 
Total liabilities and shareholders' equity$246,045 226,009 
    
Exhibit 99.1
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,
2022202320222023
(Unaudited)(Unaudited)
Revenue$91,866 $106,431 $47,586 $53,681 
Cost of revenue27,099 24,651 14,004 12,575 
Gross profit64,767 81,780 33,582 41,106 
Operating expenses:
Research and development30,771 28,253 16,058 13,902 
Sales and marketing62,488 55,088 32,146 26,422 
General and administrative24,155 21,276 11,844 10,539 
Total operating expenses117,414 104,617 60,048 50,863 
Loss from operations(52,647)(22,837)(26,466)(9,757)
Finance income, net5,423 1,965 4,601 610 
Loss before income taxes(47,224)(20,872)(21,865)(9,147)
Provision for income taxes446 255 196 146 
Net loss$(47,670)$(21,127)$(22,061)$(9,293)
Net loss per share attributable to ordinary shareholders, basic and diluted$(0.63)$(0.27)$(0.29)$(0.12)
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted75,350,079 77,222,490 75,661,037 77,579,279 
Net loss(47,670)(21,127)(22,061)(9,293)
Other comprehensive (loss) income, net of tax
Change in unrealized (loss) gain on cashflow hedges(1,328)(232)(1,414)45 
Total other comprehensive (loss) income, net of tax(1,328)(232)(1,414)45 
Total comprehensive loss$(48,998)$(21,359)$(23,475)$(9,248)
Exhibit 99.1
Share-based compensation costs included above:
U.S. dollars in thousands
Six Months Ended June 30,Three Months Ended June 30,
2022202320222023
(Unaudited)(Unaudited)
Cost of revenue$320 $327 $174 $172 
Research and development2,631 2,850 1,422 1,460 
Sales and marketing3,161 2,730 1,788 1,356 
General and administrative2,454 3,191 1,379 1,701 
Total$8,566 $9,098 $4,763 $4,689 
Exhibit 99.1
Similarweb Ltd.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
Six Months Ended June 30,Three Months Ended June 30,
2022202320222023
(Unaudited)(Unaudited)
Cash flows from operating activities:
Net loss$(47,670)$(21,127)$(22,061)$(9,293)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization5,758 5,112 2,709 2,572 
Finance expense1,137 869 906 662 
Unrealized loss from hedging future transactions347 4 343 31 
Share-based compensation8,566 9,098 4,763 4,689 
(Gain) loss from sale of equipment(127)1 (127)(1)
Changes in operating assets and liabilities:
Change in operating lease right-of-use assets and liabilities, net2,095 (2,415)(1,082)(1,190)
Decrease in accounts receivable, net4,333 5,633 3,847 4,989 
(Increase) decrease in deferred contract costs(2,358)2,590 (591)1,141 
Increase in other current assets(379)(880)(1,483)(1,130)
(Increase) decrease in other non-current assets(85)417 (85)(14)
Increase (decrease) in accounts payable1,402 343 (92)1,402 
Increase (decrease) in deferred revenue12,333 2,941 (185)(4,302)
Decrease in other non-current liabilities(428)(319)(366)(225)
Increase (decrease) in other liabilities and accrued expenses2,940 (4,246)454 (1,636)
Net cash used in operating activities(12,136)(1,979)(13,050)(2,305)
Cash flows from investing activities:
Purchase of property and equipment, net(19,620)(1,315)(14,836)(183)
Capitalized internal-use software costs(1,375)(707)(995)(274)
Decrease (increase) in restricted deposits106 (87)94 (43)
Payment in relation to business combinations(3,787)— (3,787)— 
Net cash used in investing activities(24,676)(2,109)(19,524)(500)
Cash flows from financing activities:
Proceeds from exercise of stock options1,761 1,830 1,152 438 
Exhibit 99.1
Proceeds from employee share purchase plan1,234 660 1,234 660 
Payments of contingent consideration, net— (2,363)— — 
Net cash provided by financing activities2,995 127 2,386 1,098 
Effect of exchange rates on cash and cash equivalents(1,137)(869)(906)(662)
Net decrease in cash and cash equivalents(34,954)(4,830)(31,094)(2,369)
Cash and cash equivalents, beginning of period128,879 77,810 125,019 75,349 
Cash and cash equivalents, end of period$93,925 $72,980 $93,925 $72,980 
Supplemental disclosure of cash flow information:
Interest (received) paid, net$(16)$(40)$1 $(46)
Taxes paid$241 $1,613 $181 $1,557 
Supplemental disclosure of non-cash financing activities:
Additions to operating lease right-of-use assets and liabilities$8,978 $780 $4,699 $610 
Deferred proceeds from exercise of share options included in other current assets$— $42 $(479)$26 
Deferred costs of property and equipment incurred during the period included in accounts payable$3,454 $41 $(7,088)$(80)
Deferred payments in relation to business combinations held in escrow$— $1,269 $— $— 
Schedule A : Business combinations
Working capital (deficit), net (excluding cash and cash equivalents)(668)— 
Cash refund to be received resulting from adjustment to working capital
Property, plant and equipment43 — 
Goodwill and other intangible assets4,565 — 
Deferred taxes, net(153)— 
$3,787 $— 

Exhibit 99.1

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,
2022202320222023
(In thousands)(In thousands)
GAAP gross profit$64,767 $81,780 $33,582 $41,106 
Add:
Share-based compensation expenses320 327 174 172 
Retention payments related to business combinations1,145 306 455 218 
Amortization of intangible assets related to business combinations2,151 2,335 1,110 1,167 
Non-recurring expenses related to termination of lease agreement and others35 — 26 — 
Non-GAAP gross profit$68,418 $84,748 $35,347 $42,663 
Non-GAAP gross margin74 %80 %74 %79 %


Exhibit 99.1
Reconciliation of Loss from operations (GAAP) to Non-GAAP operating loss
Six Months Ended June 30,Three Months Ended June 30,
2022202320222023
(In thousands)(In thousands)
Loss from operations$(52,647)$(22,837)$(26,466)$(9,757)
Add:
Share-based compensation expenses8,566 9,098 4,763 4,689 
Retention payments related to business combinations1,254 687 542 405 
Amortization of intangible assets related to business combinations2,170 2,403 1,129 1,201 
Adjustment of fair value of contingent consideration related to business combinations682 — 130 — 
Non-recurring expenses related to termination of lease agreement and others559 13 241 — 
Capital gain related to sale of operating equipment(127)— (127)— 
Non-GAAP operating loss$(39,543)$(10,636)$(19,788)$(3,462)
Non-GAAP operating margin(43)%(10)%(42)%(6)%
Exhibit 99.1
Reconciliation of GAAP operating expenses to non-GAAP operating expenses
Six Months Ended June 30,Three Months Ended June 30,
2022202320222023
(In thousands)(In thousands)
GAAP research and development$30,771 $28,253 $16,058 $13,902 
Less:
Share-based compensation expenses2,631 2,850 1,422 1,460 
Non-recurring expenses related to termination of lease agreement and others87 — 64 — 
Non-GAAP research and development$28,053 $25,403 $14,572 $12,442 
Non-GAAP research and development margin31 %24 %31 %23 %
GAAP sales and marketing$62,488 $55,088 $32,146 $26,422 
Less:
Share-based compensation expenses3,161 2,730 1,788 1,356 
Retention payments related to business combinations109 381 87 187 
Amortization of intangible assets related to business combinations19 68 19 34 
Non-recurring expenses related to termination of lease agreement and others381 13 110 — 
Non-GAAP sales and marketing$58,818 $51,896 $30,142 $24,845 
Non-GAAP sales and marketing margin64 %49 %63 %46 %
GAAP general and administrative$24,155 $21,276 $11,844 $10,539 
Less:
Share-based compensation expenses2,454 3,191 1,379 1,701 
Adjustment of fair value of contingent consideration related to business combinations682 — 130 — 
Non-recurring expenses related to termination of lease agreement and others56 — 41 — 
Capital gain related to sale of operating equipment(127)— (127)— 
Non-GAAP general and administrative$21,090 $18,085 $10,421 $8,838 
Non-GAAP general and administrative margin23 %17 %22 %16 %

Exhibit 99.1
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,
2022202320222023
(In thousands)(In thousands)
Net cash used in operating activities$(12,136)$(1,979)$(13,050)$(2,305)
Purchases of property and equipment, net(19,620)(1,315)(14,836)(183)
Capitalized internal use software costs(1,375)(707)(995)(274)
Free cash flow$(33,131)$(4,001)$(28,881)$(2,762)
Purchases of property and equipment related to the new headquarters18,279 1,100 13,823 52 
Payments received in connection with purchases of property and equipment(8,017)— (3,848)— 
Payments received from escrow in relation to contingent consideration— (380)— — 
Normalized free cash flow$(22,869)$(3,281)$(18,906)$(2,710)



Exhibit 99.2 Dear Shareholders, Our dedication to disciplined execution continued to serve us well during the second quarter of 2023. We delivered an improvement of more than 35 percentage points year-over-year in non-GAAP operating margin. We remain on track to generate sustained positive free cash flow by the end of this year. During the quarter, 25 million unique visitors used our free tools at Similarweb.com, and we are forecasting that more than 100 million unique visitors will use our free tools this year. This is a new record for interest at the top of our marketing funnel and we are encouraged by this signal of our growth potential from our marketing initiatives. We continued to advance our data and our solutions, and to create compelling value for our customers in Q2-23. We are regularly told by our customers that there is no other data with insights like ours available in the market today. Our customers rely on our mission-critical offerings to power data-driven decisions that they make in various aspects of their businesses. Our Business Performance Revenue reached $53.7 million in Q2-23, which landed near the high end of our estimate range, and grew 13% compared to the second quarter of 2022. 1 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 While our revenue grew in line with our expectations in Q2-23, our growth has slowed compared to years past, and reflects a different selling environment. As we have shared in previous shareholder letters, our sales cycles have lengthened versus those in previous years. This change was brought on by businesses preparing to deal with anticipated recessionary pressures and increasing uncertainty. Though demand for our offering has persisted globally, the adoption and expansion rate of our offering has changed to align with new macroeconomic realities and the more disciplined procurement processes that many of these businesses have installed to manage their risks and expenses. We are making swift and agile adjustments to position ourselves and our customers to succeed in these circumstances. Our customer base increased to 4,301 accounts, as of June 30, 2023, representing 12% growth year-over-year (YoY). The average annual revenue per account was approximately $50.6 thousand, similar to the second quarter of 2022 (Q2-22). The sequential flattening trend in average revenue per customer from Q4-22 to Q2-23 reflects continued softness in upselling with existing accounts as we add new customers at entry-level pricing and packaging. 2 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 As our global customer base continued to expand overall in Q2-23, the number of customers who generate more than $100K in ARR grew from 309 as of June 30, 2022, to 356 as of June 30, 2023, representing an increase of 15% YoY. This important customer segment represents 55% of our total ARR, as of June 30, 2023. We achieved an overall net revenue retention (NRR) rate of 101% in Q2-23, and we achieved an NRR rate of 109% for our $100K+ annual recurring revenue (ARR) customer segment. While customer acquisition and logo retention were steady in the second quarter, we saw challenges to expansion within our existing customer base. Some 3 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 customers needed to reduce their spending with us in order to fit their corporate budgets while remaining a Similarweb customer. Our logo retention of our $100,000 customers remains at 98%. Our Strategy At our core, we are a data and analytics company. Our unique data asset, which we call Similarweb Digital Data, consists of our proprietary estimations of the performance of companies, markets, products, consumer behavior and trends in the digital world. Our world-class team of over 200 data scientists, engineers, developers and analysts gathers billions of unrefined data points amounting to up to one percent of online transactions and interactions, and then transforms them into a comprehensive view of the internet across the web and mobile continuum. We deliver Similarweb Digital Data to our customers via Software-as-a-Service (SaaS) solutions, Data-as-a-Service (DaaS), or recurring Advisory Services. Our customers rely on our mission-critical offerings to power data-driven growth decisions that they make in their businesses, mainly to create strategy, acquire customers, or increase monetization. 4 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Our overall strategy consists of three pillars: 1. Establishing, maintaining, and enhancing substantial advantages in digital data and technology innovation 2. Delivering considerable return on investment for our customers through our digital intelligence solutions 3. Executing our go-to-market strategies, catalyzed by smart investments and operational discipline As we executed on our strategy in Q2-23, we made progress in our intelligence solutions. In addition to our Q2-23 results, we focused efforts on an upcoming broad feature release called Similarweb 3.0, which will be brought to market in late Q3-23. Our Digital Research Intelligence solution, which our customers use to understand and grow their digital market share, emphasized data visibility and facilitated our go-to-market motions in Q2-23. First, we created considerable pipeline and press exposure from the release of our flagship report, The State of Ecommerce. The report contributed to Similarweb data and insights being cited in 15,000 articles during Q2-23 in publications such as The New York Times and The Wall Street Journal. Next, we released our price and packaging changes based on meters for segments and industries. Lastly, our pilots and testing of new market research feature add-ons yielded positive indications supporting the upcoming Similarweb 3.0 launch in Q3-23. Our Digital Marketing Intelligence solution, which our customers use to grow user acquisition, focused on data expansion and core product innovation in Q2-23. We advanced our search ads analysis capabilities, which enables users to see the performance metrics of each search ad and evaluate which ads are driving the most impressions for their competitors and market. Next, we expanded our brand protection feature that allows our customers unique visibility to deploy ad spend on Google and constantly monitor their brand. Lastly we enhanced our paid search tracking dashboards and sharing capabilities, which included a release of additional features enabling customers to to visualize a complete picture of the paid search activities, tactics and strategies of their competitors. 5 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Our Sales Intelligence solution, which our customers use to grow their sales pipeline and increase their win rates, focused on user engagement and customer workflows in Q2-23. We improved our contacts offering, which differentiates our solution as a one stop shop for our customers. Additionally, we recently released Sales Signals (in Q3-23) - a new alerting system that allows sales teams to monitor their markets and identify the best opportunities to go after with daily notifications. Our Shopper Intelligence solution, which our customers use to grow their eCommerce sales, focused on data accessibility and timeliness in Q2-23. In order to ensure a more actionable platform, Shopper on-site-search data is now offered at weekly granularity, and as of early Q3-23, also at weekly freshness. Our free offering, My Brand Analytics - an easy-to-use dashboard that visualizes Seller Central data so ecommerce teams can increase sales on Amazon - gained traction during Q2-23. Upon adding demo capabilities to showcase the tool, we received elevated inbound demand immediately. Our Investor Intelligence solution, which our public investor customers use to grow ROI & drive alpha, emphasized expanding access to customers and data accessibility in Q2-23. We increased the number of stocks we cover in our basic, advanced, and premium packages. Also, we launched tier pricing to include both advanced stocks and individual stocks to monetize institutional investors. Beyond advancing our solutions, during Q2-23 we made a significant leap in our capabilities with generative AI. We recently announced the launch of SimilarAsk™ in beta release, which is a digital intelligence AI assistant within our platform that leverages large language models (LLMs). SimilarAsk is designed to answer real questions that users type in free text without having to know how to navigate within our solutions. We are solving one of the hardest problems that every analytics software has - that is to quickly find insights in the data and to take action on them. In the future, we believe that using SimilarAsk with its AI capabilities will be like having a conversation with the world’s most effective and talented market researcher, analyst, strategy consultant, and data scientist combined in one - the AI can give answers to critical business questions instantly. This will accelerate our time to feature development and drive more efficiency in our product development cycle and product adoption. We believe our upside potential from working with AI is high, and we look forward to bringing SimilarAsk into the market. 6 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Our Financial Results When examining our financial results, please note that references to expenses and operating results (other than revenue) are presented both on a GAAP and on a non-GAAP basis below, and that all non-GAAP results are reconciled to the most directly comparable GAAP results in the financial statements exhibits presented at the end of this letter. Our financial results in Q2-23 met our top line and exceeded our bottom line projections. Revisiting our top line results, in Q2-23, we delivered revenues of $53.7 million, reflecting 13% YoY growth driven primarily by an increase in the number of customers. Approximately 99% of our revenue is annual recurring revenue with minimum subscription terms of one year. We continue to increase the number of customers with multi-year subscription terms. As of the end of Q2-23, 42% of our ARR was generated from customers with multi-year subscription commitments, compared to 36% at the same time last year. We continue to believe this is a strong indicator of the long-term durability of our customer relationships and demand for our solutions. Our GAAP gross profit totaled $41.1 million and our non-GAAP gross profit totaled $42.7 million in Q2-23, compared to $33.6 million and $35.3 million in Q2-22, respectively. Non-GAAP gross margin was 79% in Q2-23, versus 74% in Q2-22. GAAP operating expenses decreased to $50.9 million and our non-GAAP operating expenses decreased to $46.1 million in Q2-23, down from $60.0 million and $55.1 million in Q2-22, respectively, largely reflecting our focus on operating efficiency. Non-GAAP operating expenses represented 86% of revenue in Q2-23 as compared to 116% of revenue in Q2-22, exemplifying progress towards achieving our objective of becoming sustained free cash flow positive. Specific components of our second quarter 2023 operating expenses: Our GAAP research and development investment decreased to $13.9 million and our non-GAAP research and development investment decreased to $12.4 million in Q2-23, down from $16.1 million and $14.6 million in Q2-22, respectively. As a percentage of 7 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 revenue, non-GAAP research & development expense was 23% in Q2-23, an improvement of 7 percentage points versus Q2-22. GAAP sales and marketing expenses decreased to $26.4 million and non-GAAP sales and marketing expenses decreased to $24.8 million in Q2-23, down from $32.1 million and $30.1 million in Q2-22, respectively, driven primarily by our efforts to align our resources with our moderating growth trajectory. As a percentage of revenue, non-GAAP sales & marketing expense was 46% in Q2-23, as compared to 63% in Q2-22, an improvement of 17 percentage points. An operating tenet in our model is that our sales and marketing costs are divided with approximately 50% to 55% attributable to new customer acquisition (land), and the remaining 45% to 50% attributable to retention, upselling and cross-selling (expand) of our existing customer base. When analyzing our investment in customer acquisition costs (CAC) for growth efficiency, we track an estimated payback period. This metric has historically averaged between 15 and 16 months on a gross profit basis over the trailing four quarters. Currently, the average payback is ranging between 19 and 20 months, primarily due to the longer sales cycles. Payback from expansion and customer retention costs (CRC) is faster than payback on new customer CAC and contributes meaningfully to our growth efficiency. We continue to invest in customer acquisition to support future growth, as well as in customer retention to drive NRR and to increase the lifetime value of our customers. GAAP general and administrative costs decreased to $10.5 million and our non-GAAP general and administrative costs decreased to $8.8 million in Q2-23, from $11.8 million and $10.4 million in Q2-22, respectively. As a percentage of revenue, non-GAAP general & administrative expense was 16% in Q2-23, an improvement of 5 percentage points compared to Q2-22. Looking at our bottom line, Q2-23 GAAP operating loss was ($9.8) million or (18%) of revenue, compared to ($26.5) million or (56%) of revenue for the second quarter of 2022. Q2-23 non-GAAP operating loss was ($3.5) million or (6%) of revenue, compared to ($19.8) million or (42%) of revenue for the second quarter of 2022. During Q2-23, we achieved excellent operating efficiencies across the business, which drove operating margin improvement year over year. 8 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 We believe that a strong indication of future performance is our deferred revenue, which was $97.1 million at the end of Q2-23, compared to $91.4 million in the same period last year. Our Remaining Performance Obligations (RPO) totaled $174.8 million at the end of Q2-23, up from $160.5 million at the end of Q2-22. We expect to recognize approximately 78% of total Q2-23 RPO as revenue over the next 12 months. The cumulative effect of longer sales cycles that began in the second half of fiscal year 2022 is impacting this metric on a year-over-year basis. We ended the second quarter with $73.0 million in cash and cash equivalents. Net cash used in operating activities was $2.3 million in Q2-23, compared to $13.1 million in Q2-22. Normalized free cash flow was negative $2.7 million in Q2-23, compared to negative $18.9 million in Q2-22. We are making progress toward our goal of becoming sustained free cash flow positive by the end of the fourth quarter. 9 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Our Business Outlook We are updating our guidance for the year to reflect our performance to date along with our current assessment of our market prospects in the back half of the year. In the third quarter of 2023 (Q3-23), we expect total revenue in the range of $54.1 million to $54.5 million, representing approximately 9% YoY growth at the midpoint. For the full year of 2023, we expect total revenue in the range of $216 million to $218 million, representing approximately 12% growth YoY at the midpoint of the range. Longer sales cycles and the timing of the GAAP revenue recognition have impacted our expectations for full year results in 2023. Looking at our projected Non-GAAP operating loss for Q3-23, we expect it to be in the range of $2.8 million to $3.2 million, and for the full year of 2023 between $16 million and $17 million, reflecting further progress on our path to profitability. In 2023, our strategic financial focus is to achieve positive free cash flow on a sustained quarterly basis by the fourth quarter of this year. We remain focused on disciplined execution to support both our growth and profitability, and on managing our balance sheet prudently. Our customers frequently tell us that they utilize our data extensively to make better decisions today. We believe that Similarweb Digital Data powers the revenue-driving operations of such customers — sales, marketing, analytics, ecommerce — by providing actionable insights to address their external risks and opportunities, which are especially valuable during these times of volatility, uncertainty, complexity, and ambiguity. We maintain our belief that our SaaS solutions along with our DaaS and advisory offerings disrupt and redefine the category of online market research and intelligence. Without our services, it could take weeks or months to research, benchmark, and analyze companies, industries and markets at a substantial cost. By either using our solutions or accessing our data directly, we believe our customers can reduce the time it takes to discover actionable insights to hours, minutes, or even seconds. With our beta release and development of SimilarAsk, we believe that we will be in a stronger position to further disrupt and transform this market in the future, as we will leverage LLMs to bring new features and insights to our customers almost instantly. 10 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Over the long term, we aspire to achieve sustained revenue growth, profitability and positive free cash flow as we capture a greater share of the estimated $44 billion TAM. We are taking the right steps now to turn our aspirations into our future reality. We look forward to sharing our progress in future updates. Sincerely, Or Offer Founder and Chief Executive Officer Jason Schwartz Chief Financial Officer 11 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Consolidated Balance Sheets 12 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Consolidated Statements of Comprehensive Income (Loss) 13 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Share-based compensation costs included above: 14 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Consolidated Statements of Cash Flows 15 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 16 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Reconciliation of GAAP gross profit to Non-GAAP gross profit 17 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Reconciliation of GAAP operating loss to Non-GAAP operating loss 18 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Reconciliation of GAAP operating expenses to non-GAAP operating expenses 19 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Reconciliation of net cash provided by operating activities (GAAP) to Free cash flow and Normalized free cash flow Forward-Looking Statements This letter to shareholders contains “forward-looking statements” within the meaning of 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 2023 described under "Business Outlook,” the expected performance of our business, future financial results, strategy, long-term growth and overall future prospects, our customers continued investment in digital transformation and reliance on digital intelligence and the size and our ability to capitalize on our market opportunity. 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 number of known and unknown risks, uncertainties, other factors and assumptions that are beyond our control. Such risks and uncertainties include, without limitation, risks and uncertainties associated with: (i) our expectations regarding our revenue, expenses and other operating results; (ii) our ability to acquire new customers and successfully retain existing customers; (iii) our ability to increase usage of our solutions and upsell and cross-sell additional solutions; (iv) our ability to achieve or sustain profitability; (v) anticipated trends, growth rates, rising interest rates, rising global inflation and current macroeconomic 20 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 conditions, and challenges in our business and in the markets in which we operate; (vi) future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; (vii) the costs and success of our sales and marketing efforts and our ability to promote our brand; (viii) our reliance on key personnel and our ability to identify, recruit and retain skilled personnel; (ix) our ability to effectively manage our growth, including continued international expansion; (x) our reliance on certain third party platforms and sources for the collection of data necessary for our solutions; (xi) our ability to protect our intellectual property rights and any costs associated therewith; (xii) our ability to identify and complete acquisitions that complement and expand our reach and platform; (xiii) our ability to comply or remain in compliance with laws and regulations that currently apply or become applicable to our business, including in Israel, the United States, the European Union, the United Kingdom and other jurisdictions where we elect to do business; (xiv) our ability to compete effectively with existing competitors and new market entrants; and (xv) the growth rates of the markets in which we compete. 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 23, 2023, 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 letter. 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. Certain information contained in this letter relates to or is based on studies, publications, surveys, and other data obtained from third-party sources and the Company's own internal estimates and research. While the Company believes these third-party sources to be reliable as of the date of this letter, it has not independently verified, and makes no representation as to the adequacy, fairness, accuracy, or completeness of any information obtained from third-party sources. In addition, all of the market data included in this letter involves a number of assumptions and limitations, and there can be no guarantee as to the accuracy or reliability of such assumptions. Finally, while we believe our own internal research is reliable, such research has not been verified by any independent source. 21 Similarweb Q2 2023 Shareholder Letter

 
Exhibit 99.2 Non-GAAP Financial Measures This letter to shareholders 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, payments received in connection with these capital investments and deferred payments related to business combinations. Non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross margin, 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, 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. 22 Similarweb Q2 2023 Shareholder Letter

 
Similarweb (NYSE:SMWB)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024 Similarweb 차트를 더 보려면 여기를 클릭.
Similarweb (NYSE:SMWB)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024 Similarweb 차트를 더 보려면 여기를 클릭.