SMWB - Earnings call transcript Q1 2022

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Operator

Greetings, and welcome to Similarweb Q1 Fiscal 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to Vice conference President like host, to now Jones, Raymond Investor would turn over the your I Relations. Please go ahead, sir. Thank Operator. you, to XXXX quarter our Call. everyone Earnings Welcome Conference first

forward-looking an the the discussion our today such March factors statements. forward-looking by Risk filed obligation the to as update statements statements. with XXXX. statements to future our cause based will performance not or note uncertainties, SEC results on results or and future should those for expected therein subject as our Factors These cause XXXX. undertake it's no actual and our and COVID-XX uncertainty, the of entitled XXth business of financial that economic by of review events assumptions the statements During particular, XX, In to of potential from include: future the except implied Please XX, of make indication risks, our prospects. and could our associated We growth, unknown results considered make Form certain differ during our may are reported known required call, materially statements may from global information as Again, timing implied we related this today's this section and any on that Further, a anticipated pandemic to actual results, business. call projected be performance. results and to statements the results that forward-looking impacts available These differ the the predicted actual the on law. timing overall, forward-looking projected the call. Also, made are date, we May forward-looking materially could long-term strategy, or differ from of

facilitate operating represents measures non-GAAP are intangible non-recurring particular, call non-GAAP We outlook. loss, analysis when related trends assets, and planning use certain measures, may because business and may taken internal non-GAAP use business which We these investors performance purposes. of believe payments and and non-GAAP other reminder, financial indicative in our adjustments helpful of compensation, other results and collectively, on on a financial less to certain of expressed excluding or operating In provide our share-based certain we internally that loss, results and of this today financial referenced by forecasting GAAP and and they of with to to comparability measures financial financial operations As presentations amortization consistency not be a we items our past business, items. combinations, basis. for be

have of to call from over First our CFO, Relations Similarweb. discussion with call the an I will Jason website. our which XXXX strategic the attendance. well that, GAAP questions and brief are a isolation that overview in However, up our measures Or informational for as Or tool our in between sell-side Schwartz. at included Offer, information an and With be non-GAAP investor non-GAAP website from Quarter with should can of remarks supplemental note purposes financial open results Investor available presentation for CEO, in updated these both on They begin earnings ir.similarweb.com. detailed of published found Then to the on Offer is Investor we will our financial CEO as Today our a A which with Please and on press accordance reconciliation in prepared from prepared we are a for we will release, Relations GAAP. to a not measures only. financial or presented analytical be letter investors reference, to business, landlords as limitations as of substitute shareholders considered turn

Or Offer

all you the Revenue grow joining everyone to result. million QX strong, being have quarter. to one excellent anniversary exceeded a post also public in year, $XX XX year and RJ, over XXXX We our you, and company. today. the first happy started here % Thank on call of last I'm and

benefit grew Furthermore, of to and results than designed customer improve we X,XXX. enhanced who ecosystem, data And nearly our data We learning proprietary our better teams. generated machine are The momentum predict order users $XX,XXX to actionable business. win base the and their nearly to seek our we revenue is comes accounts insight we XX digital and marketing, driven from from give and our customers, recurring take built of internet digital to to amounts in the to solution in activity them how % as innovate behave. year-over-year and of top year c-suite range average % I XX with this us Intelligence at refined and we think how us into directly data. a the constantly sales, Similarweb with one traffic operations create The our it our advanced the techniques per over provide our prediction We of comprehensive a underlying data. process than The e-commerce see more thing the we spend that revenue to data building annual market. wide team us. advantage convert includes operational to from Our competitive anyone market how spend and the timing on on will signals. using digital move digital analytics, continue of that essential of customers solution which produce to customer world, annually. Those $XXX,XXX vast behavior, do In signals else, of digital excites

marketing We're we and to improvement portfolio leverage to web customers. previously Annie, intelligent as which mobile other datasets made all our data major our topic valuable our releases delivering and across channels, from make as App as more up mobile app referrals, feature and well shipping is investment Data.ai, constantly data, also app which known This solution keywords our include in quarter, enhancing metrics. new that product

execution first of expansion XX continue efficient highly globally. our of base, States strategic revenue global our to customer comes The SMB go-to-market outside be from quarter. % of consisting in accounts, of an XX the United Our continue continue the contracts and looking of relationships expand that Today, since % of XXXX. in enterprise and gain our metrics year-over-year edge to multiyear to the momentum. gain consist markets to

of from Our volume the than solution we % strong XX more with customer appreciate offer, nearly currently one customer purchasing base us. our

moment concluding, continue member an to like can the they a to of extraordinary contribution and Ukraine, when situation. team our to for who we in where Before recognize XX would take work

the all. with a and market to unlock and are are hearts within over you. Again, inspiring I great will multi-billion-dollar a in only XXXX off style you Our you Jason, we're beginning to we to just us potential call turn opportunity. are our

Jason Schwartz

Thank everyone to you, thank on And joining the us Or. call you today.

calls, that For questions we those investor we differently. things are will answering prioritizing earnings and remarks. of are feedback, notice reducing you previous conducting Based spending have our you been investor prepared on will on on time

of few the we published our a call supplemental a this which to results a discusses reporting now, we will our briefly topics shift, As shareholder part cover open then in will quarterly clarifying up letter part of questions. detail as

continued Revenue our range. the high-end million to quarter outlook reached in $XX.X exceeded our our million on and for disciplined quarter, of show $XX.X results of the Our commitment first to execution. the

XXX quarter in overall QX as % Importantly, dollar-based increased XXX ARR NRR, year. net first XXX $XXX,XXX the XXX XXXX. our NRR And last or in rate, our to as compared to customer increased compared % to of segment, to retention for % %

million. as our was stellar go-to-market during XX execution increased s, RPO remaining to quarter $XXX the year-over-year Our obligations, or performance %

XXXX plans increased acquisition include payback ahead our period. of costs in Our for historical customer investment

We in returns indicators XX below remain consistent. executing on line to average, plan are as remain with our for months

revenue, to our our in plans gains we we bottom-line. incremental through exceeded saw As flow

non-GAAP our on includes less our million, loss $XX.X Our expense loss impacts guidance result from This million end $XX.X which the noncomparable the operating range. of acquisition. low was than was

achieved we profit the the margin of estimated incremental Importantly, operating midpoint XX would from ranges. an % non-GAAP

expect the raising % revenue is approximately between XX expect the million To loss these $-XX fiscal of goods the of be year, a $-XX will million $XXX of in to % to guidance million. growth XX to QX in million to the our million. year, $-XX.X range of outlook midpoint our and acquisitions range full in XX range margin and revenue representing now % % for gross the and million. full of total year, to total to XXXX Embee for impacts Compared we non-GAAP we Data.ai QX, impacts. the result Turning % the of are to XX to as Non-GAAP $XXX $XX.X year partnership and to in quarter $XX.X be XXXX, to XXXX the year-over-year for at last to operating anticipate sold We And cost million of Mobile. includes related million, expected second $-XX XX the range.

starting XXXX Or results exit of our questions. and indicate your are track as three-year target With and reach first-quarter cash we $XXX that, to I to XXXX. positive ARR million $XXX Our free in million happy are take we to flow on

Operator

time, first Arjun For it you. on speaker Thank at a before on comes while the your with this our using Hold [Operator Yes. please participants Bhatia mentioned questions. question-and-answer And will poll as we [Operator may from today we handset Blair. William necessary equipment, Instructions] be And Instructions]. for pressing session. put to be keys. conducting question

Arjun Bhatia

driving I'm on congrats and momentum let's bit. great continues drivers into guys. metric you with and as of to more XX get there. in the are how maybe a data of rate. know multiple % metric high and think there as Is progresses up mention the you That I that it much, start takes just strength up-sell year hold. using Obviously, cross-sell products, very customers here? of QX, you that you that's Thank move seats, little unpacking the can but dig if lot net underlying continued a there's I can Perfect. wanted a retention consumption, go cross-sell didn't more if just curious that? to

Or Offer

you Thank Or Hi, question. for that speaking.

the of to them think out about of contribution. head if methods to has my think I growth, different I So nice a had contributes all

the sell introducing shopping Some for of our solution new cross-setting the is products, a or them of like customers.

Some more of data consumptions. is that about

and way we more. continue momentum, and that and to then it's happy lines meter, our And the more buying each I and the solution business improving that grow And offer own innovate And we is and capabilities that's great API more there bringing one the tool products, and up-sell users, our with have approach, success of we the our the of with and some have are And a we the customers will and have. we're is also, to getting other of up-sell better. the consumption. users, think products so continue

Arjun Bhatia

the on us working Very Annie, Data.ai for Or. up you the App helpful, And I then any just what if can a give that rather, or development Thanks. of sense on the follow partnership solution. updates

we by announced On there's still customer the if launch love mobile deployments? partnership would of terms are reception potential hear QX and to the commentary or to side, was since any set early in

Or Offer

Yeah.

about The weeks. So is we partnership. excited about team quoted excited and few hard we the it this is it. in really will and as team in into also here introduced before, next are And launch the very very working market the be

we like think that And of opportunities areas more specific more it's on because ecosystem. in us where those dominant customers. I Asia unlocked in region and Southeast a lot it's region, for dependent whereas and have

upset a introduce well. to the motion going this nice I we're there's also of contribution to as to So course, think across and lend

Arjun Bhatia

Perfect. and Thank much again, very guys. congrats you

Operator

you. next the Ryan question Barclays. with MacWilliams And comes Instructions] [Operator Thank

Ryan MacWilliams

we my about just through website. on there quarter, looking your from was the shareholder any I Thanks and the definitely this That when recent Jason, And most also think on was or just this from appreciate as through anything FX say to taking question. the move year? guidance full-year for letter impact quarter. want helpful just should

Jason Schwartz

contracts feedback. good us dollars. Ryan, Not in most by materially are getting our to U.S. thanks most for from way, our for of the But and the denominated hear contracts. And of it's you

this it wasn't by So often material hold or impact is But quarter. a while euro in otherwise. there

Ryan MacWilliams

and in strength retention some Appreciate RPO that. your in sounds And growth look, there accelerated then like business. net

think Before, think do any potential more seen customers about Similarweb Do those you circumstances? while you macro-environment, know do you you interact the impact or and guys point, may with a macro your worsening headwinds under from for at your would less exposure? have how maybe interacts this how

Or Offer

which more time, what data in will and go a back from in then the this stage we their So they we think growing data as into even also it's strategy when historically, the a And market, that question. when for -- If need good all happen needs world companies re-planning than is COVID more uncertainty they can market I we others, lot uncertainties and happened discovered that. in there saw if because of them will stand. the market about need look the what was they hurting where into go uncertainty context for is and the

So question. increase. I engagement that will hope the hope your I that answers

Ryan MacWilliams

That Thanks, helps guys. for love format. sure, this

Jason Schwartz

you. Thank

Operator

you. with Jason Oppenheimer. Thank Instructions] [Operator Helfstein And comes next from question the

Jason Helfstein

with questions. two see to ask and it you and on seeing typical when then into clients renewal? had market is slowing flow. cash if seasonality products call -- of taking to corporate I'll visibility One, you cash if etc., do the sign start then would increasingly to companies the renewals, the new And longer just pausing headcount focused flow and talking obviously, obviously maybe second, your we spending, current that play how see up, we're each already, about to up-selling slowing renew, what's or would and that start cycle on you account

discussion You accelerating the guys you. put on that free commentary letter and that mean, 'XX. that? any get about to expected cash Thank positive to you exiting I any in

Or Offer

hear Good you. to Thank you, from Jason.

XX So are as % have sales regarding we the we -- deals cycle, the and XX evolve, multi-year. of

contracts, the that multiple the chunk the are it's average this around our smaller, of big $XX,XXX. the I big even are still accounts locked contract if that book for especially in business, companies, years. is other of big So And think already

significant companies to core closed as amount the is It to expensive. a think that of try not it's that not I optimize is So product around.

think early regarding on to the know. now communicate more sure efficient. that we're also in so look did down we're dynamics into -- flow internally XXXX too direction. going that how to be we we -- there, it's slow the and cash not I'm and I we our market did look So me Let do maybe And faster how question, we working and And -- it's can

and spend So the now do. making coming so of we the places and sure do that dynamic don't we market we money understand voice we well of in disciplined, do a lot execution, tone emphasis, put not

do, momentum, and efficient great to that. have We just be continue deliver, to we more do continue we as do and what

So we are that seeing and executing.

Operator

Jefferies. question [Operator comes from Instructions] Thill Alright. the And Brent Thank next you. with

Brent Thill

of the the go raising macro you in the or lower stiffening you're into assuming you on guide now? rates headwinds, same your or you guidance I still taking right are conversion just guess environment, Jason, economic methodology you raise a the when and pipe, are on year? think based as close about back rates the close keeping place half face assuming the a same of what and the you the rate what you're seeing guide, into can see in are you that pipeline good on Meaning, down in is you

Jason Schwartz

to forecast. very execution got approach disciplined it's Hey, Like how to very, and Or Yes. we've said, good check. a we

great backlog ARR got into Having into a just that month-to-month and really lower into our a being to and multiplied gives business, backlog. we've confidence are visibility us have do. our so we we able also that -- pipeline that that not give visibility by guidance contracts the an great being And XX, monthly

current in had we're the that the the and as know the we meet. we'll guidance at quarters, we we and , at at give numbers, So year looking that the pipeline we looking and conversion of part can that obviously, guide, rates looking to be using first in

Brent Thill

what adoption seeing adopted average of pass maybe follow-up, give happening Jason, add of number Can And with just Intelligence. there? products shopper what's just the customers. the on versus you're Great. quick a on And levels, multi-product us by on Okay. and sense you a

Jason Schwartz

Sure.

Often more the So getting go solution a are or depending the a as We with they're a third we Research today in the sale business, really the Intelligence nearly thing onto they that afterwards said BXB or solution. that the those as a Intelligence Digital of in a because that hand-in-hand. and customers purchased business prepared customers solution. Intelligence is now two more transactional remarks, is Shopper XX % starts more both one see than CPG the and Marketing The they that retail more in, add-on they are publisher on like of they're on the well, if that and add thereafter business. if times do

that that sets two, product we mix vary see or looking customer industry trend to on from that in. So depending of and the going customer's journey that three happening, for solutions to are just which one the two

Brent Thill

Thank you.

Operator

with the you. And question Radke comes Citi. from next [Operator Instructions]. Thank Tyler

Tyler Radke

side question. so I I well Is retention much the the think you the the of the it XXXK new overall the as the from sustainability driver to about in thinking improvement or uptake on as the year? Thanks for of that? that about net more of rest of the is saw, products? gross think you are the wanted both the customers. just primary rate taking it that improvement Great. as retention cross-sell and And some What's unpack customers, you how of

Or Offer

think the come in that many improvement I angles.

working notch insight, hired consultants a top global past with And We're year-and-a-half, We on better improving. our get customer, Product improving lot relationship, system, working lines. success well, also, the data the is a and cross-sell, in the Customers customer First, customer. our lot happier. services. put of and retention job up-sell is with work on has and emphasis them, really great much a improved. the organization doing of very customers that get grew at because we the helping are

get this majority thoughts to any the I helping those more have So that? years are now, think put now. two testing Jason, of efforts, is you around fruits we really ago, all almost and

Jason Schwartz

Or. Yeah,

from % as more, upsell sides, of And retention, able It's net. gross good the our customers the we previously ROI. that's was mentioned Intelligence sales that Forrester well. you XXX that I ROI as press Digital that customers we the and to I are available is Solutions. think ROI, for site, now that a that, But on not solution the that also the both on you the hit have well in on the mention the had Thailand, and Research to what good able see which on it's report had only and the mentioned Digital And which drives both release, interviewed. obviously Forrester I really our think we're but suddenly more Intelligence that the think over measure Marketing metrics

a metric for growth we look I in drives That for we're our that showed think it's to at. ROI good the ultimately that customers folks drives that today. that and net retention quantifiable that results delivering

Tyler Radke

guide? And are Jason, to about should embedded in -- retention that this the continue or as improve you just to you from here net a think is expecting peak, what's

Jason Schwartz

have the been to on internally that worked executed. to expand, seeing investment -- that NRR's done to, don't that We think think has And number. the numbers land very we recognizing something the model look that really over only need the talking been that we that from months because the NRR. due about XX retain, this that's we've guide of retain proud today, hard the and with execution in the remember, We do The we're on. results results all you're is that go XX-month is and XX disciplined achievements, and to we've of we've but not back land, we've because ensuring last a to

Tyler Radke

rates. just in pipeline like and just clarify how secondly, in And what follow-up could environment saw have you've question environment you're And very on that if characterize it's to I better really meant. what any April than March. to wanted if you curves assumption. your then, Brent’s good not you seen sounds you're and material the rate I wanted that through Thank May, just worse about you and or you. business that's saying you evolve Great. making changes visibility, so close It then

Jason Schwartz

Sure.

time, that We've seeing you of thinking when we're of the by way do and in just and the that look we COVID, the think about in when previously. about adapting not company. into put able all would the concerned report long operating what we've what together. the to about, we over start we we the to were account continue for I been back and to think, yet last taken So it's pipeline very what conscious and we we've at a would and mentioned, saw We humbled now, as macro here think did. deliver That that and with we said, impact Again, we macro results are weren't activity headwinds. the up are we're line guidance the years Again, that internally X.X that were guide a we how that I think happened you we with public environment, when spending Similarweb. that

digital going able I Thank we've on to we because business much, two know are that's as that identify today, the deliver where Similarweb focused remainder that we where competitor to you're drive and need and In there to conversations -- growth of that macro thinking -- more, today as provides, I steal take you. or you our driving that customers which in decisions. times decision to good to over operators the budgets your important they the to the as times think plan And learned tough you it optimize hear good more order they macro XXXX should the and leveraged is make they're environment. their takeaway where happen that today's tough to something in optimizing, last even we customers you Similarweb from think about years. where your advantage times your want Similarweb maybe business in has to from with than or that And seen 'XX if from be you be into and about, be it's makers in in should in looking operating should from markets see should the like results that your smarter investing trends you and investment be in. times, opportunities enables growth intelligence for. market reduce the And not the

Operator

you. with Walravens our question next [Operator JMP. Thank Instructions]. Patrick comes And from

Patrick Walravens

Great. And me % on congratulations plus on me Thank more add let well growth. can in thoughts, a let your And the Or, you. Ukraine. my prayers, two XX we cash quarters about my the talk -- burn. in add of in wishes for team Jason, row just and

cash So this you no only for. million a was burned have quarter $XXX and in debt, right? $XX And loss your operating but you million,

great. how of you year? or something But we this burn because this quarter the like should really to that's So that? of through much collections rest expect Was unusual

Jason Schwartz

Hey, that that in general. upfront, year. cycles back I heavily take flow in seasonality about we cash and and flow QX, the some QX. have works collections talk we you've invoice you have. our advance, Those first in higher a And in because Pat. There step in the of year year cash beginning typically in the a back-end in typically part the to and cash is come Sure. so QX in how the of just QX Similarweb for customers that than cycles maybe see higher got renewal and on renewal

basis, -- of including, we've as than years that operating we way something this so less perform that, or you've year, is well. if we in burning do past that and an shown $XX going less on is that burden had that think last be said looked are than And we overall will we couple the we this something and -- for, back we million the over aim obviously, quarter. for that the Having this account

a today, we million have additional we balance sheet cash $XXX talking And have the more So than facility. the from we're a $XX enough. plus million on credit

cash cash than guided we the $XXX us at think million. and look way We over more to enough So flow profitability being the today. to that's we through reaffirming take as our that our available to

Patrick Walravens

heard starting we're conserve we're about fast you going that , for look we're down? mean, to, enough. that? Or's okay, How and you looking grow I at Yeah. you startups think it's It the about efficiency, going than more when just And I say, do at you sounds cash, and but burn comments guys all our when to like going are look do -- less what rate to you do

Or Offer

We in like the approach because but term and and think a capture don't speed front shouldn't This are offering different we We, our slow to a to we're of I huge very seeing market just is are unique. us. we we technology down, up. say, getting we seeing as should started, huge is all

we in different in world, a accelerate different even so growth. And maybe environment, would our

maybe we've As voice, to seen, Jason, have think doing and anything the macroeconomics they as add. you to continue that need I are we now. same we said to internal the execute

Jason Schwartz

acquisition. again, the basis if the now tracking we're a you profit and on Maybe payback investor said. on I'll to presentation, just in both add shareholder payback period in XX XX -- look gross at we, shared how that months the we to what Or When customer you at a look letter for

that and have back sales look % the order what got the % to at margin. we the cost, to XX XX better gross over a second-year, expand quarter. contribution our XX flip % On That's marketing when rate, is, resources, minus side, you retain retention clarify XX customer margin success just those when net % that customers. trailing the And margin contribution in that to for we've to providing that a you and the look that

ago, on side. highly we we the and that. a focused back, right if flow We're on taken So company %. at itself, efficient IPO flow is growing the have cash business and we break-even to a model this as came look you And XX were -- in the cash a year to slightly mark profitable

is the got $XXX XXXX of tab Or model us. to we've been of number order that We've that a itself for million We that efficient. doing that execution profitability on we massive cash years of said, in As know $XXX ARR. disciplined flow ahead deliver see in the to

Patrick Walravens

you. Thank Great.

Operator

Ryan for MacWilliams And [Operator the a Barclays? Instructions]. Thank with next you. is follow-up question

Ryan MacWilliams

last start-ups Back are late-stage question. challenges you as products taking might some through again. to to desire longer but you talked Or, take that know some companies pick or develop? be off market-leading with and the that go for functionalities your Thanks, we alternative of up about I consolidator maybe the data tempted to further question, Patrick seeing, intelligence, year, guys, are teams or position or this quarter the add market additional addressing

Or Offer

Okay. question. It’s great

ecosystem. We player the be to and call leading the we are what data still inspired alternative in

investor I already think momentum. the Investor the a that ecosystem, this dedicated new quarter, have launch platform And expecting are new we and market Solutions. plan really for raising public is in great we now to

Stay can bullish and I enable help integrate once rolling going on company those platform, better launch us So to be market. -- will make have platform And We put our are products. our to to integrate and to this out us both faster, be it is alternative ability And that have platform to to make performances, to invest in all more in and website, stock not data get acquisition buy in like we apps, starts this helped this And enable quarter. able and consolidation we this this in to will and core And it's we like usability. going us our more get and then in we -- signals be hope like even data, that you it sources. faster. going much which will data, a tuned. decent

Ryan MacWilliams

just getting usage the the Appreciate the about Thanks. the of margin line? more Can side, gross and step-up through that second-half. the Products? just be to leverage how some rebound you Is the great margin of you're would Just Jason, of there components on walk hear Embee more more Mobile on just color helpful. gross color. plans for And

Jason Schwartz

Embee what Mobile the Both as be Data.ai quarter, starts the as that the sales license well will agreement across at fixed this costs. are hitting

for whether And revenue other same overall out, costs we're integrated to as or or the more and cost, delivering the into the that more % edge. acquisition costs quarter, service that like the of the costs revenue, and assets And XX and the number those amortizing XX to our % you'll XX to gross previously historical XXX from years margin. we gross customers more that leverage the hits or we the and % XXXX XX customer that fixed able more fixed data three be X,XXX much those and And then are customer, But we're Data.ai partnership, data margin that's and % took increased leverage saw once revenue customers, over starts XX company, and Like thereafter we going to see customers. so and drive of number we data increased build therefore, we to announced as mentioned as here. that's more. parts per a trend ARR those that and last that attracting a to to in short-term of additional our Embee

Ryan MacWilliams

Excellent. appreciate the I Thanks, guys. color.

Jason Schwartz

Sam. Thanks,

Operator

answer Instructions]. as the [Operator Thank as And and dialing you. the that much question itself. you about so concludes in. well for session, event Thank

lines. your disconnect now may You

Jason Schwartz

Thank you.

Similarweb (SMWB) 11 May 222022 Q1 Earnings call transcript