Similarweb reports Q2 2024 results, raises full-year guidance

Similarweb this week announced its financial results for the second quarter ended June 30, 2024. The company reported accelerating revenue growth, improved profitability, and raised its full-year 2024 guidance. Similarweb, which provides digital market data and analytics to businesses worldwide, saw its customer base expand to over 5,000 and secured its first eight-figure annual recurring revenue (ARR) customer during the quarter.

According to the earnings release, Similarweb's total revenue for Q2 2024 reached $60.6 million, representing a 13% increase compared to $53.7 million in the same period last year. This marks the third consecutive quarter of accelerating revenue growth for the company. The positive momentum in Similarweb's business performance comes amid ongoing macroeconomic challenges and reflects the growing demand for digital intelligence solutions across industries.

Similarweb's CEO and co-founder, Or Offer, expressed optimism about the company's trajectory, stating that they are "just getting started" in realizing the potential of their data and addressable markets. The company's unique selling proposition lies in its proprietary digital data, which provides comprehensive insights into websites, mobile apps, and e-commerce activity worldwide.

One of the key highlights of Similarweb's Q2 results was the improvement in profitability. The company reported a non-GAAP operating profit of $5.3 million, or 9% of revenue, compared to a non-GAAP operating loss of $3.5 million in Q2 2023. This represents the fourth consecutive quarter of non-GAAP operating profit for Similarweb, demonstrating the company's focus on efficient growth and operational discipline.

The expanding customer base played a crucial role in Similarweb's Q2 performance. The number of customers grew by 17% year-over-year to 5,034, with 383 customers generating over $100,000 in annual recurring revenue. Notably, Similarweb secured its first eight-figure ARR customer during the quarter, a significant milestone that showcases the company's ability to expand relationships with strategic accounts.

Similarweb's Chief Financial Officer, Jason Schwartz, highlighted the company's improving financial metrics. The dollar-based net retention rate for customers with ARR over $100,000 increased to 109% in Q2, up from the previous quarter. Additionally, the company generated positive free cash flow for the third consecutive quarter, totaling $16 million in the first half of 2024.

In line with its growth strategy, Similarweb announced the acquisition of 42matters AG, a Swiss app intelligence provider, on July 1, 2024. This strategic move expands Similarweb's capabilities in the rapidly growing app analytics market. The integration of 42matters' extensive app data covering 12 app store platforms, over 2.1 million publishers, and more than 20 million apps is expected to enhance Similarweb's offerings and provide more comprehensive insights to its customers.

The company also released a new version of its data estimation technology, which significantly improves the accuracy and coverage of its digital intelligence. The updated version includes insights from over 30 million new websites across additional countries, enhancing Similarweb's ability to provide valuable market insights to its global customer base.

Looking ahead, Similarweb raised its guidance for the full year 2024. The company now expects total revenue in the range of $246 million to $248 million, an increase from its previous forecast. Non-GAAP operating profit for the year is projected to be between $13 million and $15 million, also higher than previously anticipated.

For the third quarter of 2024, Similarweb expects revenue between $62.5 million and $63 million, representing approximately 15% year-over-year growth at the midpoint of the range. The company's guidance reflects its confidence in continued revenue acceleration and profitability improvement.

Similarweb's strong Q2 results and raised guidance come at a time when businesses across industries are increasingly relying on digital intelligence to inform their strategies and decision-making processes. The company's ability to provide comprehensive insights into the digital landscape, including web traffic, mobile app usage, and e-commerce trends, positions it well to capitalize on this growing demand.

The rise of generative AI and large language models (LLMs) presents another opportunity for Similarweb. The company reported increased interest from tech giants in using its digital data to train and improve their AI models. This emerging use case for Similarweb's data could open up new revenue streams and further solidify its position as a critical provider of digital intelligence.

Similarweb's focus on profitable growth is evident in its strategic objectives for 2024. These include landing more new strategic accounts, improving customer retention and expansion, continuing product innovation, and maintaining operational efficiency. The company's ability to execute on these objectives while navigating macroeconomic uncertainties will be crucial for its long-term success.

As digital transformation continues to reshape industries, the demand for accurate and comprehensive digital intelligence is likely to grow. Similarweb's expanding product portfolio, which now includes enhanced app intelligence capabilities through the 42matters acquisition, positions the company to meet this demand across various customer segments and use cases.

However, challenges remain. The company acknowledges that global macroeconomic conditions may continue to present hurdles for its business and customers in the coming months. Additionally, Similarweb operates in a competitive market, facing pressure from both established players and emerging startups in the digital intelligence space.

Despite these challenges, Similarweb's Q2 2024 results demonstrate the company's resilience and ability to execute on its growth strategy. By focusing on customer acquisition, retention, and product innovation, while maintaining financial discipline, Similarweb aims to capitalize on the growing importance of digital intelligence in today's business landscape.

Key facts from Similarweb's Q2 2024 earnings

Revenue grew 13% year-over-year to $60.6 million

Non-GAAP operating profit reached $5.3 million, or 9% of revenue

Customer base expanded to 5,034, a 17% year-over-year increase

Secured first eight-figure ARR customer

Acquired app intelligence provider 42matters AG

Released new version of data estimation technology

Raised full-year 2024 guidance for revenue and non-GAAP operating profit

Expects continued revenue acceleration and profitability improvement in second half of 2024