Similarweb (SMWB) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 18% year-over-year to $64.7 million, marking the fourth consecutive quarter of accelerating growth and positive free cash flow.

• Customer base expanded 21% year-over-year to 5,308, with 395 customers generating over $100K in ARR and 60% of ARR from this segment.

• Net revenue retention was 101% overall and 111% for $100K+ ARR customers, with 45% of ARR in multi-year contracts.

• Secured a second eight-figure deal with a major tech customer for LLM training data, highlighting the value of proprietary digital data.

• Continued investment in AI and product innovation is driving customer engagement and operational improvements.

Financial highlights

• Q3 2024 revenue: $64.7 million, up 18% year-over-year; annualized revenue: $259 million.

• Non-GAAP gross margin was 80% and non-GAAP operating margin was 7% in Q3 2024.

• Free cash flow was $8.7–$9 million, the fourth consecutive quarter of positive free cash flow.

• Remaining performance obligations totaled $212–$212.5 million, up 27% year-over-year.

• Non-GAAP operating profit was $4.4 million (7% margin); GAAP operating loss improved to $(2.5) million.

Outlook and guidance

• Q4 2024 revenue expected between $64.7 million and $65.7 million, representing 15% year-over-year growth at the midpoint.

• Full-year 2024 revenue guidance raised to $249–$250 million; non-GAAP operating profit guidance narrowed to $14–$15 million.

• Q4 2024 non-GAAP operating profit expected between $1.5 million and $2.5 million.

• Guidance reflects increased operating expenses due to accelerated hiring and market opportunities.

• Target model aims for 85% gross margin, 25% operating margin, and 30% free cash flow margin.