SimilarWeb Ltd. Q1 FY2025 earnings call

• Revenue increased by 14% to $67 million, ahead of expectations. - Customer base grew 19% year-over-year to over 5,700 ARR customers. - Six consecutive quarters of positive free cash flow. - Investments in sales and R&D starting to generate positive returns, with doubled inside sales reps compared to Q1 last year. - Launched new products like App Intelligence, AI Chatbot traffic intelligence, and AI agents (SEO strategy, traffic trend analyzer, meeting prep). - 52% of ARR contracted under multi-year contracts, up from 42% last year. - Remaining performance obligations (RPO) totaled $253 million at quarter end, up 18% year-over-year.

Revenue increased by 14% to $67 million. Customer base grew 19% year-over-year to more than 5,700 ARR customers at quarter end. App Intelligence was launched, with 484 customers already signed up. Revenue contribution from various segments isn't explicitly broken down by percentage in detail, but overall revenue growth and customer base expansion are key points.

• For full-year 2025, maintain total revenue guidance in the range of $285 million to $288 million, representing 15% year-over-year growth at the midpoint. - Expect non-GAAP operating profit to be between $1 million and $4 million. - For Q2 2025, expect total revenue in the range of $68.6 million to $69 million. - Non-GAAP operating loss for Q2 2025 is expected to be in the range of $0.5 million to $1 million.

• Global macroeconomic and market developments could impact the business. - If returns on investments in sales and R&D do not materialize as planned, profitability could be affected. - Foreign exchange volatility could impact financial results.

Q: Curious about the quality of hires and ramp to productivity for sales reps.

A: Or Offer stated they're happy with the quality of hires, have a process to measure activities and expected outcomes, and currently looking good with the inside sales team showing positive signs.

Q: Early indications of usage or interest in AI chatbot traffic data.

A: Or Offer said customers are very excited about it, seeing a 'wow effect' and unique insights into traffic from chatbots and prompts.

Q: Visibility on deals supporting revenue reacceleration in the second-half.

A: Or Offer explained different roles in the go-to-market organization have varying ramp times, with inside sales ramping faster and others taking more time.

Q: Change to guidance philosophy.

A: Jason Schwartz said they haven't changed a lot of assumptions but aim to give guidance they know they can meet.

Q: Behavior of larger clients and NRR dip.

A: Or Offer explained the NRR dip was due to less big upsells compared to the prior year, and larger clients like Fortune 100 are engaged and growing.

Q: Selling AI products differently than legacy products.

A: Or Offer said AI products are appealing to many personas across different roles and it's early to determine the exact buyer, while Jason Schwartz talked about billing being a function of invoicing schedules.

Q: Billings slowing and seasonality.

A: Jason Schwartz said billings are a seasonal function with shifting invoicing schedules, and bookings and RPO will replenish in the back end of the year.

Q: Execution item for the year and validation of vision.

A: Or Offer said driving the upsell enterprise motion is a key execution item, and the data as a service and GenAI opportunities performed well in Q1.

Q: Engagement and pipeline for AI Chatbot traffic product.

A: Or Offer said traffic GenAI is in beta for paying yearly customers, helping convert leads, and the second part of the AI offering will be launched to monetize more.

Q: Expansion activity and impact of Search Monitor acquisition.

A: Jason Schwartz talked about healthy expansion with examples like a large U.S. retailer expanding, and Or Offer discussed how Search Monitor's offerings fit with Similarweb's assets to create a powerful proposition.