Similarweb Ltd. · NYSE:SMWB
Similarweb — Q3 2022 Earnings Presentation
33 slides from Similarweb's earnings presentation, Nov 16, 2022
Slide 1: Investor Presentation Q3 2022
INVESTOR PRESENTATION Q3 2022 Business Proprietary & Confidential | 1
Slide 2: Notes Regarding This Presentation
NOTES REGARDING THIS PRESENTATION This presentation 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. Forward-looking statements include stateme
Slide 3: Similarweb by the numbers
Similarweb Q3 2022 by the numbers $50.0M 41% Q3 2022 revenue Q3 2022 YoY revenue growth $200.1M 123% Q3 2022 Revenue Q3 2022 Dollar-based Annualized net retention rate (Q3 2022 Revenue * 4) (for $100K+ ARR customers) Efficient & Predictable Business Model 99% 76.2% Of revenue is ARR Q3 2022 gross mar
Slide 4: How do we grow efficiently? is top-of-mind for executives
“How do we grow efficiently?” is top-of-mind for executives, especially in times of uncertainty In 2022, CEOs view digital touch points as a top strategic driver.* * Source: EY CEO Survey 2022. Business Proprietary & Confidential | 4
Slide 5: Companies want data and insights that provide them with visibility
Companies want data and 1 2 3 insights that provide them Their own data Competitor data Other market data with visibility MY DATA COMPETITOR PROSPECT CUSTOMER CONSUMER PARTNER To drive growth, companies want to benchmark themselves against the entire universe in their markets, and to identify risks
Slide 6: Without access to data and actionable insights, companies operate in digital darkness
Without access to data and actionable insights, companies operate in digital darkness Business Proprietary & Confidential | 6
Slide 7: Companies spend $ billions to capture and understand their own data
Companies spend $ billions* to capture and understand their own data MODERN OPERATING SYSTEMS But the operational systems they’re investing in only show them a small slice of the terrain – data about themselves. MY DATA * Source: IDC 2021 Business Proprietary & Confidential | 7
Slide 8: Similarweb illuminates the digital landscape & provides comprehensive market insights
Similarweb illuminates the digital landscape & provides comprehensive MARKET DATA AND INSIGHT market insights COMPETITOR PROSPECT CUSTOMER CONSUMER PARTNER We give companies visibility that enables them to optimize their strategies and grow MY DATA efficiently. COMPETITOR COMPETITOR Overview video* P
Slide 9: The Similarweb Digital Intelligence Platform
The Similarweb Digital Intelligence Platform Understand market trends Improve customer and dynamics conversion rates and loyalty Monitor competitors and react instantly Discover new markets, prospects, revenue streams Benchmark performance to enable continuous Be the first to react to improvement cha
Slide 10: Our intelligence platform complements operational systems to accelerate revenue growth
Our intelligence platform complements operational systems to accelerate revenue growth How is my company How are competitors performing and operating? markets behaving? Sales Product walkthrough Marketing Product walkthrough Analytics Product walkthrough E-commerce Product walkthrough Business Propr
Slide 11: We convert comprehensive digital data into timely and actionable market insights
We convert comprehensive digital data into timely and actionable market insights that provide our customers (and us) with substantial advantages we aggregate anonymous behavioral data from Contributor Network opt-in participants across devices 1 Data Sources millions of websites and apps share their
Slide 12: The Similarweb insights engine empowers company decision-makers
The Similarweb insights engine empowers company decision-makers responsible for accelerating growth Marketing e-Commerce → More keywords → More purchases → More affiliates → More consumer insights → More campaigns → More volume → More channels → Better conversion → Better targeting Sales Strategy & B
Slide 13: Our data and proprietary insights address a variety of valuable use cases
Our data and proprietary insights allow us to address a variety of valuable use cases across many different market segments Sales Data Digital Digital eCommerce Company Data & Alternative Research Marketing Insights Data Markets Enrichment Grow market share Grow user acquisition Grow eCommerce sales
Slide 14: Our solutions are recognized market leaders
Our solutions are recognized market leaders Core Platform Page From 463 to 547 reviews ↑ 15% Q4 pacing for 80 reviews ↑ 15% MARKET INTELLIGENCE COMPETITIVE INTELLIGENCE SEO Market Intelligence Software ENTERPRISE MID-MARKET Source: G2 Business Proprietary & Confidential | 14
Slide 15: Our durable growth strategy
Our durable growth strategy We see an expanding market ahead with strong M&A potential and multiple entry points to further expand our business opportunity. Deepen product portfolio Grow within existing customers Accelerate customer acquisition 1 2 3 4 Business Proprietary & Confidential | 15
Slide 16: Our current market opportunity
Our current market opportunity SMB Enterprise Strategic (100-1000 employees) (1000-5000 employees) (5000+ employees) ~850,000 ~$40,000 Total Number of Companies Total Average Contract Value (ACV) per Combined Across Segments1 Company Across Segments2 $34 bn TAM 1 S&P Capital IQ, May 2021 2 Internal
Slide 17: Longer term our market opportunity potential expands
Longer term our market opportunity potential expands Business Intelligence Software1 $23-$30B Alternative Data Market Research (Investors)6 & Analysis (mainly services)5 $4.4B Sales Intelligence 4 Audience Analytics3 $76B $3-$7.7B $5.65B Marketing Analytics Software2 $3.5-$6.1B (OEM) DaaS 1. ReportL
Slide 18: Over 3,900 customers rely on us to deliver game-changing insights
Over 3,900 customers rely on us to deliver game-changing insights Consumer Goods Retail Financial Services Pharma Media Travel Technology Agencies & Consulting Other Business Proprietary & Confidential | 18
Slide 19: MGM Resorts customer testimonial
The reason that we use Similarweb is because it gives us something we don’t have. With Google Analytics or PowerBI, we know what’s happening with us. It’s what’s happening with our competitors, our affiliates, our partners, that’s what we need to know. And there’s nothing like that. For MGM Resorts,
Slide 20: Independent Assessment of ROI Potential
Independent Assessment of ROI Potential We commissioned an independent study from Forrester Consulting which showed our solutions drove a return on customer investment of 642% between 2018 and 2021 for one of our customers who used our Research Intelligence and Marketing Intelligence solutions. See
Slide 21: Strong revenue growth
Strong revenue growth Our large addressable opportunity and efficient business model have led to growing revenue sequentially and year-over-year. +46% +51% +51% +46% +41% $50M $48M $44M $40M $36M Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Business Proprietary & Confidential | 21
Slide 22: Consistent NRR Performance
Consistent NRR Performance Our dollar-based net retention rate (NRR) over time indicates increased usage and the purchase of more than one solution by customers. In our largest and most strategic customer segment, customers that generate over $100K in ARR, our ability to retain and grow our business
Slide 23: Positive momentum in customer and account growth
Positive momentum in customer and account growth We have consistently # of total customers # of $100K+ ARR customers Average annual revenue per acquired new customers and customer ($K) increased our average deal size as we enhanced our +21% yoy +31% yoy +15% yoy platform. 3,911 $51 $52 3,849 3,242 3
Slide 24: Strength of our revenue base
Strength of our revenue base $100K+ ARR 37% 53% $25K-$100K ARR 29% 32% $0K-$25K 34% ARR 15% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2018 2019 2020 2021 2022 Note: We define ARR as the annualized subscription revenue we would contractually expect to receive from customers
Slide 25: Attractive Sales Efficiency and CAC Payback Metrics Historically
Attractive Sales Efficiency and CAC Payback Metrics Historically S&M spend Implied Customer retention ~45% to 50% ~40% to 45% contribution margin1 for existing Historically implied customers 15-16 month payback2 for CAC Customer acquisition currently ~55% to 60% 17-18 months expected to normalize w/c
Slide 26: Margin and cash flow performance
Margin and cash flow performance FY’19 FY’20 FY’21 Q3’22 77% 78% 76% 71% Non-GAAP Gross Margin (Margin %, USD mil.) $50.1 $72.1 $106.7 $38.1 Non-GAAP ($14.1) ($14.9) ($51.7) ($13.3) Operating Loss (Margin %, USD mil.) (16%) (20%) (27%) (38%) ($11.5) ($4.9) ($30.4) ($25.1) Non-GAAP Normalized Free (5%
Slide 27: Disciplined execution accelerating path to profitability
Disciplined execution accelerating path to profitability Business Proprietary & Confidential | 27
Slide 28: Long Term Model
Long Term Model % of revenue 2019A 2020A 2021A Target Model Gross Margin 71% 77% 78% 85% Research & 22% 22% 28% 15% Development Sales & Marketing 55% 57% 65% 35% Non-GAAP General & 14% 14% 21% 10% Administration Operating Margin (20%) (16%) (38%) 25% Free Cash Flow Margin (16%) (5%) (22%) 30% The Co
Slide 29: Led by a focused and experienced team
Led by a focused and experienced team Or Offer Benjamin Seror Jason Schwartz Lior Degani Maoz Lakovski Co-Founder & Co-Founder & Chief Financial Officer Chief Operation Officer Chief Business Officer Chief Executive Officer Chief Product & Marketing Officer Sigal Gill More Carrie Lazorchak Ron Asher Uri Perel
Slide 30: We are just getting started
We are just getting started A leading platform Strong and Attractive sales addressing mission-critical accelerating efficiency and CAC use cases growth payback metrics Innovative technology Early innings of a Founder-led based on durable multi-billion $ TAM leadership team and barriers to entry oppor
Slide 31: Appendix - GAAP to non-GAAP reconciliation (USD thousands)
Appendix - GAAP to non-GAAP reconciliation (USD thousands) FY'19 FY'20 FY'21 Q3'21 Q3'22 Reconciliation of non-GAAP gross profit Gross profit 50,078 72,069 105,916 27,802 36,273 Stock-based compensation expense (38) (40) (211) (54) (143) Retention payments related to business combinations 0 0 0 0 (511
Slide 32: Appendix - GAAP to non-GAAP reconciliation (USD thousands)
Appendix - GAAP to non-GAAP reconciliation (USD thousands) FY'19 FY'20 FY'21 Q3'21 Q3'22 Reconciliation of free cash flow Net cash used in operating activities (9,692) (3,760) (27,625) (16,592) (21,669) Purchases of property and equipment, net (285) (748) (2,311) (395) (6,705) Capitalized internal-us
Slide 33: Thank you
THANK YOU. Business Proprietary & Confidential | 33