Similarweb Ltd.

Greetings and welcome to the SimilarWeb fourth quarter fiscal year 2022 earnings call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to RJ Jones, Vice President of Investor Relations. Thank you. You may begin.

Thank you, operator. Welcome, everyone, to our fourth quarter 2022 earnings conference call. During this call, we will make forward-looking statements related to our business. These statements may include the expected performance of our business and our future financial results, our strategy, the potential impacts of the COVID-19 pandemic and its associated global economic uncertainty, our anticipated long-term growth, and overall future prospects. These statements are subject to known and unknown risks uncertainties, and assumptions that could cause actual results to differ materially from those projected or implied during the call. Further, reported results should not be considered as an indication of future performance. Please review our Form 20F filed with the SEC on March 25, 2022, in particular the section entitled Risk Factors Therein, for a discussion of the factors that could cause our actual results to differ from the forward-looking statements. Also note that the forward-looking statements made on this call are based on the information available as of today's date, February 15, 2023. We undertake no obligation to update any forward-looking statements we make today, except as required by law. As a reminder, certain financial measures we use in presentations of results and on our call today are expressed on a non-GAAP basis. In particular, we reference non-GAAP operating loss, which represents GAAP operating loss less share-based compensation, adjustments and payments related to business combinations, amortization of intangible assets, and certain other non-recurring items. We use this and other non-GAAP financial measures internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. We believe these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance, by excluding certain items that may not be indicative of our business, results of operations, or outlook. However, non-GAAP financial measures have limitations as an analytical tool and are presented for supplemental informational purposes only. They should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. A reconciliation between these GAAP and non-GAAP financial measures is included in our earnings press release, which can be found on our investor relations website at ir.similarweb.com. Today, we will begin with brief prepared remarks from our CEO or offer and our CFO, Jason Schwartz. Then we will open up the call to questions from sell-side analysts in attendance. Please note that we published a detailed discussion of our fourth quarter 2022 results in a letter to shareholders for investors to reference, as well as an updated investor presentation with a strategic overview of the business, both of which are available on our investor relations website. With that, I will turn the call over to Orr Offer, CEO of SennlerWeb.

Thank you, RJ, and welcome everyone joining the call today. As we completed 2022, we reached a key milestone for our business as we crossed over the $200 million ARR mark. This was a special milestone for me. It took us almost seven years to grow to $100 million ARR business, and we achieved that in 2020. And then it took us only two years to double that and cross the $200 million of ARR in 2022. While the year was filled with unexpected challenges, we were able to achieve healthy growth and begin accelerating our path to profitability. We reported a solid result in the fourth quarter as we navigated the challenging microeconomic environment. Revenue grew 28% over Q4 last year to $51 million in the fourth quarter. The expansion of our global customer base consisting of SMB, enterprise, and strategic accounts has been steady. Our customer base grew 16% year-over-year to over 4,000 customers, and our average account spent about $52,000 with us annually, up 80% over last year. Furthermore, 55% of our annual recurring revenue comes from customers who spend more than $100,000 per year with us. Today, 39% of our ARR is generated from customers with multi-year contracts, demonstrating the durability of those customer relationships. This is a metric that has grown year over year since 2020. Looking forward to 2023, we believe current microeconomic conditions will persist for some time. To succeed in this environment, we have adjusted our strategic objectives and sharpened our focus to deploy resources carefully on core activities that create revenue and improve profitability. Our first objective is to successfully serve strategic customers. Now, more than ever, our strategic customers are increasing and expanding their use of our data. Our second objective is to grow our number of accounts through product-led growth and effective go-to-market strategies. We have barely penetrated our multi-billion dollar total addressable market that consists of hundreds of thousands of businesses, that all need digital market data to win and to be successful in the digital world. We will experience with different approaches to packaging and pricing this year. The third objective is to accelerate the adoption of new products and add-ons. Today, SimilarWeb is a multi-solution company with many products and solutions we can offer to our customers. we see a big opportunity to continue cross-selling those solutions to our current book of business. Last but not least, we'll strive to operate efficiently with an excellent inefficiency. We will optimize our execution this year with a focus for finding new efficiencies across our sales and marketing areas. This will enable us to achieve cash flow positive by the fourth quarter of this year. We believe that our digital data is simply the best. Period. Our customers tell us that our solutions are more valuable than ever in today's environment. We will continue to double down on our customers' needs to survive and win in this unpredictable economy. Jason, I will turn the call over to you.