Similarweb Ltd.

Greetings and welcome to SimilarWeb's third quarter fiscal 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, R.J. Jones, Vice President, Investor Relations. Thank you, R.J. You may begin.

Thank you, Operator. Welcome, everyone, to our third quarter 2023 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 rising interest rates, rising global inflation, and current macroeconomic and geopolitical conditions, including the current war in Israel, challenges in our business, and then the markets in which we operate. are 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 in the projected or implied during the call. Further, reported results should not be considered as an indication of future performance. Please review the forward-looking statements discussion in our shareholder letter, along with our Form 20F filed with the SEC on March 23, 2023, and in particular, the sections entitled cautionary statement regarding forward-looking statements and risk factors therein for discussion of the factors that could cause our actual results to differ from the forward-looking statements. Also note that any forward-looking statements made on this call are based on information available as of today's date, November 8th, 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 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 CFO, Jason Schwartz. Then we will open up the call to questions from sell-side analysts in attendance. Please note that we publish a detailed discussion of our third quarter 2023 results in the letters 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 Opper, CEO of SimilarWeb.

Thank you, RJ, and welcome everyone joining the call today. In Q3, we reported another quarter of growth and operating improvements. We grew our revenues 10% over Q3 last year to 54.8 million. Our global customer base grew 12% year over year to nearly 4,400 customers. And our average customer spends nearly $51,000 with us annually. I'm very proud of the team as we crossed a series of profitability milestones. I'm excited to report that our Q3 non-GAAP operating margins show the strong improvement of 29 percentage point compared to last year, which led us to achieving our first ever non-GAAP operating profits in a quarter. This is a significant achievement for us, and it is truly a team accomplishment, and I'm very proud of the team. Q3 metrics at the top of our funnel continue to stay strong. We had around 30 million visitors to our free tools at similarweb.com and Q3, and we are on a phase of exceeded more than 120 million visits to our tools this year. As a result, our pipeline remains robust and we are adding new customer and expanding our penetration into our market. During the quarter, we launched SimilarWeb 3.0, which is the latest generation of our platform. SimilarWeb 3.0 is a new way in which we package our offering that includes new data insights, and navigation. We now have a better pricing alignment with our customer that enhance our go-to-market motion and improves our offering to our enterprise customer and our average order value since launch has increased noticeably. We continue to make progress with SimilarEsc, our digital intelligent AI assistant, that uses similar web digital data to answer real questions that the user type in free text without having to know how to navigate our platform. The latest version of the feature is now widely available to our platform and integrate AI-based trends analysis into the research results for websites benchmarking. We are just getting started with what is possible with generative AI and we believe that merging similar web digital data with AI capabilities creates an amazing growth potential for us. I would like to take a minute to discuss the circumstances we are facing in Israel. As you know, one month ago, Israel suffered a horrific terrorist attack. We stand in solidarity with Israel by recognizing the human suffering across the region. We are proud to be an Israeli company with offices and employees around the world Since October 7, our people have demonstrated a great resilience, keeping business as usual while adopting to the current situation. We continue to deliver our solution and insights to all of our global customers without interruption. To all SimilarWebers, we thank you for your continuing commitment to keep business operating, running smoothly. To our customers, partners, and you in the investment community, We are grateful for your support. So many of you wrote to me personally to share solidarity. It means so much to me and thank you so much. With that, Jason, I will turn the call over to you.