Similarweb Ltd.

Greetings, and welcome to SimilarWeb Q4 Fiscal 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and then zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, RJ Jones. Vice President, Investor Relations. Please go ahead.

Thank you, Operator. Welcome, everyone, to our fourth quarter and fiscal year 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 in the markets in which we operate, 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 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 a discussion of 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 available information as of today's date, February 14, 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 profit or loss, which represents GAAP operating profit or loss, less share-based compensation, adjustments of 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 publish a detailed discussion of our fourth quarter and fiscal year 2023 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 websites. With that, I will turn the call over to Or Offer, CEO of SimilarWeb.

Thank you, RJ, and welcome, everyone, joining the call today. In Q4, we reported another quarter of growth and operating improvements. We grew our revenue by 11% over Q4 last year to 56.8 million. Our global customer base grew 16% year-over-year to over $4,000. 700 customers, and our average customer spends around $50,000 with us annually. The top of our funnel continues to stay strong. We add around 13 million visitors to our free tools at similarweb.com in Q4, and we extended 120 million visits to our tool in 2023. As a result, our pipeline remains robust, and we are adding new customers and expanding our penetration into our markets. The changes we made to packaging, insight, and navigation in the launch of SimilarWeb 3.0 and Q3 are bringing in new customers, creating upside from bigger average orders at renewals. We are excited to see all the new customers at our entry-level price points, especially in our monthly packages, which are no-touch with low acquisition costs. Pricing alignment with our customers 3.0 has greatly enhanced our go-to-market mode and improved our offering to our enterprise customers. It is even better with our strategic customers who are reaching new heights with us. We closed a record number of seven-figure deals during the fourth quarter because some of the largest companies in the world are recognizing the value of actionable insight that can be extracted from our data at scale. We are rapidly becoming a go-to source to power up competitive advantage for the largest companies who are investing massive resources into Gen AI. We believe that we are just getting started with what is possible with generative AI and only beginning to see its tremendous growth potential for us. I'm very proud of our team as we achieve an important milestone that we want to reach this year on. We were profitable on a non-GAAP basis in the fourth quarter, and our Q4 non-GAAP operating margins show a strong improvement of 30% points compared to last year, which led to us achieving our first positive free cash flow quarter since our IPO. This is a great achievement for us and reflects a lot of smart work and discipline from our team. We want to continue to build on this performance in the coming year. in terms of growth, profitability, and free cash flow. To do this, we are focused on execution in four areas. First, we intend to build on the positive momentum with our strategic account. We want to land and expand in those large global customers. Second, we are focused on increasing the net retention of our enterprise and SMB customers, helping our customers to take advantage of everything in CW3.0, is a customer success priority for us. Third, we will enhance and innovate in our product line. One area where we have a greater potential to drive market penetration is with our mobile data and app intelligence, as well as by unleashing our own Gen AI similar S capabilities with our data. Lastly, we will continue to operate efficiently. We will carefully invest where needed to support growth and create operating leverage. Thank you, everyone, for your continued support. We look forward to update everyone on our progress. With that, Jason, I will turn the call over to you.