Similarweb Ltd.

Greetings. Welcome to SimilarWeb's fourth quarter fiscal 2025 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 zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Rami Meyerson, Vice President, Investor Relations. Thank you. You may begin.

Thank you, Operator. Welcome, everyone, to our fourth quarter 2025 Earnings Conference Call. Joining me today are our CEO and co-founder, or author, our Chief Financial Officer, Ran Vered, who started with us in late December 2025, and Miles Lakowski, our Chief Business Officer, who is joining us as well. Yesterday, after market close, we released our results for the fourth quarter and published a discussion of our results in a letter to shareholders on our investor relations website at ir.similarweb.com. Today's webcast will be accompanied by an earnings presentation, which is new and underscores our commitment to investor relations and transparent communication. The webcast can also be accessed from our investor relations website. Certain statements made on the call today constitute forward-looking statements, which reflect management's best judgment based on the currently available information. These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our earnings release and our most recent annual report filed on Form 20F for more information on the risk factors that could cause actual results to differ from our forward-looking statements. Additionally, certain non-GAAP financial measures will be discussed in the call today. Reconciliation is the most directly comparable GAAP financial measures are available in the earnings release and the earnings presentation. Or and Ran will walk through the highlights of the quarter and the full year, review the progress we're making on our profitable growth strategy, and provide our initial outlook for 2026. Following our prepared remarks, we will open up the call to questions from sell-side analysts. With that, I'll turn the call over to Or. Or, please go ahead.

Thank you, Rami. Welcome, everyone, joining the call today, and a special welcome to Ran, who joined us as our new CFO in December 2025. I will begin with our Q4 and full year 2025 highlights, then cover our strategy and the progress we made in 2025, rolling out our innovative solution and conclude with our 2026 priorities and goals. Now let's look at our Q4 2025 performance on slide five. Revenue grew 11% year over year to $72.8 million. This was below our guidance, mostly due to the timing of two large LLM data training contracts that did not close yet, but remain active in our pipeline. Given the size and complexity of those AI contracts, sell cycles can take longer to complete. That said, once closed, we expect them to represent a very big multi-year revenue opportunities with strong expansion potential. We are working hard to close those deals. In addition, and despite the delay of those deals, we slightly exceeded the midpoint of our non-GAAP operating profit targets for the quarter for disciplined cost management. Despite the low top-line performance, we delivered our ninth consecutive quarter of positive free cash flow and achieved our second consecutive year of positive operating profit. We generated approximately $13 million in free cash flow for the year, reinforcing our commitment to profitable and durable growth. Net revenue retention for all clients was 98% and 103% for clients above $100,000. We are focused on driving improvement in this matrix in 2026 by executing our customer expansion playbook. Later on, I will expand on the drivers behind that optimism and the action we are taking. Finally, customer demand for our AI offering continued to expand. AI-related revenue reached 11% of sales in the fourth quarter, up from 8% at the end of the second quarter of 2025. driven by our portfolio of innovative AI solutions, which we also will cover later in the presentation. Turning to slide six and our key messages. First, 2025 was a big deal. We built the platform to win in the AI era. While the market was dynamic, we leaned into the opportunity forming around AI. We accelerated product innovation and launched new offering such as app intelligence, which was the fastest growing product we had in 2025. We introduced an ad intelligence, gen AI intelligence, AI agent, and MCP integrations, which is a new industry standard for AI systems to access our data. Most recently, we launched a AI studio, which is an AI-powered chatbot interface that makes it easier for more users to access our data and actual insights and recommendations. These are commercial products already gaining traction. As said in Q4, 11% of our revenue came from AI-related use case. We see AI as a magnificent monetization tailwind going forward. Second, we demonstrated the strength and durability of our model. We grew AI revenue 3x year over year and achieved our second consecutive year of positive operating profit and free cash flow. One important highlight is that 60% of ARR is now multi-year, up from 49% a year ago. This is an important metric as it reflects deeper customer relationships stronger alignment with our value proposition and greater revenue visibility. Most importantly, it shows that our customers are choosing to commit to our data and products for a longer period of time, which is a strong vote of confidence in the value we deliver. In addition, 63% of ARR comes from customers generating over $100,000 annually. reinforcing how embedded we are in mission-critical use cases in the enterprise segment. Third, our data mode matters more than ever. AI models and systems are only as strong as the data behind them. Our proprietary digital data now powers enterprises, LLM, and AI agents. The quality of our data has been validated by both third parties and customers. For example, we expanded our integration within the Bloomberg terminal. This positioned SimilarWeb as a premium alternative data provider for institutional investors and provide another proof point of the quality of the data we provide. And finally, 2026 is transformation year. We are moving from building to scaling. As AI become embedded into workflow and trusted digital data become a strategic asset. We believe SimilarWeb is well positioned to power the next generation of digital intelligence. Let me walk you through how we are executing our strategy to build an AI-driven data powerhouse on slide seven. Our strategy is built on three pillars. strengthening our data mode, deepening enterprise relationship, and third, scaling AI-first integrated solution. So let's start with the first one, verbal data mode. We are a leader in the digital market data. For more than a decade, we invest hundreds of millions of dollars in developing and deepening our data mode, building deep expertise in collecting and estimating digital behavior at global scale. We continue to invest in R&D to enhance the quality, accuracy, and breadth of the data sets that power our digital intelligence. We continue to expand coverage, accuracy, and freshness across web, app, search, ads, and now chat-based channels, staying at the forefront wherever digital traffic is shifting. This is how to replace assets with compounding advantage and significant long-term commercial potential. AI depends on it. It does not replace it. Second, we are powering leading enterprise with our trusted digital data. Many of the world's largest and most sophisticated companies are already our customers. We see significant opportunity to scale those relationships by applying our proven expansion playbooks. increasing multi-product adoption over time and driving higher NRL. We already have two large tech customers generating over $10 million in ARR. Those are broad multi-use case relationships across multiple teams and functions. Both have expanded into a data agreement that powers their LLMs, positioning SimilarWeb as a critical building block within their AI stack. Enterprise expansion will be a key focus area for us in 2026 and beyond. Third, we are doubling down on AI first integrated solution. And we will continue to expand our AI portfolio to establish ourselves as a winner in the AI transformation. Our data sets are uniquely positioned to power both enterprise users and AI systems, a dual strategy built for people and for agents. Through ecosystem partnerships like MANOS, our data is embedded directly into AI-native workflows, especially for research-driven use case. Just as financial data become essential for research platforms, chatbots, we believe that digital market data can play a similar role across all platforms. We expect it become a meaningful commercial growth driver. As we execute on our three pillars, we remain fully committed to operational excellence to drive durable, profitable, and cash-generated growth. As you can see on slide eight, we made significant steps forward on our strategy in 2025 as we build SimilarWeb for the next stage in our journey. Starting with the data mode, In 2025, we launched multiple new datasets to further extend our 360-degree visibility across the digital world and establish our leadership in digital data. We significantly expanded our coverage across app data, ad spend data, chatbot activity data, and Gen-AI visibility. These datasets are very unique, and we believe we are uniquely positioned to provide a comprehensive view across web, app, search, e-commerce, advertising, and emerging AI-driven channels, uncovering the full digital journey across touchpoints. Moving to the enterprise pillar, we delivered a solid performance in 2025. Our $100,000 customers grew 12% year-over-year and now represent 63% of ARR. Revenue for multi-year contracts increased significantly to 60% of ARR from 49 in 2024. Lastly, on our AI-first solution, we launched our innovative offering AI Studio, AI agent embedded across our business solution to accelerate time to insight. Gen AI intelligence module, which help brands measure their visibility and sentiment across generative AI platforms. and a new chatbot MCP integration, including partnerships like Manos, which open an exciting new distribution and monetization channel. Our partnership with Manos extends our data sets into agent-driven workflow, where autonomous AI agents capable of performing complex text activities execute marketing analysis, competitive assessment, and strategic planning, Manos, which was recently acquired by Meta, is one of the fastest scaling startups in history, and this collaboration offers us revenue opportunities to scale with it. Furthermore, Manos provides access to a much broader set of potential end users beyond our core subscribers base, expanding our time by empowering millions of users with our data. This milestone partnership reinforce our value proposition as essential data layer for the next generation of agentic tools and serve as a strategic blueprint for more integration to come. Those are some of the steps we took to strengthen our data-mode-dependent enterprise relationship and position SimilarWeb to win in the AI era. Slide nine captures our AI data and product strategy, how we power the ecosystem build AI-first solution, and expand distribution at scale. First, we are powering LLM and AI agents. We are seeing strong traction licensing our data directly to leading LLM companies for both pre- and post-training use case. This is a strategic priority for us, and we expected to become increasingly strong revenue stream for us over time. At the same time, autonomous agents require trusted, structured digital intelligence to operate efficiently. That's exactly what we provide. Our data is built for both human and agent, and we see accelerating demand from both. Second, we are building our own AI native solution. With GenAI intelligence, we are helping brands to improve their GenAI visibility and sentiment. We are seeing strong market validation on this front, including recognition of our leadership by G2 Crowd, and we have recently launched it in a self-serve with adoption from hundreds of customers. We believe our data provides an important competitive advantage in this new market, and we are on a journey to become a market leader in this category as well. We are also transforming our traditional software into an agent-first model, launching workflow-specific AI agents across marketing and sales use case. This moved customers from insights to action with a faster time to value and stronger ROI. This effort is helping us to get to many more users, grow adoption, and time. We are very excited about the potential of our own agentic strategy. Third, we are expanding distribution at scale. For partnership with leading LLM and agent platform, such as Manos, and for MCP integration, we're embedding SimilarWeb directly into AI ecosystems. Our MCP is already available in cloud and will soon be integrated into ChatGPT, enabling AI systems to seamlessly access our data so users can consume SimilarWeb insights directly within the workflows. Those ecosystems partnership unlock new customer, expand our time, and position our digital data as a critical ingredient for AI driven research and decision making. We believe we are well positioned to be an AI winner with multiple commercial opportunities across data, products, and partnership, and we are excited about the potential. I would like to spend a moment on the AI studio on slide 10. Because this is more than just a new product launch. AI Studio represents a huge shift in how users interact with similar web data. Historically, our platform delivered a powerful data-driven insight, but often required technical expertise to extract value. AI Studio changed that. With an AI-powered interface, users can ask business questions in a plain language and in all languages. and instantly receive actionable insight. What used to take time and specialized skill can now happen quickly and easily. This is a major step in democratizing access to our data across teams and workflows. AI Studio expands the number of users who can leverage similar web, increases engagement, enables faster and more seamless insight generation, and unlock new monetization opportunities. The early feedback, both from beta customers and since launch, has been amazing. We see AI Studio as a core part of our product strategy and an important driver of future growth. I encourage you to watch the demo video after the call via the link on the slide to see it in action. Let me close by reflecting back on 2025 and how it set up for 2026 on slide 11. 2026 was a pivotal year. We made real progress. As I said, AI revenue grew 3x and now represent 11% of Q4 revenue. That is meaningful traction and clear validation that AI is already contributing to the business. We also strengthened our durability of the model. $100,000 K customer grew 12%. And 60% of ARR is now multi-year, up from 49% a year ago. They give us better visibility and reinforce the depth of our enterprise relationship. At the same time, we acknowledge that 2025 was not within challenge. Overall, NRR stabilized at 98%, and we are not satisfied with that level. While NRR for our $100,000 customers was at 103%, we know we can execute better across the border base. We have taken action by sharpening our go-to-market strategy, upgrading talent, refining processes, and building scalable playbook to drive cross-sell and expansion. We see a clear opportunity to convert one-time AI evaluation deals into recurring revenues and to accelerate the adoption of our newer solution across the installed base. That's why we have a strong conviction in 2026. We are well positioned to capture long-term AI spend. Our AI force portfolio is scaling, ecosystem publishing are expanding, and we are targeting high growth segments like LLM companies, large big tech players, and OEM with our own dedicated go-to-market team and focus. With Ron joining as a CFO, there are also strengths our financial discipline, and public market execution. So 2025 set the stage. 2026 is about disciplined execution and acceleration. With that, I will hand it over to Juan.