Q2 2024 Similarweb Ltd Earnings Call
Speaker Change: If you should require assistance throughout the conference, please press star zero to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Rami Myerson. Sir, the floor is yours.
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Karen: At this time, it is my pleasure to turn the floor over to your host, Rami Myerson. There, the floor is yours.
Rami Myerson: Thank you, Karen. Welcome everyone to our second quarter, 2024 earnings conference call. Joining me today are our CEO and co-founder, Or Offer, and our CEO, Jason Schwartz. Yesterday, after March of close, we released our results for the second quarter and published a discussion of our results in a letter to shareholders, as well as the investor presentation with a strategic overview of the business on our investor relations website at iront.symminalweb.com.
Operator: Thank you, Karen. Welcome, everyone, to our second quarter 2024 earnings conference call. Joining me today are our CEO and co-founder, Or Offer, and our CFO, Jason Schwartz.
Or Offer: During the quarter, we were able to upsell and sign a contract with our first eight-figure ARL customer and increase our customer count to more than 5,000 customers. It is great to see the continuing demand for our data from both new and existing customers. Last week, we launched our newest improved version of our digital data estimation. The new version significantly enhanced our accuracy and coverage of our data and provided broader insights for more than 30 million new websites that we added to our coverage and many more countries than we had included in our previous data version.
Rami Myerson: Thank you, Karen. Welcome, everyone, to our second quarter 2024 earnings conference call. Joining me today are our CEO and co-founder, Or Offer, and our CFO , Jason Schwartz.
Rami Myerson: Certain statements met on the call today constitute four looking statements, which reflect management's best judgment based on currently available information. These statements involve risks and uncertainties that may cause actual results to differ from our expectations.
Rami Myerson: These are photo earnings reviews and our most recent annual report filed on 420F from our information on the risk factors. It could cause actual results to differ from our four looking statements.
Speaker Change: Please refer to our earnings release and our most recent annual report filed on Fall 20th for more information on the risk factors that could cause actual results to differ from our forward-looking statements.
Rami Myerson: Additionally, certain non-GAAP financial measures will be discussed on the call today. Reconciliation to the most directly comparable gap financial measures is available in the earnings rates and the earnings presentation.
Speaker Change: Additionally, certain non-GAAP financial measures will be discussed on the call today. Reconciliations, the most directly comparable GAAP financial measures, are available in the earnings series and the earnings presentation.
Rami Myerson: We have decided to shorten our preparedness, so we'll begin with all adjacent highlights of the quarter, and then we'll open the call to questions from South Lab, and with that, I'll turn the call over to all.
Speaker Change: We have decided to shorten our prepared remarks, so we will begin with Paul and Jason's highlights of the quarter, and then we'll open the call to questions from self-serve analysts. With that, I'll turn the call over to Paul. Paul, please go ahead.
Or Offer: Oh, please go ahead. Thank you, Rami, and welcome everyone joining the call today. Three years after renewing the bell at the New York Stick Change following a successful IPO, we are proud that SimilarWeb today is a growing possible and cash generating company. I'm super excited that this quarter our efforts to accelerate growth were successful. Our growth has primarily driven by proved go-to-market motion and innovation that we're doing in our R&D sign.
Paul: Thank you Rami and welcome everyone joining the call today. Three years after ringing the bell at the New York Stock Exchange following a successful IPO, we are proud that SimilarWeb today is a growing profitable and cash generating company.
Or Offer: As a result of those successful efforts, we feel confident in our continued business growth, and we are increasing our outlook for 2024 revenue and non-GAAP operating profits. During the Quotella, we were able to excel and sign the contract with our first eight-figure ARL customer and increase our customer count to more than 5,000 customers. It is great to see the continuing demand for our data from both new and existing customers.
Speaker Change: As a result of those successful efforts, we feel confident in our continuing business growth and we are increasing our outlook for 2024 revenue and non-GAAP operating profits.
Speaker Change: During the quarter, we were able to upsell and sign the contract with our first eight-figure ARL customer and increase our customer count to more than 5,000 customers.
Or Offer: Last week we launched our newest improved version of our digital data estimation. The new version significantly enhanced our accuracy and coverage of our data and provide both insights for more than 30 million new websites that we added to our coverage and many more countries than we had included in our previous data version. We're excited with those new data improvement and the potential that they're bringing. This new improvement will increase our position as the leader in the digital market data, and we've already got initially good and positive feedback from our customer. We continue to benefit from the positive tailwind of the AI revolution.
Speaker Change: Last week, we launched our newest improved version of our digital data estimation.
Or Offer: We continue to benefit from the positive tailwind of the AI revolution. As part of the significant investment in AI infrastructure, many large global tech companies are engaging with us to access our digital data to fill their LLM. Those companies recognize that LLM requires high-quality, fresh, and scalable data to generate and update outputs and realize the potential of our data to feed their models. This is where our digital consumer data is already providing a range of insights.
Speaker Change: We continue to benefit from the positive tailwind of the AI revolution. As part of the significant investment in AI infrastructure, many large global tech companies are engaging with us to access our digital data to fill their LLM models.
Or Offer: As part of the significant investment in AI infrastructure, many large global tech companies are engaging with us to access our digital data to feed their LLM models. Those companies are recognized that LLM require high-quality, fresh, and scalable data to generate updated outputs and rely on the potential of our data to feed their models. They also recognize that, similar with digital data, is the most unique and high-quality data source in the market for their models. Some of the world leading LLM's are already training on similar web data. We believe that there is even more ways similar web can benefit from the AI's evolution.
Speaker Change: Those companies recognize that LLM requires high-quality, fresh, and scalable data to generate updated outputs and realize the potential of our data-to-feeder model.
Speaker Change: They also recognize that SimilarWebDigitalData is the most unique and high-quality data source in the market for their models. Some of the world's leading LLMs are already training on SimilarWebData.
Or Offer: We see that many of the large global consumer brands are eager to learn how the new world of AI and chatbots is changing their customer-online behaviour. And they are keen to understand how the task to purchase is changing. We're consumers of the research before making purchase decisions, and how the new AI chatbots are impacting this behaviour. This is where our digital consumer data is already providing a range of insights. And I believe that this is a great opportunity that can have the significant potential for SimilarWeb as the AI revolution is always.
Speaker Change: and they are keen to understand how the path to purchase is changing, where consumers are doing their research before making purchase decisions, and how the new AI chatbots are impacting this behavior. This is where our digital consumer data is already providing a range of insights.
Or Offer: And I believe that this is a great opportunity that can have significant potential for SimilarWeb as the AI revolution evolves. By combining 42 methods and SimilarWeb, we have expanded our app intelligence offering across app store data, app engagement, and app SDK data. We can now provide enhanced insights for the app developer and brand into the performance of their own app versus their competitors and their market. We are also going to add sales data to enrich all of our other solutions that will benefit from the combination of having web and app data in one platform. We would like to welcome the 42 Method team to SimilarWeb and look forward to working together to build the number one global app intelligence provider.
Or Offer: In July, we acquired 42-metals, a Swiss app intelligent provider, to expand our app data capabilities in the rapidly growing app market. By combining 42-metals and similar web, we have expanded our app intelligence offering across app store data, app engagement, and app SDK data. We can now provide enhanced insights for the app developer and brand into the performance of their own app, process of their competitor, and their markets. We are also going to add the desired market data to enrich all of our other solutions that would benefit from the combination of having web and app data in one platform.
Speaker Change: In July , we acquired 42Metro, a Swiss app intelligence provider, to expand our app data capabilities in the rapidly growing app market.
Speaker Change: By combining 42 methods and SimilarWeb, we have expanded our app intelligent offering across app store data, app engagement, and app SDK data.
Speaker Change: We are also going to add the sales market data to enrich all of our other solutions that will benefit from the combination of having web and app data in one platform.
Or Offer: We would like to welcome the 42-metals team to the SimilarWeb and look forward to working together to build the number one global app intelligent provider. I want to thank to the whole team for another successful quarter of excellent results and growing execution. We believe that we are still only starting to realize the potential of our data and the addressable market we serve. And as I like to say, we are on; we are just getting started.
Speaker Change: We would like to welcome the 42method team to the SimilarWeb and look forward to working together to build the number one global app intelligence provider.
Speaker Change: I want to thank the whole team for another successful quarter of excellent results and growing execution. We believe that we are still only starting to realize the potential of our data and the addressable market we serve. And as I like to say, we are on, we are just getting started.
Or Offer: Thank you everyone for joining the call today and continue your support. We did.
Speaker Change: Thank you everyone for joining the call today and continue your support. With that, I will turn the call over to Jason.
Jason Schwartz: I will turn the call over to Jason. Jason. Thanks a lot, and everyone joining us on the call today to discuss our second quarter results. I'll provide highlights of our financial performance, and then we'll open up the call to questions. Revenue growth continued to accelerate to 13% year-over-year in the second quarter, driven by new customer growth and improving retention. In Q224, we achieved an overall net revenue retention rate of 99% and an NRR of 199% for our over $100,000 AR customer segment and improvement relative to the first quarter of 2024. We believe this quarter's NRR demonstrates a change of the trajectory and expect further improvement in the quarters ahead.
Jason Schwartz: Thanks, Or, and everyone joining us on the call today to discuss our second quarter results. I'll provide highlights of our financial performance, and then we'll open up the call to questions.
Jason: Thanks, Or, and everyone joining us on the call today to discuss our second quarter results. I'll provide highlights of our financial performance, and then we'll open up the call to questions.
Jason: Revenue growth continued to accelerate to 13% year-over-year in the second quarter, driven by new customer growth and improving retention.
Jason Schwartz: In Q2'24, we achieved an overall net revenue retention rate of 99% and an NRR of 109% for our over $100,000 ARR customer segment, an improvement relative to the first quarter of 2024. We believe this quarter's NRR demonstrates a change in trajectory and expect further improvement in the quarters ahead. Our operational performance in the quarter demonstrates our continued commitment to disciplined execution, and we delivered a fourth consecutive quarter of non-GAAP operating profit and a record non-GAAP operating margin of nine percent.
Jason: In Q2'24, we achieved an overall net revenue retention rate of 99% and an NRR of 109% for our over $100,000 ARR customer segment, an improvement relative to the first quarter of 2024.
Jason: We believe this quarter's NRR demonstrates a change of the trajectory and expect further improvement in the quarters ahead.
Jason Schwartz: Our operational performance in the quarter demonstrates our continued commitment to discipline to execution, and we delivered a fourth consecutive quarter of non-GAAP operating profit and a record non-GAAP operating margin of 9%. We generated $6 million of free cash flow in the quarter and $16 million of free cash flow in the first half of 2024. Our remaining performance obligations for RPO totaled $217 million at the end of Q224, up 24% year over year. We expect to recognize approximately 75% of total RPO as revenue over the next 12 months. Following the strong results that we're reporting today and that exceeded expectations, we are raising our guidance for both revenue and non-GAAP operating profit for the full year 2024.
Jason: We generated $6 million of free cash flow in the quarter and $16 million of free cash flow in the first half of 2024.
Jason: Our remaining performance obligations, or RPO, totaled $217 million at the end of Q2-24, up 24% year-over-year.
Jason: We expect to recognize approximately 75% of total RPO as revenue over the next 12 months.
Jason Schwartz: In Q324, we expect total revenue in the range of $62.5 to $63 million, representing approximately 15% growth year over year at the midpoint of the range. For the full year 2024, we expect total revenue in the range of $246 to $248 million, a $2 million increase from our previous expectations. Non-GAAP operating profit for the third quarter is expected to be in the range of $2.8 to $3.2 million. For the full year, we expect our operating profit to be between $13 and $15 million, up from our previous expectations of $7 to $9 million. Our guidance reflects increased operating expenses, primarily related to increased headcount, in which we intend to invest to further accelerate our revenue growth.
Jason: non-GAAP operating profit for the third quarter is expected to be in the range of $2.8 to $3.2 million.
Jason Schwartz: For the full year, we expect our operating profit to be between $13 and $15 million, up from our previous expectations of $7 to $9 million. Our guidance reflects increased operating expenses primarily related to increased headcount, which we intend to invest in to further accelerate our revenue growth. We anticipate being profitable on a non-gap basis and generating positive free cash flow in all of the remaining quarters of 2024.
Jason: For the full year, we expect our operating profit to be between $13 and $15 million, up from our previous expectations of $7 to $9 million.
Jason: Our guidance reflects increased operating expenses primarily related to increased headcount in which we intend to invest to further accelerate our revenue growth.
Jason Schwartz: We anticipate being profitable on a non-GAAP basis and generating positive free cash flow in all of the remaining quarters of 2024. We remain focused on delivering profitable growth and making further progress towards the rule of 40 over time, as well as achieving our long-term profit and free cash flow targets.
Rami Myerson: And with that, or an I are ready to answer your questions.
Operator: Thank you. Ladies and gentlemen, the floor is now open to questions. If you do have a question, please press star 1 on your telephone keypad at this time. Again, that's star 1 if you have a question or comment.
Rami Myerson: Thank you.
Operator: Ladies and gentlemen, the floor is now open for questions. If you do have a question, please press star one on your telephone keypad at this time. Again, that's star one. If you do have a question or comment.
Arjun Bhattia: And we'll take our first question from Arjun Bhattia from William Blair. Please go ahead.
Arjun Bhattia: Perfect.
Unnamed Participant: Perfect. Thank you guys and congrats on a great Q2 here.
Arjun Bhattia: Thank you, guys, and congrats on a great Q2 here. One thing that's stuck out to me in the short hold of the letter and or in your reporter box is that you're getting interest from some of these large tech companies to buy your data to train their LLMs. It sounds like you have that from that a figure customer you mentioned. So when you think about just the economics of that, how do you make sure value is aligned, and how do you go about pricing a use case? Like that. And you know, it sounds like you're expecting more of these.
Speaker Change: Perfect. Thank you guys and congrats on a great Q2 here. One thing that stuck out to me in the shareholder letter and or in your in your prepared remarks is you're getting interest from some of these large tech companies.
Unnamed Participant: One thing that stuck out to me in the shareholder letter and in your prepared remarks is that you're getting interest from some of these large tech companies to buy your data to train their LLMs. It sounds like you had that from that eight-figure customer you mentioned. So when you think about just the economics of that, how do you make sure value is aligned, and how do you go about pricing a use case like that? And it sounds like you're expecting more of these. So any insight into how that kind of flows through the business side for SimilarWeb would be very helpful.
Speaker Change: It sounds like you had that from that eight-figure customer you mentioned.
Speaker Change: So when you think about just...
Speaker Change: The economics of that, how do you make sure value is aligned, and how do you go about pricing a use case?
Arjun Bhattia: So any insight into how that kind of flows through the business side for some or what would be would be very helpful.
Or Offer: Hey, Harjan. Thank you for the question. It's a good question.
Or Offer: Hey, how's Jenna? Thank you for the question, the good question. And I had two questions here. The first one is about the demand for this offering. So we do see an increase in demand for consuming more digital data by those big tech companies that are building these LLMs. So we are expecting this. But I think we're doing a good job now, building trust and working as a good partner with those companies.
Speaker Change: Thank you for the question. It's a good question.
Or Offer: And I had two questions here. The first one is about the demand for this offering. So we do see an increase of demand for consuming more digital data by those big tech companies that are building those LLAM. So we are expecting this offering to accelerate and down the road.
Speaker Change: And I had two questions here. The first one is about the demand for this offering. So we do see increase of demand for consuming more digital data by those big tech companies that are building those LLMs. So we are expecting this.
Or Offer: And regarding pricing and packaging of this offering, it's a good question. It's new. And you know, there are still a few ways how you can price and package it. It's a lot about consumption. And there's many ways the customer would want to get the data. It's a lot very custom. But I think we're doing a good job now, building trust and working as a good partner with those companies to do the great solution for them.
Speaker Change: And regarding pricing and packaging of this offering, it's a good question, it's new, and you know, there is still...
Speaker Change: But I think we're doing a good job now building trust and working as a good partner with those companies to build a great solution for them.
Arjun Bhattia: Very interesting. Okay, we'll stay tuned on that.
Speaker Change: Very interesting. Okay, well, we'll stay tuned on that. And the other one, you know, I think when I look at your growth drivers, it looks like the 100K, the revenue from 100K plus customers.
Arjun Bhattia: And the other one, you know, when I think when I look at your drivers, it looks like the 100K, the revenue from 100K plus customers is growing above 20%, at least by my estimation from your disclosures, which is much higher than your overall overall revenue. So, what is driving that?
Speaker Change: is growing above 20%, at least by my estimation from your disclosures, which is much higher than your overall
Speaker Change: Overall revenue. So what is the, what is driving that? And maybe can you just touch a little bit on
Or Offer: And maybe can you just touch a little bit on the similarities and differences in demand that you're seeing from smaller customers versus larger ones and how buying behaviors are maybe diverging between those two groups. Yeah, we do see more success in the strategic account. And the past quarter or so, we become much better with serving those customers every announce. We've got our first eight-figure customer this quarter that was super excited. And we becoming better with the way we serve them, the way we work with them, and because we do serve the biggest companies in the world and the appetite for digital data is increasing.
Or Offer: Yeah, we do see more success in the strategic accounts. And in the past quarter or so, we've become much better at serving those customers, as we announced. We've got our first eight-figure customer this quarter that was super excited, and we're becoming better at the way we serve them, the way we work with them, and because we do serve the biggest companies in the world.
Speaker Change: Yeah, we do see more success in the strategic account. In the past quarter or so, we become much better with serving those customers as we announced. We've got our first eight-figure customer this quarter that was super excited.
Speaker Change: And we're becoming better with the way we serve them, the way we work with them. And because we do serve the biggest companies in the world, and the appetite for digital data is increasing. So there's a lot of opportunity, and we're doing a great job now.
Or Offer: So there's a lot of opportunity, and we're doing a great job though.
Jason Schwartz: I don't do it, so maybe I have anything to add on.
Or Offer: Yeah, I would probably just add that part of that was also intentional. One of the things that we did with 3.0 was to make it easier for customers to get started on board with SimilarWeb. And we know that because based on the history, and you see that this eight-digit customer that we announced yesterday was, you know, started with a few tens of thousands of dollars and over time grew 450x to an over eight-digit customer.
Jason Schwartz: Yeah, I would probably just add that, remember, part of that is also intentional.
Jason Schwartz: We have one of the things that we did with 3.0 was to make it easier for customers to get started on board with SimilarWeb. And we know the app, because based on the history and you see that in this eight-digit customer that we announced yesterday, was started as a few tens of thousands of dollars and over time grew 450x to an over eight-digit customer. And they have bought four of our solutions; of course, multiple departments and multiple geographies. And that's the kind of journey that we see over and over again. And so the customers start, and we land with them.
Speaker Change: was to make it easier for customers to get started with an onboard with SimilarWeb. And we know that because based on the history, and you see that in this eight-digit customer that we announced yesterday,
Speaker Change: was, you know, started as...
Speaker Change: a few tens of thousands of dollars and over time grew 450x to to an over eight digit customer and they have bought
Or Offer: And they have bought four of our solutions across multiple departments and multiple geographies. And that's the kind of journey that we see over and over again. And so the customers start, and we land with them. We could land with them at a more nominal number than the, you know, $100,000 or whatever. But over time, they land, retain, and expand. And then you start seeing them when they get to that $50,000, $100,000 number; they start realizing that there are even more and more places where they can leverage our data, whether it's through the productized solutions or the DAS and integrations that Oral was talking about.
Speaker Change: Four of our solutions across multiple departments and multiple geographies. And that's the kind of journey that we see over and over again.
Speaker Change: And so the customers start and we land with them, we could land with them in a more nominal number than the, you know, $100,000 or what.
Jason Schwartz: We could land with them in a more nominal number than the, you know, 100,000 dollars or what. But over time, they land, retain, and expand. And then you start seeing them. When they get to that $50,000, $100,000 number, they start realizing that there are even more and more places where they leverage our data, whether it's through the prototype solutions or the death and integrations that we're going to restore.
Speaker Change: They start realizing that there are even more and more places where they can leverage our data, whether it's through the product art solutions or the DAS and integrations that Oral was talking about.
Arjun Bhattia: Okay.
Unnamed Participant: Okay, got it. Super helpful. Thank you both and congrats again here.
Arjun Bhattia: Got it. Super helpful.
Or Offer: Thank you both. And congrats again here. Thank you.
Speaker Change: Okay, got it. Super helpful. Thank you both and congrats again here.
Jason Helfstein: Thank you. And we'll take our next question from Jason Helfstein from Oppenheimer. Please go ahead.
Jason Helfstein: And we'll take our next question from Jason Helfstein from Oppenheimer. Please go ahead.
Speaker Change: Thank you. And we'll take our next question from Jason Helfstein from Oppenheimer. Please go ahead.
Steve Hromin: Hi, this is Steve Hromin on for Jason. So just one question from us. Do you expect a similar Web 3.0 to continue sort of driving lower AR per customer given kind of lower entry points to allow companies to kind of just start up quickly? And just to follow up on that. Yeah, and we took the strategy to make it much more easy landing. And this is what you're seeing: a nice acceleration in our local growth was customer. We also seen great success in ourselves and customer that can just put credit card. Trying to get familiar with this digital market data.
Speaker Change: Hi, this is Steve Homan on for Jason. So just one question from us. Do you expect...
Steve Homan: 3.0 to continue sort of driving lower AR per customer given kind of the lower entry points allow companies to kind of just start up quickly and just to follow up on that.
Or Offer: Yeah, and we took the strategy to make it much more easy to lend. And this is why you're seeing a nice acceleration in our logo growth of customers.
Unnamed Participant: Awesome, and just a follow-up, in terms of margins, sort of on that, kind of per customer, I was wondering... For smaller customers, do you see that there's almost a better margin there because there's a lot less that you have to, you know, spend to service them? For She on The Simpsons.
Speaker Change: Yeah and we took the strategy to make it much more easy lending and this is why you're seeing a nice acceleration in our logo growth of customers.
Speaker Change: We're also seeing great success in our self-search, a customer that can just put...
Speaker Change: credit card.
Speaker Change: trying to get familiar with this digital market data. And then as they're getting more familiar, they're ready to move on for more yearly engagement. So we're seeing a very strong success, so it's really proved itself to give easy lending for our customers.
Or Offer: And then as they getting more familiar, they're ready to move on from a yearly engagement. So we see a very strong success. So it's really prove itself to easy landing and so our customers and then grow them over time. Awesome. And just follow up in terms of margins, sort of on that kind of per customer, I was wondering for smaller customers, do you see that there's almost better margin there because there's a lot less that you have to, you know, spend to service them? For easier on the self customer. Yeah, for sure. It's a very good margins.
Speaker Change: and then grow them over time.
Speaker Change: Awesome and just a follow-up in terms of margins sort of on that kind of per customer I was wondering
Operator: For watching.
Or Offer: And so you write about it.
Speaker Change: And so you're right about that. It's partly what you're seeing increasing our overall AOV, because we're getting much more customers in the lower part, but we're very confident in our ability to increase their AOV over time.
Steve Hromin: It's probably what you're seeing increasing our overall AOV because we're getting much more customers in the lower part, but we're very concerned on our ability to increase their AOV over time. So, thank you.
Operator: Thank you. And our next question comes from Surinder Thind from Jeffries. Please go ahead.
Surinder Thind: And our next question comes from Surrender, then from Jeffries, please go ahead. Thank you. First question is just on the plans for increased headcount. Any color that you can provide there in terms of, is this more sales focused a lot more engineers, how should we think about the build out of that part of the expense profile?
Surinder Thind: Thank you. My first question is just on the plan for increased headcount. Any color that you can provide there in terms of is this more sales focused, a lot more engineers, how should we think about the build out of that part of the expense profile?
Speaker Change: Thank you. First question is just on the plan for increased headcount. Any color that you can provide there in terms of, is this more sales focused, a lot more engineers? How should we think about the build out of that part of the expense profile?
Or Offer: I'm mostly a self related. We think from the momentum, revenues increasing, you can see that we have to increase our growth in the past three quarters 11 to 12 now 13. We're ready gave guidance for next quarter that's talking about 15 and it's mean that we need to hire more personal success to build the book of business. And that's the same a lot of opportunity ahead of us.
Speaker Change: Mostly sales-related. We're seeing strong momentum, revenues increasing. You can see that we're able to increase our growth in the past three quarters.
Speaker Change: from 11 to 12 and now 13. We already gave guidance for next quarter that talks about 15 and it means that we need to hire more customers success to deal with the Book of Business we're seeing a lot of opportunity ahead of us.
Jason Schwartz: So, this is mostly about the...
Or Offer: So this is mostly the increasing headcount. Thank you. And then for the net revenue retention for when we look at clients that are smaller than a hundred thousand dollars. Any incremental color there, it seems like the trends are bottoming. Is that a fair read of where the data is and what you're seeing at this point? And we're also approaching the one-year anniversary of the rollout of the new sales motion. And if that would somehow reflect the NRR number. Yeah, so we've seen positive trends on the retention, as you can see in the numbers. We're super happy about that.
Speaker Change: So, this is mostly the implicit head code.
Surinder Thind: And then for the net revenue retention for when we look at clients that are smaller than $100,000. Any incremental color there, it seems like the trends are bottoming. Is that a fair read of where the data is and what you're seeing at this point? We're also approaching the one-year anniversary of the rollout of the new sales motion, and whether that would somehow inflect the N or R numbers.
Or Offer: Yeah, so we're seeing a positive trend. All of those efforts, of course, we started a year ago, and now we are starting to collect those fruits. So you're right about your assumption.
Or Offer: All of those efforts is, of course, efforts we started a year ago, and now we still have to collect those sorts. So you write about your assumption.
Surinder Thind: Thank you, that's it for me.
Surinder Thind: Thank you. That's it for me.
Ryan Macwilliams: Thank you. And we'll take our next question from Ryan MacWilliams from Barclays. Please go ahead, Ryan.
Ryan Macwilliams: Thank you. And we'll take our next question from Ryan McWilliams from Barclays.
Speaker Change: Thank you. And we'll take our next question from Ryan MacWilliams from Barclays. Please go ahead, Ryan.
Ryan Macwilliams: Please go ahead, Ryan. Hey guys, next question on the 42 Matters acquisition or will love to hear about just how you're seeing interests from customers on monitoring mobile app analytics at this point. And from Jason, how are you thinking about the top and bottom line contribution from 42 matters and is aiming big into the gut.
Ryan Macwilliams: Hey guys, thanks for taking the question.
Ryan Macwilliams: And from Jason, how are you thinking about the top and bottom line contributions from 42 Matters and his aiming vision for the guide? Thanks.
Or Offer: Thanks. Okay, so thank you, Ryan, and that we answered the first question. I'm glad Jason answered the second one. For so from our customers, we know for a while the majority of our customers when they operate in the digital world, they have usually a website asset that they need to grow and a lot of them have apps. As said, they also want to be successful. Sometimes that is more for retention playing. But I think that most of our customers want to do digital risk or digital investment. You want to see a holistic view about the digital world that is the combination of where then app together.
Or Offer: Okay, so thank you, Ryan. And let me answer the first question, and Jason will answer the second one.
Or Offer: So, from our customers, we know for a while that the majority of our customers, when they operate in the digital world, they usually have a website asset that they need to grow, and a lot of them have app assets that they also want to be successful. Sometimes the app is more for attention play. But I think that most of our customers want to do digital research or digital investment and want to see a holistic view of the digital world that is the combination of web and app together.
Speaker Change: about the digital world that is the combination of web and app together. And this acquisition will enable us to provide this holistic view to the customers. And we see that there are probably a lot of cross-sell apps and opportunities.
Jason Schwartz: And this acquisition will enable us to provide this holistic view to the customers, and we see that there's probably a lot of cross and absolute opportunities. Because the majority of our customer doesn't matter if it's B2C, B2B, or just all, you probably would want to have access to both of those insights. So I'm very optimistic and bullish on that acquisition and Jason.
Or Offer: And this acquisition will enable us to provide this holistic view to customers. And we see that there are probably a lot of cross-sell apps and opportunities because the majority of our customers, doesn't matter if it's B2C, B2B, or an investor, you probably would want to have access to both of those insights.
Speaker Change: Because the majority of our customers, doesn't matter if it's B2C, B2B, or Investor, you probably would want to have access to both of those insights.
Speaker Change: So I'm very optimistic and bullish on that acquisition. And Jason?
Jason Schwartz: Yeah, hey Ryan, yes, we built that into the guide that we have for the remainder of the year. There were 42 matters, a great team, a small business, so it has a, you know, some incremental where it's worth that bullish about the impact that it can have selling into our customer base on the bottom line. I mean, very small contribution there; the expansion and on the profit guide is really the results of a lot of the activity and the efficiencies that we have going through the our core business on that.
Jason: Yeah. Hey, Ryan. Yes, we built that into the guide that we have for the remainder of the year.
Jason: is really the result of a lot of the activity and the efficiencies that we have going through our core business on that.
Or Offer: Appreciate the color there. And then, you know, just on the overall macro, getting, you know, a lot of different viewpoints from investors and companies there. But with you guys improving our PO, proving an RR, and improving net new customers, it just seems like you're kind of maybe bucking some of the more pressing macro concerns that we're seeing elsewhere in software. I guess, are there any key trends that are driving your improvement quarter to quarter? And I guess how do you guys feel overall about how macro is impacting your business at this point?
Speaker Change: Appreciate the color there. And then, you know, just on the overall macro, getting, you know, a lot of different viewpoints from investors and companies there. But with you guys improving RPO, improving NRR, and improving net new customers, it just seems like you're kind of maybe bucking some of the
Speaker Change: More pricing macro concerns that we're seeing elsewhere in software. I guess, are there any key trends that are driving your improvement quarter to quarter? And I guess, how do you guys feel overall about how macro is impacting your business at this point? Thanks.
Or Offer: Thanks. Yeah, so it's a good question. I think, as I talked a little bit earlier today, we didn't work in putting our start motion and our self-serve motion that are doing extremely well—driving great growth and success. And all of those efforts we did are basically improving. And we always saw the demand we had on top of the phone as far as it was mostly just executing right, and we can drive a lot of growth because we really operate in a very big time.
Or Offer: And all of those efforts we did are basically improving, and we always saw the demand we had on top of the funnel. So for us, it was mostly just executing right, and we could drive a lot of growth because we really operate in a very big town. Now I am regarding the other question about market dynamics.
Speaker Change: Efforts we need are basically Improving and we always saw the demand we had on top of the final set. For us it was mostly just executing right and we can drive a lot of growth because we really operate in a very big time.
Or Offer: Now, regarding the other question about market dynamics, I think it reminds me a little bit about when COVID came. I think that when markets are struggling and you have a tough dynamic, maybe recession, maybe not, a lot of companies tend to double down and get market data to understand their positioning. And so we think that we have a benefits here; our solution help get a company's visibility about market dynamics and where their position in this hostile environment. And so I think that those stuff are kind of giving a nice 10-win to business like us. Is it color, Nagi?
Speaker Change: Are there questions about market dynamics?
Speaker Change: I think it reminds me a little bit about when COVID came. I think that when markets are struggling and you have a...
Speaker Change: So we think that we have a benefit here. Our solution helps get a company's visibility about market dynamics and where they're positioned in this hostile environment. So I think that...
Speaker Change: That those stuff are kind of giving nice tailwind to business like us.
Brett Knoblauch: Thank you. And we'll take our next question from Brett Noblach from Cantor Fitzgerald.
Speaker Change: Thank you. And we'll take our next question from Brett Knoblauch from Cantor Fitzgerald. Please go ahead.
Brett Knoblauch: Please go ahead.
Or Offer: Hi guys, thanks for taking my question, and congrats on the quarter. I guess as you look at your broader product portfolio, where would you say you're spending the most time? I guess where do you think the man has really reflected higher across that product portfolio? And any update on shopper intelligence and how the man is looking for that? Yeah, and we saw nice demand, mostly a lot about our data as a service. Those people want to, as they more recognize us as the leading digital data market provider. They want to implement our data to their own dashboarding systems. So this line of business had a good success.
Unnamed Participant: Hi, guys. Thanks for taking my question and congrats on the quarter. I guess as you look at your, you know, broader product portfolio, where would you say you're spending the most time, or, I guess, where do you think demand has really inflected higher across that product portfolio? And any update on shopper intelligence and how demand is looking for that?
Brett Knoblauch: Thanks for taking my question and congrats on the quarter.
Or Offer: Yeah, and we saw nice demand, mostly for our DAS, you know, data as a service, because people want to, as they more recognize us as the leading digital data market provider, they want to implement our data into their own dashboarding system. So this was The more we're able to publicize it and introduce it into the market, we see great success there as well. And so those two lines of business did really well this quarter.
Speaker Change: Yeah, we saw nice demand, mostly a lot about our DAS, Data-as-a-Service, because people want to, as they more recognize us as the leading digital data market provider.
Or Offer: And I was talking to legend, and the product that we sell for public investor is doing quite well this quarter as well. The more we are able to productize that and introduce it into the market, and we see great success there as well. And so those, those two lines of business did really well this quarter.
Brett Knoblauch: Perfect.
Unnamed Participant: Perfect. And then just on the acquisition, I guess, is there any way to quantify, you know, how much of maybe the full-year guide is coming from this, you know, call it organic demand versus some of the inorganic revenues? Or would you say, you know, maybe most of the guide is just from the core business doing better?
Jason Schwartz: And then just on the acquisition, I guess, is there any way to quantify how much of maybe the full year guide is coming from this maybe, you know, called organic demand versus some of the organic revenues. Or would you say, you know, maybe most of the, the guide is just from the core business doing better and not so much from the acquisition. So, so the acquisition.
Speaker Change: perfect and then just on the the acquisition I guess
Jason Schwartz: Is that is. No, no. So, so the activitions are for the most part have been, has been small businesses. So there is a contribution that they, that they will add, but we're actually seeing, you know, good momentum in the core organic business. You see it in the number of customers, you see it in the RPO, you see it in the NLR. And so there's, you know, every time you add a small business in, there's going to be some additional top line grant with that. But overall, when you look at the total revenue for the year, the contribution from these acquisitions is really.
Unnamed Participant: No, I'm going to go with Jason.
Jason Schwartz: So the acquisitions, for the most part, have been small businesses. So there is a contribution that they will add.
Jason Schwartz: But we're actually seeing good momentum in the core organic business. You see it in the number of customers. You see it in the RPO. You see it in the NRR. And so every time you add a small business, there's going to be some additional top-line growth with that. But overall, when you look at the total revenue for the year, the contribution from these acquisitions is really not much.
Or Offer: I think to add on top of that, that our strategy is to find the most strong team within the tenorial spirit that have great data assets, that we know that easily will invest and prototype and match with our core offerings, which can scale. And so this is the assumption, so that there's usually very small businesses. Got it.
Speaker Change: Yeah, I think to add on top of that, our strategy is to find a mostly strong team with entrepreneurial spirits that have great data assets.
Jason Schwartz: If we know that if we invest and prioritize and match our core offering, it can scale. And so this is the assumption. So there are usually very small businesses.
Speaker Change: If we know that if we will invest and monetize and match with our core offering, it can scale. And so this is the assumption. So they're usually very small businesses.
Unnamed Participant: Got it. Then maybe just one last question on the eight-figure deal. Could you maybe help quantify, like, what that deal went from before eight figures? I mean, how much of an uplift was that?
Brett Knoblauch: Let me just one last question on the eight-figure deal. I guess could you maybe help quantify what that deal went from before eight figures, I guess, how much of an uplift was that? It was a seven-figured deal before, and that we were able to significantly increase it.
Speaker Change: Got it. Then maybe just one last question on the eight-figure deal. I guess could you maybe help quantify like what that deal went from before eight figures? I guess how how much of an uplift was that?
Speaker Change: It was seven figures until before, but we were able to significantly increase it.
Jason Schwartz: And now, Jason? Yeah, and what I would say is that, again, when it started, this customer started as a nine years ago as a similar customer; they were a few tens of thousands of dollars of AR. And today, it's a, you know, well over eight digits at a steady grower and news around multiple products from similar lab across many, many different departments and geographies. Got it.
Unnamed Participant: and now Jason. Yeah.
Speaker Change: And now, Jaipur.
Speaker Change: you know, well over eight digits at a steady grower and user of multiple products from SimilarWeb across many, many different departments and geographies.
Unnamed Participant: Got it. Thank you, guys. I really appreciate it.
Brett Knoblauch: Thank you. I really appreciate it. Thanks so much.
Speaker Change: Got it. Thank you guys, really appreciate it.
Patrick Walravens: As a reminder, that star one, if you do have a question or comment, and next we'll go to Patrick Wall Ravens from Citizens' JMP, please go ahead. Thank you, guys. Thank you for taking my question.
Nick Lee: And congrats on the corner. This is Nick Lee on for Pat.
Speaker Change: Hey, guys. Thank you for taking my question and congrats on the quarter. This is Leon for Pat. With the new data version you guys mentioned in the shareholder letter, is there a way to quantify how much more accurate this new version is compared to the old one?
Or Offer: What the new data version you guys mentioned in the shareholder letter, is there a way to quantify how much more accurate this new version is compared to the old one? Yeah, of course, we have our internal measurement. It's significantly better and improved dramatically. You know, there's many ways to look on the measurement. It's by country, by size of website, by vertical website, but we increase accuracy all across the board. And also increase a lot of coverage, as I wrote, we had more than 30 million more websites that we now adding to our estimation. And we were super excited for us.
Speaker Change: Yeah, of course, we have our internal measurement.
Speaker Change: It's significantly better and dramatically, you know, there's many ways to look on the measurement. It's by country, by size of website, by vertical website, but we increase accuracy all across the board.
Speaker Change: And also increase a lot of coverage, as I wrote. We have more than 30 million more websites that we now...
Unnamed Participant: adding to our estimation. And we were super excited for us. It's a big thing to do such a big update.
Speaker Change: adding to our explanation, and we were super excited for us. It's a big thing to do such a big update.
Or Offer: It's a big thing to do such a big update. And we'll do it once in a while after we do a lot of testing to see that it's significantly improving our digital estimation. Awesome.
Speaker Change: And we'll do it once in a while after we did a lot of testing to see that it's significantly improving our digital estimation.
Operator: Thank you. Once again, that's Star One. If you do have a question or comment.
Operator: And there appear to be no further questions at this time, ladies and gentlemen. This does conclude today's Similarweb Q2 24 earnings call. We thank you for your participation. You make disconnect your lines at this time and have a great day.