Thank you, operator. Welcome, everyone, to our fourth quarter 2024 earnings conference call. Joining me today are our CEO and Co-Founder, Or Offer; and our CFO, Jason Schwartz. Yesterday, after market close, we released our results for the fourth quarter and published a discussion of our results in a letter to shareholders as well as an investor presentation with a strategic overview of the business on 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 20-F 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 on the call today. Reconciliations to the most directly comparable GAAP financial measures are available in the earnings release and the earnings presentation. We will begin with Or and Jason's highlights of the quarter, and then 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, and welcome, everyone, joining the call today. I'm extremely proud of the financial results for the fourth quarter and 2024 that we reported yesterday. Revenue for the year of nearly $250 million was up 15% year-over-year and for Q4 was up 16% year-over-year. Overall NRR was 101% and for the over $100,000 ARR customers, the NRR was 112%, up from 111% in Q3 and 107% for last year. Our customer base grew 17% year-over-year, ending with more than 5,500 ARR customers. In Q4, we signed 15 customer contracts, each of which had 7-digit contract value. Our top line demand remains strong with more than 10 million visitors to our website on a monthly basis and more than 120 million users visiting our Similarweb website in 2024. I'm encouraged by two new customer relationships with companies that are global leaders in the financial sector. In December, we announced that S&P Global, a leader in credit scoring and risk management analytics, will begin to integrate Similarweb digital data into its credit risk analysis. And today, I'm also excited to share that Bloomberg Professional Services has entered into a multiyear agreement to supply Similarweb digital data to Bloomberg Terminal subscribers. I believe that these deals highlight the strength and versatility of our data assets as alternative data for investors. But 2024 was not only about revenue and customer growth. We also demonstrated our disciplined execution. As the top line growth accelerated, we delivered our first full financial year of non-GAAP operating profit and free cash flow, and I'm super proud that we delivered Rule of 26 performance for the full year of 2024 with a great mix of accelerating growth and improving profitability. As a leading supplier of digital data, the AI revolution presents a significant opportunity for Similarweb. High-quality, comprehensive, actionable, and trusted data like Similarweb is a critical component for every AI and LLM tech stack. The AI revolution presents a significant opportunity for our digital data with many new use cases. Last quarter, I discussed four different opportunities for us to capitalize and monetize the generative AI opportunity. The first one is embedding AI solutions into our own platform. The second one is helping brands navigate the shift in consumer behavior driven by the increase in the use of chatbots, and all those brands need this visibility and they come to us. The third one is providing fresh data for LLM training. And the last one is streamlining internal processes and making operations more efficient within our company. To capitalize on this huge growth opportunity, we have decided to ramp up our investment in R&D and our go-to-market teams. We plan to increase our investment in R&D to enhance our data collection and measurement for the new Gen AI world and continue to develop additional products and solutions that companies require to compete and win in this new landscape. We are also investing in our go-to-market teams, hiring people across all geographies as well as upskilling and expanding our sales force to capture the opportunity presented by the AI revolution and the high demand we are seeing at the top of our funnel. I believe that we are still only starting to realize the potential of our data and the addressable market we serve. This investment will reduce our operating profit in the short term, but I believe it will enable us to continue to accelerate growth and capitalize on the growth opportunity. As we have demonstrated, we know how to drive efficiency and scale and believe that this is the right time for us to invest. And as I like to say, we are just getting started. Thank you to everyone on the call for your continued support. And with that, I will turn the call over to Jason.

Thanks, Or, and everyone joining us on the call today to discuss our fourth quarter results. I'll provide highlights of our financial performance, and then we'll open up the call to questions. We generated $65.6 million of revenue in Q4, a 16% increase relative to the fourth quarter of 2023. For the full year of 2024, we generated $249.9 million of revenue, representing 15% growth over 2023. Revenue from our $100,000 ARR customers increased and represents 61% of our overall ARR. The number of $100,000 ARR customers grew to 405 at the end of '24, increasing 11% year-over-year. As this customer base grew, the average ARR per customer increased 7% year-over-year to approximately $376,000. The increase in the average annual revenue per customer was driven by further product adoption and expansion by our customers. We are proud that 49% of our ARR is contracted under multiyear contracts, up from 42% last year. We believe this demonstrates the importance and critical nature of our data to our customers, and we expect these multiyear contracts will contribute to improved retention rates ahead. Our remaining performance obligations, or RPO, totaled $246 million at the end of Q4, up 26% year-over-year. We expect to recognize approximately 69% of total RPO as revenue over the next 12 months. Our operational performance in the quarter and the full year demonstrates our continued commitment to disciplined execution, and we delivered a non-GAAP operating margin of 4% in Q4, a sixth consecutive quarter of non-GAAP operating profit. For the full year, we delivered a non-GAAP operating margin of 6%, an 800 basis point improvement relative to 2023 and our first full year of operating profit on a non-GAAP basis. We generated $2.7 million of normalized free cash flow in the quarter, a fifth consecutive quarter of positive free cash flow and $27.7 million in 2024, reflecting an 11% free cash flow margin. We expect to continue to generate positive free cash flow for 2025 as well. Turning to our outlook for 2025. For the full year of 2025, we expect total revenue in the range of $285 million to $288 million, representing 15% year-over-year growth at the midpoint of the range. In Q1 2025, we expect total revenue in the range of $66 million to $66.5 million. For the full year, we expect our operating profit to be between $1 million and $4 million. Non-GAAP operating loss for the first quarter of 2025 is expected to be in the range of $1 million to $1.5 million. Our guidance reflects increased operating expenses to accelerate our hiring to capture the opportunities presented by the growing demand for our data and solutions, as Or mentioned. After delivering a year of accelerating revenue growth, non-GAAP operating profit, and positive free cash flow, we remain focused on delivering profitable growth over time as well as achieving our long-term profit and free cash flow targets. And with that, Or and I are ready to answer your questions.

Can you provide a little bit more color on this incremental spend? I'm estimating it's about $20 million versus expectations here. How much of that is towards the go-to-market strategy? How much is that towards R&D? And how should we think about the cadence of hiring as we look across the year?

I think the majority of the spend is for accelerating our go-to-market and ramping it up. And we do see also nice investment in the R&D. But I think also the Forex pressure that we saw in Q4 and Q1 is also part of that $20 million that you're talking about.

And then just the cadence of the spend, like how did you come up with that number in terms of just thinking about, was it that you just wanted to keep margins kind of positive at this point? Like why not more, why not less at this point?

Yes. I think it's a great question. So our philosophy was always that we are pivoting our company to profitability, and we're going to stay profitable going forward as long we're going to see good opportunity to accelerate our growth. We are still a small-cap company, ending up the year with close to $250 million, meaning that we have a lot of market to capture. And we did see a lot of strong demand at the top of the funnel. So we made the decision to do a big investment and to capture this opportunity as long as we are profitable growth and keeping the company profitable on a free cash flow basis and the EBITDA for the year and we can maximize the opportunity as we do see that we can bring Similarweb to be one of the top growing software companies in the public market with the opportunities ahead of us, and we want to capture it.

Got it. And then I guess as my second or the follow-up question here. Can you talk a little bit about the growth outlook in terms of the midpoint being 15% year-over-year? That seems like it's roughly the same as what it was in 2024. So with the incremental spend, is the idea that you're expecting to see an acceleration in growth in 2026 then? Or is your expectation of how do we think about the return or what we should expect in terms of the acceleration that we should expect? And maybe why is there not perhaps higher expectations for growth given all the spend in 2025?

I think it's an excellent question, and you're right. I think there are two elements that this is why we decided to come with the 15% as a starting line for the year. What we did see is that because we are arming our go-to-market and hiring a lot of people during the end of Q4 and still continue hiring them in Q1. A lot of our sellers and managers are spending time with interviewing and ramping people and also going through change in management. So we replaced managers and over-performance in Q4 and then ramped up people. So we did see a little bit softness with the execution in Q4 moving into Q1. And on top of that, we had the Forex pressure. We, as a global company, around 50% of the revenue comes outside of the U.S. We saw a headwind from the Forex in Q4 that hurt the growth. And now that you start the year already below, you need to close that gap. And then you saw another headwind on the Forex going into Q1, meaning that Q1 is a little bit soft, and we guide for 12%, but you see we are very confident on the 15% for this year, meaning that during the next quarter, we're going to see an acceleration of growth, which means that we are expecting a much higher growth rate going into Q3 and Q4 as an exit rate for 2026. So we're going to see a significant increase in growth in the second part of the year. And this is why we decided to give 15% as a starting point.

Maybe for Jason, how did revenue results in the fourth quarter perform versus your expectations into the quarter? It looks like you guys kind of came in around the high end of your guide, and usually, you do a little higher than that. And then can you quantify any one-time impacts to consider for the fourth quarter? Like if there was an FX impact, what that looked like either on the revenue or profitability side?

So as Or mentioned, we saw some of the Forex pressure hitting in Q4, and part of that is built into the guide. It's about 1% to 2% on a run rate, so that is built into some of what you see in achieving the high end of our guide for Q4 as well as the guide that we have going forward.

Okay. And then just on the fourth quarter, was there any Forex impact to that quarter? And then I guess, how would you characterize the quarter in general versus your expectations into the quarter?

So I think that, again, from an overall perspective, it was a good quarter. You see acceleration in terms of the larger customers, both in growth of 11% year-over-year in customer count, and the average revenue from those customers up 7%, seeing the NRR for that group pick up another 1%. We think that that was very strong indications of what was going on, as well as some of these large relationships, one of which we had shared previously while we were on the road of the S&P. The second one, which we announced just today with Bloomberg, a multiyear relationship as well. We think those things are good indications as to what we have been working on and continue that growth. So we were pleased with where it was. The Forex headwinds are something that we are dealing with in terms of the guidance going forward, but we feel comfortable with the overall momentum that we're seeing in the business.

Perfect. Or, maybe one for you. On the AI investments you're making, I know you mentioned a lot of it is go-to-market. But on the product side, I think you mentioned you're investing in data collection and forecasting to get ready for the Gen AI kind of revolution. Can you expand on that a little bit? Because I had assumed that the platform, the way it exists today has a lot of those capabilities and can be maybe more easily pivoted for Gen AI. But it sounds like there is some more change on the platform required. So what are you changing and what's evolving on the product side?

There are two fronts now that we need to make investment. Basically, we want to integrate AI in order to accelerate the insights coming from our data to make our customers' lives easier to discover value and get ROI from the platform. So we start seeing really amazing innovation with that. We're basically putting agents on top of our platform and automatically generating insights. So we're shifting a lot of the teams to start working on those innovations, and we don't want to stop the regular cadence. We had to do some investment in that front to continue development to make our platforms much better for the majority of the users. This is the first front. The second front is we're getting more and more demand for brands that want to get better visibility on the change chatbot and Gen AI is having on the consumers and the way they search for consumer information and making purchase decisions. In order to do that, we need to collect and analyze much more granular data around conversation and the different channels and basically introducing what I will call Gen AI intelligence. The brands can understand their sentiment and the impact each one of those chatbots have on their brand and purchase decision. So this is some investment that we are doing now to collect this data and productize it so we can start assisting customers in a more scalable way. So this is another front of investment that we are undertaking.

Okay. Understood. And then, Jason, one for you again on the revenue guidance. It seems like there are a few changes on go-to-market that you're incorporating in. But is it fair to say this is a more conservative outlook on '25 than you've given historically? Are the changes driving any kind of change in your guidance philosophy as you maybe wait to see how the year unfolds in the first half here before growth really starts to pick up? Like what did you consider when you were giving the revenue guidance?

Sure, Arjun. As you know, we like to give guidance we know we can meet. We looked at the backlog that we have as well as some of the macro factors like the Forex impact, and we built all that into our assumptions. As Or mentioned, when you look at the guide, which starts at a midpoint of 12% for Q1 and ends with a 15% for the full year, that mathematically means that we are expecting to have a strong back end of the year that is already built into our philosophy, which is exactly what we have been talking about—that we are accelerating the investment in our go-to-market teams in order to drive that contribution happening in the back end of the year, and we think this is the right way to approach that.

Just wanted to touch on gross margin, which was down sequentially here. Could you just talk a little bit about what drove this? And then is this kind of a level you see it being at across 2025 as you guys are investing in the business?

Yes. So I think this little decrease in gross margin is mostly due to investment in this new data capturing for the Gen AI. So we need to put the investment. And then on top of that, we also introduced two new data sets of App Intelligence and Ad Intelligence. This is two acquisitions we made in 2024. So we are now integrating those data sets. So every time we are adding more data sets, it increases a little bit the gross margin, but we expect that to improve over the year.

Got it. And then just on the Bloomberg customer announcement, it seems like a very nice win. I was just wondering if this is going to be like an add-on that people will be paying separately as an add-on for that service or if this will be just embedded into everyone who has a Bloomberg terminal and that this is kind of a fixed contract for you guys or if it has anything to do with people adding that on to their Bloomberg?

Yes. So we're very proud of this engagement. It's many years of dialogue and Bloomberg testing our data and getting to the conclusion that we are the #1 digital data provider of choice. And this is why they decided to go with us. It was a long discussion, and we feel very proud about this relationship. From what I remember, they will add us, they will take a small portion of our data that represents digital growth and will add it as part of their alternative data solution for their subscribers. I'm not sure if it will be free to the subscribers or with a little bit of a premium, but the consumer will be exposed to the concept of digital market data and how it can predict public companies' growth. And if they would love a user, they can come to Similarweb and buy a more advanced solution that we are offering with our Stock Intelligence. So what we see in Bloomberg is a small part of our capabilities, and I think for all the subscribers.

So just really, it's kind of like one question. How do you think about the timing of the payback on the increased investments, again, around AI and go-to-market? Should we think about target margins for '26 and '27? Or do you want us to think of it like your progress toward a Rule of 40 scale? And then can you kind of be maybe a bit specific on how you see yourself progressing over the next few years, obviously, given that everyone is surprised by the level of investment, but you obviously are confident around the payback.

Yes. We are confident because it solves the hardest part, which is the demand, and it's there, and we just need to approach and monetize it. What we're doing now is just changing the way we're growing. We are focusing more on growth but still maintaining profitability. I think last year, we were super proud with driving 15% growth and 11% free cash flow. Going into this year, we're just going to change the balance to be more on the growth side. I think we're going to see the return in the second part of the year, the ROI of this investment. Going into 2026, we are positioning the company to be a top-notch growth software company and, of course, profitable. We will start to work on increasing profitability to probably double digits around 2026.

Or, I wanted to focus on a comment you had earlier in the Q&A that you did see some softness in your fourth quarter execution. Can you help elaborate on that a little bit? And I guess, as you look at that softness, is it corrected for in Q1? Or how do we think about the timing to returning to a more normalized sales cadence?

Yes. We started seeing improvement. We have an amazing new CRO, Susan Dunn, who came over from NielsenIQ and SG&O, driving group changes and doing some great change management in order to set the foundation for growth. Moving low performance, getting new strong managers, and increasing hiring; we saw that it created some more noise in the go-to-market, but we're able to stabilize. We're seeing better performance now in Q1. Funny enough, across our team around the world, the sellers got too many meetings from the high demand that it started hurting the win rate. So we were not hiring fast enough in Q4, and we're now close to closing that gap in Q1. We do see strong performance now hitting the floors.

Very helpful. And then, Jason, as we look at your guidance for this year, this is kind of a follow-up to the last question. Your revenue growth guidance suggests the rest of the year accelerates from the Q1 guidance here today. First of all, is that an accurate statement? I assume that it is given how the math works. But then two, is your confidence high in that acceleration relative to what you're seeing on the sales execution side here in Q1?

So on the first question, the answer is yes. Like you said, that's the way the math works. So we do see that acceleration coming in the back end of the year. We also see the pipeline. So we have some visibility that gives us the confidence that we build the guidance. And like I like to say, we'd like to give guidance we know we can meet.

You talked a lot about this initiative to monetize brands that are navigating shifts in consumer behavior. I just want to get an update on how that's trending, particularly your conversations into the beginning of the year? How are brands evolving in the Gen AI environment? And how does Similarweb plan to address that?

Yes. More and more brands are starting to look for visibility about how much consumers are querying chatbots about their brands or about their industry, and how the answers that chatbots are giving are changing the purchasing decisions they make. They want to understand if this is positive for them or negative, or if the chatbots are bringing them the right choice and how they can impact the chatbots to understand the resources the chatbots are using to generate those answers. This is data that only Similarweb can provide—very few companies in the world can give visibility about what people are asking the chatbot, what those answers are, and how they're impacting the consumer journey. We believe we are positioned to best supply those answers that are becoming increasingly important to brands as consumer behavior changes and the use of chatbots for purchase decisions increases. Yes. There's not a lot of companies with numbers trying to build those chatbots, probably less than 100—maybe single-digit, double-digit. It's not a big market, but a lot of investments are needed to build those. So this market is not big, but when they enter into those ventures to develop chatbots, they will need the best data to feed those LLMs. When they want to choose the best data providers like Bloomberg, they're all ending up engaging in Similarweb as they recognize us as the leader for digital market data, knowing we're the best provider. The engagements are low in numbers, but they are substantial when they occur.

Great. Forgive me, Or, if I go back to Q4, I mean, sort of a series of questions here. How soft was the execution in Q4? Like was it a pretty big miss by the sales team? When was the last time you guys had a soft execution quarter? Was Susan surprised? When you broke it down after, what caused it? So we don't usually hear that too many leads or too many meetings is the reason for a miss. Usually, we hear things like customers didn't want to commit. So if you could drill into that more, that would be great. And I just think the reason it's important is because you're investing on the back of that. So we just want to get a better understanding of why you decided to invest more in sales and marketing if Q4 wasn't very good.

Yes, of course. I think it's a great question, thank you for raising it, Pat. I think Q4 was okay. It wasn't great. Usually, our Q4 is amazing if you look historically at 2023 and 2022. And Q4 was okay; it was soft. I wish it was better, but it was okay. There were some areas in the business with more softness, mostly due to managerial issues and low performance that hadn't been addressed before. In Q4, we took the opportunity to improve around the go-to-market. We did some change management in EMEA and that was behind the change management in Japan when they were underperforming. I believe this also impacted our performance a little. But the new people we hired are in place, and they're looking good. I'm fully confident, and you see the numbers, and we are investing because we're bullish on what we see.

Just wanted to ask about the 15 customer contracts that were 7 figures. Could you kind of give more color on whether the deals grew into that or whether any were new lands? And how many of those were AI related?

Yes. Ashley, first of all, thank you for asking this question because I think it's important to discuss this great indication. This is a record high quarter for us for closing 7-figure deals. As you saw in the past few quarters, we started reporting 8-figure engagements. All of those indicate that we are now ready to increase our engagement with our customers. The majority of those 15 seven-figure contracts were expansions, meaning that we have more and more customers now ready to invest more with us. From our side, we are ramping up more senior account managers on the process to negotiate and expand and really grow our book of business with the customers that Similarweb has. You can also see that with the multiyear increase of our customers, we are now going into this year with almost 50% of the book of business on multiyear contracts. This is a very strong indication that the customers are trusting our data and want a long-term relationship. I think the 15 deals show that many of them are now ready to invest more with us. From our side, we just need to hire more executives, more experienced salespeople on the cost side in order to drive this expansion and improve our NRR going forward.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to management for any closing remarks.

Thank you, everyone, for the questions. We have the confidence for a really great year. We ended 2024 with truly amazing results, and we are looking very positive going into this year. Good luck to all of us. Bye-bye.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.