To The Moon

Q3 Earnings Report Highlights

Similarweb ( $Similarweb Ltd.(SMWB)$ ) recently released its Q3 2024 earnings report, showcasing an 18% year-over-year revenue growth to $64.7 million, surpassing analysts' expectations. Despite missing earnings estimates by 75%, the company's revenue performance indicates strong demand for its digital data and analytics services2. The company also reported a 21% increase in its customer base, now totalling over 5,300 annual customers.

Fundamentals and Growth Prospects

Similarweb's fundamentals are robust. It has had positive free cash flow for the fourth consecutive quarter and a dollar-based net retention rate (NRR) of 111% for customers with an ARR of $100,000 or more. The company's disciplined execution and focus on profitability have resulted in a non-GAAP operating profit of $4.4 million or 7% of revenue. With a growing customer base and increasing demand for high-quality digital data, Similarweb is well-positioned to continue its growth trajectory.

Analysts Expectations

Analysts have mixed expectations for Similarweb. The consensus EPS estimate for the coming quarter is $0.04 on $65.03 million in revenues. For the full fiscal year, analysts expect revenues of $247.38 million. Despite some downward revisions in earnings estimates, the stock's average target price suggests an 18.09% upside from the current price.

Debt Situation

Similarweb's debt situation appears manageable, with cash and cash equivalents totalling $60.1 million as of September 30, 2024. The company has been generating positive free cash flow, which bodes well for its ability to service any existing debt and invest in growth opportunities.

Outlook for Next Year

Looking ahead, Similarweb's outlook for 2025 is promising, with revenue estimates expected to reach $282.95 million. The company's continued focus on innovation and expanding its customer base should drive further growth. Analysts expect the company to achieve profitability, with earnings estimates for 2025 at $0.04 per share.

When Will It Be Profitable?

Based on current growth trends and the company's disciplined approach to profitability, Similarweb is likely to achieve profitability within the next year. The company's strong revenue growth, positive free cash flow, and increasing customer base provide a solid foundation for sustained profitability.

Conclusion

Similarweb's recent Q3 earnings report, strong fundamentals, and positive growth prospects make it an attractive investment opportunity. With a manageable debt situation and a promising outlook for the next year, Similarweb is well-positioned to deliver value to its shareholders. Investors should watch the company's continued execution and market expansion efforts as key drivers of future success.

@TigerWire