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Similarweb Announces Third Quarter 2024 Results

Fourth consecutive quarter of accelerating revenue growth

Fourth consecutive quarter of positive free cash flow

Customer base increased by 21%

Similarweb Ltd. (NYSE: SMWB) ("Similarweb" or the "Company"), a leading digital data and analytics company powering critical business decisions, today announced financial results for its third quarter ended September 30, 2024. The Company published a letter to shareholders from management discussing these results, which can be accessed at the link: https://ir.similarweb.com/financials/quarterly-results, located on the Company's investor relations website.

“Revenue growth in the third quarter accelerated to 18% YoY, the fourth consecutive quarter of accelerating growth, driven by the growing demand for our high quality digital data for a broad range of applications including AI and Large Language Model training,” stated Or Offer, Co-Founder and CEO of Similarweb. “We increased our customer base by 21% YoY to more than 5,300 annual customers and Remaining performance obligations increased by 27% YoY, faster than customer growth. Our focus on disciplined execution has resulted in another quarter of profitability and cash generation.” Offer concluded, “We are just beginning to tap into the vast potential of our data and the addressable markets we serve.”

Third Quarter 2024 Financial Highlights

  • Total revenue was $64.7 million, an increase of 18% compared to $54.8 million for the third quarter of 2023.
  • GAAP operating loss was $(2.5) million or (4)% of revenue, compared to $(4.9) million or (9)% of revenue for the third quarter of 2023.
  • GAAP net loss per share was $(0.03), compared to $(0.06) for the third quarter of 2023.
  • Non-GAAP operating profit was $4.4 million or 7% of revenue, compared to $1.1 million or 2% of revenue for the third quarter of 2023.
  • Non-GAAP operating profit per share was $0.05, compared to $0.01 for the third quarter of 2023.
  • Cash and cash equivalents totalled $60.1 million as of September 30, 2024, compared to $71.7 million as of December 31, 2023.
  • Net cash provided by (used in) operating activities was $9.3 million, compared to $(4.8) million for the third quarter of 2023.
  • Free cash flow was $8.7 million, compared to $(4.9) million for the third quarter of 2023.

Recent Business Highlights

  • Grew number of customers to 5,308 as of September 30, 2024, an increase of 21% compared to September 30, 2023.
  • Grew number of customers with ARR of $100,000 or more to 395, an increase of 11% compared to September 30, 2023.
  • Customers with ARR of $100,000 or more contributed 60% of the total ARR as of September 30, 2024, increased from 55% as of September 30, 2023.
  • Dollar-based net retention rate, or NRR, for customers with ARR of $100,000 or more was 111% in the third quarter of 2024, increased from 108% in the third quarter of 2023.
  • Overall NRR was 101% in the third quarter of 2024, increased from 99% in the third quarter of 2023.
  • 45% of our overall ARR is contracted under multi-year subscriptions as of September 30, 2024, increased from 43% as of September 30, 2023.
  • Remaining performance obligations, or RPO, increased 27% year-over-year, to $212.5 million as of September 30, 2024, as compared to $167.7 million as of September 30, 2023.

Financial Outlook

"New customer acquisition and improving retention rates supported the acceleration in revenue growth in the quarter,” stated Jason Schwartz, Chief Financial Officer of Similarweb. “The overall NRR increased to 101% and to 111% for customers with more than $100K of ARR following a series of internal initiatives and the growing appreciation of the value of our unique digital data." He further noted, “We achieved a fourth consecutive quarter of positive free cash flow due to our continued focus on disciplined execution. Following these results, which exceeded our expectations, we are raising our revenue outlook for the full year 2024." Schwartz emphasized the company's progress, saying, “We continue to make significant strides towards our long-term profit and free cash flow targets.”

  • Q4 2024 Guidance
    • Total revenue estimated between $64.7 million and $65.7 million, representing approximately 15% growth year over year at the mid-point of the range.
    • Non-GAAP operating profit estimated between $1.5 million and $2.5 million.
  • FY 2024 Guidance
    • Total revenue estimated between $249.0 million and $250.0 million.
    • Non-GAAP operating profit estimated between $14.0 million and $15.0 million.

The Company’s fourth quarter and full year 2024 financial outlook is based upon a number of assumptions that are subject to change and many of which are outside the Company’s control. Actual results may vary from these assumptions, and the Company’s expectations may change. There can be no assurance that the Company will achieve these results.

The Company does not provide guidance for operating loss, the most directly comparable GAAP measure to non-GAAP operating loss, and similarly cannot provide a reconciliation of this measure to their closest GAAP equivalent without unreasonable effort due to the unavailability of reliable estimates for certain items. These items are not within the Company’s control and may vary greatly between periods and could significantly impact future financial results.

Conference Call Information

The financial results and business highlights will be discussed on a conference call and webcast scheduled at 8:30 a.m. Eastern Time on Wednesday, November 13, 2024. A live webcast of the call can be accessed from Similarweb’s Investor Relations website at https://ir.similarweb.com. An archived webcast of the conference call will also be made available on the Similarweb website following the call. The live call may also be accessed via telephone at (877) 407-0726 toll-free and at +1 (201) 689-7806 internationally.

About Similarweb: Similarweb powers businesses to win their markets with Digital Data. By providing essential web and app data, analytics, and insights, we empower our users to discover business opportunities, identify competitive threats, optimize strategy, acquire the right customers, and increase monetization. Similarweb products are integrated into users’ workflow, powered by advanced technology, and based on leading comprehensive Digital Data.

Learn more: Similarweb | Similarweb Digital Data

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Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to our guidance for the fourth quarter and full year of 2024 described under "Financial Outlook". Forward-looking statements include all statements that are not historical facts. Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. These forward-looking statements reflect our current views regarding our intentions, products, services, plans, expectations, strategies and prospects, which are based on information currently available to us and assumptions we have made. Actual results may differ materially from those described in such forward-looking statements and are subject to a number of known and unknown risks, uncertainties, other factors and assumptions that are beyond our control. Such risks and uncertainties include, without limitation, risks and uncertainties associated with: (i) our expectations regarding our revenue, expenses and other operating results; (ii) our ability to acquire new customers and successfully retain existing customers; (iii) our ability to increase usage of our solutions and upsell and cross-sell additional solutions; (iv) our ability to achieve or sustain profitability; (v) anticipated trends, growth rates, rising interest rates, rising global inflation and current macroeconomic conditions, challenges in our business and in the markets in which we operate, and the impact of Israel's war with Hamas and other terrorist organizations and hostilities with Iran or Lebanon on geopolitical and macroeconomic conditions or on our company and business; (vi) future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; (vii) the costs and success of our sales and marketing efforts and our ability to promote our brand; (viii) our reliance on key personnel and our ability to identify, recruit and retain skilled personnel; (ix) our ability to effectively manage our growth, including continued international expansion; (x) our reliance on certain third party platforms and sources for the collection of data necessary for our solutions; (xi) our ability to protect our intellectual property rights and any costs associated therewith; (xii) our ability to identify and complete acquisitions that complement and expand our reach and platform; (xiii) our ability to comply or remain in compliance with laws and regulations that currently apply or become applicable to our business, including in Israel, the United States, the European Union, the United Kingdom and other jurisdictions where we elect to do business; (xiv) our ability to compete effectively with existing competitors and new market entrants; and (xv) the growth rates of the markets in which we compete.

These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission, including in the section entitled “Risk Factors” in our Form 20-F filed with the Securities and Exchange Commission on February 28, 2024, and subsequent reports that we file with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements, or events and circumstances reflected in the forward-looking statements will occur.

Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. Except as required by law, we undertake no duty to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.

Non-GAAP Financial Measures

This press release contains certain financial measures that are expressed on a non-GAAP basis. We use these non-GAAP financial measures internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. We believe these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. However, non-GAAP financial measures have limitations as an analytical tool and are presented for supplemental informational purposes only. They should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Free cash flow represents net cash provided by (used in) operating activities less capital expenditures and capitalized internal-use software costs. Normalized free cash flow represents free cash flow less capital investments related to the Company's new headquarters, payments received in connection with these capital investments and deferred payments related to business combinations. Non-GAAP operating income (loss), non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating margin, non-GAAP research and development expenses, non-GAAP sales and marketing expenses and non-GAAP general and administrative expenses represent the comparable GAAP financial figure operating income (loss) or expense, less share-based compensation, adjustments and payments related to business combinations, amortization of intangible assets and certain other non-recurring items, as applicable and indicated in the below tables.

Other Metrics

Customer acquisition costs (CAC) represent the portion of sales and marketing expenses allocated to acquire new customers. Customer retention costs (CRC) represent the portion of sales and marketing expenses allocated to retain existing customers and to increase existing customers’ subscriptions. Annual recurring revenue (ARR) represents the annualized subscription revenue we would contractually expect to receive from customers assuming no increases or reductions in their subscriptions. CAC payback period is the estimated time in months to recover CAC in terms of incremental gross profit that newly acquired customers generate. Net retention rate (NRR) represents the comparison of our ARR from the same set of customers as of a certain point in time, relative to the same point in time in the previous year ago period, expressed as a percentage.

Similarweb Ltd.

Consolidated Balance Sheets

U.S. dollars in thousands (except share and per share data)

 

 

December 31,

 

September 30,

 

2023

 

2024

 

 

 

(Unaudited)

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

71,732

 

 

$

60,131

 

Restricted deposits

 

10,020

 

 

 

10,434

 

Accounts receivable, net

 

47,869

 

 

 

35,486

 

Deferred contract costs

 

11,165

 

 

 

10,570

 

Prepaid expenses and other current assets

 

5,599

 

 

 

5,682

 

Total current assets

 

146,385

 

 

 

122,303

 

Property and equipment, net

 

28,630

 

 

 

26,449

 

Deferred contract costs, non-current

 

9,845

 

 

 

8,853

 

Operating lease right-of-use assets

 

36,007

 

 

 

35,945

 

Goodwill and Intangible assets, net

 

17,652

 

 

 

32,439

 

Other non-current assets

 

494

 

 

 

411

 

Total assets

$

239,013

 

 

$

226,400

 

Liabilities and shareholders' equity

 

 

 

Current liabilities:

 

 

 

Borrowings under Credit Facility

$

25,000

 

 

$

 

Accounts payable

 

8,422

 

 

 

10,956

 

Payroll and benefit related liabilities

 

20,437

 

 

 

18,352

 

Deferred revenue

 

99,968

 

 

 

98,557

 

Other payables and accrued expenses

 

23,263

 

 

 

26,247

 

Operating lease liabilities

 

7,095

 

 

 

8,510

 

Total current liabilities

 

184,185

 

 

 

162,622

 

Deferred revenue, non-current

 

878

 

 

 

624

 

Operating lease liabilities, non-current

 

35,329

 

 

 

32,549

 

Other long-term liabilities

 

3,074

 

 

 

4,424

 

Total liabilities

 

223,466

 

 

 

200,219

 

Shareholders' equity

 

 

 

Ordinary Shares, NIS 0.01 par value 500,000,000 shares authorized as of December 31, 2023 and September 30, 2024 (unaudited), 78,653,046 and 81,665,784 shares issued as of December 31, 2023 and September 30, 2024 (unaudited), 78,650,878 and 81,663,616 outstanding as of December 31, 2023 and September 30, 2024 (unaudited), respectively;

 

216

 

 

 

224

 

Additional paid-in capital

 

367,558

 

 

 

384,978

 

Accumulated other comprehensive income

 

872

 

 

 

115

 

Accumulated deficit

 

(353,099

)

 

 

(359,136

)

Total shareholders' equity

 

15,547

 

 

 

26,181

 

Total liabilities and shareholders' equity

$

239,013

 

 

$

226,400

 

 

Similarweb Ltd.

Consolidated Statements of Comprehensive Income (Loss)

U.S. dollars in thousands (except share and per share data)

 

 

Nine Months Ended September 30,

 

Three Months Ended September 30,

 

2023

 

2024

 

2023

 

2024

 

(Unaudited)

 

(Unaudited)

Revenue

$

161,264

 

 

$

184,326

 

 

$

54,833

 

 

$

64,707

 

Cost of revenue

 

35,231

 

 

 

39,483

 

 

 

10,580

 

 

 

14,243

 

Gross profit

 

126,033

 

 

 

144,843

 

 

 

44,253

 

 

 

50,464

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

42,452

 

 

 

40,238

 

 

 

14,199

 

 

 

14,460

 

Sales and marketing

 

79,362

 

 

 

77,903

 

 

 

24,274

 

 

 

26,806

 

General and administrative

 

31,941

 

 

 

32,806

 

 

 

10,665

 

 

 

11,665

 

Total operating expenses

 

153,755

 

 

 

150,947

 

 

 

49,138

 

 

 

52,931

 

Loss from operations

 

(27,722

)

 

 

(6,104

)

 

 

(4,885

)

 

 

(2,467

)

Finance income (expenses), net

 

3,026

 

 

 

1,235

 

 

 

1,061

 

 

 

(43

)

Loss before income taxes

 

(24,696

)

 

 

(4,869

)

 

 

(3,824

)

 

 

(2,510

)

Provision for income taxes

 

1,269

 

 

 

1,168

 

 

 

1,014

 

 

 

56

 

Net loss

$

(25,965

)

 

$

(6,037

)

 

$

(4,838

)

 

$

(2,566

)

Net loss per share attributable to ordinary shareholders, basic and diluted

$

(0.33

)

 

$

(0.08

)

 

$

(0.06

)

 

$

(0.03

)

Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted

 

77,521,361

 

 

 

80,404,216

 

 

 

78,121,824

 

 

 

81,279,239

 

Net loss

$

(25,965

)

 

$

(6,037

)

 

$

(4,838

)

 

$

(2,566

)

Other comprehensive (loss) income, net of tax

 

 

 

 

 

 

 

Change in unrealized (loss) gain on cashflow hedges

 

(365

)

 

 

(757

)

 

 

(133

)

 

 

123

 

Total other comprehensive (loss) income, net of tax

 

(365

)

 

 

(757

)

 

 

(133

)

 

 

123

 

Total comprehensive loss

$

(26,330

)

 

$

(6,794

)

 

$

(4,971

)

 

$

(2,443

)

 

 

 

 

 

 

 

 

Share-based compensation costs included above:

U.S. dollars in thousands

 

 

Nine Months Ended September 30,

 

Three months Ended September 30,

 

2023

 

2024

 

2023

 

2024

 

(Unaudited)

(Unaudited)

Cost of revenue

$

482

 

$

578

 

$

155

 

$

190

Research and development

 

4,303

 

 

4,181

 

 

1,453

 

 

1,378

Sales and marketing

 

4,051

 

 

3,101

 

 

1,321

 

 

1,109

General and administrative

 

4,849

 

 

5,232

 

 

1,658

 

 

1,830

Total

$

13,685

 

$

13,092

 

$

4,587

 

$

4,507

 

Similarweb Ltd.

Consolidated Statements of Cash Flows

U.S. dollars in thousands

 

 

Nine Months Ended September 30,

 

Three Months Ended September 30,

 

2023

 

2024

 

2023

 

2024

 

(Unaudited)

 

(Unaudited)

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

$

(25,965

)

 

$

(6,037

)

 

$

(4,838

)

 

$

(2,566

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

7,688

 

 

 

8,012

 

 

 

2,576

 

 

 

2,873

 

Finance expense (income)

 

1,752

 

 

 

(211

)

 

 

883

 

 

 

(677

)

Unrealized loss (gain) from hedging future transactions

 

26

 

 

 

41

 

 

 

22

 

 

 

(19

)

Share-based compensation

 

13,685

 

 

 

13,092

 

 

 

4,587

 

 

 

4,507

 

Gain from sale of equipment

 

(1

)

 

 

(10

)

 

 

(2

)

 

 

(3

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Change in operating lease right-of-use assets and liabilities, net

 

(3,938

)

 

 

(1,304

)

 

 

(1,523

)

 

 

1,209

 

Decrease (increase) in accounts receivable, net

 

3,421

 

 

 

13,361

 

 

 

(2,212

)

 

 

3,742

 

Decrease in deferred contract costs

 

3,594

 

 

 

1,588

 

 

 

1,004

 

 

 

1,005

 

(Increase) decrease in other current assets

 

(1,587

)

 

 

(754

)

 

 

(707

)

 

 

2,163

 

Decrease (increase) in other non-current assets

 

408

 

 

 

83

 

 

 

(9

)

 

 

36

 

Increase in accounts payable

 

4,309

 

 

 

2,284

 

 

 

3,966

 

 

 

5,542

 

Decrease in deferred revenue

 

(3,957

)

 

 

(3,792

)

 

 

(6,898

)

 

 

(11,108

)

(Decrease) increase in other non-current liabilities

 

(155

)

 

 

355

 

 

 

164

 

 

 

(265

)

(Decrease) increase in other liabilities and accrued expenses

 

(6,051

)

 

 

48

 

 

 

(1,805

)

 

 

2,905

 

Net cash (used in) provided by operating activities

 

(6,771

)

 

 

26,756

 

 

 

(4,792

)

 

 

9,344

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of property and equipment, net

 

(1,377

)

 

 

(1,198

)

 

 

(62

)

 

 

(290

)

Capitalized internal-use software costs

 

(788

)

 

 

(793

)

 

 

(81

)

 

 

(324

)

Increase in restricted deposits

 

(132

)

 

 

(414

)

 

 

(45

)

 

 

(125

)

Payment for business combinations, net of cash acquired

 

 

 

 

(15,442

)

 

 

 

 

 

(11,609

)

Net cash used in investing activities

 

(2,297

)

 

 

(17,847

)

 

 

(188

)

 

 

(12,348

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

2,125

 

 

 

3,724

 

 

 

295

 

 

 

667

 

Proceeds from employee share purchase plan

 

660

 

 

 

555

 

 

 

 

 

 

 

Repayment of Credit Facility

 

 

 

 

(25,000

)

 

 

 

 

 

 

Payments of contingent consideration, net

 

(2,363

)

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

422

 

 

 

(20,721

)

 

 

295

 

 

 

667

 

Effect of exchange rates on cash and cash equivalents

 

(1,752

)

 

 

211

 

 

 

(883

)

 

 

677

 

Net decrease in cash and cash equivalents

 

(10,398

)

 

 

(11,601

)

 

 

(5,568

)

 

 

(1,660

)

Cash and cash equivalents, beginning of period

 

77,810

 

 

 

71,732

 

 

 

72,980

 

 

 

61,791

 

Cash and cash equivalents, end of period

$

67,412

 

 

$

60,131

 

 

$

67,412

 

 

$

60,131

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

Interest received, net

$

(89

)

 

$

(848

)

 

$

(49

)

 

$

(291

)

Taxes paid

$

1,857

 

 

$

1,151

 

 

$

244

 

 

$

303

 

Supplemental disclosure of non-cash financing activities:

 

 

 

 

 

 

 

Additions to operating lease right-of-use assets and liabilities

$

1,048

 

 

$

6,064

 

 

$

268

 

 

$

1,611

 

Share-based compensation included in capitalized internal-use software

$

36

 

 

$

62

 

 

$

3

 

 

$

29

 

Deferred proceeds from exercise of share options included in other current assets

$

54

 

 

$

5

 

 

$

12

 

 

$

5

 

Deferred costs of property and equipment incurred during the period included in accounts payable

$

63

 

 

$

92

 

 

$

22

 

 

$

92

 

Deferred payments in relation to business combinations held in escrow

$

1,269

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

Schedule A: Business combinations

 

 

 

 

 

 

 

Working capital (deficit), net (excluding cash and cash equivalents)

 

 

 

 

(217

)

 

 

 

 

Property, plant and equipment

 

 

 

 

18

 

 

 

 

 

Goodwill and other intangible assets

 

 

 

 

4,684

 

 

 

 

 

Deferred taxes, net

 

 

 

 

(152

)

 

 

 

 

 

$

 

 

$

4,333

 

 

 

 

 

Less non-cash:

 

 

 

 

 

 

 

Deferred cash payments

$

 

 

$

(500

)

 

 

 

 

Total

$

 

 

$

3,833

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule B: Business combinations

 

 

 

 

 

 

 

Working capital (deficit), net (excluding cash and cash equivalents)

 

 

 

 

(1,474

)

 

 

 

 

Goodwill and other intangible assets

 

 

 

 

13,926

 

 

 

 

 

Deferred taxes, net

 

 

 

 

(843

)

 

 

 

 

 

$

 

 

$

11,609

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures

Reconciliation of GAAP gross profit to non-GAAP gross profit

 

 

Nine Months Ended September 30,

 

Three months Ended September 30,

 

2023

 

2024

 

2023

 

2024

 

(In thousands)

(In thousands)

GAAP gross profit

$

126,033

 

 

$

144,843

 

 

$

44,253

 

 

$

50,464

 

Add:

 

 

 

 

 

 

 

Share-based compensation expenses

 

482

 

 

 

578

 

 

 

155

 

 

 

190

 

Retention payments related to business combinations

 

306

 

 

 

44

 

 

 

 

 

 

19

 

Amortization of intangible assets related to business combinations

 

3,504

 

 

 

3,376

 

 

 

1,169

 

 

 

1,152

 

Non-GAAP gross profit

$

130,325

 

 

$

148,841

 

 

$

45,577

 

 

$

51,825

 

Non-GAAP gross margin

 

81

%

 

 

81

%

 

 

83

%

 

 

80

%

 

Reconciliation of Loss from operations (GAAP) to Non-GAAP operating (loss) income

 

 

Nine Months Ended September 30,

 

Three months Ended September 30,

 

2023

 

2024

 

2023

 

2024

 

(In thousands)

(In thousands)

Loss from operations

$

(27,722

)

 

$

(6,104

)

 

$

(4,885

)

 

$

(2,467

)

Add:

 

 

 

 

 

 

 

Share-based compensation expenses

 

13,685

 

 

 

13,092

 

 

 

4,587

 

 

 

4,507

 

Retention payments related to business combinations

 

851

 

 

 

1,347

 

 

 

164

 

 

 

528

 

Amortization of intangible assets related to business combinations

 

3,605

 

 

 

3,795

 

 

 

1,202

 

 

 

1,448

 

Non-recurring expenses related to termination of lease agreement and others

 

17

 

 

 

 

 

 

4

 

 

 

 

Secondary offering costs

 

 

 

 

350

 

 

 

 

 

 

350

 

Non-GAAP operating (loss) income

$

(9,564

)

 

$

12,480

 

 

$

1,072

 

 

$

4,366

 

Non-GAAP operating margin

 

(6

)%

 

 

7

%

 

 

2

%

 

 

7

%

 

Reconciliation of GAAP operating expenses to non-GAAP operating expenses

 

 

Nine Months Ended September 30,

 

Three months Ended September 30,

 

2023

 

2024

 

2023

 

2024

 

(In thousands)

(In thousands)

GAAP research and development

$

42,452

 

 

$

40,238

 

 

$

14,199

 

 

$

14,460

 

Less:

 

 

 

 

 

 

 

Share-based compensation expenses

 

4,303

 

 

 

4,181

 

 

 

1,453

 

 

 

1,378

 

Retention payments related to business combinations

 

 

 

 

27

 

 

 

 

 

 

11

 

Non-GAAP research and development

$

38,149

 

 

$

36,030

 

 

$

12,746

 

 

$

13,071

 

Non-GAAP research and development margin

 

24

%

 

 

20

%

 

 

23

%

 

 

20

%

 

 

 

 

 

 

 

 

GAAP sales and marketing

$

79,362

 

 

$

77,903

 

 

$

24,274

 

 

$

26,806

 

Less:

 

 

 

 

 

 

 

Share-based compensation expenses

 

4,051

 

 

 

3,101

 

 

 

1,321

 

 

 

1,109

 

Retention payments related to business combinations

 

545

 

 

 

1,276

 

 

 

164

 

 

 

498

 

Amortization of intangible assets related to business combinations

 

101

 

 

 

419

 

 

 

33

 

 

 

296

 

Non-recurring expenses related to termination of lease agreement and others

 

17

 

 

 

 

 

 

4

 

 

 

 

Non-GAAP sales and marketing

$

74,648

 

 

$

73,107

 

 

$

22,752

 

 

$

24,903

 

Non-GAAP sales and marketing margin

 

46

%

 

 

40

%

 

 

41

%

 

 

38

%

 

 

 

 

 

 

 

 

GAAP general and administrative

$

31,941

 

 

$

32,806

 

 

$

10,665

 

 

$

11,665

 

Less:

 

 

 

 

 

 

 

Share-based compensation expenses

 

4,849

 

 

 

5,232

 

 

 

1,658

 

 

 

1,830

 

Secondary offering costs

 

 

 

 

350

 

 

 

 

 

 

350

 

Non-GAAP general and administrative

$

27,092

 

 

$

27,224

 

 

$

9,007

 

 

$

9,485

 

Non-GAAP general and administrative margin

 

17

%

 

 

15

%

 

 

16

%

 

 

15

%

 

Reconciliation of Net cash (used in) provided by operating activities (GAAP) to Free cash flow and Normalized free cash flow

 

 

Nine Months Ended September 30,

 

Three months Ended September 30,

 

2023

 

2024

 

2023

 

2024

 

(In thousands)

(In thousands)

Net cash (used in) provided by operating activities

$

(6,771

)

 

$

26,756

 

 

$

(4,792

)

 

$

9,344

 

Purchases of property and equipment, net

 

(1,377

)

 

 

(1,198

)

 

 

(62

)

 

 

(290

)

Capitalized internal use software costs

 

(788

)

 

 

(793

)

 

 

(81

)

 

 

(324

)

Free cash flow

$

(8,936

)

 

$

24,765

 

 

$

(4,935

)

 

$

8,730

 

 

 

 

 

 

 

 

 

Purchases of property and equipment related to the new headquarters

 

1,127

 

 

 

 

 

 

27

 

 

 

 

Payments received from escrow in relation to contingent consideration

 

(380

)

 

 

 

 

 

 

 

 

 

Deferred payments in relation to business combinations

 

260

 

 

 

265

 

 

 

260

 

 

 

265

 

Normalized free cash flow

$

(7,929

)

 

$

25,030

 

 

$

(4,648

)

 

$

8,995

 

 

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