Similarweb Ltd. — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone Q4 filing; the provided filing text does not give clear Q4-only financial results. Figures below are in U.S. dollars unless stated otherwise.
Business context
Similarweb sells subscription-based digital intelligence software and related services, including API access, to businesses and investors. Its platform analyzes digital activity across websites and apps. The company reported 3,487 paying customers at year-end, up from 2,718 in 2020. No customer contributed more than 5% of revenue. Similarweb completed its IPO in May 2021 and reported 926 employees at year-end.
Key financial metrics
| Metric | FY2020 | FY2021 | Change |
|---|---|---|---|
| Revenue | $93.5 million | $137.7 million | +47.3% |
| Gross profit / gross margin | $72.1 million / 77.1% | $105.9 million / 76.9% | Margin down 0.2 percentage points |
| Operating expenses | $91.7 million | $172.0 million | +87.5% |
| Operating loss | $(19.7) million | $(66.1) million | Loss widened |
| Net loss | $(22.0) million | $(69.0) million | Loss widened |
| Net cash used in operating activities | $(3.8) million | $(27.6) million | Cash use increased |
| Free cash flow (non-GAAP) | $(4.9) million | $(30.4) million | Cash use increased |
| Cash and cash equivalents at year-end | $23.9 million | $128.9 million | Higher following IPO |
| Cash, cash equivalents, short-term investments and restricted deposits | $55.4 million | $140.4 million | Increased |
| Debt outstanding at year-end | $26.9 million | None | Repaid in 2021 |
FY2021 diluted and basic loss per share was $1.30, compared with $1.58 in FY2020. The company reported deferred revenue of $78.8 million at year-end, including $76.7 million current, and remaining performance obligations of $137.5 million; it expected to recognize 87.6% of those obligations as revenue during 2022. FY2021 revenue outside the United States was approximately 55.6% of total revenue.
Material changes and unusual items
- Revenue growth was driven primarily by subscription revenue and customer growth. U.S. revenue rose 47% to $61.1 million; Europe and U.K. revenue increased 54% to $44.4 million combined.
- Operating expenses grew faster than revenue, particularly sales and marketing (+74.8%), research and development (+101%) and general and administrative (+111.7%). Management attributed increases mainly to hiring, commissions, marketing, product-development costs and public-company expenses.
- Share-based compensation rose to $11.2 million from $4.8 million. The 2021 operating loss included $1.2 million of IPO-related fees, $1.1 million of acquisition-related retention payments, $0.6 million of acquired-intangible amortization and $0.3 million of lease-termination and other non-recurring costs.
- The May 2021 IPO generated approximately $150.7 million of net proceeds to the company. Proceeds helped lift year-end liquidity; the company reported no outstanding SVB borrowings at year-end.
- Acquisitions included Embee Mobile, for which cash consideration was $9.1 million plus contingent consideration with a reported acquisition-date fair value of $7.1 million, and SimilarTech assets/business for $0.5 million plus possible retention payments. Acquisition accounting included $8.5 million of goodwill additions overall.
Outlook, risks and contingencies
The company did not provide specific numerical revenue or earnings guidance in the supplied filing text. Management expects to continue investing in product development, sales and marketing, international expansion and infrastructure, and anticipates higher operating expenses. It stated that available cash, operating cash flows and credit-facility availability should be adequate for at least the next 12 months, while warning that it may continue to incur losses and may not achieve profitability.
- Data access, privacy and regulation: The business depends on first-party measurement, a contributory network, public data capture and third-party data partners. Opt-outs, platform restrictions, privacy-law changes or challenges to automated data collection could reduce data availability or increase costs.
- Cybersecurity and service reliability: The filing disclosed that an independent cybersecurity maturity assessment identified material areas considered risky or not mature, which the company said it was remediating. It also relies substantially on AWS for hosting.
- Growth and profitability: Rapid hiring and rising operating costs, customer retention and expansion, competition, sales-cycle variability and the ability to convert free users to paid subscriptions could affect growth and losses.
- Geopolitical and operating exposure: The company cited COVID-19 uncertainty, regional risks in Israel and the February 2022 conflict in Ukraine, where approximately 70 personnel worked primarily in software development and quality assurance.
- Liquidity and commitments: The SVB facility permits borrowing up to $75 million subject to a borrowing base and requires at least $35 million of defined liquidity. It is secured by substantially all assets. Reported contractual commitments include operating leases and purchase obligations.
- Legal matters: The company said it was not party to litigation expected to have a material adverse effect, but noted that ordinary-course claims and contractual indemnification obligations could create costs.
Important facts for investors to verify
- Confirm FY2021 cash used in operating activities: the audited cash-flow statement reports $27.625 million, while one MD&A table reports $26.725 million. The filing’s free-cash-flow reconciliation uses $27.625 million.
- Reconcile purchase-obligation disclosures: the MD&A contractual-obligations table reports $13.1 million, while the financial-statement note reports $24.2 million before its stated landlord-participation offset.
- Review the extent and progress of remediation for the cybersecurity gaps disclosed, and any subsequent security incidents or regulatory inquiries.
- Assess cash burn against the company’s investment plans, the $35 million facility liquidity covenant, lease commitments and expected 2022 revenue recognition from remaining performance obligations.
- Track customer retention and expansion, subscription renewals, and whether expense growth moderates enough to improve operating leverage and the path to profitability.
- Consider dilution from equity awards: 10.9 million ordinary shares were subject to outstanding options and RSUs at December 31, 2021, in addition to the 2021 plan’s evergreen share increase.