Similarweb (NYSE:SMWB) reported fourth-quarter 2025 revenue of $72.8 million, up 11% year over year, but below its guidance as the timing of two large LLM data training contracts pushed out beyond the quarter. Management said both contracts remain active in the pipeline, noting that AI-related deals can involve longer sales cycles given their size and complexity, and that the opportunities could be “very big” multi-year revenue drivers once closed.
Despite the revenue shortfall, the company said it slightly exceeded the midpoint of its non-GAAP operating profit targets for the quarter through cost discipline. Similarweb delivered its ninth consecutive quarter of positive free cash flow and its second consecutive year of positive operating profit, generating approximately $13 million of free cash flow in 2025.
Quarterly metrics and AI mix
Offer also highlighted growing demand tied to AI. AI-related revenue represented 11% of fourth-quarter sales, up from 8% at the end of the second quarter of 2025. On the call, management described AI-related revenue as coming from multiple streams, including data licensing for LLM use cases, the company’s Gen AI Intelligence product sold to brands, and revenue connected to AI chatbot partnerships such as Manus, which includes an initial setup component and usage-based revenue.
Strategy: data moat, enterprise expansion, and AI-first products
Management framed 2025 as a “build year” focused on preparing the platform for what it called the AI era. Offer outlined a three-part strategy:
- Strengthening the data moat by expanding coverage and freshness across web, app, search, ads, and chat-based channels
- Deepening enterprise relationships by driving multi-product adoption and improving expansion to lift NRR
- Scaling AI-first integrated solutions that serve both human users and AI agents
Offer said Similarweb has invested “hundreds of millions of dollars” over more than a decade to build its digital market data capabilities, and argued that AI systems “depend” on high-quality data rather than replacing it.
He also pointed to enterprise traction, including two large tech customers generating more than $10 million in annual recurring revenue (ARR), and said both expanded into data agreements that power their LLMs. Similarweb said it expanded its integration within the Bloomberg Terminal as another validation point for the company’s data quality and positioning as an alternative data provider for institutional investors.
Durability and customer mix
Offer emphasized longer-term customer commitments, saying 60% of ARR is now multi-year, up from 49% a year ago. He described the shift as improving visibility and reflecting deeper customer alignment. The company also said 63% of ARR now comes from customers generating more than $100,000 annually, and that the number of $100,000 customers grew 12% year over year in 2025.
Management acknowledged that overall NRR of 98% is not where it wants it to be. Offer said the company is “sharpening” its go-to-market approach, upgrading talent, refining processes, and building scalable cross-sell and expansion playbooks. Chief Business Officer Maoz Lakovski said renewal rates and gross retention were showing “good traction,” and that the company is focused on improving the expansion path to increase NRR.
Executives also discussed how one-time AI evaluation and data deals can affect NRR comparisons. Offer said some large deals are one-time and therefore not reflected in NRR, which tracks recurring revenue. He added that management expects NRR to improve over time as more one-time LLM trials mature into recurring ARR.
Financial position, capital allocation, and 2026 outlook
New CFO Ran Vered, who joined in late December 2025, said Similarweb ended 2025 with $72 million in cash and cash equivalents, no debt, and access to a $75 million line of credit. Vered said the company’s capital allocation priorities include continuing to invest in R&D at around 20% of revenue, pursuing M&A only when it meets return criteria and advances strategic goals, and maintaining a strong balance sheet. He cited prior bolt-on acquisitions including 42matters, which enhanced App Intelligence, and Admetricks, which strengthened Ad Intelligence, and said market volatility is “enriching the M&A pipeline.”
For 2026 guidance, Similarweb issued a wide revenue range reflecting uncertainty around the timing of large LLM-related agreements. Vered said the company is taking a “deliberately prudent approach,” assuming pockets of end-market weakness persist while noting encouragement from demand in the pipeline for larger AI deals.
- Full-year 2026 revenue: $305 million to $350 million (10% year-over-year growth at the midpoint)
- Q1 2026 revenue: $72 million to $74 million (9% year-over-year growth at the midpoint)
- Full-year 2026 non-GAAP operating profit: $16 million to $19 million
- Q1 2026 non-GAAP operating profit: $0.5 million to $2.5 million
In Q&A, Vered said the widened revenue guidance range was largely due to the “big deals” in the LLM pipeline, which are difficult to forecast on timing and size. Executives said landing those large agreements would be a key driver differentiating results toward the high end of the range.
Offer also described go-to-market changes following what he called commercial execution shortfalls in 2025. He said the company added many salespeople in a short period in an effort to accelerate growth, but ramping and management disruption contributed to lower yield than expected. He added that Similarweb shifted back toward a more inbound-driven “land and expand” model and backed off an outbound enterprise approach that introduced longer sales cycles than the company was used to. Offer said the company enters 2026 with a fully ramped team and does not anticipate needing additional sales investment to pursue its targets.
Management reiterated that 2026 is intended to be a “transformation year,” shifting from building to scaling. In closing remarks, Offer highlighted four takeaways: 2025 as a build year for the AI era; AI revenue growth and expanded multi-year ARR alongside ongoing profitability and free cash flow; the increasing value of digital data as AI adoption accelerates; and a 2026 focus on disciplined execution and scaling.
About Similarweb (NYSE:SMWB)
Similarweb Ltd. (NYSE: SMWB) is a digital intelligence company that provides insights into website and mobile app performance. Its cloud-based platform aggregates and analyzes data on global web traffic, user engagement, and referral sources, enabling businesses to benchmark their digital presence against competitors. The company’s core offering includes metrics on audience behavior, traffic acquisition channels, and industry trends, which are designed to inform strategic decisions in marketing, sales, and product development.
Similarweb’s platform delivers a suite of tools for market research, competitor analysis, and performance optimization.
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