Similarweb Q2 Earnings Call Highlights

Key Points

• Similarweb reported strong Q2 results, with revenue rising 9% year over year to $77.2 million and its first-ever positive GAAP operating profit. Non-GAAP operating profit increased to $6.5 million, while free cash flow reached $8.7 million.
• Enterprise and AI demand accelerated: the company signed three multiyear contracts worth more than $60 million cumulatively, including an agreement involving large-language-model training. AI-related revenue rose to 13% of total revenue, and net revenue retention improved to 107% among customers with more than $100,000 in ARR.
• Management raised its full-year 2026 outlook to $340 million–$380 million in revenue and $24 million–$26 million in non-GAAP operating profit, expecting growth to accelerate in the second half as enterprise momentum and ARR strengthen.

Similarweb NYSE: SMWB reported second-quarter fiscal 2026 revenue growth of 9% year over year and raised its full-year outlook, as the company cited larger enterprise contracts, improving retention and rising demand for its digital data from artificial intelligence companies.

Revenue for the quarter totaled $77.2 million, above the company’s prior guidance range. Non-GAAP operating profit was $6.5 million, or an 8% margin, compared with $2.4 million in the second quarter of 2025. The company also recorded positive GAAP operating profit for the first time in its history, according to CEO and Co-Founder Or Offer.

“Similarweb is at [an] inflection point,” Offer said, pointing to stronger core-business performance and what he described as a significant growth opportunity tied to AI. He said the company delivered its strongest quarter for net new annual recurring revenue, or ARR, while also improving retention and profitability.

Enterprise Contracts and AI Demand

Offer said Similarweb signed three large multiyear enterprise contracts during the quarter with cumulative contract value of more than $60 million. The company also signed a fourth large contract in July, he said.

The three Q2 agreements each represented eight-figure engagements, Offer said during the question-and-answer session. One of the contracts involved a major technology company using Similarweb data to train its large language model, and the expansion made that customer Similarweb’s third with an ARR engagement exceeding $10 million.

Offer said only one of the three large deals was tied to LLM pre-training and post-training. The other two involved large enterprises using the company’s data in other ways, which he said could offer broader opportunities as organizations deploy AI across multiple teams and applications.

“We are increasingly monetizing access to data and the consumption of the data,” Offer said. “We believe AI will accelerate.”

The company said AI-related revenue represented 13% of total revenue in the second quarter, up from 11% at the end of the fourth quarter of 2025. Offer said AI is increasing the value enterprises can derive from Similarweb’s data because AI systems can analyze more information and support more use cases than individual analysts.

Chief Financial Officer Ran Vered said the company is seeing demand across several markets, including LLM-related uses, original equipment manufacturer arrangements, brands and investors. He said large organizations are increasingly seeking to integrate Similarweb’s data at scale.

Retention, Customer Mix and Cash Flow

Net revenue retention reached 100% across all customers and 107% among customers with more than $100,000 in ARR. Vered said the reported NRR figure is based on an average of the previous four quarters, and management expects it to continue rising after a strong quarterly performance.

Vered attributed the retention improvement in part to changes made earlier in the year, including shifting account-management efforts toward expansion while maintaining a focus on gross retention.

The company continued to emphasize larger customers and multiyear arrangements. ARR under multiyear contracts represented 66% of ARR at the end of the quarter, compared with 57% a year earlier. Customers generating more than $100,000 of ARR accounted for 69% of ARR, while customers generating more than $25,000 accounted for 90%.

• Similarweb had 1,815 customers with ARR above $25,000, compared with 1,809 a year earlier.
• Average account value for customers above $25,000 in ARR increased 19% year over year to $149,000.
• The number of customers above $100,000 in ARR rose 9% year over year to 473.
• Average account value in the above-$100,000 cohort increased 18% to $438,000.

Vered said the relatively flat count of customers above $25,000 reflected a decision to prioritize larger opportunities within the existing customer base rather than smaller inbound small- and medium-sized business deals.

Normalized free cash flow was $8.7 million in the quarter, representing an 11% margin. Similarweb ended the quarter with about $73 million in cash and cash equivalents, no debt and a $75 million available credit line. Remaining performance obligations totaled $345 million, up 26% year over year, with the company expecting to recognize about 66% as revenue over the next 12 months.

Outlook Raised

For the third quarter, Similarweb forecast revenue of $80.5 million to $82.5 million, representing 17.5% year-over-year growth at the midpoint. The company projected third-quarter non-GAAP operating profit of $7.5 million to $9.5 million.

For full-year 2026, the company raised its revenue guidance to a range of $340 million to $380 million, representing about 12% growth at the midpoint. It also increased its full-year non-GAAP operating-profit outlook to $24 million to $26 million.

Management said it expects revenue growth to accelerate in the second half of 2026, supported by second-quarter ARR growth and enterprise momentum. Vered said the company is continuing to manage the impact of a stronger Israeli shekel against the U.S. dollar, noting that about half of Similarweb’s employees are based in Israel.

Offer said the company’s pricing for its large data agreements has not materially changed, describing the contracts as primarily consumption- and data-access-oriented rather than software-seat-based. He added that any one-time revenue elements in the large contracts are immaterial, while the agreements are principally ARR deals.

Looking ahead, Offer said Similarweb plans to continue expanding relationships with large enterprises, pursuing cross-sell and upsell opportunities within its existing customer base, and building AI-focused products and distribution channels. The company said its data is available through MCP on Claude and ChatGPT and that it expanded partnerships with Perplexity and Manus during the quarter.

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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