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Similarweb Surpasses Q2 Expectations, but Loss Widens Year-over-Year

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Similarweb has posted strong quarterly results and reiterated third-quarter and full-year guidance.

Even though Israel-based Similarweb Ltd. (NYSE: SMWB) has reported better-than-expected results for the second quarter of 2022, its net loss has widened on a year-over-year basis.

What Kind of Company Is Similarweb?

Headquartered in Tel Aviv, Israel, Similarweb provides digital intelligence services to small and medium-sized businesses across the world. Its offerings include web analytics services as well as data on web traffic and the performance of competitors and clients.

Highlights of SimilarWeb’s Q2 Performance

The company has reported an adjusted loss of 26 cents per share, narrower than the Street’s loss estimate of 30 cents per share but wider than the year-ago loss of 23 cents a share.

Total revenues increased 46% year-over-year to $47.6 million, exceeding analysts’ expectations of $45.97 million.

Adjusted gross profit grew to $35.3 million from $25.6 million in the second quarter of last year. The gross profit margin stood at 74.3%, compared to 78.6% a year ago.

The number of customers jumped 25% to 3,849, and the average annual revenue (AAR) per customer rose 16% to around $50,700. The number of customers with an ARR of at least $100,000 climbed 40% to 309.

The digital intelligence provider ended the quarter with cash and cash equivalents of $93.9 million.

In a release, Similarweb said, “After assessing the momentum in our business and its continued likelihood in the current global macroeconomic environment, we are maintaining our revenue guidance for the year.”

The company expects total revenue to range from $48.8 million to $49.2 million and adjusted gross margin to be around 74%-75% in the third quarter.

For the full-year 2022, it anticipates total revenues between $196 million and $197 million, in line with the consensus estimate of $196.6 million. The adjusted gross margin is expected to be in the range of 75% to 76%.

Similarweb’s Website Traffic Trends Hinted at a Strong Q2 Show

According to TipRanks’ Website Traffic Tool, Similarweb’s website traffic registered an almost 31% rise in global visits during the second quarter, compared to the first quarter. Website visits on the desktop grew 25.1% quarter-over-quarter and traffic to the company’s mobile app climbed 34.8%. The increased footfall on the company’s website is visible in its Q2 revenue figures. Learn how Website Traffic can help you research your favorite stocks.

Is Similarweb a Good Stock to Buy?

Even though Similarweb’s current price looks appealing as the stock is currently trading near its annual low price of $7.60, investors may want to resist buying the dip because the company has been consistently reporting losses since its listing on the New York Stock Exchange in May 2021. Further, the stock closed 4.8% down on Tuesday in anticipation of weak second-quarter results.

However, on TipRanks, Similarweb has a Strong Buy consensus rating, which is based on four unanimous Buys. SMWB’s average price target of $19.33 implies upside potential of 135.7%.

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