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Similarweb Announces Fourth Quarter and Fiscal Year 2023 Results

Delivers positive free cash for the first time since IPO

Non-GAAP operating profit margin of 8%

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 fourth quarter ended December 31, 2023. 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.

“We finished the year with 13% annual revenue growth, successfully navigated through a challenging demand environment, and in the fourth quarter we achieved positive free cash flow for the first time as a public company, which is a tremendous accomplishment for us as a team,” said Or Offer, Co-Founder and CEO of Similarweb. “During the quarter, we experienced significant new demand from our largest strategic accounts who are coming to us for unique digital data that they can leverage in their work with generative AI." Offer added, "This is an important development for us as we enter 2024 seeking profitable growth."

Fourth Quarter 2023 Financial Highlights

  • Total revenue was $56.8 million, an increase of 11% compared to $51.3 million for the fourth quarter of 2022.
  • GAAP operating loss was $(1.1) million or (2)% of revenue, compared to $(14.6) million or (28)% of revenue for the fourth quarter of 2022.
  • GAAP net loss per share was $(0.04), compared to $(0.20) for the fourth quarter of 2022.
  • Non-GAAP operating profit (loss) was $4.7 million or 8% of revenue, compared to $(10.9) million or (21)% of revenue for the fourth quarter of 2022.
  • Non-GAAP operating earnings (loss) per share was $0.06, compared to $(0.14) for the fourth quarter of 2022.
  • Cash and cash equivalents totalled $71.7 million as of December 31, 2023, compared to $77.8 million as of December 31, 2022.
  • Net cash provided by (used in) operating activities was $3.7 million, compared to $(12.3) million for the fourth quarter of 2022.
  • Free cash flow was $3.5 million, compared to $(14.6) million for the fourth quarter of 2022.
  • Normalized free cash flow was $3.5 million, compared to $(13.8) million for the fourth quarter of 2022.

Fiscal Year 2023 Financial Highlights

  • Total revenue was $218.0 million, an increase of 13% compared to $193.2 million for fiscal year 2022.
  • GAAP operating loss was $(28.8) million or (13)% of revenue, compared to $(87.9) million or (45)% of revenue for fiscal year 2022.
  • GAAP net loss per share was $(0.38), compared to $(1.10) for fiscal year 2022.
  • Non-GAAP operating loss was $(4.8) million or (2)% of revenue, compared to $(63.8) million or (33)% of revenue for fiscal year 2022.
  • Non-GAAP operating loss per share was $(0.06), compared to $(0.84) for fiscal year 2022.

Recent Business Highlights

  • Grew number of customers to 4,712 as of December 31, 2023, an increase of 16% compared to December 31, 2022.
  • Annual revenue per customer was approximately $50,000 in the fourth quarter of 2023, as compared to $51,600 in the fourth quarter of 2022.
  • Grew number of customers with ARR of $100,000 or more to 365, an increase of 8% compared to December 31, 2022.
  • Customers with ARR of $100,000 or more contributed 57% of the total ARR as of December 31, 2023, compared to 55% as of December 31, 2022.
  • Dollar-based net retention rate for customers with ARR of $100,000 or more was 107% in the fourth quarter of 2023 as compared to 120% in the fourth quarter of 2022.
  • Overall dollar-based net retention rate was 98% in the fourth quarter of 2023 as compared to 109% in the fourth quarter of 2022.
  • Multi-year subscriptions now comprise 42% of our overall ARR as of December 31, 2023, as compared to 39% as of December 31, 2022.
  • Remaining performance obligations increased 14% year-over-year, to $195.2 million as of December 31, 2023, as compared to $171.0 million as of December 31, 2022.

Financial Outlook

“We accomplished our goal of generating positive free cash flow in the fourth quarter and delivered a second consecutive quarter of non-GAAP operating profit,” said Jason Schwartz, Chief Financial Officer of Similarweb. “We remain focused on driving operating efficiency in order to achieve profitable growth and sustainable positive free cash flow quarterly in 2024.”

  • Q1 2024 Guidance
  • Total revenue estimated between $58.5 million and $59.0 million, representing approximately 11% growth year over year at the mid-point of the range.
  • Non-GAAP operating profit estimated between $1.0 million and $1.5 million.
  • FY 2024 Guidance
  • Total revenue estimated between $242.0 million and $246.0 million, representing approximately 12% growth year over year at the mid-point of the range.
  • Non-GAAP operating profit estimated between $6.0 million and $8.0 million.

The Company’s first 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 and gross margin, the most directly comparable GAAP measures to non-GAAP operating loss and non-GAAP gross margin, respectively, and similarly cannot provide a reconciliation of these measures to their closest GAAP equivalents 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, February 14, 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 (201) 689-7806 internationally.

About Similarweb: Similarweb powers the data-driven decisions that help businesses win their market by revealing what is happening online. Similarweb provides businesses with the essential digital data & analytics needed to build strategy, optimize customer acquisition and increase monetization. We enable our users to become the first to discover and capture the best business opportunities and to stay alert and react instantly to emerging threats to their business. Similarweb products are easy to use and integrated into users’ workflow, powered by the most advanced technology, and based on what we believe to be the most comprehensive digital data on the planet.

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 first 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 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 March 23, 2023, 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 above 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,

 

December 31,

 

 

2022

 

 

 

2023

 

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

77,810

 

 

$

71,732

 

Restricted deposits

 

9,814

 

 

 

10,020

 

Accounts receivable, net

 

38,141

 

 

 

47,869

 

Deferred contract costs

 

9,789

 

 

 

11,165

 

Prepaid expenses and other current assets

 

6,628

 

 

 

5,599

 

Total current assets

 

142,182

 

 

 

146,385

 

Property and equipment, net

 

31,823

 

 

 

28,630

 

Deferred contract costs, non-current

 

8,348

 

 

 

9,845

 

Operating lease right-of-use assets

 

40,823

 

 

 

36,007

 

Intangible assets, net

 

9,561

 

 

 

4,785

 

Goodwill

 

12,867

 

 

 

12,867

 

Other non-current assets

 

441

 

 

 

494

 

Total assets

$

246,045

 

 

$

239,013

 

Liabilities and Shareholders' equity

 

 

 

Current liabilities:

 

 

 

Borrowings under Credit Facility

$

25,000

 

 

$

25,000

 

Accounts payable

 

7,144

 

 

 

8,422

 

Payroll and benefit related liabilities

 

18,512

 

 

 

20,437

 

Deferred revenue

 

93,195

 

 

 

99,968

 

Other payables and accrued expenses

 

27,990

 

 

 

23,263

 

Operating lease liabilities

 

9,091

 

 

 

7,095

 

Total current liabilities

 

180,932

 

 

 

184,185

 

Deferred revenue, non-current

 

974

 

 

 

878

 

Operating lease liabilities, non-current

 

40,075

 

 

 

35,329

 

Other long-term liabilities

 

2,113

 

 

 

3,074

 

Total liabilities

 

224,094

 

 

 

223,466

 

Shareholders' equity

 

 

 

Ordinary Shares, NIS 0.01 par value 500,000,000 shares authorized as of December 31, 2022 and December 31, 2023, 76,435,940 and 78,653,046 shares issued as of December 31, 2022 and December 31, 2023, 76,433,772 and 78,650,878 outstanding as of December 31, 2022 and December 31, 2023, respectively;

 

210

 

 

 

216

 

Additional paid-in capital

 

345,834

 

 

 

367,558

 

Accumulated other comprehensive (loss) income

 

(367

)

 

 

872

 

Accumulated deficit

 

(323,726

)

 

 

(353,099

)

Total shareholders' equity

 

21,951

 

 

 

15,547

 

Total liabilities and shareholders' equity

$

246,045

 

239,013

 

Similarweb Ltd.

Consolidated Statements of Comprehensive Income (Loss)

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

 

 

Year Ended December 31,

 

Three Months Ended December 31,

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

 

 

Revenue

$

193,234

 

 

$

218,019

 

 

$

51,346

 

 

$

56,755

 

Cost of revenue

 

53,274

 

 

 

47,090

 

 

 

12,426

 

 

 

11,859

 

Gross profit

 

139,960

 

 

 

170,929

 

 

 

38,920

 

 

 

44,896

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

59,904

 

 

 

56,158

 

 

 

13,977

 

 

 

13,706

 

Sales and marketing

 

122,635

 

 

 

101,198

 

 

 

30,096

 

 

 

21,836

 

General and administrative

 

45,277

 

 

 

42,380

 

 

 

9,441

 

 

 

10,439

 

Total operating expenses

 

227,816

 

 

 

199,736

 

 

 

53,514

 

 

 

45,981

 

Loss from operations

 

(87,856

)

 

 

(28,807

)

 

 

(14,594

)

 

 

(1,085

)

Other income, net

 

290

 

 

 

 

 

 

290

 

 

 

 

Finance income (expenses), net

 

4,421

 

 

 

941

 

 

 

(375

)

 

 

(2,085

)

Loss before income taxes

 

(83,145

)

 

 

(27,866

)

 

 

(14,679

)

 

 

(3,170

)

Provision (benefit) for income taxes

 

516

 

 

 

1,507

 

 

 

319

 

 

 

238

 

Net loss

$

(83,661

)

 

$

(29,373

)

 

$

(14,998

)

 

$

(3,408

)

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

$

(1.10

)

 

$

(0.38

)

 

$

(0.20

)

 

$

(0.04

)

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

 

75,718,623

 

 

 

77,752,960

 

 

 

76,197,984

 

 

 

78,443,438

 

 

 

 

 

 

 

 

 

Net loss

$

(83,661

)

 

$

(29,373

)

 

$

(14,998

)

 

$

(3,408

)

Other comprehensive (loss) income, net of tax

 

 

 

 

 

 

 

Change in unrealized (loss) gain on cashflow hedges

 

(527

)

 

 

1,239

 

 

 

592

 

 

 

1,604

 

Total other comprehensive (loss) income, net of tax

 

(527

)

 

 

1,239

 

 

 

592

 

 

 

1,604

 

Total comprehensive loss

$

(84,188

)

 

$

(28,134

)

 

$

(14,406

)

 

$

(1,804

)

Share-based compensation costs included above:

U.S. dollars in thousands

 

Year Ended December 31,

 

Three Months Ended December 31,

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

(In thousands)

 

(In thousands)

Cost of revenue

$

599

 

$

635

 

$

136

 

$

153

Research and development

 

5,287

 

 

5,782

 

 

1,193

 

 

1,479

Sales and marketing

 

5,995

 

 

5,196

 

 

1,087

 

 

1,145

General and administrative

 

5,106

 

 

6,514

 

 

1,156

 

 

1,665

Total

$

16,987

 

$

18,127

 

$

3,572

 

$

4,442

 

Similarweb Ltd.

Consolidated Statements of Cash Flows

U.S. dollars in thousands

 

 

Year Ended December 31,

 

Three Months Ended December 31,

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

$

(83,661

)

 

$

(29,373

)

 

$

(14,998

)

 

$

(3,408

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

10,584

 

 

 

10,258

 

 

 

2,472

 

 

 

2,570

 

Finance expense (income)

 

1,112

 

 

 

1,646

 

 

 

(307

)

 

 

(106

)

Unrealized gain from hedging future transactions

 

(20

)

 

 

(52

)

 

 

(493

)

 

 

(78

)

Share-based compensation

 

16,987

 

 

 

18,127

 

 

 

3,572

 

 

 

4,442

 

Gain (loss) from sale of equipment

 

(142

)

 

 

 

 

 

(10

)

 

 

1

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

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

 

5,744

 

 

 

(1,926

)

 

 

475

 

 

 

2,012

 

Increase in accounts receivable, net

 

(6,882

)

 

 

(9,728

)

 

 

(13,080

)

 

 

(13,149

)

(Increase) decrease in deferred contract costs

 

(459

)

 

 

(2,873

)

 

 

1,670

 

 

 

(6,467

)

Decrease in other current assets

 

1,342

 

 

 

617

 

 

 

456

 

 

 

2,204

 

Decrease (increase) in other non-current assets

 

372

 

 

 

(53

)

 

 

503

 

 

 

(461

)

(Decrease) increase in accounts payable

 

(4,284

)

 

 

1,255

 

 

 

(1,444

)

 

 

(3,054

)

Increase in deferred revenue

 

15,055

 

 

 

6,677

 

 

 

9,622

 

 

 

10,634

 

(Decrease) increase in other non-current liabilities

 

(1,497

)

 

 

961

 

 

 

(936

)

 

 

1,116

 

(Decrease) increase in other liabilities and accrued expenses

 

(316

)

 

 

1,426

 

 

 

238

 

 

 

7,477

 

Net cash (used in) provided by operating activities

 

(46,065

)

 

 

(3,038

)

 

 

(12,260

)

 

 

3,733

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of property and equipment, net

 

(28,257

)

 

 

(1,559

)

 

 

(1,932

)

 

 

(182

)

Capitalized internal-use software costs

 

(2,919

)

 

 

(821

)

 

 

(424

)

 

 

(33

)

Decrease (increase) in restricted deposits

 

1,660

 

 

 

(206

)

 

 

507

 

 

 

(74

)

Payment in relation to business combinations

 

(3,787

)

 

 

 

 

 

 

 

 

 

Cash received in relation to business combinations

 

294

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(33,009

)

 

 

(2,586

)

 

 

(1,849

)

 

 

(289

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

2,034

 

 

 

2,296

 

 

 

130

 

 

 

171

 

Proceeds from employee share purchase plan

 

2,083

 

 

 

1,259

 

 

 

849

 

 

 

599

 

Borrowings under Credit Facility

 

25,000

 

 

 

 

 

 

 

 

 

 

Payments of contingent consideration, net

 

 

 

 

(2,363

)

 

 

 

 

 

 

Net cash provided by financing activities

 

29,117

 

 

 

1,192

 

 

 

979

 

 

 

770

 

Effect of exchange rates on cash and cash equivalents

 

(1,112

)

 

 

(1,646

)

 

 

307

 

 

 

106

 

Net (decrease) increase in cash and cash equivalents

 

(51,069

)

 

 

(6,078

)

 

 

(12,823

)

 

 

4,320

 

Cash and cash equivalents, beginning of period

 

128,879

 

 

 

77,810

 

 

 

90,633

 

 

 

67,412

 

Cash and cash equivalents, end of period

$

77,810

 

 

$

71,732

 

 

$

77,810

 

 

$

71,732

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

Interest received, net

$

(18

)

 

$

(203

)

 

$

(2

)

 

$

(114

)

Taxes paid

$

485

 

 

$

1,883

 

 

$

68

 

 

$

26

 

Supplemental disclosure of non-cash financing activities:

 

 

 

 

 

 

 

Initial public offering costs incurred during the period included in accounts payable and accrued expenses

$

(120

)

 

$

 

 

$

(120

)

 

$

 

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

$

9,485

 

 

$

2,597

 

 

$

50

 

 

$

1,549

 

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

$

 

 

$

11

 

 

$

 

 

$

(43

)

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

$

116

 

 

$

139

 

 

$

(654

)

 

$

76

 

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)

$

(657

)

 

$

 

 

 

 

 

Cash refund to be received resulting from adjustment to working capital

193

 

Property, plant and equipment

 

43

 

 

 

 

 

 

 

 

Goodwill and other intangible assets

 

4,361

 

 

 

 

 

 

 

 

Deferred taxes, net

 

(153

)

 

 

 

 

 

 

 

 

$

3,787

 

 

$

 

 

 

 

 

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

Reconciliation of GAAP gross profit to non-GAAP gross profit

 

Year Ended December 31,

 

Three Months Ended December 31,

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

(In thousands)

(In thousands)

GAAP gross profit

$

139,960

 

 

$

170,929

 

 

$

38,920

 

 

$

44,896

 

Add:

 

 

 

 

 

 

 

Share-based compensation expenses

 

599

 

 

 

635

 

 

 

136

 

 

 

153

 

Retention payments related to business combinations

 

1,785

 

 

 

306

 

 

 

129

 

 

 

 

Amortization of intangible assets related to business combinations

 

4,487

 

 

 

4,641

 

 

 

1,168

 

 

 

1,137

 

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

 

35

 

 

 

 

 

 

 

 

 

 

Non-GAAP gross profit

$

146,866

 

 

$

176,511

 

 

$

40,353

 

 

$

46,186

 

Non-GAAP gross margin

 

76

%

 

 

81

%

 

 

79

%

 

 

81

%

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

 

Year Ended December 31,

 

Three Months Ended December 31,

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

(In thousands)

(In thousands)

Loss from operations

$

(87,856

)

 

$

(28,807

)

 

$

(14,594

)

 

$

(1,085

)

Add:

 

 

 

 

 

 

 

Share-based compensation expenses

 

16,987

 

 

 

18,127

 

 

 

3,572

 

 

 

4,442

 

Retention payments related to business combinations

 

2,342

 

 

 

1,072

 

 

 

351

 

 

 

221

 

Amortization of intangible assets related to business combinations

 

4,573

 

 

 

4,776

 

 

 

1,202

 

 

 

1,171

 

Adjustment of fair value of contingent consideration related to business combinations

 

(884

)

 

 

 

 

 

(1,628

)

 

 

 

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

 

1,174

 

 

 

17

 

 

 

197

 

 

 

 

Capital gain related to sale of operating equipment

 

(127

)

 

 

 

 

 

 

 

 

 

Non-GAAP operating (loss) income

$

(63,791

)

 

$

(4,815

)

 

$

(10,900

)

 

$

4,749

 

Non-GAAP operating margin

 

(33

)%

 

(2

)%

 

 

(21

)%

 

 

8

%

Reconciliation of GAAP operating expenses to non-GAAP operating expenses

 

Year Ended December 31,

 

Three Months Ended December 31,

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

(In thousands)

(In thousands)

GAAP research and development

$

59,904

 

 

$

56,158

 

 

$

13,977

 

 

$

13,706

 

Less:

 

 

 

 

 

 

 

Share-based compensation expenses

 

5,287

 

 

 

5,782

 

 

 

1,193

 

 

 

1,479

 

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

 

87

 

 

 

 

 

 

 

 

 

 

Non-GAAP research and development

$

54,530

 

 

$

50,376

 

 

$

12,784

 

 

$

12,227

 

Non-GAAP research and development margin

 

28

%

 

 

23

%

 

 

25

%

 

 

22

%

 

 

 

 

 

 

 

 

GAAP sales and marketing

$

122,635

 

 

$

101,198

 

 

$

30,096

 

 

$

21,836

 

Less:

 

 

 

 

 

 

 

Share-based compensation expenses

 

5,995

 

 

 

5,196

 

 

 

1,087

 

 

 

1,145

 

Retention payments related to business combinations

 

557

 

 

 

766

 

 

 

222

 

 

 

221

 

Amortization of intangible assets related to business combinations

 

86

 

 

 

135

 

 

 

34

 

 

 

34

 

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

 

996

 

 

 

17

 

 

 

197

 

 

 

 

Non-GAAP sales and marketing

$

115,001

 

 

$

95,084

 

 

$

28,556

 

 

$

20,436

 

Non-GAAP sales and marketing margin

 

60

%

 

 

44

%

 

 

56

%

 

 

36

%

 

 

 

 

 

 

 

 

GAAP general and administrative

$

45,277

 

 

$

42,380

 

 

$

9,441

 

 

$

10,439

 

Less:

 

 

 

 

 

 

 

Share-based compensation expenses

 

5,106

 

 

 

6,514

 

 

 

1,156

 

 

 

1,665

 

Adjustment of fair value of contingent consideration related to business combinations

 

(884

)

 

 

 

 

 

(1,628

)

 

 

 

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

 

56

 

 

 

 

 

 

 

 

 

 

Capital gain related to sale of operating equipment

 

(127

)

 

 

 

 

 

 

 

 

 

Non-GAAP general and administrative

$

41,126

 

 

$

35,866

 

 

$

9,913

 

 

$

8,774

 

Non-GAAP general and administrative margin

 

21

%

 

 

16

%

 

 

19

%

 

 

15

%

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

 

Year Ended December 31,

 

Three Months Ended December 31,

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

(In thousands)

(In thousands)

Net cash (used in) provided by operating activities

$

(46,065

)

 

$

(3,038

)

 

$

(12,260

)

 

$

3,733

 

Purchases of property and equipment, net

 

(28,257

)

 

 

(1,559

)

 

 

(1,932

)

 

 

(182

)

Capitalized internal use software costs

 

(2,919

)

 

 

(821

)

 

 

(424

)

 

 

(33

)

Free cash flow

$

(77,241

)

 

$

(5,418

)

 

$

(14,616

)

 

$

3,518

 

 

 

 

 

 

 

 

 

Purchases of property and equipment related to the new headquarters

 

27,221

 

 

 

1,156

 

 

 

1,781

 

 

 

29

 

Payments received in connection with purchases of property and equipment

 

(12,124

)

 

 

 

 

 

(932

)

 

 

 

Payments received from escrow in relation to contingent consideration

 

 

 

 

(380

)

 

 

 

 

 

 

Deferred payments in relation to business combinations

 

413

 

 

 

260

 

 

 

 

 

 

 

Normalized free cash flow

$

(61,731

)

 

$

(4,382

)

 

$

(13,767

)

 

$

3,547

 

 

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