20-F: Similarweb Reports Revenue Growth Amid Increased Net Loss in 2025

Similarweb Ltd. reported a 13.1% revenue increase to $282.6 million in 2025, alongside a higher GAAP net loss of $32.9 million, while maintaining non-GAAP operating profitability.

Summary

• Revenue increased by 13.1% to $282.6 million for the year ended December 31, 2025, up from $249.9 million in 2024.
• Net loss widened to $32.9 million in 2025, compared to $11.5 million in 2024 and $29.4 million in 2023.
• Non-GAAP operating income was $9.1 million in 2025, a decrease from $15.0 million in 2024.
• Operating cash flow was $14.6 million in 2025, down from $30.2 million in 2024.
• Free cash flow was $13.0 million in 2025, a decrease from $27.4 million in 2024.
• The number of paying customers grew by 10.7% to 6,128 as of December 31, 2025, from 5,534 in 2024.
• Customers generating $100,000 or more in Annual Recurring Revenue (ARR) increased by 12% to 454 in 2025, representing 63% of total ARR.
• Revenue from multi-year contracts accounted for 60% of ARR in 2025, up from 49% in 2024.
• Acquired three companies in 2025: Signal Insights Inc., The Search Monitor LLC, and Wincher International AB, and one in Q1 2026: XPLN, GmbH.
• Geopolitical conditions in Israel, including the October 2023 attack by Hamas and ongoing regional conflicts, may adversely affect operations and limit product marketing.
• The company is integrating artificial intelligence capabilities across its product portfolio, including AI Studio, AI agents, and a GenAI Intelligence module.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral-to-slightly-negative report. While revenue growth and customer expansion are positive, the significant increase in GAAP net loss and decrease in non-GAAP operating income and cash flows raise concerns about profitability and efficiency, despite strategic AI investments and acquisitions.

Positives

• Revenue increased by 13.1% year-over-year to $282.6 million in 2025, demonstrating continued top-line growth.
• The number of paying customers grew by 10.7% to 6,128, indicating successful customer acquisition.
• Customers with ARR of $100,000 or more increased by 12%, now representing 63% of total ARR, showing strong enterprise adoption and expansion.
• Revenue from multi-year contracts increased to 60% of ARR, up from 49% in 2024, reflecting increased customer commitment and retention.
• Gross margin improved to 79.5% in 2025 from 78.1% in 2024, driven by cost of revenue leverage.
• The company achieved positive operating cash flow of $14.6 million and free cash flow of $13.0 million in 2025, indicating cash generation from operations.
• Strategic acquisitions of Admetricks SpA, 42matters AG, Signal Insights Inc., and The Search Monitor LLC in 2024-2025, and XPLN, GmbH in early 2026, are expanding platform capabilities and market reach.
• Significant investment in AI capabilities, including AI Studio and GenAI Intelligence, positions the company for future innovation and competitive differentiation.

Negatives

• Net loss increased significantly to $32.9 million in 2025 from $11.5 million in 2024, primarily due to increased operating expenses and negative finance income.
• Non-GAAP operating income decreased to $9.1 million in 2025 from $15.0 million in 2024.
• Operating cash flow decreased to $14.6 million in 2025 from $30.2 million in 2024.
• Free cash flow decreased to $13.0 million in 2025 from $27.4 million in 2024.
• Operating expenses increased by $43.6 million in 2025, with research and development up 30.6% and sales and marketing up 17.2%.
• Finance income turned into a net expense of $5.2 million in 2025, primarily due to a $5.7 million impact from foreign exchange depreciation of the U.S. dollar against the New Israeli Shekel and other currencies.
• The company has a history of net losses and anticipates increasing operating expenses, making sustained GAAP profitability uncertain.

Risks

• Inability to attract new customers, expand existing subscriptions, or compete effectively could adversely affect financial results.
• The evolving role of artificial intelligence and its impact on Internet search engines could reduce demand for solutions.
• Increased customer demand for heightened liability, indemnification, and warranty protections for AI-related risks could increase exposure to claims and reduce margins.
• AI-driven outputs may contain inaccuracies, biases, or outdated information, leading to customer dissatisfaction, reputational harm, or legal liability.
• Integration of AI into the platform may increase system complexity and expand the attack surface, raising security incident risks.
• Real or perceived errors, failures, vulnerabilities, or bugs in the platform could decline data accuracy and harm the business.
• Security breaches or unauthorized access to data could harm reputation, reduce demand, and incur significant liabilities.
• Reduced demand for solutions and deterioration in data depth, breadth, or accuracy if reliable data from suppliers cannot be obtained.
• Reliance on third-party AI models may limit control over performance, availability, pricing, compliance, and security.
• Changes in data collection methodologies or scope of information collected could harm the business.
• International sales and operations subject the company to additional risks and costs, including foreign currency fluctuations and compliance burdens.
• Inability to optimize pricing for solutions across customer segments, geographies, and product offerings could adversely affect demand and revenue.
• Failure to offer a high-quality customer experience could harm business and reputation.
• Changes in search engine algorithms and shifts toward answer-engine optimization and generative responses could negatively affect traffic and data availability.
• Increasing variability in sales cycles, particularly with large organizations, may cause financial results to fluctuate.
• Subscription revenue recognition over the term means downturns are not immediately reflected, and an increasing mix of non-recurring transactions may increase revenue variability.
• Future acquisitions, strategic investments, partnerships, or alliances could be difficult to integrate, divert management attention, disrupt business, and dilute stockholder value.
• Failure to retain and motivate key management or employees, or attract qualified personnel, could harm business and growth prospects.
• Indebtedness under the credit facility could adversely affect financial position and ability to raise additional capital.
• Failure to protect intellectual property rights could impair competitive position and ability to generate revenue.
• Use of open-source software could negatively affect ability to offer solutions and subject the company to litigation.
• Laws, regulations, and public perception concerning data privacy, cybersecurity, and AI could impact data collection and solution provision, or increase legal exposure.
• Classification of actionable insights or data as material non-public information (MNPI) could lead to customer agreement cancellations and regulatory investigation.
• Non-compliance with trade restrictions and sanctions could expose the company to penalties and reputational harm.
• Government actions to restrict access to solutions or require data disclosure could harm business.
• Sales to government entities and highly regulated organizations are subject to specific challenges and risks.
• Requirements and increased costs of being a U.S. public company may strain resources and divert management attention.
• Failure to maintain an effective system of disclosure controls and internal control over financial reporting could impair ability to produce timely and accurate financial statements.
• Changes in existing financial accounting standards or practices may harm results of operations.
• Classification as a passive foreign investment company (PFIC) could result in adverse U.S. federal income tax consequences to U.S. Holders.
• Changes in tax laws or regulations in various jurisdictions could increase costs and harm business.
• Potential adverse tax consequences from international operations.
• Share price may be volatile, causing investors to lose all or part of their investment.
• Concentration of share ownership with insiders limits ability to influence corporate matters.
• Future sales of ordinary shares in the public market could cause the market price to decline.
• Loss of 'foreign private issuer' status could result in significant additional costs and expenses.
• No expectation to pay dividends in the foreseeable future.
• Conditions in Israel, including ongoing regional conflicts and political/economic instability, may adversely affect operations and limit ability to market products, leading to decreased revenues.
• Difficulty enforcing U.S. judgments or asserting U.S. securities laws claims in Israel.
• Shareholder rights and responsibilities governed by Israeli law, which may differ from U.S. corporations.
• Provisions of Israeli law and amended articles of association may delay, prevent, or make undesirable an acquisition.
• Exclusive forum provision for certain disputes in Tel Aviv District Court may limit shareholder ability to choose a favorable judicial forum.
• Estimates of market opportunity and forecasts of market growth may prove inaccurate.
• Liability claims for contract breaches, with potentially inadequate insurance coverage.
• Catastrophic events, including natural disasters and geopolitical conflicts (e.g., Russia-Ukraine war), may disrupt business.
• Evolving corporate governance and public disclosure regulations and expectations, including ESG matters, could expose the company to numerous risks.

Future Outlook

The company intends to continue investing in the development and expansion of its proprietary data, deepen relationships with enterprise customers, and integrate artificial intelligence capabilities across its product offerings. It aims to balance investment in product development, data infrastructure, and go-to-market capabilities with the pursuit of sustainable revenue growth and cash generation. The company expects research and development, sales and marketing, and general and administrative expenses to increase in absolute dollars but decrease as a percentage of revenue over time, anticipating operating leverage. It also plans to continue evaluating strategic acquisitions and investments.

Management Comments

• We believe we are becoming recognized as the standard for powering data-driven decisions for businesses across all channels within the digital world.
• Our business has grown rapidly, and in 2024 we achieved our goal of generating cash while being profitable on a non-GAAP basis.
• We believe that through our delivery of Similarweb Digital Data, we provide businesses with mission-critical insights to make better decisions and high-quality external data inputs that can be consumed programmatically by advanced analytics and artificial intelligence systems.
• We believe that our sales and marketing model provides us with a competitive advantage because we attract and engage new businesses efficiently and at scale, and we have established a successful upsell motion to grow existing customer accounts.
• We believe that we have built highly differentiated data and solutions on a platform that will position us to further expand adoption.
• We seek to grow revenue by offering a unique value proposition powered by Similarweb Digital Data and to pursue operating profit.

Industry Context

StockSavvy.ai notes that Similarweb operates in a rapidly evolving market for digital data and analytics, characterized by intense competition and the accelerating adoption of artificial intelligence. The company's focus on AI integration, such as AI Studio and GenAI Intelligence, aligns with the broader industry trend of leveraging AI for data-driven decision-making and addressing shifts in consumer behavior driven by AI chatbots and large language models. The estimated $55 billion TAM reflects the growing recognition of analytics and data-informed business decisioning across industries. However, the increasing scrutiny of data privacy and the potential for AI-generated content to disrupt traditional search models present significant industry-wide challenges that Similarweb must navigate.

Comparison to Industry Standards

• Similarweb competes with traditional market research companies like NielsenIQ and Kantar Group, media measurement solutions such as Nielsen Holdings plc and comScore, Inc., and management consulting firms like McKinsey & Company, Bain & Company, and Accenture plc.
• The company also competes with media buying and advertising agencies such as WPP plc, Omnicom Group, and Interpublic Group, and technology platforms that embed analytics.
• In specific narrow market segments, Similarweb competes with digital marketing tools like SEMrush (recently acquired by Adobe Systems) and mobile application data providers like Sensortower.
• The company differentiates itself based on market vision, pace of product innovation, reliability and timeliness of analytics, breadth and depth of digital data, ease of use, digital market expertise, adaptability, brand awareness, scalability, pricing, security, and customer support.

Management Changes

Corporate Governance

Legal Proceedings

• A third party has initiated an action against Similarweb in the Supreme Court of the State of New York, County of New York, Commercial Division, alleging breach of contract and seeking to recover amounts due under an agreement. The matter is in the discovery phase, with the note of issue due in July 2026 and summary judgment motions scheduled for September 2026. Similarweb's counterclaims have been dismissed, and it is evaluating appellate rights. The company believes it has recorded an appropriate provision and intends to vigorously defend against the claims.

Related Party Transactions

• In February 2014, the company entered into an agreement with an affiliate of a shareholder, granting a SaaS subscription. Revenue from this affiliate was $182,000 in 2023, $160,000 in 2024, and $236,000 in 2025. No balances were owed from the affiliate as of December 31, 2025.

Stakeholder Impact

• Shareholders: Experience dilution from future equity issuances for operations or acquisitions. Share price volatility is a risk due to market factors and company performance. Concentration of ownership with insiders may limit influence on corporate matters. No dividends are expected in the foreseeable future.
• Employees: Geopolitical instability in Israel and Ukraine (where developers are located) poses risks to employee safety and operational continuity. Competition for skilled personnel, especially in Israel, may lead to wage inflation. Workforce reductions may impact morale and retention. Equity awards are a key component of compensation, making employee retention sensitive to stock price performance.
• Customers: Continued innovation and AI integration aim to provide enhanced solutions and value. However, real or perceived errors in AI outputs, security breaches, or changes in data collection methodologies could lead to dissatisfaction, reduced usage, or contract terminations. Increased regulatory requirements for data privacy and AI governance may affect service delivery and features.
• Suppliers/Partners: Reliance on third-party data sources and cloud infrastructure (AWS) exposes the company to risks of disruption, increased costs, or changes in terms. Geopolitical conflicts could disrupt supplier operations.
• Creditors: The company has a credit facility with SVB, secured by substantially all assets, with financial covenants. Compliance with these covenants is crucial for maintaining financial flexibility.

Next Steps

• Continue to invest in the development and expansion of proprietary data.
• Expand and deepen relationships with enterprise customers, increasing product adoption and extending long-term contractual arrangements.
• Integrate artificial intelligence capabilities across product offerings and data platform, including AI Studio, AI agents, and GenAI Intelligence module.
• Focus on operational efficiency, disciplined cost management, and capital allocation to balance investment with sustainable revenue growth and cash generation.
• Evaluate strategic acquisitions and investments in businesses and technologies to drive solution and market expansion.
• Finalize purchase price allocation valuation for the XPLN, GmbH acquisition within one year from the acquisition date.

Key Dates

Recommendation

Similarweb demonstrates strong revenue growth and customer expansion, particularly in enterprise accounts and multi-year contracts, indicating solid market demand for its digital data and analytics solutions. The strategic focus on AI integration and recent acquisitions are positive for long-term competitive positioning. However, the significant increase in GAAP net loss, coupled with a decrease in non-GAAP operating income and cash flows in 2025, raises concerns about profitability and operational efficiency. Geopolitical risks in Israel and the evolving regulatory landscape for AI and data privacy also introduce considerable uncertainty. Given these mixed signals, a 'hold' recommendation is appropriate, suggesting investors monitor the company's ability to translate revenue growth into sustainable GAAP profitability and effectively manage its increasing operating expenses and geopolitical exposures.

Keywords

Digital Data, Analytics, AI, Machine Learning, SaaS, Data-as-a-Service, Web Intelligence, App Intelligence, Retail Intelligence, Sales Intelligence, Stock Intelligence, Market Research, Competitive Intelligence, SEO, SEM, Generative AI, LLMs, Israel, SEC Filing, 20-F