Similarweb Reports Slower Q4 Revenue Growth, NRR Decline; Projects Stronger FY26 Profitability

summarizeSummary

Similarweb reported Q4 2025 results with revenue growth below expectations and a decline in Net Retention Rate, but provided strong guidance for non-GAAP operating profit in fiscal year 2026, alongside continued investment in AI-driven solutions.

check_boxKey Events

• Q4 2025 Revenue Growth Missed Expectations

  Total revenue for Q4 2025 was $72.8 million, an 11% increase year-over-year, which was slower than anticipated due to delays in closing large LLM data training contracts.

• FY 2026 Revenue Guidance Indicates Deceleration

  The company projects total revenue for fiscal year 2026 to be between $305.0 million and $315.0 million, representing approximately 10% growth year-over-year at the midpoint, a slowdown from the 13% growth in FY 2025.

• Non-GAAP Operating Profit Expected to Nearly Double in FY 2026

  Similarweb forecasts non-GAAP operating profit for fiscal year 2026 between $16.0 million and $19.0 million, a substantial increase compared to $9.1 million in FY 2025, signaling a strong focus on profitability.

• Net Retention Rate (NRR) Declined

  Overall NRR decreased to 98% in Q4 2025 from 101% in Q4 2024, and NRR for customers with over $100K ARR fell to 103% from 112%, reflecting reduced expansion activity.

auto_awesomeAnalysis

Similarweb's latest earnings report presents a mixed financial picture. While the company achieved its ninth consecutive quarter of positive free cash flow and is guiding for a significant increase in non-GAAP operating profit for fiscal year 2026, revenue growth in Q4 2025 was slower than expected, and the full-year 2026 revenue guidance indicates further deceleration. The decline in Net Retention Rate (NRR) is a notable concern for a SaaS business, suggesting challenges in expanding existing customer relationships. However, the company's strong emphasis on AI, including new product launches like AI Studio and strategic partnerships, positions it for potential long-term growth in a rapidly evolving market. Investors will need to weigh the immediate growth slowdown and NRR pressures against the improved profitability outlook and strategic AI initiatives.