Similarweb : Shareholder Letter Q2 2022

Dear Shareholders,

We performed well in the second quarter of 2022, crossing the midpoint of the year ahead of where we expected to be. We achieved excellent results during a challenging time for businesses globally. Over this period, we have seen an increased interest for our products from decision-makers at many companies, which is key to driving revenue growth to new levels in the rapidly shifting global macroeconomic environment.

As we navigate in this dynamic environment, we are adapting. Prior to becoming a publicly traded company, we developed a culture of disciplined growth, focused on optimizing our unit economics that enabled us to achieve positive free cash flow in the first quarter of 2021. We used the proceeds of our IPO to accelerate our growth with the same disciplined culture on a path that saw us achieve over 50% revenue growth year-over-year on a quarterly basis. Today, we are expanding our strategic focus to balance growth and profitability. As we progress through the remainder of 2022, we will be working diligently to build on our growth success and drive operational efficiencies on our path to sustained free cash flow.

Returning to our results, our momentum continued in the second quarter of 2022 (Q2-22). Revenue reached $47.6 million, which exceeded our estimates, and grew 46% year-over-year.

• Similarweb Q2 2022 Shareholder Letter

Our customer base increased to 3,849 accounts, as of June 30, 2022, representing 25% growth year-over-year (YoY). The average annual revenue per account was approximately $50,700 and increased approximately 16% compared to the second quarter of 2021 (Q2-21).

Notably, we achieved an overall net revenue retention (NRR) rate of 115% in Q2-22. We achieved an NRR rate of 127% for our $100K+ annual recurring revenue (ARR) customer segment alone.

Again, we completed our second quarter with strong growth and sustained momentum from our results of the prior quarter. As our results indicate, we believe that companies continue to invest in digital transformation and our customers have increasingly relied on our technological solutions to operate and grow, especially during challenging times. Our

• Similarweb Q2 2022 Shareholder Letter

digital intelligence solutions are critical enablement tools for our customers to understand their markets better than their competitors, to act faster, and to win in today's online world.

Favorable Global Trends

We continue to see three digital trends worldwide that are beneficial to the growth of our company.

The first trend: we are living in the age of digital transformation. The collision of business and consumer dependencies on digital means of commerce and interaction create tremendous opportunities. The effect of "online first" activity necessitates that businesses constantly evaluate and understand current consumer and competitor behavior in the digital world. We believe that the actionable insights we deliver to our customers enable them to optimize their digital performance and position themselves for growth.

The second trend: Data-driven decision-making by business leaders requires adding context and visibility beyond internal data. Businesses need reliable external data and insights on the current market environment. We believe that the increasingly urgent need for better visibility during rising global macroeconomic uncertainty appears to have become a catalyst for this trend. We believe Similarweb solutions ease anxiety at a time of volatility by enhancing visibility into the digital world, and are now more important than in the past.

The third trend: The full ramifications of data privacy initiatives are yet to be felt by the global business community. From our close interactions with customers and partners, it is increasingly apparent that of the three trends, privacy and security will likely be the next definitive digital frontier over the long term. When support for third party cookies in Chrome is phased out in 2024, and as control of identifiers for advertisers (IDFAs) move into the hands of consumers, we foresee what will resemble a giant light switch being flipped from on to off. Companies will become enshrouded in digital darkness with limited means to discern meaningful audience behavior. As a result, we anticipate that Similarweb audience intelligence capabilities may become more essential to the operations of these companies. In particular, we believe our web and application intelligence solutions illuminate opportunities and facilitate action in the digital world.

We believe we remain positioned to benefit from these trends because our customers' growth challenges represent our growth opportunities.

• Similarweb Q2 2022 Shareholder Letter

Strategy Execution

For over 10 years, we have been working relentlessly on solving the challenging problem of measuring and predicting online behavior and determining its applications for companies and organizations around the world. Our passion led to us innovating in the research and business intelligence industries in the global market. Today, we believe our software-as-a-service (SaaS) solutions revolutionize the category of market research and intelligence within the digital world. Without our software, it can take weeks or months to research, benchmark, and analyze companies, industries and markets at a substantial cost. Using our software, companies can take hours, minutes, or seconds to access actionable insights with our relevant solutions. Our solutions apply to a wide variety of industries, ranging from financial services to retail, travel, CPGs, media, and others, and we believe they open up a tremendous market opportunity for us and our customers. We estimate the current total addressable market is approximately $34 billion annually that companies allocate to market research and analysis. To successfully grow our market share, we are laser-focused on execution.

Our overall strategy is supported by three pillars we strive to implement:

1. Establishing, maintaining, and enhancing substantial advantages in data and technology

2. Delivering considerable return on investment for our customers through our digital intelligence solutions

3. Executing our go-to-market strategies, catalyzed by smart investments and operating discipline

Ultimately, our success depends on the success of our customers. They come to us with data-driven requests such as: How do we increase our demand? How should we change our product portfolio? How do we grow our market share? How do we grow our audience? How do we grow our sales?

We can predict how consumers and businesses interact on the internet, across the web and mobile continuum.

From our vast data-enabled perspective, we can provide fresh, highly valuable, market-based digital signals to decision-makers who are responsible for driving their companies' revenue growth. We offer compelling proprietary technology solutions in

• Similarweb Q2 2022 Shareholder Letter

digital marketing, sales, market research, and ecommerce strategy, which contain easy-to-understand insights that guide companies on what they can do in order to grow. Additionally, we provide reliable and timely alternative data for the investment community that help investors make informed decisions on companies and their strategies.

We constantly innovate and improve upon the ability to create accurate insights and develop use cases. This quarter we launched a new, premium App Intelligence module, for which we have received favorable feedback from customers. The new module incorporates mobile app data through our partnership with data.ai (formerly App Annie), integrating leading mobile app coverage into our award-winning desktop and mobile web measurement solutions. We now give organizations a comprehensive view of available digital activity, and the ability to harness insights from mobile, desktop, and app users, from a single interface. We can provide a 360-degree view into virtually any company's estimated digital footprint, which we believe gives our customers a competitive edge and aids their ability to make better informed business decisions in the digital world.

Further advancing our capabilities, we acquired Rank Ranger in May 2022, and expanded our capabilities to create a solution that dominates the field of search engine optimization (SEO). By integrating our traffic analysis and competitive intelligence capabilities with Rank Ranger's rank and backlink monitoring, we can connect many of the dots of cause-and-effect in SEO activities. Aligning ranking and backlinks monitoring with estimated real-time traffic and real competitors allows us to drive faster and smarter analysis and reporting over time. Combining tracking, advanced reporting, and varied API abilities with our existing solutions can potentially change the competitive landscape for our customers and we look forward to giving them new insights to drive their own operational results.

Additionally, we are in the middle of an exciting platform build cycle for our InvestorIntelligence solution. We are preparing to release our next major platform iteration, which includes new stock-specific analysis, and new estimated performance indicators on SaaS companies that have not been available previously on the platform. The early feedback that we are receiving from our customers that have participated in the beta testing and operations in the new interface has been positive. Our goal is to launch the new feature set in the second half of 2022, pending any final modifications.

The performance of our current product solutions and the strong customer demand for our data insights drove positive results across our product portfolio in Q2-22. When

• Similarweb Q2 2022 Shareholder Letter