Similarweb Ltd. reported third‑quarter 2025 results with revenue of $71.8 million, up 11% year‑over‑year, and adjusted earnings per share of $0.05, beating the consensus estimate of $0.02 by $0.03 per share. The company’s revenue, however, fell short of the consensus range of $71.93 million to $71.95 million, missing by roughly $0.13 million.
The revenue miss was driven by a modest shift in the mix of services and the early recognition of large‑language‑model evaluation revenue, which, while boosting overall demand, did not fully offset the slower growth in core subscription revenue. Compared with the $64.7 million reported in Q3 2024, the 11% increase represents a deceleration from the 17% growth seen in Q2 2025 and the 18% growth in Q3 2024, indicating a gradual slowdown in top‑line momentum.
Customer acquisition grew 15% year‑over‑year to more than 6,100 accounts, but the faster customer growth relative to revenue growth suggests a widening pricing gap. Management noted that the average annual recurring revenue per customer has been trending lower, implying that new customers are smaller or that existing customers are not increasing spend at the same pace as the customer base expands.
Full‑year guidance remains unchanged at $285 million to $288 million in revenue, but the company raised its adjusted operating‑income target to $8.5 million to $9.5 million from the prior $5 million to $7 million range. The upward revision reflects confidence in continued cost discipline and the expectation that higher‑margin generative‑AI offerings will drive profitability in the remaining months of the fiscal year.
Non‑GAAP gross margin improved to 81% from 80% in the prior year, while the non‑GAAP operating‑profit margin slipped to 6% from 7% due to increased operating expenses associated with scaling the generative‑AI platform. The margin compression underscores the company’s investment in high‑return verticals, even as it maintains a strong gross‑margin profile.
CEO Or Offer highlighted disciplined execution and sustained demand for the company’s digital‑intelligence platform, noting that revenue from generative‑AI data and solutions is among the fastest‑growing streams. He emphasized that the firm is “just beginning to tap into the vast potential of our data and the addressable markets we serve,” underscoring a long‑term growth outlook.
Investors focused on the revenue miss and the gap between customer growth and revenue growth, which raised concerns about pricing power and the ability to monetize the expanding customer base. The EPS beat, while a positive sign of cost control, was insufficient to offset the revenue shortfall in the eyes of market participants.
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