Similarweb Announces Fiscal 2025 Results, Testing Key Growth and Profitability Metrics

What happened

Similarweb released its fourth quarter and full-year 2025 financial results on February 17, 2026, with management directing investors to a shareholder letter for detailed analysis. Based on Q3 2025 trends, full-year revenue likely met or slightly exceeded the guided $285-288 million range, indicating mid-teens growth but potentially below the 15% target. Critical watchpoints include net revenue retention (NRR), which softened to 98% in Q3, and free cash flow (FCF), which showed volatility at $3.0 million in the same quarter. The company's increasing reliance on large enterprise customers—63% of ARR from accounts over $100k—and multi-year contracts at 58% of ARR offer revenue visibility but amplify risks if expansion falters. Investors must scrutinize whether these results signal resilient demand or further pressure on upsell momentum and cash generation.

Implication

The fiscal 2025 results serve as a crucial validation point for Similarweb's investment thesis, which relies on sustained low- to mid-teens revenue growth and margin improvement. If revenue hit the $285-288 million guidance and non-GAAP operating profit reached $8.5-9.5 million, it would support operational discipline but leave NRR below 100% as a persistent concern. Continued NRR under 100% could indicate weakening customer expansion, threatening the land-and-expand model that underpins growth assumptions. Additionally, volatile FCF, despite a streak of positive quarters, raises doubts about cash flow sustainability and the company's ability to self-fund growth amid rising costs. Investors need to monitor updates on GenAI ARR contributions, credit facility refinancing plans, and initial 2026 guidance to gauge whether the stock's depressed valuation offers a margin of safety or increased risk.

Thesis delta

The DeepValue report's POTENTIAL BUY thesis is contingent on Similarweb stabilizing NRR above 100% and maintaining positive FCF to support a re-rating. If the Q4 results reveal NRR stuck below 100% or FCF turning negative, the thesis would deteriorate, shifting probability toward the bear case with implied value of $4.50. However, evidence of NRR recovery or accelerated GenAI adoption could strengthen the bull case, though current data suggests the base case of gradual improvement remains most likely, requiring cautious monitoring.