Similarweb Ltd (SMWB) 2023 Q3 法說會逐字稿

Greetings, and welcome to Similarweb's Third Quarter Fiscal 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, RJ Jones, Vice President, Investor Relations. Thank you, RJ. You may begin.

您好，歡迎參加 Sametimeweb 的 2023 財年第三季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，投資者關係副總裁 RJ Jones。謝謝你，RJ。你可以開始了。

Thank you, operator. Welcome, everyone, to our third quarter 2023 earnings conference call. During this call, we will make forward-looking statements related to our business. These statements may include the expected performance of our business and our future financial results, our strategy, the potential impacts of rising interest rates, rising global inflation and current macroeconomic and geopolitical conditions, including the current war in Israel, challenges in our business and in the markets in which we operate, our anticipated long-term growth and overall future prospects.

謝謝你，接線生。歡迎大家參加我們的 2023 年第三季財報電話會議。在本次電話會議中，我們將做出與我們業務相關的前瞻性陳述。這些陳述可能包括我們業務的預期表現和未來的財務業績、我們的策略、利率上升、全球通膨上升以及當前宏觀經濟和地緣政治狀況的潛在影響，包括當前以色列的戰爭、我們的業務和環境中的挑戰。我們經營所在的市場、我們預期的長期成長和整體未來前景。

These (inaudible) to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those in the projected or implied during the call. Further, reported results should not be considered as an indication of future performance. Please review the forward-looking statements discussion in our shareholder letter, along with our Form 20-F filed with the SEC on March 23, 2023, and in particular, the sections entitled Cautionary Statement regarding Forward-Looking Statements and risk factors therein. For discussion of the factors that could cause our actual results to differ from the forward-looking statements.

這些（聽不清楚）已知和未知的風險、不確定性和假設可能導致實際結果與電話會議期間預測或暗示的結果有重大差異。此外，報告的結果不應被視為未來績效的指標。請查看我們的股東信中對前瞻性陳述的討論，以及我們於2023 年3 月23 日向SEC 提交的20-F 表格，特別是其中題為“有關前瞻性陳述和風險因素的警告聲明”的部分。用於討論可能導致我們的實際結果與前瞻性陳述不同的因素。

Also note that any forward-looking statements made on this call are based on information available as of today's date, November 8, 2023. We undertake no obligation to update any forward-looking statements we make today, except as required by law. As a reminder, certain financial measures we use in presentations of results on our call today are expressed on a non-GAAP basis. In particular, we referenced non-GAAP operating loss, which represents GAAP operating loss, less share-based compensation, adjustments and payments related to business combinations, amortization of intangible assets and certain other nonrecurring items. We use this and other non-GAAP financial measures internally to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes.

另請注意，本次電話會議中所做的任何前瞻性陳述均基於截至今天（2023 年11 月8 日）的可用資訊。除非法律要求，否則我們不承擔更新我們今天所做的任何前瞻性陳述的義務。提醒一下，我們在今天的電話會議上介紹業績時使用的某些財務指標是根據非公認的會計原則表示。我們特別提到了非 GAAP 營運虧損，即 GAAP 營運虧損減去基於股份的薪酬、與業務合併相關的調整和付款、無形資產攤銷和某些其他非經常性項目。我們在內部使用此和其他非公認會計準則財務指標，以促進對我們的財務和業務趨勢的分析以及內部規劃和預測的目的。

We believe these non-GAAP financial measures when taking collectively may be helpful to investors because they provide consistency and comparability with past financial performance by excluding certain items that may not be indicative of our business, results of operations or outlook. However, non-GAAP financial measures have limitations as an analytical tool and are presented for supplemental informational purposes only. They should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. A reconciliation between these GAAP and non-GAAP financial measures is included in our earnings press release, which can be found on our Investor Relations website at ir.similarweb.com.

我們相信，這些非公認會計準則財務指標綜合起來可能對投資者有所幫助，因為它們排除了某些可能無法表明我們業務、經營業績或前景的項目，從而提供了與過去財務業績的一致性和可比性。然而，非公認會計準則財務指標作為分析工具有其局限性，僅供補充資訊。它們不應被視為孤立於或取代根據 GAAP 準備的財務資訊。這些 GAAP 和非 GAAP 財務指標之間的調整包含在我們的收益新聞稿中，您可以在我們的投資者關係網站 ir.similarweb.com 上找到該新聞稿。

Today, we will begin with brief prepared remarks from our CEO, Or Offer and CFO, Jason Schwartz. Then we will open up the call to questions from sell-side analysts in attendance. Please note that we publish a detailed discussion of our third quarter 2023 results in a letter to shareholders for investors to reference as well as an updated investor presentation with a strategic overview of the business, both of which are available on our Investor Relations website. With that, I will turn the call over to Or Offer, CEO of SimilarWeb.

今天，我們將首先聽取我們的執行長 Or Offer 兼財務長 Jason Schwartz 準備好的簡短演講。然後我們將開放電話會議，接受出席的賣方分析師的提問。請注意，我們在致股東的一封信中發布了對2023 年第三季度業績的詳細討論，供投資者參考，並發布了包含業務戰略概述的最新投資者演示文稿，兩者均可在我們的投資者關係網站上獲取。接下來，我會將電話轉給 Sametime Web 執行長 Or Offer。

Thank you, RJ, and welcome, everyone, joining the call today. In Q3, we reported another quarter of growth and operating improvements. We grew our revenue 10% over Q3 last year to $54.8 million. Our global customer base grew 12% year-over-year to [94,400] customers. And our average customer spends nearly $51,000 with us annually. I'm very proud of the team as we crossed a series of profitability milestones. I'm excited to report that our Q3 non-GAAP operating margin showed a strong improvement of 29 percentage points compared to last year, which led us to achieving our first ever non-GAAP operating profit in the quarter. This is a significant achievement for us, and it is truly a team accomplished, and I'm very proud of the team.

謝謝 RJ，歡迎大家今天加入電話會議。在第三季度，我們報告了又一個季度的成長和營運改善。我們的營收比去年第三季成長了 10%，達到 5,480 萬美元。我們的全球客戶群年增 12%，達到 [94,400] 個客戶。我們的平均客戶每年在我們這裡花費近 51,000 美元。我為我們的團隊感到非常自豪，因為我們跨越了一系列獲利里程碑。我很高興地向大家報告，我們第三季的非 GAAP 營業利潤率比去年大幅提高了 29 個百分點，這使我們在本季度首次實現了非 GAAP 營業利潤。這對我們來說是一項重大成就，這確實是一個團隊所取得的成就，我為這個團隊感到非常自豪。

Q3 metrics at the top of our funnel continue to stay strong. We had around 30 million visitors to our free tools at similarweb.com in Q3 and we are in a phase of exceeded more than 120 million visits to our tool this year. As a result, our pipeline remains robust, and we are adding new customers and expanding our penetration into our market. During the quarter, we launched Similarweb 3.0, which is the latest generation of our platform. Similarweb 3.0 is a new way in which we package our offering that includes new data insights and obligation.

我們漏斗頂部的第三季指標持續保持強勁。第三季度，similarweb.com 的免費工具約有 3,000 萬訪客，今年我們的工具流量已超過 1.2 億。因此，我們的管道仍然強勁，我們正在增加新客戶並擴大我們對市場的滲透。本季度，我們推出了 Sameweb 3.0，這是我們最新一代的平台。 Sameweb 3.0 是我們打包產品的新方式，其中包括新的資料見解和義務。

We now have a better pricing alignment with our customer that enhance our go-to-market motion and improve our offering to our enterprise customer and our average order value since launch has increased noticeably. We continue to make progress with SimilarAsk our digital intelligent AI system that uses Similarweb digital data to answer real question that the user type in free text without having to know how to navigate our platform. The latest version of the feature is now widely available to our platform and integrate AI-based trends analysis into the research results for websites benchmarking.

我們現在與客戶有了更好的定價一致性，這增強了我們的上市行動並改善了我們為企業客戶提供的產品，自推出以來我們的平均訂單價值顯著增加。我們的數位智慧人工智慧系統SimilarAsk繼續取得進展，該系統使用Similarweb數位資料來回答用戶輸入自由文字的真實問題，而無需知道如何導航我們的平台。該功能的最新版本現已在我們的平台上廣泛使用，並將基於人工智慧的趨勢分析整合到網站基準測試的研究結果中。

Now just getting started with what is possible with Generative AI and we believe that merging similar digital data with AI capabilities creates an amazing growth potential for us. I would like to take a minute to discuss the second [stances] we are facing in Israel. As you know, 1 month ago, Israel suffered a horrific terrorist attack. We stand in solidarity with Israel, we recognizing the human suffering across the region. We are proud to be an Israeli company with office and employees around the world. Since October 7, our people have demonstrated great resilience, keeping business as usual while adopting to the current situation. We continue to deliver our solution and insights to all of our global customers without interruption. To all Similarwebers, we thank you for your continuing commitment to keep business operating running smoothly. To our customers, partners and you in the investment committee, we are grateful for your support. So many of you wrote to me personally to share solidarity, it means so much to me, and thank you so much. With that, Jason, I will turn the call over to you.

現在才剛開始了解生成式人工智慧的可能性，我們相信將類似的數位數據與人工智慧功能結合可以為我們創造驚人的成長潛力。我想花一點時間討論我們在以色列面臨的第二種[立場]。如你所知，1個月前，以色列遭受了可怕的恐怖攻擊。我們與以色列站在一起，我們認識到整個地區的人類苦難。我們很自豪能夠成為一家在世界各地設有辦事處和員工的以色列公司。自10月7日以來，我們的人民表現出了強大的韌性，在適應當前局勢的同時保持一切照常進行。我們繼續不間斷地向所有全球客戶提供我們的解決方案和見解。對於所有 Sametimewebers，我們感謝您持續致力於保持業務順利運作。對於我們的客戶、合作夥伴以及投資委員會的各位，我們感謝你們的支持。你們中的許多人親自寫信給我表達聲援，這對我來說意義重大，非常感謝你們。這樣，傑森，我會把電話轉給你。

Thank you, Or, and thank you to everyone joining us on the call today to discuss our third quarter results. I will briefly address our financial performance, and then we'll open up the call to questions. Our results in the third quarter reflect the cumulative effect of our focus on disciplined execution. Revenue was $54.8 million for the quarter and exceeded the high end of our guidance range. For our $100,000 ARR customer segment, NRR was 108% as compared to 123% in Q3 last year and now represents 55% of our total ARR. Despite longer sales cycles than we have seen historically, customer acquisition and logo retention were steady in the third quarter. Consistent with trends earlier this year, we saw challenges to expansion within our existing customer base as enterprises are continuing to optimize their budgets and spending.

謝謝您，或者，感謝今天加入我們電話會議討論我們第三季業績的所有人。我將簡要介紹我們的財務業績，然後我們將開始提問。我們第三季的業績反映了我們注重嚴格執行的累積效應。該季度收入為 5480 萬美元，超出了我們指導範圍的上限。對於我們的 ARR 為 100,000 美元的客戶群，NRR 為 108%，而去年第三季為 123%，現在占我們總 ARR 的 55%。儘管銷售週期比我們歷史上看到的更長，但第三季的客戶獲取和徽標保留保持穩定。與今年稍早的趨勢一致，隨著企業繼續優化預算和支出，我們看到現有客戶群擴張面臨挑戰。

Some customers have reduced their spending with us in order to meet budget constraints while remaining a Similarweb customer. We are encouraged that 43% of our ARR is generated from customers with multiyear contracts, demonstrating the strength and longevity of those customer relationships driven by the enduring value that we deliver. While our results on the top line were better than planned, we also exceeded expectations in our operating efficiency and on our bottom line. Our non-GAAP gross margin reached a new record of 83%. Our third quarter GAAP operating loss was $4.9 million while our non-GAAP operating profit was $1.1 million. This result was our first ever profitable quarter on a non-GAAP operating basis and is a momentous achievement. Notably, as Or mentioned, our non-GAAP operating margin improved 29 percentage points versus the prior year.

一些客戶減少了我們的支出，以滿足預算限制，同時仍是 Sametime 客戶。令我們感到鼓舞的是，我們 43% 的 ARR 是由簽訂多年合約的客戶產生的，這證明了由我們提供的持久價值驅動的客戶關係的強度和持久性。雖然我們的營收結果好於計劃，但我們的營運效率和利潤也超出了預期。我們的非 GAAP 毛利率達到 83% 的新紀錄。我們第三季的 GAAP 營業虧損為 490 萬美元，而非 GAAP 營業利潤為 110 萬美元。這項結果是我們在非公認會計準則營運基礎上第一個獲利的季度，是一項重大成就。值得注意的是，正如 Or 所提到的，我們的非 GAAP 營業利潤率比前一年提高了 29 個百分點。

Turning now to Q4 2023. We expect total revenue in the range of $55.5 million to $56 million. For the full year, we now expect total revenue in the range of $216.8 million to $217.3 million, representing approximately 12% growth year-over-year midpoint to the range. Non-GAAP operating profit for the fourth quarter is expected to be in the range of $0.5 million to $1 million which would amount to our second profitable quarter on a non-GAAP basis. For the full year, we expect our operating loss to be between $8.6 million and $9.1 million. In the fourth quarter, we expect to reach our goal of sustained positive free cash flow quarterly. We continue to focus on balancing growth with profitability as we become sustained free cash flow positive. We believe that our team, our business model and our balance sheet remain resilient as we navigate the current environment. As a global company headquartered in Israel, we remain united, resilient and determined to achieve our goals. We are committed to keeping business as usual, and our focus on disciplined execution will continue.

現在轉向 2023 年第四季。我們預計總收入在 5,550 萬美元至 5,600 萬美元之間。我們目前預計全年總收入在 2.168 億美元至 2.173 億美元之間，年比該範圍中位數成長約 12%。第四季的非 GAAP 營業利潤預計在 50 萬美元至 100 萬美元之間，這將相當於我們在非 GAAP 基礎上的第二個獲利季度。我們預計全年營業虧損將在 860 萬美元至 910 萬美元之間。在第四季度，我們預計將實現季度自由現金流持續為正的目標。隨著我們的自由現金流持續為正，我們將繼續專注於平衡成長與獲利能力。我們相信，在我們應對當前環境的過程中，我們的團隊、業務模式和資產負債表仍然保持彈性。作為一家總部位於以色列的跨國公司，我們保持團結、堅韌並決心實現我們的目標。我們致力於保持業務照常，並將繼續注重嚴格執行。

The opportunities in front of us will continue to inspire us and our hope for piece will not relent. With that, Or and I are ready to answer your questions.

我們面前的機會將繼續激勵我們，我們對作品的希望也不會減弱。 Or 和我準備好回答你的問題了。

(Operator Instructions) Our first question is from Ryan MacWilliams with Barclays.

（操作員說明）我們的第一個問題來自巴克萊銀行的 Ryan MacWilliams。

Congrats on the results given the circumstances. It's great to see the improvements and profitability. Now for Jason, how did you see macro change during the quarter? Maybe certain different customer segments? And have you seen any changes from a macro standpoint since the end of the quarter to your customer base?

鑑於這種情況，恭喜你取得了這樣的結果。很高興看到這些改進和盈利能力。現在賈森，您如何看待本季的宏觀變化？也許某些不同的客戶群？自本季末以來，從宏觀角度來看，您的客戶群有什麼變化嗎？

Thanks, Ryan. So we saw -- we're starting to see some improvements in the overall demand environment and deals starting to accelerate. We're seeing that mostly in Europe and in APAC. And still U.S. is similar kind of trends like we can see. But we're starting to see that demand starting (inaudible) a little optimistic going into the future.

謝謝，瑞安。所以我們看到——我們開始看到整體需求環境有所改善，交易開始加速。我們主要在歐洲和亞太地區看到這種情況。正如我們所看到的，美國仍然存在類似的趨勢。但我們開始看到需求開始（聽不清楚）對未來有點樂觀。

Excellent. And then -- in your shareholder letter, you said the average order value has increased since the launch of Similarweb 3.0. That's great to hear. This mean like a higher price point for the platform? Or are customers adopting additional capabilities? Or is just a larger scope within organizations, love more detail there.

出色的。然後，在您的股東信中，您表示，自 Sameweb 3.0 推出以來，平均訂單價值有所增加。聽到這個消息我很高興。這意味著該平台的價格會更高嗎？或者客戶是否正在採用額外的功能？或只是組織內更大的範圍，喜歡那裡的更多細節。

Ryan, it's Or. Thank you for the question. So they kind of repackage the different features in different motion and drove very nice growth in AOV. So that you get different features for the (inaudible). Because they really build it from scratch. So it's very different than the old pricing structure we had.

瑞安，是奧爾。感謝你的提問。因此，他們在不同的動作中重新包裝了不同的功能，並推動了 AOV 的良好成長。這樣您就可以獲得不同的功能（聽不清楚）。因為他們確實是從頭開始建造的。所以它與我們舊的定價結構非常不同。

Our next question is from Jason Helfstein with Oppenheimer.

我們的下一個問題來自傑森·赫夫斯坦和奧本海默。

I just want to send support and best wishes to everybody in Israel. So first, do you think we're at an inflection point here? I mean, obviously, we saw the improvement in billings on a year-over-year basis. How much of this is you're basically getting customers to move to sign contracts faster versus you're now starting to see customers add some more capabilities, where they were not willing to do that and/or some pricing. So if you kind of like look at the three ways, you can kind of drive billings, maybe break that down? And I guess, do you think we're an inflection point from here?

我只想向以色列的每個人表示支持和最美好的祝愿。首先，您認為我們正處於轉折點嗎？我的意思是，顯然，我們看到賬單同比有所改善。其中有多少是你基本上讓客戶更快地簽署合同，而你現在開始看到客戶增加了一些更多的功能，而他們不願意這樣做和/或一些定價。因此，如果你想看看這三種方式，你可以推動比林斯，也許打破它？我想，你認為我們現在是個轉捩點嗎？

I will start. It's all and maybe our Jason also can add more information. I do start seeing that dialogue around [downturn]. It's something that I feel that we -- in the end of the area of companies and trying to optimize their budgets. I think this is a good indication that maybe there is a trend shift on that angle. Jason, maybe you have anything to add from your side?

我會開始。就這些了，也許我們的 Jason 還可以添加更多資訊。我確實開始看到圍繞著[經濟衰退]的對話。我覺得我們在公司領域的最後並試圖優化他們的預算。我認為這是一個很好的跡象，表明也許在這個角度上存在趨勢轉變。傑森，也許你有什麼要補充的？

Yes. I think that we're starting to see some of that starting to trough. But I think the thing that continues to impress us is the continuous desire of customers to sign on for multiyear commitments. And that's very encouraging in an environment where people were trying to reduce commitments or reduce their spend and the fact that we see, again, year-over-year and sequentially quarter-over-quarter, that number of the percentage of our ARR that's committed under a multiyear agreement is something that we watch closely as a good sign for the durability.

是的。我認為我們開始看到其中一些開始陷入低谷。但我認為繼續給我們留下深刻印象的是客戶持續渴望簽署多年承諾。在人們試圖減少承諾或減少支出的環境中，這是非常令人鼓舞的，事實上，我們再次看到，逐年逐季變化，我們承諾的 ARR 百分比我們密切關註一項多年協議，認為這是持久性的好兆頭。

Our next question is from Rachel Ayotte with William Blair.

我們的下一個問題來自雷切爾·阿約特和威廉·布萊爾。

Yes. Thank you. I was wondering if you could talk a little bit more about any impact you guys have seen to either like the sales cycles or pipeline conversions since you've introduced the new pricing impact in plans earlier this quarter?

是的。謝謝。我想知道您是否可以多談談自本季度早些時候在計劃中引入新的定價影響以來，您所看到的對銷售週期或渠道轉換的任何影響？

Yes, sure. And so I think that the new pricing and packaging, we introduced improved a little bit and the sales cycle and the conversion rate. But overall, in the past few quarters, those metrics got hurt because of the macro environment. So we did see longer sales cycle around SMBs that increased dramatically. I think around Straton strategic and enterprise accounts, it was a small increase. And the conversion rate, I think, again, in the past few quarters, you saw that it was harder to convert mostly SMBs and I don't think it's improved the trend, but we still need to do more improvement in order to back to the metrics that they were before the macro environment start changing early this year.

是的，當然。因此，我認為我們推出的新定價和包裝有所改善，銷售週期和轉換率也有所改善。但總體而言，在過去幾個季度，這些指標因宏觀環境而受到損害。因此，我們確實看到中小企業的銷售週期更長，並且大幅成長。我認為圍繞著 Straton 策略和企業客戶，這是一個小幅成長。至於轉換率，我認為，在過去的幾個季度中，您會發現大多數中小企業的轉換變得更加困難，我認為這並沒有改善這一趨勢，但我們仍然需要做更多的改進才能回到今年年初宏觀環境開始改變之前的指標。

Awesome. And then maybe just following up on that. Were there any adjustments you needed to make with go-to-market motion or the sales force when you introduce the Similarweb 3.0.

驚人的。然後也許只是跟進。當您引入Similarweb 3.0 時，您是否需要對上市行動或銷售人員進行任何調整？

No, no.

不，不。

Our next question is from Brent Thill with Jefferies.

我們的下一個問題來自 Jefferies 的布倫特希爾 (Brent Thill)。

Jason, this is John Byun for Brent Thill. I have two questions on Similarweb 3.0, I mean, it's been, I guess, 2 months since that was announced. I don't know if you could dig in a little bit in terms of details into where you've seen the most impact, it comes out on the major solution category or add-ons? And then second, from the previous comments earlier, it does look like things are starting to maybe stabilize a bit. The net revenue retention numbers seem to be slowing the decent as well. And I don't know if you agree with that. Where or when do you think that might bottom?

傑森，我是布倫特·希爾的約翰·拜恩。我有兩個關於Similarweb 3.0 的問題，我的意思是，我想自宣布以來已經過去兩個月了。我不知道您是否可以深入了解您所看到的最大影響的細節，它出現在主要解決方案類別或附加元件上？其次，從先前的評論來看，事情似乎確實開始穩定下來。淨收入保留數字似乎也在放緩。我不知道你是否同意這一點。您認為這可能在何時何地觸底？

Yes. I will try to answer that two questions I heard. I think the nice thing we're seeing with the solution (inaudible).It's like a new approach when we kind of -- when a customer now buying that package, he gets exposed to most of the features we have, even the premium one, but with the lower capacity. So it's giving us also much better land and expand. So if you like, one of the features, it play once or twice. If you want to repeat usage then you go to like a meter approach. And we do see that those features that we introduced and also one of them was then tracking capabilities. It's capability we got from acquisition we did last year from a company called Ranger.

是的。我將嘗試回答我聽到的兩個問題。我認為我們在解決方案中看到的好事（聽不清楚）。這就像一種新方法，當客戶現在購買該軟體包時，他會接觸到我們擁有的大部分功能，甚至是高級功能，但容量較低。因此，它也為我們提供了更好的土地和擴張。因此，如果您願意，其中一個功能可以播放一兩次。如果您想重複使用，那麼您可以使用儀表方法。我們確實看到我們引入的這些功能，其中之一就是追蹤功能。我們去年從一家名為 Ranger 的公司收購了這種能力。

So those kinds of operational capabilities are increasing the user engagement and retention in the platforms. So they're coming more often, they use the platform more. So it was a good success. And now with the solution free all. All the customers getting exposed to those features. This is around that? And the second question, what I remember was around the trend around NRR. So we do see stability around the logo retenant that is stable. And in the past few quarters, it was tougher to do upsell. But I do feel and seeing this is going to change, hopefully, especially as the macro environment get more stable.

因此，這些營運能力正在提高平台中的用戶參與度和保留率。因此，他們來得更頻繁，使用該平台的次數也更多。所以這是一個很好的成功。現在有了解決方案，一切都免費了。所有客戶都會接觸到這些功能。就在這附近嗎？第二個問題，我記得的是 NRR 的趨勢。因此，我們確實看到徽標保留的穩定性是穩定的。在過去的幾個季度中，追加銷售變得更加困難。但我確實感覺並看到這種情況將會改變，希望如此，尤其是隨著宏觀環境變得更加穩定。

Our next question is from Brett Knoblauch with Cantor Fitzgerald.

我們的下一個問題來自布雷特·諾布勞赫和坎托·菲茨杰拉德。

Just want to send my support as well. Maybe on the product front. Could you maybe walk us through what the top two or three things are you're doing that you think will kind of increase the mission criticality of your platform maybe it's something to do with Gen AI, but just curious what you're doing on that front and what remains kind of like a difficult demand backdrop.

我也想表達我的支持。也許在產品方面。您能否向我們介紹一下您正在做的最重要的兩三件事，您認為這些事情會提高平台的任務關鍵性，也許這與 Gen AI 有關，但只是好奇您在這方面做了什麼前面和仍然有點像是困難的需求背景。

Yes. Yes, for sure. And -- so I will answer in two parts. First, a lot of our teams, we shift them to improve stickiness and success of onboarding in the past few quarters. So we're putting a lot of antsy about improving setup, onboarding. I think the AR platform is very deep and have a lot of capabilities and we still feel that most of the customers are not aware of all of the capabilities we have. We can have an amazing insight and we know that if we push them and discover all those other capabilities. It is increasing retention and upsell and all the other metrics. So we're putting a lot of emphasis around that.

是的。是肯定的。而且——所以我將分兩部分回答。首先，我們對許多團隊進行了調整，以提高過去幾季的黏著度和入職成功率。因此，我們在改進設置和入職方面投入了大量精力。我認為AR平台非常深入，有很多功能，但我們仍然覺得大多數客戶並不了解我們擁有的所有功能。我們可以擁有驚人的洞察力，我們知道，如果我們推動它們並發現所有其他能力。它正在增加保留率和追加銷售以及所有其他指標。所以我們非常重視這一點。

And regarding AI, we have a dedicated team that is all job is to implement AI all across the platform. So we just released what we call the first version of SimilarAsk that help you guys to navigate inside our platform like in free text, (inaudible), whatever data they want to get, and he will work them in the platform to the right place to find that. And I think the second part is able to integrate AI in any other part to help you do the analysis. Basically be your copilot as you use the platform. So there's a lot of exciting stuff that are working in progress. And we will introduce them slowly every quarter in different parts of the platform.

關於人工智慧，我們有一個專門的團隊，他們的全部工作就是在整個平台上實施人工智慧。因此，我們剛剛發布了我們稱之為“SimilarAsk”的第一個版本，它可以幫助你們在我們的平台內導航，例如自由文本（聽不清楚），無論他們想要獲取什麼數據，他都會在平台中將它們處理到正確的位置發現。我認為第二部分能夠將人工智慧整合到任何其他部分來幫助你進行分析。當您使用該平台時，基本上就是您的副駕駛。因此，有很多令人興奮的事情正在進行中。我們每季都會在平台的不同部分慢慢引入它們。

Awesome. And then maybe one for Jason on to sales cycles. I think you guys first mentioned the possibility of them elongating in the second quarter of last year. And I think every quarter since we kind of have talked about sales cycles elongating. I'm just curious if they still have been lengthening, call it, quarter-over-quarter or if they've kind of remained steady. And at what point if they are remaining steady, will it become maybe less of a headwind.

驚人的。然後也許是傑森進入銷售週期的一個。我想你們首先提到了去年第二季延長的可能性。我認為自從我們每個季度都在談論銷售週期延長以來。我只是好奇他們是否仍然在延長，稱之為季度環比，或者是否保持穩定。如果他們保持穩定，到什麼時候，逆風會變得更少。

(inaudible). You're right. We started seeing the impact of that about Q2 of last year. We saw that the cycle starting elongating. I think the last couple of quarters, we've seen them stabilizing kind of at the rate, and we don't see any length any longer, but we do see them not getting -- we didn't see them getting shorter. We're starting to see some of that free up and starting to turn, but it's too early to say that that's a trend just yet. I think the number that we report in the investor deck, we shared the CAC payback period, which is now between 19 to 20 months on a gross profit basis. Historically, that's been in the 15 to 16 month payback period. And we think that as (inaudible) starts shifting back to normal cycles, that we'll start seeing those payback periods starting to return back to those historical levels.

（聽不清楚）。你說得對。我們從去年第二季開始看到這項影響。我們看到週期開始延長。我認為在過去的幾個季度中，我們看到它們的速度趨於穩定，我們看不到任何長度，但我們確實看到它們沒有變短——我們沒有看到它們變短。我們開始看到其中一些被釋放並開始轉變，但現在說這是一種趨勢還為時過早。我認為我們在投資者平台上報告的數字，我們共享了 CAC 投資回收期，以毛利計算，現在該投資回收期為 19 至 20 個月。從歷史上看，投資回收期為 15 至 16 個月。我們認為，隨著（聽不清楚）開始轉向正常週期，我們將開始看到這些投資回收期開始回到歷史水平。

Our next question is from Patrick Walravens with JMP.

我們的下一個問題來自 JMP 的 Patrick Walravens。

Great. And we're keeping you and your families in our prayers. First of all, congratulations on the profitability, I mean, it's kind of a big deal, right? So Jason, where can that go? What's the plan?

偉大的。我們為您和您的家人祈禱。首先，祝賀獲利，我的意思是，這是一件大事，對吧？那麼傑森，那能去哪裡呢？計劃是什麼？

And we believe that on a long-term basis, you're going to be seeing 85% gross margins and 25% non-GAAP operating margins. And we -- that's our long-term margin and our long-term model and that we think it's somewhere in the neighborhood of $400 million to $500 million and has been consistent that way. And we're really excited to see that the numbers start pulling into -- going into place seeing gross margin getting 82%, 83%. Seeing sales and marketing down to 41%. And G&A already at 16% and coming down. I think there's a lot of efficiency that we talked about throughout this year that we were going to deliver. And we are really focused on that disciplined execution that we've talked about over the last couple of quarters.

我們相信，從長遠來看，您將看到 85% 的毛利率和 25% 的非 GAAP 營業利潤率。我們——這就是我們的長期利潤率和我們的長期模型，我們認為它在 4 億至 5 億美元左右，而且一直如此。我們真的很高興看到這些數字開始回升，毛利率達到 82%、83%。銷售和行銷下降至 41%。 G&A 已經達到 16%，而且還在下降。我認為我們今年全年都在談論我們將要實現的許多效率。我們真正關注的是我們在過去幾季中討論過的嚴格執行。

Okay. And then so once you hit free cash flow positive, Will you feel like you can start operating a little differently?

好的。一旦你的自由現金流達到正數，你會覺得你可以開始採取一些不同的經營方式嗎？

What do you mean?

你是什​​麼意思？

What will we be able to do that you're not doing now?

我們能做哪些現在沒有做過的事情？

No. I think the model that we've built, we've been a -- the model is designed to be profitable from the get go, the beauty of the unit economics here that we have a good retention rate. And more importantly, we have great ongoing margins in the second and third year. We lose money on the customer in year 1, that's a '15 to '16 payback period. But in year 2, we're widely profitable on the customer. And so that retention that we have and the durability that you see in those multiyear deals gives us a lot of confidence that we're going to be continuing to produce that. We'll continue to invest in the things that drive further growth, but we're very committed to operating as a profitable growth company. And I think that's what we said in the beginning of the year. And we're happy to see some of this stuff start to come to fruition with the achievement of operating profitability already this quarter.

不。我認為我們建立的模型是一個——該模型的設計目的是從一開始就盈利，單位經濟效益的美妙之處在於我們擁有良好的保留率。更重要的是，我們在第二年和第三年持續保持巨大的利潤率。我們在第一年就在客戶身上賠錢了，也就是 15 到 16 年的投資回收期。但在第二年，我們從客戶身上獲得了廣泛的利潤。因此，我們所擁有的保留率以及您在這些多年交易中看到的持久性給了我們很大的信心，我們將繼續生產這種產品。我們將繼續投資於推動進一步成長的事物，但我們非常致力於作為一家盈利的成長型公司進行營運。我認為這就是我們在年初所說的。我們很高興看到其中一些東西開始取得成果，本季已經實現了營運獲利。

Okay. Last one for me. So as a customer and a user, an example of something I'd love to see you invest in would be an iPhone mobile app and especially if you're going to use Gen AI, so I can just talk to my phone and tell them what I want to see in terms of the data from Similar or when am I going to get one of those?

好的。最後一張給我。因此，作為客戶和用戶，我希望看到您投資的一個例子是 iPhone 行動應用程序，特別是如果您要使用 Gen AI，這樣我就可以對著我的手機說話並告訴他們我想從類似的數據中看到什麼，或者我什麼時候可以獲得其中一個？

Maybe when we start producing cash, I will start in the right how to monetize -- now when we will be profitable, I can go back to those adventure of trying new things, but so yes, here's what we're going to do with the free cash flow? You got your answer.

也許當我們開始產生現金時，我會開始正確的貨幣化方式——現在當我們盈利時，我可以回到嘗試新事物的冒險，但是，是的，這就是我們要做的自由現金流？你得到了答案。

Our next question is from Tyler Radke with Citi.

我們的下一個問題來自花旗銀行的泰勒拉德克 (Tyler Radke)。

Yes. And I'll echo my best wishes and good to see the resiliency here. I wanted to just start off on the gross retention side, it's encouraging to hear kind of the pickup in what seems to be new bookings and expansion bookings. But -- do you feel like you're starting to see the gross retention rates in that turn the corner? If you could just kind of comment on the time line of seeing that bottom.

是的。我將表達我最美好的祝愿，並很高興看到這裡的韌性。我想從總保留率方面開始，聽到新預訂和擴展預訂有所回升是令人鼓舞的。但是——你是否覺得你開始看到總保留率出現了好轉？如果您能對看到底部的時間軸發表評論的話。

Yes, we're starting to see I think Or mentioned earlier, Tyler, that we're starting to see a slowdown in the down sales or the constriction of budgets that customers are having. I think people have done the optimizations that they needed. And we're starting to see those things not only renew but also renewing for longer periods of time as you -- that's that metric that we keep on watching the multiyear commitment. So -- that gives us some degree of confidence. But again, we're starting to see it turn and we're going to keep on monitoring it over the next couple of quarters and see that turn is happening on a sustained basis.

是的，我們開始看到我認為或之前提到的，泰勒，我們開始看到銷售放緩或客戶預算緊縮。我認為人們已經完成了他們需要的優化。我們開始看到這些東西不僅會更新，而且會像你們一樣在更長的時間內更新——這就是我們持續關注多年承諾的指標。所以——這給了我們一定程度的信心。但我們再次開始看到它的轉變，我們將在接下來的幾個季度繼續監測它，並看到這種轉變正在持續發生。

Okay. Okay. Great. And Jason, I know you're not providing official 2024 guidance. Obviously, Q4 is a big quarter to get through. But if we just think about where you're guiding I believe, in the high single-digit revenue growth range. Is that a good baseline for next year? Or maybe given what you're seeing on the new business side, we could see growth rates pickup from that 9%? And then secondly, on profitability, do you feel like certainly, there's been a lot of margin expansion this year, but how should we just think about the puts and takes on the margin expansion side of the equation, too.

好的。好的。偉大的。 Jason，我知道您沒有提供 2024 年官方指導。顯然，第四季是一個重要的季度。但如果我們只考慮你的指導，我相信，在高個位數的收入成長範圍內。這是明年的良好基準嗎？或者考慮到您在新業務方面看到的情況，我們可能會看到成長率從 9% 開始回升？其次，就獲利能力而言，您是否肯定認為今年的利潤率擴張了很多，但我們應該如何考慮等式的利潤率擴張方面的看跌期權和認購期權？

Yes. So -- so we're going to obviously wait on giving guidance for 2024 until the end of the year. I think you're right that Q4 is an important part as we start thinking about that. But the optimizations and that we've done during the year, I think, have proven that we can operate more efficiently, and we've done that. The beauty of the model is that there's a lot of leverage, right, the same fixed cost that we have, whether that's in the gross margin line or in G&A, R&D and the like, are highly leveraged as the revenue grows. So that's -- there should be further margin expansion as that continues to grow. But we'll give more guidance on all the margins for 2024 at the beginning of the year.

是的。所以，我們顯然要等到年底才給 2024 年的指引。我認為你是對的，當我們開始考慮這一點時，第四季是一個重要的部分。但我認為，我們在這一年中所做的優化已經證明我們可以更有效地運營，而且我們已經做到了。該模型的美妙之處在於，有很多槓桿，對吧，我們擁有的相同固定成本，無論是在毛利率線還是在一般管理費用、研發等方面，隨著收入的增長，槓桿率都很高。因此，隨著利潤率的持續成長，利潤率應該會進一步擴大。但我們將在年初就 2024 年的所有利潤率給予更多指引。

Thank you. There are no further questions at this time. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

謝謝。目前沒有其他問題。今天的會議到此結束。此時您可以斷開線路。感謝您的參與。

Thank you.

謝謝。

Thank you.

謝謝。