Similarweb ( NYSE: SMWB ) plunged 23% on Wednesday as the digital intelligence company offered an updated forecast for its fourth quarter and full year that fell well short of Wall Street's expectations.
Similarweb ( SMWB ), which competes with the likes of The Trade Desk ( TTD ), Google ( GOOG ) ( GOOGL ) Campaign Manger 360 and other intelligence platforms, said it now expects fourth-quarter sales to be between $50.5M and $50.9M, a growth rate of 26% year-over-year. Similarweb ( SMWB ) also expects an adjusted operating loss of $14.5M to $15M and gross margins of 75% to 76%.
Wall Street analysts were forecasting the company to generate $54.5M in sales for the upcoming period, along with an adjusted loss of 24 cents a share.
The company's full-year guidance also fell short of expectations, as it now estimates revenue to be between $192.4M and $192.8M, below the $195.49M analysts were expecting .
In addition, Similarweb ( SMWB ) expects its full-year adjusted operating loss to be between $67.4M and $67.9M and a non-GAAP gross margin of approximately of 75%.
The Trade Desk ( TTD ) fell 4% in mid-day trading following the results.
Despite the pending shortfall, Similarweb's ( SMWB ) third-quarter results topped expectations, as sales rose 40.5% year-over-year to $50.02M, leading to a loss of 18 cents per share, excluding one-time items. Analysts were expecting the company to lose 27 cents per share on $49.14M in revenue.
In the year-ago period, Similarweb ( SMWB ) lost 19 cents a share, excluding one-time items.
Similarweb ( SMWB ), led by Chief Executive Or Offer, also said it had 3,911 customers as of the end of the period and its annual average revenue per customer grew to $51,570, up 15% year-over-year.
Tel Aviv-based Similarweb ( SMWB ) also announced a 10% cut to its total workforce as it continues to deal with a challenging economy/
"As a result of these shifts, we have made the very difficult decision to reduce our headcount in preparation for prolonged changes in demand," Mr. Offer said.
In October, investment firm Jefferies said that "winter came quick" for software companies, but added that Similarweb ( SMWB ) was among those with the cheapest valuations .
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Similarweb plunges as Q4, full-year guidance falls, company cuts 10% of staff