Similarweb Ltd. (SMWB) Q4 2021 Earnings Call Transcript

Similarweb Ltd. (SMWB -0.77%)
Q4 2021 Earnings Call
Feb 16, 2022, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to Similarweb quarter four fiscal 2021 earnings conference call. [Operator instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Annie Rosenberg. Thank you, and over to you, Ma'am.

Annie Rosenberg -- Investor Relations

Thank you, operator. During this call, we will make forward-looking statements related to our business, including statements related to the expected performance of our business, future financial results, strategy, the potential impacts of the COVID-19 pandemic and associated global economic uncertainty, long-term growth, and overall future prospects. These statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected or implied during the call. Actual results and the timing of certain events may differ materially from the result or timing predicted or implied by such forward looking statements and reported results should not be considered as an indication of future performance.

Please review our filings with the SEC, including our final prospectus, and the section entitled risk factors therein, filed with the SEC on May 12, 2021, for discussion of the factors that could cause our results to differ. Also, note that forward-looking statements on this call are based on information available as of today's date. We disclaim any obligation to update any forward-looking statements except as required by law. As a reminder, certain financial measures we use in this presentation and on our call today are expressed on a non-GAAP basis.

We use these non-GAAP financial measures internally to facilitate an analysis of our financial and business trends, and for internal planning and forecasting purposes. We believe these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with that 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. With that, I will turn the call over to Or Offer, CEO of Similarweb.

Or Offer -- Co-Founder, Director, and Chief Executive Officer

Thank you, Annie, and thank you all for joining us here today for our Q4 2021 earning call. It's great to be here with all of us this morning. We finished off a very strong 2021 with excellent performance in Q4, got revenue grew 51% year-over-year to $40.2 million, exceeding our guidance for the quarter. I am very proud of our team for continuing to execute well and accelerating our growth.

During today's call, our CFO Jason and I will provide more details around the Q4 and 2021 results, and provide Q1 and full year guidance for 2022. So let's discuss the results. In many ways, 2021 was a game changing year for us. Most importantly, our growth trajectory has changed.

In 2021, our total revenue grew by 47% to $137.7 million. That's represent an increase of 15% point of growth over the last year that was 32%. We ended this year with $165 million of ARR, concluding our third straight year of accelerating ARR growth. As we move into 2020, we're seeing very strong tailwinds for the business and increasing and rapidly expanding demand for our solution.

In light of those favorable condition, we will continue to invest across the business in order to further merit, and grow our customer base, as well as strengthen our product portfolio and data assets. The strength of our customer base has also improved. In 2021, almost significant growth come from the largest and most strategic customer segment, those companies that generate more than $100,000 in ARR. We grew the total number of those customers by 45%, and together they are now represent more than 51% of our total ARR.

Overall, we are more than double our rate of new customer acquisition versus 2020. We continue to see our customer growth being driven from a diverse set of industries. In 2021, the new logos we added, including amazing global brands like Fiat Chrysler, Intel, 3M, Mondelez, DoorDash, Tesco, CVS Health, and many more. Our customers are more engaged with our solution, and more committed to them than ever before.

33% of our ARR is generate from our customer signed multi-year contract. This is an 8% point increase from the 25% of ARR last year. And even more significantly, we have increased our customer total lifetime value with NRR hitting an all time high. We close Q4 with overall NRR at 113%, and it's 125% for the critical $100,000 ARR customer segment.

Both at 12%  point improvement over our Q4 2020 numbers. I want to pause here for a second to reflect on what they see as the most important market driver for our business growth. We believe that today number one mission for every CEO, and business leader is to drive growth, and the biggest growth opportunities come from the digital world. A place without borders where it's possible to almost instantly reach and sell to audience at a global scale.

In this world where growth potential is almost unlimited, data is king to see and capture the growth opportunities. Every company is looking for little market data. They need a complete picture of what's happening in the markets to answer the most strategic growth questions like; How do I go by demand?; How do I get my product portfolio?; How do I grow my market share?; How do I grow my audience?; And how do I grow my service? This is what Similarweb does. We give companies the visibility they don't have.

An insight that guides them to what to do next in order to grow. We believe our proprietary data and growth inside give our customer an advantage in their markets. So we believe the value we deliver is outstanding, and that every company that wants to compete and win in the digital world need us. And this is why we see a huge [Inaudible] and potential for high growth for many years to come.

In 2021, to accelerate our own growth rate, we expanded and improve our product portfolio. In Q2, we launched the Shopper Intelligence solution, and by Q3, we already signed our first seven figure deal to this product. Shopper Intelligence is highly differentiated solution that give our customer an amazing insight into consumer behavior within online marketplaces. In Q4, we expanded this offering significantly improving our market insights coverage by adding Walmart, Target, Best Buy initially, surely on top of our existing support for Amazon Insights.

Our goal is to become the markets standout in this emerging space, and to be an essential growth enabler for every CPG or retail company looking to do business in the online marketplaces. Within our customer base alone, when identified, over 700 companies that meet our target profile, so the opportunity for this product is huge. We're continued to add major enhancements to all of the offering as well. In Q4, we enhance our self-intelligence solution by partnering with the leading data provider to add contacts database to our offering.

That solution will bring together 400 million plus contacts with digital traffic, and engagement insights and techno graphics data. We believe this combination of data and insight is ideal for sales organization while targeting digital first businesses such as e-commerce, publishing, payment, and digital advertising. Now, with just one Similarweb solution, sales representative can identify qualified account, connect with the right decision makers and influencer, and engage those prospect with a compelling pitch that leverage proprietary digital insights. Finally, as you may have seen, I'm very excited about today's announcement of a new data licensing agreement with App Annie, a market leader in the mobile app insights.

The agreement to give us access to an important set of any mobile application data, which we will incorporate into our platform. We plan to launch a new offering based on the App Annie data and insights in Q2. By bringing together, our respective best in class data, we believe Similarweb will be able to deliver an even more accurate, more comprehensive view of the digital world, a powerful offering that will improve the insights, and competitive advantage we create for our customers. And of course, this means that companies will be able to purchase industry leading web and mobile apps, data, and insights from a single source.

We believe this will be a very compelling proposition in our markets and a game changer for companies looking to take a unified approach to optimizing the digital strategy across platforms. In 2021, we also enhance and expand our product offering by completing two acquisitions; SimilarTech and MD Mobile. Both transactions demonstrate our ability to execute on a smart acquisition opportunities and improve our customer value. SimilarTech techno-graphic data is now used across the board in almost every similar product from our free offering to solution like self-intelligence and investor intelligence to our API and data feeds.

MD Mobile, which was completed in Q4 was already being used to enhance our offering as well. For example, in Q4, we added the new feature to Shopper Intelligence solution called shopper demographics. This feature enables e-commerce companies to get to know the audience on a deeper level so they can inform your product development and optimize buyer campaigns. Going beyond basic identifiers like age and gender, this new analysis segment every category, and brand on Amazon according to education level, household size and income, and employment status.

We believe it is a highly different feature in the market, and it would not have been possible without data from MD Mobile acquisition. Finally, in 2021, we continue to invest in our people aggressively scaling our organization to support our growth. We expand and grow organically and adding new offices in Munich and Melbourne, Virginia. And we're working hard to build out our new similar headquarter, which will be located in the center of the Louisville metropolitan area.

When it's completed, we believe it will be a significant attraction that will help us to continue to recruit top tenant here in Israel. To summarize, we believe that 2021 was a pivotal year, and we are entering into 2022 with a great momentum, including a track record of accelerating growth, and growing market opportunities ahead of us. Back in May, we successfully completed our IPO on the New York Stock Exchange. Since then, we have delivered three consistent quarters of strong revenue growth, all for 45% year-over-year growth.

Concluding this quarter with more than 50% year-over-year growth, our story has improved materially since IPO across all of our business. We continue to add and to improve our product portfolio and offering. Both organically and inorganically, extending our term where we are rapidly increasing our product volume and stickiness, resulting in double-digit growth in our net revenue retention. We believe our combination of consistently strong growth and solid gross margin positions us as a small group of best in class size businesses.

And most importantly, we are a leader in the large and high value market with a unique opportunity to become a critical growth driver for every company that want to compete and win in the digital world. I'm excited about the progress, and opportunity we have going forward. We delivered a strong Q4, capping off a year of tremendous acceleration in our business. We are confident about the growth strategy and our ability to unlimited captured a large share of a very valuable market.

I will now turn the call over to our CFO, Jason, to discuss more about our financial results and 2022 financial guidance. Jason. 

Jason Schwartz -- Chief Financial Officer

Thank you, Or, and good morning, everyone. I will now walk you through our fourth quarter financial results before introducing our guidance for the first quarter and full year 2022. Total revenue for the fourth quarter of 2021 was $4.2 million, reflecting record 51% year-over-year growth. This increase was driven both by an increase in our total number of customers, which rose by 28% in Q4 to 3,487, also a record high for us, as well as an increase of 18% in our average revenue per customer to nearly $48,000 in Q4.

For the full year 2021, total revenue was $137.7 million, reflecting 47% year-over- year growth. Dollar based net retention rate, or NRR, was 113% overall, and was 125% for our greater than $100,000 ARR customer segment. An increase of 12 percentage points for each of those metrics compared to last year. As you know, substantially, all of our revenue is annual recurring revenue for ARR with a minimum subscription term of one year.

But we continue to increase the number of our customers who commit to multi-year subscriptions. As of the end of Q4, 33% of our ARR is generated from customers with multi-year subscriptions, compared to 25% last year. This trend toward increasing contractual commitments, along with our high NRR, reaffirms the value our customers see in SimilarWeb, and speaks to the increasing health and durability of our ARR. Please note that unless otherwise stated, all references to our expenses and operating results are on a non-GAAP basis and are reconciled to the GAAP results in the earnings press release that was issued earlier today.

Our gross profit totaled $30.2 million in the quarter, representing a gross margin of 75.1% versus 78.9% in Q4 2020. The decrease is primarily the result of the acquisition of MD Mobile, which closed in Q4, whose fixed costs contributed to an increase in cost of revenue. Operating expenses grew to $48.5 million in Q4, up from $25.7 million in Q4 2020, largely reflecting the investment in personnel across the business to support our growth. The specific components of our operating expenses were research and development $12.8 million versus $6.2 million in Q4 2020.

This increase was driven primarily by growth in employee headcount, particularly among employees focused on our newer solutions, such as shopper intelligence, self-intelligence, and investor intelligence. As I discussed in Q3, we are already realizing revenue growth from these new solutions and believe that these investments will prove to be meaningful growth drivers in the future. Sales and marketing was $26.6 million versus $15.4 million in Q4 2020, driven principally by increased investment in sales and account management headcount and marketing activities as we scale to build pipeline and support our plans for growth in 2022. General and administrative $9.1 million versus $4.2 million in Q4 2020, which includes $1.4 million of additional costs for the quarter that we now incur as a publicly traded company, as well as additional employee headcount required to support our growing operations globally.

As a result, our non-GAAP operating loss for the quarter totaled $18.4 million better than our guidance, compared to $4.7 million in Q4 2020. For the full year, our non-GAAP operating loss totaled $51.7 million better than our guidance, compared to $14.9 million in 2020. Free cash flow for the quarter was negative $11.5 million compared to negative $1.4 million in Q4 2020, primarily as the result of the investment in employee hiring to drive our growth. These investments continue to show their value in the acceleration of ARR, customer growth and higher NRR.

Turning to the balance sheet, we ended Q4 2021 with $128.9 million in cash and cash equivalents and no debt. We believe that our cash balance and our $75 million credit facility totaling $204 million of available funds, provides us with more than enough liquidity to execute on our growth plans and to take us to positive cash flow, which we plan to reach in 2024. Our deferred revenue increased 46% year-over-year to $78.8 million, compared to $53.9 million at the end of Q4 2020. Our remaining performance obligations, or RPO, increased 60% year-over-year to $137.5 million, compared to $85.7 million at the end of Q4 2020.

We expect to recognize approximately 88% of total RPO as revenue over the next 12 months, and we believe these metrics are a good indicator of the health of our business, and our revenue streams. As a result of our strong performance over the last three quarters since completing our IPO, as well as the product innovation that we continue to deliver and the market opportunity that we see ahead of us, we are issuing strong guidance for Q1 and for the 2022 fiscal year. For the first quarter of 2022, we expect total revenue in the range of $41.1 million to $41.5 million, representing 40% growth year-over-year at the midpoint. For the full year, we expect total revenue in the range of $193 million to $184 million, representing 41% growth year-over-year at the midpoint.

Non-GAAP operating loss for the first quarter is expected to be in the range of $20.5 million to $20.9 dollars, and for the full year between $83 and $84 million. This is driven by the investments we are making to continue our strong growth, as well as the investments we are making to further expand our data moats through strategic moves such as the acquisitions of SimilarTech and MD Mobile, as well as the data licensing agreement with App Annie. This also includes negative impact due to foreign exchange movements, which we estimate at approximately $10 million of additional cost. In light of our strong unit economics, and efficient land and expand model, which are reflected in our strong NRR.

And in order to capitalize on our strong momentum and market opportunity, we expect to continue to make significant investments in the business through 2022 and 2023 as we execute on our plans to become cash flow positive on an ARR of between $450 million to $500 million in 2024. As I mentioned, we are in a strong cash position and believe that our available funds provide us with more than enough liquidity to execute on our growth plan until we reach positive cash flow. To conclude, we've executed well since our IPO last year. Our business is performing extremely well across all of our major initiatives, and our financial results and guidance indicate that we're heading into 2022 with strong momentum.

And with that, Or and I are happy to take your questions. Operator.

Questions & Answers:

Operator

Thank you. At this time, we will be conducting a question-and-answer session [Operator instructions] The first question comes from the line of Brent Thill with Jefferies. Please go ahead.

John Byun -- Jefferies -- Analyst

Hi, this is John Byun for Brent. Thanks for the question. Just two questions. First, on the investment plan for '22 [Inaudible] If we could go a little bit more detail as to where those things would be focused, prioritize across banks and other investment needs.

And then in terms of the ARR at 2024, that looks like a pretty big growth. And just wondering how you're thinking about the bridge from last year, $165 to that number '24? Thank you. 

Jason Schwartz -- Chief Financial Officer

Thanks so much. As we mentioned in the in the first part of the call, we're seeing a great opportunity and ahead of us and the momentum that we're seeing in the business in terms of both unit economics and the revenue growth is pretty big. We see the demand coming in and you're seeing, I think, the guidance that we're giving for the upcoming year, and we see that that the opportunities that is ahead of us in the big [Inaudible] and our market position is not going away. Great, thank you.

John Byun -- Jefferies -- Analyst

Great, thank you.

Operator

Thank you. The next question comes from the line of Bhavan Suri with William Blair. Please go ahead.

Bhavan Suri -- William Blair and Company -- Analyst

Hey, Jason and Or. This is actually [Inaudible] but great forward, guys. If I can ask on the app Annie partnership. Can you just give us a sense for how the data assets that you're getting your app differ from MD mobile? Are these going to be complementary in the new offering that you're trying to introduce in Q2 here? Or do they both end up feeding into that offering? Just help us understand the different, how the data differs between the traffic there.

Or Offer -- Co-Founder, Director, and Chief Executive Officer

Hi, of course, it's all here. So it's a great question. And first of all, there's a major difference between MD mobile data to app Annie data. MD data, that is based more on little panel, when you have the small sample of panel but a lot of deep data demographic and etc.

And one example that we discussed here in Downing's, how we're using this data to enrich our shoper solutions about what people are basically, the demographic of people of buyers online, and also MD data is more data that you can see in app activity. That's a little bit different than the data that is presenting. So there is a major different and different use case for all those assets.

Bhavan Suri -- William Blair and Company -- Analyst

That's very helpful. And then I wanted to touch on a large customer activity, it seems like the deal sizes are getting larger overall and even among your largest customers, the deal sizes are getting larger. And maybe just give us a sense for where digital data and intelligence is on the investment priority list for more enterprises today? And then I would love to understand, 2024 target that you've put out where enterprise activity and large deals actually flow into how those flow into that? I think it's like a 40% to 45% take that you implied in that 2024 target? Thank you.

Or Offer -- Co-Founder, Director, and Chief Executive Officer

Yeah. I think that as our offering is growing and we know improving our product and not only the access to the data, the insights we have pooling and our ability to train and teach our customer how to drive more ROIs on the market that we provide. And they [Inaudible] ROI and was a willingness to pay is go up. If you think about Similarweb, for example, they no solution five years ago compared to what we're giving them today, the ROIs dramatically bigger.

So, we're presenting more deep and more advanced software, this gives more ROIs, his ability to pay and the willingness is go up. This is one element. Second, is our conversion of the company to a multi offering solution. Historically, we used to land only with our research solution.

Now, we come into the enterprise and we have this full suite of offerings to them. We learned with the research  and then we have a nice solution for the marketing organization to have some drive and more growth and ROI. And then we have another offering for the sales organization that we go and help them drive mold growth and so on. So and I think, all those combination together, in fact what you see in the increase and value there and the increase [Inaudible] and know that you see that growing very nicely over the past few years.

Bhavan Suri -- William Blair and Company -- Analyst

OK. Thank you very much, and congrats again on a great Q4.

Or Offer -- Co-Founder, Director, and Chief Executive Officer

Thank you.

Operator

Thank you. The next question comes from the line of Sterling Auty with JPMorgan. Please go ahead.

Maya Kilcullen

Hi, this is Maya Kilcullen for Sterling. So looking at 75% of gross margin during the quarter because most of that coming from the app Annie licensing deal and how are you thinking about gross margin moving forward?

Or Offer -- Co-Founder, Director, and Chief Executive Officer

Yeah. So I will answer part and if Jason can also join. The app Annie deal will only go into now for in this Q1. So the gross margin you're seeing is for Q4, and it's mostly come from the acquisition of MD data that we need to integrate their data operation about managing a little panel, and the headcount involved.

This acquisition was to strength a moat around our data moats. And we are very bullish around that. I don't think all those moves that we're doing to increase those data acquisition and building more moats about our uniqueness of our data is really very strong. Smart strategic move.

And as the company grow on their on the long-term model will bring the company to the 80% gross margin that we're targeting. This is my thoughts around it. Jason, you want to add anything from your file?

Jason Schwartz -- Chief Financial Officer

Yeah, I think, like you said, Or. The app Annie licensing agreement will always go into effect in 2022. And just as a reminder, most of the course that we have in our in our cost of revenue is our fixed cost. And therefore, as we integrate MD mobile, and then see the revenue that comes in, we get a lot of leverage out of those fixed costs, both on the data side as well as on the personnel.

Maya Kilcullen

OK. Great. And then just on if I can add a follow up. So between now and those fiscal '24 targets, do you see that 125% retention rate for the top bucket of customers as kind of a target retention rate between that between now and then? 

Or Offer -- Co-Founder, Director, and Chief Executive Officer

Of course not. We're only getting started is I like to say. --

Jason Schwartz -- Chief Financial Officer

I think we're excited about the performance that we've had this year and the transformation that you've been seeing from 2020 into 2021. And we like the momentum. And like I said, there's a lot of business to be done over the next couple of years.

Maya Kilcullen

Great. Thank you.

Operator

Thank you. The next question comes from the line of Jason Helfstein with Oppenheimer. Please go ahead.

Jason Helfstein -- Oppenheimer and Company -- Analyst

Hey, guys, thanks. Just on MD [Inaudible]. How much we will all have that factored into our gross margin for the quarter? I guess how fast would you expect the gross margin to recover as you scale those costs? Again, I like by the end of this year, would the gross margins be back to historical levels? And then I guess on top of that, and maybe the answer is no, how are you thinking about the impact of app Annie this year's revenue gross margins and EBITDA? And then I guess I don't think you did, but maybe opine on, the deal lane, the terms. Why not buy them anything you want to share? Thanks.

Jason Schwartz -- Chief Financial Officer

Sure. So let me maybe, I'll start with the financial questions that you had. I think that's exactly right. We're expecting to see gross margins start going back toward the end of the year, back to the same historical levels that you've seen.

And I think this is consistent with what we've done in the past. When you look back, that's going back to 2018, 2019 and 2020. You saw gross margin go from 54% to 71% to 77% to 78% this year. As we added additional data sets and increased our data moat and then leverage that as we grew and accelerated our our revenue.

I think that's the same thing you see here. In terms of the impact of the app Annie, the app Annie [Inaudible]. All of that is baked into the guidance that we have given earlier today. 

Jason Helfstein -- Oppenheimer and Company -- Analyst

I guess I'm asking like if we wanted to think about how much of the guidance is app Annie versus not app Annie? If you could answer that question. Thanks.

Jason Schwartz -- Chief Financial Officer

Yeah. We're feeling very comfortable with the guidance that we've given and are looking forward to a strong. 

Jason Helfstein -- Oppenheimer and Company -- Analyst

OK. Or, and then just any more color on like the length of the deal, the terms, the terms get more favorable over time. If you sell more of it. And then why not? Why partner not acquire?

Or Offer -- Co-Founder, Director, and Chief Executive Officer

And so I will try to talk carefully because we have an agreement with app Annie. I'm not 100% sure what we can disclose or not disclose but determines that it's a fixed price and that we pay. So this is a great motion. And we have a really great relationship with management and highly respect, and we're very excited that we're able to put in place this partnership together, and strengthen the relationship and start working together.

And I would tell.

Jason Helfstein -- Oppenheimer and Company -- Analyst

OK. Thanks. I had to try.

Operator

Thank you. The next question comes from the line of Pat Walravens with JMP Securities. Please go ahead.

Pat Walravens -- JMP Securities -- Analyst

Oh, great. Thank you, and congrats on the 51% growth, you guys. So first of all, and Jason, I emailed you about this during the quarter, but when I was when I was using the product, which we do in January, there was a there was a message that popped up that said, we're having issues with the app analysis section that began in January, and we expect to have it resolved sometime in February. Can you talk about what that was? And was that related to the App Annie data?

Or Offer -- Co-Founder, Director, and Chief Executive Officer

Yeah. I go, I will talk about it. So first, what's happened is that it was a bug in our [Inaudible]. One of them deploy a code and then Friday night that will create the bug and then caused a little bit of mess and just took them a time to recover, the discovered after two days and then until they fix it.

So this is what, that is a very stupid mistake and that this thing there's nothing to do with the app Annie deal, as you can probably and think this conversation relationship with app Annie has been going on for many, many months and in this dialog. So there's no relation between those two. 

Pat Walravens -- JMP Securities -- Analyst

OK. Great. And then, Jason, can you maybe, if you look at the operating income or operating loss guidance versus the street, it's for 2022, it's a $35 million delta. Can you bucket that for us? A third this a third that for half this, half that just roughly how does that $35 million breakdown?

Jason Schwartz -- Chief Financial Officer

Yeah. The the bulk of that is what you will see in both our R&D and our  sales and marketing, which is really focused on the making the investments in order to, like I said, to really focus on growing the business.  The thing that we've seen, we have the conviction when we started 2021 that we had hit an inflection point, that the business was solid. Remember, at the end of 2015, at the end of 2020, we're effectively a cash flow break, even business. We know how to manage a business that's cash flow breakeven.

But what we saw in front of us was this with this big tam and this big opportunity. And what we're seeing today is the strong unit economics and the efficient land and expand model which you're seeing, and it's ultimately in not only revenue growth, but the strong NRR. And that's the proof pudding to us that our conviction was right. And therefore, we are continuing to invest in order to grab the tam that we see ahead of us.

And I would tell you is that we know where we're going, so you'll see the breakdown and we could have a take off line and go through each line. But it's mostly focused on headcount and marketing activities to continue to give that to him. And on the flip side, on the R&D and building up the data moat, it's the kinds of things to strengthen our product set that with is the exact factor that drives that higher NRR, having more products and solutions to sell into our existing installed base as well.

Pat Walravens -- JMP Securities -- Analyst

OK. Now I know you mentioned, but can you just remind me what the effects, the [Inaudible] is super strong, right? That's the issue. --

Jason Schwartz -- Chief Financial Officer

That's right. Yeah, exactly. We said about $10 million of that is in effects. 

Pat Walravens -- JMP Securities -- Analyst

Wow. So a third, well, almost a third of the stuff is just effects. OK.

Jason Schwartz -- Chief Financial Officer

Right, exactly. In the absence, in the absence of the effects change, this would be an even stronger guidance, as you pointed out.

Pat Walravens -- JMP Securities -- Analyst

OK. Thank you.

Jason Schwartz -- Chief Financial Officer

Good. 

Operator

Thank you. The next question comes from the line of Ryan MacWilliams with Barclays. Please go ahead.

Ryan MacWilliams -- Barclays -- Analyst

Thanks for taking the questions and pleased to hear about the opportunity ahead for Similarweb. How can Similarweb benefit from Amazon retiring, Alexa.com in May? Do you view this primarily as a source of new logo growth? Or do you think this could be a meaningful revenue opportunity? Thanks. 

Or Offer -- Co-Founder, Director, and Chief Executive Officer

I think it's a great thing for Similarweb, it could be two element; One, from traffic and an awareness, and Alexa.com, it was a website owned by Amazon was the big source for linking digital assets. And it was the thing I think that what this website is attracting till today, few millions of [Inaudible] that will need to find a new home to get this ranking and statistic, and they will come to us because we would be the only place to get this data. So this is one is a lot of social awareness. I think this will come to a; Second, I think there is a great amount of book of business.

This will look for a new home and a new alternative. I don't know what to expect, how much I don't have the numbers, but, it was a decent business. That's one for maybe 20, 25 years, I don't know exactly. So I can assume we have a lot of customers, but I think Similarweb is the right place to come to get alternatives.

So I think we are going to have some benefit. I don't know how much.

Ryan MacWilliams -- Barclays -- Analyst

Perfect. And then maybe for Jason. Two part question here. If you quantified what MD Mobile meant for us for this quarter and then maybe into the guide for next year? And you mentioned targeted investments to support new products.

So what does that investment look like for shoper intelligence to capitalize on the early momentum there? Thanks. 

Jason Schwartz -- Chief Financial Officer

Thanks, Ryan. So the MB stand-alone contribution to Q4 or 2021 revenue was not meaningful, was not [Inaudible]. But one of the things that as we're mentioned and we talked about when we announced the acquisition last quarter was that the data moats that creates and the enhancements that it enables us to do on our existing solutions that is pretty impactful. And so we're mentioned in his remarks earlier.

For example, we were able to enhance shoper intelligence and give now demographic data that we couldn't do before. Because now that we were able to leverage that, that data that we get from MD Mobile. And so we're pretty excited about what that does to all of our existing products and the net retention that'll drive that you'll see the ongoing for the sales of these into the existing customer base, as well as new sales to new customers as well. And on the investment side, like I said, we don't break down, for one solution to another solution where the the headcount is going.

But we look at that shoper intelligence as an example, as a place, as a very early days of their growth, of that product's growth.  And we see within the guidance that we've given today some nice contribution from that product specifically. 

Ryan MacWilliams -- Barclays -- Analyst

Appreciate the color. Thanks so much.

Operator

Thank you. The next question comes from the line of Tyler Radke with Citi. Please go ahead.

Tyler Radke -- Citi -- Analyst

Hey, good morning, thanks for taking the question. I wanted to ask you just about what you saw in the quarter in terms of seasonality. I think if I look at the net new ARR contribution last year, Q4 was your biggest quarter. This year, it looks like Q3 came in ahead of Q4.

So anything to call out from a seasonality perspective. And then would you expect with accelerated sales and marketing investments that ARR growth should accelerate next year as well? Thank you.

Jason Schwartz -- Chief Financial Officer

Yes. Tyler, thanks for the question. So, yes, we're seeing, last year was an outstanding Q3 with this this year, Q4, which was great and really, really strong performance, a good end. I think it exceeded all of our expectations, both of what we had guided to and I think you guys had expected.

So we're pretty proud of the results in Q4. And more importantly, the momentum that we see going into this year, which is part of the guidance that  we have updated and issued now for 2022. I think that what we're already starting to see is this favorable unit economics from the investments that we've already made in the sales and marketing teams that hopefully you guys are seeing in terms of the both the revenue growth, and the net retention numbers. I think the raw numbers are again are really outstanding.

And what the customer growth and the the other metrics that we talked about, when you look all across the board, the the customer lifetime value of our customer base is going up. Net retention is growing, pricing is going up, number of customers are going up, number of customers we're expanding to being $100,000 customers are more are going up that is now representing 51% of our overall revenue. When you look at that, we're feeling, that we're seeing that from where we set a really strong performance and ROI on those investments that we've made, and we anticipate that we are going to continue to see that as part of our investment plan.

Tyler Radke -- Citi -- Analyst

Thanks. And just a follow up, I guess, as we think about your long-term guidance here in 2024, 2025. If you think about the investments you need to make on the data acquisition side, do you feel like with this app Annie partnership and MD, you've completed the portfolio? I guess what gives you the confidence that you can go out and make these margin kind of multiyear commitments given just the rapidly evolving landscape and obviously, some of the investments that you've made recently? Thank you.

Or Offer -- Co-Founder, Director, and Chief Executive Officer

And first of all, I think it's a good question, I think that from our side, data moat thing, with this move with MD and app Annie partnership, we fully cover mobile aspect that I think we're probably not going to have a lot of no more expenses down the road to increase this area. So I think around everything else, data expense, I think we're in a good place right now.  So I think looking back into the future, I don't think we've increased it anymore. Jason, maybe you have any thing to add there. 

Jason Schwartz -- Chief Financial Officer

Yeah. I think, Tyler, one other thing too, is that you were asking was about the like, where do we get the confidence to go into these multiyear investment agreements? I think that the other thing there was a big standout this quarter where we're two metrics; One, is that today 33% of our ARR is now struck contracts under multiyear agreement. So it's not only cost to some degree, but it's also a third of our ARR is already contracted a multi-year agreement. And you see that not only that, but you see it also in the 60% growth in the RPO.

So we have to some degree, great visibility into the revenue that we that we see going forward. And that gave us the confidence that we needed in order to raise the street's expectations as to what we think Q1, as well as the full year of 2022 will look like.

Tyler Radke -- Citi -- Analyst

Thank you. 

Operator

Thank you, ladies and gentlemen. We have reached the end of question-and-answer session. And I would like to turn the call back to Or Offer, co-founder and CEO for closing remarks. Thank you.

Or Offer -- Co-Founder, Director, and Chief Executive Officer

So thank you, everyone. Really do appreciate it for you for coming and spending the time. As I said before, we're just getting started and we are very excited into Q1 and 2020 with this great momentum. [Inaudible] Thank you. 

Operator

[Operator signoff]

Duration: 53 minutes

Call participants:

Annie Rosenberg -- Investor Relations

Or Offer -- Co-Founder, Director, and Chief Executive Officer

Jason Schwartz -- Chief Financial Officer

John Byun -- Jefferies -- Analyst

Bhavan Suri -- William Blair and Company -- Analyst

Maya Kilcullen

Jason Helfstein -- Oppenheimer and Company -- Analyst

Pat Walravens -- JMP Securities -- Analyst

Ryan MacWilliams -- Barclays -- Analyst

Tyler Radke -- Citi -- Analyst

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