Jason Schwartz
Thanks and everyone joining us on the call today to discuss our fourth quarter results. I'll provide highlights of our financial performance, and then we'll open up the call to questions. We generated $65.6 million of revenue in Q4, A 16% increase relative to the fourth quarter of 2023. For the full year of 2024, we generated $249.9 million of revenue representing 15% growth over 2023.
Revenue from our $100,000 ARR customers increased and represents 61% of our overall ARR. The number of $100,000 ARR customers grew to 405 at the end of '24, increasing 11% year over year.
As this customer base grew, the average ARR per customer increased 7% year over year to approximately $376,000. The increase in the average annual revenue per customer was driven by further product adoption and expansion by our customers. We are proud that 49% of our ARR is contracted under multi-year contracts, up from 42% last year. We believe this demonstrates the importance and critical nature of our data to our customers, and we expect these multi-year contracts will contribute to improved retention rates ahead.
Our remaining performance obligations or RPO total $246 million at the end of Q4, up 26% year over year. We expect to recognize approximately 69% of total RPO as revenue over the next 12 months. Our operational performance in the quarter and the full year demonstrates our continued commitment to disciplined execution, and we delivered a non-GAAP operating margin of 4% in Q4, a 6th consecutive quarter of non-GAAP operating profits.
For the full year, we delivered a non-gap operating margin of 6% and 800 basis point improvement relative to 2023 and our first full year of operating profit on a non-GAAP basis. We generated $2.7 million of normalized free cash flow in the in the quarter, [1/5] consecutive quarter of positive free cash flow, and $27.7 million in 2024, reflecting an 11% free cash flow margin. We expect to continue to generate positive free cash flow for 2025 as well.
Turning to our outlook for 2025, for the full year of 2025, we expect total revenue in the range of $285 million to $288 million representing 15% year over year growth at the midpoint of the range. In Q1 2025, we expect total revenue in the range of $66 million to $66.5 million. For the full year, we expect our operating profit to be between $1 million and $4 million.
non-GAAP operating loss for the first quarter of 2025 is expected to be in the range of $1million to $1.5 million. Our guidance reflects increased operating expenses to accelerate our hiring to capture the opportunities presented by the growing demand for our data and solutions as Or mentioned.
After delivering a year of accelerating revenue growth, non-gap operating profit, and positive free cash flow, we remain focused on delivering profitable growth over time as well as achieving our long-term profit and free cash flow targets.
And with that, Or and I are ready to answer your questions.
Operator
(Operator Instructions)
Surinder Thind, Jefferies.
Surinder Thind
Thank you. Can you provide a little bit more color on this incremental spend? I'm estimating it's about $20 million versus expectations here. How much of a debt is towards the go to market strategy? How much is that towards R&D, and how should we think about the cadence of hiring as we look across the year?
Or Offer
I think the majority of the spend is, for accelerating go to market and ramping it up. And we just see, also nice investment in in the R&D, but I think also the forks, pressure that we saw in the Q4 and Q1 is also part of that, $20 million that you're talking about.
Surinder Thind
And then just the cadence of the spend like how did you come up with that number in terms of just thinking about was it that you just wanted to keep, margins kind of positive at this point, like why not more, why not less at this point?
Or Offer
Yes, I think it's a great question. So, our philosophy was always that we are pivoting our company to profitability and we're going to stay profitable moving forward. As long as we're going to see good opportunity to accelerate our growth. We're still a small catch company, ending up the year with close to $250 million meaning that we have a lot of markets to capture.
And we did see a lot of strong demand on all the fun. So, we made a decision to do a big investment and how to capture this opportunity as long as we are a pro-growth and keeping the company profitable on the free cash flow basis and the EBITA for the year.
And we can maximize the opportunity as we do see that we can bring similar work to be one of the top growing company in the public market with us and we want to catch it.
Surinder Thind
Got it. And then I guess it's my second or the follow up question here. Can you talk a little bit about the growth outlook in terms of the midpoint being 15% year over year? That seems like it's, roughly the same as what it was in 2024. So with the incremental spend, is the idea that you're expecting to see an acceleration growth in 2026 then, or?
Is there expectation of what, how do we think about the return or what we should expect in terms of the acceleration that we should expect and maybe why is there not perhaps higher expectations for growth given all the spend in in 2025?
Or Offer
I think it's an excellent question, and you're right. I think there's two elements that That this is why we decided to come with the 15 as a starting line for the year. What we did see is that because we are arming our go to market and hiring a lot of people during the end of Q4 and still continue hiring them and in Q1.
And a lot of our sellers and managers are spending time with interviewing ramping people, and also going through change management so we replace managers and all performance in Q4 and then ramp up people. So, we did see a little bit softness with the execution in Q4 now going into Q1.
And on top of that, we have the for pressure and we have a global company, around 50% of the revenue come outside of the US. We saw, a head headwind from the forex on Q4 that hurt the growth and you know that you start the year already below so you need to close that GAAP then you saw another headwinds on the forex Q1, meaning that the Q1 is a little bit soft and we died for 12%, but you see we are very confident on the 15 for this year, meaning that.
During the next quarter we're going to see an acceleration of the growth that means that we are expecting a much more growth rate for the Q4 as an ex rate for in 2026. So, we're going to see a significant increasing growth in the second part of the year.
And this is why we decided to get 15 as the starting point.
Surinder Thind
Okay, thank you, that's helpful on understanding the near term dynamics.
Operator
(Operator Instructions)
Thank you.
Ryan MacWilliams, Barclays.
Ryan MacWilliams
Hey guys, thanks for taking the question. Maybe for Jason, how did revenue results in the 4th quarter before versus your expectations into the quarter? It looks like you guys’ kind of came in around the high end of your guide, and usually you do a little higher than that. And then can you quantify any one-time impacts to consider for the 4th quarter, like if there was an FX impact, what that looked like either on the revenue or profitability side.
Jason Schwartz
Sure, thanks, Ryan. So, as Or mentioned, we saw, some of the FX pressure hitting in Q4 and part of that is built into the guide. It's about 1% to 2% on a run rate, so that is built into some of what you see in in achieving the high end of our guide for Q4 as well as the guide that we have going forward.
Ryan MacWilliams
Okay, and then just on the 4th quarter, was there any impact of that quarter and then I guess how would you characterize the quarter in general versus your expectations into the quarter?
Jason Schwartz
So I think that again from an overall perspective it was a it was a good quarter, you see, acceleration in terms of the larger customers both in growth of 11% year over year in customer count, the ARR average cost revenue from those customers up 7%. Seeing the NRR for that group pick up another 1%.
We think that that was very strong indications of what was going on, as well as some of these large, relationships that, one of which we had shared previously while we were on the road, of the S&P, the second one, which, sorry, the second one which we announced just today with Bloomberg, a multi-year relationship as well.
I think those things are good indications as to what we have been working on and continued that that growth. So, we were pleased with the where it was. We would have, the FX headwinds are something that we are, dealing with in terms of the guidance going forward, but we feel comfortable with the overall momentum that we're seeing in the business.
Ryan MacWilliams
I'll leave it there. Appreciate the color. Thanks guys.
Operator
(Operator Instructions)
Arjun Bhatia, William Blair.
Arjun Bhatia
Perfect, thank you guys.
Or maybe one for you on the AI investments you're making, I know you mentioned a lot of us go to market, but on the product side, I think you mentioned you're investing in data collection and forecasting, to get ready for the Gen AI kind of revolution.
Can you expand on that a little bit because I had assumed that. The platform, the way it exists today, has a lot of those capabilities, and can be maybe more easily pivoted for Gen AI, but it sounds like there's some more change on the platform required. So, what are you changing and what's evolving on the product side?
Or Offer
Yes. Hi, Arjun. Thank you for the questions. There's two fronts now that we need to make investment.
Basically, we need, we want to integrate AI in order to accelerate the insight coming from our data to make our customer life easier to discover value and get why from the platform. So we're starting a really amazing innovation with that, we're basically putting agents. On top of our platform and, automatically generating insights.
So, we shifting a lot of the teams to start working on those innovation and we don't want to stop the regular cadence. We had to do some investment at that front to the development to make our platforms much better for the majority of the users.
This is the first front. The second front as we are getting more and more demand for brands that want to get better visibility on the change, chatbots and Gen AI's having the consumers and the way they search consumer information and making purchase decisions.
And in order to do that we need to collect and analyze much more granular data around chat conversation and the different channels and basically introducing what I will call Gen AI intelligence that brands can understand the sentiment and the impact each one of those chatbots have on their brand and purchase decision.
So, this is some investment that we are doing now to collect this data, productize that we can start present into customers more scalable way. So, this is another fun of investment that we are doing.
Arjun Bhatia
Okay, Understood, thank you. And then, Jason, one for you again on the revenue guidance.
Did you, it seems like there's a few changes on go to market that you're incorporating in, but are you, is it fair to say this is more, this is a more conservative outlook? I'm 25 than you've given historically.
Are the changes is driving any kind of Change in in in your guidance philosophy as you maybe wait to see how the year unfolds in in in the first half year before growth really starts to pick up like what did you consider when you were giving the revenue guidance?
Jason Schwartz
Sure Arjun, Yeah, as we like to give guidance we know we can meet and we looked at the with the backlog that we have as well as the some of the macro like the FX impact and we built all that into to our assumption as we mentioned, when you look at the guide which starts at a midpoint of 12% for Q1.
And ends with a 15% for the full year that mathematically means that we are expecting to have a strong backhand of the year that is already built into our philosophy, which is exactly what we've been talking about, that we are accelerating the investment in our go to market teams in order to drive that contribution happening in the back end of the year, and we think this is the right way to approach that.
Arjun Bhatia
Okay, got it. Thank You
Operator
(Operator Instructions)
Luke Horton, Northland Securities.
Luke Horton
Yeah, hey guys, just wanted to touch on gross margin, which is down sequentially here. Could you just talk a little bit about what drove this, and then is this kind of a level, you see it being added across 2025 as you guys are investing in the business?
Or Offer
Yeah, So, I think this a little bit decrease in gross in margin is to mostly invest in this new data capturing for the Gen AI. So, we need to investment and then on top of that we also introduce two data sets of intelligent. And add intelligent this is to a position we did in 2024.
So, we are now integrating those data sets. So, every time we adding more data sets, it's increasing with the gross margin, but we expect that to. And get better over the year.
Luke Horton
Got it. And then just on the Bloomberg customer announcement, seems like a very nice win. I was just wondering if this is going to be like an add on that people will be paying separately.
As an add on for that service or if this will be just embedded into everyone who has a Bloomberg terminal and that this is kind of a fixed contract for you guys or if it has anything to do with people adding that on to their Bloomberg.
Or Offer
Yeah, so we're very proud of this, engagement. It's many years of dialogue and Bloomberg testing our data and getting to the conclusion that we are the number one digital data providers of choice, and this is why they decided to go with us and it was a long discussion and we feel very proud about this relationship.
And what I remember that they will add us as they will take small portion of our data that represents digital growth and we will add it as part of the alternative data solution for the subscribers and I'm not sure if it would be free to the subscribers or with little bit premium.
But the consumer will be able to get exposed to the concept of digital market data and how it can predict public companies' growth. And if they would love and use that, they can come to a similar web and buy more advanced solution that we are offering with our stock intelligent. So, what will we see in Bloomberg is a small part of our capabilities and for I think for all of the subscribers.
Luke Horton
Got it. Makes sense. Awesome well thanks for taking the questions. Guys.
Operator
(Operator Instructions)
Jason Helfstein, Oppenheimer.
Jason Helfstein
Hey everybody, so just really, it's kind of like one question. How do you think about the timing of the payback on the increased investments again around like AI and go to market, should we think about target margins for '26 and '27, or do you want us to think about it like your progress to a rule of 40 scale and then can you kind of be maybe a bit specific on.
You know how you see yourself progressing over the next few years is obviously given that everyone's surprised by the level of investment, but you obviously are confident around the payback. Thank you.
Or Offer
Yeah, we are confident. Thank you for the question, Jason. We are confident on demand because it solve the hardest part that is demand, and it's there and we just need to approach and it.
And what we're doing now is just changing the way we are growing. We are focusing more on growth, that's still a maintaining possibility. I think that last year we were super proud, we I think 15% growth and 11%, and free cash flow and going into this year, we're just going to change the balance to, and be more on the growth side.
And I think we can see the return in the second part of the year, why of this investment and going into 2026, we are positioning the company to be top-notch growth software. Company and of course profitable and would start to work on increasing possibility.
And to probably double digits around 2026.
Operator
(Operator Instructions)
Scott Berg, Needham and Company.
Scott Berg
Hi everyone, thanks for taking my questions, Or, I wanted to focus on a comment you had early in the Q&A that you did see some softness in your 4th quarter execution.
Can you help elaborate on that a little bit and, I guess, as you look at that softness, is it corrected for in Q1 or how do we think about the timing to returning to a more normalized sales case? Thanks.
Or Offer
Yeah, we start, seeing, improvement. We know we have an amazing new [CRO] and which came over from, Nielsen IQ, and as driving, good changes and doing some great change management in order to send the foundation for the growth, and So, Removing low performance, getting new store managers, and increasing the hiring.
Yes, we saw that it creates some, more noise in the go to market and we're able to stay bit. And we're seeing better performance now in the Q1. Funny enough, all across our team around the world, and the seller has got too many meetings.
And from the high demands that it starts hurting the win rate. So, we were not hiring fast enough in Q4 and we now also closing the GAAP in Q1. Yeah, so we do see strong performance now to hitting the floor.
Scott Berg
Very helpful. And then Jason, as we look at your guidance for this year, this is kind of a follow up to the last question. Your revenue growth guidance suggests the rest of the year accelerates from the Q1 guidance here today.
First of all, is that an accurate statement? I assume that it is given how the math works, but the two is your confidence high in in that acceleration relative to what you're seeing on the sales execution side here in Q1.
Jason Schwartz
And So, on the first question, the answer is yes, like you said, that's the way the math works, So, we do see that acceleration coming in the back end of the year. We also see, pipeline and so we have some visibility, that gives us the confidence that we, build the guidance and like I like to say we'd like to give guidance we know we can meet.
Scott Berg
Thanks again.
Operator
(Operator Instructions)
Adam Hotchkiss, Goldman Sachs.
Adam Hotchkiss
Great, thanks so much for taking the questions.
You talked a lot about this initiative, the monetized brands that are navigating shifts in consumer behaviour. I just want to get an update on how that's trending, particularly your conversations into the beginning of the year, how our brands sort of evolving to the evolving Gen AI environment and how a similar web plan to address that.
Or Offer
Yeah, I think more and more brands start to look out there for more visibility about how much consumers are swing chatbots about their brand or about their industry and how the answers that chatbots are giving are changing the decision of purchase they're going to make.
And they want to understand if this sentiment is positive on them or negative or if the tables are bringing them the right choice. And how they can impact the chatbots to understand the resource the chatbots are using in order to generate those answers.
And this is that it's probably. Only similar can bring maybe a very few companies in the world can give the visibility about what people asking the chatbots what are those answers and how they're impacting the consumer journey. So, we are positioned, I think that the world to supply those answers.
That are becoming more and more important to brand as the consumer behaviour change and they start using more and more of those chatbots for purchase decisions.
Adam Hotchkiss
Okay, great, that's helpful. And then could you just give us an update on the large language model opportunity? I know this involves quickly and you've signed a couple of eight figure deals here, but I'm curious how you're thinking about monetization potential now that we're a couple of months away from some of those announcements.
Have you had any incremental conversations with folks that give you confidence around monetization? How should we think about that?
Or Offer
Yeah, I think there is not a lot of companies with numbers that's trying to build those chatbots, probably.
Less than 100 maybe single digit double digit. It's not a big market. It's a lot of Lots of investments they need to do in order to build those tables so this market is not big, but when they are going into those adventure to boats, they will need the best data to feed those LLN
And when they want to choose the best data providers like Bloomberg, they all ended up engaging with similar weathers. They recognize us as the leader for digital market data. They know that we are the best one to provide this data.
And so it's, low level engagement because there's not a lot of them, and but if we have, it's great engagements.
Adam Hotchkiss
Okay, thank you very much.
Operator
(Operator Instructions)
Patrick Walravens, Citizens JMP.
PATRICK WALRAVENS
Oh, great. Thank you. And thanks for all the cover on this. .
Forgive me, or if I go back to Q4, I mean how sort of a series of questions here how soft was the execution in Q4? Like was it a pretty big me by the sales team? When's the last time you guys had, a soft execution quarter?
Was Susan's surprise, right? And when you broke it down after, where, what caused it, right? So, like, we don't usually hear that too many leads or too many meetings is the reason for mess, right? You hear things like customers didn't want to commit, So, if you could drill into that more, that would be great.
I just think the reason it's important is because. You're investing on the back of that, so we just want we want to sort of close that. Get a better understanding of why you decided to invest sales and marketing if Q4 wasn't very good, right? Thanks so much.
Or Offer
Yeah, of course, and I think it's a great question. Thank you for raising it at that. I think that Q4 was okay, wasn't great. Usually, our Q4 is amazing if you look historically in 2023 and 2022, and Q4 was okay. Like it's, it was solved. I wish it was better, but it was okay.
And we had some areas in the business when we, the softness were stronger mostly because of managerial and low performance and the decision that wasn't been cleaned before. And in Q4 we took the opportunity to improve and do improvement around the market and we did some change management in email.
And it was behind the change management in in Japan when they were behind the numbers and I think this is also was impacting, the performance a bit. And but the new people, we hire their own place and they look looking good. So I'm fully confident and I see the numbers and we are, investing because we publish on the what we see.
PATRICK WALRAVENS
That's super helpful thank you.
Operator
(Operator Instructions)
Ashley Kim with (City).
Hi Or & Jason. Thanks for the question. Just wanted to ask about the 15 customer contracts that were 7 figures. Could you, kind of give more color on whether the deals grew into that or whether any anywhere new lands and how many of those were AI related?
Or Offer
Yeah, Hi, Ashley, first of all, thank you for asking this question because I think it's important to discuss this great indication.
This is a record high quarter (inaudible) for closing 7 figures a deal, and as you saw in the past, a few quarters are reporting 8 figures engagement. All of those indicate that we are now ready to increase our engagement with our customers.
And most, the majority of those are 15, 7 figures and or expansion. It's meaning that we have more and more customers that are now ready to invest more with us.
And we from our side are now ramping up and more senior am on the post to know to negotiate and expand and really great business of customers that similar web have and you can also see that with the multi-year increase of our customers.
We are now going into this year with almost 50% of the book of business is multi-year. This is a very strong indication. That the customer are trusting our data and want a long term relationship. I think this 15 bills showing you that a lot of them are ready to invest more with us.
We from our side just need to hire more executive, more experienced sales and people on the both side in order to drive this expansion and improving our going forward.
Thank you.
Operator
Thank you. There are no further questions at this time. I'd like to hand the floor back over to management for any closing remarks.
Or Offer
Yeah, thank you everyone for the question. We have the confidence for a really great year, the end of 2024 with a really amazing results, and we are looking very positive going into this year.
And good luck to all of us. Bye-bye.
Operator
This concludes today's conference. You may disconnect your lines at this time.
Thank you for your participation.
