Financial Performance - Company achieved $411.6 million in Annual Recurring Revenue (ARR) as of December 31, 2024, up from $337.1 million in 2023, representing a growth of 22%[242] - Revenue for the year ended December 31, 2024, was $376.8 million, an increase of $69.1 million or 22% compared to $307.7 million in 2023[279] - Non-GAAP income from operations for 2024 was $45.8 million, compared to $11.6 million in 2023, showing a significant improvement[256] - Free cash flow increased to $35.3 million in 2024 from $0.3 million in 2023, marking a substantial rise[260] - Gross profit for 2024 was $311.3 million, reflecting a 22% increase from $255.3 million in 2023, maintaining a gross margin of 83%[280] Customer Metrics - The number of paying customers increased to approximately 117,000 in 2024 from 108,000 in 2023, indicating a growth of 8.3%[242] - ARR per paying customer rose to $3,522 in 2024 from $3,125 in 2023, reflecting an increase of 12.7%[247] - Average Annual Recurring Revenue (ARR) per paying customer increased to $3,522 as of December 31, 2024, from $3,125 as of December 31, 2023, driven by strong upsell activity[279] - The number of paying customers grew to approximately 117,000 as of December 31, 2024, up from nearly 108,000 as of December 31, 2023[279] Expenses and Costs - Cost of revenue increased by $13.2 million or 25% to $65.5 million in 2024, primarily due to higher integration and data costs, depreciation, and personnel costs[280] - Sales and marketing expenses rose by $17.5 million or 14% to $144.3 million in 2024, with personnel costs being the primary driver[281] - Research and development expenses increased by $22.6 million or 39% to $80.1 million in 2024, largely due to higher personnel costs and increased headcount[282] - General and administrative expenses increased by $1.2 million or 2% to $78.6 million in 2024, primarily driven by higher professional services costs[283] Cash Flow and Investments - Net cash provided by operating activities for 2024 was $47.0 million, resulting from net income of $7.4 million adjusted for non-cash charges of $51.1 million[290] - Cash and cash equivalents as of December 31, 2024, totaled $48.9 million, with short-term investments at $186.7 million and accounts receivable at $9.0 million[286] - Net cash used in investing activities for 2024 was $58.2 million, primarily due to $151.2 million for short-term investments and $25.9 million for acquisitions[292] - Net cash provided by financing activities for 2024 was $1.9 million, consisting of $4.1 million from stock option exercises, offset by $1.6 million in debt repayment[295] - Cash flows from operations and cash on the balance sheet are expected to meet capital needs for at least the next 12 months[288] Strategic Initiatives - The company launched the general availability of the Enterprise SEO solution in 2024, contributing to its product innovation strategy[239] - The company plans to continue investing in product development to enhance its technological capabilities and expand its product offerings[248] - The company expects to continue investing in research and development to enhance its platform and customer experience[267] - The company anticipates fluctuations in cost of revenue as it expands its customer base and invests in data center operations and customer support[265] Other Financial Metrics - The company’s dollar-based net revenue retention rate slightly decreased from 107% in 2023 to 106% in 2024[246] - Stock-based compensation expense as a percentage of revenue increased to 7.4% in 2024 from 5.0% in 2023[256] - Other income, net decreased by $0.2 million to $12.1 million, representing 3% of total revenue for 2024, down from 4% in 2023[284] - Provision for income taxes increased by $9.3 million to $13.0 million, accounting for 3.5% of total revenue, up from 1.2% in 2023, primarily due to increased profits in foreign subsidiaries[285] - Deferred revenue increased by $8.5 million due to the addition of new customers and business expansion[290] Currency and Investments - The company has not engaged in hedging of foreign currency transactions but may evaluate this as international operations expand[314] - The company’s investments are primarily in short-term investments and money market funds, totaling $235.6 million as of December 31, 2024[312]

Financial Data and Key Metrics Changes - Fourth quarter revenue grew 23% year-over-year, with full year revenue growth of 22% [10][34] - Non-GAAP income from operations for Q4 was $11.8 million, with a non-GAAP operating margin of 11.5%, up approximately 150 basis points year-over-year [10][35] - Full year non-GAAP income from operations was $45.8 million, representing a non-GAAP operating margin of 12.2%, up 840 basis points compared to 2023 [10][35] - Cash flow from operations was $11.9 million in Q4 and $47 million for the full year, with free cash flow of $9.5 million in Q4 and $35.3 million for the full year [35][36] Business Line Data and Key Metrics Changes - Annual recurring revenue (ARR) for Q4 grew 22% year-over-year to $411.6 million, with enterprise-sized customer ARR particularly strong [36] - The number of customers paying over $50,000 increased 82% year-over-year to 336, while customers paying over $10,000 grew 40% year-over-year to over 4,300 [37][39] - The average ARR per paying customer grew to over $3,500, up nearly 13% year-over-year [36][37] Market Data and Key Metrics Changes - The company closed over 40 enterprise SEO deals in December alone, with more deals in Q4 than the rest of the year combined [12][38] - The enterprise customer segment showed strong growth, with 144 enterprise SEO customers by year-end [38] Company Strategy and Development Direction - The company plans to enhance its product portfolio with more enterprise capabilities, focusing on AI-driven offerings [14][41] - The strategy includes increasing paying customers across all segments and expanding average ARR per customer [41][44] - The company aims to lead in AI optimization, launching a new AI optimization solution in closed beta in the first half of 2025 [16][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory and ability to execute, highlighting strong positive momentum continuing into 2025 [19][45] - The outlook for Q1 2025 expects revenue in the range of $103.9 million to $104.7 million, representing approximately 22% year-over-year growth [42][44] - For the full year 2025, revenue guidance is set between $448 million and $453 million, translating to approximately 20% growth at the midpoint [44] Other Important Information - The company has appointed Bill Wagner as the new CEO, effective March 10, 2024, with Oleg Shchegolev transitioning to Chief Technology Officer [18][21] - The company is focused on maintaining efficiency and profitability while investing in growth opportunities [41][90] Q&A Session Summary Question: Thoughts on DeepSeq and its impact on the roadmap - Management noted that technology democratization is beneficial for consumers and enhances freemium models, with DeepSeq contributing to lower inferencing costs [48][50] Question: Changes in macro environment and momentum - Management indicated no significant changes in the macro environment, with continued softness in the lower end of the market [53][55] Question: Reason for CEO change and initial priorities - The leadership change is seen as timely to address new opportunities, with a focus on aligning growth among the user base and enterprise opportunities [59][62] Question: Downtick in net revenue retention (NRR) - NRR was reported at 106%, with softness in the lower market impacting the metric, but management expects it to remain strong moving forward [64][66] Question: Details on AIO and its integration - AIO will be tested for pricing and packaging, with an enterprise version expected soon [71][73] Question: Strong month of December for enterprise deals - The strong performance was attributed to ongoing investments and the sales organization ramping up productivity [75][77] Question: Difference in ARPU between existing and new enterprise customers - There was no significant difference in ARPU between existing and new customers, with strong success seen across both segments [93][95] Question: Guidance for fiscal 2025 and macro outlook - The company maintains a prudent outlook for 2025, awaiting more concrete economic indicators before adjusting guidance [99][101] Question: Functionality and pricing of new AIO features - Initial functionality will focus on measuring visibility in AI-powered search, with pricing to be determined based on customer feedback [103][105] Question: Growth in the $10K customer segment - Growth was driven by both enterprise contributions and enhanced sales strategies targeting leadership within organizations [107][109]

Semrush Holdings (SEMR) Q4 2024 Earnings Call February 27, 2025 08:30 AM ET Company Participants Brinlea Johnson - Head of Investor RealtionsOleg Shchegolev - Co Founder and Chief Executive OfficerWilliam Wagner - CEOEugene Levin - PresidentBrian Mulroy - Chief Financial OfficerArti Vula - Equity Research AssociateElizabeth Porter - Executive DirectorJackson Ader - Managing DirectorScott Berg - Managing Director Conference Call Participants Luke Horton - VP - Senior Equity Research Analyst Operator Good mor ...

分组1 - SEMrush Holdings, Inc. reported quarterly earnings of $0.07 per share, matching the Zacks Consensus Estimate, but down from $0.08 per share a year ago [1] - The company posted revenues of $102.64 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 1.07% and up from $83.39 million year-over-year [2] - SEMrush shares have increased approximately 26.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.3% [3] 分组2 - The earnings outlook for SEMrush is favorable, with a current consensus EPS estimate of $0.25 on revenues of $104.57 million for the upcoming quarter and $0.37 on revenues of $452.85 million for the current fiscal year [7] - The Internet - Software industry, to which SEMrush belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a positive outlook for stocks in this sector [8]

Revenue Growth - Fourth quarter revenue reached $102.6 million, representing a 23% year-over-year increase[5] - Full year revenue totaled $376.8 million, up 22% year-over-year[5] - Annual Recurring Revenue (ARR) as of December 31, 2024, was $411.6 million, reflecting a 22% year-over-year growth[9] - For Q1 2025, the company expects revenue in the range of $103.9 million to $104.7 million, representing approximately 22% year-over-year growth[16] - The full year 2025 revenue guidance is projected to be between $448 million and $453 million, indicating a growth of approximately 20% year-over-year[16] - Revenue for Q4 2024 was $102,642,000, a 23% increase from $83,394,000 in Q4 2023[35] - Gross profit for the fiscal year 2024 reached $311,338,000, up from $255,348,000 in 2023, representing a 22% growth[35] Profitability Metrics - Non-GAAP income from operations for Q4 was $11.8 million, compared to $8.3 million in the prior year period[9] - Non-GAAP operating margin for Q4 was 11.5%, an increase of 150 basis points year-over-year[12] - Net income attributable to Semrush Holdings, Inc. for Q4 2024 was $3,345,000, compared to $6,874,000 in Q4 2023, indicating a decrease of 51%[35] - Non-GAAP income from operations for Q4 2024 was $11,819,000, a 42% increase from $8,308,000 in Q4 2023[36] - Free cash flow for Q4 2024 was $9,522,000, which is a 7% increase from $8,880,000 in Q4 2023[36] - Net income for the fiscal year ended December 31, 2024, was $7,375 million, a significant increase from $950 million in 2023[40] Customer Growth - Approximately 117,000 paying customers were reported as of December 31, 2024, an 8% increase from the previous year[9] - The company closed over 40 SEO Enterprise deals in December 2024 alone, indicating strong demand for its enterprise solutions[11] Cash Flow and Assets - The company achieved a net cash provided by operating activities of $11.9 million in Q4 and $47.0 million for the full year 2024[5] - The company reported a net cash provided by operating activities of $46,996,000 for the fiscal year 2024, compared to $7,986,000 in 2023, indicating significant operational cash flow improvement[36] - Total current assets increased to $276,184,000 as of December 31, 2024, compared to $265,554,000 in 2023, reflecting a growth of 4%[38] - Total assets rose to $390,943,000 as of December 31, 2024, up from $331,490,000 in 2023, marking a 18% increase[38] Stockholder Equity and Compensation - Total stockholders' equity attributable to Semrush Holdings, Inc. increased to $256,604,000 in 2024 from $219,149,000 in 2023, a growth of 17%[38] - Stock-based compensation for the fiscal year 2024 totaled $27,999,000, compared to $15,337,000 in 2023, representing an increase of 83%[35] - Stock-based compensation expense increased to $27,999 million from $15,337 million year-over-year[40] - Proceeds from the exercise of stock options amounted to $4,118 million, compared to $2,240 million in the previous year[40] Investment Activities - Cash paid for acquisition of assets and businesses was $25,902 million, up from $5,066 million in 2023[40] - Net cash used in investing activities was $58,222 million, compared to $29,068 million in the prior year[40] Other Financial Metrics - Total depreciation and amortization expense increased to $10,068 million from $6,790 million year-over-year[40] - Deferred revenue was $8,479 million, slightly down from $8,755 million in 2023[40] - The company experienced a decrease in cash equivalents and restricted cash of $9,788 million, compared to a decrease of $20,917 million in the prior year[40]

Company Overview - SEMrush Holdings, Inc. (SEMR) shares increased by 10.7% to $14.75 in the last trading session, with a higher-than-average trading volume [1] - The company is experiencing strong growth in annual recurring revenue, effective upselling and cross-selling strategies, and heightened demand for its enterprise Search Engine Optimization (SEO) products [1] Earnings Expectations - SEMrush is projected to report quarterly earnings of $0.07 per share, reflecting a year-over-year decline of 12.5% [2] - Expected revenues for the upcoming quarter are $101.58 million, which represents a 21.8% increase compared to the same quarter last year [2] Stock Performance Insights - The consensus EPS estimate for SEMrush has remained unchanged over the past 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] - SEMrush currently holds a Zacks Rank of 2 (Buy), suggesting positive market sentiment [3] Industry Context - SEMrush is part of the Zacks Internet - Software industry, which includes other companies like Riskified (RSKD) [3] - Riskified's consensus EPS estimate for its upcoming report is $0.08, showing a year-over-year increase of 14.3%, and it currently holds a Zacks Rank of 3 (Hold) [4]

Group 1 - The analyst upgraded the rating of Semrush Holdings (NYSE: SEMR) from hold to buy, indicating a bullish outlook on the company's performance [1] - The analyst's investment strategy incorporates fundamental, technical, and momentum investing approaches, suggesting a comprehensive analysis of market trends [1] - The article serves as a platform for tracking investment ideas and connecting with like-minded investors [1] Group 2 - There is no disclosure of any stock, option, or derivative positions in the companies mentioned, indicating an unbiased perspective [2] - The article expresses the author's personal opinions and is not influenced by compensation from any company [2] - Seeking Alpha clarifies that past performance does not guarantee future results, emphasizing the independent nature of the analysis [3]

Revenue Growth - Total revenue for the three months ended September 30, 2024, was $53.5 million, up from $45.2 million for the same period in 2023, representing an increase of approximately 18.2%[145] - Annual Recurring Revenue (ARR) as of September 30, 2024, reached $400.7 million, an increase from $322.8 million as of September 30, 2023, reflecting a growth of approximately 24.1%[148] - In Q3 2024, the company reported revenue of $97,410,000, a 23.7% increase from $78,718,000 in Q3 2023[180] - Revenue for the three months ended September 30, 2024, was $97,410,000, representing a 24% increase from $78,718,000 in the same period of 2023[184] Customer Metrics - The number of paying customers increased to over 117,000 as of September 30, 2024, compared to more than 106,000 as of September 30, 2023, indicating a growth of approximately 10.4%[148] - The company served over 117,000 paying customers as of September 30, 2024, with no single customer accounting for more than 10% of total revenue[166] - The number of paying customers increased from over 106,000 as of September 30, 2023, to over 117,000 as of September 30, 2024[184] Financial Performance - Free cash flow for the nine months ended September 30, 2024, was $25.8 million, compared to a negative free cash flow of $(8.5) million for the same period in 2023[159] - Net cash provided by operating activities as a percentage of revenue was 12.8% for the nine months ended September 30, 2024, compared to (1.6)% for the same period in 2023[160] - Non-GAAP income from operations for the nine months ended September 30, 2024, was $33.98 million, significantly up from $3.34 million for the same period in 2023[161] - The net cash provided by operating activities was $35,063,000 in 2024, compared to a net cash used of $(3,567,000) in 2023[163] - Net income for the three months ended September 30, 2024, was 1% of revenue, down from 5% in the same period of 2023[183] - The net income attributable to Semrush Holdings, Inc. for Q3 2024 was $1,094,000, compared to $4,215,000 in Q3 2023[180] Operating Expenses - The cost of revenue for Q3 2024 was $17,063,000, up from $13,032,000 in Q3 2023, representing a 31% increase[180] - Total operating expenses for the three months ended September 30, 2024, were 81% of revenue, compared to 80% in the same period of 2023[183] - Research and development expenses increased to $22,183,000 in Q3 2024 from $14,075,000 in Q3 2023, reflecting a 57.7% rise[180] - Research and development expenses for the three months ended September 30, 2024, increased by $8,108,000, a 58% increase compared to the same period in 2023[192] - Sales and marketing expenses for the three months ended September 30, 2024, were $35,689,000, a 19% increase from $30,094,000 in the same period of 2023[189] - General and administrative expenses for the three months ended September 30, 2024, were $20,770,000, an 11% increase from $18,769,000 in the same period of 2023[194] Cash and Investments - As of September 30, 2024, the company had cash and cash equivalents of $45.1 million and short-term investments of $187.8 million[203] - Net cash used in investing activities for the nine months ended September 30, 2024, was $51.1 million, primarily due to $136.8 million in purchases of short-term investments[211] - Net cash provided by financing activities for the nine months ended September 30, 2024, was $2.0 million, consisting of $3.7 million from the exercise of stock options[213] - The company believes existing cash and short-term investments will be sufficient to meet operating and capital needs for at least the next 12 months[204] Strategic Plans - The company plans to continue investing in product development to enhance its technology and expand its product offerings[153] - The company expects to continue investing in research and development to enhance its platform and customer experience[171] - The company anticipates fluctuations in its cost of revenue as it continues to expand its customer base and invest in infrastructure[168] Other Financial Metrics - The dollar-based net revenue retention rate was approximately 107% as of September 30, 2024, consistent with the rate at the end of 2023[150] - ARR per paying customer increased to $3,414 as of September 30, 2024, up from $3,022 as of September 30, 2023, representing an increase of approximately 13%[152] - Non-GAAP income from operations margin improved to 12.4% in 2024 from 1.5% in 2023[162] - Total stock-based compensation expense for Q3 2024 was $7,575,000, up from $4,203,000 in Q3 2023, indicating an increase of 80.5%[181] - The provision for income taxes for the three months ended September 30, 2024, was $3,899,000, representing a 512% increase from $637,000 in the prior year[200] - The increase in other income for the nine months ended September 30, 2024, was primarily due to an increase in foreign currency exchange gains and interest income[199] Market Presence - The company operates subsidiaries in multiple countries, including the U.S., Spain, and Germany, indicating a broad market presence[144] - The company is exposed to foreign currency exchange risk, with a potential $7.7 million gain or loss from a 10% change in the euro relative to the U.S. dollar[222]

Semrush Investor Presentation November 2024 Safe Harbor This presentation will contain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements concerning our expected future business and financial performance and financial condition, expected growth, adoption and existing and future demand for our existing and any new products and features, our expected gro ...

Financial Data and Key Metrics Changes - The company reported revenue of $97.4 million, representing a 24% year-over-year increase [6][26] - Non-GAAP operating income was $12.1 million, with a non-GAAP operating margin of 12.4%, up from 9.5% in the prior year [7][33] - Annual recurring revenue (ARR) grew 24% year-over-year to $401 million [30] - The average ARR per paying customer exceeded $3,400, up 13% year-over-year [31] Business Line Data and Key Metrics Changes - The company has 8,000 enterprise accounts, over 17,000 mid-market accounts, and over 21,000 marketing agencies [27] - The enterprise product has secured major deals with clients such as Salesforce, HSBC, and Samsung, indicating strong demand [12][24] - The company has seen a significant increase in customers paying over $10,000 and $50,000 annually, with over 4,000 customers now in the former category [28] Market Data and Key Metrics Changes - The total addressable market (TAM) has increased from $13 billion at the time of the IPO to approximately $40 billion [9] - The company is experiencing strong demand for its enterprise SEO products, which are expected to drive future growth [12][24] Company Strategy and Development Direction - The company aims to leverage profitability to invest in new products and enhance cross-sell and upsell capabilities [15] - The acquisition of Third Door Media is part of the strategy to expand reach and provide industry-related content [18] - The company is focused on maintaining a 20% compound annual revenue growth rate over the near term [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities for 2025 and beyond, citing a strong foundation built in 2024 [7][15] - The company anticipates continued strong demand for its enterprise products, which are expected to enhance net revenue retention rates [48] Other Important Information - Cash and cash equivalents at the end of the quarter were $233 million, reflecting a slight increase from the previous quarter [34] - The company raised its full-year 2024 revenue guidance to a range of $375 million to $376 million, up from the previous range [36] Q&A Session Summary Question: Insights on AI capabilities and pricing strategy - Management discussed the positive reception of AI capabilities and various monetization strategies for core and enterprise plans [39][44] Question: Net Revenue Retention (NRR) expectations - Management confirmed NRR at 107% and highlighted the importance of segment analysis in understanding this metric [45][48] Question: Interest in SEO following Google's AI updates - Management noted increased interest from marketers in optimizing content for new search features introduced by Google [50][51] Question: Enterprise product penetration and migration - Management reported that over 90 enterprise accounts have migrated to the new SEO solution, with expectations for continued growth [63] Question: Consolidation of SEO tools for enterprises - Management explained the goal of providing an integrated solution to replace disparate tools used by enterprises [70][72]