Financial Data and Key Metrics Changes - Fourth quarter revenue grew 23% year over year, with full year revenue growth of 22% [7][24] - Non-GAAP income from operations for the fourth quarter was $11,800,000, resulting in a non-GAAP operating margin of 11.5%, up approximately 150 basis points year over year [7][24] - Full year non-GAAP income from operations was $45,800,000, with a non-GAAP operating margin of 12.2%, up 840 basis points compared to 2023 [7][24] - Cash flow from operations was $11,900,000 in the fourth quarter and $47,000,000 for the full year [24] - The company ended the year with cash and cash equivalents of $235,600,000, up $2,700,000 from the previous quarter [25] Business Line Data and Key Metrics Changes - Annual recurring revenue (ARR) for the quarter grew 22% year over year to $411,600,000, with enterprise ARR particularly strong [25] - 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 [25][26] - The average ARR per paying customer grew to over $3,500, up nearly 13% year over year [25] 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 [9][26] - The dollar-based net revenue retention at the end of the fourth quarter was 106%, with expectations for it to remain strong [27] Company Strategy and Development Direction - The company plans to evolve its platform further in 2025, focusing on enhancing product depth across various digital marketing channels [9][10] - There is a strong emphasis on AI-driven offerings and expanding enterprise capabilities [10][27] - The company aims to maintain a focus on increasing paying customers across all segments and enhancing profitability [27] 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 [13][31] - The macro environment has shown some softness in the lower end of the market, but no significant changes were noted in the overall business momentum [38][72] - The company is taking a prudent approach to its 2025 outlook, maintaining a cautious view while observing economic indicators [72] Other Important Information - Oleg Shchegolev will transition to the role of Chief Technology Officer, with Bill Wagner appointed as the new CEO [12][15] - The company is focused on integrating AI capabilities into its offerings, with plans to launch a new AI optimization solution in closed beta [11][21] Q&A Session Summary Question: Impact of DeepSeq on roadmap and potential for lower inferencing costs - Management noted that technology democratization is beneficial for consumers and makes freemium models viable, with DeepSeq contributing to cost-effective AI solutions [34][36] 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 [38] 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 and prosecuting enterprise opportunities [43][44] Question: Downtick in net revenue retention - The slight decrease to 106% was attributed to softness in the lower end of the market, but management expects it to remain strong [46][47] Question: Details on AI optimization (AIO) and pricing - AIO will be tested for pricing and packaging, with an initial product priced at $99 per month [53][54] Question: Strong December performance and momentum into 2025 - The strong performance in December was attributed to ongoing investments and initiatives, with optimism for continued momentum [55][56] Question: Differences in average 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 [66] Question: Guidance for fiscal 2025 and macro outlook - The guidance for 2025 remains prudent, with a focus on maintaining trends while observing economic indicators [72]

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]

Core Insights - SEMrush Holdings, Inc. reported quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.07 per share, representing an earnings surprise of -14.29% [1] - The company posted revenues of $97.41 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.95%, compared to year-ago revenues of $78.72 million [2] - SEMrush shares have increased about 1% since the beginning of the year, underperforming the S&P 500's gain of 24.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $100.93 million, and for the current fiscal year, it is $0.25 on revenues of $374.19 million [7] - The estimate revisions trend for SEMrush is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which SEMrush belongs, is currently in the top 25% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Growth - Q3 2024 revenue reached $97.4 million, up 24% year-over-year[1][3] - Revenue for Q3 2024 increased to $97.41 million, up 23.8% from $78.72 million in Q3 2023[27] - Total revenue for the first nine months of 2024 reached $274.17 million, a 22.2% increase from $224.28 million in the same period of 2023[27] - Q4 2024 revenue guidance is $100.8 to $101.8 million, representing approximately 21% year-over-year growth at the midpoint[8] - Full-year 2024 revenue guidance raised to $375 to $376 million, representing 22% year-over-year growth[9] Annual Recurring Revenue (ARR) and Customer Growth - ARR as of September 30, 2024, was $401 million, up 24% year-over-year[1][4] - Paying customers grew to over 117,000, up 10% year-over-year[4] - Dollar-based net revenue retention was 107% as of September 30, 2024[4] - Customers paying more than $10,000 annually grew by 44% year-over-year[6] Profitability and Operating Income - Q3 2024 non-GAAP operating income was $12.1 million, with a non-GAAP operating margin of 12.4%, up nearly 300 basis points year-over-year[4][8] - Non-GAAP income from operations for Q3 2024 was $12.06 million, representing 12.4% of revenue, up from $7.51 million (9.5% of revenue) in Q3 2023[29] - Net income for Q3 2024 was $1.09 million, compared to $4.22 million in Q3 2023[27] - Net income for the nine months ended September 30, 2024, was $4,082 thousand, compared to a net loss of $(5,924) thousand in the same period in 2023[32] Cash Flow and Financial Position - Q3 2024 free cash flow was $6.2 million, with a free cash flow margin of 6.3%[4] - Free cash flow for Q3 2024 was $6.16 million, compared to $4.97 million in Q3 2023[30] - Net cash provided by operating activities was $35,063 thousand for the nine months ended September 30, 2024, compared to $(3,567) thousand used in the same period in 2023[32] - Total assets as of September 30, 2024, increased to $383.80 million from $331.49 million as of December 31, 2023[31] - Deferred revenue as of September 30, 2024, was $68.99 million, up from $58.31 million as of December 31, 2023[31] - Total stockholders' equity attributable to Semrush Holdings, Inc. increased to $248.52 million as of September 30, 2024, from $219.15 million as of December 31, 2023[31] Expenses and Investments - Research and development expenses for Q3 2024 were $22.18 million, a 57.6% increase from $14.08 million in Q3 2023[27] - Stock-based compensation expense for Q3 2024 was $7.58 million, up from $4.20 million in Q3 2023[28] - Stock-based compensation expense increased to $19,856 thousand in 2024 from $10,764 thousand in 2023[32] - Purchases of short-term investments totaled $(136,768) thousand in 2024, compared to $(182,381) thousand in 2023[32] - Proceeds from sales and maturities of short-term investments were $132,500 thousand in 2024, down from $154,741 thousand in 2023[32] - Cash paid for acquisition of businesses, net of cash acquired, was $(21,082) thousand in 2024, significantly higher than $(1,232) thousand in 2023[32] - Cash, cash equivalents, and restricted cash decreased by $(13,580) thousand in 2024, compared to a decrease of $(38,576) thousand in 2023[32] - Depreciation and amortization expense increased to $7,094 thousand in 2024 from $4,807 thousand in 2023[32] - Amortization of deferred contract costs rose to $9,163 thousand in 2024 from $7,510 thousand in 2023[32] - Net cash used in investing activities was $(51,076) thousand in 2024, compared to $(34,319) thousand in 2023[32] Enterprise Customer Growth - Semrush Enterprise SEO Platform signed new deals with large multinational corporations including Salesforce, HSBC, LG, Samsung, Alibaba, Sony, DoorDash, TikTok, and Square[6]