SEMrush Holdings, Inc. (SEMR) shares soared 11.1% in the last trading session to close at $12.45. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.8% loss over the past four weeks.SEMRush is benefiting from an expanding clientele. It had approximately 106,800 paying customers as of Sep 30, 2023, up nearly 14% year over year.This company is expected to post quarterly earnings of $0.03 per share in its upcoming report, which repre ...

Semrush Holdings, Inc. (NYSE:SEMR) Q3 2023 Earnings Conference Call November 2, 2023 8:30 AM ET Company Participants Brinlea Johnson - Investor Relations Oleg Shchegolev - Chief Executive Officer Eugene Levin - President Brian Mulroy - Chief Financial Officer Conference Call Participants Adam Hotchkiss - Goldman Sachs Chris Cantera - Morgan Stanley Rob Morelli - Needham & Company Michael Vidovic - KeyBanc Capital Markets Wayne Trinh - Piper Sandler Operator Thank you for standing by and welcome to the Semru ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-40276 Semrush Holdings, Inc. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or O ...

Semrush Holdings, Inc. (NYSE:SEMR) Q2 2023 Earnings Conference Call August 4, 2023 8:30 AM ET Company Participants Brinlea Johnson – Investor Relations-The Blueshirt Group Oleg Shchegolev – Chief Executive Officer Eugene Levin – President Brian Mulroy – Chief Financial Officer Conference Call Participants Michael Turits – KeyBanc Parker Lane – Stifel Adam Hotchkiss – Goldman Sachs Elizabeth Porter – Morgan Stanley Scott Berg – Needham Operator Good morning, and welcome to Semrush Holdings Second Quarter 2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-40276 Semrush Holdings, Inc. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organi ...

Semrush Holdings, Inc. (NYSE:SEMR) Q1 2023 Earnings Conference Call May 9, 2023 8:30 AM ET Company Participants Brinlea Johnson - Investor Relations, Blueshirt Group Oleg Shchegolev - Chairman & Chief Executive Officer Eugene Levin - President Brian Mulroy - Chief Financial Officer Andrew Warden - Chief Marketing Officer Conference Call Participants Rob Morelli - Needham Matthew Kikkert - Stifel Michael Vidovic - KeyBanc Elizabeth Porter - Morgan Stanley James Heaney - Jefferies Operator Good morning. My na ...

Part I. Financial Information [Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) The company reported increased revenue but a wider net loss and negative operating cash flow for Q1 2023, with slight asset reduction [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased as of March 31, 2023, primarily due to reduced cash, while liabilities and deferred revenue increased Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $56,889 | $79,765 | | Short-term investments | $175,416 | $157,774 | | Total current assets | $255,131 | $257,379 | | Total assets | $295,500 | $298,690 | | **Liabilities & Equity** | | | | Deferred revenue | $56,255 | $49,354 | | Total current liabilities | $92,996 | $88,701 | | Total liabilities | $102,047 | $98,786 | | Total stockholders' equity | $193,453 | $199,904 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenue increased 24% year-over-year, but a significant rise in operating expenses led to a wider operating and net loss for the quarter Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Revenue | $70,870 | $57,128 | | Gross Profit | $58,231 | $45,541 | | Total Operating Expenses | $68,999 | $48,131 | | Loss from Operations | $(10,768) | $(2,590) | | Net Loss | $(9,860) | $(2,571) | | Net Loss Per Share (Basic & Diluted) | $(0.07) | $(0.02) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company experienced negative cash flow from operations in Q1 2023, a reversal from the prior year, leading to a significant decrease in cash and equivalents Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(3,609) | $8,026 | | Net cash used in investing activities | $(18,889) | $(16,656) | | Net cash used in financing activities | $(451) | $(13) | | Decrease in cash, cash equivalents and restricted cash | $(22,876) | $(9,902) | | Cash, cash equivalents and restricted cash, end of period | $56,889 | $259,939 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, recent acquisition, Russia exit costs, increased stock-based compensation, and the discontinuation of the ESPP - On February 23, 2023, the Company acquired certain assets of Traffic Think Tank for total cash consideration of **$1.8 million**. The acquisition's primary purpose was to acquire valuable brand and content related to its SEO community and courses[89](index=89&type=chunk) - During Q1 2023, the company incurred **$1.0 million** in exit costs related to its efforts to exit operations in Russia and relocate employees, which began in March 2022[102](index=102&type=chunk)[103](index=103&type=chunk) - The Employee Stock Purchase Plan (ESPP) was discontinued after the last purchase on February 28, 2023[130](index=130&type=chunk) - Revenue is primarily derived from monthly or annual subscriptions to the company's SaaS platform. For Q1 2023, subscription revenue accounted for nearly all of the company's revenue[40](index=40&type=chunk)[41](index=41&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue growth driven by customer acquisition, widening operating loss due to strategic investments, and assesses liquidity as sufficient for the next 12 months [Key Factors Affecting Our Performance](index=35&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) Performance is driven by customer acquisition and retention, with key metrics showing growth in paying customers and ARR, despite a slight decrease in retention rate Key Performance Indicators | Metric | March 31, 2023 | March 31, 2022 | | :--- | :--- | :--- | | Paying Customers | >100,000 | 87,000 | | Annual Recurring Revenue (ARR) | $293.0 million | $238.4 million | | ARR per Paying Customer | $2.9 thousand | $2.7 thousand | - The dollar-based net revenue retention rate was approximately **116%** as of March 31, 2023, compared to **118%** as of December 31, 2022[149](index=149&type=chunk) [Results of Operations Comparison](index=42&type=section&id=Results%20of%20Operations%20Comparison) Q1 2023 revenue increased 24% year-over-year, but significant increases in operating expenses, particularly Sales & Marketing and R&D, led to higher overall costs Revenue by Geography (in thousands) | Region | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | United States | $34,747 | $25,820 | | United Kingdom | $7,007 | $5,870 | | Other | $29,116 | $25,420 | | **Total Revenue** | **$70,870** | **$57,120** | Year-over-Year Change in Operating Expenses (in thousands) | Expense Category | Q1 2023 | Q1 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sales and marketing | $35,496 | $25,830 | +$9,666 | +37% | | Research and development | $13,880 | $8,138 | +$5,742 | +71% | | General and administrative | $18,640 | $14,163 | +$4,477 | +32% | | Exit costs | $983 | $0 | +$983 | N/A | [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity with cash and investments, supplemented by an undrawn credit facility, despite negative operating cash flow in Q1 2023 - As of March 31, 2023, the company had cash and cash equivalents of **$56.9 million** and short-term investments of **$175.4 million**[189](index=189&type=chunk) - The company has a **$45.0 million** senior secured revolving credit facility that matures on January 12, 2024. As of March 31, 2023, no amount had been drawn on this facility[192](index=192&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) - Net cash used in operating activities was **$3.6 million** in Q1 2023, compared to net cash provided by operating activities of **$8.0 million** in Q1 2022[197](index=197&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from foreign currency fluctuations, primarily the euro, and interest rate changes on its short-term investment portfolio - The company is exposed to foreign currency risk as it incurs significant expenses in foreign currencies, primarily the euro. A hypothetical **10%** increase or decrease in the relative value of the U.S. dollar to the euro would result in a **$3.9 million** gain or loss[210](index=210&type=chunk) - Interest rate risk exists for the company's portfolio of cash, cash equivalents, and short-term investments (**$232.3 million** as of March 31, 2023). However, due to the short-term nature of the portfolio, a **10%** change in interest rates is not expected to have a material effect[209](index=209&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to material weaknesses in financial reporting, despite ongoing remediation efforts - Management concluded that disclosure controls and procedures were not effective as of March 31, 2023[212](index=212&type=chunk) - The ineffectiveness is due to material weaknesses in internal control over financial reporting related to deficiencies in controls over the financial statement close process and the cash disbursement process[213](index=213&type=chunk) - Remediation efforts are underway, including hiring additional qualified accounting personnel, engaging a professional accounting services firm, and enhancing the ERP system. However, the material weaknesses were not fully remediated as of March 31, 2023[215](index=215&type=chunk)[218](index=218&type=chunk) Part II. Other Information [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - The company currently believes that the ultimate costs to resolve any pending ordinary course legal matters will not have a material adverse effect on its business, operating results, financial condition, or cash flows[221](index=221&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including customer retention, intense competition, reliance on third-party data, evolving data privacy laws, and internal control weaknesses - **Business Risks:** The business is harmed if paying customers do not renew or upgrade subscriptions. The market is intensely competitive, and the company has a history of net losses[224](index=224&type=chunk)[229](index=229&type=chunk)[233](index=233&type=chunk) - **Data & Technology Risks:** Products depend on access to third-party data sources, which could be lost or become less favorable. Failures in third-party data centers or infrastructure could adversely affect business[234](index=234&type=chunk)[248](index=248&type=chunk) - **Security & Privacy Risks:** A security breach of confidential customer information could harm reputation and lead to significant liability. The company must comply with complex and evolving data protection laws like GDPR and CCPA[252](index=252&type=chunk)[292](index=292&type=chunk) - **Financial Control & Ownership Risks:** The company has identified material weaknesses in its internal control over financial reporting. The dual-class stock structure concentrates **81%** of voting power with pre-IPO stockholders, limiting the influence of new investors[325](index=325&type=chunk)[329](index=329&type=chunk)[360](index=360&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=88&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and no material change in IPO proceeds usage during the quarter - There were no unregistered sales of equity securities in the period[372](index=372&type=chunk) - There has been no material change in the use of proceeds from the company's IPO[373](index=373&type=chunk) [Exhibits](index=88&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Quarterly Report, including CFO employment agreements and required certifications - The report includes exhibits such as the offer letter for new CFO Brian Mulroy, the separation agreement for former CFO Evgeny Fetisov, and CEO/CFO certifications[376](index=376&type=chunk)

Part I [Business](index=8&type=section&id=Item%201.%20Business) Semrush operates a leading SaaS platform for online visibility management, serving over 95,000 paying customers globally with subscription-based services and strategic acquisitions - Semrush is an online visibility management SaaS platform aiding companies in enhancing their digital presence across various channels[38](index=38&type=chunk) Key Customer and Financial Metrics (as of Dec 31, 2022) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Paying Customers | >95,000 | >82,000 | | Active Free Customers | >803,000 | >537,000 | | Countries Served | >157 | >145 | | Annual Recurring Revenue (ARR) | $275.1 million | $215.7 million | | Revenue | $254.3 million | $188.0 million | | Net Loss | $33.8 million | $3.3 million | - The company's growth strategy emphasizes new customer acquisition, existing customer expansion, continuous product innovation, and opportunistic M&A[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - The platform leverages over 14 years of proprietary technology, analyzing **770 million domains**, **23 billion keywords**, and **43 trillion backlinks**[47](index=47&type=chunk)[57](index=57&type=chunk) Subscription Plan Pricing (as of Dec 31, 2022) | Plan | Monthly Price | | :--- | :--- | | Pro | $119.95 | | Guru | $229.95 | | Business | $449.95 | [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including customer retention, intense competition, reliance on third-party data, geopolitical instability, and evolving data privacy regulations - Business performance heavily relies on retaining paying customers and their subscription renewals and upgrades[92](index=92&type=chunk)[93](index=93&type=chunk) - The company operates in a highly competitive market, facing pressure from specialized point solutions and larger, better-resourced competitors[97](index=97&type=chunk)[99](index=99&type=chunk) - Platform functionality depends on access to third-party data sources; loss of access or unfavorable terms could adversely impact the business[103](index=103&type=chunk)[104](index=104&type=chunk) - The company has a history of net losses, including **$33.8 million in 2022**, and may not achieve or sustain future profitability[101](index=101&type=chunk) - Geopolitical instability, particularly the conflict in Ukraine, resulted in significant expenses for employee relocation and the sale of Russian subsidiaries[108](index=108&type=chunk)[109](index=109&type=chunk) - Evolving data privacy laws like GDPR and CCPA, along with tracking technology regulations, could impair marketing and product functionality, potentially leading to significant fines[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) - The dual-class stock structure concentrates **89% of voting power** with pre-IPO stockholders, limiting Class A stockholder influence on corporate matters[36](index=36&type=chunk)[241](index=241&type=chunk) - Material weaknesses in internal control over financial reporting, specifically in the financial statement close and cash disbursement processes, rendered disclosure controls ineffective as of December 31, 2022[211](index=211&type=chunk)[578](index=578&type=chunk)[584](index=584&type=chunk) [Unresolved Staff Comments](index=53&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[252](index=252&type=chunk) [Properties](index=53&type=section&id=Item%202.%20Properties) Semrush maintains its headquarters in Boston, leases various global offices, operates data centers in Virginia and Georgia, and terminated its St Petersburg lease in 2022 - Corporate headquarters are located at 800 Boylston Street, Boston, MA, with a lease for **16,467 sq. ft.** expiring in 2027[254](index=254&type=chunk) - The company operates two data centers in Ashburn, Virginia, one in Atlanta, Georgia, and two Google Cloud locations in Virginia and South Carolina[255](index=255&type=chunk) - The lease for **122,031 sq. ft.** of office space in Saint Petersburg, Russia, was terminated in August 2022 due to the company's exit from the country[254](index=254&type=chunk) [Legal Proceedings](index=55&type=section&id=Item%203.%20Legal%20Proceedings) The company anticipates no material adverse effect on its financial condition or operations from any current legal proceedings - The company is not currently involved in any legal proceedings expected to have a material adverse effect on the business[257](index=257&type=chunk) [Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[258](index=258&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=56&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Semrush's Class A common stock trades on the NYSE under "SEMR", with no dividends paid or planned, and no issuer equity purchases - Class A common stock trades on the NYSE under the symbol **"SEMR"**, while Class B common stock is neither listed nor traded[261](index=261&type=chunk)[262](index=262&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future[264](index=264&type=chunk) - Net proceeds from the March 2021 IPO and subsequent underwriter option exercise totaled **$135.9 million**[265](index=265&type=chunk) [Reserved](index=57&type=section&id=Item%206.%20%5BReserved%5D) This item is not applicable - Not applicable[269](index=269&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=58&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, Semrush's revenue grew **35% to $254.3 million**, but net loss widened to **$33.8 million** due to increased operating expenses and **$11.3 million** in Russia exit costs, while maintaining strong liquidity [Results of Operations](index=66&type=section&id=Results%20of%20Operations) In 2022, revenue grew **35% to $254.3 million**, but operating expenses surged **63% to $242.1 million**, leading to a net loss of **$33.8 million** from **$3.3 million** in 2021 Comparison of Results of Operations (2022 vs. 2021) | Metric (in thousands) | 2022 | 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $254,316 | $188,001 | $66,315 | 35% | | Gross Profit | $205,763 | $146,067 | $59,696 | 41% | | Total Operating Expenses | $242,136 | $148,560 | $93,576 | 63% | | Sales and marketing | $126,889 | $81,122 | $45,767 | 56% | | Research and development | $41,204 | $24,322 | $16,882 | 69% | | General and administrative | $62,779 | $43,116 | $19,663 | 46% | | Exit costs | $11,264 | $0 | $11,264 | N/A | | Loss from operations | ($36,373) | ($2,493) | ($33,880) | 1359% | | Net loss | ($33,848) | ($3,285) | ($30,563) | 930% | - Revenue growth was primarily driven by an increase in paying customers from **over 82,000 to over 95,000**, alongside growth in user licenses and add-on purchases[313](index=313&type=chunk) - Sales and marketing expenses increased by **$45.8 million**, primarily due to a **$23.6 million** rise in marketing and advertising spend and a **$20.1 million** increase in personnel costs from **38% headcount growth**[316](index=316&type=chunk) - Research and development costs increased by **$16.9 million**, mainly due to a **40% increase in headcount** for product development teams[317](index=317&type=chunk) [Liquidity and Capital Resources](index=71&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2022, liquidity included **$79.8 million** cash and **$157.8 million** short-term investments, with **$9.6 million** net cash used in operations, a shift from **$23.8 million** provided in 2021 Key Liquidity Metrics (as of Dec 31, 2022) | Metric | Amount (in millions) | | :--- | :--- | | Cash and cash equivalents | $79.8 | | Short-term investments | $157.8 | | Accounts receivable | $3.6 | - The company holds an undrawn **$45.0 million** revolving credit facility maturing in January 2024[326](index=326&type=chunk)[327](index=327&type=chunk) Cash Flow Summary (2022 vs. 2021) | Cash Flow Activity (in millions) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | ($9.6) | $23.8 | | Net cash used in investing activities | ($179.8) | ($4.6) | | Net cash (used in)/provided by financing activities | ($0.3) | $215.3 | [Critical Accounting Policies and Estimates](index=73&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting policies include revenue recognition for subscriptions, capitalization of sales commissions over 24 months, and stock-based compensation valuation using Black-Scholes - Revenue from SaaS subscriptions is recognized ratably over the contract term, treating subscription and support as a single performance obligation[342](index=342&type=chunk) - Incremental costs to obtain a contract, mainly sales commissions, are capitalized and amortized over an estimated **24-month** customer relationship period[346](index=346&type=chunk) - Stock-based compensation is valued using the Black-Scholes model, with key assumptions including **53.3% volatility in 2022** and a **6-year expected life**[348](index=348&type=chunk)[353](index=353&type=chunk) - As an "emerging growth company," Semrush has elected to use the extended transition period for adopting new or revised accounting standards[354](index=354&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency fluctuations, particularly the euro, and interest rate changes on its short-term investment portfolio - The primary market risks are foreign currency exchange rates and interest rates[356](index=356&type=chunk) - Foreign currency risk primarily stems from operating expenses in foreign currencies, mainly the euro; a **10% change in USD/EUR** would impact operations by **$3.5 million**[359](index=359&type=chunk) - Interest rate risk relates to the company's **$237.5 million** in cash and investments, but its short-term nature limits material impact from rate changes[357](index=357&type=chunk) [Financial Statements and Supplementary Data](index=78&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Semrush's audited consolidated financial statements for 2022, including balance sheets, income statements, cash flows, and detailed accounting notes [Consolidated Balance Sheets](index=80&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2022, total assets were **$298.7 million**, with cash decreasing to **$79.8 million** offset by **$157.8 million** in short-term investments, while liabilities increased to **$98.8 million** Consolidated Balance Sheet Summary (in thousands) | | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $79,765 | $269,665 | | Short-term investments | $157,774 | $0 | | Total current assets | $257,379 | $283,538 | | Total assets | $298,690 | $300,074 | | **Liabilities & Equity** | | | | Total current liabilities | $88,701 | $71,549 | | Total liabilities | $98,786 | $74,532 | | Total stockholders' equity | $199,904 | $225,542 | | Total liabilities and stockholders' equity | $298,690 | $300,074 | [Consolidated Statements of Operations and Comprehensive Loss](index=81&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) In 2022, revenue increased **35% to $254.3 million**, but operating expenses, including **$11.3 million** in Russia exit costs, led to a net loss of **$33.8 million** or **($0.24)** per share Consolidated Statement of Operations (in thousands) | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Revenue | $254,316 | $188,001 | $124,875 | | Gross profit | $205,763 | $146,067 | $94,945 | | Total operating expenses | $242,136 | $148,560 | $101,090 | | Loss from operations | ($36,373) | ($2,493) | ($6,145) | | Net loss | ($33,848) | ($3,285) | ($7,012) | | Net loss per share | ($0.24) | ($0.03) | ($0.07) | [Consolidated Statements of Cash Flows](index=82&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In 2022, net cash used in operations was **$9.6 million**, a reversal from 2021, with **$179.8 million** used in investing, resulting in **$79.8 million** cash at year-end Consolidated Statement of Cash Flows (in thousands) | | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($9,624) | $23,761 | $5,852 | | Net cash used in investing activities | ($179,832) | ($4,633) | ($6,084) | | Net cash (used in) provided by financing activities | ($345) | $215,324 | ($1,672) | | Net (decrease) increase in cash | ($190,076) | $234,222 | ($1,904) | | Cash, cash equivalents and restricted cash, end of year | $79,765 | $269,841 | $35,619 | [Notes to Consolidated Financial Statements](index=83&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the impact of Russia exit costs, 2022 acquisitions, credit facility terms, tax provisions, and stock-based compensation expenses - The company completed the sale of its two Russian subsidiaries on August 3, 2022, incurring total exit costs of **$11.3 million** in 2022, including a **$1.7 million** loss on the sale[388](index=388&type=chunk)[512](index=512&type=chunk)[516](index=516&type=chunk) - In 2022, the company acquired Backlinko for **$4.0 million** and Kompyte for **$10.0 million**, adding **$4.9 million** to goodwill[504](index=504&type=chunk)[506](index=506&type=chunk)[507](index=507&type=chunk) - The company maintains a full valuation allowance against its worldwide net deferred tax assets due to a history of cumulative net losses[525](index=525&type=chunk) - Total stock-based compensation expense was **$7.4 million** in 2022, an increase from **$2.7 million** in 2021[562](index=562&type=chunk) - The company has multi-year commitments with data providers totaling **$33.2 million** through 2026[565](index=565&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=123&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes or disagreements with its accountants regarding accounting principles or financial disclosure - None[576](index=576&type=chunk) [Controls and Procedures](index=123&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of December 31, 2022, due to material weaknesses in financial statement close and cash disbursement processes - The CEO and CFO concluded that disclosure controls and procedures were not effective as of December 31, 2022[578](index=578&type=chunk) - Material weaknesses were identified in internal control over the financial statement close and cash disbursement processes, specifically regarding period-end recognition and expense cutoff[584](index=584&type=chunk) - Remediation efforts are underway, including new hires and external firm engagement, but material weaknesses were not fully remediated by year-end[585](index=585&type=chunk)[589](index=589&type=chunk) [Other Information](index=125&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[590](index=590&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=125&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[591](index=591&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=126&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[594](index=594&type=chunk) [Executive Compensation](index=126&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation details are incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[595](index=595&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=126&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information for beneficial owners and management is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[596](index=596&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=126&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Details on related party transactions and director independence are incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[597](index=597&type=chunk) [Principal Accounting Fees and Services](index=126&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the 2023 Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[598](index=598&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=127&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists documents filed with the 10-K, confirms financial statement inclusion in Item 8, and provides a detailed exhibit index - This section contains the financial statements (Item 8), confirms the omission of financial statement schedules, and provides an index of all exhibits filed with the report[601](index=601&type=chunk)[602](index=602&type=chunk)[603](index=603&type=chunk) [Form 10-K Summary](index=129&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no summary for this item - None[610](index=610&type=chunk)

Semrush Holdings, Inc. (NYSE:SEMR) Q4 2022 Results Conference Call March 14, 2023 8:30 AM ET Company Participants Bob Gujavarty - Vice President, Investor Relations Oleg Shchegolev - Chairman and Chief Executive Officer Eugene Levin - President Evgeny Fetisov - Chief Financial Officer Andrew Warden - Chief Marketing Officer Conference Call Participants Elizabeth Porter - Morgan Stanley Parker Lane - Stifel Scott Berg - Needham & Company Michael Turits - KeyBanc Capital Markets Operator Good morning. My name ...

Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $65.8 million, representing a 34% year-over-year increase and a 5% increase from the previous quarter [9][21] - The company had approximately 94,000 paying customers at the end of September, with customer growth of over 17% consistent with the previous quarter [9][21] - Non-GAAP gross margin was 81.2%, up over 400 basis points year-over-year and up 160 basis points from the previous quarter [21][22] - Non-GAAP net loss was $7.1 million, compared to a non-GAAP net income of $12,000 a year ago [24] Business Line Data and Key Metrics Changes - The product mix remained largely unchanged, with growth slightly favoring the entry-level pro plan [21] - The dollar-based net revenue retention for Q3 was down to 122%, impacted by lower expansion from existing customers [21] Market Data and Key Metrics Changes - The company noted a more uncertain demand environment compared to the previous year, particularly affecting larger accounts [12][31] - The small business segment showed resilience, with strong performance despite macroeconomic pressures [31] Company Strategy and Development Direction - The company is focused on user growth and plans to introduce new features in late 2023, including enhancements to the App Center [10][11] - The App Center strategy aims to address market fragmentation by offering third-party applications to meet diverse customer needs [16][19] - The company is optimistic about long-term growth, emphasizing efficiency and solid unit economics [12][27] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for Q4, acknowledging potential challenges in the economic environment but highlighting positive demand signals [26][37] - The company expects Q4 revenue in the range of $67.25 million to $67.75 million, representing approximately 26% year-over-year growth at the midpoint [26] Other Important Information - Total non-GAAP operating expenses were $55.8 million, up 48% year-over-year, primarily due to increased investment in sales and marketing [22][24] - The company entered the quarter with $247 million in cash, with cash flow from operations being negative $500,000 [25] Q&A Session Summary Question: Changes in macroeconomic conditions and their impact - Management noted that larger accounts are experiencing scrutiny in spending, but the small business segment remains stable [31] Question: Sales leadership changes and their effects - Management indicated that while changes in sales leadership can cause concerns, they did not see a significant impact on current results [33] Question: Q4 guidance assumptions - Management expressed cautious optimism for Q4, noting that while demand signals are positive, they are being careful due to potential seasonality effects [37] Question: Demand environment comparison between Q3 and Q4 - Management observed that demand was strong in August but showed variability in September and October, leading to a cautious outlook [42] Question: Monetization of free users through the App Center - The company aims to convert free users into paying customers by offering lower-priced apps through the App Center, which could increase overall revenue [53][54] Question: Cost structure and future modeling - Management indicated that Q4 will serve as a proper baseline for modeling next year's costs, as most relocated employees will be settled by then [57]