SEMrush (US:SEMR)2024-11-12 21:05Revenue 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]