SEMrush (SEMR) - 2025 Q1 - Quarterly Results

Semrush First Quarter 2025 Financial Results This report details Semrush's financial performance and business achievements for the first quarter of 2025, along with future outlook and financial statements Financial & Business Highlights Semrush achieved strong first-quarter 2025 results, with revenue up 22% to $105.0 million, ARR growing 20% to $424.7 million, and significant expansion in high-value customer segments, alongside robust profitability and free cash flow Q1 2025 Financial Highlights Key financial metrics for Q1 2025 demonstrate strong revenue and ARR growth, alongside improved non-GAAP operating margin Q1 2025 Key Financial Metrics (Year-over-Year) | Metric | Q1 2025 | Change (YoY) | | :--- | :--- | :--- | | Revenue | $105.0 million | +22% | | Annual Recurring Revenue (ARR) | $424.7 million | +20% | | Paying Customers | ~118,000 | +5.1% | | Dollar-based Net Revenue Retention | 106% | N/A | | GAAP Operating Margin | (0.1)% | Down from 1.7% | | Non-GAAP Operating Margin | 11.6% | Up from 11.3% | | Free Cash Flow | $18.5 million | N/A | Q1 2025 Business Highlights Business highlights for Q1 2025 include strategic investments in AI, significant growth in high-value customer segments, and an expanding free customer base - Advanced and expanded offerings with investments in Generative AI, launching AI Optimization (AIO) and AI Toolkit to enhance content creation and marketing capabilities[12] - Demonstrated strong growth in high-value customer segments[9][12] - Customers paying over $10,000 annually grew by 39% year-over-year[12] - Customers paying over $50,000 annually increased by 86% year-over-year to 388[9][12] - Ended the quarter with over 1.0 million registered free active customers[12] Financial Outlook Semrush reiterated its full-year 2025 guidance and provided Q2 projections, anticipating approximately 20% year-over-year revenue growth for both periods, while absorbing an $8.0 million expense headwind from unfavorable foreign exchange rates Q2 2025 Outlook | Metric | Guidance Range/Value | | :--- | :--- | | Revenue | $108.2M - $109.2M (~20% YoY growth) | | Non-GAAP Operating Margin | ~11% | Full Year 2025 Outlook (Reiterated) | Metric | Guidance Range/Value | | :--- | :--- | | Revenue | $448.0M - $453.0M (~20% YoY growth) | | Non-GAAP Operating Margin | ~12% | | Free Cash Flow Margin | ~12% | - Full year 2025 guidance now absorbs an incremental $8.0 million expense headwind due to a revised EURO to USD exchange rate assumption (from 1.05 to 1.13)[10] Consolidated Financial Statements The unaudited consolidated financial statements present Semrush's Q1 2025 financial position and performance, highlighting a GAAP net income of $0.7 million, increased cash to $64.7 million, and robust operating cash flow of $22.1 million Statements of Operations The unaudited condensed consolidated statements of operations detail revenue, gross profit, and net income for Q1 2025 and Q1 2024 Q1 2025 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $105,018 | $85,812 | | Gross Profit | $85,147 | $71,167 | | (Loss) Income from Operations | $(74) | $1,468 | | Net Income | $655 | $2,003 | | Diluted EPS | $0.01 | $0.01 | - Total stock-based compensation expense increased to $9.1 million in Q1 2025, up from $5.1 million in Q1 2024[29] Balance Sheets The unaudited condensed consolidated balance sheets present the company's financial position at March 31, 2025, and December 31, 2024 Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $64,665 | $48,875 | | Total Assets | $416,501 | $390,943 | | Deferred Revenue (Current) | $79,926 | $71,827 | | Total Liabilities | $138,343 | $124,591 | | Total Stockholders' Equity | $278,158 | $266,352 | Statements of Cash Flows The unaudited condensed consolidated statements of cash flows summarize cash movements from operating, investing, and financing activities for Q1 2025 and Q1 2024 Q1 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,109 | $14,779 | | Net cash used in investing activities | $(5,686) | $(31,981) | | Net cash (used in) provided by financing activities | $(345) | $434 | | Increase (decrease) in cash | $15,790 | $(17,275) | Reconciliation of GAAP to Non-GAAP Financial Measures This section provides reconciliations of GAAP to non-GAAP financial measures, detailing adjustments for items such as stock-based compensation to derive non-GAAP income from operations and free cash flow for Q1 2025 Reconciliation of GAAP (Loss) Income from Operations to Non-GAAP (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | (Loss) income from operations (GAAP) | $(74) | $1,468 | | Stock-based compensation | $9,112 | $5,115 | | Amortization of acquired intangibles | $1,379 | $692 | | Restructuring and other costs | $1,312 | $2,124 | | Acquisition-related costs, net | $484 | $338 | | Non-GAAP income from operations | $12,213 | $9,737 | Reconciliation to Free Cash Flow (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,109 | $14,779 | | Purchases of property and equipment | $(725) | $(759) | | Capitalization of internal-use software costs | $(2,879) | $(2,015) | | Free cash flow | $18,505 | $12,005 | Definitions of Non-GAAP Measures & Key Metrics This section defines key non-GAAP measures and metrics, including ARR, Dollar-based Net Revenue Retention, Free Cash Flow, and Non-GAAP Income from Operations, explaining their calculation and purpose for financial analysis - Annual Recurring Revenue (ARR): Total subscription revenue expected contractually over the next 12 months, assuming no changes[20] - Dollar-based Net Revenue Retention: Compares revenue from a cohort of customers over two consecutive twelve-month periods[22] - Free Cash Flow: Defined as net cash from operating activities less purchases of property and equipment and capitalized software costs[23] - Non-GAAP Income from Operations: Excludes Stock-Based Compensation, Amortization of Acquired Intangible Assets, Acquisition Related Costs, and Restructuring Costs[24] Supplementary Information This section provides details on the upcoming conference call, a company overview, standard forward-looking statement disclaimers, and contact information for investor relations and media - A conference call to discuss the results is scheduled for May 8th, 2025, at 8:30 a.m. ET[14] - The report includes forward-looking statements concerning financial guidance, demand for products, and future operating results, which are subject to risks and uncertainties detailed in SEC filings[16][17] - Provides contact information for Investor Relations (The Blueshirt Group) and Media (Jena Sullivan)[34]