Semrush Announces Fourth Quarter and Full Year 2021 Financial Results

Rhea-AI Summary

Semrush Holdings, Inc. (NYSE: SEMR) reported strong financial results for Q4 and full-year 2021. Q4 revenue reached $53.7 million, a 47% increase year over year, while total revenue for 2021 was $188 million, up over 50% year over year. The company added nearly 15,000 paid customers, bringing the total over 82,000. However, there was a net loss of $3.9 million in Q4. Looking forward, Semrush expects Q1 2022 revenue between $55.8 million and $56.2 million, an increase of 40%.

Positive

• Q4 revenue up 47% year over year to $53.7 million.
• Full-year revenue of $188 million, up over 50% year over year.
• Added approximately 15,000 paid customers, totaling over 82,000.
• Annual Recurring Revenue (ARR) increased to $213 million, up 48% year over year.
• Dollar-based net revenue retention rose to 126%, up from 124%.

Negative

• Net loss of $3.9 million for Q4.
• Full-year net loss of $3.3 million.

Full year 2021 revenue up more than 50% year over year

More than 82,000 Customers as of December 31, 2021

BOSTON--(BUSINESS WIRE)-- Semrush Holdings, Inc. (NYSE: SEMR), a leading online visibility management SaaS platform, today reported fourth quarter 2021 financial results for the quarter ended December 31, 2021.

“2021 was a historic year for Semrush, as we completed a successful IPO and grew revenue by more than 50%. In the process we added nearly fifteen thousand paid customers while also delivering strong growth in average revenue per customer. I want to extend my thanks to all our employees and partners who helped make it possible,” said Oleg Shchegolev, CEO and Co-Founder of Semrush.

“We continue to see strong demand for our products across virtually all our markets. I believe our solutions are becoming more relevant to a wider audience as creating effective digital marketing campaigns becomes ever more challenging. I am excited about the large market opportunity in front of us and I believe we are well positioned to capitalize on that opportunity,” added Mr. Shchegolev.

Fourth Quarter and Full-Year 2021 Financial Highlights

• Fourth quarter revenue of $53.7 million, up 47% year over year and full year 2021 revenue of $188 million, up more than 50% year over year
• ARR of $213 million as of December 31, 2021, up 48% year over year
• Dollar based net revenue retention of 126% as of December 31, 2021, up from 124% in the previous quarter
• Over 82,000 paying customers as of December 31, 2021, up approximately 22% from a year ago
• Net loss of $3.9 million for the fourth quarter and net loss of $3.3 million for the full year 2021
• Non-GAAP net loss of $2.9 million for the fourth quarter and non-GAAP net loss of $0.5 million for the full year 2021
• Cash flow from operations of nearly $24 million for full year 2021, ended the year with cash and cash equivalents of nearly $270 million and zero debt

See “Non-GAAP Financial Measures & Definitions of Key Metrics” below for how Semrush defines ARR, dollar based net revenue retention, non-GAAP net income (loss), and the financial tables that accompany this release for reconciliations of each non-GAAP financial measure to its closest comparable GAAP financial measure.

Business Highlights

• Semrush now offers a keyword intent filter which helps customers create more effective and efficient campaigns through better keyword targeting

• We launched App Center in early 2021, and it is now home to fifteen apps, including ten third party offerings

• Continued to see strong growth from larger accounts, with the number of customers paying more than $10K annually up more than 75% year over year in the fourth quarter

• Prowly had more than 1,000 customers and grew ARR more than 100% year over year in the fourth quarter

Business Outlook

Based on information as of today, February 28, 2022, we are issuing the following financial guidance:

First Quarter 2022 Financial Outlook

• Revenue is expected to be in a range of $55.8 million to $56.2 million, ​​up 40% year over year
• Non-GAAP net loss is expected to be in a range of $4.7 to $4.5 million

Full-Year 2022 Financial Outlook

• Revenue is expected to be in a range of $245 million to $247 million, up over 30% year over year
• Non-GAAP net loss is expected to be in a range of $22 to $21.5 million

Reconciliation of non-GAAP net loss guidance to the most directly comparable GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from this non-GAAP measure, in particular the measures and effects of share-based compensation expense, employer taxes and tax deductions specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

Conference Call Details

Semrush will host a conference call and webcast to discuss its financial results, business highlights, outlook and other matters, the details for which are provided below.

Date: Tuesday, March 1, 2022
Time: 8:30 a.m. ET
Hosts: Oleg Shchegolev, CEO and Evgeny Fetisov, CFO
Conference ID: 3520221
Participant Toll Free Dial-In Number: 1 (888) 350-3436
Participant International Dial-In Number: 1 (646) 360-0185

Registration:
The live webcast of the conference call as well as the replay can be accessed for a limited time from the Semrush investor relations website at http://investors.semrush.com/.

About Semrush

Semrush is a leading online visibility management SaaS platform that enables businesses globally to run search engine optimization, pay-per-click, content, social media and competitive research campaigns and get measurable results from online marketing. Semrush offers insights and solutions for companies to build, manage, and measure campaigns across various marketing channels. Semrush, with over 82,000 paying customers, is headquartered in Boston and has offices in Philadelphia, Dallas, Prague, St. Petersburg, Warsaw, and Limassol.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements include, but are not limited to, guidance on financial results for the first quarter and full year of 2022; statements about future operating results; statements regarding the expectations of demand for our products, including adoption of and demand for new products and features, our addressable market size, and growth of our business; statements about the market opportunity and our positioning to capture the market opportunity; and statements about the effectiveness of our products and our competitive advantages.

The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations'' in our filings with the Securities and Exchange Commission ("SEC"), including the final prospectus for our initial public offering filed with the SEC on March 25, 2021, as updated by our subsequently filed quarterly reports and other SEC filings. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. The forward-looking statements in this release are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Additional information regarding these and other factors that could affect our results is included in our SEC filings, which may be obtained by visiting our Investor Relations page on its website at investors.semrush.com or the SEC's website at www.sec.gov.

Non-GAAP Financial Measures & Definitions of Key Metrics

Semrush has provided in this release the non-GAAP financial measure of non-GAAP net income (loss). Semrush uses this non-GAAP financial measure internally in analyzing its financial results and believes it is useful to investors, as a supplement to GAAP measures, in evaluating Semrush’s ongoing operational performance. Semrush believes that the use of this non-GAAP financial measure provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in Semrush’s industry, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

ARR is defined as the daily revenue of all paid subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. Semrush includes both monthly recurring paid subscriptions, which renew automatically unless canceled, as well as the annual recurring paid subscriptions so long as Semrush does not have any indication that a customer has canceled or intends to cancel its subscription and Semrush continues to generate revenue from them.

Dollar Based Net Revenue Retention is defined as (a) the revenue from our customers during the twelve-month period ending one year prior to such period as the denominator and (b) the revenue from those same customers during the twelve months ending as of the end of such period as the numerator. This calculation excludes revenue from new customers and any non-recurring revenue.

Non-GAAP net income (loss). We define non-GAAP net income (loss) as GAAP income (loss), excluding stock-based compensation expense. We believe non-GAAP net income (loss) provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of stock-based compensation, which is often unrelated to overall operating performance.

Semrush Holdings, Inc. Unaudited Consolidated Statement of Operations (in thousands, except per share data)
		Three Months Ended December 31,								Fiscal Year Ended December 31,
		2021				2020				2021				2020
Revenue		$	53,746			$	36,440			$	188,001			$	124,875
Cost of revenue ¹			11,561				8,533				41,934				29,930
Gross profit			42,185				27,907				146,067				94,945
Operating expenses
Sales and marketing ¹			25,694				14,852				81,122				54,518
Research and development ¹			6,825				5,086				24,322				17,528
General and administrative ¹			13,320				9,610				43,116				29,044
Total operating expenses			45,839				29,548				148,560				101,090
Loss from operations			(3,654	)			(1,641	)			(2,493	)			(6,145	)
Other expense, net			266				103				522				290
Loss before income taxes			(3,920	)			(1,744	)			(3,015	)			(6,435	)
Provision for income taxes			(58	)			193				270				577
Net loss		$	(3,862	)		$	(1,937	)		$	(3,285	)		$	(7,012	)
Net income loss per share attributable to common stockholders:
Basic and diluted:		$	(0.03	)		$	(0.02	)		$	(0.03	)		$	(0.07	)
Weighted-average number of shares of common stock used in computing net loss per share applicable to common stockholders:
Basic and diluted:			138,363				95,046				126,586				94,803
Other comprehensive loss, net of tax
Foreign currency translation adjustments			(230	)			—				(230	)			—
Comprehensive loss		$	(4,092	)		$	(1,937	)		$	(3,515	)		$	(7,012	)
¹ includes stock-based compensation expense as follows:
		Three Months Ended December 31,								Fiscal Year Ended December 31,
		2021					2020			2021				2020
Cost of revenue		$	15			$	3			$	37			$	18
Sales and marketing			160				76				405				166
Research and development			144				26				348				113
General and administrative			634				302				1,952				782
Total stock-based compensation		$	953			$	407			$	2,742			$	1,079
		Three Months Ended December 31,								Fiscal Year Ended December 31,
		2021				2020				2021				2020
Reconciliation of Non-GAAP net loss
Net loss		$	(3,862	)		$	(1,937	)		$	(3,285	)		$	(7,012	)
Stock-based compensation expense			953				407				2,742				1,079
Non-GAAP net loss		$	(2,909	)		$	(1,530	)		$	(543	)		$	(5,933	)

Semrush Holdings, Inc. Unaudited Consolidated Balance Sheets (in thousands, except per share data)
		As of
		December 31, 2021				December 31, 2020
Assets
Current assets
Cash and cash equivalents		$	269,665			$	35,531
Accounts receivable			2,190				1,399
Deferred contract costs, current portion			6,338				4,049
Prepaid expenses and other current assets			5,345				2,649
Total current assets			283,538				43,628
Property and equipment, net			8,270				2,968
Intangible assets, net			2,925				2,231
Goodwill			1,991				1,991
Deferred contract costs, net of current portion			2,254				1,670
Other long-term assets			1,096				2,470
Total assets		$	300,074			$	54,958
Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
Current liabilities
Accounts payable		$	9,942			$	8,654
Accrued expenses			19,479				7,719
Deferred revenue			40,232				26,537
Other current liabilities			1,896
Total current liabilities			71,549				42,910
Long-term liabilities
Deferred revenue, net of current portion			237				123
Deferred tax liability			268				209
Other long-term liabilities			2,478				497
Total liabilities		$	74,532			$	43,739
Series A redeemable convertible preferred stock, $0.00001 par value - no shares authorized, issued or outstanding as of December 31, 2021; 3,379,400 shares authorized, issued and outstanding as of December 31, 2020 (liquidation value of $8,000 at December 31, 2020)			—				7,789
Series A-1 redeemable convertible preferred stock, $0.00001 par value - no shares authorized, issued, or outstanding as of December 31, 2021; 1,837,600 shares authorized, issued and outstanding as of December 31, 2020 (liquidation value of $5,000 at December 31, 2020)			—				10,270
Stockholders’ equity (deficit)
Series B convertible preferred stock, $0.00001 par value - no shares authorized, issued, or outstanding as of December 31, 2021; 4,681,400 shares authorized, issued and outstanding as of December 31, 2020 (liquidation value of $24,000 at December 31, 2020)			—				24,000
Common stock, $0.00001 par value - no shares authorized, issued, or outstanding as of December 31, 2021; 300,000,000 shares authorized, 95,206,893 shares issued, and 95,050,041 shares outstanding at December 31, 2020			—				—
Class A common stock, $0.00001 par value; 1,000,000,000 shares authorized, and 31,841,861 shares issued and outstanding as of December 31, 2021; no shares authorized, issued or outstanding as of December 31, 2020			—
Class B common stock, $0.00001 par value; 160,000,000 shares authorized, and 108,959,591 shares issued and 108,870,126 outstanding as of December 31, 2021; no shares authorized, issued or outstanding as of December 31, 2020			1
Additional paid-in capital			264,871				4,975
Accumulated other comprehensive deficit			(230	)			—
Accumulated deficit			(39,100	)			(35,815	)
Total stockholders’ equity (deficit)			225,542				(6,840	)
Total liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit)		$	300,074			$	54,958

Semrush Holdings Inc. Unaudited Consolidated Statements of Cash Flows (in thousands)
		For the Year Ended
		December 31,
		2021				2020
Operating Activities
Net loss		$	(3,285	)		$	(7,012	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization expense			3,535				1,484
Amortization of deferred contract costs			6,489				4,623
Stock-based compensation expense			2,742				1,079
Non-cash interest expense			211				—
Other long-term liabilities			—				497
Deferred taxes			59				(90	)
Changes in operating assets and liabilities
Accounts receivable			(791	)			738
Deferred contract costs			(9,362	)			(6,637	)
Prepaid expenses and other assets			(2,784	)			(70	)
Accounts payable			1,527				1,825
Accrued expenses			11,613				2,501
Deferred revenue			13,807				6,914
Net cash provided by operating activities			23,761				5,852
Investing Activities
Purchases of property and equipment			(2,380	)			(2,367	)
Purchases of convertible debt securities			(500	)			—
Capitalization of internal-use software development costs			(1,403	)			(1,032	)
Cash paid for acquisition of business, net of cash acquired			(350	)			(2,685	)
Net cash used in investing activities			(4,633	)			(6,084	)
Financing Activities
Proceeds from exercise of stock options			1,327				252
Net proceeds from completing public offerings			215,370				—
Payment of capital leases			(1,373	)			—
Payment of deferred offering costs			—				(1,924	)
Net cash provided by (used in) financing activities			215,324				(1,672	)
Effect of exchange rate changes on cash and cash equivalents			(230	)			—
Increase in cash, cash equivalents, and restricted cash			234,222				(1,904	)
Cash, cash equivalents, and restricted cash, at beginning of period			35,619				37,523
Cash, cash equivalents, and restricted cash, at end of period		$	269,841			$	35,619

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220228006182/en/

INVESTOR:

Bob Gujavarty

Semrush Holdings, Inc

bobby.gujavarty@semrush.com

MEDIA:

Jena Sullivan

Semrush Holdings, Inc

jena.sullivan@semrush.com

Source: Semrush Holdings, Inc.

FAQ

What were Semrush's revenue results for Q4 2021?

Semrush reported Q4 revenue of $53.7 million, a 47% increase year over year.

How much did Semrush's revenue grow in 2021?

Full-year 2021 revenue was $188 million, up over 50% year over year.

What is the expected revenue guidance for Q1 2022?

Semrush expects Q1 2022 revenue to be between $55.8 million and $56.2 million, up 40% year over year.

What was Semrush's net loss for Q4 2021?

The net loss for Q4 2021 was $3.9 million.

How many paying customers did Semrush have as of December 31, 2021?

As of December 31, 2021, Semrush had over 82,000 paying customers.