Semrush Announces Fourth Quarter and Full Year 2023 Financial Results
- Strong financial performance with revenue growth of 21% for Q4 and full year 2023
- Achieved ARR of $337.1 million and net income of $1.0 million for the full year
- Focused on increasing new user growth, driving expansion, and adding new products
- Plans to launch new Enterprise Platform in 2024
- Expects revenue growth of approximately 19% year-over-year for 2024
- None.
Insights
The reported financial results from Semrush Holdings, Inc. indicate a robust year-over-year revenue growth of 21%, highlighting a significant upswing in the company's financial performance. The transition from a net loss in the previous year to a net income in both the fourth quarter and full year is a particularly strong sign of improved financial health. Additionally, the achievement of an Annual Recurring Revenue (ARR) growth of 23% suggests a stable and expanding customer base, which is critical for the sustainability and predictability of future revenues.
The increase in paying customers by 12.5% and the growth in free, active customers to over one million are positive indicators of market penetration and product acceptance. However, the slight decrease in dollar-based net revenue retention from 109% to 107% could signal a need to focus on customer satisfaction and retention strategies. The forward-looking guidance provided for the first quarter and full year 2024, with expected revenue growth and non-GAAP operating margin improvements, reflects management's confidence in the company's growth trajectory.
It is also noteworthy that the company is shifting its guidance focus from non-GAAP net income to non-GAAP Operating Margin and Free Cash Flow Margin, which may offer investors a clearer picture of operational efficiency and cash generation potential. This strategic move aligns with the company's emphasis on profitability and efficiency.
Semrush's continued investment in Generative AI and the expansion of its platform offerings, including the introduction of new tools like AI Chat and the AI Ad Copy Generator app, demonstrate the company's commitment to innovation and staying ahead of market trends. The upcoming General Availability of the new Enterprise Platform in the first half of 2024 is a strategic move to cater to large-scale business customers, potentially opening up new revenue streams and strengthening the company's position in the competitive SaaS landscape.
The reported growth of customers paying more than $10,000 annually by over 30% indicates successful penetration into the higher-end market segment, which could lead to increased average revenue per user (ARPU) and contribute to the overall financial growth of the company. This segment typically offers higher margins and longer contract durations, which can be beneficial for long-term financial stability.
Furthermore, the addition of Bing to the Position Tracking tool reflects the company's responsiveness to customer needs and may enhance the value proposition for existing and prospective clients. This diversification of offerings can help mitigate risks associated with reliance on a single search engine and potentially attract a broader customer base.
The updates to the definitions of non-GAAP Income (Loss) from Operations, which now exclude certain costs such as Amortization of Acquired Intangible Assets and Acquisition Related Costs, represent a refinement in financial reporting that aims to provide a more transparent view of the company's operating performance. This change underscores the importance of clear financial communication to stakeholders and aligns with regulatory trends emphasizing non-GAAP reporting clarity.
While the company has not provided specific reconciliations of non-GAAP operating margin and free cash flow margin guidance to the most directly comparable GAAP measures, citing variability and complexity, this practice is not uncommon. It is important for investors to understand the limitations of non-GAAP measures and to use them in conjunction with GAAP results to form a complete picture of financial performance.
The decision to focus on non-GAAP Operating Margin and Free Cash Flow Margin for future guidance, rather than non-GAAP net income, may assist investors in assessing the company's operational efficiency and cash management, which are key factors in evaluating a company's financial health and growth potential.
-
Fourth quarter revenue of
$83.4 million 21% year-over-year -
Full year 2023 revenue increases over
21% year-over-year -
Achieves ARR of
$337.1 million 23% year-over-year -
Full year net income of
$1.0 million $16.3 million
“In 2023, we accelerated revenue growth throughout the year, delivering ARR growth of
Fourth Quarter and Full Year 2023 Financial Highlights
-
Fourth quarter revenue of
$83.4 million 21% year-over-year and full year 2023 revenue of$307.7 million 21% year-over-year. -
Net income of
$6.9 million $13.9 million -
Net income of
$1.0 million $33.8 million -
Non-GAAP net income of
$11.4 million $11.6 million -
Non-GAAP net income of
$16.3 million $26.5 million -
Q4 free cash flow of
$8.9 million $0.3 million -
ARR of
$337.1 million 23% year-over-year. -
Nearly 108,000 paying customers as of December 31, 2023, up
12.5% from a year ago. -
Dollar-based net revenue retention of
107% as of December 31, 2023, compared to109% in the previous quarter.
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 free cash flow, and the financial tables that accompany this release for reconciliations of each non-GAAP financial measure to its closest comparable GAAP financial measure.
Fourth Quarter 2023 Business Highlights
We are committed to empowering our customers with the best-in-class platform needed to boost their online presence and gain an edge in the market. In the fourth quarter, we advanced and expanded many of our offerings:
-
Continued investments in Generative AI to provide enhanced, more efficient content creation capabilities through Semrush’s platform and App Center:
- Introduced AI Chat, a generative chat system within ContentShake AI that allows customers to enter detailed prompts, request additional content, and ask questions to improve the content creation process and help businesses connect with a larger audience.
- Released the AI Ad Copy Generator app, a data-driven tool that uses billions of ad copies to draft effective copy variations, helping customers launch high-performing Google Ads campaigns.
- Announced the AI Accessibility Widget, an app that uses AI to diagnose accessibility issues in real time, enabling businesses to enhance user-friendliness and ensure website compliance.
- Added Bing to the Position Tracking tool, allowing customers to set up their tracking campaign and track daily rankings for their target keyword lists.
- We are pleased to announce our new Enterprise Platform will be Generally Available (GA) in the first half of 2024. It has been in a soft launch state since late October 2023 and is currently being used by a select number of large-scale business customers.
-
Semrush customers who pay more than
$10,000 30% year-over-year. -
Ended the quarter with more than 1,041,000 registered free active customers, up nearly
30% year-over-year.
Business Outlook
“During 2023, we were able to re-accelerate revenue growth, improve our profitability and generate strong free cash flow,” said Brian Mulroy, CFO of Semrush. “Looking ahead to 2024, we are confident in our ability to grow and to continue to scale our business to capitalize on the market opportunity. We remain committed to a disciplined and balanced approach to spending to improve efficiency and profitability, even while we invest in future growth opportunities that we expect will continue to create long-term, durable growth and value for our shareholders.”
Based on information as of today, March 4, 2024, we are issuing the following financial guidance:
First Quarter 2024 Financial Outlook
-
For the first quarter, we expect revenue in a range of
$84.7 $85.3 million 20% year-over-year. -
We expect first quarter Non-GAAP operating margin to be approximately
8% .
Full-Year 2024 Financial Outlook
-
For the full year, we expect revenue in a range of
$364 $368 million 19% year-over-year. -
We expect full year Non-GAAP operating margin of
10% to11% . -
We expect full year free cash flow margin to be in the range of
7% to8% .
Starting with our guidance for the first quarter 2024 and full year 2024, we are no longer providing guidance for non-GAAP net income, and instead will guide both non-GAAP Operating Margin and Free Cash Flow Margin. We are also updating our definitions of non-GAAP Income (Loss) from Operations to exclude Amortization of Acquired Intangible Assets, Acquisition Related Costs, Restructuring Costs and other one-time expenses outside the ordinary course of business (for example, our Exit Costs incurred primarily in 2022) in addition to the current exclusion of Stock Based Compensation. Our guidance for the first quarter 2024 and full year 2024 reflect this change. Additionally, with this release, we are also providing a reconciliation of historical non-GAAP Income (Loss) from Operations and non-GAAP operating margin under both the prior definition and the new definition for the prior periods presented. We believe these changes will allow investors to better understand our financial performance, better align with the measures used internally by management in operating our business, and permit a better evaluation of the efficacy of the methodology and information used by management to evaluate and measure our performance.
Reconciliations of non-GAAP operating margin and free cash flow margin guidance to the most directly comparable GAAP measures are 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 these non-GAAP measures, 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 5, 2024
Time: 8:30 a.m. ET
Hosts: Oleg Shchegolev, CEO, Eugene Levin, President, and Brian Mulroy, CFO
Conference ID: 726760
Participant Toll Free Dial-In Number: 1 (833) 470-1428
Participant International Dial-In Number: 1 (929) 526-1599
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 nearly 108,000 paying customers, is headquartered in
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 2024 (including revenue, non-GAAP operating margin, and free cash flow margin); statements regarding the expectations of demand for our products, including demand from return customers, adoption of and demand for new products and features, statements about expansion of our platform, the effectiveness of our products and our competitive advantages, statements about future operating results, growth opportunities (including new user growth, expansion from delivering higher value to customers and adding new products and monetization to address user needs and market trends), future spending, business trends, capability to improve efficiency and deliver profits, and growth and value for shareholders.
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 our most recent annual report on form 10-K, and 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
We believe that providing non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view the financial results in the way management views the operating results. We further believe that providing this information allows investors to not only better understand our financial performance, but also to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. We also believe that the use of non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors. We also believe free cash flow margin is useful to investors as we monitor it as a measure of our overall business performance, which enables us to analyze our future performance without the effects of non-cash items and allows us to better understand the cash needs of our business. The non-GAAP information included in this press release should not be considered superior to, or a substitute for, financial statements prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. Investors are encouraged to review the reconciliation of non-GAAP measures to their most directly comparable GAAP financial measures provided in the financial statement tables included below in this press release.
ARR is defined as of a given date as the monthly recurring revenue that we expect to contractually receive from all paid subscription agreements that are actively generating revenue as of that date multiplied by 12. We include both monthly recurring paid subscriptions, which renew automatically unless canceled, as well as the annual recurring paid subscriptions so long as we do not have any indication that a customer has canceled or intends to cancel its subscription and we continue 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.
Free cash flow and free cash flow margin. We define free cash flow, a non-GAAP financial measure, as net cash provided by (used in) operating activities less purchases of property and equipment and capitalized software development costs. We define free cash flow margin as free cash flow divided by GAAP revenue.
Non-GAAP income (loss) from operations, non-GAAP operating margin, and Non-GAAP Net Income. As described above, we have updated our definitions for non-GAAP income (loss) from operations and are introducing non-GAAP operating margin; the updated definitions, which apply to our guidance for the first quarter and full year 2024, are as follows. We define non-GAAP income (loss) from operations as GAAP income (loss) from operations, excluding Stock Based Compensation, Amortization of Acquired Intangible Assets, Acquisition Related Costs, Restructuring Costs and other one-time expenses outside the ordinary course of business (for example, our Exit Costs incurred primarily in 2022). We define non-GAAP operating margin as non-GAAP income (loss) from operations divided by GAAP revenue. With respect to our prior financial results (including the fourth quarter and full year 2023 and comparable periods in 2022), we define (i) non-GAAP net income as GAAP net income (loss), excluding Stock Based Compensation and (ii) non-GAAP income (loss) from operations as GAAP income (loss) from operations, excluding Stock Based Compensation. We believe investors may want to consider our results with and without the effects of these items in order to compare our financial performance with that of other companies that exclude such items and to compare our results to prior periods.
Stock-based compensation.
Stock-based compensation is a non-cash expense accounted for in accordance with FASB ASC Topic 718. We believe that the exclusion of stock-based compensation expense allows for financial results that are more indicative of our operational performance and provide for a useful comparison of our operating results to prior periods and to our peer companies because stock-based compensation expense varies from period to period and company to company due to such things as differing valuation methodologies, timing of awards and changes in stock price.
Amortization of acquired intangible assets.
Excluding amortization of acquired intangible assets from non-GAAP expense and income measures allows management and investors to evaluate results “as-if” the acquired intangible assets had been developed internally rather than acquired and, therefore, provides a supplemental measure of performance in which our acquired intellectual property is treated in a comparable manner to our internally developed intellectual property. These amounts are inconsistent in amount and frequency and are significantly impacted by the timing and size of acquisitions. Although we exclude amortization of acquired intangible assets from our non-GAAP expenses, we believe that it is important for investors to understand that such intangible assets contribute to revenue generation.
Restructuring and other costs.
Restructuring and other costs include restructuring expenses as well as other charges that are unusual in nature, are the result of unplanned events, and arise outside the ordinary course of our business. Restructuring expenses consist of employee severance costs, charges for the closure of excess facilities and other contract termination costs. Other costs include litigation contingency reserves, asset impairment charges, relocation expenses associated with the migration of employees in 2022 that occurred throughout 2022 and early 2023, and gains or losses on the sale or disposition of certain non-strategic assets or product lines.
Acquisition-related costs, net.
In recent years, we have completed a number of acquisitions, which result in transition, integration and other acquisition-related expense which would not otherwise have been incurred, are unpredictable and dependent on a significant number of factors that are deal-specific or outside of our control, are not indicative of our operational performance (or that of the acquired businesses or assets) and are likely to fluctuate as our acquisition activity increases or decreases in future periods. By excluding acquisition-related costs and adjustments from our non-GAAP measures, management is better able to evaluate our ability to utilize our existing assets and estimate the long-term value that acquired assets will generate for us.
Semrush Holdings, Inc. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) |
||||||||||||||
|
Three months ended December 31, |
|
Fiscal Year ended December 31, |
|||||||||||
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenue |
$ |
83,394 |
|
$ |
68,785 |
|
|
$ |
307,675 |
|
|
$ |
254,316 |
|
Cost of revenue ¹ |
|
13,684 |
|
|
11,963 |
|
|
|
52,327 |
|
|
|
48,553 |
|
Gross profit |
|
69,710 |
|
|
56,822 |
|
|
|
255,348 |
|
|
|
205,763 |
|
Operating expenses |
|
|
|
|
|
|
|
|||||||
Sales and marketing ¹ |
|
31,044 |
|
|
39,596 |
|
|
|
126,871 |
|
|
|
126,889 |
|
Research and development ¹ |
|
15,371 |
|
|
13,261 |
|
|
|
57,442 |
|
|
|
41,204 |
|
General and administrative ¹ |
|
20,613 |
|
|
17,391 |
|
|
|
77,410 |
|
|
|
62,779 |
|
Exit Costs |
|
— |
|
|
1,847 |
|
|
|
1,292 |
|
|
|
11,264 |
|
Total operating expenses |
|
67,028 |
|
|
72,095 |
|
|
|
263,015 |
|
|
|
242,136 |
|
Income (loss) from operations |
|
2,682 |
|
|
(15,273 |
) |
|
|
(7,667 |
) |
|
|
(36,373 |
) |
Other income, net |
|
5,585 |
|
|
1,103 |
|
|
|
12,313 |
|
|
|
3,456 |
|
Income (loss) before income taxes |
|
8,267 |
|
|
(14,170 |
) |
|
|
4,646 |
|
|
|
(32,917 |
) |
Provision for income taxes |
|
1,393 |
|
|
(269 |
) |
|
|
3,696 |
|
|
|
931 |
|
Net income (loss) |
|
6,874 |
|
|
(13,901 |
) |
|
|
950 |
|
|
|
(33,848 |
) |
Net income (loss) attributable to noncontrolling interest in consolidated subsidiary |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net income (loss) attributable to Semrush Holdings, Inc. |
$ |
6,874 |
|
$ |
(13,901 |
) |
|
$ |
950 |
|
|
$ |
(33,848 |
) |
|
|
|
|
|
|
|
|
|||||||
Net income (loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
|||||||
Basic |
$ |
0.05 |
|
$ |
(0.10 |
) |
|
$ |
0.01 |
|
|
$ |
(0.24 |
) |
Diluted |
$ |
0.05 |
|
$ |
(0.10 |
) |
|
$ |
0.01 |
|
|
$ |
(0.24 |
) |
Weighted-average number of shares of common stock used in computing net income (loss) per share attributable to common stockholders: |
|
|
|
|
|
|
|
|||||||
Basic |
|
143,620 |
|
|
141,531 |
|
|
|
142,593 |
|
|
|
141,160 |
|
Diluted |
|
146,889 |
|
|
141,531 |
|
|
|
146,065 |
|
|
|
141,160 |
|
¹ includes stock-based compensation expense as follows: |
|
|
|
|
|
|
|||||
|
Three months ended December 31, |
|
Fiscal Year ended December 31, |
||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
Cost of revenue |
$ |
48 |
|
$ |
22 |
|
$ |
130 |
|
$ |
74 |
Sales and marketing |
|
887 |
|
|
1,636 |
|
|
3,077 |
|
|
2,235 |
Research and development |
|
749 |
|
|
287 |
|
|
2,213 |
|
|
1,123 |
General and administrative |
|
2,889 |
|
|
332 |
|
|
9,917 |
|
|
3,961 |
Total stock-based compensation |
$ |
4,573 |
|
$ |
2,277 |
|
$ |
15,337 |
|
$ |
7,393 |
|
|
|
|
|
|
|
|
||||
|
Three months ended December 31, |
|
Fiscal Year ended December 31, |
||||||||||
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||
Reconciliation of Non-GAAP net income (loss) |
|
|
|
|
|
|
|
||||||
Net income (loss) |
$ |
6,874 |
|
$ |
(13,901 |
) |
|
$ |
950 |
|
$ |
(33,848 |
) |
Stock-based compensation |
|
4,573 |
|
|
2,277 |
|
|
|
15,337 |
|
|
7,393 |
|
Non-GAAP net income (loss) |
$ |
11,447 |
|
$ |
(11,624 |
) |
|
$ |
16,287 |
|
$ |
(26,455 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Three months ended December 31, |
|
Fiscal Year ended December 31, |
|||||||||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||||||||
Reconciliation of Non-GAAP income (loss) from operations |
($) |
(%) |
|
($) |
(%) |
|
($) |
(%) |
|
($) |
(%) |
|||||||||||
Income (loss) from operations |
$ |
2,682 |
3 |
% |
|
$ |
(15,273 |
) |
(22 |
)% |
|
$ |
(7,667 |
) |
(2 |
)% |
|
$ |
(36,373 |
) |
(14 |
)% |
Stock-based compensation |
|
4,574 |
5 |
% |
|
|
2,277 |
|
3 |
% |
|
|
15,337 |
|
5 |
% |
|
|
7,393 |
|
3 |
% |
Non-GAAP income (loss) from operations (prior definition) |
|
7,256 |
9 |
% |
|
|
(12,996 |
) |
(19 |
)% |
|
|
7,670 |
|
2 |
% |
|
|
(28,980 |
) |
(11 |
)% |
Amortization of acquired intangibles |
|
680 |
— |
% |
|
|
535 |
|
1 |
% |
|
|
2,307 |
|
1 |
% |
|
|
1,880 |
|
1 |
% |
Restructuring and other costs |
|
— |
— |
% |
|
|
1,847 |
|
3 |
% |
|
|
1,292 |
|
— |
% |
|
|
11,264 |
|
4 |
% |
Acquisition-related costs, net |
|
372 |
— |
% |
|
|
— |
|
— |
% |
|
|
372 |
|
— |
% |
|
|
— |
|
— |
% |
Non-GAAP income (loss) from operations (new definition) |
$ |
8,308 |
10 |
% |
|
$ |
(10,614 |
) |
(15 |
)% |
|
$ |
11,641 |
|
4 |
% |
|
$ |
(15,836 |
) |
(6 |
)% |
Semrush Holdings, Inc. UNAUDITED CONSOLIDATED BALANCE SHEETS (in thousands) |
|||||||
|
As of |
||||||
|
December 31, 2023 |
|
December 31, 2022 |
||||
Assets |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
58,848 |
|
|
$ |
79,765 |
|
Short-term investments |
|
179,721 |
|
|
|
157,774 |
|
Accounts receivable |
|
7,897 |
|
|
|
3,559 |
|
Deferred contract costs, current portion |
|
9,074 |
|
|
|
6,974 |
|
Prepaid expenses and other current assets |
|
10,014 |
|
|
|
9,307 |
|
Total current assets |
|
265,554 |
|
|
|
257,379 |
|
Property and equipment, net |
|
6,686 |
|
|
|
8,076 |
|
Operating lease right-of-use assets |
|
14,069 |
|
|
|
12,009 |
|
Intangible assets, net |
|
16,083 |
|
|
|
10,286 |
|
Goodwill |
|
24,879 |
|
|
|
6,529 |
|
Deferred contract costs, net of current portion |
|
3,586 |
|
|
|
2,082 |
|
Other long-term assets |
|
633 |
|
|
|
2,329 |
|
Total assets |
$ |
331,490 |
|
|
$ |
298,690 |
|
Liabilities and stockholders' equity |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
9,187 |
|
|
$ |
15,495 |
|
Accrued expenses |
|
19,891 |
|
|
|
17,847 |
|
Deferred revenue |
|
58,310 |
|
|
|
49,354 |
|
Current portion of operating lease liabilities |
|
4,274 |
|
|
|
3,694 |
|
Other current liabilities |
|
2,817 |
|
|
|
2,311 |
|
Total current liabilities |
|
94,479 |
|
|
|
88,701 |
|
Deferred revenue, net of current portion |
|
331 |
|
|
|
122 |
|
Deferred tax liability |
|
839 |
|
|
|
11 |
|
Operating lease liabilities, net of current portion |
|
10,331 |
|
|
|
8,929 |
|
Other long-term liabilities |
|
1,195 |
|
|
|
1,023 |
|
Total liabilities |
|
107,175 |
|
|
|
98,786 |
|
Stockholders' equity |
|
|
|
||||
Class A common stock |
|
1 |
|
|
|
— |
|
Class B common stock |
|
— |
|
|
|
1 |
|
Additional paid-in capital |
|
291,898 |
|
|
|
274,057 |
|
Accumulated other comprehensive loss |
|
(752 |
) |
|
|
(1,206 |
) |
Accumulated deficit |
|
(71,998 |
) |
|
|
(72,948 |
) |
Total stockholders' equity attributable to Semrush Holdings, Inc. |
|
219,149 |
|
|
|
199,904 |
|
Noncontrolling interest in consolidated subsidiary |
$ |
5,166 |
|
|
$ |
— |
|
Total stockholders’ equity |
|
224,315 |
|
|
|
199,904 |
|
Total liabilities and stockholders' equity |
$ |
331,490 |
|
|
$ |
298,690 |
|
Semrush Holdings Inc. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
|||||||
|
Fiscal Year Ended December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Operating Activities |
|
|
|
||||
Net income (loss) |
$ |
950 |
|
|
$ |
(33,848 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities |
|
|
|
||||
Depreciation and amortization expense |
|
6,790 |
|
|
|
6,650 |
|
Amortization of deferred contract costs |
|
10,379 |
|
|
|
8,988 |
|
Amortization (accretion) of premiums and discounts on investments |
|
(6,067 |
) |
|
|
— |
|
Non-cash lease expense |
|
3,940 |
|
|
|
4,520 |
|
Stock-based compensation expense |
|
15,337 |
|
|
|
7,393 |
|
Non-cash interest expense |
|
209 |
|
|
|
242 |
|
Change in fair value of convertible debt securities |
|
(3,552 |
) |
|
|
(1,152 |
) |
Deferred taxes |
|
301 |
|
|
|
(253 |
) |
Intangible asset impairment expense |
|
122 |
|
|
|
642 |
|
Loss on disposal of subsidiaries |
|
— |
|
|
|
1,738 |
|
Other non-cash items |
|
858 |
|
|
|
— |
|
Changes in operating assets and liabilities |
|
|
|
||||
Accounts receivable |
|
(3,789 |
) |
|
|
(3,317 |
) |
Deferred contract costs |
|
(13,982 |
) |
|
|
(9,452 |
) |
Prepaid expenses and other current assets |
|
(2,347 |
) |
|
|
(2,446 |
) |
Accounts payable |
|
(7,394 |
) |
|
|
6,793 |
|
Accrued expenses |
|
1,627 |
|
|
|
(848 |
) |
Other current liabilities |
|
(238 |
) |
|
|
(394 |
) |
Deferred revenue |
|
8,755 |
|
|
|
9,133 |
|
Other long-term liabilities |
|
— |
|
|
|
94 |
|
Change in operating lease liability |
|
(3,913 |
) |
|
|
(4,107 |
) |
Net cash provided by (used in) operating activities |
|
7,986 |
|
|
|
(9,624 |
) |
Investing Activities |
|
|
|
||||
Purchases of property and equipment |
|
(2,486 |
) |
|
|
(4,234 |
) |
Purchases of short-term investments |
|
(257,516 |
) |
|
|
(157,899 |
) |
Proceeds from sales and maturities of short-term investments |
|
241,641 |
|
|
|
— |
|
Purchases of convertible debt securities |
|
(326 |
) |
|
|
(2,000 |
) |
Capitalization of internal-use software costs |
|
(5,165 |
) |
|
|
(1,706 |
) |
Cash paid for acquisition of assets and businesses, net of cash acquired |
|
(5,066 |
) |
|
|
(13,993 |
) |
Purchases of other investments |
|
(150 |
) |
|
|
— |
|
Net cash used in investing activities |
|
(29,068 |
) |
|
|
(179,832 |
) |
Financing Activities |
|
|
|
||||
Proceeds from exercise of stock options |
|
2,240 |
|
|
|
981 |
|
Proceeds from issuance of shares in connection with Employee Stock Purchase Plan |
|
264 |
|
|
|
758 |
|
Payment of finance leases |
|
(2,523 |
) |
|
|
(2,084 |
) |
Net cash used in financing activities |
|
(19 |
) |
|
|
(345 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
184 |
|
|
|
(275 |
) |
(Decrease) increase in cash, cash equivalents and restricted cash |
|
(20,917 |
) |
|
|
(190,076 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
79,765 |
|
|
|
269,841 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
58,848 |
|
|
$ |
79,765 |
|
Unaudited Reconciliation of GAAP Operating Income (Loss) from Operations and Margin to non-GAAP Income (Loss) from Operations and Margin for previously reported periods during 2023 (in thousands, except percentages) |
|||||||||||
|
|
Three months ended
|
|
Nine months ended
|
|||||||
Reconciliation of Non-GAAP income (loss) from operations |
|
($) |
(%) |
|
($) |
(%) |
|||||
Income (loss) from operations |
|
$ |
2,748 |
3 |
% |
|
$ |
(10,349 |
) |
(5 |
)% |
Stock-based compensation |
|
|
4,202 |
5 |
% |
|
|
10,764 |
|
5 |
% |
Non-GAAP income from operations (prior definition) |
|
$ |
6,950 |
9 |
% |
|
$ |
415 |
|
— |
% |
Amortization of acquired intangibles |
|
|
557 |
1 |
% |
|
|
1,631 |
|
1 |
% |
Restructuring and other costs |
|
|
— |
— |
% |
|
|
1,292 |
|
1 |
% |
Acquisition-related costs, net |
|
|
— |
— |
% |
|
|
— |
|
— |
% |
Non-GAAP income from operations (new definition) |
|
$ |
7,507 |
10 |
% |
|
$ |
3,338 |
|
1 |
% |
|
|
|
|
|
|
|
|||||
|
|
Three months ended
|
|
Six months ended
|
||||||||
Reconciliation of Non-GAAP income (loss) from operations |
|
($) |
(%) |
|
($) |
(%) |
||||||
Loss from operations |
|
$ |
(2,329 |
) |
(3 |
)% |
|
$ |
(13,097 |
) |
(9 |
)% |
Stock-based compensation |
|
|
3,765 |
|
5 |
% |
|
|
6,561 |
|
5 |
% |
Non-GAAP income (loss) from operations (prior definition) |
|
$ |
1,436 |
|
2 |
% |
|
$ |
(6,536 |
) |
(4 |
)% |
Amortization of acquired intangibles |
|
|
548 |
|
1 |
% |
|
|
1,070 |
|
1 |
% |
Restructuring and other costs |
|
|
309 |
|
— |
% |
|
|
1,292 |
|
1 |
% |
Acquisition-related costs, net |
|
|
— |
|
— |
% |
|
|
— |
|
— |
% |
Non-GAAP income (loss) from operations (new definition) |
|
$ |
2,293 |
|
3 |
% |
|
$ |
(4,174 |
) |
(3 |
)% |
|
|
|
|
|
|
|
||||||
|
|
Three months ended
|
||||
Reconciliation of Non-GAAP income (loss) from operations |
|
($) |
(%) |
|||
Loss from operations |
|
$ |
(10,768 |
) |
(15 |
)% |
Stock-based compensation |
|
|
2,796 |
|
4 |
% |
Non-GAAP loss from operations (prior definition) |
|
$ |
(7,972 |
) |
(11 |
)% |
Amortization of acquired intangibles |
|
|
522 |
|
1 |
% |
Restructuring and other costs |
|
|
983 |
|
1 |
% |
Acquisition-related costs, net |
|
|
— |
|
— |
% |
Non-GAAP loss from operations (new definition) |
|
$ |
(6,467 |
) |
(9 |
)% |
|
|
|
|
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240304664455/en/
INVESTOR
Brinlea C. Johnson
The Blueshirt Group
Semrush Holdings, Inc.
ir@semrush.com
MEDIA
Jesse Platz
VP of Analyst and Public Relations
Semrush Holdings, Inc.
jesse.platz@semrush.com
Source: Semrush Holdings, Inc.
FAQ
What was Semrush's revenue growth in Q4 and full year 2023?
What was Semrush's ARR as of December 31, 2023?
What was Semrush's net income for the full year 2023?
What are Semrush's main growth pillars?
When will Semrush's new Enterprise Platform be Generally Available (GA)?
