Latest news with #BillWagner
Yahoo
7 days ago
- Business
- Yahoo
Semrush (NYSE:SEMR) Posts Q2 Sales In Line With Estimates But Stock Drops 13.6%
Marketing analytics software Semrush (NYSE:SEMR) met Wall Street's revenue expectations in Q2 CY2025, with sales up 19.7% year on year to $108.9 million. On the other hand, next quarter's revenue guidance of $111.6 million was less impressive, coming in 2.9% below analysts' estimates. Its GAAP loss of $0.04 per share was significantly below analysts' consensus estimates. Is now the time to buy Semrush? Find out in our full research report. Semrush (SEMR) Q2 CY2025 Highlights: Revenue: $108.9 million vs analyst estimates of $108.8 million (19.7% year-on-year growth, in line) EPS (GAAP): -$0.04 vs analyst estimates of $0.02 (significant miss) Adjusted Operating Income: $11.96 million vs analyst estimates of $12.01 million (11% margin, in line) The company dropped its revenue guidance for the full year to $444.5 million at the midpoint from $450.5 million, a 1.3% decrease Operating Margin: -4%, down from 3.7% in the same quarter last year Free Cash Flow was -$3.57 million, down from $18.51 million in the previous quarter Customers: 116,000, down from 118,000 in the previous quarter Net Revenue Retention Rate: 105%, down from 106% in the previous quarter Market Capitalization: $1.26 billion 'We posted strong revenue growth in the second quarter and were especially pleased by the accelerated adoption of our AI and Enterprise products,' said Bill Wagner, CEO. Company Overview Started by Oleg Shchegolev while still in university, Semrush (NYSE:SEMR) is a software-as-a-service platform that helps companies optimize their search engine and content marketing efforts. Revenue Growth A company's long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last three years, Semrush grew its sales at a decent 22.9% compounded annual growth rate. Its growth was slightly above the average software company and shows its offerings resonate with customers. This quarter, Semrush's year-on-year revenue growth was 19.7%, and its $108.9 million of revenue was in line with Wall Street's estimates. Company management is currently guiding for a 14.6% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 18.5% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is admirable and indicates the market sees success for its products and services. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Customer Retention One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company's products and services over time. Semrush's net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 106% in Q2. This means Semrush would've grown its revenue by 6% even if it didn't win any new customers over the last 12 months. Semrush has a decent net retention rate, showing us that its customers not only tend to stick around but also get increasing value from its software over time. Key Takeaways from Semrush's Q2 Results We struggled to find many positives in these results. Its full-year revenue guidance was lowered and slightly missed and its revenue guidance for next quarter fell short of Wall Street's estimates. Overall, this was a weaker quarter. The stock traded down 13.6% to $7.99 immediately after reporting. Semrush didn't show it's best hand this quarter, but does that create an opportunity to buy the stock right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
7 days ago
- Business
- Business Wire
Semrush Announces Second Quarter 2025 Financial Results
BOSTON--(BUSINESS WIRE)--Semrush Holdings, Inc. (NYSE: SEMR), a leading online visibility management SaaS platform, today reported financial results for the second quarter ended June 30, 2025. 'We posted strong revenue growth in the second quarter and were especially pleased by the accelerated adoption of our AI and Enterprise products,' said Bill Wagner, CEO. 'We are very excited about our leadership position in the market and our long-term growth opportunities. To underscore this conviction, we are announcing a $150 million share repurchase program.' Second Quarter 2025 Financial Highlights Second quarter revenue of $108.9 million, up 20% year-over-year. Loss from operations of ($4.3) million for the second quarter, compared to income from operations of $3.4 million in the prior year's quarter. Second quarter operating margin of (4.0%), compared to 3.7% in the prior year period. Non-GAAP income from operations of $12.0 million for the second quarter for a non-GAAP operating margin of 11.0%, compared to non-GAAP income from operations of $12.2 million in the prior year period for a non-GAAP operating margin of 13.4%. Cash flow from operations was $0.7 million in the second quarter, representing a cash flow from operations margin of 0.6%. ARR of $435.3 million as of June 30, 2025, up 15% year-over-year. Approximately 116,000 paying customers as of June 30, 2025. Dollar-based net revenue retention of 105%, as of June 30, 2025. See 'Non-GAAP Financial Measures & Definitions of Key Metrics' below for how Semrush defines ARR, dollar-based net revenue retention, non-GAAP income from operations, non-GAAP operating margin, free cash flow, and free cash flow margin, and the financial tables that accompany this release for reconciliations of each non-GAAP financial measure to its closest comparable GAAP financial measure. Second Quarter 2025 Business Highlights We are committed to empowering our customers with a best-in-class platform designed to boost their online presence and gain an edge in the market. We advanced and expanded many of our offerings and continued investments in Generative AI to provide enhanced, more efficient content creation and marketing capabilities through Semrush's platform: Announced general availability of AI Optimization (AIO), a Semrush Enterprise Solution, providing businesses with tools to track, control, and optimize brand presence across AI-powered search platforms. Introduced Toolkits, an AI-powered, all-in-one platform that provides businesses with streamlined workflows, centralized marketing tools, and the ability to drive measurable performance. Added SearchGPT as a search engine option within the Position Tracking tool, enabling users to monitor domain visibility on leading AI conversational platforms alongside traditional search engines. Released the AI Traffic dashboard inside the Traffic & Market Toolkit, allowing businesses to track brand visibility across AI tools like ChatGPT, Copilot, Gemini, and Perplexity. Launched a new algorithm update in Semrush .Trends, offering sharper insights, broader domain coverage, and faster delivery of fresh traffic data. Semrush customers who pay more than $10,000 annually grew by 35% year-over-year. Forrester named Semrush as a Leader in SEO Solutions and recognized Semrush's competitive intelligence, robust analytics, and vision for SEO as the 'engine of digital discoverability.' Company strengthens leadership with appointment of Caroline Tsay to Board of Directors. 'Looking ahead, I am energized about our ability to drive durable growth, profitability, and strong cash flow,' said Brian Mulroy, CFO. 'Our share repurchase program demonstrates our strong conviction in the business, reflects the strength of our balance sheet and free cash flow generation, highlights the attractive valuation opportunity and reinforces our commitment to delivering shareholder value.' Share Repurchase Program Today, the Company announces that a special committee composed of independent members of our Board of Directors authorized an inaugural share repurchase program. Share repurchases of our Class A common stock under the $150 million program may be made from time to time on the open market (including pursuant to Rule 10b5-1 trading plans), through privately negotiated transactions, or other legally permissible means. The share repurchase program has no time limit, does not obligate Semrush to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on market conditions and other factors. Based on information as of today, August 4, 2025, we are issuing the following financial guidance: Third Quarter 2025 Financial Outlook For the third quarter, we expect revenue in a range of $111.1 million to $112.1 million, which at the mid-point would represent growth of approximately 15% year-over-year. We expect third quarter non-GAAP operating margin to be approximately 11.5%. Full-Year 2025 Financial Outlook The company is revising its annual revenue outlook to reflect softer demand at the lower end of the market, impacted by an increase in paid-search cost per click. For the full year, we expect revenue in a range of $443.0 to $446.0 million, which at the mid-point would represent growth of approximately 18% year-over-year. We expect full year non-GAAP operating margin to be approximately 12%. We expect the full year free cash flow margin to be approximately 12%. 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 and Webcast 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, August 5th, 2025 Time: 8:30 a.m. ET Hosts: Bill Wagner, CEO, and Brian Mulroy, CFO Conference ID: 978610 Participant Toll Free Dial-In Number: +1 833 470 1428 Participant International Dial-In Number: +1 929 526 1599 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 About Semrush Semrush is a leading online visibility management SaaS platform that enables businesses globally to run search engine optimization, advertising, 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 is headquartered in Boston and has offices in Austin, Dallas, Amsterdam, Barcelona, Belgrade, Berlin, Munich, Limassol, Prague, Warsaw, and Yerevan. 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,' 'positioning,' '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 third quarter and full fiscal year of 2025 (including revenue, non-GAAP operating margin, and free cash flow margin); statements regarding the expectations of demand for our products and cash flow generation; statements about improvements to and expansion of our products and platform, and launching new products; statements about future operating results, including revenue, growth opportunities, variability of expenses, ability to realize efficiencies, future spending and incremental investments, business trends, our ability to deliver profits, and growth and value for shareholders; assumptions regarding foreign exchange rates; and plans, expectations and statements regarding our share repurchase program. 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 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 or the SEC's website at 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 financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables included below in this press release. Annual Recurring Revenue (ARR) is defined as the total subscription revenue as of a given date that we expect to contractually receive over the subsequent 12 months from customers on an annualized basis, assuming no increases, reductions or cancellations. This ARR definition was updated in our Annual Report on Form 10-K for the period ended December 31, 2024 to simplify the explanation of our calculation around the treatment of monthly and longer-term contracts, and to be more consistent with other SaaS businesses, which we believe improves the ability for investors to compare our metric against other businesses. Additionally, our definition was updated to note that we do not assume there will be any increases, reductions, or cancellations. Given our efforts to retain and win back customers, and our belief that we will be successful in many of those retention efforts, we believe the updated definition is more accurate. We did not recast ARR results to conform ARR under the prior definition to the updated definition as there is no variance between the two definitions for the periods presented. 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, and non-GAAP operating margin. 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. 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. 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. ¹ includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cost of revenue $ 116 $ 59 $ 160 $ 98 Sales and marketing 2,260 1,209 3,887 1,979 Research and development 3,917 1,371 6,383 2,007 General and administrative 7,143 4,527 12,118 8,197 Total stock-based compensation $ 13,436 $ 7,166 $ 22,548 $ 12,281 Expand The following table sets forth a reconciliation of our (loss) income from operations and operating margin to non-GAAP income from operations and non-GAAP operating margin, respectively (percentage amounts may not sum due to rounding): The following table sets forth a reconciliation of our net cash provided by operating activities and net cash provided by operating activities (as a percentage of revenue) to free cash flow and free cash flow margin, respectively (percentage amounts may not sum due to rounding): Semrush Holdings, Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) As of December 31, 2024 Assets Current assets Cash and cash equivalents $ 54,322 $ 48,875 Short-term investments 204,225 186,693 Accounts receivable 14,243 8,955 Deferred contract costs, current portion 10,178 10,044 Prepaid expenses and other current assets 18,138 21,617 Total current assets 301,106 276,184 Property and equipment, net 6,673 6,534 Operating lease right-of-use assets 11,551 11,126 Intangible assets, net 35,317 32,055 Goodwill 59,924 56,139 Deferred contract costs, net of current portion 3,495 3,080 Other long-term assets 6,883 5,825 Total assets $ 424,949 $ 390,943 Liabilities, noncontrolling interest, and stockholders' equity Current liabilities Accounts payable $ 13,505 $ 10,463 Accrued expenses 20,627 20,216 Deferred revenue 81,730 71,827 Current portion of operating lease liabilities 4,966 4,669 Other current liabilities 4,853 6,913 Total current liabilities 125,681 114,088 Deferred revenue, net of current portion 235 235 Deferred tax liability 1,798 1,621 Operating lease liabilities, net of current portion 7,852 7,602 Other long-term liabilities 1,216 1,045 Total liabilities 136,782 124,591 Commitments and contingencies Stockholders' equity Class A common stock 1 1 Class B common stock — — Additional paid-in capital 345,664 322,586 Accumulated other comprehensive income (loss) 2,862 (2,221 ) Accumulated deficit (69,480 ) (63,762 ) Total stockholders' equity attributable to Semrush Holdings, Inc. 279,047 256,604 Noncontrolling interest in consolidated subsidiaries 9,120 9,748 Total stockholders' equity 288,167 266,352 Total liabilities, noncontrolling interest and stockholders' equity $ 424,949 $ 390,943 Expand Semrush Holdings, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Six Months Ended June 30, 2025 2024 Operating Activities Net (loss) income $ (6,122 ) $ 3,364 Adjustments to reconcile net (loss) income to net cash provided by operating activities Depreciation and amortization expense 6,313 4,269 Amortization of deferred contract costs 7,043 6,054 Amortization (accretion) of premiums and discounts on investments (1,400 ) (2,023 ) Non-cash lease expense 2,451 2,233 Stock-based compensation expense 22,548 12,281 Change in fair value included in other income, net (1,271 ) — Deferred taxes 39 (217 ) Other non-cash items 1,255 1,400 Changes in operating assets and liabilities Accounts receivable (5,427 ) (774 ) Deferred contract costs (7,591 ) (6,129 ) Prepaid expenses and other current assets (4,166 ) (4,017 ) Accounts payable 2,630 1,906 Accrued expenses 104 2,917 Other current liabilities (233 ) 360 Deferred revenue 9,358 7,353 Other long-term liabilities 162 92 Change in operating lease liability (2,900 ) (2,147 ) Net cash provided by operating activities 22,793 26,922 Investing Activities Purchases of property and equipment (1,329 ) (2,906 ) Capitalization of internal-use software costs (6,532 ) (4,369 ) Purchases of short-term investments (61,524 ) (83,605 ) Proceeds from sales and maturities of short-term investments 46,000 102,500 Purchases of convertible debt securities — (650 ) Funding of investment loan receivables — (7,000 ) Proceeds from repayment of investment loan receivables 7,676 — Cash paid for acquisition of assets and businesses, net of cash acquired (1,097 ) (10,026 ) Purchases of noncontrolling interest (223 ) — Purchases of other investments — (131 ) Net cash used in investing activities (17,029 ) (6,187 ) Financing Activities Proceeds from exercise of stock options 648 3,053 Taxes paid related to net share settlement of equity awards (426 ) — Repayment of acquired debt (1,088 ) — Payment of finance leases (211 ) (493 ) Net cash (used in) provided by financing activities (1,077 ) 2,560 Effect of exchange rate changes on cash and cash equivalents 760 (614 ) Increase (decrease) in cash, cash equivalents and restricted cash 5,447 22,681 Cash, cash equivalents and restricted cash, beginning of period 49,060 58,848 Cash, cash equivalents and restricted cash, end of period $ 54,507 $ 81,529 Expand
Yahoo
15-07-2025
- Business
- Yahoo
Semrush Holdings, Inc. Announces Investor Conference Call to Review Second Quarter 2025 Financial Results
BOSTON, July 15, 2025--(BUSINESS WIRE)--Semrush Holdings, Inc. (NYSE: SEMR), a leading online visibility management SaaS platform, will release its financial results for the second quarter ended June 30, 2025, after the close of the US markets on Monday, August 4, 2025. Semrush will host a corresponding conference call to discuss the results on Tuesday, August 5, 2025 at 8:30 a.m. Eastern Time. Conference Call Details Date: Tuesday, August 5th, 2025Time: 8:30 a.m. ETHosts: Bill Wagner, CEO, and Brian Mulroy, CFOConference ID: 978610Participant Toll Free Dial-In Number: +1 833 470 1428Participant International Dial-In Number: +1 929 526 1599 Participants should dial in at least ten minutes before the start of the conference call. A live webcast of the conference call and financial results will be accessible at An archived replay of the webcast will be available on this website for a limited time after the call. About Semrush Holdings, Inc. Semrush is a leading online visibility management SaaS platform that enables businesses globally to run search engine optimization, advertising, 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 is headquartered in Boston and has offices in Austin, Dallas, Amsterdam, Barcelona, Belgrade, Berlin, Munich, Limassol, Prague, Warsaw, and Yerevan. View source version on Contacts Investor: Brinlea JohnsonThe Blueshirt GroupSemrush Holdings, Incir@ Media: Jena SullivanSenior Public Relations ManagerSemrush Holdings, Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
15-07-2025
- Business
- Business Wire
Semrush Holdings, Inc. Announces Investor Conference Call to Review Second Quarter 2025 Financial Results
BOSTON--(BUSINESS WIRE)--Semrush Holdings, Inc. (NYSE: SEMR), a leading online visibility management SaaS platform, will release its financial results for the second quarter ended June 30, 2025, after the close of the US markets on Monday, August 4, 2025. Semrush will host a corresponding conference call to discuss the results on Tuesday, August 5, 2025 at 8:30 a.m. Eastern Time. Conference Call Details Time: 8:30 a.m. ET Hosts: Bill Wagner, CEO, and Brian Mulroy, CFO Conference ID: 978610 Participant Toll Free Dial-In Number: +1 833 470 1428 Participant International Dial-In Number: +1 929 526 1599 Participants should dial in at least ten minutes before the start of the conference call. A live webcast of the conference call and financial results will be accessible at An archived replay of the webcast will be available on this website for a limited time after the call. About Semrush Holdings, Inc. Semrush is a leading online visibility management SaaS platform that enables businesses globally to run search engine optimization, advertising, 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 is headquartered in Boston and has offices in Austin, Dallas, Amsterdam, Barcelona, Belgrade, Berlin, Munich, Limassol, Prague, Warsaw, and Yerevan.
Yahoo
11-06-2025
- Business
- Yahoo
SEMR Q1 Earnings Call: Enterprise and AI Products Lead Growth, Profitability Misses Expectations
Marketing analytics software Semrush (NYSE:SEMR) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 22.4% year on year to $105 million. The company expects next quarter's revenue to be around $108.7 million, close to analysts' estimates. Its non-GAAP profit of $0.02 per share was 74.9% below analysts' consensus estimates. Is now the time to buy SEMR? Find out in our full research report (it's free). Revenue: $105 million vs analyst estimates of $104.1 million (22.4% year-on-year growth, 0.9% beat) Adjusted EPS: $0.02 vs analyst expectations of $0.07 (74.9% miss) The company reconfirmed its revenue guidance for the full year of $450.5 million at the midpoint Operating Margin: -0.1%, down from 1.7% in the same quarter last year Customers: 118,000, up from 117,000 in the previous quarter Net Revenue Retention Rate: 106%, in line with the previous quarter Market Capitalization: $1.51 billion Semrush's first quarter results reflected a pivotal phase for the company, as management attributed revenue growth primarily to expanding adoption of its Enterprise SEO Solution and a focus on higher-value customers. CEO Bill Wagner pointed to the strong performance of Semrush's enterprise offerings, noting nearly 200 paying enterprise customers with average annual recurring revenue (ARR) per customer exceeding previous expectations. Wagner also highlighted early success with the company's new AI Toolkit, which he described as one of Semrush's fastest-growing products. CFO Brian Mulroy emphasized that this performance was driven by both increased average revenue per customer and continued customer base growth, supported by cross-sell and up-sell strategies. Management acknowledged intentional shifts toward larger, higher-quality accounts, stating this was expected to result in different seasonal trends compared to prior years. Looking ahead, Semrush's outlook is anchored by management's conviction that AI-driven search and enterprise solutions will be major growth drivers in the coming quarters. Wagner described AI as a 'once-in-a-generation opportunity' and outlined plans to double down on AI product innovation, including the upcoming launch of its AI Optimization product for enterprise customers. He stated, 'We expect Semrush will become the go-to source companies will turn to, to analyze, monitor and proactively shape their brand presence within these new AI-driven search environments.' Mulroy reaffirmed the company's commitment to expanding its enterprise product suite and noted that new solutions, along with enhancements to customer onboarding and data capabilities, are expected to improve adoption and retention. Management cautioned, however, that ongoing macroeconomic and geopolitical uncertainties could lead to elongated sales cycles and deferred customer spending, which are reflected in the company's reiterated guidance. Semrush's first quarter performance was propelled by enterprise customer momentum, rapid uptake of new AI products, and ongoing initiatives to streamline user onboarding and product accessibility. Enterprise Segment Expansion: Management credited the strong quarter to higher adoption of the Enterprise SEO Solution, with nearly 200 enterprise customers and average ARR per enterprise account around $60,000, surpassing initial targets. The company views the enterprise market as a significant long-term growth driver. AI Product Traction: The introduction of the AI Toolkit, targeting smaller businesses and freelancers, was identified as one of the fastest-growing product launches in the company's history. Management cited over $4 million in ARR from AI products within a short timeframe and emphasized the potential of AI Optimization, now in open beta for enterprise customers. Shift Toward Higher-Value Customers: CFO Brian Mulroy explained that Semrush intentionally shifted focus toward attracting and retaining larger, higher-value customers, particularly in the enterprise segment, resulting in changes to seasonal sales patterns and a higher average revenue per customer. Enhanced Data Platform: CEO Wagner underlined the strategic value of Semrush's data platform, which he described as a 'data warehouse for digital marketing' capable of turning fragmented signals across digital channels into actionable insights. This data advantage is seen as a core differentiator and an enabler for future AI-driven solutions. Product Accessibility Initiatives: Wagner detailed efforts to reduce friction for customers, including the rollout of new onboarding flows and the forthcoming AI Assistant. These initiatives are designed to accelerate value delivery, especially for small and midsize businesses, and are part of a broader strategy to make digital marketing tools more accessible to all customer segments. Semrush's forward guidance is shaped by anticipated growth from new AI-driven products, deeper enterprise penetration, and ongoing investments in its data platform and onboarding experience. AI Product Expansion: Management believes that continued investment in AI-enabled solutions—including the upcoming launch of AI Optimization for enterprises—will support both revenue growth and higher average deal sizes. Wagner suggested that the combination of core SEO and AI products will be additive, rather than cannibalistic, to overall customer spend. Enterprise Momentum and Upsell: The company expects its enterprise segment to be the primary growth engine, with further cross-sell and up-sell opportunities. Mulroy highlighted a growing pipeline of enterprise accounts and projected that average ARR per enterprise customer could eventually exceed $100,000 as additional solutions are adopted. Macro and Currency Headwinds: Management acknowledged that macroeconomic challenges and currency fluctuations, particularly related to the euro, could create headwinds to margin expansion despite strong operating leverage and cost discipline. These risks are factored into the company's reaffirmed guidance for margins and cash flow. In the coming quarters, we will watch for (1) continued growth in enterprise customer adoption and expansion of the AI product suite, (2) measurable improvements in onboarding efficiency and customer retention, and (3) the impact of macroeconomic and currency headwinds on margin progression. Progress on these fronts will be key markers of Semrush's ability to execute its strategy and sustain profitable growth. Semrush currently trades at a forward price-to-sales ratio of 3.3×. At this valuation, is it a buy or sell post earnings? Find out in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
