More than 91,000 Customers as of June 30,
2022
Second Quarter Revenue of $62.6 million
Semrush Holdings, Inc. (“Semrush” )(NYSE: SEMR), a leading
online visibility management SaaS platform, today reported results
for the quarter ended June 30, 2022.
“We saw sequential growth accelerate in the second quarter as we
added a record $5.5 million of revenue. Our growth was once again
underpinned by higher average revenue per customer, driven by an
increased proportion of customers from higher priced plans and
growth of add-ons. We also made remarkable progress with
relocations and are well on target to wind down our operations in
Russia ahead of plan,” said Oleg Shchegolev, CEO and Co-Founder of
Semrush.
“I am pleased with our customer additions, combined with a
record performance in the first quarter we added 9,000 new
customers through the first six months of the year. It is still
very early but our two most recent acquisitions, Backlinko and
Kompyte are already having a positive impact on our growth. Looking
ahead, we are mindful of a more uncertain economic environment but
remain focused on pursuing the appropriate investments to sustain
strong growth through 2022 and beyond,” added Mr. Shchegolev.
Second Quarter 2022 Financial Highlights
- Second quarter revenue of $62.6 million, up 39% year over
year
- ARR of $255 million as of June 30, 2022, up 35% year over
year
- Dollar-based net revenue retention of 125% as of June 30, 2022,
compared to 127% in the previous quarter
- More than 91,000 paying customers as of June 30, 2022, up
approximately 18% from a year ago
- Net loss of $8.3 million for the second quarter, compared with
a net loss of $279 thousand a year ago
- Non-GAAP net loss of $6.1 million for the second quarter which
includes $3.5 million of expense associated with the winding down
of our Russia operations, compared with non-GAAP net income of $290
thousand a year ago
See “Non-GAAP Financial Measures & Definitions of Key
Metrics” below for how we define 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
- Local listing add-on revenue was up more than 70% from the
previous year as we expanded availability to 22 new markets in the
quarter
- We continue to see a richer mix as the number of customers who
pay more than $10,000 annually grew more than 80% and customers on
our two higher priced plans are up more than 25% from a year
ago
- Kompyte achieved the first cross-sale to an existing Semrush
customer, and we continue to see strong demand from both new and
existing customers
- Relocated the vast majority of eligible employees ahead of
schedule and under budget, and as of August 10, 2022 we no longer
have operating subsidiaries in Russia
Business Outlook
Based on information as of today, August 10, 2022, we are
issuing the following financial guidance:
Third Quarter 2022 Financial Outlook
- Revenue is expected to be in a range of $63.8 million to $64.2
million, up 30% year over year
- Non-GAAP net loss is expected to be in a range of $13 to $12
million, which includes incremental $7 to $5 million of one-time
relocation costs related to the winding down of our Russia
operations
Full-Year 2022 Financial Outlook
- Revenue is expected to be in a range of $251 million to $253
million, up 34 to 35% year over year
- Non-GAAP net loss is expected to be in a range of $32 to $28
million, which includes $11 to $10 million of one-time relocation
costs related to the winding down of our Russia operations
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: Thursday, August 11, 2022 Time: 8:30 a.m. ET Hosts: Oleg
Shchegolev, CEO, Evgeny Fetisov, CFO, and Eugene Levin, President
Conference ID: 3520221 Participant Toll Free Dial-In Number: 1
(888) 350-3436 Participant International Dial-In Number: 1 (646)
960-0185
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 91,000 paying customers, is headquartered in Boston and has
offices in Philadelphia, Dallas, Amsterdam, Berlin, Barcelona,
Prague, Warsaw, Belgrade, and Limassol as well as new locations in
Turkey, Armenia, and Georgia.
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 future periods; statements
about our ability to successfully relocate employees out of Russia,
including executing our relocation plans on the timeline we expect
and at the anticipated cost; 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 our Annual
Report on Form 10-K, filed with the SEC on March 18, 2022, 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, except that
we calculate the ARR of Prowly's customers as the monthly recurring
revenue as of the last month of the reporting period multiplied by
12. 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.
Condensed Consolidated
Statement of Operations (Unaudited)
(in thousands, except per
share data)
Three months ended June
30,
Six months ended June
30,
2022
2021
2022
2021
Revenue
$
62,610
$
45,005
$
119,738
$
85,003
Cost of revenue ¹
12,598
10,238
24,185
19,011
Gross profit
50,012
34,767
95,553
65,992
Operating expenses
Sales and marketing ¹
30,894
18,298
56,724
34,755
Research and development ¹
9,671
5,964
17,809
11,322
General and administrative ¹
14,218
10,520
28,381
18,424
Exit costs
3,485
—
3,485
—
Total operating expenses
58,268
34,782
106,399
64,501
(Loss) income from operations
(8,256
)
(15
)
(10,846
)
1,491
Other income (expense), net
711
(123
)
870
(72
)
(Loss) income before income taxes
(7,545
)
(138
)
(9,976
)
1,419
Provision for income taxes
739
141
879
227
Net (loss) income
$
(8,284
)
$
(279
)
$
(10,855
)
$
1,192
Net (loss) income per share attributable
to common stockholders:
Basic
$
(0.06
)
$
—
$
(0.08
)
$
0.01
Diluted
$
(0.06
)
$
—
$
(0.08
)
$
0.01
Weighted-average number of shares of
common stock used in computing net (loss) income per share
attributable to common stockholders:
Basic
141,042
135,312
140,921
115,951
Diluted
141,042
135,312
140,921
137,263
¹ includes stock-based compensation
expense as follows:
Three months ended June
30,
Six months ended June
30,
2022
2021
2022
2021
Cost of revenue
$
21
$
7
$
32
$
14
Sales and marketing
277
52
410
242
Research and development
358
68
507
135
General and administrative
1,548
442
2,187
771
Total stock-based compensation
$
2,204
$
569
$
3,136
$
1,162
Three months ended June
30,
Six months ended June
30,
2022
2021
2022
2021
Reconciliation of Non-GAAP net (loss)
income
Net (loss) income
$
(8,284
)
$
(279
)
$
(10,855
)
$
1,192
Stock-based compensation expense
2,204
569
3,136
1,162
Non-GAAP net (loss) income
$
(6,080
)
$
290
$
(7,719
)
$
2,354
Semrush Holdings, Inc.
Condensed Consolidated Balance
Sheets (Unaudited)
(in thousands, except per
share data)
As of
June 30, 2022
December 31, 2021
Assets
Current assets
Cash and cash equivalents
$
248,917
$
269,665
Accounts receivable
2,346
2,190
Deferred contract costs, current
portion
7,276
6,338
Prepaid expenses and other current
assets
10,484
5,345
Total current assets
269,023
283,538
Property and equipment, net
8,632
8,270
Intangible assets, net
11,344
2,925
Goodwill
6,740
1,991
Deferred contract costs, net of current
portion
2,586
2,254
Other assets
3,921
1,096
Total assets
$
302,246
$
300,074
Liabilities and stockholders’
equity
Current liabilities
Accounts payable
$
5,729
$
9,942
Accrued expenses
25,309
19,479
Deferred revenue
48,303
40,232
Other current liabilities
2,621
1,896
Total current liabilities
81,962
71,549
Long-term liabilities
Deferred revenue, net of current
portion
185
237
Deferred tax liability
24
268
Other long-term liabilities
2,179
2,478
Total liabilities
84,350
74,532
Stockholders' equity
Class A common stock, $0.00001 par value -
1,000,000,000 shares authorized, and 43,261,183 shares issued and
outstanding as of June 30, 2022; 31,841,861 shares issued and
outstanding as of December 31, 2021
—
—
Class B common stock, $0.00001 par value -
160,000,000 shares authorized, and 97,975,754 shares issued and
97,870,664 outstanding as of June 30, 2022; 108,975,216 shares
issued and 108,870,126 outstanding as of December 31, 2021
1
1
Additional paid-in capital
269,201
264,871
Accumulated other comprehensive
deficit
(1,351
)
(230
)
Accumulated deficit
(49,955
)
(39,100
)
Total stockholders’ equity
217,896
225,542
Total liabilities and stockholders'
equity
$
302,246
$
300,074
Semrush Holdings Inc.
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended
June 30,
2022
2021
Operating Activities
Net (loss) income
$
(10,855
)
$
1,192
Adjustments to reconcile net (loss) income
to net cash provided by operating activities
Depreciation and amortization expense
4,221
1,447
Amortization of deferred contract
costs
4,763
2,950
Stock-based compensation expense
3,136
1,162
Non-cash interest expense
53
104
Change in fair value of convertible debt
securities
(1,028
)
—
Deferred taxes
202
(83
)
Changes in operating assets and
liabilities
Accounts receivable
109
(1,324
)
Deferred contract costs
(6,033
)
(4,789
)
Prepaid expenses and other current
assets
(4,874
)
(4,530
)
Other current liabilities
1,589
—
Accounts payable
(2,714
)
720
Accrued expenses
4,818
4,981
Deferred revenue
7,240
8,229
Other long-term liabilities
(38
)
—
Net cash provided by operating
activities
589
10,059
Investing Activities
Purchases of property and equipment
(2,798
)
(750
)
Purchases of convertible debt
securities
(2,000
)
(500
)
Capitalization of internal-use software
development costs
(782
)
(271
)
Cash paid for acquisition of assets and
businesses, net of cash acquired
(13,993
)
(350
)
Net cash used in investing activities
(19,573
)
(1,871
)
Financing Activities
Proceeds from exercise of stock
options
1,194
26
Net proceeds from completing initial
public offering
—
137,467
Payment of capital leases
(1,445
)
(453
)
Net cash (used in) provided by financing
activities
(251
)
137,040
Effect of exchange rate changes on cash
and cash equivalents
(1,513
)
—
(Decrease) increase in cash, cash
equivalents and restricted cash
(20,748
)
145,228
Cash, cash equivalents and restricted
cash, at beginning of period
269,841
35,619
Cash, cash equivalents and restricted
cash, at end of period
$
249,093
$
180,847
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220810005776/en/
INVESTOR: Bob Gujavarty Semrush Holdings, Inc
bobby.gujavarty@semrush.com MEDIA: Jena Sullivan Semrush
Holdings, Inc. jena.sullivan@semrush.com
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