0001831840FALSE00018318402024-05-062024-05-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 6, 2024
Semrush Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction
of Incorporation)
001-4027684-4053265
(Commission
File Number)
(I.R.S. Employer
Identification No.)
800 Boylston Street, Suite 2475
Boston, Massachusetts
02199
(Address of Principal Executive Offices)(Zip Code)
(800) 851-9959
(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, If Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol
Name of each exchange
on which registered
Class A Common Stock, par value $0.00001 per shareSEMRThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section



13(a) of the Exchange Act.
Item 2.02. Results of Operations and Financial Condition.

On May 6, 2024, Semrush Holdings, Inc. announced its financial results for the fiscal quarter ended March 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.


Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.Description
Press Release issued by the registrant on May 6, 2024, furnished herewith.
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SEMRUSH HOLDINGS, INC.
Date: May 6, 2024By:/s/ David Mason
Name: David Mason
Title: General Counsel and Secretary


Exhibit 99.1
image_0.jpg

Semrush Announces First Quarter 2024 Financial Results
First quarter revenue of $85.8 million, up 21% year-over-year
ARR of $354.2 million, up 21% year-over-year
First quarter net cash provided by operating activities of $14.8 million
First quarter free cash flow of $12.0 million, free cash flow margin of 14.0%
New Enterprise SEO Platform now Generally Available (GA)

May 6, 2024 — BOSTON — (BUSINESS WIRE) — Semrush Holdings, Inc. (NYSE: SEMR), a leading online visibility management SaaS platform, today reported financial results for the first quarter ended March 31, 2024.
“We had a strong start to 2024, achieving first quarter revenue and ARR growth of 21% year-over-year. Importantly, we reported strong profitability exceeding our guidance, with income from operations of $1.5 million and non-GAAP income from operations of $9.7 million. In the first quarter, we reported nearly 112,000 paying customers and added several new products and features to our platform. Looking ahead, we are very optimistic about our potential. We continue to succeed in executing on our core growth pillars by onboarding more customers, cross-selling and up-selling to existing customers and leveraging AI in our platform to ensure businesses of any size have the most valuable digital marketing software suite. And now with our Enterprise SEO product generally available, we expect to drive momentum by moving up-market to larger accounts,” said Oleg Shchegolev, CEO and Co-Founder of Semrush.

First Quarter 2024 Financial Highlights
First quarter revenue of $85.8 million, up 21% year-over-year.
Income from operations of $1.5 million for the first quarter, compared to a loss from operations of $10.8 million in the prior year period.
Operating margin of 1.7% for the first quarter, compared to operating margin of (15.2)% in the prior year period.
Non-GAAP income from operations of $9.7 million for the first quarter, compared to a non-GAAP loss from operations of $6.5 million in the prior year period.
Non-GAAP operating margin of 11.3% for the first quarter, compared to non-GAAP operating margin of (9.1)% in the prior year period.
Q1 free cash flow of $12.0 million and free cash flow margin of 14.0%.
ARR of $354.2 million as of March 31, 2024, up 21% year-over-year.
Nearly 112,000 paying customers as of March 31, 2024, up 10% from a year ago.
Dollar-based net revenue retention of 107% as of March 31, 2024, consistent with 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 income (loss) 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.
First Quarter 2024 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 first 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 Semrush Copilot, a feature that provides AI-powered SEO alerts and recommendations based on machine learning algorithms that reference data from several Semrush tools at once.
Launched AdCreative.ai, an AI-powered app that generates ad creatives, product photoshoots, and texts for any social media or display platform.
We are pleased to announce our new Enterprise SEO Platform is now generally available following a soft launch in October 2023. We see strong demand for the product and it is now being used by large, multinational corporations.
We have upgraded .Trends, one of our Competitive Intelligence (CI) products with daily and weekly competitor website traffic data. Previously the data was tracked monthly. We believe the added granularity will help businesses gain deeper insights on their competitors’ content performance, shifts in strategy, website and individual page traffic, special events, and seasonal variations.
Semrush customers who pay more than $10,000 annually grew by 32% year-over-year.
Ended the quarter with more than 1,125,000 registered free active customers, up 27% year-over-year.
Business Outlook
“We delivered a strong first quarter across the board, exceeding our revenue and Non-GAAP operating margin guidance,” said Brian Mulroy, CFO of Semrush. “Growth this quarter was driven by new customer additions and expansion of our average revenue per customer as we continue to execute on our cross-sell and up-sell strategy. We continue to drive cost efficiencies, invest in the business, and expand profitability. Looking ahead, we are raising our full year 2024 guidance and are confident in our ability to grow and scale our business. We expect to make incremental investments to strengthen our position while also driving further operating leverage in the business and delivering long-term value to our shareholders.”
Based on information as of today, May 6, 2024, we are issuing the following financial guidance:



Second Quarter 2024 Financial Outlook
For the second quarter, we expect revenue in a range of $89.1 to $90.1 million, which at the mid-point would represent growth of approximately 20% year-over-year.
We expect second quarter non-GAAP operating margin to be approximately 11.0%.
Full-Year 2024 Financial Outlook

For the full year, we expect revenue in a range of $366 to $369 million, which represents growth of 19% to 20% year-over-year.
We expect full year non-GAAP operating margin of 10.5% to 11.5%.
We expect full year free cash flow margin to be approximately 8.0%.
As indicated in our fourth quarter 2023 and full year 2023 Financial Results, we are no longer providing guidance for non-GAAP net income, and instead are guiding both non-GAAP operating margin and free cash flow margin. We have also updated 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 prior exclusion of Stock Based Compensation. Our guidance for the second quarter 2024 and full year 2024, as well as actual results presented herein, reflect this change.
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, May 7, 2024
Time: 8:30 a.m. ET
Hosts: Oleg Shchegolev, CEO, Eugene Levin, President, and Brian Mulroy, CFO

Conference ID: 283299
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 112,000 paying customers, is headquartered in Boston and has offices in Philadelphia, Trevose, Austin, Dallas, Florida, Amsterdam, Barcelona, Belgrade, Berlin, 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,” “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 second 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 the .Trends product, onboarding new customers, adoption of and demand for new products and features; statements about expansion of our platform, and launching new products; statements about future operating results, growth opportunities, future spending and incremental investments, business trends, capability to 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.
Annual Recurring Revenue (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, and non-GAAP operating margin. As described above, we have updated our definitions for non-GAAP income (loss) from operations and have introduced non-GAAP operating margin; the updated definitions, which apply to our guidance for the second 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. 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Three Months Ended March 31,
20242023
Revenue$85,812 $70,870 
Cost of revenue ¹14,645 12,639 
Gross profit71,167 58,231 
Operating expenses
Sales and marketing ¹33,921 35,496 
Research and development ¹17,304 13,880 
General and administrative ¹18,474 18,640 
Exit costs— 983 
Total operating expenses69,699 68,999 
Income (loss) from operations1,468 (10,768)
Other income, net3,639 1,705 
Income (loss) before income taxes5,107 (9,063)
Provision for income taxes3,104 797 
Net income (loss)2,003 (9,860)
Net loss attributable to noncontrolling interest in consolidated subsidiary(135)— 
Net income (loss) attributable to Semrush Holdings, Inc.$2,138 $(9,860)
Net income (loss) attributable to Semrush Holdings, Inc. per share attributable to common stockholders—basic:$0.01 $(0.07)
Net income (loss) attributable to Semrush Holdings, Inc. per share attributable to common stockholders—diluted:$0.01 $(0.07)
Weighted-average number of shares of common stock used in computing net income (loss) per share attributable to common stockholders—basic:144,566 141,650 
Weighted-average number of shares of common stock used in computing net income (loss) per share attributable to common stockholders—diluted:147,698 141,650 
¹ includes stock-based compensation expense as follows:
Three Months Ended March 31,
20242023
Cost of revenue$39 $17 
Sales and marketing770 528 
Research and development636 343 
General and administrative3,670 1,908 
Total stock-based compensation$5,115 $2,796 



Three Months Ended March 31, 2024Three Months Ended March 31, 2023
Reconciliation of Non-GAAP income (loss) from operations($)(%)($)(%)
Income (loss) from operations$1,468 %$(10,768)(15)%
Stock-based compensation expense5,115 %2,796 %
Non-GAAP income (loss) from operations (prior definition)$6,583 %$(7,972)(11)%
Amortization of acquired intangibles692 %522 %
Restructuring and other costs2,124 %983 %
Acquisition-related costs, net338 — %— — %
Non-GAAP income (loss) from operations (new definition)$9,737 11 %$(6,467)(9)%
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
Reconciliation of Free cash flow($)(%)($)(%)
Net cash provided by (used in) operating activities$14,779 17 %$(3,609)(5)%
Purchases of property and equipment(759)(1)%(268)— %
Capitalization of internal-use software costs(2,015)(2)%(1,056)(2)%
Free cash flow$12,005 14 %$(4,933)(7)%




Semrush Holdings, Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

As of
March 31, 2024December 31, 2023
Assets
Current assets
Cash and cash equivalents$41,388 $58,848 
Short-term investments201,756 179,721 
Accounts receivable7,115 7,897 
Deferred contract costs, current portion9,613 9,074 
Prepaid expenses and other current assets16,914 10,014 
Total current assets276,786 265,554 
Property and equipment, net5,999 6,686 
Operating lease right-of-use assets12,225 14,069 
Intangible assets, net16,936 16,083 
Goodwill24,757 24,879 
Deferred contract costs, net of current portion3,485 3,586 
Other long-term assets1,542 633 
Total assets$341,730 $331,490 
Liabilities and stockholders' equity
Current liabilities
Accounts payable$10,159 $9,187 
Accrued expenses19,597 19,891 
Deferred revenue63,985 58,310 
Current portion of operating lease liabilities4,143 4,274 
Other current liabilities2,642 2,817 
Total current liabilities100,526 94,479 
Deferred revenue, net of current portion306 331 
Deferred tax liability633 839 
Operating lease liabilities, net of current portion9,150 10,331 
Other long-term liabilities67 1,195 
Total liabilities110,682 107,175 
Stockholders' equity
Class A common stock
Class B common stock
— — 
Additional paid-in capital297,857 291,898 
Accumulated other comprehensive loss(1,981)(752)
Accumulated deficit(69,860)(71,998)
Total stockholders' equity attributable to Semrush Holdings, Inc.226,017 219,149 
Noncontrolling interest in consolidated subsidiary5,031 5,166 
Total stockholders’ equity231,048 224,315 
Total liabilities and stockholders' equity$341,730 $331,490 



Semrush Holdings, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Three Months Ended March 31,
20242023
Operating Activities
Net income (loss)$2,003 $(9,860)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization expense2,183 1,487 
Amortization of deferred contract costs3,016 2,397 
Amortization (accretion) of premiums and discounts on investments(1,071)(1,716)
Non-cash lease expense1,164 895 
Stock-based compensation expense5,115 2,796 
Non-cash interest expense— 53 
Change in fair value of convertible debt securities— (134)
Deferred taxes(100)
Other non-cash items844 568 
Changes in operating assets and liabilities
Accounts receivable782 (1,104)
Deferred contract costs(3,455)(2,587)
Prepaid expenses and other current assets(2,275)(651)
Accounts payable1,012 (4,226)
Accrued expenses1,414 2,469 
Other current liabilities(390)
Deferred revenue5,658 7,005 
Other long-term liabilities— — 
Change in operating lease liability(1,121)(1,009)
Net cash provided by (used in) operating activities14,779 (3,609)
Investing Activities
Purchases of property and equipment(759)(268)
Purchases of short-term investments(46,706)(103,751)
Proceeds from sales and maturities of short-term investments25,000 87,741 
Purchases of convertible debt securities— (323)
Funding of investment loan receivable(7,000)— 
Capitalization of internal-use software costs(2,015)(1,056)
Cash paid for acquisition of businesses, net of cash acquired(501)(1,082)
Purchases of other investments— (150)
Net cash used in investing activities(31,981)(18,889)
Financing Activities
Proceeds from exercise of stock options844 67 
Proceeds from issuance of shares in connection with employee stock purchase plan— 264 
Payment of finance leases(410)(782)
Net cash provided by (used in) financing activities434 (451)
Effect of exchange rate changes on cash and cash equivalents(507)73 
Decrease in cash, cash equivalents and restricted cash(17,275)(22,876)
Cash, cash equivalents and restricted cash, beginning of period58,848 79,765 
Cash, cash equivalents and restricted cash, end of period$41,573 $56,889 



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

v3.24.1.u1
Cover
May 06, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 06, 2024
Entity Registrant Name Semrush Holdings, Inc.
Entity File Number 001-40276
Entity Tax Identification Number 84-4053265
Entity Address, Postal Zip Code 02199
Entity Address, City or Town Boston
Entity Address, State or Province MA
Entity Address, Address Line One 800 Boylston Street
Entity Address, Address Line Two Suite 2475
City Area Code 800
Local Phone Number 851-9959
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, par value $0.00001 per share
Trading Symbol SEMR
Security Exchange Name NYSE
Entity Emerging Growth Company true
Entity Ex Transition Period false
Entity Central Index Key 0001831840
Amendment Flag false
Entity Incorporation, State or Country Code DE

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