0001831840FALSE00018318402023-11-012023-11-01

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): November 1, 2023
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 November 1, 2023, Semrush Holdings, Inc. announced its financial results for the fiscal quarter ended September 30, 2023. 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 November 1, 2023, 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: November 1, 2023By:/s/ David Mason
Name: David Mason
Title: General Counsel and Secretary


Exhibit 99.1
image_0.jpg

Semrush Announces Third Quarter 2023 Financial Results
•Third quarter revenue of $78.7 million, up 20% year-over-year
•Achieves $322.8 million ARR, delivering 21% year-over-year growth in the third quarter
•Net income increases to $4.2 million and Non-GAAP net income improves to $8.4 million
•Delivering greater profitability, raises full year 2023 Non-GAAP net income guidance
BOSTON — (BUSINESS WIRE) — Semrush Holdings, Inc. (NYSE: SEMR), a leading online visibility management SaaS platform, today reported financial results for the third quarter ended September 30, 2023.
"In the third quarter, we achieved strong results, with revenue growth accelerating to 20%, ARR growth of 21%, and customers increasing roughly 14% year-over-year," said Oleg Shchegolev, CEO and Co-Founder of Semrush. "We have built a business focused on driving strong, sustainable growth with improving profitability. We remain focused on three main growth pillars to set us up for long-term, durable success: increasing new user growth, maximizing the value we generate from our users, and adding new products to our portfolio to address client needs and market trends. Looking ahead, we are excited about what the future holds and are committed to making Semrush the platform of choice for businesses of all sizes, across all industries, all around the world, to improve their online visibility," added Mr. Shchegolev.
Third Quarter Financial Highlights
•Third quarter revenue of $78.7 million, up 20% year-over-year.
•ARR of $322.8 million as of September 30, 2023, up 21% year-over-year.
•Dollar-based net revenue retention of 109% as of September 30, 2023, compared to 112% in the previous quarter.
•Approximately 106,800 paying customers as of September 30, 2023, up nearly 14% from a year ago.
•Net income of $4.2 million for the third quarter, compared with a net loss of $9.1 million from a year ago.
•Non-GAAP net income of $8.4 million for the third quarter, compared with non-GAAP net loss of $7.1 million from a year ago.
See “Non-GAAP Financial Measures & Definitions of Key Metrics” below for how Semrush defines ARR, dollar-based net revenue retention, non-GAAP net income (loss), and the financial tables that accompany this release for reconciliations of each non-GAAP financial measure to its closest comparable GAAP financial measure.
Third 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 third 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:
◦Released two new ChatGPT features in the Listing Management tool that allows customers to reply to online reviews faster and find higher-quality keywords for their local business listings.
◦Introduced the AI Social Media Post Generator, an AI-powered tool that generates social media posts based on trending topics, enabling customers to amplify their social presence while speeding up the content creation process.
◦Launched the Ecommerce Booster app that uses built-in AI tools to audit product page performance and create customized action plans, helping businesses easily improve their Shopify listings.
•Semrush customers who pay more than $10,000 annually grew by more than 20% year-over-year.
•Ended the quarter with more than 987,000 registered free active customers, up 25% year-over-year.
As of September 30, 2023, we had approximately 106,800 paying customers, accounting for $322.8 million in ARR, an increase from 94,000 paying customers accounting for $267.3 million in ARR as of September 30, 2022.
Business Outlook
“Looking at the fourth quarter, I am confident in the underlying trends in the business and capabilities of our team as we continue on the path to delivering strong growth and profitability. As a result, we are meaningfully raising our non-GAAP net income guidance to account for our improved efficiency and tightening our previously issued top line guidance,” said Brian Mulroy, CFO of Semrush. “We believe we will continue to make progress on our revenue growth pillars and maintain a disciplined and balanced approach to improving efficiency and profitability while also investing in future growth opportunities that we expect will drive long-term value.”
Based on information as of today, November 1, 2023, we are issuing the following financial guidance:
Fourth Quarter 2023 Financial Outlook
•For the fourth quarter, we expect revenue in a range of $82.7 to $83.7 million, which at the mid-point would represent growth of approximately 21% year-over-year.
•We expect fourth quarter non-GAAP net income of $4.1 to $6.1 million.
Full-Year 2023 Financial Outlook

•For the full year, we are tightening our revenue guidance to $307.0 to $308.0 million, which would represent growth at the midpoint of approximately 21% year-over-year.
•We are raising our non-GAAP net income guidance to $9.0 to $11.0 million, up from our prior guidance of $2.0 to $4.0 million, for the full year 2023.


Reconciliation of non-GAAP net income 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, November 2, 2023
Time: 8:30 a.m. ET
Hosts: Oleg Shchegolev, CEO, Eugene Levin, President, and Brian Mulroy, CFO
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 approximately 106,800 paying customers, is headquartered in Boston and has offices in Philadelphia, Trevose, Austin, Dallas, 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 fourth quarter and full year of 2023, including revenue and non-GAAP net income; statements about future operating results, growth opportunities, our ability to add new products and address user needs, business trends, capability to deliver profits, cost reduction and structures, product development and consumer growth.
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
Semrush has provided in this release the non-GAAP financial measures of non-GAAP income (loss) from operations and non-GAAP net income (loss). Semrush uses these non-GAAP financial measures 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 these non-GAAP financial measures 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 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.
Non-GAAP income (loss) from operations. We define non-GAAP income (loss) from operations as GAAP income (loss) from operations, excluding stock-based compensation expense. We believe non-GAAP income (loss) from operations 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.


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


Semrush Holdings, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Three months ended September 30,Nine months ended September 30,
2023202220232022
Revenue$78,718 $65,793 $224,281 $185,531 
Cost of revenue ¹13,032 12,405 38,643 36,590 
Gross profit65,686 53,388 185,638 148,941 
Operating expenses
Sales and marketing ¹30,094 30,569 95,827 87,293 
Research and development ¹14,075 10,134 42,071 27,943 
General and administrative ¹18,769 17,007 56,797 45,388 
Exit costs— 5,932 1,292 9,417 
Total operating expenses62,938 63,642 195,987 170,041 
Income (loss) from operations2,748 (10,254)(10,349)(21,100)
Other income, net2,104 1,483 6,728 2,353 
Income (loss) before income taxes4,852 (8,771)(3,621)(18,747)
Provision for income taxes637 321 2,303 1,200 
Net income (loss)$4,215 $(9,092)$(5,924)$(19,947)
Net income (loss) per share attributable to common stockholders:
Basic$0.03 $(0.06)$(0.04)$(0.14)
Diluted$0.03 $(0.06)$(0.04)$(0.14)
Weighted-average number of shares of common stock used in computing net income (loss) per share attributable to common stockholders:
Basic142,837 141,256 142,247 141,034 
Diluted146,271 141,256 142,247 141,034 
¹ includes stock-based compensation expense as follows:
Three months ended September 30,Nine months ended September 30,
2023202220232022
Cost of revenue$33 $20 $82 $52 
Sales and marketing822 189 2,190 599 
Research and development579 329 1,464 836 
General and administrative2,769 1,442 7,028 3,629 
Total stock-based compensation$4,203 $1,980 $10,764 $5,116 
Three months ended September 30,Nine months ended September 30,
2023202220232022
Reconciliation of Non-GAAP income (loss) from operations
Income (loss) from operations$2,748 $(10,254)$(10,349)$(21,100)
Stock-based compensation expense4,203 1,980 10,764 5,116 
Non-GAAP income (loss) from operations$6,951 $(8,274)$415 $(15,984)
Three months ended September 30,Nine months ended September 30,
2023202220232022
Reconciliation of Non-GAAP net income (loss)
Net income (loss)$4,215 $(9,092)$(5,924)$(19,947)
Stock-based compensation expense4,203 1,980 10,764 5,116 
Non-GAAP net income (loss)$8,418 $(7,112)$4,840 $(14,831)


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

As of
September 30, 2023December 31, 2022
Assets
Current assets
Cash and cash equivalents$41,189 $79,765 
Short-term investments188,882 157,774 
Accounts receivable5,820 3,559 
Deferred contract costs, current portion8,192 6,974 
Prepaid expenses and other current assets16,403 9,307 
Total current assets260,486 257,379 
Property and equipment, net5,661 8,076 
Operating lease right-of-use assets10,942 12,009 
Intangible assets, net12,901 10,286 
Goodwill7,738 6,529 
Deferred contract costs, net of current portion3,189 2,082 
Other long-term assets1,045 2,329 
Total assets$301,962 $298,690 
Liabilities and stockholders' equity
Current liabilities
Accounts payable$9,904 $15,495 
Accrued expenses17,923 17,847 
Deferred revenue55,240 49,354 
Current portion of operating lease liabilities3,713 3,694 
Other current liabilities1,878 2,311 
Total current liabilities88,658 88,701 
Deferred revenue, net of current portion405 122 
Deferred tax liability24 11 
Operating lease liabilities, net of current portion7,880 8,929 
Other long-term liabilities226 1,023 
Total liabilities97,193 98,786 
Stockholders' equity
Class A common stock
1 — 
Class B common stock
— 1 
Additional paid-in capital285,831 274,057 
Accumulated other comprehensive deficit(2,191)(1,206)
Accumulated deficit(78,872)(72,948)
Total stockholders’ equity204,769 199,904 
Total liabilities and stockholders' equity$301,962 $298,690 


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

Nine Months Ended
September 30,
20232022
Operating Activities
Net loss$(5,924)$(19,947)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization expense4,807 6,626 
Amortization of deferred contract costs7,510 7,145 
Amortization (accretion) of premiums and discounts on investments(4,667)— 
Non-cash lease expense2,828 — 
Stock-based compensation expense10,764 5,116 
Non-cash interest expense158 149 
Change in fair value of convertible debt securities(335)(889)
Deferred taxes12 290 
Loss on disposal of subsidiaries— 1,738 
Other non-cash items771 — 
Changes in operating assets and liabilities
Accounts receivable(2,261)(344)
Deferred contract costs(9,835)(8,358)
Prepaid expenses and other current assets(5,411)(1,395)
Accounts payable(5,570)4,824 
Accrued expenses174 (2,772)
Other current liabilities— 1,562 
Deferred revenue6,198 6,299 
Other long-term liabilities— (38)
Change in operating lease liability(2,786)— 
Net cash (used in) provided by operating activities(3,567)6 
Investing Activities
Purchases of property and equipment(1,065)(4,016)
Purchases of short-term investments(182,381)— 
Proceeds from sales and maturities of short-term investments154,741 — 
Purchases of convertible debt securities(319)(2,000)
Capitalization of internal-use software development costs(3,913)(1,273)
Cash paid for acquisition of businesses, net of cash acquired(1,232)(13,993)
Purchases of other investments(150)— 
Net cash used in investing activities(34,319)(21,282)
Financing Activities
Proceeds from exercise of stock options746 1,539 
Proceeds from issuance of shares in connection with Employee Stock Purchase Plan264 257 
Payment of finance leases(1,938)(1,967)
Net cash used in financing activities(928)(171)
Effect of exchange rate changes on cash and cash equivalents238 (1,664)
Decrease in cash, cash equivalents and restricted cash(38,576)(23,111)
Cash, cash equivalents and restricted cash, beginning of period79,765 269,665 
Cash, cash equivalents and restricted cash, end of period$41,189 $246,554 


INVESTOR
Brinlea C. Johnson
Managing Director
The Blueshirt Group
brinlea@blueshirtgroup.com

MEDIA
Jesse Platz
VP of Analyst and Public Relations
Semrush Holdings, Inc.
jesse.platz@semrush.com

v3.23.3
Cover
Nov. 01, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 01, 2023
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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