SEMR SEMrush Holdings Inc

More than 76,000 Customers as of June 30, 2021

Second Quarter Revenue of $45 million

Semrush Holdings, Inc. (NYSE: SEMR), a leading online visibility management SaaS platform, today reported second quarter 2021 financial results for the quarter ended June 30, 2021.

“Semrush entered April with strong momentum, and we sustained that momentum through the second quarter as we grew revenue 13% sequentially and 58% year over year. The year over year increase was driven by a 29% growth in paid users and average check growth of 19%,” said Oleg Shchegolev, CEO and Founder of Semrush.

“We continued to add new capabilities to our platform in the second quarter. Our Social Media Marketing toolkit ended the quarter with more than 30 thousand active users, up 25% sequentially. We also saw rapid growth for our Local Listing Management add-on, as revenue more than doubled from the previous year. I believe these examples illustrate how enhancements to the Semrush platform further extend our advantage over point solution providers,” added Mr. Shchegolev.

Second Quarter 2021 Financial Highlights

• Total revenue of $45 million, up 58% year over year and up 13% sequentially
• ARR of $188 million as of June 30, 2021, up 57% year over year
• Dollar based net revenue retention of 121%, up 500 basis points sequentially
• Net loss of $279 thousand, an improvement from a loss of $2.1 million a year ago
• Non-GAAP net income, which excludes stock-based compensation expense, of $290 thousand, an improvement from a loss of $1.9 million a year ago
• Over 76,000 customers as of June 30, 2021, up 29% compared to a year ago (excludes Prowly customers)

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.

Business Highlights

• Total add-on revenue growth of more than 75% from the previous year with particular strength in Local Listings Management, which more than doubled.
• Strong user response to Semrush’s Core Web Vitals, which upon launch has become one of the most popular reports within our Site Audit product. This report helps customers optimize their website user experience and improve organic search rankings.
• Semrush Social Media Marketing toolkit surpassed 30,000 active users, up approximately 25% sequentially.
• Semrush launched a new Keyword Difficulty score which incorporates many additional metrics that help users rule out ineffective keywords for best in class SEO performance marketing.

Business Outlook

Based on information as of today, August 9, 2021, we are issuing the following financial guidance:

Third Quarter 2021 Financial Outlook

• Revenue is expected to be in a range of $47.3 million to $47.7 million, ​​up 47-48% year over year
• Non-GAAP net loss is expected to be in a range of $4.5 to $4.0 million

Full Year 2021 Financial Outlook

• Revenue is expected to be in a range of $182 million to $184 million, up 46-47% year over year
• Non-GAAP net loss is expected to be in a range of $7.9 to $6.3 million

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 Information

Semrush will host a conference call and webcast at 8:30 a.m. Eastern Time, tomorrow, August 10, 2021, to discuss its financial results, business highlights, outlook and other matters. The conference call can be accessed by dialing (833) 329-1691 from the United States and Canada or (236) 714-3944 internationally with conference ID 7178568. 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 76,000 paying customers, is headquartered in Boston and has offices in Philadelphia, Dallas, Prague, St. Petersburg, Warsaw, and Limassol.

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 third quarter and full year of 2021; statements about future operating results; statements regarding the expectations of demand for our products, including adoption of and demand for new products and features, and growth of our business; statements about the growth rates in the markets in which we compete and our competitive advantages; and statements about our investments in technology and infrastructure, ability to deliver innovative solutions and ability to attract new paying customers.

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 the final prospectus for our initial public offering filed with the SEC on March 25, 2021, 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 Semrush as of the date hereof, and Semrush disclaims any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing Semrush’s views as of any date subsequent to the date of this press release.

Additional information regarding these and other factors that could affect Semrush's results is included in Semrush’s SEC filings, which may be obtained by visiting Semrush’s 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. Semrush includes both monthly recurring paid subscriptions, which renew automatically unless cancelled, as well as the annual recurring paid subscriptions so long as Semrush does not have any indication that a customer has cancelled 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,

 

2021

 

 

2020

 

Revenue

$

45,005

 

$

28,452

 

Cost of revenue (1)

 

10,238

 

 

7,055

 

Gross profit

 

34,767

 

 

21,397

 

  Operating expenses Sales and marketing (1)

 

18,298

 

 

12,704

 

Research and development (1)

 

5,964

 

 

4,001

 

General and administrative (1)

 

10,520

 

 

6,570

 

Total operating expenses

 

34,782

 

 

23,275

 

Income (loss) from operations

 

(15

)

 

(1,878

)

Other income (expense), net

 

(123

)

 

(138

)

Income (loss) before income taxes

 

(138

)

 

(2,016

)

Provision for income taxes

 

141

 

 

92

 

Net income (loss)

$

(279

)

$

(2,108

)

    Net income (loss) per share attributable to common stockholders: Basic and diluted:

$

(0.00

)

$

(0.02

)

Weighted-average number of shares of common stock used in computing net income (loss) per share applicable to common stockholders: Basic:

 

135,312

 

 

94,738

 

Diluted:

 

135,312

 

 

94,738

 

  (1) Includes stock-based compensation expense as follows   Three Months Ended June 30,

 

2021

 

 

2020

 

Cost of Revenue

$

7

 

$

5

 

Sales and Marketing

 

52

 

 

27

 

Research and Development

 

68

 

 

29

 

General and Administrative

 

442

 

 

148

 

Total stock-based compensation

$

569

 

$

209

 

  Reconciliation of non-GAAP Financial Measures   Net income/(loss) and comprehensive income/(loss)

$

(279

)

$

(2,108

)

Stock-based compensation expense

 

569

 

 

209

 

Non-GAAP net income/(loss)

$

290

 

$

(1,899

)

 

Semrush Holdings Inc.

Consolidated Balance Sheets (Unaudited)

(in thousands, except per share data)

  As of June 30, 2021 December 31, 2020 Assets Current assets Cash and cash equivalents

$

180,759

 

$

35,531

 

Accounts receivable

 

2,722

 

 

1,399

 

Deferred contract costs, current portion

 

5,418

 

 

4,049

 

Prepaid expenses and other current assets

 

7,180

 

 

2,649

 

Total current assets

 

196,079

 

 

43,628

 

Property and equipment, net

 

8,396

 

 

2,968

 

Intangible assets, net

 

2,127

 

 

2,231

 

Goodwill

 

1,991

 

 

1,991

 

Deferred contract costs, net of current portion

 

2,140

 

 

1,670

 

Other long-term assets

 

1,026

 

 

2,470

 

Total assets

$

211,759

 

$

54,958

 

  Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit Current liabilities Accounts payable

$

9,135

 

$

8,654

 

Accrued expenses

 

12,847

 

 

7,719

 

Deferred revenue

 

34,652

 

 

26,537

 

Other current liabilities

 

1,859

 

Total current liabilities

 

58,493

 

 

42,910

 

Long-term liabilities Deferred revenue, net of current portion

 

237

 

 

123

 

Deferred tax liability

 

126

 

 

209

 

Other long-term liabilities

 

3,438

 

 

497

 

Total liabilities

 

62,294

 

 

43,739

 

    Series A redeemable convertible preferred stock, $0.00001 par value - no shares authorized, issued or outstanding as of June 30, 2021; 3,379,400 shares authorized, issued and outstanding as of December 31, 2020; no shares issued or outstanding as of June 30, 2021 (liquidation value of $8,000 at December 31, 2020)    

 

-

 

 

7,789

 

Series A-1 redeemable convertible preferred stock, $0.00001 par value - no shares authorized, issued or outstanding as of June 30, 2021; 1,837,600 shares authorized, issued and outstanding as of December 31, 2020; (liquidation value of $5,000 at December 31, 2020)  

 

-

 

 

10,270

 

Stockholders' equity (deficit) Series B convertible preferred stock, $0.00001 par value - no shares authorized, issued or outstanding as of June 30, 2021; 4,681,400 shares authorized, issued and outstanding as of December 31, 2020; (liquidation value of $24,000 at December 31, 2020)    

 

-

 

 

24,000

 

Undesignated preferred stock, $0.00001 par value - 100,000,000 shares authorized, no shares issued or outstanding as of June 30, 2021; no shares authorized, issued, or outstanding as of December 31, 2020  

 

-

 

 

-

 

Common stock, $0.00001 par value - no shares authorized, issued, or outstanding as of June 30, 2021; 300,000,000 shares authorized; 95,206,893 shares issued at December 31, 2020, and 95,050,041 shares outstanding at December 31, 2020    

 

-

 

 

-

 

Class A common stock, $0.00001 par value; 1,000,000,000 shares authorized, and 10,000,000 shares issued and outstanding as of June 30, 2021; no shares authorized, issued or outstanding as of December 31, 2020  

 

-

 

Class B common stock, $0.00001 par value; 160,000,000 shares authorized, and 124,905,954 shares issued and 124,749,102 outstanding as of June 30, 2021; no shares authorized, issued or outstanding as of December 31, 2020  

 

1

 

Additional paid-in capital

 

184,087

 

 

4,975

 

Accumulated deficit

 

(34,623

)

 

(35,815

)

Total stockholders’ equity (deficit)

 

149,465

 

 

(6,840

)

Total liabilities, redeemable convertible preferred stock, and stockholders' deficit

$

211,759

 

$

54,958

 

 

Semrush Holdings Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

  Six Months Ended June 30,

 

2021

 

 

2020

 

  Operating Activities Net income (loss)

$

1,192

 

$

(4,039

)

Adjustments to reconcile net loss to net cash provided by operating activities Depreciation and amortization expense

 

1,447

 

 

474

 

Amortization of deferred contract costs

 

2,950

 

 

2,259

 

Stock-based compensation expense

 

1,162

 

 

414

 

Non-cash interest expense

 

104

 

 

-

 

Deferred tax

 

(83

)

 

(108

)

Changes in operating assets and liabilities Accounts receivable

 

(1,324

)

 

603

 

Deferred contract costs

 

(4,789

)

 

(3,114

)

Prepaid expenses and other current assets

 

(4,530

)

 

(788

)

Accounts payable

 

720

 

 

438

 

Accrued expenses

 

4,981

 

 

2,589

 

Deferred revenue

 

8,229

 

 

2,233

 

Net cash provided by operating activities

 

10,059

 

 

961

 

Investing Activities Purchases of property and equipment

 

(750

)

 

(1,792

)

Purchases of convertible debt securities

 

(500

)

 

-

 

Capitalization of internal-use software development costs

 

(271

)

 

(700

)

Cash paid for acquisition of business, net of cash acquired

 

(350

)

 

-

 

Net cash used in investing activities

 

(1,871

)

 

(2,492

)

Financing Activities Proceeds from exercise of stock options

 

26

 

 

-

 

Net proceeds from completing initial public offering

 

137,467

 

 

-

 

Payment of capital leases

 

(453

)

Payment of deferred offering costs

 

-

 

 

(38

)

Net cash (used in) provided by financing activities

 

137,040

 

 

(38

)

Increase in cash, cash equivalents, and restricted cash

 

145,228

 

 

(1,569

)

Cash, cash equivalents, and restricted cash, at beginning of period

 

35,619

 

 

37,523

 

Cash, cash equivalents, and restricted cash, at end of period

$

180,847

 

$

35,954

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005814/en/

MEDIA: Vincent Schiano Semrush Holdings, Inc. Vincent.Schiano@semrush.com INVESTOR: Bob Gujavarty Semrush Holdings, Inc Bobby.Gujavarty@semrush.com