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May 2025 Semrush Investor Presentation
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Safe Harbor 2 This presentation will contain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements concerning our expected future business and financial performance and financial condition, expected changes to our management team, expected growth, adoption and existing and future demand for our existing and any new products and features, our expected growth of our customer base and specific customer segments, the continued development of our products, the expansion of certain of our tools, industry and market trends, our competitive position, market opportunities, sales and marketing activities and strategies, future spending and incremental investments, our guidance for the second quarter of 2025 and the full year 2025, and statements about future pricing and operating results, including margin improvements, revenue growth and profitability, and assumptions regarding foreign exchange rates. Forward looking statements are statements other than statements of fact and can be identified by words such as expect, can, anticipate, could, plan, believe, seek or will. These statements reflect our views as of today only, and should not be relied upon as representing our views at any subsequent date and we do not undertake any duty to update these statements. Forward-looking statements address matters that are subject to risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. For a discussion of the risks and important factors that could affect our actual results, please refer to our most recent annual report on Form 10K, filed with the Securities and Exchange Commission, as well as our subsequent quarterly reports on Form 10Q and other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements. No representations or warranties (expressed or implied) are made about the accuracy of such forward-looking statements. Certain information contained in this presentation relates to or is based on studies, publications, surveys and other data obtained from third-party sources and the Companyʼs own internal estimates and research. While the Company believes these third-party sources to be reliable as of the date of this presentation, it has not independently verified, and makes no representation as to the adequacy, fairness, accuracy, or completeness of, any information obtained from third-party sources. In addition, all of the market data included in this presentation involves a number of assumptions and limitations, and there can be no guarantee as to the accuracy or reliability of such assumptions. Finally, while we believe our own internal research is reliable, such research has not been verified by any independent source. This presentation includes non-GAAP financial measures which have certain limitations and should not be considered in isolation, or as alternatives to or substitutes for, financial measures determined in accordance with generally accepted accounting principles in the United States (“GAAPˮ). The non-GAAP measures as defined by us may not be comparable to similar non-GAAP measures presented by other companies. Our presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that our future results will be unaffected by these or other unusual or non-recurring items. See the GAAP to Non-GAAP Reconciliation slides in the Appendix for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures. This presentation may contain trademarks, service marks, trade names and copyrights of other companies, which are property of their respective owners. Solely for convenience, some of the trademarks, service marks, trade names and copyrights referred to in this presentation may be listed without the TM, SM, © or ® symbols, but we assert, to the fullest extent under applicable law, the rights of the applicable owners, if any, to these trademarks, service marks, trade names and copyrights.
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Meet the Team Oleg Shchegolev Co-founder and Chief Technology Officer Eugene Levin President Former Target Global Vitalii Obishchenko Chief Product Officer Former SEO Quake Tatiana Starikova Chief HR Officer Former Realweb & Adhands David Mason Chief Legal Officer Former Kayak & EverQuote Brian Mulroy Chief Financial Officer Former Microsoft & Nuance Andrew Warden Chief Marketing Officer Former Cisco & SoftServe Alex Sukennik Chief Information Officer Former Avid & Rapid7 Tommie OʼBrien Chief Sales Officer Former Salesforce & LinkedIn 3 Veronique Montreuil Chief Customer and Data Officer Former Covetrus & INAP William R. Wagner Chief Executive Officer Former LogMeIn
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Our Journey 4 2012 Founded Semrush 2024 Launched Enterprise SEO and Surpassed $400M in ARR2022 Launched First AI product powered by ChatGPT 1.0 2018 Launched Semrush Local & Intelligence 2016 Launched Semrush Brand & Content 2008 Built First SEO Product 2015 10,000 Customers 2018 Completed Venture Capital Financing 2021 Initial Public Offering 2023 Surpassed 100,000 Customers & Launched Semrush Social 2025 Launched AI Optimization AIO Enterprise Solution
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5 2008 Started with a Single SEO Product 2012 Expanded into a Search Engine Marketing Toolkit 2015 Became a Suite of Online Visibility Tools 2020 Evolved into a Digital Marketing Platform 2025 Becoming an Enterprise-Ready AIPowered Digital Marketing Platform Our Journey From a Product to a Toolkit to a Suite to a Platform to now a Fully-Integrated Enterprise Ready Platform
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Our Strong Financial Performance 6 20% Q1ʼ25 ARR Growth % YoY* $424.7M Q1ʼ25 Annual Recurring Revenue* 11.6% Q1ʼ25 Non-GAAP Operating Margin** $261.8M Cash, Cash Equivalents and Short-Term Investments*** ARR is calculated as of 3/31 of the applicable year See Appendix for GAAP to Non-GAAP Operating Margin reconciliation *** As of 3/31/25
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Our Diverse & Loyal Customer Base 7 8,500 Countries 150 Customers 118,000 Industries, Market Segments and Marketing Disciplines All All metrics as of 3/31/25. References to Customers reflect paying customers. Enterprise Customers are paying customers from companies who have more than 500 employees. Enterprise Customers
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8 Our Large Market Opportunity + Evolved from Suite to Platform + Enterprise GTM Investment + Enhanced Sophistication + Enterprise SEO Launch + Portfolio Investment + Pricing Leverage + Market Growth $13B $40B TodayAt IPO See Appendix for detailed TAM calculation
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Our Strong Competitive Moat Extensive Data Set that Enables Proprietary Insights History & Vision / Oleg Shchegolev — CEO Network Effect to Enhance AIPowered Intelligence High Gross Margin Structural Advantage Leading Brand Loyalty Integrated Platform Global Scale 1 2 3 4 5 6 9
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10 2023 & 2024 Award Winning → Ownership → Innovation → Creativity → Data-Driven → Efficiency
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Our Customers Love Us International Awards 22 "...the all in one tool you need" "THE Best in the Business!!!" "The best feature of Semrush might be its ability to offer multiple tools in one place!" "...covers all aspects of Digital Marketing at a competitive price" "If you're using anything else, you're missing out" "A Must-Have Tool for Social Media Success" "Great platformˮ Source: g2.com/products/semrush 4.7 out of 5 4.6 out of 5 4.5 out of 5 Rating, Awards and Reviews as of 9/30/24 11
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Industry Analysts Recognize Our Leadership 12 SEO Tools SEO Leader Leader Leader Local SEO Local Leader Leader Local Marketing Leader Leader Local Listing Management Leader Leader Social Media Suites Social Media Leader Leader Leader Social Media Analytics Leader Leader Leader Social Media Management Leader Leader Leader Social Media Advertising Leader Media Monitoring Brand Marketing Leader Leader Leader Market Intelligence Competitive Intelligence Leader Leader Competitive Intelligence Leader Leader Leader Content Analytics Content Marketing Leader Leader Leader Content Creation Leader AI Writing Assistant Leader Leader Marketing Analytics Paid Advertising Leader Paid Search Intelligence Leader Leader Digital Analytics Leader Source: G2 Category Leaderboards from September 2024
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13 The Digital Marketing Problem We Solve
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Overwhelming Digital Noise 14 Information barrier gets bigger every day: average consumer already spends 6.5 hours a day online and is overwhelmed with information 2.3M 720K 1B 8.5B 50B hours of video uploaded to Youtube Facebook stories across all apps blog posts on Wordpress alone Google searches Meta and Google impressions … and more every single day * See Third Party Sources slide in Appendix; stats are estimates on a “per dayˮ basis.
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15 Constantly Evolving Digital Marketing Channels In 20 years we went from website and email to ● Google / Bing ● Content Marketing ● Youtube / TikTok ● FB / X / Snapchat / Instagram / Linkedin ● Mobile ● Influencers ● Blogs / Digital media ● Review websites ● AI agents Yelp Digital reviewsGoogle becomes default search engine Google AI overview Iphone mobile interfaces Mailchimp (email marketing) Snap Wordpress Facebook Twitter/X Google Maps Youtube Instagram TikTok ChatGPT
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Growing Complexity Drives Demand for Martech As complexity increased, marketers needed more data, tools and features and that demand created a market that greatly benefits from the most complete platforms such as Semrush Source: chiefmartec.com Marketing Technology Landscape as of May 2024 (with 2013 and 2021 being extrapolated estimates) 16
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Businesses Have Three Bad Options 17 Biased Use tools provided by Google, Facebook and other networks Challenges: ● Paid Channel Focus ● Siloed ● Single Network ● Conflict of Interest Fragmented Use point solutions for each channel Challenges: ● Inefficient ● Siloed ● Limit Visibility ● Disaggregated Expensive Rely on army of engineers and data scientists to build custom systems Challenges: ● Costly Implementation ● Costly Maintenance ● Custom ● Proprietary
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Attention is Limited Content & Martech Tools are Exploding Budgets are Limited 18 In Short…
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19 The Semrush Digital Marketing Solution
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Our Digital Marketing Platform Solves these Increasingly Complex & Critical Problems 20 We understand these problems well at Semrush. We are both Marketers and Technologists. Our platform utilizes Data and Intelligence at the core surrounded by AI-Powered Interconnected Hubs focused on Search Engine Optimization, Paid Advertising, Social Media Management, Local Marketing, Brand Marketing, and Content Marketing.
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It starts with our Unique Combination of Data Assets and Intelligence Foundation 21 Total Profiles 200+ million domains Monitored in 150 countries Keyword Data 25+ billion keywords Anonymized Panel Data Billions of events analyzed per week Display Ads Data 300+ million ad samples Web Index 33+ trillion backlinks 17+ billion URLs crawled per day Source: Estimated based on Semrush Intelligence as of September 2024
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Over time customers run more campaigns and share more data Which is continually Enhanced as we Leverage Network Effects 22 As customers use more products they convert to paying customers Unique Insights generate demand Data from customers allows us to improve quality of insights for all customers
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Provides a Holistic Workflow 23 Each Marketing Channel Hub is uniquely designed to ensure our customers can analyze, enhance and measure website navigation and performance, content relevance and authority, and overall prospective customer interests and engagement. And most importantly show how each channel is connected to the others to provide a much needed means for our customers to optimize returns.
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And is Powered by AI with 3 Pillars of AI Monetization 24 Core Features for All to Increase Retention & Conversion Premium Features to Drive Upgrades Stand Alone Products to Drive Cross-Sell Examples ● Reply to review feature Examples ● ContentShake ● SocialContent AI ● AdCreative AI Examples ● Copilot ● Report summary
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FINANCIAL HIGHLIGHTS 25
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Strong Track Record of Growth Strong ARR Growth 26 32% CAGR Q1ʼ2019Q1ʼ2025 ARR amounts in chart above for 20192024 are as of 12/31 and 2025 YTD is as of 3/31/25. CAGR represents a 6 year CAGR from Q1ʼ19 through Q1ʼ25.
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Strong Track Record of Growth Strong New Customer Demand 27 2X Since 2019 20192024 are as of 12/31 and 2025 YTD is as of 3/31/25
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Strong Track Record of Growth Consistent Average ARR Per Customer Expansion 28 2X Since 2019 20192024 are as of 12/31 and 2025 YTD is as of 3/31/25; reflects Average ARR per paying Customer
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Efficient Performance As we scale, our efficiency continues to improve 29 1800 Basis Point Increase to Non-GAAP Operating Margin Since 2022 20192024 are our full year Non-GAAP Operating Margin results for the year ended 12/31 and Q1ʼ25 is for the fiscal quarter ended 3/31/25.
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Efficient Performance Cost Efficiency Drivers 30 Highly Scalable Platform which gives us a structural advantage to reinvest into Product, Sales and Marketing Strong CAC to LTV economics by using Semrush Products AI and Automation investments that enable an efficient, frictionless journey through Product-Led Sales Motion Culture of efficiency remains from our humble beginnings04 03 01 02
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Capital Allocation Strategy Focused on Building Shareholder Value 31 1 Invest in Organic Growth ● Platform infrastructure ● Product suite offerings ● Sales and marketing 2 Invest in Inorganic M&A ● Close Adjacencies ● Talent ● Technology 3 Maintain Strong Balance Sheet ● $261.8M Cash & Equivalents* ● Strong FCF Margin ● Continued disciplined approach to SBC M&A GuidingPrinciples Complement, not complicate our current platform and products New capabilities or talent we do not currently have Strong synergies with accretive growth and profitability Reflects cash, cash equivalents and short-term investments balance as of 3/31/25
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Core Strategies for Growth 32 Increase Paying Customers Across All Segments Expand Average ARR per Customer with Semrush Marketing Platform Extend SEO Reach with new Enterprise Product Enhance Product Portfolio with more Enterprise Capabilities 04 03 01 02
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Near-Term Outlook Continued Strong Growth and Profitability Expansion 33 01 02 Sustained 20% Near Term Revenue CAGR Continued Free Cash Flow Margin Expansion
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Long-Term Target Operating Model 34 * All metrics are calculated as a percentage of revenue and are on a non-GAAP basis. 20212024 are for the full year ended 12/31. FY 2025 E represents the metrics as a percentage of revenue aligned with guided Non-GAAP Operating Margin for the full year ended 12/31/25. FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 E Target Model Gross Margin 78% 81% 83% 84% 82% 85% Sales & Marketing 43% 49% 40% 36% 37% 35% Research & Development 13% 16% 18% 20% 18% 18% General & Administrative 22% 23% 22% 15% 15% 10% Non-GAAP Operating Income Loss Margin 0% 6% 4% 12% 12% 22% FCF Margin 11% 6% 0% 9% 12% 25%
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Appendix 35
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TAM Calculation Details 36 We estimate that, based on our potential customer spending levels for Semrush products in market, the annual global potential market opportunity for our Marketing SaaS Platform is currently $40 billion. We calculated this estimate based on the number of Enterprise (those with employes 500, Mid-Market (those with employees between 50 and 499) and Small and Medium Sized companies (those with less than 50 employees) in the United States and Canada based on information published by the US Small Business Administration, North American Industry Classification System, and Innovation, Science and Economic Development Agency in Canada. With approximately 50% of our Annual Recurring Revenue coming from customers outside of the United States and Canada as of March 31, 2025, we believe the opportunity internationally is at least as large as the opportunity in the United States and Canada. Based on web presence, dependence on traffic, and budget, we assume 100% penetration in the Enterprise Segment, 60% in the Mid-Market and 10% in SMB. We then multiplied the total number of companies by the potential Average Annual Revenue per customer for each segment. We calculate the potential Average Annual Revenue per customer for each segment based on a potential subscription bundle for the average customer in each segment.
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GAAP to Non-GAAP Operating Margin Reconciliation 37 Amounts are for the full year ended 12/31, except for Q1ʼ25 which is for the fiscal quarter ended 3/31/25. Note: Reconciliation of non-GAAP operating income (loss) margin guidance to the most directly comparable GAAP measures 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. FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Q1'25 GAAP operating income (loss) 8.2 6.1 2.5 36.4 7.7 8.3 0.1 Stock-based compensation expense 0.5 1.0 2.7 7.4 15.3 28.0 9.1 Amortization of acquired intangibles 0.0 0.1 0.2 1.9 2.3 4.3 1.4 Restructuring and other costs 0.0 0.0 0.0 11.3 1.3 2.2 1.3 Acquisition-related costs, net 0.0 0.0 0.0 0.0 0.4 2.9 0.5 Non-GAAP operating income (loss) 7.7 5.0 0.4 15.8 11.6 45.8 12.2 GAAP Revenue 92.1 124.9 188.0 254.3 307.7 376.8 105.0 Non-GAAP operating income (loss) margin 8.4% 4.0% 0.2% 6.2% 3.8% 12.2% 11.6%
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GAAP to Non-GAAP Gross Margin Reconciliation 38 *20212024 are for the full year ended 12/31. Q1ʼ25 is for the fiscal quarter ended 3/31/25. All metrics calculated as a percentage of Revenue Note: Reconciliations of non-GAAP gross margin guidance to the most directly comparable GAAP measures 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. FY 2021 FY 2022 FY 2023 FY 2024 Q1'25 GAAP Gross Margin 77 .7% 80.9% 83.0% 82.6% 81.1% Stock-based compensation expense 0.0% 0.0% 0.0% 0.1% 0.0% Amortization of acquired intangibles 0.0% 0.5% 0.3% 0.8% 1.0% Restructuring and other costs 0.0% 0.0% 0.0% 0.0% 0.1% Acquisition-related costs, net 0.0% 0.0% 0.0% 0.0% 0.0% Non-GAAP Gross Margin 77 .7% 81.4% 83.3% 83.5% 82.2%
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Net cash provided by operating activities margin to Free Cash Flow margin Reconciliation 39 *20212024 are for the full year ended 12/31. All metrics calculated as a percentage of Revenue Note: Reconciliations of Free Cash Flow Margin guidance to the most directly comparable GAAP measures 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 purchases of property and equipment and capitalization of internal-use software costs. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results. Percentage amounts may not sum due to rounding. FY 2021 FY 2022 FY 2023 FY 2024 Net cash provided by operating activities 12.6% 3.8% 2.6% 12.5% Purchases of property and equipment 1.3% 1.7% 0.8% 1.0% Capitalization of internal-use software costs 0.7% 0.7% 1.7% 2.1% FCF Margin 10.6% 6.1% 0.1% 9.4%
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Definitions 40 Annual Recurring Revenue (ARR): we define Annual Recurring Revenue 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 has been 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 are not recasting 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. CAGR: we define CAGR as Compound Annual Growth Rate. Dollar-based Net Revenue Retention (NRR): we define NRR 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. Enterprise Customers: we define our Enterprise Customers as paying customers with 500+ employees regardless of type of subscription. 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: 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). Non-GAAP Operating Margin: we define Non-GAAP Operating Margin as non-GAAP income (loss) from operations divided by GAAP revenue. Non-GAAP Gross Margin: we define non-GAAP gross margin as GAAP gross margin 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.
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41 Estimated Stats Source Average consumer already spends 6.5 hours a day online “Digital 2023 Global Overview Report - The Essential Guide to the World’s Connected Behaviors” by We Are Social and Meltwater; and GlobalWebIndex Insight Reports (2017-2022) +720K hours of video uploaded to Youtube daily “Hours of video uploaded to YouTube every minute as of February 2022” by Statista; and “The State of the Creator Economy - Assessing the Economic, Cultural, and Societal Impact of YouTube in the US in 2022” by Oxford Economics. +8.5B Google Searches daily Hubspot, “31 Google Search Statistics to Bookmark ASAP” dated August 30, 2023 +1B Facebook stories across Facebook family apps daily Data made available from Facebook.com - Stories Ads (accessed on 09/26/2024) +50B Meta and Google impressions on average daily Estimate derived from: Data from (i) HootSuite Blog “How Much Do Facebook Ads Cost in 2024?”, (ii) NetScale Blog “What is Average CPM Google Ads & How to Reduce It (2024)” and (iii) Shopify Blog “What is YouTube CPM? How Much YouTube Pays Creators in 2024”; Alphabet Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023; and Meta Platforms, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023. +2.3M blog posts created on average daily on Wordpress alone Data made available from WordPress.com - “A live look at activity across WordPress.com” (accessed on 09/26/2024) Third Party Sources