Semrush Holdings, Inc. Q3 FY2024 earnings call

• Oleg Shchegolev noted Q3 revenue of $97.4M, up 24% Y/Y, with non-GAAP operating margin at 12.4%. TAM has tripled to ~$40B. New enterprise product has early momentum with deals from major companies like Salesforce, HSBC, etc.
• Eugene Levin discussed acquiring Third Door Media, customer wins (e.g., New Enterprise Customer and large online retailer), and strong traction with enterprise product, having secured major deals in 5 months since launch.
• Brian Mulroy highlighted revenue growth driven by cross sell/upsell, customer segmentation metrics (8,000 enterprise, over 17k mid-market, over 21k agencies), and raised full-year 2024 guidance with revenue range $375M-$376M, non-GAAP operating margin ~12%, and expected 20% CAGR near term.

Semrush Holdings reported revenue of $97.4 million in Q3 2024, up 24% year-over-year. Annual recurring revenue for the quarter grew 24% Y/Y to $401 million. The company has 8,000 enterprise accounts, over 17,000 mid-market, and over 21,000 marketing agencies, with mid-market, agency, and enterprise accounts contributing 55% of overall annual recurring revenue. The number of customers paying more than $10,000 and $50,000 per year has significantly expanded, with over 4,000 customers paying over $10,000 and nearly 300 paying over $50,000, and new enterprise SEO solution adding 50 new customers to the $50,000+ cohort since launch.

• For Q4 2024, revenue expected in range $100.8M-$101.8M (21% Y/Y midpoint growth).
• Full-year 2024 revenue guidance raised to $375M-$376M (22% midpoint growth).
• Full-year 2024 non-GAAP operating margin expected ~12%, free cash flow margin ~8%.
• Expects to maintain 20% compound annual revenue growth rate over near term.

Q: Robert Morelli asked about pricing strategy and interest in AI capabilities.

A: Eugene Levin discussed monetizing AI through including features in core plans, standalone SKUs for specialized features (e.g., Content Shake AI), and enterprise product with AI-powered workflows.

Q: Mark Murphy asked about SEO interest post-Google's AI-infused search and enterprise user populations.

A: Eugene Levin said there's interest in being featured in new search elements, and Semrush tools help analyze ranking rules, with enterprise product having substantial user populations.

Q: Elizabeth Porter asked about enterprise product penetration into existing accounts.

A: Eugene Levin said 90+ accounts migrated to enterprise SEO solution since launch, with focus on displacing competitors and white space opportunities.

Q: Adam Hotchkiss asked about enterprise platform goals and monetization for agencies vs non-agencies.

A: Eugene Levin said enterprise platform integrates tools to replace patchwork solutions, and Brian Mulroy explained scaling offerings based on marketing disciplines, data needs, etc., for agencies and companies.