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Semrush Q1 2025 Earnings Report
Semrush reported a strong start to the year with significant revenue growth, improved margins, and robust free cash flow, driven by the adoption of AI products and enterprise solutions.
Key Takeaways
Semrush Holdings, Inc. reported first quarter 2025 revenue of $105.0 million, a 22% increase year-over-year. The company achieved an ARR of $424.7 million, up 20% year-over-year, and reported a non-GAAP operating margin of 11.6%. Net income attributable to Semrush Holdings, Inc. was $849 thousand, with basic and diluted EPS of $0.01.
First quarter revenue increased by 22% year-over-year to $105.0 million.
Annual Recurring Revenue (ARR) reached $424.7 million, growing 20% year-over-year.
Non-GAAP operating margin improved to 11.6% from 11.3% in the prior year period.
Free cash flow for Q1 was $18.5 million, with a free cash flow margin of 17.6%.
Semrush
Semrush
Forward Guidance
For Q2 2025, Semrush expects revenue between $108.2 million and $109.2 million, representing approximately 20% year-over-year growth at the mid-point, and a non-GAAP operating margin of approximately 11%. For the full year 2025, revenue is projected to be between $448.0 million and $453.0 million, with a non-GAAP operating margin and free cash flow margin of approximately 12%.
Positive Outlook
- Expected Q2 2025 revenue growth of approximately 20% year-over-year.
- Reiteration of full year 2025 guidance for revenue, non-GAAP operating margin, and free cash flow margin.
- Continued confidence in driving growth, profitability, and free cash flow generation.
- Anticipated full year 2025 non-GAAP operating margin of approximately 12%.
- Anticipated full year 2025 free cash flow margin of approximately 12%.
Challenges Ahead
- Full year 2025 guidance absorbs an incremental $8.0 million expense headwind due to recent movement in exchange rates.
- Previous guidance assumed a EURO to USD exchange rate of 1.05, now modeled at 1.13.
- Reconciliations of non-GAAP operating margin and free cash flow margin guidance to GAAP measures are not available without unreasonable efforts.
- High variability, complexity, and low visibility with respect to excluded charges from non-GAAP measures.
- Variability of charges like share-based compensation expense, employer taxes, and tax deductions could have a significant and unpredictable impact on future GAAP financial results.