Semrush Q3 Revenue soars 24% to $97.4M, enterprise SEO platform gains major clients
Digital marketing platform reports strong enterprise growth with new clients like Salesforce and HSBC; raises full-year 2024 guidance.
Semrush Holdings, Inc. (NYSE: SEMR) announced its financial results for the third quarter ended September 30, 2024, showcasing significant growth and improved profitability. The Boston-based online visibility management platform reported revenue of $97.4 million, marking a 24% increase compared to the same period last year.
The company's Annual Recurring Revenue (ARR) reached $401 million, also growing 24% year-over-year. This growth was driven by successful expansion of the company's core business and effective upselling and cross-selling of additional offerings.
Key financial highlights for Q3 2024 include:
- Operating income of $1.7 million, with an operating margin of 1.8%
- Non-GAAP operating income of $12.1 million, representing a 12.4% margin
- Free cash flow of $6.2 million, with a 6.3% margin
- Customer base growth to over 117,000 paying customers
- Dollar-based net revenue retention rate of 107%
Enterprise SEO platform gains significant traction
Major Enterprise Customer Acquisitions
Semrush's Enterprise SEO Platform has demonstrated strong market demand, securing notable deals with major multinational corporations. New enterprise customers include prominent names such as Salesforce, HSBC, LG, Samsung, Alibaba, Sony, DoorDash, TikTok, and Square.
The company has successfully grown its enterprise segment, with customers paying more than $10,000 annually increasing by 44% year-over-year. The expansion of high-value customers reflects Semrush's effective strategy in the enterprise market.
Product Innovation and AI Integration
During Q3, Semrush enhanced its product portfolio with several key developments:
- Extended AI Overview tracking capabilities across multiple tools
- Improved social media management features with TikTok integration
- Launched AdCreative.ai's AdLLM Spark for optimized ad text creation
- Introduced daily insights for faster market analysis
- Integrated Klaviyo for enhanced email performance tracking
- Released AlgoPix's Product Research Pulse for e-commerce sellers
Market Position
Expanding Total Addressable Market
Semrush has significantly expanded its total addressable market (TAM) from $13 billion at the time of its IPO to approximately $40 billion. This expansion reflects both the company's ability to gain share within existing markets and capitalize on new opportunities in the evolving digital marketing landscape.
Customer Segmentation Strategy
The company's customer base includes:
- 8,000 Enterprise accounts
- 17,000 Mid-Market customers
- 21,000 Marketing Agencies
- A strong SMB business segment
These mid-market, agency, and enterprise accounts contribute 55% of overall ARR, demonstrating successful penetration of higher-value market segments.
Future Outlook
Raised Financial Guidance
Based on strong Q3 performance, Semrush has raised its full-year 2024 guidance:
- Full-year revenue expected between $375-376 million, representing 22% growth
- Full-year non-GAAP operating margin projected at approximately 12%
- Free cash flow margin anticipated at approximately 8%
For Q4 2024, the company expects:
- Revenue between $100.8-101.8 million
- Non-GAAP operating margin of approximately 11%
Key Facts
- Revenue growth: 24% year-over-year to $97.4 million
- ARR growth: 24% year-over-year to $401 million
- Customer base: Over 117,000 paying customers
- Enterprise presence: Nearly 40% of Fortune 500 companies
- Cash position: $233 million in cash and investments
- Geographic reach: Operations in 13 offices worldwide
- Employee base: Approximately 1,600 employees and contractors
- Customer satisfaction: 4.7/5 rating on G2.com