Looking for insider info on Semrush Inc (NASDAQ: SEMR)?
I”ll admit, I didn’t expect this hidden find. Still, the research shows otherwise.
Read on for quick stats, a sneaky look under the hood, and MarTech industry forecasts.
Semrush Holdings Announces Third Quarter 2022 Financial Results.
We delivered solid growth despite a more challenging demand environment. We saw steady new customer growth, which was partially offset by lower expansion from existing customers. Interest in our products remains high, however at the moment, customers are more cautious and closely scrutinizing their spendingOleg Shchegolev, CEO and Co-Founder of
Here’s everything you need to know about the SaaS company.
Semrush Inc is a leading provider of cloud-based marketing and business intelligence software.
The company offers a wide range of software features for SEO optimization to increase visibility online:
- Content Marketing
- Competitor Research
- Social Media Marketing
Semrush is used by Tesla, Samsung, IBM, Walmart, and 30% of Fortune 500 companies.
Third Quarter 2022 Financial Highlights
- Third quarter revenue of $65.8 million, up 34% year over year
- ARR of $267 million as of September 30, 2022, up more than 33% year over year
- Dollar-based net revenue retention of 122% as of September 30, 2022, compared to 125% in the previous quarter
- More than 94,000 paying customers as of September 30, 2022, up more than 17% from a year ago
- Net loss of $9.1 million for the third quarter, compared with a net loss of $615 thousand a year ago
- Non-GAAP net loss of $7.1 million for the third quarter which includes $5.8 million of expense associated with the winding down of our Russia operations, compared with non-GAAP net income of $12 thousand a year ago
Semrush Inc: Official Profile and Stats
Semrush is a leading online visibility management SaaS platform that enables companies globally to identify and reach the right audience in the right context and through the right channels.
Semrush allows our customers to understand trends, derive unique and actionable insights to improve their websites and social media pages and distribute highly relevant content to their targeted customers across a variety of digital channels.
We empower companies to improve their online visibility across key channels through a holistic strategy.Semrush
SEMRush Inc is headquartered in Boston, MA.
Revenue: $188 million USD
Profit: -$8.8 million Q2 2022
CEO: Oleg Shchegolev
Basic Investment Overview
Semrush (NYSE: SEMR) is a publicly traded company that helps businesses effectively target their customers online by aggregating data and turning it into meaningful insights.
Semrush went public in March 2021, and its customers vary substantially in both size and industry.
Semrush is a leader in a huge number of traditional MarTech categories, demonstrating its ability to offer solutions that are at a similar level to its competitors, who maybe only specialize in one or two categories.
Semrush Compares to SimilarWeb
Similarweb Ltd (NYSE: SMWB) is an Israeli web analytics company specializing in web traffic and performance.
SMWB announced its Q3 earnings following SEMR on 11/15/2022.
Over the last year, share price for SMWB has dropped 68%, with share price down 39% over the last 3 months.
A Sneaky Look Under the Hood
Take a look around this website, and you will notice that I am by no means a stock advisor but rather a digital marketer who has frequented tools like Semrush for data-driven insights online.
So while some of you will search for forecasts and balance sheets, I am drawn to what’s “under the hood.”
With a brick-and-mortar business, you would have to spend a lot of time hanging around the store to see what kind of customers come through the door.
However, with SaaS businesses like Semrush driving their business almost exclusively online, we can get a pretty good idea of their customer base by taking a look at their website traffic (i.e., their customers).
Here’s what we see
First, I was very surprised to see the top 10 pages on their site. Take a look for yourself in the screenshot above.
In comparison, here’s a leading SaaS player, Salesforce’s top 10:
Considering the top organic pages alone, we can make the very rough assessment that a significant portion of their organic traffic is not driving revenue (which is arguably the cheapest way to acquire customers online).
So, can we say the company is targeting the “right” customer online?
Now, I could add another 100+ uncovered indicators here, but I’ll keep it simple.
Although intriguing, a site’s top organic pages and keywords won’t give you the complete story but can help validate authority and traffic quality.
What We Know About MarTech Today
Despite the questionable audience pool here, the larger MarTech software industry is expected to see continued growth through 2024.
According to an October 2022 eMarketer report:
B2C spending on MarTech is higher but slower-growing than that of B2B, per their estimates. B2C firms will invest $14.54 billion this year compared with B2Bs’ $6.59 billion.
However, B2C MarTech spend is concentrated among a few providers.
40% to 50% of this year’s total will go to Adobe, Oracle, and Salesforce.
So if B2C MarTech spend is largely spoken for by huge names in the space, then where does the Semrush platform fit in?
Semrush: B2B MarTech reports point to lower investment than B2C, but higher growth
Semrush Holdings, Inc. leaned into this space in the second quarter of 2022, according to their press release:
“Our growth was once again underpinned by higher average revenue per customer, driven by an increased proportion of customers from higher priced plans and growth of add-ons.”
“We continue to see a richer mix as the number of customers who pay more than $10,000 annually grew more than 80%, and customers on our two higher priced plans are up more than 25% from a year ago.”Semrush Holdings, Inc
Semrush Top 3 Challenges
According to eMarketer:
Additionally, the sheer volume of competing solutions is overwhelming to the B2B buyer.
In B2B, Marketing and Sales must work together to prove ROI
eMarketer argues in their 2024 B2B MarTech Forecast:
Following another well-known trend–blurring lines between marketing and sales teams—marketers are considering enhancements to CRM platforms.
CRMs are mainly a solution for sales.
But B2B marketers now responsible for pipeline contribution and revenue growth require new—or better—solutions that feed, sync, and measure data from CRMs to show attribution and measure ROI.eMarketer
Semrush prove ROI to B2B stakeholders?
As a digital marketer, I can tell you that ROI can be particularly difficult to measure- and, more importantly, hard to prove to leadership.
Rather, is Semrush positioning itself as a platform that will generate (and prove) strong ROI?
A quick look at the enterprise “success stories” (case studies) above and I can say the answer is no.
Other than a single study that mentions sales growth (although starting from 0), the success metrics here are mainly traffic and rankings.
Not to say that these aren’t how we should measure search success, but as we enter a period of economic instability, will an increase in traffic and rankings alone convince the B2B buyer?
What about their boss?
According to KPMG, 80% of CEOs, CMOs, and senior executives anticipate a recession over the next 12 months.
Okay, so what does this mean for
Semrush Inc stock?
To be honest, I can’t tell you.
All I can do is validate your instincts either way.
On one hand, Semrush is a legitimate name in the digital marketing visibility management space, most well-known for its comprehensive SEO tools.
On the other hand,
Based on their inbound traffic, we can reasonably question their overall profitability. After all, the B2B paid advertising space is extremely competitive, not to mention expensive.
However, the overall growth trajectory for MarTech is positive, so we can challenge the short-term insights against the long-term forecasts.
Here’s where I tell you that this is in no way, shape, or form financial advice.
Always consult your trusted financial advisor- just not for digital marketing advice.
Thoughts? Let me know below.