
Semrush Announces Third Quarter 2023 Financial Results
· Third quarter revenue of $78.7 million, up 20% year-over-year
November 2, 2023
Three months ended September 30, | Nine months ended September 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Revenue | $ 65,793 | $ 49,252 | $ 185,531 | $ 134,255 | |||
Cost of revenue ¹ | 12,405 | 11,362 | 36,590 | 30,373 | |||
Gross profit | 53,388 | 37,890 | 148,941 | 103,882 | |||
Operating expenses | |||||||
Sales and marketing ¹ | 30,569 | 20,674 | 87,293 | 55,428 | |||
Research and development ¹ | 10,134 | 6,174 | 27,943 | 17,497 | |||
General and administrative ¹ | 17,007 | 11,372 | 45,388 | 29,796 | |||
Exit costs | 5,932 | — | 9,417 | — | |||
Total operating expenses | 63,642 | 38,220 | 170,041 | 102,721 | |||
(Loss) income from operations | (10,254) | (330) | (21,100) | 1,161 | |||
Other income (expense), net | 1,483 | (184) | 2,353 | (256) | |||
(Loss) income before income taxes | (8,771) | (514) | (18,747) | 905 | |||
Provision for income taxes | 321 | 101 | 1,200 | 328 | |||
Net (loss) income | $ (9,092) | $ (615) | $ (19,947) | $ 577 | |||
Net (loss) income per share attributable to common stockholders: | |||||||
Basic | $ (0.06) | $ — | $ (0.14) | $ — | |||
Diluted | $ (0.06) | $ — | $ (0.14) | $ — | |||
Weighted-average number of shares of common stock used in computing net (loss) income per share attributable to common stockholders: | |||||||
Basic | 141,256 | 135,673 | 141,034 | 122,595 | |||
Diluted | 141,256 | 135,673 | 141,034 | 138,639 | |||
¹ includes stock-based compensation expense as follows: |
Three months ended September 30, | Nine months ended September 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Cost of revenue | $ 20 | $ 7 | $ 52 | $ 22 | |||
Sales and marketing | 189 | 100 | 599 | 245 | |||
Research and development | 329 | 68 | 836 | 204 | |||
General and administrative | 1,442 | 452 | 3,629 | 1,318 | |||
Total stock-based compensation | $ 1,980 | $ 627 | $ 5,116 | $ 1,789 | |||
Three months ended September 30, | Nine months ended September 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Reconciliation of Non-GAAP net (loss) income | |||||||
Net (loss) income | $ (9,092) | $ (615) | $ (19,947) | $ 577 | |||
Stock-based compensation expense | 1,980 | 627 | 5,116 | 1,789 | |||
Non-GAAP net (loss) income | $ (7,112) | $ 12 | $ (14,831) | $ 2,366 |
As of | |||
September 30, 2022 | December 31, 2021 | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | $ 246,554 | $ 269,665 | |
Accounts receivable | 2,762 | 2,190 | |
Deferred contract costs, current portion | 7,362 | 6,338 | |
Prepaid expenses and other current assets | 6,340 | 5,345 | |
Total current assets | 263,018 | 283,538 | |
Property and equipment, net | 6,985 | 8,270 | |
Intangible assets, net | 11,254 | 2,925 | |
Goodwill | 6,337 | 1,991 | |
Deferred contract costs, net of current portion | 2,443 | 2,254 | |
Other assets | 3,748 | 1,096 | |
Total assets | $ 293,785 | $ 300,074 | |
Liabilities and stockholders’ equity | |||
Current liabilities | |||
Accounts payable | $ 13,153 | $ 9,942 | |
Accrued expenses | 17,647 | 19,479 | |
Deferred revenue | 47,121 | 40,232 | |
Other current liabilities | 2,664 | 1,896 | |
Total current liabilities | 80,585 | 71,549 | |
Long-term liabilities | |||
Deferred revenue, net of current portion | 382 | 237 | |
Deferred tax liability | 111 | 268 | |
Other long-term liabilities | 1,430 | 2,478 | |
Total liabilities | 82,508 | 74,532 | |
Stockholders' equity | |||
Undesignated preferred stock, $0.00001 par value - 100,000,000 shares authorized, and no shares issued or outstanding as of September 30, 2022 or December 31, 2021 | — | — | |
Class A common stock, $0.00001 par value - 1,000,000,000 shares authorized, and 43,615,053 shares issued and outstanding as of September 30, 2022; 31,841,061 shares issued and outstanding as of December 31, 2021 | — | — | |
Class B common stock, $0.00001 par value - 160,000,000 shares authorized, and 97,918,005 shares issued and 97,864,674 outstanding as of September 30, 2022; 108,975,216 shares issued and 108,870,126 outstanding as of December 31, 2021 | 1 | 1 | |
Additional paid-in capital | 271,783 | 264,871 | |
Accumulated other comprehensive deficit | (1,460) | (230) | |
Accumulated deficit | (59,047) | (39,100) | |
Total stockholders’ equity | 211,277 | 225,542 | |
Total liabilities and stockholders' equity | $ 293,785 | $ 300,074 |
Nine Months Ended | |||
September 30, | |||
2022 | 2021 | ||
Operating Activities | |||
Net (loss) income | $ (19,947) | $ 577 | |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities | |||
Depreciation and amortization expense | 6,626 | 2,438 | |
Amortization of deferred contract costs | 7,145 | 4,578 | |
Amortization of deferred financing and debt issuance costs | 53 | — | |
Loss on disposal of subsidiary | 1,738 | — | |
Stock-based compensation expense | 5,116 | 1,789 | |
Non-cash interest expense | 96 | 158 | |
Change in fair value of convertible debt securities | (889) | — | |
Deferred taxes | 290 | (83) | |
Deposit on letter of credit | — | 88 | |
Changes in operating assets and liabilities | |||
Accounts receivable | (344) | (741) | |
Deferred contract costs | (8,358) | (6,964) | |
Prepaid expenses and other current assets | (1,395) | (3,924) | |
Other current liabilities | 1,562 | — | |
Accounts payable | 4,824 | (3,219) | |
Accrued expenses | (2,772) | 14,419 | |
Deferred revenue | 6,299 | 9,634 | |
Other long-term liabilities | (38) | — | |
Net cash provided by operating activities | 6 | 18,750 | |
Investing Activities | |||
Purchases of property and equipment | (4,016) | (1,558) | |
Purchases of convertible debt securities | (2,000) | (500) | |
Capitalization of internal-use software development costs | (1,273) | (433) | |
Cash paid for acquisition of assets and businesses, net of cash acquired | (13,993) | (350) | |
Net cash used in investing activities | (21,282) | (2,841) | |
Financing Activities | |||
Proceeds from exercise of stock options | 1,539 | 604 | |
Issuance of shares in connection with Employee Stock Purchase Plan | 257 | — | |
Payment of capital leases | (1,967) | (913) | |
Net proceeds from completing initial public offering | — | 137,467 | |
Net cash (used in) provided by financing activities | (171) | 137,158 | |
Effect of exchange rate changes on cash and cash equivalents | (1,664) | — | |
(Decrease) increase in cash, cash equivalents and restricted cash | (23,111) | 153,067 | |
Cash, cash equivalents and restricted cash, at beginning of period | 269,665 | 35,619 | |
Cash, cash equivalents and restricted cash, at end of period | $ 246,554 | $ 188,686 |