SEMrush (NYSE:SEMR) Q4: Beats Sales Estimates, Guides For 30% Growth Next Year

Jabin Bastian /
2022/02/28 7:37 pm EST

Marketing analytics software Semrush (NYSE:SEMR) announced better-than-expected results in the Q4 FY2021 quarter, with revenue up 47.4% year on year to $53.7 million. Guidance for next quarter's revenue was $56 million at the midpoint, 2.26% above the average of analyst estimates. SEMrush made a GAAP loss of $3.86 million, down on its loss of $734 thousand, in the same quarter last year.

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SEMrush (SEMR) Q4 FY2021 Highlights:

  • Revenue: $53.7 million vs analyst estimates of $52.1 million (3.12% beat)
  • EPS (GAAP): -$0.03
  • Revenue guidance for Q1 2022 is $56 million at the midpoint, above analyst estimates of $54.7 million
  • Management's revenue guidance for upcoming financial year 2022 is $246 million at the midpoint, beating analyst estimates by 3.59% and predicting 30.8% growth (vs 50.6% in FY2021)
  • Free cash flow of $3.21 million, down 58.3% from previous quarter
  • Net Revenue Retention Rate: 126%, in line with previous quarter
  • Customers: 82,000, up from 79,000 in previous quarter
  • Gross Margin (GAAP): 78.4%, up from 75.5% same quarter last year

“2021 was a historic year for Semrush, as we completed a successful IPO and grew revenue by more than 50%. In the process we added nearly fifteen thousand paid customers while also delivering strong growth in average revenue per customer. I want to extend my thanks to all our employees and partners who helped make it possible,” said Oleg Shchegolev, CEO and Co-Founder of Semrush.

Started by Oleg Shchegolev while still in university, Semrush (NYSE:SEMR) is a software as a service platform that helps companies optimize their search engine and content marketing efforts.

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Sales Growth

As you can see below, SEMrush's revenue growth has been exceptional over the last year, growing from quarterly revenue of $36.4 million, to $53.7 million.

SEMrush Total Revenue

And unsurprisingly, this was another great quarter for SEMrush with revenue up 47.4% year on year. On top of that, revenue increased $4.49 million quarter on quarter, a solid improvement on the $4.24 million increase in Q3 2021, and even a sign of slight acceleration of growth.

Guidance for the next quarter indicates SEMrush is expecting revenue to grow 40% year on year to $56 million, in line with the 43.9% year-over-year increase in revenue the company had recorded in the same quarter last year. For the upcoming financial year management expects revenue to be $246 million at the midpoint, growing 30.8% compared to 50.6% increase in FY2021.

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Customer Growth

You can see below that SEMrush reported 82,000 customers at the end of the quarter, an increase of 3,000 on last quarter. That's in line with the customer growth we have seen last quarter but a bit below what we have typically seen over the last year, suggesting that sales momentum may be slowing a little.

SEMrush Customers

Key Takeaways from SEMrush's Q4 Results

With a market capitalization of $2.09 billion SEMrush is among smaller companies, but its more than $269.6 million in cash and positive free cash flow over the last twelve months give us confidence that SEMrush has the resources it needs to pursue a high growth business strategy.

We were impressed by the exceptional revenue growth SEMrush delivered this quarter. And we were also glad that the revenue guidance for the rest of the year exceeded expectations. On the other hand, the revenue guidance for next year indicates a slowdown, although the growth still looks strong. Overall, this quarter's results seemed pretty positive and shareholders can feel optimistic. The company is down 1.07% in the thinly traded after-hours and currently trades at $14.7 per share.

Should you invest in SEMrush right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.