SEMrush Reports 22% Revenue Growth to $105M in Q1 2025

SEMrush Holdings, Inc. reported its financial results for the first quarter of 2025, revealing a revenue of $105.0 million, a 22% increase from $85.8 million in the same period last year. The company’s gross profit also rose to $85.1 million, up from $71.2 million, although the gross margin slightly decreased to 81% from 83%. The increase in revenue was primarily attributed to a rise in the number of paying customers, which grew to approximately 118,000 from 112,000 year-over-year, alongside strong upsell and cross-sell activities.

Operating expenses for the quarter totaled $85.2 million, compared to $69.7 million in the prior year, reflecting increased investments in sales and marketing, research and development, and general administrative functions. Notably, sales and marketing expenses rose by 22% to $41.3 million, driven by higher personnel costs and increased marketing activities. Despite the rise in expenses, SEMrush reported a net income of $0.7 million, a decline from $2.0 million in the previous year, largely due to increased operational costs and a higher provision for income taxes.

In terms of strategic developments, SEMrush has been active in expanding its product offerings and capabilities through acquisitions. The company completed several acquisitions in 2024, including Third Door Media and Exploding Topics, aimed at enhancing its content and educational offerings. These acquisitions are expected to contribute positively to SEMrush's growth trajectory, although they have also led to increased operational costs in the short term.

The company’s cash position improved significantly, with cash and cash equivalents rising to $64.7 million from $48.9 million at the end of 2024. SEMrush also reported short-term investments of $197.1 million, indicating a strong liquidity position to support future growth initiatives. The company anticipates that its existing cash and investments will be sufficient to meet its operational and capital needs for at least the next 12 months.

Looking ahead, SEMrush remains optimistic about its growth prospects, driven by increasing demand for its online visibility management platform. The company aims to continue expanding its customer base and enhancing its product offerings, particularly in the areas of artificial intelligence and data analytics. Management expects to maintain a dollar-based net revenue retention rate of approximately 106%, reflecting its commitment to customer retention and expansion.