Total Revenue

+22.5% (Q1 2025 increased from $85.81M in Q1 2024 to $105.02M)

Strong top‐line growth was driven by an expanded and balanced mix of revenues—with the U.S. contributing $45.94M, the U.K. $9.25M, and “Other” regions $49.84M—indicating both domestic and international momentum compared to the previous period. " "

Gross Profit

Achieved $85.15M in Q1 2025 with an 81% margin

Despite rising cost pressures, the company maintained a robust gross margin of 81% through effective revenue scaling and cost management, comparing favorably to previous periods even as operating costs increased. "

Operating Income

Turned negative at –$74K in Q1 2025 (compared with positive performance in Q4 2024)

After previously positive operating results, increased operating expenses—likely due to higher cost pressures—eroded margins, resulting in a negative operating income despite strong revenue performance. "

Net Income

Dropped to $655K in Q1 2025 from $3,293K in Q4 2024

The sharp decline in net income indicates that, while revenue was growing, enlarged operating and non‐operating expenses (or other adverse adjustments) significantly compressed net earnings compared to the prior period. "

Cash Flow from Operating Activities

$22.11M in Q1 2025

Healthy operating cash generation was maintained—supported by favorable working capital adjustments—even as profit metrics suffered, demonstrating the company’s ability to convert operating performance to cash flow. " "

Earnings Per Share (EPS)

Remained subdued at $0.01

Despite robust revenue growth, EPS stayed minimal at $0.01 due to the impact of rising costs and diluted profit margins that outweighed the revenue expansion, limiting per-share profitability improvements. "

Revenue (quarterly)

Q1 2025

$103.9M to $104.7M (22% YoY) "

No guidance provided

no current guidance

Non-GAAP Operating Margin

Q1 2025

Approximately 11% "

No guidance provided

no current guidance

Revenue (annual)

FY 2025

$448M to $453M (20% YoY) "

No guidance provided

no current guidance

Non-GAAP Operating Margin

FY 2025

Approximately 12% "

No guidance provided

no current guidance

Free Cash Flow Margin

FY 2025

Approximately 12%, +260 basis points vs 2024 "

No guidance provided

no current guidance

Assumed Euro Exchange Rate

FY 2025

1.05 "

No guidance provided

no current guidance

Enterprise SEO Growth and Expansion

In Q2–Q4 2024, discussions centered on strong product adoption, expanding enterprise customer base, and higher average ARR (e.g., over 144 enterprise customers and rising ARR levels). " " " " " " " "

In Q1 2025, the enterprise solution continues to drive growth with nearly 200 paying customers, an average ARR of $60K, and new upsell opportunities via AI Optimization that are expected to further boost ARR. " " " " "

Consistent growth with increasing momentum – Sentiment remains highly positive, with additional emphasis on new revenue opportunities.

AI-Driven Product Innovation and Monetization

Q2–Q4 2024 featured early-stage AI offerings such as AI Optimization (AIO) and standalone AI products with experimental pricing, revealing early adoption and testing of AI capabilities. " " " " "

Q1 2025 shows accelerated traction with the launch of the AI Toolkit (one of the fastest-growing products) and the upcoming GA of the AI Optimization product for enterprise. Early customer interest and a robust pipeline indicate that AI is now a central growth engine. " " " "

Growing emphasis with stronger market traction – The company’s focus on AI has intensified with more revenue impact and broader customer appeal.

ARPU Expansion and Pricing Strategies

In Q2–Q4 2024, ARPU expansion was driven by cross-sell/up-sell strategies, pricing increases (including adjustments post-Q3 2023 price hikes), and structured enterprise pricing—resulting in average ARR growth (e.g., 13%–14% YoY increase). " " " " "

In Q1 2025, ARPU expansion continues with enterprise SEO customers maintaining ARR in the $50K–$60K range, and the introduction of flexible pricing for the upcoming AI add-on solution reinforces the focus on higher-quality customers. " " " "

Steady improvement and strategic pricing focus – The sentiment remains positive with continuous emphasis on unlocking further revenue per user.

Net Revenue Retention and Customer Segmentation

Q2–Q4 2024 saw steady NRR of around 106%–107% with a strong enterprise mix; segmentation focused on bringing higher-value, sophisticated accounts—enterprise, mid-market, and agencies—leading to high retention (often above 120% for these segments). " " " "

Q1 2025 maintained similar NRR levels (106%) while emphasizing continued enterprise expansion (e.g., growth in customers paying over $50K) and a deliberate shift toward higher-value, lower-volume customer segments. " " " "

Stable NRR with enhanced enterprise focus – Consistent results, with the enterprise segment poised to further drive retention improvements.

New Product Adoption Risks

In Q2–Q3 2024, there was little explicit discussion of new product risks; Q4 2024 briefly hinted at uncertainties in pricing feedback during new AI optimization tests. "

Q1 2025 explicitly addresses early-stage uncertainty for the AI Optimization product, noting the need for more customer feedback and cautious optimism in measuring adoption success, alongside monitoring the new enterprise SEO momentum. " " " "

Emerging as a notable concern with cautious optimism – Previously less discussed, this topic now features more precise risk monitoring.

Operating Margin and Expense Management

In Q2–Q4 2024, Semrush reported significant improvements in non-GAAP operating margins (e.g., increasing by 150–300 basis points YoY and reaching around 12%–13.4%), with disciplined expense management and integration costs managed effectively. " " " " "

Q1 2025 shows a non-GAAP operating margin of 11.6%, with strong performance even while managing an $8M headwind from euro-denominated expenses. Expense management remains robust despite minor currency-related challenges. " " "

Consistent performance with new currency-related challenges – Solid margin performance continues, albeit with attention to FX impacts.

Strategic Acquisitions and Cross-Sell Opportunities

In Q2–Q4 2024, acquisitions such as Brand24, Ryte, and Third Door Media were highlighted; cross-sell and upsell strategies played a major role in boosting ARR, especially in the enterprise segment (with notable increases in enterprise customer upgrades). " " " "

In Q1 2025, while fewer new acquisitions are mentioned, the impact of prior acquisitions (e.g., Brand24’s contribution) is recognized as having lapped, and cross-sell strategies—particularly in the enterprise SEO solution—continue to drive revenue growth. " "

Stable topic with matured acquisition contributions and ongoing cross-selling – Integration benefits are maturing, while cross-sell remains key.

Macroeconomic and Seasonality Risks

In Q4 2024, macroeconomic factors were observed to cause some softness in lower-end customer segments, with seasonality affecting net additions. Q2–Q3 2024 had minimal explicit discussion on these risks. " "

In Q1 2025, there is clear acknowledgment of modest macroeconomic risks (e.g., potential for elongated sales cycles) and seasonality (reflected in a slightly lower ARR result), though the overall growth drivers remain intact. " " "

Increased focus with cautious outlook amid external uncertainties – A more proactive stance on external risks than in earlier periods.