Summary
Semrush closed the first quarter of fiscal 2025 with revenue of $105.0 million, up 22.4% from the prior-year quarter. The company ended March 31, 2025 with ARR of $424.7 million, up 20% year over year. Paying customers reached about 118,000, up about 5.1% from a year earlier. Dollar-based net revenue retention was 106%. ARR per paying customer was $3,608 as of March 31, 2025, up from $3,163 a year earlier. Enterprise momentum stayed strong: customers paying more than $50,000 per year grew 86% to 388, and customers paying more than $10,000 per year grew 39%. Semrush also reported over 1.0 million registered free active customers. Management highlighted new AI products, including AI Optimization in open beta and an AI Toolkit, as drivers of future expansion.
Profitability was mixed. Gross profit rose 19.6% to $85.1 million, but gross margin slipped 1.9 percentage points to 81.1%. The company swung to an operating loss of $0.07 million, and operating margin fell 1.8 percentage points to -0.1%. Net income dropped 60.3% to $0.85 million. Diluted EPS was $0.01, flat with the prior-year quarter. On a non-GAAP basis, income from operations was $12.2 million and non-GAAP operating margin was 11.6%, up from 11.3% a year earlier. Operating cash flow increased 49.6% to $22.1 million. Capital expenditures were $0.72 million, down 4.5%. Free cash flow was $18.5 million, and free cash flow margin was 17.6%.
The balance sheet showed deferred revenue of $79.9 million, up 24.9% from a year earlier. Remaining performance obligations fell 29.1% to $0.98 million. Guidance points to continued growth. For the second quarter of 2025, Semrush expects revenue of $108.2 million to $109.2 million, which at the midpoint implies growth of about 20% year over year, and non-GAAP operating margin of about 11%. For the full fiscal year 2025, the company reiterated revenue guidance of $448.0 million to $453.0 million, about 20% growth at the midpoint, non-GAAP operating margin of about 12%, and free cash flow margin of about 12%. The full-year outlook now includes an incremental $8.0 million expense headwind from exchange rates. The company had previously assumed a EUR to USD rate of 1.05 and now models 1.13.
Risks remain. The quarter included a GAAP operating loss and a lower gross margin, even as non-GAAP profitability improved. Revenue growth depends on upselling and cross-selling to existing customers, plus continued adoption of enterprise offerings. Currency movements are a direct headwind to the full-year plan. The company also faces execution risk from its recent leadership transition: William Wagner became CEO, Oleg Shchegolev moved to CTO, and Vitalii Obischenko became CPO. Competition and changes in search behavior, including AI-powered search platforms, could pressure demand for traditional SEO tools. Management reiterated guidance, but the higher exchange-rate assumption absorbs $8.0 million and leaves less room for cost surprises. Semrush ended the quarter with solid operating cash flow and a growing deferred revenue balance, which supports visibility, though the RPO decline and flat EPS show that GAAP earnings remain thin.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $105.0M | $102.6M | +2.3% | $85.8M | +22.4% |
| Gross profit | $85.1M | $83.8M | +1.6% | $71.2M | +19.6% |
| Gross margin | 81.1% | 81.7% | -0.6 pp | 82.9% | -1.9 pp |
| Research & development | $21.9M | $21.3M | +2.8% | $17.3M | +26.6% |
| Sales & marketing | $41.3M | $39.7M | +4.0% | $33.9M | +21.8% |
| General & administrative | $22.0M | $21.1M | +4.5% | $18.5M | +19.1% |
| Total operating expenses | $85.2M | $82.1M | +3.8% | $69.7M | +22.3% |
| Operating income (loss) | -$74.0K | $1.7M | -104.3% | $1.5M | -105.0% |
| Operating margin | -0.1% | 1.7% | -1.8 pp | 1.7% | -1.8 pp |
| Net income (loss) | $655.0K | $2.5M | -73.6% | $2.0M | -67.3% |
| Net margin | 0.6% | 2.4% | -1.8 pp | 2.3% | -1.7 pp |
| Diluted EPS | $0.01 | $0.02 | -$0.01 | $0.01 | ±$0.00 |
Risks
Cost of revenue increased 36% to $19.9 million for the three months ended March 31, 2025, while revenue rose 22.4% to $105.0 million, and gross margin declined to 81.1% from 82.9%. Operating income swung to a loss of $0.07 million, down 105.0% from income of $1.47 million, and operating margin fell to -0.1% from 1.7%.
On March 10, 2025, former CEO Oleg Shchegolev became CTO, William Wagner became CEO, and Vitalii Obischenko moved from COO to CPO. This newly disclosed transition may create execution and product innovation risk.
Dollar-based net revenue retention rate was approximately 106% as of March 31, 2025 and December 31, 2024. Management notes that customer cohorts typically experience their lowest retention in their second full year, so failure to expand or win back customers could slow growth.
The platform is positioned around AI-powered hubs, and the CEO transition is intended to let the former CEO focus on artificial intelligence and product innovation. Failure to sustain product and technology innovation in an evolving landscape could reduce differentiation and customer retention.
Sales and marketing expense increased $7.4 million, or 22%, for the three months ended March 31, 2025, driven by higher personnel costs. New sales personnel require several months or more to become productive, so these costs may not be offset by near-term revenue.
SaaS KPIs
All quarters →ARR per Paying Customer
Paying Customers
Dollar-Based Net Revenue Retention
Free cash flow
Free cash flow margin
Registered Free Active Customers
Non-GAAP operating margin
Annual Recurring Revenue (ARR)
Customers Paying More Than $10,000 Annually
Summary, forecast, risks and KPIs are extracted from SEMrush Holdings, Inc.'s SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.