Summary
Semrush closed fiscal 2025 with solid top-line growth and a heavier cost base. Fourth-quarter revenue was $117.66 million, up 14.6% from $102.64 million in the prior-year quarter. Full-year revenue was $443.64 million, up 17.7% from $376.82 million. Gross profit rose 12.8% in the quarter to $94.55 million from $83.83 million, and rose 14.8% for the year to $357.34 million from $311.34 million. Both trailed revenue growth. Gross margin declined to 80.4% in the quarter from 81.7% a year earlier, and to 80.5% for the full year from 82.6%. Management credited upsell and cross-sell activity for most of the revenue increase, with continued softness at the lower end of the market as an offset.
Profitability went the other way. The fourth quarter swung to an operating loss of $13.90 million from operating income of $1.74 million, and operating margin fell to -11.8% from 1.7%. The full year swung to an operating loss of $22.81 million from operating income of $8.31 million, with operating margin at -5.1% versus 2.2%. The quarter's net loss attributable to Semrush was $11.10 million, compared with net income of $3.34 million a year earlier. For the full year, the net loss was $18.96 million versus net income of $8.24 million, and diluted EPS was -$0.13 versus $0.06. Non-GAAP income from operations for the full year was $53.3 million, up from $45.8 million, and non-GAAP operating margin was 12.0% versus 12.2%. The distance between the two sets of results comes from the items excluded from the non-GAAP measure, which include stock-based compensation, amortization of acquired intangibles, restructuring and other costs, and acquisition-related costs.
Cash flow told a better story than earnings. Fourth-quarter operating cash flow was $14.90 million, up 24.8% from $11.93 million, and full-year operating cash flow was $59.58 million, up 26.8% from $47.00 million. Free cash flow, a non-GAAP measure defined as operating cash flow less purchases of property and equipment and capitalized internal-use software costs, was $42.9 million for the year versus $35.3 million, with a free cash flow margin of 9.7% versus 9.4%. Capital expenditures fell to $0.07 million in the quarter from $0.39 million, and to $1.79 million for the year from $3.80 million. Deferred revenue, current portion only, rose 29.7% to $93.19 million from $71.83 million. Remaining performance obligations rose 2912.7% to $30.40 million from $1.01 million.
Customer metrics show both the strengths and the strain. ARR at December 31, 2025 was $471.4 million, up from $411.6 million a year earlier, and ARR per paying customer rose to $4,369 from $3,522. Paying customers, however, fell to approximately 108,000 from 117,000, a decline of about 9,000 during the year. Management attributed continued softness among freelancers and less sophisticated users to macro-economic pressure, industry-wide increases in paid search cost-per-click, and some consolidation from AI. Dollar-based net revenue retention was approximately 104%, down from 106%, and the company expects continued pressure on that metric in the near term. Enterprise platform ARR grew to $37 million, while AI products surpassed $38 million in ARR.
The pending Adobe transaction now frames the outlook. The merger agreement, signed November 18, 2025, gives holders $12.00 per share in cash, and stockholder approval was obtained on February 3, 2026. The Hart-Scott-Rodino waiting period has expired, but other antitrust and foreign investment approvals remain outstanding. The outside date is August 18, 2026, extendable to November 18, 2026 for regulatory approvals, and a company termination fee of $63,000,000 applies in specified circumstances. Management expects cost of revenue to increase in absolute dollars and plans to increase its research and development investment, while sales and marketing expenses fluctuate as a percentage of revenue and general and administrative costs rise to support growth and the transaction. No shares were repurchased under the $150.0 million 2025 program, and none are planned before closing. The main risks are the merger conditions themselves, including required approvals and the absence of a material adverse effect, plus persistent weakness in the lower end of the customer base that drags on retention.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $117.7M | $112.1M | +5.0% | $102.6M | +14.6% |
| Gross profit | $94.6M | $89.9M | +5.2% | $83.8M | +12.8% |
| Gross margin | 80.4% | 80.2% | +0.2 pp | 81.7% | -1.3 pp |
| Research & development | $25.7M | $25.7M | +0.2% | $21.3M | +20.9% |
| Sales & marketing | $45.9M | $44.3M | +3.6% | $39.7M | +15.6% |
| General & administrative | $36.8M | $24.3M | +51.4% | $21.1M | +74.7% |
| Total operating expenses | $108.5M | $94.3M | +15.0% | $82.1M | +32.1% |
| Operating income (loss) | -$13.9M | -$4.5M | -209.6% | $1.7M | -898.6% |
| Operating margin | -11.8% | -4.0% | -7.8 pp | 1.7% | -13.5 pp |
| Net income (loss) | -$11.6M | -$2.4M | -385.9% | $2.5M | -568.5% |
| Net margin | -9.9% | -2.1% | -7.8 pp | 2.4% | -12.3 pp |
| Diluted EPS | -$0.08 | -$0.01 | -$0.07 | $0.02 | -$0.10 |
Risks
Pending acquisition by Adobe is subject to closing conditions including antitrust and foreign investment approvals and no material adverse effect; outside date is August 18, 2026, extendable to November 18, 2026, and a $63.0 million termination fee may be payable in specified circumstances.
Two stockholder lawsuits filed in January 2026 in New York Supreme Court seek to enjoin the Merger; additional similar complaints may be filed, and defending them may result in substantial costs and delay.
During the year ended December 31, 2025, paying customers decreased by approximately 9,000 and dollar-based net revenue retention fell to approximately 104% from 106% as of December 31, 2024, due to lower-end market softness tied to macro-economic pressures, 2025 paid search cost per click increases, and AI market consolidation.
Increased adoption of AI for search queries may significantly change how search engines rank, return, and display responses; search engine or AI service changes could make backlink analytics and other products obsolete and require costly recalibration or new product development.
The Merger Agreement restricts the company from entering certain contracts, acquiring or disposing of assets, entering new lines of business, incurring indebtedness, or making capital expenditures until closing, which could prevent it from pursuing attractive opportunities or responding to competitive pressures.
The platform relies on third-party data sources and social media APIs including Facebook, X, Instagram, Pinterest, and LinkedIn; changes or terminations of data access or less favorable renewal terms could require expensive alternatives and harm product functionality.
The EU AI Act entered into force in August 2024 with some provisions effective in 2025 and most in August 2026, and U.S. state AI laws such as California's 2025 laws impose compliance burdens, potential lawsuits, and data protection risks on AI offerings.
The company and its vendors have experienced and expect continued cybersecurity threats and incidents; a breach involving customer personal data could lead to liability, regulatory penalties, customer termination rights, and reputational harm.
Approximately 51% of revenue for the year ended December 31, 2025 was generated from customers outside the United States, and approximately 30% of expenses are denominated in Euros, exposing results to geopolitical instability, tariffs, foreign exchange fluctuations, and immigration changes.
Uncertainty regarding the Merger and the company's future could adversely affect its ability to recruit and retain key personnel; loss of executive officers or key employees could delay or prevent achievement of business objectives.
As the paying customer base expands to include more large enterprise customers, sales expenses may increase, sales cycles may lengthen and become less predictable, and longer terms and extended payment terms may increase credit risk.
Operating income was -$22.81 million for the year to date ended December 31, 2025, down $31.12 million and swung to a loss from $8.31 million in the prior-year year-to-date period, and net income attributable to the company was -$18.96 million, down $27.19 million and swung to a loss.
SaaS KPIs
All quarters →ARR per Paying Customer
Paying Customers
ARR
Dollar-Based Net Revenue Retention
Summary, forecast, risks and KPIs are extracted from SEMrush Holdings, Inc.'s SEC filings for Q4 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.