Semrush (SEMR) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $105 million, up 22% year-over-year, driven by upsell, cross-sell, and an increase in paying customers to approximately 118,000.

• ARR was $424.7 million, up 20% year-over-year, with ARR per paying customer at $3,608.

• Non-GAAP operating margin was 11.6%, with free cash flow margin up to 17.6% year-over-year.

• AI products, including the new AI Toolkit, generated over $4 million in ARR and saw early traction.

• Management is focused on AI, enterprise expansion, product innovation, and data platform enhancement.

Financial highlights

• Gross profit rose 20% year-over-year to $85.1 million, with gross margin at 81%.

• Non-GAAP operating income was $12.2 million (11.6% margin), up from $9.7 million (11.3%) in Q1 2024.

• Free cash flow was $18.5 million (17.6% margin), up from $12.0 million (14.0%) year-over-year.

• Cash, cash equivalents, and short-term investments totaled $261.8 million as of March 31, 2025.

• Net income attributable to the company was $0.8 million, down from $2.1 million in Q1 2024.

Outlook and guidance

• Q2 2025 revenue expected at $108.2–$109.2 million, ~20% year-over-year growth.

• Q2 non-GAAP operating margin expected at ~11%.

• Full-year 2025 revenue guidance reiterated at $448–$453 million (~20% growth), with an $8 million FX headwind.

• Full-year non-GAAP operating margin guidance reiterated at ~12%.

• Free cash flow margin for 2025 expected at ~12%, up 260 bps from 2024.