This represents user growth of ~25-30%, which could accelerate as new products hit the market and find popularity.Īnnual recurring revenue (ARR) is growing quite a bit faster at >50% as of the last quarter and likely to grow >40% on the full year.
Semrush newsletter free#
They are net adding about 5,000 paying customers per quarter, most of which is converting from its pool of 400,000+ active free customers (note those are 400k customers not using competing products, a testament to the Freemium model). SEMR has 72,000 paying customers as of Q1 2021. If SEMR’s revenue growth is notably strong, how are they doing on KPIs? They are equally as stout if not more so. Frankly, this is the type of financial model that Benjamin Graham could only have dreamed of. This is a company that exhibits strong sequential quarterly growth, very high gross margins, insanely high incremental margins, and has a history of operating within cash flow as evidenced by their positive operating income. Īside : I love financial models that look like SEMR’s. Pretty sure you could count those names on one hand. There aren’t too many public companies out there growing topline >40% while also generating cash. The beauty of SEMR’s model is their substantial pool of freemium customers that convert at predictable intervals and represent a very low CAC pool of paid converts.īecause of this CAC efficiency, SEMR has hit escape velocity on an operating basis, which puts them in some pretty rarified air. Typically you see substantial operating losses as companies are pushing to maximize customer acquisition and topline growth. Moreover, operating income is now positive, which is quite rare for the high growth group. So strong topline is driving efficiency downstream in the business model.
Also, gross margins (not shown) have hovered in the mid 70%, but as of last quarter came in at 78% with incremental GM’s in the low 80s. Show me the numbersĪs you can see, SEMR currently has about $40m of quarterly revenue as of Q1 2021 growing in the mid 40’s% YoY and slated to accelerate handsomely through the Q2 Covid-19 lap. Therefore, SEMR represents the affordable all-in-one platform with best-in-class tools for all things SEO. That is their value add - Everything you could possibly need at a good price. But if you need anything more than that, or frankly don’t even know what you need and you begin to add more point solutions, quickly it becomes cheaper to choose SEMR. So if you are just going to do backlinking, you choose Ahrefs. Ahrefs is known for being the best backlinking tool. It is this multitude of products that gives it an edge over competition. And this is the key - They went from being a point solution to a full fledged platform. SEMR kept adding services that its core clients wanted. From what I gather, SEMR’s bread and butter was always keyword related - tools, analysis, optimization, etc. SEMR is similar in that it does a little bit of everything. Display ads only or YouTube ads only, etc). The key innovation that TTD had made as a demand side advertising platform was committing early on to offering multiple different advertising products while competition largely remained monoline (i.e. “All-in-one tool at a discount would pay much more to replace SEMrush with several tools”Īs an aside, this reminds me a lot of The Trade Desk (TTD) when it went public in 2017. It is the bundling of disparate point solutions into one platform at a reasonable price that has made SEMR the 800 pound gorilla in online presence for SMBs. The beauty of SEMR is that it can be as simple as informing an SMB where their digital traffic is coming from or as complex as helping them run a full-spectrum content marketing or public relations campaign across platforms including the major social media platforms. Their job is to help an SMB or brand be in the right place to become noticed on the internet and subsequently catch the attention of likely customers.
0 kommentar(er)
