Semrush at JPMorgan Conference: AI and Enterprise Growth in Focus

On Wednesday, 14 May 2025, Semrush Holdings (NYSE:SEMR) presented at the 53rd Annual JPMorgan Global Technology, Media and Communications Conference. The company’s leadership discussed its strategic pivot towards enterprise solutions and AI-powered products, highlighting both growth opportunities and potential challenges. While the focus was on expanding enterprise offerings, the company also acknowledged macroeconomic headwinds that could impact its ambitious growth targets.

Key Takeaways

• Semrush’s enterprise product is projected to reach $30 million in annual recurring revenue (ARR) within a year of its launch.
• The company aims for a 20% revenue compound annual growth rate (CAGR) through 2026, driven by enterprise expansion and AI adoption.
• AI offerings have shown strong demand, with $4 million in ARR at the end of Q1 2024.
• Headcount growth is expected to slow as AI increases productivity and efficiency.
• The company is optimizing its product-led growth platform to better serve freelancers and solopreneurs.

Financial Results

• Enterprise Product ARR: Grew from zero to a projected $30 million in just over a year.
• Overall ARR Growth: Aims to maintain a 20% CAGR from 2024 to 2026, with a 22.5% growth in Q1 2024.
• AI ARR: Reached $4 million, about 1% of the total ARR.
• Customer ARR: Average ARR per customer increased by 14% year-over-year to $3,600, with enterprise customers averaging $60,000.
• Net Revenue Retention: Enterprise cohort retention exceeds 120%, growing by 30%.
• Freelancer ARR: Represents 20% of total ARR but shows retention below 80% and declining ARR.

Operational Updates

• Enterprise Focus: Prioritizing enterprise sales with plans to equip the sales team with at least three products this year.
• AI Product Launch: A new AI optimization product for enterprises will be generally available next month, with 1,000 customers on the waitlist.
• PLG Optimization: Efforts to reduce friction in the product-led growth platform include improvements in onboarding, pricing, and packaging.
• Data Platform Investment: Continuing investment in the data platform is seen as a key competitive advantage.

Future Outlook

• Revenue Growth: Committed to a 20% revenue CAGR through 2026.
• Growth Drivers: Enterprise adoption, AI product demand, and platform diversification are expected to drive growth.
• Headcount Growth: Anticipated to slow as AI enhances productivity.
• Enterprise Expansion: Plans to increase average ARR per customer by targeting sophisticated enterprise accounts.
• AI Monetization: Strategies to monetize AI capabilities include AI optimization and AI toolkits.

Q&A Highlights

• Enterprise Adoption: Driven by unique data insights and visualization tools.
• Competitive Landscape: Semrush often replaces disparate operations with more integrated solutions.
• AI Impact: AI is seen as transformative, helping companies influence brand perception in AI-driven search environments.
• Economic Resilience: Semrush’s offerings provide high ROI, potentially making them more resilient to economic downturns.

For further details, readers are encouraged to refer to the full transcript below.

Full transcript - 53rd Annual JPMorgan Global Technology, Media and Communications Conference:

Mark Murphy, Head of Software Research, JPMorgan: Okay. Good afternoon, everyone. I am Mark Murphy, head of software research for JPMorgan. And, it it is a great pleasure to be up here on stage with Bill Wagner, the new CEO of SEMRush, and Brian Mulroy who is the CFO of the business. So first off, just wanted to say, you know, welcome welcome here and, you know, thank you for taking the time out to be with us.

Happy to be here, Mark. Maybe you could begin with with just a brief introduction of yourselves and a and a kind of a brief, you know, minute or two overview of SEMRush so everybody’s grounded here.

Bill Wagner, CEO, SEMRush: Yeah. So sure. I’m Bill Wagner, as Mark said. New CEO. Been not quite sixty days, I don’t think, yet.

I was on the board at SEMRush for a little over two years, and they gave me great insight to the company. Companies, you know, I think probably by most accounts, the leader in online visibility really came out of the search engine optimization space, search engine marketing space. And then through some tuck ins as well as organic has built out a platform that goes from social to local marketing to, obviously, search and search marketing. So it really kind of spreads the whole online digital visibility space. The company started began its life as really a product led growth company selling high velocity software, credit card purchase, and then has evolved more recently into moving up market, adding essentially up market capabilities and enterprise product.

And now today, enterprise is our fastest growing part of our business. We just we just announced that our enterprise now up to about 200 accounts. We have 8,000 enterprise, but only 200 are using our new enterprise product, which we just launched less than a year ago. So that’s a really big growth driver for the company. We’re excited about that.

We’re excited about artificial intelligence and what that means for marketers. I’m a recovering chief marketing officer myself. So before I became a CEO, I spent many years in in running marketing teams at private and public companies. So I I kinda know the pain, and I’ve talked to customers. I know what the pain is going through.

They’re all really scrambling to understand the impact that artificial intelligence is gonna have on their organizations and on their brands. And, you know, we are really well poised to help with that.

Mark Murphy, Head of Software Research, JPMorgan: Okay. You’ve lived it. You you have you have you have lived straight through it. And I and I definitely wanna spend some time on the two or three, you know, kind of big topics that that you brought up right there. So if if we think back to the time of the IPO and, you know, the evolution that we’ve seen in the business today, the I would call it going from traditional SEO to a much broader marketing platform.

You mentioned all these. You mentioned local marketing. I think you mentioned social media management. Consentative intelligence. All this.

Bill Wagner, CEO, SEMRush: Yep.

Mark Murphy, Head of Software Research, JPMorgan: When when when you you sit down and get a demo of the product these days, it is kind of a mind blower in terms of how many screens are in there, the data flow, and and and how deep you can go in there. How has the addressable market opportunity expanded in these years that you’ve been on the board and you’ve been watching this? And how receptive do you think customers are going to be to giving an increasing share of their wallet for this, broader suite that you’re developing?

Bill Wagner, CEO, SEMRush: Yeah. Look, think like a lot of other sectors of software, ultimately people end up preferring to buy a platform that solves multiple problems than a point solution. So as as digital marketing has matured, I think we have benefited from people who have been trying to consolidate around limited number of tools as opposed to buying, you know, 10 different tools to solve marketing problem. And and that’s been going on, by the way, since, like, early days, e email marketing platforms that have now been acquired by other people. And So that was my big complaint with my team when I was running marketing and it’s still going on today, although the product sets are obviously different.

What we’ve also seen is I think the SMB space is, and as we moved into mid market customers and larger customers, we really up until recently, we made them kind of purchase SEO first and then spread out from there. And then we realized from talking to our customers, they actually wanted to buy the other tools first sometimes. Certain companies are better you know, marketing in local is more important. Marketing in social is more important. So giving more optionality to those folks was something that we set out to do, and actually we just launched that capability this past week.

And then, obviously, moving the enterprise space, I think enterprises in particular are trying to consolidate their tools. And you probably see this in multiple sectors. And so for them, I think we are what what is we present to them is a we think an unrivaled dataset and capability that goes really deep, and then the visualization tool that allows them to do really deep research into how they’re performing, how their competitors are performing, how they can improve their visibility, whether that’s in search, local, or in AI and and answer engines.

Mark Murphy, Head of Software Research, JPMorgan: Okay. When that’s a that’s a great vision, and I agree with you that I think the underlying underlying data set is an important factor too. Let’s talk about the enterprise product that you’ve launched. And we again, the simple view of it to me would be that you launched it a year ago or even less than a year ago. As of Q1, it’s 11,000,000 of ARR.

You’re talking about that growing to 30,000,000 by the end of the year. Yep. I think we even I think in the first quarter that you launched it, the logos that you mentioned were impressive. And we we we look at it since then, Gartner, Salesforce, DoorDash, Samsung, HSBC, Alibaba, Square, you big companies and they do have sophisticated marketing organizations. What do you think is leading to that level of adoption quite so quickly for something that’s only been out there about a year?

Bill Wagner, CEO, SEMRush: Well, I so I I think we have very unique capabilities in our product. So I think we’re widely recognized as having being able to give these these bigger brands really deep insights and and multi leveled insights. So you may wanna know how you’re if you’re a Samsung, you may want to know how one product is performing in one region against a certain set of competitors. That may be very different than another set of competitors in a different region. And you may want to know how one TV is performing versus another product and how you’re comparing if someone searches in a retailer like Best Buy online and how you perform.

And that kind of visibility is something that we do and it’s pretty unique and really hard to get anywhere else. And so we have this really rich data platform and then we’ve layered on this really powerful visualization tool essentially on top. And it’s really we’ve been very, very pleased with the reception in the first year, as you mentioned. And then we’re launching our AI tool for the enterprise that will go GA next month. And so we have 1,000 customers who have already signed up for the wait list for that product.

So we’re really encouraged by what we think the opportunity is there.

Mark Murphy, Head of Software Research, JPMorgan: Okay. So you had touched on earlier, you said like all markets, there’s going to be eventually in the fullest of time, there’s going to be a preference for a single platform. And you’re driving some of this with the enterprise product. What do you think is the can you comment on the cost savings or value prop if you go into an enterprise and they adopt this product and they’re consolidating, you know, some of the other point products? How what is the because you’ve been again, you know, you’re recovering CMO.

Bill Wagner, CEO, SEMRush: Yeah. Yeah. I so I I think it’s really that’s not what the way I see CMOs and marketing teams look at our product yeah. Our product is really about revenue growth and acceleration. Mhmm.

So it’s much more that than replacing a tool set. What they do today is they they get data from a platform, whether it’s ours or somewhere else, and they generally have had to export it into their own homegrown tools or other kind of publicly available BI tools. Yeah. We’ve kind of that’s what we’re replacing. You can now do all that work within our platform with our data, which is already really powerful.

So that’s and and because you do that, you get greater insights and you drive ultimately drive greater revenue and more efficiently. So the cost savings are actually in using the platform, you’re actually more efficient in your marketing spend. You’re saving money because you’re not wasting. You know what dollars you’re spending and are yielding a good return versus not. That’s where the savings come out.

Mark Murphy, Head of Software Research, JPMorgan: Okay. Who do you see competitively when you go in and try to sell at the enterprise level? Because I’m thinking if you’ve got a patchwork of products and you’re dumping it into Excel or you’re dumping it into Power BI or Tableau or something like that, then are you running up against them or are you running up against more traditional kind of SEO?

Bill Wagner, CEO, SEMRush: Ironically what we’re seeing in a lot of times is is we’re kind of replacing our PLG product. So the individual marketers have been buying our, like, lower end product for years. They’ve been swiping a credit card, and they expense it. And you may have 10 people in a company. In in one company I know of, have literally dozens of people who have their own individual accounts.

And we’re going in and maybe that customer might be we have 8,000 enterprise sized customers. On average, they pay us 8,000. The people who are buying enterprise solution for us are paying us $60,000 And I think that number will continue to go up. So it’s really an opportunity for us to displace these disparate operations inside the company and give them a holistic look across their brand and unify their marketing vision. So that’s really we that’s the it’s a lot of greenfield, but I think the competitive opportunity for us is really kind of upgrading them, taking them along the path and showing them the capabilities they can get in the new solution versus kind of do it themselves with our kind of consumer grade solution.

Mark Murphy, Head of Software Research, JPMorgan: Does the seat count rise when you go and do exactly what you described? Think you said, I don’t if you said a dozen users or dozens of users.

Bill Wagner, CEO, SEMRush: Yeah. I think ultimately it will. I think it’s probably one year in. I don’t wanna make any proclamations yet because I I think we’re we’ve sold 200 we’ve upgraded.

Mark Murphy, Head of Software Research, JPMorgan: Yeah.

Bill Wagner, CEO, SEMRush: So we’re really early days, although we’re pretty happy it’s gonna go from 0 to 30,000,000 in, you know, in in a little over a year. So I think we’re really pleased with the traction. Very excited about the AI optimization product we’re about to launch. But as we said on our call, we’ve been pretty conservative about not building any expectations around that product for this year. So we want to get that product GA and start selling it.

But interest is very high.

Mark Murphy, Head of Software Research, JPMorgan: I’m sorry, the AI product, you’re talking about the enterprise one that’s Your AI, I think you disclosed $4,000,000 in ARR was coming from AI at the end of Q1. AI Toolkit, ContentShake, etcetera, ad creative AI. Is there anything else that’s that’s going into that bucket or

Bill Wagner, CEO, SEMRush: That’s that’s the majority of it Yeah. And the and that excludes AI optimization, is really our enterprise product, which again will go GA next month. It’s an open beta today.

Mark Murphy, Head of Software Research, JPMorgan: Where do you see the best product market fit? You know, so across those products that I mentioned, what what is resonating?

Bill Wagner, CEO, SEMRush: Well, I I think, I mean, we we saw AI Toolkit, which is again is a really entry level AI AI marketing tool. We saw well, it it became one of, if not the fastest growing product ever. And for again, it just speaks to the the desire of marketers and business owners to figure out how they get their brands to show up in these answer engines. And you think about how an enterprise, especially who’s spending hundreds of millions of dollars in marketing a year, packaged goods company or a clothing company or a consumer goods company. And they are really desperate to help finding tools that help them show up in those answer engines.

And so again, we’re really excited about it, but it’s not even out yet. So we’ll we’ll we’ll temper our expectations.

Mark Murphy, Head of Software Research, JPMorgan: Okay. We appreciate that. So, you know, but it is the 4,000,000 still is of interest. Right? Because it is that is something like 1% of ARR in round numbers.

Right? Most SaaS application companies have really struggled to get anything AI related that they’re doing, literally up to that level. They’re well below 1%. You are there. I remember talking to Eugene about what you were doing.

As an organization you’ve been way ahead of the curve in making use of the GPT models. I think before people knew what GPT meant, you you were using it. So, you know, what’s the best way to think about the growth of that pre existing, you know, AI book of business? And then the the other question you always get is, is it gonna be is that additive or is it somehow, negating or cannibalizing some other

Brian Mulroy, CFO, SEMRush: usage? Yeah, we see it as a huge opportunity and I think SEMrush is uniquely positioned to benefit from AI. Most companies are utilizing AI to sort of enhance the value of their product, and of course we’re doing that. So we have an AI assistant that’s essentially doing some of the work for marketers and business owners to make sure that we’re highlighting the best opportunities and getting them faster time to value. So like many other software companies, we’re doing that monetizing and enhancing the overall value of our platform.

But there’s a unique opportunity based on the market that we play in. So businesses and marketers are looking to understand how the LLMs and answer engines are perceiving their brands, what consumers are searching for, and how it relates to their market and the keywords that are important to them. And we have an opportunity to do what we’ve always done, to give them the insights, the analytics, the actual insights, and intelligence to help them understand what’s happening, and then more importantly, how they can shape and influence that to ensure that they’re actually perceived in the most positive light going forward. So we have an entire suite of products now, AI tool kits, which was just launched, and then AI optimization, which is now in beta, which does exactly that. So we see the opportunity as as quite extensive for

Mark Murphy, Head of Software Research, JPMorgan: us. So so so quite an opportunity, but I assume it’s not gonna trace out the kind of arc that the that the enterprise product is tracing out if you’re, you know, you got 11,000,000 now and we think it’s going to be 30 in a few quarters? Or do you think it’s just too early to say?

Bill Wagner, CEO, SEMRush: Yeah. I think it’s too early to say. I mean, we’re we’re I think the demand is as strong as I’ve seen for any product I’ve ever been involved in. But, you know, until we start selling it, I think so I know the market demand is really high in in companies who are trying to figure out how their brands show up in an AI search driven world. And that’s still, you know, today that’s still depending on how you measurements measure it somewhere between 316% of all searches.

So it’s still small, but brands are really desperate to figure that out.

Mark Murphy, Head of Software Research, JPMorgan: I want to come back to that. I think it’s a huge topic across the broader landscape that’s not getting enough attention. Before we do that, Bill, what rewinding back to kind of some of some of your opening statements, what made you excited about trying to take on the role of CEO at SEMRush? You know, the the I’m sure you had a good view into it because you’ve been on the board for so many years as you said. Yeah.

What what are what are the ingredients that you what are, like, the raw ingredients here that you see that you were impressed by?

Bill Wagner, CEO, SEMRush: Yeah. So so first of all, as a as a before I was a as I said, before I was the CEO, I was a a marketer. And so I understand the use case really well. Semrush, that’s what drew me to the company in the first place along with the with Oleg and and the the team that was there. And over the years being on the board, I helped recruit the team.

I I worked with Oleg to to to bring Brian aboard and bring other kind of really talented executives. I knew the company super well, and I really think the company is poised in a very unique position to take advantage of the disruption of AI and how marketers, how their roles and their jobs are gonna change. And I I was super excited to be a part of that. And that was really what, you know, made me kind of jump in and say, like, this is a company I wanna be a part of. It’s also a fun size.

It’s still small. It’s, you know, all those things. And you know the company quite well. So companies that’s still sub a billion dollars, there’s a lot of opportunity for do. We’re just beginning our profit journey as well.

Brian and the team have done a nice job getting leverage out the model. We’re still a 20 plus percent grower, so we’re not anxious to like we just want to be consistent in our delivery of margin and continue to invest in growth. Yeah, I just see a lot of opportunity. So the combination of those things is probably

Mark Murphy, Head of Software Research, JPMorgan: worth it, Yeah. A lot of great characteristics there. I think you had mentioned that in your first couple of months in, you had gone out and met with a number of customers. What has surprised you, you know, kind of upside and downside as you’re out there mingling more directly with them?

Bill Wagner, CEO, SEMRush: Yeah. I think the upside has been the and I would say it’s the surprise. And as a board member, I probably didn’t fully appreciate the value of the data platform. And I think every customer conversation, I think without exception, the customers were talking about the value of our data. And I really began to appreciate what a competitive moat that is for us and gave me a a real interest in understanding how we can continue to leverage it even further going forward, which, you know, I talked about on the call last week.

Yeah. And I think on the downside, it’s just like I wanna move faster. So yeah. I mean, it’s it’s very much a founder led company until recently. And, you know, I I I think we have this opportunity and I think the world is changing really rapidly and we are really at this point that we can be part of that positive change, especially for the marketing world out there.

So, you know, let’s go. Let’s go do it.

Mark Murphy, Head of Software Research, JPMorgan: So, and just to pull on that concept of, you know, I mean, obviously every company is always trying to go faster, but it can kind of come in different, you know, different reasons and at different cadences. Have you identified any low hanging fruit where as you’ve gotten out there in the early stages where you say, you know, maybe it’s product, maybe it’s go to market that you think you can you can focus on. I think the sense that we’re getting is the main thrust is gonna be it seems like it would be enterprise and AI. It’s hard to kind of disagree with, you know, those two vectors. But is there anything else you

Bill Wagner, CEO, SEMRush: Sure. There’s one which again I highlighted last week was I I still think on our product led growth platform, which is the majority of our revenue today, And and I I think it’s I think there’s too much friction in that. And I think we can make it easier for customers to buy and use our products and get decrease the time to value. So I think that’s an example of something I saw that even before I started, a hypothesis I had coming in, I was able to confirm that within the first thirty days and work with the team. And some of the things have already been introduced, there’ll be more down the road.

Mark Murphy, Head of Software Research, JPMorgan: Just onboarding steps that you can take out, configuration steps, the checkout

Bill Wagner, CEO, SEMRush: Simple I mean, all that all those things for sure. There’s also pricing and packaging opportunities in the company that that’s not something I’m prepared to talk more about today, but I think we can do I think we can be sharper there. And we also have a lot of free users, a lot of people who use our product and then pay for it and then drop out and they use the free version and then come back and use the paid version. So I think there’s opportunities to think about our products and how we price and package them differently than we have in the past.

Mark Murphy, Head of Software Research, JPMorgan: And when since you mentioned the PLG side of it in that context as well, you’ve all you you know, on the other end of the spectrum, you can have a sales led motion in the somewhere in between, you can have kind of a sales assisted motion. I would assume as you’re going up market, you’ve got to think a lot more about the the the the sales led motion. How do you feel about the state of that team, you know, and kind of its ready its readiness to go on there and, you know, take on large enterprises?

Bill Wagner, CEO, SEMRush: Oh, I think first of all, I think the results have proven to be really good. So, clearly, we’re doing some things right, and that’s without my help. So even before I came in, I think the team had done a nice job. Good leadership in place. But I look.

We’ve been at it for a year since we have our enterprise introduce our enterprise product. So I think there’s room to continue to invest behind it. But I think the structure is there. The framework is there. We figured out a I think a good model in terms of what the right quotas are, what what the right rep profiles are, what our leadership needs to do, and now we have the product.

So now we just need to introduce new products more quickly. And as you heard, I’m like that was one of my other priorities last week was we’ll have at least three products in the hand of our of our enterprise sales team this year to sell at least versus the one they have today. So I think that’s exciting opportunity for them and they’re obviously very excited to hear about it.

Mark Murphy, Head of Software Research, JPMorgan: So kind of accelerating that enterprise roadmap is definitely something that we’re investing behind. How are you thinking about headcount growth cadence now, Brian? It was slower in 2023. It was around 2% in headcount growth. And then 2024 picked up a lot, was 12%.

Is there an implication for where you need total head count growth to be to kind of carve out the 20% trajectory and do what you want to do with enterprise and AI?

Brian Mulroy, CFO, SEMRush: Yeah. I think it’ll slow from here. Look, we have a lot of efficiencies and capabilities to grow and scale. 2024 was the year where we were pushing really hard to invest and accelerate our enterprise opportunity. So there were for sure investments in both our go to market motion and product portfolio.

And remember we did do a couple of small acquisitions where there were some headcounts, not all of that 12 was organic. So I think we’ll continue to pace at a modest rate. AI is certainly a game changer for us where we feel like productivity and efficiency through the organization will continue to scale. And I think it means that we can gain leverage and scale in a way where head count growth will potentially slow from here.

Mark Murphy, Head of Software Research, JPMorgan: Back to maybe somewhere in between those two zones?

Bill Wagner, CEO, SEMRush: That’s right.

Mark Murphy, Head of Software Research, JPMorgan: Okay. Let’s talk about the way you think about average ARR per customer. Enterprise SEO you mentioned having reached 200 or more paying customers. But the the ARR being 60 is it’s completely different zip code for this business. The blended is 3,600.

And so you go in an enterprise and it’s 60,000. How long do you think it could take the maybe maybe we’re beginning to see it where I think that that that 3600 is up 14% year over year. Is that like are we seeing that then? Is that the impact of what’s happening on the enterprise side or are we still kind of early

Brian Mulroy, CFO, SEMRush: innings? That’s exactly what it is. So we’ve doubled our average ARR and of course continuing to drive that upwards is a big growth driver for the company. We’re able to do that in three ways. One is we just continue to innovate.

We continue to stay ahead of the demands and the complexity of digital marketing and release new tools that we were able to monetize and expand our overall footprint. As we’ve been talking about today, we’re moving in a much more pronounced way into the enterprise, both from a go to market and a product portfolio perspective. That’s continuing to expand it. And then we see opportunity with AI, with this new AIO product and AI toolkit. So our expectation is our average ARR will continue to grow.

And we’re focusing a little bit more on that more sophisticated cohort of accounts. So even in general as that mix of accounts starts to increase, average ARR will rise from that as well. What about retention? Retention in general?

Bill Wagner, CEO, SEMRush: Yeah. With the impact

Mark Murphy, Head of Software Research, JPMorgan: of retention. How can it change over Retention as you skew more up

Brian Mulroy, CFO, SEMRush: into enterprise. For sure it’ll increase. And actually we already see that. So one of the segmentation that we did for Analyst Day was showing how the enterprise cohort has a net revenue retention of 120% plus and that that cohort is growing 30%. So it’s by far the strongest, growing the fastest, has the highest propensity to adopt a more sophisticated and higher valued products, and of course AI.

So as that cohort increases in mix for a business, we’ll see net revenue retention, our lifetime value, our average ARR, and overall growth potentially benefit from that.

Mark Murphy, Head of Software Research, JPMorgan: Okay. Then if we think about the inverse, you probably don’t get too many questions on this, but I think at the last Analyst Day that you did there was this stat of 20% of ARR was coming from kind of way down market, solopreneur, freelance. And then the net was the retention on that is 80%? Less than 80%. Expected when you talk about or when you go that small in customer size.

And then the ARR is declining there. There’s a lot of seasonal use and all that. Do you want to have happen there? Or what do you think is going to happen there this year? Do you think that it kind of stabilizes and flattens out?

Or is it more like you’re designing in kind a kind of a bleeding off there and maybe wanting to go where the cohort economics are better?

Brian Mulroy, CFO, SEMRush: Yeah, look for those new to SEMRush, we benefit from very wide appeal. So we have Fortune 500 accounts, enterprises, we actually have over 8,500 companies that have more than 500 employees that use our portfolio. We have 27,000 agencies. We have quite a few mid market accounts, SMBs, and what we call solopreneur and freelancers. We’re also in a 50 countries and we span across all segments and all industries.

So very wide appeal across quite a diverse set of customers. On the lower end, we have a cohort of freelancers and solopreneurs that are more project based and seasonal in their usage. We’re happy to have them. The unit economics associated with them are fantastic. We’re going to continue to invest in the product and make sure that it’s easy to use and is providing value for all segments of the market.

What’s happening at the lower end of the market is a little bit by design. We’re focusing more of our investments and our initiatives on the enterprise and making sure that we can capitalize on that opportunity. We see a lot of opportunity within that enterprise segment with AI, and that’s the focus right now. Over time, as we continue to simplify the product, leverage more AI assistant features, and not only make it easier to use our product, but also get to value in an automated way so we’re almost doing the work on behalf of those freelancers and solopreneurs. In the long run, we see an opportunity not only to have that trend abate, but also turn into

Mark Murphy, Head of Software Research, JPMorgan: a growth driver for us. Oh, okay. Interesting.

Bill Wagner, CEO, SEMRush: And keep in mind, any investment in the data platform really benefits both segments. Sure. Again, back to like that’s a moat for us and it’s something we’re going to continue to build out.

Mark Murphy, Head of Software Research, JPMorgan: So let’s talk about the top line trend. You had given, you know, back at the Analyst Day, this guidance is for a sustained 20% near term revenue CAGR. It’s you know, you’ve been executing to that. It’s not as though you’re running five to 10 points above that. You’re kind of you’re kind of right around there in that zone.

But a lot of companies will shy away from giving kind of a multi year top line look. What do you think what gave you the confidence to establish it that way?

Brian Mulroy, CFO, SEMRush: Yeah, we’re guiding in the near term which is growth ’24 through ’26, a 20% CAGR. We’re actually a little bit ahead of that, so we ended 2024 at 22.5% growth. We’re guiding 20% growth at the midpoint for 2025, and we’re committed to that number. What gives us confidence is the enterprise opportunity and the momentum that we’re building, the potential with AI and then the continued diversification of our platform that continues to grow and scale our footprint within our base and for new customers that are joining the SEMRush world. So we’ll see there’s obviously uncertainty in the market.

We’re cognizant of some of the macro dynamics and geopolitical dynamics are out there. That certainly could impact the number, but assuming things continue to stay steady and where they have been, we’re committed to that number.

Mark Murphy, Head of Software Research, JPMorgan: The trends you saw in Q1 and through April and that type of thing are kind of supporting this 20% number

Brian Mulroy, CFO, SEMRush: I know there’s a lot of news in the headline in terms of tariffs, geopolitical dynamics, lot of uncertainty. We didn’t see anything directly related to that that impacted our business. The growth drivers that are driving the business are strong and continuing to influence the results. Again, it’s not to say we’re not conscious of and preparing for certain things and being prudent about what the second half could have in store depending on how all that uncertainty plays out. But in terms of what we’re directly experiencing, we’re continuing to execute our heads down focused on controlling what we can, building out our enterprise business, continuing to innovate with AI, and continuing to drive towards that near term outlook.

Bill Wagner, CEO, SEMRush: Okay. I would say the only impact it’s really had on us, Mark, as you know, is on the expense side where the changing dollar has really you know, FX really hit us on the expense side. We’ve we’ve absorbed it, which just underscores the leverage in the model, but but that that’s probably the only thing that we’ve seen.

Mark Murphy, Head of Software Research, JPMorgan: So when you when you look back around the the history of economic fluctuations, you know, and advertising does seem to be an area where a lot of companies feel as though they can dial it up and dial it back down, right, kind depending on the weather. Do you see any potential differences? I mean it manifests differently for different companies and different business models. But do you see any potential differences or opportunities maybe for that activity to be a little more resilient versus some of the other cycles? If we do in fact get into economic slowdown or some kind of a change through the course of this year, you think it could be any different?

I mean like we of our prior sessions, know, one of the companies was saying, companies just went through COVID. They they they went through the, you know, the kind of readjust they went through the inflation wave, you know, now it’s now it’s tariffs and doge. Like, they’re almost like they may be becoming a little inured to this, like a little accustomed to the fact that things will there will always be hurdles and maybe it creates a little more resilience.

Bill Wagner, CEO, SEMRush: Yeah. Again, I think as as a former marketer, I know that what you really the most effective use of your marketing dollar is people who are searching to buy something. And so think of from a ranking of where you spend your marketing dollars. I mean, digital marketing tends to have a very high return compared to other forms of marketing.

Mark Murphy, Head of Software Research, JPMorgan: Yeah.

Bill Wagner, CEO, SEMRush: So, you know, again, we haven’t seen any degradation from my perspective given my experience. It’s I’d be I would be surprised if we would if we’d be one of the first or early companies to see any kind of pullback. Not saying it couldn’t happen, but we haven’t seen it. And, again, my experience is where we are in the marketing stack, we generally provide the most value, very high in terms of return return on investment. So, you know, that’s that’s our perspective.

Brian Mulroy, CFO, SEMRush: And one thing I’d add is just under all things equal, the impact potentially, it could potentially have an impact, but AI is a game changer right now. And companies that aren’t focused on that and investing in it and understanding how their brands are being perceived, building capabilities to be able to influence it and getting ahead of that will fall behind. And I think that’s something that would certainly add to the resilience of our ability to navigate through it.

Mark Murphy, Head of Software Research, JPMorgan: It’s a great note to end on and think the excitement is pretty tangible here around the trend line you’re carving out in the enterprise side of it and then the thousand customers that are signed up and going to be trying your enterprise AI products. So I wanna thank you for taking the time to come over here to the conference and we really appreciate it. Hopefully, we’ll see you next year.

Bill Wagner, CEO, SEMRush: Thanks, Mark. Thanks, Jordan. Thanks very much.

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