With customer and revenue growth hitting new highs in Q3, Semrush achieved its first profitable quarter since Q1 2021. That ends a stretch of nine straight quarters posting a net loss.
Semrush’s third quarter revenue was $78.7 million, up 20% year-over-year ($65.8 million) from 2022.
Earlier this year, Semrush said it expected to break even or show a profit for 2023, after losing $33.8 million in 2022.
Customers. Semrush had about 106,800 paying customers as of Sept. 30. This was up nearly 14% from the “over 94,000” figure it reported a year ago. Also:
- 20% growth in customers who pay more than $10,000 annually.
- 987,000 registered free active customers (up 25%)
Price increases starting. On the investor call, Eugene Levin, President, discussed one of the company’s growth pillars – to “maximize the value” Semrush generates from its users. Pricing changes started rolling out in Q3, according to Levy:
- “We took the opportunity to optimize our pricing strategy to better align with the tremendous value our product delivers. During Q3, and into the early part of Q4, we tested price increases with a cohort of customers, and we were encouraged by the response, as net adds, and retention were in line with our expectations and recent trends.
- “In our view, this indicates customers have a strong need for our offering and are willing to pay more given the unique benefits it provides them with. While we are still in the early phases of pricing adjustments, these initial findings suggest there may be room to prudently raise prices to better capture the value we provide, which we think, over time, would also contribute further to our growth.
- “Our plan is to be thoughtful and measured. We expect to continue testing and analyzing data so that any broader pricing changes are backed by customer insights while maintaining our commitment to delivering exceptional value.”
Why we care. Many Search Engine Land readers use Semrush daily, so it’s good to know the company continues to be in good shape financially. Meanwhile, these results show SEO and SEO platforms continue to be in-demand. However, be aware pricing changes have started – and if you haven’t seen them yet, they are coming.
Read the full press release. Semrush Announces Third Quarter 2023 Financial Results