Online visibility management platform Semrush (NYSE:SEMR) met Wall Streets revenue expectations in Q3 CY2025, with sales up 15.1% year on year to $112.1 million. The company expects next quarter’s revenue to be around $118.5 million, close to analysts’ estimates. Its GAAP loss of $0.01 per share was $0.03 below analysts’ consensus estimates.
Is now the time to buy Semrush? Find out by accessing our full research report, it’s free for active Edge members.
Semrush (SEMR) Q3 CY2025 Highlights:
- Revenue: $112.1 million vs analyst estimates of $111.6 million (15.1% year-on-year growth, in line)
- EPS (GAAP): -$0.01 vs analyst estimates of $0.02 ($0.03 miss)
- Revenue Guidance for Q4 CY2025 is $118.5 million at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: -4%, down from 1.8% in the same quarter last year
- Free Cash Flow was $17.04 million, up from -$3.57 million in the previous quarter
- Net Revenue Retention Rate: 105%, in line with the previous quarter
- Market Capitalization: $1.05 billion
Company Overview
Born from the need to make sense of the complex digital marketing landscape, Semrush (NYSE:SEMR) is a software-as-a-service platform that helps companies improve their online visibility, analyze digital marketing efforts, and optimize content across search engines and social media.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Semrush’s sales grew at an impressive 30.3% compounded annual growth rate over the last five years. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Semrush’s annualized revenue growth of 20.9% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Semrush’s year-on-year revenue growth was 15.1%, and its $112.1 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 15.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 16.1% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is above average for the sector and implies the market is forecasting some success for its newer products and services.
Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking. Go here for access to our full report.
Customer Retention
One of the best parts about the software-as-a-service business model (and a reason why they trade at high valuation multiples) is that customers typically spend more on a company’s products and services over time.
Semrush’s net revenue retention rate, a key performance metric measuring how much money existing customers from a year ago are spending today, was 106% in Q3. This means Semrush would’ve grown its revenue by 5.5% even if it didn’t win any new customers over the last 12 months.
Semrush has a decent net retention rate, showing us that its customers not only tend to stick around but also get increasing value from its software over time.
Key Takeaways from Semrush’s Q3 Results
We struggled to find many positives in these results. Revenue and revenue guidance were in line while EPS missed. The stock remained flat at $7.50 immediately following the results.
Is Semrush an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.