SEMrush Holdings, Inc.

Good day. Thank you for standing by and welcome to the SEMrush Holdings first quarter 2021 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please note that today's call is being recorded. If you require any further assistance, please press star 0. I will now hand the conference over to Mr. Bob Gujarvati, Vice President of Investor Relations.

Good afternoon. I'm Bob Gujarvati, VP of Investor Relations, and welcome to the SEMrush Holdings first quarter 2021 results conference call. We'll be discussing the results announced in our press release issued after market closed today. With me on the call is our CEO, Oleg Shogilov, our CFO, Evgeny Fetisov, and our CSO, Eugene Levin. Before we begin, I'd like to highlight our participation in several virtual investor conferences to be held during the second quarter. We will attend the Needham Virtual Technology and Media Conference on May 20th, the J.P. Morgan Technology and Media Telecom Conference on May 25th, and the Bayer Global Consumer Technology and Services Conference on June 10th. Details on our attendance at these conferences can be found on our website, investors.samrush.com. Today's call will contain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning our expected future business, future financial performance and financial condition, expected growth, market opportunities, and our guidance for the second quarter and the full year 2021, and can be identified by words such as expect, anticipate, intend, plan, believe, seek, or will. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements address matters that are subject to risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. For discussion of the risks and important factors that could affect our actual results, please refer to our final perspective filed with the Securities and Exchange Commission, our quarterly reports on Form 10-Q, as well as our other filings with the SEC. Also, during the course of today's call, we will refer to certain non-GAAP financial measures. There's a reconciliation schedule showing the GAAP versus non-GAAP results currently available in our press release issued after market closed today and which can be found at our website, investors.semrush.com. And with that, let me turn the call over to Oleg.

Thank you, and good afternoon to everyone on the call. I believe many of those joining us on the call today may be new to the SEMrush story, so I would like to take a few minutes to cover our story and our product offerings. Later, I will offer some comments on the first quarter and our outlook for the full year. SEMrush is a leading platform for online visibility management, which we believe is a new software category. A category with a total addressable market is nearly $13 billion and potentially greater. I believe we are well positioned to be in share, and since 2016, we have grown revenue at a compound annual growth rate of over 50%, while growing our paid customers count over 30%. Today, an average consumer already spends more than six hours a day online and is overwhelmed by information. Businesses of all sizes struggle to break through this wall of noise to connect with potential customers. Our solutions help businesses break through the noise and become visible to potential customers. We offer a broad range of solutions, and according to data from G2, we ranked a leader across 19 different categories, including SEO, competitive intelligence, and social media marketing. I believe the breadth of our platform is a key differentiator in the marketplace, as many of our competitors only offer point solutions today. Simrush was founded by myself and my friend Dmitry Melnikov in 2008 in St. Petersburg, Russia, and we opened our first office in the United States in 2012. Today we are headquartered in Boston, Massachusetts, and we have more than 1,000 employees in our offices in five countries. Walking across large distances and various time zones has been part of Simrush DNA from the very beginning. I believe this helped us acclimate quickly to avoid pandemic work from home environment. Our global workforce supports a global operation. As of the end of 2020, we had customers in over 140 countries, and approximately 55% of our revenue was generated from customers outside the United States. We have a very low-friction sales strategy with a premium pricing model. Users can try our product free of charge, but to access the full capability of the platform requires them to become a paid customer. We have no specific customer or industry concentration, as we have built a business across customers of all types. Our platform is used by very large enterprises who can drive an ACV well into the six figures, as well as small businesses on our entry-level pro plan at $120 per month. I am very excited about the opportunity ahead of us. We have a large and diverse customer base, rapid growth underpinned by robust margins, and we have barely scratched the surface of what we believe is a very large market opportunity. Looking at the first quarter, revenue of $40 million was up 44% year-over-year, our best year-over-year growth since 2019. The growth pattern in the quarter was consistent with the pattern over the last few years. Our paid users grew 31% year-over-year, while the average checks grew by about 17% year-over-year. I want to express my thanks to our employees, our customers, and our partners. All of them were key to delivering the strong results of our first quarter as a publicly traded company. Looking at some of product highlights from the quarter, we have launched App Center with two third-party apps initially and more on the way. We want to unlock the creative potential of our partners, and App Center is a key element of that strategy. We offer API access to our data assets to some customers today. However, App Center will more easily allow third-party developers to innovate on top of our unique data assets. On the topic of our data assets, we passed a milestone in the quarter as our backlinks database now contains more than 41 trillion links, up over 50% from a year ago. We believe our database is larger than many of our competitors in the space. Larger datasets can help drive more value for our customers and further differentiate our offering from those of our competitors. Finally, I want to highlight our ranking in G2's Analyst of Best Global Software Sellers for 2021. We were ranked number 26 alongside leading brands like Microsoft, Google, Zoom, Slack, and others. This was a remarkable achievement, given our size and our limited brand marketing efforts so far, and I believe our ranking speaks to the strength of our product and our relationship with our customers. The IPO was not the end, but rather the beginning of what I believe will be a very successful journey. Our platform continues to resonate with customers of all sizes, and the category of online visibility management is poised for rapid growth, and so is SEMrush. With that, I would like to pass the call to Yevgeny for more detailed discussion of our financials.