SEMrush Holdings, Inc.

Good morning. My name is Chris and I'll be your conference operator today. At this time, I'd like to welcome everyone to the SEMrush Holdings Q1 2022 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, please press star one again. A transcript of the prepared remarks will be available at investors.samrush.com after the call. Thank you. Bob Guccivardi, VP of Investor Relations. You may begin.

Good morning. I'm Bob Guccivardi, VP of Investor Relations, and welcome to SEMrush Holdings' first quarter 2022 results conference call. We'll be discussing the results announced in our press release issued after market closed on Tuesday. With me on the call is our CEO, Oleg Shegolov, our CFO, Evgeny Fatisov, and our CSO, Eugene Levin. Before we begin, I'd like to highlight our participation in several investor conferences in the second quarter. We'll attend the 17th Annual Needham Technology and Media Conference in New York City on May 17th, the New York Stock Exchange Healthcare and Tech Investor Day on June 8th, and the Stiefel 2022 Cross-Sector Conference in Boston on June 9th. Today's call will contain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Form Act of 1995. Forward-looking statements include statements concerning our expected future business and financial performance and financial condition, expected growth, adoption and demand for our products and features, expected investments and acquisitions and their anticipated benefits, industry and market trends, our competitive position, our market strategies, market opportunities, our guidance for the second quarter of 2022 and the full year 2022, and our ability to successfully relocate employees outside Russia, including executing our relocation plan on the timeline we expect and at the anticipated cost, 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 annual reports on Form 10-K 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 today's call, we'll 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 close, which can be found at investors.semrush.com. And with that, let me turn the call over to Oleg.

Thank you, and good morning to everyone on the call. I'm very pleased with our execution in the first quarter. We delivered solid financial results with revenue up 43% year-over-year and record new customer additions. Before diving into the results, I would like to speak about our decision to wind down our operations in Russia by the end of September. Bank sanctions were first announced by the United States and other countries. We quickly developed mitigation strategies and hoped that the situation would get better and would not last long. It has become clear that there is potential for a long conflict and further decline of the business environment in Russia. Looking at our performance in the first quarter, it's clear that SEMrush is doing well despite all the uncertainty. However, we need to prepare the possible new sanctions and reduce the potential impact to our operations. I believe ending our operations in Russia will not only help us to reduce these risks but help remove the uncertainty for our stakeholders. Early indications are that a large majority of eligible employees will relocate outside Russia. The high level of employee buy-in and our broad experience managing remote workforce should help minimize disruption through the relocation process. Our goal is to wind down our operations in Russia by the end of September, but I'm hopeful that we can accelerate that timeline. The decision to leave Russia was a difficult one. It's a decision that comes with human and financial costs. But we believe this is the correct decision and best for the long-term success of Chemrush. We hope for a rapid and peaceful resolution to the conflict in Ukraine, But our plans to exit should leave us better prepared in case the conflict gets worse. Now to the results. We had a solid start to the year. First quarter revenue of $57.1 million was up 43% year-over-year and up more than 6% sequentially. Our first brand marketing campaign launched in mid-March. It's too early to make conclusions But I'm inspired by the initial results. We added more than 5,000 paid customers in the quarter, a new record. And the growth was strong, extending beyond our largest markets. These are very uncertain times in the business environment now, but we are gaining new customers and see trial subscriptions growing at a great pace. It gives us confidence in our growth outlook for 2022. On the product side, I wanted to pull out the performance of our App Center. Last quarter, I mentioned that the App Clarity app exceeded 100K of growth bookings. In less than three months, I wrote the report that App Center added 1 million of growth ARR in the first quarter. The majority of growth was driven by a single app at Clarity. I believe the growth of our App Center is proof that our platform approach will provide us with a competitive advantage related to point solutions providers. I have asked the team to accelerate the availability of new third-party apps and for our marketing teams to promote them more actively. Looking at our pipeline today, I believe the number of third-party apps will more than triple by the end of 2022. We closed the acquisition of Campyte in the first quarter, and I am excited about the potential of adding new self-enablement and intelligent functionality to our industry-led dot-trans product offering. The Campyte team is growing. We plan to advance their product but also to offer new products that we can cross-sell to similar platform customers. In conclusion, really solid financial results and record customer growth despite all the uncertainty in the market. I will now turn the call over to Yevgeny for a more detailed recap of our financial performance.