SEMrush Holdings, Inc.

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the SEMrush Holdings Third Quarter 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 1 on your telephone keypad. To withdraw your question, press star 1 again. I would now like to turn the conference over to Bob Gugivardi, VP, Investor Relations. Please go ahead.

Good morning. I'm Bob Gugivardi, VP of Investor Relations, and welcome to Semrush Holdings' third quarter 2022 results conference call. We will be discussing the results announced in our purpose release issued after market close on Monday. With me on the call is our Chairman and CEO, Oleg Shagalov, our CFO, Evgeny Fetisov, our President, Eugene Levin, and our CMO, Andrew Ward. Before we begin, I'd like to highlight our participation in the 12th Annual Needham Virtual Software as a Service 101 Conference and the Southwest Ideas Conference in Dallas, both this week. 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, and financial performance and financial condition, expected growth, adoption and demand for new and existing products and features, industry and market trends, our competitive position, our market strategies, market opportunities, our guidance for the fourth quarter of 2022 and the full year 2022, and our ability to successfully relocate employees outside Russia, including executing our relocation plans on the timeline we expect and at the anticipated cost. These forward-looking statements 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 those forward-looking statements. For discussion of the risks and important factors that could affect our actual results, please refer to our annual report 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 the course of 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 on our press release issued after market close. which can be found at investors.femrush.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 results in the third quarter. Despite a more uncertain demand environment, we experienced solid growth with a revenue of $65.8 million, up 34% year-over-year and up 5% from the previous quarter. As of the end of September, we had approximately 94,000 paid customers, and I would note that we had slightly more customers in the first quarter of 2022 than in the year-over-year period. The strength in new customer ads was partially upset by low expansion from existing customers, particularly those customers with larger average revenue per user. And this team has done a wonderful job. leveraging our high marketing spend to drive new customer growth. We continue to fine-tune our go-to-market spending, and I'm hopeful that we will continue to see solid new customer growth in the fourth quarter. On the product front, we rolled out a major update to our social media management toolkit, and I believe this update brings us closer to future paychecks with the leaders in the space. We ended the quarter with over 50,000 monthly active users of our SMM toolkit. And we estimate more than half of these users are dedicated social media marketing professionals, demonstrating our ability to expand our total addressable market beyond digital marketing professionals. At the moment, the team remains focused on user growth However, we may introduce a paid offering in late 2023. In January 2022, we introduced our App Center, which allows our customers to use third-party applications with our purpose built to address a variety of use cases on our platform. Despite relatively few new launches, our App Center continued to see strong growth in the quarter. We have a great lineup of apps set to launch in the near future, and this should boost App Center growth in the fourth quarter. Eugene will expand on our studies around App Center in his remarks, but our goal is not simply to set up a total operation as the mobile platform operators have done. We see the App Center as central to extending the reach of SEMrush platform. It's clear We face a more uncertain demand environment compared to a year ago. However, I believe SEMrush is uniquely positioned to continue to sustain our strong growth. Customers are looking for products that are easy to purchase, easy to use, and deliver quick return on investment. And our product checks all these boxes. This year has been full of challenges, but despite these challenges, We delivered a strong craving for growth and executed a substantial relocation program on the budget and ahead of schedule. SEMrush has always operated with efficiency as high priority, and as a boot-set startup, we hardly had any choice in the matter. Today, we are a successful public company, but the focus on efficiency remains. We will pursue growth, but growth underpinned by solid unit economics. I will now turn the call over to Eugene for a more detailed discussion of our App Center strategy.