SEMrush Holdings, Inc.

Thank you for standing by and welcome to the SEMrush third quarter earnings 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. I would like to hand over to Rinley Johnson to begin the call. Please go ahead.

Good morning, and welcome to Semrush Holdings' third quarter 2023 conference call. We'll be discussing the results announced in our press release issued after market close on Wednesday, November 1st. With me on the call is our CEO, Oleg Shlegelov, our President, Eugene Levin, and our CFO, Brian Mulroy. 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, that are not limited to, statements concerning our expected future business and financial performance and financial condition, expected growth, adoption and demand for existing and any new products and features, our app center expansion, industry and market trends, our competitive position, market opportunities, sales and marketing activities, the sufficiency of our staffing levels, our guidance for the fourth quarter of 2023 and the full year 2023, and statements about future pricing and operating results, including margin improvements, revenue growth, and profitability. Forward-looking statements are statements other than statements of fact and can be identified with words such as expect, can, 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 most recent quarterly report on Form 10-Q and our annual report on Form 10-K, filed with the Securities and Exchange Commission, as well as our other filings with the SEC. Also, during the course of today's call, we refer to certain non-GAAP financial measures. There is a reconciliation schedule showing the GAAP versus non-GAAP results currently available in our press release issued yesterday after market closed, which can be found at investors.samrush.com. And with that, let me turn the call over to Oleg.

Thank you, and good morning to everyone on the call. Our team executed well this quarter, delivering revenue of $78.7 million, up 20% year over year. Importantly, we also generated strong profitability, reporting non-GAAP net income of $8.4 million. Due to our solid performance this quarter, we are raising our full-year non-GAAP net income guidance, and we continue to drive toward sustained profitability. We have built a business focused on driving strong, sustainable growth with improving profitability, and this quarter was no exception. Before handing it over to Eugene and Brian to talk about the quarter in more detail, I would like to touch on a few highlights we discussed on our last earnings call and share why we are excited about the future of SEMrush. On our last call, I talked about how we have heavily invested and continue to invest in a unique combination of data assets and products to create a software platform that helps customers improve their online visibility across all major channels. While there are point product competitors, we believe SEMrush has become the platform of choice for businesses of all sizes across all industries all over the world to improve their online visibility. We remain differentiated in our market. Importantly, we are uniquely positioned to help our clients because of our strong data assets and because of certain industry dynamics. Our strong competitive positioning that comes from our unique data assets is based on a combination of our own intellectual property and historical data that we have collected from our customers used together with new data that's being fed into our algorithms. Collectively, this allows us to generate strong predictive capabilities that can drive significant ROI for our customers. When looking at industry dynamics, Big tech search engine companies primarily make their money from advertising. As a result, their tools are designed to get their clients to optimize paid advertising on their own platform. Because of this, we believe it is not in their best interest to give those clients unbiased advice on optimal use of their marketing efforts. particularly if the best RI would come from organic efforts or advertisements on a platform other than their own. SEMrush, on the other hand, provides unbiased advice to its customers and seeks the highest expected RI marketing activities across a vast array of platforms. This is important because we continue to benefit from the tectonic shift of dollars being allocated away from physical visibility towards online visibility. Historically, companies spent their efforts creating their physical world's brands. They were able to be competitive without a significant online presence that leveraged church, organic, social media, and digital PR. But the world has changed. And in order to be successful, businesses now must not only embrace these new ways to create awareness for their brands, but they must excel at them. Now, more than ever, Brands recognize that the competitive world we live in demands that they distinguish themselves online. To be successful, businesses need to be easily discovered online. We need to appear at the top of the rankings, and we need to be a part of the discussions that are happening on social media channels. These are critical components to connecting with consumers in the places where they now spend their time. We are still in the early innings of this exponential shift. And we believe the compelling ROI provided by SEMrush only continues to strengthen as online markets become more saturated. Through our unique data set and 15 years of expertise and investment in R&D, we have built a platform for companies to enhance and maintain a competitive online presence across all channels. This is the essence of what SEMrush does. We are GPS of the internet. We help companies establish, maintain, and enhance their online presence. Our customers can choose which market content is the most efficient for their businesses. And they can map out new routes and change routes at any time. Let me provide a client example of an SMB furniture manufacturing client whose organic rankings and online sales were stalled for three years. Then they began their journey with us, and everything changed. First, we started with site audits to fix website problems and generate a strong site health score. Then we added the backlink audit tool to improve their online visibility. Next, we built a keyword strategy using our keyword magic and keyword review tools and explored what their competitors were doing and how they were faring with our organic research report and position tracking tool. They began to show impressive step-ups in engagement, and over the next two years, they saw a 73% increase in organic traffic. This example underlines how businesses are increasingly shifting their time, effort, and money to create awareness of and visibility for their businesses online. We believe businesses that are best able to analyze, plan, and execute on this shift will have the potential for exceptional results. And SEMrush provides all these tools in one place where they can do this. This industry tailwinds and our unique software offering positions us well to enjoy lasting, durable growth. We're excited about where we sit today and what the future holds for SEMrush. I will now turn the call over to Eugene and Brian to discuss the results of the quarter in more detail. Thank you, Oleg.