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What changed in SEMrush Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SEMrush Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+359 added−264 removedSource: 10-K (2026-03-02) vs 10-K (2025-03-03)

Top changes in SEMrush Holdings, Inc.'s 2025 10-K

359 paragraphs added · 264 removed · 227 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

57 edited+34 added−11 removed40 unchanged
Biggest changeProduct and Development Our product and development team has delivered high-quality products and new capabilities to increase the functionality of our platform and maximize the value we deliver to our customers. Our 13 product development organization plays a critical role in maintaining the effectiveness and differentiation of our technology in an evolving landscape and maximizing retention of our existing customers.
Biggest changeOur product development organization plays a critical role in maintaining the effectiveness and differentiation of our technology in an evolving landscape and maximizing retention of our existing customers. Our online visibility management SaaS platform depends on innovating new tools and features to continually improve our offerings.
The evolving online landscape and information overload from online content have made it increasingly difficult for companies to understand and manage their online visibility. Our proprietary online visibility management SaaS platform (our “platform”) enables us to aggregate and enrich trillions of data points collected from more than 808 million unique domains.
Online Visibility Landscape The evolving online landscape and information overload from online content have made it increasingly difficult for companies to understand and manage their online visibility. Our proprietary online visibility management SaaS platform (our “platform”) enables us to aggregate and enrich trillions of data points collected from more than 808 million unique domains.
We are the registered holder of a variety of domestic and international domain names that include “www.semrush.com”, “www.prowly.com”, “www.backlinko.com”, “www.kompyte.com”, “www.ryte.com”, www.explodingtopics.com”, “www.thirddoormedia.com” and similar variations of them. In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights or similar agreements with our employees, consultants, and contractors.
We are the registered holder of a variety of domestic and international domain names that include “www.semrush.com”, “www.prowly.com”, “www.backlinko.com”, “www.kompyte.com”, “www.ryte.com”, “www.explodingtopics.com”, “www.thirddoormedia.com” and similar variations of them. In addition to the protection provided by our intellectual property rights, we enter into confidentiality and proprietary rights or similar agreements with our employees, consultants, and contractors.
To increase brand awareness and generate customer demand, we also maintain partnerships with various entities, including: agencies, influencers, strategic partners, and referral affiliates. The Semrush Affiliate Program contributes to the enhancement of our brand awareness and the generation of customer demand by offering a commission for each new registration, trial, and subscription activated through a referral affiliate’s promotion.
To increase brand awareness and generate customer demand, we also maintain partnerships with various entities, including: agencies, influencers, strategic partners, and referral affiliates. The Semrush Affiliate Program contributes to the enhancement of our brand awareness and the generation of customer 15 demand by offering a commission for each new registration, trial, and subscription activated through a referral affiliate’s promotion.
We also integrate with third-party solutions to create comprehensive end-to-end workflows across the entire marketing funnel. These workflows include 7 analyzing trends, identifying potential opportunities to optimize visibility, creating high-quality content efficiently, helping customers assess different marketing approaches, executing campaigns regularly, and measuring the effectiveness of their marketing campaigns.
We also integrate with third-party solutions to create comprehensive end-to-end workflows across the entire marketing funnel. These workflows include analyzing trends, identifying potential opportunities to optimize visibility, creating high-quality content efficiently, helping customers assess different marketing approaches, executing campaigns regularly, and measuring the effectiveness of their marketing campaigns.
Sales-Assisted Motion: Expansion & Engagement Our Sales-Assisted motion complements our PLG strategy by targeting mid-market customers, sophisticated small and midsize business (“SMB”) customers who demonstrate strong potential for 12 expansion and deeper engagement and marketing specialists across all digital marketing disciplines within large agencies or enterprise-size businesses.
Sales-Assisted Motion: Expansion & Engagement Our Sales-Assisted motion complements our PLG strategy by targeting mid-market customers, sophisticated small and midsize business (“SMB”) customers who demonstrate strong potential for expansion and deeper engagement and marketing specialists across all digital marketing disciplines within large agencies or enterprise-size businesses.
Our platform creates significant network effects as we grow the number of our customers and our customers provide us with more data. By combining our customer data with our own market data, we are able to improve our algorithms and, in turn, increase the accuracy of our metrics and analytics.
Our platform creates significant network effects as we grow the number of our customers and our customers provide us with more data. By combining our customer data with our own market data, we are able to improve our algorithms and, in 10 turn, increase the accuracy of our metrics and analytics.
The Benefits of Our Platform The key benefits of our platform include: • All-in-one platform to provide comprehensive online visibility. Our software products cover key aspects of online visibility, including search engine optimization, paid advertising, local marketing, content marketing, competitive research, social media management, and brand marketing.
The Benefits of Our Platform The key benefits of our platform include: • All-in-one platform to provide comprehensive online visibility. Our software products cover key aspects of online visibility, including search engine optimization, generative engine optimization, paid advertising, local marketing, content marketing, competitive research, social media management, and brand marketing.
Our employees, consultants, and contractors are also generally subject to invention assignment agreements. 14 We further control the use of our proprietary technology and intellectual property through provisions in both general and product-specific terms of use.
Our employees, consultants, and contractors are also generally subject to invention assignment agreements. We further control the use of our proprietary technology and intellectual property through provisions in both general and product-specific terms of use.
We have additional registered trademarks in the United States, including for the “Prowly” marks, Semrush, Ryte and Prowly logos, and registrations of other trademarks in the EU and other countries, including for the “Prowly”, “Ryte” and “Sellzone” marks and the Prowly, Ryte and Semrush logos, with additional trademark registration applications pending in other countries.
We have additional registered trademarks 17 in the United States, including for the “Prowly” marks, Semrush, Ryte and Prowly logos, and registrations of other trademarks in the EU and other countries, including for the “Prowly”, “Ryte” and “Sellzone” marks and the Prowly, Ryte and Semrush logos, with additional trademark registration applications pending in other countries.
We also use the following social media channels as a means of disclosing information about the company, our platform, our planned financial and other announcements, and other matters and for complying with our disclosure obligations under Regulation FD: – Semrush X Account (https://x.com/semrush) – Semrush Facebook Page (https://www.facebook.com/Semrush) – Semrush LinkedIn Page (https://www.linkedin.com/company/semrush) – Semrush Instagram Account (https://www.instagram.com/semrush) – Semrush Threads Account (https://www.threads.net/@semrush) – Semrush YouTube Account (https://www.youtube.com/@semrush) – Semrush TikTok Account (https://www.tiktok.com/@semrush) – Semrush Bluesky Account (https://bsky.app/profile/semrushofficial.bsky.social) 15 The information disclosed by the foregoing channels could be deemed to be material information.
We also use the following social media channels as a means of disclosing information about the Company, our platform, our planned financial and other announcements, and other matters and for complying with our disclosure obligations under Regulation FD: 18 – Semrush X Account (https://x.com/semrush) – Semrush Facebook Page (https://www.facebook.com/Semrush) – Semrush LinkedIn Page (https://www.linkedin.com/company/semrush) – Semrush Instagram Account (https://www.instagram.com/semrush) – Semrush Threads Account (https://www.threads.net/@semrush) – Semrush YouTube Account (https://www.youtube.com/@semrush) – Semrush TikTok Account (https://www.tiktok.com/@semrush) – Semrush Bluesky Account (https://bsky.app/profile/semrushofficial.bsky.social) The information disclosed by the foregoing channels could be deemed to be material information.
Our platform utilizes data and intelligence at the core surrounded by AI-powered interconnected hubs focused on search engine optimization, paid advertising, social media management, local marketing, brand marketing, and content marketing.
Our platform utilizes data and intelligence at the core surrounded by AI-powered interconnected hubs focused on generative engine optimization, search engine optimization, paid advertising, social media management, local marketing, brand marketing, and content marketing.
We offer a broad range of paid products and tools, bundled into different solutions, that are designed to help customers with SEO, SMM, content marketing, brand marketing, data and intelligence, local marketing, and paid advertising, among others. Our solutions are made available via monthly or annual subscription plans, as well as one-time and ongoing add-ons.
We offer a broad range of paid products and tools, bundled into different solutions, that are designed to help customers with SEO, GEO, SEM, SMM, content marketing, brand marketing, data and intelligence, local marketing, and paid advertising, among others. Our solutions are made available via monthly or annual subscription plans, as well as one-time and ongoing add-ons.
“SEMRush” is our registered trademark in the United States, Australia, Bahrain, Belarus, Bosnia and Herzegovina, Brazil, Canada, China, the European Union (“EU”), Iceland, India, Iran, Israel, Japan, Kazakhstan, Liechtenstein, Monaco, Montenegro, New Zealand, Norway, Philippines, Russia, Serbia, Singapore, South Korea, Swaziland, Switzerland, Turkey, Ukraine, and Vietnam.
“SEMRush” is our registered trademark in the United States, Australia, Bahrain, Belarus, Bosnia and Herzegovina, Brazil, Canada, China, the European Union (“EU”), Iceland, India, Iran, Israel, Japan, Kazakhstan, Liechtenstein, Monaco, Montenegro, New Zealand, Norway, Serbia, Singapore, South Korea, Swaziland, Switzerland, Turkey, Ukraine, and Vietnam.
We completed our initial public offering in 2021 and our Class A common stock is currently listed on the New York Stock Exchange under the symbol “SEMR”. Our principal executive offices are located at 800 Boylston Street, Suite 2475, Boston, MA 02199, and our telephone number is (800) 851-9959. 16
We completed our initial public offering in 2021 and our Class A common stock is currently listed on the New York Stock Exchange under the symbol “SEMR”. Our principal executive offices are located at 800 Boylston Street, Suite 2475, Boston, MA 02199, and our telephone number is (800) 851-9959. 19
No single customer accounted for more than 10% of our revenue in the year ended December 31, 2024. Intellectual Property We protect our intellectual property through a combination of trademarks, domain names, copyrights, and trade secrets, as well as contractual provisions and restrictions on access to our proprietary technology.
No single customer accounted for more than 10% of our revenue in the year ended December 31, 2025. Intellectual Property We protect our intellectual property through a combination of trademarks, domain names, copyrights, and trade secrets, as well as contractual provisions and restrictions on access to our proprietary technology.
Our compliance with applicable laws and regulations may be onerous and could, individually or in the aggregate, increase our cost of doing business, impact our competitive position relative to our peers, and/or otherwise have an adverse impact on our business, reputation, financial condition, and operating results.
Our compliance with applicable laws and regulations may be onerous and could, individually or in the aggregate, increase our cost of doing business, impact our competitive position relative to our peers, and/or otherwise have an adverse impact on our proposed Merger, business, reputation, financial condition, and operating results.
Channels for Disclosure of Information Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available, free of charge, on our website (www.semrush.com) as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission, (the “SEC”).
Channels for Disclosure of Information Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are available, free of charge, on our website (www.semrush.com) as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.
Companies often attempt to address individual aspects of online visibility, such as search engine optimization (“SEO”), search engine marketing (“SEM”), content marketing, social media management (“SMM”), brand marketing, and competitive intelligence, among others.
Companies often attempt to address individual aspects of online visibility, such as search engine optimization (“SEO”), generative engine optimization (“GEO”), search engine marketing (“SEM”), content marketing, social media management (“SMM”), brand marketing, and competitive intelligence, among others.
Our data sources include: • Data we collect from websites algorithmically through our proprietary data collection techniques, including web crawling of third-party websites; • Data purchased from independent third-party data providers, which includes clickstream data, search engine data, online advertising data, and data from social media sources; and • Reference data that our customers grant us access to, which includes our customers’ website and social media data.
Our data sources include: • Data we collect from websites algorithmically through our proprietary data collection techniques, including web crawling of third-party websites; 13 • Data purchased from independent third-party data providers, which includes clickstream data, search engine data, LLM prompt data, online advertising data, and data from social media sources; and • Reference data that our customers grant us access to, which includes our customers’ website and social media data.
We have developed our technology platform, and various products, tools, and features, over the last 16 years. Since our founding in 2008, our platform has evolved through technology innovation as we have added these new products, tools, and features.
We have developed our technology platform, and various products, tools, and features, over the last 17 years. Since our founding in 2008, our platform has evolved through technology innovation as we have added these new products, tools, and features.
We developed our technology platform over the last 16 years, leveraging machine learning to aggregate, cleanse, and analyze an immense amount of proprietary and third-party unstructured data.
We developed our technology platform over the last 17 years, leveraging machine learning to aggregate, cleanse, and analyze an immense amount of proprietary and third-party unstructured data.
Through our one-to-many approach, we attract prospective users via: • Organic online visibility powered by our own online visibility management platform; • Content marketing initiatives, including online advertising, blogs, podcasts, ebooks, and webinars; and • The Semrush Academy, a free learning platform with over 1.1 million enrolled students and 500,000 certifications issued as of December 31, 2024, which enhances our brand awareness and builds credibility for our products.
Through our one-to-many approach, we attract prospective users via: • Organic online visibility powered by our own online visibility management platform; • Content marketing initiatives, including online advertising, blogs, podcasts, ebooks, and webinars; and • The Semrush Academy, a free learning platform with over 1.4 million enrolled students and 600,000 certifications issued as of December 31, 2025, which enhances our brand awareness and builds credibility for our products.
We have a demonstrated track record of upgrading customers to higher-priced plans, whether to increase usage limits or to access specialized features and functionalities — such as content marketing tools or historical data tracking.
We have a demonstrated track record of upgrading customers to higher-priced plans, whether to increase usage limits or to access specialized features and functionalities — such as AI brand insights, content marketing tools, or historical data tracking.
In addition, as of December 31, 2024, we had a total of 183 contractors located in various countries. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good and we have not experienced any work stoppages.
In addition, as of December 31, 2025, we had a total of 148 contractors located in various countries. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good and we have not experienced any work stoppages.
For example, we maintain three paid subscription tiers for our SEO solution (Pro, Guru, and Business), four paid subscription tiers for our Enterprise SEO solution (Bronze, Silver, Gold, and Platinum) and additional tiered subscription structures across our paid advertising, social media management, data & intelligence, local marketing, brand marketing and content marketing solutions.
For example, we have historically maintained three paid subscription tiers for our SEO solution (Pro, Guru, and Business), four paid subscription tiers for our Enterprise SEO solution (Bronze, Silver, Gold, and Platinum) and additional tiered subscription structures across our paid advertising, social media management, data & intelligence, local marketing, brand marketing and content marketing solutions.
Our data assets include more than 808 million domains, 26 billion keywords, click stream panel data from billions of events per week, over 43 trillion backlinks, over 10 billion URLs crawled per day on average, and a range of data aggregated from social media networks, all of which scale continuously as customers use our platform. • End-to-end workflows with third-party integrations.
Our data assets include more than 808 million domains, nearly 28 billion keywords, click stream panel data from billions of events per week, over 43 trillion backlinks, over 10 billion URLs crawled per day on average, over 200 million LLM prompts, and a range of data aggregated from social media networks, all of which scale continuously as customers use our platform. • End-to-end workflows with third-party integrations.
Our Enterprise SEO solution, which is built on top of our SEO platform but with additional features and functionalities, is typically sold at a higher subscription price point (as compared to our other product subscriptions), and subscriptions are typically at least an annual term.
Our enterprise portfolio, which is built on top of our SEO platform but with these additional features, is typically sold at a higher subscription price point (as compared to our other product subscriptions), and subscriptions are typically at least an annual term.
Our platform enables our customers to understand trends and act upon unique insights to improve their online visibility, drive high-quality traffic to their websites and social media pages, as well as online listings, distribute highly targeted content to their customers, and measure the effectiveness of their digital marketing campaigns.
Our platform enables our customers to understand trends and act upon unique insights to improve their online visibility, understand their presence in search engines and generative engines, drive high-quality traffic to their websites and social media pages, as well as online listings, distribute highly targeted content to their customers, and measure the effectiveness of their digital marketing campaigns.
We plan to focus research and development investments to increase the functionality of our online visibility management SaaS platform in order to adapt to the latest changes in the digital marketing landscape, leverage AI, and ensure our platform maintains leading technology innovations. Research and development expenses accounted for $80.1 million for the year ended December 31, 2024.
We plan to focus research and development investments to increase the functionality of our online visibility management SaaS platform in order to adapt to the latest changes in the digital marketing landscape, leverage AI, and ensure our platform maintains leading technology innovations. Research and development expenses accounted for $97.2 million for the year ended December 31, 2025.
(“G2”), our platform is listed in the Best Global Software Companies and listed as a leader across 17 software categories including SEO, competitive intelligence, marketing analytics, content analytics, and social media analytics, which reinforces the strategic advantages of providing a comprehensive solution.
(“G2”), our platform is listed in the Best Global Software Companies and listed as a leader across 18 software categories including SEO, answer engine optimization, competitive intelligence, marketing analytics, content analytics, and social media analytics, which reinforces the strategic advantages of providing a comprehensive solution.
Government Regulations We operate globally and are subject to numerous U.S. federal and state, and foreign laws and regulations covering a wide variety of subject matters that are constantly evolving and developing, including laws regarding intellectual property, artificial intelligence, data collection, privacy and security, human resources, consumer protection and marketing, anti-bribery and anti-corruption laws, and tax regulations.
Government Regulations We operate globally and are subject to numerous U.S. federal and state, and foreign laws and regulations covering a wide variety of subject matters that are constantly evolving and developing, including laws regarding intellectual property, artificial intelligence, data collection, privacy and security, human resources, consumer protection and marketing, anti-bribery and anti-corruption laws, tax regulations, and antitrust regulations in connection with our proposed Merger.
Our comprehensive product suite delivers differentiated insights through a multi-faceted platform that enables companies to efficiently manage online visibility, reduce traffic acquisition costs, promote consumer engagement, minimize the cost associated with managing multiple third-party vendors, and acquire new customers. 9 Our Growth Strategies The key elements of our growth strategy include: • Acquire new customers.
Our comprehensive product suite delivers differentiated insights through a multi-faceted platform that enables companies to efficiently manage online visibility, reduce traffic acquisition costs, promote consumer engagement, minimize the cost associated with managing multiple third-party vendors, and acquire new customers. 12 Our Growth Strategies The key elements of our growth strategy include: • Focus on expanding the adoption of our Enterprise product portfolio.
Our multi-price point structure also drives meaningful upsell opportunities through higher usage limits, greater product functionality, additional user licenses, and product add-ons, as reflected by our dollar-based net revenue retention rate of 106% and 107% as of December 31, 2024 and 2023, respectively, and our compounded average annual revenue growth rate of 35% between the years ended December 31, 2018 and December 31, 2024.
Our multi-price point structure also drives meaningful upsell opportunities through higher usage limits, greater product functionality, additional user licenses, and product add-ons, as reflected by our dollar-based net revenue retention rate of 104% and 106% as of December 31, 2025 and 2024, respectively, and our compounded average annual revenue growth rate of 30% between the years ended December 31, 2019 and December 31, 2025.
Our comprehensive online visibility management SaaS platform is built with differentiated insights into traffic sources for specific sites, analysis of drivers of traffic to a company’s and its competitors’ websites, the keywords and backlinks that are driving this traffic, and the effectiveness of a company’s content marketing strategy. • Robust, proprietary technology platform and datasets.
Our comprehensive online visibility management SaaS platform is built with differentiated insights into traffic sources for specific sites, analysis of drivers of traffic to a company’s and its competitors’ websites, the keywords and backlinks that are driving this traffic, and the effectiveness of a company’s content marketing strategy. • Comprehensive AI and GEO capabilities.
As of December 31, 2024, we had 563 full-time employees and 57 contractors in our product and development organization. We have primary development hubs in Prague, Czech Republic; Limassol, Cyprus; Warsaw, Poland; Barcelona, Spain; Amsterdam, the Netherlands; and Berlin, Germany.
As of December 31, 2025, we had 584 full-time employees and 55 contractors in our product and development organization. We have primary development hubs in Prague, Czech Republic; Limassol, Cyprus; Warsaw, Poland; Barcelona, Spain; Amsterdam, the Netherlands; and Berlin, Germany.
Our Customers We serve a range of customers from SMBs to enterprise-size businesses and marketing agencies, across a wide variety of verticals, including consumer internet, digital media, education, financial services, healthcare, retail, software, and telecommunications, among others. As of December 31, 2024, we had approximately 117,000 paying customers and 1,049,000 active free customers on our platform across 153 countries.
Our Customers We serve a range of customers from SMBs to enterprise-size businesses and marketing agencies, across a wide variety of verticals, including consumer internet, digital media, education, financial services, healthcare, retail, software, and telecommunications, among others. As of December 31, 2025, we had approximately 108,000 paying customers on our platform across 145 countries.
Sales-Led Motion: Personalized, High-Value Engagement For our most sophisticated enterprise-size customers, we deploy a “Sales-Led” motion designed to create a one-on-one, highly personalized experience. These customers require deeper strategic engagement, custom solutions, and negotiated contracts. • The Sales-Led motion for enterprise-size customers starts with demand generation, leveraging both inbound and outbound strategies.
Sales-Led Motion: Personalized, High-Value Engagement For our most sophisticated enterprise-size customers, we deploy a “Sales-Led” motion designed to create a one-on-one, highly personalized experience. These customers require deeper strategic engagement, custom solutions, and negotiated contracts.
While traditional outbound demand generation remains part of our playbook, most leads come from inbound interest, referrals, and cross-sell opportunities. • A structured B2B sales process follows: ◦ Discovery phase to understand customer pain points; ◦ Tailored product demonstrations showcasing relevant Semrush capabilities; ◦ Technical deep dives for complex integrations; and ◦ Negotiation and contract finalization for customized pricing and enterprise-grade solutions. • Many of our enterprise-size and Fortune 500 accounts have existing master subscription agreements from their prior subscription, designed to allow us to accelerate sales cycles and unlock cross-sell and up-sell opportunities efficiently after the initial contracting stage.
While traditional outbound demand generation remains part of our playbook, most leads come from inbound interest, referrals, and cross-sell opportunities. • A structured B2B sales process follows: ◦ Discovery phase to understand customer pain points; ◦ Tailored product demonstrations showcasing relevant Semrush capabilities; ◦ Technical deep dives for complex integrations; and ◦ Negotiation and contract finalization for customized pricing and enterprise-grade solutions. • Many of our enterprise-size and Fortune 500 accounts have existing master subscription agreements from their prior subscription, designed to allow us to accelerate sales cycles and unlock cross-sell and up-sell opportunities efficiently after the initial contracting stage. 16 Aligning Our GTM Motions For Impact We believe each of these GTM motions serves a unique purpose but operates within a cohesive strategy to drive revenue growth across different customer segments and geographies.
Sales & Marketing Our customer acquisition strategy is built around three core Go-To-Market (“GTM”) motions: Product-Led Growth (“PLG”), Sales-Assisted, and Sales-Led. Each motion is tailored to different buyer segments, considering factors such as customer acquisition costs (“CAC”), lifetime value (“LTV”) potential, and engagement strategies.
Sales & Marketing Our customer acquisition strategy is built around our three core Go-To-Market (“GTM”) motions: Product-Led Growth (“PLG”), Sales-Assisted, and Sales-Led. Each motion is tailored to different buyer segments, considering factors such as customer acquisition costs (“CAC”), lifetime value (“LTV”) potential, and engagement strategies. In 2025 we also introduced a channel-led model with a select group of agency partners.
We have grown our ARR per paying customer to $3,522 as of December 31, 2024, up from $3,125 as of December 31, 2023, driven by strong upsell activity .
We have grown our ARR per paying customer to $4,369 as of December 31, 2025, up from $3,522 as of December 31, 2024, driven by strong upsell activity and adoption of our AI products .
For both the acquisition of new customers and the expansion of the use of our platform by our existing paying customer base, we expect to continue to heavily market, cross-sell and up-sell our Enterprise SEO solution for which general availability was launched in June 2024.
For both the acquisition of new customers and the expansion of the use of our platform by our existing paying customer base, we expect to continue to heavily market, cross-sell and up-sell our Enterprise portfolio.
With over 5.5 billion internet users in 2024, according to research platforms, and consumers worldwide spending an average of over six and a half hours per day online, according to GlobalWebIndex, digital channels are essential for customer engagement.
As interactions between companies and their customers continue to shift online, managing a company’s online visibility has become critical. With over 5.5 billion internet users in 2025, according to research platforms, and consumers worldwide spending an average of over six and a half hours per day online, according to GlobalWebIndex, digital channels are essential for customer engagement.
Our unique set of data assets have been developed over the 10 last 16 years and includes more than 808 million domains, 26 billion keywords, click stream panel data from billions of events per week, 43 trillion backlinks, 10 billion URLs crawled per day on average, and a range of data aggregated from social media networks.
Our unique set of data assets have been developed over the last 17 years and includes more than 808 million domains, nearly 28 billion keywords, click stream panel data from billions of events per week, 43 trillion backlinks, 10 billion URLs crawled per day on average, a range of data aggregated from social media networks, and a database of over 200 million LLM prompts which we leverage to provide insights into user behavior across conversational AI platforms.
The release of new products, tools, add-ons, and features has enabled us to drive higher monetization over time as we have increased our ARR per paying customer to $3,522 as of December 31, 2024 from $3,125 as of December 31, 2023. • Pursue opportunistic Mergers & Acquisitions.
The release of new products, tools, add-ons, and features, including our Enterprise AIO, Enterprise Site Intelligence, and AI toolkit, has enabled us to drive higher monetization over time as we have increased our ARR per paying customer to $4,369 as of December 31, 2025 from $3,522 as of December 31, 2024. • Acquire new customers.
Enterprise. Our Enterprise SEO subscription includes the same features as under the Business subscription, plus AI-driven analysis, customizable dashboards, comprehensive reporting capabilities, and extended limits. Within our Enterprise SEO solution, we currently have four paid subscription tiers — Bronze, Silver, Gold, and Platinum — which differ in terms of usage limits, features, and support levels.
Within our Enterprise SEO solution, we currently have four paid subscription tiers — Bronze, Silver, Gold, and Platinum — which differ in terms of usage limits, features, and support levels.
For the years ended December 31, 2024, 2023, and 2022, our revenue was $376.8 million, $307.7 million, and $254.3 million, respectively, representing growth of 22% and 21%, respectively. For the years ended December 31, 2024, 2023, and 2022, our net income (loss) was $7.4 million, $1.0 million, and $(33.8) million, respectively.
For the years ended December 31, 2025, 2024, and 2023, our revenue was $443.6 million, $376.8 million, and $307.7 million, respectively. This represents growth of 18% from 2024 to 2025 and 22% from 2023 to 2024. For the years ended 11 December 31, 2025, 2024, and 2023, our net (loss) income was $(19.5) million, $7.4 million, and $1.0 million, respectively.
Human Capital As of December 31, 2024, we had 1,561 full-time employees, consisting of 452 in Spain, 326 in the United States, 153 in Germany, 142 in the Netherlands, 129 in Serbia, 122 in Cyprus, 119 in the Czech Republic, and 118 employees located in other countries and employees working remotely.
Human Capital As of December 31, 2025, we had 1,567 full-time employees, consisting of 494 in Spain, 324 in the United States, 137 in Germany, 137 in Serbia, 133 in the Netherlands, 117 in Cyprus, 97 in the Czech Republic, and 128 employees located in other countries and employees working remotely.
We continue to invest in research and development to enhance our platform and release new products and features, including our Enterprise SEO solution, while bolstering one of the largest independent data sets for online visibility.
We continue to invest in research and development to enhance our platform and release new products and features, including our Enterprise portfolio while bolstering one of the largest independent data sets for online visibility. We maintain close relationships with our customer base who provide us with frequent and real-time feedback, which we leverage to rapidly update and optimize our platform.
Our Guru subscription includes the same features as under Pro plus additional capabilities, such as our content marketing and content creation tools, historical data, extended limits, and Google Data Studio integration. 11 Business. Our Business subscription includes the same features as under Guru, but builds on Guru with further enhancements, such as API access, extended usage limits, and share-of-voice metrics.
Our Business subscription includes the same features as under Guru, but builds on Guru with further enhancements, such as API access, extended usage limits, and share-of-voice metrics. Enterprise. Our Enterprise SEO subscription includes the same features as under the Business subscription, plus AI-driven analysis, customizable dashboards, comprehensive reporting capabilities, and extended limits.
Our Pro subscription provides access to our SEO solution and ongoing software updates, giving customers the tools to run SEO, pay-per-click , and SMM projects with advanced features. Guru.
Our Pro subscription provides access to our SEO solution and ongoing software updates, giving customers the tools to run SEO, pay-per-click, and SMM projects with advanced features. Guru. Our Guru subscription includes the same features as under Pro plus additional capabilities, such as our content marketing and content creation tools, historical data, extended limits, and Google Data Studio integration. Business.
Our online visibility management SaaS platform depends on innovating new tools and features to continually improve our offerings. We work closely with our customers and partners to understand their needs and incorporate their feedback as we innovate our platform. We invest substantial resources in research and development to continue to drive our technology innovation.
We work closely with our customers and partners to understand their needs and incorporate their feedback as we innovate our platform. We invest substantial resources in research and development to continue to drive our technology innovation. Our research and development efforts are focused on designing, testing, and refining our products, as well as operating and scaling our technology infrastructure.
We expect to continue to target new customers who have not yet adopted online visibility management solutions and those who are currently using our free offering.
We expect to continue to target new customers who have not yet adopted online visibility management solutions and those who are currently using our free offering. While our sales model for new customers remains highly efficient due to our low-friction, self-service onboarding, our acquisition strategy has evolved to highlight our unified search capabilities.
By aligning these approaches, we expect to maintain and strengthen our position as the global platform leader in online visibility management, while continuing to efficiently balance CAC and LTV, ensuring long-term sustainable growth. As of December 31, 2024, we had 540 full-time employees and 95 contractors in our sales and marketing organization.
While PLG fuels our pipeline at scale, we believe our Sales-Assisted motion enhances expansion, and Sales-Led motion maximizes long-term value and retention for our most sophisticated customers. By aligning these approaches, we expect to maintain and strengthen our position as the global platform leader in online visibility management, while continuing to efficiently balance CAC and LTV, ensuring long-term sustainable growth.
Our research and development efforts are focused on designing, testing, and refining our products, as well as operating and scaling our technology infrastructure. We will continue our investment to improve and increase our data assets, the accuracy of results, and the integration of new data assets.
We will continue our investment to improve and increase our data assets, the accuracy of results, and the integration of new data assets.
Our substantial base of approximately 117,000 paying customers as of December 31, 2024 presents a significant opportunity to increase monetization.
Our substantial base of approximately 108,000 paying customers as of December 31, 2025 presents a significant opportunity to increase monetization, particularly as existing customers supplement their traditional SEO tools with newer GEO and AI search products.
Wagner who is a SaaS industry veteran with over 30 years in the technology sector and who has served as a member of our Board of Directors since September 2022. Our capital efficient model has enabled us to grow to $411.6 million in ARR as of December 31, 2024 from $337.1 million in ARR as of December 31, 2023.
This calculation excludes revenue from new customers and any non-recurring revenue. Our capital efficient model has enabled us to grow to $471.4 million in ARR as of December 31, 2025 from $411.6 million in ARR as of December 31, 2024.
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As of December 31, 2024 and 2023, our differentiated platform empowered more than 1,049,000 and 1,041,000 active free customers, respectively, and approximately 117,000 and 108,000 paying customers, respectively, in over 150 countries. As interactions between companies and their customers continue to shift online, managing a company’s online visibility has become critical.
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Pending Acquisition On November 18, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Adobe, and Fenway Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Adobe (“Merger Sub”).
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This calculation excludes revenue from new customers and any non-recurring revenue. Our culture is driven by a collaborative and innovative leadership style and team, which has fostered our ability to expand from a single product in 2008 to our comprehensive online visibility management SaaS platform comprising the products, tools, and add-ons we offer today.
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Pursuant to the Merger Agreement, and upon the terms and subject to the conditions therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Adobe.
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Since our inception 16 years ago, we have been led by our co-founder and Chief Executive Officer (“CEO”), Oleg Shchegolev. On February 26, 2025, we announced that William (Bill) R. Wagner has been named the new CEO, effective March 10, 2025, and Oleg Shchegolev will assume the role of Chief Technology Officer (“CTO”).
Added
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of Class A common stock, par value $0.00001 per share, of the Company (the “Class A common stock”) and each share of Class B common stock, par value $0.00001 per share, of the Company (the “Class B common stock” and, together with the Class A common stock, the Company common stock), in each case, issued and outstanding immediately prior to the Effective Time, subject to certain limitations, will be converted into the right to receive $12.00 in cash, without interest (the “Merger Consideration”) and thereafter the Company will be delisted from the New York Stock Exchange (“NYSE”).
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We believe this transition will further bolster our leadership team and culture of continuous improvement as it 8 will allow Mr. Shchegolev to focus on artificial intelligence (“AI”) and other product innovation matters in his new role as CTO, while also ensuring strong leadership in the CEO position from Mr.
Added
With respect to the outstanding equity awards of the Company, at the Effective Time, such awards will generally be treated as follows.
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Our sales model for new customers is highly efficient due to our low-friction, self-service onboarding capabilities that allow us to acquire new customers with relatively low sales investment. • Expand the use of our platform by our existing paying customer base.
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Options: Each vested option to purchase shares of Company common stock (“Option”) and each Option held by a non-employee director or certain contractors or service providers (each, a “Specified Individual”) will be cancelled and cashed out for a payment equal to the excess of the Merger Consideration over the exercise price of such Option in respect of each underlying share.
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We expect to continue to grow our revenue from our existing customers as they seek to add premium features and additional user licenses, as reflected by our dollar-based net revenue retention rate of 106% as of December 31, 2024. • Focus on expanding the adoption of our Enterprise SEO solution.
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Otherwise, each unvested in-the-money Option will be assumed and converted into a restricted stock unit award relating to Adobe common stock (an “Adobe RSU Award”), based on the spread value of the Option and the closing price per share of Adobe common stock over the 30 consecutive calendar days ending on (and including) the second to last calendar day preceding the closing date (“Adobe Trading Price”), with no less favorable vesting terms.
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We maintain close relationships with our customer base who provide us with frequent and real-time feedback, which we leverage to rapidly update and optimize our platform.
Added
Options with an exercise price equal to or greater than the Merger Consideration will be cancelled for no consideration.
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Our management team expects to continue to allocate resources to identify, evaluate, and execute strategic acquisitions. For example, we acquired Backlinko.com (“Backlinko”) in January 2022, Intellikom Inc. dba Kompyte (“Kompyte”) in March 2022, Rank, LLC (“Traffic Think Tank”) in February 2023, a majority stake in Datos Inc. (“Datos”) in December 2023, a majority stake in Brand 24 S.A.
Added
RSU Awards: Each restricted stock unit award relating to shares of Company Common Stock that was subject solely to service-based vesting requirements as of the grant date (“RSU Award”) held by a Specified Individual will be cancelled and cashed out for a payment equal to the Merger Consideration in respect of each underlying share.
Removed
(“Brand 24”) in April 2024, Ryte GmbH (“Ryte”) in July 2024, substantially all of the assets of Backlinko, LLC dba Exploding Topics (“Exploding Topics”) in August 2024, and Third Door Media, Inc. (“Third Door Media”) in October 2024, to expand our technological capabilities and solutions offerings.
Added
Each other RSU Award will be assumed and converted into an Adobe RSU Award representing equivalent value based on the Adobe Trading Price, with no less favorable vesting terms. 8 PSU Awards: Each restricted stock unit award relating to shares of Company common Stock that is subject to performance-based vesting requirements (“PSU Award”) that becomes vested at the Effective Time in accordance with the terms of the applicable award agreement will be cancelled and cashed out for a payment equal to the Merger Consideration in respect of each underlying share (with achievement of applicable performance metrics determined based on actual performance in accordance with the terms of the applicable award agreement), and the portion of the award that does not become vested at the Effective Time in accordance with the terms of the applicable award agreement will be forfeited for no consideration.
Removed
See Note 9 “Acquisitions, Intangible Assets, and Goodwill” to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further detail on our merger and acquisition (“M&A”) activity during 2024.
Added
Each other outstanding PSU Award will be assumed and converted into an Adobe RSU Award (with applicable performance goals deemed achieved based on actual performance through the latest practicable date prior to the Closing Date) representing equivalent value based on the Adobe Trading Price, with no less favorable service-based vesting terms.
Removed
Aligning Our GTM Motions For Impact We believe each of these GTM motions serves a unique purpose but operates within a cohesive strategy to drive revenue growth across different customer segments and geographies. While PLG fuels our pipeline at scale, we believe our Sales-Assisted motion enhances expansion, and Sales-Led motion maximizes long-term value and retention for our most sophisticated customers.
Added
RS Awards: The restricted stock award relating to shares of Company common stock will be assumed and converted into a restricted stock award of Adobe representing equivalent value based on the Adobe Trading Price, with no less favorable vesting terms.
Added
Under the terms of the Merger Agreement, the completion of the Merger is subject to certain customary closing conditions, including, among others: (i) the approval of the Merger Agreement and the Merger by the affirmative vote (in person or by proxy) of the holders of a majority of the voting power of the outstanding Company common stock entitled to vote thereon voting as a single class (the “Company Stockholder Approval”), which Company Stockholder Approval was obtained on February 3, 2026; (ii) the accuracy of the parties’ respective representations and warranties in the Merger Agreement, subject to specified materiality qualifications; (iii) compliance by the parties with their respective covenants in the Merger Agreement in all material respects; (iv) the absence of any law or order restraining, enjoining, or otherwise prohibiting the consummation of the Merger; (v) the expiration of the waiting period applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (which has occurred), and receipt of other approvals under specified antitrust and foreign investment laws; and (vi) the absence of a Company Material Adverse Effect (as defined in the Merger Agreement) on or after the date of the Merger Agreement that is continuing as of immediately prior to the closing.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

86 edited+46 added−17 removed289 unchanged
Biggest changeThese obligations include the requirement to obtain consent from individuals in specific situations, provide additional disclosures to individuals regarding data processing activities, implement safeguards to protect the security and confidentiality of personal data, limit personal data retention periods, conduct mandatory data breach notifications in certain circumstances, and put in place specific measures (including contractual requirements) when engaging third-party service providers. 34 European Data Protection Law also imposes strict rules on the transfer of personal data out of the EEA/UK to third countries deemed to lack adequate privacy protections, including the United States in certain circumstances, unless a derogation applies, or an appropriate transfer safeguard specified by the European Data Protection Law is implemented, such as the Standard Contractual Clauses (“SCCs”) approved by the European Commission and the “International Data Transfer Agreement or Addendum (“IDTA”) approved by the UK Information Commissioner’s Office.
Biggest changeEuropean Data Protection Law also imposes strict rules on the transfer of personal data out of the EEA/UK to third countries deemed to lack adequate privacy protections, including the United States in certain circumstances, unless a derogation applies, or an appropriate transfer safeguard specified by the European Data Protection Law is implemented, such as the Standard Contractual Clauses (“SCCs”) approved by the European Commission and the “International Data Transfer Agreement or Addendum (“IDTA”) approved by the UK Information Commissioner’s Office.
Our amended and restated certificate of incorporation and third amended and restated bylaws, include provisions that: • provide that the authorized but unissued shares of our common stock and our preferred stock are available for future issuance without stockholder approval; • provide that our Board is classified into three classes of directors with staggered three-year terms; • permit the Board to establish the number of directors and fill any vacancies and newly created directorships; 44 • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and third amended and restated bylaws; • authorize the issuance of “blank check” preferred stock that our Board could use to implement a stockholder rights plan; • provide that only the Chairperson of our Board, our Chief Executive Officer, or a majority of our Board will be authorized to call a special meeting of stockholders; • provide for a dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the Board is expressly authorized to make, alter or repeal our bylaws; and • advance notice requirements for nominations for election to our Board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Our amended and restated certificate of incorporation and third amended and restated bylaws, include provisions that: • provide that the authorized but unissued shares of our common stock and our preferred stock are available for future issuance without stockholder approval; • provide that our Board is classified into three classes of directors with staggered three-year terms; • permit the Board to establish the number of directors and fill any vacancies and newly created directorships; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and third amended and restated bylaws; • authorize the issuance of “blank check” preferred stock that our Board could use to implement a stockholder rights plan; • provide that only the Chairperson of our Board, our Chief Executive Officer, or a majority of our Board will be authorized to call a special meeting of stockholders; • provide for a dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the Board is expressly authorized to make, alter or repeal our bylaws; and • advance notice requirements for nominations for election to our Board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Changing consumer tastes may also render our current integrations or functionality obsolete and the financial terms, if any, under which we would obtain integrations or functionality, unfavorable. Any failure of our products to operate effectively with the social media networks used most frequently by consumers, or emerging artificial intelligence platforms, could reduce the demand for our products.
Changing consumer 28 tastes may also render our current integrations or functionality obsolete and the financial terms, if any, under which we would obtain integrations or functionality, unfavorable. Any failure of our products to operate effectively with the social media networks used most frequently by consumers, or emerging artificial intelligence platforms, could reduce the demand for our products.
Any claim against us, regardless of its merit, could be costly, divert management’s attention and operational resources, and harm our reputation. As litigation is inherently unpredictable, we cannot assure you that any potential claims or disputes will not have a material adverse effect on our business, results of 30 operations, and financial condition.
Any claim against us, regardless of its merit, could be costly, divert management’s attention and operational resources, and harm our reputation. As litigation is inherently unpredictable, we cannot assure you that any potential claims or disputes will not have a material adverse effect on our business, results of operations, and financial condition.
Our customers’ 17 decisions as to whether to upgrade their subscriptions or not is driven by a number of factors, including customer satisfaction with the additional features and functionality, performance, security and reliability of our platform and products, the perceived quality of our customer service, general economic conditions, the price and functionality of our platform and products relative to those of our competitors, and customer reaction to the price for the upgraded subscription.
Our customers’ decisions as to whether to upgrade their subscriptions or not is driven by a number of factors, including customer satisfaction with the additional features and functionality, performance, security and reliability of our platform and products, the perceived quality of our customer service, general economic conditions, the price and functionality of our platform and products relative to those of our competitors, and customer reaction to the price for the upgraded subscription.
Additionally, 45 the forum selection clauses in our third amended and restated bylaws may limit our stockholders’ ability to bring a claim in a forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees even though an action, if successful, might benefit our stockholders.
Additionally, the forum selection clauses in our third amended and restated bylaws may limit our stockholders’ ability to bring a claim in a forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees even though an action, if successful, might benefit our stockholders.
We collect and process personal data about a variety of individuals, such as our customers, users, employees, contractors, and business partners, in connection with our relationship with such individuals, 33 including to collect and process payment from our customers, provide our products and services to our customers, communicate with and recommend products to our customers and prospective customers through our marketing and advertising efforts, comply with legal obligations, and for other internal business purposes.
We collect and process personal data about a variety of individuals, such as our customers, users, employees, contractors, and business partners, in connection with our relationship with such individuals, including to collect and process payment from our customers, provide our products and services to our customers, communicate with and recommend products to our customers and prospective customers through our marketing and advertising efforts, comply with legal obligations, and for other internal business purposes.
The attractiveness of our platform depends, in part, on our ability to integrate via APIs with third-party applications that our customers desire to use with our products, such as Google, Facebook, Instagram, X, YouTube, LinkedIn, Pinterest, AIOSEO, Monday.com, Pagecloud, Renderforest, Scalenut, SurferSEO, Wix, Quickblog, Zoho and others.
The attractiveness of our platform depends, in part, on our ability to integrate via APIs with third-party applications that our customers desire to use with our products, such as Google, Facebook, Instagram, X, YouTube, LinkedIn, Pinterest, AIOSEO, Monday.com, Pagecloud, Renderforest, Scalenut, SurferSEO, 27 Wix, Quickblog, Zoho and others.
Changes in export control or economic sanctions laws and enforcement could also result in increased compliance requirements and related costs, which could materially adversely affect our business, results of operations, financial condition, and/or cash flows. We are also subject to various U.S. and international anti-corruption laws, such as the U.S.
Changes in export control or economic 42 sanctions laws and enforcement could also result in increased compliance requirements and related costs, which could materially adversely affect our business, results of operations, financial condition, and/or cash flows. We are also subject to various U.S. and international anti-corruption laws, such as the U.S.
Likewise, we expect to see continued and rapid growth of chatbot platforms that leverage the use of artificial intelligence and could result in lower demand for traditional search engine technologies. If consumers 23 widely adopt new social media networks and artificial intelligence platforms, we will need to develop integrations and functionality related to these new networks and platforms.
Likewise, we expect to see continued and rapid growth of chatbot platforms that leverage the use of artificial intelligence and could result in lower demand for traditional search engine technologies. If consumers widely adopt new social media networks and artificial intelligence platforms, we will need to develop integrations and functionality related to these new networks and platforms.
The rapid evolution of artificial intelligence will require the application of significant resources to design, develop, test and maintain our products and services to help ensure that artificial intelligence is implemented in accordance with applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts.
The rapid evolution of AI will require the application of significant resources to design, develop, test and maintain our products and services to help ensure that artificial intelligence is implemented in accordance with applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts.
These regulations seek, among other things, to allow end users to have greater control over the use of private information collected online, to forbid the collection or use of online information, to demand a business to comply with their choice to opt out of such collection or use, and to place limits upon the disclosure of information to third-party websites.
These regulations seek, among other things, to allow end users to have greater control over the use of private information collected online, to 38 forbid the collection or use of online information, to demand a business to comply with their choice to opt out of such collection or use, and to place limits upon the disclosure of information to third-party websites.
Our third amended and restated bylaws designate certain courts as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our third amended and restated bylaws designate certain courts as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could 50 limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
For example, if we finance acquisitions by issuing equity or convertible debt securities or loans, our existing stockholders may be diluted, or we could face constraints related to the terms of, and repayment obligations related to, the incurrence of indebtedness that could affect the market price of our Class A common stock.
For example, if we finance acquisitions by issuing equity or convertible debt securities or loans, our existing stockholders may be diluted, or we could face constraints related to the terms of, and repayment 35 obligations related to, the incurrence of indebtedness that could affect the market price of our Class A common stock.
If we or any of our third-party vendors were to experience an interruption, delay, or outage in service and availability, we may be unable to process new and renewals of subscriptions and our ability to 27 process such subscription and credit card payments would be delayed while we activate an alternative billing platform.
If we or any of our third-party vendors were to experience an interruption, delay, or outage in service and availability, we may be unable to process new and renewals of subscriptions and our ability to process such subscription and credit card payments would be delayed while we activate an alternative billing platform.
We may also be contractually 25 required to notify certain customers in the event of a cybersecurity incident or data breach pursuant to the applicable customer agreement. These mandatory disclosures regarding a cybersecurity incident or data breach may lead to negative publicity and may cause our customers to lose confidence in the effectiveness of our data security measures.
We may also be contractually required to notify certain customers in the event of a cybersecurity incident or data breach pursuant to the applicable customer agreement. These mandatory disclosures regarding a cybersecurity incident or data breach may lead to negative publicity and may cause our customers to lose confidence in the effectiveness of our data security measures.
Changes in our executive management team may also cause disruptions in, and harm to, our business. If we fail to develop effective succession plans for our senior management team, and to identify, recruit, onboard, train and integrate strategic hires, our business, operating results, and financial condition could be adversely affected.
Changes in our executive management team may also cause disruptions in, and harm to, our business. If we fail to develop effective succession plans for our senior management team, and to identify, recruit, onboard, train and 26 integrate strategic hires, our business, operating results, and financial condition could be adversely affected.
As our paying customer base continues to expand to include more large enterprise customers, our sales expenses may increase, sales cycles may lengthen and become less predictable, and we may see a greater number of paying customers with longer terms and extended payment terms which, in turn, may increase our paying customer acquisition costs, increase our credit risk, and may in other ways adversely affect our financial results. 18 The market in which we operate is intensely competitive, and if we do not innovate and compete effectively, our ability to attract and retain customers could be harmed, which would negatively impact our business and operating results.
As our paying customer base continues to expand to include more large enterprise customers, our sales expenses may increase, sales cycles may lengthen and become less predictable, and we may see a greater number of paying customers with longer terms and extended payment terms which, in turn, may increase our paying customer acquisition costs, increase our credit risk, and may in other ways adversely affect our financial results. 23 The market in which we operate is intensely competitive, and if we do not innovate and compete effectively, our ability to attract and retain customers could be harmed, which would negatively impact our business and operating results.
If we are not able to obtain data, including third-party data, on commercially reasonable terms, if data providers stop making their data available to us, if there are changes or limits in how we may use such data, if currently publicly available data ceases to be available, if we are limited in our ability to collect data from consumers, or if our competitors are able to purchase such data on better terms, the functionality of our platform and our ability to compete could be harmed. 20 Risks Related to Our Business Our ability to introduce new products, tools, and add-ons is dependent on adequate research and development resources.
If we are not able to obtain data, including third-party data, on commercially reasonable terms, if data providers stop making their data available to us, if there are changes or limits in how we may use such data, if currently publicly available data ceases to be available, if we are limited in our ability to collect data from consumers, or if our competitors are able to purchase such data on better terms, the functionality of our platform and our ability to compete could be harmed. 25 Risks Related to Our Business Our ability to introduce new products, tools, and add-ons is dependent on adequate research and development resources.
With consent from our customers, we obtain personal, confidential, and other customer data from our customers’ websites, social media accounts, and Google Analytics’ accounts to operate certain functionality on our platform or within products that we offer.
With consent from our customers, we obtain personal, confidential, and other customer data from our customers’ websites, social media accounts, and Google Analytics’ accounts to operate certain 29 functionality on our platform or within products that we offer.
For example, a paying customer subscribing to our SEO solution through a “Business” subscription may downgrade to the “Guru” subscription if they do not deem the additional features and functionality of “Business” worth the incremental costs.
For example, a paying customer subscribing to our 22 SEO solution through a “Business” subscription may downgrade to the “Guru” subscription if they do not deem the additional features and functionality of “Business” worth the incremental costs.
It is possible that third parties may bring claims against us, alleging non-compliance with such requirements, and seeking damages, seeking to prevent us from using certain data, or seeking to prevent us from using data in particular ways.
It is possible that third parties may bring claims against us, alleging non-compliance with such requirements, and seeking 40 damages, seeking to prevent us from using certain data, or seeking to prevent us from using data in particular ways.
We may be forced to engage in price-cutting initiatives, offer other discounts, limit or curtail price increases, or increase our sales and marketing and other expenses to attract and retain free and paying customers in response to competitive pressures, any of which would harm our business and operating results. 19 We have incurred losses in the past and may not consistently maintain profitability in the future.
We may be forced to engage in price-cutting initiatives, offer other discounts, limit or curtail price increases, or increase our sales and marketing and other expenses to attract and retain free and paying customers in response to competitive pressures, any of which would harm our business and operating results. 24 We have incurred losses in the past and may not consistently maintain profitability in the future.
We have previously identified, and may in the future identify, customer accounts for our platform and products that may originate from, or are intended to benefit, persons in countries that are subject to U.S. embargoes, including transactions or events in or relating to Cuba, Iran, North Korea, Syria, the Crimea 37 region of Ukraine and the so-called Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine.
We have previously identified, and may in the future identify, customer accounts for our platform and products that may originate from, or are intended to benefit, persons in countries that are subject to U.S. embargoes, including transactions or events in or relating to Cuba, Iran, North Korea, the Crimea region of Ukraine and the so-called Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine.
Although our customer agreements generally provide for auto-renewal of subscriptions, our paying customers have no obligation to renew their premium subscriptions if they provide proper notice of their desire not to renew, and we cannot guarantee that they will renew their premium subscriptions for the same or longer terms, the same or a greater number of user licenses or products and add-ons, or at all.
Although our customer agreements generally provide for auto-renewal of subscriptions, our paying customers have no obligation to renew their premium subscriptions if they provide proper notice of their desire not to renew, and we cannot guarantee that they will renew their premium subscriptions for the same or longer terms, the same or a greater number of user licenses, other entitlements, or products and add-ons, or at all.
Such claims could potentially adversely affect our ability to provide our services and the 35 current level of functionality of our platform in such circumstances, which could adversely affect our results of operations.
Such claims could potentially adversely affect our ability to provide our services and the current level of functionality of our platform in such circumstances, which could adversely affect our results of operations.
Changes by search engines, social networking sites, and other third-party services to their underlying technology configurations or policies regarding the use of their platforms and/or technologies for commercial purposes, including anti-spam policies, may limit the efficacy of certain of our products, tools, and add-ons and as a result, our business may suffer.
Changes by search engines, artificial intelligence services, social networking sites, and other third-party services to their underlying technology configurations or policies regarding the use of their platforms and/or technologies for commercial purposes, including anti-spam policies, may limit the efficacy of certain of our products, tools, and add-ons and as a result, our business may suffer.
The use of artificial intelligence and other new and evolving technologies in our offerings may result in spending material resources and presents risks and challenges that can impact our 26 business including by posing security and other risks to our confidential information, proprietary information and personal information, and as a result we may be exposed to reputational harm and liability.
The use of artificial intelligence and other new and evolving technologies in our offerings and operations may result in spending material resources and presents risks and challenges that can impact our business including by posing security and other risks to our confidential information, proprietary information and personal information, and as a result we may be exposed to reputational harm and liability.
Further, competitors, foreign governments, foreign government-backed 40 actors, criminals, or other third parties may gain unauthorized access to our proprietary information and technology. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our technology and intellectual property or claiming that we infringe upon or misappropriate their technology and intellectual property.
Further, competitors, foreign governments, foreign government-backed actors, criminals, or other third parties may gain unauthorized access to our proprietary information and technology. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing 45 upon or misappropriating our technology and intellectual property or claiming that we infringe upon or misappropriate their technology and intellectual property.
Outside of the EU and the United States, other countries such as Peru, China, South Korea and Thailand have adopted AI related laws and regulations, and many other countries such as Canada, the United Kingdom and Brazil have draft laws, regulations and guidance in various stages of drafting, introduction and adoption.
Outside of the EU and the United States, other countries such as Peru, China, South Korea and Thailand have adopted AI related laws and regulations, and many other countries such as United Kingdom, Brazil and the Philippines, have draft laws, regulations and guidance in various stages of drafting, introduction and adoption.
Such disputes could also disrupt our platform or products, adversely affecting our customer satisfaction and ability to attract customers. 41 Our use of “open source” software could negatively affect our ability to offer and sell access to our platform and products, and subject us to possible litigation.
Such disputes could also disrupt our platform or products, adversely affecting our customer satisfaction and ability to attract customers. 46 Our use of “open source” software could negatively affect our ability to offer and sell access to our platform and products, and subject us to possible litigation.
As we continue to see increased economic uncertainty in the United States and abroad, we may see customers, especially SMBs that are disproportionately impacted by these conditions, reduce or stop spending on our products. Specifically, most of our paying customers are on month-to-month premium subscriptions that can be canceled at any time.
As we 34 continue to see increased economic uncertainty in the United States and abroad, we have seen and may continue to see customers, especially SMBs that are disproportionately impacted by these conditions, reduce or stop spending on our products. Specifically, most of our paying customers are on month-to-month premium subscriptions that can be canceled at any time.
Additionally, we expect to see increasing government and supranational regulation related to artificial intelligence use and ethics, which may also significantly increase the burden and cost of research, development and compliance in this area, which may give rise to increased contractual and technical requirements from our customers thereby impacting the time required to, and our ability to, acquire and retain customers.
Additionally, we expect to see increasing government and supranational regulation related to AI use and ethics, which may also significantly increase the burden and cost of research, development and compliance in this area, which may give rise to increased contractual and technical requirements from our customers thereby impacting the time required to, and our ability to, acquire and retain customers.
The market price of our Class A common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our results of operations; • variance in our results of operations from the expectations of market analysts; • announcements by us or our competitors of significant business developments, changes in service provider relationships, acquisitions or expansion plans; • changes in the prices of our products; 42 • our involvement in litigation; • our sale of Class A common stock or other securities in the future; • market conditions in our industry; • changes in key personnel; • the trading volume of our Class A common stock; • changes in the estimation of the future size and growth rate of our markets; and • general economic and market conditions.
The market price of our Class A common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • the completion of the proposed Merger; • actual or anticipated fluctuations in our results of operations; • variance in our results of operations from the expectations of market analysts; • announcements by us or our competitors of significant business developments, changes in service provider relationships, acquisitions or expansion plans; 47 • changes in the prices of our products; • our involvement in litigation; • our sale of Class A common stock or other securities in the future; • market conditions in our industry; • changes in key personnel; • the trading volume of our Class A common stock; • changes in the estimation of the future size and growth rate of our markets; and • general economic and market conditions.
The EU AI Act imposes significant obligations on providers and deployers of high risk artificial intelligence systems, and encourages providers and deployers of artificial intelligence systems to account for EU ethical principles in their development and use of these systems.
The EU AI Act imposes significant obligations on providers and deployers of high risk AI systems, and encourages providers and deployers of AI systems to account for EU ethical principles in their development and use of these systems.
Additionally, increased adoption of artificial intelligence for use and responses to internet search queries may result in significant changes to how search engines rank, return, and display responses.
Additionally, increased adoption of artificial intelligence (or “AI”) for use and responses to internet search queries may result in significant changes to how search engines rank, return, and display responses.
Such risks include but are not limited to the following: • geopolitical and economic instability in and impacting the localities where we have foreign operations; • rising inflation impacting the stability of our workforce and foreign operations; • military conflicts impacting the localities where we have foreign operations; • limited protection for, and vulnerability to theft of, our intellectual property rights, including our trade secrets; 28 • compliance with local laws and regulations, and unanticipated changes in local laws and regulations, including tax laws and regulations; • trade and foreign exchange restrictions and higher tariffs; • the complexity of managing international trade sanctions and export restrictions imposed by the United States government and other jurisdictions in which we have foreign operations; • fluctuations in foreign currency exchange rates which may make our premium subscriptions more expensive for international paying customers and which may increase our expenses for employee compensation and other operating expenses that are paid in currencies other than U.S. dollars; • difficulties in staffing international operations; • changes in immigration policies which may impact our ability to hire personnel; • differing employment practices, laws, and labor relations; and • regional health issues and the impact of public health epidemics and pandemics on employees and the global economy.
Such risks include but are not limited to the following: • geopolitical and economic instability in and impacting the localities where we have foreign operations; 33 • rising inflation impacting the stability of our workforce and foreign operations; • military conflicts impacting the localities where we have foreign operations; • limited protection for, and vulnerability to theft of, our intellectual property rights, including our trade secrets; • compliance with local laws and regulations, and unanticipated changes in local laws and regulations, including tax laws and regulations; • trade and foreign exchange restrictions and higher tariffs; • the complexity of managing international trade sanctions and export restrictions imposed by the United States government and other jurisdictions in which we have foreign operations; • fluctuations in foreign currency exchange rates – in particular, the appreciation of the Euro versus the U.S. dollar – which have made our premium subscriptions more expensive for international paying customers and which have increased our expenses for employee compensation and other operating expenses that are paid in Euro and other currencies other than U.S. dollars; • difficulties in staffing international operations; • changes in immigration policies which may impact our ability to hire personnel; • differing employment practices, laws, and labor relations; and • regional health issues and the impact of public health epidemics and pandemics on employees and the global economy.
Additionally, for other company data and for certain of our other products, we also use Google Cloud and AWS locations elsewhere in the United States and western Europe, and a data center located in Poland.
Additionally, for other company data and for certain of our other products, we also use Google Cloud and AWS locations elsewhere in the United States and western Europe, co-location centers in the United States and Europe, and a data center located in Poland.
For example, we believe recent macro-economic pressures affecting some customers in the lower end of our market have contributed to decreased renewal rates and/or lower spending among such customers, impacting our financial results. Our business and operating results will be adversely affected if our paying customers do not renew or downgrade their premium subscriptions.
For example, we believe recent macro-economic pressures affecting some customers in the lower end of our market have contributed to decreased renewal rates and/or lower spending among such customers, which has negatively impacted our financial results. Our business and operating results will be adversely affected if our paying customers do not renew or downgrade their premium subscriptions.
Approximately 55% and 52% of our revenue for the years ended December 31, 2024 and 2023, respectively, was generated from sales to paying customers located outside the United States including indirect sales through our resellers outside of the United States. Additionally, approximately 30% of our expenses are denominated in Euros.
Approximately 51% and 55% of our revenue for the years ended December 31, 2025 and 2024, respectively, was generated from sales to paying customers located outside the United States including indirect sales through our resellers outside of the United States. Additionally, approximately 30% of our expenses are denominated in Euros.
Through executive and legislative action, the federal government has also taken steps to restrict data transactions involving certain sensitive data categories with persons affiliated with China, Russia, and other countries of concern. In addition, certain state laws govern privacy and security of personal information.
Through executive and legislative action, the federal government has also taken steps to restrict data transactions involving certain sensitive data categories with persons affiliated with China, Russia, and other countries of concern. At the state level, certain state laws govern privacy and security of personal information.
We continue to build and integrate artificial intelligence into our platform and products, and this innovation presents risks and challenges that could affect its adoption, and therefore our business.
We continue to build and integrate artificial intelligence into our platform, products and throughout our operations, and this innovation presents risks and challenges that could affect its adoption, and therefore 31 our business.
These claims, lawsuits, and proceedings could include labor and employment, wage and hour, income tax, commercial, data privacy, intellectual property, antitrust, alleged securities law violations or other investor claims, and other matters. The number and significance of these potential claims and disputes may increase as our business expands.
In addition to the Lawsuits described above, these claims, lawsuits, and proceedings could include labor and employment, wage and hour, income tax, commercial, data privacy, intellectual property, antitrust, alleged securities law violations or other investor claims, and other matters. The number and significance of these potential claims and disputes may increase as our business expands.
Our Class B common stock has ten votes per share, and our Class A common stock has one vote per share. As of December 31, 2024, our directors, executive officers, and their affiliates, held in the aggregate 79% of the voting power of our capital stock.
Our Class B common stock has ten votes per share, and our Class A common stock has one vote per share. As of December 31, 2025, our directors, executive officers, and their affiliates, held in the aggregate 78% of the voting power of our capital stock.
The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to the completion of our IPO, including our directors, executive officers, and their affiliates, who as of December 31, 2024 held in the 43 aggregate 79% of the voting power of our capital stock, which will limit your ability to influence corporate matters.
The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to the completion of our IPO, including our directors, executive officers, and their affiliates, who as of December 31, 2025 held in the 48 aggregate 78% of the voting power of our capital stock, which will limit your ability to influence corporate matters.
Our strategy is to sell premium subscriptions of our platform, including our Enterprise SEO solution, to paying customers of all sizes, from sole proprietors, to SMBs, to large enterprise customers.
Our strategy is to sell premium subscriptions of our platform, including our Enterprise solutions, to paying customers of all sizes, from sole proprietors, to SMBs, to large enterprise customers.
We have a limited trading history. Since shares of our Class A common stock were sold in our initial public offering on March 24, 2021 at a price of $14.00 per share, our stock price has ranged from $7.16 to $32.48 through December 31, 2024.
We have a limited trading history. Since shares of our Class A common stock were sold in our initial public offering on March 24, 2021 at a price of $14.00 per share, our stock price has ranged from $6.56 to $32.48 through December 31, 2025.
Following the UK’s exit from the EU, or Brexit, there will be increasing scope for divergence in application, interpretation and enforcement of the data protection laws between these territories.
Following the UK’s exit from the EU or Brexit, there has been increasing scope for divergence in application, interpretation and enforcement of the data protection laws between these territories.
We also could become subject to investigations by the New York Stock Exchange (“NYSE”), the SEC or other regulatory authorities. Unanticipated changes in our effective tax rate and additional tax liabilities may impact our financial results. We are subject to income taxes in the United States and various jurisdictions outside of the United States.
We also could become subject to investigations by the NYSE, the SEC or other regulatory authorities. Unanticipated changes in our effective tax rate and additional tax liabilities may impact our financial results. We are subject to income taxes in the United States and various jurisdictions outside of the United States.
Investors seeking cash dividends should not purchase our Class A common stock. General Risk Factors Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current Board, and limit the market price of our Class A common stock.
General Risk Factors Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current Board, and limit the market price of our Class A common stock.
Many foreign jurisdictions in which we do business, including the European Union (“EU”), European Economic Area (“EEA”), United Kingdom (“UK”), Canada, Australia, Japan and others have laws and regulations addressing the collection and use of personal data obtained in connection with their territories, which are more restrictive in certain respects than those in the U.S.
Many foreign jurisdictions in which we do business, including the EU, European Economic Area (“EEA”), UK, Canada, Australia, Japan and others have laws and regulations addressing the collection and use of personal data obtained in connection with their territories, which are more restrictive in certain 39 respects than those in the U.S.
While we operate as a business-to-business (“B2B”) company whose customers consist of other businesses looking to utilize our platform and products for search engine optimization, content marketing, competitive analysis and other related services, laws and regulations that were historically aimed at protecting consumers only (in the “business-to-consumer” or “B2C” context) may be expanded, or new laws and regulations adopted, to address conversion, renewal and cancellations of subscriptions in the B2B context as well.
While we operate as a business-to-business (“B2B”) company whose customers consist of other businesses looking to utilize our platform and products for search engine optimization, content marketing, competitive analysis and other related services, laws and regulations that were historically aimed at protecting consumers only (in the “business-to-consumer” or “B2C” context) may be expanded, or new laws and regulations adopted, to address conversion, renewal and cancellations of subscriptions in the B2B context as well. 41 We are subject to laws and regulations that govern sending marketing and advertising by electronic means, such as email and telephone.
Any of these factors or events, if not mitigated, could negatively impact us, for example by increasing our labor costs, making it more difficult to acquire and retain talent, creating customer service issues, or requiring us to increase our prices, the result of which could have an adverse effect on our business, results of operations or financial condition. 31 Our business would be adversely affected if our contract workers were classified as employees.
Any of these factors or events, if not mitigated, could negatively impact us, for example by increasing our labor costs, making it more difficult to acquire and retain talent, creating customer service issues, or requiring us to increase our prices, the result of which could have an adverse effect on our business, results of operations or financial condition.
We cannot provide assurances that we will effectively manage this transition. While we will strive to make this transition as smooth as possible, the loss or transition in roles of one or more of our executive officers or key 21 employees might significantly delay or prevent the achievement of our business objective and could materially harm our business.
While we will strive to make transitions as smooth as possible, the loss or transition in roles of one or more of our executive officers or key employees might significantly delay or prevent the achievement of our business objective and could materially harm our business.
The CCPA (as amended by the California Privacy Rights Act (“CPRA”)), for example, broadly defines personal information and provides an expansive meaning to activity considered to be a sale of personal information, requires covered companies to provide specific disclosures to California residents, and gives California residents expanded privacy rights and protections, including the right to opt out of the sale or sharing of personal information.
The CCPA, for example, broadly defines personal information and provides an expansive meaning to activity considered to be a sale of personal information, requires covered companies to provide specific disclosures to California residents, and gives California residents expanded privacy rights and protections, including the right to opt out of the sale or sharing of personal information and additional protections with respect to certain categories of sensitive information.
We generated a net loss of $33.8 million for the year ended December 31, 2022, and net income of $1.0 million and $7.4 million for the years ended December 31, 2023 and 2024, respectively. We had an accumulated deficit of $63.8 million as of December 31, 2024.
We generated net income of $1.0 million and $7.4 million for the years ended December 31, 2023 and 2024, respectively, and a net loss of $19.5 million for the year ended December 31, 2025. We had an accumulated deficit of $82.7 million as of December 31, 2025.
Undetected material weaknesses in our internal controls over financial reporting could lead to restatements of our financial statements and require us to incur the expense of remediation. 38 Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, which may result in a breach of the covenants under future financing arrangements.
Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, which may result in a breach of the covenants under future financing arrangements.
We may also be subject to additional liability risks for failing to disclose data breaches or other cybersecurity incidents under state data breach notification laws or under the private right of action granted to individuals under certain data privacy laws for actions arising from certain data breaches or cybersecurity incidents, such as the California Consumer Privacy Act (“CCPA”) (which is further discussed below in this “Risk Factors” section).
We may also be subject to additional liability risks for failing to disclose data breaches or other cybersecurity incidents under state data breach notification laws or under the private right of action granted to individuals under certain data privacy laws for actions arising from certain data breaches or cybersecurity incidents, such as the California Consumer Privacy Act (as amended by the California Privacy Rights Act, the “CCPA”).
The conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term. We do not expect to declare any dividends in the foreseeable future.
The conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term.
We do not anticipate declaring any cash dividends to holders of our common stock in the foreseeable future. Consequently, investors may need to rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
Consequently, investors may need to rely on sales of their Class A common stock after price 49 appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our Class A common stock.
Federal, state, and provincial regulators and industry groups may also consider and implement from time to time new privacy and security requirements that apply to our business, such as the long established Massachusetts data security regulations and the New York Stop Hacks and Improve Electronic Data Act, both of which establish administrative, technical, and physical data security requirements for companies, and permit civil penalties for each violation.
Any cybersecurity incident or data breach, whether actual or perceived, may harm our reputation, and we could lose customers or fail to acquire new customers. 30 Federal, state, and provincial regulators and industry groups may also consider and implement from time to time new privacy and security requirements that apply to our business, such as the long established Massachusetts data security regulations and the New York Stop Hacks and Improve Electronic Data Act, both of which establish administrative, technical, and physical data security requirements for companies, and permit civil penalties for each violation.
For example, the EU’s Artificial Intelligence Act (“EU AI Act”) — the world’s first comprehensive AI law — entered into force in August 2024 and most provisions will become effective on August 2, 2026.
For example, the EU’s Artificial Intelligence Act (“EU AI Act”) — the world’s first comprehensive AI law — entered into force in August 2024, with some provisions effective in 2025, and most other provisions scheduled to become effective in August 2026.
Our online visibility management SaaS platform is designed to help our customers connect with consumers across a variety of digital channels, search engines, social networking sites, and other third-party services. These third-party services may adapt and change their strategies and policies over time. Search engines typically provide two types of search results, organic (i.e., non-paid) and purchased listings.
Our online visibility management SaaS platform is designed to help our customers connect with consumers across a variety of digital channels, search engines, artificial intelligence services, social networking sites, and other third-party services. These third-party services may adapt and change their strategies and policies over time.
This lack of clarity on future UK laws and regulations and their interaction with those of the EEA could add legal risk, uncertainty, complexity, and cost to our handling of European personal data and our privacy and security compliance programs, and could require us to implement different compliance measures for the UK and EEA.
The interaction of the UK’s revised data protection regime with those of the EEA could add legal risk, uncertainty, complexity, and cost to our handling of European personal data and our privacy and security compliance programs, and could require us to implement different compliance measures for the UK and EEA.
We may also be subject to additional tax liabilities and penalties due to changes in non-income based taxes resulting from changes in federal, state, or international tax laws, changes in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, results of tax examinations, settlements or judicial decisions, changes in accounting principles, and changes to the business operations, including acquisitions, as well as the evaluation of new information that results in a change to a tax position taken in a prior period.
As our brand becomes increasingly recognizable both domestically and internationally, our tax planning structure and corresponding profile may be subject to increased scrutiny, and if we are perceived negatively, we may experience brand or reputational harm. 44 We may also be subject to additional tax liabilities and penalties due to changes in non-income based taxes resulting from changes in federal, state, or international tax laws, changes in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, results of tax examinations, settlements or judicial decisions, changes in accounting principles, and changes to the business operations, including acquisitions, as well as the evaluation of new information that results in a change to a tax position taken in a prior period.
We plan to continue to invest in our research and development, and sales and marketing efforts, and we anticipate that our operating expenses will continue to increase as we scale our business and expand our operations. We also expect our general and administrative expenses to increase as a result of our growth and operating as a public company.
We plan to continue to invest in our research and development, and sales and marketing efforts, and we anticipate that our operating expenses will continue to increase as we scale our business and expand our operations.
If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be able to, among other things: • develop new features, integrations, capabilities, and enhancements; • continue to expand our product and development, and sales and marketing teams; • hire, train, and retain employees; • respond to competitive pressures or unanticipated working capital requirements; or • pursue acquisition opportunities.
If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be able to, among other things: • develop new features, integrations, capabilities, and enhancements; • continue to expand our product and development, and sales and marketing teams; • hire, train, and retain employees; • respond to competitive pressures or unanticipated working capital requirements; or • pursue acquisition opportunities. 36 Increases in labor costs, including wages, and an overall tightening of the labor market, could adversely affect our business, results of operations or financial condition.
From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business.
From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. We cannot provide assurances that we will effectively manage such transitions.
Any change to the policies of the third-party services with which our products, tools, and add-ons integrate or interact, or with which our products are intended to be used, including any anti-spam policies, or any actions taken by these third-party service providers under their policies could adversely impact the efficacy and perceived value of our products, tools, and add-ons, and as a result, our business may be harmed. 22 If third-party applications change such that we do not or cannot maintain the compatibility of our platform with these applications or if we fail to integrate with or provide third-party applications that our customers desire to use with our products, demand for our solutions and platform could decline.
Any change to the policies of the third-party services with which our products, tools, and add-ons integrate or interact, or with which our products are intended to be used, including any anti-spam policies, or any actions taken by these third-party service providers under their policies could adversely impact the efficacy and perceived value of our products, tools, and add-ons, and as a result, our business may be harmed.
Risks Related to the Regulatory Framework that Governs Us If the use of cookies or other tracking technologies becomes subject to unfavorable legislation or regulation, is restricted by internet users or other third parties or is blocked or limited by users or by technical changes on end users’ devices, our activities could be restricted including, our ability to attract new customers, convert traffic to paying customers and to develop and provide certain products could be diminished or eliminated.
The imposition by national, state or local governments of sales tax collection obligations on out-of-state sellers could also create additional administrative burdens for us and decrease our future sales, which could adversely affect our business and operating results. 37 Risks Related to the Regulatory Framework that Governs Us If the use of cookies or other tracking technologies becomes subject to unfavorable legislation or regulation, is restricted by internet users or other third parties or is blocked or limited by users or by technical changes on end users’ devices, our activities could be restricted including, our ability to attract new customers, convert traffic to paying customers and to develop and provide certain products could be diminished or eliminated.
If the costs for such services increase due to vendor consolidation, regulation, contract renegotiation, or otherwise, we may not be able to increase the fees for our platform or products to cover the changes, which would have a negative impact on our results of operations. 24 If the security of the confidential information or personal information of our customers on our platform is breached or otherwise subjected to unauthorized access or disclosure, our reputation may be harmed, and we may be exposed to significant liability.
If the costs for such services increase due to vendor consolidation, regulation, contract renegotiation, or otherwise, we may not be able to increase the fees for our platform or products to cover the changes, which would have a negative impact on our results of operations.
Most Material Risks to Us We derive, and expect to continue to derive, substantially all of our revenue and cash flows from our paying customers with premium subscriptions, and our business and operating results may be negatively affected if our paying customers do not renew their premium subscriptions.
There can be no assurance regarding the outcome of any potential future lawsuit or the costs associated with defending against any such potential future lawsuit Other Most Material Risks to Us We derive, and expect to continue to derive, substantially all of our revenue and cash flows from our paying customers with premium subscriptions, and our business and operating results may be negatively affected if our paying customers do not renew their premium subscriptions.
If passed, the final version of the bill may have the effect of further altering the similarities between the UK and EEA data protection regimes and threaten the UK adequacy decision from the EU Commission allowing the free flow of personal data from the UK to the EEA, which may lead to additional compliance costs and could increase our overall risk.
For example, the UK passed the Data (Use and Access) Act in June 2025, which alters the similarities between the UK and EEA data protection regimes and may threaten the UK adequacy decision from the EU Commission allowing the free flow of personal data from the UK to the EEA, which may lead to additional compliance costs and could increase our overall risk.
The availability of this data may be limited by numerous potential factors, including government legislation or regulation restricting the use of cookies for certain purposes, such as retargeting, browser limitations on the collection or use of cookies, or internet users deleting or blocking cookies on their web browsers or on our website. 32 Our ability, like those of other technology companies, to collect, augment, analyze, use, and share information collected through the use of third-party cookies for online behavioral advertising is governed by U.S. and foreign laws and regulations which change from time to time, such as those regulating the level of consumer notice and consent required before a company can employ cookies to collect data about interactions with users online.
Our ability, like those of other technology companies, to collect, augment, analyze, use, and share information collected through the use of third-party cookies for online behavioral advertising is governed by U.S. and foreign laws and regulations which change from time to time, such as those regulating the level of consumer notice and consent required before a company can employ cookies to collect data about interactions with users online.
The classification of contractors is being challenged across many industries by courts, by legislatures, by government agencies in the United States and abroad, as well as by the contractors themselves.
Our business would be adversely affected if our contract workers were classified as employees. The classification of contractors is being challenged across many industries by courts, by legislatures, by government agencies in the United States and abroad, as well as by the contractors themselves.
Organic search results are determined and organized solely by automated criteria set by the search engine, and a ranking level cannot be purchased.
Search engines typically provide two types of search results, organic (i.e., non-paid) and purchased listings. Organic search results are determined and organized solely by automated criteria set by the search engine, and a ranking level cannot be purchased.
We are exposed to risks associated with payment processing and any disruption to such processing systems could adversely affect our business and results of operations. We significantly rely on our own billing systems to manage our subscriptions and billing frequencies, and we use third-party subscription management and payment processing platforms for some of our products.
We significantly rely on our own billing systems to manage our subscriptions and billing frequencies, and we use third-party subscription management and payment processing platforms for some of our products.
Furthermore, the spending patterns of the SMBs that make up a portion of our paying customer base are difficult to predict and are typically more susceptible to the adverse effects of economic fluctuations. 29 Adverse changes in the economic environment or business failures of our SMB customers may have a greater impact on us than our competitors who do not focus on SMBs to the extent that we do.
Adverse changes in the economic environment or business failures of our SMB customers may have a greater impact on us than our competitors who do not focus on SMBs to the extent that we do.
There also could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our consolidated financial statements. Confidence in the reliability of our consolidated financial statements also could suffer if we or our independent registered public accounting firm report a material weakness in our internal controls over financial reporting.
Confidence in the reliability of our consolidated financial statements also could suffer if we or our independent registered public accounting firm report a material weakness in our internal controls over financial reporting. This could materially adversely affect us and lead to a decline in the market price of our Class A common stock.
Additionally, the EU Commission is developing a Code of Practice for providers of general-purpose artificial intelligence (“GPAI”) models, which will address critical areas such as transparency, copyright-related rules and risk management, which Code of Practice is expected to be finalized by April 2025 and enter into application in August 2025.
Additionally, the EU Commission developed and released a Code of Practice for providers of general-purpose artificial intelligence (“GPAI”) models, which addresses critical areas such as transparency, copyright-related rules and risk management.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese processes include internal semi-annual technical audits of existing cybersecurity controls, which are informed by industry standards and frameworks including, but not limited to, the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and the Center for Internal Controls (CIS) critical security controls. These audits are informed by interviews with Company stakeholders to inform cybersecurity priorities.
Biggest changeThese processes include internal semi-annual technical audits of existing cybersecurity controls, which are informed by industry standards and frameworks including, but not limited to, the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and 51 the Center for Internal Controls (CIS) critical security controls. These audits are informed by interviews with Company stakeholders to inform cybersecurity priorities.
Risk Factors. 46 Governance Related to Cybersecurity Risks Our cybersecurity program is directed by our Chief Information Officer (“CIO”), along with the Senior Vice President ("SVP") of Security, who oversees our Cyber Resilience Department.
Risk Factors. Governance Related to Cybersecurity Risks Our cybersecurity program is directed by our Chief Information Officer (“CIO”), along with the Senior Vice President ("SVP") of Security, who oversees our Cyber Resilience Department.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe leases expire at various dates between May 31, 2025 and December 31, 2028, respectively. We rent serviced office spaces with 25 or more desks in Belgrade, Serbia and Berlin, Germany. The service office contracts have expirations during 2026 and 2027, respectively. We believe that these facilities are generally suitable to meet our current needs.
Biggest changeWe rent serviced office spaces with 25 or more desks in Belgrade, Serbia, Munich, Germany, and Berlin, Germany. The service office contracts expire at various dates through 2027. We believe that these facilities are generally suitable to meet our current needs. We lease space in data centers in the US and Poland.
We have excess capacity built into our primary data center leases to accommodate infrastructure growth within the lease periods should we need to add more space or power to our existing footprint. See Note 4 “Leases” to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on our data centers. 47
We have excess capacity built into our primary data center leases to accommodate infrastructure growth within the lease periods should we need to add more space or power to our existing footprint. See Note 4 “Leases” to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on our data centers. 53
We lease space in data centers in the US and Poland. We also rely on third-party owned and managed virtual cloud environments, including locations in the US and in western Europe. Our data center leases expire between fiscal years 2026 and 2027.
We also rely on third-party owned and managed virtual cloud environments, including locations in the US and in western Europe. Our data center leases expire between fiscal years 2027 and 2028.
Additionally, we lease 39,877 square feet of office space in Prague, Czech Republic, 19,763 square feet of office space in Barcelona, Spain, 16,921 square feet of office space in Amsterdam, Netherlands, 8,890 square feet of office space in Limassol, Cyprus, 7,287 square feet of office space in Munich, Germany, and 4,365 square feet of office space in Dallas, Texas.
Additionally, we lease 15,950 square feet of office space in Prague, Czech Republic, 24,703 square feet of office space in Barcelona, Spain, 16,921 square feet of office space in Amsterdam, Netherlands, 3,555 52 square feet of office space in Limassol, Cyprus, and 5,022 square feet of office space in Dallas, Texas. The leases expire at various dates through 2030.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not applicable. 48 Part II
Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not applicable. 54 Part II
Added
For example, in October 2025 the Company became party to stockholder class action and derivative complaint regarding the 2025 Repurchase Program and the Company became subject to the Lawsuits described in the Risk Factors.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 48 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 49 Item 6. Reserved 50 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 51 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 65 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 54 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 55 Item 6. Reserved 56 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 57 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 74 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThere has been no material change in the planned use of proceeds from the IPO as described in the Prospectus. We invested the funds received in accordance with our Board approved investment policy, which provides for investments in obligations of the U.S. and foreign governments, money market instruments, registered money market funds, corporate and municipal bonds.
Biggest changeThere has been no material change in the use of proceeds from the IPO as described in our final prospectus.
Our Class B common stock is neither listed nor traded. Stockholders As of February 21, 2025, we had 5 holders of record of our Class A common stock and 5 holders of record of our Class B common stock.
Our Class B common stock is neither listed nor traded. Stockholders As of February 24, 2026, we had 7 holders of record of our Class A common stock and 4 holders of record of our Class B common stock.
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As of December 31, 2025, the Company has utilized the net proceeds from its initial public offering for working capital and general corporate purposes, including investments in sales and marketing and research and development, in accordance with the intended use described in the Prospectus.
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Issuer Purchases of Equity Securities In August 2025, we announced the 2025 Repurchase Program under which we are authorized, but not obligated, to purchase up to $150.0 million of our outstanding Class A common stock from time to 55 time on the open market (including pursuant to Rule 10b5-1 trading plans), through privately negotiated transactions, or other available legally permissible means.
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Our 2025 Repurchase Program does not have a time limit, does not obligate the Company to acquire a specified number of shares, and may be suspended, modified, or terminated at any time without prior notice, subject to the discretion of the Company’s management.
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During both the three months and year ended December 31, 2025, there were no repurchases of Class A common stock under the 2025 Repurchase Plan, and no such repurchases are planned prior to the closing of the Merger.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the Year Ended December 31, 2024 2023 (in thousands) Revenue $ 376,815 $ 307,675 Cost of revenue (1) 65,477 52,327 Gross profit 311,338 255,348 Operating expenses Sales and marketing (1) 144,340 126,871 Research and development (1) 80,080 57,442 General and administrative (1) 78,610 77,410 Exit Costs — 1,292 Total operating expenses 303,030 263,015 Income (loss) from operations 8,308 (7,667) Other income, net 12,094 12,313 Income before income taxes 20,402 4,646 Provision for income taxes 13,027 3,696 Net income 7,375 950 Net loss attributable to noncontrolling interest in consolidated subsidiaries (861) — Net income attributable to Semrush Holdings, Inc. $ 8,236 $ 950 (1) Includes stock-based compensation expense as follows: For the Year Ended December 31, 2024 2023 (in thousands) Cost of revenue $ 239 $ 130 Sales and marketing 4,742 3,077 Research and development 5,906 2,213 General and administrative 17,112 9,917 Total stock-based compensation $ 27,999 $ 15,337 59 The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated (amounts may not sum due to rounding): For the Year Ended December 31, 2024 2023 Revenue 100 % 100 % Cost of revenue 17 % 17 % Gross profit 83 % 83 % Operating expenses Sales and marketing 38 % 41 % Research and development 21 % 19 % General and administrative 21 % 25 % Exit Costs — % — % Total operating expenses 80 % 85 % Income (loss) from operations 3 % (2) % Other income, net 3 % 4 % Income before income taxes 6 % 2 % Provision for income taxes 3 % 1 % Net income 3 % 1 % Net loss attributable to noncontrolling interest in consolidated subsidiaries — % — % Net income attributable to Semrush Holdings, Inc. 3 % 1 % Comparison of the Years Ended December 31, 2024 and 2023 Revenue O ur revenue during the years end ed December 31, 2024 and 2023 was as follows: For the Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Revenue $ 376,815 307,675 $ 69,140 22 % For the year ended December 31, 2024, revenue increased by $69.1 million.
Biggest changeYear Ended December 31, 2025 2024 (in thousands) Revenue $ 443,644 $ 376,815 Cost of revenue (1) 86,308 65,477 Gross profit 357,336 311,338 Operating expenses Sales and marketing (1) 176,593 144,340 Research and development (1) 97,170 80,080 General and administrative (1) 106,385 78,610 Total operating expenses 380,148 303,030 (Loss) income from operations (22,812) 8,308 Other income, net 12,710 12,094 (Loss) income before income taxes (10,102) 20,402 Provision for income taxes 9,395 13,027 Net (loss) income (19,497) 7,375 Net loss attributable to noncontrolling interest in consolidated subsidiaries (540) (861) Net (loss) income attributable to Semrush Holdings, Inc. $ (18,957) $ 8,236 (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2025 2024 (in thousands) Cost of revenue $ 406 $ 239 Sales and marketing 7,425 4,742 Research and development 14,764 5,906 General and administrative 30,030 17,112 Total stock-based compensation $ 52,625 $ 27,999 67 The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated (amounts may not sum due to rounding): Year Ended December 31, 2025 2024 Revenue 100 % 100 % Cost of revenue 19 % 17 % Gross profit 81 % 83 % Operating expenses Sales and marketing 40 % 38 % Research and development 22 % 21 % General and administrative 24 % 21 % Total operating expenses 86 % 80 % (Loss) income from operations (5) % 3 % Other income, net 3 % 3 % (Loss) income before income taxes (2) % 6 % Provision for income taxes 2 % 3 % Net (loss) income (4) % 3 % Net loss attributable to noncontrolling interest in consolidated subsidiaries — % — % Net (loss) income attributable to Semrush Holdings, Inc.
Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $58.2 million, which resulted from $151.2 million used to purchase short-term investments, $25.9 million used in cash paid for acquisition of assets and businesses, net of cash acquired, $7.9 million in capitalization of internal-use software costs, $7.8 million used in funding of investment loan receivables, $5.4 million used for the purchasing of noncontrolling interest shares, and $3.8 million used in purchases of property and equipment.
Net cash used in investing activities for the year ended December 31, 2024 was $58.2 million, which resulted from $151.2 million used to purchase short-term investments, $25.9 million used in cash paid for acquisition of assets and businesses, net of cash acquired, $7.9 million in capitalization of internal-use software costs, $7.8 million used in funding of investment loan receivables, $5.4 million used for the purchasing of noncontrolling interest shares, and $3.8 million used in purchases of property and 71 equipment.
In addition to these expenses, we incur third-party service provider costs, 56 such as data center and networking expenses, data acquisition costs, allocated overhead costs, depreciation and amortization expense associated with our property and equipment, and amortization of capitalized software development costs and intangible assets acquired through business combinations and asset acquisitions.
In addition to these expenses, we incur third-party service provider costs, such as data center and networking expenses, data acquisition costs, allocated overhead costs, depreciation and amortization expense associated with our property and equipment, and amortization of capitalized software development costs and intangible assets acquired through business combinations and asset acquisitions.
Our general and administrative expenses also include professional fees for external legal, accounting, and other consulting services, insurance, depreciation and amortization expense, as well as allocated overhead. We expect to increase the size of our general and administrative functions to support the growth of our business.
Our general and administrative expenses also include professional fees for external legal, accounting, and other consulting services, 65 insurance, depreciation and amortization expense, as well as allocated overhead. We expect to increase the size of our general and administrative functions to support the growth of our business.
Our subscription arrangements provide customers the right to access our hosted software 64 applications and customers do not have the right to take possession of our software during the hosting arrangement. We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
Our subscription arrangements provide customers the right to access our hosted software applications and customers do not have the right to take possession of our software during the hosting arrangement. We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”).
These expenses are comprised of personnel and related costs, including salaries, benefits, incentive compensation, and stock-based compensation expense related to the management of our data centers, our customer support team, and our customer success team.
These expenses are comprised of personnel and related costs, including salaries, benefits, incentive 64 compensation, and stock-based compensation expense related to the management of our data centers, our customer support team, and our customer success team.
This cash is held in deposits and money market funds. 62 We believe our existing cash, cash equivalents, and short-term investments, will be sufficient to meet our operating and capital needs for at least the next 12 months. Our future capital requirements will depend on many factors, including those set forth under Item 1A. Risk Factors.
This cash is held in deposits and money market funds. 70 We believe our existing cash, cash equivalents, and short-term investments, will be sufficient to meet our operating and capital needs for at least the next 12 months. Our future capital requirements will depend on many factors, including those set forth under Item 1A. Risk Factors.
We recommend that you review the reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure, and the reconciliation of free cash flow margin to net cash provided by operating activities (as a percentage of 55 revenue), the most directly comparable GAAP financial measure, and that you not rely on free cash flow, free cash flow margin or any single financial measure to evaluate our business.
We recommend that you review the reconciliation of free cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measure, and the reconciliation of free cash flow margin to net cash provided by operating activities (as a percentage of 63 revenue), the most directly comparable GAAP financial measure, and that you not rely on free cash flow, free cash flow margin or any single financial measure to evaluate our business.
We expect our cost of revenue to increase in absolute dollars due to expenditures related to the purchase of hardware, data, expansion, and support of our data center operations and customer support/success teams. We have seen improvement in our cost of revenue as a percentage of revenue, and expect it to remain near current levels.
We expect our cost of revenue to increase in absolute dollars due to expenditures related to the purchase of hardware, data, expansion, and support of our data center operations and customer support/success teams. We have seen improvement in our cost of revenue as a percentage of revenue as revenue has increased, and expect it to remain near current levels.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 have been omitted from this Annual Report but can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 7, 2024.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 have been omitted from this Annual Report but can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 3, 2025.
Our subscriptions are generally non-cancellable during the contractual subscription term, however some of our subscription contracts contain a right to a refund if requested within seven days of purchase. Cost of Revenue Cost of revenue primarily consists of expenses related to hosting our platform and products, acquiring data, merchant account fees, and providing support to our customers.
Our subscriptions are generally non-cancellable during the contractual subscription term, however some of our subscription contracts contain a right to a refund if requested within seven days of purchase. Cost of Revenue Cost of revenue primarily consists of expenses related to hosting our platform and products, acquiring data, AI inferencing costs, merchant account fees, and providing support to our customers.
We expect to continue to incur additional expenses as a result of operating as a public company, including costs to 57 comply with rules and regulations applicable to companies listed on a U.S. securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, increases in insurance premiums, investor relations, and professional services.
We expect to continue to incur additional expenses as a result of the proposed Merger, operating as a public company, including costs to comply with rules and regulations applicable to companies listed on a U.S. securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, increases in insurance premiums, investor relations, and professional services.
We have elected the fair value option in respect to the accounting for our convertible debt security and investment receivable investments, allowing for increases and decreases in the fair value of such investments to be recorded to other income, net for each reporting period. Interest expense is related to interest associated with outstanding finance leases.
We have elected the fair value option in respect to the accounting for our convertible debt securities and investment loan receivable investments, allowing for increases and decreases in the fair value of such investments to be recorded to other income, net for each reporting period. Interest expense is related to interest associated with outstanding finance leases.
We plan to increase the dollar amount of our investment in research and development for the foreseeable future as we focus on developing new products, features, and enhancements to our platform.
We plan to increase the dollar amount of our investment in research and development for the foreseeable future as we focus on developing new AI-specific products, features, and enhancements to our platform.
This section of this Annual Report on Form 10-K discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This section of this Annual Report on Form 10-K discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Our recurring subscription model provides significant visibility into our future results and we believe Annual Recurring Revenue (“ARR”) is the best indicator of the scale of our platform and products, while mitigating fluctuations due to seasonality and contract term.
Our recurring subscription model provides significant visibility into our future results and we believe ARR is the best indicator of the scale of our platform and products, while mitigating fluctuations due to seasonality and contract term.
New sales personnel require training and may take several months or more to achieve productivity; as such, the costs we incur in connection with the hiring of new sales personnel in a given period are not typically offset by increased revenue in that period and may not result in new revenue if these sales personnel fail to become productive.
New sales personnel, including our recent investments in Enterprise sales staff, require training and may take several months or more to achieve productivity; as such, the costs we incur in connection with the hiring of new sales personnel in a given period are not typically offset by increased revenue in that period and may not result in new revenue if these sales personnel fail to become productive.
The period-to-period comparison of financial results is not necessarily indicative of future results. Company Overview We are a leading online visibility management SaaS platform, enabling companies globally to identify and reach the right audience in the right context and through the right channels.
The period-to-period comparison of financial results is not necessarily indicative of future results. Company Overview We are a leading online visibility management SaaS platform. We enable companies globally to identify and reach the right audience for their content, in the right context, and through the right channels.
These factors include: Acquiring New Paying Customers We expect increasing demand for third-party online visibility software to accelerate adoption of our platform and products.
These factors include: Acquiring New Paying Customers We expect increasing demand for third-party online visibility software, particularly enterprise and artificial intelligence solutions, to accelerate adoption of our platform and products.
We believe that of our significant accounting policies, which are described in Note 2 “Summary to Significant Accounting Policies” to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity.
Our actual results may differ from these estimates. 72 We believe that of our significant accounting policies, which are described in Note 2 “Summary to Significant Accounting Policies” to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity.
These cash outflows were partially offset by $241.6 million in proceeds from sales and maturities of short-term investments. 63 Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $1.9 million and consisted of $4.1 million in proceeds related to the exercises of stock options; partially offset by $1.6 million in repayment of acquired debt and $0.6 million of cash outflows relating to payments on finance leases.
Net cash provided by financing activities for the year ended December 31, 2024 was $1.9 million and consisted of $4.1 million in proceeds related to the exercises of stock options; partially offset by $1.6 million in repayment of acquired debt and $0.6 million of cash outflows relating to payments on finance leases.
Since our founding in 2008, we have achieved a number of significant milestones, including: • 2010: Surpassed 1,000 customers. • 2015: Surpassed 10,000 customers. • 2016: Launched Semrush Brand and Content Marketing tools. • 2017: Completed our first round of financing and introduced collaboration features, including the ability to add users and share projects and received U.S. and UK search awards for the “Best SEO Software Suite”. • 2018: Completed another round of financing led by Greycroft and e.ventures; surpassed $70 million in ARR; and launched Semrush Local and Semrush Intelligence. • 2019: Surpassed 50,000 customers and $100 million in ARR. • 2020: Received multiple awards, including “Best SEO Software Suite” and “Best Search Software Tool” according to the European Search Awards, our headcount grew to more than 900 employees globally. • 2021 : Completed our IPO and the Follow-On Offering and surpassed $200 million in ARR. • 2022 : Launched our first AI product powered by ChatGPT 1.0. • 2023 : Surpassed $300 million in ARR, 100,000 paying customers, and 1,000,000 active free customers. • 2024 : Surpassed $400 million in ARR and launched the general availability of the Enterprise SEO solution. 51 Key Factors Affecting Our Performance We regularly review a number of factors that have impacted, and we believe will continue to impact, our results of operations and growth.
Since our founding in 2008, we have achieved a number of significant milestones, including: • 2010: Surpassed 1,000 customers. • 2015: Surpassed 10,000 customers. • 2016: Launched Semrush Brand and Content Marketing tools. • 2017: Completed our first round of financing and introduced collaboration features, including the ability to add users and share projects and received U.S. and UK search awards for the “Best SEO Software Suite”. • 2018: Completed another round of financing led by Greycroft and e.ventures; surpassed $70 million in ARR; and launched Semrush Local and Semrush Intelligence. • 2019: Surpassed 50,000 customers and $100 million in ARR. • 2020: Received multiple awards, including “Best SEO Software Suite” and “Best Search Software Tool” according to the European Search Awards, our headcount grew to more than 900 employees globally. • 2021 : Completed our IPO and the Follow-On Offering and surpassed $200 million in ARR. • 2022 : Launched our first AI product powered by ChatGPT 1.0. 57 • 2023 : Surpassed $300 million in ARR, 100,000 paying customers, and 1,000,000 active free customers. • 2024 : Surpassed $400 million in ARR and launched the general availability of the Enterprise SEO solution. • 2025 : Surpassed $460 million in ARR and launched an expanded suite of generative AI products including the AI Visibility Toolkit and Enterprise AIO.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $48.9 million, short-term investments of $186.7 million and accounts receivable of $9.0 million. Our principal uses of cash in recent periods have been to fund operations , invest in capital expenditures and short-term investments, and strategically acquire new businesses and assets.
Liquidity and Capital Resources As of December 31, 2025, we had cash and cash equivalents of $264.3 million, short-term investments of $5.0 million and accounts receivable, net of $26.5 million. Our principal uses of cash in recent periods have been to fund operations , invest in capital expenditures and short-term investments, and strategically acquire new businesses and assets.
We intend to continue investing in product development to improve our data assets, expand our products and enhance our technological capabilities. 53 Non-GAAP Financial Measures In addition to our financial results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe that non-GAAP income from operations, non-GAAP income from operations margin, free cash flow and free cash flow margin, each a non-GAAP financial measure, are useful in evaluating the performance of our business.
Non-GAAP Financial Measures In addition to our financial results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we believe that non-GAAP income from operations, non-GAAP income from operations margin, free cash flow and free cash flow margin, each a non-GAAP financial measure, are useful in evaluating the performance of our business.
By excluding acquisition-related costs and adjustments from our non-GAAP measures, management is better able to evaluate our ability to utilize our existing assets and estimate the long-term value that acquired assets will generate for us. 54 Year Ended December 31, 2024 2023 (in thousands) Income (loss) from operations $ 8,308 $ (7,667) Stock-based compensation expense 27,999 15,337 Amortization of acquired intangibles $ 4,346 $ 2,307 Restructuring and other costs $ 2,230 $ 1,292 Acquisition-related costs $ 2,917 $ 372 Non-GAAP income from operations $ 45,800 $ 11,641 Year Ended December 31, 2024 2023 Income (loss) from operations (as a percentage of revenue) 2.2 % (2.5) % Stock-based compensation expense (as a percentage of revenue) 7.4 % 5.0 % Amortization of acquired intangibles (as a percentage of revenue) 1.2 % 0.8 % Restructuring and other costs (as a percentage of revenue) 0.6 % 0.4 % Acquisition-related costs (as a percentage of revenue) 0.8 % 0.1 % Non-GAAP income from operations margin 12.2 % 3.8 % Free cash flow and free cash flow margin We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less purchases of property and equipment and capitalized software development costs.
By excluding acquisition-related costs and adjustments from our non-GAAP measures, management is better able to evaluate our ability to utilize our existing assets and estimate the long-term value that acquired assets will generate for us. 62 Year Ended December 31, 2025 2024 (in thousands) (Loss) income from operations $ (22,812) $ 8,308 Stock-based compensation expense 52,625 27,999 Amortization of acquired intangibles 5,966 4,346 Restructuring and other costs 6,621 2,230 Acquisition-related costs, net 10,938 2,917 Non-GAAP income from operations $ 53,338 $ 45,800 The following table sets forth a reconciliation of our (loss) income from operations (as a percentage of revenue) to non-GAAP income from operations margin (percentage amounts may not sum due to rounding): Year Ended December 31, 2025 2024 (Loss) income from operations (as a percentage of revenue) (5.1) % 2.2 % Stock-based compensation expense (as a percentage of revenue) 11.9 % 7.4 % Amortization of acquired intangibles (as a percentage of revenue) 1.3 % 1.2 % Restructuring and other costs (as a percentage of revenue) 1.5 % 0.6 % Acquisition-related costs, net (as a percentage of revenue) 2.5 % 0.8 % Non-GAAP income from operations margin 12.0 % 12.2 % Free cash flow and free cash flow margin We define free cash flow, a non-GAAP financial measure, as net cash provided by operating activities less purchases of property and equipment and capitalized software development costs.
Stock-Based Compensation We measure stock options and other stock-based awards granted to employees and members of our board of directors for their services as directors based on the fair value on the date of the grant and recognize the corresponding compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award.
Amortization of deferred contract costs is included in sales and marketing expense in the accompanying consolidated statements of operations and comprehensive (loss) income. 73 Stock-Based Compensation We measure stock options and other stock-based awards granted to employees and members of our board of directors for their services as directors based on the fair value on the date of the grant and recognize the corresponding compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award.
Operating Activities Our largest source of operating cash is cash collections from our customers for subscription services. Our primary uses of cash from operating activities are for online advertising, personnel costs across the sales and marketing, product and development, and general and administrative departments, and hosting costs.
Operating Activities Our largest source of operating cash is cash collections from our customers for subscription services. Our primary uses of cash from operating activities are for personnel costs, online advertising, and hosting costs.
The increase in the provision for income taxes for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to increased profits in our foreign subsidiaries, the non-deductibility of certain equity awards and the requirement to capitalize certain research and development costs which results in a current U.S. tax provision but no deferred tax benefit as a result of the valuation allowance maintained against our net deferred tax assets.
The decrease in the provision for income taxes for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily due to lower (loss) income before income taxes, the effects of changes in the tax provision recorded on the earnings of our profitable foreign subsidiaries, restrictions on the deductibility of equity awards, restrictions on the deductibility of transaction costs, and the impact of the requirement to capitalize and amortize certain research and development costs which results in a current provision for U.S. taxes but no deferred tax benefit as a result of the valuation allowance maintained against our net deferred tax assets.
In addition to our leases, we also have multi-year commitments with certain data providers expiring at various dates through 2026. For more information regarding our commitments with data providers, see Note 15 “Commitments and Contingencies” to the consolidated financial statements of this Annual Report on Form 10-K.
Contractual Obligations and Commitments Our principal commitments consist of obligations under leases for office space. For more information regarding our lease obligations, see Note 4 “Leases” to the consolidated financial statements of this Annual Report on Form 10-K. In addition to our leases, we also have commitments with certain data providers expiring at various dates through 2028.
Other Income, Net Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Other income, net $ 12,094 $ 12,313 $ (219) (2) % Percentage of total revenue 3 % 4 % For the year ended December 31, 2024, other income, net decreased by $0.2 million.
Other Income, Net Year Ended December 31, Change 2025 2024 Amount % (dollars in thousands) Other income, net $ 12,710 $ 12,094 $ 616 5 % Percentage of total revenue 3 % 3 % For the year ended December 31, 2025, other income, net increased by $0.6 million.
Other costs include litigation contingency reserves, asset impairment charges, relocation expenses associated with the migration of employees in 2022 that occurred throughout 2022 and early 2023, and gains or losses on the sale or disposition of certain non-strategic assets or product lines. Acquisition-related costs.
Other costs include litigation contingency reserves, asset impairment charges, and gains or losses on the sale or disposition of certain non-strategic assets or product lines. Acquisition-related costs.
Provision for Income Taxes Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Provision for income taxes $ 13,027 $ 3,696 $ 9,331 252 % Percentage of total revenue 3.5 % 1.2 % For the year ended December 31, 2024, the provision for income taxes increased by $9.3 million.
Provision for Income Taxes Year Ended December 31, Change 2025 2024 Amount % (dollars in thousands) Provision for income taxes $ 9,395 $ 13,027 $ (3,632) (28) % Percentage of total revenue 2 % 3 % For the year ended December 31, 2025, the provision for income taxes decreased by $3.6 million.
Net cash provided by operating activities during the year ended December 31, 2023 was $8.0 million, which resulted from net income of $1.0 million adjusted for non-cash charges of $28.3 million and a net cash outflow of $21.3 million from changes in operating assets and liabilities.
Net cash provided by operating activities during the year ended December 31, 2025 was $59.6 million, which resulted from a net loss of $19.5 million adjusted for non-cash charges of $84.4 million and a net cash outflow of $5.3 million from changes in operating assets and liabilities.
Deferred contract costs that will be recorded as expense during the succeeding 12-month period are recorded as current deferred contract costs, and the remaining portion is recorded as deferred contract costs, net of current portion. Amortization of deferred contract costs is included in sales and marketing expense in the accompanying consolidated statements of operations and comprehensive income (loss).
Deferred contract costs that will be recorded as expense during the succeeding 12-month period are recorded as current deferred contract costs, and the remaining portion is recorded as deferred contract costs, net of current portion.
Year Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 46,996 $ 7,986 Net cash used in investing activities (58,222) (29,068) Net cash provided by (used in) financing activities 1,870 (19) Effect of exchange rate changes on cash and cash equivalents (432) 184 Decrease in cash and cash equivalents $ (9,788) $ (20,917) Year Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 46,996 $ 7,986 Purchases of property and equipment (3,802) (2,486) Capitalization of internal-use software costs (7,862) (5,165) Free cash flow $ 35,332 $ 335 Year Ended December 31, 2024 2023 Net cash provided by operating activities (as a percentage of revenue) 12.5 % 2.6 % Purchases of property and equipment (as a percentage of revenue) (1.0) % (0.8) % Capitalization of internal-use software costs (as a percentage of revenue) (2.1) % (1.7) % Free cash flow margin 9.4 % 0.1 % Components of our Results of Operations Revenue We generate nearly all of our revenue from subscriptions to our online visibility management SaaS platform under a SaaS model.
Year Ended December 31, 2025 2024 (in thousands) Net cash provided by operating activities $ 59,583 $ 46,996 Net cash provided by (used in) investing activities 162,942 (58,222) Net cash (used in) provided by financing activities (7,535) 1,870 Effect of exchange rate changes on cash and cash equivalents 415 (432) Increase (decrease) in cash and cash equivalents $ 215,405 $ (9,788) Year Ended December 31, 2025 2024 (in thousands) Net cash provided by operating activities $ 59,583 $ 46,996 Purchases of property and equipment (1,793) (3,802) Capitalization of internal-use software costs (14,865) (7,862) Free cash flow $ 42,925 $ 35,332 The following table sets forth a reconciliation of our net cash provided by operating activities (as a percentage of revenue) to free cash flow margin (percentage amounts may not sum due to rounding): Year Ended December 31, 2025 2024 Net cash provided by operating activities (as a percentage of revenue) 13.4 % 12.5 % Purchases of property and equipment (as a percentage of revenue) (0.4) % (1.0) % Capitalization of internal-use software costs (as a percentage of revenue) (3.4) % (2.1) % Free cash flow margin 9.7 % 9.4 % Components of our Results of Operations Revenue We generate nearly all of our revenue from subscriptions to our online visibility management SaaS platform under a SaaS model.
In addition, this method requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. To date, we have incurred cumulative net losses and maintain a full valuation allowance on our net deferred tax assets.
In addition, this method requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. We continue to evaluate the need for a valuation allowance, which is dependent on our future financial performance and expected long-term projects.
We have successfully increased ARR per paying customer over time and believe this metric is an indicator of our ability to grow the long-term value of our platform and products. We expect ARR per paying customer to continue to increase as customers adopt our premium offerings and we continue to introduce new products and functionality.
This calculation excludes revenue from new customers and any non-recurring revenue. We have successfully increased ARR per paying customer over time and believe this metric is an indicator of our ability to grow the long-term value of our platform and products.
We define the number of paying customers as the number of unique business and individual customers as of a given date.
We define ARR per paying customer as of a given date as ARR from our paying customers as of that date divided by the number of paying customers as of that date. We define the number of paying customers as the number of unique business and individual customers as of a given date.
Operating Expenses Sales and Marketing Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Sales and marketing $ 144,340 $ 126,871 $ 17,469 14 % Percentage of total revenue 38 % 41 % For the year ended December 31, 2024, sales and marketing expense increased by $17.5 million.
Operating Expenses Sales and Marketing Year Ended December 31, Change 2025 2024 Amount % (dollars in thousands) Sales and marketing $ 176,593 $ 144,340 $ 32,253 22 % Percentage of total revenue 40 % 38 % For the year ended December 31, 2025, sales and marketing expense increased by $32.3 million.
On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates.
On an ongoing basis, we evaluate our estimates and assumptions.
We expect to fund these obligations with cash flows from operations and cash on our balance sheet. Recent Accounting Pronouncements Refer to sections titled “Recent Accounting Pronouncements” in Note 2 “Summary of Significant Accounting Policies” to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information.
Recent Accounting Pronouncements Refer to sections titled “Recent Accounting Pronouncements” in Note 2 “Summary of Significant Accounting Policies” to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information. Critical Accounting Policies and Estimates Our audited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States.
Costs to Obtain a Contract We capitalize incremental direct costs of obtaining revenue contracts, which primarily consist of sales commissions paid for new subscription contracts. We amortize these commissions over a period of approximately 24 months on a systematic basis, consistent with the pattern of transfer of the goods or services to which the asset relates.
We amortize these commissions over a period of approximately 24 months on a systematic basis, consistent with the pattern of transfer of the goods or services to which the asset relates.
Non-cash charges primarily consisted of $15.3 million of stock-based compensation expense, $10.4 million for amortization of deferred contract costs related to capitalized commissions, $6.8 million of depreciation and amortization expense, and $3.9 million of non-cash lease expense; partially offset by $6.1 million for accretion of premiums and discounts on investments.
Non-cash charges primarily consisted of $52.6 million of stock-based compensation expense, $14.7 million for amortization of deferred contract costs related to capitalized commissions, $13.9 million of depreciation and amortization expense, $5.0 million of non-cash lease expense, $1.5 million in other non-cash items; partially offset by $2.1 million for accretion of premiums and discounts on investments and $0.9 million for change in fair value included in other income, net.
Our tax expense for the years ended December 31, 2024 and 2023 primarily relates to increased profits in our foreign subsidiaries, the non-deductibility of certain equity awards and the requirement to capitalize certain research and development costs which results in a current U.S. tax provision but no deferred tax benefit as a result of the valuation allowance maintained against our net deferred tax assets. 58 Results of Operations for the Years Ended December 31, 2024 and 2023 The following tables set forth information comparing our results of operations in dollars and as a percentage of total revenue for the periods presented.
Our tax expense for the years ended December 31, 2025 and 2024 primarily relates to increased profits in our foreign subsidiaries, the non-deductibility of certain equity awards and the requirement to capitalize certain research and development costs which results in a current U.S. tax provision but no deferred tax benefit as a result of the valuation allowance maintained against our net deferred tax assets. 66 On July 4, 2025, the One Big Beautiful Bill Act, or the “OBBBA”, was enacted in the United States.
We do not expect to incur exit costs associated with our relocation efforts in future periods. Other Income, Net Included in other income, net are foreign currency transaction gains and losses. The functional currencies of our international locations are the local currencies for these regions.
Exit costs in connection with our relocation efforts include employee severance and fringe benefit costs, the loss on the sales of our Russian subsidiaries, and other associated relocation costs. We do not expect to incur exit costs associated with our relocation efforts in future periods. Other Income, Net Included in other income, net are foreign currency transaction gains and losses.
We expect our general and administrative expenses to decrease as a percentage of revenue over time. Exit Costs During the second quarter of 2022, we began relocating our Russia-based workforce to other jurisdictions. As of June 30, 2023, we had substantially completed our relocation efforts.
We expect our general and administrative expenses to decrease as a percentage of revenue over time. Our future general and administrative expenses will be significantly dependent on our ability to successfully consummate the Merger as well as related expenses. Exit Costs During the second quarter of 2022, we began relocating our Russia-based workforce to other jurisdictions.
As indicated in the chart, our customer cohorts typically experience their lowest dollar-based net revenue retention rate during their second full year after becoming a customer, after which the dollar-based net revenue retention rate typically improves and we are able to drive increased spending across the remaining customers within the cohort. 52 We calculate our dollar-based net revenue retention rate as of the end of a period by using (a) the revenue from our customers during the twelve month period ending one year prior to such period as the denominator and (b) the revenue from those same customers during the twelve months ending as of the end of such period as the numerator.
We calculate our dollar-based net revenue retention rate as of the end of a period by using (a) the revenue from our customers during the twelve month period ending one year prior to such period as the denominator and (b) the revenue from those same customers during the twelve months ending as of the end of such period as the numerator.
Other income, net also includes amounts for interest income and expense, other miscellaneous income and expense, and gains and losses unrelated to our core operations.
We continue to expect our foreign currency exchange gains and losses to continue to fluctuate in the future as foreign currency exchange rates change. Other income, net also includes amounts for interest income and expense, other miscellaneous income and expense, and gains and losses unrelated to our core operations.
Any differences resulting from the re-measurement of assets and liabilities denominated in a currency other than the functional currency are recorded within other income, net. We expect our foreign currency exchange gains and losses to continue to fluctuate in the future as foreign currency exchange rates change.
The functional currencies of our international locations are the local currencies for these regions. Any differences resulting from the re-measurement of assets and liabilities denominated in a currency other than the functional currency are recorded within other income, net.
This increase was primarily driven by an increase to personnel costs of $20.4 million primarily as a result of increased wage, contractor, and stock based compensation costs, which increased year over year, and an overall increase in allocable overhead costs.
This increase was primarily driven by a $23.8 million increase in personnel costs as a result of higher wage, commission, and stock-based compensation costs.
We believe that investing in the development of new products, features, and enhancements improves customer experience, makes our platform more attractive to new paying customers, and provides us with opportunities to expand sales to existing paying customers and convert free customers to paying customers.
We believe these investments will improve customer experience, make our platform more attractive to new paying customers, and provide us with opportunities to expand sales to existing paying customers and convert free customers to paying customers.
The change in operating assets and liabilities was primarily the result of a $14.0 million increase in deferred contract costs, a $7.4 million decrease in accounts payable, a $3.9 million decrease in operating lease liabilities, and a $3.8 million increase in accounts receivable, and a $2.3 million increase in prepaid expenses and other current assets.
The change in operating assets and liabilities was primarily the result of a $21.9 million increase in deferred revenue, a $13.2 million increase in accounts payable, and a $5.5 million increase in accrued expenses.
Our sales team is largely focused on driving account expansion by encouraging our customers to fully recognize the potential benefit from our comprehensive platform and the additional features and functionalities available in our Enterprise SEO solution. As a result, we have become increasingly efficient at acquiring customers who increase their spend with us over time.
Our sales team is largely focused on driving account expansion by encouraging our customers to fully recognize the potential benefit from our comprehensive platform and the additional features and functionalities available in our Enterprise and AI Optimization (“AIO”) solutions. As a result, we continue to see increased momentum cross-selling our broader digital marketing platform within our existing customer base.
All costs associated with our relocation efforts are included in the consolidated statements of operations in our operating expenses under the line item, Exit Costs . Exit costs in connection with our relocation efforts include employee severance and fringe benefit costs, the loss on the sales of our Russian subsidiaries, and other associated relocation costs.
As of June 30, 2023, we had substantially completed our relocation efforts. All costs associated with our relocation efforts are included in the consolidated statements of operations in our operating expenses under the line item, Exit Costs .
In 2024, macro-economic pressure in the lower end of our market was a contributing factor to a slight decrease of our dollar-based net revenue retention rate from 107% to 106% as of December 31, 2023 and 2024, respectively. This calculation excludes revenue from new customers and any non-recurring revenue.
Our dollar-based net revenue retention rate as of December 31, 2025 and December 31, 2024 was approximately 104% and 106%, respectively. The decrease in our dollar-based net revenue retention was the result of softness in the lower end of the market.
Net cash used in investing activities for the year ended December 31, 2023 was $29.1 million, which resulted from $257.5 million used to purchase short-term investments, $5.2 million in capitalization of internal-use software costs, $5.1 million used in cash paid for acquisition of assets and businesses, and $2.5 million used in purchases of property and equipment.
These inflows were partially offset by $140.8 million used to purchase short-term investments, $14.9 million in capitalization of internal-use software costs, $6.4 million used for the purchasing of noncontrolling interest shares, $5.6 million used in cash paid for acquisition of assets and businesses, net of cash acquired, and $1.8 million used in purchases of property and equipment.
Contractual Obligations and Commitments Our principal commitments consist of obligations under leases for office space and leases for data center facilities. For more information regarding our lease obligations, see Note 4 “Leases” to the consolidated financial statements of this Annual Report on Form 10-K.
For more information regarding our commitments with data providers, see Note 15 “Commitments and Contingencies” to the consolidated financial statements of this Annual Report on Form 10-K. We expect to fund these obligations with cash flows from operations and cash on our balance sheet.
Net cash used in financing activities for the year ended December 31, 2023 consisted of $2.5 million in cash outflows relating to payments on finance leases. These outflows were partially offset by $2.2 million in proceeds related to the exercises of stock options and $0.3 million in proceeds related to shares issued in connection with the Employee Stock Purchase Plan.
Financing Activities Net cash used in financing activities for the year ended December 31, 2025 was $7.5 million and consisted of $10.1 million in taxes paid related to net share settlement of equity awards and $1.1 million in repayment of acquired debt; partially offset by $3.9 million in proceeds related to the exercises of stock options.
Our ARR per paying customer as of December 31, 2024 and 2023 was $3,522 and $3,125, respectively, in absolute unrounded amounts. We define ARR per paying customer as of a given date as ARR from our paying customers as of that date divided by the number of paying customers as of that date.
We expect ARR per paying customer to continue to increase as customers adopt our premium offerings and we continue to introduce new products and functionality. Our ARR per paying customer as of December 31, 2025 and 2024 was $4,369 and $3,522, respectively, in absolute unrounded amounts.
Research and Development Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Research and development $ 80,080 $ 57,442 $ 22,638 39 % Percentage of total revenue 21 % 19 % For the year ended December 31, 2024, research and development costs increased by $22.6 million, primarily due to a $12.8 million increase to personnel costs, which includes a $3.7 million increase to stock based compensation expense, primarily as a result of a 11% increase in headcount as compared to the year ended December 31, 2023.
This increase was primarily driven by a $16.5 million increase in personnel costs as a result of higher wage and stock-based compensation costs. 69 General and administrative Year Ended December 31, Change 2025 2024 Amount % (dollars in thousands) General and administrative $ 106,385 $ 78,610 $ 27,775 35 % Percentage of total revenue 24 % 21 % For the year ended December 31, 2025, general and administrative expense increased by $27.8 million.
ARR for prior periods have not been adjusted to reflect this change as there is no variance between the two definitions for the periods presented. As of December 31, 2024 and 2023, we had approximately 117,000 paying customers and 108,000 paying customers, respectively, accounting for $411.6 million and $337.1 million in ARR, respectively.
As of December 31, 2025 and 2024, we had approximately 108,000 paying customers and 117,000 paying customers, respectively, accounting for $471.4 million and $411.6 million in ARR, respectively. During the year ended December 31, 2025, we experienced a decrease of approximately 9,000 paying customers.
This increase was primarily driven by a $3.9 million increase to integration and data costs, primarily as a result of increasing costs incurred related to new products and customer growth, a $3.5 million increase to depreciation and amortization expense primarily related to increased intangible asset balances as of December 31, 2024, a $1.7 million increase to personnel costs, a $1.6 million increase to merchant fees commensurate with revenue growth, and an overall increase in allocable overhead costs.
This increase was primarily driven by a $11.0 million increase to integration and data costs, a $3.5 million increase to depreciation and amortization costs, a $2.5 million increase to personnel costs, a $1.5 million increase in hosting fees, a $1.0 million increase to other costs, and a $0.9 million increase to merchant fees .
This increase was also driven by an increase in the number of paying customers to approximately 117,000 as of December 31, 2024 from nearly 108,000 as o f December 31, 2023. 60 Cost of Revenue, Gross Profit and Gross Margin For the Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Cost of revenue $ 65,477 $ 52,327 $ 13,150 25 % Gross profit $ 311,338 $ 255,348 $ 55,990 22 % Gross margin 83 % 83 % For the year ended December 31, 2024, cost of revenue increased by $13.2 million.
This trend is also reflected in the growth of ARR per paying customer to $4,369 as of December 31, 2025 from $3,522 as of December 31, 2024. 68 Cost of Revenue, Gross Profit and Gross Margin Year Ended December 31, Change 2025 2024 Amount % (dollars in thousands) Cost of revenue $ 86,308 $ 65,477 $ 20,831 32 % Gross profit $ 357,336 $ 311,338 $ 45,998 15 % Gross margin 81 % 83 % For the year ended December 31, 2025, cost of revenue increased by $20.8 million.
The change in other income, net for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily due to a decrease in fair value adjustments compared to the prior year. This decrease was partially offset by increases to foreign currency gains.
This increase was primarily due to an increase in fair value adjustments compared to the prior year.
The period-to-period comparison of results is not necessarily indicative of results for future periods.
Results of Operations for the Years Ended December 31, 2025 and 2024 The following tables set forth information comparing our results of operations in dollars and as a percentage of total revenue for the periods presented. The period-to-period comparison of results is not necessarily indicative of results for future periods.
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This ARR definition has been updated to simplify the explanation of our calculation around the treatment of monthly and longer-term contracts, and to be more consistent with other SaaS businesses, which we believe improves the ability for investors to compare our metric against other businesses.
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Our platform utilizes data and intelligence at the core surrounded by AI-powered interconnected hubs focused on AI and AI search optimization, search engine optimization, paid advertising, social media management, local marketing, brand marketing, and content marketing.
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The chart below illustrates the subscription revenue from each customer cohort based on the year in which they became customers during the year presented.
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Each of these marketing channel hubs is uniquely designed to ensure our customers can analyze, enhance and measure website navigation and performance, content relevance and authority, and overall prospective customer interests and engagement, and most importantly show how each channel is connected to the others to provide a much needed means for our customers to optimize returns on their investments.
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We expect this trend to continue for the foreseeable future.
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Enterprise platform ARR grew to $37 million. AI products surpassed $38 million in ARR. Entered into a Merger Agreement with Adobe.
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The majority of this increase was driven by an increase in average ARR per paying customer to $3,522 as of December 31, 2024 from $3,125 as of December 31, 2023, driven by strong upsell activity.
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Recent Developments On November 18, 2025, we entered into the Merger Agreement, pursuant to which, and upon the terms and subject to the conditions therein, Merger Sub will merge with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Adobe.
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These increases were partially offset by a $3.5 million decrease to marketing and advertising expense as a result of decreased expenses for paid video and paid search marketing.
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Subject to the terms and conditions of the Merger Agreement, at the Effective Time, each share of Class A common stock and each share of Class B common stock, in each case, issued and outstanding immediately prior to the Effective Time, subject to certain limitations, will be converted into the right to receive $12.00 in cash, without interest.
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This increase was also driven by a $1.5 million increase in rent and office expenses, a $1.5 million increase to professional services costs related to outsourcing, a $0.9 million increase to depreciation and amortization costs, primarily due to a higher intangible asset balance in the current year, and an overall increase in allocable overhead costs. 61 General and administrative Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) General and administrative $ 78,610 $ 77,410 $ 1,200 2 % Percentage of total revenue 21 % 25 % For the year ended December 31, 2024, general and administrative expense increased by $1.2 million, primarily driven by a $1.4 million increase in professional services due to increased acquisition costs.
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With respect to the outstanding equity awards of the Company, such awards will generally be treated as follows. Options: Each vested Option and each Option held by a Specified Individual will be cancelled and cashed out for a payment equal to the excess of the Merger Consideration over the exercise price of such Option in respect of each underlying share.
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These outflows were partially offset by an $8.8 million increase in deferred revenue due to the addition of new customers and expansion of the business and a $1.6 million increase in accrued expenses.
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Otherwise, each unvested in-the-money Option will be assumed and converted into an Adobe RSU Award, based on the spread value of the Option and the Adobe Trading Price, with no less favorable vesting terms. Options with an exercise price equal to or greater than the Merger Consideration will be cancelled for no consideration.
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Critical Accounting Policies and Estimates Our audited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Currency Exchange Risk We are not currently subject to significant foreign currency exchange risk with respect to revenue as our U.S. and international sales are predominantly denominated in U.S. dollars. However, we have some foreign currency risk related to a small amount of sales denominated in euros, and expenses denominated in euros, Czech korunas, and Polish zloty.
Biggest changeAs such we do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates. 74 Foreign Currency Exchange Risk While we have some foreign currency risk related to a small amount of sales denominated in euros and other currencies, we are not currently subject to significant foreign currency exchange risk with respect to revenue as our U.S. and international sales are predominantly denominated in U.S. dollars.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 65 Quantitative and Qualitative Disclosures of Market Risk We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Quantitative and Qualitative Disclosures of Market Risk We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.
Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates, interest rates, and inflation. We do not hold or issue financial instruments for trading purposes. Interest Rate Risk We are exposed to market risk related to changes in interest rates. Our investments primarily consist of short-term investments and money market funds.
Our market risk exposure continues to primarily be a result of fluctuations in foreign currency exchange rates, interest rates, and inflation. We do not hold or issue financial instruments for trading purposes. Interest Rate Risk We are exposed to market risk related to changes in interest rates. Our investments primarily consist of short-term investments, commercial paper, and money market funds.
However, as our international operations expand, our foreign currency exchange risk may increase. If our foreign currency exchange risk increases in the future, we may evaluate the costs and benefits of initiating a foreign currency hedge program in connection with non-U.S. dollar denominated transactions. 66
We have not engaged in the hedging of foreign currency transactions to date. However, as our international operations expand, our foreign currency exchange risk may increase. If our foreign currency exchange risk increases in the future, we may evaluate the costs and benefits of initiating a foreign currency hedge program in connection with non-U.S. dollar denominated transactions. 75
Sales denominated in euros reflect the prevailing U.S. dollar exchange rate on the date of invoice for such sales. Increases in the relative value of the U.S. dollar to the euro may negatively affect revenue and other operating results as expressed in U.S. dollars. We incur significant expenses outside the United States denominated in these foreign currencies, primarily the euro.
Increases in the relative value of the U.S. dollar to the euro may negatively affect revenue and other operating results as expressed in U.S. dollars. We incur significant expenses outside the United States denominated in foreign currencies, primarily the euro.
For example, an immediate 10% decrease or increase in the relative value of the U.S. dollar to the euro would result in a $10.0 million gain or loss on our consolidated statements of operations and cash flows. We have not engaged in the hedging of foreign currency transactions to date.
For example, an immediate 10% decrease or increase in the relative value of the U.S. dollar to the euro would result in a $13.2 million gain or loss on our consolidated statements of operations and cash flows.
Our investments are exposed to market risk due to a fluctuation in interest rates, which may affect our interest income and the fair market value of our investments. Due to the short-term nature of our investment portfolio, we believe only dramatic fluctuations in interest rates would have a material effect on our investments.
Due to the short-term nature of our investment portfolio, we believe only dramatic fluctuations in interest rates would have a material effect on our investments. We do not believe that an immediate 10% increase in interest rates would have a material effect on the fair market value of our portfolio.
The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs and the fiduciary control of cash and investments. We are obligated by our investment policy to invest the majority of our portfolio into U.S. government securities. We do not enter into investments for trading or speculative purposes.
We are obligated by our investment policy to invest the majority of our portfolio into U.S. government securities. We do not enter into investments for trading or speculative purposes. Our short-term investments are exposed to market risk due to a fluctuation in interest rates, which may affect our interest income and the fair market value of our investments.
As of December 31, 2024 and 2023, we had cash, cash equivalents, and short-term investments of $235.6 million and $238.6 million, respectively. The carrying amount of our cash and cash equivalents reasonably approximates fair value, due to the short maturities of these investments.
The carrying amount of our cash and cash equivalents reasonably approximates fair value, due to the short maturities of these investments. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs and the fiduciary control of cash and investments.
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We do not believe that an immediate 10% increase in interest rates would have a material effect on the fair market value of our portfolio. As such we do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates.
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As of December 31, 2025 and 2024, we had cash, cash equivalents, and short-term investments of $269.3 million and $235.6 million, respectively. See Note 3 “Cash, Cash Equivalents, Restricted Cash, and Investments” to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for an overview of investment balances.
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However, in the fiscal quarter ended December 31, 2025, we experienced negative impacts on our non-GAAP income from operations margin, and we expect to continue to have foreign currency risk related to expenses denominated in euros and other currencies. Sales denominated in euros reflect the prevailing U.S. dollar exchange rate on the date of invoice for such sales.
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In connection with our operations in Europe, where our expenses are incurred in euros and other currencies, we are exposed to some increased foreign currency exchange risk related to additional expenses denominated in euros.
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Global events, macroeconomic conditions, and geopolitical developments, including conflicts in Europe and the Middle East, the recent changes to U.S. trade policy, including increased tariffs on imports, and corresponding retaliatory tariffs from other countries on the U.S., and inflation, have caused, and in the future may cause additional, global economic uncertainty, which could amplify the volatility of currency fluctuations.

Other SEMR 10-K year-over-year comparisons