Semrush Holdings, Inc. (SEMR): BCG Matrix [Dec-2025 Updated]

You're looking at the strategic health of Semrush Holdings, Inc. (SEMR) right now, late in 2025, and the picture is one of deliberate transformation. The analysis, mapped onto the Boston Consulting Group Matrix, clearly shows the company is successfully pivoting its future growth away from its mature base toward high-potential areas; we see the Enterprise Segment and the new AI Portfolio lighting up the 'Stars' quadrant with massive growth, while the foundational SEO Toolkit keeps printing cash-our 'Cash Cow'-generating a solid $21.9 million in Q3 operating cash flow. Still, the path isn't clear everywhere; heavy investment is required to turn international efforts and the new AI Visibility Toolkit into reliable winners, as they sit squarely in the 'Question Marks' zone, even as the core business supports an expected 18% full-year revenue growth. Dive in to see exactly where Semrush is placing its bets and which legacy products are quietly being phased out as 'Dogs.'

Background of Semrush Holdings, Inc. (SEMR)

You're looking at Semrush Holdings, Inc. (SEMR), which operates as a leading online visibility management software-as-a-service (SaaS) platform. This company, headquartered in Boston, MA, provides businesses with a suite of tools covering search engine optimization, advertising, content, social media management, and competitive research campaigns.

The platform's core strength comes from its deep proprietary data set, analyzing over 200 million domains and 26 billion keywords globally, which is quite a scale to replicate. Strategically, Semrush is focused on an upmarket shift, evidenced by the fact that customers paying over $50,000 annually grew by 72% year-over-year in the third quarter of 2025.

Looking at the latest figures from the third quarter ended September 30, 2025, Semrush Holdings, Inc. reported revenue of $112.1 million, marking a 15% year-over-year increase. Annual Recurring Revenue (ARR) stood at $455.4 million as of that date, up 14% compared to the prior year.

The company is seeing significant momentum from its newer product areas; the AI portfolio's ARR more than doubled from the second quarter to the third quarter of 2025, contributing $10 million in net new ARR during Q3 alone. This focus on innovation is also seen in the launch of products like Semrush One, which integrates AI visibility with traditional SEO workflows.

Financially, the third quarter showed strong cash generation, with cash flow from operations hitting $21.9 million, resulting in a healthy cash flow from operations margin of 19.5%. On a non-GAAP basis, the operating margin for Q3 2025 was 12.6%, though the GAAP loss from operations was ($4.5) million for the quarter.

It's worth noting that the company's customer base is being strategically refined; the total number of paying customers decreased slightly to approximately 114,000 in Q3 2025, which management attributed to a focus on higher-value customers. Still, retention in the enterprise segment is very strong, with net revenue retention reaching 125% in that cohort.

Semrush Holdings, Inc. (SEMR) - BCG Matrix: Stars

You're looking at the engine room of Semrush Holdings, Inc.'s current growth, the segment where high market share meets a rapidly expanding market. These are the areas demanding significant investment to maintain leadership, but they are also the ones most likely to transition into long-term Cash Cows.

The Star quadrant for Semrush Holdings, Inc. is currently defined by its successful upmarket shift, evidenced by explosive growth in its largest customer tiers and the rapid monetization of its Artificial Intelligence (AI) product suite. These businesses units are leaders in their respective, still-growing spaces.

Here's a quick look at the key metrics driving these segments as of the third quarter of 2025:

The Enterprise Segment is clearly a primary driver, showing enterprise ARR growth of 33% year-over-year. This is supported by a very strong Net Revenue Retention (NRR) within that segment, which reached 125%, showing existing large customers are significantly increasing their spend with Semrush Holdings, Inc.. This NRR is an improvement of nearly 800 basis points year over year, which is defintely a sign of successful upselling.

The AI Portfolio is demonstrating hyper-growth, which is what you expect from a Star. The Annual Recurring Revenue (ARR) for the AI portfolio more than doubled from the second quarter to the third quarter of 2025, adding approximately $10 million in ARR during the third quarter alone. This rapid adoption validates the investment in product innovation, making AI products a new revenue growth engine for Semrush Holdings, Inc..

Growth in High-Value Customers directly feeds the Star classification. The count of customers spending over $50,000 annually increased by 72% year-over-year as of September 30, 2025. This focus on larger accounts is strategic, even though the total number of paying customers was approximately 114,000 as of that date, slightly down from the prior quarter, reflecting a shift away from lower-tier acquisition.

The product Semrush One, the integrated AI/SEO solution, is positioned to capture this high-growth trend. While specific standalone ARR for Semrush One isn't broken out, its launch alongside other AI advancements signals a commitment to owning the evolving search landscape.

These high-growth areas are consuming cash to fuel expansion, which is typical for Stars. However, the overall business is showing strong cash generation, with Cash Flow from Operations in Q3 2025 reaching $21.9 million, representing a margin of 19.5%. The Non-GAAP operating margin for the quarter was 12.6%.

You need to keep investing here.

Semrush Holdings, Inc. (SEMR) - BCG Matrix: Cash Cows

You're looking at the engine room of Semrush Holdings, Inc., the established products that keep the lights on and fund the next big thing. These are the market leaders generating consistent cash, even if the overall market growth has settled down a bit.

The Core SEO Toolkit, which includes foundational suites like Keyword Magic and Site Audit, is the bedrock here. This established offering is responsible for the bulk of the reported Annual Recurring Revenue, which stood at $455.4 million as of September 30, 2025. This recurring revenue stream is what allows the company to invest aggressively elsewhere.

This stability translates directly to the balance sheet. For the third quarter of 2025, Semrush Holdings, Inc. reported cash flow from operations of $21.9 million. That figure represents a healthy cash flow from operations margin of 19.5% for the period. To be fair, the GAAP loss from operations was ($4.5) million for the same quarter, but the non-GAAP operating margin was a solid 12.6%, showing underlying operational profitability from these core assets.

The market position of these core tools is defensible. Semrush Holdings, Inc. holds a market share of 6.62% in the core SEO/SEM category. This high share in a mature segment means the product is a known quantity, requiring less promotional spend to maintain its base.

The subscription base for these established tools is mature, providing the predictable revenue needed to cover corporate overhead and fund growth initiatives. Consider these key metrics that illustrate the strength and maturity:

• Annual Recurring Revenue (ARR) as of Q3 2025: $455.4 million.
• Paying Customers as of Q3 2025: Approximately 114,000.
• Dollar-based Net Revenue Retention (DBNRR): 105%.
• Q3 2025 Revenue: $112.1 million.

These cash cows provide the necessary fuel. They fund the high-growth AI and Enterprise segments, which saw their respective ARR more than double quarter-over-quarter and grow 33% year-over-year, respectively. Here's a quick look at the financial snapshot supporting this cash generation:

You want to maintain this productivity level, maybe even squeeze out a bit more efficiency through infrastructure improvements, because this is the reliable source that underwrites the riskier, higher-potential Question Marks in the portfolio. Finance: draft 13-week cash view by Friday.

Semrush Holdings, Inc. (SEMR) - BCG Matrix: Dogs

You're looking at the parts of the Semrush Holdings, Inc. portfolio that aren't driving the high-growth narrative right now, the ones that tie up resources without delivering outsized returns. These are the Dogs-low market share in low-growth areas, or products where the strategic focus has intentionally shifted away.

Low-End/Lower-Margin Marketing Tiers: Strategic focus shift led to a decrease in total paying customers (down to approximately 114,000) as lower-value accounts are de-emphasized.

The strategic pivot toward higher-value customers is clear in the subscriber numbers. As of the third quarter of 2025, Semrush Holdings, Inc. reported approximately 114,000 paying customers. This figure reflects a deliberate culling or de-emphasis of the lower end of the customer base, which aligns with minimizing cash traps in low-return segments. The goal here is to improve the Average ARR per customer, which increased by 17% year-over-year in Q3 2025. Still, shedding customers, even low-value ones, means the dollar-based net revenue retention rate held steady at approximately 105% in Q3 2025, suggesting there's work to do to drive expansion within the remaining base.

Web Analytics Tools: Low market share of 0.23% in the broader web analytics category, making it a non-core, low-impact offering.

When you look at pure web analytics, Semrush Holdings, Inc. competes against free, deeply integrated tools. Their competitive offering, Traffic Analytics, is part of the premium .Trends toolkit, which requires an additional spend of about $200 per month on top of a standard subscription. This positions the capability as a high-value, specialized add-on rather than a core, high-volume, low-cost product. The focus is clearly on competitive intelligence derived from traffic data, not on being the primary site performance tracker.

Legacy Tools with Low Usage: Older, non-integrated tools within the 55+ product suite that lack AI-driven updates and have minimal standalone growth.

Semrush Holdings, Inc. has expanded its platform aggressively, now offering over 55+ tools as of 2025. With this breadth, it's inevitable that some older, non-integrated tools are lagging, especially as the company pours investment into its new AI portfolio, which added $10 million in ARR in Q3 2025 alone. These legacy components, which don't benefit from the latest machine learning enhancements, become candidates for minimization or eventual sunsetting. They consume engineering cycles without contributing meaningfully to the growth story.

Here's a quick look at the scale of the customer base driving this dynamic and the overall product breadth:

You need to decide which of those 55+ tools are truly legacy and which ones can be integrated or retired to free up engineering capacity. The current trend shows that customers spending over $50,000 annually grew by 72% year-over-year in Q3 2025, which is where the focus should remain.

The units that fit the Dog profile are characterized by:

• Lower contribution to the $112.1 million Q3 2025 revenue.
• Lack of integration with new AI features.
• Customer segments that do not align with the $10,000+ average ARR target for growing segments.
• Products that do not drive the 33% ARR growth seen in the Enterprise segment.

Finance: draft 13-week cash view by Friday.

Semrush Holdings, Inc. (SEMR) - BCG Matrix: Question Marks

You're looking at the areas of Semrush Holdings, Inc. (SEMR) that are burning cash now but have the potential to become market leaders. These are high-growth bets where market share is still being fought for.

International Expansion

The push outside the core US market is a classic Question Mark scenario. While the prompt suggests that 45.04% of customers are outside the US, the most recent reported revenue data shows the US accounted for 45.31% of total revenue in 2024, meaning the rest of the world, including the UK, represented 54.69% of revenue that year. To capture more of that international growth, heavy localized investment is necessary to build local market share against established regional players. This requires significant upfront capital deployment.

PPC/Advertising Toolkit Competition

The PPC/Advertising Toolkit operates in a high-demand space, but it is dominated by the platform on which the ads run. The prompt specifies intense competition from a dominant player like Google Ads, which holds a 68.63% market share in the broader advertising ecosystem. Semrush Holdings, Inc. (SEMR) must invest to carve out a defensible niche for its competitive intelligence features, like analyzing competitor ad copy and estimated traffic cost, against the native, free tools offered by the incumbent.

New AI Visibility Toolkit

The new AI Visibility Toolkit, released in 2025, is a pure growth play in a rapidly shifting landscape. To establish a dominant share here, Semrush Holdings, Inc. (SEMR) must pour resources into Research and Development and marketing to educate the market on the value of tracking AI-generated answers. The commitment is visible in the financials: the AI portfolio Annual Recurring Revenue (ARR) more than doubled from the second quarter of 2025, and the company projects AI-driven ARR could reach $30 million by the end of 2025. This is a clear signal of heavy investment in a high-growth, uncertain market segment.

Sustaining High Growth Targets

The overall company growth trajectory depends on successfully converting these Question Marks into Stars. Full-Year 2025 revenue guidance is set in the range of $443.5 million to $445.5 million, representing an expected growth rate of approximately 18% at the midpoint. This strong growth rate, compared to the Q3 2025 revenue of $112.1 million (up 14% year-over-year), hinges on continued, heavy investment in these new, cash-consuming areas. The company is operating at a loss from operations of ($4.5) million in Q3 2025, illustrating the cash consumption required for these growth initiatives.

Key Financial and Market Metrics for Question Marks:

The required actions for these segments involve tough choices on capital allocation:

• Invest heavily in the AI Visibility Toolkit to rapidly gain share.
• Allocate capital for localized marketing to grow non-US customer base.
• Continue funding R&D to maintain feature parity/superiority in the PPC space.
• Monitor cash flow from operations, which was $21.9 million in Q3 2025.

Finance: draft 13-week cash view by Friday.