Baptista Research

25-02-2023

SEMrush Holdings, Inc. (SEMR)

Current Price: $8.6

Shares Outstanding: 141.50 MM

Average Daily Volume (3 months): 208326

52-Week High: $15.00

52-Week Low: $7.16

Company Overview

SEMrush Holdings, Inc. develops online visibility management software as a service (SaaS) platform. It helps
businesses to run search engine optimization, pay-per-click, content, social media, and competitive research
campaigns. The company offers insights and solutions to build, manage, and measure campaigns across
various marketing channels. SEMrush Holdings, Inc. was founded in 2008 and is based in Boston,
Massachusetts with additional offices in Pennsylvania, Texas, Czech Republic, Cyprus, Poland, and Russia.

3000000 180.00

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2500000

140.00

2000000 120.00

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80.00
Licensed to Mikhail Kakuzin. Email address: [email protected]

1000000 60.00

40.00

500000

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0 0.00
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25-02-2023

Introduction

This is a special one-time report on Semrush, a leading online visibility management SaaS platform that has
recently been in the news for its acquisition of Traffic Think Tank. The company has made waves in the digital
marketing industry. In addition to its acquisition of Backlinko, Semrush has also acquired Traffic Think Tank,
an exclusive community for digital marketing professionals seeking advanced education and networking
opportunities. These recent developments demonstrate Semrush's commitment to providing the highest
quality tools and training to its customers and community.While Semrush's innovative offerings have caught
the attention of many investors, evaluating the company's financial statements is crucial to understanding its
potential as an investment opportunity. However, as with any investment, there are risks to consider, such as
the potential for increased competition in the online visibility management space.

Baptista Research looks to evaluate the different factors that could influence the company's price in the near
future. In this report, we have carried out a fundamental analysis of the historical financial statements of the
company. We also have a dedicated analysis of the company's Environmental, Social, and Governance
(ESG) risk scores in order to evaluate the sustainability risk.

Financial Performance & Expectations

SEMRush reported a top-line of $65.79 million for the most recent quarterly result for the period ended
9/30/22 which implies a 22.40% change as compared to the $49.25 million number reported in the
corresponding quarter of the previous year.The company beat the analyst consensus estimate of $63.97
million.
In terms of cash flows, SEMRush reported $-0.58 million in the form of operating cash flows and spent $1.71
million in investing activities during the previous quarter. The company produced lower cash flows as
compared to the same period in the previous year.
Licensed to Mikhail Kakuzin. Email address: [email protected]

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25-02-2023

Key Drivers

Traffic Think Tank Acquisition

Semrush has announced its acquisition of Traffic Think Tank (TTT), a marketing education company and
community that offers premium content by and for marketing and growth leaders. The TTT Academy is
renowned for its extensive content library of over 300 hours from 90 industry experts, making it one of the
most respected resources for digital marketing education worldwide. In addition to its content, TTT provides a
members-only expert community on Slack, where marketers can connect with peers, ask questions, and
serve as a sounding board. TTT's founders started the company in 2017 with a small group of marketing
experts to create a community of like-minded professionals facing similar challenges. By 2020, TTT had
almost 1,000 members, facilitating real-time Q&A sessions with industry leaders. The TTT acquisition will
enable Semrush to expand its Academy, giving marketers access to communities focused on SEO, Content
Marketing, Social Media, Digital PR, and PPC, with support from industry thought leaders and founders. The
TTT acquisition is the most recent for Semrush, following its acquisition of Backlinko in January 2022, which
added SEO training to the Semrush Academy. TTT co-founders, Matthew Howells-Barby, Nick Eubanks, and
Ian Howells, along with other consultants, will join Semrush to drive the continued growth of the Semrush
community, develop original content for the Semrush Academy, and participate in TTT community
discussions. Semrush aims to establish a customized and comprehensive online self-paced training platform,
setting a new benchmark for digital marketing education and providing a premium experience for marketers
worldwide.

Partnership With Narrative BI

SemRush and Narrative Bi have partnered in order to bring the power of its platform to Semrush users and
customers through a new app version. This app offers easy-to-use reporting and website analysis
capabilities, providing marketers with a complete view of their marketing efforts and measuring their success.
Semrush is a comprehensive digital marketing toolkit that provides businesses with tools and insights to
improve their online presence and drive traffic and revenue. The app integrates with Google Analytics,
providing Semrush users with access to a wide range of data and metrics, including website traffic, user
behavior, and conversions. Additionally, it offers data on search engine rankings, paid and organic traffic,
backlink analysis, and other website analytics metrics. The integration of Narrative BI's platform with Semrush
is a natural fit, as both companies share a commitment to helping marketing and growth teams succeed.
Semrush users and customers can leverage the powerful analytics and reporting capabilities of Narrative BI
to get a deeper understanding of their website data and make informed decisions about how to optimize and
improve their content. Overall, the new app is designed to be user-friendly and intuitive, making it easy for
Semrush users to access and analyze their Google Analytics data. With just a few clicks, users can see how
their campaigns perform, identify areas that need improvement, and make data-driven decisions about their
marketing strategies. By offering this powerful new app, Narrative BI is helping Semrush users drive even
Licensed to Mikhail Kakuzin. Email address: [email protected]

better business results.

Synergies From The Backlinko Acquisition

Semrush acquired Backlinko, a platform that provides marketing and search engine optimization (SEO)
training to digital marketers in January 2022. Backlinko, established in 2012, offers text and video-based
content, widgets, code, and proprietary SEO techniques. Its platform received more than 500,000 visits per
month and is a popular resource for training and advice for digital marketers. Semrush, which offers digital
marketers tools and insights for SEO, content marketing, PPC, and other areas, aims to inspire both current
and next-generation marketers. It believes that the best training comes from real experts and practitioners in
the field. This was a highly synergistic acquisition from the standpoint of Semrush Academy and now, the
company offers one of the most robust digital marketing and SEO training resources on the web. The
acquisition of Backlinko was one step towards Semrush's goal of creating a tailored and comprehensive self-
service training platform to set the standard for digital marketing education globally. They are working towards
creating and curating original content for the Semrush Academy.

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25-02-2023

Historical Quarterly Statement Analysis - Income Statement & Cash Flows (USD Million)

Particulars 12/31/21 3/31/22 6/30/22 9/30/22

Revenues 54 57 63 66
% growth 6.3% 9.6% 5.1%
Cost of Goods Sold -12 -12 -13 -12
% of revenue -21.5% -20.3% -20.1% -18.9%
Gross Income (excl. D&A) 42 46 50 53
% of revenue 78.5% 79.7% 79.9% 81.1%
EBITDA -2 -1 -2 -2
% of revenue -4.4% -2.2% -3.5% -3.2%
Depreciation & Amortization 1 1 3 2
% of Fixed Assets 8.0% 4.9% 9.6% 13.6%
Extraordinary Expenses 0 0 0 0
EBIT (incl. extraordinary exp) -3 -3 -5 -4
% of revenue -6.4% -4.5% -7.6% -6.6%
Pretax Income -4 -2 -8 -9
% of revenue -7.3% -4.3% -12.1% -13.3%
Income Tax 0 0 1 0
% rate 1.5% -5.8% -9.7% -3.6%
Net Income -4 -3 -8 -9
% of revenue -7.2% -4.5% -13.2% -13.8%

Quarterly Cash Flow Summary (USD Million)

Particulars 12/31/21 3/31/22 6/30/22 9/30/22

Cash from Operations 5 8 -7 -1
Licensed to Mikhail Kakuzin. Email address: [email protected]

% of revenue 9.3% 14.1% -11.9% -0.9%

Cash from Investing 2 17 3 2
% of Fixed Assets -13.6% -61.5% -10.9% -10.5%
Free Cash Flows 3 -9 -10 -2
% of revenue 6.0% -15.1% -16.5% -3.5%

֍
Let us start off with analyzing the most recent and historical quarterly data reported by the company.
֍
SEMRush has reported a top-line of $65.79 million in its recent quarterly result which is a 5.08% appreciation
over the previous quarter.
֍
The company reported a positive gross margin of 81.14% for the quarter ended 9/30/22.
֍
Its EBITDA for the quarter was $-2.11 million and the EBITDA margin was -3.21%.
֍
This was a 0.32% margin expansion at the EBITDA level which is definitely a positive outcome.

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25-02-2023

֍
SEMRush's operating income (EBIT) was reported at $-4.32 million and a margin of -6.57%.

֍
This EBIT margin grew by 1.05% in this quarter.
֍
The company's pre-tax margin for the quarter was -13.33%.
֍
SEMRush reported a net income of $-9.09 million which resulted in a diluted earnings per share (EPS) of $-
0.06.
֍
The company's net margin was -13.82%

Evolution Of Gross Income, EBIT, & Net Income (USD Million)

60

50

40

30

20

10

-10

-20
12/31/21 3/31/22 6/30/22 9/30/22

Net Income EBITDA Gross Income (excl. D&A)

֍
Now let us move on to the cash flow generation in the recent quarter.
֍
SEMRush burnt $-0.58 million in terms of operating cash flows for the quarter ended 9/30/22.

֍
The company was able to convert about -0.88% of its revenues into operating cash flows in the recent
quarter.
Licensed to Mikhail Kakuzin. Email address: [email protected]

֍
This quarter's EBITDA-to-operating cash flow conversion ratio is 27.49%
֍
Overall, SEMRush delivered a negative free cash flow of $2.29 million for the past quarter.

Historical Quarterly Statement Analysis - Balance Sheet (USD Million)

Balance Sheet 12/31/21 3/31/22 6/30/22 9/30/22

Assets
Net Intangible Fixed Assets 5 19 18 9

Net Tangible Fixed Assets 8 8 9 7

Total Fixed Assets 13 27 27 16

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25-02-2023

% of revenue 24.5% 47.4% 42.7% 24.7%

LT Investments 1 0 0 0

Inventories 0 0 0 0
% of revenue 0.0% 0.0% 0.0% 0.0%
Accounts Receivable 2 3 2 3
% of revenue 4.1% 5.0% 3.8% 4.2%
Cash and ST Investments 270 260 249 247
% of revenue 501.7% 454.8% 397.6% 374.8%
Other Current Assets 12 12 18 14
Total Current Assets 284 274 269 263

Other Assets 3 6 7 15

Total Assets 300 307 302 294

Liabilities & Shareholder's Equity

Equity & Minorities 226 225 218 211
% of capital employed 98.7% 98.6% 98.9% 99.1%

LT Debt 0 0 0 0
Other LT Liabilities 3 3 2 2
Total LT Liabilities 3 3 2 2
% of capital employed 1.3% 1.4% 1.1% 0.9%
Licensed to Mikhail Kakuzin. Email address: [email protected]

ST Debt 0 0 0 0
% of capital employed 0.0% 0.0% 0.0% 0.0%
Accounts Payable 10 11 6 13
% of COGS 18.5% 19.0% 9.2% 20.0%
Other ST Liabilities 62 69 76 67
% of revenue 114.6% 120.7% 121.8% 102.5%
Total Current Liabilities 72 80 82 81

Total Liabilities 75 83 84 83

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Total Liabilities &

300 307 302 294
Shareholder's Equity

֍
When we look at the quarterly Balance Sheet of the company, we see that the Fixed Asset base has evolved
from $26.71 million to $16.26 million over the last 2 quarters.
֍
The current level of fixed assets, including tangibles & intangibles, is around 24.72% of the company's
quarterly turnover.

֍
The company's receivables were around 4.20% of the quarterly top-line.
֍
As a result of the negative free cash flows, the company had a final cash and short-term investment balance
of $246.55 million.
֍
When we analyze the capital structure of SEMRush, we realize that the company relies more on equity to
finance its operations.
֍
The company's equity accounts for 99.10% of its total capital employed whereas debt (both long-term and
short-term) accounts for about 0.90% of the total capital.
֍
SEMRush's payables account for 19.99% of its cost of goods sold.
֍
The following chart demonstrates the evolution of the company's working capital elements and its current ratio
over the past 4 quarters.

Current Assets & Current Liabilities (USD Million)

300 4.50

4.00
250
3.50

200 3.00

2.50
150
2.00
Licensed to Mikhail Kakuzin. Email address: [email protected]

100 1.50

1.00
50
0.50

0 0.00
12/31/21 3/31/22 6/30/22 9/30/22

Total Current Assets Total Current Liabilities Current Ratio

Historical Income Statement - Annual (USD Million)

Particulars 2019 2020 2021

Revenues 92 125 188

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% growth 35.6% 50.5%

Cost of Goods Sold -23 -30 -42
% of revenue -24.5% -24.0% -22.3%
Gross Income (excl. D&A) 70 95 146
% of revenue 75.5% 76.0% 77.7%
EBITDA -7 -5 1
% of revenue -8.0% -3.6% 0.4%
Depreciation & Amortization 1 1 3
% of Fixed Assets 54.0% 39.7% 36.9%
Extraordinary Expenses 0 0 0
EBIT (incl. extraordinary exp) -8 -6 -2
% of revenue -8.9% -4.6% -1.2%
Pretax Income -10 -6 -3
% of revenue -10.5% -5.2% -1.6%
Income Tax 0 1 0
% rate -4.8% -8.9% -8.9%
Net Income -10 -7 -3
% of revenue -11.0% -5.6% -1.8%

֍
When we analyze the company's annualized historical income statement, we see that the top-line was $188
million for the previous financial year ending in 2021.

֍
The revenue growth was 50.54% in 2021 as compared to around 35.58% in 2020.
֍
SEMRush's cost of goods sold has increased from -23.97% to -22.30% as a percentage of the top-line
resulting in a drop in the gross margins.
֍
The company's overall annual EBITDA margin of 0.42% is higher than the reported quarterly EBITDA margin
for the most recent quarter.
֍
Non-cash expenses in the form of depreciation and amortization have gone up as compared to the result in
Licensed to Mikhail Kakuzin. Email address: [email protected]

2020.

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Revenue & Operating Margin (USD Million)

200 0.0%

180 -1.0%

160 -2.0%

140 -3.0%

120 -4.0%

100 -5.0%

80 -6.0%

60 -7.0%

40 -8.0%

20 -9.0%

0 -10.0%
2019 2020 2021

Revenues EBIT Margin

֍
The good news for investors holding the stock is that its net margin had increased from -5.61% in 2020 to -
1.75% in 2021.

Historical Balance Sheet - Annual (USD Million)

Particulars 2019 2020 2021

Assets
Net Intangible Fixed Assets 0 0 0
Licensed to Mikhail Kakuzin. Email address: [email protected]

Net Tangible Fixed Assets 2 3 8

Total Fixed Assets 2 3 8
% of revenue 1.7% 2.4% 4.4%

LT Investments 0 0 1

Inventories 0 0 0
% of revenue 0.0% 0.0% 0.0%
Accounts Receivable 0 0 0
% of revenue 0.0% 0.0% 0.0%
Cash and ST Investments 37 36 270
% of revenue 40.6% 28.5% 143.4%

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Other Current Assets 7 8 14

Total Current Assets 45 44 284

Other Assets 1 8 8

Total Assets 48 55 300

Liabilities & Shareholder's Equity

Equity & Minorities 17 11 226

LT Debt 0 0 0
Other LT Liabilities 1 1 3
Total LT Liabilities 1 1 3

ST Debt 0 0 0

Accounts Payable 0 0 0
% of COGS 0.0% 0.0% 0.0%
Other ST Liabilities 30 43 72

Total Current Liabilities 30 43 72

Total Liabilities 31 44 75

Total Liabilities &

48 55 300
Shareholder's Equity
Licensed to Mikhail Kakuzin. Email address: [email protected]

֍
Moving on to the company's historical annualized balance sheet, when we analyze the fixed assets versus the
revenues, we see that the percentage has evolved from 2.38% to 4.40%
֍
Its receivables of $0 million are about 0.00% of the top-line.
֍
SEMRush has close to $269.67 million in terms of liquidity i.e. cash and short term investments.

֍
On the other hand, its payables for 2021 account for around 0.00% of the cost of goods sold.
֍
The company's long term debt is around 0.0x times its equity.

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Historical Cash Flow Statement - Annual (USD Million)

Particulars 2019 2020 2021

Net Income (GAAP) -10 -7 -3

+ Depreciation &
1 1 3
Amortization

+/- Working Capital,

Deferred Taxes & Other 11 12 24
Adjustments

Cash Flow from

2 6 24
Operations

% of EBITDA -25.6% -128.6% 3007.6%

Capital Expenditure -1 -2 -2
% of revenues 1.1% 1.9% 1.3%

Other Investment Cash

0 -4 -2
Flow items

Cash Flow from

-1 -6 -5
Investments

Free Cash Flow 1 3 21

% of EBITDA -12.0% -76.5% 2706.3%
Licensed to Mikhail Kakuzin. Email address: [email protected]

Cash Flow from

5 -2 215
Financing

֍
SEMRush's Cash Flow from Operations as a % of EBITDA went up which is a good sign.

֍
The company delivered a positive free cash flow of $21.38 million in 2021.
֍
It was able to convert about 2706.33% into free cash flows which was higher than the previous financial year.
֍
SEMRush reported $215.32 million as Cash Flow from Financing for 2021 which was higher than the
previous year.

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Evolution Of Cash flow from Operations, Cash flow from Operations, & Cash flow from
Financing (USD Million)

250

200

150

100

50

-50
2019 2020 2021

Cash Flow from Operations Cash Flow from Investments Cash Flow from Financing

Key Ratios - Annual

Other Metrics 2019 2020 2021

Total Cash Dividends Paid 0.00 0.00 0.00
% growth NA NA NA
Total Common Shares
Outstanding 95 137 141
% change #DIV/0! 43.7% 3.2%
Licensed to Mikhail Kakuzin. Email address: [email protected]

Dividend Per Share 0.00 0.00 0.00

% change NA NA NA

Operating Ratios 2019 2020 2021

Receivables Turnover NA NA NA
Days Receivable NA NA NA
Inventory Turnover NA NA NA
Inventory Days NA NA NA
Payables Turnover NA NA NA
Days Payable NA NA NA

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Fixed Asset Turnover 57.2 42.0 22.7

Total Asset Turnover 1.9 2.3 0.6

Other Performance Ratios 2019 2020 2021

Return on Assets -21.3% -12.8% -1.1%
Return on Equity -60.2% -62.5% -1.5%

֍
The company does not pay any dividend.

֍
SEMRush's total common shares outstanding have increased in 2021 by 3.16% implying a share issuance.

֍
The receivables turnover helps quantify a company's effectiveness in collecting the money owed by clients
and demonstrates how well it uses and manages the credit it extends to customers.
֍
As per the days receivable, the company takes an average period of NA days to collect money from its clients
which appears to be on the higher side and blocking its working capital.
֍
The inventory turnover shows the number of times a given company has sold and replaced inventory during
the year and is an indicator of how many days of working capital is blocked in inventory.
֍
The inventory days ratio is not applicable as the company has no inventory.

֍
The accounts payable turnover is a short-term liquidity measure used to quantify the rate at which a company
pays off its suppliers. It shows how many days of credit a company gets from its suppliers.
֍

As per the days payable, the company takes an average period of NA days to pay off its creditors which
appears to be reasonable.
֍
The fixed asset turnover ratio measures how well a company generates sales from its tangible as well as
intangible fixed assets. The higher the ratio, the greater the company’s efficiency to its assets to generate
revenues.
֍
SEMRush's fixed assets turnover ratio of 22.7 has decreased in 2021 indicating that the company is
Licensed to Mikhail Kakuzin. Email address: [email protected]

generating lower revenues from its fixed assets.

֍
The total asset turnover ratio measures the value of a company's sales or revenues relative to the value of its
assets. The higher the asset turnover ratio, the more efficient a company is, with respect to using its assets to
generate revenues.
֍
SEMRush's total assets turnover has decreased to 0.63 in 2021.

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Evolution of Return on Equity & Return on Assets

0.0%

-10.0%

-20.0%

-30.0%

-40.0%

-50.0%

-60.0%

-70.0%
2019 2020 2021

Return on Assets Return on Equity

֍
In the above chart, we see the evolution of the company's return on equity and its return on assets.
֍
Return on assets is an excellent indicator of how efficient a company's management is in generating earnings
from their economic resources or assets on their balance sheet.
֍
On the other hand, the return on equity of a company measures the value creation of the management and
profitability in relation to stockholders’ equity.
֍
The company's overall Return on Assets is -1.10%.
֍
SEMRush's Return on Equity is -1.46%. The company's Return on Equity is lower than its Return on Assets
and this is because it does not resort to using significant capital gearing.

Leverage Ratios 2019 2020 2021

Net Debt -37 -36 -270
Net Debt/ Equity -2.2 -3.2 -1.2
Net Debt/ EBITDA 5.1 7.8 -341.4
Licensed to Mikhail Kakuzin. Email address: [email protected]

֍ SEMRush reported a Net Debt of $-269.67 million for the previous financial year.
֍
The Net Debt to Equity ratio is a critical gearing ratio that shows us how encumbered a company is with debt
and helps us figure whether it is overleveraged or not.
֍
In this case, we see that SEMRush's Net Debt/ Equity ratio is -1.20 which is below the standard level of 2,
implying that the company is having a low gearing.
֍
The Net Debt to EBITDA ratio is another key measure of a company's leverage and shows how many years it
would take for a company to pay back its debt if net debt and EBITDA are held constant.
֍
SEMRush's Net Debt/ EBITDA ratio is -341.35 which is below the ideal level of 4, implying that the company
is underleveraged.

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Evolution of Net Debt Levels

0 1.2

-50 1.0

-100 0.8

-150 0.6

-200 0.4

-250 0.2

-300 0.0
2019 2020 2021

Net Debt

֍
SEMRush's Net Debt is expected to increase in 2020 and is expected to follow a similar trend over the
coming years.
֍
The Net Debt-to-EBITDA ratio is a measure of leverage, calculated as a company's interest-bearing liabilities
minus cash or cash equivalents, divided by its EBITDA. It shows how many years it would take for a company
to pay back its debt if net debt and EBITDA are held constant.

֍
Net-Debt-to-Equity ratio, also known as the gearing ratio shows how encumbered a company is with its debt.
֍
The company's Net Debt-to-Equity ratio for 2019 is -2.22 and it indicates that the company has no gearing.
Licensed to Mikhail Kakuzin. Email address: [email protected]

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Key Risks
It is important to highlight the key risks associated with an investment in SEMRush as well as the inherent
risks associated with the financial projections and price forecasts presented in this report.

Semrush operates in a highly competitive market, and faces competition from many other companies that
offer similar services. If Semrush is unable to compete effectively, or if competitors develop better or more
popular products, it could negatively impact the company's financial performance and stock price.

Semrush has been actively acquiring other companies to expand its product offerings and customer base.
While these acquisitions can provide opportunities for growth, they also carry risks, such as integration
challenges, cultural clashes, and potential overpayment for the acquisition.
Semrush generates a significant portion of its revenue from a small number of key customers. If any of these
customers reduce their spending or decide to switch to a competitor, it could have a significant negative
impact on Semrush's financial performance.

Global economic, political and other conditions may adversely affect trends in consumer, business and
government spending, which may adversely impact the demand for the company’s services and its revenue
and profitability.

Rapid technological progress, changing client demands, and developing industry standards may all contribute
to the obsolescence of present and future products and services. In addition, the management claims that the
success of their client acquisition approach will always be critical to their business.

It is worth highlighting that the extent to which Covid-19 impacts the financial results of the company is highly
uncertain and could significantly disrupt the operations including sales, manufacturing and supply chain-
related activities. It could also result in social, economic, and labor instability in the countries where the
customers and suppliers operate.

With respect to our price projection, we would like to clarify that the valuation of SEMRush in this report is
specific to the date of the analysis i.e. 25-02-2023.

We must emphasize that the projected valuation and the share price of SEMRush are dependent on the
realization of the revenue growth, free cash flows and the other assumptions taken into account. Our analysis
cannot be directed to providing any assurance about the achievability of these financial forecasts.
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There is a possibility that the actual results of the company are different from the projected results as a result
of unexpected events and circumstances such as the realization of the threats mentioned in the paragraph
above. Lastly, we would like to clarify that we had no interaction with the management of the company and
they did not comment on the achievability or the reasonableness of the assumptions underlying the financial
forecasts. Please check out our detailed disclosures at the end for further details.

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25-02-2023

Environment, Social and Governance (ESG) Risk Ratings

The assessment of ESG (Environmental, Social & Governance) risks by Baptista Research includes a wide
range of considerations that pertain to the long-term sustainability of a company. We keep our evaluation
focused on updates with the potential to have a material impact on a company’s financial performance.
Environmental and social risks tend to be both sector-related as well as company-specific and could be driven
by external factors such as regulations or demographic changes. On the other hand, we believe that
governance risks are largely entity-driven. Often, if the ESG risks are material and yet remain unmitigated,
they result in a lower price target.

Environment Risk Score 1.9

Social Risk Score 16.2

Governance Risk Score 8.4

Total ESG Risk score 26

We use the ESG Risk Ratings Score provided by Sustainalytics, Inc. The final ESG Risk Rating score is
measures on a scale of 0-100 with a higher score implying a higher ESG risk. Sustainalytics assesses the
degree to which a company’s enterprise business is affected by ESG issues.

The rating uses a two-dimensional framework that combines an assessment of the company’s industry-
specific material ESG issues and an evaluation of the manner in which the company is handling those issues.
The higher the level of unmanaged risk, the higher the above-mentioned score.

As per this measure, SEMRush has an Environment Risk score of 1.9, a Social Risk score of 16.2, and a
Governance Risk score of 8.4 totalling to an ESG Risk score of 26.

The company lies on the 50th percentile implying a Medium ESG Risk.
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We also evaluate the ESG Controversy level of SEMRush as per Sustainalytics data, measured on a scale of
1 to 5 (5 being the most constroversial).

SEMRush's Controversy Level score is 1 which is considered as a Low Controversy level as it is well above
its industry average.

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Analyst Ratings

Buy: Expected to outperform market over next 6 to 12 months. Minimal risk to fundamentals and valuation.
Good long-term investment.
Outperform: Expected to outperform the market over next 6 to 12 months but there is a moderate risk to
fundamentals and valuation.
Sell: Expected to significantly underperform the market over next 6 to 12 months. There is a strong likelihood
of the security delivering negative returns and a very high risk to fundamentals and valuation.
Underperform: Expected to underperform the market over next 6 to 12. There is a moderate to high risk to
fundamentals and valuation.
Hold: Expected to perform in line with the market over next 6 to 12 months. However, there is a moderate to
high risk to fundamentals and valuation.

Analyst Industry Views

Attractive: The analyst expects the performance of his or her industry coverage universe over the next 12-18
months to be attractive vs. the relevant broad market benchmark, as indicated below.
In-Line: The analyst expects the performance of his or her industry coverage universe over the next 12-18
months to be in line with the relevant broad market benchmark, as indicated below.
Cautious: The analyst views the performance of his or her industry coverage universe over the next 12-18
months with caution vs. the relevant broad market benchmark, as indicated below.
Benchmarks for each region are as follows: North America - S&P 500; Latin America – MSCI Emerging
Markets Latin America; Europe – MSCI Europe; Japan - TOPIX; Asia - relevant country index or sub-regional
index. Please contact us to know the relevant index in case it is not specified in the report.

Disclosures

This report has been prepared by Baptista Research (“Baptista Research”, “its”, “our”) for informational
purposes only and does not constitute an offer, solicitation or recommendation to acquire or dispose of any
investment or to engage in any transaction. Key statistical data, historical data, and price-volume information
is sourced from reliable sources. This report is based solely on publicly-available information about the
featured company(s) which Baptista Research considers reliable, but Baptista Research does not represent it
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is accurate or complete, and it should not be relied upon as such. All information contained in this report is
subject to change without notice.

This report is not disseminated in connection with any distribution of securities and is not an offer to sell or the
solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.
This report neither constitute a personal trading recommendation nor take into account the particular
investment objectives, financial situation or needs of the recipients of this report, and does not provide all of
the key elements for any user to make an investment decision. Recipients should consider whether any
information in this report is suitable for their particular circumstances, review the company’s filings and, if
appropriate, seek professional advice, including tax advice.

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 Baptista Research
25-02-2023

Investors need to be aware of the high degree of risk in small-cap, mid-cap, and micro-cap equities. The price
per share and trading volume of the company(s) in this report may fluctuate and Baptista Research is not
liable for these inherent market fluctuations. Past performance is not a guide to future performance, future
returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those
involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all
investors.

Baptista Research and its owners, analysts, employees, contractors or interns accepts no liability whatsoever
for any direct or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by the
recipients of this report, arising out or in connection with the access to, use, misuse of or reliance on any
information contained in this report.

Baptista Research and/or www.baptistaresearch.com is an equity research focused firm but it is not a FINRA
registered broker/dealer or investment advisor and does not provide investment banking services. Baptista
Research and its owners, analysts, employees, contractor or interns do not have any long/short equity
position of the shares of the companies covered in this report. Baptista Research has not received any fees
or other compensation for preparing this report. Its team has not receive any compensation from the featured
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and conflicts of interest. Baptista Research does not receive any equity securities from the featured
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employees, contractors or interns do not engage in purchasing or selling the securities of any featured
companies at any period beginning 72 hours following the public release of the report and until at least 72
hours after the report is released to general public, via electronic distribution.

This report may not be reproduced, redistributed or published in electronic, paper or other form for any
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employees, contractor and interns accept no liability whatsoever for any direct, indirect or consequential loss
arising from any inaccuracy herein or from any use of this report or its contents. Any unauthorized use,
duplication, redistribution or disclosure is prohibited by law and will attract penalty. Baptista Research and its
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referenced website and shall have no liability or responsibility arising out of, or in connection with, any such
referenced website. Accessing third party portal or website is at your own risk. Additional information
regarding this research publication will be furnished upon request.
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 Baptista Research
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Contact Us

Analyst Name: Ishan Majumdar

Designation: Founder, CEO of Baptista Research
Contact Email: [email protected]
Website: https://baptistaresearch.com/
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 Baptista Research
25-02-2023
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