Semrush Holdings, Inc. (NYSE:SEMR) Q4 2023 Earnings Call Transcript

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Operator: Thank you. Our next question — our final question for today comes from Mark Murphy of JPMorgan. Your line is now open. Please go ahead.

Unidentified Analyst: Hey, thanks for taking the question. This is [Arti] (ph) for Mark Murphy. You guys talked about this kind of shift of resources from the SMB up to — upmarket and I think that makes a lot of sense. But do you guys expect any headwinds as you guys are kind of shifting those resources away from the SMB and as you kind of get those fires going in the upmarket? Thanks.

Eugene Levin: Thank you for the question. So, no, we actually see both sides of the market being great. It’s more of just number of customers that we already have that are large enterprises reached a certain point where we just couldn’t ignore that. When you have thousands of customers who come to you on a regular basis and they say, I’m willing to pay more money, but you have to build this and this and this for me. As volume of those conversations increases, we started to realize how big is the opportunity there doesn’t mean we’re unhappy with what we see on SMB front. On SMB front, we’re adding a lot of great products, especially with our recent focus on AI capabilities. We’re seeing a lot of traction in all those products.

We’ve recently launched monetization of our social media tools. That is doing great. We have very good traction with our local marketing products with a lot of SMBs using it on a regular basis pretty much daily. So, yeah, I don’t think there is any kind of headwind. We’re very excited about both sides of the market. At the end of the day, small companies need more traffic and big companies need more traffic, and we’re there to help.

Brian Mulroy: And one thing I’d add, just building on Elizabeth’s question is, Elizabeth was asking about our use of AI, that’s a big contributor to the efficiencies we’re seeing in the business. So, we’re now automating over 40% of the customer interactions. And the use and continued expansion of that is giving us a lot more efficiency on the SMB side and giving us the capability to be able to reinvest that into Enterprise, which is why we’re saying our [indiscernible] for sales won’t expand overall despite the investment.

Unidentified Analyst: Great. That’s very helpful. Thank you.

Operator: Thank you. At this time, we currently have no further questions, so I’ll hand back to Oleg for any further remarks.

Oleg Shchegolev: Thank you for your support. We are very pleased with our results and our [execution] (ph) in 2023, and we are very optimistic about our future. Once again, I thank you all for your support and keep — and look forward to keep you updated on our progress.

Operator: Thank you for joining today’s call. You may now disconnect your lines.

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