SEMrush Holdings, Inc. ( SEMR ) shares are trading lower after the company reported fourth-quarter FY23 results yesterday.

Revenue rose 21% Y/Y to $83.39 million, beating the consensus of $83.11 million. In the quarter, the company achieved an ARR of $337.1 million, up 23% Y/Y.

The company ended the quarter with over 1,041,000 registered free active customers (up nearly 30% Y/Y) and had about 108,000 paying customers (+12.5% Y/Y) as of December 31, 2023.

Dollar-based net revenue retention was 107% as of December 31, 2023, vs. 109% in the previous quarter.

EPS of $0.05 surpassed the consensus of $0.04.

The free cash flow stood at $8.9 million in the fourth quarter.

Brian Mulroy, CFO of SEMrush ( SEMR ) said, “Looking ahead to 2024, we are confident in our ability to grow and to continue to scale our business to capitalize on the market opportunity.”

Outlook: For the first quarter, the company expects revenue of $84.7 million-$85.3 million (around +20% Y/Y at mid-point) vs. consensus of $86.25 million and adjusted operating margin of roughly 8%.

For FY24, SEMrush ( SEMR ) projects revenue of $364 million-$368 million (up about 19% Y/Y at mid-point) vs. $368.81 million estimate and adjusted operating margin of 10% to 11%.

Also, the company anticipates a free cash flow margin of 7% to 8% in FY24.

Price Action: SEMR shares are down 18.8% at $10.55 on the last check Tuesday.