SEMrush Holdings, Inc.SEMR
SEMrush Holdings, Inc. Fair Value Disclosure
Fair Value Measurement
The following tables summarize financial assets and liabilities measured and recorded at fair value on a recurring basis in the accompanying consolidated balance sheets as of December 31, 2025 and
December 31, 2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
| December 31, 2025 | |||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) | Significant Other Observable Inputs (Level 2 Inputs) | Significant Unobservable Inputs (Level 3 Inputs) | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 234,901 | $ | — | $ | — | $ | 234,901 | |||||||||||||||
| U.S. treasury securities | — | 4,996 | — | 4,996 | |||||||||||||||||||
| Convertible debt securities (See Note 7) | $ | — | $ | — | $ | 3,860 | 3,860 | ||||||||||||||||
| Total assets | $ | 234,901 | $ | 4,996 | $ | 3,860 | $ | 243,757 | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1 Inputs) | Significant Other Observable Inputs (Level 2 Inputs) | Significant Unobservable Inputs (Level 3 Inputs) | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 6,376 | $ | — | $ | — | $ | 6,376 | |||||||||||||||
| U.S. treasury securities | — | 186,693 | — | 186,693 | |||||||||||||||||||
| Commercial paper | — | 14,918 | — | 14,918 | |||||||||||||||||||
| Convertible debt securities (See Note 7) | — | — | 3,593 | 3,593 | |||||||||||||||||||
| Investment loan receivables (See Note 7) | — | — | 7,676 | 7,676 | |||||||||||||||||||
| Total assets | $ | 6,376 | $ | 201,611 | $ | 11,269 | $ | 219,256 | |||||||||||||||
The fair value measurements of the Company’s money market funds are based on quoted market prices in active markets for identical assets and, therefore, these assets are recorded at fair value on a recurring basis and classified as Level 1 in the fair value hierarchy. The fair value measurements of the Company’s U.S. treasury securities and commercial paper are based on significant other observable inputs and, therefore, these assets are recorded at fair value on a recurring basis and classified as Level 2 in the fair value hierarchy.
As of December 31, 2025, the Company measured its convertible debt securities (See Note 7 “Other Assets”) on a recurring basis using significant unobservable inputs (Level 3). As of December 31, 2024, the Company measured its investment loan receivables (see Note 7 “Other Assets”), its convertible debt securities (See Note 7 “Other Assets”) and its contingent consideration associated with the acquisition of Datos Inc. on a recurring basis using significant unobservable inputs (Level 3).
Convertible Debt Securities
The Company records its convertible debt securities at fair value on the purchase date. The Company determines the fair value of these investments using the Black-Scholes Merton model. For each reporting period thereafter, these investments are revalued and increases or decreases in their fair values are recorded as adjustments to other income, net within the consolidated statements of operations and comprehensive (loss) income to reflect the gains and losses. Changes in the fair value of these investments can result from changes in the estimated enterprise value of the issuers, the likelihoods and methods of such conversions, and other market factors. Significant judgment is employed in determining
the appropriateness of these assumptions as of the purchase date and for each subsequent period. Accordingly, changes in any of the assumptions described above can materially impact the amount of gain or loss the Company records in any given period.
A rollforward of the fair value measurements of the convertible debt securities for the years ended December 31, 2024 and 2025 is as follows:
Balance as of December 31, 2023 | $ | — | |||
| Investment in convertible debt security | 3,000 | ||||
| Change in fair value included in other income, net | 593 | ||||
Balance as of December 31, 2024 | 3,593 | ||||
| Change in fair value included in other income, net | 267 | ||||
Balance as of December 31, 2025 | $ | 3,860 | |||
Investment Loan Receivables
The Company elected to account for its investment loan receivables by utilizing the fair value option. The Company records investment loan receivables at their fair value on the agreement date. Each reporting period thereafter, these receivables are revalued and increases or decreases in their fair values are recorded as an adjustment to other income, net within the consolidated statements of operations and comprehensive (loss) income. The Company generally determines the fair value using the discounted cash flow method. The significant assumptions used to estimate the fair value include the interest rate, risk-free rate, expected repayment date, equity value, equity volatility, expected timing of exercise, and the credit spread assumption specific to the investment loan. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period.
A rollforward of the fair value measurements of the investment loan receivable for the year ended December 31, 2025 is as follows:
Balance as of December 31, 2024 | $ | 7,676 | |||
| Change in fair value included in other income, net | 762 | ||||
| Repayment of investment loan receivables | (8,438) | ||||
Balance as of December 31, 2025 | $ | — | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Mar 7, 2024 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.