We're good? All right, we're good to go. Excellent. Thanks, everyone, for joining us today. My name is Scott Berg. I lead the enterprise software and SaaS research efforts here at Needham. Today we have Semrush with us. We have the company's president, Eugene Levin, and we have the company's CFO, Brian Mulroy. Welcome, gentlemen. Thank you for joining us.
Thanks, Scott.
I'm going to have about 30 minutes of prepared Q&A. We will take questions from the audience when we're done, if there are any. But to kick us off, one of you give a little history and background of Semrush for maybe those that are less familiar.
Sure, I can do that. So Semrush is a SaaS recurring revenue marketing technology company. And in particular, we focus on top-of-funnel marketing. We just released our Q1 results early last week and delivered another strong quarter with 21% top-line revenue growth. Our ARR is now $354 million, also grew 21% in the first quarter. And we have really strong profitability, so 83%-84% gross margins, which gives us a structural advantage to reinvest back into the organization and take advantage of a very large TAM that we're servicing. And we have really strong operating margins, where we hit 11.3%. That's up 2,000 basis points year-over-year, and then 14% free cash flow. From a product perspective, our focus is on making sure companies are optimizing their online presence and visibility.
So we focus on search engine optimization, search engine marketing, social media intelligence, content marketing, and then local marketing. The key for our customers is they all have products that they want to promote. They want to be able to generate traffic and find out where their consumers are spending their time and make sure that their website, their blogs, and their materials are present in those areas as well. So we look at ourselves as the GPS of the internet, helping companies navigate through all the different channels, where their consumers and customers are located, and giving them the tools, the data, and the technology to be able to find them. Three key things that I'll tell you and close it out is one is we're focusing on continuing to gain more adoption. So we have 112,000 paying customers today.
We believe there are millions of marketers and business owners who can benefit from our platform. So we're on a path to getting into the millions. We also have quite an extensive platform across those different channels that I mentioned. So we have a really strong cross-sell and upsell play and have been able to sustain more than 100% net retention rate. So the last quarter, 107% across the board. And then I mentioned our strong gross profitability. So we're able to reinvest that back into the organization. We continually launch new products that we're able to monetize and contribute to growth. Most recently, we launched some AI capabilities and then an enterprise-grade product within search engine optimization that's allowing us to expand our ARPU.
Key thing to remember is we're the GPS of the internet, helping companies navigate through all that and make sure that their online presence and visibility is optimized.
Question curveball. Brian, you've been the CFO for just over a year now. What's been the most impressive part about the company since you've been able to see up close?
Yeah, I just turned one, so I started April 10th of last year. It's just been a year. I think two things that I found the most impressive. One is just the capabilities and the passion and the knowledge of the individuals throughout the organization. Our founder has been in this space for 15-20 years, very passionate about and very knowledgeable about what marketers and business owners need to be able to succeed, and just continues to deliver that next feature and functionality that helps them to stay on top of their game. I love the passion. The other part of it is the market just continues to grow. We continue to see secular shifts where companies are shifting dollars from one channel to all the channels where we play and help them to optimize. So the opportunity is tremendous.
The ability for the company to execute and capitalize on that has been top-notch.
So let's talk about product in the industry. I think big picture, online visibility management, it's kind of a mouthful to say, I like to call it, because I think it's a product category that investors are maybe less familiar with. But they might be familiar with the individual kind of functionalities, or at least some of them out there. Why is your platform approach the right approach? And how does it compete with maybe some of the large technology players like Google or Facebook, which Google certainly competes with some of the functionality in the space?
Yeah, I think I'll start with the second part of the question, then get to more of a history of MarTech and how different players have evolved. So in terms of relationships with tech giants who provide this traffic to other players, I think we have a unique advantage in the way that we can be an unbiased player in this space while they have their own agenda. So for example, if the right decision for the business is to spend more money on Facebook, would Google tell you to spend more money on Facebook? Probably not. So how much you can trust advice from some of their tools, like Google Analytics? The other thing is that they all make money by selling ads. And they're not very interested to give you an advice about organic marketing, so things you can do without ads.
And unlike them, Semrush actually is platform-agnostic and totally unbiased. So we will tell people to do whatever provides them the best ROI. And I think there is definitely a place in the broader MarTech universe for this kind of unbiased player who knows where users spend their time and how to get them to your website and can give you actionable insight about this. And then in terms of platform, if you look at how MarTech evolved in general, the biggest companies always have been platforms. And the only difference is that those platforms focus on different stages of the funnel. So for example, email marketing was one of the earliest kind of channels for marketers to optimize. And that's why there are a lot of big companies in email marketing and marketing automation space and in the CRM space. And they're also platforms: Salesforce, Mailchimp, HubSpot.
They're also platforms in their own way. It's just they focus on lower stages of the funnel. And like those companies from the past who have been around for much longer than Semrush, Semrush is building platform, but for top of the funnel. So while they help businesses to optimize for conversions, we help businesses to optimize for visibility and get more traffic and more visitors to their properties, be it a website or their Facebook page or their local listing. And I think what we do is actually more important in the new world, because in the past, it was easy enough to get people. You just needed to have a website. Competition was low. And right now, competition is extremely high. So everyone can have a voice, but it's very hard to be heard. And we help people to be heard and find their audience online.
From an industry perspective, we touched on this a little bit in January about the deprecation of cookies in the environment. Pardon me. In April, a U.K. regulator ruled that Google's replacement for cookies actually does not go far enough for consumer privacy. But maybe can you remind investors why that, in general, is not a big deal for the Semrush platform? And maybe does this new ruling drive any benefit to the platform?
I think, in general, there is a big trend towards more privacy. People don't want to have kind of spooky advertising that is so personalized that you wonder how they knew that about me. And I think it's been a big push from consumers, from regulators. And deprecation of cookies for advertising purposes, I think, is a good thing. And what it does for us, for example, is that if previously some businesses could say, well, I'll just target John Smith, and I think John Smith has high propensity to buy my product, now there is no way to target John Smith. You can target topics. You can target audiences, much broader audiences. And that makes products like Semrush even more valuable. So here are just a couple of examples. If you want to optimize for a specific search term, you will use Semrush.
If you want to find the right websites to partner with from an affiliate marketing point of view, you will use Semrush .Trends tool. If you want to partner with influencers and use their audience to get more traffic, you will use Influencer Analytics products from Semrush or other companies, maybe. So in general, it's a kind of gentle tailwind for everyone who works in organic marketing, because the efficiency of paid marketing goes a little bit down once you lose the ability to target an individual person. But in terms of regulation, I think sooner or later that happens. They've delayed deprecation a little bit again. I think, again, advertising companies and they're asked to do something that may be not ideal for advertising. And maybe we're talking about a couple of percentage points of loss in efficiency. For them, that's still billions of dollars in the long run.
So they might be a little bit hesitant to do something that damages their advertising. So they've been delaying it for a while. But I think it's inevitable. So kind of hyper-personalized advertising will disappear anyway. But like I said, for us and other people in the organic marketing space, it's kind of a gentle tailwind.
If I think about the marketing space in general over the last couple of years, budgets have certainly been pressured throughout the marketing tech stack in different areas. Your results over the last year have been incredibly consistent. What has separated or stood out amongst the Semrush platform relative to some of these other marketing technologies out there that have had maybe less consistent demand trends?
I think a big part is value for money and kind of must-have versus nice-to-have. There are a lot of things in marketing technology that you probably could do yourself using Excel spreadsheets or Google Docs. And it will be less efficient. You would spend more time, but you can still get it done. And a lot of products that Semrush provides, technically, if you want to do this, you cannot do this any other way. Like, for example, keyword research. You cannot just go and do keyword research on your own, because there is no way for you to know volumes of different keywords. There is no way for you to have a database with billions of keywords like Semrush.
Or if you want to do backlinks research to find the right partners for digital PR, promotion, or for affiliate marketing, again, without this index of the internet, you cannot really perform this task very well. So I think that was a big factor. If people want to do certain things ok.
Oh, it was for me? Oh, I'm good. I'm good.
I didn't know I sounded that bad.
Sorry.
So I think from this point of view, there is a difference between things that are nice-to-have and things that are must-have. And for a lot of things, Semrush is a must-have if you decided you want to do certain tasks, like you want to do organic search optimization, you want to be serious about content marketing. And another thing that I think was very important for our performance is that we provide phenomenal value for money. And we haven't done any kind of artificial moves to optimize for short-term performance and sacrifice long-term performance. So that's why we've been very, very consistent in our growth. That's really a function of us being focused on the long-term picture during kind of market turbulence. A lot of companies have had spikes where they would grow fast and then grow really slow.
Semrush was just growing consistently, because we didn't focus on, let's say, next quarter that much. We always focused on, ok, what our growth rate is going to be in two years, three years from now.
The company just recently released a new enterprise platform. I know it's early, but I guess two questions in there. One, how does it differ from your traditional, more down-market-focused solution? Then two, any trends or anything that are worth noting early in the process here?
Yeah, we're really pleased that we've been able to launch that new product. We soft-launched it at the end of October. We were doing beta and early access for a while, and then just went general availability last week. The key for our enterprise offering is we have over 5,000 enterprise accounts. Those are companies that have more than 500 employees. They've been using our full platform for a long time and get a tremendous amount of value out of it. Over the years, they've been supplementing the data and technology with other point solutions, in some cases of their own homegrown proprietary solutions.
But they've been asking us to create more of a platform that allows the tool to bring together the developers, the content creators, social media, search engine optimization, and all aspects of marketing together to allow for more collaboration and a more optimized environment to be able to work together. So we've created technology that does that. We've built customizations in it to make sure that we can tailor the products and workflows to their needs. We've created more advanced automation and AI capabilities in the product that allows enterprises to do their best work in a more efficient way and created an in-product network of professionals that gives them access to experts that can help them to navigate some of the more complex aspects of their work. So we're creating a much more community-focused, collaborative, customizable, and of course, more technologically advanced environment.
We believe that that technology will allow us to get about 10x-15x the average ARR for our enterprise accounts. So we do see that in 2024 as being a gentle upward pressure on our growth and retention rates and expansion rates. But sales cycle is a little bit longer. It's going to take about three to six months to really develop a pipeline and get some traction there. So the impact in 2024 is lower, but we expect it to ramp up and really be a contributor to growth in 2025 and beyond.
So I think the topic every investor wants to discuss over the last 18 months has two letters, and it's called AI. I remember hosting a bus tour through Boston last year in June. And you all had demoed and I think it was your first investor demo of your new AI ContentShake. That was kind of the first one, at least, which I thought was super cool, because if you are a marketer, sometimes you just don't know how to use the right terminology, I guess, to use especially in the SEO-type process out there. But how do you think about your journey through those technologies on the Semrush platform, both in terms of the functionality, maybe up-market or down-market? Does it change at all with the new platform? And then lastly, how are you able to monetize it, do you think, over time?
So for us, AI has been a big part of what we do from early days, even before ChatGPT kind of became very mainstream. We've been using earlier versions of GPT in some of our products. And the way we think about this is that there are a lot of technologies you can use. And the best way to use any kind of technology is not to say, oh, this is nice, cool. I'll just use it everywhere. The best way to use technology is to think, ok, if I'm a customer, how this thing can help me in a practical way? And that's how we approached AI. And we've been adding it to many, many of our products.
In Q1, we had several major releases, including our kind of own AI Copilot in all of our core products that really connects the dots between all the projects that people have and provides actions and suggestions about what people should do based on how they perform. We have a reply-to-review feature in our local product that is extremely popular, one of the most popular features in terms of adoption rates from the day of launch and, let's say, a year later or less than a year later. We have, of course, ContentShake, the tool that we showed you back then. And it was in beta. And now it's available and has great traction and helps people to create a lot of content. And the best part of this ContentShake product is that it helps, it's not just using a large language model API.
It also supplements it with unique Semrush data and provides value add, because large language models, they don't really know what is a search engine or how to optimize for search engines. So you kind of need to pre-train them and explain, like, if you want to write about this topic and you want content to rank well, you need to use those keywords. Paragraphs should be that long. There should be a picture. There should be a video, and so on. And once you start feeding all this information into a large language model, you realize that prompt might be bigger than the output. So it's unlikely that people would write this prompt themselves. But you can write it for them, feed it into a large language model, and then show people the output. And we've done several tests.
Content created this way ranks much better than just a standard output of a large language model. From a monetization point of view, there are three different ways for us to monetize AI features. Number one is a standalone product. ContentShake is a good example, where we just sell it separately, starting from $50. There are certain features that will fit well into other products. You can put them on higher tiers and tell people, well, if you want to have access to this feature, you need to upgrade from tier A to tier B. That's how we monetize, for example, our reply-to-review feature in the local product. Finally, you can have features that are available for everyone, like our AI Copilot. Over time, it starts to improve conversion, starts to improve retention.
But what's even more interesting, as you add more and more of those features, you can just increase the price for everyone. And in the long run, that's probably the most sustainable way to monetize AI as an additional functionality.
So moving on to go-to-market a little bit, the company's move upmarket probably necessitates at least some change to what that strategy looked like. You made the comment on the Q1 call that you're, I think the term was, reallocating resources. To me, I took that as taking new growth investments and moving them upmarket versus taking a rep in your PLG strategy and move them. I guess, is that accurate? Or how do we think about what that strategy looks like to sell?
That's exactly what it is. So for years, for 12-15 years, we've been building up this business, now have 112,000 paying customers. More than 5,000 of them are already enterprise. So we've already established the foundation needed to service the enterprise. There's four key things that we look at. One is you need a certain caliber account executive who knows how to build a strategic partnership, how to work with sponsors, and how to collaborate across functions to create the need and the alignment across the leaders on what platform and solution that they ultimately purchase. So we have been, over the years, building out that capability. Now that we have the enterprise SEO product, our expectation is that part of the business will ramp up.
Even independent of that, we did note that our biggest customers that spend more than $10,000 of ARR is the fastest growing part of our business. It grew 32% in the first quarter. So we've been building this for a while and expanding those sales capabilities. The second part is there's a need to negotiate and work through sometimes custom terms and conditions. So there's a deal desk capability. We have that. We have a foundation, but we're continuing to ramp it up. And then there's post-sales support, where certain accounts do need more attention through a customer success management model or CSM. So we have those in-house.
We're continuing to ramp those up to make sure that we can support our customers' needs and make sure they have the technical product support and, in general, just are constantly focused on the value of our platform and the value that they're actually getting out of it. So we've been building it up for a long time, have really ramped it up over the last two years. And again, now with enterprise SEO, we'll continue to put more investment in that place. Simultaneous to that, but not really related, is we've been able to find efficiencies in other areas of the business so that in the P&L, you're not going to see the investment show up as absolute dollar or even EDR increases in our sales spend. So key for us is we've had a very successful product-led growth motion for SMB and mid-market accounts.
We've been able to take advantage of a low-cost, frictionless selling motion, where we support most of those accounts through e-commerce. In the last year or two, we've been able to gain significant efficiencies by using automation and AI to enhance that. We've freed up investment from that much more efficient SMB mid-market selling motion. We're reinvesting those dollars in enterprise as we start to ramp that up even more than what we've had.
And you and I were talking last night, Brian. Enterprise as a percentage of the revenues is much bigger than what I expected, and I think bigger than the average investor out here, not necessarily detailing the data today. How do we think about the sales of that? Because you've been selling to some of these large companies for a while. I like to throw out the example. There's a large company in Orlando might have ears on their head type of example. They've been a customer of yours for a while without naming them directly. But I guess, what's the sales motion to that type of company like? Because you're probably not selling to the CMO in that organization. But a smaller company, you're selling to the business owner or the one marketing person. Does that differ?
Does the sales cycle differ a lot, even though for them it's a probably inexpensive purchase overall?
Yeah. And I mean, no question, it's different. Because we have 112,000 paying customers, we span all the way from solopreneurs and small business owners all the way up to Fortune 500 accounts. And as I mentioned, we have more than 5,000 enterprise with more than 500 employees. So sales cycle, of course, is on a spectrum. So if you think about the top cohort of enterprise accounts and compare those to the SMB market, very different selling motion. So with the SMB, we're focused on generating traffic and awareness about our products. We're looking to get these business owners and marketers to our online assets and ultimately our website to be able to learn about the product and then be able to use a credit card and transact without any interaction with a sales rep.
For enterprise, there's a need for a demo and a conversation about a more comprehensive value proposition for the full platform. There's a need to bring together the developers, the content owners, and of course, your social media and search engine experts to collaborate and align on a full suite of products that we provide and then negotiate a deal, work through procurement to get approvals and POs, and ultimately get a booking and a contract in place to be able to facilitate the relationship with that account. So very different selling motions, something that we've always had. But again, with this enterprise SEO product, we're continuing to ramp it up, expecting that we've got a significant upside with our enterprise accounts.
I guess last on go-to-market, when I think of marketing technologies broadly, out of all the ones I've covered over the last x number of years I stopped adding them up, or at least I'm trying to stop adding them up is marketing is probably the one product category, along with ERP systems, that has a really heavily involved partner ecosystem, whether it's a SaaS partner or marketing and ad agencies, et cetera. How do they factor into your go-to-market strategy?
It's a huge part of it. So we have, I'd say, pretty much every single marketing agency in the world is using our products and advocating for our platform. They're using it, in certain cases, for consulting engagements where they're working with their clients to optimize their online awareness. And in many cases, we then become a supplier for that account after that engagement is over. So we're always relying on affiliates and partners and agencies who have the expertise, are leveraging our technology, are promoting our brands, and ultimately helping us to expand our footprint and the number of paying customers we have.
You also have a freemium model. I think we touched on it briefly earlier. It is a model I've seen work for a lot of similar companies in the marketing category, especially down market to smaller customers. But we're seeing success, actually, up market with some of them. Larger customers want to try it kind of on their own. How do you think about conversions of those customers in this macro? Are you seeing any improvements, any degradation in terms of their ability to maybe spend and become a paid customer? And how does that motion change at all for you maybe over the next year or two?
No question. We're very pleased with the base of users we've been able to develop over time. In addition to the 112,000 paying customers, we have 1.1 million free users. There's three groups. One is students. We're in 120 universities, part of the core curriculum. I think you said it on our callback. It's the Happy Meal approach where we're trying to get them used to the products and using it every day and making it an essential part of the work they do when they graduate and become successful marketers and business owners after they graduate. A lot of students are using us. They're getting used to the value it provides. We also provide a free version to small business owners who are just starting on their journey.
We use it as a means to be able to educate them about all the different channels they need to promote their brands. We want to make sure that they're getting value out of it very early on. Then as they grow and scale their business and become more successful, they'll evolve into a paying customer. Then the third group is we often push features and functionality into the market for free to test and see what the adoption is and then start to ramp up and test the reaction, the use, and what investment's required to get it up to a fully scalable and monetized solution. We recently did that with social media, where we had it out for free for a number of years. We monetized it in the second half of 2023. It's one of our fastest growing areas of the business.
Combined, all three or more, a long-term play to make sure Semrush is a household name and a de facto standard when you think about marketing technology for students, small business owners, and then just specialists that are looking for that next generation of technology that they want to put into use.
I just have two questions left. Then I'm happy to turn it over to any from the audience. And since we have the company CFO, I think I'd be remiss not to at least ask a couple of financial questions, right? So the most impressive part of your business to me over the last year is you've been able to maintain a growth rate that's above 20%, very consistent and durable over the last 12 months. But your margin expansion at a 20%+ growth rate's been really impressive. I think you mentioned in the last quarter it was about 2,000 basis points on a year-over-year basis. Help us kind of walk through this balance in how you're able to maintain that growth rate. Because usually, I only see that type of leverage when companies fall to, I don't know, maybe the 10%, 15% revenue growth level.
Yeah. Yeah, we are, I mean, plain and simple, just an incredibly disciplined and efficient business. It starts with our gross profitability and the platform we built and the scale that we get out of it. So we're servicing millions of users with our platform and able to scale that very efficiently. So we have 83%-84% gross margin. That gives us a structural advantage to be able to reinvest back in the business. And as Eugene mentioned early on, and I was talking about with our free users, we always have our long-term potential in mind. So we're always building our sales and marketing and R&D organizations for long-term growth and profitability. And over time, we continue to just get benefits out of the investments and the discipline around those investments and the efficiency of the business.
To kind of walk down the P&L, I mentioned gross margins from a sales and marketing perspective. Our CAC now has a payback within 6-8 months. We're getting about a 5x-6x return on that investment. It keeps becoming more efficient as Semrush becomes an even more well-known brand. We start to get that flywheel effect where more and more companies are becoming aware of us. It's getting less the cost to actually find those customers and attract them where our business is becoming more efficient. In our PLG motion with AI and automations becoming more efficient, we're using AI for our tech support organization and now able to respond to about 40% of our customer requests without any human involvement at all.
So just across the board, the engineers in the organization are very talented, always looking at that next piece of technology that makes us more efficient. And we're really disciplined with our spend, always keeping in mind that long-term growth potential. And that's enabled us to drive pretty significant profitability while also investing in AI enterprise for SEO and intelligence and really extend our footprint and reach from a technology perspective. So we'll expect that efficiency. We'll continue. And we'll continue to gain, scale, and leverage and sustain durable growth for a long period of time.
With the margin leverage over the last year, you certainly demonstrated that you can be a profitable company at a reasonable growth rate or better. How do you think about the balance between the two? Could the market bear additional investments for you to grow maybe 25%-30% again? Or do you think the balance right now is really the right kind of, as Eugene said, more durable growth rate over a period of time?
Yeah. This is always my favorite question. It's something.
It wasn't even on the list. I just made it.
Exactly. I mean, I think about this every single day. And to be honest, every CFO and executive in every organization needs to be thinking about the trade-off between growth and profitability. The way we look at it is we're after what we call the efficient frontier. So we want to be investing in the business. And as long as we see strong returns in the long term, we're going to keep those investments. And we'll ramp up those investments. But if we see investments in technology or the operations of the business that we don't feel is yielding results, we're going to pull that back and drop it to profitability or rethink and start to shift the resources like we're doing with our SMB sellers to enterprise sellers in the last couple of quarters. So we're constantly focused on investments.
We're investing significantly in the business with AI, our enterprise up market motion, and the products that are needed to support that and extending our reach to create a more comprehensive platform for marketers. So the investments are significant. But the reality is the company's incredibly efficient and just generates really good profitability. And it takes us a little bit of time to figure out what's next for Semrush to invest in that next thing that will allow us to continue to grow and scale.
With that, we have a few minutes left. I'm happy to open Q&A to the floor.
Over the next few years, do you see more growth coming from more logos and an increased customer count or more of that kind of uphill expansion?
I see both. So our three growth vectors are adding new customers. We added 4,000 customers in the first quarter and about 100,000 free paid users. So the opportunity for extending our reach is significant. We also have a very successful cross-sell upsell play where we're focused on expanding our footprint within existing accounts. Our average ARR per paying customer grew 10% year-over-year to $3,200. And of course, we've been talking about the entire morning, this strong gross profitability that gives us a structural advantage to reinvest back in the organization and come out with new products that we can monetize and continue on that trajectory of expanding our average ARR per paying customer. So all three of those are important. We love all our children.
The one thing I would say is enterprise is probably the one that's going to generate growth more significantly because we have a very broad platform. We have this new enterprise SEO product that we believe will generate 10x-15x what our average is. As of now, we're seeing that portion of the business grow about 50% more than the remainder of business. It's growing 32% for our largest account. In, I'd say, the midterm, the enterprise business will be probably a more significant growth driver than the rest.
Any other questions? Sure. Go ahead.
Maybe a follow-up from that. In enterprise, what do you think gives you that which to kind of consolidate more point solutions around, I guess, your platform?
It's three things. I think this is the best of breed versus a single platform argument that a lot of companies have. Reality is Semrush is becoming both of those. We're the best of breed for all these point solutions. Our data set is the most comprehensive. And we're now in a place where companies don't need to supplement the data to get a holistic view. They can rely on us to predict and figure out what types of content are going to rank, what keywords they need to focus on, and what social media channels are important to them. So we're at a point now where 12 years of developing the data set and the technology is paying off. And we get this flywheel effect where customers are sharing their data with us.
We have 112,000 paying, over 1 million free, where we're able to get access to their data across social media, search engine, and traffic in general, which is really giving us a competitive advantage in the market. There is some fragmentation where companies are relying on Ahrefs, some of our competitors, and then homegrown solutions that we've now proven with our latest platform. You can replace all of it and bring it on one centralized platform.
Alex.
As you go to the enterprise, give us a color in to this transition from reps that are SMB reps to enterprise reps. You're not disclosing these numbers.
Yeah. I'd say in the next couple of quarters, we'll start talking about the segments separately. The key for us is our enterprise accounts. So the largest and most sophisticated accounts are growing faster. Those who spend 10,000 or more grew 32% while we grew overall 21%. Their retention rates are significantly higher. Their propensity to adopt more of the platform's higher. And of course, their average ARR is multiples higher than the rest of the SMB and mid-market businesses. So we're investing quite a bit to continue to drive that growth. As I was telling from the question Scott mentioned before, we're not exactly shifting people.
We're investing in continuing to expand our enterprise selling capabilities and creating that deal desk, the product specialists, the solution engineers, and of course, the account executives that are needed to make that a successful play and then relying more and more on our PLG or product-led growth and e-commerce motion to support the SMB and mid-market, which has given us an opportunity to reinvest without a significant impact to the P&L.
All right. With that, I'll give everyone a minute 45 back into their day. Thank you so much for joining us. Brian, Eugene, thank you.
You got it. Thank you.