As we reflect back on the just completed Q1 sales and marketing software sector earnings season, we dig into the relative performance of SEMrush (NYSE:SEMR) and its peers.
The Internet and the exploding amount of data have transformed how businesses interact with, market to, and transact with their customers. Personalization of offerings, e-commerce, targeted advertising and data-empowered sales teams are now table stakes for modern businesses, and sales and marketing software providers are becoming the tools of evolving customer interaction.
The 23 sales and marketing software stocks we track reported a weak Q1; on average, revenues beat analyst consensus estimates by 2.48%, while on average next quarter revenue guidance was 0.04% under consensus. Tech stocks have been under pressure since the end of last year, but sales and marketing software stocks held their ground better than others, with the share price up 1.59% since earnings, on average.
Started by Oleg Shchegolev while still in university, Semrush (NYSE:SEMR) is a software as a service platform that helps companies optimize their search engine and content marketing efforts.
SEMrush reported revenues of $57.1 million, up 42.8% year on year, beating analyst expectations by 2.04%. It was a very strong quarter for the company, with accelerating customer growth and an exceptional revenue growth.
“The first quarter was a solid start to the year, and I am proud of our team as they navigated through a challenging geopolitical environment to deliver record new customer growth. We added more than 5,000 customers in the quarter and the strong start to the year gives me confidence in our outlook for the remainder of 2022. The customer growth was broad-based, which is very encouraging given that select geographies experienced challenges in the first quarter. I believe the customer growth speaks to the tremendous value we deliver to our customers and the critical role we play in their success,” said Oleg Shchegolev, CEO and Co-Founder of Semrush.
The stock is up 50.6% since the results and currently trades at $13.45.
Best Q1: DoubleVerify (NYSE:DV)
When Oren Netzer saw a digital ad for US-based Target while sitting in his Tel Aviv apartment, he knew there was an unsolved problem, so he started DoubleVerify (NYSE: DV), a provider of advertising solutions to businesses that helps with ad verification, fraud prevention, and brand safety.
DoubleVerify reported revenues of $96.7 million, up 43.1% year on year, beating analyst expectations by 7.58%. It was a very strong quarter for the company, with an exceptional revenue growth and an impressive beat of analyst estimates.
DoubleVerify delivered the strongest analyst estimates beat among its peers. The stock is up 35% since the results and currently trades at $24.68.
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Weakest Q1: ON24 (NYSE:ONTF)
Started in 1998 as a platform to broadcast press conferences, ON24’s (NYSE:ONTF) software helps organizations organize online webinars and other virtual events and convert prospects into customers.
ON24 reported revenues of $48.4 million, down -3.21% year on year, beating analyst expectations by 1.88%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations and a slow revenue growth.
ON24 had the slowest revenue growth and weakest full year guidance update in the group. The stock is down 4.08% since the results and currently trades at $10.33.
Founded in 2006, as an online ad platform focused on ad sellers, Pubmatic (NASDAQ: PUBM) is a fully integrated cloud-based programmatic advertising platform.
PubMatic reported revenues of $54.5 million, up 25% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year below analysts' estimates.
PubMatic had the weakest performance against analyst estimates among the peers. The stock is down 11.5% since the results and currently trades at $16.80.
Founded in 2007 as DiscoveryOrg and renamed after a merger in 2019, ZoomInfo (NASDAQ:ZI) is a software as a service product that provides sales departments with access to a database of prospective clients.
ZoomInfo reported revenues of $241.7 million, up 57.6% year on year, beating analyst expectations by 6.03%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.
ZoomInfo pulled off the fastest revenue growth and highest full year guidance raise among the peers. The company added 171 enterprise customers paying more than $100,000 annually to a total of 1,623. The stock is down 24.8% since the results and currently trades at $37.
The author has no position in any of the stocks mentioned