What To Expect From SEMrush’s (SEMR) Q3 Earnings

Max Juang /
2023/10/31 4:48 am EDT

Marketing analytics software Semrush (NYSE:SEMR) will be announcing earnings results tomorrow after market close. Here's what you need to know.

Last quarter SEMrush reported revenues of $74.7 million, up 19.3% year on year, in line with analyst expectations. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and decelerating customer growth. The company added 4,000 customers to a total of 104,000.

Is SEMrush buy or sell heading into the earnings? Read our full analysis here.

This quarter analysts are expecting SEMrush's revenue to grow 19.7% year on year to $78.7 million, slowing down from the 33.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.02 per share.

SEMrush Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.37%.

Looking at SEMrush's peers in the sales and marketing software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. VeriSign delivered top-line growth of 5.44% year on year, missing analyst estimates by 0.75%, and ZoomInfo reported revenues up 9.11% year on year, exceeding estimates by 1.06%. VeriSign traded flat on the results, Zoominfo was up 1.48%.

Read our full analysis of VeriSign's results here and ZoomInfo's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off in 2022, and while some of the sales and marketing software stocks have fared somewhat better, they have not been spared, with share price declining 8.09% over the last month. SEMrush is down 1.94% during the same time, and is heading into the earnings with analyst price target of $12, compared to share price of $8.1.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.