The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how sales and marketing software stocks fared in Q2, starting with Yext (NYSE:YEXT).
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 mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was in line.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
Thankfully, sales and marketing software stocks have been resilient with share prices up 5.4% on average since the latest earnings results.
Yext (NYSE:YEXT)
Founded in 2006 by Howard Lerman, Yext (NYSE:YEXT) offers software as a service that helps their clients manage and monitor their online listings and customer reviews across all relevant databases, from Google Maps to Alexa or Siri.
Yext reported revenues of $97.89 million, down 4.6% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with full-year revenue guidance exceeding analysts’ expectations and a decent beat of analysts’ billings estimates.
"Our second quarter results delivered significant margin expansion due to our continued focus on operating efficiency, positioning us for growing profitability," said Yext CEO and Chair of the Board, Michael Walrath.
Yext Total Revenue
Yext scored the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 37.7% since reporting and currently trades at $6.76.
Co-founded by former Apple CEO John Scully, Zeta Global (NYSE:ZETA) provides software and data analytics tools that help companies market their products to billions of customers.
Zeta reported revenues of $227.8 million, up 32.6% year on year, outperforming analysts’ expectations by 7.2%. The business had an exceptional quarter with an impressive beat of analysts’ billings estimates and optimistic revenue guidance for the next quarter.
Zeta Total Revenue
Zeta scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 37.6% since reporting. It currently trades at $29.55.
Founded in 2006 as an online ad platform helping ad sellers, Pubmatic (NASDAQ: PUBM) is a fully integrated cloud-based programmatic advertising platform.
PubMatic reported revenues of $67.27 million, up 6.2% year on year, falling short of analysts’ expectations by 4.1%. It was a disappointing quarter as it posted underwhelming revenue guidance for the next quarter.
As expected, the stock is down 27.8% since the results and currently trades at $14.16.
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 $90.95 million, up 21.8% year on year. This print surpassed analysts’ expectations by 1.3%. It was a very strong quarter as it also put up an impressive beat of analysts’ billings estimates and a solid beat of analysts’ ARR (annual recurring revenue) estimates.
The company added 4,000 customers to reach a total of 116,000. The stock is up 17.7% since reporting and currently trades at $15.20.
Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ:TTD) offers cloud-based software that uses data to help advertisers better plan, place, and target their online ads.
The Trade Desk reported revenues of $584.6 million, up 25.9% year on year. This number topped analysts’ expectations by 1.1%. Overall, it was a strong quarter as it also recorded a meaningful improvement in its gross margin and strong sales guidance for the next quarter.
The stock is up 23% since reporting and currently trades at $108.48.
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