Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Sprout Social (NASDAQ: SPT) and the best and worst performers in the sales and marketing software industry.
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 22 sales and marketing software stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.9% since the latest earnings results.
Sprout Social (NASDAQ: SPT)
Born from the recognition that businesses needed a centralized way to handle their growing social media presence, Sprout Social (NASDAQ: SPT) provides a comprehensive software platform that helps businesses manage, analyze, and optimize their presence across various social media networks.
Sprout Social reported revenues of $111.8 million, up 12.5% year on year. This print exceeded analysts’ expectations by 0.8%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations significantly.
“Our team delivered strong results in the second quarter, highlighted by 12% revenue growth and solid profitability," said Ryan Barretto, CEO of Sprout Social.
Unsurprisingly, the stock is down 33.3% since reporting and currently trades at $10.70.
Read our full report on Sprout Social here, it’s free for active Edge members.
Best Q2: Shopify (NASDAQ: SHOP)
Starting with just three people selling snowboards online in 2004, Shopify (NYSE: SHOP) provides a comprehensive platform that enables merchants of all sizes to create, manage and grow their businesses across multiple sales channels.
Shopify reported revenues of $2.68 billion, up 31.1% year on year, outperforming analysts’ expectations by 5.2%. The business had a stunning quarter with a solid beat of analysts’ gross merchandise volume estimates and an impressive beat of analysts’ EBITDA estimates.
Shopify delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19.5% since reporting. It currently trades at $151.94.
Is now the time to buy Shopify? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Semrush (NYSE: SEMR)
Born from the need to make sense of the complex digital marketing landscape, Semrush (NYSE: SEMR) is a software-as-a-service platform that helps companies improve their online visibility, analyze digital marketing efforts, and optimize content across search engines and social media.
Semrush reported revenues of $108.9 million, up 19.7% year on year, in line with analysts’ expectations. It was a slower quarter as it posted full-year revenue guidance slightly missing analysts’ expectations.
As expected, the stock is down 23.6% since the results and currently trades at $7.07.
Read our full analysis of Semrush’s results here.
The Trade Desk (NASDAQ: TTD)
Built as an alternative to "walled garden" advertising ecosystems, The Trade Desk (NASDAQ: TTD) provides a cloud-based platform that helps advertisers and agencies plan, manage, and optimize digital advertising campaigns across multiple channels and devices.
The Trade Desk reported revenues of $694 million, up 18.7% year on year. This number surpassed analysts’ expectations by 1.2%. More broadly, it was a mixed quarter as it also recorded a solid beat of analysts’ EBITDA estimates but a miss of analysts’ billings estimates.
The stock is down 42.2% since reporting and currently trades at $51.04.
Read our full, actionable report on The Trade Desk here, it’s free for active Edge members.
Sprinklr (NYSE: CXM)
With a proprietary AI engine processing 450 million data points daily across 30+ digital channels, Sprinklr (NYSE: CXM) provides cloud-based software that helps large enterprises manage customer experiences across social, messaging, chat, and voice channels.
Sprinklr reported revenues of $212 million, up 7.5% year on year. This result topped analysts’ expectations by 3.2%. It was a very strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance exceeding analysts’ expectations.
The stock is down 13.5% since reporting and currently trades at $7.46.
Read our full, actionable report on Sprinklr here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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