Sales And Marketing Software Stocks Q1 Teardown: Sprout Social (NASDAQ:SPT) Vs The Rest
Let's dig into the relative performance of Sprout Social (NASDAQ:SPT) and its peers as we unravel the now-completed Q1 sales and marketing software earnings season.
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 20 sales and marketing software stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 2.5%. while next quarter's revenue guidance was in line with consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and sales and marketing software stocks have held roughly steady amidst all this, with share prices up 3.2% on average since the previous earnings results.
Weakest Q1: Sprout Social (NASDAQ:SPT)
Founded by Justyn Howard and Aaron Rankin in 2010, Sprout Social (NASDAQ:SPT) provides a software as a service platform that companies can use to schedule and respond to posts on major social media networks like Twitter, Facebook, Instagram, Youtube and LinkedIn.
Sprout Social reported revenues of $96.78 million, up 28.7% year on year, falling short of analysts' expectations by 0.5%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
“As partners in this company’s success to date and strategic direction moving forward, Ryan and I had an opportunity to re-draw our roles to best position us to accelerate beyond our $1B target.” said Justyn Howard, Sprout Social’s CEO and co-founder.
Sprout Social delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. The company added 134 enterprise customers paying more than $10,000 annually to reach a total of 8,823. The stock is down 32.4% since the results and currently trades at $32.57.
Is now the time to buy Sprout Social? Access our full analysis of the earnings results here, it's free.
Best Q1: AppLovin (NASDAQ:APP)
Co-founded by Adam Foroughi, who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ:APP) is both a mobile game studio and provider of marketing and monetization tools for mobile app developers.
AppLovin reported revenues of $1.06 billion, up 47.9% year on year, outperforming analysts' expectations by 8.6%. It was an exceptional quarter for the company, with an impressive beat of analysts' revenue estimates and an improvement in its gross margin.
AppLovin scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 10.9% since the results and currently trades at $82.11.
Is now the time to buy AppLovin? Access our full analysis of the earnings results here, it's free.
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 $140.8 million, up 14.8% year on year, exceeding analysts' expectations by 1.8%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter.
The stock is down 38.7% since the results and currently trades at $18.76.
Read our full analysis of DoubleVerify's results here.
BigCommerce (NASDAQ:BIGC)
Founded in Sydney, Australia in 2009 by Mitchell Harper and Eddie Machaalani, BigCommerce (NASDAQ:BIGC) provides software for businesses to easily create online stores.
BigCommerce reported revenues of $80.36 million, up 12% year on year, surpassing analysts' expectations by 4.1%. It was a solid quarter for the company, with an impressive beat of analysts' billings estimates and a decent beat of analysts' revenue estimates.
The stock is up 22.9% since the results and currently trades at $8.23.
Read our full, actionable report on BigCommerce here, it's free.
SEMrush (NYSE:SEMR)
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 $85.81 million, up 21.1% year on year, in line with analysts' expectations. It was a solid quarter for the company, with accelerating customer growth and a decent beat of analysts' ARR (annual recurring revenue) estimates.
The company added 4,000 customers to reach a total of 112,000. The stock is up 20.3% since the results and currently trades at $15.85.
Read our full, actionable report on SEMrush here, it's free.
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