SEMrush Holdings Q2 Earnings Miss Estimates, Stock Falls 28.5% YTD

SEMrush Holdings reported Q2 earnings of $0.05 per share, missing the Zacks Consensus Estimate of $0.08 per share. Revenues were $108.89 million, in line with estimates. The stock has lost 28.5% this year, underperforming the S&P 500. The company's earnings outlook is mixed, with a Zacks Rank of #3 (Hold).

SEMrush Holdings, Inc. (SEMR) reported its second-quarter (Q2) 2025 financial results, revealing mixed performance that has led to a significant decline in the stock's value. The company announced earnings of $0.05 per share, falling short of the Zacks Consensus Estimate of $0.08 per share. Revenue for the quarter was $108.89 million, in line with Wall Street's expectations. However, the stock has lost 28.5% this year, underperforming the S&P 500's gain of 6.1% [2].

Key Financial Highlights:
- Revenue: $108.89 million, up 20% year-over-year (YoY) [3].
- EPS (GAAP): $0.05 per share, missing the Zacks Consensus Estimate of $0.08 per share [2].
- Operating Margin: -4%, down from 3.7% in the same quarter last year [3].
- Free Cash Flow: -$3.57 million, down from $18.51 million in the previous quarter [1].
- Customers: 116,000, down from 118,000 in the previous quarter [1].

Customer Retention and Growth:
Semrush's net revenue retention rate was 105%, indicating that its customers are spending more over time. The company has seen a 22.9% compounded annual growth rate in sales over the last three years, slightly above the average software company [1].

Stock Performance:
The stock has experienced a significant decline, dropping 13.6% to $7.99 immediately after reporting [1]. The company's full-year revenue guidance was lowered to $444.5 million at the midpoint from $450.5 million, a 1.3% decrease [1]. The company's earnings outlook is mixed, with a Zacks Rank of #3 (Hold) [2].

Outlook:
The outlook for SEMrush is uncertain, with the company's earnings guidance for the next quarter falling short of Wall Street's estimates. The stock's performance will likely depend on management's commentary and future earnings expectations. The company has announced a $150 million share repurchase program to underscore its long-term growth opportunities [3].

Conclusion:
SEMrush's Q2 results were mixed, with revenue growth in line with expectations but earnings falling short. The stock's decline highlights the market's concern over the company's earnings outlook and guidance. Investors should closely monitor the company's earnings call and future guidance for clarity on the stock's potential direction.

References:
[1] https://finviz.com/news/127052/semrush-nyse-semr-posts-q2-sales-in-line-with-estimates-but-stock-drops-136
[2] https://finance.yahoo.com/news/semrush-holdings-inc-semr-lags-221002229.html
[3] https://www.morningstar.com/news/business-wire/20250804892298/semrush-announces-second-quarter-2025-financial-results