SEMrush Holdings, Inc. (SEMR) stock is experiencing a significant pre-market plunge of 13.11% on Thursday, following the release of its first-quarter 2025 financial results. This sharp decline comes on the heels of a 6.46% drop in after-hours trading on Wednesday, indicating investors' continued negative reaction to the company's mixed performance.

The digital marketing software company reported Q1 revenue of $105.02 million, surpassing analyst expectations of $104.36 million and marking a robust 22% year-over-year growth. However, SEMrush's earnings per share (EPS) of $0.01 fell short of the $0.02 estimate, which appears to be the primary driver behind the stock's downward movement. The company's net income for the quarter stood at $655,000, while it reported a slight operating loss of $74,000.

Despite the earnings miss, SEMrush has maintained its full-year guidance, projecting revenue between $448 million and $453 million. The company also provided a Q2 revenue outlook of $108.2 million to $109.2 million. However, the market's severe reaction suggests that investors are more focused on the company's profitability concerns rather than its strong revenue growth. The continued sell-off in pre-market trading indicates that shareholders may be reassessing the company's valuation in light of its earnings performance and potential challenges in achieving anticipated profit levels.