Group 1 - Sprout Social (SPT) shares have increased by 22.6% over the past four weeks, closing at $23.14, with a mean price target of $29.46 indicating a potential upside of 27.3% [1] - The average of 13 short-term price targets ranges from a low of $18 to a high of $42, with a standard deviation of $6.49, suggesting variability in analyst estimates [2] - Analysts show strong agreement on SPT's ability to report better earnings than previously predicted, which supports the potential for stock upside [4][11] Group 2 - The Zacks Consensus Estimate for SPT has increased by 10.5% due to five upward revisions in earnings estimates over the last 30 days, with no negative revisions [12] - SPT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [13]

Core Viewpoint - Sprout Social (SPT) shows potential as a strong investment opportunity due to significant revisions in earnings estimates, indicating an improving earnings outlook [1][2]. Earnings Estimates - Analysts are increasingly optimistic about Sprout Social's earnings prospects, leading to higher estimates that are expected to positively impact the stock price [2]. - The current quarter's earnings estimate is projected at $0.15 per share, reflecting a year-over-year increase of +66.67%, with a 6.67% rise in consensus estimates over the last 30 days [5]. - For the full year, the earnings estimate stands at $0.72 per share, representing a year-over-year change of +44%, with a 10.54% increase in consensus estimates over the past month [6][7]. Zacks Rank - Sprout Social currently holds a Zacks Rank 2 (Buy), supported by favorable estimate revisions, which historically correlate with strong stock performance [8]. - The Zacks Rank system has demonstrated a strong track record, with Zacks 1 (Strong Buy) stocks averaging an annual return of +25% since 2008 [3]. Stock Performance - The stock has appreciated by 21.7% over the past four weeks, driven by strong estimate revisions, suggesting further upside potential [9].

Core Insights - Sprout Social has introduced new innovations to its Care by Sprout Social solution, aimed at enhancing proactive, secure, and insights-driven social care for brands, transforming support into a strategic business driver [1][6][7] - The importance of social media in product discovery and purchasing is emphasized, with 73% of consumers indicating they would switch to a competitor if their inquiries are not addressed on social platforms [2][3] Innovations and Features - Key innovations include additional bot channels, customizable workflows, compliance and governance capabilities, and enhanced reporting functionality [6][7] - Upcoming AI agent integration will allow for quick resolution of routine inquiries, enabling human agents to focus on more complex tasks [7] - New governance and compliance features will help brands manage complex social care cases while ensuring customer data protection [7] Strategic Importance - Social care is identified as a key differentiator that influences purchasing decisions and brand loyalty, with companies like ScottsMiracle-Gro recognizing its strategic imperative [3][5] - The innovations provided by Sprout Social are designed to help brands exceed customer expectations and turn social care into a powerful driver of business outcomes [3][5]

Financial Performance - Total revenue for Q1 2025 was $109.289 million, a 13% increase from $96.784 million in Q1 2024[18] - Subscription revenue reached $108.680 million, up 13% from $95.789 million year-over-year[18] - Gross profit for the quarter was $84.451 million, compared to $74.356 million in the same period last year, reflecting a gross margin improvement[18] - Net loss for Q1 2025 was $11.220 million, a decrease from a net loss of $13.575 million in Q1 2024, indicating improved financial performance[18] - For the three months ended March 31, 2025, Sprout Social reported a net loss of $11,220,000, an improvement from a net loss of $13,575,000 in the same period of 2024, representing a decrease of approximately 17.4%[24] - Revenue for the three months ended March 31, 2025, was $109.289 million, representing a 12.8% increase from $96.784 million in the same period of 2024[68] - The net loss attributable to common shareholders for the three months ended March 31, 2025, was $11.220 million, a decrease from a net loss of $13.575 million in the same period of 2024[70] Cash and Liquidity - Cash and cash equivalents increased to $100.902 million as of March 31, 2025, up from $86.437 million at the end of 2024[13] - Cash, cash equivalents, and restricted cash increased to $104,915,000 at the end of the period, up from $73,437,000 at the end of the same period in 2024, marking an increase of approximately 42.9%[24] - Net cash provided by operating activities for the first quarter of 2025 was $18,104,000, compared to $11,164,000 in the first quarter of 2024, reflecting an increase of approximately 62.4%[24] - The company had an outstanding balance of $20,000,000 under its $100,000,000 senior secured revolving credit facility as of March 31, 2025[47] Assets and Liabilities - Total assets decreased slightly to $424.657 million from $428.341 million at the end of 2024[13] - Total liabilities decreased to $249.348 million from $261.747 million at the end of 2024, indicating improved financial health[13] - The company reported an increase in additional paid-in capital to $578.328 million from $558.391 million at the end of 2024[15] Shareholder Information - The number of weighted-average shares outstanding increased to 57,890,898 in Q1 2025 from 56,344,242 in Q1 2024[18] - The weighted average number of common shares outstanding increased to 57,890,898 for the three months ended March 31, 2025, compared to 56,344,242 in the same period of 2024[70] Revenue Recognition and Deferred Revenue - As of March 31, 2025, the company had $360,200,000 in expected revenue from remaining performance obligations, with 71% expected to be recognized in the next 12 months[38] - The company recognized $77,500,000 in revenue from deferred revenue at the beginning of the period, compared to $62,000,000 in the same period of 2024, indicating a growth of approximately 25%[37] Operating Expenses - Operating expenses totaled $95.653 million, an increase of 9% from $87.643 million in Q1 2024, driven by higher sales and marketing costs[18] - For the three months ended March 31, 2025, the total stock-based compensation was $19.795 million, an increase of 9.6% from $18.066 million in the same period of 2024[52] Legal and Regulatory Matters - The Company is currently facing legal challenges, including two putative securities fraud class action cases filed in 2024, which may impact its financial position[55][64] - The Company intends to vigorously defend against the claims asserted in the ongoing legal actions, which could result in significant resource expenditure[64] Marketable Securities - As of March 31, 2025, the total fair value of marketable securities is $1,000,000, a decrease from $3,745,000 as of December 31, 2024[72] - The company holds corporate bonds classified as Level 2 marketable securities, valued at $1,000,000 as of March 31, 2025[72] - The company's marketable securities due in one year or less amount to $1,000,000 as of March 31, 2025, down from $3,745,000 as of December 31, 2024[76] - The total assets measured at fair value were $1,000,000 as of March 31, 2025, consistent with the valuation hierarchy[72] - The company utilizes a three-level hierarchy for fair value measurements, with Level 1 being quoted prices in active markets and Level 3 being unobservable inputs[75]

Core Insights - Sprout Social reported revenue of $109.29 million for Q1 2025, a year-over-year increase of 12.9% and a surprise of +1.59% over the Zacks Consensus Estimate of $107.58 million [1] - The EPS for the same quarter was $0.22, compared to $0.10 a year ago, resulting in a surprise of +46.67% over the consensus estimate of $0.15 [1] Financial Performance - The number of customers contributing more than $10,000 in ARR was 9,381, slightly below the estimated 9,530 [4] - Revenue from professional services and other was $0.61 million, below the estimated $0.89 million, representing a year-over-year decline of -38.8% [4] - Subscription revenue was $108.68 million, exceeding the estimated $107.25 million, with a year-over-year increase of +13.5% [4] Market Performance - Over the past month, shares of Sprout Social have returned -2.5%, while the Zacks S&P 500 composite has increased by +11.3% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Sprout Social (SPT) came out with quarterly earnings of $0.22 per share, beating the Zacks Consensus Estimate of $0.15 per share. This compares to earnings of $0.10 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 46.67%. A quarter ago, it was expected that this developer of cloud software would post earnings of $0.15 per share when it actually produced earnings of $0.19, delivering a surprise of 26.67%.Over the last four quart ...

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $109.3 million, representing a year-over-year growth of 13% [7][27] - Non-GAAP operating margin reached a record 11.5%, up over 500 basis points from the previous year [26][29] - Non-GAAP free cash flow was $19.5 million, an increase of 72% year-over-year [26][27] - Remaining performance obligations (RPO) totaled $360.2 million, up 24% year-over-year [28] Business Line Data and Key Metrics Changes - Subscription revenue was $108.7 million, also reflecting a 13% year-over-year growth [27] - The number of customers contributing more than $50,000 in annual recurring revenue (ARR) grew by 22% year-over-year [27] - Average contract value (ACV) for Q1 was $14,961, up 16% year-over-year [28] Market Data and Key Metrics Changes - The company noted a shift in consumer behavior, with 46% of Gen Z preferring social media over traditional search engines for brand discovery [10][11] - The enterprise customer cohort saw a 22% growth, indicating strong demand in the market [7] Company Strategy and Development Direction - The company aims to expand its sales capacity and pipeline generation, particularly focusing on enterprise customers [8][9] - Key growth drivers include winning enterprise accounts, enhancing customer health and adoption, expanding partnerships, and improving account penetration [14][24] - The rebranding of the influencer marketing platform aims to enhance brand engagement and ROI [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the enterprise pipeline generation despite elongated procurement processes [9][30] - The company does not expect significant changes in the demand environment for fiscal year 2025 compared to the previous year [29][30] - Management highlighted the importance of social media for customer engagement and brand reputation [35][86] Other Important Information - The company launched significant enhancements to its influencer marketing product, including AI-powered features [12][17] - The integration with Salesforce's AgentForce is expected to enhance customer engagement and pipeline opportunities [61] Q&A Session Summary Question: Insights on enterprise wins and pipeline - Management noted a variety of industry verticals in enterprise wins, indicating healthy pipeline creation [32][34] Question: Pipeline coverage ratios for 2025 - Management expressed confidence in pipeline hygiene and metrics, with no material changes observed in the macro environment [45][46] Question: CRPO growth and gross retention - Management confirmed strong CRPO growth of over 21% and noted improvements in gross retention across customer segments [50][51] Question: Profitability and full-year investment philosophy - The revenue overperformance and back-end loaded hiring contributed to the profitability beat, with flexibility maintained for potential risks [54][56] Question: Impact of AgentForce integration on pipeline - Management indicated that it is early to assess the full impact of the AgentForce integration on pipeline trends [60][62] Question: Q2 revenue guidance and deferred revenue - Management explained that the Q2 guidance reflects a measured approach, with deferred revenue impacted by large deals signed in Q4 [66][67] Question: Cross-sell platform expansion - Management highlighted the importance of cross-selling and noted healthy trends in penetration rates for existing customers [70][72] Question: State of the sales organization - Management confirmed an increase in sales capacity and expressed confidence in the stability and focus of the sales organization [76][80] Question: Sales cycles and macroeconomic impacts - Management stated that there are currently no material changes in sales cycles, emphasizing the mission-critical nature of their product [84][86]

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $109.3 million, representing a year-over-year growth of 13% [5][27] - Non-GAAP operating margin reached a record 11.5%, up over 500 basis points from the previous year [26][29] - Non-GAAP free cash flow was $19.5 million, an increase of 72% year-over-year [26][27] - Remaining performance obligations (RPO) totaled $360.2 million, up 24% year-over-year [28] Business Line Data and Key Metrics Changes - Subscription revenue was $108.7 million, also up 13% year-over-year [27] - The number of customers contributing more than $50,000 in annual recurring revenue (ARR) grew by 22% [27] - The average contract value (ACV) for Q1 was $14,961, reflecting a 16% year-over-year increase [28] Market Data and Key Metrics Changes - The company noted a shift in consumer behavior, with 46% of Gen Z preferring social media over traditional search engines for brand discovery [9][10] - The enterprise pipeline generation showed early signs of improvement, despite elongated procurement processes [6][7] Company Strategy and Development Direction - The company aims to expand its sales capacity and focus on winning enterprise customers, particularly those with higher ARR [6][14] - Key growth drivers include winning enterprise accounts, enhancing customer health and adoption, expanding partnerships, and improving account penetration [13][24] - The rebranding of the influencer marketing platform aims to enhance ROI for brands by leveraging creator strategies [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macro environment, expecting procurement challenges to persist through 2025 [7][30] - The company is closely monitoring spending patterns and does not anticipate significant changes in demand for the fiscal year [29][30] Other Important Information - The company launched significant enhancements to its influencer marketing product, including AI-powered features for creator discovery [11][12] - The integration with Salesforce's AgentForce is expected to enhance customer engagement and case resolution [16][63] Q&A Session Summary Question: Can you discuss the early stages of the enterprise pipeline? - Management highlighted a variety of industry wins and noted healthy pipeline creation, driven by the need for enterprises to engage customers on social platforms [33][34][35] Question: What is the current status of the enterprise pipeline for this year? - The team is focused on identifying ideal customer profiles and leveraging trial data to engage effectively with prospects [39][42][43] Question: Can you provide context on pipeline coverage ratios for 2025? - Management expressed confidence in pipeline hygiene and creation metrics, while closely monitoring macroeconomic conditions [46][48] Question: What drove the recent profitability beat? - The revenue overperformance and back-end loaded hiring contributed to the profitability beat, with a focus on maintaining flexibility for potential risks [56][58] Question: How has the AgentForce integration impacted the pipeline? - The integration is still in early stages, but management is optimistic about its potential contributions to future pipeline trends [61][63] Question: What are the biggest factors affecting the guided Q2 revenue number? - Management emphasized a measured approach to guidance, assuming consistent macro conditions with previous quarters [67][68] Question: How is the company focusing on cross-selling and platform expansion? - The company is seeing healthy trends in cross-selling and is focused on training sales teams to enhance penetration rates across existing and new customers [72][75]

Q1 FY2025 Performance Highlights - The company has approximately 30,000 customers across over 100 countries[7] - ACV growth was 16% year-over-year[7] - Revenue growth reached 13% year-over-year[7] - Subscription revenue accounted for 99% of total revenue[7] - The Non-GAAP FCF Margin was 18%[10] Q1 FY2025 Financial Overview (vs Q1 FY2024) - Total revenue was $109.3 million, compared to $96.8 million[10] - Customers contributing >=$10k in ARR increased from 8,823 to 9,381[10] - Customers contributing >=$50k in ARR increased from 1,449 to 1,766[10] - Average Contract Value (ACV) grew from $12,892 to $14,961[10] - Remaining Performance Obligation (RPO) increased from $290.0 million to $360.2 million[10] - Current Remaining Performance Obligation (cRPO) increased from $210.6 million to $255.8 million[10] - Non-GAAP Operating Margin increased from 6% to 11%[10] Q2 and FY2025 Guidance - Q2 FY2025 total revenue is projected to be between $110.4 million and $111.2 million[35] - FY2025 total revenue is projected to be between $448.9 million and $453.9 million[35] - FY2025 Non-GAAP Operating Income is expected to be between $40.7 million and $45.7 million[35] Long Term Operating Model - The company aims to achieve >$1 billion in revenue in the medium to longer term[48] - The company aims to achieve >80% Non-GAAP Gross Margin in the medium to longer term[48] - The company aims to achieve >20% Non-GAAP Operating Margin in the medium to longer term[48] - The company aims to achieve 20-22% Non-GAAP FCF Margin in the medium to longer term[48]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): May 8, 2025 Sprout Social, Inc. 131 South Dearborn St., Suite 700 60603 Chicago , Illinois (Address of Principal Executive Offices) (Zip Code) (866) 878-3231 (Registrant's telephone number, including area code) Not applicable (Former Name or Former Address, if Changed Since Last Report) Check t ...