Core Insights - Sprout Social (SPT) reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.15 per share, and showing an increase from $0.10 per share a year ago, resulting in an earnings surprise of 46.67% [1] - The company achieved revenues of $109.29 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.59% and up from $96.78 million year-over-year [2] - Sprout Social has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The sustainability of Sprout Social's stock price movement will largely depend on management's commentary during the earnings call [3] - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $110.73 million, and for the current fiscal year, it is $0.68 on revenues of $448.47 million [7] Industry Context - The Internet - Services industry, to which Sprout Social belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, which may impact the stock's performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the company's earnings outlook is crucial for investors [5][6]

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 ...

Core Insights - Sprout Social reported strong financial results for Q1 2025, with a revenue growth of 13% year-over-year, reaching $109.3 million [6][2] - The company emphasized its focus on enterprise growth, customer adoption, and leveraging partnerships to drive expansion [2] Financial Performance - Revenue for Q1 2025 was $109.3 million, a 13% increase compared to Q1 2024 [6] - Current remaining performance obligations (cRPO) stood at $255.8 million, up 21% year-over-year [6] - GAAP operating loss improved to ($11.2) million from ($13.3) million in Q1 2024 [6] - Non-GAAP operating income was $12.5 million, compared to $6.0 million in Q1 2024 [6] - GAAP net loss was ($11.2) million, an improvement from ($13.6) million in Q1 2024 [6] - Non-GAAP net income reached $12.5 million, up from $5.7 million in Q1 2024 [6] - Cash and equivalents totaled $101.9 million as of March 31, 2025, compared to $90.2 million at the end of 2024 [6] Customer Metrics - The number of customers contributing over $10,000 in annual recurring revenue (ARR) increased by 6% to 9,381 [7] - The number of customers contributing over $50,000 in ARR grew by 22% to 1,766 [7] - Notable customers acquired during the quarter included Palo Alto, NASCAR, and Avis Budget Car Rental [8] Business Outlook - For Q2 2025, the company expects total revenue between $110.4 million and $111.2 million [15] - Full-year 2025 revenue is projected to be between $448.9 million and $453.9 million [15]

Markets are breathing a huge sigh of relief as we enter into the thick of the Q1 earnings season. Across all sectors, the major theme appears to be "not as bad as feared." Many companies are revising theirWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 20 ...

Core Insights - Social media has transformed from a niche marketing tool to a central element of culture, commerce, and connection, becoming essential for brands to engage with customers and drive growth [1][2] - Sprout Social has achieved a 32% compound annual growth rate since going public in 2019, serving around 30,000 customers across more than 100 countries [2][6] Company Developments - Sprout Social has expanded its platform with over 200 new product capabilities in 2024, focusing on AI-driven customer care, employee advocacy, analytics, and influencer marketing solutions [3][6] - The company has a global workforce of over 1,000 employees and has established offices in Chicago, Seattle, Dublin, and Krakow [2][6] Industry Trends - The current social media landscape is characterized by rapid advancements in AI, rising consumer expectations, and the growing influence of social media influencers [3] - Brands must adapt to the evolving social media environment, emphasizing real-time engagement and customer loyalty [2][3] Recognition and Future Outlook - Sprout Social was awarded the 1 Best Software Product by G2's 2024 Best Software Award, highlighting its commitment to customer-led innovation [3][7] - The company is actively engaging with customers and industry leaders to discuss future trends in social media, including the impact of influencers and AI [4]

Core Viewpoint - Sprout Social (SPT) is experiencing significant selling pressure, with a 20.9% decline over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory, supported by analyst expectations of better-than-previously predicted earnings [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to determine if a stock is oversold, with a reading below 30 typically indicating this condition [2]. - SPT's current RSI reading is 29.21, suggesting that the heavy selling pressure may be exhausting itself, indicating a potential trend reversal [5]. Group 2: Fundamental Analysis - There is strong consensus among sell-side analysts that earnings estimates for SPT have increased by 2.1% over the last 30 days, which often correlates with price appreciation [7]. - SPT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further indicating a potential turnaround [8].

Core Insights - Sprout Social has launched a reimagined influencer marketing platform featuring AI-driven capabilities for natural language discovery and data analysis, aimed at enhancing brand partnerships and revenue generation [1][2][3] Company Developments - The new platform includes a refreshed design and is tailored to meet the evolving needs of marketers who are shifting towards more authentic and relatable connections with consumers [1][2] - Strategic updates were made based on customer feedback to address challenges in creating cohesive, data-driven campaigns and finding suitable influencers [3][6] Industry Trends - Traditional marketing tactics are becoming less effective, prompting marketers to seek innovative ways to engage consumers through social media [2] - Influencer marketing has transitioned from a trend to a critical driver of return on investment (ROI), with nearly half of consumers making purchases influenced by social media posts [2] Platform Features - AI-Powered Natural Language Creator Search allows marketers to identify creators based on topics, facilitating faster and more impactful partnerships [6][7] - The AI-Powered Brand Fit Score provides an instant assessment of how well a creator's content aligns with a brand's values, aiding in smarter decision-making [7] - Customizable Brand Safety Reporting helps brands ensure that creators align with their safety guidelines by analyzing content against defined parameters [7][8]