Financial Data and Key Metrics Changes - The company reported Q2 2025 revenue of $111.8 million, representing a year-over-year growth of 12% [5][28] - Non-GAAP operating margin expanded by almost 400 basis points to 9.2% [5][27] - Non-GAAP free cash flow for the quarter was $5.2 million, an increase of 110% year-over-year [27][28] - Remaining performance obligations (RPO) totaled $347 million, up 18% year-over-year [29] Business Line Data and Key Metrics Changes - Subscription revenue was $111.1 million, reflecting a 13% year-over-year increase [28] - The number of customers contributing more than $50,000 in annual recurring revenue (ARR) grew by 18% year-over-year [28] - The average contract value (ACV) for Q2 was $15,321, up 14% year-over-year [28] Market Data and Key Metrics Changes - The company secured strategic wins with global brands such as Honda, Cigna, and the U.S. Department of Transportation, indicating strong market presence [6][38] - The company earned 164 Leader Badges in G2's reports, showcasing its competitive positioning in the market [6] Company Strategy and Development Direction - The acquisition of Newswhip is seen as a pivotal milestone to enhance AI-powered predictive media intelligence capabilities [8][9] - The company aims to deepen customer engagement through use case expansion and premium modules [21][23] - The strategy focuses on winning enterprise customers, improving customer health and adoption, and expanding partnerships [13][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the core business performance and noted strong retention and renewal rates [38][71] - The company anticipates some near-term pressure on rep productivity due to the integration of Newswhip [33] - Management highlighted the importance of social media as a channel for product discovery, especially among Gen Z consumers [25][102] Other Important Information - The company launched several product innovations, including enhancements in influencer marketing and customer care [14][16] - The company is expanding partnerships with key networks to enhance its capabilities [21] Q&A Session Summary Question: How would you characterize the core business today? - Management noted strong performance and progress, with significant wins and growth in the enterprise customer segment [38] Question: What is the impact of Newswhip on guidance? - Management projected Newswhip to contribute approximately $2.5 million over the final five months of the year, taking a cautious approach to guidance [41] Question: What is the timeline for integrating Newswhip? - Management indicated that integration efforts are underway, with positive initial feedback from customers [48] Question: How are rising advertising costs affecting customer strategies? - Management noted that customers are increasingly looking to social media for discovery due to disruptions in traditional search [60] Question: What are the trends in the international market? - Management acknowledged that while international business is smaller, there is strong potential for growth and pipeline development [85]

Financial Performance - Total revenue for Q2 FY2025 reached $111.8 million, compared to $99.4 million in Q2 FY2024[10] - The company achieved revenue growth of 12% year-over-year[7] - Average Contract Value (ACV) increased to $15,321 in Q2 FY2025, up from $13,403 in Q2 FY2024, representing 14% growth[7, 10] - Remaining Performance Obligation (RPO) grew to $347.0 million, compared to $295.1 million[10] - Current Remaining Performance Obligation (cRPO) increased to $251.6 million, compared to $212.5 million[10] - Non-GAAP Gross Margin remained consistent at 79%[10, 57] - Non-GAAP Operating Margin improved to 9%, compared to 5%[10, 57] - Non-GAAP Free Cash Flow (FCF) Margin increased to 5%, compared to 3%[10, 57] Customer Metrics - The company has approximately 30,000 customers across 100+ countries[7] - The number of customers contributing >=$10k in ARR increased to 9,517 from 8,966[10] - The number of customers contributing >=$50k in ARR increased to 1,826 from 1,545[10] Acquisition and Guidance - Sprout Social acquired NewsWhip for $55 million in cash, with up to $10 million in performance-based cash earnouts over two years[39] - The company projects total revenue for Q3 FY2025 to be between $114.4 million and $115.2 million, and for the full year FY2025 between $452.9 million and $455.9 million[45] - The company projects Non-GAAP Operating Income for Q3 FY2025 to be between $9.3 million and $10.3 million, and for the full year FY2025 between $43.1 million and $45.1 million[45]

Core Insights - Sprout Social reported strong financial results for Q2 2025, with a revenue growth of 12% year-over-year, reaching $111.8 million [6][2] - The company aims to enhance its enterprise presence through increased customer adoption and strategic partnerships, bolstered by the acquisition of NewsWhip [2] Financial Highlights - Revenue for Q2 2025 was $111.8 million, a 12% increase from Q2 2024 [6] - Total remaining performance obligations (RPO) stood at $347.0 million, up 18% year-over-year [6] - Current remaining performance obligations (cRPO) were $251.6 million, also up 18% year-over-year [6] - GAAP operating loss was ($12.3) million, an improvement from ($16.5) million in Q2 2024 [6] - Non-GAAP operating income was $10.3 million, compared to $5.3 million in Q2 2024 [6] - GAAP net loss was ($12.0) million, improved from ($16.9) million in Q2 2024 [6] - Non-GAAP net income was $10.7 million, up from $4.9 million in Q2 2024 [6] - Cash and equivalents totaled $101.5 million as of June 30, 2025, slightly down from $101.9 million as of March 31, 2025 [6] Customer Metrics - The number of customers contributing over $10,000 in annual recurring revenue (ARR) grew to 9,517, a 6% increase year-over-year [7] - The number of customers contributing over $50,000 in ARR increased to 1,826, an 18% rise compared to the previous year [7] - Notable new and existing customers include Honda, Cigna, and the U.S. Department of Transportation [8] Business Outlook - For Q3 2025, the company expects total revenue between $114.4 million and $115.2 million [9] - For the full year 2025, total revenue is projected to be between $452.9 million and $455.9 million [9]

[Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Sprout Social reported strong Q2 2025 results with **12% revenue growth to $111.8 million** and improved Non-GAAP profitability Q2 2025 Key Performance Metrics | Metric | Q2 2025 | YoY Growth | | :--- | :--- | :--- | | Revenue | $111.8 million | 12% | | Total RPO | $347.0 million | 18% | | Current RPO (cRPO) | $251.6 million | 18% | Q2 2025 Profitability Summary (GAAP vs. Non-GAAP) | Metric | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Q2 2025 (Non-GAAP) | Q2 2024 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | Operating Income/(Loss) | ($12.3) million | ($16.5) million | $10.3 million | $5.3 million | | Net Income/(Loss) | ($12.0) million | ($16.9) million | $10.7 million | $4.9 million | | Net Income/(Loss) Per Share | ($0.21) | ($0.30) | $0.18 | $0.09 | Q2 2025 Cash Flow and Liquidity | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $5.1 million | $2.1 million | | Non-GAAP Free Cash Flow | $5.2 million | $2.5 million | | Cash and Equivalents | $101.5 million | - | [Operational and Business Highlights](index=2&type=section&id=Operational%20and%20Business%20Highlights) Sprout Social increased high-value customers by **18%**, expanded key relationships, and enhanced its platform through the NewsWhip acquisition and 'Guardian' launch [Customer Metrics & Highlights](index=2&type=section&id=Customer%20Metrics%20%26%20Highlights) Customer metrics show an **18% increase in customers with over $50,000 ARR**, alongside new and expanded relationships with major brands High-Value Customer Growth (as of June 30, 2025) | Customer Segment | Count | YoY Growth | | :--- | :--- | :--- | | > $10,000 in ARR | 9,517 | 6% | | > $50,000 in ARR | 1,826 | 18% | - New and existing customers that expanded their relationship in Q2 include Honda, Cigna, Authentic Brands Group, Metropolitan Transportation Authority, U.S. Department of Transportation, LaCroix, Smuckers, and Kimberly-Clark[6](index=6&type=chunk) [Recent Business Developments](index=2&type=section&id=Recent%20Business%20Developments) Recent developments include the NewsWhip acquisition for AI enhancement, the launch of 'Guardian' for brand safety, and new 'Care' product innovations - Acquired NewsWhip to enhance predictive intelligence capabilities and accelerate its AI roadmap[12](index=12&type=chunk) - Launched 'Guardian by Sprout Social' to enhance data security and brand safety[12](index=12&type=chunk) - Released new research indicating social media is the primary search tool for Gen Z, surpassing traditional search engines[12](index=12&type=chunk) [Financial Outlook](index=2&type=section&id=Third%20Quarter%20and%202025%20Financial%20Outlook) Sprout Social forecasts Q3 2025 revenue between **$114.4M and $115.2M**, with full-year revenue projected at **$452.9M to $455.9M** Q3 2025 Financial Outlook | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $114.4M - $115.2M | | Non-GAAP Operating Income | $9.3M - $10.3M | | Non-GAAP Net Income Per Share | $0.15 - $0.16 | Full Year 2025 Financial Outlook | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $452.9M - $455.9M | | Non-GAAP Operating Income | $43.1M - $45.1M | | Non-GAAP Net Income Per Share | $0.71 - $0.75 | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail Sprout Social's operations, balance sheet, and cash flows for the three and six months ended June 30, 2025 [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 revenue increased to **$111.8 million**, with gross profit of **$86.8 million**, and a narrowed operating loss of **($12.3) million** Q2 2025 Statement of Operations Highlights (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenue | $111,778 | $99,396 | | Gross Profit | $86,844 | $76,994 | | Total Operating Expenses | $99,159 | $93,507 | | Loss from Operations | ($12,315) | ($16,513) | | Net Loss | ($11,985) | ($16,892) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$422.9 million**, with cash of **$101.5 million**, and total stockholders' equity increased to **$184.6 million** Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $101,532 | $86,437 | | Total Current Assets | $207,774 | $210,215 | | Total Assets | $422,934 | $428,341 | | Deferred Revenue (Current) | $171,105 | $178,585 | | Total Liabilities | $238,375 | $261,747 | | Total Stockholders' Equity | $184,559 | $166,594 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q2 2025 net cash from operating activities significantly improved to **$5.1 million**, resulting in a net increase in cash of **$0.6 million** Q2 Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $5,090 | $2,063 | | Net Cash from Investing Activities | $92 | $13,337 | | Net Cash used in Financing Activities | ($4,542) | ($4,007) | | Net Increase in Cash | $640 | $11,393 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to Non-GAAP financial measures, with Q2 2025 GAAP net loss of **($12.0) million** adjusted to Non-GAAP net income of **$10.7 million** Reconciliation of GAAP Net Loss to Non-GAAP Net Income (Q2 2025, in thousands) | Description | Amount | | :--- | :--- | | **Net Loss (GAAP)** | **($11,985)** | | Stock-based compensation expense | $20,166 | | Amortization of acquired intangible assets | $1,213 | | Loss on lease termination | $1,175 | | Acquisition-related expenses | $90 | | **Non-GAAP Net Income** | **$10,659** | Reconciliation of Net Cash from Operations to Non-GAAP Free Cash Flow (Q2 2025, in thousands) | Description | Amount | | :--- | :--- | | **Net cash provided by operating activities** | **$5,090** | | Expenditures for property and equipment | ($908) | | Interest paid on credit facility | $338 | | Payments related to restructuring charges | $697 | | **Non-GAAP free cash flow** | **$5,217** | [Definitions of Key Metrics](index=3&type=section&id=Definitions%20of%20Key%20Metrics) This section defines Non-GAAP financial measures and key business metrics, including RPO and customer counts based on Annualized Recurring Revenue (ARR) [Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Non-GAAP measures, such as operating income and free cash flow, are used for comparability, excluding items like stock-based compensation and acquisition costs - Non-GAAP operating income is defined as GAAP loss from operations, excluding expenses like stock-based compensation, amortization of acquired intangibles, restructuring charges, and acquisition-related costs[18](index=18&type=chunk) - Non-GAAP free cash flow is defined as net cash from operating activities less expenditures for property and equipment, interest payments on the credit facility, and payments for restructuring charges[22](index=22&type=chunk) [Key Business Metrics](index=5&type=section&id=Key%20Business%20Metrics) Key business metrics include Remaining Performance Obligations (RPO) and customer counts with over **$10,000** and **$50,000** in Annualized Recurring Revenue (ARR) - Remaining Performance Obligations (RPO) represent contracted revenue that has not yet been recognized. Current RPO (cRPO) is the portion expected to be recognized within the next 12 months[25](index=25&type=chunk) - The company tracks the number of customers with over **$10,000** in ARR and over **$50,000** in ARR as a measure of its ability to scale with customers and attract larger organizations[26](index=26&type=chunk)[27](index=27&type=chunk)

Core Insights - Sprout Social has acquired NewsWhip to enhance its capabilities in predictive media intelligence, allowing brands and publishers to better navigate the digital media landscape [1][4] - The integration of NewsWhip's AI-driven insights with Sprout Social's existing solutions will provide a comprehensive view of media and social signals, enabling proactive engagement [2][7] - The acquisition is expected to accelerate Sprout Social's AI roadmap and enhance its Listening capabilities, providing real-time, actionable intelligence to its customers [6][7] Company Overview - Sprout Social is a leading provider of cloud-based social media management software, serving approximately 30,000 brands with a focus on delivering smarter business impact [8] - NewsWhip, founded in 2011, specializes in real-time media intelligence, monitoring millions of signals to help brands identify trending stories and manage crises effectively [3][4] - The acquisition will see NewsWhip's team join Sprout Social, with its CEO Paul Quigley taking on the role of General Manager for Sprout's Listening business [4] Financial Details - The acquisition of NewsWhip was valued at $55 million in cash, with an additional potential of up to $10 million in performance-based earnouts over the next two years [5] - The deal was funded through Sprout's revolving credit facility and cash reserves [5]

Core Viewpoint - Sprout Social (SPT) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive earnings outlook that could lead to increased buying pressure and stock price appreciation [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for Sprout Social suggest an improvement in the company's underlying business, which should encourage investors to push the stock price higher [5][8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7][9]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [10]. Recent Performance of Sprout Social - Analysts have raised their earnings estimates for Sprout Social, with the Zacks Consensus Estimate increasing by 13.8% over the past three months [8]. - The expected earnings per share for the fiscal year ending December 2025 is $0.73, reflecting no year-over-year change [8].

Core Viewpoint - Sprout Social, Inc. will report its financial results for Q2 2025 on August 6, 2025, after market close [1] Financial Results Announcement - The financial results and business highlights will be discussed in a conference call and webcast at 4:00 p.m. Central Time on August 6, 2025 [2] - Online registration for the conference call is available on the company's website [2] Webcast Availability - A replay of the webcast will be available for 12 months after the event [3] Company Overview - Sprout Social is a global leader in social media management and analytics software, serving approximately 30,000 brands [4] - The company offers a comprehensive platform that includes publishing, engagement functionality, customer care, influencer marketing, and AI-powered business intelligence [4] - Sprout Social's software operates across all major social media networks and digital platforms [4] Information Disclosure - Sprout Social routinely announces material information through SEC filings, press releases, public conference calls, webcasts, and its investor relations website [5] - The company encourages stakeholders to review the information shared on its investor website and social media profiles [5]

Core Insights - Sprout Social has been recognized with 164 leader badges in G2's 2025 Summer Reports across all business segments and regions, highlighting its strong market presence [1][5] - The company ranked 1 in 33 individual G2 reports, including key categories such as the Enterprise Grid Report for Social Media Suites and the Grid Report for Social Customer Service [2][5] - Sprout Social received eight awards in the TrustRadius 2025 Top Rated Awards across various categories, including Social Media Customer Service and Social Media Marketing [3][5] Company Performance - The recognition from G2 and TrustRadius reflects the meaningful results achieved by customers using Sprout Social's platform, emphasizing its effectiveness in social media management [4] - Recent product innovations and advanced AI capabilities have contributed to Sprout's strong performance, including new features in Care by Sprout Social and Sprout Social Influencer Marketing [4] - Customer feedback highlights the platform's robust reporting features, intuitive interface, and collaboration tools, which enhance marketing efforts and streamline team operations [4] Market Position - Sprout Social has established itself as a global leader in social media management and analytics software, serving approximately 30,000 brands [6] - The company continues to invest in AI and product innovation to help brands leverage social media for smarter decision-making and deeper engagement [4] - Sprout Social's software operates across all major social media networks and digital platforms, reinforcing its comprehensive service offering [6]

Core Insights - Sprout Social is utilizing Coupa's AI-native total spend management platform to enhance spend management analysis and improve financial visibility across its operations [1][2] - The partnership aims to streamline procurement processes and drive operational efficiency, allowing Sprout Social to gain better control over its spending and growth [2][3] Company Overview - Sprout Social is recognized as a leader in cloud-based social media management software, serving approximately 30,000 brands with its platform [6][7] - Coupa is the leader in AI-native total spend management, leveraging a dataset of $8 trillion and a network of over 10 million buyers and suppliers to automate the buying process [5] Operational Efficiency - The integration of Coupa with Sprout Social's ERP has eliminated manual data entry, reducing operational issues and fiscal anomalies [3] - Coupa's solutions are designed to enhance procurement practices, providing Sprout with visibility into all lines of spend and improving overall efficiency [3][4] Strategic Growth - The collaboration between Sprout Social and Coupa is positioned to unlock the full potential of total spend management, driving transparency and impactful business outcomes [4] - Coupa's platform supports Sprout in implementing effective controls and monitoring spending abnormalities, thereby streamlining indirect procurement and accounts payable processes [3]

Summary of Sprout Social (SPT) FY Conference Call - June 03, 2025 Company Overview - **Company**: Sprout Social (SPT) - **Focus**: Social media management platform for businesses, serving approximately 30,000 customers globally, including Fortune 500 companies [6][13] Key Industry Insights - **Social Media Engagement**: Half of the world's population is on social media, spending an average of 2.5 hours daily, making it a critical platform for customer engagement and marketing [11][12] - **Shift in Customer Care**: Customers increasingly prefer social media for support over traditional methods, necessitating sophisticated social customer care solutions [62][63] Core Business Strategies 1. **Enterprise Upmarket Focus**: - Significant investment in targeting large enterprises, with a successful cohort of customers spending over $50,000 annually [5][6] - Continued growth in enterprise customer base, with three new Fortune 500 clients reported [6][70] 2. **Product Adoption and Usage**: - Emphasis on enhancing product sophistication and ensuring high customer retention through improved implementation and ongoing support [7][70] 3. **Multiproduct Strategy**: - Expanding product offerings to solve more problems for enterprise clients, enhancing the platform's value [8][70] 4. **Ecosystem and Partnerships**: - Building strategic partnerships within the tech ecosystem and social networks to enhance service delivery [8][70] Financial Performance and Market Position - **Net Retention Rate**: Reported at 104% overall, with 108% excluding SMBs, indicating strong customer loyalty and growth potential in the enterprise segment [70][75] - **Customer Quality**: Shift towards acquiring higher quality SMB customers with lower acquisition costs, contributing positively to unit economics [72][75] Influencer Marketing Insights - **Acquisition of Tagger**: Enhancing influencer marketing capabilities, allowing brands to identify and engage with relevant influencers effectively [30][47] - **ROI from Influencer Marketing**: Brands see an average return of $5.67 for every dollar spent on influencer marketing, making it a compelling investment compared to traditional channels [52][70] Customer Care Solutions - **Social Customer Care**: Development of sophisticated tools to manage customer inquiries and complaints on social media, integrating with traditional customer service platforms like Salesforce and Zendesk [66][68] - **Smart Inbox Feature**: Utilizes AI to classify customer inquiries by urgency and sentiment, improving response efficiency [64][70] Market Environment and Guidance - **Stable Customer Behavior**: Despite macroeconomic uncertainties, customer behavior remains consistent, with no significant changes in spending patterns observed [77][79] - **Measured Guidance Approach**: The company is adopting a cautious approach to financial guidance, ensuring flexibility in operations amid market fluctuations [79][80] Conclusion Sprout Social is strategically positioning itself to capitalize on the growing importance of social media in business operations, particularly in enterprise customer engagement and influencer marketing. The company is focused on enhancing its product offerings and customer care solutions while maintaining a strong retention rate and adapting to market dynamics.