Sprout Social(SPT) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Highlights 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 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 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] Recent Business Developments 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] - Launched 'Guardian by Sprout Social' to enhance data security and brand safety[12] - Released new research indicating social media is the primary search tool for Gen Z, surpassing traditional search engines[12] Financial Outlook 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 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 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 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 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 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 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 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] - 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] Key Business Metrics 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] - 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][27]