Sprout Social(US:SPT)2025-11-06 21:01Financial Performance - Total revenue for Q3 2025 was $115.593 million, a 12.5% increase from $102.638 million in Q3 2024[19] - Subscription revenue reached $114.720 million, up from $101.813 million year-over-year, representing a 12.7% growth[19] - Gross profit for Q3 2025 was $89.809 million, compared to $79.406 million in Q3 2024, reflecting a 13.0% increase[19] - Net loss for Q3 2025 was $9.381 million, an improvement from a net loss of $17.087 million in Q3 2024[21] - Operating expenses totaled $98.920 million in Q3 2025, slightly up from $96.285 million in Q3 2024[19] - Revenue recognized during the three months ended September 30, 2025, from deferred revenue at the beginning of the period was $81.2 million, compared to $70.1 million for the same period in 2024[46] - Revenue for the three months ended September 30, 2025, was $115,593,000, representing an increase from $102,638,000 in the same period of 2024, a growth of approximately 12.5%[79] - The net loss attributable to common shareholders for the three months ended September 30, 2025, was $(9,381,000), compared to $(17,087,000) for the same period in 2024, indicating a reduction in losses[81] - Basic and diluted net loss per share for the three months ended September 30, 2025, was $(0.16), an improvement from $(0.30) in the same period of 2024[81] Assets and Equity - Cash and cash equivalents increased to $90.639 million as of September 30, 2025, from $86.437 million at the end of 2024[14] - Total assets grew to $481.396 million as of September 30, 2025, compared to $428.341 million at December 31, 2024[14] - The total stockholders' equity rose to $194.126 million as of September 30, 2025, up from $166.594 million at the end of 2024[16] - The total stockholders' equity increased to $194,126 thousand as of September 30, 2025, up from $158,086 thousand at the same date in 2024, representing a growth of about 22.8%[25] Cash Flow and Operating Activities - Cash provided by operating activities for the nine months ended September 30, 2025, was $32,492 thousand, compared to $22,179 thousand for the same period in 2024, indicating a year-over-year increase of approximately 46.5%[27] - The total cash, cash equivalents, and restricted cash at the end of the period was $92,572 thousand, compared to $86,855 thousand at the end of September 2024, marking an increase of approximately 6.5%[27] - Cash payments related to operating leases for the nine months ended September 30, 2025, were $4.7 million, down from $6.2 million in the same period in 2024[51] Acquisitions and Goodwill - The company incurred $50,333 thousand in payments for business acquisitions during the nine months ended September 30, 2025[27] - The acquisition of NewsWhip was completed on July 30, 2025, for a total purchase consideration of $63.978 million, which includes an upfront cash payment of $52.3 million and contingent consideration valued at $8.5 million[91][92][97] - Goodwill increased significantly to $166.972 million from $121.315 million, indicating potential acquisitions or market expansion[14] - Goodwill resulting from the acquisition of NewsWhip amounted to $45.657 million, increasing the total goodwill balance to $166.972 million as of September 30, 2025[95][104] - The company acquired net operating loss carryforwards of approximately $31.8 million from NewsWhip, with a full valuation allowance recorded on the related deferred tax asset[101] Legal and Regulatory Matters - The company is currently facing multiple legal actions related to alleged securities fraud, which could have material impacts on its financial position[75] - The company has recorded a full valuation allowance on its deferred tax assets related to domestic operations due to historical operating losses[55] Future Expectations - As of September 30, 2025, the company expects to recognize $357.1 million in revenue from remaining performance obligations, with 72% expected to be recognized in the next 12 months[47] Stock and Shares - The company reported a weighted-average share count of 58,930,087 for Q3 2025, compared to 57,179,710 in Q3 2024[19] - The total number of shares outstanding increased from 57,398,808 shares as of September 30, 2024, to 59,175,178 shares as of September 30, 2025[25] - The weighted average common shares outstanding for the three months ended September 30, 2025, was 58,930,087, compared to 57,179,710 for the same period in 2024[81] Contingent Consideration - The company has a contingent consideration liability of $8,450,000 related to the acquisition of NewsWhip Group Holdings Limited, based on future performance metrics[86] - The fair value of contingent consideration in connection with business acquisition was reported at $8,450 thousand as of September 30, 2025[28] - The fair value of the contingent consideration was determined using a scenario-based approach, classified as Level 3 within the fair value hierarchy[100] - The fair value of the acquired intangible assets was estimated at $24.85 million, with significant components including customer relationships valued at $15.2 million and acquired technology at $8.4 million[101] Other Financial Metrics - The company recorded $2.7 million in restructuring charges for the nine months ended September 30, 2025, with cash payments totaling $2.9 million related to these plans[38] - Stock-based compensation expense for the nine months ended September 30, 2025, was $58,990 thousand, slightly lower than $61,850 thousand for the same period in 2024[27] - Total stock-based compensation for the nine months ended September 30, 2025, was $58.99 million, compared to $61.85 million for the same period in 2024[62] - The company recognized $4,622 thousand in amortization of acquired intangible assets for the nine months ended September 30, 2025, compared to $4,677 thousand for the same period in 2024[27] - Amortization of intangible assets for the nine months ended September 30, 2025, totaled $4.6 million, with expected future amortization expenses outlined for the next several years[105]