Core Points - Sprout Social, Inc. will report its financial results for Q3 2025 on November 5, 2025, after market close [1] - A conference call and webcast to discuss the financial results will take place at 4:00 p.m. Central Time on the same day [2] - A replay of the webcast will be available for 12 months following the event [3] Company Overview - Sprout Social is a leading provider of cloud-based social media management software, serving approximately 30,000 brands [4] - The company has been recognized as the 1 Best Software Product by G2's 2024 Best Software Award [4] - Sprout Social's platform offers comprehensive functionalities including publishing, engagement, customer care, influencer marketing, and AI-powered business intelligence [4] Information Availability - Sprout Social routinely announces material information through SEC filings, press releases, public conference calls, and webcasts [5] - The company encourages stakeholders to review information shared on its investor relations website and social media profiles [5] - Users can sign up for email alerts regarding company updates through the investor website [5]

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]

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]

Core Viewpoint - Sprout Social, Inc. will report its financial results for Q1 2025 on May 8, 2025, after market close [1] Financial Results Announcement - The financial results and business highlights will be discussed in a conference call and webcast scheduled for 4:00 p.m. Central Time on May 8, 2025 [2] - Online registration for the conference call is available at the provided link [2] - A live webcast of the conference call can be accessed from Sprout Social's investor relations website [2] Webcast Replay - A replay of the webcast will be available for 12 months following 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, advocacy, and AI-powered business intelligence [4] - Sprout Social's software operates across all major social media networks and digital platforms [4] Information Availability - Sprout Social routinely announces material information through SEC filings, press releases, public conference calls, webcasts, and its investor website [5] - The company encourages stakeholders to review the information shared on its investor website and social media profiles [5] Social Media Profiles - Sprout Social maintains various social media profiles for communication with investors and the public [6]

Financial Data and Key Metrics Changes - The company reported Q4 revenue of $107.1 million, representing a year-over-year growth of 14% [7] - Subscription revenue was $105.9 million, up 15% year-over-year [45] - Non-GAAP operating margin reached over 10% for the first time in operating history, with a non-GAAP operating income of $11.4 million [42][48] - The number of customers contributing more than $50,000 in ARR grew 23% year-over-year [46] - The dollar-based net retention rate for 2024 was 104%, down from 107% in 2023 [49] Business Line Data and Key Metrics Changes - The enterprise segment saw revenue growth of over 35% in FY 2024, indicating success in the upmarket strategy [10] - The company closed the largest new business ACV win in its history with a Fortune 500 financial services company [11][30] - The TAGR product, now rebranded as Influencer Marketing, had one of the strongest growth rates since its acquisition [43] Market Data and Key Metrics Changes - The current remaining performance obligations (RPO) reached $249.4 million, representing a 26% year-over-year growth [7] - The company experienced steady pipeline trends with healthy year-over-year growth across both inbound and outbound channels, particularly in the enterprise business [10] Company Strategy and Development Direction - The company aims to solidify its market position with enterprise-level care, AI functionality, and Influencer Marketing capabilities [11] - Key growth drivers include winning the enterprise, driving customer health and adoption, expanding partnerships, and improving account penetration [20][38] - The company is focused on expanding its footprint of technical and go-to-market integrations with other platforms and deepening international partner reach [17] Management's Comments on Operating Environment and Future Outlook - Management expects the demand environment in FY 2025 to track similarly to FY 2024, with cautious investments and prolonged sales cycles [9][50] - The company is optimistic about the quality of new customers, which are expected to drive higher dollar-based net retention rates going forward [96] Other Important Information - The company processed over 1 billion messages per day for nearly 30,000 customers, providing a unique understanding of content and workflows [18] - The company is enhancing its AI capabilities, with a 300% year-over-year increase in AI-generated content [22] Q&A Session Summary Question: What does the pipeline look like entering 2025? - Management indicated that the pipeline has grown year-on-year with good growth in Q4, particularly within the enterprise group [59] Question: How should we think about margin guidance for 2025? - Management stated that they want to maintain flexibility to invest in growth opportunities throughout the year, with expectations for incremental leverage if revenue overperforms [61][64] Question: What assumptions are being made regarding the economy in the guidance? - Management is taking a measured approach, assuming the demand environment in 2025 remains unchanged from 2024 [70] Question: Can you elaborate on the platform selling approach? - Management emphasized the importance of knowing the ideal customer profile and ensuring the right products are available to support those customers [80] Question: What portion of the customer base can adopt the new Influencer Marketing products? - Management believes every customer is a potential target, but sophistication in social media management will influence adoption [90] Question: How does the company view the competitive landscape? - Management noted that the competitive environment is becoming more favorable due to the strength of their products and the speed to value that they provide [126]