Investor Presentation 2Q FY25 1 Disclaimers Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "explore," "future," "intend," "long-term operating model," "medium to long-term goals," ...

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]