Sprout Social Announces Second Quarter 2026 Financial Results
Rhea-AI Summary
Sprout Social (NASDAQ: SPT) reported second quarter 2026 revenue of $123.8 million, up 11% year-over-year, with subscription revenue of $121.9 million. Total remaining performance obligations reached $400.8 million (+16%), and current RPO was $282.7 million (+12%). GAAP operating loss narrowed to $2.7 million, while non-GAAP operating income rose to $16.0 million. GAAP net loss was $3.1 million and non-GAAP net income was $15.6 million, or $0.26 per share.
Customers contributing $30,000+ in ARR grew to 3,926 (+11%), and those at $50,000+ in ARR reached 2,127 (+16%). Approximated trailing twelve month subscription revenue from ≥$30k ARR customers increased 20% to $291.7 million, representing 61.4% of subscription revenue. For Q3 2026, the company guides revenue of $123.3–$124.1 million and non-GAAP EPS of $0.29–$0.30. For full-year 2026, it expects revenue of $493.0–$495.6 million, non-GAAP operating income of $68.3–$70.3 million, and non-GAAP EPS of $1.11–$1.15, and has raised its targeted exit Q4 2026 non-GAAP operating margin from 15% to approximately 17%.
Positive
- Revenue up 11% YoY to $123.8 million in Q2 2026
- Non-GAAP operating income rose to $16.0 million from $10.3 million
- Non-GAAP EPS increased to $0.26 from $0.18 year-over-year
- RPO growth: total RPO $400.8 million (+16%), cRPO $282.7 million (+12%)
- Large customer expansion: ≥$30k ARR customers 3,926 (+11%); ≥$50k 2,127 (+16%)
- TTM revenue from ≥$30k ARR cohort approximated at $291.7 million, +20% YoY and 61.4% of subscription revenue
- Improved cash generation: operating cash flow $8.5 million vs. $5.1 million; free cash flow $8.3 million vs. $5.2 million
- Raised profitability outlook: exit Q4 2026 non-GAAP operating margin increased from 15% to ~17%
Negative
- Continued GAAP losses: Q2 2026 operating loss $2.7 million; net loss $3.1 million
- Interest expense increased to $0.6 million from $0.4 million year-over-year
News Explained
The $400.8 million RPO is contracted but unrecognized revenue, including $282.7 million expected to be invoiced and recognized within 12 months.
Sprout Social reported results for the quarter ended
RPO means contracted revenue not yet recognized, including deferred amounts and amounts to be invoiced later, while cRPO is the portion expected to be invoiced and recognized in the next 12 months.
The release’s approximated trailing-twelve-month subscription-revenue contribution for customers with at least
Market reaction after 2Q26 earnings report: SPT +11.23%
Following this news, SPT has gained 11.23%, reflecting a significant positive market reaction. Our momentum scanner has triggered 24 alerts so far, indicating elevated trading interest and price volatility. The stock is currently trading at $9.11. Trading volume is above average at 1.9x the average, suggesting increased trading activity.
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Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 07 | Q1 earnings report | Positive | +8.8% | Revenue growth, improved profitability, free cash flow, and share repurchase authorization |
| Feb 26 | Q4 earnings report | Positive | -9.3% | Revenue growth, improving enterprise metrics, and 2026 guidance initiation |
| Nov 05 | Q3 earnings report | Positive | -3.7% | Revenue growth, stronger non-GAAP income, and full-year guidance |
| Aug 06 | Q2 earnings report | Positive | -8.2% | Revenue growth, improved operating income, and full-year guidance |
| May 08 | Q1 earnings report | Positive | +9.6% | Revenue growth, higher RPO, improved non-GAAP income, and outlook |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-matched earnings announcements produced mixed reactions, with three divergences and an average move of -0.56%.
Key Terms
rpo financial
arr financial
rule of 40 financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Approximated TTM Subscription Revenue Contribution for ≥
CHICAGO, Aug. 06, 2026 (GLOBE NEWSWIRE) -- Sprout Social, Inc. (“Sprout Social”, the “Company”) (NASDAQ: SPT), a leading AI-powered Social Intelligence Platform, today announced financial results for its second quarter ended June 30, 2026.
“We are pleased with our financial performance this quarter, highlighted by
Second Quarter 2026 Financial Highlights
Revenue
- Revenue was
$123.8 million , up11% compared to the second quarter of 2025. - Total remaining performance obligations (RPO) of
$400.8 million as of June 30, 2026, up16% year-over-year. - Current remaining performance obligations (cRPO) of
$282.7 million as of June 30, 2026, up12% year-over-year.
Operating Income (Loss)
- GAAP operating loss was (
$2.7) million , compared to ($12.3) million in the second quarter of 2025. - Non-GAAP operating income was
$16.0 million , compared to$10.3 million in the second quarter of 2025.
Net Income (Loss)
- GAAP net loss was (
$3.1) million , compared to ($12.0) million in the second quarter of 2025. - Non-GAAP net income was
$15.6 million , compared to$10.7 million in the second quarter of 2025. - GAAP net loss per share was (
$0.05) b ased on 60.2 million weighted-average shares of common stock outstanding, compared to ($0.21) b ased on 58.4 million weighted-average shares of common stock outstanding in the second quarter of 2025. - Non-GAAP net income per share was
$0.26 b ased on 60.2 million weighted-average shares of common stock outstanding, compared to$0.18 b ased on 58.4 million weighted-average shares of common stock outstanding in the second quarter of 2025.
Cash
- Cash and cash equivalents totaled
$119.9 million as of June 30, 2026, compared to$111.6 million as of March 31, 2026. - Net cash provided by operating activities was
$8.5 million , compared to$5.1 million in the second quarter of 2025. - Non-GAAP free cash flow was
$8.3 million , compared to$5.2 million in the second quarter of 2025.
See “Use of Non-GAAP Financial Measures” below for definitions of Non-GAAP operating income (loss), Non-GAAP net income (loss), Non-GAAP net income (loss) per share and Non-GAAP free cash flow and the financial tables that accompany this release for reconciliations of our non-GAAP measures to their closest comparable GAAP measures. See “Key Business Metrics” below for how Sprout Social defines RPO, cRPO, the number of customers contributing
Customer Metrics
- Grew number of customers contributing
$30,000 or more in ARR to 3,926 customers as of June 30, 2026, up11% compared to June 30, 2025. - Grew number of customers contributing
$50,000 or more in ARR to 2,127 customers as of June 30, 2026, up16% compared to June 30, 2025.
Beginning in the fourth quarter of 2025, we replaced our disclosure of customers with ARR of
| Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | |
| Number of customers contributing | 3,226 | 3,374 | 3,451 | 3,538 | 3,711 | 3,803 | 3,875 | 3,926 |
| Approximated TTM Subscription Revenue Contribution for ≥ | ||||||||
| Approximated TTM Subscription Revenue Contribution for ≥ | ||||||||
Recent Customer Highlights
- During the second quarter, we had the opportunity to grow with new and existing customers, including Salesforce, Cintas, MillerKnoll, Church & Dwight, Regal Cinemas, Wiley, and CoreWeave.
Recent Business Highlights
Sprout Social recently:
- Released the 2026 Influencer Marketing Report (link)
- Named as a Visionary in the 2026 Gartner Magic Quadrant for Social Media Management and Listening (link)
- Expanded Snapchat integration, giving brands a direct line to highly engaged audiences (link)
- Released the Q2 2026 Pulse Survey highlighting social media as the primary channel for brand crisis response (link)
- Unveiled AI-Powered social intelligence platform and the expansion of proprietary AI Agent, Trellis (link)
Third Quarter and 2026 Financial Outlook
For the third quarter of 2026, the Company currently expects:
- Total revenue between
$123.3 million and$124.1 million . - Non-GAAP operating income between
$17.5 million and$18.3 million . - Non-GAAP net income per share between
$0.29 and$0.30 b ased on approximately 60.7 million weighted-average shares of common stock outstanding.
For the full year 2026, the Company currently expects:
- Total revenue between
$493.0 million and$495.6 million . - Non-GAAP operating income between
$68.3 million and$70.3 million , an increase of20% over the midpoint of our prior year outlook. - Non-GAAP net income per share between
$1.11 and$1.15 b ased on approximately 60.6 million weighted-average shares of common stock outstanding.
The Company raised its outlook for non-GAAP operating margin exiting the fourth quarter of 2026 from
The Company’s third quarter and 2026 financial outlook is based on a number of assumptions that are subject to change and many of which are outside the Company’s control. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.
The Company does not provide guidance for operating loss, the most directly comparable GAAP measure to non-GAAP operating income, operating margin, the most directly comparable GAAP measure to non-GAAP operating margin, or net loss per share, the most directly comparable GAAP measure to non-GAAP net income per share, and similarly cannot provide a reconciliation between its forecasted non-GAAP operating income, non-GAAP operating margin and non-GAAP net income per share and these comparable GAAP measures without unreasonable effort due to the unavailability of reliable estimates for certain items. These items are not within the Company’s control and may vary greatly between periods and could significantly impact future financial results.
Conference Call Information
The financial results and business highlights will be discussed on a conference call and webcast scheduled at 3:30 p.m. Central Time (4:30 p.m. Eastern Time) today, August 6, 2026. Online registration for this event conference call can be found at https://events.q4inc.com/analyst/. The live webcast of the conference call can be accessed from Sprout Social’s investor relations website at http://investors.sproutsocial.com.
Following completion of the events, a webcast replay will also be available at http://investors.sproutsocial.com for 12 months.
About Sprout Social
Sprout Social is a leading AI-powered Social Intelligence Platform, built on the belief that All Business is Social℠. Powered by Trellis, Sprout’s proprietary AI agent, the platform is designed to transform real-time social media signals into actionable insights that drive business forward. Consistently recognized as a top software by G2, Sprout enables brands to deliver smarter, faster business impact through a suite of solutions including comprehensive publishing and engagement, customer care, influencer marketing, advocacy and predictive media intelligence. Sprout’s software operates across all major social networks and digital platforms. For more information about Sprout Social (NASDAQ: SPT), visit sproutsocial.com.
Forward-Looking Statements
This press release 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 the use of words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “explore,” “future,” “intend,” “long-term model,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or the negative of these terms, and similar expressions intended to identify forward-looking statements, as they relate to Sprout Social, our business and our management. However, not all forward-looking statements contain these identifying words. Forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Sprout Social and our management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements may relate to our market size and growth strategy, our estimated and projected costs, margins, revenue, expenditures and customer and financial growth rates, our Q3 2026 and full year 2026 financial outlook, our plans and objectives for future operations, growth, initiatives or strategies, including our investments in research and development, our workforce reduction plan approved in July 2026, and share repurchases, and other statements that are not historical fact. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance or achievement to differ materially and adversely from those anticipated or implied in the forward-looking statements. These assumptions, uncertainties and risks include that, among others: our workforce reduction plan may not achieve the anticipated benefits and could adversely affect our business, we may not be able to sustain our revenue and customer growth rate in the future, including due to risks associated with our strategic focus on enterprise customers; price increases have negatively impacted and price increases and packaging changes may in the future negatively impact demand for our products, customer acquisition and retention and reduce the total number of customers or customer additions; our business would be harmed by any significant interruptions, delays or outages in services from our platform, our API providers, or certain social media platforms, or if we are unable to renew agreements governing access to the data provided by such APIs on terms acceptable to us or at all; if we are unable to attract potential customers through unpaid channels, or other sources of demand, including expansion opportunities from existing customers and outbound sales efforts or convert prospective customers and expansion opportunities into paid subscriptions, our business and results of operations may be adversely affected; technological advances in AI may in the future disrupt the social media industry, which could significantly reduce the demand for our services or otherwise adversely impact our business or reputation if we are unable to keep pace and navigate this evolving environment; we may be unable to successfully enter new markets, manage our international expansion and comply with any applicable international laws and regulations; we may be unable to integrate acquired businesses or technologies successfully or achieve the expected benefits of such acquisitions and investments; unstable market, economic, and geopolitical conditions, such as recession risks, effects of inflation, tariffs and trade tensions, changes in government spending, labor shortages, supply chain issues, geopolitical instability and uncertainty, and fluctuation in interest rates, have and could continue to adversely impact our business and that of our existing and prospective customers, which may result in reduced demand for our products; we may not be able to generate sufficient cash to service our indebtedness; covenants in our credit agreement may restrict our operations, and if we do not effectively manage our business to comply with these covenants, our financial condition could be adversely impacted; any cybersecurity-related attack, significant data breach or disruption of the information technology systems or networks on which we rely could negatively affect our business; changing regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and harm our brand; and risks related to ongoing legal proceedings. These forward-looking statements should not be read as a guarantee of future performance or results, and stockholders should not place undue reliance on forward-looking statements. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 27, 2026, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 8, 2026, and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, to be filed with the SEC, as well as any future reports that we file with the SEC. Moreover, you should interpret many of the risks identified in those reports as being heightened as a result of the current and ongoing instability in market, economic, and geopolitical conditions. Forward-looking statements speak only as of the date the statements are made and are based on information available to Sprout Social at the time those statements are made and/or management's good faith belief as of that time with respect to future events. Sprout Social assumes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law.
Use of Non-GAAP Financial Measures
We have provided in this press release certain financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Our management uses these non-GAAP financial measures internally in analyzing our financial results and believes that these non-GAAP financial measures are useful to investors as additional tools to evaluate ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial measures prepared in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our non-GAAP financial measures may differ from similarly titled measures presented by other companies and therefore may not be comparable. A reconciliation of our historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations.
Non-GAAP gross profit. We define non-GAAP gross profit as GAAP gross profit, excluding stock-based compensation expense, amortization expense associated with the acquired developed technology from the Tagger Media, Inc. (“Tagger”) and NewsWhip Group Holdings Limited (“NewsWhip”) acquisitions, and restructuring and related charges. We believe non-GAAP gross profit provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of stock-based compensation, amortization expense and restructuring and related charges, which are often unrelated to overall operating performance.
Non-GAAP operating income. We define non-GAAP operating income as GAAP loss from operations, excluding stock-based compensation expense, acquisition-related expenses, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring and related charges, non-cash (gains)/losses from lease modifications and terminations and changes in the fair value of contingent consideration. We believe non-GAAP operating income provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of stock-based compensation, acquisition-related expenses, amortization expense, restructuring and related charges, non-cash (gains)/losses from lease modifications and termination and changes in the fair value of contingent consideration, which are often unrelated to overall operating performance.
Non-GAAP operating margin. We define non-GAAP operating margin as non-GAAP operating income (loss) as a percentage of revenue.
Non-GAAP net income. We define non-GAAP net income as GAAP net loss, excluding stock-based compensation expense, acquisition-related expenses, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring and related charges, non-cash (gains)/losses from lease modifications and terminations and changes in the fair value of contingent consideration. We believe non-GAAP net income provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this non-GAAP financial measure eliminates the effect of stock-based compensation, acquisition-related expenses, amortization expense, restructuring and related charges, non-cash (gains)/losses from lease modifications and terminations and changes in the fair value of contingent consideration, which are often unrelated to overall operating performance.
Non-GAAP net income per share. We define non-GAAP net income per share as GAAP net loss per share attributable to common shareholders, basic and diluted, excluding stock-based compensation expense, acquisition-related expenses, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring and related charges, non-cash (gains)/losses from lease modifications and terminations and changes in the fair value of contingent consideration. We believe non-GAAP net income per share provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this non-GAAP financial measure eliminates the effect of stock-based compensation, acquisition-related expenses, amortization expense, restructuring and related charges, non-cash (gains)/losses from lease modifications and terminations and changes in the fair value of contingent consideration, which are often unrelated to overall operating performance.
Non-GAAP free cash flow. We define non-GAAP free cash flow as net cash provided by operating activities, less expenditures for property and equipment, plus interest payments on our revolving credit facility and payments related to restructuring and related charges. Non-GAAP free cash flow does not reflect our future contractual obligations or represent the total increase or decrease in our cash balance for a given period. We believe non-GAAP free cash flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash provided by our core operations that, after expenditures for property and equipment, interest payments on our revolving credit facility and payments related to restructuring and related charges, is available for strategic initiatives.
Non-GAAP sales and marketing expenses, non-GAAP research and development expenses and non-GAAP general and administrative expenses. Non-GAAP sales and marketing expenses, non-GAAP research and development expenses and non-GAAP general and administrative expenses are defined as sales and marketing expenses, research and development expenses and general and administrative expenses, respectively, less stock-based compensation expense, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring and related charges and changes in the fair value of contingent consideration. We believe these non-GAAP measures provide our management and investors with insight into day-to-day operating expenses given that these measures eliminate the effect of stock-based compensation, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring and related charges and changes in the fair value of contingent consideration.
Key Business Metrics
Remaining performance obligations (“RPO”). RPO, or remaining performance obligations, represents contracted revenue that has not yet been recognized, and includes deferred revenue and amounts that will be invoiced and recognized in future periods.
Current remaining performance obligations (“cRPO”). cRPO, or current RPO, represents contracted revenue that has not yet been recognized, and includes deferred revenue and amounts that will be invoiced and recognized in the next 12 months.
Number of customers contributing
Number of customers contributing
Approximated TTM Subscription Revenue Contribution for ≥
We believe that customers contributing
While we no longer believe that ARR and number of customers are key performance indicators of Sprout Social’s business, these metrics are necessary for an understanding of how we define number of customers contributing
We no longer believe that the number of customers contributing
Availability of Information on Sprout Social’s Website and Social Media Profiles
Investors and others should note that Sprout Social routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Sprout Social Investors website. We also intend to use the social media profiles listed below as a means of disclosing information about us to our customers, investors and the public. While not all of the information that the Company posts to the Sprout Social Investors website or to social media profiles is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Sprout Social to review the information that it shares at the Investors link located at the bottom of the page on www.sproutsocial.com and to regularly follow our social media profiles. Users may automatically receive email alerts and other information about Sprout Social when enrolling an email address by visiting "Email Alerts" in the "Shareholder Services" section of Sprout Social's Investor website at https://investors.sproutsocial.com/.
Social Media Profiles:
www.twitter.com/SproutSocial
www.twitter.com/SproutSocialIR
www.facebook.com/SproutSocialInc
www.linkedin.com/company/sprout-social-inc-/
www.instagram.com/sproutsocial
Contact
Media:
Kaitlyn Gronek
Email: pr@sproutsocial.com
Phone: (773) 904-9674
Investors:
Lexi Johnson
Twitter: @SproutSocialIR
Email: investors@sproutsocial.com
Phone: (312) 528-9166
| Sprout Social, Inc. | |||||||
| Consolidated Statements of Operations (Unaudited) | |||||||
| (in thousands, except share and per share data) | |||||||
| Three Months Ended June 30, | |||||||
| 2026 | 2025 | ||||||
| Revenue | |||||||
| Subscription | $ | 121,877 | $ | 111,110 | |||
| Professional services and other | 1,970 | 668 | |||||
| Total revenue | 123,847 | 111,778 | |||||
| Cost of revenue(1) | |||||||
| Subscription | 27,159 | 24,551 | |||||
| Professional services and other | 600 | 383 | |||||
| Total cost of revenue | 27,759 | 24,934 | |||||
| Gross profit | 96,088 | 86,844 | |||||
| Operating expenses | |||||||
| Research and development(1) | 26,643 | 24,587 | |||||
| Sales and marketing(1) | 47,416 | 48,152 | |||||
| General and administrative(1) | 24,698 | 26,420 | |||||
| Total operating expenses | 98,757 | 99,159 | |||||
| Loss from operations | (2,669 | ) | (12,315 | ) | |||
| Interest expense | (618 | ) | (409 | ) | |||
| Interest income | 843 | 946 | |||||
| Other income (expense), net | (291 | ) | 356 | ||||
| Loss before income taxes | (2,735 | ) | (11,422 | ) | |||
| Income tax expense | 354 | 563 | |||||
| Net loss | $ | (3,089 | ) | $ | (11,985 | ) | |
| Net loss per share attributable to common shareholders, basic and diluted | $ | (0.05 | ) | $ | (0.21 | ) | |
| Weighted-average shares outstanding used to compute net loss per share, basic and diluted | 60,242,258 | 58,360,966 | |||||
| (1) Includes stock-based compensation expense as follows: | |||||||
| Three Months Ended June 30, | |||||||
| 2026 | 2025 | ||||||
| Cost of revenue | $ | 555 | $ | 684 | |||
| Research and development | 5,374 | 6,405 | |||||
| Sales and marketing | 4,514 | 6,089 | |||||
| General and administrative | 5,421 | 6,988 | |||||
| Total stock-based compensation expense | $ | 15,864 | $ | 20,166 | |||
| Sprout Social, Inc. | |||||||
| Consolidated Statements of Operations (Unaudited) | |||||||
| (in thousands, except share and per share data) | |||||||
| Six Months Ended June 30, | |||||||
| 2026 | 2025 | ||||||
| Revenue | |||||||
| Subscription | $ | 241,897 | $ | 219,790 | |||
| Professional services and other | 3,447 | 1,277 | |||||
| Total revenue | 245,344 | 221,067 | |||||
| Cost of revenue(1) | |||||||
| Subscription | 54,594 | 49,024 | |||||
| Professional services and other | 1,156 | 748 | |||||
| Total cost of revenue | 55,750 | 49,772 | |||||
| Gross profit | 189,594 | 171,295 | |||||
| Operating expenses | |||||||
| Research and development(1) | 53,590 | 47,816 | |||||
| Sales and marketing(1) | 95,962 | 95,604 | |||||
| General and administrative(1) | 48,557 | 51,392 | |||||
| Total operating expenses | 198,109 | 194,812 | |||||
| Loss from operations | (8,515 | ) | (23,517 | ) | |||
| Interest expense | (1,285 | ) | (923 | ) | |||
| Interest income | 1,594 | 1,841 | |||||
| Other income (expense), net | (454 | ) | 188 | ||||
| Loss before income taxes | (8,660 | ) | (22,411 | ) | |||
| Income tax expense | 765 | 794 | |||||
| Net loss | $ | (9,425 | ) | $ | (23,205 | ) | |
| Net loss per share attributable to common shareholders, basic and diluted | $ | (0.16 | ) | $ | (0.40 | ) | |
| Weighted-average shares outstanding used to compute net loss per share, basic and diluted | 59,990,662 | 58,127,231 | |||||
| (1) Includes stock-based compensation expense as follows: | |||||||
| Six Months Ended June 30, | |||||||
| 2026 | 2025 | ||||||
| Cost of revenue | $ | 1,129 | $ | 1,430 | |||
| Research and development | 11,299 | 12,611 | |||||
| Sales and marketing | 9,524 | 12,025 | |||||
| General and administrative | 12,059 | 13,895 | |||||
| Total stock-based compensation expense | $ | 34,011 | $ | 39,961 | |||
| Sprout Social, Inc. | |||||||
| Consolidated Balance Sheets (Unaudited) | |||||||
| (in thousands, except share and per share data) | |||||||
| June 30, 2026 | December 31, 2025 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 119,929 | $ | 95,268 | |||
| Accounts receivable, net of allowances of | 78,075 | 100,996 | |||||
| Deferred Commissions | 28,956 | 26,995 | |||||
| Prepaid expenses and other assets | 15,207 | 13,945 | |||||
| Total current assets | 242,167 | 237,204 | |||||
| Property and equipment, net | 9,982 | 9,864 | |||||
| Deferred commissions, net of current portion | 56,093 | 57,049 | |||||
| Operating lease, right-of-use asset | 8,972 | 9,810 | |||||
| Goodwill | 167,122 | 167,122 | |||||
| Intangible assets, net | 34,917 | 39,733 | |||||
| Other assets, net | 2,962 | 2,280 | |||||
| Total assets | $ | 522,215 | $ | 523,062 | |||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 10,713 | $ | 10,115 | |||
| Deferred revenue | 193,419 | 205,639 | |||||
| Operating lease liability | 2,799 | 2,664 | |||||
| Accrued wages and payroll related benefits | 14,182 | 20,549 | |||||
| Accrued expenses and other | 14,967 | 17,294 | |||||
| Total current liabilities | 236,080 | 256,261 | |||||
| Revolving credit facility | 32,500 | 40,000 | |||||
| Deferred revenue, net of current portion | 1,169 | 752 | |||||
| Operating lease liability, net of current portion | 10,583 | 12,055 | |||||
| Other non-current liabilities | 13,333 | 10,572 | |||||
| Total liabilities | 293,665 | 319,640 | |||||
| Stockholders' equity | |||||||
| Class A common stock, par value | 5 | 5 | |||||
| Class B common stock, par value | 1 | 1 | |||||
| Additional paid-in capital | 673,832 | 638,894 | |||||
| Treasury stock, at cost | (38,153 | ) | (37,768 | ) | |||
| Accumulated other comprehensive income | - | - | |||||
| Accumulated deficit | (407,135 | ) | (397,710 | ) | |||
| Total stockholders’ equity | 228,550 | 203,422 | |||||
| Total liabilities and stockholders’ equity | $ | 522,215 | $ | 523,062 | |||
| Sprout Social, Inc. | |||||||
| Consolidated Statements of Cash Flows (Unaudited) | |||||||
| (in thousands) | |||||||
| Three Months Ended June 30, | |||||||
| 2026 | 2025 | ||||||
| Cash flows from operating activities | |||||||
| Net loss | $ | (3,089 | ) | $ | (11,985 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities | |||||||
| Depreciation and amortization of property, equipment and software | 917 | 764 | |||||
| Amortization of line of credit issuance costs | 60 | 58 | |||||
| Amortization of acquired intangible assets | 2,408 | 1,293 | |||||
| Amortization of deferred commissions | 7,354 | 5,636 | |||||
| Amortization of right-of-use operating lease asset | 423 | 381 | |||||
| Stock-based compensation expense | 15,864 | 20,166 | |||||
| Provision for accounts receivable allowances | 802 | 1,116 | |||||
| Change in fair value of contingent consideration | (355 | ) | - | ||||
| Loss on lease termination | - | 1,175 | |||||
| Other, net | (366 | ) | - | ||||
| Changes in operating assets and liabilities, excluding impact from business acquisition | |||||||
| Accounts receivable | (9,462 | ) | (3,598 | ) | |||
| Prepaid expenses and other current assets | 1,335 | 3,430 | |||||
| Deferred commissions | (8,418 | ) | (7,518 | ) | |||
| Accounts payable and accrued expenses | 2,479 | (1,734 | ) | ||||
| Deferred revenue | (812 | ) | (2,788 | ) | |||
| Lease liabilities | (672 | ) | (1,306 | ) | |||
| Net cash provided by operating activities | 8,468 | 5,090 | |||||
| Cash flows from investing activities | |||||||
| Expenditures for property and equipment | (621 | ) | (908 | ) | |||
| Proceeds from maturity of marketable securities | - | 1,000 | |||||
| Net cash (used in) provided by investing activities | (621 | ) | 92 | ||||
| Cash flows from financing activities | |||||||
| Repayments of line of credit | - | (5,000 | ) | ||||
| Payments for line of credit issuance costs | - | (486 | ) | ||||
| Proceeds from employee stock purchase plan | 587 | 944 | |||||
| Employee taxes paid related to the net share settlement of stock-based awards | (122 | ) | - | ||||
| Net cash provided by (used in) financing activities | 465 | (4,542 | ) | ||||
| Net increase in cash, cash equivalents, and restricted cash | 8,312 | 640 | |||||
| Cash, cash equivalents, and restricted cash | |||||||
| Beginning of period | 113,557 | 104,915 | |||||
| End of period | $ | 121,869 | $ | 105,555 | |||
| Sprout Social, Inc. | |||||||
| Consolidated Statements of Cash Flows (Unaudited) | |||||||
| (in thousands) | |||||||
| Six Months Ended June 30, | |||||||
| 2026 | 2025 | ||||||
| Cash flows from operating activities | |||||||
| Net loss | $ | (9,425 | ) | $ | (23,205 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities | |||||||
| Depreciation and amortization of property, equipment and software | 1,839 | 1,989 | |||||
| Amortization of line of credit issuance costs | 119 | 110 | |||||
| Accretion of discount on marketable securities | - | (7 | ) | ||||
| Amortization of acquired intangible assets | 4,816 | 2,586 | |||||
| Amortization of deferred commissions | 14,374 | 10,919 | |||||
| Amortization of right-of-use operating lease asset | 838 | 722 | |||||
| Stock-based compensation expense | 34,011 | 39,961 | |||||
| Provision for accounts receivable allowances | 1,080 | 2,245 | |||||
| Change in fair value of contingent consideration | (848 | ) | - | ||||
| Loss on lease termination | - | 1,175 | |||||
| Other, net | (431 | ) | - | ||||
| Changes in operating assets and liabilities, excluding impact from business acquisition | |||||||
| Accounts receivable | 21,841 | 14,524 | |||||
| Prepaid expenses and other current assets | (2,224 | ) | 201 | ||||
| Deferred commissions | (15,380 | ) | (15,095 | ) | |||
| Accounts payable and accrued expenses | (3,787 | ) | (3,221 | ) | |||
| Deferred revenue | (11,803 | ) | (7,578 | ) | |||
| Lease liabilities | (1,336 | ) | (2,132 | ) | |||
| Net cash provided by operating activities | 33,684 | 23,194 | |||||
| Cash flows from investing activities | |||||||
| Expenditures for property and equipment | (1,720 | ) | (2,265 | ) | |||
| Proceeds from maturity of marketable securities | - | 3,750 | |||||
| Net cash (used in) provided by investing activities | (1,720 | ) | 1,485 | ||||
| Cash flows from financing activities | |||||||
| Repayments of line of credit | (7,500 | ) | (10,000 | ) | |||
| Payments for line of credit issuance costs | - | (486 | ) | ||||
| Proceeds from employee stock purchase plan | 587 | 944 | |||||
| Employee taxes paid related to the net share settlement of stock-based awards | (385 | ) | - | ||||
| Net cash used in financing activities | (7,298 | ) | (9,542 | ) | |||
| Net increase in cash, cash equivalents, and restricted cash | 24,666 | 15,137 | |||||
| Cash, cash equivalents, and restricted cash | |||||||
| Beginning of period | 97,203 | 90,418 | |||||
| End of period | $ | 121,869 | $ | 105,555 | |||
The following schedule reflects our non-GAAP financial measures and reconciles our non-GAAP financial measures to the related GAAP financial measures (in thousands, except per share data):
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Reconciliation of Non-GAAP gross profit | |||||||||||||||
| Gross profit | $ | 96,088 | $ | 86,844 | $ | 189,594 | $ | 171,295 | |||||||
| Stock-based compensation expense | 555 | 684 | 1,129 | 1,430 | |||||||||||
| Amortization of acquired developed technology | 1,125 | 705 | 2,250 | 1,410 | |||||||||||
| Restructuring and related charges | - | - | - | 416 | |||||||||||
| Non-GAAP gross profit | $ | 97,768 | $ | 88,233 | $ | 192,973 | $ | 174,551 | |||||||
| Reconciliation of Non-GAAP operating income | |||||||||||||||
| Loss from operations | $ | (2,669 | ) | $ | (12,315 | ) | $ | (8,515 | ) | $ | (23,517 | ) | |||
| Stock-based compensation expense | 15,864 | 20,166 | 34,011 | 39,961 | |||||||||||
| Amortization of acquired intangible assets | 2,328 | 1,213 | 4,656 | 2,426 | |||||||||||
| Restructuring and related charges | 816 | - | 816 | 2,731 | |||||||||||
| Loss on lease termination | - | 1,175 | - | 1,175 | |||||||||||
| Change in fair value of contingent consideration | (355 | ) | - | (848 | ) | - | |||||||||
| Acquisition-related expenses | - | 90 | - | 90 | |||||||||||
| Non-GAAP operating income | $ | 15,984 | $ | 10,329 | $ | 30,120 | $ | 22,866 | |||||||
| Reconciliation of Non-GAAP net income | |||||||||||||||
| Net loss | $ | (3,089 | ) | $ | (11,985 | ) | $ | (9,425 | ) | $ | (23,205 | ) | |||
| Stock-based compensation expense | 15,864 | 20,166 | 34,011 | 39,961 | |||||||||||
| Amortization of acquired intangible assets | 2,328 | 1,213 | 4,656 | 2,426 | |||||||||||
| Restructuring and related charges | 816 | - | 816 | 2,731 | |||||||||||
| Loss on lease termination | - | 1,175 | - | 1,175 | |||||||||||
| Change in fair value of contingent consideration | (355 | ) | - | (848 | ) | - | |||||||||
| Acquisition-related expenses | - | 90 | - | 90 | |||||||||||
| Non-GAAP net income | $ | 15,564 | $ | 10,659 | $ | 29,210 | $ | 23,178 | |||||||
| Reconciliation of Non-GAAP net income per share | |||||||||||||||
| Net loss per share attributable to common shareholders, basic and diluted | $ | (0.05 | ) | $ | (0.21 | ) | $ | (0.16 | ) | $ | (0.40 | ) | |||
| Stock-based compensation expense | 0.27 | 0.35 | 0.57 | 0.69 | |||||||||||
| Amortization of acquired intangible assets | 0.04 | 0.02 | 0.08 | 0.04 | |||||||||||
| Restructuring and related charges | 0.01 | - | 0.01 | 0.05 | |||||||||||
| Loss on lease termination | - | 0.02 | - | 0.02 | |||||||||||
| Change in fair value of contingent consideration | (0.01 | ) | - | (0.01 | ) | - | |||||||||
| Acquisition-related expenses | - | - | - | - | |||||||||||
| Non-GAAP net income per share | $ | 0.26 | $ | 0.18 | $ | 0.49 | $ | 0.40 | |||||||
| Reconciliation of Non-GAAP free cash flow | |||||||||||||||
| Net cash provided by operating activities | $ | 8,468 | $ | 5,090 | $ | 33,684 | $ | 23,194 | |||||||
| Expenditures for property and equipment | (621 | ) | (908 | ) | (1,720 | ) | (2,265 | ) | |||||||
| Interest paid on credit facility | 494 | 338 | 1,123 | 822 | |||||||||||
| Payments related to restructuring charges | - | 697 | - | 2,946 | |||||||||||
| Non-GAAP free cash flow | $ | 8,341 | $ | 5,217 | $ | 33,087 | $ | 24,697 | |||||||
