Sprout Social (NASDAQ: SPT) cuts 20% of staff, sees high-end Q2 outlook
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Sprout Social, Inc. announced that, based on preliminary unaudited data, it expects financial results for the quarter ended June 30, 2026 to be at the high end of its previously issued outlook ranges for revenue, non-GAAP operating income and non-GAAP net income per share. Final results are scheduled to be released after market close on August 6, 2026.
The board approved a workforce reduction plan to reduce headcount by approximately 20%, or about 260 employees, to streamline operations and align costs with strategic priorities, including AI-powered social intelligence. The company expects pre-tax restructuring charges of $18.0 million to $20.0 million, primarily cash severance and benefits, with substantially all recognized in the third quarter of 2026 and excluded from its non-GAAP measures. A CEO letter outlines support for affected employees, including salary continuation, six months of paid healthcare in the U.S., a cash payment for equity that would have vested in the next 90 days, and three months of outplacement services.
Positive
- None.
Negative
- Plans a workforce reduction of approximately 20% (about 260 employees) and expects $18.0–$20.0 million in pre-tax restructuring charges, largely impacting results in the third quarter of 2026.
Insights
Analyzing...
8-K Event Classification
4 items: 2.02, 2.05, 7.01, 9.01
4 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 2.05
Costs Associated with Exit or Disposal Activities
Financial
The company committed to an exit plan involving layoffs, facility closures, or restructuring charges.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Pre-tax restructuring charges: $18.0 million to $20.0 million
Workforce reduction: Approximately 20%
Employees affected: Approximately 260 employees
+5 more
8 metrics
Pre-tax restructuring charges
$18.0 million to $20.0 million
Estimated charges related to the workforce reduction plan
Workforce reduction
Approximately 20%
Portion of the workforce to be reduced under the plan
Employees affected
Approximately 260 employees
Estimated number of employees impacted by the workforce reduction
Severance duration
12 weeks plus 1 week per year of tenure
Salary continuation offered to departing employees
Healthcare coverage period
Six months
Fully paid healthcare coverage in the U.S. for affected employees
Outplacement support period
Three months
Duration of outplacement support for departing employees
Equity protection window
90 days
Cash payment equal to equity that would have vested in the next 90 days
Q2 2026 earnings release date
August 6, 2026
Scheduled date to report results for the quarter ended June 30, 2026
Key Terms
non-GAAP operating income, non-GAAP net income per share, workforce reduction plan, restructuring charges, +2 more
6 terms
non-GAAP operating income financial
"outlook ranges for revenue, non-GAAP operating income, and non-GAAP net income"
Non-GAAP operating income is a measure of a company's profit from its core business activities, calculated by excluding certain expenses or income that are not part of regular operations. It provides a clearer picture of how well the business is performing by focusing on ongoing operations, helping investors compare companies more consistently and make better-informed decisions.
workforce reduction plan financial
"the Board of Directors of the Company approved a workforce reduction plan"
restructuring charges financial
"incur total pre-tax restructuring charges of approximately $18.0 million to $20.0 million"
Restructuring charges are costs that a company pays when it changes how it operates, like closing factories or laying off employees. These expenses are often one-time and happen to help the company become more efficient in the long run. They matter because they can affect the company's profits and how investors see its future prospects.
AI-powered social intelligence technical
"align its cost base with its strategic priorities, including its ongoing investments in AI-powered social intelligence"
Regulation FD regulatory
"Item 7.01. Regulation FD Disclosure. A letter from Ryan Barretto"
Regulation FD is a rule that prevents company insiders, like executives, from sharing important information with some people before others get it. It matters because it helps ensure all investors have equal access to key news, making the stock market fairer and reducing chances of insider trading.
FAQ
What did Sprout Social (SPT) indicate about its Q2 2026 financial performance?
Sprout Social stated it expects Q2 2026 results to be at the high end of its previously issued outlook ranges for revenue, non-GAAP operating income and non-GAAP net income per share, based on preliminary unaudited information that may change.
How large is Sprout Social's (SPT) 2026 workforce reduction?
The company approved a workforce reduction plan affecting approximately 20% of employees, or about 260 people. Management describes the move as streamlining the organizational structure and aligning the cost base with strategic priorities, including continued investment in AI-powered social intelligence.
What restructuring charges will Sprout Social (SPT) record from the workforce reduction?
Sprout Social expects total pre-tax restructuring charges of $18.0 million to $20.0 million. These costs are primarily cash severance and benefits, with substantially all charges anticipated to be recognized in the third quarter of 2026 and excluded from non-GAAP financial measures.
When will Sprout Social (SPT) report Q2 2026 financial results?
The company plans to report financial results for the quarter ended June 30, 2026 after market close on Thursday, August 6, 2026. The preliminary update references high-end outlook performance, but full details will come with that earnings release.
What severance and support is Sprout Social (SPT) offering affected employees?
Departing employees are offered 12 weeks of salary plus one additional week per year of tenure, six months of fully paid healthcare in the U.S., a cash payment equal to equity vesting over the next 90 days, and three months of outplacement support.
How will Sprout Social (SPT) treat restructuring costs in its non-GAAP metrics?
The company intends to exclude restructuring charges related to the workforce reduction from its non-GAAP financial measures. This means non-GAAP operating income and non-GAAP net income per share will remove the estimated $18.0–$20.0 million in pre-tax charges.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 15, 2026
(Exact Name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| , | |||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
(866 ) 878-3231
(Registrant’s telephone number, including area code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On July 15, 2026, Sprout Social, Inc. (the “Company”) announced that it expects its financial results for the quarter ended June 30, 2026 to be at the high end of its financial outlook ranges for revenue, non-GAAP operating income, and non-GAAP net income per share for such period previously included in the Company’s earnings press release for the first quarter ended March 31, 2026, which was furnished with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on May 7, 2026. These results are based on preliminary unaudited financial and other information, and subject to normal quarterly closing processes and accounting review; actual results could differ materially from these estimates. As previously announced, the Company is scheduled to report its financial results for the quarter ended June 30, 2026 after market close on Thursday, August 6, 2026.
The contents of this Item 2.02 of this Current Report on Form 8-K are furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing.
Item 2.05. Costs Associated with Exit or Disposal Activities.
On July 8, 2026, the Board of Directors of the Company approved a workforce reduction plan (the "Plan") designed to streamline the Company's organizational structure and align its cost base with its strategic priorities, including its ongoing investments in AI-powered social intelligence. As part of the Plan, the Company will reduce its workforce by approximately 20%, or approximately 260 employees. On July 15, 2026, the Company began notifying affected employees.
The Company estimates that it will incur total pre-tax restructuring charges of approximately $18.0 million to $20.0 million in connection with the Plan, consisting primarily of cash expenditures related to employee severance payments and benefits. The Company expects to recognize substantially all of these charges in the third quarter of 2026. The Company expects to substantially complete the Plan by the end of the third quarter of 2026, subject to local law and consultation requirements.
The Company intends to exclude the restructuring charges from its non-GAAP financial measures.
The charges that the Company expects to incur in connection with the Plan are estimates and are subject to a number of assumptions. Actual results may differ materially from these estimates. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the Plan.
Item 7.01. Regulation FD Disclosure.
A letter from Ryan Barretto, the Company’s Chief Executive Officer, regarding the Plan is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The contents of this Item 7.01 of this Current Report on Form 8-K and the exhibit attached hereto are furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section or Section 11 and 12(a)(2) of the Securities Act, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing.
Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements include, but are not limited to, statements regarding the expected costs associated with, and timing of completion for, the Plan, the anticipated impact of the Plan on the Company's business, financial condition, and results of operations, and the Company’s expected financial results for the quarter ended June 30, 2026. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially, including the Company's ability to realize the expected benefits or objectives of the Plan due to execution risks, operational disruptions, or other unforeseen factors, the possibility that the Plan may result in additional costs or charges not currently contemplated, the risk that the workforce reduction may adversely affect the Company's ability to attract and retain talent, and other risks and uncertainties described in the Company's
filings with the SEC, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
| Exhibit No. | Description | |||||||||||||
| 99.1 | CEO Letter, dated July 15, 2026 | |||||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SPROUT SOCIAL, INC. | |||||
| By: | /s/ Heidi Jonas | ||||
| Name: | Heidi Jonas | ||||
| Title: | General Counsel and Secretary | ||||
Date: July 15, 2026
A letter from Sprout Social’s CEO: Today, we began the process of saying goodbye to about 20% of Team Sprout. The people who are leaving built things that matter. They shaped our culture, delivered innovative programs, and helped build Sprout into the company it is today. Each of them chose to dedicate part of their career to Sprout, and I am grateful for their service and contributions. This decision is not a reflection of their talent or their commitment. We made this decision because we believe it was the right one for Sprout's future. Our industry, and software more broadly, is changing quickly, and the way companies need to operate and invest has changed with it. We chose to act now, from a position of strength, to build a more focused and durable business, and to do right by the people this affects. To support the people leaving, we are offering 12 weeks of salary plus one additional week for every year of tenure, fully paid healthcare coverage for six months in the US and similar treatment internationally, a cash payment equal to the value of equity that would have vested in the next 90 days, and three months of outplacement support, among other resources. We are moving forward today with deep appreciation for every person who has been part of this chapter of Sprout. Ryan Barretto CEO, Sprout Social