Sprout Social Inc Class A ((SPT)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Sprout Social Inc. recently held its earnings call, showcasing a positive sentiment driven by robust revenue growth, strategic customer acquisitions, and notable industry recognition. The acquisition of NewsWhip was highlighted as a strategic move, despite some anticipated short-term integration challenges. Overall, the company remains optimistic, with an increased revenue guidance for the year.
Revenue Growth and Margin Expansion
Sprout Social reported impressive financial results for the second quarter, with revenue reaching $111.8 million, marking a 12% year-over-year growth. The company also achieved a significant non-GAAP operating margin expansion of nearly 400 basis points, reflecting its strong financial performance and operational efficiency.
Strong Customer Cohort Growth
The company experienced an 18% growth in its $50,000 and above ARR customer cohort, securing strategic wins with prominent global brands such as Honda, Cigna, and Kimberly-Clark. This growth underscores Sprout Social’s ability to attract and retain high-value customers.
Industry Recognition and Awards
Sprout Social’s industry leadership was further validated by securing 164 leader badges in G2’s latest reports and earning TrustRadius 2025 top-rated awards in eight categories. These accolades highlight the company’s strong reputation and influence in the market.
NewsWhip Acquisition
The acquisition of NewsWhip, a leader in AI-powered predictive media intelligence, is expected to bolster Sprout Social’s AI, Listening, and Care capabilities. This strategic move aims to enhance the company’s product offerings and competitive edge.
Increased Full-Year Revenue Guidance
Sprout Social raised its full-year revenue guidance to a range of $452.9 million to $455.9 million, reflecting the early positive impact of the NewsWhip acquisition. This adjustment signifies the company’s confidence in its growth trajectory and market position.
Sequential RPO Decline
Despite the positive outlook, the company reported a sequential decline in RPO, which totaled $347.0 million, down from $360.2 million in the previous quarter. This decline indicates some challenges in maintaining consistent growth in this metric.
Integration Challenges with NewsWhip
Sprout Social anticipates potential near-term pressure on representative productivity as teams undergo training and alignment with the go-to-market strategy for the NewsWhip integration. These challenges are expected to be temporary as the integration process progresses.
Forward-Looking Guidance
For the upcoming fiscal period, Sprout Social provided guidance with an expected revenue range of $114.4 million to $115.2 million for Q3. The company anticipates a non-GAAP operating income between $9.3 million and $10.3 million, and a non-GAAP net income per share of $0.15 to $0.16. For the full year of 2025, revenue guidance has been raised to between $452.9 million and $455.9 million, with an increased non-GAAP operating income guidance of $43.1 million to $45.1 million. These projections reflect the anticipated contributions from the NewsWhip acquisition and a focus on expanding enterprise solutions.
In conclusion, Sprout Social’s recent earnings call conveyed a positive sentiment, driven by strong financial performance, strategic customer growth, and industry recognition. The acquisition of NewsWhip is seen as a strategic enhancement, despite some short-term integration challenges. With increased revenue guidance and a focus on expanding capabilities, Sprout Social is poised for continued growth and success.