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Sprout Social, Inc. (SPT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid top line and record profitability: revenue $115.6M (+13% YoY) and non-GAAP operating margin 11.9% (up ~460 bps YoY), with cRPO up 17% YoY to $258.5M .
  • Results beat Wall Street: revenue modestly above consensus ($114.9M*), and a significant non-GAAP EPS beat ($0.23 vs $0.165*); 10 revenue and 12 EPS estimates contributed to consensus*.
  • Management raised FY 2025 guidance (revenue to $454.9–$455.7M; non-GAAP operating income to $46.1–$47.1M; non-GAAP EPS to $0.77–$0.79), and introduced Q4 guidance (revenue $118.2–$119.0M; non-GAAP EPS $0.15–$0.17) .
  • Enterprise momentum and NewsWhip (“NewsWeb”) are driving larger deals and pipeline; Q3 was the strongest non-Q4 quarter for large deals, with multi-year contracts now nearly half of the mix .
  • Near-term catalysts: Nov 18 “Breaking Ground” unveiling Sprout’s AI agent and MCP integrations; continued enterprise wins/integrations and premium module attach .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Strong profitability and beat: Non-GAAP operating income $13.7M (vs outlook high end) and 11.9% non-GAAP operating margin, driven by revenue outperformance, internal efficiency (including AI), and hiring cadence shift .
  • Enterprise execution: cRPO +17% YoY to $258.5M and >$50K ARR customers +21% YoY to 1,947; management: “Q3 was Sprout’s strongest non-Q4 quarter for large deals” .
  • Strategic wins and platform breadth: Large expansion/new logos (Fortune 500 pharma ~$2M; national convenience store $1.2M; food & beverage >$800K), citing consolidation and Salesforce Service Cloud integration benefits .
  • AI strategy momentum: “We anticipate Q4 will be our most significant quarter yet for AI product expansion… a proprietary AI Agent … and Model Context Protocol (MCP) integrations with ChatGPT” .

What Went Wrong

  • SMB/agency softness: CEO reiterated ongoing pressure in the smaller-customer segment, noting it drags overall growth despite enterprise strength .
  • Cash balance and investment cadence: Cash & equivalents decreased to $90.6M (from $101.5M in Q2), reflecting investment and acquisition-related outflows; line of credit borrowings increased to $44.0M .
  • Operating loss on GAAP: GAAP operating loss ($9.1M) and GAAP net loss ($9.4M), despite significant non-GAAP profitability improvements .

Financial Results

Quarterly trends and margins

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$109.3 $111.8 $115.6
Non-GAAP Operating Margin (%)11.5% 9.2% 11.9%
GAAP Diluted EPS ($)-$0.194*-$0.205*-$0.159*

Values retrieved from S&P Global.*

Q3 vs Wall Street consensus

MetricConsensusActualSurprise# of Estimates
Revenue ($USD Millions)$114.864*$115.593 +$0.72910*
Primary EPS ($)$0.1648*$0.23 +$0.065212*

Values retrieved from S&P Global.*

Revenue segment breakdown (Q3 2025)

Revenue SegmentQ3 2025 ($USD Millions)
Subscription$114.720
Professional services and other$0.873
Total$115.593

KPIs and cash flow

KPIQ1 2025Q2 2025Q3 2025
RPO ($USD Millions)$360.2 $347.0 $357.1
cRPO ($USD Millions)$255.8 $251.6 $258.5
ACV ($USD)$14,961 $15,321 $16,064
Non-GAAP Free Cash Flow ($USD Millions)$19.5 $5.2 $10.339
>$50K ARR customers (count)——1,947
>$10K ARR customers (count)——9,756

Additional Q3 cash/capital items: Cash & equivalents $90.639M; Revolver balance $44.0M .

Non-GAAP adjustments (Q3): Stock-based compensation $19.029M; amortization of acquired intangibles $1.957M; acquisition-related expenses $1.690M; accretion of contingent consideration $0.169M; reconciling to non-GAAP net income $13.464M and non-GAAP EPS $0.23 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$452.9–$455.9 $454.9–$455.7 Raised (midpoint +$0.9M)
Non-GAAP Operating Income ($USD Millions)FY 2025$43.1–$45.1 $46.1–$47.1 Raised
Non-GAAP EPS ($)FY 2025$0.71–$0.75 $0.77–$0.79 Raised
Revenue ($USD Millions)Q4 2025N/A$118.2–$119.0 Initiated
Non-GAAP Operating Income ($USD Millions)Q4 2025N/A$9.5–$10.5 Initiated
Non-GAAP EPS ($)Q4 2025N/A$0.15–$0.17 Initiated

Notes: Q2 had Q3 guidance (revenue $114.4–$115.2; non-GAAP op income $9.3–$10.3; non-GAAP EPS $0.15–$0.16), and actuals were above revenue and EPS ranges . No explicit guidance provided for OpEx, OI&E, tax rate, dividends.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
AI/technology initiativesAI Assist for content; Agentforce integration; accessibility features; focus on social search dynamics NewsWhip AI agents; AI-driven influencer discovery; Care automation; Guardian trust & compliance Proprietary AI Agent rollout; MCP integration with ChatGPT; expanded integrations (TikTok Listening, Canva, Adobe Express) Accelerating
Enterprise momentumStrong pipeline; multi-product selling; large wins; cRPO +21% YoY 50K+ cohort growth; large wins; seasonality context for RPO Strongest non-Q4 large-deal quarter; multi-year contracts ~50% of mix; 50K+ cohort ~2,000 customers Strengthening
Partnerships/ecosystemSalesforce/AWS leadership hires; ramping reseller network Expanding network integrations (TikTok, Reddit planned, LinkedIn, Blue Sky) Preferred Reddit data partner; Canva/Adobe publishing; LinkedIn metrics; Salesforce Service Cloud integration wins Broadening
Macro/tariffsTaking measured view; tariffs/federal spending cuts noted Demand environment unchanged; pipeline hygiene focus Macro unchanged; SMB/agency pressure persists; enterprise resilient Stable
Product performance & attachInfluencer marketing rebrand; attach strategy Premium module attach (influencer, Care) driving ACV Premium analytics, Care, Guardian, NewsWhip attach lifting deal sizes Improving
Regulatory/legal/securityGuardian launched for compliance/security; EU data hosting Continued Guardian traction Guardian adoption in enterprise suite; compliance positioning Stable/positive

Management Commentary

  • “We anticipate Q4 will be our most significant quarter yet for AI product expansion and will set the tone for how our products are crafted… and how we can unlock an entirely new layer of value for our customers.” — CEO Ryan Barretto .
  • “This quarter marks Sprout’s most profitable non-GAAP quarter in our history… driven by strategic, targeted investments and revenue outperformance.” — CFO Joe Del Preto .
  • “Q3 was Sprout’s strongest non-Q4 quarter for large deals… excluding any NewsWeb contribution.” — CEO Ryan Barretto .
  • “NewsWeb is creating net new pipeline… and increasing deal size when bundled into existing Sprout opportunities.” — CEO Ryan Barretto .

Q&A Highlights

  • Growth mix: Enterprise remains robust while SMB/agency softness continues to pressure aggregate growth; opportunities to evolve pricing/packaging and AI for smaller customers .
  • Profitability drivers: Revenue outperformance, internal AI-driven efficiencies, and hiring cadence benefit in Q3; some hiring cost pickup expected in Q4 .
  • NewsWhip (“NewsWeb”) impact: Pipeline creation at or above enterprise ACVs; larger bundled deals; smooth integration; competitive displacements and ~10–50% ARR uplifts on select accounts .
  • Seasonality/context: RPO/cRPO seasonality discussed; larger renewals skew to H2 (Q3/Q4), supporting exit momentum .
  • Salesforce/Service Cloud: Strong Care use cases with large-scale case volumes; integration cited in major wins .

Estimates Context

  • Q3 beats: Revenue $115.593M vs consensus $114.864M*; non-GAAP EPS $0.23 vs consensus $0.1648*; 10 revenue and 12 EPS estimates contributed*.
  • Guidance raise likely prompts upward revisions to FY 2025 EPS and operating income, with Q4 guidance implying continued profitability and top-line growth .
  • ACV trajectory (+15% YoY) and enterprise pipeline strength reinforce estimate stability upward bias .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Enterprise-led growth with durable KPIs: cRPO +17% YoY to $258.5M and >$50K ARR customers +21% YoY to 1,947 underpin visibility and mix shift to larger accounts .
  • Profitability inflecting: Record non-GAAP operating margin (11.9%), with FY 2025 margin guide raised; focus on operating leverage while investing in product and GTM .
  • AI as a structural tailwind: Proprietary AI Agent/MCP integrations position Sprout as orchestration layer for social intelligence; expected to drive expansion/retention across the base .
  • Product consolidation and integrations as wedge: Demonstrated $1M+ deals and expansions via consolidation, Salesforce Service Cloud integration, and premium module attach .
  • Near-term catalysts: Nov 18 AI event, Q4 delivery against raised guidance, continued Reddit/data partnerships and TikTok listening ramp .
  • Watch SMB/agency dynamics: Ongoing pressure in smaller segments continues to cap aggregate growth rate; pricing/packaging/AI may help over time .
  • Liquidity and investment posture: Cash $90.6M, revolver $44.0M; disciplined investment with non-GAAP FCF $10.3M in Q3 supports growth and integration priorities .

Appendix: Source Notes

  • Q3 press release and 8-K: revenue/margins/KPIs, segment split, guidance, and non-GAAP reconciliations .
  • Q3 call transcript: enterprise momentum, AI roadmap, NewsWhip pipeline, profitability commentary .
  • Prior quarters’ transcripts: trend analysis for cRPO/RPO, ACV, margin progression, macro/seasonality .
  • Other press releases in the period reviewed were not SPT corporate releases; no additional relevant SPT press beyond 8-K exhibits were found .