Sprout Social Q3 revenue rises 8% on larger customer cohort

Overview

• AI-powered social intelligence platform's Q3 revenue rose 8% yr/yr, beating analyst expectations

• Non-GAAP operating income more than doubled from prior year

• Company repurchased over $26 mln of shares under new $50 mln buyback program

Outlook

• Sprout Social sees Q4 revenue between $124.2 mln and $125.2 mln

• Company expects Q4 non-GAAP net income per share of $0.36-$0.38

• Sprout Social targets sustainable GAAP profitability beginning Q4 2026

Result Drivers

• LARGER CUSTOMER COHORT - Approximated trailing twelve month subscription revenue from customers with $30k+ ARR rose 18% yr/yr, and the number of customers with $50k+ ARR grew 11% yr/yr

• COST DISCIPLINE - CEO said focus on cost discipline contributed to record non-GAAP operating income and margin

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 5 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Sprout Social, Inc. is $11.00, about 9% below its November 2 closing price of $12.09

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

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• Nov 2 - Upwork Q3 revenue beats analyst estimates; acquires WorkMotion to strengthen enterprise offering

• Nov 2 - Roku Q3 revenue beats estimates on advertising, subscription growth

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)