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Sprout Social Q3 revenue rises 8% on larger customer cohort

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Beat

$125.15 mln

$123.81 mln (9 Analysts)

Q3 Loss Per Share

$0.11

Q3 Net Loss

$6.45 mln

Q3 Gross Profit

$95.81 mln

Q3 Operating Expenses

$102.72 mln


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

  • Nov 3 - DigitalOcean Q3 revenue jumps 40%, beats estimates; raises outlook

  • 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


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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