Sprout Social Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 6, 2025

Key Takeaways

  • Positive Sentiment: Sprout delivered Q2 revenue of $111.8 M (12% YoY growth) with non-GAAP operating margin expanding by ~400 bps to 9.2%.
  • Positive Sentiment: Acquired NewsWhip for $55 M to integrate AI-powered predictive media intelligence, bolstering crisis management and trend detection capabilities.
  • Positive Sentiment: Raised full-year 2025 revenue guidance to $452.9–$455.9 M and non-GAAP operating income guidance to $43.1–$45.1 M, reflecting early NewsWhip contributions.
  • Positive Sentiment: Launched Guardian by Sprout Social and enhanced Influencer Marketing and Care (“Cues”) with AI tools to drive enterprise adoption and customer loyalty.
  • Negative Sentiment: Expect some near-term rep productivity pressure as sales teams train and align go-to-market on NewsWhip integration with only five months of revenue contribution this year.
AI Generated. May Contain Errors.
Earnings Conference Call
Sprout Social Q2 2025
00:00 / 00:00

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Operator

Ladies and gentlemen, today's conference call is scheduled to begin shortly. Your lines will once again be placed on music hold until your conference begins. Thank you for your patience. Thank you for standing by. My name is Rebecca, and I will be your conference operator today.

Operator

At this time, I would like to welcome everyone to the Sprout Social Second Quarter twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to Alex Kurtz, Vice President of Investor Relations, Corporate Development. Please go ahead.

Alex Kurtz
Alex Kurtz
VP - IR & Corporate Development at Sprout Social

Thank you, operator, and welcome to Sprout Social's second quarter twenty twenty five earnings call. We will be discussing the results announced in our press release issued after the market closed today and have also released an updated investor presentation, which can be found on our website. With me are Sprout Social's CEO, Ryan Baretto and CFO, Joe DelPretto. Today's call will contain forward looking statements, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward looking.

Alex Kurtz
Alex Kurtz
VP - IR & Corporate Development at Sprout Social

These include, among others, statements concerning our expected future financial performance, including our Q3 and 2025 outlook and business plans and objectives, and can be identified by words such as expect, anticipate, intend, plan, believe, seek, opportunity or will. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward looking statements address matters that are subject to risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks and other important factors that could affect our actual results, please refer to our annual report on Form 10 ks for the year ended 12/31/2024, as well as our quarterly report on Form 10 Q for the fiscal quarter ended 06/30/2025 to be filed with the SEC. During the call, we will discuss non GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

Alex Kurtz
Alex Kurtz
VP - IR & Corporate Development at Sprout Social

Definitions of these non GAAP financial measures, along with the reconciliations to the most directly comparable GAAP financial measures, are included in our second quarter earnings release, which has been furnished to the SEC and is available on our website at investors.sproutsocial.com. With that, let me turn the call over to Ryan. Ryan?

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thank you, Alex, and welcome to our second quarter earnings call for fiscal twenty twenty five. We reported second quarter results with revenue of $111,800,000 representing year over year growth of 12% and non GAAP operating margin expansion of almost 400 basis points. Our current remaining performance obligations, reached $251,600,000 represented 18% year over year growth. Our go to market delivered another solid quarter with 18% growth in the 50 ks and above ARR customer cohort. We landed strategic wins with global brands like Honda, Cigna, Kimberly Clark, Authentic Brands Group, LaCroix, Smucker's, the U.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

S. Department of Transportation and Texas Tech. These customers demonstrate our continued execution and strategic fit with the most socially sophisticated enterprise customers. During the quarter, Sprout continued to earn industry recognition. We secured 164 Leader Badges in G2's latest reports with top rankings in enterprise social media suites, analytics and customer service across North America, EMEA and APAC.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

We also earned TrustRadius twenty twenty five Top Rated Awards in eight categories, including social media marketing, audience intelligence and online reputation management, reinforcing the meaningful business outcomes our customers achieve with Sprout. Additionally, we received silver for Best Influencer Marketing Platform at the Global Influencer Marketing Awards and a Silver Shorty Award in the micro influencer strategy category for our own innovative influencer strategy that turns Sprouts listening data into thought leadership and helped shape industry conversations. Today, I'm excited to begin by discussing our recent acquisition of Newswhip, a leader in AI powered predictive media intelligence. Headquartered in Dublin, Ireland, Newswhip was a privately held company with approximately 70 employees, and we couldn't be more excited to welcome the team to Sprout. NewsWhip has become a mission critical tool for some of the largest global brands, media companies and agencies for crisis management, real time media monitoring, research and strategy.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Strategic customers such as Nissan, the Associated Press, a Fortune 50 media company, two Fortune 50 technology companies and a Fortune 100 consumer beverage company all rely on NewsWhip for real time monitoring of news articles, social posts and other media related to their brand, products and their competitors. I want to outline our strategic rationale for acquiring Newswhip and why we see this as a pivotal milestone that combined with our existing product roadmap will drive unique crisis management, trend detection and AI offerings from spread over the next several years. First, Newswhip's AI powered predictive media intelligence can help identify which stories and narratives are about to go viral. This has become mission critical for brands as news stories can quickly escalate across various social media platforms. Newswift provides three core values: real time alerts and predictive analysis key insights into emerging trends and conversations and sophisticated AI alerting capabilities that are leveraged by crisis management teams and the C suite.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Over time, we expect to enable early crisis detection from Newswhip to seamlessly flow to customer care teams working in the Sprout platform, creating a truly differentiated end to end experience, which transforms insights into action. We also believe integrating Newswhip's capabilities with Sprout's listing products and its extensive social interaction data will create a comprehensive three sixty degree view of social and media ecosystems. Together, we will combine predictive media intelligence with agile social action to drive impactful earned, owned and paid media strategies. This integrated approach will enable real time trend detection, targeted engagement and clear ROI reporting, delivering measurable outcomes for businesses. During the second quarter, Newswhip launched its AI agents, which have garnered strong interest among Newswhip's larger customers with over 70% of brand customers leveraging them in just over a month.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Newsweek's AI agents proactively scan global news and social data, identifying stories and themes gaining momentum before they peak and giving brands the strategic edge to own the narrative. With the massive volumes these brands have to manage, these agents are designed to separate the signal from the noise and to drive clear efficiency for practitioners while also ensuring they never miss a critical moment. NewZip will enable Sprout to enter in the mission critical PR and crisis monitoring space with a new offering. These are potentially new buyers for Sprout, both new logos to Sprout as well as growth opportunities within our existing customers. And in both cases, are often groups of long standing dedicated budgets.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

We're incredibly excited to discuss NewsWhip's capabilities with them in the coming weeks and months. While there is some minimal customer overlap, we believe Spread's full go to market distribution will accelerate these opportunities. We also believe that Newswhip can further strengthen our gross retention goals among larger enterprise customers given its stickiness with crisis management teams. Newsweek has built an impressive list of top tier customers over the last ten years with contract sizes often at the higher end of Sprout's customer TCV range. Finally, we are thrilled about the future impact we expect the Newswhip team members will have at Sprout.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

This agile team has built a must have tool for some of the biggest brands, and we've been really impressed with the Newswhip engineering talent shaping the future of AI driven real time media monitoring. I'm also pleased to share that Newswhip's cofounder and CEO, Paul Quigley, will step into the role of general manager for our listening business, overseeing both Newswhip and Spreads listening products. Paul is a great executive and will be a tremendous asset in leading this critical part of our business moving forward. Before handing the call to Joe, let me briefly take you through some customer wins and our four key growth drivers that include winning the enterprise, driving customer health and adoption, expanding our partnership and ecosystem and driving improved account penetration. To win the enterprise, we intend to expand the pipeline, close more 50 ks plus deals and accelerate adoption with a product roadmap built for enterprise needs.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Let's start with the key product releases in the quarter. For Influencer Marketing, we reimagined our Influencer Marketing platform now featuring a refreshed design and advanced AI driven capabilities. As social media becomes central to brand discovery, influencer marketing is an increasingly important strategy to drive ROI. Key updates include AI powered natural language discovery for search, driving more authentic and impactful activations, a customizable brand safety solution to align creators with brand values and a new creator vetting feature that drastically reduces time spent in discovery so brands can refocus on their more strategic creative tasks. In Care, we introduced innovations for proactive customer engagement through enhanced efficiency and smarter workflows.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

With the introduction of Cues, Care teams can easily organize high volumes of inbound customer interactions by urgency, topic or customer segment, significantly reducing response times and ensuring critical conversations receive immediate attention. Additionally, new bot integrations and AI enhancements automate routine interactions, proactively resolve customer issues and free up care agents to focus on higher value tasks. These innovations mean faster resolution times with increased agent productivity and more tailored and effective support for customers, ultimately cultivating greater customer satisfaction and loyalty. Social media has become central to product discovery and purchasing, which means brands must deliver fast personalized social care across platforms or risk losing vital customer trust in business. In fact, 73% of consumers say they will buy from a competitor if a brand doesn't reply to them on social.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

While reactive support is expected, the new innovations in care by Sprout empowers brands to deliver proactive care, turning positive interactions into business assets that build loyalty and attract new customers. For governance, we enhanced brand safety and customer data handling with the launch of our new product Guardian by Sprout Social. Guardian supercharges social customer care and social media management with innovative AI driven tools that reduce brand risk, helping our customers securely and confidently handle their customer data. Guardian is a huge asset for security conscious and highly regulated industries, providing features like blocked words, data masking and secure forms. We're also pleased to share several strategic enterprise wins this quarter.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

The first win was a 7 figure new business deal with a global brand management company consolidating their marketing care and customer experience under one tech stack. With Premier's success, listening and premium analytics, they can unify social strategy across 50 plus brands, ensuring consistent governance and workflows. They can also boost efficiency with powerful and intuitive reporting tools while reducing costs and complexity by consolidating the social management, publishing and analytics into our single platform. The next story we want to highlight is an almost 900,000 expansion deal with a global health technology company that switched from a competitor due to its overly complex workflows. They were seeking a seamless care agent workflow with our Service Cloud integration.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

With Sprout, this company can amplify its brand messaging with over 60 publishers and 15,000 advocates, expanding reach and boosting brand awareness. Sprout also enables real time insights for deep customer behavioral analysis. Our Service Cloud integration allows them to manage 90,000 customer support requests per month to increase customer satisfaction. They can also safely host data in The EU in a compliant manner, which is critical in a highly regulated industry. This final customer story is a 3 60 ks expansion win, highlighting the growth opportunities that exist within our customer base.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

This Fortune 500 global healthcare company, already a seven figure Sproat customer for marketing care and customer experience, expanded to include listening, premium analytics, influencer marketing and employee advocacy. They are now able to unify social efforts globally for consistent brand messaging worldwide and to elevate brand reputation by tracking sentiment and covering key drivers of perception and benchmarking against competitors in real time. Our second growth driver is a sharper focus on customer health, onboarding and adoption to maximize long term value. This quarter, we introduced two new support offerings, Accelerated Support and Accelerated Support Plus, while also enhancing our existing Premier Success Lite offering. Features include two hour response times and access to a dedicated customer experience specialist.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Since launch, these offerings have gained strong traction, driving new deals and significant interest across our Premier Support Suite. Our third driver is our continued investment in our partnerships with strong global partners that bring Sprout into strategic accounts and expand our reach into some of the largest digital marketing budgets. We continue to ramp our partnership activities through the 2025. As we mentioned last quarter, our social network, technical integrations and go to market partnerships provide what we believe is a lasting competitive advantage in the market. As we move into the second half of the year, we'll be expanding our partnerships and capabilities across key networks, including publishing, reporting and listening capabilities with Blue Sky, engagement and reporting with Reddit, listening with TikTok and building out personal profile reporting with LinkedIn.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Our fourth growth driver focuses on deepening customer engagement through use case expansion and premium modules with our sales team seeking to drive greater value across both new and existing customers. Expanding our trust and compliance offerings at Sprout has been a key priority. As I mentioned earlier, this past quarter we launched Guardian, a solution enabling our customers to securely manage their data while still personalizing interactions and enhancing brand safety. We've seen strong interest across highly regulated industries, especially healthcare and financial services, closing our first deal within just a couple of weeks of launch. We're even seeing demand from less regulated industries as organizations increasingly recognize the inherent value of having these capabilities readily available.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

The acquisition of Newswhip will significantly enhance our AI listening and care capabilities, enabling us to expand use cases and elevate our premium module offerings. We're excited to share more in Q3 as we begin introducing NewsWhip to our customers. In closing, I'd like to revisit our discussion last quarter of social search and the undeniable long term trends we see playing out and how the Newswhip acquisition ties into this theme. As traditional search continues to trend towards zero click with AI, current content strategies face headwinds with traffic changing in real time. We know nearly half of Gen Z starts product discovery on platforms like TikTok and Instagram, and over 80% of consumers say social is our top channel for product discovery.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Organic website traffic is declining, while paid search costs are rising. Social has become the new front door for discovery, but most brands are optimizing for it or they're not getting there first. Our ability to drive discovery on social platforms is critical and translates into AI search where platforms like Reddit increasingly contribute to source content and in traditional search where both Reddit and Instagram index on the first page of Google search results. Social media's authenticity, immediacy and community driven nature fill the gap as search behaviors shift, offering businesses stronger ROI outcomes. Sprout helps brands win in the new era of discovery.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Our publishing tools are designed to optimize every post for maximum visibility using keyword rich titles, platform specific formatting and built in guidance for hashtags, alt text and timing to help ensure nothing gets missed in social search and brands can reclaim lost organic traffic. And now Newsweek, in our view, is the perfect addition to this strategy as Sprout will enable global brands with a greater ability to recognize real time and predictive trends powered by AI agents. These innovations will help marketers know exactly what content they should be creating to benefit from social search momentum as well as spot issues before they arise with differentiated solutions for crisis management. We believe the future of this category will be defined by real time data and intelligence, extensible platforms and trusted AI. That's the foundation we're building at Spread and we're excited about where it's taking us.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

And with that, I'll turn it over to Joe to run through the financials. Joe?

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Thanks, Ryan. I'll now run through our financial results and guidance. Our second quarter results were highlighted by a quarterly non GAAP operating margin of 9.2%, up nearly 400 basis points from the year ago period. We generated 5,200,000.0 in non GAAP free cash flow during the quarter, up $2,700,000 from our non GAAP free cash flow in 2Q twenty twenty four, an increase of 110% on a year on year basis. And on a trailing twelve month basis, non GAAP free cash flow is up 4x.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

We remain committed to growing operating leverage on a fiscal year basis. On to a summary of the quarter. Total revenue for the second quarter was 111,800,000.0 representing 12% year over year growth. Subscription revenue was $111,100,000 up 13% year over year. The number of customers contributing more than $10,000 in ARR grew 6% from a year ago.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

The number of customers contributing more than $50,000 in ARR grew 18% from a year ago. Q2 ACV was 15,321, up 14% year over year. As Ryan discussed earlier, our strategy to drive ACV growth remains focused on shifting to a higher enterprise mix and strengthening premium module attach rates such as influencer marketing and customer care. RPO totaled $347,000,000 down from $360,200,000 exiting Q1 and up 18% year over year. We expect to recognize 72% or $251,600,000 of total RPO as revenue over the next twelve months, implying a C RPO growth rate of 80% year over year.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Non GAAP operating income totaled $10,300,000 which is ahead of the high end of our outlook. This was up from $5,300,000 a year ago and equates to a non GAAP operating margin of 9.2%. We're pleased that our progress here demonstrates our focus on continued growth in our margin profile. Before moving on to guidance, a few quick comments about our acquisition of NewsWhip. We acquired Newsweb for a cash consideration of $55,000,000 with an additional $10,000,000 in potential cash earn outs that are structured over the next two years.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

We financed the acquisition with our credit revolver in cash and believe this was an efficient use of capital as our products address the needs of our customers and we believe the combined solution is a highly differentiated offering. Looking ahead, we're increasing our full year revenue guidance primarily reflecting the early contribution from Newsweek. We've strong early interest from new and existing enterprise customers, including new conversations with globally recognized brands that underscore the strategic value of this acquisition. We believe this early traction is a strong signal for the opportunity ahead and reinforces the differentiation we believe Sprout is building. That said, we're early in the integration.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

While the core Sprout business continues to perform in line with the expectations we set at the start of the year, we expect some near term pressure on rep productivity as we train teams, align our go to market motion, and support customers through a more expansive conversation around listening and news with. Only five months of revenue contribution remaining this year. As we're just starting to operate the Newswhip business given the closing last week, we've taken a measured approach to modeling the impact. Lastly, while part of the acquisition, NewsOp was expected to be in approximately breakeven business in the back half of the year on a standalone basis. We're pleased that we were still able to raise our non GAAP operating income outlook while absorbing the associated cost.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Now on to guidance. For the 2025, we expect revenue in the range of $114,400,000 to $115,200,000 We expect non GAAP operating income in the range of $9,300,000 to $10,300,000 We expect a non GAAP net income per share of between $0.15 and $0.16 This assumes approximately 59,000,000 weighted average basic shares of common stock outstanding. For the full year 2025, we are raising our guidance from the prior quarter and now expect revenue in the range of $452,900,000 to $455,900,000 We are also raising our non GAAP operating income guidance expected to be in the range of $43,100,000 to $45,100,000 We expect non GAAP net income per share between $0.71 and $0.75 assuming approximately 58,700,000.0 weighted average basic shares of common stock outstanding. We look forward to continuing to innovate and create more opportunities for our customers to grow with us. We appreciate your interest in Sprout Social.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

And with that, Ryan, Alex and I are happy to take any of your questions. Operator?

Operator

And your first question comes from the line of Arjun Bhartia with William Blair. Your line is open.

Arjun Bhatia
Co-Group Head - Technology, Media & Communications at William Blair

Yes, perfect. Thank you so much. Appreciate you guys taking the question here. Maybe to start out with just if if you can zoom out and just take a step back for a second, I'd be very curious to hear just how you would characterize the the core business as it stands today. And then I have a I have a follow-up after that.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Hey, Arjun. It's Ryan. I will start. Thanks for the question.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Yeah. Just in terms of the the business, we've we've been really pleased with the progress that that we've been seeing and and incredibly proud of the the effort from the team. It's the business being performing really well and tracking the plan that we laid out to all of you at the beginning of the year. We've we've had some great wins this quarter, Cigna, Authentic Brands, Honda, Smucker's, Department of Transportation were were a few that we had shared in the prepared remarks. And we group up the 10 k and 50 k customer accounts quarter over quarter.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

On top of that, our 50 k trailing twelve month revenue cohort is growing greater than 30%, which just shows the the enterprise execution. On the retention and renewal side, the performance has been really strong. We've seen steady improvement in gross revenue retention year over year. And we're seeing continued momentum with our teams in in closing more annual and multiyear deals, which will will contribute to retention and and certainly gives us better visibility in the business. And then finally, from a non GAAP operating margin, we're up nearly 400 basis points, which I think really speaks to the the execution and the operating discipline discipline that we have in the business.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

So everything considered, we're we're feeling really good about where the business is as we head into the back half.

Arjun Bhatia
Co-Group Head - Technology, Media & Communications at William Blair

Alright. Perfect. Very helpful. And then just as a follow-up, as I'm looking at the guidance, can you just give us a sense of what the impact of of Newsweek is and what you've incorporated into into the guidance here?

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Yeah. Thanks, Harvey. This is Joe. I'll jump in on this one, and thanks for the question. You know, maybe let me walk you through how we approach the, you know, the guidance in total, and I think that'll be most helpful to address the question you're asking.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

I think first, you know, our corporate just came in probably ahead in q two. It continues to track the plan we laid out to you at the start of the year. You know, we haven't seen the a change in the broader demand environment, and we flow through a modest portion of the q two beat into our updated full year guide to reflect that. You know, for the newslet business, we're projecting that to contribute approximately 2,500,000.0 over the final five months of the year. And you gotta remember with any small tuck in acquisition, you wanna take a prudent approach looking ahead. We just closed the acquisition last week.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

There's still natural unknowns around renewal rate, pipeline conversion, other business fundamentals we need to consider. So as a result, we're taking a very measured approach with our guidance. And then, you know, we're still early, but we believe this really sets us up to lead in the area that's becoming increasingly important to our customers and to the market, and we're really excited about this acquisition.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thanks, Arjun. Next question, please.

Arjun Bhatia
Co-Group Head - Technology, Media & Communications at William Blair

Thank you.

Operator

Your next question comes from the line of Scott Berg with Needham. Your line is open.

Robert Morelli
Equity Research Associate at Needham & Company

Yes. This is Ram Marelli on for Scott Berg. Thanks for taking the question. Just to double click on the Newsweek acquisition. Can you just touch on, you know, the timeline to integration of the teams and products?

Robert Morelli
Equity Research Associate at Needham & Company

And you noted some, you know, positive momentum with enterprise conversations so far. You know, any other feedback from customers just regarding the, you know, this this acquisition of the capability being added to Suite? Thanks.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. Thanks, Rob. Appreciate it. Yep. We're we're digging in.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

As as Joe said, we're about a week in. The the teams are chugging along already. We've been working on a bunch of, all hands with the teams, and I actually just did an all hands with the news rep team yesterday and a company all hands last week. We've we've been getting the CRMs together and aligning everything and and working really closely on the go to market strategies. We've also just seen, you know, a number of conversations already in the first week.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So lots of progress being made on the integration. In terms of product integration pieces, those will develop over the next probably few quarters or so, but the teams are working in the background. Obviously, as we you mentioned on the call, Paul, that cofounder, is now the GM of our our listening business, and we'll be really working closely with the rest of the team there. And then from a from a customer perspective, you know, one, I'd just say the teams are internally incredibly excited about the opportunity to to share the the value of the news with product to our customers. We've seen this as a mission critical solution for PR communications professionals, and the ability to take the insights from news with and and have them drive actions in the spread platform is really, really exciting.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So initial feedback and, again, if it would be the week, it's been it's been strong, and I I encourage all of you to take a look at the NewsWhip website and go to the customer stories. You'll get a great sense for that the quality of the customers there and the types of problems that they're solving.

Robert Morelli
Equity Research Associate at Needham & Company

Got it. That's helpful. Thank you.

Robert Morelli
Equity Research Associate at Needham & Company

And then last quarter, there was reference to the launch of a multiproduct campaign. I understand it might still be early days, but have you seen any benefit from this effort resulting in expansions with existing customers or larger lands with new? Any sort of jump in new customer ARPU since this is launched? Thanks.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. Thanks, Rob. Yeah. I I mean, I I will say it's it's been a massive focus for our team across both the product organization and and go to market. We've been seeing healthy pipeline being created there.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Clearly, Newsweek has been a a big contributor to that and will be in as we go forward. I mentioned Guardian on the call as well, another great example of a of a product that we launched in the quarter. So I think lots of progress happening right now, but, not nothing else to add. We'll certainly come back and and share the the progress along the way. Thanks for the question.

Robert Morelli
Equity Research Associate at Needham & Company

Got it. You.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thanks, Rob. Next question, please.

Operator

Your next question comes from the line of Adam Hotkiss with Goldman Sachs. Your line is open.

Adam Hotchkiss
Adam Hotchkiss
VP - Emerging Software Equity Research at Goldman Sachs

Great. Thanks so much for taking the questions. I guess, I think we've heard from some of your peers, and I think you had mentioned that the growing cost of advertising, particularly if you're a smaller business. And I'd be curious if that is resonating with your customers when you talk to them about the value of social as a channel and if you're seeing any mix shift in the way that brands are thinking about their advertising strategies. It really feels like that that's really ticked up in the last couple of quarters.

Adam Hotchkiss
Adam Hotchkiss
VP - Emerging Software Equity Research at Goldman Sachs

I'm I'm just curious if that's impacted you and your your deals at all.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. I appreciate the question, Adam. It ties a lot to the final piece of my prepared remarks as I got into the idea of social search. We are certainly seeing customers talking a lot about the fact that they've seen pretty significant disruptions to the things that they counted out in the past, specifically around search engine optimization and search engine marketing. And, certainly, we're in this world right now where, you know, that the cost per click from a lot of these things has increased significantly, and people are clicking less.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So our customers are definitely looking for more help, and how do they show up in the right places where discovery is happening? And we're seeing more and more of that happening on social. So a lot of the conversations we're having with customers is, how do you reclaim some of this lost traffic and performance in places like social? And so if you think about what our platform does, it really helps customers figure out the right type of content to produce, the right time to post it to their audience, give you analytics on both your your paid and organic so that you can really double down on the things that are working. And and, clearly, in this environment, that's something that's really, really critical.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So I'd say that it's been a a a material part of the conversations that we're having with customers. And and I'd say, most of our customers are having that conversation right now with the disruption in the market for their their funnels.

Adam Hotchkiss
Adam Hotchkiss
VP - Emerging Software Equity Research at Goldman Sachs

Okay. That's that's really helpful. Thanks, Ryan. And then just on the the RPO and the CRPO dynamic, I noticed that step down sequentially. I think you mentioned it.

Adam Hotchkiss
Adam Hotchkiss
VP - Emerging Software Equity Research at Goldman Sachs

And RPO, I think, was even below q four levels. Is that just, you know, churn at the low end of the market or anything else to call out there? Seasonality would be helpful. Thank you.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Yeah. Adam, I I I think really, what it's attributed to the last thing you said there was which is the seasonality part of the business. So as we move more up market over the last couple of years, a lot of our bigger renewals and the larger deals were signed in q three and q four. And so what you'll see is, you know, in the back half of this year, you'll see that those dollars start to tick up, in the next couple of quarters. We feel pretty good about how we'll exit the year, in 2025 as it relates to those metrics. So we feel good about the momentum there. It's it's the seasonality that you called out.

Adam Hotchkiss
Adam Hotchkiss
VP - Emerging Software Equity Research at Goldman Sachs

Okay. Thanks so much, Joe.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thanks, Adam. Next question, please.

Operator

Next question comes from the line of Parker Lane with Stifel. Your line is now open.

Jack McShane
Jack McShane
Equity Research Associate at Stifel Financial Corp

Yes. Hey, guys. This is Jack McShane on for Parker. Thanks for taking the question. So I wanted to touch on the macro.

Jack McShane
Jack McShane
Equity Research Associate at Stifel Financial Corp

Obviously, there's been a lot of geopolitical headlines this quarter. So I'd be curious to hear how both the pipeline was impacted by the noisy macro and how renewal conversations have been impacted as well. Thanks.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thanks, Jack. Appreciate the question. I'll start off on the the pipeline side of it. Yeah. We clearly, we're we're still in the same demand environment.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

I I wouldn't call out anything that's materially changed for us this quarter from the last previous quarters. You know, for us, it's it's definitely leaning into the value prop. Similar to some, my feedback from the last question to Adam, a lot of this for our customers right now is this is this is an important part of the work that they're doing, whether it's discovery and making sure that they're getting their customers in the front door thinking about how they respond to their customers from a care perspective. We're certainly leaning in more, as I've shared in previous quarters, on just the the customer value and the ROI story. But I feel feel really good about what I'm seeing from the teams and the the type of rigor that Mike and the team has created around pipe creation and pipe acceleration.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So not nothing to call out that's different from previous quarters there. On the renewal side, we feel really good about that. We've seen a lot of progress year on year in terms of our our retention and renewal rates. I think this also speaks to the the value of the the product for our customers and, you know, the fact that they're spending hours a day in our products, and this is how they execute execute on their social strategy. But we've seen that as a as a strength for us.

Jack McShane
Jack McShane
Equity Research Associate at Stifel Financial Corp

Got it. And as a follow-up, I'd be curious to touch on the customer care use case and more specifically, you know, how Salesforce's emphasis on agent force has impacted the demand in the segment.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. No. I appreciate it. The care continues to be a really important use case for our customers. We shared a a few stories today just highlighting with really large customers how they're leveraging care.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

You know, one specifically was an example of a customer that moved over over to us, a global health tech company, that moved over to use the service cloud integration. I mean, this customer is literally managing 90,000 customer support requests every single month, and they're able to execute on that with that speed and customer satisfaction because of the integration that we built with with Salesforce. So it's it's continued to be a really important part of the strategy. Clearly, our customers are doing it directly in our product or they get the benefit of leveraging integrations like the service cloud. But more and more, we're seeing customers showing up on social as a place that they wanna be served, and their expectations when they show up on social are are higher than any other channel.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

And so the way that our platform's set up to support customers, matters significantly. And, yes, on the on the agent force side of things, we're we're excited about the work that we're doing there. We're coming off of connections and getting geared up for for Dreamforce. So I I I believe this will continue to be kind of the next chapter in the in the value that we're adding to to customers that are that are joint spread and service cloud Salesforce customers.

Jack McShane
Jack McShane
Equity Research Associate at Stifel Financial Corp

Thanks.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thanks, Jeff. Next question, please.

Operator

Your next question comes from the line of Surinder Thyde with Jefferies. Your line is open.

Surinder Thind
Surinder Thind
Equity Research Analyst at Jefferies Financial Group

Thank you. Can you maybe talk a little bit about, just kind of the the sales of some of the premium modules and the attach rates that you referenced as part of the strategy? Does environment like this make it a little bit more difficult? I mean, it feels like things haven't really changed a lot in the last few quarters, but, you know, there just seems to be a lot of noise out there, and we're hearing different things from different channels.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. I appreciate the question. Yeah. I alluded to it a little bit before, but, I've been proud of that what I'm seeing from the team in terms of creating this multiproduct pipeline. But the product teams have been working hard in the background here.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

We we talked through a few of the use cases that that we have. We've added Guardian, our trust and compliance product this this past quarter. Obviously, Newslook is another addition there. I think this is just really important for us because what it means is it allows our sales team to show up to customers with a variety of different product problems that we can solve for our customer base. You know, clearly, the demand environment hasn't, to your point, changed over the last number of quarters, but that's why it's even more important for us to be able to to really serve customers depending on where they are.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So, you know, we we get customers coming in where they get high volumes acting on social from a care perspective, which we can support. We've got other customers who are seeing significant disruption in the top of the funnel from a marketing perspective, and social ends up being a really important thing for them. So these are some of the examples, but I you know, I think the the last piece I'll leave you with is that from an attach rate perspective, we continue to see a lot of headroom and opportunity for us to to sell our products, both from a new business perspective to land bigger as well as from a current customer perspective to be able to to attach more products to our current base, almost 30,000 customers.

Surinder Thind
Surinder Thind
Equity Research Analyst at Jefferies Financial Group

Got it. And then, when I think you know, obviously, the international business international clients are little bit smaller part of the business, but just any color on the trends there? You know, EMEA had been, you know, lagging The US for a little bit, and I didn't see the the QO yet. So just any color that you can provide there on some of those numbers and trends.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. Appreciate it. You you're right. International is still a smaller part of our business, but we we feel really strongly about that market opportunity there and the teams that we have on the ground. Our distribution teams are still relatively small compared to The US, but we're seeing good progress in terms of the pipeline and the opportunity.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

We're also with a lot of the multiproducts that we're bringing to bear and the types of companies we're selling to. We're getting more of these global type opportunities where, you know, the footprint in The US will open up opportunities for our teams in EMEA or in APAC. So and the main takeaway is that, we're early on that journey, but there's there's quite a bit of room there. And over time, we'll be continuing to invest in our distribution. And, Turner, just to to answer that part of your question, as far as the mix for international, you know, q one to q two, it hasn't changed materially.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So when you see the q come out, the the ratio of international revenue versus the rest is is pretty consistent. So no major shift there as yet.

Surinder Thind
Surinder Thind
Equity Research Analyst at Jefferies Financial Group

Thank you.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Alright. Alright. Thank you. Next question, please.

Operator

Your next question comes from the line of Matt Van Vellet with Cantor. Your line is open.

Matt Vanvliet
MD & Software Equity Research at Cantor Fitzgerald

Hey, good afternoon. Thanks for taking the question. I guess when you look at where the NewsWhip technology fits in, in the current product platform, curious if this was sort of a discovered either gap or just a greater extension of the listening platform where you're getting into to situations where people are trying to push listening into other use cases and, you just needed more functionalities. Curious, I guess, if you could elaborate a little more on on where it overlaps or complements the listening platform.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. I appreciate the question, Matt. It is an excellent complement for us. Now one of the things that we really appreciated, about the Newsweek team is what they do is some is is really, really tied to a lot of our future product road map. And and maybe maybe the best way to think about this is we we see it as really strengthening our overall approach to the market and really differentiating us against our our our closest competitors.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

You know, if you think about the spread listening, spread listening is really about deep analysis and longer term understanding of social conversations and share voice and brand sentiment. It's it's ideal for brands when they're trying to understand the why behind historical trends and insights. Newswidth is the command center for real time action. It's it's built for speed and high stakes. It's helping, today's teams figure out this massive fragmented media landscape, and it's giving them these proactive alerts to breaking stories with real time monitoring and predictive analytics to allow them to know exactly where the trends are.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So it becomes this essential tool for crisis communications and anything that really needs to get ahead of the narrative. There's also just as a side note, and I've mentioned it a little bit in my prepared remarks. They've launched some agents to their customers, which is, being adopted really, really quickly here, and it's really helping customers cut through the the from the signals and the noise. So I think the the the main thing to highlight here is it fits really well. It complements our overall strategy, and it fast forwards our our road map.

Matt Vanvliet
MD & Software Equity Research at Cantor Fitzgerald

Okay. Very helpful. And then, Joe, you mentioned, NewsRip was on pace to be breakeven for the second half. Is is that still incorporated in the guidance, or is there some additional expenses related to integration, maybe speeding up anything they had in the works? I guess, what's the second half impact or the next five months impact of NewsWhip on the operating income guidance?

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Yeah. No. The guidance is a good question, Matt. The guidance contemplated that they would breakeven for the for the rest of the year. So there shouldn't be any incremental expense or any other expenses that we're incurring.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

That's kind of an all in when it comes to guidance. And then I think, you know, over the longer term, we definitely believe there's a lot of leverage that can come out of that business. We think about putting that product in our sales team and the distribution we can get that you know, over, you know, the more fixed cost that they have right now. I think we feel good about the the ability to drive more leverage, Sprout overall coming out of '25.

Matt Vanvliet
MD & Software Equity Research at Cantor Fitzgerald

Great. Thank you.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thanks, Matt. Next question, please.

Operator

Your next question comes from the line of Jackson Ader with KeyBanc Capital Markets. Your line is open.

Jackson Ader
Jackson Ader
Managing Director at KeyBanc Capital Markets

Great. Good evening, guys. Thanks for taking our questions. The first one is in the core business. Ryan, you've mentioned a bunch of times about trying to capitalize on the struggles of organic and paid search and switching things over to social.

Jackson Ader
Jackson Ader
Managing Director at KeyBanc Capital Markets

So I'm just curious, you guys especially with new sales leadership, are you running any particular sales plays or special incentives or something to really kinda capitalize on this the beginning of this possible mega shift? Thanks.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. Thanks for the question. I I think the biggest thing to highlight is we've definitely been enabling the team on the value props behind this, the things that we can do to help customers in social search, but also in AI search and traditional search. And so a lot of this is just being rep enablement and then, obviously, customer communication. You know, if we think about it, and I I mentioned some of this in the prepared remarks, you know, we're seeing more and more, especially in Gen z, consumers showing up in social searching in places like TikTok and YouTube and Reddit before they're going to traditional search.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

And so you showing up in the right place matters a ton, which which our customers need to do. We also know that performing really well on social ties into how content is being presented in AI search. So the better you do in social means that you will perform better in AI search. And then finally, we're seeing more and more of these relationships happening between social and traditional search for things like Reddit and Instagram or indexing on the first page. So, again, if you're performing really well in social, you will have a a byproduct downstream impact of performing better on traditional search as well.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So for for us, all all of these things are things that we're enabling the team on to be able to have those conversations with customers. Okay. Alright. Got it.

Jackson Ader
Jackson Ader
Managing Director at KeyBanc Capital Markets

And then quick follow-up. I think, Joe, I think it was you who mentioned in your prepared remarks that, you know, with any acquisition, there's always, the potential for some disruption as you, you know, train and kind of, you know, add things to the plate of the salespeople. To an outsider, though, I hear news whips capabilities, and I think pretty similar to what, you know, the salespeople were already itching, right, as far as, like, a value proposition. So I'm just curious, is there something specific that you'll be adding to people's plates, or is this just, you know, this is the business of acquisitions and things get a little noisy when you're integrating things? Thanks.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Yeah. I think I you know, I well, first, I'll say we're we're one weekend. I think the the biggest thing that I'd I'd highlight is and it it's actually tied up in your your question there. It's it's enablement on making sure that we can perfectly articulate what I shared in a earlier question here around the the differences between listening, our core listening product, and news with and how they fit together, both for our internal teams and then certainly for for customers. So there's enablement. There's things that come with any integration here, but we we're off to the races on that. We had an all hands call last Friday.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

The revenue team kicked off on Monday. So we're we're deep in that already. And I think to your point, these things are so close and so complementary. And we also in in many of our customer accounts, we have folks from the PR and media and comms teams who are in our core platform. So these are also people that we, in many cases, should know inside the organization and have have an opportunity now go and share more about this new solution that we have that can that can perfectly help us.

Jackson Ader
Jackson Ader
Managing Director at KeyBanc Capital Markets

Yep. Okay. That makes sense. Thank you.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Thank you.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thanks, Jackson. Next question, please.

Operator

Your next question comes from the line of Rob Oliver with Baird. Your line is open.

Rob Oliver
Senior Research Analyst at Robert W. Baird & Co

Great. Thanks, guys. Good afternoon. I had two, Ryan. First for you, I just wanted to ask about the influencer marketing portion of the business.

Rob Oliver
Senior Research Analyst at Robert W. Baird & Co

Seems like still a lot of interest in the market around it, a lot of buzz around the potential impact of Fotentic AI or AI there. You guys obviously made pretty strong tuck in acquisition a couple of years ago, and they're not breaking that out anymore. But, just wanted to get a sense for how that's doing and and how when you come in for those renewals for perhaps customers that don't have it, how those negotiations are going. And then I had a quick follow-up for Joe.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. Thanks, Rob. Appreciate it. We we feel really good about the opportunity for influencer marketing, the artist formerly known as Tiger. You know, the the team shared a little bit on the the prepared remarks there, but the product teams have just been cranking in terms of of some of the advancements that we've done there.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

There's been some some really nice AI enhancements in the way that we think about creator discovery for our customers. We've been doing a lot actually from a a brand safety perspective. As you might imagine, as these large brands are leaning in and trying to figure out the right creators, they need to make sure that these creators perfectly fit their brand and and that there's no risk. And so that's something that we've also just really built into the platform that that has added a ton of value. And then just creator of editing to make it much easier for our customers to figure out how to build their strategy and how to add the right creators.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

So a lot of automation workflow and tools built into all of that. It continues to be a really nice wedge for us to go into accounts that might be bended for social media management, But this is a great way to land with a differentiated product and then leverage that to to go back and be able to sell more to that customer later on. So continued progress there and and feeling good about the the opportunity in front of us. Last thing I'll say is I did some of your earlier questions around if you're having disruption with traditional SEM or SEO and pay, we've seen that influencer marketing is returning a a five to six x on the dollars in. And so this has been a really great opportunity for our customers to get good return on ad spend in in places that they they probably aren't investing today.

Rob Oliver
Senior Research Analyst at Robert W. Baird & Co

Got it. Really helpful. Thanks. Appreciate that. And then, Joe Joe, just one for you.

Rob Oliver
Senior Research Analyst at Robert W. Baird & Co

You know, lot lot of questions, obviously, NewsWhip. But I guess more broadly speaking, you guys are doing some product investments. I know you've been working on the go to market on the enterprise and sales side, pace of innovation. Just, you know, not asking you guys the next year or anything. Just wanted to think about how you're thinking about balancing all of those and the potential for more tuck in acquisitions onto your platform with, potential continued margin expansion? Thanks.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

Yeah, Matt. Thanks for the question. I think, you know, consistent with what we've shown over the last couple of years and, you know, what we've kinda guided to to this year, which is now you can expect a couple 100 basis points of margin improvement, you know, year over year, and I don't see that changing in the near term. And and that's regardless of, like, what our growth rate is and what what we're doing. I think we've got this commitment that, hey.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

We believe that we can manage this business a very responsible manner in any type of condition, and we wanna make sure we're continuing to drive that margin in the business. So, you know, we're not we're not moving off of that commitment to drive margin on a year over year.

Rob Oliver
Senior Research Analyst at Robert W. Baird & Co

Okay. Helpful to hear. Thank you guys very much.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Alright. Thanks, Rob. Next question, please.

Operator

Your next question comes from the line of Raimo Lenschow with Barclays. Your line is open.

Raimo Lenschow
Raimo Lenschow
Managing Director at Barclays

Thanks for squeezing me in. Ryan, one for you. Like, with all the changes in the industry where people you know, customers have to think about search, you have to think about social, you have to think about, like, what do we do through LLMs. How how does pipeline conversation change for you as you kind of engage with customers, in terms of, like, number of conversations, but also, like, size of potential deals?

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thanks, Ramo. Appreciate it. Yeah. There there's certainly a lot that our customers have to be thinking about. I mean, I I think the biggest thing here, just just goes back to making sure that we are perfectly tuned into the biggest problems for these customers.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

And that that is so dependent, obviously, on the key stakeholders we're getting in front of. If you're in front of a marketing audience, they're absolutely thinking about how AI is impacting search, how their SEO and SEM may not be working as well, how their website traffic may not be working as well. And so we're thinking a lot about social as the front door and trying to figure out how can we help them show up in the right places, drive awareness, get a better return on that spend. Other customers might be seeing just a significant amount of demand changing channels from their call center or website into social from a care perspective, and they've gotta figure out how to manage that that demand like this, you know, that example, the 90,000 cases that we're that we're managing. So a lot of this just comes down to making sure that our teams are really doing a lot of discovery to understand where the biggest problem sets are and that we're leaning into those solutions.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

And then and then tying back with real return on investment feedback on the places in which we think that we can help our customers. So, you know, that there's a lot in there for our teams in terms of just investing in the right places and understanding the right problems. But I I I feel like we'd be making a lot of progress there and have been really proud of how the team's showing up in front of customers.

Raimo Lenschow
Raimo Lenschow
Managing Director at Barclays

Perfect. And then I have one follow-up for Joe. Like, if you think news with with kind of more AI usage, etcetera, is there any like and you talked about breakeven already, but, like, is there anything we should be aware of in terms of gross margin implications from I I assume they use GPUs, etcetera, that I that we need to consider? Thank you.

Joe Del Preto
Joe Del Preto
CFO at Sprout Social

No, Raimo. We feel pretty good about we we did a lot of work during diligence on the side to understand the scalability of their platform, and that was one of the the real positives and one of the one of the big check the boxes for our CTO was that the way they built the back end infrastructure and how this is scaling with the AI considered. And so we feel pretty good, Raimo, that there's not been any major change in the in the cost structure that business has this ramp.

Raimo Lenschow
Raimo Lenschow
Managing Director at Barclays

Okay. Perfect. Thank you.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Thanks, Raimo. Next question, please.

Operator

Your final question comes from the line of David Hines with Canaccord Genuity. Your line is open.

David Hynes
MD - Software Lead Analyst at Canaccord Genuity - Global Capital Markets

Hey, guys. Ryan, two questions on NewsWhip. So I get your positioning as kind of command center for real time action. That makes a lot of sense. I didn't hear you say, does does Newsweek give you access to media sources that previously weren't being captured by the listening offering?

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah, DJ. It does. It does.

David Hynes
MD - Software Lead Analyst at Canaccord Genuity - Global Capital Markets

K. Can you elaborate? Like, what are those?

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. I I mean, think think about, pretty much any of the media sources out there that we we'd be consuming and looking at all the articles. The the value prop of their platform, it takes a little bit of a different angle than than we've taken on our our listing. Right? Like, our listing is, more deep brand sentiment.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Our customers use it from a a research perspective. They're going back and looking at trends. Newslet's full angle is consuming all the the news and media and publications out there, identifying articles that are being created, and then figuring out where there's gravity around those articles and what's trending. This matters a lot for our customers because these articles can as we've seen news breaking many different places over the the last few weeks and months and years, these things can turn into real viral moments that are either good or bad. Right?

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

On the good side, it could end up creating a lot of demand if you're a product company. On the bad side, it can create a a lot of crisis management. And so they're looking at those media articles and then figuring out where there's gravity around them in places like social to allow those PR and comms teams to figure out where they should be leaning in.

David Hynes
MD - Software Lead Analyst at Canaccord Genuity - Global Capital Markets

Yep. Yep. Okay. Got it. And then and then the second the follow-up to that.

David Hynes
MD - Software Lead Analyst at Canaccord Genuity - Global Capital Markets

Like, what's the price point for Newsweek? I know it's an enterprise product, but, like, how much are people spending on it?

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. Yeah. It's it's an enterprise product. It's, multiples bigger than our average deal size. You know, if you go to the, their their customer case studies, you'll see a lot of the large enterprises that are that are working with them fits fits really nicely into our our enterprise segment, but we think that we'll see some opportunities there certainly with agencies in mid market as well.

David Hynes
MD - Software Lead Analyst at Canaccord Genuity - Global Capital Markets

Yep. Yep. Perfect. Okay. Thank you.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Yeah. Thank you.

Operator

I will now turn the call back over to Ryan Borreto for closing remarks.

Ryan Barretto
Ryan Barretto
CEO & Director at Sprout Social

Great. Thank you very much, operator, and thanks for joining us tonight and for the thoughtful questions. I wanna end by thanking our team for their continued dedication and effort. I'm really grateful for all you do for our customers and for our business. We look forward to spending more time with the rest of you later over the next quarter, and we will talk to you soon. Have a great night.

Operator

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Executives
    • Alex Kurtz
      Alex Kurtz
      VP - IR & Corporate Development
    • Ryan Barretto
      Ryan Barretto
      CEO & Director
    • Joe Del Preto
      Joe Del Preto
      CFO
Analysts
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