Sprout Social (NASDAQ:SPT) Announces Earnings Results, Beats Estimates By $0.07 EPS

Key Points

• Sprout Social beat earnings and revenue expectations, reporting adjusted EPS of $0.23 versus the $0.16 consensus and revenue of $121.5 million, slightly above forecasts. The company also said revenue grew 11.2% year over year.
• Guidance was raised for both Q2 and full-year 2026, with Q2 EPS guidance of $0.15 to $0.16 and FY 2026 EPS guidance of $0.88 to $0.97. Full-year revenue outlook also came in above Wall Street estimates.
• Management highlighted stronger cash generation and capital returns, including record quarterly non-GAAP free cash flow of $24.7 million and a new $50 million share repurchase authorization. The company also said its AI product Trellis has moved to general availability and is seeing rapid adoption.

Sprout Social (NASDAQ:SPT - Get Free Report) issued its quarterly earnings results on Thursday. The company reported $0.23 earnings per share for the quarter, topping analysts' consensus estimates of $0.16 by $0.07, FiscalAI reports. The firm had revenue of $121.50 million for the quarter, compared to analysts' expectations of $120.33 million. Sprout Social had a negative return on equity of 14.28% and a negative net margin of 8.18%. Sprout Social updated its Q2 2026 guidance to 0.150-0.160 EPS and its FY 2026 guidance to 0.880-0.970 EPS.

Here are the key takeaways from Sprout Social's conference call:

• Sprout reported revenue of $121.5 million (+11.2% Y/Y) with non‑GAAP operating margin of 11.6% and a record quarterly non‑GAAP free cash flow of $24.7 million, underscoring improved cash generation and operating leverage.
• The board authorized a $50 million share repurchase program, signaling management confidence in the business and providing a capital‑allocation lever to address perceived valuation dislocation while continuing product investment.
• Sprout moved its AI orchestration framework, Trellis, out of beta to general availability, with rapid adoption (thousands of customers) and plans for a hybrid user/access plus usage‑based monetization model as Trellis expands across the platform.
• The company is shifting toward larger customers: customers with ≥$30K ARR grew 21% Y/Y and now represent over 60% of subscription revenue, with multi‑year contracts nearing half the mix—improving ACV, retention and multi‑product attach economics.
• Sprout is reworking the sub‑$30K segment (launched "Essentials" and a self‑serve motion) and expects a modest deceleration in that cohort through 2026, acknowledging this transition as a near‑term drag while aiming for efficiency gains into 2027.

Sprout Social Stock Up 8.8%

NASDAQ:SPT traded up $0.60 on Friday, hitting $7.40. 4,669,853 shares of the company's stock traded hands, compared to its average volume of 1,355,016. The company has a market cap of $440.74 million, a PE ratio of -11.21 and a beta of 0.94. The company has a current ratio of 0.93, a quick ratio of 0.93 and a debt-to-equity ratio of 0.20. Sprout Social has a 1 year low of $4.92 and a 1 year high of $25.48. The firm has a 50-day moving average price of $5.94 and a 200-day moving average price of $8.48.

Insider Activity

In other news, insider Justyn Russell Howard sold 40,000 shares of Sprout Social stock in a transaction dated Friday, April 10th. The stock was sold at an average price of $5.03, for a total transaction of $201,200.00. Following the completion of the sale, the insider directly owned 7,417 shares in the company, valued at $37,307.51. The trade was a 84.36% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 103,855 shares of company stock worth $600,860. 9.60% of the stock is owned by insiders.

Institutional Investors Weigh In On Sprout Social

Large investors have recently added to or reduced their stakes in the stock. Quadrant Capital Group LLC bought a new stake in Sprout Social during the fourth quarter worth approximately $28,000. Summit Securities Group LLC boosted its position in Sprout Social by 399.0% during the fourth quarter. Summit Securities Group LLC now owns 2,520 shares of the company's stock worth $28,000 after purchasing an additional 2,015 shares during the period. Quarry LP boosted its position in Sprout Social by 264.2% during the third quarter. Quarry LP now owns 3,784 shares of the company's stock worth $49,000 after purchasing an additional 2,745 shares during the period. Kestra Advisory Services LLC bought a new stake in Sprout Social during the fourth quarter worth approximately $54,000. Finally, Russell Investments Group Ltd. boosted its position in Sprout Social by 39.1% during the fourth quarter. Russell Investments Group Ltd. now owns 6,235 shares of the company's stock worth $70,000 after purchasing an additional 1,752 shares during the period.

Key Sprout Social News

Here are the key news stories impacting Sprout Social this week:

• Positive Sentiment: Q1 earnings beat estimates, with EPS of $0.23 versus the $0.16 consensus, while revenue of $121.5 million also topped forecasts. Sprout Social (SPT) Q1 Earnings and Revenues Top Estimates
• Positive Sentiment: The company raised its FY 2026 outlook, guiding for EPS of $0.88 to $0.97 and revenue of $492.5 million to $495.5 million, both above consensus estimates. Sprout Social Announces First Quarter 2026 Financial Results
• Positive Sentiment: Second-quarter guidance also came in slightly above expectations, with EPS of $0.15 to $0.16 and revenue of $121.7 million to $122.5 million versus a lower Street forecast. Sprout Social Announces First Quarter 2026 Financial Results
• Neutral Sentiment: Management said subscription revenue tied to customers with at least $30K in annual recurring revenue grew 21% year over year, and it authorized a new $50 million share repurchase program, which may support sentiment but is not an immediate earnings driver. Sprout Social Announces First Quarter 2026 Financial Results
• Negative Sentiment: Despite the stronger report, Sprout Social remains unprofitable, with negative net margin and negative return on equity, which could temper upside. Sprout Social stock page

Wall Street Analysts Forecast Growth

A number of equities analysts recently weighed in on the company. Wall Street Zen raised Sprout Social from a "hold" rating to a "buy" rating in a research note on Sunday, March 8th. Needham & Company LLC dropped their price target on Sprout Social from $32.00 to $14.00 and set a "buy" rating on the stock in a research note on Friday, February 27th. Canaccord Genuity Group reaffirmed a "hold" rating and set a $9.00 target price (down from $16.00) on shares of Sprout Social in a research note on Friday, February 27th. Weiss Ratings reaffirmed a "sell (e+)" rating on shares of Sprout Social in a research note on Tuesday, April 21st. Finally, The Goldman Sachs Group lowered their target price on Sprout Social from $13.00 to $8.00 and set a "neutral" rating on the stock in a research note on Monday, March 2nd. Four research analysts have rated the stock with a Buy rating, five have issued a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, Sprout Social currently has an average rating of "Hold" and an average price target of $13.11.

About Sprout Social

Sprout Social NASDAQ: SPT is a Chicago-based software company specializing in social media management solutions for businesses of all sizes. The company provides a cloud-based platform designed to help organizations improve their social media presence through a suite of tools for content scheduling, community engagement, social listening and analytics. Sprout Social's platform is built to streamline the workflows of marketing, customer care and public relations teams by providing a centralized hub for managing multiple social channels.

The company's product offerings include publishing and scheduling capabilities that allow users to plan and automate social content across networks such as Facebook, Instagram, Twitter, LinkedIn and Pinterest.

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