Summary
Sprout Social reported first quarter fiscal 2026 revenue of $121.5 million, up 11% from the prior-year quarter. Gross profit was $93.5 million, up 10.7%. The company still posted a GAAP operating loss of $5.8 million, but that loss narrowed from the prior-year quarter. GAAP net loss was $6.3 million, also narrower than the prior-year quarter, and GAAP net loss per share was $0.11, narrowing from the prior-year quarter. Gross margin was 77.0%, down 0.3 percentage points. Operating margin was -4.8%, up 5.4 percentage points. The gap between GAAP and non-GAAP results remains wide because of stock-based compensation and amortization expenses.
Non-GAAP operating income was $14.1 million, compared with $12.5 million in the first quarter of 2025. Non-GAAP net income was $13.6 million, and non-GAAP net income per share was $0.23. Operating cash flow was $25.2 million, up 39.3% from the prior-year quarter. Non-GAAP free cash flow, a separate measure, was $24.7 million, compared with $19.5 million in the first quarter of 2025. Capital expenditures were $1.1 million, down 19.0%. The balance sheet showed current deferred revenue of $194.3 million, up 11.7% year-over-year, and total remaining performance obligations of $395.3 million, up 9.7% year-over-year. Current remaining performance obligations were $281.7 million, up 10% year-over-year.
The customer mix continued to shift toward larger accounts. Customers contributing $30,000 or more in ARR reached 3,875 as of March 31, 2026, up 12% compared with March 31, 2025. Customers contributing $50,000 or more in ARR reached 2,085, up 18%. Approximated trailing twelve month subscription revenue contribution from $30,000 or more ARR customers was $280.1 million, or 60.3% of total subscription revenue. Management highlighted new and existing customers including Monster, Naterra International, CSL Behring, Reebok, and Roku. The company released its 2026 Social Intelligence Report, was named the #1 social listening product in G2's 2026 spring reports with 59 top rankings, and hosted a platform webinar. Sprout Social also announced its first share repurchase program, with an initial authorization of $50 million.
For the second quarter of 2026, management guided non-GAAP operating income between $9.5 million and $10.3 million and non-GAAP net income per share between $0.15 and $0.16. The company also issued total revenue guidance for the second quarter of 2026. For the full year 2026, it guided non-GAAP operating income between $54.9 million and $60.4 million and non-GAAP net income per share between $0.88 and $0.97, along with total revenue guidance for the full fiscal year. It continues to expect a non-GAAP operating margin of approximately 15% by the fourth quarter of fiscal 2026 and reiterates a 30% Rule of 40 target by the fourth quarter of fiscal 2027. Management does not provide guidance for GAAP operating loss, operating margin, or net loss per share because it cannot reconcile those measures without unreasonable effort.
Risks include macroeconomic and geopolitical uncertainty, measured buying behavior, longer sales cycles, pricing pressure, and the strategic shift toward larger enterprise customers. Sprout Social also cites potential demand effects from price increases and packaging changes, dependence on platform and API access, AI disruption, international expansion, acquisition integration, credit agreement covenants, cybersecurity, privacy regulation, and legal proceedings. The MD&A notes that total customer count decreased while higher-tier customer counts rose. The company also warns that it expects to continue incurring operating losses for the foreseeable future. Its credit agreement contains covenants that restrict certain activities.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $121.5M | $120.9M | +0.5% | $109.3M | +11.2% |
| Gross profit | $93.5M | $93.7M | -0.3% | $84.5M | +10.7% |
| Gross margin | 77.0% | 77.5% | -0.6 pp | 77.3% | -0.3 pp |
| Research & development | $26.9M | $28.4M | -5.1% | $23.2M | +16.0% |
| Sales & marketing | $48.5M | $47.9M | +1.3% | $47.5M | +2.3% |
| General & administrative | $23.9M | $28.3M | -15.6% | $25.0M | -4.5% |
| Total operating expenses | $99.4M | $104.6M | -5.0% | $95.7M | +3.9% |
| Operating income (loss) | -$5.8M | -$10.8M | +46.0% | -$11.2M | +47.8% |
| Operating margin | -4.8% | -8.9% | +4.1 pp | -10.3% | +5.4 pp |
| Net income (loss) | -$6.3M | -$10.7M | +41.0% | -$11.2M | +43.5% |
| Net margin | -5.2% | -8.9% | +3.7 pp | -10.3% | +5.1 pp |
| Diluted EPS | -$0.11 | -$0.18 | +$0.07 | -$0.19 | +$0.08 |
Risks
The company cites geopolitical instability, inflation, interest rates, currency swings, tariffs and trade tensions, and capital market volatility. It attributes more measured buying behavior and lengthening average sales cycles to these conditions, which have contributed to a slowdown in revenue growth compared to historical levels, and expects the negative trends may emerge or recur in future quarters.
The shift toward larger enterprise customers has brought longer and more expansive average sales cycles and increased pricing pressure. As of March 31, 2026 the total number of customers decreased versus the prior year while customers contributing $30,000 or more in ARR grew 12% and customers contributing $50,000 or more in ARR grew 18%, concentrating growth in a narrower set of large accounts.
This filing's sole new risk factor: the board approved a share repurchase program of up to $50 million of Class A common stock. The company warns repurchases carry market timing and valuation risk, may occur at prices later shown to be excessive, could increase stock volatility, and could materially diminish cash and marketable securities and adversely impact overall liquidity.
Subscriptions depend on third-party data, and cost of subscription revenue rose 12% for the quarter ended March 31, 2026, driven in part by $1.9 million higher data provider fees for third-party data. The company also carries $96.9 million of purchase commitments, mostly for data and services, of which $70.6 million is payable within twelve months.
The July 2025 NewsWhip acquisition added $32 million of borrowings under the Facility and roughly $8.4 million of estimated contingent earnout liability as of March 31, 2026, payable on financial performance metrics through June 30, 2027. The purchase price allocation is preliminary and subject to revision, and the deal added intangible amortization to both cost of revenue and G&A.
The company reported a net loss of $6.3 million for the quarter ended March 31, 2026 (narrowed from $11.2 million) and expects to continue incurring operating losses for the foreseeable future. It has $32.5 million outstanding under the Amended Credit Agreement, which carries maximum Consolidated Senior Net Leverage Ratio and minimum Consolidated Interest Coverage Ratio covenants, plus $16.9 million of operating lease obligations.
SaaS KPIs
All quarters →Non-GAAP Operating Income
Total remaining performance obligations (RPO)
Current remaining performance obligations (cRPO)
Non-GAAP free cash flow
Summary, forecast, risks and KPIs are extracted from Sprout Social, Inc.'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.