Summary
Sprout Social reported $111.8 million of revenue for the quarter ended June 30, 2025, up 12.5% from $99.4 million in the prior-year quarter. Revenue for the first six months of fiscal 2025 was $221.1 million, up 12.7%. Subscription sales accounted for 99% of the total. Management credited the growth to higher spending from the company's largest customers, and that mix shift shows up in the customer metrics discussed below.
Profitability improved on both bases. Gross profit rose 12.8% to $86.8 million, and gross margin was 77.7%, up from 77.5% in the prior-year quarter. The GAAP operating loss was $12.3 million, narrower than the $16.5 million loss a year earlier. The GAAP net loss was $12.0 million against a $16.9 million loss in the same quarter last year. GAAP diluted loss per share was -$0.21, compared with -$0.30. Operating margin of -11.0% was 5.6 percentage points better than the -16.6% recorded a year earlier, as cost growth ran below revenue growth.
The non-GAAP picture is brighter. Non-GAAP operating income reached $10.3 million, up from $5.3 million, while non-GAAP net income was $10.7 million against $4.9 million and non-GAAP net income per share was $0.18 versus $0.09. The gap between the two sets of numbers comes from stock-based compensation, amortization of acquired intangibles, restructuring charges and a lease termination loss. Those are real costs, even if management asks investors to look past them.
Enterprise metrics kept moving the right way. Customers contributing more than $10,000 in ARR totaled 9,517, up 6% year over year, and those contributing more than $50,000 in ARR reached 1,826, up 18%. Average contract value rose to $15,321 from $13,403. Total RPO was $347.0 million, up 17.6%, and current RPO was $251.6 million, up 18%. Current deferred revenue of $171.1 million was up 15.4%. The company's overall customer count fell, a trade-off it attributes to concentrating sales and customer success resources on larger accounts.
Cash generation held up. Operating cash flow for the quarter was $5.09 million, up from $2.06 million a year earlier, and operating cash flow for the six months was $23.2 million against $13.2 million. Capital expenditures in the quarter were $0.91 million versus $0.49 million. Non-GAAP free cash flow, a separate measure that also deducts interest and restructuring payments, was $5.2 million compared with $2.5 million. Cash and cash equivalents and marketable securities totaled $101.5 million at June 30, 2025, down modestly from $101.9 million at March 31, 2025. The balance sheet carried $15.0 million of revolving credit borrowings at quarter end, and the company borrowed an additional $32 million after the quarter closed.
Management's third-quarter 2025 outlook calls for $114.4 million to $115.2 million in total revenue, non-GAAP operating income of $9.3 million to $10.3 million and non-GAAP net income per share of $0.15 to $0.16. For the full year 2025, the outlook is $452.9 million to $455.9 million in total revenue, non-GAAP operating income of $43.1 million to $45.1 million and non-GAAP net income per share of $0.71 to $0.75. The company does not provide guidance for GAAP operating loss or GAAP net loss per share.
The risks are familiar. Macroeconomic uncertainty has produced more measured buying behavior, longer average sales cycles and pricing pressure, and management expects those conditions to recur. Restructuring plans in November 2024 and February 2025 cut headcount, including a 17% reduction in research and development. General and administrative expense rose 19% in the quarter, including a $1.2 million lease termination loss on part of the Chicago office and higher bad debt expense. Data provider fees added $2.1 million. The NewsWhip acquisition, closed on July 30, 2025 for $55 million in cash plus up to $10 million in earnouts, adds integration risk, and the company still expects net losses for the foreseeable future.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $111.8M | $109.3M | +2.3% | $99.4M | +12.5% |
| Gross profit | $86.8M | $84.5M | +2.8% | $77.0M | +12.8% |
| Gross margin | 77.7% | 77.3% | +0.4 pp | 77.5% | +0.2 pp |
| Research & development | $24.6M | $23.2M | +5.8% | $25.1M | -2.1% |
| Sales & marketing | $48.2M | $47.5M | +1.5% | $46.2M | +4.2% |
| General & administrative | $26.4M | $25.0M | +5.8% | $22.2M | +19.1% |
| Total operating expenses | $99.2M | $95.7M | +3.7% | $93.5M | +6.0% |
| Operating income (loss) | -$12.3M | -$11.2M | -9.9% | -$16.5M | +25.4% |
| Operating margin | -11.0% | -10.3% | -0.8 pp | -16.6% | +5.6 pp |
| Net income (loss) | -$12.0M | -$11.2M | -6.8% | -$16.9M | +29.0% |
| Net margin | -10.7% | -10.3% | -0.5 pp | -17.0% | +6.3 pp |
| Diluted EPS | -$0.21 | -$0.19 | -$0.02 | -$0.30 | +$0.09 |
Risks
Unstable market, economic and political conditions, including tariffs, trade tensions, inflation and reductions in government spending, may reduce customer social media budgets and demand for the platform. MD&A states these conditions have contributed to more measured buying behavior and lengthening average sales cycles, slowing revenue growth compared to historical levels.
The company's focus on larger enterprise customers has led to longer and more expansive average sales cycles and increased pricing pressure. MD&A expects these trends to continue as it targets more sophisticated prospects and customers.
The Amended Credit Agreement imposes restrictive and financial covenants, including maximum consolidated senior net leverage and minimum interest coverage. At June 30, 2025, $15.0 million was outstanding, and subsequent to quarter-end the company borrowed an incremental $32 million under the Facility to fund the NewsWhip acquisition, increasing leverage and default risk.
The NewsWhip acquisition involved a $55 million upfront cash payment plus up to $10 million of contingent consideration tied to financial metrics through June 30, 2027. The company's substantial debt could reduce the benefits it expects from this and future acquisitions, and integration may not achieve anticipated results.
SaaS KPIs
All quarters →Total Customers
Non-GAAP Operating Income
Current remaining performance obligations (cRPO)
Non-GAAP free cash flow
Non-GAAP Operating Margin
Summary, forecast, risks and KPIs are extracted from Sprout Social, Inc.'s SEC filings for Q2 FY2025 (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.