Sprout Social, Inc. Q3 FY2025 earnings

Sprout Social's third quarter fiscal 2025 revenue reached $115.6 million, up 12.6% from the prior-year quarter. Year-to-date revenue through September 30, 2025 was $336.7 million, up 12.7% from the first nine months of 2024. Gross profit was $89.8 million, up 13.1%, and gross margin was 77.7%, up 0.3 percentage points. The company still posted a GAAP operating loss of $9.1 million, but that loss narrowed from the prior-year quarter. GAAP net loss was $9.4 million, and diluted EPS was a loss of $0.16, also a narrowed loss. The top line benefited from enterprise execution and a small contribution from the NewsWhip acquisition, which closed on July 30, 2025.

Customer metrics showed continued movement upmarket. Customers contributing more than $10,000 in ARR totaled 9,756, up 7% from September 30, 2024. Customers contributing more than $50,000 in ARR totaled 1,947, up 21%. Current remaining performance obligations were $258.5 million, up 17% year-over-year. Total RPO was $357.1 million as of September 30, 2025. Deferred revenue was $172.6 million, up 15.7% from the prior-year quarter. Average contract value was $16,064, compared with $13,959 a year earlier. The company had approximately 30,000 customers across more than 100 countries. Management attributed the enterprise momentum to prioritizing customer success and growth resources toward larger accounts.

Non-GAAP profitability improved. Non-GAAP operating income was $13.7 million, compared with $7.5 million in the prior-year quarter. Non-GAAP net income was $13.4 million, compared with $7.3 million. Non-GAAP net income per share was $0.23, compared with $0.13. Non-GAAP gross margin was 79%. Operating cash flow was $9.3 million, up from the prior-year quarter, and year-to-date operating cash flow was $32.5 million, up 46.5%. Capital expenditures were $0.8 million, up from the prior-year quarter. Non-GAAP free cash flow was $10.3 million, compared with $9.3 million. Non-GAAP operating margin was 12%, and non-GAAP free cash flow margin was 9%.

Guidance points to continued growth but at a moderating pace. For the fourth quarter of 2025, Sprout Social expects non-GAAP operating income between $9.5 million and $10.5 million and non-GAAP net income per share between $0.15 and $0.17. For the full year 2025, the company expects non-GAAP operating income between $46.1 million and $47.1 million and non-GAAP net income per share between $0.77 and $0.79. Management also issued a revenue outlook for both periods, and does not provide GAAP guidance for operating loss or net loss per share because certain items cannot be reliably estimated. It also cannot provide reconciliations between forecasted non-GAAP measures and comparable GAAP measures without unreasonable effort.

Risks remain material. The company cites macroeconomic uncertainty, measured buying behavior, longer sales cycles, pricing pressure, and the potential for reduced demand from inflation, tariffs, trade tensions, and geopolitical conflicts. It also points to risks from platform or API interruptions, challenges converting unpaid traffic and free trials to paid subscriptions, international expansion execution, acquisition integration, and compliance with privacy and data security regulations. The company expects to continue investing in growth and generating net losses for the foreseeable future. The NewsWhip deal added $52.3 million in upfront cash consideration, $3.2 million in deferred consideration, and up to $10.0 million in earnout payments tied to financial performance through June 30, 2027. Sprout Social also highlighted new product integrations with Canva and expanded Salesforce collaboration, and it was named a silver winner for Best Influencer Marketing Platform at the 2025 Global Influencer Marketing Awards.