Summary
Sprout Social closed fiscal 2025 with double-digit top-line growth but still posted a GAAP net loss. Fourth-quarter revenue was $120.89 million, up 12.9% from the prior-year quarter. Full-year revenue was $457.55 million, up 12.7%. Deferred revenue ended the year at $206.40 million, up 14.9% from a year earlier, which points to a healthy backlog of subscription billings. The customer mix kept shifting toward larger accounts. Customers contributing $30,000 or more in ARR totaled 3,803 as of December 31, 2025, up from 3,374 a year earlier. Customers contributing $50,000 or more in ARR reached 2,022, up from 1,718. Those counts grew 13% and 18%, respectively. The trade-off showed up in retention. Dollar-based net retention was 100% for the year, down from 104%. Excluding SMB customers, net retention was 102%, down from 108%. Management said the total number of customers decreased as it prioritized larger accounts.
Profitability improved on a GAAP basis. Fourth-quarter gross profit was $93.75 million, up 12.0%, while gross margin slipped to 77.6% from a year earlier. For the full year, gross profit was $354.85 million, up 12.9%, and gross margin was 77.6%, flat versus the prior year. The operating loss narrowed. Fourth-quarter operating loss was $10.82 million, an improvement of 20.9% from the prior-year quarter. Full-year operating loss was $43.45 million, an improvement of 28.0%. Operating margin moved to -9.0% in the fourth quarter, up 3.8 percentage points, and to -9.5% for the full year, up 5.4 percentage points. Net loss was $10.74 million in the fourth quarter, an improvement of 25.5%. For the full year, net loss was $43.33 million, an improvement of 30.1%. Diluted EPS for the full year was -$0.74, and the loss narrowed from the prior year. On a non-GAAP basis, the company reported full-year operating income of $48.1 million and net income of $48.2 million, or $0.82 per share.
Cash generation was a bright spot. Fourth-quarter operating cash flow was $10.94 million, up 164.0% from the prior-year quarter. Full-year operating cash flow was $43.43 million, up 65.0%. Capital expenditures were $1.05 million in the fourth quarter, up 18.7%, and $4.11 million for the full year, up 39.2%. Management said the company has generated positive cash flows from operations for the last five fiscal years, from 2021 to 2025. It expects existing cash and cash equivalents to be sufficient for at least the next 12 months. The company also carries non-cancellable contractual obligations for data and services and operating leases. Those commitments are a fixed cost that management must manage against a backdrop of continued GAAP losses.
The outlook remains cautious. Management expects to keep incurring operating losses for the foreseeable future as it invests in growth. It pointed to macroeconomic and geopolitical conditions, measured buying behavior, longer average sales cycles, and pricing pressure as factors that could slow revenue growth. The annual report also flags integration work from the NewsWhip acquisition, which closed on July 30, 2025 and moved the company into public relations and crisis monitoring. Earlier acquisitions, Tagger and Repustate, expanded influencer marketing and social listening. General and administrative expenses increased for the year, driven by personnel costs, stock-based compensation, bad debt, and acquisition-related costs. Stock-based compensation remains a large non-cash expense. Management also completed restructuring plans in February 2025 and November 2024 to reduce costs and reshape sales, customer experience, and research and development teams. International revenue was about 26% of total revenue for the year.
The quarter showed real operating leverage. Revenue growth, stable gross margin, a narrower operating loss, and stronger operating cash flow all point in the right direction. The enterprise push is working: larger customers are growing, and deferred revenue is rising. But net retention of 100% and a declining total customer count are clear headwinds. The company still loses money on a GAAP basis, and management expects that to continue. The main swing factors ahead are the length of sales cycles, pricing pressure, the pace of NewsWhip integration, and the broader macro environment. No numerical guidance was provided for the next quarter or the full fiscal year.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $120.9M | $115.6M | +4.6% | $107.1M | +12.9% |
| Gross profit | $93.7M | $89.8M | +4.4% | $83.7M | +12.0% |
| Gross margin | 77.5% | 77.7% | -0.1 pp | 78.1% | -0.6 pp |
| Research & development | $28.4M | $25.1M | +13.3% | $27.6M | +2.8% |
| Sales & marketing | $47.9M | $47.0M | +1.9% | $45.9M | +4.4% |
| General & administrative | $28.3M | $26.8M | +5.4% | $23.8M | +18.5% |
| Total operating expenses | $104.6M | $98.9M | +5.7% | $97.4M | +7.4% |
| Operating income (loss) | -$10.8M | -$9.1M | -18.8% | -$13.7M | +20.9% |
| Operating margin | -8.9% | -7.9% | -1.1 pp | -12.8% | +3.8 pp |
| Net income (loss) | -$10.7M | -$9.4M | -14.5% | -$14.4M | +25.5% |
| Net margin | -8.9% | -8.1% | -0.8 pp | -13.5% | +4.6 pp |
| Diluted EPS | -$0.18 | -$0.16 | -$0.02 | -$0.25 | +$0.07 |
| Net retention rate | 104.0% | — | — | 107.0% | -3.0 pp |
Risks
Rapid AI advances could enable competitors or customers to replicate or bypass Sprout Social's services, including reducing seats, and customers may reallocate technology budgets toward AI tools, which could reduce or delay demand. The filing also notes that AI regulatory scrutiny and evolving customer expectations add execution risk.
Sprout Social depends on third-party APIs and social media networks, and its X Official Partner Program membership could change or end on commercially unacceptable terms; API price increases or loss of data access could limit platform functionality and raise costs. Data provider fees increased $8.5 million in 2025 due to higher third-party data costs.
As sales efforts target larger mid-market and enterprise customers and lower-recurring-revenue customers shift to self-service, sales cycles have become longer and more expensive, with fewer sales, less revenue, reduced expansion, and increased attrition in those segments. MD&A also cites lengthening average sales cycles and increased pricing pressure.
Dollar-based net retention rate declined to 100% for 2025 from 104% for 2024, and excluding SMB customers declined to 102% from 108%, while total customer count decreased even as higher-tier customer counts grew. Failure to renew or expand subscriptions could harm revenue and growth.
Macroeconomic and geopolitical conditions, including inflation, interest rates, tariffs, trade tensions, and market volatility, have caused measured buying behavior and a slowdown in revenue growth, and management expects negative trends may recur. This pressure could continue to lengthen sales cycles and reduce customer budgets.
AI-specific laws such as the EU AI Act and FTC scrutiny of AI, along with data privacy laws, may impose compliance, transparency, and governance obligations that limit AI feature deployment or lead to fines. The company uses generative AI and agentic AI in its platform and employee workflows.
As of December 31, 2025, Sprout Social had $40 million outstanding under its Amended Credit Agreement, including $32 million borrowed for the NewsWhip acquisition, and the facility contains restrictive covenants including maximum consolidated senior net leverage and minimum interest coverage. A breach could accelerate repayment and strain liquidity.
The July 2025 NewsWhip acquisition involved $52.3 million upfront cash, $3.2 million deferred consideration, and up to $10.0 million earnout, with integration risks including unknown liabilities, retention of key personnel, and inability to realize expected benefits. Acquisition-related costs and accretion expense increased in 2025.
The company has been the target of phishing, social engineering, SQL injection, card testing, and credential stuffing attacks, and relies on third-party cloud infrastructure and a shared responsibility model with customers. A significant breach or vendor incident could lead to regulatory action, customer loss, and reputational harm.
SaaS KPIs
All quarters →Summary, forecast, risks and KPIs are extracted from Sprout Social, Inc.'s SEC filings for Q4 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.