Sprout Social (NASDAQ:SPT) Releases Quarterly Earnings Results, Beats Estimates By $0.04 EPS

Sprout Social (NASDAQ:SPT) announced its quarterly earnings results on Thursday. The company reported $0.20 earnings per share for the quarter, beating the consensus estimate of $0.16 by $0.04, FiscalAI reports. Sprout Social had a negative net margin of 9.47% and a negative return on equity of 16.51%. The firm had revenue of $120.89 million for the quarter, compared to analysts’ expectations of $118.68 million. Sprout Social updated its FY 2026 guidance to 0.880-0.970 EPS and its Q1 2026 guidance to 0.150-0.160 EPS.

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

• Sprout reported Q4 revenue of $120.9 million (12.9% YoY), a full?year non?GAAP operating margin of 10.5% (up 306 bps), and strong free cash flow of $45.9 million for FY 2025, highlighting improved leverage and cash generation.
• Upmarket momentum is a key growth driver — customers with $30K+ approximated subscription revenue grew ~22% and now represent 59% of subscription revenue, with 50K+ ARR customers up 18% and multi?product attach rates well over 70%.
• Management is pushing AI and product differentiation, with Trellis in beta (1,000+ users) and a roadmap to expand AI agents across listening, publishing, reporting and care as both a value driver and future monetization lever.
• The sub?30K ARR segment remains a drag on growth and efficiency; management plans a self?serve motion and simplified SKU to improve unit economics but expects stabilization to take through 2026 into 2027.
• Management targets a 30% Rule of 40 (YoY revenue growth + current quarter non?GAAP operating margin) by Q4 2027, relying on upmarket scale, margin discipline, AI automation, and hiring in lower?cost locations to achieve it.

Sprout Social Trading Down 9.3%

NASDAQ SPT traded down $0.66 during trading on Friday, hitting $6.45. The stock had a trading volume of 4,021,391 shares, compared to its average volume of 1,817,627. The company has a quick ratio of 0.89, a current ratio of 0.89 and a debt-to-equity ratio of 0.23. The company has a market capitalization of $381.77 million, a PE ratio of -8.72 and a beta of 0.90. The firm has a 50 day moving average price of $9.12 and a 200 day moving average price of $11.13. Sprout Social has a twelve month low of $6.03 and a twelve month high of $27.81.

Trending Headlines about Sprout Social

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

• Positive Sentiment: Q4 results beat estimates and management raised guidance — Sprout reported $0.20 non?GAAP EPS and $120.9M revenue (both above consensus) and issued Q1 and FY?2026 non?GAAP EPS and revenue guidance well above prior expectations; this supports the company’s claim of improving profitability and cash generation. SPT Beats Q4 Sales Expectations (Yahoo)
• Positive Sentiment: Strategic catalysts: management set a new target (30% Rule of 40 on a non?GAAP basis by Q4 2027), highlighted growth in $30K+ customers (22% subscription revenue growth contribution) and promoted AI product Trellis — these initiatives aim to lift enterprise ARPU and margins over time. Quiver: Targets 30% Rule of 40
• Neutral Sentiment: Earnings call and disclosures provide detail but mixed signals — transcripts and slide deck show recurring GAAP losses alongside improving non?GAAP profitability and higher deferred revenue/RPO, giving investors both runway and execution risk to weigh. Seeking Alpha: Earnings Call Transcript
• Negative Sentiment: Analysts pared targets and some issued downgrades after the print — KeyCorp cut its target to $6 and moved to underweight, Canaccord trimmed its target to $9 (hold), and Needham sharply reduced a prior $32 target to $14 (still buy); the headline KeyCorp move and mixed analyst views are likely driving near?term selling pressure. These Analysts Cut Their Forecasts On Sprout Social After Q4 Earnings (Benzinga)
• Negative Sentiment: Underlying fundamentals still show GAAP losses and retention headwinds — Sprout reported a GAAP net loss, negative net margin and dollar?based net retention of 100% (down from 104%), which keeps execution risk and future growth sustainability on investors’ radar. Quiver: Financial & Customer Metrics
• Negative Sentiment: Insider and institutional flows look unfavorable in recent filings — Quiver/other summaries show multiple insider sales and notable institutional reductions by some large holders, which can amplify downside momentum even when results beat. Quiver: Insider & Institutional Activity

Insider Activity

In related news, insider Justyn Russell Howard sold 40,000 shares of Sprout Social stock in a transaction that occurred on Friday, January 9th. The shares were sold at an average price of $10.70, for a total value of $428,000.00. Following the completion of the transaction, the insider owned 7,417 shares in the company, valued at approximately $79,361.90. The trade was a 84.36% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, Director Aaron Edward Frederick Rankin bought 90,661 shares of Sprout Social stock in a transaction on Wednesday, December 17th. The shares were acquired at an average price of $11.14 per share, for a total transaction of $1,009,963.54. Following the completion of the acquisition, the director owned 114,969 shares in the company, valued at $1,280,754.66. This represents a 372.97% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Insiders own 10.12% of the company’s stock.

Institutional Investors Weigh In On Sprout Social

Hedge funds and other institutional investors have recently modified their holdings of the company. Brighton Jones LLC raised its stake in Sprout Social by 391.7% in the fourth quarter. Brighton Jones LLC now owns 35,985 shares of the company’s stock valued at $1,105,000 after buying an additional 28,667 shares in the last quarter. Russell Investments Group Ltd. boosted its position in shares of Sprout Social by 39.1% during the 4th quarter. Russell Investments Group Ltd. now owns 6,235 shares of the company’s stock worth $70,000 after acquiring an additional 1,752 shares in the last quarter. EP Wealth Advisors LLC purchased a new position in shares of Sprout Social in the 4th quarter valued at about $114,000. Tower Research Capital LLC TRC raised its position in shares of Sprout Social by 55.5% during the 2nd quarter. Tower Research Capital LLC TRC now owns 5,496 shares of the company’s stock worth $115,000 after acquiring an additional 1,962 shares in the last quarter. Finally, Norges Bank acquired a new stake in shares of Sprout Social during the 4th quarter worth about $173,000.

Wall Street Analyst Weigh In

Several equities analysts have weighed in on SPT shares. Needham & Company LLC decreased their target price on shares of Sprout Social from $32.00 to $14.00 and set a “buy” rating on the stock in a report on Friday. Weiss Ratings reaffirmed a “sell (e+)” rating on shares of Sprout Social in a research report on Thursday, January 22nd. Jefferies Financial Group decreased their price objective on Sprout Social from $15.00 to $12.00 and set a “buy” rating on the stock in a report on Tuesday, February 3rd. Wall Street Zen lowered Sprout Social from a “buy” rating to a “hold” rating in a research report on Saturday. Finally, Canaccord Genuity Group restated a “hold” rating and issued a $9.00 target price (down from $16.00) on shares of Sprout Social in a research report on Friday. Four equities research analysts have rated the stock with a Buy rating, five have given a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock has a consensus rating of “Hold” and a consensus price target of $15.11.

Sprout Social Company Profile

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.