Sprout Social (NASDAQ:SPT) Releases Earnings Results, Beats Expectations By $0.07 EPS

Sprout Social (NASDAQ:SPT) issued its earnings results on Thursday. The company reported $0.23 EPS for the quarter, beating analysts’ consensus estimates of $0.16 by $0.07, FiscalAI reports. The business had revenue of $121.50 million during the quarter, compared to analysts’ expectations of $120.33 million. Sprout Social had a negative net margin of 8.18% and a negative return on equity of 14.28%. Sprout Social updated its Q2 2026 guidance to 0.150-0.160 EPS and its FY 2026 guidance to 0.880-0.970 EPS.

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

• Sprout reported revenue of $121.5 million (+11.2% Y/Y) with non‑GAAP operating margin of 11.6% and a record quarterly non‑GAAP free cash flow of $24.7 million, underscoring improved cash generation and operating leverage.
• The board authorized a $50 million share repurchase program, signaling management confidence in the business and providing a capital‑allocation lever to address perceived valuation dislocation while continuing product investment.
• Sprout moved its AI orchestration framework, Trellis, out of beta to general availability, with rapid adoption (thousands of customers) and plans for a hybrid user/access plus usage‑based monetization model as Trellis expands across the platform.
• The company is shifting toward larger customers: customers with ≥$30K ARR grew 21% Y/Y and now represent over 60% of subscription revenue, with multi‑year contracts nearing half the mix—improving ACV, retention and multi‑product attach economics.
• Sprout is reworking the sub‑$30K segment (launched “Essentials” and a self‑serve motion) and expects a modest deceleration in that cohort through 2026, acknowledging this transition as a near‑term drag while aiming for efficiency gains into 2027.

Sprout Social Trading Up 8.8%

SPT stock traded up $0.60 during mid-day trading on Friday, hitting $7.40. 4,669,853 shares of the company were exchanged, compared to its average volume of 1,355,016. The company has a quick ratio of 0.93, a current ratio of 0.93 and a debt-to-equity ratio of 0.20. The firm has a market capitalization of $440.74 million, a P/E ratio of -11.21 and a beta of 0.94. The business has a fifty day simple moving average of $5.94 and a 200-day simple moving average of $8.48. Sprout Social has a 12-month low of $4.92 and a 12-month high of $25.48.

Key Stories Impacting Sprout Social

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

• Positive Sentiment: Q1 earnings beat estimates, with EPS of $0.23 versus the $0.16 consensus, while revenue of $121.5 million also topped forecasts. Sprout Social (SPT) Q1 Earnings and Revenues Top Estimates
• Positive Sentiment: The company raised its FY 2026 outlook, guiding for EPS of $0.88 to $0.97 and revenue of $492.5 million to $495.5 million, both above consensus estimates. Sprout Social Announces First Quarter 2026 Financial Results
• Positive Sentiment: Second-quarter guidance also came in slightly above expectations, with EPS of $0.15 to $0.16 and revenue of $121.7 million to $122.5 million versus a lower Street forecast. Sprout Social Announces First Quarter 2026 Financial Results
• Neutral Sentiment: Management said subscription revenue tied to customers with at least $30K in annual recurring revenue grew 21% year over year, and it authorized a new $50 million share repurchase program, which may support sentiment but is not an immediate earnings driver. Sprout Social Announces First Quarter 2026 Financial Results
• Negative Sentiment: Despite the stronger report, Sprout Social remains unprofitable, with negative net margin and negative return on equity, which could temper upside. Sprout Social stock page

Insiders Place Their Bets

In other Sprout Social news, insider Justyn Russell Howard sold 40,000 shares of the stock in a transaction dated Friday, April 10th. The shares were sold at an average price of $5.03, for a total transaction of $201,200.00. Following the completion of the transaction, the insider owned 7,417 shares of the company’s stock, valued at $37,307.51. This trade represents a 84.36% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 103,855 shares of company stock worth $600,860 over the last ninety days. Company insiders own 9.60% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in SPT. Brighton Jones LLC boosted its stake in shares of 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 purchasing an additional 28,667 shares during the period. AQR Capital Management LLC purchased a new position in shares of Sprout Social in the first quarter valued at approximately $365,000. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its stake in shares of Sprout Social by 2.4% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 53,127 shares of the company’s stock valued at $1,168,000 after purchasing an additional 1,265 shares during the period. Goldman Sachs Group Inc. boosted its stake in shares of Sprout Social by 23.0% in the first quarter. Goldman Sachs Group Inc. now owns 325,750 shares of the company’s stock valued at $7,163,000 after purchasing an additional 60,947 shares during the period. Finally, Empowered Funds LLC purchased a new position in shares of Sprout Social in the first quarter valued at approximately $325,000.

Wall Street Analyst Weigh In

A number of brokerages recently issued reports on SPT. Canaccord Genuity Group reissued a “hold” rating and issued a $9.00 price objective (down from $16.00) on shares of Sprout Social in a report on Friday, February 27th. Weiss Ratings reissued a “sell (e+)” rating on shares of Sprout Social in a report on Tuesday, April 21st. The Goldman Sachs Group dropped their price objective on shares of Sprout Social from $13.00 to $8.00 and set a “neutral” rating for the company in a report on Monday, March 2nd. Barclays dropped their price objective on shares of Sprout Social from $9.00 to $8.00 and set an “overweight” rating for the company in a report on Tuesday, April 21st. Finally, Wall Street Zen raised shares of Sprout Social from a “hold” rating to a “buy” rating in a report on Sunday, March 8th. Four equities research analysts have rated the stock with a Buy rating, five have given a Hold rating and two have assigned a Sell rating to the company’s stock. Based on data from MarketBeat, Sprout Social has an average rating of “Hold” and a consensus price target of $13.11.

About Sprout Social

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.