Sprout Social (NASDAQ:SPT) Posts Earnings Results, Beats Estimates By $0.10 EPS

Sprout Social (NASDAQ:SPT) announced its quarterly earnings data on Thursday. The company reported $0.26 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.16 by $0.10, FiscalAI reports. Sprout Social had a negative return on equity of 9.06% and a negative net margin of 6.13%.The company had revenue of $123.85 million during the quarter, compared to the consensus estimate of $122.19 million. Sprout Social updated its FY 2026 guidance to 1.110-1.150 EPS and its Q3 2026 guidance to 0.290-0.300 EPS.

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

• Q2 results exceeded expectations: Revenue rose 10.8% year over year to $123.8 million, while non-GAAP operating margin expanded 370 basis points to 12.9%. Non-GAAP free cash flow increased approximately 60% to $8.3 million.
• Sprout continued its shift toward larger enterprise customers. Revenue from customers contributing at least $30,000 in ARR grew 20% year over year and now represents more than 61% of subscription revenue, supported by 14.8% ACV growth and stronger retention and expansion trends.
• Early adoption of the AI-powered Trellis platform has been encouraging, with monthly active users growing and customers using Trellis showing higher retention across segments. Sprout also began monetizing the product through the Trellis Plus paid tier and expects AI to support win rates, upsell, and retention over time.
• The company raised its 2026 profitability outlook, forecasting non-GAAP operating income of $68.3 million to $70.3 million, or 20% above the midpoint of its prior outlook. Sprout also expects at least $50 million in annualized cost savings from its restructuring and plans to begin opportunistic purchases under its $50 million share-repurchase authorization.
• Sprout reduced its workforce by approximately 20%, expecting $18 million to $20 million in restructuring charges and acknowledging execution and change-management risks. Management also expects continued pressure from customers below $30,000 in ARR, no material improvement in demand, and a deceleration in that segment to slightly negative growth in 2026.

Sprout Social Price Performance

NASDAQ SPT traded up $2.15 on Friday, reaching $10.34. The company had a trading volume of 3,394,785 shares, compared to its average volume of 954,699. The company has a quick ratio of 0.95, a current ratio of 0.95 and a debt-to-equity ratio of 0.15. The stock has a market capitalization of $621.54 million, a PE ratio of -20.68 and a beta of 0.97. Sprout Social has a 12 month low of $4.92 and a 12 month high of $16.03. The firm’s 50 day moving average price is $7.83 and its 200 day moving average price is $7.11.

Insider Activity

In other news, insider Justyn Russell Howard sold 40,000 shares of the company’s stock in a transaction that occurred on Friday, July 10th. The stock was sold at an average price of $8.28, for a total transaction of $331,200.00. Following the sale, the insider directly owned 7,417 shares of the company’s stock, valued at $61,412.76. This represents a 84.36% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 9.60% of the stock is owned by company insiders.

Institutional Trading of Sprout Social

A number of large investors have recently made changes to their positions in the business. Quadrant Capital Group LLC purchased a new position in Sprout Social in the fourth quarter worth about $28,000. Summit Securities Group LLC boosted its holdings in shares of Sprout Social by 399.0% in the 4th quarter. Summit Securities Group LLC now owns 2,520 shares of the company’s stock worth $28,000 after purchasing an additional 2,015 shares during the period. Quarry LP increased its position in shares of Sprout Social by 264.2% during the 3rd quarter. Quarry LP now owns 3,784 shares of the company’s stock valued at $49,000 after purchasing an additional 2,745 shares during the last quarter. Kestra Advisory Services LLC bought a new position in shares of Sprout Social during the 4th quarter valued at approximately $54,000. Finally, Tower Research Capital LLC TRC raised its holdings in Sprout Social by 55.5% during the 2nd quarter. Tower Research Capital LLC TRC now owns 5,496 shares of the company’s stock valued at $115,000 after buying an additional 1,962 shares during the period.

Sprout Social News Roundup

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

• Positive Sentiment: Sprout Social reported second-quarter revenue of approximately $123.85 million, ahead of the $122.19 million analyst consensus. Adjusted earnings were $0.26 per share, beating estimates of $0.16 and improving from $0.18 a year earlier. Sprout Social Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: Management issued notably stronger profitability guidance: third-quarter adjusted EPS of $0.29-$0.30 versus a $0.18 consensus, and full-year 2026 EPS of $1.11-$1.15 versus expectations of $0.68. Full-year revenue guidance of $493.0-$495.6 million was broadly in line with the $494.4 million consensus. Sprout Social Earnings and Guidance
• Positive Sentiment: The earnings presentation and call emphasized continued growth among larger customers, with subscription revenue contribution from customers generating at least $30,000 in annual recurring revenue rising 20% year over year. AI product investment and customer upselling support the case for stronger monetization and operating leverage. Sprout Social Announces Second Quarter 2026 Financial Results
• Neutral Sentiment: Although adjusted results were profitable, Sprout Social remained unprofitable under GAAP, recording an operating loss of approximately $2.7 million and a net loss of $3.1 million. Operating cash flow was positive at $8.5 million, with $119.9 million in cash and equivalents. Sprout Social Q2 2026 Results
• Negative Sentiment: Recent insider activity remains a potential overhang: insiders reported eight sales and no purchases over the past six months, including sales by the executive chair and CFO. This may raise concerns about insider confidence despite the strong quarterly outlook.

Analyst Ratings Changes

A number of equities analysts have weighed in on the stock. Barclays upped their price target on shares of Sprout Social from $8.00 to $9.00 and gave the stock an “overweight” rating in a research report on Monday, May 11th. Weiss Ratings reaffirmed a “sell (e+)” rating on shares of Sprout Social in a report on Friday, July 17th. Finally, KeyCorp increased their price target on Sprout Social from $6.00 to $7.00 and gave the stock an “underweight” rating in a research note on Friday. Three equities research analysts have rated the stock with a Buy rating, four have given a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of “Hold” and a consensus target price of $10.43.

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.