Sprout Social (NASDAQ:SPT) Issues Earnings Results, Beats Estimates By $0.16 EPS

Sprout Social (NASDAQ:SPT) announced its quarterly earnings results on Tuesday. The company reported $0.45 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.29 by $0.16, FiscalAI reports. Sprout Social had a negative net margin of 6.13% and a negative return on equity of 8.80%. The company had revenue of $125.15 million during the quarter, compared to the consensus estimate of $123.83 million.

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

• Profitability and cash flow improved sharply: Q3 revenue reached $125.1 million, non-GAAP operating margin was a record 21%, and non-GAAP free cash flow rose 158% year over year to $26.7 million. Sprout expects its first GAAP-profitable quarter in Q4 and deployed more than $26 million of its $50 million share-repurchase authorization.
• The company continued shifting toward larger enterprise customers, with subscription revenue from customers generating at least $30,000 in ARR growing 18% year over year to more than 62% of total subscription revenue. Customers above $150,000 in ARR increased 22%, supported by broader adoption of multi-product offerings.
• Trellis adoption is expanding: the AI offering is now available across all plans and in trials, with thousands of customers using it across listening, publishing, inbox management, and reporting. Sprout introduced a shared-credits pricing option aimed at increasing enterprise monetization, although paid adoption remains early.
• Macroeconomic caution continued to weigh on new business and expansion, particularly among customers in the $30,000-$50,000 ARR range; customer adds in the $30,000-plus cohort declined sequentially. Management expects Q4 revenue of $124.2 million-$125.2 million and warned that Q4 bookings could affect fiscal 2027 momentum.

Sprout Social Trading Down 1.3%

SPT stock traded down $0.16 during midday trading on Tuesday, reaching $11.93. The stock had a trading volume of 717,152 shares, compared to its average volume of 1,382,513. The business has a fifty day simple moving average of $11.06 and a two-hundred day simple moving average of $8.27. The company has a quick ratio of 1.03, a current ratio of 1.03 and a debt-to-equity ratio of 0.14. The firm has a market cap of $722.86 million, a price-to-earnings ratio of -23.86 and a beta of 1.01. Sprout Social has a twelve month low of $4.92 and a twelve month high of $13.35.

Analysts Set New Price Targets

Several analysts have issued reports on SPT shares. Morgan Stanley boosted their target price on shares of Sprout Social from $10.00 to $11.00 and gave the company an “equal weight” rating in a research note on Thursday, August 13th. Zacks Research cut shares of Sprout Social from a “strong-buy” rating to a “hold” rating in a research note on Monday, October 12th. KeyCorp upped 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, August 7th. Wall Street Zen raised shares of Sprout Social from a “buy” rating to a “strong-buy” rating in a research report on Saturday, August 15th. Finally, Barclays boosted their target price on shares of Sprout Social from $9.00 to $12.00 and gave the stock an “overweight” rating in a research report on Tuesday, August 11th. Four equities research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat, Sprout Social presently has a consensus rating of “Hold” and an average price target of $10.88.

Insider Transactions at Sprout Social

In other news, insider Justyn Howard sold 40,000 shares of the firm’s stock in a transaction dated Friday, October 9th. The shares were sold at an average price of $11.02, for a total value of $440,800.00. Following the transaction, the insider owned 7,417 shares of the company’s stock, valued at approximately $81,735.34. This trade represents a 84.36% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 51,612 shares of company stock worth $573,757. Corporate insiders own 9.60% of the company’s stock.

Sprout Social Company Profile

Sprout Social, Inc is a software company that provides a cloud-based social media management platform for businesses and organizations. Its platform helps customers manage social media publishing, engagement, customer care, analytics, listening and employee advocacy from a centralized environment.

The company’s products are designed to help marketing, communications, sales and customer service teams plan and publish content, monitor conversations, respond to audiences, evaluate social media performance and gain insights from online activity.