Expects 2021 Revenue Growth of 40%
Third Quarter Total Revenue of $49.1 Million
30,705 Customers as of September 30, 2021

Sprout Social, Inc., an industry-leading provider of cloud-based social media management software, today announced financial results for its third quarter ended September 30, 2021.

“We’re excited to report our fastest quarterly revenue growth rate as a public company,” said Justyn Howard, Sprout Social’s CEO and co-founder. “Our outperformance this quarter was driven by accelerated momentum in our large-customer cohorts, underscoring the quality of our growth. We’re pleased to deliver very strong ACV growth and we see even greater future opportunities as our customers operationalize social.”

Marketing Technology News: MarTech Interview with Parry Malm, CEO at Phrasee

“We’re incredibly proud of our team for continuing to raise the bar for our customers and partners.”

Third Quarter 2021 Financial Highlights

Revenue

• Revenue was $49.1 million, up 46% compared to the third quarter of 2020.
• ARR was $204.6 million, up 44% compared to the third quarter of 2020.

Operating Loss

• GAAP operating loss was ($6.8) million, compared to ($6.9) million in the third quarter of 2020.
• Non-GAAP operating loss was ($1.6) million, compared to a Non-GAAP operating loss of ($4.4) million in the third quarter of 2020.

Net Loss

• GAAP net loss was ($7.0) million, compared to ($7.0) million in the third quarter of 2020.
• Non-GAAP net loss was ($1.8) million, compared to a Non-GAAP net loss of ($4.4) million in the third quarter of 2020.
• GAAP net loss per share was ($0.13) based on 53.9 million weighted-average shares of common stock outstanding, compared to ($0.13) based on 51.9 million weighted-average shares of common stock outstanding in the third quarter of 2020.
• Non-GAAP net loss per share was ($0.03) based on 53.9 million weighted-average shares of common stock outstanding, compared to Non-GAAP net loss per share of ($0.09) based on 51.9 million weighted-average shares of common stock outstanding in the third quarter of 2020.

Cash

• Cash and equivalents and marketable securities totaled $175.0 million as of September 30, 2021, up from $171.5 million as of June 30, 2021.
• Net cash generated by operating activities was $4.4 million, compared to net cash used by operating activities of ($2.6) million in the third quarter of 2020.
• Free cash flow was $4.2 million, compared to ($4.0) million in the third quarter of 2020.

Marketing Technology News: Zip Kicks Off Brand Campaign to Attract New Customers Ahead of Holiday Shopping Season

See “Customer Metrics” and “Use of Non-GAAP Financial Measures” below for how Sprout Social defines ARR, Non-GAAP operating loss, Non-GAAP net loss, Non-GAAP net loss per share and free cash flow and the financial tables that accompany this release for reconciliations of these measures to their closest comparable GAAP measures.

Customer Metrics

• Grew number of customers to 30,705 as of September 30, 2021, up 20% compared to September 30, 2020.
• Grew number of customers contributing over $10,000 in ARR to 4,380 customers as of September 30, 2021, up 57% compared to September 30, 2020.
• Grew number of customers contributing over $50,000 in ARR to 478 customers as of September 30, 2021, up 98% compared to September 30, 2020.

Recent Customer Highlights

• During the third quarter, we had the opportunity to help new customers like Tesco PLC, TrueCar, Northland Properties and InstantBrands. We executed growth deals with great brands like Atlassian, Blue Cross Blue Shield of Michigan, BARK and LHC Group.

Recent Business Highlights

Sprout Social published:

• 2021 Diversity, Equity & Inclusion Report
• Environmental, Social and Governance (ESG) Website

Fourth Quarter and 2021 Financial Outlook

For the fourth quarter of 2021, the Company currently expects:

• Total revenue between $51.2 and $51.3 million, or overall growth of 37%.
• Non-GAAP operating loss between ($4.0) million and ($3.5) million.
• Non-GAAP net loss per share of between ($0.07) and ($0.06) based on approximately 54.1 million weighted-average shares of common stock outstanding.

“We are pleased to deliver positive free cash flow and another very efficient quarter,” said Joe Del Preto, CFO. “We’re continuing to drive fast growth with improving efficiency, which underscores the attractiveness of our unit economics. As we shared recently at investor day, these economics reinforce our confidence in durable, multi-year growth.”

For the full year 2021, the Company is updating guidance to reflect the following:

• Total revenue between $185.8 to $185.9 million, or overall growth of 40%.
• Non-GAAP operating loss between ($7.8) and ($7.3) million.
• At the midpoint of these ranges, this implies a (4.1%) operating margin and nearly 1,200bps of year-over-year operating margin improvement.
• Non-GAAP net loss per share of between ($0.15) and ($0.14) based on approximately 53.8 million weighted-average shares of common stock outstanding.

The Company’s fourth quarter and 2021 financial outlook is based on a number of assumptions that are subject to change and many of which are outside the Company’s control, including the impact of the ongoing COVID-19 pandemic on our financial performance and customer demand. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.

The Company does not provide guidance for operating loss, the most directly comparable GAAP measure to non-GAAP operating loss, or net loss per share, the most directly comparable GAAP measure to non-GAAP net loss per share, and similarly cannot provide a reconciliation between its forecasted non-GAAP operating loss and non-GAAP net loss per share and these comparable GAAP measures without unreasonable effort due to the unavailability of reliable estimates for certain items. These items are not within the Company’s control and may vary greatly between periods and could significantly impact future financial results.

Marketing Technology News: Cepton Technologies Adds Brunno Moretti as Vice President of Product Marketing