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

Sprout Social (NASDAQ:SPT) released its quarterly earnings results on Thursday. The company reported $0.26 EPS for the quarter, topping the consensus estimate of $0.16 by $0.10, FiscalAI reports. Sprout Social had a negative return on equity of 13.90% and a negative net margin of 8.18%.The company had revenue of $123.85 million for the quarter, compared to analyst estimates 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 Stock Performance

Sprout Social stock traded down $0.44 during trading hours on Thursday, reaching $8.19. 1,778,832 shares of the stock were exchanged, compared to its average volume of 1,495,685. Sprout Social has a 52-week low of $4.92 and a 52-week high of $17.41. The company has a debt-to-equity ratio of 0.15, a quick ratio of 0.95 and a current ratio of 0.95. The firm’s 50 day moving average is $7.75 and its 200 day moving average is $7.10. The stock has a market cap of $492.27 million, a P/E ratio of -12.41 and a beta of 0.97.

Analysts Set New Price Targets

A number of brokerages have recently commented on SPT. Barclays lifted their target price on shares of Sprout Social from $8.00 to $9.00 and gave the company an “overweight” rating in a report on Monday, May 11th. Weiss Ratings restated a “sell (e+)” rating on shares of Sprout Social in a research note on Friday, July 17th. Four investment analysts have rated the stock with a Buy rating, four have given a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus price target of $11.88.

Trending Headlines about Sprout Social

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

• Positive Sentiment: Adjusted earnings and revenue beat expectations. Sprout Social reported second-quarter revenue of approximately $123.8 million, up 10.8% year over year and ahead of consensus estimates. Adjusted EPS was reported at $0.26 versus expectations of $0.16. MarketBeat earnings report
• Positive Sentiment: Full-year and third-quarter adjusted EPS guidance was raised above analyst expectations. The company projected third-quarter EPS of $0.29–$0.30, compared with consensus of $0.18, and full-year EPS of $1.11–$1.15 versus consensus of $0.68. Revenue guidance was broadly in line, at $123.3–$124.1 million for the third quarter and $493.0–$495.6 million for fiscal 2026. Sprout Social second-quarter financial results
• Positive Sentiment: Customer expansion remains encouraging. Subscription revenue contribution from customers generating at least $30,000 in annual recurring revenue grew 20% year over year. Operating cash flow was positive at $8.5 million, and the company ended the quarter with $119.9 million in cash and equivalents.
• Neutral Sentiment: The results contain conflicting profitability signals. Sprout Social posted a $2.7 million operating loss and a $3.1 million net loss, with third-party data citing GAAP diluted EPS of negative $0.05. This contrasts with the company’s stronger adjusted EPS result and may be contributing to investor caution.
• Negative Sentiment: Insider selling adds pressure to sentiment. Executives reported eight open-market sales totaling roughly 216,000 shares over the past six months, with no reported insider purchases. Revenue guidance that is essentially in line with estimates may also limit enthusiasm despite the profit outlook.

Insider Buying and Selling

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

Hedge Funds Weigh In On Sprout Social

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

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.