Sprout Social Inc (SPT, Financial), a leading provider of cloud-based social media management software, announced its financial results for the fourth quarter ending December 31, 2024, on February 25, 2025. The company reported a 14% increase in revenue, reaching $107.1 million, and a 26% growth in current remaining performance obligations (cRPO). The company also improved its cash flow from operations to $26.3 million for fiscal 2024. CEO Ryan Barretto highlighted the company's focus on execution and future growth, emphasizing their commitment to winning enterprise clients and expanding their partnership ecosystem.
Positive Highlights
- Revenue increased by 14% year-over-year to $107.1 million.
- cRPO grew by 26% year-over-year, indicating strong future revenue potential.
- Non-GAAP operating income rose to $11.4 million from $1.7 million in the previous year.
- Non-GAAP net income improved to $10.7 million, up from $1.0 million in Q4 2023.
- Cash flow from operations increased to $26.3 million for fiscal 2024.
- Customer base expanded, with a 23% increase in customers contributing over $50,000 in ARR.
Negative Highlights
- GAAP operating loss was ($13.7) million, though improved from ($18.2) million in Q4 2023.
- GAAP net loss was ($14.4) million, compared to ($20.1) million in the previous year.
- Dollar-based net retention rate decreased to 104% from 107% in 2023.
Financial Analyst Perspective
From a financial analyst's perspective, Sprout Social Inc (SPT, Financial) has demonstrated robust growth in key financial metrics, particularly in revenue and cRPO. The significant improvement in non-GAAP operating income and net income suggests effective cost management and operational efficiency. However, the company still faces challenges in achieving GAAP profitability, as indicated by the operating and net losses. The decrease in the dollar-based net retention rate could be a concern, indicating potential challenges in customer retention or expansion.
Market Research Analyst Perspective
As a market research analyst, Sprout Social Inc (SPT, Financial) is well-positioned in the social media management software market, as evidenced by its expanding customer base and recognition in industry awards. The company's strategic focus on enterprise clients and partnerships is likely to drive future growth. However, the competitive landscape and evolving customer needs require continuous innovation and adaptation. The company's recent product updates and AI solutions are positive steps towards maintaining its competitive edge.
Frequently Asked Questions (FAQ)
Q: What was Sprout Social's revenue for Q4 2024?
A: Sprout Social's revenue for Q4 2024 was $107.1 million, a 14% increase from the previous year.
Q: How much did the cRPO grow year-over-year?
A: The current remaining performance obligations (cRPO) grew by 26% year-over-year.
Q: What is the company's financial outlook for Q1 2025?
A: For Q1 2025, Sprout Social expects total revenue between $107.2 million and $108.0 million, with non-GAAP operating income between $8.5 million and $9.5 million.
Q: How did the customer base change in 2024?
A: The number of customers contributing over $50,000 in ARR increased by 23% compared to the previous year.
Read the original press release here.
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