Sprout Social (SPT, Financial) has introduced a series of enhancements to its Care by Sprout Social platform, aimed at improving client service levels in response to growing consumer expectations. These new tools are designed to support teams in delivering more proactive, secure, and data-driven social care, transforming it from a mere necessity into a strategic asset for businesses.
Moreover, Sprout Social revealed its plan to integrate a new AI agent, set to advance customer interactions and boost operational effectiveness for brands. This development is expected to uplift customer experience and influence brand loyalty significantly, as social care increasingly becomes a key competitive edge in consumer decisions. The company is focused on evolving its platform to help businesses stay ahead in a fast-paced technological landscape.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 13 analysts, the average target price for Sprout Social Inc (SPT, Financial) is $29.77 with a high estimate of $42.00 and a low estimate of $18.00. The average target implies an upside of 22.11% from the current price of $24.38. More detailed estimate data can be found on the Sprout Social Inc (SPT) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Sprout Social Inc's (SPT, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Sprout Social Inc (SPT, Financial) in one year is $77.78, suggesting a upside of 219.03% from the current price of $24.38. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Sprout Social Inc (SPT) Summary page.
SPT Key Business Developments
Release Date: May 08, 2025
- Revenue: $109.3 million, representing 13% year-over-year growth.
- Operating Margin: Record non-GAAP operating margin of 11.5%, up over 500 basis points from the previous year.
- Free Cash Flow: Record $19.5 million in non-GAAP free cash flow, a 72% increase year-over-year.
- Subscription Revenue: $108.7 million, up 13% year-over-year.
- Customers with >$50,000 ARR: Grew 22% year-over-year.
- Annual Contract Value (ACV): $14,961, up 16% year-over-year.
- Remaining Performance Obligations (RPO): $360.2 million, up 24% year-over-year.
- Current RPO (cRPO): $255.8 million, implying 21% year-over-year growth.
- Q2 2025 Revenue Guidance: $110.4 million to $111.2 million.
- Q2 2025 Non-GAAP Operating Income Guidance: $8.4 million to $9.4 million.
- Full Year 2025 Revenue Guidance: $448.9 million to $453.9 million.
- Full Year 2025 Non-GAAP Operating Income Guidance: $40.7 million to $45.7 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sprout Social Inc (SPT, Financial) reported a revenue of $109.3 million for Q1 2025, marking a 13% year-over-year growth.
- The company achieved a record quarterly non-GAAP operating margin of 11.5%, up over 500 basis points from the previous year.
- Sprout Social Inc (SPT) saw a 22% growth in the $50,000 ARR customer cohort, indicating strong enterprise customer acquisition.
- The company announced strategic wins with global brands such as Palo Alto, NASCAR, and Interscope Records, showcasing its appeal to large enterprises.
- Sprout Social Inc (SPT) launched significant enhancements to its influencer marketing product, including AI-powered features, to better serve its customers.
Negative Points
- The macroeconomic environment remains challenging, with elongated procurement and purchasing processes expected to persist through 2025.
- Despite the positive growth, the number of customers contributing more than $10,000 in ARR grew only 6% year-over-year, indicating slower growth in smaller customer segments.
- Sprout Social Inc (SPT) continues to face seasonality impacts on its cRPO, with Q1 being affected by the strong Q4 performance.
- The company is closely monitoring the dynamic spending environment impacted by tariffs and federal spending cuts, which could affect future performance.
- Sprout Social Inc (SPT) does not expect the demand environment to improve in fiscal year 2025 compared to 2024, indicating cautious outlook.
