Q4 2025 Sprout Social Inc Earnings Call Transcript
Key Points
- Sprout Social Inc (SPT) reported a strong quarter with revenue of $120.9 million, representing a 12.9% year-over-year growth.
- The company achieved a non-GAAP operating margin of 10.5%, up 306 basis points year-over-year.
- Sprout Social Inc (SPT) saw a significant increase in multi-year contracts, now representing nearly 50% of their contract mix.
- The company reported strong non-GAAP free cash flow of $10.9 million for the fourth quarter and $45.9 million for the year, an improvement of approximately 55% year-over-year.
- Sprout Social Inc (SPT) continues to expand its AI capabilities with the introduction of Trellis, enhancing the intelligence of their platform and driving higher win rates.
- The sub-30k customer segment has been a headwind for growth, with higher customer acquisition costs and lower product-market fit.
- Sprout Social Inc (SPT) faces challenges in the expansion revenue, impacting their overall dollar-based net retention rate.
- The company anticipates modest deceleration in the sub-30k segment in 2026, with stabilization expected in 2027.
- There is pressure on the company to move faster with AI and agentic revenue, as competitors are already generating significant revenue in this area.
- Sprout Social Inc (SPT) needs to optimize costs and investments in the downmarket segment to improve conversion and retention.
Hello, everyone.
Thank you for joining us and welcome to Sprout Social Fourth quarter 2025 earnings call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. I will now hand the call over to Alex Kurtz, VP of Investor Relations and Corp Development.
Thank you and welcome to Sprout Social's 4th quarter 2025 earnings call. We'll be discussing the results announced in our press release issued after the market closed today and I've also released an updated investor presentation which can be found on our website. With me are Sprout Social CEO Ryan Barretto and CFO Joe Del Preto.
Today's call will contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1,995.
All statements other than statements of historical fact are
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