Sprout Social (NASDAQ:SPT) Releases Earnings Results, Beats Estimates By $0.04 EPS

Sprout Social (NASDAQ:SPT) issued its quarterly earnings data on Thursday. The company reported $0.20 earnings per share for the quarter, beating analysts’ consensus estimates of $0.16 by $0.04, FiscalAI reports. The business had revenue of $120.89 million for the quarter, compared to analysts’ expectations of $118.68 million. Sprout Social had a negative net margin of 10.59% and a negative return on equity of 18.93%. Sprout Social updated its FY 2026 guidance to 0.880-0.970 EPS and its Q1 2026 guidance to 0.150-0.160 EPS.

Here are the key takeaways from Sprout Social’s conference call:

• Sprout reported Q4 revenue of $120.9 million (12.9% YoY), a full‑year non‑GAAP operating margin of 10.5% (up 306 bps), and strong free cash flow of $45.9 million for FY 2025, highlighting improved leverage and cash generation.
• Upmarket momentum is a key growth driver — customers with $30K+ approximated subscription revenue grew ~22% and now represent 59% of subscription revenue, with 50K+ ARR customers up 18% and multi‑product attach rates well over 70%.
• Management is pushing AI and product differentiation, with Trellis in beta (1,000+ users) and a roadmap to expand AI agents across listening, publishing, reporting and care as both a value driver and future monetization lever.
• The sub‑30K ARR segment remains a drag on growth and efficiency; management plans a self‑serve motion and simplified SKU to improve unit economics but expects stabilization to take through 2026 into 2027.
• Management targets a 30% Rule of 40 (YoY revenue growth + current quarter non‑GAAP operating margin) by Q4 2027, relying on upmarket scale, margin discipline, AI automation, and hiring in lower‑cost locations to achieve it.

Sprout Social Stock Down 12.3%

Shares of Sprout Social stock traded down $0.87 on Friday, hitting $6.24. 1,444,812 shares of the company traded hands, compared to its average volume of 1,535,554. Sprout Social has a 12-month low of $6.03 and a 12-month high of $27.81. The company has a quick ratio of 0.89, a current ratio of 0.89 and a debt-to-equity ratio of 0.23. The company has a market cap of $369.29 million, a PE ratio of -7.76 and a beta of 0.90. The company has a 50-day moving average price of $9.22 and a 200 day moving average price of $11.18.

Analyst Upgrades and Downgrades

SPT has been the subject of several recent analyst reports. Barclays decreased their price objective on shares of Sprout Social from $26.00 to $13.00 and set an “overweight” rating for the company in a report on Monday, January 12th. Weiss Ratings restated a “sell (e+)” rating on shares of Sprout Social in a research report on Thursday, January 22nd. Jefferies Financial Group lowered their price target on Sprout Social from $15.00 to $12.00 and set a “buy” rating on the stock in a research report on Tuesday, February 3rd. KeyCorp dropped their price objective on Sprout Social from $9.00 to $6.00 and set an “underweight” rating on the stock in a research note on Friday. Finally, Canaccord Genuity Group reaffirmed a “hold” rating and set a $9.00 target price (down from $16.00) on shares of Sprout Social in a research note on Friday. Four investment analysts have rated the stock with a Buy rating, five have given a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and an average target price of $15.11.

Insider Transactions at Sprout Social

In related news, insider Justyn Russell Howard sold 40,000 shares of the firm’s stock in a transaction that occurred on Friday, January 9th. The shares were sold at an average price of $10.70, for a total transaction of $428,000.00. Following the transaction, the insider owned 7,417 shares of the company’s stock, valued at approximately $79,361.90. This trade represents a 84.36% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, Director Aaron Edward Frederick Rankin purchased 90,661 shares of the business’s stock in a transaction dated Wednesday, December 17th. The shares were acquired at an average price of $11.14 per share, for a total transaction of $1,009,963.54. Following the acquisition, the director directly owned 114,969 shares in the company, valued at $1,280,754.66. This represents a 372.97% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Company insiders own 10.12% of the company’s stock.

Institutional Trading of Sprout Social

Several institutional investors have recently modified their holdings of the company. Quadrant Capital Group LLC acquired a new stake in Sprout Social during the fourth quarter valued at approximately $28,000. Summit Securities Group LLC lifted 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 buying an additional 2,015 shares during the period. Quarry LP boosted its stake in Sprout Social by 264.2% in the 3rd quarter. Quarry LP now owns 3,784 shares of the company’s stock valued at $49,000 after buying an additional 2,745 shares in the last quarter. Kestra Advisory Services LLC bought a new stake in Sprout Social in the fourth quarter valued at $54,000. Finally, Tower Research Capital LLC TRC raised its stake in Sprout Social by 55.5% during the second quarter. Tower Research Capital LLC TRC now owns 5,496 shares of the company’s stock worth $115,000 after acquiring an additional 1,962 shares in the last quarter.

More Sprout Social News

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

• Positive Sentiment: Q4 results beat consensus: revenue $120.9M (+13% Y/Y) and non‑GAAP EPS $0.20 topped estimates; company raised near‑term guidance (Q1 and FY2026 EPS and revenue ranges materially above prior consensus), and non‑GAAP profitability improved with stronger cash flow — a fundamental positive for execution and valuation. Sprout Social (NASDAQ:SPT) Beats Q4 CY2025 Sales Expectations
• Positive Sentiment: Management set a strategic target (30% on a Rule of 40 basis by Q4 2027), highlighted growth in higher‑value customers (22% growth from ≥$30K ARR cohort) and launched Trellis (AI product). These initiatives support longer‑term margin expansion and enterprise revenue mix improvements. Quiver: Sprout Social Targets 30% Non‑GAAP Rule of 40
• Neutral Sentiment: Some analysts cut models after the print but kept constructive stances: Needham slashed its price target (big reduction from $32 to $14) but retained a Buy rating — signaling model reset rather than loss of conviction. These Analysts Cut Their Forecasts On Sprout Social After Q4 Earnings
• Neutral Sentiment: Canaccord reaffirmed a Hold and lowered its target from $16 to $9 — another mixed message that keeps analyst views divergent. Canaccord Rating Update
• Negative Sentiment: KeyCorp downgraded to Underweight and cut its target to $6 — a direct negative catalyst that increases selling pressure and sets a lower benchmark for the stock. KeyCorp Lowers Price Target
• Negative Sentiment: Customer retention and GAAP results remain concerns: dollar‑based net retention fell to 100% (from 104%) and Sprout still posts GAAP net losses — risks that make investors sensitive despite non‑GAAP gains. Sprout Social Q4 2025 Press Release
• Negative Sentiment: Significant insider and institutional selling reported (several large funds materially reduced positions and insiders sold shares), which can amplify downward pressure in a low‑float / lower‑cap environment. Quiver: Insider & Institutional Activity

Sprout Social Company Profile

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.