spt-20250630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-Q

_________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from to

Commission File Number 001-39156

__________________________________

SPROUT SOCIAL, INC.

(Exact name of registrant as specified in its charter)


Delaware		27-2404165
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

131 South Dearborn St.	,	Suite 700
Chicago	,	Illinois
60603
(Address of principal executive offices and zip code)

(866)	878-3231
(Registrant's telephone number, including area code)

__________________________________


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per share	SPT	The Nasdaq Stock Market LLC

__________________________________

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): ☐ Yes ☒ No

As of August 1, 2025, there were 52,645,842 shares and 6,169,357 shares of the registrant’s Class A and Class B common stock, respectively, $0.0001 par value per share, outstanding.

TABLE OF CONTENTS


		Page
	Cautionary Note Regarding Forward-Looking Statements	2
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Loss	7
	Condensed Consolidated Statements of Stockholders’ Equity	8
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Condensed Consolidated Financial Statements	11
	1. Nature of Operations and Summary of Significant Accounting Policies	11
	2. Revenue Recognition	12
	3. Operating Leases	13
	4. Income Taxes	14
	5. Revolving Line of Credit	15
	6. Incentive Stock Plan	16
	7. Commitments and Contingencies	16
	8. Segment and Geographic Data	18
	9. Net Loss per Share	19



	1 0 . Subsequent Events	20
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 5.	Other Information	47
Item 6.	Exhibits	49
SIGNATURES		50

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in this Quarterly Report on Form 10-Q (“Quarterly Report”) not based on historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about Sprout Social, Inc.’s (“Sprout Social”) plans, objectives, strategies, financial performance and outlook, trends, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “explore,” “intend,” “long-term model,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or the negative of these terms and similar expressions intended to identify forward-looking statements, as they relate to Sprout Social, our business and our management. Forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Sprout Social and our management based on their knowledge and understanding of the business and industry, are inherently uncertain. These forward-looking statements should not be read as a guarantee of future performance or results, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report. Such risks, uncertainties and other important factors include, among others, the risks, uncertainties and factors set forth under Part II—Item IA. Risk Factors” and “Part I—Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our most recent Annual Report on Form 10-K under Part I—Item 1A. “Risk Factors” and the risks and uncertainties related to the following:

•our ability to attract, retain, and grow customers;

•our future financial performance, including our revenue, cost of revenue, gross profit, operating expenses, ability to generate positive cash flow, and ability to achieve and maintain profitability;

•our ability to access third-party APIs and data on favorable terms;

•our ability to increase spending of existing customers;

•the evolution of the social media industry, including technological advances, utilization of artificial intelligence (AI) and adapting to new regulations and use cases;

•the introduction of AI technologies into our products, which may lead to increased governmental or regulatory scrutiny;

•our ability to innovate and provide a superior customer experience;

•our ability to successfully enter new markets, manage our international expansion and comply with any applicable laws and regulations;

•our ability to successfully adapt our sales, success, and compliance efforts to the demands of sophisticated enterprise customers;

•our ability to maintain and enhance our brand;

•our estimates of the size of our market opportunities;

•the effects of increased competition from our market competitors or new entrants to the market;

•our ability to securely maintain customer and other third-party data;

•our ability to comply with existing, modified or new laws and regulations applying to our business, including data privacy and security regulations;

•our ability to maintain, protect and enhance our intellectual property;

•worldwide economic and political conditions, including the macroeconomic impacts of fluctuations in inflation, interest rates and currency exchange rates, volatility in the capital markets, tariffs and trade tensions, changes in government spending and ongoing overseas conflict, and their impact on demand for our platform and products;

•our ability to acquire, invest in, and integrate other businesses or technologies into our business or achieve the expected benefits of such acquisitions and technologies;

•our ability to attract and retain qualified employees and key personnel;

•our ability to manage our substantial debt in a way that does not adversely affect our business; and

•the other factors set forth under “Part II—Item IA. Risk Factors” in this Quarterly Report and in our Annual Report filed with the United States Securities and Exchange Commission (“SEC”) on Form 10-K under Part I—Item 1A, “Risk Factors.”

These factors are not necessarily all of the important factors that could cause our actual financial results, performance, achievements or prospects to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made, and we do not undertake or assume any obligation to update forward-looking statements to reflect actual results, changes in assumptions, laws or other factors affecting forward-looking information, except to the extent required by applicable laws. Therefore, you should not assume that our silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

In addition, statements such as "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this report. While we believe such information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


Sprout Social, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)


	June 30, 2025		December 31, 2024

Assets
Current assets
Cash and cash equivalents	$	101,532	$	86,437
Marketable securities	—		3,745

Accounts receivable, net of allowances of $3,325 and $2,169 at June 30, 2025 and December 31, 2024, respectively	67,264		84,033
Deferred commissions	23,270		20,184
Prepaid expenses and other assets	15,708		15,816
Total current assets	207,774		210,215

Property and equipment, net	9,848		10,951
Deferred commissions, net of current portion	52,743		51,653
Operating lease, right-of-use assets	10,605		11,326

Goodwill	121,315		121,315
Intangible assets, net	19,328		21,914
Other assets, net	1,321		967

Total assets	$	422,934	$	428,341
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	11,406	$	6,984
Deferred revenue	171,105		178,585
Operating lease liabilities	2,473		3,747
Accrued wages and payroll related benefits	14,279		20,567
Accrued expenses and other	9,329		10,869
Total current liabilities	208,592		220,752

Revolving credit facility	15,000		25,000
Deferred revenue, net of current portion	1,004		1,101
Operating lease liabilities, net of current portion	13,431		14,543
Other noncurrent liabilities	348		351
Total liabilities	238,375		261,747


Sprout Social, Inc.
Condensed Consolidated Balance Sheets (Unaudited) (cont’d)
(in thousands, except share and per share data)


	June 30, 2025		December 31, 2024

Commitments and contingencies (Note 7)
Stockholders’ equity
Class A common stock, par value $0.0001 per share; 1,000,000,000 shares authorized; 55,547,480 and 52,605,536 shares issued and outstanding, respectively, at June 30, 2025; 54,219,684 and 51,277,740 shares issued and outstanding, respectively, at December 31, 2024	4		4
Class B common stock, par value $0.0001 per share; 25,000,000 shares authorized; 6,416,301 and 6,209,357 shares issued and outstanding, respectively, at June 30, 2025; 6,687,582 and 6,480,638 shares issued and outstanding, respectively, at December 31, 2024	1		1
Additional paid-in capital	599,564		558,391
Treasury stock, at cost	(37,422)		(37,422)
Accumulated other comprehensive income	—		3
Accumulated deficit	(377,588)		(354,383)
Total stockholders’ equity	184,559		166,594
Total liabilities and stockholders’ equity	$	422,934	$	428,341

See Notes to Condensed Consolidated Financial Statements.


Sprout Social, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenue
Subscription	$	111,110	$	98,498	$	219,790	$	194,287
Professional services and other	668		898		1,277		1,893
Total revenue	111,778		99,396		221,067		196,180
Cost of revenue
Subscription	24,551		22,078		49,024		44,283
Professional services and other	383		324		748		547
Total cost of revenue	24,934		22,402		49,772		44,830
Gross profit	86,844		76,994		171,295		151,350
Operating expenses
Research and development	24,587		25,126		47,816		48,895
Sales and marketing	48,152		46,194		95,604		90,734
General and administrative	26,420		22,187		51,392		41,521
Total operating expenses	99,159		93,507		194,812		181,150
Loss from operations	(12,315)		(16,513)		(23,517)		(29,800)
Interest expense	(409)		(972)		(923)		(2,018)
Interest income	946		1,053		1,841		2,088
Other income (expense), net	356		(257)		188		(663)
Loss before income taxes	(11,422)		(16,689)		(22,411)		(30,393)
Income tax expense	563		203		794		74
Net loss	$	(11,985)	$	(16,892)	$	(23,205)	$	(30,467)
Net loss per share attributable to common shareholders, basic and diluted	$	(0.21)	$	(0.30)	$	(0.40)	$	(0.54)
Weighted-average shares outstanding used to compute net loss per share, basic and diluted	58,360,966		56,699,148		58,127,231		56,521,490

See Notes to Condensed Consolidated Financial Statements.


Sprout Social, Inc.
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
(in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net loss	$	(11,985)	$	(16,892)	$	(23,205)	$	(30,467)
Other comprehensive loss:
Net unrealized gain (loss) on available-for-sale securities, net of tax	(1)		19		(3)		48
Comprehensive loss	$	(11,986)	$	(16,873)	$	(23,208)	$	(30,419)

See Notes to Condensed Consolidated Financial Statements.


Sprout Social, Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands, except share data)


	Voting Common Stock (Class A and B)			Additional Paid-in Capital		Treasury Stock			Accumulated other comprehensive loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balances at March 31, 2025	58,175,307	$	5	$	578,328	3,148,888	$	(37,422)	$	1	$	(365,603)	$	175,309

Stock-based compensation				20,292									20,292
Issuance of common stock from equity award settlement	586,481	—											—

Issuance of common stock in connection with employee stock purchase plan	53,105	—		944									944
Other comprehensive gain (loss), net of tax									(1)				(1)
Net loss											(11,985)		(11,985)
Balances at June 30, 2025	58,814,893	$	5	$	599,564	3,148,888	$	(37,422)	$	—	$	(377,588)	$	184,559


	Voting Common Stock (Class A and B)			Additional Paid-in Capital		Treasury Stock			Accumulated other comprehensive loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balances at March 31, 2024	56,537,262	$	5	$	489,969	3,122,058	$	(36,589)	$	(48)	$	(305,987)	$	147,350
Exercise of stock options	25,000	—		27									27
Stock-based compensation				20,653									20,653
Issuance of common stock from equity award settlement	476,944	—											—
Taxes paid related to net share settlement of equity awards						8,407	(272)						(272)
Issuance of common stock in connection with employee stock purchase plan	40,807	—		1,238									1,238
Other comprehensive gain (loss), net of tax									19				19
Net loss											(16,892)		(16,892)
Balances at June 30, 2024	57,080,013	$	5	$	511,887	3,130,465	$	(36,861)	$	(29)	$	(322,879)	$	152,123


Sprout Social, Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands, except share data)


	Voting Common Stock (Class A and B)			Additional Paid-in Capital		Treasury Stock			Accumulated other comprehensive loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balances at December 31, 2024	57,758,378	5		558,391		3,148,888	(37,422)		3		(354,383)		$	166,594

Stock-based compensation				40,229									40,229
Issuance of common stock from equity award settlement	1,003,410	—											—

Issuance of common stock in connection with employee stock purchase plan	53,105	—		944									944
Other comprehensive gain (loss), net of tax									(3)				(3)
Net loss											(23,205)		(23,205)
Balances at June 30, 2025	58,814,893	$	5	$	599,564	3,148,888	$	(37,422)	$	—	$	(377,588)	$	184,559

Voting Common Stock (Class A and B)

Additional
Paid-in
Capital

Treasury Stock

Accumulated
other comprehensive loss

Accumulated
Deficit

Total
Stockholders’ Equity

Amount

Balances at December 31, 2023

56,235,759

471,789

SEC Form 10-Q filed by Sprout Social Inc