Sprout Social Q1 2023 Earnings Report
Key Takeaways
Sprout Social reported revenue of $75.2 million, a 31% increase compared to Q1 2022, and ARR of $309.9 million, a 30% increase compared to Q1 2022. The company's focus on higher-tier customers led to increased churn from non-core customers but drove significant ARR growth from core customers. They also delivered record free cash flow.
Revenue was $75.2 million, up 31% compared to the first quarter of 2022.
ARR was $309.9 million, up 30% compared to the first quarter of 2022.
Non-GAAP operating income was $1.7 million, compared to a Non-GAAP operating loss of ($1.2) million in the first quarter of 2022.
Free cash flow was $7.9 million, compared to $5.1 million in the first quarter of 2022.
Sprout Social
Sprout Social
Sprout Social Revenue by Segment
Forward Guidance
For Q2 2023, Sprout Social expects revenue between $78.6 and $78.7 million, and a non-GAAP operating loss between ($1.8) million and ($1.5) million. For the full year 2023, the company expects revenue between $332.0 and $333.0 million and ARR growth exceeding reported revenue growth by at least 225bps.
Positive Outlook
- Total revenue between $78.6 and $78.7 million, or growth of 28% year-over-year for Q2 2023.
- Non-GAAP operating loss between ($1.8) million and ($1.5) million for Q2 2023.
- Total revenue between $332.0 to $333.0 million, or growth of 31% year-over-year for the full year 2023.
- Total 2023 ARR growth will exceed total reported revenue growth by at least 225bps.
- Non-GAAP operating income between $2.1 million and $2.4 million for the full year 2023.
Challenges Ahead
- Services revenue will be lower than the second quarter of 2022.
- Non-GAAP net loss per share of ($0.02) based on approximately 55.7 million weighted-average shares of common stock outstanding for Q2 2023.
- Services revenue will be lower than 2022 levels for the full year 2023.
- Company’s second quarter and 2023 financial outlook is based on a number of assumptions that are subject to change and many of which are outside the Company’s control.
- There can be no assurance that the Company will achieve these results.