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Mar 31, 2023
Sprout Social Q1 2023 Earnings Report
Sprout Social's first quarter 2023 financial results were announced, exceeding guidance range.
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
Revenue by Segment
Subscription Revenue
CapyFin.comProfessional services and other Revenue
CapyFin.com 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.