Sprout Social (SPT) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 11% year-over-year to $121.5 million, with 99% from subscriptions and strong non-GAAP profitability; non-GAAP free cash flow reached $24.7 million, the highest in company history.

• Customer base of $30K+ ARR grew 12% to 3,875, and $50K+ ARR customers rose 18% to 2,085 year-over-year, now representing over 60% and nearly 50% of subscription revenue, respectively.

• Board authorized a $50 million share repurchase program, reflecting confidence in long-term value and current valuation disconnect.

• AI orchestration framework Trellis moved out of beta, now live across Listening and NewsWhip, with rapid adoption and strong customer feedback.

• Completed the acquisition of NewsWhip in July 2025, expanding into public relations and crisis monitoring.

Financial highlights

• Q1 total revenue: $121.5 million (+11.2% YoY); subscription revenue: $120 million (+10.4% YoY); professional services revenue: $1.5 million (+143% YoY).

• Non-GAAP operating margin: 12% (+16 bps YoY); non-GAAP operating income: $14.1 million; non-GAAP net income: $13.6 million; non-GAAP free cash flow: $24.7 million (+27% YoY).

• Gross margin was 77% in Q1 2026; gross profit rose to $93.5 million.

• Cash and equivalents: $111.6 million, up from $100.9 million a year ago.

• Total remaining performance obligations (RPO): $395.3 million (+10% YoY); current RPO: $281.7 million (+10% YoY).

Outlook and guidance

• Q2 2026 revenue expected between $121.7 million and $122.5 million; non-GAAP operating income $9.5–$10.3 million; non-GAAP EPS $0.15–$0.16.

• FY2026 revenue guidance: $492.5–$495.5 million; non-GAAP operating income: $54.9–$60.4 million; non-GAAP EPS: $0.88–$0.97.

• Targeting ~15% non-GAAP operating margin by Q4 2026 and reaffirming Rule of 40 target of 30% by Q4 2027.

• Management expects continued investment in growth and ongoing net losses for the foreseeable future.