Sprout Social (SPT) Q3 2024 earnings summary

Executive summary

• Achieved $102.6 million in Q3 2024 revenue, up 20% year-over-year, with 99% from subscriptions and a gross profit margin of 77–79%.

• Customer base expanded to ~30,000 across 100+ countries, with 9,119 customers >$10K ARR (+12% YoY) and 1,610 >$50K ARR (+29% YoY).

• Focused on enterprise growth, customer health, strategic partnerships, and deeper customer penetration with premium modules and product innovation.

• Notable customer wins include a $1.8 million multi-year deal with a global electronics brand and expanded use by the US Coast Guard.

• Named #1 in 94 G2 Fall 2024 Reports and recognized as a launch partner for Salesforce Agentforce.

Financial highlights

• Q3 2024 revenue: $102.6 million (+20% YoY); subscription revenue: $101.8 million (+20% YoY); services revenue: $0.8 million (+13% YoY).

• Gross profit for Q3 2024 was $79.4 million, with non-GAAP gross margin at 79%.

• Non-GAAP operating income: $7.5 million (7–7.3% margin), up from -$0.6 million YoY; non-GAAP net income: $7.3 million ($0.13 per share).

• Free cash flow for Q3 2024 was $9.3 million; $23.1 million YTD.

• Cash and equivalents were $82.9–$91.5 million at quarter end; $30 million outstanding on revolving credit facility.

Outlook and guidance

• Q4 2024 revenue expected: $106.3–$107.1 million; non-GAAP operating income: $8.7–$9.5 million.

• Q4 non-GAAP net income per share: $0.15–$0.16 (57.6M shares).

• FY2024 revenue expected: $405.1–$405.9 million; non-GAAP operating income: $27.5–$28.3 million.

• FY2024 non-GAAP net income per share: $0.46–$0.47 (57.0M shares).

• Medium/long-term goals: >$1B revenue, >80% non-GAAP gross margin, >20% non-GAAP operating margin, 20–22% FCF margin; 2028 timeframe removed.