Sprout Social (SPT) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $125.1M, up 8.3% YoY; record non-GAAP operating income was $26.3M at a 21% margin, and non-GAAP net income was $26.7M.

• Customers with $30K+ ARR contributed $301.5M in approximated TTM subscription revenue, up 18% YoY and representing 62.3% of subscription revenue.

• 9M revenue rose 10% YoY to $370.5M; GAAP net loss narrowed to $15.9M from $32.6M.

Financial highlights

• Q3 subscription revenue was $123.4M, up 8% YoY; professional services and other revenue was $1.8M, up 102%.

• GAAP net loss narrowed to $6.5M from $9.4M; non-GAAP EPS was $0.45 versus $0.23, and GAAP EPS was -$0.11 versus -$0.16.

• Non-GAAP free cash flow was $26.7M, up 158% YoY, with a 21% margin; 9M free cash flow was $59.8M, up 71%.

• Cash and cash equivalents were $103.7M at quarter-end, versus $90.6M a year earlier.

• Q3 non-GAAP operating margin benefited partly from hiring timing; hiring was expected to catch up in Q4.

Outlook and guidance

• Q4 FY2026 guidance: revenue $124.2M–$125.2M, non-GAAP operating income $21.4M–$22.4M, and non-GAAP EPS $0.36–$0.38.

• FY2026 guidance: revenue $494.7M–$495.7M, non-GAAP operating income $77.8M–$78.8M, and non-GAAP EPS $1.29–$1.31.

• Q4 is expected to be the first GAAP-profitable quarter, with sustainable quarterly GAAP profitability targeted thereafter; Q4 exit non-GAAP operating margin outlook is ~18%.

• Reaffirmed a 30% Rule of 40 target by Q4 FY2027, defined as YoY revenue growth plus current-quarter non-GAAP operating margin; management expects greater bottom-line contribution.

• Longer-term goals include revenue above $1B, non-GAAP gross margin above 80%, non-GAAP operating margin above 20%, and FCF margin of 20%–22%.