Sprout Social Inc (SPT) Q3 2023 Earnings: Revenue Up 31%, ARR Grows 33% YoY
Sprout Social Inc (NASDAQ:SPT) reports Q3 2023 revenue of $85.5 million, a 31% increase YoY.
Annual Recurring Revenue (ARR) stands at $359.5 million, up 33% compared to Q3 2022.
GAAP and Non-GAAP operating losses widen to $24.2 million and $0.6 million respectively.
Cash and equivalents decrease to $121.4 million from $192.4 million in Q2 2023.
On November 2, 2023, Sprout Social Inc (NASDAQ:SPT), a leading provider of cloud-based social media management software, announced its financial results for the third quarter ended September 30, 2023. The company reported strong Q3 results, with revenue and ARR showing significant growth compared to the same period in 2022.
Financial Highlights
Revenue for the quarter was $85.5 million, marking a 31% increase compared to Q3 2022. The company's ARR stood at $359.5 million, up 33% YoY. Total remaining performance obligations (RPO) also saw a significant increase, up 67% YoY to $228.7M.
However, the company's GAAP operating loss widened to $24.2 million from $14.4 million in Q3 2022. Similarly, the Non-GAAP operating loss also increased to $0.6 million from a loss of $1.4 million in the same period last year. The GAAP net loss was $23.0 million, compared to $13.9 million in Q3 2022, while the Non-GAAP net loss was $0.6 million, compared to a loss of $1.0 million in Q3 2022.
Customer Metrics and Business Highlights
Sprout Social reported growth in the number of customers contributing over $10,000 and $50,000 in ARR, up 33% and 49% respectively compared to September 30, 2022. However, the total number of customers as of September 30, 2023, was 32,383, down 5% compared to the same period in 2022.
The company also highlighted new and existing customer relationships with notable companies such as American Honda Motor Company, Activision Blizzard, and Hormel Foods. In addition, Sprout Social was recognized by G2s 2023 Fall Reports as a leader across 138 categories including Social Customer Service and Social Media Analytics.
Outlook for Q4 and Full Year 2023
For Q4 2023, Sprout Social expects total revenue to be between $90.5 million and $90.6 million, and Non-GAAP operating income to be between $0.6 million and $0.7 million. For the full year 2023, the company expects total revenue to be between $330.6 million and $330.7 million, and Non-GAAP operating income between $3.6 million and $3.7 million.
"Our focused investments are delivering strong returns," said Joe Del Preto, CFO of Sprout Social. "Our current performance and leading indicators performed well during Q3 led by the rapidly changing mix of our business and further acceleration in our enterprise segment."
Explore the complete 8-K earnings release (here) from Sprout Social Inc for further details.
This article first appeared on GuruFocus.
