Sprout Social Beats Q2 Estimates, Raises Profit Outlook; Revenue Growth Steady at 11%
SPT sits 66% above its 52-week low of $4.92.
Summary
Sprout Social reported Q2 2026 results above expectations, with non-GAAP operating income beating guidance by $6.1 million, and raised its full-year profit outlook. Revenue grew 11% year-over-year, and the company lifted its Q4 exit margin target to ~17%.
Key Events · Earnings and Guidance · SPT
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Q2 Revenue and Profit Beat
Revenue of $123.8M (+11% YoY) and non-GAAP operating income of $16.0M exceeded guidance by $6.1M. Non-GAAP net income per share was $0.26.
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Full-Year Profit Guidance Raised
2026 non-GAAP operating income guidance raised to $68.3M–$70.3M, up 20% from the prior-year midpoint. Q4 exit non-GAAP operating margin target lifted to ~17% from 15%.
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Enterprise Customer Growth
Customers contributing ≥$30K ARR grew 11% YoY to 3,926; approximated TTM subscription revenue from this cohort rose 20% to $291.7M, now 61.4% of total subscription revenue.
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Rule of 40 Target Reiterated
Management reiterated its target of achieving a Rule of 40 (revenue growth + non-GAAP operating margin) by Q4 2027, implying a path to accelerating growth or further margin expansion.
Analysis · SPT · Technology
Sprout Social delivered Q2 revenue of $123.8 million, up 11% year-over-year, and non-GAAP operating income of $16.0 million — $6.1 million above the high end of its guidance range. The company raised its full-year non-GAAP operating income outlook to $68.3–$70.3 million and lifted its Q4 exit margin target to approximately 17%, signaling improving profitability even as revenue growth remains in the low teens. The beat and raise come just three weeks after announcing a 20% workforce reduction, suggesting the restructuring is already contributing to margin expansion. With $119.9 million in cash and positive free cash flow, the balance sheet is stable, but the stock trades at $8.19 — down sharply from its highs — and the market will focus on whether the enterprise pivot can reaccelerate growth toward the Rule of 40 target by late 2027.
At the time of this filing, SPT was trading at $8.19 on NASDAQ in the Technology sector, with a market capitalization of approximately $492.3M. The 52-week trading range was $4.92 to $17.41. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.