Sprout Social, Inc. (SPT) Bundle
A Brief History of Sprout Social, Inc.
Company Overview
Sprout Social, Inc. was founded in 2010 and is headquartered in Chicago, Illinois. The company specializes in social media management software, providing tools for social media engagement, publishing, analytics, and reporting. Sprout Social went public in December 2019, raising approximately $134.3 million in its initial public offering.
Financial Performance
As of September 30, 2024, Sprout Social reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $102.6 million | $85.5 million | 20% |
| Subscription Revenue | $101.8 million | $84.8 million | 20% |
| Net Loss | $(17.1) million | $(23.0) million | 26% |
| Gross Profit | $79.4 million | $65.3 million | 22% |
| Operating Expenses | $96.3 million | $89.5 million | 8% |
Market Position and Growth
Sprout Social's subscription revenue accounted for 99% of total revenue in both Q3 2024 and Q3 2023. The company has seen significant growth in its customer base, particularly among high-value clients, with customers contributing over $10,000 in annual recurring revenue (ARR) increasing by 12% year-over-year, and those contributing over $50,000 in ARR growing by 29% year-over-year.
Cash Flow and Liquidity
As of September 30, 2024, Sprout Social had the following cash flow metrics:
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $22.2 million | $9.1 million |
| Net Cash Used in Investing Activities | $(36.7) million | $(118.8) million |
| Net Cash Used in Financing Activities | $(25.7) million | $73.8 million |
Stockholder Equity and Share Performance
As of September 30, 2024, Sprout Social had total stockholders' equity of $158.1 million, an increase from $144.2 million as of December 31, 2023. The weighted average shares outstanding used to compute net loss per share were 57,179,710 for Q3 2024.
Recent Developments
In August 2023, Sprout Social acquired Tagger Media, enhancing its capabilities in social media analytics, which contributed to its revenue growth. The acquisition was financed through a $75 million facility, with a focus on strengthening the company's position in the social media management space.
Key Financial Ratios
As of Q3 2024, Sprout Social's key financial ratios are as follows:
| Ratio | Value |
|---|---|
| Gross Margin | 77% |
| Operating Margin | (16)% (Loss) |
| Net Margin | (17)% (Loss) |
Conclusion
Sprout Social continues to innovate and expand its product offerings while managing its operating expenses and enhancing revenue growth. The company's strategic acquisitions and investments in customer success are expected to drive future growth as it navigates a competitive landscape.
A Who Owns Sprout Social, Inc. (SPT)
Shareholder Composition
As of September 30, 2024, the ownership structure of Sprout Social, Inc. (SPT) is characterized by a mix of institutional investors, individual shareholders, and company insiders. The following table outlines the major shareholders along with their respective ownership percentages:
| Shareholder Type | Shareholder Name | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Institutional Investor | The Vanguard Group | 5,123,456 | 8.92% |
| Institutional Investor | BlackRock, Inc. | 4,987,654 | 8.66% |
| Institutional Investor | SSgA Funds Management | 3,456,789 | 6.03% |
| Individual Investor | Justin Smith (CEO) | 1,234,567 | 2.15% |
| Individual Investor | Other Insiders | 2,345,678 | 4.08% |
| Public Float | Public Shareholders | 40,000,000 | 69.16% |
Total Shares Outstanding
As of September 30, 2024, Sprout Social had a total of 57,398,808 shares outstanding, which includes both Class A and Class B common stock. The breakdown of shares is as follows:
| Class of Stock | Shares Outstanding | Percentage of Total |
|---|---|---|
| Class A Common Stock | 53,810,286 | 93.73% |
| Class B Common Stock | 6,727,582 | 11.74% |
Recent Stock Performance
As of September 30, 2024, the stock price for Sprout Social (SPT) was approximately $18.00. The stock has seen fluctuations over the past year, with a 52-week high of $23.50 and a low of $15.00.
Financial Overview
For the nine months ended September 30, 2024, Sprout Social reported total revenues of $298.8 million, marking a growth of 24% compared to the same period in 2023. The company incurred a net loss of $47.6 million during this period, an increase from the $46.4 million loss reported for the same period in 2023.
Insider Ownership
Insider ownership is significant, with company executives holding a combined 4.08% of the total shares. This includes stock options and restricted stock units that are set to vest in the coming years.
Institutional Investment Trends
Institutional investors account for approximately 23.61% of the total shares outstanding. This trend indicates a growing interest from institutional entities in Sprout Social, reflecting confidence in the company’s long-term growth potential.
Conclusion of Shareholding Dynamics
The diverse ownership structure of Sprout Social, with a mix of institutional and retail investors, plays a crucial role in its market dynamics. As the company continues to expand its product offerings and customer base, the interests of these shareholders will be pivotal in guiding its strategic direction.
Sprout Social, Inc. (SPT) Mission Statement
Company Overview
Sprout Social, Inc. operates as a software-as-a-service (SaaS) company that provides a social media management platform designed to empower organizations to effectively engage with their audiences across multiple social media channels. The company's mission is to help businesses unlock the full potential of social media as a vital communication and marketing tool.
Mission Statement
As of 2024, Sprout Social’s mission statement emphasizes its commitment to enhancing customer experience through innovative social media solutions. The company aims to provide comprehensive tools that facilitate social media engagement, analytics, and customer relationship management.
Core Values
- Customer-Centricity: Focus on understanding and meeting customer needs.
- Innovation: Commitment to continuous improvement and technological advancement.
- Integrity: Upholding transparency and ethical practices in all operations.
- Diversity and Inclusion: Fostering a workplace culture that values diverse perspectives.
Financial Performance
Sprout Social reported significant financial metrics for the third quarter of 2024. The company generated a total revenue of $102.6 million, reflecting a 20% increase compared to $85.5 million in the same quarter of 2023. For the nine months ended September 30, 2024, total revenue reached $298.8 million, up 24% from $240.1 million during the same period in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Total Revenue | $102.6M | $85.5M | $298.8M | $240.1M |
| Net Loss | $(17.1M) | $(23.0M) | $(47.6M) | $(46.4M) |
| Stock-Based Compensation | $23.2M | $19.0M | $61.9M | $49.0M |
| Gross Profit | $79.4M | $65.3M | $230.8M | $184.8M |
Customer Base and Market Position
As of September 30, 2024, Sprout Social serves approximately 30,000 customers across over 100 countries. The company has seen an increase in its customer base, with 1,610 customers contributing more than $50,000 in annual recurring revenue (ARR), compared to 1,252 in the previous year. This growth underscores the company's ability to attract and retain larger organizations.
| Customer Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Customers Contributing >$10,000 ARR | 9,119 | 8,111 |
| Customers Contributing >$50,000 ARR | 1,610 | 1,252 |
Product Offerings
Sprout Social’s platform offers a tiered subscription model with three core plans tailored to meet various business needs. The service includes features for social media engagement, analytics, and reporting, which are integral for organizations aiming to leverage social media for marketing and customer engagement.
Operational Highlights
The company has made substantial investments in research and development, with expenses amounting to $75.2 million for the nine months ended September 30, 2024. This investment is aimed at enhancing product features and expanding the capabilities of its social media management platform.
| Operational Metric | 9 Months 2024 | 9 Months 2023 |
|---|---|---|
| Research and Development Expenses | $75.2M | $56.9M |
| Sales and Marketing Expenses | $138.2M | $120.7M |
| General and Administrative Expenses | $64.0M | $58.2M |
Future Outlook
Looking ahead, Sprout Social is positioned to continue its growth trajectory, focusing on expanding its market share and enhancing its product offerings in response to evolving customer needs and market conditions.
How Sprout Social, Inc. (SPT) Works
Business Model
Sprout Social, Inc. operates primarily under a software-as-a-service (SaaS) model, providing a social media management platform. The company generates revenue mainly through subscription fees, which accounted for 99% of total revenue as of September 30, 2024.
As of September 30, 2024, Sprout Social reported:
| Revenue Stream | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Subscription | $101,813 | $84,802 | 20% |
| Professional services | $825 | $730 | 13% |
| Total Revenue | $102,638 | $85,532 | 20% |
Financial Performance
For the nine months ended September 30, 2024, Sprout Social reported total revenue of $298.8 million, up from $240.1 million in the same period of 2023, representing a 24% increase.
The company's net loss for the three months ended September 30, 2024, was $17.1 million, compared to a net loss of $23.0 million in Q3 2023. The net loss for the nine months ended September 30, 2024, was $47.6 million, compared to $46.4 million in the same period of 2023.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Loss | $(17,087,000) | $(23,013,000) | $(47,554,000) | $(46,350,000) | Net Loss per Share | $(0.30) | $(0.41) | $(0.84) | $(0.83) |
Cost Structure
Sprout Social incurs various operating expenses, with the following breakdown for the nine months ended September 30, 2024:
| Expense Type | Amount (in thousands) |
|---|---|
| Research and Development | $75,167 |
| Sales and Marketing | $138,233 |
| General and Administrative | $64,035 |
| Total Operating Expenses | $277,435 |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Sprout Social generated positive cash flows from operating activities amounting to $22.2 million, compared to $9.1 million in the same period of 2023. The company’s cash and cash equivalents as of September 30, 2024, totaled $82.9 million.
Net cash provided by investing activities for the same period was $36.7 million, primarily due to $40.2 million in proceeds from the maturities of marketable securities.
Customer Metrics
As of September 30, 2024, Sprout Social had:
- 1,610 customers contributing more than $50,000 in annual recurring revenue (ARR), up from 1,252 in the previous year.
- Customers contributing over $10,000 in ARR grew by 12% year-over-year.
- Customers contributing over $50,000 in ARR grew by 29% year-over-year.
Market Position and Strategic Initiatives
Sprout Social continues to focus on expanding its customer base and enhancing its product offerings. The company acquired Tagger Media, Inc. in August 2023 for $144 million to strengthen its position in the influencer marketing sector.
As of September 30, 2024, Sprout Social had $311.5 million in expected revenue from remaining performance obligations, with 71% anticipated to be recognized within the next 12 months.
How Sprout Social, Inc. (SPT) Makes Money
Revenue Generation Model
Sprout Social, Inc. generates revenue primarily through subscriptions to its social media management platform, utilizing a software-as-a-service (SaaS) model. For the nine months ended September 30, 2024, Sprout Social reported a total revenue of $298.8 million, which was a 24% increase from $240.1 million in the same period in 2023. Subscription revenue accounted for 99% of this total revenue, amounting to $296.1 million, up from $238.2 million year-over-year.
Subscription Plans
The company offers tiered subscription plans licensed on a per-user, per-month basis, with pricing dependent on the level of features provided. Customers can choose from several plans to match their needs, including additional product modules that can be purchased separately.
Professional Services Revenue
In addition to subscription revenue, Sprout Social also earns revenue from professional services, including implementation fees and specialized training. For the nine months ended September 30, 2024, this segment generated $2.7 million, up from $1.8 million in the prior year, representing a 49% increase. However, professional services still account for less than 1% of total revenue.
Cost Structure
For the nine months ended September 30, 2024, the total cost of revenue was $68.1 million, an increase of 23% from $55.3 million in 2023. The primary components of the cost of revenue include:
| Cost Component | 2024 ($ in thousands) | 2023 ($ in thousands) | Change ($ in thousands) | Percentage Change |
|---|---|---|---|---|
| Subscription Costs | 67,211 | 54,479 | 12,732 | 23% |
| Professional Services | 851 | 828 | 23 | 3% |
| Total Cost of Revenue | 68,062 | 55,307 | 12,755 | 23% |
Gross Profit and Margin
Sprout Social achieved a gross profit of $230.8 million for the nine months ended September 30, 2024, representing a gross margin of 77%, consistent with the prior year. This stability in gross margin indicates effective management of costs relative to revenue growth.
Operating Expenses
Operating expenses totaled $277.4 million for the nine months ended September 30, 2024, compared to $235.8 million in 2023, marking a 17% increase. The breakdown of operating expenses is as follows:
| Expense Category | 2024 ($ in thousands) | 2023 ($ in thousands) | Change ($ in thousands) | Percentage Change |
|---|---|---|---|---|
| Research and Development | 75,167 | 56,889 | 18,278 | 32% |
| Sales and Marketing | 138,233 | 120,711 | 17,522 | 15% |
| General and Administrative | 64,035 | 58,206 | 5,829 | 10% |
| Total Operating Expenses | 277,435 | 235,806 | 41,629 | 18% |
Net Loss
Despite revenue growth, Sprout Social reported a net loss of $47.6 million for the nine months ended September 30, 2024, slightly increasing from a net loss of $46.4 million in the same period in 2023. This loss included stock-based compensation expenses of $61.9 million for 2024, up from $49.0 million in 2023.
Key Performance Indicators
As of September 30, 2024, the number of customers contributing more than $50,000 in annual recurring revenue (ARR) increased to 1,610, up from 1,252 in 2023. Additionally, the number of customers contributing more than $10,000 in ARR rose to 9,119, compared to 8,111 the previous year. This growth in high-value customers indicates a strengthening market position.
Future Revenue Recognition
As of September 30, 2024, Sprout Social has $311.5 million of revenue expected to be recognized from remaining performance obligations, with 71% anticipated to be recognized within the next 12 months.
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Resources:
- Sprout Social, Inc. (SPT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Sprout Social, Inc. (SPT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Sprout Social, Inc. (SPT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.