Q1 2025 Sprout Social Inc Earnings Call and Business Update

May 8, 2025

25 earnings call.

Okay.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star. One again. Thank you I would now like to turn the call.

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Sure.

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Speaker Change: Over to Alex Kurtz, VP Investor Relations and corporate development. Please go ahead.

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Great.

Yes.

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Alex Kurtz: Thank you operator, and welcome to Sprouts Association first quarter 2025 earnings call.

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Yes.

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Alex Kurtz: We will be discussing the results announced in our press release issued after market closed today and have also released an updated investor presentation, which can be found on our website.

Okay.

Yes.

Speaker Change: With me are sprout, social CEO, Ryan Barretto, and CFO, Joe del Preto.

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Speaker Change: Today's call will contain forward looking statements, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.

Okay.

Yes.

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Speaker Change: All statements other than statements of historical fact are forward looking.

Okay.

Yes.

Speaker Change: These include among others statements concerning our expected future financial performance, including our Q2 in 2025 outlook and business plans and objectives and can be identified by words, such as expect anticipate intend plan believe seek opportunity or well.

Okay.

Speaker Change: These statements reflect our views as of today, only and should not be relied upon as representing our views at any subsequent date and we do not undertake any duty to update these statements.

Okay.

Speaker Change: Forward looking statements address matters that are subject to risks and uncertainties that could cause actual results to differ materially for.

[music].

Speaker Change: For a discussion of the risks and other important factors that could affect our actual results. Please refer to our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2025 to be filed with the SEC.

Speaker Change: As well as our most recently filed 10-K.

Yeah.

Speaker Change: During the call, we will discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

Yes.

[music].

Speaker Change: Definitions of these non-GAAP financial measures along with the reconciliations in the most directly comparable GAAP financial measures are included in our first quarter earnings release, which has been furnished to the SEC and is available on our website at investors <unk> sprout social dot com.

Ryan Barretto: With that let me turn the call over to Ryan Ryan.

Ryan Barretto: Thank you Alex and welcome to our first quarter earnings call for fiscal 2025.

Kate: Thank you for standing by my name is Kate and I will be your conference operator today at this time I would like to welcome everyone to the sprouts, social first quarter 'twenty 25 earnings call all.

Ryan Barretto: We reported first quarter results with revenue of $109 3 million representing year over year growth of 13% highlighted by strong revenue execution and operating margin expansion.

Current remaining performance obligations, which reached $255 8 million represented 21% year over year growth.

Ryan Barretto: Our go to market teams delivered another solid quarter with 22% growth in the 50 K.

Speaker Change: during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Alex Kurtz, VP Investor Relations and Corporate Development. Please go ahead.

Ryan Barretto: Our customer cohort.

Ryan Barretto: So lana and strategic wins with global brands like Palo Alto NASCAR Interscope Records Avis budget car rental and access bank.

Ryan Barretto: These customers demonstrate our continued execution and strategic fit with the most socially sophisticated enterprise customers.

Alex Kurtz: Thank you, operator, and welcome to Sprout Social's first quarter 2025 race call.

Ryan Barretto: We are expanding our sales capacity this year and will continue to throughout the first half of the year, which we believe will drive further momentum and our pipeline generation and enterprise coverage as we move into FY 2025, and beyond. We're also excited about the continued momentum in our Influencer marketing product, which has become increasing.

Alex Kurtz: We will be discussing the results announced in our press release issued after Mark and close today and have also released an updated investor presentation which can be found on our website.

Speaker Change: With me, our Sprout Social CEO , Ryan Barretto, and CFO Joe Delpertto.

Speaker Change: Today's call will contain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Security's litigation reform act of 1995. All statements other than statements of historical factor forward-looking.

Ryan Barretto: <unk> strategic to how we engage with their most socially sophisticated customers.

Ryan Barretto: I also wanted to provide a quick update on the macro environment and what we experienced during the quarter.

Speaker Change: These include, among others, statements concerning our expected future financial performance, including our Q2 and 2025 outlook, and business plans and objectives and can be identified by words such as, expect, anticipate, intend, plan, believe, seek, opportunity, or well.

Ryan Barretto: <unk> tracked as expected with the spending patterns similar to those seen in 2024.

Ryan Barretto: We continue to see elongated procurement and purchasing processes that were very similar to the prior year.

Ryan Barretto: While we expect these impacts to persist through the remainder of 2025, we are encouraged by the enterprise pipeline generation during the quarter and are seeing the early signs of the improved process and discipline that our new GTS leadership is bringing into the company.

Speaker Change: These statements reflect our views as of today only, and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements.

Speaker Change: Forward-looking statements address matters that are subject to risk uncertainties that could cause actual results to differ materially.

Speaker Change: Building on last quarter's discussion about spreads unique position in the social media management market I wanted to share how our products are enabling brand discovery in today's rapidly evolving digital landscape.

Speaker Change: For a discussion of the risks and other important factors that could affect our actual results, please refer to our quarterly report on Form 10Q for the fiscal quarter-ended March 31st, 2025 to be filed with the SEC, as well as our most recently filed 10K.

Speaker Change: Also provide updates on our four key growth drivers before handing the call over to Joe.

Speaker Change: A growing trend, we're seeing and hearing from our customers is the ongoing shift from traditional search engines social platforms for discovery.

Speaker Change: During the call, we will discuss non-GAAP financial measures which are not prepared in accordance with generally accepted accounting principles.

Speaker Change: Research from Forbes shows a 46% of Gen Z now prefers social media over conventional search behavior.

Speaker Change: Definitions of these non-GAAP financial measures, along with the reconciliations and the most directly comparable GAAP financial measures are included in our first quarter earnings release. This has been furnished to the SEC and is available on our website at investors.sproutsocial.com. With that, let me turn the call over to Ryan. Ryan?

Speaker Change: Behavior that signals, where brand engagement is headed and.

Speaker Change: And we believe this isn't a passing trend, but a fundamental rewiring of online behavior that will play out over the next several years.

Speaker Change: As the majority of searches now zero click with AI traditional content strategies faced headwinds as their traffic is changing in real time.

Ryan Barretto: Thank you, Alex, and welcome to our first quarter earnings call for fiscal 2025.

Speaker Change: So media is authenticity immediacy and community driven nature filled the gap operating business as strong ROI outcomes.

Ryan Barretto: We reported first quarter results with revenue of 109.3 million, representing year-over-year growth of 13%. Highlighted by strong revenue execution and operating margin expansion.

Speaker Change: Social platforms enable real time discovery and customer connections fostering trust and driving conversions.

Ryan Barretto: Our current remaining performance obligations, which reached 255.8 million, represented 21% year-over-year growth.

Speaker Change: Gnc's preference for social search provides critical directional data pointing to a future where brands must view their social presence as a top business priority.

Ryan Barretto: Our go-to-market team has delivered another solid quarter with 22% growth in the 50K to air our customer cohort.

Speaker Change: This shift to amplify the role of Influencer marketing, which is central to social search dynamics.

Ryan Barretto: We also landed strategic winds with global brands like Palo Alto, NASCAR, Interscope Records, Avis Budget Carrentle, and Axel Spank.

Speaker Change: Creators and Influencers shape discovery by delivering relatable content that resonates and algorithm driven feeds guiding consumers from periodically to purchase.

Ryan Barretto: These customers demonstrate our continued execution and strategic fit with the most socially sophisticated enterprise customers.

Speaker Change: Nearly 70% of consumers Trust Influencer recommendations over information from brands According to marketing drive.

Operator: into this Sprout Social first quarter 2025 or All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you.

Customer cohort.

We also landed strategic wins with global brands like Palo Alto NASCAR Interscope Records Avis budget car rental and Axis Bank.

Speaker Change: And Sprouts research shows just about half of consumers make purchases at least once a month because of influencer posts.

This past quarter, we announced the rebrand of our Influencer marketing platform, formerly Haggar media.

These customers demonstrate our continued execution and strategic fit with the most socially sophisticated enterprise customers.

Ryan Barretto: Also excited about the continued momentum in our Influencer marketing product, which has become increasingly strategic to how we engage with our most socially sophisticated customers.

Speaker Change: Social Influencer marketing. This product is designed to enable brands to turn creative strategies into a top driver a multiplier of ROI, which is crucial given the role Influencer marketing plays in the current digital landscape.

We are expanding our sales capacity this year and will continue to throughout the first half of the year, which we believe will drive further momentum and our pipeline generation and enterprise coverage as we move into FY 2025, and beyond. We're also excited about the continued momentum in our Influencer marketing product, which has become increasingly.

Alex Kurtz: I would now like to turn the call over to Alex Kurtz, VP, Investor Relations and Corporate Development. Please go ahead.

Ryan Barretto: I also wanted to provide a quick update on the macro environment and what we experienced during the quarter.

Ryan Barretto: <unk> tracked as expected with spending patterns similar to those seen in 2024.

Alex Kurtz: Thank you, operator, and welcome to Sprout Social's first quarter 2025. We will be discussing the results announced in our press release issued after market close today and have also released an updated investor presentation which can be found on our website.

Speaker Change: Mid April we launched significant enhancements to the product, including AI powered natural language discovery to enable marketers to identify creators through topic led search.

Ryan Barretto: We continued to see elongated procurement and purchasing processes that were very similar to the prior year.

<unk> strategic to how we engage with their most socially sophisticated customers.

Ryan Barretto: While we expect these impacts to persist through the remainder of 2025, we are encouraged by the enterprise pipeline generation during the quarter and are seeing early signs of the improved process and discipline that our new GTS leadership is bringing into the company.

Speaker Change: Customize more brand safety solution to better align creative partnerships with our brand's value and new creator vetting features that reduce the time spent in discovery some marketers can refocus on strategic creative tasks.

I also wanted to provide a quick update on the macro environment and what we experienced during the quarter.

Alex Kurtz: With me are Sprout Social's CEO Ryan Barretto and CFO Joe Today's call will contain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act that All statements other than statements of historical factor forward. These include, among others, statements concerning our expected future financial performance, Including our Q2 and 2025 Outlook and business plans and objectives and can be identified by words such as expect, anticipate, intend, plan, believe, seek, opportunity, or wish. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update the Forward-looking statements address matters that are subject to risk and uncertainty that could cause actual results to differ materially.

Q1 tracked as expected with the spending patterns similar to those seen in 2024 weeks.

We continue to see elongated procurement and purchasing processes that were very similar to the prior year.

Ryan Barretto: Building on last quarter's discussion about spreads unique position in the social media management market I wanted to share how our products are enabling brand discovery in today's rapidly evolving digital landscape.

Speaker Change: Our re imagine Influencer marketing product is grounded in AI and is designed to help brands finding the most valuable creators that fit their unique strategy faster and safer than ever before.

While we expect these impacts to persist through the remainder of 2025, we were encouraged by the enterprise pipeline generation during the quarter and are seeing the early signs of the improved process and discipline that our new GTS leadership is bringing into the company.

Ryan Barretto: Also provide updates on our four key growth drivers before handing the call over to Joe.

Speaker Change: We are excited about the opportunity this opens for brands to maximize their impact in today's increasingly social first ecosystem and we look forward to expanding on the success. Our customers are seeing from these updates next quarter equal.

Ryan Barretto: A growing trend, we're seeing and hearing from our customers is the ongoing shift from traditional search engines to social platforms for discovery.

Building on last quarter's discussion about sprouts unique position in the social media management market I wanted to share how our products are enabling brand discovery in today's rapidly evolving digital landscape.

Ryan Barretto: Research from Forbes shows a 46% of Gen Z now prefer social media over conventional search behavior.

Speaker Change: Equally critical social customer care as the rise of social search heightened the need for seamless integration of care strategies.

Also provide updates on our four key growth drivers before handing the call over to Joe.

Ryan Barretto: Behavior that signals, where brand engagement is headed and.

Speaker Change: Consumers turning to social platforms for discovery expected immediate personalized responses.

Ryan Barretto: And we believe this isn't a passing trend.

A growing trend, we're seeing and hearing from our customers is the ongoing shift from traditional search engines to social platforms for discovery.

Ryan Barretto: Fundamental rewiring of online behavior that will play out over the next several years.

Alex Kurtz: for discussion of the risks and other important factors that could affect our actual results.

Speaker Change: Sprouts updates to its customer care solutions, and our brands to meet customers, where they are with the goal of boosting satisfaction and retention.

Ryan Barretto: As the majority of searches now zero click with AI traditional content strategies faced headwinds as their traffic is changing in real time.

Research from Forbes shows a 46% of Gen Z now prefers social media over conventional search behavior.

Alex Kurtz: Please refer to our quarterly report on Form 10-Q for the fiscal quarter ended March 31st, 2025, to be followed with the FAQ. as well as our most recently filed.

Speaker Change: Our social search grows integrating robust care strategy is no longer optional it's essential for building trust and loyalty.

Behavior that signals, where brand engagement is headed and.

Ryan Barretto: Social media is authenticity immediacy and community driven nature filled the gap offering business is strong ROI outcomes.

And we believe this isn't a passing trend, but a fundamental rewiring of online behavior that will play out over the next several years.

Alex Kurtz: During the call, we will discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted... Definitions of these non-GAAP financial measures, along with the reconciliation... Directly Comparable Gap Financial Measures are included in our first quarter. has been furnished to the SEC and is available on our website at investors.sproutsocial.com.

Speaker Change: Innovations allow us to capitalize on the changes of an increasingly social driven world.

Ryan Barretto: Social platforms enable real time discovery and customer connections fostering trust and driving conversions.

As the majority of searches now zero click with AI traditional content strategies faced headwinds as their traffic is changing in real time.

Speaker Change: Power brands to reshape the future of the business delivering measurable value.

Ryan Barretto: Gen six preference for social search provides critical directional data pointing to a future where brands must view their social presence as a top business priority.

Speaker Change: As we dive into our growth drivers, you'll see how these advancements paired with our vision are fueling enterprise business and helping solidify our leadership in the market.

Total media its authenticity immediacy and community driven nature filled the gap offering businesses strong ROI outcomes.

Ryan Barretto: This shift to amplify the role of Influencer marketing, which is central to social search dynamics Cree.

Ryan Barretto: With that, let me turn the call over to Ryan. Thank you, Alex, and welcome to our first quarter earnings call for fiscal 2020. We reported first quarter results with revenue of $109.3 million, representing year-over-year growth of 13%. highlighted by strong revenue execution and operating margin. Our current remaining performance obligations, which reached $255.8 million, represented 21% year-over-year growth. Our go-to-market teams delivered another solid quarter with 22% growth in the 50K ARR customer cohort. We also landed strategic wins with global brands like Palo Alto, NASCAR, Interscope Records, Avis Budget Car Rental, and AXOS. These customers demonstrate our continued execution and strategic fit with the most socially sophisticated enterprise.

Speaker Change: Similar to the last few quarters I want to provide a quick update on our four key growth drivers for sprout that include number one when the enterprise number two customer health and adoption number three expand our partnership and ecosystem and number four drive improved account penetration and then I'll take a few minutes to provide some quick updates on each of these key focus.

Social platforms to enable real time discovery and customer connections fostering trust and driving conversions.

Ryan Barretto: Creators and Influencers shape discovery by delivering relatable content that resonates and algorithm driven feeds guiding consumers from curiosity to purchase near.

Gen six preference for social search provides critical directional data pointing to a future where our brands must view their social presence as a top business priority.

Ryan Barretto: Nearly 70% of consumers Trust Influencer recommendations over information from brands According to marketing drive.

This shifts amplifies the role of Influencer marketing, which is central to social search dynamics.

Speaker Change: Areas.

So when the enterprise, we intend to expand the pipeline closed more 50, K plus deals and accelerate adoption with our product roadmap built for enterprise needs.

Ryan Barretto: And Sprouts research shows just about half of consumers make purchases at least once a month because of influencer posts.

Creators and Influencers shaped discovery by delivering relatable content that resonates and algorithm driven feeds guiding consumers from curiosity to purchase.

Ryan Barretto: This past quarter, we announced the rebrand of our Influencer marketing platform, formerly CAGR media.

Speaker Change: Let's start with key product releases in the quarter.

Speaker Change: For AI, we released to generate post by AI has assessed that enables social media managers to leverage fresh content ideas through generates recommendations with a few clicks users can create a range of concepts to captivate their audience.

Nearly 70% of consumers Trust Influencer recommendations over information from brands According to marketing drive.

Ryan Barretto: Social Influencer marketing. This product is designed to enable brands to turn creator strategies into a top driver a multiplier of ROI, which is crucial given the role Influencer marketing plays in the current digital landscape.

And Sprouts research shows just about half of consumers make purchases at least once a month because of influencer posts.

Speaker Change: With convenient access from either the publishing calendar or compose window users are able to generate creative written content and there are unique brand voice to help drive productivity and inspiration for their social strategy.

This past quarter, we announced the rebranding of our Influencer marketing platform, formerly Haggar media.

Ryan Barretto: In mid April we launched significant enhancements to the product, including AI powered natural language discovery to enable marketers to identify creators through topic led search.

Ryan Barretto: We are expanding our sales capacity this year and will continue to throughout the first half of the year, which we believe will drive further momentum in our pipeline generation and enterprise coverage as we move into FY 2025 and beyond.

Social Influencer marketing. This product is designed to enable brands to turn creator strategies into a top driver a multiplier of ROI, which is crucial given the role Influencer marketing plays in the current digital landscape.

Speaker Change: For care, our latest innovations are built for brands managing high volume engagement at scale.

Ryan Barretto: Our customizable brand safety solution to better align creative partnerships with our brand's value and new creator vetting features that reduce the time spent in discovery some marketers can refocus on strategic creative tasks.

Speaker Change: During the quarter, we released our agent force integration to be generally available for service cloud and for our customers.

Ryan Barretto: We're also excited about the continued momentum in our influencer marketing product, which has become increasingly strategic to how we engage with our most socially sophisticated I also wanted to provide a quick update on the macro environment and what we experienced during the quarter. Q1 track is expected with spending patterns similar to those seen in 2020. We continue to see elongated procurement and purchasing processes that were very similar to the prior year. While we expect these impacts to persist through the remainder of 2025, we are encouraged by the enterprise pipeline generation during the quarter, and are seeing early signs of the improved process and discipline that our new GTM leadership is bringing to the table.

In mid April we launched significant enhancements to the product, including AI powered natural language discovery to enable marketers to identify creators through topic led search.

Speaker Change: With sprout and sales forces agent force brands can accelerate case resolution time with faster access to multichannel case insights.

Ryan Barretto: Our re imagine Influencer marketing product is grounded in AI and is designed to help brands find invest the most valuable creators that fit their unique strategy faster and safer than ever before.

Customizable brand safety solution to better align creative partnerships with our brand's value and new creator vetting features that reduce the time spent in discovery some marketers can refocus on strategic creative tasks.

Personalized customer responses through consolidated contact summaries and enhanced brand experience with customer insights across case in channels.

Ryan Barretto: We are excited about the opportunity this opens for brands to maximize their impact in today's increasingly social first ecosystem.

Speaker Change: We also released Linton Dms, which allows teams to apply to private messages sent to a linkedin business profile from spreads smart inbox or cases.

Our re imagine Influencer marketing product is grounded in AI and is designed to help brands find invert. The most valuable creators that fit their unique strategy faster and safer than ever before.

Ryan Barretto: And we look forward to expanding on the success our customers are seeing from these updates next quarter.

Speaker Change: By consolidating these messages in one place Karen community management teams can more efficiently engage with private inbound messages that can be sales leads customer support issues or job candidates.

Ryan Barretto: Holy critical social customer care as the rise of social search heightened the need for seamless integration of care strategies.

Speaker Change: We are excited about the opportunity this opens for brands to maximize their impact in today's increasingly social first ecosystem.

Ryan Barretto: Consumers turning to social platforms for discovery expected immediate personalized responses.

Ryan Barretto: Building on last quarter's discussion about Sprout's unique position in the social media management market, I want to share how our products are enabling brand discovery in today's rapidly evolving digital world. Also provide updates on our four key growth drivers before handing the call over to A growing trend we're seeing and hearing from our customers is the ongoing shift from traditional search engines to social platforms for discovery. Research from Forbes shows 46% of Gen Z now prefer social media over convention. A Behavior That Signals Where Brand Engagement And we believe this isn't a passing trend, but a fundamental rewiring of online behavior that will play out over the next several years.

Speaker Change: We're strengthening enterprise scalability security and compliance to help organizations manage complexity with confidence large distributed teams need consistency and control and we're excited about a new release during Q1 call to dynamic role sync, which is designed to provide customers with greater oversight of user permissions and access security.

Ryan Barretto: Sprouts updates to its customer care solutions, and our brands to meet customers, where they are with the goal of boosting satisfaction and retention.

Speaker Change: We look forward to expanding on the success our customers are seeing from these updates next quarter.

Speaker Change: Holy critical social customer care as the rise of social search heightened the need for seamless integration of care strategies.

Ryan Barretto: Our social search grows integrating robust care strategies is no longer optional it's essential for building trust and loyalty.

Speaker Change: Consumers turning to social platforms for discovery expect immediate personalized responses.

Ryan Barretto: These innovations allow us to capitalize on the changes of an increasingly social driven world and our power brands to reshape the future of the business delivering measurable value.

Speaker Change: <unk>.

Speaker Change: His teams grow to meet the demands of social brand safety continues to be top of mind for businesses and this releases designed to offer customers further confidence and ensuring the right team members have the proper access.

Alex Kurtz: Sprouts updates to its customer care solutions, and our brands to meet customers, where they are with the goal of boosting satisfaction and retention.

Ryan Barretto: As we dive into our growth drivers, you'll see how these advancements paired with our vision are fueling enterprise business and helping solidify our leadership in the market.

Alex Kurtz: Our social search grows integrating robust care strategy is no longer optional it's essential for building trust and loyalty.

Speaker Change: Finally, we are one of the first to market with a key accessibility feature where customers can now add or edit alt text on image posts on Instagram and Pinterest and sprout <unk>.

Alex Kurtz: These innovations allow us to capitalize on the changes of an increasingly social driven world.

Ryan Barretto: Similar to the last few quarters I want to provide a quick update on our four key growth drivers for sprout that include number one when the enterprise number two customer health and adoption number three expand our partnership ecosystem and number four drive improved account penetration and then I'll take a few minutes to provide some quick updates on each of these key focus.

Ryan Barretto: As the majority of search is now zero click with AI, traditional content strategies face headwinds as their traffic is changing in real time. Social media's authenticity, immediacy, and community-driven nature fill the gap, offering businesses strong ROI outputs. Social platforms enable real-time discovery and customer connections, fostering trust and driving conversion. Gen Z's preference for social search provides critical directional data pointing to a future where brands must view their social presence as a top business priority. This shift amplifies the role of influencer marketing, which is central to social search. Creators and influencers shape discovery by delivering relatable content that resonates in algorithm-driven feeds, guiding consumers from curiosity to pursuit.

Speaker Change: Including using AI assist to generate image description in one click.

Alex Kurtz: Power brands to reshape the future of the business delivering measurable value.

Speaker Change: All text as a simple, but powerful way to make social content more accessible to those globally with visual impairments.

Alex Kurtz: We dive into our growth drivers, you'll see how these advancements paired with our vision are fueling enterprise business and helping solidify our leadership in the market.

Speaker Change: It brings images to life for those using screen readers or other assistive tech and helps brands prioritize inclusivity, while reaching a broader audience.

Ryan Barretto: Areas.

Ryan Barretto: So when the enterprise, we intend to expand the pipeline closed more 50, K plus deals and accelerate adoption with a product roadmap built for enterprise needs.

Speaker Change: This is especially impactful for our customers and state and local government that will need to comply with the updated digital accessibility requirements from the 88 by April 2026.

Ryan Barretto: Let's start with key product releases in the quarter.

Ryan Barretto: For AI, we released to generate post by AI assessed that enables social media managers to leverage fresh content ideas through generates recommendations with a few clicks users can create a range of concepts to captivate their audience.

Speaker Change: I also want to spend a few minutes discussing some additional strategic enterprise wins in the quarter that you'll find in our earnings presentation.

Speaker Change: I'll take a few minutes to provide some quick updates on each of these key focus areas.

Speaker Change: So when the enterprise, we intend to expand the pipeline closed more 50, K plus deals and accelerate adoption with a product roadmap built for enterprise needs.

Speaker Change: This quarter, we closed a seven figure new business deal with a fortune 500 medical device manufacturer looking to take an enterprise approach to social and to consolidate their tech stack for publishing engagement analytics listening and Influencer marketing.

Ryan Barretto: With convenient access from either the publishing calendar or compose window users are able to generate creative written content and there are unique brand voice to help drive productivity and inspiration for their social strategy.

Speaker Change: Start with key product releases in the quarter.

Ryan Barretto: Nearly 70% of consumers trust influencer recommendations over information from brands according to marketing And Sprout's research shows just about half of consumers make purchases at least once a month because of influence.

Speaker Change: For AI, we released to generate post by AI assistant that enables social media managers to leverage fresh content ideas through generates recommendations with a few clicks users can create a range of concepts to captivate their audience.

Speaker Change: They chose <unk> for our ability to deploy quickly.

Speaker Change: Because of the access they get to our team of expert professional services, who can help enable a true enterprise strategy with stronger operations and increased visibility now.

Ryan Barretto: For care, our latest innovations are built for brands managing high volume engagement at scale.

Ryan Barretto: This past quarter, we announced the rebrand of our influencer marketing platform, formerly AgriMedia, to Sprout Social Influencer Marketing. This product is designed to enable brands to turn creator strategies into a top driver and multiplier of ROI, which is crucial given the role influencer marketing plays in the current digital landscape. In mid-April, we launched significant enhancements to the product, including AI-powered natural language discovery to enable marketers to identify creators through topic-led search. A customizable brand safety solution to better align creator partnerships with a brand's value. And new creator vetting features that reduce the time spent in discovery, so marketers can refocus on strategic, creative tasks.

Ryan Barretto: During the quarter, we released our agent force integration to be generally available for service cloud and for our customers with.

Speaker Change: Now instead of managing Siloed tech and multiple vendors there'll be able to manage their entire social strategy in sprout, which can enable faster time to value and a stronger ROI.

Ryan Barretto: With sprout and sales forces agent force brands can accelerate case resolution time with faster access to multichannel case insights.

Speaker Change: Another new business customer that closed in the quarter was with a fortune 500, food and beverage manufacturer.

Speaker Change: For care, our latest innovations are built for brands managing high volume engagement at scale.

Ryan Barretto: Personalized customer responses through consolidated contact summaries and enhanced brand experience with customer insights across case in channels.

This was another example of a company using multiple tools and seeking consolidation into one easy to use platform.

Ryan Barretto: During the quarter, we released our agent force integration to be generally available for service cloud and for our customers.

Ryan Barretto: We also released Linkedin, Dms, which allows teams to apply to private messages central Linkedin business profile from sprouts, smart inbox or cases.

Speaker Change: Ultimately wanted a solution where they can understand current customer trends pair them with their historical great products and amplify that content, while receiving immediate feedback on its performance.

Ryan Barretto: With sprout and sales forces agent force brands can accelerate case resolution time with faster access to multichannel case insights.

Ryan Barretto: By consolidating these messages in one place Karen community New management teams can more efficiently engage with private inbound messages that can be sales leads customer support issues or job candidates.

Ryan Barretto: Personalized customer responses through consolidated contact summaries and enhance brand experience with customer insights across case in channels.

Speaker Change: With sprouts, Theyre able to centralized marketing and customer support and one intuitive platform to monitor feedback traffic campaign success and engage with consumers in real time.

Ryan Barretto: We also released Linkedin, Dms, which allows teams to apply to private messages sent to a linkedin business profile from spread smart inbox or cases.

Ryan Barretto: A reimagined influencer marketing product is grounded in AI and is designed to help brands find and vet the most valuable creators that fit their unique strategy faster and safer than ever before. We are excited about the opportunity this opens for brands to maximize their impact in today's increasingly social first ecosystem. And we look forward to expanding on the success our customers are seeing from these updates.

Ryan Barretto: Strengthening enterprise scalability security and compliance to help organizations manage complexity with confidence large distributed teams need consistency and control and we're excited about a new release during Q1 call to dynamic role sync, which is designed to provide customers with greater oversight of user permissions and access security.

Speaker Change: We're also now going to be able to generate real time reports to identify trends leveraging that data to align with our product strategy and ultimately drive loyalty and repeat purchases.

Ryan Barretto: By consolidating these messages in one place caring community New management teams can more efficiently engage with private inbound messages that can be sales leads customer support issues or job candidates.

Speaker Change: The next customer story, we want to highlight is a 600 K expansion, when which highlights the growth opportunities within our existing customer base.

Ryan Barretto: We're strengthening enterprise scalability security and compliance to help organizations manage complexity with confidence large distributed teams need consistency and control and we're excited about a new release during Q1 called the dynamic role sync, which is designed to provide customers with greater oversight of user permissions and access security.

Ryan Barretto: As teams grow to meet the demands of social brand safety continues to be top of mind for businesses and this releases designed to offer customers further confidence and ensuring the right team members have the proper access.

Speaker Change: This fortune 500 restaurant chain was already managing their marketing care and experience through our platform and service cloud the integration of.

Ryan Barretto: Equally critical is social customer care, as the rise of social search heightens the need for seamless integration of care strategies. Consumers turning to social platforms for discovery expect immediate personalized Sprout's updates to its customer care solutions empower brands to meet customers where they are, with the goal of boosting satisfaction and retention. A social search grows, integrating robust care strategies is no longer optional. It's essential for building trust and loyalty. These innovations allow us to capitalize on the changes of an increasingly social driven world and empower brands to reshape the future of the business, delivering measurable value.

Speaker Change: Our expanded relationship was driven by their acute need to significantly increase the coverage of social profiles across 15000 locations now.

Ryan Barretto: Finally, we are one of the first to market with a key accessibility feature where customers can now add or edit alt text on image posts on Instagram, and pinterest and sprout, including using AI assessed to generate image description in one click <unk>.

Speaker Change: Now they can easily manage guest interactions and reviews across thousands of locations, helping ensure that messengers arent missed and that complaints are efficiently addressed. This is a great example of how critical socialists for the health of our customers brand and reputation and our ability to meet the needs of a large scale complex enterprise.

Ryan Barretto: U S.

Ryan Barretto: His teams grow to meet the demands of social brand safety continues to be top of mind for businesses and this releases designed to offer customers further confidence and ensuring the right team members have the proper access.

Ryan Barretto: All text as a simple, but powerful way to make social content more accessible to those globally with visual impairments.

Ryan Barretto: Finally, we are one of the first to market with a key accessibility feature where customers can now add or edit at textron image posts on Instagram, and pinterest and sprout, including using AI assessed to generate image description in one click all.

Ryan Barretto: It brings images to life for those using screen readers or other assistance Tac and helps brands prioritize inclusivity, while reaching a broader audience.

Speaker Change: <unk> globally.

Speaker Change: Our second growth driver is a sharper focus on customer health onboarding and adoption to maximize long term value.

Ryan Barretto: This is especially impactful for our customers and state and local government that will need to comply with the updated digital accessibility requirements from the 88 by April 2026.

Ryan Barretto: As we dive into our growth drivers, you'll see how these advancements, paired with our vision, are fueling enterprise business and helping solidify our leadership in the market. Similar to the last few quarters, I want to provide a quick update on our four key growth drivers for Sprout that include number one, win the enterprise, number two, customer health and adoption, number three, expand our partnership and ecosystem, and number four, drive improved account penetration. Then I'll take a few minutes to provide some quick updates on each of these key focuses. To win the enterprise, we intend to expand the pipeline, close more 50k plus deals, and accelerate adoption with a product roadmap built for enterprise.

Speaker Change: This quarter, we successfully implemented our new customer success platform that enhances our ability to score and assess customer health.

Ryan Barretto: All text as a simple, but powerful way to make social content more accessible to those globally with visual impairments it.

Speaker Change: With this improved visibility, we're better equipped to proactively identify both renewal risks and expansion opportunities. We also continued to strategically scale our customer success team by tailoring our approach based on customer segments.

Ryan Barretto: It brings images to life for those using screen readers or other assistance Tac and helps brands prioritize inclusivity, while reaching a broader audience.

Speaker Change: Just wanted to spend a few minutes discussing some additional strategic enterprise wins in the quarter that you'll find in our earnings presentation.

Speaker Change: SMB and mid market customers now benefit from stronger community resources and enhanced technical support while.

Ryan Barretto: I also want to spend a few minutes discussing some additional strategic enterprise wins in the quarter that you'll find in our earnings presentation.

Speaker Change: Our enterprise clients receive a higher touch experience through professional services.

Speaker Change: Chose <unk> for our ability to deploy quickly and because of the access they get to our team of expert professional services, who can help enable a true enterprise strategy with stronger operations and increased visibility.

Speaker Change: Driven insights and product usage signals move.

Ryan Barretto: This quarter, we closed a seven figure new business deal with a fortune 500 medical device manufacturer looking to take an enterprise approach to social and to consolidate their tech stack for publishing engagement analytics listening and Influencer marketing.

Speaker Change: Moving onto our third driver, we will continue to invest in our partnerships with strong local partners that bring stroke into strategic accounts and expand our reach into some of the largest digital marketing budgets.

Ryan Barretto: Let's start with key product releases and For AI, we released Generate Post by AI Assist that enables social media managers to leverage fresh content ideas through Generate's recommendations. With a few clicks, users can create a range of concepts to captivate their audience. With convenient access from either the Publishing Calendar or Compose window, users are able to generate creative written content in their unique brand voice to help drive productivity and inspiration for their social strategy.

Speaker Change: In the first quarter, we added new leaders in product partnerships and channels to lead and expand our efforts across salesforce AWS and beyond.

Joe: They chose <unk> for our ability to deploy quickly.

Ryan Barretto: Because of the access they get to our team of expert professional services, who can help enable a true enterprise strategy with stronger operations and increased visibility now.

Speaker Change: Another new business customer that closed in the quarter was with a fortune 500, food and beverage manufacturer.

Speaker Change: We also deepened our Salesforce alliance with a strong presence at the Sydney World Tour in February the flagship event for APAC customers.

Speaker Change: This was another example of a company using multiple tools and seeking consolidation into one easy to use platform.

Ryan Barretto: Now instead of managing Siloed tech and multiple vendors there'll be able to manage their entire social strategy in sprout, which can enable faster time to value and a stronger ROI.

Speaker Change: Spect us to ramp up activity on the partnership front in fiscal 2025, as we believe our social network technical integrations and go to market partnerships can be a long term acceleration to our business model.

Ryan Barretto: For CARE, our latest innovations are built for brands managing high volume engagement at During the quarter, we released our AgentForce integration to be generally available for Service Cloud Innsbruck. With Sprout and Salesforce's AgentForce, brands can accelerate case resolution time with faster access to multi-channel case Personalized customer responses through consolidated contact. an enhanced brand experience with customer insights across case We also released LinkedIn DMs, which allows teams to reply to private messages sent to a LinkedIn business profile from Sprout's smart inbox or By consolidating these messages in one place, care and community management teams can more efficiently engage with private inbound messages that could be sales leads, customer support issues, or job candidates.

Ryan Barretto: Another new business customer that closed in the quarter was with a fortune 500, food and beverage manufacturer.

Speaker Change: With sprouts, Theyre able the centralized marketing and customer support and one intuitive platform to monitor feedback track campaign success and engage with consumers in real time.

Speaker Change: A key focus in the next few quarters, we'll be working to build out our network of international resellers that can increase our access to more European based customers and overtime to replicate this in APAC.

Ryan Barretto: This was another example of a company using multiple tools and seeking consolidation into one easy to use platform.

Ryan Barretto: Ultimately wanted a solution where they can understand current customer trends pair them with their historical great products at amplify that content, while receiving immediate feedback on its performance.

Speaker Change: We're also now going to be able to generate real time reports to identify trends leveraging that data to align with our product strategy and ultimately drives loyalty and repeat purchases.

Speaker Change: Our fourth growth driver is deepening customer engagement through use case expansion and premium modules with our field teams seeking to drive greater value across both new and existing customers.

Speaker Change: With sprout, they're able the centralized marketing and customer support and one intuitive platform to monitor feedback track campaign success and engage with consumers in real time.

Speaker Change: The next customer story, we want to highlight is a 600 K expansion, when which highlights the growth opportunities within our existing customer base.

Speaker Change: We built on our momentum from Q4 by launching a multi product campaign in Q1 across our go to market teams multi product selling is now a core component of every sales rep compensation plan.

Ryan Barretto: We're also now going to be able to generate real time reports to identify trends leveraging that data to align with our product strategy and ultimately drive loyalty and repeat purchases.

Speaker Change: This fortune 500 restaurant chain was already managing their marketing care and experience through our platform and service cloud integration.

Speaker Change: Support this shift.

Speaker Change: Equipping our reps with a robust set of account based intense signals to help them identify high potential expansion opportunities and uncover untapped markets.

Speaker Change: Our expanded relationship was driven by their acute need to significantly increase the coverage of social profiles across 15000 locations now.

Ryan Barretto: The next customer story, we want to highlight is the 600 K expansion, when which highlights the growth opportunities within our existing customer base.

Ryan Barretto: We're strengthening enterprise scalability, security, and compliance to help organizations manage complexity with confidence. Large distributed teams need consistency and control, and we're excited about a new release during Q1 called Dynamic Role Setting. which is designed to provide customers with greater oversight of user permissions and access security. As teams grow to meet the demands of social, brand safety continues to be top of mind for businesses. And this release is designed to offer customers further confidence in ensuring the right team members have the proper Finally, we are one of the first to market with a key accessibility feature where customers can now add or edit alt text on image posts on Instagram and Pinterest in Sprout, including using AI assist to generate image description in one click.

Speaker Change: Now they can easily manage guest interactions and reviews across thousands of locations, helping ensure that messages aren't missed and that complaints are efficiently addressed. This is a great example of how critical socialists for the health of our customers brand and reputation and our ability to meet the needs of a large scale complex enterprise.

Speaker Change: Looking forward, we believe the strategic investments, we are making and robust customer care integrated AI powered solutions and Influencer marketing will help define this product category in a world where social is not just important but essential I'm excited about what's ahead and look forward to sharing more progress along the way.

Speaker Change: This fortune 500 restaurant chain was already managing their marketing care and experience through our platform and service cloud integration.

Ryan Barretto: Our expanded relationship was driven by their acute need to significantly increase their coverage of social profiles across 15000 locations now.

Speaker Change: That I will turn it over to Joe to run through the financials Joe.

Ryan Barretto: Now they can easily manage guest interactions and reviews across thousands of locations, helping ensure that messages aren't missed and that complaints are efficiently addressed. This is a great example of how critical socialist for the health of our customers brand and reputation and our ability to meet the needs of a large scale complex enterprise.

Speaker Change: Ization globally.

Speaker Change: Our second growth driver is a sharper focus on customer health onboarding and adoption to maximize long term value.

Joe: Thanks, Brian.

Joe: I'll now run through our financial results and guidance.

Joe: Our first quarter results were highlighted by a record quarterly non-GAAP operating margin of 11, 5%.

Speaker Change: This quarter, we successfully implemented our new customer success platform that enhances our ability to score and assess customer health.

Joe: Up over 500 basis points from the year ago period.

Speaker Change: With this improved visibility, we're better equipped to proactively identify both renewal risks and expansion opportunities.

We generated a record $19 5 million and non-GAAP free cash flow during the quarter.

Ryan Barretto: <unk> globally.

Ryan Barretto: Our second growth driver is a sharper focus on customer health onboarding and adoption to maximize long term value.

Speaker Change: We also continued to strategically scale, our customer success team by tailoring our approach based on customer segments.

Joe: $8 1 million from our non-GAAP free cash flow in <unk> 2020 for.

Ryan Barretto: All text is a simple but powerful way to make social content more accessible to those globally with the visual. It brings images to life for those using screen readers or other assistive tech and helps brands prioritize inclusivity while reaching a broader audience. This is especially impactful for our customers in state and local government that will need to comply with the updated digital accessibility requirements from the ADA by April 22nd.

Ryan Barretto: This quarter, we successfully implemented our new customer success platform that enhances our ability to score and assess customer health.

Joe: The increase of 72% on a year on year basis.

Speaker Change: SMB and mid market customers now benefit from stronger community resources and enhanced technical support while.

Joe: We remain committed to growing operating leverage on a fiscal year basis, and we'll continue to evaluate our ability to drive greater profitability as the year progresses.

Ryan Barretto: With this improved visibility, we're better equipped to proactively identify both renewal risks and expansion opportunities.

Speaker Change: Our enterprise clients receive a higher touch experience through professional services.

Speaker Change: Driven insights and product usage signals move.

Joe: On to a summary of the quarter.

Ryan Barretto: We also continued to strategically scale, our customer success team by tailoring our approach based on customer segments.

Joe: Total revenue for the first quarter was $109 3 million, representing 13% year over year growth.

Ryan Barretto: <unk> and mid market customers now benefit from stronger community resources and enhanced technical support.

Ryan Barretto: I also want to spend a few minutes discussing some additional strategic enterprise wins in the quarter that you'll find in our earnings This quarter, we closed a seven-figure new business deal with a Fortune 500 medical device manufacturer looking to take an enterprise approach to social and to consolidate their tech stack for publishing, engagement, analytics, listening, and influencer marketing. They chose Sprout for our ability to deploy. And because of the access they get to our team of expert professional services who can help enable a true enterprise strategy with stronger operations and increased visibility. Now, instead of managing siloed tech and multiple vendors, they'll be able to manage their entire social strategy in Sprout, which can enable faster time to value and a stronger ROI.

Joe: Subscription revenue was $108 7 million up 13% year over year.

Speaker Change: In the first quarter, we added new leaders in product partnerships and channels to lead and expand our efforts across salesforce AWS and beyond.

Ryan Barretto: Our enterprise clients receive a higher touch experience through professional services.

Joe: The number of customers contributing more than $10000 and <unk> grew 6% from a year ago.

Ryan Barretto: Driven insights and product usage signals move.

Joe: The number of customers contributing more than $50000 and <unk> grew 22% from a year ago.

Speaker Change: We also deepened our Salesforce alliance with a strong presence at the Sydney World Tour in February the flagship event for APAC customers.

Ryan Barretto: Moving onto our third driver, we will continue to invest in our partnerships with strong local partners that bring stroke into strategic accounts and expand our reach into some of the largest digital marketing budgets.

Joe: Q1, ACB <unk>.

Joe: 14961 up 16% year over year.

Ryan Barretto: In the first quarter, we added new leaders in product partnerships and channels to lead and expand our efforts across salesforce AWS and beyond.

Ryan Barretto: As Ryan discussed earlier, our strategy to drive ACB growth remains focused on shifting to higher enterprise mix.

Ryan Barretto: We also deepened our Salesforce alliance with a strong presence at the Sydney World Tour in February the flagship event for APAC customers.

Ryan Barretto: <unk> pre module attach rates, such as Influencer marketing and customer care.

<unk> totaled $362 million.

Ryan Barretto: Expect us to ramp up activity on the partnership front in fiscal 2025, as we believe our social network technical integrations and go to market partnerships can be a long term acceleration to our business model.

Ryan Barretto: Up to $351 5 million exiting Q4.

Ryan Barretto: Another new business customer that closed in the quarter was with a Fortune 500 food and beverage manufacturer.

Ryan Barretto: Up 24% year over year.

Speaker Change: Our fourth growth driver is deepening customer engagement through use case expansion and premium modules with our field team seeking to drive greater value across both new and existing customers.

Ryan Barretto: We expect our recognized 71% or $255 8 million of total <unk> as revenue over the next 12 months.

Ryan Barretto: This was another example of a company using multiple tools and seeking consolidation into one easy to use. They ultimately wanted a solution where they could understand current customer trends, pair them with their historical great products, and amplify that content while receiving immediate feedback.

Ryan Barretto: It keeps the focus in the next few quarters, we'll be working to build out our network of international resellers that can increase our access to more European based customers and overtime to replicate this in APAC.

Ryan Barretto: I'm, putting a <unk> growth rate of 21% year over year.

Ryan Barretto: non-GAAP operating income totaled $12 5 million, which is well ahead of the high end of our outlook.

Ryan Barretto: Our fourth growth driver is deepening customer engagement through use case expansion and premium modules with our field teams seeking to drive greater value across both new and existing customers with.

Ryan Barretto: This was up from 6.0 million a year ago.

Speaker Change: Port this shift we're equipping our reps with a robust set of account based intense signals to help them identify high potential expansion opportunities and uncover untapped markets.

Ryan Barretto: With Sprout, they're able to centralize marketing and customer support in one intuitive platform to monitor feedback, track campaign success, and engage with consumers in real We're also now going to be able to generate real-time reports to identify trends, leveraging that data to align with a product strategy, and ultimately drive loyalty and repeat The next customer story we want to highlight is a 600k expansion win, which highlights the growth opportunities within our existing customers. This fortune 500 restaurant chain was already managing their marketing care and experience through our platform and service cloud integration. Our expanded relationship was driven by their acute need to significantly increase their coverage of social profiles across 15,000 locations.

Ryan Barretto: So our non-GAAP operating margin of 11, 5%.

Ryan Barretto: A quarterly record for operating margin.

Ryan Barretto: We built on our momentum from Q4 by launching a multi product campaign in Q1 across our go to market teams multi product selling is now a core component of every sales rep compensation plan.

Ryan Barretto: We're pleased with our progress here demonstrates our focus on continued growth and our margin profile.

Ryan Barretto: Before moving onto guidance a few additional comments.

Ryan Barretto: Based on the latest data we gathered during Q1. It reflects the current macro environment expect us to continue to take a measured view and how we look at the business this fiscal year.

Ryan Barretto: To support this shift.

Ryan Barretto: Lifting our reps with a robust set of account based intense signals to help them identify high potential expansion opportunities and uncover untapped markets.

Ryan Barretto: As I mentioned earlier, we expect the demand environment to improve in fiscal year 2025.

Ryan Barretto: And what we experienced in fiscal year 2024.

Speaker Change: That I will turn it over to Joe to run through the financials Joe.

Ryan Barretto: Looking forward, we believe the strategic investments, we are making and robust customer care integrated AI powered solutions and Influencer marketing will help define this product category in a world where social is not just important but essential I'm excited about what's ahead and look forward to sharing more progress along the way.

Ryan Barretto: We are closely monitoring this dynamic spending environment impacted by tariffs and federal spending cuts.

Joe: Thanks, Brian.

Speaker Change: I'll now run through our financial results and guidance.

Ryan Barretto: Now onto guidance.

Speaker Change: Our first quarter results were highlighted by a record quarterly non-GAAP operating margin of 11, 5%.

Ryan Barretto: For the second quarter of fiscal 2025, we expect revenue in the range of $110 four to $111 2 million.

Speaker Change: Up over 500 basis points from the year ago period.

Ryan Barretto: Now they can easily manage guest interactions and reviews across thousands of locations, helping ensure that messages aren't missed and that complaints are efficiently addressed. This is a great example of how critical social is for the health of our customers brand and reputation, and our ability to meet the needs of a large scale, complex enterprise organization globally.

Ryan Barretto: We expect non-GAAP operating income in the range of $8 4 million to $9 4 million.

Ryan Barretto: That I will turn it over to Joe to run through the financials Joe.

Speaker Change: We generated a record $19 5 million in non-GAAP free cash flow during the quarter of $8 1 million from our non-GAAP free cash flow in <unk> 'twenty 'twenty four.

Ryan Barretto: The non-GAAP net income per share of <unk>.

Joe: Thanks, Brian.

Ryan Barretto: In 2014.

Speaker Change: I'll now run through our financial results and guidance.

16.

Ryan Barretto: This assumes approximately $58 8 million weighted average basic shares of common stock outstanding.

Ryan Barretto: First quarter results were highlighted by a record quarterly non-GAAP operating margin of 11, 5%.

Speaker Change: The increase of 72% on a year on year basis.

Speaker Change: We remain committed to growing operating leverage on a fiscal year basis, and we'll continue to evaluate our ability to drive greater profitability as the year progresses.

Ryan Barretto: For the full year 2025.

Ryan Barretto: Over 500 basis points from the year ago period.

Ryan Barretto: Or is there a guidance from the prior quarter and now expect revenue in the range of $448 9 million to $453 9 million.

Ryan Barretto: Our second growth driver is a sharper focus on customer health, onboarding and adoption to maximize long term value. This quarter, we successfully implemented a new customer success platform that enhances our ability to score and assess customer With this improved visibility, we're better equipped to proactively identify both renewal risks and expansion opportunities. We also continue to strategically scale our customer success team by tailoring our approach based on customer SMB and mid market customers now benefit from stronger community resources and enhanced technical While our enterprise clients receive a higher touch experience through professional services, AI driven insights and product usage.

Ryan Barretto: We generated a record $19 5 million.

Ryan Barretto: non-GAAP free cash flow during the quarter.

Speaker Change: Onto a summary of the quarter.

Ryan Barretto: $8 1 million from our non-GAAP free cash flow in <unk> 'twenty 'twenty four.

Speaker Change: Total revenue for the first quarter was $109 3 million, representing 13% year over year growth.

Ryan Barretto: We also are raising our non-GAAP operating income guidance expected to be in the range of $40 7 million to $45 7 million.

Ryan Barretto: The increase of 72% on a year on year basis.

Speaker Change: Subscription revenue was $108 7 million up 13% year over year.

Ryan Barretto: We now expect non-GAAP net income per share between <unk> 69 and 77.

Ryan Barretto: We remain committed to growing operating leverage on a fiscal year basis, and we'll continue to evaluate our ability to drive greater profitability as the year progresses.

Ryan Barretto: Assuming approximately $59 1 million weighted average basic shares of common stock outstanding.

Speaker Change: A number of customers contributing more than $10000 and error grew 6% from a year ago.

Ryan Barretto: Onto a summary of the quarter.

Ryan Barretto: We look forward to continuing to innovate and create more opportunities for our customers to grow with us.

Ryan Barretto: Total revenue for the first quarter was $109 3 million, representing 13% year over year growth.

Speaker Change: The number of customers contributing more than $50000 and <unk> grew 22% from a year ago.

Speaker Change: We appreciate your interest in sprouts, social with that Ryan Alex and I are happy to take any of your questions operator.

Speaker Change: Q1 ACB.

Ryan Barretto: Subscription revenue was $108 7 million up 13% year over year.

Speaker Change: 14961 up 16% year over year.

Ryan Barretto: A number of customers contributing more than $10000 and <unk> grew 6% from a year ago.

Speaker Change: Ryan discussed earlier, our strategy to drive ACB growth remains focused on shifting to higher enterprise mix and strengthening premium module attach rates, such as influencer marketing and customer care.

Speaker Change: At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad, we request that you limit yourself to one question, but a little pause for just a moment to compile the Q&A roster.

Ryan Barretto: Moving on to our third driver, we will continue to invest in our partnerships with strong global partners that bring Sprout into strategic accounts and expand our reach into some of the largest digital marketing In the first quarter, we added new leaders and product partnerships and channels to lead and expand our efforts across Salesforce, AWS and beyond. We also deepen our Salesforce Alliance with a strong presence at the Sydney World Tour in February, the flagship event for APAC. Expect us to ramp up activity on the partnership front in fiscal 2025, as we believe our social network, technical integrations, and go-to-market partnerships can be a long-term acceleration to our business.

Ryan Barretto: The number of customers contributing more than $50000 and <unk> <unk>.

Ryan Barretto: One 2% from a year ago.

Speaker Change: <unk> totaled $360 2 million up.

Ryan Barretto: Q1, ACB <unk>.

Ryan Barretto: 14961 up 16% year over year.

Speaker Change: Your first question comes from the line of Frank Mill ratio with Barclays. Your line is open.

Speaker Change: $351 5 million exiting Q4.

Speaker Change: Up 24% year over year.

Ryan Barretto: As Ryan discussed earlier, our strategy to drive ACB growth remains focused on shifting to higher enterprise mix.

Speaker Change: Perfect. Thank you congrats on a great start.

Speaker Change: We expect to recognize 71% or $255 8 million of total <unk> as revenue over the next 12 months.

Speaker Change: Okay.

Speaker Change: And Brian you mentioned some interesting.

Ryan Barretto: <unk> premium module attach rates, such as Influencer marketing and customer care.

Speaker Change: Enterprise wins.

Speaker Change: Compounding of CRP or growth rate of 21% year over year.

Speaker Change: Can you talk a little bit of what you're seeing there more in the early stages of the pipeline like obviously, it's volatile.

Ryan Barretto: <unk> totaled $362 million.

Speaker Change: non-GAAP operating income totaled $12 5 million, which is well ahead of the high end of our outlook.

Ryan Barretto: Up to $351 $5 million exiting Q4.

Alterra, but like.

Speaker Change: It still sounds very interesting that enterprises are continuing to do some work. There can you just kind of go a little bit deeper in terms of what youre seeing in the field there.

Ryan Barretto: Up 24% year over year.

Speaker Change: This was up from 6.0 million a year ago.

Ryan Barretto: We expect to recognize 71% or $255 8 million of total <unk> as revenue over the next 12 months.

Speaker Change: Wait to a non-GAAP operating margin of 11, 5%.

Ryan Barretto: A key focus in the next few quarters will be working to build out our network of international resellers that can increase our access to more European based customers, and over time to replicate this Our fourth growth driver is deepening customer engagement through use case expansion and premium modules, with our field team seeking to drive greater value across both new and existing We built on our momentum from Q4 by launching a multi-product campaign in Q1 across our go-to-market Multiproduct selling is now a core component of every sales reps company.

Speaker Change: Especially on the high end of the customer base. Thank you.

Speaker Change: <unk> record for operating margin.

Ryan Barretto: We're planning a <unk> growth rate of 21% year over year.

Speaker Change: We're pleased with our progress here demonstrates our focus on continued growth and our margin profile.

Speaker Change: Thanks, very much I appreciate the question.

Ryan Barretto: non-GAAP operating income totaled $12 5 million.

Speaker Change: Yes, we had some great wins in the quarter across the board I think one of the things. That's most interesting to US here is just the wide variety of industry verticals you see even in the Fortune 500, you've got med device, you've got restaurant chains, you've got food and Bev.

Speaker Change: Before moving onto guidance a few additional comments.

Ryan Barretto: Which is well ahead of the high end of our outlook.

Speaker Change: Based on our latest data we gathered during Q1 reflects the current macro environment expect us to continue to take a measured view and how we look at the business this fiscal year.

Ryan Barretto: This was up from 6.0 million a year ago.

Ryan Barretto: Equates to a non-GAAP operating margin of 11, 5%.

Ryan Barretto: Quarterly record for operating margin.

Speaker Change: As I mentioned earlier, we do not expect the demand environment to improve in fiscal year 2025.

Ryan Barretto: We're pleased with our progress here demonstrates our focus on continued growth and our margin profile.

Speaker Change: From a pipeline perspective, we have seen some some really healthy things from our enterprise team during the quarter.

Speaker Change: And what we experienced in fiscal year 2024.

Speaker Change: Before moving onto guidance a few additional comments.

Speaker Change: And we are closely monitoring this dynamic spending environment impacted by tariffs and federal spending cuts.

Speaker Change: A lot of credit to the team in terms of just the execution in the market right now in the conversations that we're having I think that's really comes down to where our customers' customers are and more and more of their on social right. We're seeing customers on social two and a half hours a day and there is a ton of gravity for these <unk>.

Ryan Barretto: To support this shift, we're equipping our reps with a robust set of account-based intent signals to help them identify high-potential expansion opportunities and uncover untapped For more information visit www.fema.gov Looking forward, we believe the strategic investments we're making in robust customer care, integrated AI powered solutions, and influencer marketing will help define this product category in a world where social is not just important, but essential. I'm excited about what's ahead and look forward to sharing more progress along the way.

Speaker Change: Now onto guidance.

Speaker Change: For the second quarter of fiscal 2025, we expect revenue in the range of $110 four to $111 2 million.

Speaker Change: As I mentioned earlier, we do not expect the demand environment to improve in fiscal year 2025.

Speaker Change: We expect non-GAAP operating income in the range of $8 4 million to $9 4 million.

Speaker Change: And what we experienced in fiscal year 2024.

Speaker Change: We're closely monitoring this dynamic spending environment impacted by tariffs and federal spending cuts.

Speaker Change: We expect a non-GAAP net income per share of.

Speaker Change: Prize customers manage them there they need a platform like sprout to be able to engage with them and thats from a marketing perspective of care perspective and analytics perspective.

Speaker Change: Between 2014.

Speaker Change: 16.

Speaker Change: Now onto guidance.

Speaker Change: This assumes approximately $58 8 million weighted average basic shares of common stock outstanding.

Speaker Change: For the second quarter of fiscal 2025, we expect revenue in the range of $110 four to $111 2 million.

So these are all the types of things that we're solving for customers today and.

Joe: And with that, I'll turn it over to Joe to run through the financials. Joe? Thanks, Ryan. I'll now run through our financial results and guidance. Our first quarter results were highlighted by a record quarterly non-gap operating margin of 11.5%. up over 500 basis points from the year ago. We generate a record $19.5 million in non-gap free cash flow during the quarter, up $8.1 million from our non-gap free cash flow in 1Q 2024, an increase of 72% on a year-on-year basis.

Speaker Change: For the full year 2025.

Speaker Change: We expect non-GAAP operating income in the range of $8 4 million to $9 4 million.

Speaker Change: Is there a guidance from the prior quarter and now expect revenue in the range of $448 9 million to $453 9 million.

Speaker Change: The team is finding themselves in more opportunities than before at a larger scale. So really good progress on the pipeline creation.

Speaker Change: The non-GAAP net income per share.

Speaker Change: Between 2014.

Speaker Change: Also raising our non-GAAP operating income guidance expected to be in the range of $40 7 million to $45 $7 million we.

Yeah.

Speaker Change: 16.

Speaker Change: Your next question comes from the line of Rob Oliver with Baird. Your line is open.

Speaker Change: This assumes approximately $58 8 million weighted average basic shares of common stock outstanding.

Speaker Change: Great.

Speaker Change: We now expect non-GAAP net income per share between <unk> 69 and 77.

Rob Oliver: Thanks, I appreciate it guys.

Speaker Change: For the full year 2025.

Speaker Change: All we're trying to squeeze a two parter and if I can.

Speaker Change: Is there a guidance from the prior quarter and now expect revenue in the range of $448 9 million to $453 9 million.

Speaker Change: Assuming approximately $59 1 million weighted average basic shares of common stock outstanding.

Ryan: Ryan for you just.

Speaker Change: I guess, an extension of Ramos question.

Speaker Change: He can comment a little bit more on the pipeline for enterprise for this year and I know you've spent some time.

Speaker Change: We look forward to continuing to innovate and create more opportunities for our customers to grow with us.

Speaker Change: Also raising our non-GAAP operating income guidance expected to be in the range of $40 7 million to $45 7 million.

Speaker Change: With Mike tried to make sure you guys identify kind of that ideal customer profile as you've called it and I'd be curious what the progress you guys are making to make sure you're maximizing your higher touch touch points.

Speaker Change: We appreciate your interest in sprouts, social and with that Brian Alex and I are happy to take any of your questions operator.

Joe: We remain committed to growing operating leverage on a fiscal year basis and will continue to evaluate our ability to drive greater profitability as the year progresses. I'll do a summary of the Total revenue for the first quarter was $109.3 million, representing 13% year-over-year growth. Subscription revenue was $108.7 million, up 13% year-over-year. A number of customers contributing more than $10,000 in ARR grew 6% from a year ago. The number of customers contributing more than $50,000 in ARR grew 22% from a year ago. Q1 ACV, 14,961, up 16% year over year. As Ryan discussed earlier, our strategy to drive ACB growth remains focused on shifting to a higher enterprise mix.

Speaker Change: Now expect non-GAAP net income per share between <unk> 69 and 77.

Speaker Change: Assuming approximately $59 1 million weighted average basic shares of common stock outstanding.

Speaker Change: At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad, we request that you limit yourself to one question, we will pause for just a moment to compile the Q&A roster.

Speaker Change: Your prize.

Speaker Change: Yes, that's too thanks, guys appreciate it.

Speaker Change: We look forward to continuing to innovate and create more opportunities for our customers to grow with us.

Speaker Change: Yeah, Thanks, Rob Yeah, Mike and the team had been doing a really nice job. There I mean, one of the biggest things that we're really focused in on and you mentioned it in the question is just ideal customer profile and so one of the benefits for US as you know with nearly 30000 customers across so many industries and verticals, we get a really good sense of where our opportunities.

Speaker Change: We appreciate your interest in sprouts, social with that Ryan Alex and I are happy to take any of your questions operator.

Speaker Change: Your first question comes from the line of Raimo <unk> with Barclays. Your line is open.

Speaker Change: At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad, we request that you limit yourself to one question with a little pause for just a moment to compile the Q&A roster.

Speaker Change: Perfect. Thank you and congrats on a great start.

Speaker Change: Okay.

Brian: And Brian you mentioned some interesting.

Speaker Change: Exist and then on top of that.

Speaker Change: Enterprise wins.

Speaker Change: Can you talk a little bit of what you're seeing there more in the early stages of the pipeline like obviously, it's volatile.

Speaker Change: Our customers are also so we get really good signal and the things that they're doing right. We also as you all know we lead with the product in a trial so when prospects come in even before they sign a contract and they're in our trial, we get a really good sense of how they're leveraging social and we get really good data and analytics that the team can use to make sure.

Speaker Change: Your first question comes from the line of Frank Mill ratio with Barclays. Your line is open.

Speaker Change: Alterra, but like.

Speaker Change: Perfect. Thank you congrats on a great start.

Joe: in strengthening pre-module test rates, such as influencer marketing and customer. RPO totaled $360.2 million. from $351.5 million, editing Q4. 24% year-over-year. We expect to recognize 71% or $255.8 million of total RPO as revenue over the next 12 months. applying a CRPO growth rate of 21% year-over-year. The non-gap operating income totaled $12.5 million, which is well ahead of the high end of our outlook. This was up from 6.0 million a year ago. equates to a non-gap operating margin of 11.5%. A quarterly record for operating...

Speaker Change: Okay.

Speaker Change: And Brian you mentioned some interesting.

Speaker Change: Especially on the high end of the customer base. Thank you.

Speaker Change: Enterprise wins.

Speaker Change: Can you talk a little bit of what you're seeing there more in the early stages of the pipeline like obviously, it's volatile.

Speaker Change: We're engaging in the right places, we're ensuring that they're using the product in the right places and that we're solving the biggest problems I think from an enterprise perspective, as you might imagine customer care matters, a ton to them yes.

Speaker Change: Thanks, very much I appreciate the question.

Speaker Change: Yes, we had some great wins in the quarter across the board I think one of the things. That's most interesting to US here is just the wide variety of industry verticals, you see right even in the Fortune 500, you've got med device, you've got restaurant chains, you've got food and Bev.

Speaker Change: Alterra, but like.

Speaker Change: Not on social in front of your customers, it's really reputation roulette and these customers care deeply about making sure that they're all over it so but those are some of the highlights for the team and where they are spending time with the enterprise.

Speaker Change: Especially on the high end of the customer base. Thank you.

Speaker Change: From a pipeline perspective, we have seen some some really healthy things from our enterprise team during the quarter.

Speaker Change: Thanks, very much I appreciate the question.

Speaker Change: A lot of credit to the team in terms of just the execution in the market right now in the conversations that we're having I think it's really comes down to where our customers' customers are and more and more of their on social right. We're seeing customers on social two and a half hours a day and there's a ton of gravity for these.

Speaker Change: Your next question.

Speaker Change: Your next question comes from the line of Elizabeth Order with Morgan Stanley. Your line is open.

Joe: Please note that our progress here demonstrates our focus on continued growth and our margin profile.

Elizabeth Order: Great. Thank you very much I wanted to follow up on your comments just about a really strong pipeline heading into the year.

Speaker Change: From a pipeline perspective, we have seen some some really healthy things from our enterprise team during the quarter.

Joe: Before moving on to guidance, a few Based on the latest data we gathered during Q1, it reflects our current macro environment. I'd like to continue to take a measured view on how we look at the business this fiscal year. As I mentioned earlier, we do not expect the demand environment to improve in fiscal year 2025. and what we experienced in fiscal year 2020. We are closely monitoring the dynamic spending environment impacted by tariffs and federal spending. I want to get The second quarter of fiscal 2025, we expect revenue in the range of $110.4 to $111.2 million.

Speaker Change: Could you just give us some more context for some of the pipeline coverage ratios that you're including for 2025 kind of where you may be today versus prior periods and how that gives you comfort to be able to move through a potentially more difficult macro although I recognize we're not seeing any impact yet today. Thank you.

Speaker Change: As customers manage them there they need a platform like sprout to be able to engage with them and thats from a marketing perspective of care perspective and analytics perspective.

Speaker Change: So these are all the types of things that we're solving for customers today and the team is finding themselves in more opportunities than before at a larger scale. So it's just really good progress on the pipeline creation.

Elizabeth Order: Yeah I appreciate the question.

Elizabeth Order: We feel we feel good about the coverage that we've had here.

Rob Oliver: Your next question comes from the line of Rob Oliver with Baird. Your line is open.

Elizabeth Order: Similar to some of my comments just before the team is doing a really good job in terms of pipeline hygiene and we're seeing really great effort in terms of creation from the top of the funnel as you might imagine we're paying very close attention to all of the metrics with Pi creation and pipe velocity.

Joe: We expect non-gap operating income in the range of $8.4 million to $9.4 million. We expect a non-gap net income per share. between $0.14 and $0.06. This assumes approximately 58.8 million weighted average basic shares of common stock outs. for the full year 2020.

Speaker Change: Great.

Speaker Change: So these are all the types of things that we're solving for customers today and.

Rob Oliver: Thanks, I appreciate it guys.

Speaker Change: I will try to squeeze a two parter and if I can.

Speaker Change: The team is finding themselves in more opportunities than before at a larger scale. So really good progress on the pipeline creation.

Ryan Barretto: Ryan for you just.

Speaker Change: I guess as an extension of Ramos question.

Speaker Change: You can comment a little bit more on the pipeline for enterprise for this year and I know you've spent some time.

Speaker Change: Your next question comes from the line of Rob Oliver with Baird. Your line is open.

Elizabeth Order: Certainly like all of us paying very close attention to the things that are happening in the macro currently not seeing any anything material in terms of changes, but paying a lot of attention there.

Speaker Change: With Mike tried to make sure you guys identify kind of that ideal customer profile as you've called it and I'd be curious what progress you guys are making to make sure you're maximizing your higher touch touch points.

Joe: We're raising our guidance from the prior quarter and now expecting revenue in the range of $448.9 million to $453.9 million. We're also raising our non-GAAP operating income guidance, expected to be in the range of $40.7 million to $45.7 million. We now expect non-getting an income per share between $0.69 and $0.77. This would be approximately 59.1 million weighted average basic shares of Common Snack.

Speaker Change: Great.

Rob Oliver: Thanks, I appreciate it guys.

Speaker Change: I'll try to squeeze a two parter and if I can.

Speaker Change: Ryan for you just.

Speaker Change: I guess, an extension of Ramos question.

Elizabeth Order: Your next question comes from the line of David Hynes with Canaccord Genuity. Your line is open.

Speaker Change: The prize.

Speaker Change: Yes, that's too thanks, guys I appreciate it.

Speaker Change: I can comment a little bit more on the pipeline for enterprise for this year and I know you've spent some time.

David Hynes: Hey, guys.

Speaker Change: Yeah, Thanks, Rob, Yes, Mike and the team have been doing a really nice job. There I mean, one of the biggest things that we're really focused in on and you mentioned it in the question is just ideal customer profile and so one of the benefits for US as you know with nearly 30000 customers across so many industries and verticals, we've got a really good sense of where our opportunities.

Speaker Change: For Joe.

Speaker Change: Joe I'm getting 6% <unk> based bookings growth is that a decent proxy for enterprise bookings growth.

Speaker Change: And if not what's missing and then the second question is what are you seeing from a gross retention standpoint, and that 10% to 50 K cohort.

Joe: We look forward to continuing to innovate and create more opportunities for our customers to grow.

Speaker Change: Prize.

Speaker Change: Yes, that's too thanks, guys appreciate it.

Alex Kurtz: We appreciate your interest in Sprout Social. And with that, Ryan, Alex, and I are happy to take any of your questions.

Speaker Change: Yeah. Thanks for the question as D. J when we look at <unk> I think there's a couple of things that we've talked about before and I think overall we were pleased.

Speaker Change: Exist and then on top of that.

Speaker Change: Yeah, Thanks, Rob Yeah, Mike and the team have been doing a really nice job. There I mean, one of the biggest things that we're really focused in on and you mentioned it in the question is just ideal customer profile and so one of the benefits for US as you know with nearly 30000 customers across so many industries and verticals, we've got a really good sense of where our opportunities.

Speaker Change: Our customers are also so we get really good signal and the things that they're doing right.

Operator: Operator? At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. We request that you limit yourself to one question.

Speaker Change: The growth of over 21% growth in CRE.

Speaker Change: We also as you all know we lead with the product in a trial so when prospects come in even before they sign a contract and they're in our trial, we get a really good sense of how they're leveraging social and we get really good data and analytics that the team can use to make sure that we're we're engaging in the right places we're ensuring that they are using the product in the right places.

Speaker Change: In the quarter I think theres, two things that always skew that number as we've talked about before number one.

Speaker Change: Got the seasonality from Q4 to Q1 Q4 is always going to be really strong when it comes to <unk> and then that's going to kind of burn off.

Operator: We will pause for just a moment to compile the Q&A rest .

Speaker Change: Exist and then on top of that.

Raimo Lenschow: Your first question comes from the line of Raimo Lenschow with Barclays, your line is open. Perfect. Thank you, Congress, on a great start. Ryan, you mentioned some interesting enterprise wins. Can you talk a little bit about what you're seeing there more in the early stages of the pipeline? Like, obviously, it's volatile out there, but, like, you know, it still sounds very interesting that enterprises continue to do some work there. Can you just kind of go a little bit deeper in terms of what you're seeing in the field there, especially on the high end of the customer base?

Speaker Change: In Q1, and always be a little bit impacted by that seasonality and then number two is we still have the month to month.

Speaker Change: And that we're solving the biggest problems I think from an enterprise perspective, as you might imagine customer care matters, a ton to them yes.

Speaker Change: Aspect of our business and so that kind of we've talked about this over the longer term the CRP a growth number is going to be.

Speaker Change: Not on social in front of your customers, it's really reputation roulette and these customers care deeply about making sure that they're all over it. So those are some of the highlights for the team and where they are spending time with the enterprise.

Speaker Change: You have a real good indicator, but we're still at a point, where we're still going to converge on that with revenue over time.

Speaker Change: We're engaging in the right places, we're ensuring that they are using the product in the right places and that that we're solving the biggest problems I think from an enterprise perspective, as you might imagine customer care matters a ton to them.

Speaker Change: With the gross retention side, we continued to see really strong gross retention in the quarter was up again quarter over quarter and I think for us. It's a really strong indication of how mission critical our software to our customers and so continue to see improvement on the gross attention not just in the enterprise I would say across our customer base, even down in the SMB we're seeing.

Speaker Change: Your next question.

Speaker Change: Your next question comes from the line of Elizabeth quarter with Morgan Stanley. Your line is open.

Ryan Barretto: Thank you.

Speaker Change: On social in front of your customers, it's really reputation roulette and these customers care deeply about making sure that they're all over it. So those are some of the highlights for the team and where they are spending time with the enterprise.

Ryan Barretto: Thanks, Raimo, appreciate the question. Yeah, we had some great wins in the quarter across the board. I think one of the things that's most interesting to us here is just the wide variety of industry and verticals you see, right? Even in the Fortune 500, you've got MedDevice, you've got restaurant chains, you've got Food & Bev. From a pipeline perspective, we've seen some really healthy things from our enterprise team during the quarter. You know, a lot of credit to the team in terms of just the execution in the market right now and the conversations that we're having.

Speaker Change: Great. Thank you very much I wanted to follow up on your comments just about a really strong pipeline heading into the year. So could you just give us some more context for some of the pipeline coverage ratios that you're including for 2025 kind of where you may be today versus prior periods and how that gives you comfort to be able to move through it.

Speaker Change: <unk> strong gross retention there.

Speaker Change: Okay. Thank you next question please.

Speaker Change: Okay.

Speaker Change: Your next question.

Speaker Change: Your next question comes from the line of Adam Hotchkiss with Goldman Sachs. Your line is open.

Speaker Change: Your next question comes from the line of Elizabeth Order with Morgan Stanley. Your line is open.

Speaker Change: Hey, guys. This is grace and scope on for Adam. Thanks for taking the question I wanted to touch on profitability quickly pretty nicely in the quarter, there as well as a nice raise for the full year guide.

Speaker Change: Tend to lead more difficult macro although I recognize we're not seeing any impact yet today. Thank you.

Speaker Change: Yeah I appreciate the question.

Speaker Change: Could just talk a little bit about what drove that beat.

Speaker Change: Yeah, we feel we feel good about the coverage that we've had here.

Ryan Barretto: I think this really comes down to where our customers' customers are. And more and more, they're on social, right? We're seeing customers on social two and a half hours a day. And there's a ton of gravity for these enterprise customers to manage in there. They need a platform like Sprout to be able to engage with them. And that's from a marketing perspective, a care perspective, an analytics perspective. So these are all the types of things that we're solving for customers today. And, you know, the team is finding themselves in more opportunities than before at a larger scale.

Speaker Change: And if theres any sort of changes or impacts to the full year investment philosophy. Following the outperformance in the quarter. Thank you.

Speaker Change: Similar to some of my comments just before the team is doing a really good job in terms of pipeline hygiene and we're seeing really great effort in terms of creation from the top of the funnel as you might imagine we're paying very close attention to all of the metrics with Pi creation and pipe velocity.

Speaker Change: Yeah. Thanks for the question as far as what drove the beta a couple of things one the revenue over performance.

Speaker Change: Tend to lead more difficult macro although I recognize we're not seeing any impact yet today. Thank you.

Speaker Change: One of the key areas. The other one is some of the hiring that we had in the quarter was more backend loaded in the quarter.

Speaker Change: Yeah I appreciate the question.

Speaker Change: We feel we feel good about the coverage that we've had here.

Speaker Change: Certainly like all of us paying very close attention to the things that are happening in the macro currently not seeing any anything material in terms of changes, but paying a lot of attention there.

Speaker Change: And so that definitely benefited us, but what I will say overall when you look at the full year guide, we're really trying to make sure we're still maintaining some flexibility to adjust for any kind of unknown risks throughout the year.

Ryan Barretto: So just really good progress on the pipeline creation.

Speaker Change: But what I would say is very similar to Q1, if we continue to outperform on the topline youll definitely see more leverage in the business throughout the year.

Speaker Change: Your next question comes from the line of David Hynes with Canaccord Genuity. Your line is open.

Rob Oliver: Your next question comes from the line of Rob Oliver with Baird, your line is open. Great. Thanks. I appreciate it, guys.

David Hynes: Hey, guys.

Speaker Change: Okay.

Speaker Change: For Joe.

Rob Oliver: I'll try to squeeze a two-parter in if I can. Ryan, for you, just I guess an extension of Raimo's question, if you can comment a little bit more on the pipeline for enterprise for this year. And I know you've spent some time with Mike trying to make sure you guys identify kind of that ideal customer profile, as you've called it. And I'd be curious what progress you guys are making to make sure you're maximizing your higher touch points at enterprise. Yeah, that's two. Thanks, guys. Appreciate it.

Speaker Change: Joe I'm getting 6% <unk> based bookings growth is that a decent proxy for enterprise bookings growth.

Speaker Change: Okay. Thanks next question please.

Speaker Change: Your next question comes from the line of Scott Berg with Needham Your line is open.

Speaker Change: And if not what's missing and then the second question is what are you seeing from a gross retention standpoint, and that 10% to 50 K cohort.

Speaker Change: Hi, everyone. This is Rob <unk> on for Scott. Thanks for taking my question and congrats on the quarter understand the Asian Force integration was still pretty recent.

Speaker Change: Your next question comes from the line of David Hynes with Canaccord Genuity. Your line is open.

Speaker Change: Yeah. Thanks for the questions D. J when we look at <unk> I think there's a couple of things that we've talked about before and I think overall, we were pleased with the growth of over 21% growth in CRE.

Speaker Change: Hey, guys.

Speaker Change: Commentary you can provide on how that might have impacted pipeline or deal flow for the quarter and any thought on do you have a certain contribution that's come out for 2025 pipeline trends. Thanks.

Joe: For Joe.

Speaker Change: Joe I'm getting 6% CRP based bookings growth is that a decent proxy for enterprise bookings growth.

Speaker Change: And if not what's missing and then the second question is what are you seeing from a gross retention standpoint in that 10% to 50 K cohort.

Speaker Change: In the quarter I think theres, two things that always skew that number as we've talked about before number one is you've got the seasonality from Q4 to Q1 Q4 is always going to be really strong when it comes to <unk> and then that's going to kind of burn off.

Speaker Change: Yeah. Thanks, Rob I. Appreciate the question, we're really excited about agent force and partnership this is just another.

Ryan Barretto: Yeah, thanks, Rob. Yeah, Mike and the team have been doing a really nice job there. I mean, one of the biggest things that we're really focused in on, and you mentioned it in the question, is just ideal customer profile. And so one of the benefits for us is, you know, with nearly 30,000 customers across so many industries and verticals, we've got a really good sense of where our opportunities exist. And then on top of that, you know, when our customers are on social, we get really good signal on the things that they're doing, right? We also, as you all know, we lead with the product in a trial.

Speaker Change: Another chapter in terms of the partnership we've had with Salesforce growing from the service cloud. We're really early there obviously, we just went with that.

Speaker Change: Yes. Thanks for the question as D. J when we look at <unk> I think there's a couple of things that we've talked about before and I think overall we were pleased.

Speaker Change: In Q1, and always be a little bit impacted by that seasonality and the number two is we still have the month to month.

Speaker Change: Integration, we had a chance to talk about it a little bit at Sydney will have a chance to talk about it as we head into marketing connections and then again it reinforced at the end of the year.

Speaker Change: <unk> growth over 21% growth in <unk>.

Speaker Change: Aspect of our business and so that kind of.

Speaker Change: In the quarter I think theres, two things that always skew that number as we've talked about before number one is <unk>.

Speaker Change: Talked about this over the longer term the CRP a growth number is going to be a real good indicator, but we're still at a point, where we're still going to converge on that with revenue over time with the gross retention side. We continued to see really strong gross retention in the quarter was up again quarter over quarter and I think for us, it's a really strong indication.

Speaker Change: Got the seasonality from Q4 to Q1 Q4 is always going to be really strong when it comes to <unk> and then that's going to kind of burn off.

Speaker Change: Nothing else to call out this early in the stage and as we come back I think we can share a little bit more color around some of the progress that we're making there and the customer stories.

Speaker Change: In Q1, and always be a little bit impacted by that seasonality and the number two is we still have the month to month.

Ryan Barretto: So when prospects come in, even before they sign a contract, and they're in our trial, we get a really good sense of how they're leveraging social, and we get really good data and analytics that the team can use to make sure that we're engaging in the right places, we're ensuring that they're using the product in the right places, and that we're solving their biggest problems. I think from an enterprise perspective, as you might imagine, customer care matters a ton to them. You know, if you're not on social in front of your customers, it's really reputation roulette.

Speaker Change: Okay. Thank you next question please.

Speaker Change: Aspect of our business and so that kind of we've talked about this over the longer term the CRP a growth number is going to be.

Speaker Change: Your next question comes from the line of Alan <unk> with Scotiabank. Your line is open.

Speaker Change: How mission critical our software to our customers and so continue to see improvement on the gross retention not just in the enterprise I would say across our customer base, even down in the SMB, we're seeing strong gross retention there.

Speaker Change: Are you a real good indicator, but we're still at a point, where we're still going to converge on that with revenue over time.

Speaker Change: Hey, guys. Thanks for taking the question.

Speaker Change: Good to see numbers for the full year going up top and bottom line.

Speaker Change: I noticed your Q2 revenue growth rate that we've guided to is higher than what you've guided for in Q1, I know the comps are easier, but given the Q1 beat here can you just maybe talk about the biggest puts and takes.

Speaker Change: Yes.

Speaker Change: Okay. Thank you next question please.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of Adam Hotchkiss with Goldman Sachs. Your line is open.

Ryan Barretto: And these customers care deeply about making sure that they're all over it. So those are some of the highlights for the team and where they're spending time with the enterprise.

Speaker Change: Hey, guys. This is grace and scope on for Adam. Thanks for taking the question I wanted to touch on profitability quickly pretty nice beat in the quarter, there as well as a nice raise for the full year guide if you could just talk a little bit about what drove that beat.

Speaker Change: With respect to the guided Q2 revenue number and then as a quick follow up what drove the current deferred revenue.

Speaker Change: Strong gross retention there.

Speaker Change: Okay. Thank you next question please.

Speaker Change: In the quarter to fall for the first time on a sequential basis.

Elizabeth Porter: Your next question comes from the line of Elizabeth Porter with Morgan Stanley. Great, thank you very much. I wanted to follow up on your comments, just about a really strong pipeline heading into the year.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of Adam Hotchkiss with Goldman Sachs. Your line is open.

Speaker Change: And if theres any sort of changes or impacts to the full year investment philosophy. Following the outperformance in the quarter. Thank you.

Speaker Change: Yes, thanks for the question on the <unk>.

Speaker Change: First point I think when it comes to the Q2 guide and then also on the full year I think the only thing to call out there as I mentioned this in my prepared remarks is we're just trying to take a very measured approach and the way. We guide. It's also Ryan called this out as well we are assuming that the macro is consistent with what we saw in Q1 and most of 2012.

Speaker Change: Hey, guys. This is greater scope on for Adam and thanks for taking the question I wanted to touch on profitability quickly pretty nice beat in the quarter, there as well as a nice raise for the full year guide.

Speaker Change: Yes. Thanks for the question as far as what drove the beta a couple of things one the revenue over performance.

Ryan Barretto: So could you just give us some more context for some of the pipeline coverage ratios that you're including for 2025, kind of where you may be today versus prior periods, and how that gives you comfort to be able to move through a potentially more difficult macro, although I kind of recognize we're not seeing any of the impacts yet today. Thank you. Yeah, appreciate the question. Yeah, we feel we feel good about the coverage that we've had here. Similar to some of my comments just before, the team's doing a really good job and in terms of pipeline hygiene, and we're seeing really great effort in terms of creation from the top of the funnel.

Speaker Change: One of the key areas. The other one is some of the hiring that we had in the quarter was more backend loaded in the quarter.

Speaker Change: You could just talk a little bit about what drove that beat.

Speaker Change: And if theres any sort of changes or impacts to the full year investment philosophy. Following the outperformance in the quarter. Thank you.

Speaker Change: Four and so we feel pretty good about the guidance, we set for the year and our ability to achieve those numbers.

Speaker Change: Yeah. Thanks for the question as far as what drove the beta a couple of things one the revenue over performance.

Speaker Change: As it relates to deferred revenue I think the biggest impact there is just the fact that we signed six large deals in Q4 and I think Q4 last year was one of the largest increases we've seen when it comes to annual and multiyear deals and the impact on deferred revenue and as that Burns off in Q1 that was just a bigger sequential.

Speaker Change: But what I would say is very similar to Q1, if we continue to outperform on the topline youll definitely see more leverage in the business throughout the year.

Speaker Change: One of the key areas. The other one is some of the hiring that we had in the quarter was more backend loaded in the quarter.

Speaker Change: Okay.

Speaker Change: Okay. Thanks next question please.

Speaker Change: Your next question comes from the line of Scott Berg with Needham Your line is open.

Ryan Barretto: As you might imagine, we're paying very close attention to all of the metrics with pipe creation and pipe velocity. Certainly, like all of us paying very close attention to the things that are happening in the macro. We're currently not seeing anything material in terms of changes, but paying a lot of attention there.

Speaker Change: Impact because of the size of the deals where we're landing in Q1 or Q4 and that kind of drove that impact on Q1.

Speaker Change: But what I would say is very similar to Q1, if we continue to outperform on the topline youll definitely see more leverage in the business throughout the year.

Rob early: Hi, everyone. This is Rob early on for Scott. Thanks for taking my question and congrats on the quarter understand the Asian Force integration was still pretty recent.

Alan: Great. Thanks, Alan next question please.

Speaker Change: Your next question comes from the line of Arjun Bhatia with William Blair <unk> Company. Your line is open.

Speaker Change: Commentary you can provide on how that might have impacted pipeline or deal flow for the quarter and any thought on do you have a sort of a contribution that's come out for 2025 pipeline trends. Thanks.

Speaker Change: Okay.

Speaker Change: Okay. Thanks next question please.

Scott Berg: Your next question comes from the line of Scott Berg with Needham Your line is open.

Alan: Alright.

Arjun Bhatia: Thank you so much.

David Hynes: Your next question comes from the line of David Hynes with Kanakora Genuity. Your line is open. Hey, guys.

Alan: Or were you one for you.

Speaker Change: Yeah. Thanks, Rob I. Appreciate the question, we're really excited about agent force and partnership. This is just another another chapter in terms of the partnership we've had with Salesforce growing from the service cloud. We're really early there. Obviously, we just went with that integration we had a chance to talk about it a little bit at Sydney will have a <unk>.

Alan: It seems like there is certainly going to be a lot of focus this year and beyond.

Scott Berg: Hi, everyone. This is Rob early on for Scott. Thanks for taking my question and congrats on the quarter understand the Asian Force integration was still pretty recent.

David Hynes: Two for Joe. Joe, I'm getting 6% CRPO-based bookings growth. Is that a decent proxy for enterprise bookings growth? And if not, what's it missing?

Alan: On cross sell.

Alan: Our farm expansion and write songs R&D entire sprout.

Scott Berg: Commentary you can provide on how that might have impacted pipeline or deal flow for the quarter and any thoughts on do you have a sort of contribution that has come out for 2025 pipeline trends. Thanks.

Alan: Form as opposed to just the individual products, especially with Influencer marketing and care I'm curious how we should.

Joe: And then the second question is, what are you seeing from a gross retention standpoint in that 10 to 50k cohort? Yeah, thanks for the question, DJ. You know, when we look at CRPO, I think there's a couple of things that we've talked about before. And I think overall, we were pleased with the growth, you know, the over 21% growth in CRPO in the quarter. I think there's two things that always skew that number, as we've talked about before. Number one, is you've got the seasonality, right from Q4 to Q1. Q4 is always going to be really strong when it comes to CRPO.

Alan: Think about just penetration with those solutions and when you're thinking about <unk>.

Speaker Change: To talk about it as we head into marketing connections and then again it reinforced at the end of the year.

Alan: Increasing the role that they played in the growth rate is that mostly going to be through existing customer expansions or through more of the larger kind of enterprise deals like you are where you were.

Speaker Change: But nothing else to call out this early in the stage and as we come back I think we can share a little bit more color around some of the progress that we're making there and the customer stories.

Alan: They just started yourselves, where we'll see attach rates where those increase.

Speaker Change: Okay. Thank you next question please.

Speaker Change: Yes, Thanks, Serge I appreciate the question.

Speaker Change: To talk about it as we head into marketing connections and then again it reinforced at the end of the year.

Speaker Change: Your next question comes from the line of Alan <unk> with Scotiabank. Your line is open.

Alan: Right.

Alan: Cross sell the multi products are really important part of our strategy, we're continuing to see some really healthy trends there.

Joe: And then that's going to kind of burn off in Q1 and always be a little bit, you know, impacted by that seasonality. And the number two is just we still have the month to month aspect of our business. And so that kind of, you know, we've talked about this over the longer term, the CRPO growth number is going to be a real good indicator, but we're still at a point where we're still, you know, going to converge on that with revenue over time. With the gross retention side, you know, we continue to see really strong gross retention in a quarter was up again, quarter over quarter.

Alan: Hey, guys. Thanks for taking my question good to see.

Alan: A big part of this and I mentioned this in the prepared remarks, it's just making sure that the teams had the right level of training across all the products and then it's built into the commission plans and compensation models.

Speaker Change: The numbers for the full year going up top and bottom line.

Speaker Change: I noticed your Q2 revenue growth rate that was guided to is higher than what you guided for in Q1, I know the comps are easier, but given the Q1 beat here can you just maybe talk about the biggest puts and takes.

Speaker Change: Okay. Thank you next question please.

Speaker Change: Your next question comes from the line of Alan <unk> with Scotiabank. Your line is open.

Alan: So thats been heading well, we also from a penetration perspective, and we shared this before we continue to see good progress on that but we're still very early in the penetration rates.

Rob Oliver: Hey, guys. Thanks for taking the question.

Speaker Change: With respect to the guided Q2 revenue number and then as a quick follow up what drove the current deferred revenue.

Speaker Change: The numbers for the full year going up lets up.

Ryan Barretto: And bottom line.

Clearly our current customers are almost 30000, and then lots of opportunity as we are landing new logos. So when I think about the growth rate for existing first new business, it's going to be a bit of both we see opportunities to go and expand our current customers and then we see a lot of opportunities on the new business side from an expansion perspective and in my prepared.

Joe: And I think for us, it's a really strong indication of how mission critical our software is to our customers. And so continue to see improvements on the gross retention, not just in the enterprise, I would say across our customer base, even down in the SMB, we're seeing strong gross retention there.

Speaker Change: In the quarter to fall for the first time on a sequential basis.

Speaker Change: Yeah. Thanks for the question on the first point I think when it comes to the Q2 guide and then also on the full year I think the only thing to call out there as you know.

Speaker Change: With respect to the guided Q2 revenue number and then as a quick follow up what drove the current deferred revenue in.

Ryan Barretto: I mentioned this in my prepared remarks is we're just trying to take a very measured approach in the way. We guide. It's also you know Ryan called this out as well, we're assuming that the macro is consistent with what we saw in Q1 and most of 2024 and so we feel pretty good about the guidance, we set for the year and our ability to achieve those numbers.

Joe: Okay, thank you.

Alan: <unk> shared a great customer example.

Alan: A restaurant chain that increased by 600 K.

Adam Hotchkiss: Your next question comes from the line of Adam Hotchkiss with Goldman Sachs. Your line is open.

Speaker Change: In the quarter to fall for the first time on a sequential basis.

Alan: And then on the new business side, we continue to see more of those customers showing up wanting to solve more than one problem.

Speaker Change: Yeah. Thanks for the question on the first point I think when it comes to the Q2 guide and then also on the full year I think the only thing to call out there as I am.

Joe: Hey, guys, this is Grayson Skelbon for Adam. Thanks for taking the question. I wanted to touch on profitability quickly. Pretty nice beat in the quarter there as well as a nice race to the full year guide. If you could just talk a little bit about what drove that beat, and if there's any sort of changes or impacts to the full year investment philosophy. following the outperformance in the quarter.

Alan: Wanting to do more than one one specific area. So both of those things are going to be really important for our growth strategy.

Speaker Change: Mentioned this in my prepared remarks is we're just trying to take a very measured approach and the way. We guide. It's also Ryan called this out as well, we're assuming that the macro is consistent with what we saw in Q1 and most of 2024.

Ryan Barretto: As it relates to deferred revenue I think the biggest impact there is just the fact that we signed six large deals in Q4 and I think Q4 last year was one of the largest increases we've seen when it comes to annual and multiyear deals and the impact on deferred revenue and as that Burns off in Q1 that was just a bigger so.

Speaker Change: Alright, Thanks, sorry, Jay next question please.

Speaker Change: Your next question comes from the line of Brian Swartz with Oppenheimer. Your line is open.

Brian Swartz: Yes, hi, Thanks for taking my question. This afternoon, Ryan I just wanted to ask about kind of the state of the sales organization you did say in the introductory comments that you are increasing investments this year.

Joe: Yeah, thanks for the question. You know, as far as, you know, what drove the beat, you know, a couple things. One, the revenue over performance was one of the key areas. The other one is some of the hiring that we had in the quarter was more back end loaded in the quarter. And so that, you know, definitely benefited us. But what I will say overall, when you look at the full year guide, we're really trying to make sure we're still maintaining some flexibility to adjust for any kind of unknown risk throughout the year. But what I would say is very similar to Q1, if we continue to outperform on the top line, you'll definitely see more leverage in the business throughout the year.

Speaker Change: And so we feel pretty good about the guidance, we set for the year and our ability to achieve those numbers.

Ryan Barretto: <unk> impact because of the size of the deals where we're landing in Q1 or Q4 and that kind of drove that impact on Q1.

Speaker Change: Great. Thanks, Alan next question please.

Brian Swartz: And your sales reps I guess two questions. One is are you increasing capacity or are you just kind of pruning the low performers and then to <unk>.

Speaker Change: Your next question comes from the line of Arjun Bhatia with William Blair <unk> Company. Your line is open.

Speaker Change: Alright.

Brian Swartz: Bring in some some new players they are and then along that line can.

Speaker Change: Thank you so much.

Speaker Change: Impact because of the size of the deals where we're landing in Q1 or Q4 and that kind of drove that impact on Q1.

Speaker Change: Or were you one for you.

Speaker Change: It seems like there is certainly going to be a lot of focus this year and beyond.

Brian Swartz: Do you feel that you're through the sales transition or are you happy where the organization is in terms of targeting the up market, which is the longer term strategy for the company. Thank you.

Speaker Change: Great. Thanks, Alex next question please.

Speaker Change: Cross sell platform expansion and write songs R&D entire sprout.

Speaker Change: Your next question comes from the line of Arjun Bhatia with William Blair <unk> Company. Your line is open.

Joe: Okay, thanks.

Scott Berg: Your next question comes from the line of Scott Berg with Needham. Your line is open.

Speaker Change: Platform as opposed to just the individual products, especially with Influencer marketing and care I'm curious how we should.

Yeah. Thanks, Brian I appreciate the question.

Rob Morelli: Hi, everyone, this is Rob Morelli, I'm for Scott. Just taking a question in regards to the corridor. I understand the agent force integration was still pretty recent. Any commentary you can provide on how that may have impacted pipeline or deal flow for the corridor? And any thought on the sort of contribution this can have for 2025 pipeline trends? Thanks. Yeah, thanks, Rob. Appreciate the question. We're really excited about AgentForce and the partnership. This is just another, another chapter in terms of the partnership we've had with Salesforce growing from the Service Cloud. We're really early there.

Speaker Change: You so much.

Speaker Change: Think about just penetration with those solutions and when you're thinking about incur.

Brian Swartz: Yes. It is it is increasing the capacity and we tend to see this as we head into the back half of the year as well just in terms of combination of hiring reps, but also having those reps being more productive in the back half. So youll see naturally the quota carrying capacity increasing as we head into the back end.

Speaker Change: A real one for you.

Speaker Change: It seems like there is certainly going to be a lot of focus this year and beyond.

Speaker Change: Increasing the role that they played in the growth rate is that mostly going to be through existing customer expansions or through more of a larger kind of enterprise deals like that you're trying to you're starting to sell where we will see attach rates for those increase.

Speaker Change: Cross sell platform expansion and write songs R&D entire sprout.

Speaker Change: Platform as opposed to just the individual products, especially with Influencer marketing and care I'm curious how we should.

Brian Swartz: In terms of the sales transition, yes, we're feeling really good about all the things that we've done I wouldn't really call out any transitions per se I think the biggest thing that Mike and the team have been focused in on as we turned the year was just stability and getting it to a fast start. So if we think about making sure territories were in place in Q1 very early.

Raj: Yes, Thanks Raj I appreciate the question.

Speaker Change: Think about just penetration with those solutions and when you're thinking about increasing.

Speaker Change: Right.

Speaker Change: Cross sell the multi products are really important part of our strategy, we're continuing to see some really healthy trends there.

Ryan Barretto: Obviously, we just went GA with that integration. We had a chance to talk about it a little bit at Sydney, we'll have a chance to talk about it as we head into marketing connections. And then again, at Dreamforce at the end of the year. But nothing else to call out this early in the stage. And as we come back, I think we can share a little bit more color around some of the progress that we're making there in the customer stories.

Speaker Change: A big part of this and I mentioned this in the prepared remarks, it's just making sure that the teams had the right level of training across all the products and then it's built into the commission plans and compensation models.

Speaker Change: When you're trying to you're starting to sell where we will see attach rates are those increase.

Brian Swartz: Compensation plans, making sure that the enablement plans were set and that the teams knew exactly where our focus areas, where those were all things that were achieved really well in the quarter. So feeling really good about where the sales organization is and our opportunity to execute here.

Speaker Change: Yes, Thanks Raj I appreciate the question Bob you are right.

Speaker Change: That's been heading well, we also from a penetration perspective, and we shared this before we continue to see good progress on that but we're still very early in the penetration rates.

Speaker Change: Cross sell the multi products are really important part of our strategy, we're continuing to see some really healthy trends there.

Allan Verkhovski: Next question, please. Your next question comes from the line of Allan Verkhovski with Scotiabank. Your line is open. Hey guys, thanks for taking the question. Good to see numbers for the full year going up on the top and bottom line. I noticed your Q2 revenue growth rate that was guided to is higher than what you guided for in Q1.

Speaker Change: Clearly our current customers are almost 30000, and then lots of opportunity as we are landing new logos. So when I think about the growth rate for existing the first new business, it's going to be a bit of both we see opportunities to go and expand our current customers and then we see a lot of opportunities on the new business side from an expansion perspective and in my prepared remark.

Brian Swartz: Alright.

Brian Swartz: Thanks next question please.

Speaker Change: Your next question comes from the line of Jackson Ader with Keybanc capital markets. Your line is open.

Speaker Change: So thats been heading well, we also from a penetration perspective, and we shared this before we continue to see good progress on that but we're still very early in the penetration rates.

Jackson Ader: Great. Thanks for taking our questions guys.

Speaker Change: Our question is about the potential for I think you mentioned.

Speaker Change: Sure a great customer example.

Speaker Change: Clearly our current customers are almost 30000, and then lots of opportunity as we are landing new logos. So when I think about the growth rate for existing first new business, it's going to be a bit of both we see opportunities to go and expand our current customers and then we see a lot of opportunities on the new business side from an expansion perspective in my prepared.

Jackson Ader: <unk> cycles elongated.

Joe: I know the comps are easier, but given the Q1 beat here, can you just maybe talk about the biggest puts and takes with respect to the guided Q2 revenue number? And then as a quick follow-up, what drove the current deferred revenue? in the quarter to fall for the first time on a sequential basis. Yeah, thanks for the question.

Speaker Change: A restaurant chain that increased by 600 K.

If things were to get worse macro economy and I'm. Just curious like is that because people are just simply trying to hold on to their cash a little longer or is there something that's like.

Speaker Change: And then on the new business side, we continue to see more of those customers showing up wanting to solve more than one problem.

Speaker Change: Wanting to do more than one one specific area. So both of those things are going to be really important for our growth strategy.

Jackson Ader: Uh huh.

Jackson Ader: Because of the sprout place social media advantage.

Speaker Change: <unk> shared a great customer example.

Speaker Change: Alright, Thanks, sorry, the next question please.

Speaker Change: A restaurant chain that increased by 600 K.

Jackson Ader: Where there are like advertising or social media budgets that might impact.

Speaker Change: Your next question comes from the line of Brian Schwartz with Oppenheimer. Your line is open.

Joe: On the first point, I think when it comes to, you know, the Q2 guide, and then also on the full year, I think the only thing to call out there is, you know, and I mentioned this in my prepared remarks is, we're just trying to take a very measured, you know, approach in the way we guide. It's also, you know, Ryan called this out as well, we're assuming that the macro is consistent with what we saw in Q1 and most of 2024. And so we feel pretty good about, you know, the guidance we set out for the year and our ability to achieve those numbers.

Speaker Change: Then on the new business side, we continue to see more of those customers showing up wanting to solve more than one problem.

You guys book of business.

Brian Schwartz: Yeah, Hi, Thanks for taking my question. This afternoon, Ryan I just wanted to ask about kind of the state of the sales organization you did say in the introductory comments that you are increasing investments this year and in your sales reps I guess two questions. One is are you increasing.

Thank you.

Speaker Change: Wanting to do more than one one specific area. So both of those things are going to be really important for our growth strategy.

Jackson Ader: Yes.

Jackson Ader: The question.

One I would just call out where we're not seeing any of those material changes today. So as I think about the Q1 performance that we saw.

Speaker Change: Alright, Thanks, sorry, Jay next question please.

Speaker Change: Your next question comes from the line of Brian Schwartz with Oppenheimer. Your line is open.

Jackson Ader: And early in Q2, the the dynamics with the same as they did in 2024.

Speaker Change: Capacity or are you just kind of pruning the low performers and then you know what.

Joe: As it relates to the deferred revenue, I think the biggest impact there is just the fact that, you know, we signed such large deals in Q4. And I think Q4 last year was one of the largest, you know, increases we've seen when it comes to annual and multi-year deals and the impact on deferred revenue. And as that burns off in Q1, there was just a bigger sequential impact because of the size of the deals we were landing in Q1 or Q4. And that kind of drove that impact on Q1. Great. Thanks, Al.

Jackson Ader: Really nothing to call out there.

Speaker Change: Bring in some some new players they are and then along that line.

Jackson Ader: And then I would also just highlight we do not have exposure to traditionally AD budgets, we play on the organic side.

Speaker Change: Do you feel that you're through the sales transition or are you happy where the organization is in terms of targeting the up market, which is the longer term strategy for the company. Thank you.

Speaker Change: And your sales reps I guess two questions. One is are you increasing capacity or are you just kind of pruning the low performers and then to <unk>.

Jackson Ader: And again I'll go back to just the mission critical nature of the product rather customers or any app three to four hours a day, they're leveraging it across a variety of use cases.

Brian Schwartz: Yes, Thanks, Brian I appreciate the question.

Speaker Change: Bring in some some new players they are and then along that line can.

Jackson Ader: Customer care is one of the biggest ones our customers need to be where their customers are and more and more we're seeing consumer behavior change where those customers are showing up.

Brian Schwartz: Yes. It is it is increasing the capacity and we tend to see this as we head into the back half of the year as well just in terms of combination of hiring reps, but also having those reps being more productive in the back half. So youll see naturally the quota carrying capacity increasing as we head into the back end in terms of the sales transition.

Arjun Bhatia: Your next question comes from the line of Arjun Bhatia with William Blair and Company. Your line is open. Thank you so much. Everyone for you. It seems like there's certainly going to be a lot of focus this year and beyond. on cross-sell platform expansion, right, selling the entire Sprout platform as opposed to just the individual products, especially with influencer marketing and care. I'm curious how we share the think about just penetration with those solutions.

Jackson Ader: In social.

Jackson Ader: Service perspective, Theyre going there for search and for discovery that brands that work with us are really needing that data the analytics and the social listening data to inform their strategy.

Brian Schwartz: Yeah. Thanks, Brian I appreciate the question.

Brian Schwartz: Yes, we're feeling really good about all the things that we've done I wouldn't really call out any transitions per se I think the biggest thing that Mike and the team have been focused in on as we turned the year was just stability and getting out to a fast start. So if we think about making sure territories were in place in Q1 very early compensation plans.

Speaker Change: Yes. It is it is increasing the capacity and we tend to see this as we head into the back half of the year as well just in terms of combination of hiring reps, but also having those reps being more productive in the back half. So youll see naturally the quota carrying capacity, increasing as we head into the back and.

Jackson Ader: So we feel really good about the positioning of <unk>.

Jackson Ader: Sprout and the value that we're adding to our customers and then if I just think about the gross retention dynamics that we've been seeing and the improvements there I think it just really shows the resilience of the business.

Ryan Barretto: And when you're thinking about increasing the role that they play in your growth rate, is that mostly going to be through existing customer expansions or through more of the larger kind of enterprise deals like that, that you're that you're trying to that you're starting to sell, where we'll see attached rates for the Yeah, thanks, Arjun. Appreciate the question. You're right. The cross-sell, the multi-products are a really important part of our strategy. We're continuing to see some really healthy trends there. You know, a big part of this, and I mentioned this in the prepared remarks, is just making sure that the teams had the right level of training across all the products, and then it's built into the commission plans and the compensation models.

Speaker Change: In terms of the sales transition, yes, we're feeling really good about all the things that we've done I wouldn't really call out any transitions per se I think the biggest thing that Mike and the team have been focused in on as we turned the year was just stability and getting it to a fast start. So if we think about making sure territories were in place in Q1 very early.

Jackson Ader: Alright, thanks for the question.

Brian Schwartz: Making sure that the enablement plans were set and that the teams knew exactly where our focus areas, where those were all things that were achieved really well in the quarter. So feeling really good about where the sales organization is and our opportunity to execute here.

Jackson Ader: I will turn the call back over to Ryan Barretto for closing remarks.

Speaker Change: Great. Thank you very much and thank you all for joining us and for your thoughtful questions I want to end by thanking our incredible team here at sprout their dedication and commitment and hard work drive everything that we're achieving we're incredibly excited about the road ahead and confident in our strategy to deliver meaningful value.

Brian Schwartz: Alright. Thanks.

Brian Schwartz: Thanks next question please.

Speaker Change: Compensation plans, making sure that the enablement plans were set and the teams knew exactly where our focus areas, where those were all things that were achieved.

Speaker Change: Your next question comes from the line of Jackson Ader with Keybanc capital markets. Your line is open.

Speaker Change: To our customers and our shareholders. We appreciate your continued support and we will talk to you all soon thanks for joining us.

Brian Schwartz: Great. Thanks for taking.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Ryan Barretto: So that's been heading well. We also, from a penetration perspective, and we shared this before, we continue to see good progress on that, but we're still very early in the penetration rates. For, clearly, our current customers are almost 30,000, and then lots of opportunity as we're landing new logos.

Ryan Barretto: So when I think about the growth rate for existing first new business, it's going to be a bit of both. We see opportunities to go and expand our current customers, and then we see a lot of opportunities on the new business side. From an expansion perspective, and, you know, in my prepared remarks, I shared a great customer example of a restaurant chain that increased by 600K. And then on the new business side, we continue to see more of those customers showing up, wanting to solve more than one problem, wanting to do more than one specific area.

Ryan Barretto: So both of those things are going to be really important for our growth strategy.

Arjun Bhatia: All right, thanks, Arjun.

Brian Schwartz: Next question, please. Your next question comes from the line of Brian Schwartz with Oppenheimer. Your line is... Yeah, hi, thanks for taking my question this afternoon. Ryan, I just wanted to ask about kind of the state of the sales organization. You did say in the introductory comment that you are increasing investments this year in, in, in your sales reps. I guess two questions. One is, are you increasing capacity? Or are you just kind of pruning the low performers and then, you know, to bring in some, some new players there? And then along that line, do you feel that you're through the sales transition?

Ryan Barretto: Are you happy where the organization is in terms of targeting the upmarket, which is the longer term strategy for the company? Thank you. Yeah, thanks, Brian. I appreciate the question. Yes, it is, it is increasing the capacity. And we tend to see this as we head into the back half of the year as well, just in terms of combination of hiring reps, but also having those reps being more productive in the back half. So you'll see naturally, the quota carrying capacity increasing as we head into the back.

Ryan Barretto: And in terms of the sales transition, yes, we're feeling really good about all the things that we've done, I wouldn't really call out any transitions per se, you know, I think that the biggest thing that Mike and the team have been focused in on as we turn the year was just stability and getting out to a fast start. So if we think about, you know, making sure territories were in place in Q1 very early, compensation plans, making sure that the enablement plans were set, and that the teams knew exactly where our focus areas were, those were all things that were achieved really well in the quarter.

Ryan Barretto: So feeling really good about where that sales organization is and our opportunity to execute here.

Jackson Ader: Your next question comes from the line of Jackson Ader with KeyBank Capital Markets. Your line is open. Great. Thanks for taking our questions, guys. Our question is about the potential for, I think you mentioned, Sales Cycles Elongating if things were to, you know, get worse back. And I'm just curious, like, is that, would that be because people... Thanks for watching! because of the area that Sprout plays in right social media. There's something where there are. Advertising or social media budgets that might impact how you guys go for business. Thank you. Yeah, appreciate the question.

Ryan Barretto: One, I would just call out, we're not seeing any of those material changes today. So, you know, as I think about the Q1 performance that we saw, and, you know, early in Q2, the dynamics look the same as they did in 2024. So really, nothing to call out there. And then I would also just highlight, you know, we don't have exposure to traditionally add budgets, right? We play on the organic. And again, I'll go back to just the mission-critical nature of the product, right? Our customers are in the app three to four hours a day.

Ryan Barretto: They're leveraging it across a variety of use cases. Customer care is one of the biggest ones. Our customers need to be where their customers are. And more and more, we're seeing consumer behavior change, where those customers are showing up in social from a customer service perspective. They're going there for search and for discovery. The brands that work with us are really needing that data, the analytics and the social listening data to inform their strategy. So we feel really good about the positioning of Sprout and the value that we're adding to our customers. And then, you know, if I just think about the gross retention dynamics that we've been seeing and the improvements there, I think it just really shows the resilience of the business.

Ryan Barretto: All right, thanks for the question.

Ryan Barretto: I will turn the call back over to Ryan Barretto for closing. Thank you very much, and thank you all for joining us and for your thoughtful questions.

Ryan Barretto: I want to end by thanking our incredible team here at Sprout. Their dedication and commitment and hard work drive everything that we're achieving. We're incredibly excited about the road ahead and confident in our strategy to deliver meaningful value to our customers and our shareholders. We appreciate your continued support, and we'll talk to you all soon. Thanks for joining us.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now...

Q1 2025 Sprout Social Inc Earnings Call and Business Update

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