Sprout Social Posts $125.1 Million in Revenue, Targets Sustainable Profitability in Fourth Quarter
Key Facts
Sprout Social reported results on November 3 for the third quarter ended September 30, 2026, posting revenue of $125.1 million, up 8% from the same period in 2025, according to the company’s statement published via GlobeNewswire. The results showed a GAAP net loss of $6.5 million, compared with a loss of $9.4 million a year earlier. Meanwhile, non-GAAP free cash flow was about $26.7 million, up 158% year over year. The results put revenue growth alongside a narrower accounting loss and increased cash generation as the company moves toward its stated goal of sustained quarterly profitability beginning in the fourth quarter.
Third-quarter revenue growth was below the rate recorded in the previous quarter, when the company reported revenue of $123.8 million in the second quarter of 2026, up 11% year over year, according to its August earnings announcement. The comparison showed the annual growth rate slowing to 8% in the third quarter, despite revenue rising from the previous quarter. In its second-quarter announcement, the company raised its non-GAAP operating margin outlook at the exit of the fourth quarter from 15% to about 17%. It then raised that outlook to about 18% at the exit of the fourth quarter in its November 3 announcement. The updated margin outlook is above the estimate the company announced months earlier, as it approaches its target of GAAP profitability.
Chief Executive Ryan Barretto said the company began a $50 million share repurchase program and bought back more than $26 million in shares during the third quarter. The announcement combined the program’s stated size with the amount spent on repurchases during the three months ended in September. The available details did not specify a price for those purchases or the number of shares involved. The program was among the disclosures accompanying the third-quarter results, alongside cash metrics and profitability targets. Barretto said: "We also began our $50 million share repurchase program, with more than $26 million in repurchases in the third quarter."
Barretto said the contribution to estimated trailing 12-month subscription revenue from customers with annual recurring revenue of $30,000 or more rose 18% year over year in the third quarter. The metric links growth among higher-revenue customers to the company’s estimated subscription revenue over the trailing 12 months, according to its wording. It measures the expansion of this group’s contribution to subscriptions alongside overall revenue growth in the quarter. The available details did not give the number of customers in this group, so the reported metric concerns their contribution to subscription revenue. Barretto said the company recorded "an 18% year-over-year increase in estimated trailing 12-month subscription revenue contribution from customers with annual recurring revenue of $30,000 or more."
The company said it would discuss the results in a webcast on November 3 at 3:30 p.m. Central time, or 4:30 p.m. Eastern time. As for its outlook, Sprout Social is targeting sustained quarterly GAAP profitability beginning in the fourth quarter of 2026. It also raised its non-GAAP operating margin outlook at the exit of that quarter to about 18%, from 17% previously. The company said its profitability target begins in the fourth quarter, while the margin outlook refers to the level at the end of that quarter. In its statement, it said: "The company is targeting sustained quarterly GAAP profitability beginning in the fourth quarter of 2026," and raised its operating margin outlook at quarter-end to about 18%.