Sprout Social | 8-K: FY2026 Q2 Revenue Beats Estimate at USD 123.85 M

Revenue: As of FY2026 Q2, the actual value is USD 123.85 M, beating the estimate of USD 122.22 M.

EPS: As of FY2026 Q2, the actual value is USD -0.05, beating the estimate of USD -0.2.

EBIT: As of FY2026 Q2, the actual value is USD -2.444 M.

Second Quarter 2026 Financial Highlights for Sprout Social, Inc.

Revenue

• Total revenue was $123.8 million, an 11% increase compared to the second quarter of 2025. Subscription revenue constituted 98% of total revenue. Total remaining performance obligations (RPO) were $400.8 million as of June 30, 2026, up 16% year-over-year. Current remaining performance obligations (cRPO) were $282.7 million as of June 30, 2026, up 12% year-over-year.

Operating Income (Loss)

• GAAP operating loss was - $2.7 million, compared to - $12.3 million in the second quarter of 2025. Non-GAAP operating income was $16.0 million, compared to $10.3 million in the second quarter of 2025.

Net Income (Loss)

• GAAP net loss was - $3.1 million, compared to - $12.0 million in the second quarter of 2025. Non-GAAP net income was $15.6 million, compared to $10.7 million in the second quarter of 2025.

Cash Flow and Cash Position

• Cash and cash equivalents totaled $119.9 million as of June 30, 2026, compared to $111.6 million as of March 31, 2026. Net cash provided by operating activities was $8.5 million, compared to $5.1 million in the second quarter of 2025. Non-GAAP free cash flow was $8.3 million, compared to $5.2 million in the second quarter of 2025.

Profitability Metrics

• Non-GAAP Gross Margin remained consistent at 79% for both Q2 FY2026 and Q2 FY2025. Non-GAAP Operating Margin improved to 13% in Q2 FY2026, up from 9% in Q2 FY2025. Non-GAAP Free Cash Flow (FCF) Margin increased to 7% in Q2 FY2026, compared to 5% in Q2 FY2025.

Customer Metrics

• The number of customers contributing $30,000 or more in Annual Recurring Revenue (ARR) grew to 3,926 as of June 30, 2026, an 11% increase compared to June 30, 2025. The number of customers contributing $50,000 or more in ARR grew to 2,127 as of June 30, 2026, a 16% increase compared to June 30, 2025. Approximated Trailing Twelve Month (TTM) Subscription Revenue Contribution for customers with ≥$30K ARR was $291.7 million for Q2 2026, representing 61.4% of Total Subscription Revenue in Q2 2026. The Average Contract Value (ACV) grew by 15% year-over-year, reaching $17,584 in Q2 FY2026.

Outlook / Guidance

Sprout Social, Inc. anticipates Q3 2026 total revenue between $123.3 million and $124.1 million, with non-GAAP operating income projected between $17.5 million and $18.3 million. For the full year 2026, total revenue is expected to be between $493.0 million and $495.6 million, and non-GAAP operating income between $68.3 million and $70.3 million. The company raised its outlook for non-GAAP operating margin exiting Q4 2026 to approximately 17% from 15% and reiterates its 30% target for a Rule of 40 framework by Q4 2027.