0001517375-26-000015
SEC filingSprout Social, Inc. reported total revenue of $457.5 million for FY 2025, representing 13% year-over-year growth from $405.9 million in FY 2024. The company generated a gross profit of $354.9 million, resulting in a gross margin of 77.6%. However, operating expenses of $398.3 million, driven by sales and marketing ($190.6M), research and development ($101.3M), and general and administrative ($106.5M) costs, led to an operating loss of $43.5 million. The net loss for the year was $43.3 million, an improvement from a $62.0 million net loss in FY 2024. Despite the net loss, the company generated positive operating cash flow of $43.4 million. Key strategic moves included the acquisition of NewsWhip for predictive media intelligence capabilities, funded partially through a revolving credit facility. The company maintains a strong liquidity position with $95.3 million in cash and cash equivalents and total assets of $523.1 million.
Sprout Social reported FY 2025 revenue of $457.5 million, representing 13% growth from $405.9 million in FY 2024. This continues the company's growth trajectory, though at a moderated pace compared to the 22% growth achieved from FY 2023 to FY 2024. The company improved its net loss position to $43.3 million from $62.0 million in the prior year, representing a 30% reduction in losses. Key financial metrics show gross profit of $354.9 million (77.6% margin), operating loss of $43.5 million, and basic/diluted net loss per share of $1.00. The company generated positive operating cash flow of $43.4 million despite the net loss, primarily due to significant non-cash adjustments including $78.7 million in stock-based compensation expense.
Revenue growth of 13% to $457.5 million was driven primarily by subscription revenue, which represented 99% of total revenue. The company's growth strategy focuses on mid-market and enterprise customers, with an emphasis on accounts contributing $50,000 or more in annualized recurring revenue (ARR). Sprout Social implemented a price increase in November 2022 to align with enterprise market expectations, resulting in decreased customer count but increased average spend per customer. The company's product-led growth strategy leverages free trials and product demonstrations, with a significant portion of inbound trials generated through unpaid marketing channels. The acquisition of NewsWhip in July 2025 expanded the company's capabilities into predictive media intelligence and crisis monitoring.
Gross margin improved slightly to 77.6% from 77.1% in the prior year, with gross profit reaching $354.9 million on total cost of revenue of $102.7 million. Operating expenses totaled $398.3 million, comprising sales and marketing ($190.6M), research and development ($101.3M), and general and administrative ($106.5M) expenses. The operating loss of $43.5 million represents an improvement from the $62.2 million operating loss in FY 2024. Stock-based compensation expense of $78.7 million significantly impacted profitability metrics, though this decreased from $84.3 million in the prior year. The company's operating margin was -9.5%, showing improvement from -15.3% in FY 2024.
Operating cash flow was positive at $43.4 million, driven by adjustments including $78.7 million in stock-based compensation and $24.1 million in amortization of deferred commissions. Investing activities used $52.1 million in cash, primarily for the NewsWhip acquisition ($51.8M) and property and equipment expenditures ($4.1M). Financing activities provided $15.5 million in cash, including $32.0 million in borrowings from the revolving credit facility partially offset by $17.0 million in repayments. The balance sheet shows total assets of $523.1 million, including $95.3 million in cash and cash equivalents, $101.0 million in accounts receivable, and $167.1 million in goodwill. Total liabilities were $319.6 million, including $256.3 million in current liabilities and $40.0 million in revolving credit facility debt. Stockholders' equity stood at $203.4 million.
The company expects to continue investing in growth and generate net losses for the foreseeable future. Strategic priorities include winning enterprise customers, increasing customer health through improved onboarding and adoption, investing in strategic partnerships, and further penetrating the customer base with use case expansion and premium modules. Management noted macroeconomic uncertainty could persist, potentially leading to more measured buying behavior, lengthening sales cycles, and continued slowdown in revenue growth compared to historical levels. The company plans to enhance go-to-market execution in 2026 by prioritizing enterprise growth, multi-threaded sales motions, high-value deals, verticalized strategies, and international market development.