Sprout Social, Inc · NASDAQ:SPT
Sprout Social — Q2 2024 Earnings Presentation
31 slides from Sprout Social's earnings presentation, Aug 1, 2024
Slide 1: Investor Presentation
y | sproutsocial Investor Presentation VA
Slide 2: Disclaimers
Disclaimers Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements b
Slide 3: Customers in 100+ countries
36% 25% ACV Growth Revenue Growth 30,000+ Customers in 100+ countries 99% 77% Subscription Gross Profit Revenue *All financial metrics are as of or for the quarter ended 6/30/24. Revenue growth represents year-over-year growth of Q2 2024 over Q2 2023.
Slide 4: Investment highlights
Investment highlights Empowering Recurring SaaS model Disruptive product Durable moats and businesses to (99% subscription) led model and fast barriers to entry operationalize social time to value Social system of Founder-led Highly scalable Large and rapidly record, intelligence leadership team and
Slide 5: Our history
Our history Sprout was built on the premise that social media would change the way the world communicates and how virtually every aspect of business operates. 2019 2021 Became a public Launched Social company Commerce 2017 Launched Reviews 2010 2013 add-on First business 2023 Hired 100th acquisition
Slide 6: Social media has fundamentally transformed the way consumers connect with brands
With more than Social media has fundamentally 5.07 billion transformed the way consumers using social media consumers connect Businesses must adapt or risk becoming irrelevant with brands to nearly half of the world’s population. The ways that business attract, acquire, sell to and service customers
Slide 7: And changed the entire customer experience, across the enterprise
And changed the entire customer experience, across the enterprise Social is a horizontal technology that has tangible benefits to nearly every department within a modern business; businesses must adapt and re-tool to harness the power of social and maximize the value of social data. Marketing Influenc
Slide 8: Requiring an entirely new system of record
Requiring an entirely new system of record Social media is massive, scattered, multi-purpose and does not conform to our existing business systems. A centralized platform is critical to creating strategic business value. Marketing Sales Support Success Product Strategy Commerce Influencer Advocacy
Slide 9: Sprout is the platform solution
Sprout is the platform solution Sprout consolidates the complexity of social channels into a powerful, elegant and seamlessly integrated platform that can be leveraged across an organization. Marketing Sales Support Success Product Strategy Commerce Influencer Advocacy Influencer category expansion vi
Slide 10: Sprout Social has become mission-critical for more than 30,000 customers
Sprout Social has become mission-critical for more than 30,000 customers globally
Slide 11: A powerful, fully integrated platform
A powerful, Listening Analytics fully integrated platform Publishing Our core platform was built to facilitate Engagement Reporting social communication. We’ve expanded our capabilities to handle new use-cases as more of the customer experience has shifted to social, and as businesses mature Influenc
Slide 12: Providing real-time insights for brands across billions of data points
Providing real-time insights for brands across billions of data points Social data is an unprecedented source of business intelligence — allowing businesses to better understand their customers, markets, competitors and to shape their strategy based on real-time global insights from billions of cons
Slide 13: With compounding competitive advantages
With compounding Seamless, unified Single code competitive base platform advantages Deep, integrated Our core platform was built to network facilitate social communication. partnerships We’ve expanded our capabilities Data scale to meet new use-cases as more Dynamic of the customer experience shifts
Slide 14: Meaningful barriers to entry
Meaningful barriers to entry We are well positioned to lead our market. Our primary competitors have taken a different approach; other software vendors have been unable to adapt effectively to social and are leaning in to social partnerships with Sprout. Direct competitors Other software vendors Speci
Slide 15: Entrenched network & integration ecosystem
Entrenched network & integration ecosystem We have deep, integrated and differentiated network & technology partner relationships that are increasingly hard to replicate; our expanding ecosystem is growing the value of our social system of record.
Slide 16: Top customer-rated platform
Top customer-rated platform Sprout was named the #1 Best Software Product by G2’s 2024 Best Software Awards. We are the top rated platform in our category for virtually every customer satisfaction dimension. Product Performance Ease of use Admin Support Ease of setup Focus direction & reliability 8.
Slide 17: Our market is early
Our market is early 90% <5% Executives agree: social will soon Have adopted a social media become their primary channel for management platform connecting with customers Data from “The 2023 State of Social Media: AI & Data Take Center Stage.” Harris Poll, Commissioned by Sprout Social, 2023.
Slide 18: And rapidly growing
And rapidly growing Sprout’s entrance into the influencer marketing category will expand ACV and SAM opportunity >$120B 2025 TAM forecast* >25% Annual Growth; influencer marketing represents additional TAM and faster growth >$55B current SAM* 2023 Estimate; influencer marketing represents additional SA
Slide 19: With a strategically diversified customer base
With a strategically diversified customer base Our product, go to market and success strategies are aligned around the most productive customers in our market. We’re positioned to capture customers as they mature into our sweet spot over time. ● >6:1 overall LTV:CAC Ratio* SMB ● Highly diverse custo
Slide 20: Disruptive and durable GTM model
Disruptive and durable GTM model SEO, content, Customer partnerships on-boarding & brand Inbound trials Acquisition Retention Success & Support Community, Sales content & customer development marketing
Slide 21: Platform adoption is early
Platform adoption is early We’re building the unified platform for all social workflow. We have a large opportunity to make social listening, advocacy, reporting and influencer marketing core to every customer. Two or more premium products Customers who Customers who have not adopted a have adopted one
Slide 22: Accelerating multi-year ACV growth
Accelerating multi-year ACV growth We are scaling with high quality, social-first customers. This is resulting in larger initial lands, more valuable existing customers, and broader penetration of larger accounts, all compounding to deliver multi-year ACV growth. Recent Customer Highlights ACV calcul
Slide 23: Broadening customer adoption
Broadening customer adoption As we accelerate growth with our largest customers, we are establishing ourselves as the social system of record, intelligence and action. Recent Customer Highlights
Slide 24: Strong economics, optimized for growth
Strong economics, optimized for growth Attractive returns on growth investments and a strong competitive position reinforce investments to support long duration growth 2021 2022 2023 2Q24 2028 Goals Revenue 41% 35% 31% 25% >$1B Non-GAAP 76% 77% 78% 79% >80% Gross Margin Non-GAAP -3% -2% 1% 5% >20% O
Slide 25: Our growth strategy
Our growth strategy We are early in our journey with multiple levers to sustain durable medium term growth ● Lead Nascent TAM ● Account Expansion ● Platform Expansion ● International Expansion ● Category Expansion
Slide 26: Culture as a business strategy
2017, 2018, 2020, 2021, Culture as a 2022, 2023 business strategy We’re building an enduring company centered on amazing people, amazing products and over-delivering for our customers. 2019, 2020, 2021, 2022, 2023, 2024, 2025
Slide 27: Driven by a world-class executive leadership team
Driven by a world-class executive Justyn Howard Ryan Barretto Joe Del Preto Rachael Pfenning CEO President CFO SVP, Operations leadership team Heidi Jonas General Counsel Alan Boyce CTO Scott Morris CMO Crystal Boysen Chief People Erika Trautman Chief Product Officer Officer Team background:
Slide 28: Creating value for all of our stakeholders
Creating value for all of our stakeholders Industry leading Attractive unit economics Sustainable competitive platform and durable long term advantages growth Social is disruptive and Strategic technology partner Top rated culture mission critical in secularly advantaged and team growth market
Slide 29: Appendix
Appendix Sprout Social, Inc. Summary and Reconciliation of Non-GAAP Financial Measures (Unaudited) (in thousands, except per share data) Reconciliation of Non-GAAP Financial Measures Reconciliation of Non-GAAP Financial Measures Three Months Ended 06/30, Three Months Ended 06/30, 2024 2023 2024 2023
Slide 30: Appendix
Appendix Gross Margin Gross profit Stock-based compensation expense Amortization of acquired developed technology Non-GAAP gross margin Operating Margin Loss from operations Stock-based compensation expense Acquisition-related expenses Amorti n of acquired intangible assets Non-GAAP operating income
Slide 31: Appendix
Appendix Annual Recurring Revenue (“ARR”). We define ARR as the annualized revenue run-rate of subscription agreements from all customers as of the last date of the specified period. We believe ARR is an indicator of the scale of our entire platform while mitigating fluctuations due to seasonality and