Sprout Social, Inc · NASDAQ:SPT
Sprout Social — Investor Day (September 2021)
100 slides from Sprout Social's investor day presentation, Sep 22, 2021
Slide 1: Sprout Social Investor Day
2021 Investor Day 2021 Sprout Social Investor Day 1
Slide 2: Jason Rechel, Head of Investor Relations
Jason Rechel Head of Investor Relations He/him/his 2
Slide 3: Disclaimers: Forward-Looking Statements
2021 Investor Day 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-lo
Slide 4: Welcome & agenda
2021 Investor Day ● 9:10 | Justyn Howard, Founder and CEO ● 9:25 | Aaron Rankin, Founder and CTO ● Short Break ● 9:55 | Maureen Calabrese, CPO ● 10:20 | Jamie Gilpin, CMO ● 10:40 | Sales Leadership Panel ● Short Break ● 11:05 | Joe Del Preto, CFO ● 11:25 | Ryan Barretto, President ● 11:45 | Q&A Welc
Slide 5: Video
2021 Investor Day 5 V I D E O
Slide 6: A different kind of company
A different kind of company 2021 Investor Day 6
Slide 7: Justyn Howard and Rachael Pfenning
Justyn Howard Co-Founder & CEO Rachael Pfenning SVP, Operations She/her/hersHe/him/his 7
Slide 8: Aaron Rankin, Co-Founder and CTO
Aaron Rankin Co-Founder and CTO He/him/his 8
Slide 9: Technical foundation and vision
Technical foundation and vision 2021 Investor Day 9
Slide 10: Day one priorities
2021 Investor Day High-velocity distribution model Obsession with customer satisfaction Solve for scale Day one priorities 10
Slide 11: Single codebase from the start
Single codebase from the start One instance Cohesive UX Rapid innovation 2021 Investor Day 11
Slide 12: Product and technology moats
2021 Investor Day Built for self-serve Elegance drives volume Fully integrated Product and technology moats 12
Slide 13: An integrated social system of record
2021 Investor Day Sprout Social Marketing An integrated social system of record Care & Success Strategy Commerce 13
Slide 14: Compounding innovation and scale advantages
2021 Investor Day Single code base Focus on core Control our pace Continuous improvement Compounding innovation and scale advantages 14
Slide 15: Continuous improvement and efficiency
Continuous improvement and efficiency Culture fuels success Innovation vs. maintenance Continuous improvement Culture fuels success Scalable R&D model Structure to scale 2021 Investor Day 15
Slide 16: Core technology teams
2021 Investor Day Core technology teams The way we build P ro du ct s qu ad s 16
Slide 17: The future
2021 Investor Day The future Accelerating value and compounding technical moats Build, learn and iterate Deepen value by expanding product capabilities Multiple products from shared core Single codebase ethos: one product or many 17
Slide 18: Break
2021 Investor Day Break See you back in: 18
Slide 19: Sprout Social Investor Day
2021 Investor Day 2021 Sprout Social Investor Day 19
Slide 20: Maureen Calabrese, Chief People Officer
Maureen Calabrese Chief People Officer She/her/hers 20
Slide 21: Culture as a business strategy
Culture as a business strategy 2021 Investor Day 21
Slide 22: Culture is the critical differentiator
Culture is the critical differentiator 2021 Investor Day 22
Slide 23: Building something special
Building something special 2021 Investor Day 23
Slide 24: 96% of employees would recommend Sprout
2021 Investor Day 96% Of Sprout employees would recommend Sprout as a great place to work. 24
Slide 25: Powerful external recognition
2021 Investor Day Powerful external recognition 4.7 96% Rating on Glassdoor 3.5 | 2021 average rating of all companies on Glassdoor CEO approval rating on Glassdoor 73% | 2021 average CEO approval rating on Glassdoor 25
Slide 26: Culture is our business strategy
2021 Investor Day Culture is our business strategy 26
Slide 27: Diversity, equity and inclusion
Diversity, equity and inclusion 2021 Investor Day 27
Slide 28: Examining systems to ensure equity
2021 Investor Day At Sprout we examine all systems in place to ensure they are equitable in design and practice 28
Slide 29: Inclusive leadership and Global Leadership Model
2021 Investor Day Inclusive leadership is at the core of our Global Leadership Model 29
Slide 30: Community Resource Groups
2021 Investor Day Community Resource Groups 30
Slide 31: Recruitment and hybrid work
2021 Investor Day Recruitment and hybrid work 31
Slide 32: Recruitment team up 50% in 2021
2021 Investor Day Recruitment team is up 50% in 2021, and growing +50% 32
Slide 33: 1,000+ employee referrals per year
2021 Investor Day 1,000+ employee referrals per year 33
Slide 34: 20% of employees outside primary offices
2021 Investor Day 20% of employees are outside of our primary office locations, up from 7% as of January 2020 34
Slide 35: 2021 Investor Day 35
2021 Investor Day 35
Slide 36: An environment where human potential can thrive
An environment where human potential can thrive 2021 Investor Day 36
Slide 37: Video
2021 Investor Day 37 V I D E O
Slide 38: Jamie Gilpin, Chief Marketing Officer
Jamie Gilpin Chief Marketing Officer She/her/hers 38
Slide 39: The inbound engine
The inbound engine 2021 Investor Day 39
Slide 40: Inbound marketing funnel
2021 Investor Day Awareness Interest Consideration Decision Inbound marketing 40
Slide 41: 95% organic traffic in 2021
2021 Investor Day 95% organic traffic in 2021 41
Slide 42: Content is king
2021 Investor Day Content is king ● Emerging trends ● Hot topics Social ● Keyword driven ● Trending topics SEO ● Sprout’s product value and social expertise at the forefront Unique value ● Relevant to pain points ● Rooted in customer insights Buyer needs 42
Slide 43: Trending topics
2021 Investor Day Trending topics 43
Slide 44: Relevancy
2021 Investor Day Relevancy 44
Slide 45: Optimizing the funnel
2021 Investor Day Optimizing the funnel 45
Slide 46: +1M monthly visitors in 2021
2021 Investor Day +1M monthly visitors in 2021 46
Slide 47: Inbound marketing: Interest
2021 Investor Day Awareness Interest Consideration Decision Inbound marketing Inter st 47
Slide 48: Reimagine the role of social in your business
@ sorostsocel Reimagine the role of social in your business 2021 Investor Day
Slide 49: Inbound marketing: Consideration
2021 Investor Day Awareness Interest Consideration Decision Inbound marketing Consid ration 49
Slide 50: Optimization: predictive ML conversion model
2021 Investor Day Optimization Proprietary, predictive ML model measuring propensity to convert Quality model Dynamic Constantly shifting and iterating with new information Optimization of sales resources against highest quality leads Prioritization 50
Slide 51: +30% conversion from Leads to Subscribers
2021 Investor Day +30% conversion from Leads to Subscribers 51
Slide 52: Customer social mentions
¥ Cristina Nogueras @cmnoguer Mentioned @SproutSocial Not only do | love @SproutSocial as a tool but | also love that when | google random questions for work, a lot of times it is their own content that ends up being the most useful. Wins all around. #SocialMediaManagement twohourdigia Really powerf
Slide 53: Enterprise
2021 Investor Day Enterprise 53
Slide 54: Reimagine the role of social
2021 Investor Day Reimagine the role of social 54
Slide 55: High sophistication
2021 Investor Day High sophistication 55
Slide 56: Expansion and growth
2021 Investor Day Expansion and growth 56
Slide 57: Market and buyer evolution
2021 Investor Day Market and buyer evolution 57
Slide 58: Social is our core
2021 Investor Day Social is our core 58
Slide 59: International
2021 Investor Day International 59
Slide 60: Customer expansion
2021 Investor Day Customer expansion 60
Slide 61: Summary
2021 Investor Day Summary ● Relevancy ● Optimization Inbound ● Quality ● Growth Funnel ● Growing TAM ● Global Expansion 61
Slide 62: Sales leadership panel
Sales leadership panel 2021 Investor Day 62
Slide 63: Sales leadership panel
Daryl Mason VP, Enterprise He/him/his Gerard Murnaghan VP & GM, EMEA He/him/his Dan Summers VP, Acquisition & Growth She/her/hers Kristin Johnson VP, Content & Communications He/him/his 63
Slide 64: Break
2021 Investor Day Break See you back in: 64
Slide 65: Sprout Social Investor Day
2021 Investor Day 2021 Sprout Social Investor Day 65
Slide 66: Joe Del Preto, Chief Financial Officer
Joe Del Preto Chief Financial Officer He/him/his 66
Slide 67: Financial overview
Financial overview 2021 Investor Day 67
Slide 68: December 2019 IPO: $104M Organic ARR, 23K customers
2021 Investor Day $104M | 23K Organic ARR | Customers December 2019 IPO 68
Slide 69: Now: $200M ARR, 30K customers
2021 Investor Day $200M | 30K ARR | Customers Now 69
Slide 70: Nascent, inflecting growth market
2021 Investor Day Nascent, inflecting growth market >225M businesses currently on social media* 1% penetration** SPT + all competitors *Public reports from social media networks **Total estimated customer count of SPT and all competitors 70
Slide 71: Prior market estimate
2021 Investor Day Prior market estimate >$50B TAM Top decile ACV >$25B SAM Current ACV 71
Slide 72: SAM estimate revision
2021 Investor Day 2021 SAM estimate revision >$44B >$25B (prior) 72
Slide 73: 2025 served available market forecast
2021 Investor Day 2025 served available market forecast Enterprise +25% CAGR SMB +20% CAGR Mid Market +45% CAGR >$100B >20% CAGR 73
Slide 74: Customer growth is accelerating
2021 Investor Day Customer growth is accelerating 1404 1490 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 661 374 700 648 627 390 273 1200 1162 583 74
Slide 75: ACV expansion has further upside
ACV expansion has further upside 2021 Investor Day $6,117 $6,386 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 $4,150 $4,376 $4,581 $4,747 $4,974 $5,175 $5,370 $5,552 $5,924 $4,423 75
Slide 76: Rising premium module attach rates
Rising premium module attach rates 2021 Investor Day Percent of total current customers that are active subscribers of one more more premium modules, social listening or premium analytics. Q4 2019 Q1 2020 Q2 2021 Q3 2020 Q4 2020 Q1 2021 Q2 2021 6.4% 8.2% 10.2% 12.4% 13.6% 14.5% 9.6% 76
Slide 77: >$10K customers are segment-agnostic
>$10K customers are segment-agnostic 2021 Investor Day Enterprise 29% SMB 13% Agency 22% Mid-market 37% *Percent of total >$10K ARR customers within each segment. As of 6/30/2021. 77
Slide 78: Large customer momentum is strong
Large customer momentum is strong 2021 Investor Day >$10K ARR customers >$50K ARR customers 78
Slide 79: Secular growth and use case expansion
Secular growth Social is mission critical Use case expansion Enterprise Mid-market Premium modules Social Listening Social commerce Social customer care Sophistication Operationalization of social Analytics Advocacy Social collaboration Preferred communication channel Engagement 2021 Investor Day So
Slide 80: Medium term framework
Medium term framework Fast growth expected through at least 2025 2021 Investor Day Annual Revenue | ARR Growth >30% Annual Op. Margin Expansion 100-300bps Annual FCF margin 200-300bps > OPM 80
Slide 81: Long term forecast update
Long term forecast update New Old Revenue | ARR Durable Growth Durable Growth Gross Margin 78-81% 78-81% Operating Margin >25% >20% FCF Margin >30% >OPM 2021 Investor Day 81
Slide 82: Ryan Barretto, President
Ryan Barretto President He/him/his 82
Slide 83: Where we're going
Where we’re going 2021 Investor Day 83
Slide 84: Product-led model
2021 Investor Day Product-led model Speed of innovation New & unique use cases Ability to scale New product offerings Hands on the keyboard 84
Slide 85: Exceptional product
Exceptional product 4.7 | 96% Overall rating | CEO approval rating Exceptional culture Ease of use Admin Product Direction Support Perf. & reliability Ease of setup 8.9 8.9 9.0 8.8 8.8 8.8 A 8.4 8.5 7.8 8.0 8.5 8.3 B 6.4 6.6 8.2 7.4 7.5 6.6 C 7.7 7.1 7.6 7.5 8.0 6.4 85
Slide 86: Bringing a $100B market to us
Awareness Interest Consideration Decision Bringing a $100B market to us 2021 Investor Day Enterprise +25% CAGR SMB +20% CAGR Mid-market +45% CAGR >$100B >20% CAGR 86
Slide 87: Virtuous growth cycle
2021 Investor Day Virtuous growth cycle Publishing Engagement Automation Reporting 87
Slide 88: Future evolution
2021 Investor Day Future evolution Product-led growth Platform improvements Horizontal use case expansion 88
Slide 89: Valuable partner ecosystem
2021 Investor Day Valuable partner ecosystem 89
Slide 90: Efficient sales motion and unit economics
Teams aligned as business unit by segment, allowing for optimal resource allocation >6:1 LTV/CAC30-45 days sales cycle Efficient sales motion Segment focus Rapid sales cycle Unit economics 90
Slide 91: Structural advantages, durable moats
2021 Investor Day Awareness Interest Consideration DecisionStructural advantages, durable moats. Scale Custom r experience Culture Platform foundation Technical barriers to entry; entrenched relationships 91
Slide 92: Investment summary
Social system of record, intelligence and action Disruptive and scalable go-to-market Large and growing (>$100B) market Efficient economics Platform leadership Valuable and symbiotic partner ecosystem Culture as a business strategy 92
Slide 93: Executive Q&A
Executive Q&A 2021 Investor Day 93
Slide 94: Thank you!
Thank you! 94
Slide 95: Sprout Social Investor Day
2021 Investor Day 2021 Sprout Social Investor Day 95
Slide 96: Financial appendix
2021 Investor Day Financial appendix 96
Slide 97: Financial appendix
2021 Investor Day Financial appendix 97
Slide 98: Data and disclaimers appendix
2021 Investor Day Data and disclaimers appendix Unless otherwise stated or noted throughout this presentation, all financial data is as of 6/30/2021. Slide 24. Based on Sprout Social’s internal CultureAmp Survey, completed in August 2021. Slide 25. Sprout Social Glassdoor ratings and averages of all
Slide 99: Financial definitions appendix
2021 Investor Day Financial definitions 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 mitiga
Slide 100: The End
2021 Investor Day THE END 100