Sprout Social, Inc · NASDAQ:SPT
Sprout Social — Investor Presentation (May 2020)
27 slides from Sprout Social's investor presentation, May 6, 2020
Slide 1: 2Q20 Investor Presentation
sproutsocial 2Q20 Investor Presentation
Slide 2: Disclaimer
Disclaimer 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 Securties Exchange Act of 1934, as amended. In some ‘cases, you can identify forward-looking statements by
Slide 3: Customers in 100+ Countries
24,000+ Customers in 100+ Countries >$120M 31% Annual Revenue Recurring Revenue Growth 99% 73% Subscription Revenue Gross Profit
Slide 4: Investment highlights
Investment highlights Powering digital transformation to social media ii Critical new system of record for modern business C7 Recurring SaaS model (99% subscription) e920 (aa ae Founder-led leadership team and exceptional culture Strong user adoption and fast time to value </> Highly scalable single
Slide 5: Our history
Our history Sprout was founded in 2010 and built on the premise that social media would change the way the world communicates and how virtually every aspect of business operates. 2019 Became a public company Launched Reviews add-on 2017 2013 First business 2010 Hired 100th acquisition employee Found
Slide 6: Social media has fundamentally transformed the way brands connect with customers
Social media has fundamentally transformed the way brands connect with customers With more than 3.4 billion consumers using social media, businesses must adapt or risk becoming irrelevant to nearly half of the world’s population. The ways that business attract, acquire and retain customers is being
Slide 7: And changed the entire customer experience, across the enterprise
And changed the entire customer experience, across the enterprise This digital transformation requires virtually every part of an organization to adapt and re-tool. Existing business tools and processes are not prepared to address this shift in communication, and it has impacted the entire customer
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 in serving the modern customer. ete ve mo) O pots) =| = Sle =Se—- ESS fo— | O54 =al [2 am) = Pa i= (2) HSS = Lan etre
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. ° ty tr vy “a > ®@ Marketing Sales Support Success Product Strategy
Slide 10: Sprout's platform is mission-critical for more than 24,000 customers globally
Sprout’s platform is mission-critical for more than 24,000 customers globally *e &% 8 e eo bid 7 ee * 8 g@ to | ¢. © a 2020 Investor Presentation
Slide 11: A powerful, fully integrated platform
co emi llisttiltvil A powerful, fully = = integrated platform = Our core platform was built to facilitate social communication. We’ve expanded to handle new use-cases as more of the customer experience has shifted to social, and as businesses mature in their adoption of social as a primary communica
Slide 12: Providing real-time insights for brands across billions of data points
Providing real-time - insights for brands across billions oe 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
Slide 13: With compounding advantages
With compounding advantages Our approach to building powerful, intuitive tools on a single code-base has allowed us to address the needs of a larger number of brands, while innovating quickly and using our scale to compound value for our customers. Seamless, Unified Platform Deep, Integrated Single
Slide 14: And rising barriers to entry
And rising barriers to entry Sprout is well positioned across all competitive-vectors. Our primary competitors have taken a different approach to the market; other software vendors have been unable to adapt effectively to social and lack entrenched network integration. Other Software Vendors Social
Slide 15: Top customer-rated platform
Top customer-rated platform Sprout is the top customer-rated platform across every category and every market segment relative to our primary competitors. Our ability to earn top ratings from more than 3,000 customers across SMB, mid-market and enterprise companies alike, in every category is a testa
Slide 16: In a very large market
In a very large market >$50B Expanded TAM Based on the average spend of our top 10% customers $25B Current SAM Based on current average customer spend, we estimate the U.S. at $13B, with the rest-of-world market at least as large 3-5% Current Penetration* Sprout and all of our direct competitors com
Slide 17: With proven success across segments
With proven success across segments We believe every market segment represents a multi-billion dollar addressable market, and Sprout has proven our ability to serve each part of the market effectively, while seeing industry-leading customer satisfaction and unit economics in each. - >6:1 Aggregate L
Slide 18: And highly-efficient GTM model
And highly-efficient GTM model Demand Customer Generation On-boarding Inbound Trials Acquisition Retention Success & Support Sales Account Growth Development PB 2020 investor Presentation 8
Slide 19: Consistently expanding ARR
Consistently expanding ARR In addition to consistently growing our customer base over time, we’ve seen the value of those customers increase disproportionately, compounding our ARR growth. i Total Customers @ Total ARR $70,422 $48,363, $43,388 $38,667 16827 | 17588 § 12189 | 18.802 1017-2017, 3017 4
Slide 20: Accelerating customer expansion
Accelerating customer expansion I >$10K ARR Customers I Aggregate ACV $5.75 As our platform strategy unfolds, larger $4,823 initial deal sizes, multi-layered strategy to $3813 drive higher value for existing customers 1625 and a steady penetration of larger customer each compound multi-year caer ACV
Slide 21: Strong economics, optimized for growth
Strong economics, optimized for growth Attractive returns on growth investments and a strong competitive position reinforce our investments to support long duration growth Organic Revenue Organic ARR Gross Margin Operating Margin FCF Margin 2017 MN% 55% 717% -48% -34% 2018 2019 44% 39% 73.7% -21% -1
Slide 22: Our growth strategy
Our growth strategy We are early in our journey with multiple levers to sustain durable medium term growth Capture Nascent TAM v Account Expansion Platform Expansion ¥ International Expansion v Category Expansion © 2201s resentation
Slide 23: Culture as a business strategy
Culture as a business strategy Since the beginning, we’ve focused on building the highest quality products, an industry-leading workplace, and taking amazing care of our customers. We’re building an enduring company that our team, families, customers and investors can be proud of. Glassdoor Best Pla
Slide 24: Driven by a world-class leadership team
Driven by a world-class leadership team oi @S Qi Justyn Howard Aaron Rankin Jamie Gilpin Joe Del Preto Maureen Calabrese Ryan Barretto CEO cTo CMO CFO cPO SVP, Global Sales Rachael Pfenning Gil Lara Peter Soung Alan Boyce Heidi Jonas ‘SVP, Operations cco Dir. Engineering VP, Engineering General Coun
Slide 25: Creating value for all of our stakeholders
Creating value for all of our stakeholders Industry leading platform Social is disruptive and mission critical wae alll Attractive unit economics and durable long term growth e Strategic technology partner in secularly advantaged growth market wv dh Sustainable competitive advantages Y Top rated cul
Slide 26: Appendix: Reconciliation of Non-GAAP Financial Measures
Appendix Reconciliation of Non-GAAP Financial Measures ‘Summary and Reconci Sprout Social, Inc. n of Non-GAAP Financial Measures (Unaudited) (in thousands, except per share data) ‘Three Months Ended March 31, 2020 Reconciliation of Non-GAAP operating loss, Loss from operations $10,944 Stock-based co
Slide 27: Appendix
Appendix ‘Organic ARR. We define organic ARR as total ARR excluding the impact of recurring revenue generated from legacy Simply Measured products, We believe organic ARR isan indicator of the scale and visibility of our core platform while mitigating fluctuations due to seasonality and contract ter