Sprout Social, Inc · NASDAQ:SPT
Sprout Social — Investor Presentation (November 2021)
29 slides from Sprout Social's investor presentation, November 2021
Slide 1: 2021 Investor Presentation
2021 Investor Presentation 1
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 Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by
Slide 3: Customers in 100+ Countries, >$204M Annual Revenue
30,000+ Customers in 100+ Countries >$204M 46% Annual Revenue Recurring Revenue Growth 99% 75% Subscription Revenue Gross Profit *All financial metrics are as of or for the period ended 9/30/21. Revenue growth represents year-over-year growth of 3Q21 over 3Q20. 3
Slide 4: Investment highlights
Investment highlights Enabling businesses Recurring SaaS Disruptive inbound Durable moats to operationalize model (99% trial model and fast and barriers to social subscription) time to value entry Mission critical Founder-led Highly scalable Large and rapidly system of record leadership team and sin
Slide 5: Our history
Our history Sprout was founded in 2010 and built on the premise that 2021 social media would change the way the world communicates Launched Social and how virtually every aspect of business operates. 2019 Commerce Became a public company Launched Reviews add-on 2017 2013 First business acquisition 2
Slide 6: Social media has fundamentally transformed the way consumers connect with brands
Social media has fundamentally transformed the way consumers connect with brands 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, 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 This digital transformation requires virtually every part of an organization to adapt and re-tool. Social is a horizontal technology that has tangible benefits to nearly every department of a modern business; businesses must maximize
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 2021 Investor Presentation 8
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 2021 Investor Presentation 9
Slide 10: Sprout's platform is mission-critical for more than 30,000 customers globally
Sprout’s platform is mission-critical for more than 30,000 customers globally 2021 Investor Presentation 10
Slide 11: A powerful, fully integrated platform
A powerful, fully integrated platform Our core platform was built to facilitate 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 in their standardization of social. Core Platform Expanded
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 competitive advantages Our approach to building powerful tools on a single code-base allows us to address the needs of a large number of brands, while using our scale to quickly compound value. The single code base allows us to innovate quickly and deliver feature enhancements to al
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 lack the entrenched network integration that represents a meaningful barrier to future entry. Dire
Slide 15: And entrenched network & integration ecosystem
And entrenched network & integration ecosystem We have deep, integrated network relationships that are increasingly hard to replicate; our expanding set of technology partner integrations is growing the value of our social system of record. 2021 Investor Presentation 15
Slide 16: Top customer-rated platform
Top customer-rated platform Sprout is the top customer-rated platform across these major categories 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, is a testament to our differentiated platform
Slide 17: In a very large market
In a very large market >$100B 2025 SAM Forecast* >20% Annual Growth >$44B Current SAM* 2021 Estimate <1% Current Penetration* Sprout and all of our direct competitors combined today serve a small fraction of global businesses 2021 Investor Presentation *See Appendix for detailed calculation 17
Slide 18: With proven success across segments
With proven success across segments We believe every market segment represents a multi-billion dollar addressable market. Sprout has proven our ability to serve each part of the market effectively, with industry-leading customer satisfaction and unit economics in each. - >6:1 overall LTV:CAC Ratio* -
Slide 19: Disruptive and efficient inbound GTM model
Disruptive and efficient inbound GTM model Demand Customer Generation On-boarding Inbound Trials Acquisition Retention Success & Support Sales Account Growth Development 2021 Investor Presentation 19
Slide 20: 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. Total Customers Total ARR $204,641 $189,109 $158,268 $172,013 33% $141,898 CAGR $130,785 $117,846 $124,630 Tota
Slide 21: Accelerating customer expansion
Accelerating customer expansion As our platform and enterprise growth efforts unfold, larger initial deal sizes, strategy to drive higher value for existing customers and a steady penetration of larger customers each compound multi-year ACV expansion. >$10K ARR Customers >$50K ARR Customers ACV 478 $
Slide 22: 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 2018 2019 2020 3Q21 2025 Framework Organic Revenue 54% 44% 36% 46% >30% / year Organic ARR 53% 39% 36% 44% >30% / year Gross Mar
Slide 23: Our growth strategy
Our growth strategy We are early in our journey with multiple levers to sustain durable medium term growth ‣ Capture Nascent TAM ‣ Account Expansion ‣ Platform Expansion ‣ International Expansion ‣ Category Expansion 2021 Investor Presentation 23
Slide 24: 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 25: Driven by a world-class leadership team
Driven by a world-class leadership team Justyn Howard Aaron Rankin Jamie Gilpin Joe Del Preto Maureen Calabrese Ryan Barretto CEO CTO CMO CFO CPO President Rachael Pfenning Gil Lara Peter Soung Alan Boyce Heidi Jonas Dir. Product & SVP, Operations CCO Engineering SVP, Engineering General Counsel Tea
Slide 26: Creating value for all of our stakeholders
Creating value for all of our stakeholders Industry leading Attractive unit Sustainable competitive platform economics and durable advantages long term growth Social is disruptive Strategic technology Top rated culture and mission critical partner in secularly and team advantaged growth market 2021
Slide 27: 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 Summary of Non-GAAP Financial Measures Three Months Ended 9/30, Three Months Ended 9/30, 2021 2020 2021 2020 Reconcil
Slide 28: Appendix
Appendix Sprout Social, Inc. Summary and Reconciliation of Non-GAAP Financial Measures (Unaudited) (in thousands) Three Months Ended 2018 2019 2020 September 30, 2021 % of % of % of % of $ Revenues $ Revenues $ Revenues $ Revenues Gross Margin Gross profit 57,819 73.4% 74,553 72.6% 98,032 73.7% 36,7
Slide 29: 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 a
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