Sprout Social, Inc · NASDAQ:SPT
Sprout Social — Q3 2024 Earnings Presentation
36 slides from Sprout Social's earnings presentation, Nov 7, 2024
Slide 1: Investor Presentation 3Q FY24
Investor Presentation 3Q FY24
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: 3Q FY2024 Results
30 FY2024 Results @ sproutsocial ?
Slide 4: Customers in 100+ countries
26% 20% 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 9/30/24. Revenue and ACV growth represents year-over-year growth of Q3 2024 over Q3 2023. 4
Slide 5: Q3 FY2024 Financial Overview
Q3 FY2024 Financial Overview Q3 FY2024 YoY Comparison Total Revenue $102.6M vs. $85.5M in Q3 FY2023 Customers Contributing >$10k in ARR 9,119 vs. 8,111 in Q3 FY2023 Customers Contributing >$50k in ARR 1,610 vs. 1,252 in Q3 FY2023 Average Contract Value (ACV) $13,959 vs. $11,103 in Q3 FY2023 RPO $311
Slide 6: Revenue
Revenue ($ Millions) $102.6 $99.4 $96.8 $93.6 $85.5 $79.3 $75.2 $69.7 $65.3 $61.4 $57.4 _ | | 4021 1022 2022 3022 4022 1023 2023 3023 4023 1024 2024 3024 sproutsocial
Slide 7: Non-GAAP Operating Income (Loss)
Non-GAAP Operating Income (Loss) ($ Millions) Non-GAAP Operating Income and Non-GAAP Operating Margin is a Non-GAAP financial metric. See appendix for reconciliations of this measure to its closest comparable GAAP measure and a definitions of this Non-GAAP measure. 7
Slide 8: Average Annual Contract Value (ACV)
Average Annual Contract Value (ACV) Recent Customer Highlights ACV calculated as ending quarter ARR divided by ending quarter total customer count 8
Slide 9: Broadening Customer Adoption
Broadening Customer Adoption Recent Customer Highlights 9
Slide 10: Guidance
Guidance ($ Millions, except EPS) Q4 FY2024 FY2024 Total Revenue $106.3 - $107.1 $405.1 - $405.9 Non-GAAP Operating Income $8.7 - $9.5 $27.5 - $28.3 Non-GAAP Net Income Per Share $0.15 - $0.16 $0.46 - $0.47 Weighted average shares of ~57.6 ~57.0 common stock outstanding 10
Slide 11: Growth Strategy
Growth Strategy Win The Customer Health & Partnerships & Improved Account Enterprise Adoption Ecosystem Penetration Driving increased Increasing our focus Continued partnering Accessing additional pipeline creation and on customer health with companies like budgets within strategic logo wins in and
Slide 12: 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 Experienced Highly scalable Large and rapidly record, intelligence leadership team sin
Slide 13: Driven by a world-class executive leadership team
Driven by a world-class executive Ryan Barretto Joe Del Preto Rachael Pfenning Alan Boyce CEO CFO SVP, Operations CTO leadership team Heidi Jonas General Counsel Mike Wolff CRO Scott Morris CMO Crystal Boysen Chief People Erika Trautman Chief Product Officer Officer Team background: 13
Slide 14: Long Term Operating Model
Long Term Operating Model Medium to Longer 2021 2022 2023 3Q24 Term Goals* Revenue 41% 35% 31% 20% >$1B Non-GAAP 76% 77% 78% 79% >80% Gross Margin Non-GAAP -3% -2% 1% 7% >20% Operating Margin Non-GAAP FCF 7% 3% 3% 9% 20-22% Margin Chart displays year over year growth. Non-GAAP Gross Margin, Non-GAAP
Slide 15: Corporate Overview
Corporate Overview @ sproutsocial
Slide 16: 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 17: Social media has fundamentally transformed the way consumers connect with brands
With more than Social media has fundamentally 5.17 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 18: 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 19: 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 19
Slide 20: 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 21: 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 22: 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 23: 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 24: 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 25: 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. 25
Slide 26: 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 27: 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. 27
Slide 28: 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 29: 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 30: 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 30
Slide 31: 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 32: 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 32
Slide 33: 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 09/30, Three Months Ended 09/30, 2024 2023 2024 2023
Slide 34: 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 Amortization of acquired intangible assets Non-GAAP operating in
Slide 35: Appendix
Appendix (Sin ns) Loss from operations Stock-based compensation expense n-related expenses tion of acquired intangible assets Non-GAAP operating income (loss) GAAP operating margin Non-GAAP operating margin Sprout Social, Inc. Summary and Reconciliation of Non-GAAP Financial Measure (Unaudited) Oper
Slide 36: 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. Non-GAAP gross profit. We define non-GAAP gross profit as GAAP gross profit, excluding stock-based compensation expense and