Sprout Social Reports $109.3 Million Revenue in Q1 2025, 13% Increase Year-Over-Year

Sprout Social, Inc. reported a revenue of $109.3 million for the first quarter of 2025, marking a 13% increase from $96.8 million in the same period of 2024. The growth was primarily driven by a rise in subscription revenue, which accounted for 99% of total revenue, reflecting a strong demand for the company's social media management platform. The company recorded a net loss of $11.2 million, an improvement from the $13.6 million loss reported in the prior year. This loss included stock-based compensation expenses of $19.8 million, up from $18.1 million in the previous year.

In terms of operational metrics, Sprout Social's customer base remains significant, with approximately 30,000 customers globally. Notably, the number of customers contributing over $10,000 in annual recurring revenue (ARR) increased by 6% year-over-year, while those contributing over $50,000 in ARR grew by 22%. However, the total customer count saw a slight decline, indicating a shift in focus towards larger enterprise clients. The company has also been investing in its sales and marketing efforts to enhance customer acquisition and retention.

The company undertook a restructuring plan in late 2024, which has led to a reduction in headcount and a focus on improving efficiency within its research and development and sales teams. This restructuring resulted in $2.7 million in charges during the first quarter of 2025. Despite these changes, operating expenses rose to $95.7 million, up from $87.6 million in the previous year, driven by increased costs in sales and marketing as well as general and administrative expenses.

Sprout Social's cash and cash equivalents stood at $100.9 million as of March 31, 2025, an increase from $86.4 million at the end of 2024. The company generated positive cash flows from operations amounting to $18.1 million during the quarter, compared to $11.2 million in the same period last year. The company also amended its credit agreement in April 2025, extending the maturity date of its $100 million revolving credit facility and adjusting the terms to better align with its financial strategy.

Looking ahead, Sprout Social anticipates continued investment in its platform and customer success initiatives, which may lead to further operating losses in the near term. The company remains focused on expanding its enterprise customer base and enhancing its product offerings to drive future growth, while also navigating macroeconomic challenges that could impact customer spending and sales cycles.