Sprout Social (SPT) Q1 2026 earnings summary

Executive summary

• Revenue grew 11.2% year-over-year to $121.5 million in Q1 2026, with 99% from subscriptions and strong non-GAAP profitability.

• Customer base of $30K+ ARR grew 12% to 3,875, and $50K+ ARR customers rose 18% to 2,085 year-over-year, now driving over 60% of subscription revenue.

• Non-GAAP free cash flow reached $24.7 million, a 27% year-over-year increase and the highest in company history.

• Board authorized a $50 million share repurchase program, reflecting confidence in long-term value and disciplined capital allocation.

• AI orchestration framework Trellis moved out of beta, now live across key products, with rapid adoption and strong customer feedback.

Financial highlights

• Subscription revenue was $120 million, up 10.4% year-over-year; professional services revenue rose 143% to $1.5 million.

• Gross profit margin remained strong at 77%, with non-GAAP operating margin at 12%.

• Non-GAAP operating income rose to $14.1 million, with a margin of 12%.

• Cash and cash equivalents totaled $111.6 million at quarter-end, up from $100.9 million a year ago.

• Total remaining performance obligations (RPO) reached $395.3 million, up 10% year-over-year.

Outlook and guidance

• Q2 2026 revenue expected between $121.7 million and $122.5 million; non-GAAP operating income between $9.5 million and $10.3 million.

• FY2026 revenue guidance set at $492.5 million–$495.5 million; non-GAAP operating income $54.9 million–$60.4 million; non-GAAP net income per share $0.88–$0.97.

• Targeting a 15% non-GAAP operating margin by Q4 2026 and reaffirming a 30% Rule of 40 target by Q4 2027.