Sprout Social (NASDAQ:SPT) Shares Gap Up After Better-Than-Expected Earnings
by Danessa Lincoln · The Markets DailySprout Social, Inc. (NASDAQ:SPT – Get Free Report) gapped up prior to trading on Friday following a better than expected earnings announcement. The stock had previously closed at $8.19, but opened at $9.61. Sprout Social shares last traded at $10.2350, with a volume of 518,895 shares changing hands.
The company reported $0.26 earnings per share for the quarter, topping analysts’ consensus estimates of $0.16 by $0.10. The company had revenue of $123.85 million during the quarter, compared to the consensus estimate of $122.19 million. Sprout Social had a negative net margin of 8.18% and a negative return on equity of 13.90%. Sprout Social has set its FY 2026 guidance at 1.110-1.150 EPS and its Q3 2026 guidance at 0.290-0.300 EPS.
Trending Headlines about Sprout Social
Here are the key news stories impacting Sprout Social this week:
- Positive Sentiment: Q2 earnings beat estimates: Sprout Social reported adjusted earnings of $0.26 per share, versus the $0.16 consensus estimate and $0.18 a year earlier. Revenue reached approximately $123.8 million, ahead of expectations near $122.2 million and up 10.8% year over year. Sprout Social Surpasses Q2 Earnings and Revenue Estimates
- Positive Sentiment: Raised full-year earnings guidance: Management now expects fiscal 2026 adjusted EPS of $1.11–$1.15, well above the prior consensus estimate of $0.68. Third-quarter EPS guidance of $0.29–$0.30 also exceeds the $0.18 consensus, supporting the view that operating leverage is improving. Sprout Social Announces Second Quarter 2026 Financial Results
- Positive Sentiment: Enterprise customer growth remained encouraging: Subscription revenue contribution from customers generating at least $30,000 in annual recurring revenue increased 20% year over year, indicating continued traction with larger accounts. Operating cash flow was positive at $8.5 million, and the company ended the quarter with approximately $119.9 million in cash.
- Neutral Sentiment: Revenue outlook was largely in line: Third-quarter revenue guidance of $123.3–$124.1 million and full-year guidance of $493.0–$495.6 million were broadly consistent with consensus estimates. The upside in the stock therefore appears driven more by earnings guidance than by accelerating revenue expectations. Sprout Social 2026 Q2 Earnings Presentation
- Negative Sentiment: GAAP losses and insider selling remain risks: A third-party report indicated a GAAP net loss of approximately $3.1 million, or $0.05 per diluted share, despite the adjusted EPS beat. It also cited eight insider sales and no insider purchases during the past six months. These factors may limit investor enthusiasm if profitability does not translate into sustained GAAP earnings.
Analyst Ratings Changes
A number of equities research analysts have weighed in on the company. Weiss Ratings reaffirmed a “sell (e+)” rating on shares of Sprout Social in a report on Friday, July 17th. KeyCorp reissued an “underweight” rating on shares of Sprout Social in a report on Friday. Finally, Barclays upped their price objective on Sprout Social from $8.00 to $9.00 and gave the stock an “overweight” rating in a research report on Monday, May 11th. Three analysts have rated the stock with a Buy rating, four have assigned a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of “Hold” and an average price target of $10.29.
Check Out Our Latest Stock Report on Sprout Social
Insider Transactions at Sprout Social
In related news, insider Justyn Russell Howard sold 40,000 shares of the stock in a transaction that occurred on Friday, July 10th. The shares were sold at an average price of $8.28, for a total value of $331,200.00. Following the completion of the transaction, the insider owned 7,417 shares of the company’s stock, valued at $61,412.76. This represents a 84.36% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 9.60% of the stock is currently owned by corporate insiders.
Institutional Inflows and Outflows
Institutional investors have recently modified their holdings of the stock. Quadrant Capital Group LLC acquired a new stake in shares of Sprout Social during the 4th quarter valued at $28,000. Summit Securities Group LLC boosted its stake in shares of Sprout Social by 399.0% during the fourth quarter. Summit Securities Group LLC now owns 2,520 shares of the company’s stock valued at $28,000 after purchasing an additional 2,015 shares in the last quarter. Quarry LP grew its holdings in shares of Sprout Social by 264.2% during the third quarter. Quarry LP now owns 3,784 shares of the company’s stock worth $49,000 after purchasing an additional 2,745 shares during the last quarter. Kestra Advisory Services LLC acquired a new position in shares of Sprout Social in the fourth quarter valued at approximately $54,000. Finally, Tower Research Capital LLC TRC boosted its position in Sprout Social by 55.5% during the 2nd quarter. Tower Research Capital LLC TRC now owns 5,496 shares of the company’s stock worth $115,000 after buying an additional 1,962 shares during the period.
Sprout Social Stock Up 25.4%
The company has a debt-to-equity ratio of 0.15, a quick ratio of 0.95 and a current ratio of 0.95. The stock’s fifty day simple moving average is $7.78 and its two-hundred day simple moving average is $7.09. The stock has a market capitalization of $617.39 million, a P/E ratio of -15.53 and a beta of 0.97.
About Sprout Social
Sprout Social (NASDAQ: SPT) is a Chicago-based software company specializing in social media management solutions for businesses of all sizes. The company provides a cloud-based platform designed to help organizations improve their social media presence through a suite of tools for content scheduling, community engagement, social listening and analytics. Sprout Social’s platform is built to streamline the workflows of marketing, customer care and public relations teams by providing a centralized hub for managing multiple social channels.
The company’s product offerings include publishing and scheduling capabilities that allow users to plan and automate social content across networks such as Facebook, Instagram, Twitter, LinkedIn and Pinterest.