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Sprout Social (SPT) Q3 Earnings: What To Expect

SPT Cover Image

Social media management platform Sprout Social (NASDAQ: SPT) will be reporting earnings this Wednesday after the bell. Here’s what to expect.

Sprout Social beat analysts’ revenue expectations by 0.8% last quarter, reporting revenues of $111.8 million, up 12.5% year on year. It was a mixed quarter for the company, with an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations significantly. It added 136 enterprise customers paying more than $10,000 annually to reach a total of 9,517.

Is Sprout Social a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Sprout Social’s revenue to grow 11.9% year on year to $114.9 million, slowing from the 20% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.16 per share.

Sprout Social Total Revenue

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Sprout Social has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1% on average.

Looking at Sprout Social’s peers in the sales and marketing software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. ZoomInfo delivered year-on-year revenue growth of 4.7%, beating analysts’ expectations by 4.7%, and GoDaddy reported revenues up 10.3%, topping estimates by 2.7%. GoDaddy traded up 5.1% following the results.

Read our full analysis of ZoomInfo’s results here and GoDaddy’s results here.

Investors in the sales and marketing software segment have had fairly steady hands going into earnings, with share prices down 1.2% on average over the last month. Sprout Social is down 17.6% during the same time and is heading into earnings with an average analyst price target of $22.20 (compared to the current share price of $10.10).

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