SPT CLASS ACTION NOTICE: Glancy Prongay & Murray LLP Files Securities Fraud Lawsuit Against Sprout Social, Inc.

By: Glancy Prongay & Murray LLP via Business Wire

May 13, 2024 at 15:32 PM EDT

Glancy Prongay & Murray LLP (“GPM”), announces that it has filed a class action lawsuit in the United States District Court for the Northern District of Illinois, captioned Munch v. Sprout Social, Inc., et al., Case No. 1:24-cv-03867, on behalf of persons and entities that purchased or otherwise acquired Sprout Social, Inc. (“Sprout Social” or the “Company”) (NASDAQ: SPT) securities between November 2, 2023 and May 2, 2024, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).

Investors are hereby notified that they have 60 days from the date of this notice to move the Court to serve as lead plaintiff in this action.

If you suffered a loss on your Sprout Social investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at www.glancylaw.com/cases/Sprout-Social-Inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com or visit our website at www.glancylaw.com to learn more about your rights.

On May 2, 2024, after the markets closed, Sprout Social announced the Company’s operating results for the first fiscal quarter of 2024, disclosing that the Company had missed its revenue guidance for the quarter. The company also revised its full year 2024 revenue guidance downward $20 million. The Company’s Chief Financial Officer (“CFO”) Joe Del Preto (“Del Preto”) stated the Company had “underestimated the magnitude of enterprise seasonality” and that the Company had also been “self-inducing sales execution headwinds.” During the earnings call held on the same day, the Company’s Present and incoming Chief Executive Officer (“CEO”), Ryan Barretto (“Barretto”) disclosed that the Company “made several important strategic decisions heading into Q1” which the Company “thought [it] could manage [] without disruption, but they collectively set us back.” Barretto stated these decisions “happened in Q4 and the execution of it happened in Q1.” Barretto further disclosed the Company’s shift in business had “changed materially” and “affect[ed] revenue recognition and planning” which would now be “heavily weighted to traditional enterprise buying cycles.” Justyn Howard (“Howard”), the Company’s current CEO, also disclosed that the Company had to spend “energy and calorie” in the first quarter on “tactical decisions” including “spending time with the team on Tagger enablement.” Barretto explained further, stating “[f]rom a sales team perspective, the maturity of the sales team, we did a lot of enablement in Q1 across our entire customer-facing or to make sure that we are up to speed with all of the elements of influencer and our Tagger platform.”

On this news, Sprout Social’s stock price fell $19.33, or 40.1%, to close at $28.82 per share on May 3, 2024, on unusually heavy trading volume.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) the Company’s sales and revenue growth were not indicative of the Company’s growth as it transitioned to an enterprise sales cycle; (2) that the Company faced integration challenges with its acquisition of Tagger; (3) as a result, the Company was “self inducing sales headwinds;” (4) as a result, the Company would revise fiscal year 2024 revenue guidance; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

If you purchased or otherwise acquired Sprout Social securities during the Class Period, you may move the Court no later than 60 days from the date of this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240513947215/en/

Contacts

Glancy Prongay & Murray LLP, Los Angeles

Charles H. Linehan, 310-201-9150 or 888-773-9224

1925 Century Park East, Suite 2100

Los Angeles, CA 90067

www.glancylaw.com

shareholders@glancylaw.com

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SPT CLASS ACTION NOTICE: Glancy Prongay & Murray LLP Files Securities Fraud Lawsuit Against Sprout Social, Inc.

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