Sprout Social Posts Record Non-GAAP Operating Income

The Tip Desk · November 10, 2026 · 3 min read

Non-GAAP operating income reached a record $26.3 million, or a 21% margin, as revenue growth slowed to 8% from 11% in the prior quarter.

Sprout Social, Inc. (SPT), an AI-powered social intelligence platform, reported third-quarter revenue of $125.1 million, up 8% from a year earlier, a slower pace than the 11% year-over-year increase in the second quarter.

The company said non-GAAP operating income was a record $26.3 million, a 21% non-GAAP operating margin, compared with $16.0 million in the second quarter. GAAP operating loss was $6.9 million. Non-GAAP net income was $26.7 million, or $0.45 a share, versus $13.4 million, or $0.23 a share, a year earlier. GAAP net loss was $6.5 million, or $0.11 a share.

Chief executive Ryan Barretto said the quarter was highlighted by the record non-GAAP operating result, an 18% year-over-year increase in approximated trailing twelve month subscription revenue contribution from the $30,000-plus ARR customer cohort, and non-GAAP free cash flow of $26.7 million, up 158% from a year earlier. He also said the company initiated a $50 million stock buyback with more than $26 million of repurchases in the third quarter.

Approximated TTM subscription revenue contribution from customers with $30,000 or more in ARR was $301.5 million, after 20% year-over-year growth in the second quarter. That cohort accounted for 62.3% of total subscription revenue. The number of customers contributing $30,000 or more in ARR was 3,925 as of September 30, 2026, up 6% from a year earlier, after 11% year-over-year growth to 3,926 as of June 30. Customers contributing $50,000 or more in ARR were 2,155.

Total remaining performance obligations were $393.9 million as of September 30, 2026, up 10% year-over-year, after 16% year-over-year growth to $400.8 million as of June 30. Current RPO was $280.2 million. Subscription revenue was $123.4 million. Professional services and other revenue was $1.8 million.

Cash and cash equivalents were $103.7 million as of September 30, 2026, compared with $119.9 million as of June 30. Net cash provided by operating activities was $10.7 million. The company repurchased $26.3 million of common stock in the quarter.

For the fourth quarter of 2026, the company currently expects total revenue between $124.2 million and $125.2 million, non-GAAP operating income between $21.4 million and $22.4 million, and non-GAAP net income per share between $0.36 and $0.38. For the full year 2026, it expects revenue between $494.7 million and $495.7 million and non-GAAP operating income between $77.8 million and $78.8 million.

The company is targeting GAAP profitability on a sustainable quarterly basis beginning in the fourth quarter of 2026. It raised its outlook for non-GAAP operating margin exiting the fourth quarter from 17% to approximately 18%. It reiterated a 30% Rule of 40 target by the fourth quarter of fiscal 2027.