Sprout Social, Inc

Thank you for standing by. My name is Rebecca and I will be your conference operator today. At this time, I would like to welcome everyone to the Sprout Social second quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Alex Kurtz, Vice President of Investor Relations Corporate Development. Please go ahead.

Thank you, Operator, and welcome to Sprout Social's second quarter 2025 earnings call. We'll be discussing the results announced in our press release issued after the market closed today and have also released an updated investor presentation, which can be found on our website. With me are Sprout Social's CEO Ryan Barreto and CFO Joe DelPretto. Today's call will contain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking. These include, among others, statements concerning our expected future financial performance, including our Q3 and 2025 outlook and business plans and objectives. It can be identified by words such as expect, anticipate, intend, plan, believe, seek, opportunity, or will. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date. And we do not undertake any duty to update these statements. Forward-looking statements address matters that are subject to risks and uncertainties that could cause actual results to differ materially. For discussion of these risks and other important factors that could affect our actual results, please refer to our annual report on Form 10-K for the year ended December 31, 2024, as well as our quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2025, to be filed with the SEC. During the call, we will discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. Definitions of these non-GAAP financial measures, along with the reconciliations to the most directly comparable GAAP financial measures, are included in our second quarter earnings release, which has been furnished to the SEC and is available on our website at investors.sproutsocial.com. With that, let me turn the call over to Ryan. Ryan?

Thank you, Alex, and welcome to our second quarter earnings call for fiscal 2025. We reported second quarter results with revenue of $111.8 million, representing year-over-year growth of 12%, and non-GAAP operating margin expansion of almost 400 basis points. Our current remaining performance obligations, which reached $251.6 million, represented 18% year-over-year growth. Our go-to-market delivered another solid quarter with 18% growth in the $50K and above ARR customer cohort. We landed strategic wins with global brands like Honda, Cigna, Kimberly-Clark, Authentic Brands Group, LaCroix, Smokers, the US Department of Transportation, and Texas Tech. These customers demonstrate our continued execution and strategic fit with the most socially sophisticated enterprise customers. During the quarter, Sprout continued to earn industry recognition. We secured 164 leader badges in G2's latest reports with top rankings in enterprise social media suites, analytics, and customer service across North America, EMEA, and APAC. We also earned TrustRadius 2025 top-rated awards in eight categories, including social media marketing, audience intelligence, and online reputation management, reinforcing the meaningful business outcomes our customers achieve with Sprouts. Additionally, we received Silver for Best Influencer Marketing Platform at the Global Influencer Marketing Awards and a Silver Shorty Award in the Micro-Influencer Strategy category for our own innovative influencer strategy that turned Sprout's listening data into thought leadership and helped shape industry conversations. Today, I'm excited to begin by discussing our recent acquisition of Newswhip, a leader in AI-powered predictive media intelligence. Headquartered in Dublin, Ireland, NewsWhip was a privately held company with approximately 70 employees, and we couldn't be more excited to welcome the team to Sprout. NewsWhip has become a mission-critical tool for some of the largest global brands, media companies, and agencies for crisis management, real-time media monitoring, research, and strategy. Strategic customers such as Nissan, the Associated Press, a Fortune 50 media company, two Fortune 50 technology companies, and a Fortune 100 consumer beverage company all rely on News Whip for real-time monitoring of news articles, social posts, and other media related to their brand, products, and their competitors. I want to outline our strategic rationale for acquiring News Whip and why we see this as a pivotal milestone that, combined with our existing product roadmap, will drive unique crisis management, trend detection, and AI offerings from Sprout over the next several years. First, News Whip's AI-powered predictive media intelligence can help identify which stories and narratives are about to go viral. This has become mission critical for brands as news stories can quickly escalate across various social media platforms. News Whip provides three core values, real-time alerts and predictive analysis, key insights into emerging trends and conversations, and sophisticated AI alerting capabilities that are leveraged by crisis management teams and the C-suite. Over time, we expect to enable early crisis detection from News Whip to seamlessly flow to customer care teams working in the Sprout platform, creating a truly differentiated end-to-end experience which transforms insights into action. We also believe integrating News Whip's capabilities with Sprout's listing products and its extensive social interaction data will create a comprehensive 360-degree view of social and media ecosystems. Together, we will combine predictive media intelligence with agile social action to drive impactful earned, owned and paid media strategies. This integrated approach will enable real time trend detection, targeted engagement and clear ROI reporting, delivering measurable outcomes for businesses. During the second quarter, News Whip launched its AI agents, which have garnered strong interest among News Whip's larger customers, with over 70% of brand customers leveraging them in just over a month. News Whip's AI agents proactively scan global news and social data, identifying stories and themes gaining momentum before they peak, and giving brands the strategic edge to own the narrative. With the massive volumes these brands have to manage, these agents are designed to separate the signal from the noise and to drive clear efficiency for practitioners while also ensuring they never miss a critical moment. News Whip will enable Sprout to enter the mission critical PR and crisis monitoring space with a new offering. These are potentially new buyers for Sprout, both new logos to Sprout as well as growth opportunities within our existing customers. And in both cases, these are often groups of longstanding dedicated budgets. We're incredibly excited to discuss News Whip's capabilities with them in the coming weeks and months. While there is some minimal customer overlap, we believe Sprout's full go-to-market distribution will accelerate these opportunities. We also believe that News Whip can further strengthen our gross retention goals among larger enterprise customers, given its stickiness with crisis management teams. News Whip has built an impressive list of top-tier customers over the last 10 years, with contract sizes often at the higher end of Sprout's customer TCV range. Finally, we are thrilled about the future impact we expect the News Whip team members will have at Sprout. This agile team has built a must-have tool for some of the biggest brands, and we've been really impressed with the News Whip engineering talent shaping the future of AI-driven, real-time media monitoring. I'm also pleased to share that News Whip's co-founder and CEO, Paul Quigley, will step into the role of general manager for our listening business, overseeing both News Whip and Sprout's listening products. Paul is a great executive and will be a tremendous asset in leading this critical part of our business moving forward. Before handing the call to Joe, let me briefly take you through some customer wins and our four key growth drivers that include winning the enterprise, driving customer health and adoption, expanding our partnership and ecosystem, and driving improved account penetration. To win the enterprise, we intend to expand the pipeline, close more 50K-plus deals, and accelerate adoption with a product roadmap built for enterprise needs. Let's start with the key product releases in the quarter. For influencer marketing, we reimagined our influencer marketing platform, now featuring a refreshed design and advanced AI-driven capabilities. As social media becomes central to brand discovery, influencer marketing is an increasingly important strategy to drive ROI. Key updates include AI-powered natural language discovery for search, driving more authentic and impactful activations, a customizable brand safety solution to align creators with brand values, and a new creator vetting feature that drastically reduces time spent in discovery so brands can refocus on their more strategic creative tasks. In CARE, we introduce innovations for proactive customer engagement through enhanced efficiency and smarter workflows. With the introduction of queues, care teams can easily organize high volumes of inbound customer interactions by urgency, topic, or customer segment, significantly reducing response times and ensuring critical conversations receive immediate attention. Additionally, new bot integrations and AI enhancements automate routine interactions, proactively resolve customer issues, and free up care agents to focus on higher value tasks. These innovations mean faster resolution times with increased agent productivity and more tailored and effective support for customers, ultimately cultivating greater customer satisfaction and loyalty. Social media has become central to product discovery and purchasing, which means brands must deliver fast, personalized social care across platforms or risk losing vital customer trust in business. In fact, 73% of consumers say they will buy from a competitor if a brand doesn't reply to them on social. While reactive support is expected, the new innovations in care by Sprout empowers brands to deliver proactive care, turning positive interactions into business assets that build loyalty and attract new customers. For governance, we enhanced brand safety and customer data handling with the launch of our new product, Guardian by Sprout Social. Guardian supercharges social customer care and social media management with innovative AI-driven tools that reduce brand risk, helping our customers securely and confidently handle their customer data. Guardian is a huge asset for security-conscious and highly regulated industries, providing features like blocked words, data masking, and secure forms. We're also pleased to share several strategic enterprise wins this quarter. The first win was a seven-figure new business deal with a global brand management company, consolidating their marketing care and customer experience under one tech stack. With premier success listening and premium analytics that can unify social strategy across 50 plus brands ensuring consistent governance and workflows. They can also boost efficiency with powerful and intuitive reporting tools, while reducing costs and complexity by consolidating the social management publishing and analytics into our single platform. The next story we want to highlight is an almost 900K expansion deal with a global health technology company that switched from a competitor due to its overly complex workflows. They were seeking a seamless care agent workflow with their service cloud integration. With Sprout, this company can amplify its brand messaging with over 60 publishers and 15,000 advocates, expanding reach and boosting brand awareness. Sprout also enables real-time insights for deep customer behavioral analysis. Our Service Cloud integration allows them to manage 90,000 customer support requests per month to increase customer satisfaction. They can also safely host data in the EU in a compliant manner, which is critical in a highly regulated industry. This final customer story is a 360K expansion win, highlighting the growth opportunities that exist within our customer base. This Fortune 500 global healthcare company, already a seven figures per customer for marketing, care, and customer experience, expanded to include listening, premium analytics, influencer marketing, and employee advocacy. They are now able to unify social efforts globally for consistent brand messaging worldwide and to elevate brand reputation by tracking sentiment, uncovering key drivers of perception, and benchmarking against competitors in real time. Our second growth driver is a sharper focus on customer health, onboarding, and adoption to maximize long-term value. This quarter, we introduced two new support offerings, Accelerated Support and Accelerated Support Plus, while also enhancing our existing Premier Success Lite offering. Features include two-hour response times and access to a dedicated customer experience specialist. Since launch, these offerings have gained strong traction, driving new deals and significant interest across our Premier Support suite. Our third driver is our continued investment in our partnerships with strong global partners that bring Sprout into strategic accounts and expand our reach into some of the largest digital marketing budgets. We continue to ramp our partnership activities through the first half of 2025. As we mentioned last quarter, our social network, technical integrations, and go-to-market partnerships provide what we believe is a lasting competitive advantage in the market. As we move into the second half of the year, we'll be expanding our partnerships and capabilities across key networks, including publishing, reporting, and listening capabilities with Blue Sky, engagement and reporting with Reddit, listening with TikTok, and building out personal profile reporting with LinkedIn. Our fourth growth driver focuses on deepening customer engagement through use case expansion and premium modules with our sales team seeking to drive greater value across both new and existing customers. Expanding our trust and compliance offerings at Sprout has been a key priority. As I mentioned earlier, this past quarter we launched Guardian. a solution enabling our customers to securely manage their data while still personalizing interactions and enhancing brand safety. We've seen strong interest across highly regulated industries, especially healthcare and financial services, closing our first deal within just a couple weeks of launch. We're even seeing demand from less regulated industries as organizations increasingly recognize the inherent value of having these capabilities readily available. The acquisition of NewsWhip will significantly enhance our AI listening and care capabilities, enabling us to expand use cases and elevate our premium module offerings. We're excited to share more in Q3 as we begin introducing NewsWhip to our customers. In closing, I'd like to revisit our discussion last quarter of social search and the undeniable long-term trends we see playing out and how the NewsWhip acquisition ties into this theme. As traditional search continues to trend toward zero click with AI, current content strategies face headwinds with traffic changing in real time. We know nearly half of Gen Z starts product discovery on platforms like TikTok and Instagram, and over 80% of consumers say social is a top channel for product discovery. Organic website traffic is declining while paid search costs are rising. Social has become the new front door for discovery, but most brands aren't optimizing for it or they're not getting there first. Our ability to drive discovery on social platforms is critical and translates into AI search, where platforms like Reddit increasingly contribute to source content. And in traditional search, where both Reddit and Instagram index on the first page of Google search results. Social media's authenticity, immediacy, and community-driven nature fill the gap as search behaviors shift, offering businesses stronger ROI outcomes. Sprout helps brands win in the new era of discovery. Our publishing tools are designed to optimize every post for maximum visibility, using keyword-rich titles, platform-specific formatting, and built-in guidance for hashtags, alt text, and timing to help ensure nothing gets missed in social search and brands can reclaim lost organic traffic. And now Newsweb, in our view, is the perfect addition to this strategy as Sprout will enable global brands with a greater ability to recognize real-time and predicted trends powered by AI agents. These innovations will help marketers know exactly what content they should be creating to benefit from social search momentum, as well as spot issues before they arise with differentiated solutions for crisis management. We believe the future of this category will be defined by real-time data and intelligence, extensible platforms, and trusted AI. That's the foundation we're building at Sprout, and we're excited about where it's taking us. And with that, I'll turn it over to Joe to run through the financials. Joe?