Sprout Social (SPT) 3 Aug 232023 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Sprout Social Second Quarter 2023 Earnings Call. I would now like to turn the call over to Jason Rechel, Vice President, Investor Relations and Corporate Development. Please go ahead.

Thank you, operator. second earnings Social Sprout to quarter call. XXXX Welcome

which results our closed website. press will investor and be Howard; issued With Barretto. in Joe the discussing presentation updated Social’s an market We me release are on CEO, Ryan announced after Del also Preto; released be President, Sprout can found have Justyn our today CFO, the and

Reform to Act contain forward-looking XXXX. Private statements, the pursuant Safe will made the Harbor call Today’s Securities are Litigation of of provisions which

XXXX words of do Forward-looking third as date guidance performance our statements multi-year and expect, expected partnerships statements pricing views will. our our of others, plans, objectives the should concerning financial year by future our our identified seek as reflect expected acquisition believe, business of for These relied be we trends, not investments, strategies subsequent opportunity, initiatives, XXXX, against include among only condition, financial concerning the and framework, future and expectations our from at products, performance customer or representing and be statements. business, not results or statements update and growth, and our our and our undertake our such duty any intend, to any the plan, views can of full financial market today benefits quarter Tagger, operations, and anticipate, upon financial size these as and

uncertainties could differ materially. Forward-looking statements are to results address cause actual risks that to that matters subject and

to for and XX, reports report we Commission results, XXXX be please ended on the quarterly Report May our Form important XXXX XX-Q ended for could XXXX SEC the with SEC other our the our the supplemented as June the XX-Q factors filed any on the for XXXX actual quarter Exchange discussion March quarterly future Securities December X, quarter XX, year that Annual of ended by with XX, a on filed filed For February our and to XX, well fiscal Form filed and as current that with on XXXX on the the with report as risks Form quarterly XX-K and SEC. refer affect

will with we press prepared is margin, along most non-GAAP per non-GAAP investors.sproutsocial.com. Accepted In measures, financial which particular, our Accounting call, with measures share. comparable measures, operating furnished release, the to which SEC income, are non-GAAP margins to non-GAAP the not and these earnings non-GAAP the income, been in discuss directly refer Definitions financial net of earnings Generally During references and non-GAAP are GAAP website profitability financial to has in and at accordance our to operating reconciliation on included available Principles.

with the to And call Justyn. me that, over let turn

Justyn?

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ARR our each Leading ARR QX XX% of than $XX,XXX RPO past X growth rate. paying our year-over-year growth growth ARR. more growth over and indicators represented up-market. ARR us years. total $XXX,XXX the basis seeing more we paying more than and customers outpace of XX% And underscores or the cRPO and in us momentum materially up or XX% were X,XXX see RPO points customers year-over-year in to to more and continue like pleased are RPO We XXX%

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business While at late and difficult business the has we strategic structural forecast the in QX. to are of see from shift very up-market, year, in seeing everything low we momentum unpredictability our our want to accelerated end last improvements our remained

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projections. competence to high We ultimately are committed

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shift our of more strategic pronounced. upside becoming even the is Meanwhile,

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I to the turn Joe? to And through run will over with that, it Joe financials.

third from in XX% growth. quarter second grew I exiting than the contributing $X,XXX greater revenue XXXX. of year on Services customer more in detail year-over-year. customers QX full And Subscription million, XX% you $XX.X existing year a up second with number quarter ARR Thanks, XX% million, of and guidance than grew representing in XX% for year-over-year Revenue was ARR the spending ARR million, contributing than ago. ARR, in $X.X year-over-year. more number $XXX.X The ago. more from Ryan. $XX,XXX quarter total from the XXX% to than was ago. year million, now down of year-over-year. than grew XX% was XX% for through revenue Core our a more XX% $XXX,XXX will The $XX,XXX was XX% $XX.X represents of now ARR moving walk before results contributing than ARR. customers in ARR a year more number Total up customers from our

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expect We QX, expect faster previously now further continue to the growth but medium ACV ACV over expected than growth will term. that accelerate through

ago. a to of and with a This $XX.X $XX.X year hire We XX.X%. non-GAAP margin XX% million, were throughout non-GAAP quarter. QX points were QX, was Non-GAAP consistent gross of non-GAAP gross is year representing well margin XXX million expenses up revenue In for profit of compared to the gross XX% XX.X% or basis sales a ago. marketing fortunate

were for XX% or development year down a $XX.X and revenue, from research million ago. expenses of XX% QX Non-GAAP

transformative We continue customer particularly care. a social R&D expenses Non-GAAP QX and administrative million general were automation around or platform, XX% revenue, $XX.X and to ago. make of AI down investments, from year XX% for and

deliver forward. to percentage G&A moving a of expect revenue We as consistent leverage

a of per per non-GAAP million $X.XX year-over-year. for for compared X.X% million non-GAAP stock share million of net Non-GAAP record $X.X Non-GAAP operating a net $X.X average year of basis weighted income quarterly outstanding million and based QX for operating on ago. of $X.XX share loss shares common was XX.X to positive and for income was more a QX than $X.X XXX points income improvement margin, net

sheet with QX. balance ended and the QX the the statement, the million million at to securities. cash the of revenue cash equivalents and $XXX.X at and flow $XXX.X quarter of marketable cash $XXX.X from we This in up Turning Deferred end million. end was is

$XXX.X $XXX.X both our totaled million, approximately up million at up from RPO QX, Looking XX% exiting year-over-year. and contracts, unbilled billed

We cash flow and cash $X.X was growth million Operating $XXX the expect flow CRPO of million on compared beginning $X.X as next or QX rate revenue year-over-year. in base implying months RPO focus of our $X.X up improvements to structural million over XX% positive customer approximately a to XX% ago. total ago. XX meaningful deliver year of is was year generation. Free unit our flow cash positive Ongoing million, economics and a a to to quality from recognize

efficient the cash acquisition We cash a to Shifting $XXX capital. revolving from balance to of million. our an financial be financed and of believe acquisition. newly credit of for our Tagger an attractive acquired media this We with cost sheet and facility. our on liquidity our balance use established sheet We expectations Tagger for consideration

Tagger and that ACB and ARR be accretive rates accretive to will expect We margins. growth our gross our to

margins be margins anticipate beyond, we upside inside to as that addition, to dilutive our our in moderately efficient in non-GAAP and And our Tagger distribution will model. growth In accelerate XXXX. operating to we aim XXXX

of incorporated revenue approximately guidance of for our into was XXXX. the and XXXX. in remainder there cross-sell, million growth meaningful have anticipate customer no we Because $X We

formal to to perform continues core our well. guidance, very Shifting business

a our expect range fiscal As of we from reminder, rate of or $XX.X in growth XX%. customer our quarter the have of By million we removed third the million XXXX, $XX.X to forecast. revenue loan report

revenue decline services expect We to year-over-year.

million one-time in the global year, QX, QX operating non-GAAP absorption X.X% the non-GAAP margin to We of the impact at the in employee $X.X hiring was operating expect of temporal Tagger of timing midpoint. loss then range accounts sum of of this expenses. in the event the million. negative timing $X.X of This sales The our

$XX.X of stock approximately assumes weighted roughly share million non-GAAP shares expect a outstanding. This basic We common net per loss of $X.XX. average

report million. of to affect we XX%. growth rate revenue of range $XXX.X is expected the $XXX.X million It XXXX, overall total a For in

than be will lower revenue services levels. expect XXXX We

For have as our this that XXXX, this the to can modeled year. our decline the business full growing at has lowest fiscal total reduce change, present QX ARR ARR will risk believe revenue. growth forecast the customer in in this of and lowest de-prioritized. year XXXX, same decisively tier of ARR we we With pace that strategically implies clearly zero be which investors expect we assess to upmarket as outperformance as believe XXXX, will that more reported pace This been

plan non-GAAP with $X.X million. to organic annual now forecasts million we of For We to million operating expect XXXX, range XXX common of operating basis. basis range and expansion the prior approximately$X.XX, expansion margin expect per our and a basis $X.XX, prior assuming will of shares that outstanding. $X.XX we to compared of of expect income approximately $XX.X average now non-GAAP basic net XXX weighted to an margin points outperform Tagger become in expect implies margin income This improvement to non-GAAP our $X.X net to XXXX. On XXX prior in operating our benefit stock share compared basis, points of we

Investor To we conclude, investors focus from I’d like low We be for our we appropriately on believe execute most where and will to to are preview ARR Sprout in focused forecast next continue allows Day month. goals. that to our our to

our segments M&A. are Tagger this if able are to our accelerate, introduced $X have expect customer we enterprise base, future to in medium-term to Salesforce further can execute We if if and mid-market exceed additional successful our cross-selling billion revenue plan in upside, strategic financial target subscription in XXXX. further if new builds we sooner We exceed

non-GAAP margins deliver at in billion operating to expect scale. XX% $X We

cash month XXXX We details with forward look sharing of of free Chicago. next a data XX% meaningful over amount to and expect further this in We in deliver XX% margins free flow to horizon. you cash assumptions flow to

we scale media great your point growth support With for in we chapter to company. social next defining starting Sprout’s grateful journey, the management the continue category of are as the

your Ryan, of With happy and that, I to Justyn, questions. are Operator? take any

from [Operator first ahead. Barclays. from Instructions] of Lenschow question go Our comes the Raimo line Please

one go removing or the calculation, are we the time you. are ARR we changes from – Hey, one basically, more you kind thank of through the what’s the low more could like, And makes that’s which seeing follow-up. so with revenue just today, that end through driving ARR my change How have And sense first one guidance? pressure more does of the that ARR. impact kind in question. revenue And

to we’re Joe. I is you is this simpler, help Raimo, And growth, I our that XX% assume revenue line way QX. our around made the you can probably that’s can I imply you if if QX a in exiting look guidance, ARR in Yes, little thinking about probably exiting think comments is that from XX% with model at range. it you, in the the

year-over-year, that So into use can get there, kind the the can flows to half to And kind as the from kind your in of back ARR, right back you you then the year. growth, ARR that we of plan of the if through add model. revenue you

then talked And And we exiting in about talk where just quarter play end out? low And you of are April. journey? the remember, Yes. can we that you maybe expected. kind quarter, like, does quicker on trends about last How than stabilization some

This question. is Justyn. great Yes,

loan half the obviously couple When the really So had that. for of spoke quarter, over positive reverted the saw in to mean, shortly after stabilization been of some us what kind the a we bit we quarter, signs then challenging of business signs, in early the back of some we quarters. last, first the second seen I and quarter, last has back of yes, in

challenging. side as so business we’ve pricing just changes, we’re prioritization, fairly And it’s further also put as bit as segment there, market, just future the remained that that that businesses that we alignment, up from a of sure new the the and the the risk well organizational only that wanted more remained with eliminating but not the model, to stabilization optimistic on unpredictable, while there’s make just that both we’re contraction

you. Okay, perfect. Thank

Please the ahead. William from Our comes Bhatia from next Arjun go question Blair. line of

Perfect. for Joe. Thank you, maybe One, guys.

what’s higher there? this to walk to of that rest I and What be maybe that think to accelerate through going growth seeing just ACV you expect you medium year? of you the through out growth called us be term, drivers than faster ACV the get Can are you some expected?

Yes, good there. question

the up For and space, they the XX%, us, definitely these days, we’re enterprise that quarter were I data business deals last over it’s XX% the think we the are in in the the – gave larger points coming growing new quarter some or business of just of are seeing in that. some momentum year-over-year, before enterprise much out, growing the

And mid-market so I think move we ACBs. just into business, as see up this to and we and enterprise continue larger can larger

at XX,XXX, If stat with. cohort over growing business XX%, the we’re you look Arjun, on XXX% XXX,XXX that organizations that the the just we’re cohort deals to over across grow larger seeing doing

us that up So a they’re continue from confidence of add market XXX basis perspective, seen I just that it gives a lot and up year. also rate lot in premium the probably a progress, Yes, points. we’ve momentum of throughout attach will

fact of then of about those in us we a future previously with both come And of products. the have add lot there’s think XX% X% for when growth them additional one but Now, we the only like have the customers we our to of there. something products, total see we of that have Tagger, and there products those headroom in

feel really ability coming those to ACV an these the from quality the some products of and other about attach So perspective. of in customers we good

cadence getting even that of progresses quarter pretty XXXX? QX Ryan, kind And pipeline, in of seems on this partnership Okay. do like in year Salesforce, then into the Got a What good think in you the see it. and and through there’s how do migrations. you it

to well A we had delivered had logos to customers a as up previously, customers, event. social cloud amazing recently being about the opportunity customers built for need integrated lot general, we added the of opportunity in XXX at but partnership, great that the feel very to that we relates in service in fully studio great these as as viewed more continue off, the across stack. these with Salesforce we see that Salesforce transition size, we XX% of looking the just share by connections it in and in Salesforce Yes, We cloud integrations customers this both we which quarter a as lot large value live integration are are tech solution to about Tableau that then QX, and customers speak marketing Slack this QX a well, into to sequentially. and

year. feel results – half this grow, from amazing we so There’s we been seen pipeline seeing customers our continuing really in And second anticipate to social stories we on that value are that the on can we’ll that strong continue social where customer that social that of And and full from ads from. of Salesforce get the Sprout we’ve combination that XXX-degree coming great then the benefit of customers immediately CRM for in is they studio, having product, this importance management were trialing customers the the have some realizing in of pervasive to having another data view see media of all across the platform, Salesforce moving record.

for coming deliver are lot heavily Dreamforce the visibility at feeling we to a about up customers, September. really Now of positioned active uniquely traction. good this we’ll And so in be and

very you much. thank Perfect,

ahead. line Our Parker next question comes Please Stifel. Lane from go of from the

here. as question for stabilization. platform the it’s of customers lot these move think we’re to wanted to know mean, around recent these and price I into month-to-month. A months to there’s the Hi, customers point X a are or lack back Joe we of changes. I non-core X,XXX realistic off the that, either about modeling timeframe customer cohort about the in guys, taking And a here. numbers the of but for certainty go what thanks should not

a an logo-terms? approach us realistic absolute a of give timeline Just customer to a sense is cohort, just what stabilization that in

Parker. Yes,

and zero that on the call we’re giving actually guidance, the we’ve kind assuming what our by year. mentioned way of goes the the we’re So end of to that

we So to that the just take kind risk off table. want of

through that relates end think kind can you about from that’s it standpoint, year. this So that the how as of of

out guidance that got So of from standpoint. a end by zeroing year this the we’ve

enterprise Understood. given mix tend at it can of size organizations model? are targeting? they’re exactly the there? what And Tagger, of they’re ACV balanced relatively Or business higher sense then maybe who is on us you And is that more to organizations you of targeting, looking skew a give that

Yes, thanks, Parker.

think I is this – Ryan.

very much customers it skews getting So the in system in to the enterprise.

and is stood great they got the technology, scalable, a we of Sprout. just is love of much work elegant, it Their us incredibly reasons which to Estee at it’s have Lauder, One like customers they stable and lot so why it Bose, a that looks with. customers Omnicom like really feels

certain R&D impressed ever implemented building, have the the enterprise liked get market we they’ve internal bias customers us. And their to we’ve of up who the side really we it the customers with. seen go that of way obviously way so one to that is lines team, within our quickly, companies the And certainly a been that first and motion and incredibly just to software utility this because well built they’ve and

the So the of they’re focused in enterprise definitely on part market.

again, see think that have so opportunities ACV the we they just we And can the as that in rates. speaks win to the impact future well of as some our competitive eventually on

guys. the it. appreciate Thanks here, Got I again. responses

from line comes ahead. go from the of Adam next Goldman Please Sachs. Our Hotchkiss question

market. seen ACV little to low a back to cohort below market. the guess thanks for out you like on a that XX,XXX little on the deeper seeing even one of the be think start questions. was you’re It in Great, when softer end you I dig very I you’ve the great would your got high was hand, to taking strongest end But XQ of mid the plus the date. my once to it XX,XXX what looks bit just

two, would wins question So success you against characterize two in XX,XXX that’s I that in the enterprise you’re plus, some in more of One, seeing your we is the that? is of? aware the guess upsells? And that how parts. there about the that we competitors? larger Thank think How then call from anything should some cohort you. XX,XXX be Is out should to that

Thanks Yeah, thanks. for the question.

greater We’re of what we XX,XXX then excited bucket QX, contribution, incredibly the XX% up was XX,XXX QX. is is And nearly QX continue from an of value similar, up things, the that progress about highlight it’s the to much in but terms rate. in ARR see the ARR of sequentially. logos Xx side if I’d pretty there XX,XXX our then from that in with growth we representative of at accelerating perspective terms From ARR looked an was

So I’d seeing the were reduction that we XX,XXX. and logo made within deals up deals then that more a for that of bigger. in count lot bucket, were the much highlight than the sub just And

of Tagger demand Okay, on accelerating out a early? us helpful. then of that just environment perspective? how really you more color customer business? click presence why and and you sheet now be to and thought about now? for on but to this hearing could great, you’re balance of build M&A sort that And Or you And give buying sure for sense that the base this think why about Was to from double second, that’s appreciate you’ve given wanted all the a a did your just function how there there,

Yes, speak this how I and is thinking now this. can we’re the about strategically why Justyn, to of kind

prior it the our referenced of of probably in of So in enterprise year. part this year you’ve customers, last this is to that important seeing we’re substantial grown know nicely. working category and about the This mid-market right me is some timing now. amount the heard an And as beginning we part of the the start the certainly about mostly late the the that on early When have deals the we remarks this, market talking up team, increasingly we’re were a we even as space a partner we upward But specific been finding that’s around for focused Finding product, here. didn’t designs the on trend time right right lines the on. think and win. on

competitive going in is it’s seeing differentiation also the next products, increased win opportunity investments business the customer are kind a the that have seriously. it over that meet demand of that demands, in think rates CMOs of foothold reached expect we and follow to our own increase standpoint winner the because substantially create there. and immediate a years. from out this to a But gives pretty is us stand many market grow competitive to take heard real of kind happening much trends a set to I a part of a opportunity really the larger it to where we’re around as in core level you an around here, got starting it’s of category not the we’ve maturity, space, only when this also

opportunity my about point we the product enterprise, is saw space. inbound it this and team in when great on incredibly have we perspective, been spending or together to rest space lot the either team, just take bring us of over brands even in we when with hour this a team Tagger, of time are been the a now, the on well news opportunity. for since you they’ve a had this our that and around talking from stood go or had customer off maybe a need And as dropped, I add asking and a for excitement real that look of about some XX really and while, know us space the in started the the us been to of remember saw point just over for a in And our folks fit Tagger I’ll team influencers, while, it us time some space sending well about in I in our Justyn’s to to we because as to the about half we’ve the and to asking talking the the from right team’s so to they product was for and And just view excited been companies paying attention the of a this get out. developing of at fit the opportunities Justyn’s plus terms think market me and there, texts R&D differentiate. And charts we’ve

lined this those we’re up are about. all So, excited opportunity things really massive that to

Okay, Thanks, Ryan. Thanks, really Justyn. helpful.

from the comes VanVliet question next Our line BTIG. ahead. of Please go Matthew from

dollar question. ones, technology waiting the Yes. how perspective when Good look of of last see this are can at to or that, how market probably or I contribution, lift in especially look about year? things into taking be as retention and a like any you you lift to kind a the sort or premium customers that? plan contribution, from and you existing this afternoon. that And you projecting number Right, guess customers what’s at looking it’s baked like anything influencer Thanks more larger kind at of comment year, get a where terms for whether of the importantly maybe emerge from a much towards this? of pricing So, next of anything product like

modeling forecasting. start chime just with off, can the you will then Joe, the in maybe I and and Yes.

going modeling But its will been from ACV The in XXXX think bit just that we expect own, you see maybe listening just now, both lot we success would to progress from a let a of perspective, from be well on opportunities forecasting. core attach And as of I more business well. rates as our side combining move I here efforts that Joe drive forward. tagger will qualitative in the an I perspective. we seen a comments analytics, tell on rate and little most a of have perspective, our would we would right focused on just success, we see my go-to-market same the as the have and as opportunity from that win of do our deals motion

Yes.

right and guidance $X not think with million any the the this talked that what and assuming for now, the kind right now Sprout. revenue we of And I Matt, got we year. have cross-sell So, is in are number about we

the think significantly here, ACVs the year the is, to all And so depending far I which deals these than of be note will questions, how average as your goes. other think ACVs. points our as data it’s And upside important rest the of that of on one then higher I are

upside move all year this business, and in mid-market that are have And the growth fits that the we we up into so and seeing, model into so when we of think The aspect. our this to think our enterprise. I contributes about think that from I the going into next ACV kind

with we of motion. part the sides that just this product to touch that I functions both to will about points our think have additional absolutely in that And obviously, asked the modeling benefit to both execute to anytime have a that. little or That’s users and is and cross-sell a contributor particularly some on for as bit we product sets, – market. Yes. start be the on you are selling we business thinking customers quickly on we able on early got know But of expect, combined question additional this add additional we NDR, about

you the rest just it we $X.X the of guidance make looks end that correctly. cohort contribution of range the $X Alright. are the in is down actually you of at this it to called And – took of midpoint. out to if are all rest bit. then a million million ARR, calculating sure we are like we little If year’s half calculate the if second Joe to X% what try lowering the you looks lowest like But of the follow-up I the adding wanted then kind out kind from guide, business,

can So, the then of guide the low out forward taking going delta for to group tie you customer are zero? of what of end terms just these is you together remaining the terms revenue And that much how in guide? in

Yes.

that end the down is the out think bucket it are about, of XK low think year. down by kind I value that about of to to way that taking bucket that sub So, the we zero

– ARR. is data the what back revenue, made had not to be And guidance and model. any I is that then would are so that think comment part lowering the our of maybe to and of the I earlier that important what about there originally we exit other about the And point you think other

the ARR rate, overall Tagger. into revenue revenue and about the what $X exiting we from we with million going in get If back end add the growth XX% are the you year then think factoring to business can of kind year-over-year you contribution to think

Okay. Great. you. Thank

next from Please go Canaccord question Genuity. line Our ahead. comes DJ of Hynes from the

get with they Hi I your over I on how you. product. early It start but going observations get guys. Studio any customers have you larger Sprout expansion customers generally that would would be they lands the and might love I on these with impact great what those forward moved land, to to it Social acquainted seeing early, from get but as scope dynamics are will may at larger in with NRR be Social the Studio. know are Ryan, thoughts to

I Thanks DJ. coming say journey. those generally, were with than I But lands we Yes. are mean on pretty that they that larger would I think Studio. early in are Social

So, on we move they those as getting a are most of accounts over. premium

more use the excited be I about they be one expand perspective the unit this think business, we when in, got might and right, opportunity across business have or there are I enterprise, in things case. from get a to then might And one might organization. is of the coming it that land in typically qualitative one be part the

what marketing mid-market I Social customers think chairs, if profile, a into the enterprise. the customer great got lot and of Studio cases to publishing see in one social a of into we side beyond those lot ideal one they because be offered, into are or customer care, now I analytics headroom the think to know that might I very much then advocacy they We customers still tend them, are and into places, of side and many side piece terms see of listening for about that expand for in it, two a doing, have that such the we they benefit fit us the think even land. usually that the our and influencer. or just in beyond side And you the the it initial product other doing the skew and

but we think that pretty there, still is bit of headroom in I the journey. a So, early there quite are

can to social maybe of to business. with a the then what sense. more drive kind on doing you compared it meaningful are here a what Justyn, how advancements listening And Makes the be I hear about was for listening AI great that you, you are Repustate prior? side bit follow-up would of and product Yes. the mean

where easy one to team market. social there a like in seamlessly creates frankly, together, back where my you that the messages get with through that generation get that’s that we pedestrian of have an are action team’s I once am take AI it And to tying customers helpful start we to with want drive our that the draw to And applying surface that simple in strategy trends may the the for But to our into something that easily that really we the next in tie I look of we That’s give a customers. the and able our things develop of the example. are interesting we most things kind be substantial, add those me. button think of the roadmap, in are are of interesting are gotten etcetera, which to to released starts I do largely etcetera, audience, on to insights things part excited fairly the have our going to ability got to to That’s where in differentiated influencers that that and it your driven to and today, that very by or those that’s a they next lot have content something that here be And have. and value it’s things may the again ton product listening, to confidence ton outcomes that listening drive tying really plan as their Pretty turn best for that aspects about. Yes. play, in opinion, bits able the to in and that coming of and the driving want the value. understanding and resonating all the of

around there not we large draw models not that’s things our you meanings, from customers is single meaning to is and language of value seeing across the start for deploy and bit be platform or useful to and is changer, a Often lot of again, to entire social massive in unlock a of is think that the give amounts multiple earliest endeavor think going and meaning for to the that one there We many. organization, to then thread, listening is our excitement, data. that of me there I a including single interesting that’s that often listening as single nuanced, to going to kind the and already customers, And are building we a ones a are strategy, are going back all drive my consuming a And to the lot analysis are their of improvements listening. a I opinion. it around on of game trying pretty be turn

has add is the think built to just leveraged just that on product, that and because have I really last been uniquely think that listening. I Sprout it really, never is elegant that I this for so is point that we help approachable have of that made, positioned Justyn way how might here folks which Yes. powerful,

So, who think about folks Justyn get at mentioned, of you it and make of data and all a all to that their are that things a listening sudden, those can to take new actionable. we and really supercharged ability

have I to And with going to us built a of we this work are way go piece have so the the because we think to that one after do that just product. much allows market that bigger that there

Yes. Helpful you, Thank color. guys.

from Scott a Berg question Please of comes Needham next from line go & Company. Our ahead.

secondly, standards there ask on on the any linearity adopted that is guidance around couple things impact looks just accounting guess like? everyone. this what’s I my what of million Tagger you the for the know and here have purchase their $X Hi, that. transition And don’t of Thanks revenues, then year together. to all, wanted I Joe, taking questions first here. of a

Yes.

is any So, gave. that be that on your guidance first there the way accounting purchase the number going to not we revenue the question, impact to Scott, or adjustments or

So, deals business, far a a similar that little companies and in bundled linearity, to be other have a definitely the our more other are front. in see obviously, as then as QX, will nothing on I that that in worry we might so And weighted And but you bit the about more not to the pretty about, bit talking services are and we there subscription know from feel that’s of you what just pure that like number, concerns QX. given side. enterprise, more definitely the little see with that

Got more follow-up the side rationale guess was question, strategically And of I a is. it. on then of I what – part the from differentiation a just the house. this product Helpful. know

typically as you there you that long only I selected being guess it media for vendor in do see in really social are other looks than and all out guess have probably – the that you your media maybe how cycle have product question, I the that different like cycle, sales you what think the are have Thank time, of see or So, would functionality. a solutions? usually about that you traditional have RFPs But vendors will sales social this for is XX% you. selling your the this this

a seeing be Tagger. are market. so that against I Yes. a were technology, of of see to things and the the for our all we in would in what And terms did the competing fit. lot this there from and much seem Tagger say, the Thanks stood out competitive wasn’t half to It in right, in the looked question, the in I approach could just set. their at diligence just solution their and being before From directly on the of we for of mentioned a we Scott. of it, as really your market on enterprise, folks Yes, us just of stat terms you And direct are really terms competitive requirement. relevance just deals perspective,

as this forward see really competitive a advantage well. we core great our move so we business, And as as in

we just sales piece in that from they for aren’t the from for their cycles, are of And go fast hour running the our And perspective, some of been are the with all without model, cycles rapid we ours, spent exciting work rest to as we we we our quite time how cycle that’s are a that our accounts. seeing can trial in elongating is, the nicely but from with the these believe attach team, And doing and sales core are that business. the was then as have what other that market seen, us enterprise. with inbound last referenced leads that as we they just

to we really So, we thesis also can together cross-sell we us these tie are as of the on we can, was that part market. this that doing that for as going are things

part just Yes. part on able And the generally, ask. of asks RFPs. prospects are of that it I in both a in point strategy this our It out an customers, demand, was we wasn’t and something seeing and what their it made to anyone quickly very the important And important their was to your in space and inbound that from anyone meet.

was was so separately. that unmet largely And left it a are about. it got those was excited And we for sourced demand an really alternative that customers now we have unless

for Thank you Excellent. taking questions. the

comes question from Please Our ahead. KeyBanc. go Turits of from line next Michael the

question. taking Michael Hi, Thanks for this Turits. Michael Vidovic is on for my

it as sort expected existing are on you was and So, And just talked that out? if to get to kind last uplift want changes just playing the last achieve able of of on pricing logos you that to update XX% play about you year. you that just year, made an

we the double digits talked Yes. customers have Joe. good existing it Michael, low-middle it this throughout now, price anywhere Right the I about, And like, think have ranges is for low-middle lifts the we rolled about single year. from to digits. are out really feeling that

lot add about we in the these bringing a increase quarter the more it’s to larger maybe side, in to it’s enterprise about it. users, so more products. A think this do deals, of of lot last in them I talked not table but buy price the deals on time, the much

in we these what an to basically larger price our so table. is related impact seeing really not bringing to overall to interesting are accounts necessarily uplift, but seeing is expand conversations ability And the directly

beneficial changes feel that And Sprout. have have we like up-market made to been especially the overall so we really pricing

Is expecting demand a if there? like of just the what it baked Thanks. just expectations into as like guidance XQ, saw one here, environment? squeeze just your slight And or you in Right. one clearly your in the I you are quick sometimes improvement, it’s same

remarks. demand the are think we the a this if and talked on value low little lower we what customers. of we prepared our business, about We the end little of top the bit the seeing, bit pressure, So, of saw of in funnel the a in side,

a I front. overall, standpoint, right. the in strategic I mid demand enterprise, from on think think new bit what the a lower changes that stronger, market, we made we the it’s side, anticipated little never on But definitely up especially business pricing been

about We have – uplift talked XX%, year-over-year the in business. the XX% enterprise increase

about the We talking ACV are growth.

business really think with I we the seeing are of happy on. the are we what we So, demand part are the focused in

the Our of Sandler. from next Piper question from Clarke Please ahead. comes Jeffries go line

question. for Thank Hello. you taking the

then that revenue it billion completely to product on other calendar follow-up? $X the I for kind even number significant with assets a maybe was categories, ‘XX. another wanted ask, how development? way if any detail entry number, I that or that of First, organic have you material in plus is, slight is that just a Tagger have And saying a that of into is Maybe today? no of organic

Yes.

our think that business standalone a little in I talked about definitely organic projection. in is bit this our remarks. So, There prepared in Tagger – we business,

it’s to think go a number. that’s We little I cross-sell that into predict early Sprout upside. Tagger to us much of of for kind will how think the more

of it of will But Sprout side business more upside Tagger Investor cross-sell. at for the now, basically a the the little with talk assumes with kind Day. We bit organic

to think maybe out Perfect. XX% margin free expansion targeting. of Alright. end that ‘XX, reaching flow EBIT you cash that And high what be by Joe, are then the at averages I

more up path to Any on color there be of expect linear weighted improvement be? to XX%? helpful. Would kind how back the flow free improvement So, would of will the end you this in be just terms cash

definitely – going more We the that market be up of to enterprise. has think way lot business shifted has to up XXXX. Yes. mid it’s linear to the our a that be into through just And has do

size are longer. and those of the are unit but talked stronger, of the those much have of contracts length this, economics that business deals, the about We

there side. upside flow cash so of is on the lot free And a

we back the linear feel versus uptick like towards So, big running that’s as pretty then through and XXXX a half. progression is the business this seeing

to that pretty expect would be even. I So,

much. very Alright. Thank you

Our ahead. Please comes from final Stanley. question the line Porter from of Elizabeth Morgan go

think the so Thanks any is about cross-sell get Great. sort customer this should versus of more just skewed guidance. Tagger, think of understanding, am there But base, now either portfolio how on with in overlap your from acquisition should the customers any and much. To I with we the opportunity? cross-sell landing XXXX benefits to about the currently. assuming you we balance asset aren’t

I categorize where some But been overlap. upside lot With we customers, plus we it there both. certainly have one Yes. has Thanks. XX,XXX a as for would of think

able from as versa, for upside customers vice core for net being to core able being to going landing, and well new to sell and Sprout. both organizations, Tagger, both cross-sell So, Tagger Spourt to customers as

the So, overlap, customers Sprout. with we for of from some see to the to quite a feedback customer get product our fit as base was And back and the opportunities of made Tagger that. which are then leveraging go us us bit our with confident some and that might of there just more that opportunity about you imagine, even on sides both

it. may more spend. of space, that you are trends we guys more be seeing then software just color get some seeing NRR the Got hoping optimization level to recently. higher And Across

benefiting are You from deeper the to hire customers. wallet also of kind mix

or may how negative current change positive be NRR, on impacting your some in factors commentary any just So, any of those trajectory?

Yes.

there. seeing will low is So, And quarters I impact we that’s offset XXX market made we that, think market talked mid kind in is are the basis confident we that think progress up part of we on the and end NRR now, Elizabeth, couple I move the going enterprise impacted couple are attach the overall of we knowing as probably the of are we of Ryan overall that’s think growth the low into put you I have talked are on about last the comments improvement. turn by NRR. when that, that One, the the a actually of the about we happy market, end rates, pressure really the obviously, strong about about obviously, NRR the really market seeing and improving. of in to that was But up-market, the well. the are strategic point change that our And think making

you. Thank it. Got

I turn call would to Justyn like over for now to closing Howard remarks. the

more you. you today. Thank be some us. talking everyone appreciate your We transition and this thank about opportunity time for visibility for important Yes. to Alright. providing And the into

positive are lot certainly that of all the and of that see of business able to are parts are changes focused we in the strategic seeing making. about that We of the the we being on momentum a we are the very benefits excited

we are add to to more look forward continue And So, excited to that. to able of there. be doing clarity

mark, as other more Just to reminder, a to the look forward are are talking more happening about the exciting going we of the XXth, that get into to in Day, we $X business. giving you will September future, and some and things have revenue visibility how we billion Investor what planned, lot a that

So, forward Thanks time seeing to your we look you today. for all everyone there.

does Thank you today’s for you. this your Thank call. participation. Ladies and gentlemen, conclude

disconnect. may now You