Sprout Social (SPT) 20 Feb 242023 Q4 Earnings call transcript

Good day, and welcome to Sprout Social, Inc. Conference Call. [Operator Instructions] Please note that today's call is being recorded. [Operator Instructions] I'd now like to introduce the call to Jason Rechel, Vice President of Investor Relations.

You may now proceed.

operator. you, Thank Social's Sprout XXXX Call. Earnings Welcome Fourth to Quarter be announced press and release We'll which also be after our results the can presentation, investor today discussing issued website. in market an updated on found our released have closed Social's . With CFO, Joe Ryan Justyn Del me CEO, Howard; and Preto; are President, Sprout Barretto.

of and be can of forward not forward-looking representing upon views will. All and Litigation Securities Reform statements. These of intend, statements XXXX. duty be plan, contain statements, pursuant others, our will at Private are call such seek, our date. We statements made these update are the any identified any objectives performance expected only the to other historical than as undertake These include, expect, among future statements as statements Today's anticipate, and do looking. and should which safe by fact words to harbor views provisions not reflect concerning plans relied or opportunity business our subsequent Act believe, today of financial

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

on please For to that could recently XX-K filed with results, important well our a our as risks as factors ended of our and the most actual filed annual XXXX, discussion other affect fiscal for to be the and Form XX-Qs. report year XX, XX-K refer December the SEC

financial on not been in the which the earnings Definitions During at to along has and in furnished the comparable a of measures, website call, included financial our investors.sproutsocial.com. release, are is with SEC directly prepared non-GAAP with generally most are quarter we'll measures financial available to accounting which GAAP these our non-GAAP accordance fourth accepted principles. discuss measures, reconciliation

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

everyone. and for Jason, you, afternoon, you, good joining us. as always, Thank Thank

across we results. momentum of were leadership outstanding of believe in and opportunities. have Earlier our we fourth XXXX the an we which entire deliver month, We leadership year and Sprout compete. We're positioned fantastic major by this breakout growth #X categories all category software leadership. GX the quarter the proud best execution define are scope to industry, expanding software We to product entering rated for a a as with as adding notable product across

we new is QX, net ARR total in record new business record saw growth growing XX% ARR, premium and continued $XX,XXX our increase added now CRPO. During XX% year-over-year. and deferred We premium with record customers. new and $XX,XXX ACV XX%, net a RPO product year-over-year. added in attach greater ACVs record rate And step-change organic product of We increase and than revenue

bookings history. contract than New RPO any was total or quarter XX% value higher in nearly our

nearly increased Xx year-over-year. bookings CRPO New

focused results. Our yielding strategy is powerful

believe social, we will the effect customers investments Our reported large over towards long-duration believe growth. indicators of and making in durability which upwards the increasingly converge future efficiency will of CRPO have compounding and our accelerating We leading time. are this

Our we from it maturing could. new industry Deloitte says and Digital than far is research better

experience customer at are of the strategic social the brands and brand a as Social-first core media repositioning key entire priority.

an to core industry brands. sophisticated and world's most the is workflow goal influencer the advocacy, engagement standard innovative to make social to marketing publishing Sprout listening, social reporting and Our of make platform

XXXX, attach XX% total growing attach rate and XX% year-over-year. We growth. businesses and see massive what accelerate Exiting all capabilities to potential ACV standard than module ARR our global rates to and greater product for premium should product is be unify social premium premium now increased

media increasingly had both together influencer that reporting. and for planned. our It clear important and an live play than social will management entering potential growth role platform to the be greater CAGR strategy, XXXX marketing proving workflow is and in is demand we

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Stepping product to strategy. broader our back

on enterprise product an We've positioned are like investments Sprout outcome acquisitions category. amazing XX differentiated of Our platform Repustate, to advocacy customer-led in rapidly Social of GX investments integrations rankings and the over partners integrations. aggressive We Care, Tagger listening, product-enhancing the believe lead Salesforce, capabilities AI, product have our Customer and our accelerated expanding industry-defining our with past months. and

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we care and SAM, that fastest-growing positioned Social is lead the we in believe market. our market are to well

in of And of XX% during the each more is which evolving innovation total than in We in ever. than getting prior pace only believe material pace This delivered enhancements product also started. market, the aligns X to change the XXX XXXX, of greater our than is faster more change years. than we new pace

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product our recognition success having. GX by are ranked Sprout's the software the highlights as best customers #X incredible

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last Day, our We goal fall revenue. progress annual next chapter executing great billion $X outlined as our and well Investor in we're toward we at growth of

our we team, potential. right we believe the to platform into XXXX, Going have realize and approach full

call Ryan. turn will I that, over with the to And

largest their and social was for progress, excellent strategy our seeing most delivered evolved put successful. and our we year with team while appreciation great customers with a ethic work to who platform. XXXX so success. Justyn. who execution filled positioned that have Thanks, I We much deep in customers every operate for make the proving value milestones perfectly complex gratitude are our and day and relentless through are and us our trust focus, of increasing the long-term

customers' is Our our success. clearly success driving

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XXXX. opportunity massive before, to Care any the a Customer even in as particular, together we've Social opportunity work in social the of future customer. a And larger in our We believe to omnichannel platform, Salesforce make care. standard Cloud, years also execute an we we as platform with with Salesforce for Service We see is Salesforce ahead have shared Sprout

by to reflect as been we a the XXXX our continue the year, made for back platform, to our all our excited building investment focused social-first past strategy brands. we've team never excited over software the We're deliver differentiation I've outsized on category-defining and the strength franchise. of of we As progress more value

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

fiscal detail, in moving results quarter first Thanks, our and Ryan. to on you I'll the fourth now XXXX quarter year walk full through XXXX. guidance then for

was XX% representing Subscription Revenue well million, XX% million, Services of XXX% ahead revenue up was $X.X million, year-over-year. growth $XX.X plan. year-over-year. for the up $XX.X and fourth quarter was revenue year-over-year

by module momentum. million, up premium QX and Record growth, of $XXX.X led Total attach ARR and ahead Tagger primarily ARR was XX% new expectations. rates exiting business our new enterprise year-over-year continued was rapid early accelerating

in than declined our customers Importantly, longer in in $XXX,XXX headwind QX further represent will without been we no be low-end that Noncore and also now entered a ARR less has unanchored business ARR. XXXX on performance. This a customers number in ago. ARR year a XXXX. than from The grew grew to of number ARR from $XX,XXX contributing growth year ago. contributing more $XX,XXX customers XX% The XX% than more in of

was growth from year-over-year. seat business and and expansion influencer a Record each module compounded ACV deal QX marketing new sizes premium XX% early record rates. attach healthy ongoing returns

ACV strength and rapid the similar marketing in XXXX second to growth by continue growth expect We rates care. half over driven customer medium term influencer ACV enterprise, to

gross non-GAAP non-GAAP a QX, XX.X%. year up non-GAAP was a margin In profit million, representing XX XX.X% to gross basis is ago. $XX.X of compared This margin points gross of a

year and sales for QX expenses XX% $XX.X million revenue, from marketing or were of up a Non-GAAP XX% ago.

and growth to organization. We continue hire enterprise in our aggressively sales

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

our social in future, care investments delivering are increasingly continue and targeted customer strong invest We returns. in and to AI our

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

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

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

reflects $XXX.X QX Turning and repayment statement. our of facility. cash, We down end to in and the $XX.X revolving million balance cash securities. QX at on equivalents and flow early million This is sheet the credit ended from marketable cash with

million, the Deferred quarter revenue record sequential a end at $XXX.X of increase. was the

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

momentum The million recognize as XX% our nearly reflects contract implying $XXX enterprise, total revenue year-over-year. highest expect of metrics these a rapidly our acceleration of highlights to revenue the RPO business XX% rate months, by total the of ever quarterly We improving and in growth underlying to CPR next bookings over of our the XX%. or quality value XX

business our changed The has of mix materially.

be to We XX our increasingly We to CRPO likely shifted we drag sustained have fewer reported and that the growth support higher-value metrics are momentum into a is our customers. to next to has increasingly RPO reported mid-market have month-to-month been high ARR resources towards informative over Billings indicators. customers, believe on converge as enterprise which likely leading XX months.

a QX $X.X in cash compared ago. Operating positive ago. flow cash million down year $X.X flow million Non-GAAP was free to was year $X.X million, negative negative from a

also the time. seasonally While receivable the working final double increased expanding nearly amount we make through XXXX, integration, QX stages our which QX over flow renewal weighted will base, by believe Tagger of cash more enterprise an of accounts reflecting towards

or full margin. the X.X% year flow free For $XX.X flow cash non-GAAP million free cash XXXX, was

We non-GAAP expect in free our margin to cash to turn XXXX. flow continue above operating margins

rate retention overall XXX% In was from net XXX%, dollar-based XXXX. in XXXX, our down

with XXX% in SMB Our XXXX compared retention in XXX% customers, excluding XXXX. net was rate, dollar-based

the Our and segments, XXX% medium-term in reported Levi's value, for was of low potential on a shift agency NDR low our towards churn we strategic in Sprout our to north horizon. [ change very substantial exit as sets up retention business on emphasis drag net XXXX SMB in forecast total customers XXXX our over continue accelerated strong ] which NDR. and

Shifting to formal guidance.

$XX.X of million XX%. million XXXX, than a the the rate we or of growth more in to For revenue fiscal range quarter of expect first $XX.X

assumes the We margin million expect non-GAAP $X.X non-GAAP range operating the million. income midpoint. X.X% $X.X of at to in of a operating This

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

to full the range growth expect rate $XXX.X in the an reported $XXX.X million, of XX%. million overall total revenue approximately of XXXX, expected we year For

improvement XXXX, non-GAAP For we the operating range million. basis implies margin annual the of non-GAAP full $XX year income roughly This expect points. to $XX XXX in of million operating

stock We net weighted between expect outstanding. of and per basic $X.XX assuming million income common non-GAAP $X.XX, share shares XX.X average

deliver durable we around efficient to XXXX, business most our fastest-growing We productive and Over our believe have transformed increasingly the and us we and model course market. our to of aligned increasingly growth. of position segments our business the investments

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

Raimo [Operator from question Our first Lenschow Instructions] comes Barclays. from

Congrats from me.

customer momentum. on is question First

bit follow-up logos names you from a there. bit about where part on And little talk But really are getting of Studio of double-click kind named a this you where Joe. because coming And the probably you coming then for You little is are broadly a interesting one would talk new quarter. more some insight, much kind bit of won it and could little that Can side. have I as from little contributing from? have they Social Studio we a bit how expected Social that we

start. Ryan. a to from, bunch the we're be Thanks, is coming of a different pipeline Raimo. This perspective, areas From tends are I'll that it customers where about. excited

heard you a see competitors the of that call, the On we lot upmarket. some typically from

some market. it few challenged to to, and where like there's of happening platform swaps complex Reporting, the they're with Typically, value that our the within customers be So they're access most we're in hearing things, a finding from Listening they're get the Sprout. trying parts great that

well needs some so be to through platform the seeing you're manage have X a of just as at different able customers like they data. the tools But using the note manage away being past. directly for moving Sinclair, many or called to native Meta, we've customers social with all, seen this so so that as in also great from engagement the risen example, need able to much Sprout a like we customers where But

obviously, growth, on So as opportunities and our seeing greenfield current that combination these of we're well then accounts. it's takeaways a as

from XX% Studio From call I'd perspective, out a those gain customers. Social ARR the yes, in Salesforce

pipeline. of see front excited in that of very about to good the opportunity Salesforce us a lot continue opportunity in with 'XX. We're We

just within Salesforce Beyond service Studio, has become Service Social cloud. us really we've a into integrations built for the ecosystem opportunity the Cloud the the the given big

think rest to just of the the swaps Social we'll see as headline this the Studio Salesforce I within more So well as year for there you continue ecosystem. of some is those opportunity

feel what Okay. Perfect. way. you over? of Like, numbers some a And with at journey. was of judging And nature you numbers probably think and the for this should that, CRP And a mentioned the you on kind the then, think Joe, business of changing. we like But year? it, changing, I about kind we're is you, metric are how of better do point about if swapping comfortable the

Yes.

So good I question, of my next where the think XX that months time we for is our Raimo. leading remarks, billings in will business. I called horizon this believe RPO, CRPO, out better indicators kind be to over XX

the every quarter of how what update give out it's plan think on over our couple are horizon those we and that of still so And time like, an next is you but years. looks trending kind

next question Our William Blair. from from comes Arjun Bhatia

the kudos a for my QX. one side. add nice Maybe on I'll Justyn product on

this launched very solution. interesting. new You sounds social It care

areas that traction capabilities on SKU? part it's one to been had maybe the a are Can the you've think the incremental you've what then this where when good monetization market the platform? expand of of this is just think separate is already. Or going about the And kind how already? be of you care product, lever, core I in differentiates a getting from part it of we

Thanks. question. Great Yes.

incredibly I Care mentioned, as think the in strong you for some been So case we've time. use

what that of were kind and that driving been to for want more that got going It's that . wins that large of to the opportunities the we've of in for that. to behind evolving to our is We and put wanting talking like. customers. And lot couple there. didn't about those to next we one the investment bigger a years. that over area, our this force that us a in accelerate us, future And be rely talked recognition about looked on way wanted was We we've be organically. continue the going of to heard wanted reimagine to also lean and horsepower we've customers You've capabilities

something ready their that operationally. and things but management social couple of what looks from something looks robust those combination was in that so what customer that that teams. and released incorporating make a routing what product around organized our like and over and they building for were we perspective, capabilities, care the care product is care-first to part a kind doing the that case built quarters, larger make have of last that of that way reoriented you're capabilities like, of into were of existing AI And that things part in from that customers automation the reimagining was And more was to charter way and work historically architected that it

fully embraced still Care this it's that know the road we're adopted, ahead the the building years, a coming of for for, build we be that. fully kind in Social that as of we the in portion that at but channel And And expect a operationalized, more we way small wanted and that market to point and down going more. and and be to that's ready has

combination a moving that a road a things customers our lot of enjoyed, been of have and we've it's things things of that forward. building lot our So planned have that map on of we lot new a

that They The expensive large is, around a plans tend care more looks. be still longer et perspective, on monetization to our monetization From to perspective. seat thinking exactly cetera. very obviously, over lever a be biggest how deployments through we're from tend those durations,

monetized thinking really continue we indirectly. that to So good on. How is that we'll from that's being about perspective how feel packaging our a looks something evolve

you should if your That's just takes hearing, module having I but year rates the you helpful. and we're retention upmarket maybe now you're rate increasing. puts through, The customers, out of have Can commentary XXX% that to business on maybe very an the I through how I attach from would net a Joe. we just could I the one in was that year. because walk impact of especially you end us net expected are to some the large here? for perhaps was maybe continue to premium Perfect. that the retention that transition, rate in that's there. And some to Okay. XXXX, trend as expect that transition think it show that walk that for then think wondering up move

Yes, for sure.

is one it our SMB, lot business. agency non-core Arjun, number the call so to customers. and that includes ex especially agency side, So thing a And out of had there, on low-end we

So chunk if there the the about dragging you that related turned of non-core, a in think number we of XXXX the was that that was that's ARR that, in on agency smaller to business, side the the agency, down. especially

look at in you XXXX. dollar you XXXX If net better, retention if actually consistent, the net saw up actually retention versus in dollar the mid-market enterprise, not really

that now this so going kind past going more majority number customer in see forward. base, of our moving that be our mid-market non-core mind, to enterprise you're going that's part And we're to

acceleration of point. in beyond. healthier much as and see We You'll that kind have net we starting just retention into dollar a XXXX go

good feel that And about so number how trend. really we will

Canaccord Hynes DJ next from Our question comes from Genuity.

your the GX Raimo's to that's to around in award, ecosystem on Congrats came opportunity. the force Ryan, want on the build that broader question sales up I pretty topic answer impressive.

strategy So Cloud. color and the go-to-market to more perspective, right, I'd from Marketing integrated more Service whether deeply heard your to product Cloud that get opportunity. lots about efforts on that's we've or a love get

direct get tandem front strategy Studio that end-of-life? coming there's of the happening their integrated are of Salesforce One, the when two, those like to folks? there. with And to So Social support of on I social is how guess in go-to-market Service aware two the Is reaches Cloud changes questions Or kind outreach dependent in from are rep? it entirely what's customers Sprout? then it

Thanks, Yes. DJ.

customers, of get still front closely working There's years awareness, it Studio opportunity Salesforce the I been those last the customers, of and on terms the for combat decent In for of SEs within be in with especially that couple AEs the We've hand-to-hand there's very to awareness. accounts. marketplace. think Social with team

like the of the Connections speaking how then including them. marketing big a ecosystem You've given that just is. Dreamforce, we've where seen been and most lot Salesforce at there's there think still keynote us often Salesforce opportunity to we've ones just doing a does, shows lot just of that I opportunities. that big of had And

So it's in I where care combination to do even the best great had with Sprout. highlighting is launch for another the customer we've recent to think omnichannel continue care that us like things Salesforce here, opportunity place

So still for I us today. pressing opportunities it's forward. we that as move There's we're on good think

To part of the presenting deals we're in the second combination question, of approach we're majority the some the is those partnership how go-to-market, a customers. that of to the

actually have. sometimes, to flat channel through So a highlight they'll us we it that

then Service and Sprout. the Sometimes we'll Salesforce be in in identify presenting and with And market between and excellent team, they've going the Cloud we'll in and us connect account there. and with solution the opportunity go oftentimes, partnering we're back been and together omnichannel that

partnership have. bring actually they #X team it to of them So if And Salesforce for us play it's good that us back directly, we think even go combination into to don't account. that a and the to I bring the is

Yes.

quantifiable repurposed inside with may utilized I folks Like being what, or well, any think the now efforts? unlocked that I'm available business. this deemphasis F&B the kind been? Is how organization? your those focus the Ryan, How would way incremental capacity guess, of comes I be doors but there for on like just call And about that's that curious has Okay. are to you of material for as

I was through transition a 'XX. lot of Yes. happening mean that

in different from perspective. are you the a hits way It capacity in spots, hits building think I few in right? AE an which it

have enterprise, about able to that emphasis there. us, for because think and mid-market I do that happening So we that, the if like there's we're more in of the and investment

you pipeline strategies marketing on inbound that a that upmarket So the just from the more take. mid-market From the and a in drive focus we opportunity, want team and lot really could even to to the enterprise an perspective, marketing give AE the places we perspective, helps. marketing and capacity approaches

to So of more focused that we're what we hoping dollars on the and out it. get be spend we would

opportunities for biggest customer us a of from the then perspective, as And well. that's one

truly the If customers way, you're able that redeploy oftentimes as by much social-first end social to resources who, more sophisticated up not really those focus the as in handholding may taking up to small you're on resources your not understand customers. enterprise,

So we're the resources to the it the And seeing just our of those think it across about core. sophisticated towards redeployment is way best think customers in I the board.

from question from next Lane Our Parker comes Stifel.

with for and quarter components in the that Joe, anticipating fourth of Tagger, I what XXXX. you the wondering, was of ACV if could you're saw break you addition growth down the

at you of I second think you grow the saw expected year. what to to rates that in half similar mentioned that the you

So any be there would visibility great.

Yes.

So in think deals, in that I the and leading business. QX, still stack We by module is if ACV followed premium would the growth rank about rates, acceleration probably we ACV new attach the Like piece. Tagger the QX, we quarter overall. I the it. in the Tagger record like had think I some in significant wasn't nice saw although then saw a indicator driver

half half that back decline than back the but us. of XXXX higher then saw to QX. And similar is you ACV put like Parker, of the driving saw be going would first we saw in what you was expect growth what the into so of And the the growth then expect couple of talking very we to historical year, XXXX was to ACV in kind we that list I XXXX. the see that ACVs still I from that of And quarters as bottom the at in what next about in of probably start

next year. how kind we so it And see that's playing of out

announcement. this of the helpful. Got your you you about channel what it. customers? of then, see I your future month talk an Can customer base Very And to others? that know sort comes importance and channel relative differences guys today of expanded that Reddit just the do of relationship you earlier with quality data that Justyn, And from in in out

Yes, it's question. a great

the cetera. tend Reddit unique around perspective in-depth new to to the typically there, in there's et bring the a of that listening products, that happening brands, conversation is short-form where brands, the of have there's able with reactions, into really lot channels long-form new the relied level around of from industries, whole conversation lot more, cetera. get of our whole think understanding for customer and et level multi-threaded sense future, the that et just insight, cetera, customers I us that in cetera. particularly the a market engagement, to And messages and listening, of kind et happening voice, larger around we on data a both context, Reddit And a in a unlocks some now kind fold, of lack in sentiment, for be

be a higher working us, So that's really relationship. that them and with addition a and phenomenal level we're at to deepening glad for

from Our Goldman comes Sachs. from next question Hotchkiss Adam

opportunity the push now enterprise wanted beyond quicker guess the I I into to upmarket to you follow Salesforce, build here partner larger the and Do significantly the see about on side partners you're How space? brand your are opportunity especially to start. here? and out moving go-to-market you thinking an up practices guys to accelerate more building mid-market that with guys

certainly data think given that had that work, have always into way internally, We've sure workflows we ecosystem. we've they more to historically that partners the to are and and rest been. our are to the have the of their are work. our of flowing we what customers do connecting do we've to to of serve their When able the the we things that care they're in and the they that but customers. that the to do, places together, within ton a need make opportunity workflows background really that lot way about is We been things Adam. tech one it is do integrate are the Thanks, that of thought easily Salesforce best to the can of The right highlighting stack take the what about things the the a Yes. we

to So leverage you've data integrations the people and automation the marketing within make HubSpot. like other allow likes We've do We've able into Marketo, with to better things business into to same things Canva. seen tools integrations got be holistic got us decisions. of with BI

that think stacks. their to customers tech getting for turned value, be we'll as more to on got there'll a certainly into bunch these for So today about customers solve our we opportunity. are continue how look that and We've and but actually great

just helpful. And then Joe bigger on for Okay. picture. That's really the one

subscription guided effectively past, or you've to target. organic to growth XXXX the think get revenue I us your so to in XX% annual compound

those just Tagger as or macro I'm things like you're offset next about some of curious given bit contemplating thinking to these that within So year expectation of some the so into and XX.X% of other be of you are a got context how the you've benefits? will obviously tailwind. things a How

Yes.

in growth we Adam, of we give point XX% earlier out earlier, we but it level think, that we and about this, it's $X pieces, it's like we then it I to And with little high billion. we the rate every that will guidance, compounded haven't also consideration, higher those get a talked in with the things and your a historically don't as now that years to give a those bit give rate, decline closer all So time fact confidence. broken

no that to out in billion. we the on, update so change And for $X see how example, any playing

Zangler question next comes Our Stephens from Nicholas with Inc.

Congrats you if there monetization provide expected to contribution? little on strategy a integrated? go-to-market familiar Or alternatively, on more change whether been become any at you've been bit quarter. you've there's I'm contemplated the Tagger has modified curious if now details are the strategy, the ACR changes as could any being that or the

up fully so a integrating and an that speed, folks up from we're and getting From us, the Nicholas. all success to Thanks, our been engineering on it influencer marketing. part of all of Yes. as being of to customer I AE the with cross-training a speed go-to-market mean really for in the is team teams things perspective, solution perspective and we've

have this a team and we're great been discovery the our calls of been to present being Tagger how the of our now has a So is is just parts right joining our product. solution the and for really exciting this team up, do lot journey which What of seeing into having from year. internal And picking marketing enablement that influencer value team, do able quickly really continued of lot beginning influencer understanding team, and for the that's present us.

new really present we're seeing a base in together. to So I our influencer logos scale good working of And as an well economies teams some lot able just to to as having installed marketing opportunity. be as of starting see opportunity think we're those within

to have on to strategy, about to are social make make and feel a From of much really optimized Their SCs to changes to which to we're things. for our a of thinking approach that holistically influencer think about marketing for perspective, I able terms go-to-market organization, this nothing present made be doing the by so all And one to the of very our of that managed to want it's I'd terms you, this just goal to perspective, is great headline today we why sure per us, us and front there. continue monetization all including how marketing. from seat AEs was similar back really like is to thesis the team in Tagger attention we'll main their that But it and the sense customers model call ours pay sure out for these fully CSMs want But thinking user influencer us. they in going opportunity the handle from is of a customers. major main in

competitor Got at been here. Obviously, fourth what of talked noted down-sell if late. any and quarter, it. renewing they recently or just curious a lower notable well of about various other if seat across customers that as industries was there's they isolated. as then call level yours of Ending one And question the in layoffs I'm of sort tech Sprout counts. has pressure here of plenty and year, seen the heightened a

the is that isolated maybe do the where continue we're the right? it's ever been unrelated large probably we that the for good seeing, From market job to we're parts in the to always did both as think we industry the of perspective, our couple there it enterprise in see And outlook, We in and that talked contracts of quarters, of climb, confidence we This been talking successful we in is guiding seems to talked be what logos trends. been revenue we've not last as Justyn. But healthy of and QX, one deals kind feeling that. year our and the a indicative and the something continue that. size I about that climb, the this the growing duration as and a the how about of continues we we're upmarket counts to just about seat question. that we we've the and Yes. to Thanks terms of is into opportunity that broader that as think that for of pipeline is have some in

use a I market. or of upside, think as that outlook see care so on continued bunch Tagger's and see we that acceleration upside experience does our we not with reflect the the cases other things,

comes Our from question from Morgan Porter Elizabeth next Stanley.

Matt on Saltzman for is This tonight. Elizabeth

incremental ask average. Sprout coming marketing way, the base, the expanding category? other areas you the to influencer absorb X cross-selling I'm than highlighted of that larger installed to new budgets curious, look guess the are where across at this I the does Or from? another expense Tagger are come of budget MarTech to ACVs So existing budget? is into Xx Tagger's just you when

as Thanks, oftentimes, think the they're Matt. I'd of how thing context about that about customers those right that thinking we're in The about highlight their the seeing paid this, they're is, now spend. rest it of thinking

. And can what's of we optimize great and their customers and We analytics between really us, most spend been figure being help out historically, to execution so has have and in organic paid, organic-based. work Sprout really the done standpoint working. an where for from obviously

paid As their from marketing from these it influencer spend. return they're is seeing their you're on investment get oftentimes, to what their thinking relates the ways and from about marketing, customers a spend better to

out and part about practices so for budget best feels the looking often, And very learning carving the the is just they're market the in the the of they'll already also from media us We've they're in today not building marketing exciting attempting testing and for also be technology, there. influencer things. to but And early that that within this market customers social management to industry. for and us days similar still seen

return. I paid it's marketing, influencer every invested industry on right And so $X now is, return think for stats that a spend, the dollar about in

finding doing. most really social in these platform creators the they opportunities are in, invest, the opportunity that want to earned their across dig networks and really they're driving what value, them our competitors what to shows clearly so opportunities which are places media are And actually

or using spend I'd is to able we're return categories category, highlight thing biggest help better from other had and a it combination the get either this them Tagger. So actually spend getting they it's we're here of a

comes BTIG. Matthew VanVliet Our from from next question

Wonder contribution either baked Tagger. could and then revenue ARR the coming maybe 'XX from the what's ultimately, you for of help Tagger us in quarter growth of or with contribution if into kind rates

Yes.

that I'll call the take here. A in of explicitly out didn't Matt, couple QX. We Tagger So one. things contribution

talked we little X we I out model of coming a we we out, that think that can in talked kind of outperformed that final what ahead months million of QX. about the of the acquisition slightly were over in the year. you $X And and QX, about

we team. then It's up we in that ARR, quarter. we're And given the a it small not was a I the give just just So the of that'll revenue you huge had contribution. said, number, the of about like ramping cadence talked kind that contribution

on think we now as XXXX, sales is now, the Tagger. up entire team If about trained of

the so to this, about analytics and talked bag, it's And premium they're or sell and like just now going listening. Ryan in social

And Tagger. kind go-to-market part like not target it's a the separate overall so just of be to motion. we It's for have going of

calling get And because into not we're managing product the so a because as XXXX. of kind as that number specifically we're separate not what's that, we of out Tagger like

the rate years. How or is more And to attach core ultimately you think of the look growth the as much 'XX, pipeline helpful. can of you at the where over it's next by billion of does premium products relative subscription there? to, attach then kind like the whether $X What couple go even rate? out Very sort just Okay. rate mark, look

and in we with influencer we're X% lot And to like about of like expand that, know I modules. across as opportunities market, attach targets have across about perspective And don't in thinking greater. you the of entire as premium and within products, the that how more something to those as We're think the customers on our opportunity start the our the we these I'll the our would base. about for focused these one that level they I direction have of numbers, Yes, great the but that that exists the adding a entire we've seeing opportunities the XX% for of it. mid-market base I all looks we customers attached business this give Matt. upside exist mature, us even enterprise. side Tagger think, those better And are new thinking customers the from of categorize been gets certainly I high as our continue more social-first Thanks, rates and of about all two especially sophisticated footprint of have modules products. top that on say in of Today, a

see and is trajectory really good, products. the us lot the all in of with So opportunity we front of a

Jeffries from from comes Piper Sandler. question Clarke Our next

during the not? then XX% million move threshold, growth double-digit quarter? precision one above there of of a around at helpful. you help but ARR certain end kind was could Or it you precision it segment. a if Joe, could would the maybe or with was some follow-up. I movement was be non-core wondering Any organic Helpful the maybe that quarter, if ARR help was the say, in the $XXX,XXX with in ARR wondering And

Yes.

into give coming $XX that now there. of sense the in ARR. mid-market so strength if was Clarke, less show non-core success by there churn of saw QX what down the the quarter, talked just of that is you end we enterprise about million we just the seen that quarter, reflects can business. saw layer that $XXX,XXX, than And about to in that you that it of kind you So we've we can the it is out left and And the the really the of

in quarter so about overperformed the churn, that So us, out really low-end momentum and we business. in felt back you the we kind of good the for once

operating maybe are kind items forward. going And exit more to could rate expenses rank you very any for us just year a your rate of the the going then of OpEx a 'XX leverage the the kind seem margin lot of start to the with QX? Perfect. would helpful. of expect would order the a operating What follow-up. through be see Maybe also you're pieces how any those expectations way of that year expenses growth exit putting it in to Obviously, place or or get you to a through targets, help progression in on

Yes.

right year basis So improvement I about operating about Clarke, saw think think XXX to in margin in points the it overperformed of throughout guidance business. in And similar to now, the for way that the our is you we the what XXXX, is, year, number.

the for long executing, of we through as And believe out And definitely of go-to-market margin of the we as on upside so hiring that a the way kind lot example, of operating plays side. the kind keep in you'll beginning lower there's as year very see, the to been aggressively that. then we year,

us quarters. see seeing, get scale margin first operating definitely of If you the that. demand the then you'll in we're at just the will size we're of look drive seeing, we the deals lower couple And over

back more year. of ramp, leverage to capacity, get start half to you'll as folks the in those operating As they full the see

comes Our next question Rob Baird. Oliver from from

Service My but expectations linearity are guys look about focus how it for a Studio, for one. Social rightfully There's from would of is about sense Service I that I contribution. on lot opportunity the from XXXX about perspective, QX how of as certainly, an but exciting thinking how heavy, is get first to guys Service that just expect be on and you're a you been one a Cloud. Cloud to you a kind Cloud, wanted thinking

Rob. Yes. Thanks,

opportunity about We to that with ecosystem, build the connected have that care product against Service specifically we opportunity the to be excited integrates Service 'XX than there the opportunity continue really Cloud into itself. continuing believe the year to Salesforce We that We're in more even Cloud the it. last console. is

within I buying on continue certainly in to Salesforce with that the really take very to it. good typical are place, for we we in you're I think good customers the getting see as being about But really we the to that of CRM. from and and it, enterprise. cycles it on mid-market is do shape pipeline main especially what will just the omnichannel the think stronger, if similar and We thing the had value take 'XX, to feel away this that a back half you believe a best you a want is year

lot helpful. of all into question, bag on salespeople. a just said, just It it. a then, That almost Got completely. is salespeople and head the And or That's last going follow-up sounds be Joe, said to Tagger sales like hiring salespeople Sprout the count. the Sprout you you're ported to

this should ramp that gain How entering expect about you efficiency we think throughout degree higher immature meet this of can year won't how year? sales force Are quota? So a salespeople the we that that this year? for with

good Rob. Yes, question,

going pretty go-to-market said, the year, over been like couple into this we've hiring of on I last So aggressively months side. the

need folks those obviously, so And ramp. to

first more by So at the full folks we're reps the see year, year, when in you quarters then is Rob. of couple of the those they at you'll be definitely way ramp capacity And not and see what about of full the year. think end capacity throughout you'll the the the

Our from Brett next comes from question Cantor Fitzgerald.

think, something on, in the I touch just want said I you to prepared remarks.

terms from you curious as customer declines? headwind customer bottom no non-core reached customers should expect I'm the we longer growth. start think that act of to will said I we count growth perspective. means Have return? And what a to to a in customer

customer will of the is trough Joe. see likely trend of see accelerating total base Yes, QX. then it probably in to of decline XXXX. you expect And Brett, base then likely out. rate seeing The improving and That's we're this in into to customer growth year-over-year we're growth total think over total play still customer our course the would how And kind 'XX. an I base

any have We as for closing the like to now hand of over back questions pending remarks. moment. I'd Justyn don't to

excitement more you, that Thank that you. the of opportunity those of growth to you weeks we're appreciate months. questions. all the kind lot right. the Thank your things the at around this forward got you All coming look a to the the we've continued of talking working business, for all on. with indicators, the of exciting We We share about to and in evolution

all want thank I I And to forward to thank of customers. talking look soon. to to team. our we you our want all

much you for Thank so today's a attending day. wonderful hope have you We session.