Highlights

  • Second quarter 2026 revenue rose 11% to $123.8 million, and the GAAP net loss narrowed to $3.1 million.
  • The board approved a workforce reduction of about 20%, with $18.0 million to $20.0 million of expected pre-tax charges.
  • A $50 million share repurchase program was authorized in May 2026, with no shares repurchased through June 30.
  • Cash totaled $119.9 million at June 30, 2026, against $32.5 million outstanding on its revolving credit facility.

Sprout Social (NASDAQ:SPT) shares were trading near their 52-week high at USD 12.64 on October 21, 2026, up 0.76%. The social media software company authorized a $50 million buyback in May, approved a workforce reduction in July, and filed its second quarter 2026 quarterly report on August 7.

Based in Chicago, Illinois, Sprout Social is a Delaware corporation that sells a cloud platform for managing, analyzing and acting on a company's presence across social media and related digital channels. Introduced in 2011, the platform processes more than two billion social interactions per day, and the company launched an AI agent called Trellis in 2026. Subscriptions made up 99% of revenue in the first six months of 2026. The company operates as one segment, and its fiscal year ends December 31.

Revenue Up 11% as Losses Narrow

Revenue for the three months ended June 30, 2026 was $123.8 million, compared with $111.8 million a year earlier. Subscription revenue contributed $121.9 million. Gross profit rose to $96.1 million, a 78% margin that matched the prior year. The GAAP loss from operations shrank to $2.7 million from $12.3 million. The net loss was $3.1 million, or $0.05 per share, versus $12.0 million, or $0.21. Non-GAAP net income, which excludes items such as stock-based compensation, was $15.6 million, or $0.26 per share, up from $10.7 million, or $0.18.

For the six months, revenue grew 11% to $245.3 million, the net loss was $9.4 million versus $23.2 million, and operating cash flow was $33.7 million versus $23.2 million.

The customer picture was mixed. Customers contributing at least $30,000 in annualized recurring revenue (ARR) rose to 3,926 from 3,538, and those at $50,000 or more rose to 2,127 from 1,826. Total customer count, however, decreased year over year, and remaining performance obligations stood at $400.8 million, with 71% expected to be recognized within 12 months. Management said longer sales cycles and more measured buying by some customers, linked to macroeconomic conditions, have contributed to slower revenue growth than in the past and may recur.

Workforce Plan, Buyback and Balance Sheet

On July 8, 2026, the board approved a plan to cut about 20% of the workforce, or roughly 260 employees, to streamline the organization and align costs with priorities including AI-powered social intelligence. The company recorded $0.8 million of related costs in the second quarter and expects total pre-tax charges of $18.0 million to $20.0 million, mostly severance and benefits, recognized substantially in the third quarter. It cautioned that charges could run higher and that the plan may not deliver the expected savings.

Sprout Social announced the $50 million repurchase program on May 7, 2026. No shares had been bought back as of June 30.

Cash and cash equivalents were $119.9 million. Borrowings under the $100 million revolving credit facility, which matures April 4, 2030, were $32.5 million after $7.5 million of repayments in the six months, and the company said it was in compliance with its financial covenants. The liability for the contingent NewsWhip earnout, tied to performance through June 30, 2027, was an estimated $8.0 million. A securities class action filed in 2024 against the company and certain executives remains pending, and the company has recorded no accrual for it.

Outlook and Items to Watch

The quarterly report contains no numeric financial guidance. It says the company expects to complete the workforce plan substantially by the end of the third quarter of 2026, subject to local law and consultation requirements, and that cash on hand should cover operating and capital needs for at least the next 12 months. These are company expectations, not guarantees.