Sprout Social, Inc. designs, develops, and operates a web-based social media management platform across the Americas, Europe, the Middle East, Africa, and Asia Pacific. The company provides cloud software for social messaging, data, and workflows in a unified system of record, intelligence, and action. Its offerings include AI-powered solutions for publishing and scheduling, social customer care, analytics, listening, reputation management, social commerce, influencer marketing, and automation. Founded in 2010 and headquartered in Chicago, Illinois, Sprout Social serves businesses, agencies, government, non-profit, and educational institutions.
Enterprise Software Stocks Surge on AI-Driven Earnings
Shares of enterprise software and SaaS companies, including Autodesk, Qualys, Rapid7, Sprout Social, and Tenable, skyrocketed in afternoon trading after quarterly earnings and upbeat commentary signaled that artificial intelligence is driving growth rather than threatening legacy business models. The sector-wide rally was fueled by stronger-than-expected results from Salesforce, CrowdStrike, and Okta, which highlighted AI as a catalyst for adoption and monetization. Salesforce's Agentforce reached $1.5 billion in annual recurring revenue, and its Slackbot surpassed 1 million active users within five months. CrowdStrike's CEO attributed momentum to AI expanding the attack surface, while Okta reported AI offerings drove about 30% of new bookings and increased contract values by roughly 40%. Among the movers, Autodesk jumped 6.2%, Qualys rose 6.9%, Rapid7 surged 15.1%, Sprout Social gained 3.8%, and Tenable climbed 13.1%. Rapid7, trading at $13.46, remains 35.6% below its 52-week high of $20.90.
Sprout Social reports 11% revenue growth and raises full-year profit outlook
Sprout Social announced second-quarter 2026 revenue of $123.8 million, an 11% increase year-over-year, and raised its full-year non-GAAP operating income guidance. Non-GAAP operating income reached $16.0 million, exceeding the company's guidance range by $6.1 million, while GAAP net loss narrowed to $3.1 million from $12.0 million a year earlier. The company grew its number of customers contributing $30,000 or more in annual recurring revenue to 3,926, up 11% year-over-year, and those contributing $50,000 or more to 2,127, up 16%. For the full year 2026, Sprout Social now expects total revenue between $493.0 million and $495.6 million and non-GAAP operating income between $68.3 million and $70.3 million, representing a 20% increase over the midpoint of its prior year outlook. The company also raised its target for non-GAAP operating margin exiting the fourth quarter of 2026 to approximately 17% from 15%.
Atlassian, Sprout Social, and Flywire Stocks Rise After Soft PPI Data
Shares of Atlassian, Sprout Social, and Flywire rose in afternoon trading after a softer-than-expected Producer Price Index report eased inflation concerns and lifted growth stocks. June wholesale inflation fell 0.3% versus expectations for a flat reading, following a sharp 0.4% decline in consumer prices the prior session, which together shifted focus away from IBM's warning about client budget reprioritization. Atlassian jumped 3.5%, Sprout Social gained 4.2%, and Flywire climbed 5.1%, with Flywire also reaching a new 52-week high of $18.82 per share. The cooling inflation data reduced pressure on the Federal Reserve to keep interest rates high, mechanically boosting valuations for growth companies whose worth depends heavily on future cash flows.
Sprout Social Shares Drop 15.4% in Six Months Amid Weak Billings and Operating Losses
Sprout Social shares have fallen 15.4% over the past six months to $8.58, underperforming the S&P 500's 8.2% gain. The company's billings reached $110.5 million in the first quarter, but year-on-year growth averaged just 9.6% over the last four quarters, signaling soft demand. Wall Street analysts project revenue growth of only 6.9% over the next 12 months, a sharp deceleration from the 26.8% annualized pace of the past five years. Sprout Social has also posted an average GAAP operating margin of negative 8.1% over the last year, reflecting an expensive cost structure. The stock trades at 1 times forward price-to-sales, but the firm recommends avoiding it in favor of a dominant aerospace business with a strong M&A track record.
Three software stocks—Sprout Social, Paycom, and Dolby Laboratories—face headwinds as the software industry pulls back 13% over six months, contrasting with the S&P 500's 6.3% gain. Sprout Social saw average billings growth of 9.6% over the last year and estimated sales growth of 6.9% for the next 12 months, implying a slowdown, while persistent operating losses raise concerns. Paycom's average billings growth of 9% and estimated sales growth of 6.7% suggest decelerating demand, and its operating margin remained flat. Dolby Laboratories posted 2.1% annual sales growth over five years, below typical software companies, and its operating margin declined by 2 percentage points as costs rose faster than revenue.
Shares of Sprout Social, ZoomInfo, and Upland Software fell sharply in afternoon trading as a broader selloff hit the communication-services and software complex, driven by high-profile AI talent departures from Alphabet and regulatory concerns. Sprout Social dropped 3.4%, ZoomInfo fell 7.3%, and Upland Software declined 8.4%. The declines came as Alphabet fell roughly 6% and Microsoft also slipped, dragging sector indices lower amid persistent market fears that AI agents will erode the subscription model underpinning traditional enterprise software economics. The previous week's near-20% single-day drop in Accenture, after the consulting giant cut its growth outlook citing AI compressing demand for traditional IT services, reinforced the thesis that AI is disrupting software vendors. Upland Software's move follows a volatile period, with the stock having had 68 moves greater than 5% over the past year, and it is up 219% year-to-date at $4.79 per share, a new 52-week high.
Alphabet Backed as Cash-Heavy Buy While Sprout Social and Redwire Flagged as Sells
StockStory highlights Alphabet as a cash-rich stock worth buying while questioning Sprout Social and Redwire. Alphabet holds a net cash position of $36.36 billion, representing 0.8% of its market cap, and is praised for robust long-term revenue growth, elite operating margins, and strong EPS expansion driven by its core Search business, Google Cloud Platform, and YouTube. In contrast, Sprout Social has a net cash position of $65.07 million, or 15.2% of its market cap, but faces slowing demand with estimated sales growth of 6.9% and historical operating losses. Redwire holds a net cash position of $14.38 million, just 0.4% of its market cap, and is avoided due to negative EPS, declining free cash flow margins, and an unfavorable liquidity position that could dilute shareholders.
Social Media Is Now the Primary Channel for Brand Crisis Response, New Research Finds
New research from Sprout Social finds that social media has become the primary channel where consumers first learn about brand controversies and expect public responses. Nearly two-thirds of consumers, 64%, say it is important for brands to respond publicly on social media rather than through a press release or website statement. The survey also reveals that 84% of consumers say a brand's response speed directly affects their view of the crisis, and 51% would consider buying from a brand within a few months of a properly addressed crisis. The Q2 2026 Pulse Survey, conducted online with 2,250 social media users across the US, UK, and Australia, highlights that social media is the number one place consumers hear about controversial moments first, surpassing news articles, friends and family, and the brands themselves.
United States