Sprout Social, Inc. Q2 2026 Earnings Recap

Sprout Social’s shares jumped nearly 20% on robust margin expansion, accelerating contract growth, and meaningful progress in AI product adoption, signaling investor confidence in the company’s ability to leverage its platform despite workforce reductions.

Key Takeaways

• Revenue reached $123.8 million, up 10.8% year-over-year, supported by a 12.4% increase in current remaining performance obligations to $202.7 million.
• Non-GAAP operating margin improved by 370 basis points to 12.9%, reflecting successful cost management despite a 20% headcount reduction.
• Non-GAAP free cash flow increased approximately 60% year-over-year to $8.3 million for the quarter, totaling around $54 million on a trailing 12-month basis.
• AI-driven products like Trellis saw strong adoption and retention, with new monetization via Trellis Plus launched in July.
• Strategic multi-year contracts now represent nearly half of the contract mix, up from about one-third two years ago, signaling deeper customer commitment.