By Townhall Chicago News Staff
Chicago-based Sprout Social on Tuesday reported third-quarter revenue of $125.1 million, an 8 percent increase over the same period last year, and posted a record non-GAAP operating income of $26.3 million.
The results from the social media management firm offer a snapshot of the city’s growing technology sector, where Sprout Social is among the most prominent publicly traded companies.
The company recorded a GAAP operating loss of $6.9 million for the quarter ended Sept. 30, narrower than the $9.1 million loss in the same period of 2025. Non-GAAP operating margin reached 21 percent, according to a Nov. 3 earnings release.
“We are pleased with our financial performance this quarter, highlighted by a record non-GAAP operating income of $26.3 million,” Ryan Barretto, CEO of Sprout Social, said in the release. “Importantly, we are targeting GAAP profitability looking ahead, a significant milestone that reflects our focus on cost discipline.”
Non-GAAP free cash flow surged 158 percent year over year to $26.7 million. The company also initiated a $50 million stock buyback program, completing over $26 million in repurchases during the quarter, according to the release.
Sprout Social grew its base of higher-value customers, reporting 3,925 customers contributing $30,000 or more in annual recurring revenue as of Sept. 30, a 6 percent increase from a year earlier. Customers contributing $50,000 or more in annual recurring revenue rose 11 percent to 2,155.
Revenue from the company’s largest customers continued to account for a growing share of total revenue. The approximate trailing 12-month subscription revenue contribution from customers spending $30,000 or more reached $301.5 million, representing 62.3 percent of total subscription revenue, up from 57.9 percent a year earlier.
Total remaining performance obligations stood at $393.9 million as of Sept. 30, up 10 percent year over year. Current remaining performance obligations rose 8 percent to $280.2 million.
Cash and cash equivalents totaled $103.7 million at the end of the quarter, down from $119.9 million at the end of the prior quarter. Net cash provided by operating activities was $10.7 million, compared to $9.3 million in the third quarter of 2025.
The company added several notable customers during the quarter, including the U.S. Department of Transportation, Freddie Mac, Stanley Black & Decker and Pabst Brewing Company, according to the release.
For the fourth quarter, Sprout Social expects total revenue between $124.2 million and $125.2 million and non-GAAP operating income between $21.4 million and $22.4 million. For the full year, the company raised its outlook and now expects total revenue between $494.7 million and $495.7 million.
The company said it is targeting GAAP profitability on a sustainable quarterly basis beginning in the fourth quarter.
Sprout Social, which describes itself as an AI-powered social intelligence platform, trades on the Nasdaq under the ticker SPT. The company is headquartered in Chicago.
Source: Sprout Social Investor Relations
