Sprout Social Reports Q3 2026 Revenue Growth and Improved Operating Margins
Sprout Social (SPT) reported third-quarter revenue of $125.1 million, an 8.3% year-over-year increase driven by expansion into the upmarket customer segment. The company demonstrated significant profitability improvements, posting a Non-GAAP operating income of $26.3 million with a 21% margin, representing a 910 basis point improvement from the previous year. The company's strategic shift toward larger customers is evident in its enterprise cohort (≥$150,000 ARR), which grew 22% year-over-year. Despite these gains, management noted macroeconomic headwinds and increased budget scrutiny among mid-market clients, which may lead to variability in Q4 performance and the 2027 trajectory. Financial health remains robust with Non-GAAP free cash flow increasing 158% year-over-year to $26.7 million. Sprout Social also utilized $26.3 million for share repurchases during the quarter, reflecting a focus on returning value to shareholders amidst its transition toward higher-value enterprise contracts.
Tickers: $SPT
Topics: customer acquisition free cash flow operating income revenue growth subscription revenue