SPT - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Sprout Social's Third Quarter 2020 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your first speaker today, to Mr. Jason Rechel, Head of Investor Relations. Thank you. sir. ahead, go Please

Jason Rechel

And Call. Sprout Operator. XXXX Third Earnings Conference welcome you, Social's to Quarter Thank

Securities be of the With which forward-looking will Del Sales, after the Social's We Ryan discussing to Justyn are Preto; the the release our CEO, of harbor XXXX. Litigation call President safe market made issued and press Barretto. Senior Reform pursuant closed of CFO, Today's Act statements today. Howard; me Private Vice Sprout results are provisions Joe announced Global in contain will

as or Forward-looking our XXXX statements guidance financial financial business year by include statements expect, of concerning such can our the and financial we performance statements as expected These and any trends, and plan, for condition, quarter not anticipate, identified XXXX, representing and reflect future fourth not full relied seek the and intend, business today be duty of and update views statements. words upon believe, date, do views our subsequent be as should only, these undertake to any our at will.

that matters Forward-looking uncertainties risks and to cause actual subject results to address that differ are materially. statements could

periodic please results, and potential a our filed the Exchange and of report affect with to factors disruption quarterly report SEC. XX-Q filings actual other Form our the to SEC For be that with with discussion from could important other the Securities annual risks the and COVID-XX, on refer filed including XX-K Commission, our our

turn and website press in to our comparable release, of that, these the in non-GAAP furnished reconciliation has each principles. with let financial accounting measures the And with on at our During call measures generally financial A over me Justyn. we available the which are discuss call, to also accordance the not GAAP prepared to also which measures financial will directly is is been certain of investors.sproutsocial.com. most earnings non-GAAP included SEC accepted

Justyn Howard

afternoon, everyone. joining Thank and you us. for Jason, you, good Thank

quarterly Social a this the stay year, all quarter On delivered again been of been for and We're have things that as ahead for Sprout I new now we're is prior able you've well to share multiple across productive. XXXX strong guidance. records. our and side, healthy to setting remarkably our executing difficult plan As our hope board, our excited well, grateful to team

sits mission believe Our becoming is is rapidly relationship to the with of most channel straightforward. connect customer powerful We the at social brand center firmly serve the and audiences. win, and

well businesses is and businesses deploy to ability software punch agility powerful, weight customers their and and all large the enterprises the elegant to easy above across give We scale. of to Our at their small platform sizes. delight efficiency power,

channel record it mission-critical to top value priority easy for maximize our of made brands on social across this centralized entirety and transformation the become of their help Sprout the for globe. have organization. Digital increasingly system the as We standardize customers of has to across the the

care, of stack fundamentally Social history. commerce at technology social communication and service, engagement, publishing, it company's important is more new sits any intelligence. our digital includes time center at the that in customer business than this And

We are new thrive our to reality. customers this perfectly help in positioned

remarkable incredible and team. has We be a and XXXX are fundamental This invested most culture, quarter, the of the down. our slowing success. to single moment a facing, curves upfront place to here customer, powerful we're which and place ever being more thrown pace want to simply focus all culture without work beginning has I at today customers in rapid With our an Sprout, has on than and the customers of been spend not on been our us we be to an incredible from wouldn't our very evolution advantage. our

us as on Best Fortune's of of public aspects about This for These named today. time. we're as of the Workplaces well Women be kind our first the In talking are the this August, a report to for results XXX to less allow Medium honored Fortune's to annual deliver business testament to quarter, one DEI the XX that available as were quantifiable Workplaces we we list. Best made

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onboarded competitive the new growth company's Fortune in wins than largest ACV contract ARR our customers. our from During the several we brands, in third multiple history; RFPs; XXX XX% including delivered quarter, signed and XX-K greater highly

of and through beginning that successful sophisticated we in the success, success media to resources build every against these innovative social. begun technology, in to advantages, in the a security expect have all have and our we the space an considerable are coming on which in thesis model right third sales management have The We becoming our playbook, aspect large tech for to culminate motion invest repeatable of served the reasons. We in processes many only our social markets on we competitive raised quarter. and foundational a The suggest layer platform, is and And out XXX disruptive in the the implications every competed Fortune these years. compliance in companies size success supports established customer behind X the that our This digital We stack. believe evaluations. the structural wins notable metrics. stand competitor to place they expand go-to-market in bar business upmarket RFP deals

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and maximum A record. fully recognize social and more in of new number our an our customers. of enterprise existing important and to a customers collaboration establishing we're the allows this integrations the ecosystem while friction better integrated value deliver strengthening value the technology help Rich, visibility deal variety partners our flywheel customer social from around and further cycles solutions This also ecosystem journey. proliferate across reduces With immediate offer of platform functions, social platform further brand relationships. enables across our to a organization. business ourselves growing customer across of across user Our social system broadening experience as to entire

to I on for Lastly, our want touch priorities XXXX.

to investment have market position that well billion growing believe a and We $XX opportunity. goals capture aggressive us we

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adjustments March, back Looking to we our to made business. rapid

full this getting quickly, allowed strategy essentially to capacity go-to-market back and to within days. operating Our us do model

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communication environment. validated being the channel, out the digital ability in market a to stands is mission-critical and as Social our win new

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Ryan Barretto

blown Thanks, have social several records like areas, well continue commerce positioned again for joining trends was our to Justyn, us ahead. new thanks everyone set We to care today. away and period team I the by performance us social listening, quarter. in emerging delivering in of key social the this and and

their records support getting Our is needs large and and opportunity heightened set larger, of transform across In to Sprout to to teams. urgency QX, is sales, turn acute we with Customers and continue our team incredibly success, executing the services and sense organizations. a well.

support delivered support for larger done The us projects. outstanding pandemic. with that success marketing of teams Cares quarterly teams, CSAT, particular, TrustRadius, recognized site, review with larger in customer and award new records Tech this was our and during and for volumes Our a

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you that customers; voice brand If the importance went and speakers attended remain the importance the the of you heard compelling; to occurred and event, all structural of changes your emphasize about of the authenticity marketing, commerce as customer care digital. listening to

Marketing During in of road Dara marketing encouraged the power summit, Treseder, the embrace of at she social strategy. pleasure and to these Head the social Peloton. critical amazing really as the Dara had data is maps of media business building interviewing product I and saw peers insights our

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attracting people employer Our culture strong continues our incredibly our out, brand is and to company. stand talented to

success well Sprout team, here. putting over to through our to my with Joe? As at I that, Joe it on With recently to the financials. turn I'll is we're that position, stars all from build leadership every means which positioned run shared

Joe Del Preto

Ryan. on for detail through and year XX% fourth our you quarter million, in was $XX.X Total growth. year-over-year third before guidance third XXXX. full for results representing to the quarter now walk quarter Thanks, I'll the moving revenue

year-over-year. organic up customers QX year-over-year. health new year-over-year. added was QX XX% net new million, Excluding revenue Organic ARR from was both up finish was XX% business in Simply year-over-year. with up $XXX.X with and the ARR exiting million, legacy ARR XX% We XX,XXX record new $XXX.X to retention. the quarter impact up customers, achieved X,XXX net We in Measured, XX% Total

Further, segments. new an do mix positive saw improved want cohort. to strength which This and reflection total as economics subscriptions, on has quarterly reiterate impressive total and you customer long-term so the us of market with to is seen a notably all landing multiyear implications our of on quarterly ARR, on of up speaks that adds both The I be net annual have we net customers economics. customers or across adds than quality this growth, year-over-year. contributing up and from XX% lumpy double-digit QX historically of number year, on ARR can high-quality and $XX,XXX in from long-term this customer reached remain continue ARR far focus premium on a over grow we X,XXX basis, ago focused more to and unit XXX% Listening in X,XXX, year analytics a XXXX. record

is onboarded unless record more the and total even larger. evidenced pleased In in stated, statement, are ACV of customers Sales on now a QX, before of in larger number customers. and a was base. This non-GAAP QX was XX% XX% were But growth XX.X% operating our the year and are results importantly, are from million GAAP basis who and expenses, than last discussing a XX.X%. In quarter. our release million, or share we to XX% up down these points as XXX consistent are We XX.X% the earnings otherwise to references basis greater XX% expenses new issued with marketing $XX.X customer compared $XX,XXX just remainder a reconciled customers was income press that our margin this of by ago call. revenue, gross are year please our of gross a ago. profit results margin count growing even that of compares representing for to record annual of note $XX.X gross a This all

and both ago. we XXXX. a into marketing QX in to for move development QX, we of down capture and of prepared our fully opportunity we XX% were teams revenue, or XX% pace sales hiring our $X.X across are expenses our accelerating from year million As that Research

deploy to follow-on This General investment QX a gives our the grow administrative We which opportunities. engineering August a the revenue, expenses from offering. migration million design year from R&D ago. XX% our multiyear next completed growth product company into a for plan. forward and expenses was Simply fees to the engineering up $X.X XX% pull to of primarily going new of to public function were and are away onetime We're to or and resources related year teams pleased efficiently have us ability Measured,

decrease We expect of as as expenses general scale operations. administrative and we to revenue our percentage a

ago. benefit workforce, QX lap from operating negative I nature due received than XX% efficiency would margin. these a however, we in future. expectations our in of operating with occurred our currently the loss have, distributed was our million quarter negative margin $X.X as to as working emphasize efficiencies compares hires, operating plan. key nonrecurring outperformed revenue, for a We which the an of environment the XX% a later realization year for and a distributed in in We Non-GAAP higher This efficiencies timing the which

of million hiring for weighted of accelerated net efficiencies share fund across long-term we outstanding during common loss the Even to the million ago. $X.X loss growth continue million compared of QX to work, QX our a stock fully as XX.X on loss we net Non-GAAP pace a realize distributed $X.XX from shares priorities. business and was a net average per based $X year of for

million the flow balance ended at QX $XX We cash QX We end statement. of received follow-on equivalents the end with was up from August in the quarter $XXX.X Deferred offering. cash securities, the and from $XX.X million to our $XXX.X marketable XXXX. in and million. million from cash, revenue of sheet cash Turning

contracts, XXXX $XX.X or from Looking obligations, RPO, approximately and and XX% remaining our year-over-year. exiting both million, our at totaled billed QX performance up $XX.X up unbilled approximately million

as during We in Seattle $XX.X Free negative negative office. our cash to QX around spend you and a to flow remaining XX% of free or We will for expect XX% $X the $X to of build-out flow told million negative expect QX free QX negative a XX revenue total during the in We flow million be roughly to over free compared margin had QX, for negative in a Operating flow was year XX% months. ago. spent was RPO margin million cash and spent flow next QX. $X.X million to previously $XXX,XXX recognize approximately during cash compared million $X.X million $XXX,XXX year the ago. $X.X us cash negative a cash

to Moving on guidance.

of the quarter XX%. we fiscal fourth of total in of $XX.X or range $XX.X XXXX, million the revenue rate For growth to expect a million

reported a be We we than faster single-digit percentage rate revenue growth points our to Measured as growth from our rate lap organic year ago. Simply expect mid-

sales accelerating range we investment operating We as the with investment non-GAAP opportunity pushed R&D, future sales In and certain and front people QX. of marketing infrastructure to of And our with medium-term as of of efficiency $X.X in and loss to capture the as in our are us. were pace to sustain expectations. from our $X into expect QX consistent the Seattle expenditures office well million. Overall million remain immediately the balance $XXX,XXX noted of earlier, marketing areas,

cash expect roughly our be such, to operating As QX we our $X better free million flow loss. than anticipated

$X.XX, and non-GAAP per a expect average XX.X million of $X.XX share We outstanding. stock common net approximately weighted assuming loss basic between shares

reminder, As count. a August shares diluted offering million X.X follow-on our share to added our approximately fully

year to prior range now $XXX.X prior up of million. to we the This a rate overall midpoint XXXX, expect total XXXX $XXX.X an of XX%. full be in million rate approximately organic expected XX%. of of XX%, growth expect is revenue from up estimate fiscal of now XX%, For a the our We reported from growth

of we million with million. our non-GAAP to to of in compared range XXXX, million million operating For $XX $XX the expect $XX.X prior $XX.X loss range

leverage. continuing for growth while are multiyear our profitability to We delivering invest long-term

share and XX.X the has shares. mission help to critical. loss of $X.XX prior summary, per and manage $X.XX approximately the channel customers million non-GAAP opportunity compared with ever social $X.XX a In and between assuming a expect more of We $X.XX net been range

for We multiyear are to growth. capitalize on positioned opportunity uniquely the

managed continue enable high strong Operator? make balance our questions. degree Justyn, a us Ryan I of balanced are gives happy will of With any that cash confidence investments flow potential. to prudently to to and take your achieve full to that, sheet Our and

Operator

line first of I Rob from Oliver [Operator Baird. Instructions]. from comes our the show question

Robert Oliver

Great.

really quarter. one the rebound adds on customer strong in first Just net this

projects kind quick saw trial you guys had of who there in Obviously, Were what where motion was were people there. a then for curious Or put -- the these COVID, some with better of month? continuation were been customers out sort you I getting on had And just while some hold. in guys? that was post guys progressively Just of had last called this trends a follow-up. things a the quarter you each

Justyn Howard

This Yes. Thanks, Rob. Justyn. is

moment cut had it's where if we new the the addressing sure a it when net I the into the saw consistent or out rebound at we question, to out for quarter you're really what pretty you, through to after compression last it we've with you'd period that end me of the and so But way was Joe. on which wasn't end address quarter, to tell called You third that adds, And healthy of from I'll some quickly. March really April, looked started quarter. the see that all tail really

And to saw over, seem through demand at just if of we what QX it pent-up spilled second be the a kind doesn't consistent of that's factor, so trend QX. of from all, line more half a in as much of of

Robert Oliver

what That's that upmarket guys premium are some really ACV right. nicely the analytics moving just Obviously, it as that? guys just very wins, fact aside listening to larger in? products you you follow-up really such -- the Fortune in newer of And some lands? kick see growth. you're are Is and with good the you the highlighted metric. from company then, quick these on What helpful. important to All for of a increase components seeing the Or within Joe, start

Joe Del Preto

Rob. Yes. question, Great

what combination you're seeing is think of a those. I

higher upmarket, X As are when modules. ACVs, customers at new we they're especially these X we're with these definitely landing premium of or landing

base. in business but only strong modules. higher the the top saw just not net overall lot end, our we right we across of not overall a kind saw then upmarket and getting of on that, overall just of improvement but a adding We're of adds momentum more And additional these customer seeing just it's So ACV now. great then combination on

Operator

Zlotsky line comes next from our the show I from Stanley. Stan Morgan of question

Stan Zlotsky

Are pandemic fire Perfect. from Obviously, stories their the what straight spend own you furlough first pre-COVID And customers? far are having I to a they seeing returning levels? heard quick their within with us. follow-up. -- companies started, -- back first as you Maybe their the you of when a as up How people. are or people people your doing lot one of we to their have

Justyn Howard

Yes. Sure. Thanks, Dan. This is Justyn.

our think which And chopping has we've this started we've immediately, had terms been impacts to going that kind be businesses of was what really really customers. an It's of recovery. maintain area hold, hit is with to in themselves customers social hasn't engaging to needed one felt interesting. I channel the for I ones that as like that take was seen started think COVID and of their to the really to last that with be conversations the the the block be been take that positioning of on to

And lot so space. our see of that we a in happen didn't

seen engagement down settled resource for and of have gotten certainly, longer-term really way of like things, hasn't and a larger thinking more have deals perspective, it kind into things that. us. we've from But the things think, around people doing as I felt concerning and

Stan Zlotsky

analytics Got you on doing us as appreciate if this apologize ones especially just the of And -- very listening? asked. it. give I'd add-on I'm as between But like and update jumping an here. conference far That's can newer and that. Got already are and I products how then your helpful. is it. calls some

Ryan Barretto

a the strong add-on Ryan from from part be well of it's our to customers. today, growth both The current really sales Barretto. new products continue for our a Stan, perspective question. perspective ACV as motion as Thanks

the in SMB how data. want own listening and as customers. and which voice social of a with the through the On this with to in agency customer coming customers, But data also they're data. and especially around trying new the be have customer but to working tend the which to their in not see limited and are enterprise the side, to and business mid-market the well, they're sophisticated they into They we as tap needs don't that they're responding campaigns lands understand

well. of see for has products. as the those then us reputation product been to So continue strength both in really great And

Glassdoor. You think heard the seeing and it of to more review customers that but well. things want brand during our and not employer as as these things all add the We're just beginning, like what traditional and social, sites review presentation you do more of together, at sites

ACVs. all well those our growing of contributing to So really

Operator

Our next the of BTIG. VanVliet line Matt from comes from question

Matt VanVliet

to maybe dig especially much like coming expansion seeing, little It of deals. of a in is social seemed on wanted a I more more just component key becoming kind of that own and curious upselling, strategy marketing with of overall along bit that kind no the you're longer like. its of just looked of from summit trend But but kind entity. you're how what seats expanding out especially doing, has just what

of approaching on in-person moved more and you're are that. companies engagement, to sort that how more has losing platforms commerce and As digital

Ryan Barretto

data we've of I manager. And the media I four Thanks, evolved social media It's certainly market media the that into you'd where for business, are customer typically When analysts but we this the area, across people that's matured. lot make Matt. a department, Yes. be it within started seen of getting into selling Sprout And of not social This evolved is has looking comms of social Ryan. parts over strength mean as which our team and you time the listening, decisions range are PR business with our entire social marketing and from and to brand to exposure analytics premium a care see to at evolved on. the to years might from other just today, addition content. ago, managers. and and

on they differentiate could identifying handle are a be doing motion. in go-to-market typical the moved in data for customers our that this right, just social a user. being perceived has which business beyond getting their the competitors how within them helping their decisions, ton are has better products more, are understanding expansion more exists realizing them the markets into, and of going potential So And through that marketplace, what their making and

things product reputation. added So the our us, and the success all XX analytics to think on expansion. have last those we And if listening to strategy, about the and the we with with for months go-to-market over really really contributed suite

really all So strength of our and good from to on progress growth good see those continuing fronts teams. really

Matt VanVliet

you're you the of follow-up, quarter. little hiring in Joe, behind a a in terms And that mentioned

Just we couple in spill you clarification. expect wanted the fourth run some hirings full the exit on weeks? pretty much the a into to Or of get last Did quarter rate and even of quarter? relatively did you plan and did those -- a little October should over

Joe Del Preto

Once sales momentum of investment QX QX, coming Yes. early hiring we marketing and the the really and out increase side. wanted to saw the in in we

And hirings a all in had we We plan. get didn't so QX. those aggressive pretty

So of going definitely especially and continue to into area, heading spill will to in XXXX. that into some QX, invest we're that

us keep And Matt. business, expect so in that the you given area, in momentum can to investing that

Operator

comes question Goldman of from Merwin from line the Chris next Sachs. Our

Chris Merwin

Okay.

in about You deal you it quarter, wondering think Just segment. trying it how in include of could bit think, What talked one And about outside in a terms called the strength through Did was future did your and include this I the this to more you large users of segment large that foreshadow if ever. wins some talk modules? department? enterprise deal. enterprise the out, could I largest marketing

Ryan Barretto

for Yes, the Ryan. few a is This Thanks things. question, deal included large Chris. that

are marketing to not touching department care. with customer Matt, perspective. different So social listening that we're departments. getting users before the both the data, that departments social Similar question places touching just the a from We're analytics other from an it's into Oftentimes, like leveraging and today. it variety included it's of

about So in of listening users, well. dozens analytics this including talking as add-ons, premium and we're circumstance,

Chris Merwin

the integrations. a follow-up And Okay. just about Great.

or just out some a who being we of Zendesk, sharing integrations how these HubSpot. these and I become with think does larger about Just of it curious retention? customer? a to want require guess, the help to platform? to -- these them with Or systems tailwind, help as new the the ones logo integration maybe about impact should we maybe customers have to a And How growth called You data think to quarter, other product? this Dynamics, of should systems? contributes the this analytics that Does number new with

Justyn Howard

is Justyn. This Yes.

we've similar seeing So some conversations is we're really, to had. of what the already here

customers quickly other across that where and marketing is is got of themselves that department. media find systems record are a of lot system that in There we of replicated a well is they've the centralized organization, expanding for processes Social management. social be can't really critical our beyond expanding ourselves record. simply the where find existing it And

more able really our to it's to some than from but a them the problems use this and most so. of of out think with the going perspective, business. data into gives to start we're an kind able of solve recipe that been and and pretty a the of allows a those data past. customers. evolve opportunity be us so a upending not bring more opportunity other certainly, processes to expose thus their us of start social And lot this both of at we their taking platforms of for help to place. those cases some cases, to about even in some tailwinds is sticky And where additional relationship think are for workflows that, us And those and some And organization do sophisticated marketing to use those just to that's That's been in we've the of far, more the of those only expanding help more get outside into us create success for customers primarily

Operator

Barclays. Lenschow of the Raimo I show line our next question comes from from

Raimo Lenschow

in. Thanks me for fitting

handholding, it talked strength and the strength you've other had Historically, bit, cetera. of largest driving I'm were to more in understand there a et it? in the larger better? -- -- base the with you customers. players trying customer the about bit of what's driving to now. about Is of little about I your the upper asked that of driving add-on the you then Is talk the Just the that you understanding do kind -- that the more little it? and of automated kind just -- modules more quarter. think the are offering what's are Can a Is is follow-up. market Chris of deal kind up just talk a You strength Can the part just in playing

Ryan Barretto

last the of customers. products analytics is listening Raimo, Ryan. additional added them. to months fit a sophisticated for and here. all one space these few and want over play the in perfectly reputation we definitely to that and this the Yes. in XX One, suited things do bill There's we've are in platform for the They one things these with vendor,

the competitive we'll that you the educating value our but And set. we're So that powerful, in too, an experience There's is to and just check a use, scalable. big and to box, that's they And our all not And from been highly just today, enterprise in but they're the what brand calls, it's disruptive the a competitive buying we're base. product, within try us. And you the it's set into think of them modern up And for of it's before that software. of the do the experience that competitors. definitely living enterprise. we've other and they means evaluating this certainly believe that like this, Sprout, state marketplace. conversely, hearing mentioned the of of to We a a trial believe future, on and very customers and customers that's customer that hybrid feeling advantage to doing element, demos. driver easy getting for is other go technology we it's get a only just the be the people. at when in contract. to in product most big Related these well huge the a but looking differentiator I certainly disruptive And getting few sign buy. are that's competitors remote just very for is not And in the way our to that's the have us, in leverage power we're back environment We before upmarket least that at, this we're for

Raimo Lenschow

I Joe. a And for had follow-up then Okay. Perfect.

of As you living kind generation lead of money, you think faster momentum I of you now that don't theory, et it but like frees different of but the -- do cetera. new other we kind of types of we're like you kind in hand, from are kind in about of on up showing up you, kind kind travel, generation -- of less this for in the maybe channels world to planning guidance stages which kind how with saves different and for -- guys we want next kind activities, kind lead speed Like that are more coming versus opportunity how using leverage of of where kind the have? the of to out of use between like year, kind

Joe Del Preto

Raimo. Thanks, Yes.

guidance obviously think our next are and without historically, things see us, from is investments marketing and what when see for working returning I think you've giving year, as seen we you'll the economics sales improvement invest kind the seen in have, to margins. those But areas. for now year-over-year you've same of going years several operating our continue in unit to that at they we're token, I

And I expect trend. so can think similar you a

things going same X You'll that will can invest assume those you also forward. the forward, decision margins we'll be going token, this and balancing constantly especially business, we and see at But us continue making that in to for growth. be driving down

Operator

the Hynes next show question of from Canaccord. David line our from comes I

David Hynes

I adds a deals. want on we right? I really high the think the Obviously, strong really X,XXX quantity, to question impressive. Congrats about a large quality is on talked right? wins, ask the results. lot net

being of kind trial in curious, Or you conversion are driven funnel by of I'm improvement is top it in trial activity? activity? the seeing on material just the So explosion rates

Justyn Howard

for is Justyn. question. Yes. the This Thanks

job having seen, I every seen part this But Absent value and through in consistency with for would enterprise. into certainly headwinds organization coming net And last between up them there it's X, a the dramatic of some March funnel. hoped much adds all that saw function as before, as would in seen an that net they a logo that the that we've we converting. of the year. you function expected is. and and this of the function top the the the things Ryan X those SMB it's have retention part think early contrast handful of a I of really it's a I team to and be the the been It's operating a not it's QX have And the in be And things year handful things. have true us. not across April. But market, months the think, of coming were into and a of just sales it doing as been just compelling QX as we've fantastic improvements a it's that COVID, think statement, of the in year, mentioned of and anomaly adds would of

David Hynes

maybe longer you against Yes. and and the for reputation opportunity. guess a Yes. than one kind I of which taken listening, kind cross-sell/upsell internal And new products to maybe Makes has little Ryan the if the sense. your then rank done had on you expectations, bit I'm the which have kind of of expected? and right, has best analytics curious, X, would

Ryan Barretto

we have think up incredibly there. One, showing be from those just that And listening technical have organization. a an expectation. been of enterprise over-delivery to hard or things consultant a who's from use. the that the many can't I the would want from. continues are it's those I the that say that get that of one Yes. are customers They're inside marketers so seeing actually couple And usually vendor highly solutions bought on usually it. they But traditionally, somebody the data to reliant from perspective,

alongside their fact listening listening reports for they immediately actually that the to And the we them into so publishing, use it the be to product. run that can data able help find, own the them powerful. within means that that sits is incredibly fact can insights the get they And

that's piece. So one certainly

areas probably continuing reputation those I and think add we're say one to. to the it's of would reputation, other that side, because on I only

So in and Google with TripAdvisor today we've there we've My Business, got stuff and some added great Glassdoor. really

I we I for say, just to very that. contribute I us, all selling customers really landing it's be our well teams as those we'll to product, contribute to product. we're think of to well continue and with think doing pretty those dangerous. our new products to about would continue than are as to going And But that as growth X things, customers excited more current all overall,

David Hynes

to Makes So an of sense. bit I your question. like right? favorite choose asking color. It's Yes. the child, a Yes. It's unfair appreciate

Ryan Barretto

never I'd out say one loud. that

Operator

William line Bhatia question the next Blair. from of comes from Arjun Our

Arjun Bhatia

love new talked the on some You hear Is Is I it the just making. some you're granularity it to sales of details. sales and mid-market? customers, those about of investments marketing those the on on would dig some making love where SMB, just in of to expansion? investments you're maybe Would side.

Ryan Barretto

the There's areas. Maybe it's Arjun, Yes. I'll different a few Thanks from start. the side, marketing question. for Ryan.

invest continue in to a content. We lot

searches tremendous a really be, product. and fantastic inbound that's the that Sprout to we've during there impressive whether or any run social, you insights do built trials content We've working, about content may that want have leads, that been or and it Index If detail you're is going content, we've happened executive, for likely of into Sprout out we some engine providing COVID. be and this Social right? it amazing practitioner Whatever people the around that's got the driving the on amount

within feel different I'd in something to opportunity of those segments. the highlight that that of throughput we We we be I'd content. And that dividends of the this it are mentioned, the the really focusing And with all and just continues enterprise increased executing that And teams our quarter, continuing that enterprise stands of opportunity resources content the we're the to area well team. both -- did about all in but perspective are outbound through one highlight. out just in got And off of marketplace. there. out think enterprise. we've a is from engine amount on saw was that areas, perspective of good are huge coming lots of but shifted perspective, would reps X we our fast our out on there's see inbound to a within There's sales From So quarter, reps. delivering. incredibly prospecting really we hiring be I enterprise. the investing The pay marketing gates team We We first a that some an the well. bunch our the really a the

Arjun Bhatia

was Perfect. wanted At there we rolled That's I touch like little pieces. few maybe integrations. color. you future time, we Joe. It at Is Simply off. maybe said there years? gross now any the And from just on a impact seems for gross to I on moving bit. when X gross has helpful a Measured I piece, know margin a we one think Simply added those And very Measured are same the then margins then new rate about from of you've margin think in? factor that more steady should kind

Joe Del Preto

Good Yes. question, Arjun.

assume the a see, with think with margin. of on the next improvement I can is to Measured integrations what over couple quarters, you you'll and then the modest continue Simply impact

see think significant think So we're but that a going at those anything think you'll I X definitely be things. state. steady it's from to don't I improvement, don't I

Operator

line comes Our the Stifel. Tom from next of Roderick from question

Tom Roderick

to you. hear Great from

still well. think regarding And Let platforms, guess. just that market Twitter it there's Ryan here had social can one the some sort me the Justyn, -- guys there. think, we've I about if I and call tremendous feeling on are platforms collectively, doing a Ryan, the some first tackle recently, side comments on that heightened I on both of out and you Snapchat of and to urgency sense throw seen monetization nontraditional But monetization you very efforts Pinterest more

urgency. bit a in seeing for I'm spread what it strong. media And talk point social to that more But manage a wondering as broadly, happens, like hear to a the of So heightened in coming that you're efforts you if sort love about little need of that's very are for driving demand extra drives market multiple sense in the little an just platforms. management of I'd that bit advertising a something the is time little odd platform, for where

Justyn Howard

Yes.

Justyn. is start. this So I'll

on got that players fact true the for with year, social been present when pretty breakout in our back there communicating that need I think more customers. and this eye of And the management. be keeping places the and to to and -- has in to the successes edges every and there's our are and of an dating way that more -- a keeping kind be started, we engaged customers be around exponential big centralized and compounds extent, some definitely need

and manage. networks people there, multiple -- There's I to at think cases force how to of that's profiles. ACV use starting more There's historically additional involved. we're some driving number and see look a that's more there's more growth when our consistent something departments been you involved, and more

is pretty ingredient. powerful And so that a

to it next working folks problem think basics there's -- look felt be shift. another but get I years. very us. sometimes think who couple going think which a where we've there further XX the they I or from we've we're about of but felt next lose that into have that And to that hitting XX of engagement into just been investment, of now, that And to for more a of for lot or are and all future prioritization us. this evolve started for marketing just level And I is sight, think quarters like like -- And and what organizations easy is this is getting how might big demand were on figured the big enough the a They've this think just there of social, got to this I And that upon far that's and their now. driver tackling coming their the is they're reality to look and kind efforts time organizations lot of it's that customer years X, it's out. needed to level over different.

Tom Roderick

financial Yes. That's accelerating metrics follow-on really And side. on just great. commentary. That's right the Joe, are Appreciate really, that the in really helpful the direction.

particularly churn quarter, Where was it understanding coming So at accelerating. net side, directionally, that dollar -- bit Can back. just accelerating; really to you the just ARR little customer total that metrics organic that, you those at on now? a on But last single the that, important your necessarily what don't unpack revenue -- hear are revenue every was to to front you you do I quarter? respect what growth churn, saw see growth out that give look more underneath dollar retention, you want or with on

Joe Del Preto

our -- we what the Yes. obviously, reflection year. at the strength is but retain give number don't Great not funnel existing customers. question, out is we're what Net net a out seeing on of Ryan in and -- our Tom. combination to top existing I the but and think customer quarterly add base maybe the the we'll at data only a new strength with give in about What able Justyn. of But we end of not basis, that kind business adds a overall also of saw, earlier record those it of it only said

in our been coming of that, so of biggest XX% have momentum larger front. values. growers, seeing talked top And dollar deals a I in. that On much new annual the in and becoming contracts coming are retention. on how of at those are that highest we're historically my lot remarks, over And customers our had The longer-term our coming contracts about we customers are

retention we're forward on think And upside years, feel that, customer coming so business. of we have like just of because stronger the an into overall as we this just look kind we we forward building going of base. And overall

Operator

next I Needham comes of Company. & question Berg from line show the from our Scott

Alex Narum

Sorry for about that. on This is Scott. Alex

seeing COVID? or compared what stats usage into terms seeing you COVID in usage to quarters were now few platform pre side, are the there of engagement a you're On what

Justyn Howard

a Yes. This take stab I'll Justyn. is at that.

we've themselves patterns with behavior sort of networks and the think usage consumer seen I reported. similar what

that's line. of been is one I things a think the of secondary interesting story kind

content, that networks for users types things years. X sharing and ago, -- et to is on reaching to. I the more doing or today with has are was with out, also been it increased what products, those just is volume, addition it than It engaging mean consistent of ago that years are several the much this on opinions consumers what In brand and brands, the cetera. X by engaging And that amounts it's likely months engagement that is

lot it's the have and last just and I not a volume, it's sharing If going more X, of particularly discourse organic we the that as communication. job of -- amount political et that So of that's that's that types of faced and there's even And environment kind that's an happening to what kind has to to I the a has where networks dynamic And powerful the commentary, you're focus as a brands year networks of changed But really engagement starts of the done looked think like. for cetera. been see good potentially has the the on or of brands think, for think the different. be lot for but we probably not going subside, for that -- well. it's something dynamic conversations something the only very shift, advertisers on

Operator

of the from question our last I comes Knoblauch from Brett show Capital line Markets. Berenberg

Brett Knoblauch

maybe try update progressing how and I to to seeing are dynamics domestic could if the those you similar you're curious what or was internationally just relative on markets?

Ryan Barretto

feel this international about Brett, We the is markets. Ryan. really good

in EMEA, having remember, helps well the our certainly that on execute may team Dublin we incredibly doing seen you We've office some marketing. up in first XXXX. building locally, team opened in It local international specifically ground, As a relationships there.

Latin there. across has good America as the really market well. thing We same and So progress APAC, see ANZ been the

been We team markets. from our So the really has started those continue markets, about so many EMEA, just we that seen those really the the rates know really and ended we within conversion customer there, progress about far, adds down the as especially of feel in feel good we that healthy funnel top have and But see we've to and again. to quarter. of shut they that good

Operator

Q&A the back like At Mr. over the I'd to this session. time, concludes This turn to call

Justyn closing Co-Founder, Howard, remarks. for and CEO

Justyn Howard

of our we been over our work last just face grateful. our in catching to couple and organization been And up employees events a spending this so more Yes. thanks The Thanks. lot all and look soon. so months, be the just close the watch, a And coming We bit everyone, this the curveballs in quarters for much. doing forward of engagement We'll and partners. time. handful some of attending Great. I in time the to with to again, the questions. and to we're thanks remarkable Thank you enjoy a customers that's of your with a appreciate has with done just you you and want afternoon. that of again of always again

Operator

this Thank conference gentlemen, and Ladies call. participating. you concludes today's for

You may now disconnect.

Sprout Social (SPT) 9 Nov 202020 Q3 Earnings call transcript