{ "docId": "019de518-f1ea-71d3-a8d0-549abf7d3ab6", "docSlug": "a19b9fec633f5b174b334b8ccbedec40", "documentTitle": "Sprout Social | Investor Presentation Deck | 29 slides", "authorId": "sprout-social", "authorName": "Sprout Social", "documentKindSlug": "pitchdeck", "documentKindLabel": "Pitch deck", "sourceTypeSlug": "investor_relations", "sourceTypeLabel": "Investor relations", "presentationDate": "2025-02-01 00:00:00", "orientation": "landscape", "aspectRatio": 1.7777778, "pageNumber": 29, "pageCount": 29, "prevPage": 28, "nextPage": null, "slideType": "appendix_disclosure", "function": "appendix", "density": "overcrowded", "nDataPoints": 0, "notes": null, "elementsJson": null, "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019de518-f1ea-71d3-a8d0-549abf7d3ab6/29", "deckHref": "/decks/019de518-f1ea-71d3-a8d0-549abf7d3ab6", "deckJsonHref": "/decks/019de518-f1ea-71d3-a8d0-549abf7d3ab6.json", "deckAnchorHref": "/decks/019de518-f1ea-71d3-a8d0-549abf7d3ab6#slide-29", "components": [ { "bbox": { "h": 0.02, "w": 0.1, "x": 0.85, "y": 0.89 }, "kind": "image", "text": "sproutsocial", "attrs": {}, "subkind": "logo", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "dd33c90e-b949-4ea5-b585-7d783eff78c2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.02, "x": 0.95, "y": 0.95 }, "kind": "other", "text": "29", "attrs": {}, "subkind": "unclassified", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "098e2493-bfea-481a-9080-b5be584fc622", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.88, "x": 0.06, "y": 0.52 }, "kind": "paragraph", "text": "Non-GAAP net income (loss) per share. We define non-GAAP net income (loss) per share as GAAP net loss per share attributable to common shareholders, basic and diluted, excluding stock-based compensation expense, acquisition-related expenses, amortization expense associated with the acquired intangible assets from the Tagger acquisition, tax expense due to changes in valuation allowances from business acquisitions, restructuring charges and non-cash gains from lease modifications. We believe non-GAAP net income (loss) per share provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this non-GAAP financial measure eliminates the effect of stock-based compensation, acquisition-related expenses, amortization expense, tax expense due to changes in valuation allowances from business acquisitions, restructuring charges and non-cash gains from lease modifications, which are often unrelated to overall operating performance. During the fourth quarter of 2024, we revised our definition of non-GAAP net income (loss) per share to exclude restructuring charges associated with a workforce reorganization, consisting primarily of severance and other personnel-related costs, and non-cash gain related to an office lease modification.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0ddb3641-a157-4523-9716-5c2c0932d07c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.01, "w": 0.6, "x": 0.06, "y": 0.76 }, "kind": "paragraph", "text": "Average Contract Value (ACV). We define ACV as the ending period total ARR divided by the ending period total customer count.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "11bdc9b8-ef40-42bd-8d0a-d7e1a0cfbc84", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.01, "w": 0.6, "x": 0.06, "y": 0.23 }, "kind": "paragraph", "text": "Non-GAAP gross margin. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "13b37566-e40b-4109-9707-4ed1b38a8b9a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.88, "x": 0.06, "y": 0.64 }, "kind": "paragraph", "text": "Non-GAAP free cash flow. We define non-GAAP free cash flow as net cash provided by (used in) operating activities less expenditures for property and equipment, acquisition-related costs, interest and payments related to restructuring charges. Non-GAAP free cash flow does not reflect our future contractual obligations or represent the total increase or decrease in our cash balance for a given period. We believe non-GAAP free cash flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash used in our core operations that, after expenditures for property and equipment, acquisition-related costs, interest and payments related to restructuring charges, is not available for strategic initiatives. During the fourth quarter of 2024, we revised our definition of non-GAAP free cash flow to exclude payments related to restructuring charges associated with a workforce reorganization.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2e6ff5cb-a858-40b5-a226-fd49b72d63d6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.01, "w": 0.6, "x": 0.06, "y": 0.73 }, "kind": "paragraph", "text": "Non-GAAP free cash flow margin (Non-GAAP FCF Margin). We define non-GAAP free cash flow margin as non-GAAP free cash flow as a percentage of revenue.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3ff7320f-591f-46b2-bac2-92aa610e3d5c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.88, "x": 0.06, "y": 0.00101 }, "kind": "paragraph", "text": "Current Penetration of our Served Addressable Market. We estimate the current total revenue of SPT and each of our primary competitors and divide by our current SAM to determine current market penetration.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5562b05c-5f91-4fb8-af75-2353ef1bd210", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.88, "x": 0.06, "y": 0.0011 }, "kind": "paragraph", "text": "While we no longer believe that ARR and number of customers are key performance indicators of Sprout Social's business, these metrics are necessary for an understanding of how we define number of customers contributing over $10,000 in ARR and number of customers contributing over $50,000 in ARR. For this purpose, we define ARR as the annualized revenue run-rate of subscription agreements from all customers as of the last date of the specified period and we define a customer as a unique account, multiple accounts containing a common non-personal email domain, or multiple accounts governed by a single agreement or entity.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5e7a6384-e241-49aa-87a6-7e61ef7fab28", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.88, "x": 0.06, "y": 0.39 }, "kind": "paragraph", "text": "Non-GAAP net income (loss). We define non-GAAP net income (loss) as GAAP net loss, excluding stock-based compensation expense, acquisition-related expenses, amortization expense associated with the acquired intangible assets from the Tagger acquisition, tax expense due to changes in valuation allowances from business acquisitions, restructuring charges and non-cash gains from lease modifications. We believe non-GAAP net income (loss) provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this non-GAAP financial measure eliminates the effect of stock-based compensation, acquisition-related expenses, amortization expense and tax expense due to changes in valuation allowances from business acquisitions, restructuring charges and non-cash gains from lease modifications, which are often unrelated to overall operating performance. During the fourth quarter of 2024, we revised our definition of non-GAAP net income (loss) to exclude restructuring charges associated with a workforce reorganization, consisting primarily of severance and other personnel-related cost, and non-cash gain related to an office lease modification.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7d54d886-25f2-41c8-991f-158e49a9b964", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.88, "x": 0.06, "y": 0.84 }, "kind": "paragraph", "text": "Number of customers contributing more than $50,000 in ARR. We define number of customers contributing more than $50,000 in ARR as those on a paid subscription plan that had more than $50,000 in ARR as of a period end. We view the number of customers that contribute more than $50,000 in ARR as a measure of our ability to scale with large customers and attract sophisticated organizations. We believe this represents potential for future growth, including expanding within our current customer base.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "88399d19-8de5-4519-b8aa-40f44a283634", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.07, "w": 0.88, "x": 0.06, "y": 0.15 }, "kind": "paragraph", "text": "Non-GAAP gross profit. We define non-GAAP gross profit as GAAP gross profit, excluding stock-based compensation expense, amortization expense associated with the acquired developed technology from the Tagger Media, Inc. acquisition and restructuring charges. We believe non-GAAP gross profit provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of stock-based compensation, amortization expense and restructuring charges, which are often unrelated to overall operating performance. During the fourth quarter of 2024, we revised our definition of non-GAAP gross profit to exclude restructuring charges associated with a workforce reorganization, consisting primarily of severance and other personnel-related costs.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8edf8d67-6687-4840-894b-87a86bab7352", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.88, "x": 0.06, "y": 0.96 }, "kind": "paragraph", "text": "We calculated our >$120B Total Addressable Market estimate using the methodology above. We then used internal estimates informed by research from the Harris Poll to determine the projected business presence on social media in 2025 that will require a social media management platform, multiplied by our internal projected average segment ACVs in 2025 for Sprout Social and its direct competitors in the applicable segment.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9700c080-cba6-4811-a115-aa1ae7a6d29b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.88, "x": 0.06, "y": 0.0010400000000000001 }, "kind": "paragraph", "text": "Remaining performance obligations (\"RPO\"). RPO, or remaining performance obligations, represents contracted revenue that has not yet been recognized, and includes deferred revenue and amounts that will be invoiced and recognized in future periods.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "97470376-c438-47b8-aa01-011870524832", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.88, "x": 0.06, "y": 0.26 }, "kind": "paragraph", "text": "Non-GAAP operating income (loss). We define non-GAAP operating income (loss) as GAAP loss from operations, excluding stock-based compensation expense, acquisition-related expenses and amortization expense associated with the acquired intangible assets from the Tagger acquisition, restructuring charges and non-cash gains from lease modifications. We believe non-GAAP operating income (loss) provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this non-GAAP financial measure eliminates the effect of stock-based compensation, acquisition-related expenses, amortization expense, restructuring charges and non-cash gains from lease modifications, which are often unrelated to overall operating performance. During the fourth quarter of 2024, we revised our definition of non-GAAP operating income (loss) to exclude restructuring charges associated with a workforce reorganization, consisting primarily of severance and other personnel-related costs, and non-cash gain related to an office lease modification.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9fb652bb-7e72-4426-a6e2-5240f253f71d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.88, "x": 0.06, "y": 0.89 }, "kind": "paragraph", "text": "We calculated our current >$55B Served Addressable Market estimate as follows: (i) utilized data from The US SBA, The US Census Bureau, The OECD and Statista to estimate the total number of businesses in the United States and globally in each of our served market segments (Enterprise, Mid-Market, SMB); (ii) utilized internal data and third party estimates to estimate of the number of such businesses that require a social media management platform (the \"Target Businesses\"); (iii) calculated the average of our ACV and our estimate of our direct competitors' ACVs in each segment; and (iv) multiplied the estimated average segment ACVs by the estimated number of Target Businesses in each applicable segment.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d1199a1a-6649-485e-ac84-5e707cb8c5aa", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.88, "x": 0.06, "y": 0.79 }, "kind": "paragraph", "text": "Number of customers contributing more than $10,000 in ARR. We define number of customers contributing more than $10,000 in ARR as those on a paid subscription plan that had more than $10,000 in ARR as of a period end. We view the number of customers that contribute more than $10,000 in ARR as a measure of our ability to scale with our customers. We believe this represents potential for future growth, including expanding within our current customer base.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d50275e4-f208-4baf-b1cf-830fa0e36a17", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.01, "w": 0.6, "x": 0.06, "y": 0.36 }, "kind": "paragraph", "text": "Non-GAAP operating margin. We define non-GAAP operating margin as non-GAAP operating income (loss) as a percentage of revenue.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "df0ccd2a-4667-4299-9c68-afbd00e682d7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.88, "x": 0.06, "y": 0.00107 }, "kind": "paragraph", "text": "Current remaining performance obligations (\"cRPO\"). cRPO, or current RPO, represents contracted revenue that has not yet been recognized, and includes deferred revenue and amounts that will be invoiced and recognized in the next 12 months.", "attrs": {}, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e9eb645d-05c7-4c10-ab17-36bac968a7bb", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.22, "x": 0.06, "y": 0.08 }, "kind": "title", "text": "Appendix", "attrs": {}, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e98bc8c6-bdf5-4bda-b1c7-7607d6cdbdea", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }