Sprout Social (SPT) to report earnings tomorrow: here is what to expect

What happened

Sprout Social, a social media management platform, is scheduled to report earnings Tuesday afternoon. Analysts expect revenue to grow 7.1% year over year this quarter, slower than the 12.6% growth in the same quarter last year. Estimates were generally reconfirmed over the past 30 days.

Confirmed

Global impact / market context

The report will show whether Sprout Social can sustain revenue growth as its pace is expected to slow. Revenue and guidance can influence expectations for future sales and spending; a shortfall could prompt investors to reassess the company’s growth outlook, while stronger results could support it.

Analyst inference

Last quarter, Sprout Social reported revenue of $123.8 million, up 10.8% year over year, and exceeded analysts’ revenue expectations. Analysts also cited stronger-than-expected adjusted operating income, a measure of operating profit adjusted for certain items, and next-quarter earnings-per-share guidance.

Confirmed

What to watch

1. Compare reported revenue growth with the 7.1% analysts expect; a faster or slower result would indicate whether the anticipated deceleration is playing out. Analyst inference
2. Check the company’s outlook for the next quarter, including earnings-per-share guidance, to see whether management signals stronger or weaker performance than analysts currently expect. Analyst inference
3. Review whether adjusted operating income, operating profit excluding certain items, again exceeds analysts’ estimates, since that may indicate how well revenue growth is translating into operating results. Analyst inference

Evidence

• stockstory.org