Initiates Non-GAAP 30% Rule of 40 Target By the Fourth Quarter of 2027
Approximated Subscription Revenue Contribution for =$30K ARR Customers Grew 22% in 2025
“Our team delivered strong results in the fourth quarter, highlighted by 15% total RPO growth and strong non-GAAP profitability," said
“Looking back at 2025, we delivered our most meaningful intelligence step-change yet. With Sprout AI, we’re using our differentiated social data and proprietary models to help teams move from insight to action faster—starting with Trellis in Listening and expanding across key workflows over time.”
Fourth Quarter 2025 Financial Highlights
Revenue
- Revenue was
$120.9 million , up 13% compared to the fourth quarter of 2024. - Total remaining performance obligations (RPO) of
$404.0 million as ofDecember 31, 2025 , up 15% year-over-year. - Current remaining performance obligations (cRPO) of
$284.7 million as ofDecember 31, 2025 , up 14% year-over-year.
Operating Income (Loss)
- GAAP operating loss was
($10.8) million , compared to($13.7) million in the fourth quarter of 2024. - Non-GAAP operating income was
$11.5 million , compared to$11.4 million in the fourth quarter of 2024.
Net Loss
- GAAP net loss was
($10.7) million , compared to($14.4) million in the fourth quarter of 2024. - Non-GAAP net income was
$11.6 million , compared to$10.7 million in the fourth quarter of 2024. - GAAP net loss per share was (
$0.18 ) based on 59.3 million weighted-average shares of common stock outstanding, compared to ($0.25 ) based on 57.5 million weighted-average shares of common stock outstanding in the fourth quarter of 2024. - Non-GAAP net income per share was
$0.20 based on 59.3 million weighted-average shares of common stock outstanding, compared to$0.19 based on 57.5 million weighted-average shares of common stock outstanding in the fourth quarter of 2024.
Cash
- Cash and cash equivalents totaled
$95.3 million as ofDecember 31, 2025 , compared to$90.6 million as ofSeptember 30, 2025 . - Net cash provided by operating activities was
$10.9 million , compared to$4.1 million in the fourth quarter of 2024. - Non-GAAP free cash flow was
$10.9 million , compared to$6.6 million in the fourth quarter of 2024.
See “Use of Non-GAAP Financial Measures” below for definitions of Non-GAAP operating income (loss), Non-GAAP net income (loss), Non-GAAP net income (loss) per share and Non-GAAP free cash flow and the financial tables that accompany this release for reconciliations of our non-GAAP measures to their closest comparable GAAP measures. See “Key Business Metrics” below for how
Customer Metrics
- Grew number of customers contributing
$30,000 or more in ARR to 3,803 customers as ofDecember 31, 2025 , up 13% compared toDecember 31, 2024 . - Grew number of customers contributing
$50,000 or more in ARR to 2,022 customers as ofDecember 31, 2025 , up 18% compared toDecember 31, 2024 . - Dollar-based net retention rate was 100% in 2025, compared to 104% in 2024.
- Dollar-based net retention rate excluding small-and-medium-sized business (SMB) customers was 102% in
2025, compared to 108% in 2024.
Beginning in the fourth quarter of 2025, we replaced our disclosure of customers with ARR of
| Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | |
| Number of customers contributing | 2,992 | 3,131 | 3,226 | 3,374 | 3,451 | 3,538 | 3,711 | 3,803 |
| Approximated TTM Subscription Revenue Contribution for =$30K ARR Customers | ||||||||
| Approximated TTM Subscription Revenue Contribution for =$30K ARR Customers as a % of Total Subscription Revenue | 49.7% | 51.5% | 53.1% | 54.5% | 55.9% | 56.9% | 57.9% | 59.1% |
Recent Customer Highlights
- During the fourth quarter, we had the opportunity to grow with new and existing customers like GE Aerospace, Archer-Daniels-Midland, PulteGroup, Caesars Entertainment,
Cox Enterprises ,Gibson Brands , and The Knot Worldwide.
Recent Business Highlights
- Named a leader in worldwide influencer marketing platforms by IDC MarketScape (link)
- Named the #1 social listening product in G2’s 2026 winter reports, achieving 40 top rankings (link)
- Unveiled Trellis, our new proprietary AI agent that turns social data into instant enterprise intelligence (link)
- Announced AI-powered solutions and an expanded Reddit partnership at our quarterly product showcase Breaking Ground (link)
- Recognized by G2’s Best Software Awards for the tenth consecutive year (link)
First Quarter and 2026 Financial Outlook
For the first quarter of 2026, the Company currently expects:
- Total revenue between
$119.9 million and$120.7 million . - Non-GAAP operating income between
$9.2 million and$10.0 million . - Non-GAAP net income per share between
$0.15 and$0.16 based on approximately 59.8 million weighted-average shares of common stock outstanding.
For the full year 2026, the Company currently expects:
- Total revenue between
$490.2 million and$495.2 million . - Non-GAAP operating income between
$54.2 million and$59.2 million . - Non-GAAP net income per share between
$0.88 and$0.97 based on approximately 60.8 million weighted-average shares of common stock outstanding.
The Company currently expects a Non-GAAP operating margin of approximately 15% by the fourth quarter of fiscal 2026 and initiates a 30% target for a Rule of 40 framework (as defined by year-over-year revenue growth plus current quarter non-GAAP operating margin) by the fourth quarter of fiscal 2027.
The Company’s first quarter and 2026 financial outlook is based on a number of assumptions that are subject to change and many of which are outside the Company’s control. If actual results vary from these assumptions, the Company’s expectations may change. There can be no assurance that the Company will achieve these results.
The Company does not provide guidance for operating loss, the most directly comparable GAAP measure to non-GAAP operating income, operating margin, the most directly comparable GAAP measure to non-GAAP operating margin, or net loss per share, the most directly comparable GAAP measure to non-GAAP net income per share, and similarly cannot provide a reconciliation between its forecasted non-GAAP operating income, non-GAAP operating margin and non-GAAP net income per share and these comparable GAAP measures without unreasonable effort due to the unavailability of reliable estimates for certain items. These items are not within the Company’s control and may vary greatly between periods and could significantly impact future financial results.
Conference Call Information
The financial results and business highlights will be discussed on a conference call and webcast scheduled at
Following completion of the events, a webcast replay will also be available at http://investors.sproutsocial.com for 12 months.
About
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “explore,” ”future,” “intend,” “long-term model,” “may,” “medium to longer term goals,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These statements may relate to our market size and growth strategy, our estimated and projected costs, margins, revenue, expenditures and customer and financial growth rates, our Q1 2026 and full year 2026 financial outlook, our plans and objectives for future operations, growth, initiatives or strategies, including our investments in research and development, and other statements that are not historical fact. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance or achievement to differ materially and adversely from those anticipated or implied in the forward-looking statements. These assumptions, uncertainties and risks include that, among others: we may not be able to sustain our revenue and customer growth rate in the future, including due to risks associated with our strategic focus on enterprise customers; price increases have negatively impacted and price increases and packaging changes may in the future negatively impact demand for our products, customer acquisition and retention and reduce the total number of customers or customer additions; our business would be harmed by any significant interruptions, delays or outages in services from our platform, our API providers, or certain social media platforms, or if we are unable to renew agreements governing access to the data provided by such APIs on terms acceptable to us or at all; if we are unable to attract potential customers through unpaid channels, or other sources of demand, including expansion opportunities from existing customers and outbound sales efforts or convert prospective customers and expansion opportunities into paid subscriptions, our business and results of operations may be adversely affected; technological advances in AI may in the future disrupt the social media industry, which could significantly reduce the demand for our services or otherwise adversely impact our business or reputation if we are unable to keep pace and navigate this evolving environment; we may be unable to successfully enter new markets, manage our international expansion and comply with any applicable international laws and regulations; we may be unable to integrate acquired businesses or technologies successfully or achieve the expected benefits of such acquisitions and investments; unstable market, economic, and geopolitical conditions, such as recession risks, effects of inflation, tariffs and trade tensions, changes in government spending, labor shortages, supply chain issues, geopolitical instability and uncertainty, and fluctuation in interest rates, have and could continue to adversely impact our business and that of our existing and prospective customers, which may result in reduced demand for our products; we may not be able to generate sufficient cash to service our indebtedness; covenants in our credit agreement may restrict our operations, and if we do not effectively manage our business to comply with these covenants, our financial condition could be adversely impacted; any cybersecurity-related attack, significant data breach or disruption of the information technology systems or networks on which we rely could negatively affect our business; changing regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and harm our brand; and risks related to ongoing legal proceedings. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the year ended
Use of Non-GAAP Financial Measures
We have provided in this press release certain financial information that has not been prepared in accordance with generally accepted accounting principles in
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 our acquisitions of
Non-GAAP operating income. We define non-GAAP operating income as GAAP loss from operations, excluding stock-based compensation expense, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring charges, non-cash losses or gains from lease terminations and modifications, acquisition-related expenses and accretion associated with contingent consideration. We believe non-GAAP operating income 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, restructuring charges, non-cash losses or gains from lease terminations and modifications, acquisition-related expenses and accretion associated with contingent consideration, which are often unrelated to overall operating performance.
Non-GAAP operating margin. We define non-GAAP operating margin as non-GAAP operating income (loss) as a percentage of revenue.
Non-GAAP net income. We define non-GAAP net income as GAAP net loss, excluding stock-based compensation expense, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring charges, non-cash losses or gains from lease terminations and modifications, acquisition-related expenses and accretion associated with contingent consideration. We believe non-GAAP net income 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, amortization expense, restructuring charges, non-cash losses or gains from lease terminations and modifications, acquisition-related expenses and accretion associated with contingent consideration, which are often unrelated to overall operating performance.
Non-GAAP net income per share. We define non-GAAP net income per share as GAAP net loss per share attributable to common shareholders, basic and diluted, excluding stock-based compensation expense, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring charges, non-cash losses or gains from lease terminations and modifications, acquisition-related expenses and accretion associated with contingent consideration. We believe non-GAAP net income 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, amortization expense, restructuring charges, non-cash losses or gains from lease terminations and modifications, acquisition-related expenses and accretion associated with contingent consideration, which are often unrelated to overall operating performance.
Non-GAAP free cash flow. We define non-GAAP free cash flow as net cash provided by operating activities, less expenditures for property and equipment, interest payments on our revolving credit facility, payments related to restructuring charges and acquisition-related costs. 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 provided by our core operations that, after expenditures for property and equipment, interest payments on our revolving credit facility, payments related to restructuring charges and acquisition-related costs, is available for strategic initiatives.
Non-GAAP sales and marketing expenses, non-GAAP research and development expenses and non-GAAP general and administrative expenses. Non-GAAP sales and marketing expenses, non-GAAP research and development expenses and non-GAAP general and administrative expenses are defined as sales and marketing expenses, research and development expenses and general and administrative expenses, respectively, less stock-based compensation expense, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring charges, non-cash losses or gains from lease terminations and modifications and acquisition-related expenses. We believe these non-GAAP measures provide our management and investors with insight into day-to-day operating expenses given that these measures eliminate the effect of stock-based compensation, amortization expense associated with the acquired intangible assets from the Tagger and NewsWhip acquisitions, restructuring charges, non-cash losses or gains from lease terminations and modifications and acquisition-related expenses.
Key Business Metrics
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.
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.
30% target for a Rule of 40. We define this target as year-over-year revenue growth plus current quarter non-GAAP operating margin equal to 30%.
Number of customers contributing
Number of customers contributing
Dollar-based net retention rate. We calculate dollar-based net retention rate by dividing the ARR from our customers as of
Dollar-based net retention rate excluding SMB customers. We calculate dollar-based net retention rate excluding SMB customers by dividing the ARR from all customers excluding ARR from customers that we have identified or that self-identified as having less than 50 employees as of
Approximated TTM Subscription Revenue Contribution for =$30K ARR Customers. This metric depicts our approximation of the trailing twelve month subscription revenue contribution from customers contributing greater than or equal to
We believe that customers contributing greater than or equal to
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
We no longer believe that the number of customers contributing over
Availability of Information on Sprout Social’s Website and Social Media Profiles
Investors and others should note that
Social Media Profiles:
www.twitter.com/SproutSocial
www.twitter.com/SproutSocialIR
www.facebook.com/SproutSocialInc
www.linkedin.com/company/sprout-social-inc-/
www.instagram.com/sproutsocial
Contact
Media:
Email: pr@sproutsocial.com
Phone: (773) 904-9674
Investors:
Twitter: @SproutSocialIR
Email: investors@sproutsocial.com
Phone: (312) 528-9166
| Consolidated Statements of Operations (Unaudited) | |||||||
| (in thousands, except share and per share data) | |||||||
| Three Months Ended | |||||||
| 2025 | 2024 | ||||||
| Revenue | |||||||
| Subscription | $ | 118,504 | $ | 105,922 | |||
| Professional services and other | 2,383 | 1,168 | |||||
| Total revenue | 120,887 | 107,090 | |||||
| Cost of revenue(1) | |||||||
| Subscription | 26,733 | 23,094 | |||||
| Professional services and other | 406 | 319 | |||||
| Total cost of revenue | 27,139 | 23,413 | |||||
| Gross profit | 93,748 | 83,677 | |||||
| Operating expenses | |||||||
| Research and development(1) | 28,395 | 27,627 | |||||
| Sales and marketing(1) | 47,921 | 45,889 | |||||
| General and administrative(1) | 28,257 | 23,838 | |||||
| Total operating expenses | 104,573 | 97,354 | |||||
| Loss from operations | (10,825 | ) | (13,677 | ) | |||
| Interest expense | (817 | ) | (656 | ) | |||
| Interest income | 718 | 878 | |||||
| Other expense, net | (98 | ) | (620 | ) | |||
| Loss before income taxes | (11,022 | ) | (14,075 | ) | |||
| Income tax expense | (281 | ) | 342 | ||||
| Net loss | $ | (10,741 | ) | $ | (14,417 | ) | |
| Net loss per share attributable to common shareholders, basic and diluted | $ | (0.18 | ) | $ | (0.25 | ) | |
| Weighted-average shares outstanding used to compute net loss per share, basic and diluted | 59,302,889 | 57,511,942 | |||||
| (1) Includes stock-based compensation expense as follows: | |||||||
| Three Months Ended | |||||||
| 2025 | 2024 | ||||||
| Cost of revenue | $ | 745 | $ | 1,046 | |||
| Research and development | 6,855 | 6,640 | |||||
| Sales and marketing | 5,062 | 7,017 | |||||
| General and administrative | 7,067 | 7,750 | |||||
| Total stock-based compensation expense | $ | 19,729 | $ | 22,453 | |||
| Consolidated Statements of Operations (Unaudited) | |||||||
| (in thousands, except share and per share data) | |||||||
| Twelve Months Ended | |||||||
| 2025 | 2024 | ||||||
| Revenue | |||||||
| Subscription | $ | 453,014 | $ | 402,022 | |||
| Professional services and other | 4,533 | 3,886 | |||||
| Total revenue | 457,547 | 405,908 | |||||
| Cost of revenue(1) | |||||||
| Subscription | 101,119 | 90,305 | |||||
| Professional services and other | 1,576 | 1,170 | |||||
| Total cost of revenue | 102,695 | 91,475 | |||||
| Gross profit | 354,852 | 314,433 | |||||
| Operating expenses | |||||||
| Research and development(1) | 101,279 | 102,794 | |||||
| Sales and marketing(1) | 190,559 | 184,122 | |||||
| General and administrative(1) | 106,467 | 87,873 | |||||
| Total operating expenses | 398,305 | 374,789 | |||||
| Loss from operations | (43,453 | ) | (60,356 | ) | |||
| Interest expense | (2,501 | ) | (3,525 | ) | |||
| Interest income | 3,418 | 3,973 | |||||
| Other expense, net | (204 | ) | (1,393 | ) | |||
| Loss before income taxes | (42,740 | ) | (61,301 | ) | |||
| Income tax expense | 587 | 670 | |||||
| Net loss | $ | (43,327 | ) | $ | (61,971 | ) | |
| Net loss per share attributable to common shareholders, basic and diluted | $ | (0.74 | ) | $ | (1.09 | ) | |
| Weighted-average shares outstanding used to compute net loss per share, basic and diluted | 58,625,925 | 56,935,910 | |||||
| (1) Includes stock-based compensation expense as follows: | |||||||
| Twelve Months Ended | |||||||
| 2025 | 2024 | ||||||
| Cost of revenue | $ | 2,802 | $ | 3,936 | |||
| Research and development | 25,162 | 25,619 | |||||
| Sales and marketing | 22,783 | 31,544 | |||||
| General and administrative | 27,972 | 23,204 | |||||
| Total stock-based compensation expense | $ | 78,719 | $ | 84,303 | |||
| Consolidated Balance Sheets (Unaudited) | |||||||
| (in thousands, except share and per share data) | |||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 95,268 | $ | 86,437 | |||
| Marketable securities | - | 3,745 | |||||
| Accounts receivable, net of allowances of | 100,996 | 84,033 | |||||
| Deferred Commissions | 26,995 | 20,184 | |||||
| Prepaid expenses and other assets | 13,945 | 15,816 | |||||
| Total current assets | 237,204 | 210,215 | |||||
| Marketable securities, noncurrent | - | - | |||||
| Property and equipment, net | 9,864 | 10,951 | |||||
| Deferred commissions, net of current portion | 57,049 | 51,653 | |||||
| Operating lease, right-of-use asset | 9,810 | 11,326 | |||||
| 167,122 | 121,315 | ||||||
| Intangible assets, net | 39,733 | 21,914 | |||||
| Other assets, net | 2,280 | 967 | |||||
| Total assets | $ | 523,062 | $ | 428,341 | |||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 10,115 | $ | 6,984 | |||
| Deferred revenue | 205,639 | 178,585 | |||||
| Operating lease liability | 2,664 | 3,747 | |||||
| Accrued wages and payroll related benefits | 20,549 | 20,567 | |||||
| Accrued expenses and other | 17,294 | 10,869 | |||||
| Total current liabilities | 256,261 | 220,752 | |||||
| Revolving credit facility | 40,000 | 25,000 | |||||
| Deferred revenue, net of current portion | 752 | 1,101 | |||||
| Operating lease liability, net of current portion | 12,055 | 14,543 | |||||
| Other non-current liabilities | 10,572 | 351 | |||||
| Total liabilities | 319,640 | 261,747 | |||||
| Stockholders' equity | |||||||
| Class A common stock, par value | 5 | 4 | |||||
| Class B common stock, par value | 1 | 1 | |||||
| Additional paid-in capital | 638,894 | 558,391 | |||||
| (37,768 | ) | (37,422 | ) | ||||
| Accumulated other comprehensive loss | - | 3 | |||||
| Accumulated deficit | (397,710 | ) | (354,383 | ) | |||
| Total stockholders’ equity | 203,422 | 166,594 | |||||
| Total liabilities and stockholders’ equity | $ | 523,062 | $ | 428,341 | |||
| Consolidated Statements of Cash Flows (Unaudited) | |||||||
| (in thousands) | |||||||
| Three Months Ended | |||||||
| 2025 | 2024 | ||||||
| Cash flows from operating activities | |||||||
| Net loss | $ | (10,741 | ) | $ | (14,417 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities | |||||||
| Depreciation and amortization of property, equipment and software | 888 | 1,064 | |||||
| Amortization of line of credit issuance costs | 59 | 51 | |||||
| Accretion of discount on marketable securities | - | (23 | ) | ||||
| Amortization of acquired intangible assets | 2,408 | 1,474 | |||||
| Amortization of deferred commissions | 6,871 | 4,698 | |||||
| Amortization of right-of-use operating lease asset | 403 | 467 | |||||
| Stock-based compensation expense | 19,729 | 22,453 | |||||
| Provision for accounts receivable allowances | 1,110 | 236 | |||||
| Loss/(gain) on lease termination and modification | - | (1,570 | ) | ||||
| Accretion of contingent consideration | 254 | - | |||||
| Other | (505 | ) | - | ||||
| Changes in operating assets and liabilities, excluding impact from business acquisition | |||||||
| Accounts receivable | (38,605 | ) | (29,908 | ) | |||
| Prepaid expenses and other current assets | 2,258 | (729 | ) | ||||
| Deferred commissions | (10,964 | ) | (13,101 | ) | |||
| Accounts payable and accrued expenses | 5,381 | 4,650 | |||||
| Deferred revenue | 32,994 | 29,475 | |||||
| Lease liabilities | (605 | ) | (678 | ) | |||
| Net cash provided by operating activities | 10,935 | 4,142 | |||||
| Cash flows from investing activities | |||||||
| Expenditures for property and equipment | (1,054 | ) | (888 | ) | |||
| Payments for business acquisition, net of cash acquired | (1,457 | ) | - | ||||
| Proceeds from maturity of marketable securities | - | 4,900 | |||||
| Net cash (used in) provided by investing activities | (2,511 | ) | 4,012 | ||||
| Cash flows from financing activities | |||||||
| Borrowings from line of credit | - | - | |||||
| Repayments of line of credit | (4,000 | ) | (5,000 | ) | |||
| Payments for line of credit issuance costs | - | - | |||||
| Proceeds from employee stock purchase plan | 392 | 718 | |||||
| Employee taxes paid related to the net share settlement of stock-based awards | (185 | ) | (309 | ) | |||
| Net cash used in financing activities | (3,793 | ) | (4,591 | ) | |||
| Net increase in cash, cash equivalents, and restricted cash | 4,631 | 3,563 | |||||
| Cash, cash equivalents, and restricted cash | |||||||
| Beginning of period | 92,572 | 86,855 | |||||
| End of period | $ | 97,203 | $ | 90,418 | |||
| Consolidated Statements of Cash Flows (Unaudited) | |||||||
| (in thousands) | |||||||
| Twelve Months Ended | |||||||
| 2025 | 2024 | ||||||
| Cash flows from operating activities | |||||||
| Net loss | $ | (43,327 | ) | $ | (61,971 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities | |||||||
| Depreciation and amortization of property, equipment and software | 3,783 | 3,890 | |||||
| Amortization of line of credit issuance costs | 229 | 206 | |||||
| Accretion of discount on marketable securities | (7 | ) | (406 | ) | |||
| Amortization of acquired intangible assets | 7,030 | 6,151 | |||||
| Amortization of deferred commissions | 24,077 | 16,347 | |||||
| Amortization of right-of-use operating lease asset | 1,517 | 1,827 | |||||
| Stock-based compensation expense | 78,719 | 84,303 | |||||
| Provision for accounts receivable allowances | 3,559 | 1,709 | |||||
| Loss/(gain) on lease termination and modification | 1,175 | (1,570 | ) | ||||
| Accretion of contingent consideration | 423 | - | |||||
| Other | (505 | ) | - | ||||
| Changes in operating assets and liabilities, excluding impact from business acquisition | |||||||
| Accounts receivable | (18,267 | ) | (22,253 | ) | |||
| Prepaid expenses and other current assets | 1,514 | (5,452 | ) | ||||
| Deferred commissions | (36,284 | ) | (34,219 | ) | |||
| Accounts payable and accrued expenses | 626 | 3,124 | |||||
| Deferred revenue | 22,482 | 38,230 | |||||
| Lease liabilities | (3,317 | ) | (3,595 | ) | |||
| Net cash provided by operating activities | 43,427 | 26,321 | |||||
| Cash flows from investing activities | |||||||
| Expenditures for property and equipment | (4,106 | ) | (2,950 | ) | |||
| Payments for business acquisition, net of cash acquired | (51,790 | ) | (1,409 | ) | |||
| Proceeds from maturity of marketable securities | 3,750 | 45,085 | |||||
| Net cash (used in) provided by investing activities | (52,146 | ) | 40,726 | ||||
| Cash flows from financing activities | |||||||
| Borrowings from line of credit | 32,000 | - | |||||
| Repayments of line of credit | (17,000 | ) | (30,000 | ) | |||
| Payments for line of credit issuance costs | (486 | ) | - | ||||
| Proceeds from exercise of stock options | - | 29 | |||||
| Proceeds from employee stock purchase plan | 1,336 | 1,956 | |||||
| Employee taxes paid related to the net share settlement of stock-based awards | (346 | ) | (2,309 | ) | |||
| Net cash provided by (used in) financing activities | 15,504 | (30,324 | ) | ||||
| Net increase in cash, cash equivalents, and restricted cash | 6,785 | 36,723 | |||||
| Cash, cash equivalents, and restricted cash | |||||||
| Beginning of period | 90,418 | 53,695 | |||||
| End of period | $ | 97,203 | $ | 90,418 | |||
The following schedule reflects our non-GAAP financial measures and reconciles our non-GAAP financial measures to the related GAAP financial measures (in thousands, except per share data):
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Reconciliation of Non-GAAP gross profit | |||||||||||||||
| Gross profit | $ | 93,748 | $ | 83,677 | $ | 354,852 | $ | 314,433 | |||||||
| Stock-based compensation expense | 745 | 1,046 | 2,802 | 3,936 | |||||||||||
| Amortization of acquired developed technology | 1,125 | 705 | 3,520 | 2,820 | |||||||||||
| Restructuring charges | - | 62 | 416 | 62 | |||||||||||
| Non-GAAP gross profit | $ | 95,618 | $ | 85,490 | $ | 361,590 | $ | 321,251 | |||||||
| Reconciliation of Non-GAAP operating income | |||||||||||||||
| Loss from operations | $ | (10,825 | ) | $ | (13,677 | ) | $ | (43,453 | ) | $ | (60,356 | ) | |||
| Stock-based compensation expense | 19,729 | 22,453 | 78,719 | 84,303 | |||||||||||
| Amortization of acquired intangible assets | 2,328 | 1,212 | 6,711 | 4,851 | |||||||||||
| Restructuring charges | - | 3,020 | 2,731 | 3,020 | |||||||||||
| Loss/(gain) on lease termination and modification | - | (1,570 | ) | 1,175 | (1,570 | ) | |||||||||
| Acquisition-related expenses | 25 | - | 1,805 | - | |||||||||||
| Accretion associated with contingent consideration | 254 | - | 423 | - | |||||||||||
| Non-GAAP operating income | $ | 11,511 | $ | 11,438 | $ | 48,111 | $ | 30,248 | |||||||
| Reconciliation of Non-GAAP net income | |||||||||||||||
| Net loss | $ | (10,741 | ) | $ | (14,417 | ) | $ | (43,327 | ) | $ | (61,971 | ) | |||
| Stock-based compensation expense | 19,729 | 22,453 | 78,719 | 84,303 | |||||||||||
| Amortization of acquired intangible assets | 2,328 | 1,212 | 6,711 | 4,851 | |||||||||||
| Restructuring charges | - | 3,020 | 2,731 | 3,020 | |||||||||||
| Loss/(gain) on lease termination and modification | - | (1,570 | ) | 1,175 | (1,570 | ) | |||||||||
| Acquisition-related expenses | 25 | - | 1,805 | - | |||||||||||
| Accretion associated with contingent consideration | 254 | - | 423 | - | |||||||||||
| Non-GAAP net income | $ | 11,595 | $ | 10,698 | $ | 48,237 | $ | 28,633 | |||||||
| Reconciliation of Non-GAAP net income per share | |||||||||||||||
| Net loss per share attributable to common shareholders, basic and diluted | $ | (0.18 | ) | $ | (0.25 | ) | $ | (0.74 | ) | $ | (1.09 | ) | |||
| Stock-based compensation expense | 0.33 | 0.39 | 1.34 | 1.48 | |||||||||||
| Amortization of acquired intangible assets | 0.04 | 0.03 | 0.11 | 0.09 | |||||||||||
| Restructuring charges | - | 0.05 | 0.05 | 0.05 | |||||||||||
| Loss/(gain) on lease termination and modification | - | (0.03 | ) | 0.02 | (0.03 | ) | |||||||||
| Acquisition-related expenses | - | - | 0.03 | - | |||||||||||
| Accretion associated with contingent consideration | 0.01 | - | 0.01 | - | |||||||||||
| Non-GAAP net income per share | $ | 0.20 | $ | 0.19 | $ | 0.82 | $ | 0.50 | |||||||
| Reconciliation of Non-GAAP free cash flow | |||||||||||||||
| Net cash provided by operating activities | $ | 10,935 | $ | 4,142 | $ | 43,427 | $ | 26,321 | |||||||
| Expenditures for property and equipment | (1,054 | ) | (888 | ) | (4,106 | ) | (2,950 | ) | |||||||
| Interest paid on credit facility | 813 | 621 | 1,889 | 3,635 | |||||||||||
| Payments related to restructuring charges | - | 2,682 | 2,946 | 2,682 | |||||||||||
| Acquisition-related costs | 185 | - | 1,759 | - | |||||||||||
| Non-GAAP free cash flow | $ | 10,879 | $ | 6,557 | $ | 45,915 | $ | 29,688 | |||||||
