Earnings just out and there is a lot to like.
Earnings are accelerating. Revenue is up 46% yoy and the company achieved its “fastest quarterly revenue growth rate as a public company” (about 10% sequential).
What I really love, though, is where all that revenue is coming from. Sprout is going after and catching more and more big fish:
Grew number of customers to 30,705 as of September 30, 2021, up 20% compared to September 30, 2020.
Grew number of customers contributing over $10,000 in ARR to 4,380 customers as of September 30, 2021, up 57% compared to September 30, 2020.
Grew number of customers contributing over $50,000 in ARR to 478 customers as of September 30, 2021, up 98% compared to September 30, 2020.
I concur, love the 98% growth YoY in customers spending over $50k in ARR.
Revenue has continuously been accelerating from the 28% range YoY to the current quarterly 46% growth. 4 straight quarters of about 10% growth QoQ as well. Gross margins are 75%.
For those interested, JabbokRiver42 did a full introduction in September of this company here:
Valuation has definitely gone up this year by any metric. That is partially due to investor’s recognition of the acceleration in revenue growth and a fairly large greenfield opportunity still ahead given the growth of Social Marketing within the Enterprise.
A couple points from the Earnings Call:
-CEO & CFO mentioned $100B opportunity ahead several times. They are planting that seed.
-ARR up 44% YoY, to $205M.
-Improving and positive FCF of 8% up from -12% YoY.
-=free cash flow margins plus revenue growth > rule of 50 benchmark for 2nd quarter in row.
-Guiding for 37% growth next Q, which is perhaps a sandbag?
-CTO reiterated expected margin expansion of 1-3% (from Sept Investors conference).
-on large customers: “the larger they are when they land with Sprout, both – certainly the stickier they are, but also the more that they tend to grow.”
Chips: This still seems like early days. The company is moving from a hope stock to starting to look like it could have a growth engine for many years. It’s early days, and I own 0.5% position as a “watch position”.