Sprout Social stock sinks 18% as revenue forecast for current quarter falls short

By Wallace Witkowski

Sprout Social Inc. shares dropped in the extended session Tuesday after the social-media management software company's revenue forecast for the current quarter fell short of Wall Street estimates.

Sprout (SPT) shares fell 18% in the extended session Tuesday, after closing the regular session down 3.7% at $48.32. The stock is already down 14.4% year to date, versus a 7.3% gain by the S&P 500 index and a 15.4% gain by the tech-heavy Nasdaq Composite Index .

Sprout forecast revenue between $78.6 million and $78.7 million for the second quarter, and $332 million to $333 million for the year. Analysts surveyed by FactSet had estimated second-quarter revenue of $79.9 million, and $332.2 million for the year.

For the first quarter, the company reported a loss of $10.3 million, or 19 cents a share, compared with a loss of $9.8 million, or 18 cents a share, in the year-ago period.

Adjusted earnings, which exclude stock-based compensation expenses and other items, were 6 cents a share, versus a loss of 3 cents a share in the year-ago period.

The company reported that revenue rose 31% to $75.2 million, while annual recurring revenue, or ARR, rose 30% to $309.9 million.

Analysts had forecast a loss of a penny a share on revenue of $75.1 million.

Separately, Sprout said it was extending its strategic partnership "with the new team" at Twitter, under the leadership of Tesla Inc. (TSLA) and SpaceX CEO Elon Musk.

"Twitter is ushering in a new phase of growth and we're excited to partner closely with Sprout to maximize the value of our ecosystem," said Chris Park, Twitter's lead for data revenue and partnerships, in a statement. "We are doubling down on our commitment to innovation in Twitter's overall product suite and API enhancements that we believe will super charge Twitter's long-term growth."

-Wallace Witkowski

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

05-03-23 0756ET

Copyright (c) 2023 Dow Jones & Company, Inc.