Sprout Social (NASDAQ: SPT) reported Q1 EPS of ($0.05), $0.05 better than the analyst estimate of ($0.10). Revenue for the quarter came in at $40.8 million versus the consensus estimate of $39.73 million.

First Quarter 2021 Financial Highlights

Revenue

• Total revenue was $40.8 million, up 34% compared to the first quarter of 2020.
• Organic revenue (excluding the impact of legacy Simply Measured revenue) was up 35% compared to the first quarter of 2020.
• Total ARR was $172.0 million, up 38% compared to the first quarter of 2020.
• Organic ARR was $171.0 million, up 39% compared to the first quarter of 2020.
• We expect the impact from legacy Simply Measured to be immaterial to revenue and ARR moving forward.

Operating Loss

• GAAP operating loss was ($6.2) million, compared to ($10.9) million in the first quarter of 2020.
• Non-GAAP operating loss was ($2.3) million, compared to ($7.4) million in the first quarter of 2020.

Net Loss

• GAAP net loss was ($6.4) million, compared to ($10.5) million in the first quarter of 2020.
• Non-GAAP net loss was ($2.5) million, compared to ($7.0) million in the first quarter of 2020.
• GAAP net loss per share was ($0.12) based on 53.4 million weighted-average shares of common stock outstanding, compared to ($0.21) based on 50.1 million weighted-average shares of common stock outstanding in the first quarter of 2020.
• Non-GAAP net loss per share was ($0.05) based on 53.4 million weighted-average shares of common stock outstanding, compared to ($0.14) based on 50.1 million weighted-average shares of common stock outstanding in the first quarter of 2020.

Cash

• Cash and equivalents and marketable securities totaled $167.8 million as of March 31, 2021, up from $163.9 million as of December 31, 2020.
• Net cash generated by operating activities was $3.6 million, compared to ($4.5) million in the first quarter of 2020.
• Free cash flow was $3.4 million, compared to ($4.8) million in the first quarter of 2020.

“Our growth rate is continuing to accelerate, reinforcing confidence in our strategy, our opportunity and the investments we’re making in our future,” said Justyn Howard, Sprout Social’s CEO and co-founder. “Social sits at the center of digital strategy for the next evolution of business. During Q1, we added a record number of net-new customers and generated positive free cash flow for the first time. We’re making aggressive investments behind growth and momentum in our business that has never been stronger.”

“We’re incredibly proud of the team for continually raising the bar and delivering for our customers, especially given the backdrop of the past year.”

GUIDANCE:

Sprout Social sees Q2 2021 EPS of ($0.10)-($0.09), versus the consensus of ($0.10). Sprout Social sees Q2 2021 revenue of $43-43.1 million, versus the consensus of $41.29 million.

Sprout Social sees FY2021 EPS of ($0.35)-($0.34), versus the consensus of ($0.38). Sprout Social sees FY2021 revenue of $176-177 million, versus the consensus of $172.84 million.

For the second quarter of 2021, the Company currently expects:

• Total revenue between $43.0 and $43.1 million, or overall growth of 37%.
• Non-GAAP operating loss between ($5.4) million and ($5.0) million.
• Non-GAAP net loss per share of between ($0.10) and ($0.09) based on approximately 53.6 million weighted average basic shares of common stock outstanding.

“We are pleased to deliver positive quarterly free cash flow for the first time,” said Joe Del Preto, CFO. “This underscores the attractiveness of our unit economics and compelling efficiencies in our business model. Our teams are executing well and we are also pleased to raise our annual forecast.”

For the full year 2021, the Company is updating guidance to reflect the following:

• Total revenue between $176 to $177 million, or overall growth of 32% to 33%.
• Non-GAAP operating loss between ($18.5) and ($18.0) million.
• At the midpoint of these ranges, this implies an (10.3%) operating margin and more than 500bps of year-over-year operating margin improvement.
• Non-GAAP net loss per share of between ($0.35) and ($0.34) based on approximately 53.8 million weighted average basic shares of common stock outstanding.

For earnings history and earnings-related data on Sprout Social (SPT) click here.