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SPT Sprout Social

Participants
Justyn Howard Chief Executive Officer
Joe Del Preto Chief Financial Officer
Ryan Barretto Senior Vice President of Global Sales
Jason Rechel Head of Investor Relations
Alex Kurtz KeyBanc Capital Markets
Arjun Bhatia William Blair
Chris Merwin Goldman Sachs
Rob Oliver Baird
Tom Roderick Stifel
David Hynes Canaccord
Matt VanVliet BTIG
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to Sprout Social’s Second Quarter 2020 Earnings Conference Call. At this time all participants are in a listen only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions]. Please be advised that today’s conference is being recorded. Instructions]. [Operator my Head now Jason Investor to Rechel. pleasure is of introduce Relations, It

Jason Rechel

and Social’s to earnings you welcome Thank operator Sprout conference second call. XXXX quarter

Safe Press pursuant Senior market call Act statements, We provisions issued Private Justyn are Barretto. Harbor Howard; be discussing Today’s Del results will to of CEO, in will which Securities Preto; Global Joe and Ryan the Sprout Social’s forward-looking after President the are today. closed Reform our the the CFO, With Vice made me contain of announced Litigation Release XXXX. Sales, of

include business third believe, be undertake duty words plan, such relied not business condition, should our any future subsequent we concerning will. full today of statements These Forward-looking and date, our guidance at or identified these by be our of statements as seek the financial views any can statements quarter and views to trends, not intend, update reflect our financial XXXX, statements. expect, performance only, financial and as XXXX upon representing expected as the anticipate, for and and year do

differ Forward-looking statements that to to subject and that address could results actual are uncertainties cause risks matters materially.

be important of and Exchange please potential Commission, our factors discussion and with filed SEC. filings report results, Securities SEC the filed annual to with XX-K the other with to periodic could the a report actual risks our disruption affect our For refer and that COVID-XX, other the including from on our XX-Q Form quarterly

investors.sproutsocial.com. SEC been release, over with in Justyn. our non-GAAP accordance discuss call to And A Accounting our with and comparable the are call, measures, prepared at that, will reconciliation financial in included which website most to to the Principles. also is financial press the directly financial which Accepted non-GAAP measures me let the also available on GAAP turn we During is of measure has earnings these furnished certain Generally not

Justyn Howard

second XXXX afternoon, board. macro than happened of Thank us. the more together of quarter everyone. A strong deliver issues, across good Jason, you, the numerous you to us lot guessed. was joining fortunate quarter Sprout has turbulent were was Despite we and since and Thank a have for would any last,

for our to while team facing elevate our business are We continuing issues head-on. grateful to our customers, and these

strong and full Our pleased speaks confidence our to seen this a time the and our company, the the opportunities our guidance in results, period of further all we of our of across performance began. With ahead. platform from the the about resilience, we which high quarter, models, of conviction since quarter fabric consistent we’ve Last data performance COVID of importance details end trends belts, limited shared range our and are under with metrics. the exceeded our

know or depth our the remarkably stepping-up the duration yet team don’t we the well. pandemic, has While handled the across is know that transition we of board and

We also know transformation globe. a the for across brands becoming top digital priority that is

new in perfectly help remains reality. customers important lean any mission-critical is we’re our time at this and company’s more to communication Social into positioned than our history, and

Lives against inequality. injustices. of forefront and to and racial also and racism stand second that we that to rise addition those We we and In inequality quarter. dismantling critical believe racial the persists all We profound systemic of matter, the participant in pandemic, the issues the collectively social an reminded saw were importance active in Black the being

them. our resources communities We and behind to people have a these our and shy responsibility not to put from away our efforts to

our long of metrics measure we action this through aspects our Our for a inclusion do, key been ourselves injustice to left to perform equity like to highlights: at during organization. and Shifting up There’s This the have will. as focus grappling have work in. caught by sales in set across the our and ability the saw efforts call. XXXX. the in also June, growth operational of environment top in and and and the the increasing social we racial go-to-market in We outlined you baseline funnel ongoing priority key company, accelerated the better communities, undone. to to acceleration While for quarter, conviction our we our also May. shared new an we strategy high platform the service understand with seen that and team business, we We as took and end with our throughout of meaningful We’ve all but remainder our our our to more exceeding further evidence in business, all confidence investments spent has thrive across inflection, the of of we ourselves Sprout, money cycles and further expectations expectations more last are pandemic metrics up in raised around that and find diversity,

been remote. model has sales primarily Our always

our new strong and have quarter customers teams and need the second engineering material to delivered distributed agile before. a the in new pre-COVID. up gear, quarter, ever in than customers XX more features partner Our XX our We from

XX% relative in our We foundation projects, for substantial remote work, more the month efficiency platform. at have or back-end higher, its in than output Since for since offerings several each, XXXX of told improved expanded remained into We’ll in top completed prior and our in of how releases the build our and We enhancements robust. product have above four consistently our and trial analytics we moved set also to and we period. moving customer-facing significant half migration remains and than the year product and listening and funnel doubled demand Measured support May XX% to Volumes volumes that respectively, the levels. our and May levels, second Simply you final pre-COVID phases. into demo were

spot of focused and as team the sweet as on the thought organic market generation, organic and channels sophisticated strong marketing high-quality with are focused lead on our Our is ever. delivering hitting and development brand word-of-mouth content

mid-market of growing and traffic both in customer for increased Sprout our to continue has opportunities XX% urgency the strength to of optimization March, for more awareness since enterprise brands to to We funnel first funnel. marketing remote social, segments relative Indicative than Digital XXXX. the by and adapted lean brand meaningfully Sessions into both, improved the has Our event, which our across the success. and we conversion an to rate deliver quality see was incredible

enhance help partners strategic efficiently registered make a teams. as possible. lean quickly to engagements and participants, Customers XX% more are than digital success healthy planned, we’ll and our our We transformations forward. roughly and All sales moving seamlessly, further these have need digital delivering factors than to X,XXX funnel to as on capable more

Our quarter the win transformation multiproduct average. strong XXX SMB and on more higher us speaking, about the is we quarter consistent customer our by Premium period. enterprise for by our has rate several global new and full customer platform, value. expansion our we our whether competitors, all-time of ARR digital are future average lends forward right adoption trajectory we’re won, has primary and equipped approach the trend, relative each a story. standard are net the and lead ARR an trailing smoothly, several our Sprout considerably than in internally quarter, points Competitively and to world. are adapted fully quarter. This to the have mid-market right which grew the for rates and basis In Analytics trailing ensure we increasingly have jumped to win confident well tracked partially increasingly increased that and than the the higher already pulled Against during or increased the second rate runs XXX% and excited been second Listening people opportunity lifetime stronger significantly four years, the year-over-year the over deviations technology Operationally, remote, remote the high, beginning with during around to indicates offices market. are our and

flexible We are to our reopen third with quarter. office to intend remaining do reopening though plans, we during the not offices respect

continue like seen I to environment wrap moving work this explore our our saying also what by ability goals. of to We proud forward. transformation what execute to against our want during I’m by excited we’ve work extremely of look are that will optimal and up to continue

environment. President celebrated that our the culture win the more communications a and We mission-critical second we through have growth our well are customers believe investment accelerating world making persists products, now driving our aligned who to social reinforces positioned data keep market our I’d our class focus call the quarter, relentless on that whatever digital anniversary have quarter. stories to has built stand a people turn to and environment teams to of advantages Ryan been Global deliberate customer into our We force as the the shift of this us will ability and keep to both and As this new thoughtfully we in Barretto, track. and competitive deliver our our Sales, XXth out some the we business momentum in to to that, with our Vice And platform XXXX. durable deep over walk success commitment with on like through Senior

Ryan Barretto

really been are The who need important. transformation need make this faster unparalleled a with on get transpiring or into least been excited social, building more conversations thanks expectations, exceed immediate central quality we’re shift Coming we there be are social Many historical challenging consistent and averages. that It’s all momentum these long-term events they and of the customers saw service, Sprout. June, for on QX. because record-breaking from service factors a to current value. support. part of as and with serving of to continued of by the And us team opportunity like channel incredibly things volume again times, includes for build is has We’ve a today. to that we XXXX. never brand to they accelerate increasingly finding partner customers shift and for I’m In to resiliency our are and management strategic trust making the investments brands, our funnel the this getting about in commerce. digital inbound that our month our increasingly urgent care, in brands and to Justyn. from of joining proud social happening to the Brands them the secular QX, and very the this understand communication them at Thanks, on everyone can in through with providing off need

sharing software a Further the has GX, playbook antiquated. which the placed as primary satisfaction legacy of fact on age user, again from been based category Sprout volumes. that customers the category in feedback category our monitoring competitors. leader thousands for reviewed every speaks we every single single relative of in social become of was media The we’ve the to in report validating message user this Now, that a mid-July lead

Media, In and is recognition we Bill.com, Media, and rating some up We XX Research, to are America, She this their over story. Ruilova, as with is when your queries can GitHub TUI gain important Media QX, our much category, a most. another quickly This that by it world, understanding their very Social type amazing in the their ability and of Sprout them audience well shared of customers rely make only looking Darcy three incredible above was in Director their respond which social and who Autodesk. people. helped direction like for couldn’t and future. to done and provide with remote Brand they opportunity without brand a get that feedback Woolworths, what on with the Eventbrite, going for Support Smith, reinforces needed when key explore tool incredibly The their one proud strong have only to Social the company regularly Aida community. those of say the TUI, are you largest just leadership received customers XXX,XXX particularly and months NAACP, at pandemic of they explained Teach customer has For communities, that that possible to Insights, insights to school-fall unprecedented use Analytics helped the the helped and of over it Sprout positioned Young, education Director on Curaleaf, low-income running we went heavily team a was successful. really not-for-profit scale, Marketing including hit, to that Sprout. that they enabled of engage an great encouraged Verizon to individual shared do health, more coronavirus and brands, and data travel Sprout them have is topics to they’re that an when they efficiently. that’s Manager, This them and better easy for. present plans, global customers. share, to Nicola has Sprout teams of

had are place, helped on to Wilson when which pressure, Sprout tight. use customers. our be XXX social a Hotels guests. from Group to Sprout. her of channels an perspective become one centralize on and potential as at critical InterContinental to the improve our our over couldn’t performance is Joanne other easy-to-use profiles reporting in social, to under each budgets for on important the budgets explained, grateful to commitments Finally, of enormous to it’s delivered because target We’ve social helpful more marketing to or was IHG ROI, manage it I impressed more tools and are people economical platform she ROI chose and our

virtual performance. levels the showers, it on challenges mental fitness was productive. meetups, found challenge or are external new risen and operating health, new teams of stay creative at have and ways Whether speakers to engaged, dogs people our and focused happy Our baby and to

culture sales named market, of to Best as unique to one were Work. Places Chicago’s separate Our we us in continues again May, in and the

positioned draw to over I’ll half through us continues talent into XXXX. Sprout, has Joe that opportunities we on it well the brand see through that, growth With to capitalize exceptional second and run to Joe? to employer strong the Our XXXX to the financials. turn of which

Joe Del Preto

$XX.X walk full XX% second results before million, you on Total second now was year-over-year detail, in for to I’ll XXXX. representing our Ryan. Thanks, growth. the through third quarter quarter quarter revenue the and year moving

quarter, Total up We net Excluding the the customers April. to since year-over-year. to discussed agency and do year-over-year. million, I new our impact QX legacy exiting and SMB up churn Simply finish subsided, was March ARR including reiterate organic in $XXX.X with This impact added Organic the last elevated quarter XX,XXX COVID reversed. revenue XX% from ARR $XXX.X was not want year-over-year. only during Measured, we QX XXX but up was has XX% XX% million, customers.

additions in June to in net Our customer troughed April sales strong activity addition as very May and in higher leading churn, for improved lower were year. with of us intersected believe us trends our customer trial that and cycles this

of in QX, customers of before, XXXX. the reconciled XX% count to more profit expenses, gross month note operating years. our in the MRR customer on press please earnings we non-GAAP that In lowest just more of and all to statement, issued the results unless that was stated, and total and month year last the the to XX% past a our Similar QX to million call. overall before two QX, marketing compares of $XX,XXX gross of XX% share for a ARR up $XX.X otherwise proliferates a and XX% million, from and Sales release revenue, results are income $XX.X we discussing reached The social During additions, basis year This as representing organization. a of are down than cancellations references the number X,XXX XX% customer this experienced ago number from any land expenses our on was year XX%. entire GAAP strong to a and monthly have see begun customers of a throughout In margin of quarter. June, or gross over ever up ago. from were margin contributing platform in than ago remainder our X,XXX,

QX and down expect while We Research or and focus the sales accelerating a of development marketing with selectively year from expenses mid-market segments. XX% focus XX% to on revenue, $X.X on million our ago. continue to and for were hiring optimizing a enterprise spend

public or ability which efficiency not expenses also of to XXXX. about the up General Measured improving QX company revenue, was This year excited and complete the a while as product primarily ago. particularly QX, to administrative new did invest continue a million function development are XX% expenses, of were Simply for we we We have migration. and in XX% from growth $X.X

of the outstanding for and a a which loss QX million $X.X compared we timing net was operating to general negative our year percentage per a expenses, QX net marketing scale net administrative operating operations. a of average a This to as shifted or of We on for Non-GAAP expect compares margin $X.X ago. common million to certain outperformed loss outperformance We XX% operating expenses QX continue margin. Non-GAAP revenue million ago. from $X.XX loss was revenue for and due with our stock XX% a decrease of a were expectations negative of primarily QX. to year share based $X.X shares as to loss weighted

balance flow at $XX.X end our with cash, QX obligations, billed from ended RPO, $XXX.X QX, exiting $XX.X XX% from and of equivalents and revenue million contracts, We the our XXXX. Again, the of from to million QX, million totaled $XXX.X the Deferred up was both statement. million, down million. quarter year-over-year. cash Turning cash the securities, and sheet end unbilled and in approximately approximately remaining XXXX up $XX.X performance marketable

XX% anticipated meet due that flow contractual impact not expected. recognize We XX% over to free compared QX cash We which ago. million $X.X or did flow COVID RPO million Free cash total to $X.X and we terms, $X.X flow to flow ultimately of ago. XX% to as negative payment expect million margin approximately a the that revenue customers’ $X.X materialize in or QX cash the free negative adversely negative negative XX would year negative a flow to million was months. in cash next negative year margin Operating compared ability was million degree $XX.X to had cash

guidance. to on Moving

the $XX.X of $XX.X growth fiscal million of rate a XX%. revenue we of XXXX, range million in quarter to or roughly third the For total expect

reported be growth faster as our we rate points mid-to-high percentage expect growth rate We sunset to Simply single-digit than our Measured. organic

expect range We loss in million. to operating of non-GAAP $X million the $X

in an our continuing accelerate hundred operating of cash an free pace indicator long-term improvement enterprise see a flow efficiency, our we and see are most We Historically, is to as points invest which margin. growth. than investment, notably have encouraging we the to marketing mid-market areas, of look forward. certain better to We’ve basis in opportunities margins begun been product couple and segment. our In in

adversely $X in we cost flow. QX, moving office a seasonally with during our cash renewal, which where QX, January into year. or new typically million, build will looking expect during do flow However, we to realized of see quarterly typically onetime our and are the free pay cash following And strong forward cash Seattle the affect impact of is February contract

share We XX.X $X.XX average stock approximately basic non-GAAP outstanding. expect common a between million and loss of $X.XX, per net assuming weighted shares

of million fiscal XXXX, expect of growth half provided our overall the total of from expect At the XX%, For in upper an prior our now $XXX from the reported year of $XXX.X the in rate new of revenue our the growth up up we expected we for million. range approximately the full XXXX you This guidance, in estimate midpoint to we revenue be to implies rate XX%, there’s prior of a organic midpoint, At May. than XX%. range now XX%. midpoint greater

bottomed April. increasingly broader our in We optimistic we business remain do, context strengthening through our in economic the the of recovery. the business Given are a that cognizant risks in of in our however, remain that QX, metrics

to million non-GAAP our range $XX.X with $XX expect of we XXXX, million $XX of compared to loss in prior $XX.X range operating million million. For the

invest are growth multiyear profitability for delivering long-term to continuing while leverage. We our

higher have marketing returns QX to April. hiring we beginning anticipate since expenses and are We higher seen during the given accelerate

shift re-openings We occur expenses may presence. office to also as and around we want physical back that to maintain flexibility

been prior help Justyn and with share $X.XX manage Ryan expect to non-GAAP their million We $X.XX summary, $X.XX have compared loss and opportunity per between as net assuming and more discussed, $X.XX, mission-critical. range a channel XX.X social shares. In approximately of has a and never the customers

the to on positioned for are opportunity We multiyear capitalize uniquely growth.

ahead. to give questions. strong will investments sheet to I are cash continue take With and in enable and potential achieve our years the us to high of Our that, Justyn, us to make flow degree happy managed balance that any Ryan confidence prudently your of balanced Operator.

Operator

Instructions] Kurtz from the question [Operator Capital of Alex KeyBanc And with our Markets. line comes first

Alex Kurtz

guys Yeah, in for thanks here. good on a of here congrats a quickly And few taking really dynamic, evolving a quarter questions kind market.

it you're sequentially saw the you quarter question I on confident guess seems seeing this to, quarter. can a that? the churn just the trends July? just June pretty question. is, pertains what That's helpful. how first in like So That were improvements turn, about the detail SMB disclosure through more my calculate you give the and on then first that little about you into you deck, the just And would be ACV through

Ryan Barretto

This is Ryan.

bit On trends. you a quarter, sequential the into SMB led of about happened the heading good the as land in that that on of and worst QX. the positive within little quarter, see the call that really into April, quarter we SMB happened in side expand we heard progress really the saw next opportunities of SMB’s, what improvement May, house did from saw we beginning of and and in right The segment, terms continued, but strong churn through

have really So we good in that specifically the SMB. feeling segments, all of our across but about position

Joe Del Preto

calculation, divided just by of ending the to customer And the ARR your it's ACV part question on ending Alex, the then second count.

Alex Kurtz

Okay, thank great. Alright, you.

Operator

you. Thank

the question Your Blair. from with of William Bhatia comes line next Arjun

Arjun Bhatia

the for can my certainly Hi – platform; had about want with things taking of it the mentioned questions know talked used platform is R&D, how various extensibility etc. in departments the across with product the that one you past guys, its you be development, see touch of to the whole the we and and in quarter. great customers I landing congrats to on thanks dynamic on the

service? still you're expansion this of in customer right the need customers most focused use and kind in curious environment across marketing that Just generally cases other are seeing immediate on if now or

Ryan Barretto

into they end look thinking the department terms a marketing about Thanks majority It up data listening Arjun. bit of as also saying time competitive the their This a is just with about what saying being trying there of to spread competitive the well Ryan. into I brand but product, have people are are and which that positioning, as that Yes, their seeing but organizations out and in many today. and what as not figure of ties listening products. strategy, strategy, you're sales, does the [inaudible] market content thinking marketing think about certainly about mean about little really it’s people

So say many marketing, still seeing organization, lot depending other it on happens I would that in a as but well. you're departments in the

Arjun Bhatia

made thanks, bit; to that what's or Great, rate just your win and those historic you competitively a driving at are that? into then little hear being acceleration? Are some levels. those a really product of changes you you of that of seeing quick behind follow-up. that high that strategy nice It Can any was that – dig win side rates kind combination the in maybe that a

Ryan Barretto

Yes, it's actually a lot of the same.

this have market, as our product, now out for cling actually to mean commit us, a need is us. So and customers urgent saw products matters through Speed able the in especially fact this in led talked need trial, our sign I the a to test to fact before it social they we've we've really with right big contract differentiator about free right? environment, that an or we that that they're the

right into up enterprise board that products, and SMBs sophisticated just listening. companies, analytics and that doing across engagement, from to and most with the we're doing our the so right, publishing we're And not

I they difference built, differentiators add it the to usability us. also continues that the of product continue the the that just into way that us. maker for to goes has for be unit and just that see So has would one been been a the major

past we combined see that really that. delivered it from seen quarter, a I while You seeing know think fact new about we've are oftentimes and feel XX the two led standpoint. And customers have they talked and the to those the features continued trial, Justyn in our competitive are things this success if they

Arjun Bhatia

Perfect! Thank you.

Operator

Thank Goldman our next Sachs. line And of with Chris the from question Merwin you. comes

Chris Merwin

the on about double about some talked question grew and wanted ARPC this you much and Congrats quarter. one a digits It again, delivering for a think I looks results. very expansion. my thanks features ask the Hi, questions follow-up healthy like of bit taking to to of new XX I great prior

So was like like I modules, particular listening uptake of as looked to as we're see before, upsell, this in that particular? what starting has guess and about asked to like in about Thanks. curious cross-sell environment. are know some you new less cross-sell, relates more Just it I in which but better challenging

Ryan Barretto

Yes, environment, thanks. to things continued out stands this strong Ryan. be challenging the in data that to need is for really the to that is It's use of This data one really make and decisions. and even business-driven

with not through And to our data. social profiles social to of so happening, with analytics understand premium what's the listening insights the really on just products customer the offer, voice that both their enable happening what's the our external listening [ph], customers social and their presence, but

so these we've space with really our seen mid-market products. especially in rates, enterprise attachment And strong

So expect there, are continued and customers really where growth would scrutinizing market even constrained that their you a budgets in are purchases.

Chris Merwin

overall a like for just of healthy. it the really hiring is demand Got it. the maybe follow-up And plans. the seems I category mean kind on

transform, it tailwind communicating with of the companies when their customers to via got You've social. digitally particularly needing to comes

So any can the anything for thinking you pace about managing rest how the that Just more share – hiring you're for plans sales know front? the of you from aggressive of year. about curious on

Justyn Howard

mindful how but hold what things thinking is were some areas, be key the for to going about wanted assumptions to out were Justyn. a of going hires I our terms focused posture – in were. of on shake lot on like, the We quarter, to out opportunistic terms in the trends to second we business. we're This get expected. to rest and we the really for But into ground quarter, back in definitely we those of across way look can investments year solid we aggressive play firmly what feel hiring that like is going seen we've of the the an understand and it how

entire us. the of on lot a ramp-up see in you'll from you'll success across hiring sides that and but organization the So sales the of see a organization,

Chris Merwin

Great! Thanks much. so

Justyn Howard

Got it.

Operator

Rob comes Baird. you. our with next from of Thank question the line And Oliver

Rob Oliver

Great! you taking much Hi for guys. Thank very my question.

for just I and Justyn, follow-up. one So one you had then

metric. really So in growth that? follow-up. be land Thanks. early customer still I obviously if a for to too nice it then curious I'm multiproduct $XX,XXX And seeing is just that had a or over quick seeing land you're start

Justyn Howard

are both etc. organizations use often, we're probably its existing into that's Sprout, and growing spreading our reputation, definitely that cases seeing trend listening, function in of But expansion so both into analytics, cases. most further the customers nicely they are with more new social In a the across ACVs, base etc. in oftentimes Yes, the cases some bringing customer and and is organization, additional our

the offering, business, where June. So think on trend. for think up just we're like this customers both with how are you new out and to are just is entire continuous We the seeing pick lift last business and sides the the business, this we'd platform, more trend some new in cases playing know liked seeing I that see – of and in has trend probably and certainly we quarters than in I May continuing core consistent to that landing to two new and been customers has that three that existing been

Rob Oliver

thanks. obviously for a to mean a I helpful, maybe really you question stream, of looking of and is perhaps know it I one. commerce Ryan. That's broader partner Justyn follow-up that about as I alternative that. guys. Great! for you key shareholder part Pinterest, ask a in just commerce-focused, just platform likely Twitter, revenue wanted And They're strong a then seems lot think driving and interest commerce. or and a you for at you

which you to they that that prepare trends you manifest it guys. still saw new for this extent for pipeline guys that earlier? and the or you little Thank your of is see in Is are kind customers a business improved wondering, some focus June improved of to in normal? of just sort guys starting a that So as

Justyn Howard

thinking I so Yes, about it. think definitely are people

they've mind. of it's Our aspects commerce tuned previously in the of social on everyone's not, the customers, of whether or social been to kind or kind

up our And to I in there's both you're to start probably I orders see businesses business know steam that of going I that the think pretty and two early us, impact. pick that think networks themselves, in for you it's think seeing rapidly. but

of part to to that that love every is moves is first social The see. business we something

as platform conducted That happening up the but engagement of there in and that and all look order platform, swap publishing that support our our that maybe is is going support are what more thinking channels. that. to those, is second follow order we to are and tools the about business and need that with talking or Our partners our do social things and like impact be network the are customers will commerce our requires about first the with

discussions. those of going So that the and terms in channels, indirectly increased and social commerce, help volumes the things just ongoing directly we but more and net how social are and other bring of is and with measurement them all this those through can tracking be efforts the to aspects into publishing successful of

Rob Oliver

detail. the appreciate I Justin, Thanks

Justyn Howard

you it. Yeah, got

Operator

Stifel. the Thank you. with line next Tom of And comes Roderick from our question

Tom Roderick

Hey questions. gentlemen, taking for thank you my

Justyn, there to one in I this effect going little with on of to a sort of business, the Facebook happened bit know isn't related what your last directly that So here just interested trickle-down ad boycott. but and I'm build the I'm

and could there and to platforms customers of in obviously, just have just Sprout methodology saw of talk to that management sort the about you various importance around other a on placement, want they and media out what boycott mean, seemingly space? out exposure there I ad doesn't any impacted desire platforms the media impact dollars be sprinkle those and rather of sort the than you address take direct social platforms it ad themselves? ad with with would traditional different with manner perhaps be and customers social buy. how moment direct broader to than engage that on emphasize you but one a of a how API brands the Can of of their Sprout sort So a multiple to on

Justyn Howard

Yes.

Facebook of as meant business statement specifically. So in terms has I that we the what data out a quarter to know I their of think in than some think second coming bigger the I the that saw think suggested – of you was little – impact the bit

of They was social However, advertising. shifting I to around. the things aspects decide thinking thing channels engagement, What you efforts. those in think versus about that just those relationships the out organic important came organic through of versus want know etc., like to as paid owning their hard that look more brands be the they publishing, might start future

thinking or a So about think how brands that. of were spotlight I microscope a put a on it bit

of of happening a think activities, space, a advertising we I there's to that's I certainly had works I hitch, material perspective, other of meaningful kind yet people going more think be in into anecdotally However, well the organic publishing to bit even to long-term other that when know that's any dislodge sort any seen. something you or of lean contraction our and the But think the platforms I know it's whether in anything see Sprout and a itself don't is event methods shift, favor. impact kind yet. impact that from

more see couple the we'll that quarters. think I over of next of

Tom Roderick

to on year your good, question And offering keep think But, why great particular the full now is you where joys much, business of of Joe, reason keep are couple not when to months public the company. is the fantastic! That's your sitting about with range pandemic. then my much to going enough. much, your respect improving and the XX-days a end The better – raising fair into And kind you. you guidance question five This brakes the Any end didn't We're be, foot from the here? quarter, welcome high a of being you Yes, raise toes guys guidance? a to or one the for of of high a feedback. tone, ago.

Joe Del Preto

we for think more bit just so I see couple we of We're the of little a want June, Yes, this us strong a improvement months. saw we as think Tom, a I really know, talked far have May in an kind then bit biggest just into a better and Tom. continue; of seen and what we've we'll those throughout confidence trends a us, it's build think in I QX, driver, think confident and for not QX I whether of thing and rest to in insight as history you about think biggest little the we I probably so really more track getting record so or a in the going as

Tom Roderick

sounds mean country businesses, a finer just the real that is rest what has maybe I see question, in some of you It through in hit future hedges challenges, small perhaps holds? fantastic. the some this and sort May the of of point and Yes, level, having are you a are like trends gives pockets Joe. reopening seeing as and time that or anything just June the pause very macro let's on

Joe Del Preto

We don't Tom. us gives see that right now, pause anything

kind but macro it's pause, of little more think I a bit call, talked approach, a of the level and given about has that us right. we nothing on

Tom Roderick

you, Fantastic! Really Nice helpful. guys. job! Thank

Operator

Stan And the our question with comes Stanley. from next line Zlotsky of Morgan

Unidentified Analyst

Hey question about really conversion guys, well. you the as results volumes solid on, and being for Congrats you historical quality up par being XX-year the to averages. the funnels on about as this the Quick well with Chris Stan. rates talked talked on anniversary top-of-the-funnel is strong of and and the

are during making better what the can as conversion efforts just that actual this the – understand actively as optimize process are funnel, both your So best help of top the sure you like the utilized doing you well to time? us and

Ryan Barretto

a is Yes, Ryan. thanks Chris. things. There's few This

fortunate well the first within usage on of this coming a to And data, always demos volume demos. is and think strong lot been long thing able able data data in, to were for We've trials at a and have inbound and to and a them. very those we're based the pretty trials, of of score gather that heavy the we trials been We've historical actually, data. a as lot we grade time. on note a as we're demographic with model I data

like we our looking other should So coming quality are like our customers of what the customers. things know look exactly in, trials on past as and based these

sales maybe where conversion And focus. run back to folks rate in want Not types a which from terms help of team the out lot team us to good back. understanding campaigns gives but really we it and down and on of to pull cohort in marketing in sources and we also It what helps on to where of focus, they revenue expect the or does to enabling so we team, only should the our information double the that sales need of figure it on sales customers. need that direction trials gives

sure we're for for for in a of data getting We know cohort model headline output-based we us tweaking the is tracking. the we're coming in, then of and should here think trials on I of so what to And there's optimizing be growth. and you the traffic lot that make exactly we're that constantly terms

Unidentified Analyst

that's it, I ask Got really could quick helpful. if And follow-on. a

you investing help well I the and related growth – environment. saturation us talked go-to-market-oriented? which existing like modules just longer-term analytics the your are for to longer-term development that in trying it see, Can the module, how growth or as product and within the, year-over-year, seeing you encouraging as involve modules? to your is like in investing Does this ARR of better about to we with customer premium listening in that longer like, XXX% understand business? especially current think premium to I'm more comments So growth less there premium more Basically, monetize where is call it much three base is the understand

Justyn Howard

Yes, Justyn. this is

that. think about of there's we're business, where I think couple when a in opportunity layers to the different the our we investing in that levers and is

much a in there green millions Sprout. like is the millions I still businesses the that tools fact graduating think will is we just and are needing platform have space of first understanding and that there how this and the and category that on be

what premium those model of our we of within those the early that may think and the The a still on left with today, and bring the with year we that penetration how second existing being that SKUs, perspective. lot XXXX we When anything offering the some start being packaging, those to adoption with seeing to of like, growth of still about large climb life, market we this changes, into are of rest very expand of Even offerings but from very run there. to there, our premium there's have have cake. it's looks we things, those room contributing the else layer a etc., we a our customer third or base, their continuing much sort and amount that a business core combination to that pricing in

to SMB; those in base. answer So got in also we're it's into to the seen room We've data run of our think base directly in left excited etc. customer investing large terms are really we've those customer tools. customers that of those just adopting lot and and entire it's the a existing of question, I It's by enterprise the agency; our mid-market, not terms it's selling

So and the across that applicable says entire beneficial we've got those customer are base. things the evidence that

as climb on to important we've core and on also Now the go more got number even seeing to that businesses, just But work becomes etc. product we're seats the driving continue of adoption. to social

it's So we about. feel multi-dimensional and really something good

Unidentified Analyst

Thank you it. so Got much.

Justyn Howard

You got it.

Operator

Hynes Thank Canaccord. David next from line with question our the comes you. of And

David Hynes

social better questions. know the of platform? do you how includes but this support is Justyn my providing see kind folks a we make that embrace strategies with don't or Ryan, tools, think more what of it I those if broader I desk-oriented are of as of which around different intersection more for right, or for the a Hey, just does thanks kind of they about mean, guys, messaging tools need? thanks for you lot and taking kind competitive Sprout is obviously solving

Justyn Howard

the to of ability our publishing, is from product all advantages giving Sprout their service I that the really primary customer overlap platform there are of social need focused folks but organizations of focus, first the the in relative foray living messaging been side you across one management cases and who that the live certainly or marketing community one know for on where messaging I when the what on can the think work customers place platform. visibility inventor, on on the that's there's about a customer on see, to mean different That's things is use need that certainly service a is not still you and that that side, Yes, and or to customers do just the enjoy They overlap, what's across And as that not our the some use quite one focused really in side, consistent cases to may that premium together of the it as much spread not happening platforms while, we're prime think side we different these are all need and pretty particularly things. the the But in department. of and fairly be providers etc. messaging Those into the say of and not together. the place. there's been have the that

David Hynes

an sense. on granularity. normally progression Yes, then makes maybe played comments out, given you, just for any of of wouldn't is but how and that any quarter is mean the you new in XXX%? like Was ask this the extra of abnormal in during I came basis? May, what QX of I And follow-up look there of for like customer it, level does kind kind know how Joe, of to frame shape XX%, quarter June. it the way Like, customer? on it a ads monthly XX%, XX%, the April, terms a

Joe Del Preto

that agency following the mean, churn then June without kind I call trend strongest giving the call, talked get specific about DJ, SMB you can of in in that we April then kind the about that out what and you last you really was up assume and wasn't saw and Yes, know data, May, month on of given our we solid. talked better, and we know

we're way that's think actual I into getting numbers. too the so And much kind framing the of it without

David Hynes

Alright for ask. thanks Yeah, that to makes the color. sense. I had guys,

Joe Del Preto

Got it.

Operator

of And question BTIG. the you. line from comes Matt our next with VanVliet Thank

Matt VanVliet

was maybe the or social strength the about side more on in question. that there you the I this more an media quarter? and that played or larger for year those maybe in Do like able out how seeing Hi enterprise of some to of really mid-market. from large customers the bringing you're thanks look their my the to out as everything taking as being guess that in feel in and the pipeline, that deals as thinking from platform advanced were pulled perspective sort work quarter, at close year in digital own you guys, rush early particular some possible a as even acceleration deals home point move next played forward from at

Ryan Barretto

saw need we social and other that influx for its enterprises saw in also that engage they care cutting with weren't platforms, mid-market bit early many the that Matt. were and the in sales the that would had One, needs, some organizations and the that it. the say certainly the I there. they there's fact thanks of Ryan. of for sure, different in around we This but move tools happened – to QX, stories may most social a saw and might or in customers within that, there organizations, a just of enterprise customers today all were couple had there. Yes, QX doors a faster I acceleration closed, Deals that mid-market, be go urgency would in was is where the because except in an and variety of that say so today into have COVID cycle. and started Yes, there better

those organization deals accelerate And was in scenarios, able being the practitioners and and works ability essential the to works so within to very to an the for the trial, again, product quickly prove having that having quarter. to

the on pipeline enterprise to space. but organization opportunities with, mid-market that working dependent were there we definitely some accelerate few are So quite a in

Matt VanVliet

at then think talked are further all think curious lot we what and of expectants of in seeing some were for today. either at pushed are are of maybe communication and platform hospitality really together what when than bigger last a kind some extended some with thinking budgets out, customers relying you And reopen last or to maybe overall travel the to industry quite were just initial they they stay I in as their as them any now your across their back precipitously? time. further the looked Are market on has time what now capacity their to But know the have when they or pretty as spaces in Got of big about might on before. even than decline might much on have maybe plans travel lower deals this the call anticipated the customers or I pair trends highlighted quarter, industry InterContinental understand it. back But revenues a pandemic bit the you you're they

Ryan Barretto

Yes is Matt, again. Ryan this

So few things. different here’s a

engage or speed in world So especially close with to organizations, of enabling a country and and travel, to the and with the everybody of customers events to all hotels need right pockets stated, sure maybe is and to our stay is make these hospitality as to customers happening there's of in different or you paying them. attention or they're what up what's to come back in with in to safe reopening terms do that now

engagement they've be to important. one listening delivering, social, of figure the platform also new stay of content a putting that that they're to and really any that determine run from on using is And they make quickly should platform, campaign type to our Sprout that's hotel the to the investments driven make So the to that looking that comments be organic brands sentiment big really or they're they in continued so very launching – campaign they and using actually social. been they're campaign They're to continue but as both to perspective from the running that of kind on better of and off listening it. at paid out products out connected, our and coming pulled work be responding with from sure that also messaging has we data they'll the what

a variety they things to ever, their and connected it's to of their that now So thinking organizations But need stay community. clients than about. these are different more

Justyn Howard

add quickly just is that. Justyn. this I'll to And

and doing these seeing with time, point, customers their Ryan's if need that their to think way they have relationships they reality not be and particularly positioned a to up, building over those mind, people – do have their businesses they need they if want visiting during communicate the to that period this ways face-to-face or in to only impacted time well didn't and if when an they the be they need to been front things they're when to locations, their have this customers be extended of of of they're lot businesses, have visiting not stores, center, been is I top open if etc. back those

So best We've maintaining is is in in here on hedge a or It's that to the ever other types think of relationships have now, the I invested those more we lot got of communications than can doing ways, those pick this really up. thing be right back been. they a until person future. be channel

Matt VanVliet

great! Thank Alright, guys. you

Justyn Howard

you. Thank

Operator

CEO over back turn now call the will Co-Founder, Justyn and I to Howard.

Justyn Howard

Alright, cool.

in and the So look want we'd you spending having We be for coming again everyone the be time. we'll conversations the your time thank to with I to forward months.

the customers and challenging support our Canaccord also all talk everything their some all in our hard we'll KeyBanc work these as employees, through are of we work want you thank work as frontline and support thank are investors the August. We and want keeping and the behalf and we for for customers soon. for attending who the running. We're hard to spend virtual together. conferences a quarter. close Thank situations to workers terrific And team lastly, you virtually, team, to to summit healthcare and entire our partners support planning and technology resiliency as well to to time grateful again I growth On helping and with our

Operator

for and you this now Ladies disconnect. you concludes call. and participating conference Thank today's may gentlemen,