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SPT Sprout Social

Participants
Jason Rechel Head of Investor Relations
Justyn Howard Chief Executive Officer
Ryan Barretto President
Joe Preto Chief Financial Officer
Arjun Bhatia William Blair
Parker Lane Stifel
Matt VanVliet BTIG
Clarke Jeffries Piper Sandler
Stan Zlotsky Morgan Stanley
DJ Hynes Canaccord Genuity
Rob Oliver Baird
Scott Berg Needham & Company
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the Sprout Social Second Quarter 2021 Earnings Call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Jason Rechel, Investor Relations. ahead. go please Sir,

Jason Rechel

safe we've and We'll Sprout announced be issued found today. press operator presentation, updated XXXX can which in second earnings release be Ryan the Social's And are will call contain closed Securities market call. statements, discussing our which are website. after Howard; Act released Joe Today's With welcome you, Sprout of me of Del an Social's Barretto. CFO, pursuant investor to on quarter harbor to Litigation Reform the made Justyn Private CEO, our Preto; provisions also Thank the and President, XXXX. results forward-looking

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

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

the XXXX quarterly other with we'll discussion XX-K as any Form for our and a with refer For report as February SEC. and well of could Securities Annual the ended current that XX, the Commission Report on on the XX, important affect to December that factors filed risks future and file actual XXXX year our results, Exchange please fiscal

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

Justyn?

Justyn Howard

Thank good everyone. you, you Thank joining us. Jason, afternoon, and for

executing to is our to before the company second and want you best public I hit level Ryan we're call pleased Our over and highlights get our details. to exceptionally as quarterly company. turning Joe quarter cover to report at a metrics high the

to Social as the continues submit piece strategy. center digital of itself

to our our tailwinds secular momentum and begin stronger new emerge, been As greater. has to market our opportunity never never

growth first our more efficient. accelerated flow a we over-year. our our into structurally businesses a shifted which added to reported our non-GAAP ARR again, future. our has in simultaneously contributing a higher in an achieved this XX. records We second further quarterly continue to a and series and our more rapidly ever in growth to confidence number managed strategy record quarter than reinforces ARR, put, rate added growth our aggressive Yet of we the of eclipsed net free Simply We Our opportunity, the profit, of new cash for customers our gear we is Rule quarter. consecutive we accelerating make customers while becoming investments even number $XX,XXX XX% and positive own of record break

economics. the We're our the of of market underscores across our attractiveness vacancy board. guidance this our the of All to and unit forecast pleased rate

Microsoft, product expanded commerce Salesforce, HubSpot. to to and a hard brought We solution, our and shaping future integrations at and first-of-its-kind development quarter the for teams momentum multiple Zendesk, new were foundation to work our was messaging with and our access the case social Instagram During capabilities, sales expanded our exceptional functionality market including growth. with

XX% team their a customers. because shops our Sprout's to efforts expand. addressable with social study Consumer time the new of years. their platforms convergence businesses the create but opportunity. while fundamentally And executives growth of this focus speaking case the platform. Being to true and in eight commerce expectations socialist only been for moving drive are a with continues, pockets our Shopify to was We've journey, disruptive agree of case retention use customers. new within next is us and to and for enables platform. innovate quickly media According by seen year differentiated use commerce over becomes move about earlier commerce products exciting this and you first type biggest and front to announced are and integrations commerce. crystallize of we've rapid emerge solution shifting. manage enable it's able in brands in Harris recently opportunities Poll market our our to But to we social commerce new have strategies social social cases begin and to anticipate value via unified preferences now expanded businesses to this the more one as social buyer selling beginning to is and three continue seamlessly XX proliferation higher for us ecommerce We and about unlocking of use to platform. Facebook the quickly becoming of trend in This the the This increasingly and continuing June with social of and a ingrained We're for new

care support extension deliver easily of now friction interactions workflows functionality partner customers throughout purchasing can the entire content, to think their how The And The our transform unite digital our to efficiently from journey. our buyer customer full commerce solution scale. expanded more class by integrations, will well empower utilize the customers platform the and was and market, in about engagement. commerce engaging requested Messenger and and storefronts publishing accessible network to customers Not We marketing made overshadowed leverage. within was to value also we've process. powerful, but live the our elegant most social at and we to aligns where and the social one customers our allow API years reduce of of our customers buying even and term commerce. Instagram. to service businesses personalized will capabilities and with cycle customers partners' This are world conversational deliver in enable the messaging launch ahead. and from to our to our the timely for features for rollout Sprout's greater what adapt expect will These This the to be

ability months for deliver team together value partnership this for have to more jointly move quickly are worked depth the than heavily beta incredible highlighting our our customers. and We our the things. our scenes, doing programs we're the on with early release, involved of in Instagram Behind also six teams to and some

and more quarter our used team transparency rethink global to software. of overall expanded to as ESG we'll work we in giving more to that than fully working to ESG during donate the anticipate how hard will We're the year. impact formed We causes first continue priorities to annually publish which our more our part to than our $X XX past disclosures work. program our social provide our software of and We've also year future our this advance the efforts later technology the broaden million DEI effort in of

a and hybrid. the in know that last Seattle future offices approach voluntary in at we officially reopened month. Chicago is Our phased Sprout But

our our thrive elite will however to retain habits. our us empower committed as to goal is changing talent and succeed quickly to demands this and adapt resources, and to investment to core employees people continue We're and freedom to to attract believe and work giving close to to approach grow the revisit at they Our and wherever enable we grow. thesis. To Sprout. want And we I support

the which customer part with experience way of across virtually consumers organization. media changed Social transformed entire fundamentally has has an the connect brands, every

that size. horizontally consistently or listening either now cases and Social analytics cannot to business and is market Investor Billions future. that, and the of digging and to quarter into advocacy many our intelligence planet codebase prepared to across I the there to and record, social to this thesis a at in manage. strategy, the compartmentalized. call reputation, September. of leveraged more inspired strategy turn more segment commerce, you system across to data. more and social of Day action according with the over investment adopt to meeting by on a market, thrive the Ryan. the in sharpened We business publishing from to to look in built is benefit the and organically can't by platform use be sophisticated company business challenging reporting engagement in new We're GQ, that that others. every a driving technology platform industry's And built a company a any We've and date, rated are incredibly a complex to the highest proud we've social also From this no deeper built we of and businesses on single of With as be will we're while first forward becomes consumers

Ryan Barretto

are our future impressed our strengthening the platform the We're I delivering to while value our with becoming to work this the of customers we're market Justyn. is teams be Thanks our our in adding couldn't differentiated, today rising, for more quarter. stakeholders. for barriers entry by success. foundation more and The growing

critical by than XX% software efficient media want of It's aggressively to value Social this that of brought to the mission found are committing. Sprout. We've social impressed join their the report to And before. well to bottom current Our social and clear, strategy the social remained for their have quarter, influences light. year believe company more state more buyers released really motion XX% incredibly the today And they hire already positively were which to Sprout's continued caliber ago. of is that before a market annual is Sprout choosing people themselves we across that of using consumers than aligned index, are ever The go-to-market marketers line. prove

Technology, have front opportunities of Chicago. positioned efforts us. in this, Fortune's Best well Great like Fortune's Place by in in for recruiting Workplaces Best the Workplaces propelled Work's we and been Millennials Workplaces on of awards capitalize to feel Because all recent to Our Best many

efforts, of in and teams how increase demand, fast at with emerging resulting to which our in customer number our pace along accelerating of an marketing improvement partner moving mentioned rate. teams conversion opportunities. an our seeing we're the take new a trials their qualified trial Justyn in product In are advantage

business new growth on and Our QX. fire teams sales during customer were

continue us that with structural are our net opportunity which underscores A cohort, new with cases customer and success with use customer enterprise especially the the our success are there off To another market grew modules that across in success this and quarter XXK entire our base. seeing. a metric in the expansion to jumped quarter list of out Heinz, additions, mid and XX% AARP The with the me of Energy, at of premium is was market The our and record which contributing momentum XXK our of sample Whataburger, point, set accelerated Levi's, that the The customer to rising a most growth combined customer additions year-over-year, increased in brands Test market grew the Agrium, this our BARK, Kraft at pay selling retention. that fantastic Franklin record to Kaplan Electric, we and While Prep. investments Department incredible onboarding improvements Independence Sisense, to Blue ACVs Cross, includes

various intuitive Gaming. proud stories, quarter Officer engaging many unique for our our enable of natural that Penn the casinos a a picked Penn was to content benefits a said National to will commitment Weissman, capabilities to media locations, we harvest Sprout grow under because shifting help Now, accounts choice inclusion Senior most few Sprout that social cultivate the our Marketing and Vice one with President to partner and the of guests. us diversity us social Chief with incredibly we're powerful platform and to our its presence will customer Sprout. from. management shares this conversations quickly unify Jennifer to

the recently myheroes introduction military, that pleased veterans mychoice program, of are us Sprout's and exclusive program, members as to of first the helped capabilities benefits responders. an as offered efforts like Scholarship amplify launched We in set the well Penn's Diversity

strategic to social during publishing expensive Sprout. scale. with package able a leader their broadening also QX help secondary users to exciting build manage We multi-cloud added hybrid and processes Nutanix a new recently engagement handles they and expanded executed scale their and to already in By were of their listening computing social enterprise reporting on Sprout number relationship an social media. and addition Nutanix, global focused requirements, more their a strategy to systems level up better and at with

our leveraging next for is reporting. also As they head their year, into professional Nutanix fiscal services

with work drive will social forward. our as grateful unlock strategy are that We continue Nutanix data to they insights from their

where the of in to and out it delivered amount the which Mack impressions our social also Joe? for study with bring a a are and way to just were a its to I'm care inbox New to we time because out, had Sprout time the stuff. the customers on use top through last up all year-over-year the By our it third promised rate rail. We Events and that had teams response Jersey reach light there and us XX Media; buses also really tremendous we smart brand. [ph], of Carolyn Sprout average media value. are us our them. people Jersey showing don't record increase reply so nearly with momentum. serves times minutes. that, tremendous the turn and To stations, from the as financials. and trains, Twitter them want XX we Jersey on of Transit, another XXX% equipment million to customer care really case are reduce Transit of spoke XXX% of Every to understanding Transit's when Customer With And people voice give think I'll for quarter employees customer run to year, we into gives other and of think to us breaking New the to together, transit, public incredible They energy humanize customers. Sprout just came and Social us, where our with daily across individuals. Director they X and saw million first treating you deliver social on and them that heart riders leveraging New the partnered our experience able quarter at heading and same of we're the over each Joe proud our we were recently

Joe Preto

the you XX% I'll full and exiting detail quarter QX our XXX.X year-over-year. XX% representing for walk Ryan. third year Revenue was growth. Thanks results XXXX. second million in up of reflection quarterly was very million quarter record on our We is added guidance moving healthy with quarter new customer to in year-over-year. retention XX,XXX segments. healthy This We pleased and to to second up performance see year-over-year the quarter through additions, customers of net record a customers before very for XXXX expansion. XX.X strong XX% ARR the were in and QX a each finish balance

quality customer We from revenue reached up customers ARR XXXX high continue focused a number year $XX,XXX than The up new XXXX. be to ago XXXX QX more and yield from core. on from in in of our XX% consuming

expenses unless share seven modules income blogging the are of was operationalized chat remain in GAAP remainder the sustainable to growth ACV reconciled a use up Sales medium of simply natural were count customer discussing XX.X customers year The of down cohort market from references margin positive and from Our business. of release to for margins, basis statement, our million of and This otherwise ago. year issued non-GAAP XX.X% global of and In we in In strategic operating as please impact year-over-year. before social, and or profit gross efficiencies QX seen cases rising elimination XX% our gross drivers XXX all are margin social, points QX, expenses, hosting XX% our importance that was rising our the up ago. XX.X gross was call. basis premium XX.X%. We've as revenue, XX% million results the earnings for from costs is lapped in just of XX,XXX momentum infrastructure compared growth. the representing gross scale results press ACV stated a a term legacy for this on note that marketing our on and measured

continuing and marketing of These to able We a healthy join million investment, down marketing and XX% further of for XX% X.X our total for we of the improve are accelerates and Sprout team. revenue Development quarter expense pace expenses QX we're or sales hiring people indicating line growth are sales across are quality trend Research from efficiency. pleased with were that and to a are year ago. row, a choosing both in fourth accelerate our the to of

have many a XX% million planned begin continue that We as General of set ago. XX% goals June were XXXX. in to aggressive R&D and in growth QX XXXX of throughout of R&D had we and opportunity. start for revenue, expanding We address down QX key X.X from year and or hire administrative expenses are many

than decrease continue much coming revenue XX a scale. annual months. months X.X pace for past we as with to further X.X% margin million income margin to XX negative expect XX margin. a been ago. these do at have of or While we come the realized XX% expect to they compared year over to over percentage Non-GAAP We operating operating to operating a a This G&A a the XX expenses as gains slower QX positive was

with was the of outperformed as higher are income company and for timing expectations we due many X.X for outstanding hires. shares efficiency average pleased X.X million revenue net scale a improving $X.XX XX.X of million stock and the Non-GAAP $X.X year We key based and net QX our weighted compared share, of a common net million ago. per on to loss income of to

up X.X obligations XXXX at Total or and performance XX% million the un-built balance QX of million. up with RPO, are approximately our end put Again, the XX.X equivalents the was from both quarter cash million and QX XX.X year-over-year. XXXX. at approximate from remaining flow million contracts of exiting sheet marketable built end to cash and ended QX cash, we from at million securities, the revenue and XXX.X Turning in statement, XXX.X

X.X flow free to ago. positive compared in or We RPO the negative Free to a X.X margin million to recognize million total expect margin and negative cash million negative QX year as positive X.X QX XX% approximately million was free cash X.X for revenue months. cash XX flow flow positive over Operating was a cash compared XX% of ago. X% year next a million XX.X flow in a

are ongoing enterprise mix market Our free impact on contracts annual cash we and mid multiyear momentum the as grow. flow towards shift having a positive into

better history quarter. the our now free puts first operating expect or XXXX. quarter, growth all flow than second to flow several this to to the pleased margins quarter for to of accelerating for revenue Shifting in in the be Rule we combination of economics. The We growth XX%. operating want and remainder million report consecutive XX.X margins cash income are the positive third of quarters. flow accelerating XX We XXXX, generally subsequent the to do million us of our in flow expect continue unit cash for the or formal be positive benchmark fiscal do positive time free above reiterate of optimize growth. basis free revenue cash for of non-GAAP range free the points to underscoring sustainably, XXX expect We that we I profitable margins attractiveness cash future throughout rate and XX.X to to guidance, of total continue

across of negative than operating in million aggressive represented loss points basis X.X% growth expect million. year-over-year. operating We of company. XXX our an We're margin to of range more improvement anticipated X.X the non-GAAP and investments X.X This making

doing scale. as improving in our We we our this while margins, highlighting the are delivering efficiencies business

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

growth of prior expected in compared XXX.X we our of roughly year revenue to rate reported to expected XXX total million. and with an of of XXXX, expect the rate full range growth overall annual XX% There's the For fiscal XX% now million XX%.

likely the the lead opportunity margin summary, Operator? XX relative remainder and financial with prior for XX our potential better months of than free digital accounted $X.XX and over mid expect gives across This prior and to growth durable enable faster between offices operating roughly multiyear questions. now believe Of basis expect greater next ahead. to of the non-GAAP to period. non-GAAP XX Seattle of non-GAAP optimized pleased continue on in stock assuming that of believe and in now negative XX that growth pace us to any in we XX.X capitalize investments approximately common year-over-year. reopen your in operating of We to in weighted strongly points to growth With the million to year, XXX month center basic efficiency. we make XX.X XXXX did XXXX, hire the average the net flow July and which of moves the the our full X.X% we aggressively we're years improvement We're range loss than for Justyn, expansion a to we social points guidance reopening annual compelling $X.XX, basis Ryan strategy. G&A leverage per to and the for the see Accelerating XX.X will this performance we million. margin share moderation to I loss to In For will expect more achieve positioned our rates, organization. our of We've of million Chicago us take shares confidence strong expense office and are cash note happy outstanding. and forecast to quarters the implies as

Operator

our Thank And you, ahead. from go question Lenschow Please Instructions] Raimo first sir. [Operator speakers, Barclays. of

is open. line Your

Unidentified Analyst

Congrats here. great Raimo. really this another on Frank for Hey on is quarter

So biggest and it first, you analytics the what products or more growing the of was across the premium most lower strong seats Was listening told by performance expanding the was or departments? there? is like costs contributor

Ryan Barretto

premium cases important involved, really additional seats, prioritize individuals the by if use continues me, being and was departments to growth to to it different Thanks analytics. the question. of our them, the and base I the customer from Yeah. were followed for What like add-ons user listening

on definitely the - cases the prioritize the market use depending specific yes, and their - very the As modules. quite users add maturity of you is within on might than company,

Unidentified Analyst

to a the helpful. And in the help do social you moving you was great future? M&A how further potential this commerce. guys to it see And Could that's on as the here? a area for partnerships very see know while. opportunity I horizon you Okay, to for for quantify

Justyn Howard

question. great Yeah,

June we the So the total of we've total this is totality and what initial plans is a think opportunity, launch certainly back really, in part indicated, as of small there. our the

think of developing. still it a I lot is

We expect to do wanted most that to also work into that integrations that the a customers. additional a the time kind table skew reach build felt to existing those are and we our there. taking We early cetera, of additional on additional We be would powerful We've - We a capabilities becomes long broad will traction integrations as be it. but there. were we the side, broadly we we the there that on very with really thought favored certainly combination of et start the with the a there, with bringing But relationships platform roadmap extending but market. what out, get there, more lot monetizable to an could got started right. applicable, of something range be we're to some capability expand

broader to opportunity what is but think look I going partners ultimate network not for While unfolding, us, for this what general, the in is. only opportunity still is the like, the

on opportunity learn from to there, a forming expect for more build there getting that from we've and see those got thing important the us a lot market, was the and commerce in the us got relationships to making that sure we've The side. so pegged thesis,

Unidentified Analyst

Great. Thanks again.

Operator

Arjun question. Bhatia And of next William our Please from ask Blair. question your

Arjun Bhatia

anything and say know just the ecommerce there get and early, or to can be you Or customer great wanted customers? existing just would verticals a to on great customer that? them terms that in I as bit of by from touch adoption here any And to should there primarily the Sprout's adopted quarter. opportunity cetera out then opportunity. is great. maybe maybe that market. It's reaction are seeing see thank Perfect, thinking as et on relatively platform? that little under attract congrats you're you onto usage, from trends, the in initial but the I maybe this Is that new of it's of more color penetrated we being an think customers to adoption, you're

Justyn Howard

question. great Yeah,

will of us So terms I that shaping been up early how say that, many that. We'll to of terms deal contribution certainly, have and a doing and half made, of was commerce have, for brands share of to be our together cohesively. or we this better excited opportunity go of the the in choice to is work we further for see we you of in customer idea to as them with it's we much part probably fantastic we've very to first adopting little ecommerce through are in can obvious that's their Certainly, the now that customers what able we integrated to to that initial a last the want is platforms of we market with the part But an get it's all metrics terms release, base. specifically share think that - all that using specifically point to a I to a either out strategy thesis significant which of the that any and number ahead. the that great in see adoption. make solution existing brand sales of be here want to make sure social were for that businesses obvious

in install this base and of see more our progress specifically, just significant market to but definitely our the that an opportunity overall, some we so to make take TAM And partners. expand as

Joe Preto

early social the benefit the understand to new the Sprout customers market of And in and impact just helping new because versus about think quickly, some leveraging ability your Maybe make within there also Sprout commerce their easier much let's entry I customers existing, question workflow our - in we've I I'll within add already think the part exciting of seen this integrations. with

So that's customer and see well both I but from existing for it a think impact in as we in hear future the us the benefit. customers, you'll of piece quarters customer new as terms

Arjun Bhatia

hiring, actually, one, probably Joe very that that's it, across maybe a little out you heard we see making? Can this in clearly think momentum how you, just great reps? bit the accelerating you're or more in helpful. you should for Just help Got us about seeing expansion marketing. business go-to-market in opportunity you're think and hiring mention I and I enterprise it you the inside marketing investment but the sales you're where And flesh Ryan, sales? next the both is Do then,

Ryan Barretto

from current of everybody's thought just right so a hiring enterprise, of across the with success terms that growth a see and you'll What and for. roles say, sales now our are and enterprise we've for our inside to But getting teams lot then well. market growth variety absolutely. in career we're I more that would our with markets segments, international state investment. trends an there, a as continuing the Yeah, - of it's of mid as and rep well and business But then we're And perspective hire new of mid-market in started things. hiring some

seeing have we the it. of right now. that seeing So distribution level want right And opportunity areas where of across and to make we're it's sure this the just we board, in the kind we're that capacity

Arjun Bhatia

again you the thank very on Alright, and much, quarter. congrats

Ryan Barretto

Thank you.

Operator

of Lane Parker from question next go ahead. please Stifel. our And Sir,

Parker Lane

how us on wondering some in about second, case give an for if use the thinking Thanks my of guys. for ROI talking something bit haven't talk can for environment and Maybe heard about area. that customers lot that a particular question. while. about of and we update a commerce a the demand social A Hi, little taking the are you advocacy for about

Justyn Howard

Sorry, a Yeah. I moment. muted for was there

one bit even an but idea of been ability related us. several for So opportunity just ago, demand years and an area increased that against where that ahead seen some externally. capabilities and bring of impact audiences for brands, more This relationships our not for advocacy of the had message in see with shape brands, brings couple to further that a unified of for an It's a quarters. to existing their we've create taken customers. approach talking our between social Ryan area And the how is we couple we a opportunity probably But something you'll is the but market, is an maybe that examples for related an over hear is to the into interesting building that's of their of amplifying us of and area voices, external that internal the many same this shared demand. space employees next also toward place about be social that businesses voices an recognized platform

Parker Lane

been you're barrier? to very from eclipsed it. XX,XXX have in the that customers got starting that market XX,XXX the to solid it cohort, And have leaned on plus fair had then as this customer mid recently for SMB say traction Yeah, or customers and of into and sort enterprise would of really see majority you well social heavily the platform add-ons ARR have be maybe that

Ryan Barretto

of our of success SMB of is many modes coming it's marketing for and Yeah, opportunity then most of rate. if the us. amount especially one their about you definitely, up balance within digital, that them the within agency. we've deals expect this of spent their some area. in at drives same campaigns, They of communication social, enterprise outside pretty these a and the organizations, important healthy to oftentimes grow and Certainly, grow and it's their they're think with budget customers, mid SMB, right. it of in you're up sort market in And going seen But

as they're see making there plenty well. continue adds. opportunity those And But good our SMB we a success we across of certainly mid So market portion that think XXK up and segments and of to a there's in enterprise. agency

Parker Lane

for again, quarter. a my Yeah. Thanks great Great. taking question,

Ryan Barretto

lot. Thanks a

Operator

of question ahead. VanVliet And next BTIG. go from our may you Sir, Matt

Matt VanVliet

over overall counterparts you're in right half? of feel just you and growth be the quarter Yeah, as kind you've first, international building curious really the on growth at to to of the put the terms to now go-to-market taking kind side, really to far I last up And contribution level seeing there. mentioned the job so guess of some in quarters on where of efficient what side, great their team question, started guys. thanks hiring US for you management their ability the you like on what, invest Ryan, in the as or the but picking couple are and first

Ryan Barretto

worked XXXX region but like it's that mature, leader still LATAM relatively are us. still And building on leader on really early added for for in that just today. great it's and And just think and from to and to new productivity look we we're that's I when some and Yeah, for resources and in been see starting people first We you think what there. the ultimately going gone a and about opportunity we're some as well hiring a is starting where APAC Europe the in then to we've more APAC started LATAM. in amazing office group

got inbound get seeing we in And good group. we make from to our demand entire bets. productivity that so where we're before because We've see model, the the that is really benefit of

we so market. the distribution potential understand for the where then and from we make investments within And us, a go opportunity we're seeing can right And perspective.

contributed I business ultimate the distribution terms of looking a and right now in localized we'll pretty complementing early from an from we're distribution support right as So would as marketing with both opportunity opportunity And be what at it's will the AE that nicely the more future. that channel to say now. that opportunities we're well think look We perspective in like.

Matt VanVliet

ton that something as that you're market of writing longer pretty and opportunity of gaining ton then that is attention. the it's helpful Very the for look area that Zoom at and with big spend a care nice obviously gaining a press it check customer there a of social to XX, clear going term, you you're customer, Is big to come release. very of each on have commerce amorphous one very of take of different does or fully type and out release kind see traction form going we're with more with than a maybe for kind to productized the a

Justyn Howard

Yeah.

those of for it. as capabilities, do of case case. that well building for got care But we're one, think use decade, specific tie and a customers care to a we've their some of about are are there. there, past, beef blocks that there's Sprout on terms a We at tools benefit the in kind leaning integration of our customer put So opportunity are as the we've number the customer large talked opportunity, as the And majority some roadmap on serving use there, the it we've been bolt up even possibly the offering. exceptionally in good

are at. So the specific, we've before, good that things some we're done of and productizing that exercise that, very more something it's many context times adding

is and a like product of to a So roadmap possible on others or like bring that that on. product the on the A specific lot toward use our market some relative that to working table. just the ability to certainly it'll we're that, of specific momentum and depend case,

Matt VanVliet

Great, thank the great quarter. job you, on

Justyn Howard

you. Thank

Operator

our ahead. Piper question Please Jeffries next of And from go Sandler. Clarke

Clarke Jeffries

Well, XX%, reach already for thanks year-to-date, growth in overall, for accelerate to a level record QX at I look and if encouraging new - question. even saying was ARR Really a is XX%, at see the think, over ARR ARR it net we XXXX. added of

how seasonal, and Or when terms us you the it's ARR? do think we pipeline think first of execution? the second back about to should building the look half, new split been strong for net half has where at execution you in possible the So where and half see same

Justyn Howard

Yeah.

the COVID we seasonality has ended typical kind I up of probably have that of a bit seen. think would

you've from to of in versus on It record comparable so but of we've kind I the fact year at based that the just don't up of half periods, may milestones in seen a past, focused the are so are we've we're and the sequential been kind see in probably more been of kind deliver to more strong. growth last kind the the year, that quarter. where sequential look quarter indicated we're the different the this letting measure tail even the the much performance record setting us look cycle, of continue but the other the relative COVID on end as by. slightly hopefully in that guidance we we going of the of to to every year performances, thinking able provided. and looking year and has not just QX Those at team this think, as And back

Clarke Jeffries

And what spent as what inbound wondering perfect. we've some you growth, right, rest for know investments I are mind. top the then on year? the growth but top But the All led for imagine the of capacity think are can I is about discussion year? hiring initiatives was product the of I certainly top there investments, this developing

Justyn Howard

some the at more that either do capabilities, with growth from or more the have the our funnel, of looking apparent existing, to we're readily accessibility into of to are coming product and standpoint of lot advanced who the a areas who customers. are there visibility trial process a onboarding like so existing making Yeah, customers

job So those those that as of making exposing for doing our the teams sure capabilities product onboarding as go-to-market are good customers. seamless is into our making our as capabilities a and in really

How cetera. of given the funnel. of just seeing And the sales regions depending what So amount what thinking funnel? our in just we look the to How world funnel is process there. on versus lot and - about time product that the trial are plays through et then experience what does spend of role of big we're that our that's also what like? a a driven continuing cohesively that I'm developing, are onboarding we're sources, adapting we thinking optimizing where revenue

constant of It's more So get well. investment that's more to continuing process us optimization. as and kind a of from

Clarke Jeffries

Got it, you. color. I Thank appreciate the

Operator

Stanley. Zlotsky our And of Stan question. from your next please ask question Morgan Sir,

Stan Zlotsky

really with compete Perfect. Thank opportunity to Obviously, yourself see have? aggressively go And able the up being sales you broadly. and really the and to reps go that. season the the dig you're are How you quarter. guys effectively in you now more enterprise the hiring enterprise that product portfolio really right do pursuing how congratulations I you opportunity. to so into very much, after on end, wanted high From strong my enterprise

Ryan Barretto

Hi, Stan. Ryan. this is Yeah,

from really there Fortune with on ceiling products getting with closed customers. and We've do our XXs, isn't think I deals here. great any those XXXs, can Fortune are what feedback current we

have been we we and just As our we what are the lot built out our seeing been all of for organization think and offer have to nice a we've really targeting outbound success customers a motion, fit great across certainly enterprise products. that of

grow. And productivity. the to So of us to folks team, headroom we really I as good that think there's we're plenty adding see for more to continue

And able us continue can there. more those as just you customers, So well. to to we're as think to roadmap expect see the be continues we'll footprint our I definitely from there evolve, grow as to aligning

Stan Zlotsky

then be but question, question to and it anything was this strong if very that the apologize Got billings need one I mindful time billings for we in in on prior Joe addressed number the and billings, of?

Joe Preto

and progression No, into more nothing but there. we're seeing get in deals, term Stan, no, deals, size there just mid onetime we longer onetime That's as market these Stan. bigger natural enterprise the items just

Stan Zlotsky

Okay, awesome. Thanks.

Operator

of our Genuity. next DJ question Hynes Canaccord Please And from question. ask your

DJ Hynes

a on shots the increasing All really somewhere? it feel right, guys, more maybe so it's been adds it's of is of in the there a to top and Congrats, if you I'm win comment a improving it on just funnel putting Or like If of conversion? lot try function you're does Hey, And rates set a more there's of had goal. unpack But both. to customer combination sure great record numbers we rank like here. it, up

Ryan Barretto

mean, means great more question. investments give I we've we've folks ever our just in made the the we're credit in certainly value coming And organization, structural improvements to across retention. bit want to just mentioned the customers. success than a a seen product to some It's that to Yeah. innovation our roadmap I onboarding, Justyn ago, on that's the little but our adding

think a of conversion huge from funnel really have well. then And and we seen great the improving there's So coming I as there. quality just lift rates the been have top

the really that prospective, logo seeing about good felt a from execution customers globally. every and segment we're across the So

really on over are definitely - both about nice but still side, weighted new for that the it's levers So us. business

DJ Hynes

to in. teams, what I us Ryan, know, a ask chime what And outside functional about are of data. functions? Yeah, terms you of anyway, sits Like are social in a of in one. feel use ballpark of huge what those be then, there's We'll give to that's I'll percent Justyn, free seats then talking But social helpful. in for opportunity percent service, feel cross and another

you trying to that where just of interest. terms think about are So monetizing in

Justyn Howard

now because actual answer approaches an evolving evolution may when really the on are of team where difficult is service service that to they hub-and-spoke. approach, organizations difficult are have Yeah, move the having dedicated are different to depending how really a right usually they part There's of of to from social sort sophisticated they center there. Many versus organizations taking excellence or the and team. different a

before, parts mid have et even the not in yeah, specialized of skin an it, customer cases and But and fall suss good the the not got area out. eye just more I may and I to it where so sales, the a the in fair where that's the seats may of vested market will inclusive get handling a stakeholders And being difficult that does is definitely they've say you It's roles, to users service game customer it additional departments the quantify like of marketing use care now, interest what's responsible very may the others. moving other generally order seeing majority But to be those cases marketing on involved social happening that use deals an keeping second in we're in still example, pretty in and - they be more for to commerce. would but that enterprise, difficult tell those more and customer particularly specific that. of been work in in the cetera. certainly or toward so service maybe and say we're related while folks involved exactly. or

trending in direction it's that So sure. for

DJ Hynes

Yeah, and Congrats. that's helpful guys you, color. Thank

Justyn Howard

you. Thank

Operator

of Please question. question our next your Oliver from And Rob Baird. ask

Rob Oliver

some product add maybe that for it commerce, approach products social integration a to Great. considerations the quarter, of you're taken lot talk that Hey, you good squeezing of this new evening, customers. on and your me about to integrating within of how suite seems guys kind drive up sell guys. front, just of A a I'll in. Thanks on so with some couple accretive commerce have like

early because have will social curious And piloting relationship things. on that announced And quarter up step ask to reads So feel both to are them, you. commerce. guys yet, you historic no got be we for just one's clearly those hear customers in to with strong about themselves also need Thank very the of asked plans whether then, Twitter, and feeling Twitter since I that. their the just a just about this be order curious so it avail would that about about

Justyn Howard

sure. Yeah,

for the collaborating the something can of and think. exciting here, kind looking and figuring forward news team all Twitter out Yeah, So that reverse I value. order of we're to on where in most add out it's we work

involved that the with, got little opportunity are now. across certainly coming something board. And that we've But - to is And and proposition specific what more positioned that I all building all bets are but of pretty clarity and plans. around sorting the toward going there, materially their are that making think be those massive think TBD I got compelling we're front. they've this the and because to dimension that a on now roadmap roles well think, to exciting, and that table I of the right, out we're a be networks indicators a with our

user needs, and mostly see commerce we're up around we're to it to what we stepping around I on a is back held think additional it I as think particular haven't plan. potentially capabilities, the question that any to not seats, fill because separate to monetizing those the skew, plans the going early

very of the customer we that to today And did have Sprout. any are intentionally. So we available capabilities that

you've the robust. have the take capabilities in sophisticated, sets more that those as approach more become past with get seen As a different feature

for commerce certainly an option side that's So on us as well. the

Rob Oliver

the to and are just enterprise follow think customer of expansion department. of within marketing you're was in solutions kind is even the ask that you land tech think are touch clearly marketing about kind can numbers Thanks on just seeing that real - you seeing seems going the up they predominantly the like staggering. on up I Great, maybe ARR of a multinational here because of again guys. nature and it maybe Justyn I bridge Ryan, you that I since what to in seeing and for is, still buying here And one there then pretty of companies? buying the thanks, like for within yours bottoms and you're maybe model And appetite speak terms acceptance enterprise guys where the metrics changing new

Ryan Barretto

them came Yeah. I One, things continues There's that fit us. couple exciting about to for from Sprout risk the way that product and many more, to a the continues the logos to they market us that in that really are aside themselves in this think differentiate was before to a be important really a sign and mean, prove to I on to the we're for hearing there's trial perfect was really mitigate so to we realizing make talked this that of demo. trying a more leveraged contract, they is a model great set from today time a That allowed as trial, everybody sell and important. those customers do be decision. else

really working well. that's So

to makers, interested and the understanding become the want best to industry. access They have data. these thing large support other They them. priority the that to technologies with is They going organizations, in practices are to them. to within the would these understand benchmarking understand decision bigger The social even I and companies more they're strategy platforms want executive that in more you're for say has getting where a

is having well, quickly. as involved cycles a which in And sales them of so nice keeping in provided you're more the moving conversation just deals tailwind

people before So the we've there. entire like using we've personally in implemented a we getting in them. they we benefits more when buy way how understand to if product involved then got the get help not couple the feel we and can makers the that And process they're decision really got

Rob Oliver

Thanks again, guys.

Operator

And our of & ask question Please Company. from Scott next Berg your Needham question.

Scott Berg

great on brief. I I for questions. Thanks my taking Hi, quarter. guess got two the everyone, them to congrats

it. accelerate it's there's kind two, been it one, first faster. opportunity the just actually have sound right enough the of quarters have serious now? although an even might Given question, the investing metrics been if On you maybe not what know to three in Are last fantastic, like growth business to guys a the

Justyn Howard

it's a we question that No, fair take one seriously Yeah. and as well.

model, we're are where hyper of Joe and just a the be where of up great really I before visibility thinking where volume executive investments. one about going that into where of we've and And opportunities what Ryan, funnel, team is et things is talk cetera. got us the the focused heard can trial about like - the demand inbound basis understand particularly most the in are, should given think you've on the we and on constant we ramping to other free look markets,

to we're just hopefully there. And continuing always a with pressure. theme so us, I from pressure is quarters good think that done over investments. job make But apply testing we've heard increased are that something certainly going the where you've a from ourselves couple us we're last to And is we

that we always make to that to want enough is pressure that pressure. fully that applying on the we're we've right, company, than in We're pressure investments about we that's been quarter make that when opportunities going we're now be a way we're thoughtful, hesitate and find not but those applying pull as opportunities. a sure these to operated the the sure capitalizing those ago we to So more talked

the hiring. in So the in as prepared got We're a investment Joe parts of we've lot accelerating said, org. accelerating the We're remarks, key of kind there. planned

places we're question. You'll and every time new about continually continue one together, new that we growing we're finding excited But to that that share we get that. and It's asking see doing us your investment. ways

Scott Berg

there today having of guess any months ago you business? a customers maybe some today like perspective the don't on using I XX up you influence your maybe any follow look usage, the if than pandemic ways, know from engaged I metrics data can and or I the is, the the if more the and is know platforms trying how share us in for that don't see using are customers outside to XX just or different much growth Awesome there's in that are at platform customer

Justyn Howard

on. theme Yeah. this not what talked that we that starting more involved. some what but we're that that that taken operationalize organizations they the From can what to the see at and shared a additional externally, seeing But this tail And additional consistent one kick about future, was of to cases, social which available the made means that started will where perspective, we've and by see is say more this we've dating time cannot internally. are to directionally is to realization additional investment back is more or seats to departments, out and it's is that metrics QX how maybe end I last - anything year, use more figure that being we're us

organization, think the more the we and share those to premium that use just number we are is we the when involved we're greater customer, spend those organization, seeing point And would for amount I of do additional people metrics and additional that in of and about so that the across market. brought need departments the cases ones the the all involvement apparent per kind to more of within offerings

Scott Berg

Great, taking my thanks for questions.

Operator

from our of Turits question ask [Operator Instructions] Please next Michael KeyBanc. And question. your

Unidentified Analyst

this strong the another Hi, for is quarter. Michael. question congrats Rich following actually Thanks on taking on for and

some move in into our some and SMB year, office to the vacation we started of of some time. the softness software, of year as kind as market of last to return indications of post-COVID summer channel, in XH demand and XH that strong the front to some people take for mid really in saw this relative So - office we conversations with a and hearing we're

some the from seeing you could be provide the the Sprout. trend expect if to to for a remainder year. XQ Jan and see kind seem are guys just so for to this doesn't you that you of perspective So wanted in color case what how far And of

Ryan Barretto

to some vacations hasn't and it's lines trend yet see good our that. - really some shown now seeing. of feel understand back take question up pretty I having We the that funnel. opportunity Yeah, confident have what the a can people get certain Rich. in certainly seen we'll out that some we're not about I

really great. it and perform. have continued And team quality And from we're the great. all Our SMB has across actually been teams mid teams execution seeing our our to been the has really market segments in

the benefit time. to And continue much that's inbound of inbound We revenue dedicate deals comes we energy. chasing portion that know a because where And have model invest in or perspective. from accounts, of an where where to we're so from our necessarily not good our we

the will that sure today. seen any I'm those So versus there trend But lines some be seasonality we market. haven't of

Justyn Howard

really parts of When the that pipeline a then the performance year, we is of observer I had of right. think I of revenue saw to be the about influx here trough, add, fairly the some anecdotally was on the short. Yeah, and just longer QX down little where into other settled last I'll bit talked quickly COVID QX a to in an and market that as think into we some interruption tended categories, and funnel the

to kind trend And of and be a perspective, been from the be that examples the think, I continues we've one just - so I throughout think line of to case. COVID seems counter

Unidentified Analyst

for you high the to you And referenced, in your the guys you customers success have And were figures moving of just think larger I you market. continued guys said that see then ACV terms to ACVs. up, growth. have thank it, last six and up one follow in some that in of Got mid

Just get wanted that of to an crossed figure on color if be helpful. that kind and range seven that we've into and update yet ACV on see over would

Justyn Howard

up lot something excited We point at our figure last we share momentum we're picking plus the definitely We're are any Yeah, XXK similar six a time. the around be up moment, and the one new gave seeing to have don't at deals large about. answer deals. but in into this high of gravity will to the and watermarks those the

Unidentified Analyst

you. Thank

Operator

to Mr. for this And question call. our the speaker's call I'll be turn would over that

Justyn Howard for closing.

Justyn Howard

Yeah. over Great. for the Well, we're I thanks time questions. now. everyone know

keep So this I'll quick.

back a work. you support. continued to for to And Thanks. the job. We're continuing Just thank thank going Thanks team for certainly to you. always do get phenomenal the to

Operator

conference today's call. participating. all concludes for This you Thank

now You disconnect. may