Sprout Social (SPT 8.65%) was a standout on the market Wednesday, thanks to an unexpected flip into profitability and generally strong results for its latest reported quarter. The niche tech company saw its shares close more than 8% higher as a consequence, a far better performance than the 0.2% dip of the S&P 500 index that day.
Sprout Social, which specializes in aggregating and organizing the social media efforts of enterprises, unveiled its fourth-quarter and full-year 2022 results. The company described the former as "exceptional," and that wasn't just hype. Revenue for the quarter rose by a robust 31% year over year to $69.7 million on the back of a 31% increase in its all-important subscription revenue (which forms the vast bulk of the total).
Better, Sprout Social flipped to a non-GAAP (adjusted) net profit in the fourth quarter. This was $600,000, or $0.03 per share, against the year-ago loss of $2.6 million.
On average, analysts following the stock were modeling $69.86 million for revenue and an adjusted net loss of $0.02 per share.
In its earnings release, Sprout Social quoted its co-founder and CEO Justyn Howard as saying that the company "achieved multiple new high water marks in both new business and expansion, led by outstanding new business momentum in the enterprise."
"Our pricing changes are performing well, our partnerships are strengthening, and social has never been more critical to our customers," he added.
Sprout Social also proffered guidance for its current (first) quarter and for the entirety of 2023. For the latter period, it believes revenue will rise 31% at an annual clip to hit $332 million to $333 million. Adjusted net income should be $0.03 to $0.04 per share.