Company reports lower-than-expected revenue in 1Q and cuts FY forecast
- Sprout Social shares fall 23% after 1Q revenue miss
- Company reports lower-than-expected revenue and cuts FY outlook
- Net loss of $13.6 million in 1Q
- Revenue rose 29% to $96.8 million
- New revenue outlook for the year is $405 million to $406 million
Shares of Sprout Social fell 23% in post-market trading after the company reported lower-than-expected revenue in the first quarter and lowered its outlook for the year. The social media management software company posted a net loss of $13.6 million in the first quarter, compared to a loss of $10.3 million in the same period last year. Despite a 29% increase in revenue to $96.8 million, the company’s performance fell short of Wall Street’s forecast of $97.4 million. As a result, Sprout Social now expects revenue for the year to be between $405 million and $406 million, down from the previous outlook of $425.3 million to $425.5 million. Finance Chief Joe Del Preto acknowledged the underperformance in the first quarter but expressed confidence in the company’s long-term success.
Factuality Level: 8
Factuality Justification: The article provides factual information about Sprout Social’s stock performance, revenue, net loss, and outlook for the year. It includes relevant details without digressions or unnecessary background information. The article does not contain misleading information, sensationalism, redundancy, or opinion masquerading as fact. Overall, the reporting is objective and based on concrete financial data.
Noise Level: 3
Noise Justification: The article provides relevant information about Sprout Social’s financial performance, including details on revenue, net loss, and outlook for the year. It stays on topic and does not contain irrelevant or misleading information. However, it lacks in-depth analysis, antifragility considerations, and accountability of powerful people. It could benefit from more context on the reasons behind the revenue shortfall and potential strategies for improvement.
Financial Relevance: Yes
Financial Markets Impacted: Shares of Sprout Social
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article pertains to financial topics as it discusses the drop in shares of Sprout Social and the company’s lower-than-expected revenue and revised outlook for the year.
Public Companies: Sprout Social (SPT)
Key People: Joe Del Preto (Finance Chief)
Reported publicly:
www.marketwatch.com 
