Core Viewpoint - The article introduces Daniel Japps as a new contributing analyst for Seeking Alpha, emphasizing the opportunity for individual investors to share their investment ideas and gain exposure [1]. Group 1: Analyst Background - The analyst has over 10 years of experience in equity markets, focusing on a fundamentally driven, value-oriented investment approach [2]. - The analyst seeks undervalued companies or those at a potential turnaround point, often identifying situations where market sentiment is overly pessimistic compared to the company's fundamentals [2]. - The analyst has successfully initiated positions in companies like JAMF and Unity Software prior to significant positive re-ratings and fundamental improvements [2]. Group 2: Investment Philosophy - The analyst's perspective is shaped by a non-traditional background outside of formal finance, which aids in articulating investment theses in clear, practical language [2]. - The motivation for writing is to share investment theses, engage in discussions, and contribute to data-driven analysis of closely followed businesses [2].

Core Insights - Sprout Social has achieved significant recognition in G2's 2026 Winter Reports, earning 177 leader badges across various business segments and global regions [1][4] - The company ranked 1 in 40 individual G2 reports, highlighting its leadership in social media listening tools, analytics, and customer service [2][4] - TrustRadius awarded Sprout Social the 2026 Buyer's Choice Award, emphasizing the platform's impact on brand-audience connections [2][4] Company Performance - Sprout Social's strong performance is attributed to verified customer reviews, showcasing the platform's strategic value in the evolving social media landscape [2][3] - The company has introduced advanced AI capabilities, including Sprout AI and its proprietary AI agent, Trellis, enhancing its product offerings [2][3] - Customer feedback highlights Sprout Social as a mature, full-featured platform excelling in analytics, governance, and team workflows [3] Product Innovations - Recent product innovations have transformed real-time social data into predictive intelligence, aiding brands in making smarter decisions [3] - The platform offers comprehensive functionalities, including publishing, engagement, customer care, influencer marketing, and crisis management [4][5] - Sprout Social's software operates across all major social media networks, providing a robust enterprise-grade experience [4][5]

Core Insights - The term "Aura" has been named the Word of the Year for 2025, generating 31.9 billion impressions across major social networks, illustrating the impact of social media on culture and language [3][4] - Sprout Social's analysis indicates that niche trends, AI-driven discovery, and community-led content have significantly reshaped language and culture in 2025 [2] Social Media Trends - "Aura" exemplifies how viral micro-moments can evolve into global cultural phenomena, with related terms like "aura-farming" and "aura-maxxing" emerging from this trend [3] - The character "Labubu," created by artist Kasing Lung, gained over 5.8 million mentions online, driven by unboxing videos and celebrity influence, highlighting the power of niche communities in creating viral content [4] - The catchphrase "6–7," from Skrilla's song, became a popular inside joke among younger audiences, with 3.8 million mentions, reflecting the rise of absurdist humor in online conversations [5] Marketing Insights - The top marketing terms of 2025 included "GEO" (Generative Engine Optimization) with 116 billion impressions, indicating the importance of optimizing content for AI-driven discovery [6] - "Substack" also emerged as a significant term with over 117 billion impressions, showcasing brands' focus on engaging niche communities through long-form storytelling [6] Future Trends - Looking ahead to 2026, terms like "AI Slop" and "Clanker" reflect growing skepticism towards low-quality AI-generated content, with over 2 million mentions combined, indicating a preference for human-led content [7] - The term "Group 7" highlights the increasing appeal of niche, exclusive, and personalized online communities, a trend expected to expand in 2026 [8]

Core Insights - Meridian Growth Fund's third-quarter 2025 performance was impacted by sector positioning and adherence to strict investment discipline, resulting in a return of -1.78% compared to the Russell 2500 Growth Index's 10.73% return [1] Company Analysis - Sprout Social, Inc. (NASDAQ:SPT) reported a one-month return of -4.04% and a significant 68.30% decline in value over the past 52 weeks, closing at $9.97 per share with a market capitalization of $590.118 million as of November 28, 2025 [2] - The company provides a leading social media management platform recognized for its intuitive design and ease of deployment, which contributes to its competitive advantage [3] - Despite exceeding expectations in results, Sprout Social's stock underperformed due to a reduction in forward guidance, overshadowing solid execution in a market that favors "beat and raise" patterns [3] - Meridian Growth Fund views the recent pullback in Sprout Social's stock price as excessive, citing its durable double-digit growth trajectory and expanding margin profile as reasons for a modest increase in their position during the period [3] Financial Performance - In the third quarter of 2025, Sprout Social, Inc. reported revenue of $115.6 million, reflecting a 13% year-over-year growth [4] - The number of hedge funds holding Sprout Social, Inc. increased from 29 to 34 in the third quarter, indicating growing interest among institutional investors [4]

Group 1 - The event "Breaking Ground" is a quarterly launch event focused on social media, strategy sharing, and updates on the Sprout platform [1] - The highlight of this event is the introduction of a significant product innovation related to a social-powered AI engine [1] Group 2 - Attendees are encouraged to engage in a live chat discussing tasks they wish AI could handle, indicating a strong interest in AI's potential to simplify everyday chores [2][3] - Common themes in the chat include cleaning tasks, such as laundry and yard work, showcasing a desire for AI solutions in household management [3][4]

Summary of Sprout Social Update / Briefing (November 18, 2025) Company Overview - **Company**: Sprout Social (NasdaqCM:SPT) - **Event**: Breaking Ground, a quarterly launch event focusing on social media and AI innovations Key Industry Insights - **Social Media Evolution**: The customer journey has shifted to social media, with social search becoming the new SEO and social content acting as the new marketing site map [6][8] - **Data Volume**: 5.4 billion people share hundreds of billions of messages daily, generating tens of petabytes of data on social networks [6] - **Customer Engagement**: 55% of users feel brands are not adequately responding to their interactions on social media, indicating a gap in customer engagement [8] Core Product Innovations - **AI Integration**: Sprout has been investing in AI for over a decade, with over 40 custom AI models in use, enabling features like optimal send times and sentiment analysis [14][15] - **Agentic AI**: Introduction of agentic AI, which can reason and take actions based on social data, enhancing workflows and decision-making processes [10][12] - **Trellis**: A new AI agent designed to facilitate social intelligence across organizations, allowing users to interact conversationally with social data for insights [16][20] Product Features and Enhancements - **Trellis Capabilities**: Users can perform tasks like trend analysis and campaign performance reporting through a conversational interface, significantly reducing the time spent on data analysis [16][19] - **Spam Detection**: New AI model for spam detection that categorizes and auto-completes spam messages, improving team efficiency [28] - **Influencer Marketing**: Enhanced capabilities for influencer matchmaking, including brand fit and safety scores, and upcoming features for analyzing video content [30] Upcoming Features - **Integration with ChatGPT**: Launch of a remote MCP server to connect Sprout with ChatGPT, allowing for deeper content analysis and performance comparisons [24][27] - **New Social Listening Sources**: Introduction of Blue Sky for comprehensive insights and monitoring capabilities across various social networks [39] Customer Engagement and Feedback - **Customer Participation**: Early access to Trellis for qualifying social listening customers, with plans for broader rollout [20] - **User Experience**: Positive feedback from customers on the ease of use and efficiency improvements brought by Trellis [52] Panel Discussion Highlights - **AI in Workflows**: Discussion on the transition from AI as an assistant to AI as a coworker, emphasizing the importance of personalized AI applications [48][56] - **Human Element**: Acknowledgment that while AI enhances efficiency, the human aspect of content creation and customer engagement remains crucial [60] Conclusion - **Future Vision**: Sprout Social aims to leverage AI to unlock social intelligence for businesses, enhancing customer engagement and operational efficiency at an unprecedented scale [31]

Core Insights - Sprout Social has launched Sprout AI, featuring a new proprietary AI Agent named Trellis, aimed at transforming social media data into actionable business insights [1][6] - The introduction of Sprout AI represents a significant shift in how organizations can access and utilize social intelligence, enabling faster and more effective responses to market dynamics [2][6] Company Overview - Sprout Social is a leading provider of social media management and analytics software, serving approximately 30,000 brands globally [6][8] - The company emphasizes that its platform is designed to empower businesses to leverage social data for smarter and faster decision-making [6] Product Features - Trellis, the AI Agent, allows users to query billions of social data points for insights related to market research, competitive analysis, and customer feedback [7] - The AI capabilities include proactive risk management by monitoring sentiment and emerging complaints, enabling early crisis detection [7] - Sprout AI enhances routine workflows, allowing teams to focus on strategic initiatives while showcasing the ROI of social media efforts [7] - Features like Optimal Send Times and AI-generated content aim to maximize engagement and reach for social media campaigns [7] Strategic Partnerships - Sprout AI includes secure connections with leading AI providers, starting with ChatGPT, facilitating the integration of social data into daily AI workflows [4][6]

Core Insights - The Q3 earnings season is causing concern among investors due to high valuations and declining consumer sentiment [1] - Gary Alexander has extensive experience in technology sectors, influencing his insights on current industry trends [1] Group 1: Market Conditions - Valuations are at all-time highs, which is a significant concern for investors as they navigate the upcoming earnings season [1] - Consumer sentiment is sliding, and spending data is weak, indicating potential challenges for companies [1] Group 2: Analyst Background - Gary Alexander has a combined experience of covering technology companies on Wall Street and working in Silicon Valley [1] - He has been a contributor to Seeking Alpha since 2017 and has been quoted in various web publications [1]

Core Insights - The Q3 earnings season is causing concern among investors due to high valuations and declining consumer sentiment [1] - Despite challenges, there is significant industry expertise from analysts with backgrounds in technology and startup advisory roles [1] Group 1: Market Conditions - Valuations are at all-time highs, which is a point of concern for investors [1] - Consumer sentiment is sliding, and spending data is weak, indicating potential economic challenges ahead [1] Group 2: Analyst Expertise - Gary Alexander has extensive experience covering technology companies and advising startups, providing valuable insights into current industry themes [1] - His contributions to platforms like Seeking Alpha and popular trading apps highlight his influence and reach within the investment community [1]

Financial Performance - Total revenue for Q3 2025 was $115.593 million, a 12.5% increase from $102.638 million in Q3 2024[19] - Subscription revenue reached $114.720 million, up from $101.813 million year-over-year, representing a 12.7% growth[19] - Gross profit for Q3 2025 was $89.809 million, compared to $79.406 million in Q3 2024, reflecting a 13.0% increase[19] - Net loss for Q3 2025 was $9.381 million, an improvement from a net loss of $17.087 million in Q3 2024[21] - Operating expenses totaled $98.920 million in Q3 2025, slightly up from $96.285 million in Q3 2024[19] - Revenue recognized during the three months ended September 30, 2025, from deferred revenue at the beginning of the period was $81.2 million, compared to $70.1 million for the same period in 2024[46] - Revenue for the three months ended September 30, 2025, was $115,593,000, representing an increase from $102,638,000 in the same period of 2024, a growth of approximately 12.5%[79] - The net loss attributable to common shareholders for the three months ended September 30, 2025, was $(9,381,000), compared to $(17,087,000) for the same period in 2024, indicating a reduction in losses[81] - Basic and diluted net loss per share for the three months ended September 30, 2025, was $(0.16), an improvement from $(0.30) in the same period of 2024[81] Assets and Equity - Cash and cash equivalents increased to $90.639 million as of September 30, 2025, from $86.437 million at the end of 2024[14] - Total assets grew to $481.396 million as of September 30, 2025, compared to $428.341 million at December 31, 2024[14] - The total stockholders' equity rose to $194.126 million as of September 30, 2025, up from $166.594 million at the end of 2024[16] - The total stockholders' equity increased to $194,126 thousand as of September 30, 2025, up from $158,086 thousand at the same date in 2024, representing a growth of about 22.8%[25] Cash Flow and Operating Activities - Cash provided by operating activities for the nine months ended September 30, 2025, was $32,492 thousand, compared to $22,179 thousand for the same period in 2024, indicating a year-over-year increase of approximately 46.5%[27] - The total cash, cash equivalents, and restricted cash at the end of the period was $92,572 thousand, compared to $86,855 thousand at the end of September 2024, marking an increase of approximately 6.5%[27] - Cash payments related to operating leases for the nine months ended September 30, 2025, were $4.7 million, down from $6.2 million in the same period in 2024[51] Acquisitions and Goodwill - The company incurred $50,333 thousand in payments for business acquisitions during the nine months ended September 30, 2025[27] - The acquisition of NewsWhip was completed on July 30, 2025, for a total purchase consideration of $63.978 million, which includes an upfront cash payment of $52.3 million and contingent consideration valued at $8.5 million[91][92][97] - Goodwill increased significantly to $166.972 million from $121.315 million, indicating potential acquisitions or market expansion[14] - Goodwill resulting from the acquisition of NewsWhip amounted to $45.657 million, increasing the total goodwill balance to $166.972 million as of September 30, 2025[95][104] - The company acquired net operating loss carryforwards of approximately $31.8 million from NewsWhip, with a full valuation allowance recorded on the related deferred tax asset[101] Legal and Regulatory Matters - The company is currently facing multiple legal actions related to alleged securities fraud, which could have material impacts on its financial position[75] - The company has recorded a full valuation allowance on its deferred tax assets related to domestic operations due to historical operating losses[55] Future Expectations - As of September 30, 2025, the company expects to recognize $357.1 million in revenue from remaining performance obligations, with 72% expected to be recognized in the next 12 months[47] Stock and Shares - The company reported a weighted-average share count of 58,930,087 for Q3 2025, compared to 57,179,710 in Q3 2024[19] - The total number of shares outstanding increased from 57,398,808 shares as of September 30, 2024, to 59,175,178 shares as of September 30, 2025[25] - The weighted average common shares outstanding for the three months ended September 30, 2025, was 58,930,087, compared to 57,179,710 for the same period in 2024[81] Contingent Consideration - The company has a contingent consideration liability of $8,450,000 related to the acquisition of NewsWhip Group Holdings Limited, based on future performance metrics[86] - The fair value of contingent consideration in connection with business acquisition was reported at $8,450 thousand as of September 30, 2025[28] - The fair value of the contingent consideration was determined using a scenario-based approach, classified as Level 3 within the fair value hierarchy[100] - The fair value of the acquired intangible assets was estimated at $24.85 million, with significant components including customer relationships valued at $15.2 million and acquired technology at $8.4 million[101] Other Financial Metrics - The company recorded $2.7 million in restructuring charges for the nine months ended September 30, 2025, with cash payments totaling $2.9 million related to these plans[38] - Stock-based compensation expense for the nine months ended September 30, 2025, was $58,990 thousand, slightly lower than $61,850 thousand for the same period in 2024[27] - Total stock-based compensation for the nine months ended September 30, 2025, was $58.99 million, compared to $61.85 million for the same period in 2024[62] - The company recognized $4,622 thousand in amortization of acquired intangible assets for the nine months ended September 30, 2025, compared to $4,677 thousand for the same period in 2024[27] - Amortization of intangible assets for the nine months ended September 30, 2025, totaled $4.6 million, with expected future amortization expenses outlined for the next several years[105]