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Hello, everyone. Thank you for joining us, and welcome to Sprout Social Fourth Quarter 2025 Earnings Call. [Operator Instructions] I will now hand the call over to Alex Kurtz, VP of Investor Relations and Corp Development.

Thank you, and welcome to Sprout Social's Fourth Quarter 2025 Earnings Call. We will be discussing the results announced in our press release issued after the market closed today and have also released an updated investor presentation, which can be found on our website. With me are Sprout Social's CEO, Ryan Barretto; and CFO, Joe Del Preto. Today's call will contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking. These include, among others, statements concerning our expected future financial performance, including our Q1 and 2026 outlook and business plans and objectives and can be identified by words such as expect, anticipate, intend, plan, believe, seek, opportunity or will. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements address matters that are subject to risks and uncertainties that could cause actual results to differ materially. For a discussion of the risks and other important factors that could affect our results, please refer to our annual report on Form 10-K for the year ended December 31, 2025, to be filed with the SEC as well as our most recently filed 10-K and 10-Qs. During the call, we will discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. Definitions of these non-GAAP financial measures, along with the reconciliations to the most directly comparable GAAP financial measures are included in our fourth quarter earnings release, which has been furnished to the SEC and is available on our website at investors.sproutsocial.com. We have also developed a new metric, approximated subscription revenue contribution for customers contributing $30,000 and above in ARR. We believe this metric is useful in measuring our success in serving this particular customer cohort. Please refer to the detailed definition of this metric and how it's calculated in the appendix to the earnings presentation on our website. This metric is intended to approximate the subscription revenue of a subset of customers over a historical period by using their average ARR as a proxy and showing this quarterly estimate on a trailing 12-month basis. For brevity, we will refer to this metric through the rest of this call as $30K and above subscription revenue. With that, let me turn the call over to Ryan. Ryan?

Thank you, Alex, and welcome to our fourth quarter earnings call for fiscal 2025. Sprout delivered another strong quarter with revenue of $120.9 million, representing 12.9% year-over-year growth, and we closed the year with non-GAAP operating margin at 10.5%, up 306 basis points year-over-year. Current remaining performance obligations grew 14% year-over-year to $284.7 million and total remaining performance obligations grew almost 15% with solid growth in our longer-term RPO balances. This growth is being driven by multiyear contracts that now represent nearly half of our contract mix, up from about 1/3 two years ago, which illustrates our success moving upmarket. Our go-to-market team delivered solid growth in our 50,000-plus ARR customer count, up 18% year-over-year. During this quarter, we landed strategic wins with amazing global brands like GE Aerospace, Archer-Daniels-Midland, PulteGroup, Caesars Entertainment, Cox Enterprises, Gibson Brands and The Knot Worldwide. These customers demonstrate our continued success serving the most socially sophisticated enterprise customers. Sprout also delivered strong non-GAAP free cash flow in the fourth quarter at $10.9 million and for the year at $45.9 million, an improvement of approximately 55% year-over-year. This improvement underscores our ability to drive leverage in our model. In 2025, we took a major step forward, enhancing the intelligence in our platform. With Sprout AI, we're using our differentiated data layer and proprietary agents to help teams move from insight to action faster. starting with Trellis in listening and expanding across key workflows in 2026. Alongside that, we strengthened our multiproduct portfolio with a reimagined Influencer Marketing platform, meaningful advances in social care, Guardian for trust and compliance and the introduction of NewsWhip for real-time PR and comms intelligence. Overall, our multiproduct strategy continues to drive meaningfully higher win rates. We entered 2026 with strong product momentum and a clear opportunity to expand within our base as customers consolidate vendors. I'm also excited to share that Lori Jiménez has started as our new Chief Revenue Officer. Lori hit the ground running and led our revenue kickoff last month. She brings great commercial software experience from SMB to the enterprise after leading teams at companies like Box, Meta, Google and most recently, WorkRamp. I wanted to start today's remarks with important behind-the-scenes details to help you understand our business at a deeper level. We know that many in the investment community are in the process of discerning the potential impacts of AI across categories and in specific companies in the software space. We'll talk more about our AI strategy and our progress in general. But first, I want to speak to two of the prevailing concerns directly. The first concern is moat durability in a world where agents are becoming proficient at writing code. Even if an agent could generate perfect, secure, production-ready code on demand, that's still not the hard part. The hard part is making it work in production, permission data access, reliability at scale and governed workflows that enterprises trust. On a given day, we ingest and publish more than 1 billion social interactions and data points from hundreds of volatile APIs across more than a dozen social networks. All of this is real time, uniquely structured across networks and message types and not meaningfully accessible to LLMs today. This data comes from our elevated network partnerships, which are made possible by deep long-standing relationships, in many cases, governed by complex legal agreements, rapid execution as platforms change, robust security and compliance and a track record of proven customer value. Access to high-quality social data has been getting more restricted, not less. Platforms have tightened controls and increased enforcement against unapproved scraping, especially for AI training. We believe this makes reliable, compliant access under the right permissions a true differentiator. At the end of the day, social data access is permission and controlled by the platforms, not by the model layer. So reliable access at scale is earned, not assumed. Even if the data were accessible, we believe the magnitude needed to power core features is unwieldly and untenable for in-house solutions or upstarts to manage. In fact, many of the largest LLM providers with their massive arsenal resources are customers of Sprout and rely on our platform to meet this mission-critical area of their business. We've built hundreds of features underpinned by a complex matrix of sources and endpoints optimized over more than 15 years of incredibly challenging engineering feats. We translate raw social activity at enormous volumes into structured comparable signals adding customer-specific context, routing logic, semantic meaning and workflow. Staying in constant lockstep with our network partners and evolving customer needs is even more involved still. Together, these technical strengths form the foundation of Sprout as a social system of record in action, where social data becomes governed workflow, measurable outcomes and trusted execution across teams. We'll go deeper in an upcoming investor-focused webinar we are running with our CTO, Alan Boyce, and distinguished engineer, Kevin Stanton. This event will take place on March 11 and will be hosted on our IR website. More details to come. Most people are surprised to learn about the complexity and scale of the engineering challenges involved in bringing all this together in an elegant platform for tens of thousands of brands around the world. These are arguably some of the most difficult challenges in SaaS. This moat is hard-earned, and we believe is very durable in an AI world. We also believe AI development will radically improve our own products, operations and efficiency, and it already is. But that's only possible because of the foundation we've built and the complexity we've already tackled. All of this is also a key factor in the second prevailing concern, the durability of revenue, potential seat erosion and the terminal value of SaaS businesses. We agree that many categories of software will need to adapt to counter this potential, especially front-end heavy, narrow applications with less architecture and data complexity, touching large portions of the workforce. We do not anticipate that this will play out in the same way in the relatively nascent and understaffed category of social media where trust, compliance, direct connection with customers and precision are inextricably linked to a brand's reputation. Rather, we believe that AI will unlock new capabilities, use cases and revenue opportunities for Sprout over time. As we expand our AI products called Trellis across the platform, we expect the ROI customers are seeing to translate into durable business results for Sprout through deeper adoption, broader use cases and over time, new monetization levers aligned with outcomes we're delivering. In May, at breaking ground, we'll share our road map and initial packaging and pricing framework, including how we're scaling Trellis from listening into publishing, reporting and care. Now I'd like to dedicate the remaining portion of my remarks today discussing 2 important and highly connected strategic initiatives. First, our multiyear plan to drive our two distinct customer segments and how this plan can drive better overall growth at Sprout. And second, how we can improve the overall margin profile of the company over the next 2 years with a new target of reaching 30% against our Rule of 40 framework by 4Q 2027. Let's start with our 2 customer segments. As Alex highlighted in his intro, to provide greater visibility into these customer cohorts, we're now disclosing 2 years of historical data for an approximated subscription revenue metric, which you can find in our IR deck on our website. Over the last year, we have provided insight into our $50,000 and above customer segment. We continue to see success in this segment since we initiated our focus here in 2023 with approximated subscription revenue contribution growth of 27% in FY 2025, driven by strategic investments in our products, marketing and go-to-market resources. Moving forward and from what you'll see in our IR presentation, we are widening the discussion of our larger customers to now include those over $30K of approximated subscription revenue. Customers over $30K are generally more socially sophisticated, have more advanced marketing strategies, have deeper budgets and view social as a more strategic part of their business. This customer spend level and above is more broadly representative of how we manage our go-to-market and R&D investments as well as the fact that these customers provide a strong expansion pipeline to matriculate to $50,000 and above. In FY 2025, $30K and above subscription revenue grew by 22% and represented 59% of our total subscription revenue across all customers. These customers are looking for a highly scalable platform that can deliver the capabilities, workflows, security, speed and innovation that's required to deliver on their social strategies at scale. And that's what we are bringing to them and to the market. We are now consistently winning larger ACV opportunities with some of the most socially sophisticated customers, and our win rates continue to trend positively against our core competitors. And win rates are multiples higher when an opportunity includes a premium product. In addition to the revenue growth here, the success of this multiyear strategy to serve more socially sophisticated customers has put us in a position to serve Fortune 500 companies like Honda, McDonald's, Procter & Gamble, Palo Alto Networks and Xerox. We couldn't be more proud to partner with these globally recognized brands. The success we have seen has been driven by major advancements in our social care capabilities, strong adoption of our Influencer Marketing platform as well as consistent updates to our core publishing and listening capabilities. We see even more opportunity as our go-to-market teams bring NewsWhip deeper into our customer base to solve complex real-time PR comms challenges and our Guardian capabilities deliver the trust, security and compliance enterprises need. We are committed to deepening our success with this customer segment and believe we have the products, road map and teams to continue to win here. As we move throughout fiscal 2026, you will see Sprout unlock what we believe is the market's richest data asset that we have built over the last 15 years and will power a whole new set of AI and enterprise capabilities. This includes number one, Trellis. Trellis is Sprout's proprietary AI agent that transforms social data into actionable insights by giving teams instant contextual answers, eliminating manual time-intensive analysis. In our early beta with listening, more than 1,000 users are already empowered to produce executive-ready insights in minutes instead of hours, pinpointing what's driving sentiment shifts and isolating the themes behind them. Our 2026 road map focuses on high-value use cases in listening, publishing, reporting and care that will give customers intuitive ways to interact with social data and build custom agent workflows. We believe deep cross-product integrations, unified data and a standardized agent platform will position Sprout to lead the emerging social intelligence category. Number two, security and compliance. In 2026, we will make significant investments in the enterprise-grade foundation that large organizations require through our Guardian product. We will deliver automated user provisioning, including system for cross-domain identity management integration, streamlined group configuration and advanced tag management to reduce administrative overhead at scale. For regulated industries, we will advance Guardian with blocked words approval, data unmasking, AI assist for custom data types and customer audit improvements, giving compliance and legal teams the controls they need to run social operations with confidence. And number three, autonomous media monitoring and crisis intelligence. This is Sprout's AI-powered media monitoring agent that detects breaking stories and delivers analyst-grade intelligence reports within minutes. Our 2026 road map will deliver comprehensive context, including share of voice, sentiment analysis, geographic distribution and predictive growth trajectory, transforming media monitoring from reactive tracking to strategic crisis preparation. Our $30K-plus customer segment has stronger unit economics, a better retention and expansion profile, and they tend to adopt more of our strategic products than is typical with our smaller customers. On this point, for customers above $30K, we generally see a multiproduct attach rate well over 70%, which is multiples of our corporate averages with products like Influencer Marketing and NewsWhip, which carry higher ACV. Let me take you through 3 customer stories from the quarter that should help illustrate why we see so much opportunity here. This quarter, we closed a $1.4 million new business deal with a global information systems leader. We successfully consolidated fragmented point solutions into a single enterprise-grade platform for 450 users, significantly reducing operational complexity. By unifying publishing, listening and advocacy, their 50-plus global teams are empowered to drive faster data-led decisions while maintaining centralized governance. This partnership demonstrates Sprout's unique ability to drive ROI and scale across a massive global footprint. We also closed a $630,000 expansion deal with a Fortune 50 global technology company. By deeply integrating social intelligence within Salesforce Service Cloud, we have created a unified data set that allows their teams to make faster decisions and provide consistent customer care across every channel. This expansion was driven by our ability to replace legacy tools with a stable long-term solution that unifies the agent experience. Through this dedicated partnership, we've simplified complex workflows, ensuring their teams are up and running quickly to deliver exceptional, secure social support at scale. Last, I'd like to highlight a $1.3 million new business deal with a global nonprofit. Sprout has become the central engine for their national and regional communication strategy. We're enabling this organization to scale social operations nationwide across all 50 states, supported by a specialized national team. By deploying our advanced listening capabilities, we provide the localized state-level insights and trending content predictions necessary for them to maintain brand relevance in a complex media landscape. This win highlights how Sprout is critical for large-scale organizations to benchmark sentiment against competitors and to ensure data hygiene through precise custom reporting. Our platform is not just a tool for them, it's an intuitive workspace that has fundamentally improved their cross-team collaboration and mission-critical workflows. Now let's turn to the sub-$30K business. While we believe there is strong potential in this customer segment, it clearly has been a headwind to the growth of Sprout over the last several years. It's a business that has its very own distinct dynamics as far as customer acquisition costs, pricing and packaging and how these customers use our platform relative to larger customers. We believe we can turn the sub-$30K segment from a drag on growth and profitability into a more productive and efficient part of the business over the medium term. Importantly, we continue to see healthy inbound interest and pipeline volume in this cohort. But today, the motion is too expensive, and we haven't had the right product market fit, which has made it a drag to growth and efficiency. We're addressing that in 2 ways. First, we're evolving our self-serve motion powered by automation and AI to move customers through evaluation, onboarding and support with minimal human touch. That lowers the cost to acquire and serve, and we expect it to improve conversion and unit economics over time while keeping our direct sales capacity focused on more socially sophisticated customers. Second, we're launching a simplified product offering designed around the functionality these customers actually need with a faster time to value at a price point that matches their current willingness to pay. Over time, as a portion of these customers mature and their needs expand, we expect natural expansion into higher-tier plans and select premium modules like Listening, Influencer Marketing and NewsWhip. The goal is straightforward. Over the medium term, better conversion and retention at a much lower cost to serve creates a more efficient run rate business and a healthier contributor to the business. Next, I want to share more about a new company-wide objective. Using the Rule of 40 framework, we're targeting a combined growth plus margin of 30% by the fourth quarter of 2027. We define that as year-over-year revenue growth plus current quarter non-GAAP operating margin. The path to this objective maps directly to the segment plan we just walked through. First, we keep scaling $30K-plus by driving new business wins and by expanding within our customer base while increasing premium module attach rates in both areas. Second, we stabilized sub-$30K by simplifying the offer, improving time to value and shifting more of that motion to self-serve, so we improve unit economics. And third, we expand margin through disciplined hiring and spend, more hiring in lower-cost markets, AI and automation to raise productivity, while keeping our incremental spend and hiring focused on the highest leverage priorities across R&D, go-to-market and G&A. With the momentum we're seeing in $30K-plus, the actions underway in sub-$30K and the leadership we've added, we believe we're well positioned to reach our 30% Rule of 40 target by the end of 2027 with opportunity beyond that in subsequent years. The future of our category will be defined by AI native, real-time intelligence delivered through extensible platforms that customers trust to drive outcomes. Our strategy is to be the social intelligence layer for modern organizations, connecting data, context and action so teams can make better decisions faster. With our differentiated data, proven platform and deep enterprise relationships, we believe we're positioned to lead and our segment strategy gives us a clear path to execute. Before I turn it over, I want to say thank you to Joe. As we shared a couple of weeks ago, Joe will transition in March to a new opportunity. Over the last 8 years, he's been a trusted partner and friend, and he's helped build a strong financial foundation through disciplined execution and a high-caliber team with a deep bench of leaders we rely on every day. With that, one last time, over to you, Joe.

Thanks, Ryan. On a personal note, I want to start by thanking Ryan, Justyn, Aaron and the Board for giving me this opportunity 8 years ago to lead the finance function here at Sprout. It's been an honor of a lifetime, and I'm leaving the finance team in a very strong position. I'll now run through our financial results and guidance and then provide some additional comments on our $30K customer segments and Rule of 40 plans, as Ryan mentioned. Our fourth quarter results were highlighted by a quarterly non-GAAP operating margin of 9.5%. And for the year, we finished at 10.5% non-GAAP operating margin, up 306 basis points from fiscal 2024. For a company of our scale, we believe this year-over-year leverage improvement is a strong testament to our ability to improve customer retention and at the same time, optimize costs across our platform. Turning to cash flow. We generated $10.9 million in non-GAAP free cash flow during the quarter. For the full year, we generated $45.9 million, an increase of approximately 55% from the prior year. As we have communicated previously, we expect our non-GAAP free cash flow margin to closely track to our non-GAAP operating margin on an annual basis. Importantly, we remain committed to growing operating leverage on a fiscal year basis. On to a summary of the quarter. Total revenue was $120.9 million, representing 13% year-over-year growth. Subscription revenue was $118.5 million, up 12% year-over-year. Q4 ACV was up 16% year-over-year. As Ryan discussed earlier, our strategy to drive ACV growth remains focused on shifting to a higher enterprise mix and strengthening premium and module attach rates such as Influencer Marketing, Customer Care, Premium Analytics and now NewsWhip. RPO totaled $404.0 million, up from $357.1 million exiting Q3, representing growth of 14.9% year-over-year. We expect to recognize 70.5% or $284.7 million of total RPO as revenue over the next 12 months, representing CRPO growth of 14.2% year-over-year. Our success in closing multiyear contracts is clearly exhibited in the sequential growth of total RPO in Q4, which increased approximately $47 million quarter-over-quarter. In 2025, overall dollar-based net retention rate, or NDR, was 100% and excluding SMB customers, was 102%. The main challenge to our NDR remains expansion revenue, which was partially offset by gross retention improvements on a year-over-year basis in 2025. As Ryan mentioned, our target revenue growth plus non-GAAP operating margin, consistent with the Rule of 40 framework has reached 30% for the fourth quarter of fiscal 2027. Regarding this framework and target, a few additional notes. For our 30,000-plus growth segment, we will continue investing behind enterprise expansion and driving premium module attach rates. For our sub-$30K, we're repositioning, it's a slower growth segment today, and we're updating the product, packaging and go-to-market to improve quality and efficiency. We expect the growth profit to remain subdued as that transition plays out in 2026. For margin expansion, we will drive operating leverage through disciplined hiring and spend more hiring in lower-cost markets, AI and automation to raise productivity, and scaling self-serve starting in Q1 while keeping our incremental spend and hiring focused on the highest leverage priorities across R&D, go-to-market and G&A. As we move through fiscal 2026, we plan to execute with discipline, scaling $30K-plus, repositioning sub-$30K and driving operating leverage with capital allocation decisions anchored to the 30% target. With that, turning to guidance. We're starting off the fiscal year with what we believe are achievable targets and as always, the first quarter for Sprout is our traditionally lowest point of visibility for the fiscal year as we build our new business activity in the first half to drive the results through the remainder of the year. For the first quarter of fiscal 2026, we expect revenue in the range of $119.9 million to $120.7 million. Non-GAAP operating income in the range of $9.2 million to $10.0 million. Non-GAAP net income per share of between $0.15 and $0.16. This assumes approximately 59.8 million weighted average basic shares of common stock outstanding. For fiscal year 2026, we expect revenue in the range of $490.2 million to $495.2 million. Non-GAAP operating income in the range of $54.2 million to $59.2 million. For modeling purposes, we expect to exit Q4 with a non-GAAP operating margin close to 15% and non-GAAP net income per share between $0.88 and $0.97, assuming approximately 60.8 million weighted average basic shares of common stock outstanding. We appreciate your interest in Sprout Social. And with that, Ryan, Alex and I are happy to take any of your questions. Operator?

[Operator Instructions] Your first question comes from Scott Berg with Needham & Company.

Joe, it's been a good time. I enjoyed our conversations here at Sprout over the years.

Thank you, Scott.

Yes. I guess first question here, Ryan, as you think about this Rule of 30 goal 8 quarters from now, what does that composition look like? I kind of think about the growth rate of the company and what you've guided to here in fiscal '26 looks like total revenue growth of, we'll call it, high single digits, 8% plus or minus. But what does that look like as we start looking at '27? I know you're not guiding to '27, obviously, today, but what do we -- how do we think about those puts and takes?

Yes, Scott, I'll actually take that one, and I appreciate the kind words and really appreciate working with you as well. So as we think about the Rule of 40 as we go out over the next couple of years, I think a couple of things to call out there in the way we're thinking about it from a strategy standpoint. First, we're definitely going to look for opportunities to drive growth. We still think growth is more important margin than margin in this environment right now. But that being said, we do believe we can drive fair bit of margin in the business over the next couple of years through a couple of means. One, as the greater than $30K core continues to become a larger part of our business, that's just going to drive incremental margin because the unit economics of that part of the business is just stronger than the rest. And then if I think about what we're doing to stabilize the sub-$30K cohort with the self-serve offering and some of the way that we're going to acquire those customers in a much more efficient way, that will also drive like incremental margin in the business. And then the other thing I would call out is if we think of the rest of the business, G&A, R&D, the things we're doing internally, right? We're using AI to be more efficient. We're hiring in more of our low-cost locations, and we're really being focused on the areas where we believe are the most value to, like what are the high leverage priorities for us. And so I think if you think about all those together, we believe we can drive a decent amount of leverage in this business over the next couple of years.

Yes. And I think I'd just add, this has been a long discussion with myself and the management team and the rest of the Board as we think about the opportunities in front of us. And we're excited here as we go through '26 with the work that we get to do on both the above $30K cohort as well as the below $30K cohort.

Got it. Understood. And then Ryan, I know you got a change in CRO, new CRO starting here, and it all starts to change, I guess, we'd expect to see as we get through the year. But how would you characterize your larger kind of enterprise type sales in the fourth quarter? I look at your $30K cohorts and your $50,000 cohorts at least, they're down, we'll call it, a reasonable level on a year-over-year basis for net new adds. And one quarter is not necessarily a trend, but it's been a really strong segment for you lately, and it just looks maybe not as strong as what we've seen over the last couple of years.

Yes. I appreciate the question, Scott. We are actually very encouraged with what we saw in Q4. We saw really good execution on the large deals, solid ACVs, more customers coming in with a multiproduct footprint. Like many of the calls we -- of the deals that we actually talked about on the call, it's representative of the types of logos that the teams are getting a chance to work with. As you know, as we look at the $50,000, the net add count can move around quarter-to-quarter and based on timing and mix. And it doesn't always perfectly reflect what's happening at the very high end. But if we think about Q4, we had meaningful big deal momentum, large new business wins where customers were consolidating multiple point solutions on to Sprout, major expansion deals where we are embedding social intelligence into customer care workflows. So I think -- the thing that I'd highlight is that we feel really good about the upmarket motion and trend, and we're seeing really good strength from both the execution as well as the pipeline that the teams have been building.

Your next question is from Elizabeth Porter with Morgan Stanley.

This is Luca Sal on for Elizabeth Porter. Can you share how AI Assist adoption is trending across your larger customer cohorts and whether you're seeing any early impact on retention or expansion behavior?

Yes, I appreciate the question. We've been really pleased with what we're seeing from an AI and an AI assist perspective. The use cases, you might imagine, across many different parts of our platform. You see it from the marketing use case to the care use case. The thing that we've been talking about a little bit here on the prepared remarks is what we've been seeing from a listening perspective with Trellis, we are going to go general availability on that shortly here, but the initial uptake from it has been excellent. We've got over 1,000 users that are in the platform. And if we think about something like listening and what Trellis brings, this has historically been a really important part of the product. But generally, listening has been something that's very difficult for companies, right? It's trillions of data points that are in here that are unstructured data. Usually, users have to be fairly sophisticated in how they drive insights from the platform. Sprout has built this in a really intuitive way, and we constantly get feedback that the way that we have built it is more approachable than most solutions in the marketplace. But this is really turbocharging the ability for customers to get value. The ability to go in and similar to our prompt window to ask questions around sentiment or competition or market share or anything else and immediately get back insights has really been a game changer for our customers. So we've seen really good trend rates so far, and we're excited to go GA with this product. And then similarly to the prepared remarks, I think it's important to note that it's starting in Listening, but it will cut across other parts of the platform. And that, again, is one of the biggest benefits in the way that we've architected our solution because our customers are thinking about completing workflows in every part of their business, not just in one isolated part.

And then with multiyear contracts nearing half of the mix, how should we think about duration impacting for growth visibility?

Yes. I think we've talked about this before, but you're going to continue to see this convergence between CRPO and our revenue growth rate. And those numbers are getting closer and closer. So I think as you see more of these multiyear deals over the next 12 to 24 months, I definitely think you're going to see that be a pretty good indicator as far as where our growth is going. We're not there yet, but we're making a lot of progress.

Your next question comes from Arjun Bhatia with William Blair & Company.

Willow on for Arjun Bhatia. Maybe to start with the new disclosure. Can you maybe help us understand better this disclosure and if it's better to watch this versus the $50,000 plus ARR cohort? Just trying to understand this $20,000 differential between the two cohorts and what it means.

You were breaking up. Can you just repeat that middle part of the question there?

Sure. So I'm asking about the new disclosure around $30K-plus ARR customers. And I'm trying to better understand, is this a better metric to watch versus the $50,000 plus ARR cohort? I'm just trying to understand that $20,000 differential between the two groups and what it means.

Yes. We haven't given out historically like the trailing -- the last 2 years on the $50,000 cohort. So the way we're looking at this is we do believe the $30K disclosure that we gave out that kind of breaks out the trailing 12-month revenue over the last couple of years will be the metric we update you on every single quarter. And then we will continue to give you the $50,000 customer count number going forward, but we really are trying to position this new metric as the way to look at the business. And so I think that will be the more meaningful one when you're trying to track the performance of the business overall.

Yes. And maybe just to add, as we looked at the data and looked at ways in which we could give even more direction on the trajectory of the business, $30K was a clear breakpoint for us. Getting above $30K is less about a single price step and more about the scope of the deployment. This is about customers with teams, not individuals. They're running social as a workflow with broader use cases, and they have higher social maturity and larger social audiences. And this is also where we see more durable adoption and budget allocation. So we're excited to be able to give you all more visibility into the trajectory of that business and the dynamics there as we grow.

Okay. Understood. And then one more question, if I may. I appreciate the color in the prepared remarks about better addressing the $30K ARR and below customer cohort. Can you give us more color into the 2 initiatives in terms of go-to-market and the new product SKU, have you already made those changes? Or will you be making them throughout the year?

Yes. So let me start on the $30K and above. I think what's really important to note here is this is the same strategy that we have been talking about for the last number of years. We feel really great about the opportunity above. You've seen us doing a lot of things from a product perspective, whether it's been the evolution of our Care offering, the introduction of Guardian from a compliance and security perspective, our work with NewsWhip and Listening and Trellis. So all of those things and then obviously, the investments we've made on the go-to-market upmarket, those are all things that we've been very focused in on. On the sub-$30K, I think it's also important to note that we've always served that part of the market. And a proxy for that is SMBs. These customers that we've served in this market from an SMB perspective have been the ones that have been more socially sophisticated, where the needs and usage have looked a lot like a bigger, more mature company. And over the last few years, similar to the comments I was just making, we made a shift to focus resources around the strongest part of the growth engine, which was for the socially sophisticated customers. And we invested in the product depth and go-to-market, and we've seen great growth from the $30K and $50,000. On the earlier-stage SMB side, the demand hasn't gone away. Those customers still show up in our funnel. The fundamentals are still there for the company, strong practitioner brand. We've got healthy inbound. We've got the low friction trial-led entry point. But in the current product and motion, we are not serving them as well as we could have. And historically, when we serve those customers, it was with a high-touch sales and support model, but that also came along with higher cost to acquire and higher cost to serve and higher churn because many of these customers weren't far enough along in their social journey to stick. So what's really different now is the current setup lets us approach these customers in a fundamentally more efficient way. So we're pairing a more purpose-built offer with the right packaging and price point with the right motion. It's going to be self-serve PLG with AI that's really helping us improve the onboarding and support efficiency. And so the goal is to keep driving the business through the $30K-plus while we're stabilizing the sub-$30K and improving conversion and retention there and then eventually scaling that part of the business into a more durable contributor. I'd also just add, so in terms of where we are on that journey, we've started the work on the sub-$30K with the pricing and the packaging. We've got work to do on it this year. We'll still see some modest deceleration within that segment this year with stabilization coming in 2027.

Your next question is from Parker Lane with Stifel.

Ryan, looking back to when you first made that big emphasis on upmarket and you guys raised prices in '22, '23, big impact on the downmarket component of the business, both net new and existing. It sounds like these changes are primarily top of funnel and becoming more efficient in the way you sort of capture these businesses. Can you speak to what implications there are from this new strategy to the existing customers that are in that cohort? Do you anticipate any elevated churn? Any differences in the way that you serve them? Or is this simply about how you acquire businesses?

Yes. Thanks, Parker. I appreciate it. I think the first thing to note, this is fundamentally about product. So if we think about it, the first thing that's really important is we're introducing a new product that's purpose-built for customers within that space. If you think about those customers, they typically don't have large audiences yet. They are more in the marketing use case. They're looking for ways to be more effective and efficient in their marketing efforts. This product will help them with publishing tools to allow them to do that better. It will give them the types of analytics that they need to make sure that they're doubling down on the place where they're seeing success and ultimately trying to grow their audience and their base leveraging this platform. Obviously, we'll be building pricing and packaging that has a stronger willingness to pay that aligns with that use case. But I think that's really important to note because the customers that are in our platform today that are using many different products or using many different use cases across marketing into care or other places won't be a fit for this type of product. The reason we are leaning so heavily into this purpose-built solution as well as we continue to see demand in the top of funnel today, but it's not served with the solution set that we have that's for more of a sophisticated audience. So this is really aimed at making sure that we can support those customers in a new way. And again, the way that we're approaching it will really reduce the CAC and the cost to serve while providing these customers with a really great solution.

Understood. Appreciate that feedback. And then maybe, Joe, one for you on the numbers here. Looking at the DBNR in '25, I think it was a 4-point step down, 6-point step down ex SMB. In the context of the guide you just provided, any thoughts on how NRR should trend throughout 2026?

Yes. And one, call it on the NDR side, Parker, a couple of things. One is we talked about this throughout the year, the pressure we saw on that was really around the expansion side. We talked about the budget constraints we had throughout the year. I think it's important to note that we did see improvement on gross retention year-over-year that really kind of gives us a strong indication that our existing customers really like our product. They really like the value they're getting out of it. And so the real impact on that metric was on the expansion side. So if I think about guidance as we go into 2026, there's a couple of things. One, we assume that the gross retention continues to improve. So that will have a positive impact on that metric. If I think about the products that we came to market with last year in '25, NewsWhip, Guardian, the customer care side and some of the Trellis and AI things we're rolling out in 2026, we do think that will help drive better expansion in '26. And so we do think there's upside to that metric as we move throughout the year in 2026.

Your next question is from Matt VanVliet with Cantor.

I guess first, on the margin outlook for both this year and the target for the Rule of 40 framework in '27. Curious how you're breaking down the margin expansion. It's pretty substantial in the next couple of years. How should we think about gross margins being impacted? And embedded within maybe OpEx, what are the headcount expectations to achieve that? Because it seems like more than just growth leverage.

Now, you cut on the last part of that question after gross margin end. I'm sorry. Can you repeat the last part after the gross margin side?

Yes. Just how much is coming from gross margin? How much -- or what are the expectations for headcount that are built into that? Because it all seems a little bit more than just top line growth leverage.

Yes. Good question. So gross margin, there'll be a little bit there, Matt, not a ton. We think gross margins will be pretty consistent, maybe up 50, 100 basis points, '26 to '27. So that's not going to be the largest driver. I think what it's going to come down to is probably what you alluded to. If you think about the things we talked about as far as the go-to-market self-serve motion and the efficiencies we're going to get from that, the low-cost location hiring that we're talking about and the ways we're using AI internally, we feel like we don't need to do a ton of hiring over the next couple of years. to get to the targets we need. And so I think you'll just see a lot of leverage come out of below the gross margin. So a lot of that leverage will come from OpEx.

And then as you're launching the Trellis product, how should we think about that from a monetization standpoint? Is that something that will be directly an add-on type of feature set? Or are you going to embed that in the products and use it as more of a demand driver for both new and expansionary sales?

Yes. Thanks for the question. It's a bit of both. Our focus right now is getting customers into the product to have those magical moments, those breakthrough moments. So it's really about driving awareness and delivering value today. As you might imagine, where a lot of this stuff will live will be in our most advanced plans. So you're going to be getting it just in terms of the value that they're investing upfront. It's starting in Listening today, and then it's going to cut across the rest of the platform. It also came out in NewsWhip as well from an agent perspective. The other way to think about it for us is there'll be a baseline of access that you can get. And as usage increases, there will be a usage-based way that we'll be monetizing on top of that. So right now, the focus is really driving usage and adoption and driving awareness, and then it will be a monetization lever for us. And when we get back together here in May for breaking ground, we'll be sharing more of the approach and the framework.

Your next question is David Hynes with Canaccord Genuity.

Joe, first, congrats to you. You'll be missed on these calls. I appreciate all the help over the years. Ryan, I'm going to start with you. So I think you said something in your prepared remarks, and I'm paraphrasing a bit here, but it was something like social data is not meaningfully accessible to the LLMs today. Can you just unpack that a bit more? Like what social data is accessible to LLMs and homegrown agents and what social data isn't?

Yes. Thanks, DJ. Appreciate the question. Yes, there's a few different layers to this. I mean I think just first, generally, we are sitting in an elevated partner status. So if you think about the relationships that we have today with the social networks, it's privileged access against some very private APIs that are governed by legal contracts and licensing requirements and agreements. It is also just when I think about that piece of it today, which is really important to note, is that many of these social networks also happen to be LLMs. So as you might imagine, a lot of the data that exists today is not shared across those different domains. It's a very limited subset of data that exists. I mean even if you end up going into any of these LLMs in and searching for data, it's not the full set of data that exists. So there's that limitation that is there today. And for us, we've got full access across all these social networks that we're ingesting billions of data points in here that we're leveraging. And then against that, we're also enriching these things with a ton of social activity. We are adding specific context and routing logic and semantic meaning and workflow on top of all of these things. So there's a few different layers. And then maybe the last piece that I did share in the prepared remarks that I think is an interesting point as well. Many of the largest LLM providers who clearly have a lot of resources are customers of Sprout and rely on our platform every day to meet this mission-critical area of their business.

And then maybe just a follow-up to some of the announcements today. Do you feel like you guys are moving fast enough with agents? And I ask, I mean, look, you talked about initial pricing and packaging for Trellis coming in May. But we're already seeing a bunch of companies that are generating real agentic revenue. They're scaling those efforts quickly. So I'd love to get your thoughts just are you guys moving quick enough here?

Yes. I appreciate the question. I will tell you, we're putting a healthy amount of pressure on ourselves to continue moving fast. I've been really pleased with the work that the teams are doing. This answer is also just weaved in your first question, DJ. Like the amount of data that we're ingesting, the structure behind it, the infrastructure required, all of the things that are required to ensure that we are able to execute on the AI at scale without hallucinations is critically important. And so for us, we're moving incredibly quickly to build these products. We need to make sure that they are incredibly effective for our customers. We know that trust is such an important part of the work that's happening here. And we want to make sure that as we're putting AI and agents in our customers' hands that they're having these magical moments and that they trust these products to be able to do the work. So I will always tell you that we want to move faster, but I've been really pleased with the work that the teams have been doing and the customer feedback that we've been getting from the 1,000-plus users that are in Trellis today has been really, really wonderful. So I appreciate the work that the teams are doing. And I think you all will see a lot of good stuff from us here on this point as we move through Listening into the other parts of our product.

And DJ, just to follow up, it's Alex here. We're going to be hosting the call on March 11. Ryan mentioned it in his prepared remarks. which will be a call with some of our -- with our CTO and one of our top engineers to discuss how the platform is built, how Sprout kind of functions as a system of record in action. So just all that will be on our IR site and looking forward to having everyone on the call.

Your next question is from Adam Hotchkiss with Goldman Sachs.

Let's go to the next question, and we'll just reach out to Adam directly to see if we can jump back on.

Perfect. Your next question is from Patrick Schultz with Baird.

Just maybe first on the go-to-market focus. There's been a lot of product evolution over the past year or so with the addition of Influencer Marketing, NewsWhip, Trellis, et cetera. If you were just to narrow it down, what are the top priorities for the go-to-market engine in '26? And can you also touch on the sales kickoff now that you have Lori on board to lead sales? Just what was the key message for the team there?

Patrick, I appreciate the question. Yes, I mean, you nailed it. I think our sales team would tell you they're very excited about the number of things that they have in their bag to take to customers today. Multiproduct sales is a huge part of the focus for us. So if I think about the kickoff and the enablement that we're doing with the teams, our customers today, one of the biggest things that they're trying to do is they're trying to consolidate. They want to do all of the work that they need to do in social in one platform. And they want one platform with one partner. And as we're seeing the benefit for something like Trellis and our ability to go from Listening to Care to Publishing across all the different areas within our product is a huge differentiator for us. So the multiproduct was certainly a standout for us at kickoff. Trellis and AI has certainly been a standout for us at kickoff as well. And yes, just a big welcome to Lori. She joined us for the kickoff in early January. We handed her Sprout Social tracksuit and got her on stage in front of the team. And she's just been laser-focused in on making sure that we're driving the right enablement for the team in all of these areas and really focused in on our execution.

Great. I appreciate the color there. And maybe a quick follow-up, too. Just on a partner perspective, and Salesforce is probably a good example as they have put a lot of emphasis on agent force. But as customers are starting to adopt different AI solutions across customer care, are you seeing this have any impact to your pipeline? And maybe more broadly speaking, what's the top priority for the partner ecosystem this year?

Yes. I wouldn't call out any change in behavior based on that. I mean I think one of the biggest things that we go back to that's really, really important here is that this social data that we're talking about, this system of record and action specific to social is what we do every single day. And so this data doesn't exist in many different places. The ability to execute doesn't exist in many places. Our customers are logging into Sprout to respond to customer care that comes through social through a variety of different platforms. And I go back to -- on the note of partnership, that's really been one of the biggest things in terms of our partnership with Salesforce and the Salesforce Service Cloud. And I mentioned one of those case studies in our prepared remarks with a Fortune 50 company that is leveraging us to connect that social customer care back into their Service Cloud. So that's just been a huge part for us. We expect it to be very similar as we move forward. From a partner ecosystem perspective, we're continuing to look for places where we can add more value to our customers and helping them with their workflows. Salesforce was a great example. In the last call, we talked about Canva and Adobe as great examples from a creative perspective. So you can expect for us to be leaning into these places where there's tangential products, where we have the ability to help a customer not have that swivel chair and to be able to complete their workflows in a more productive way by connecting Sprout into other parts of their tech stack.

The next question is from Jackson Ader with KeyBanc.

And Joe, it's been nice working with you, and congrats on whatever comes next. The first question I have is, I appreciate that the product and packaging changes down market are to try and stimulate some top of funnel. But you've been on this kind of deemphasis or deemphasizing the downmarket journey for a while now. I'm just curious on the -- maybe on the cost side, what costs or investments are you currently making down there that you still need to optimize?

Thanks, Jackson. I appreciate the question. A tweak just in terms of the interpretation of that a little bit in that. For us, if I think about that SMB, it's more focused in on the conversion than the increasing top of funnel. Certainly, we hope to attract more customers that might be a great fit for that purpose-built marketing solution for customers that are -- have a lower social maturity. But for us, we see these signals in our pipeline today, and we have an opportunity to convert more in a way that really reduces the CAC and cost to serve. From a cost perspective, because those customers are still showing up in the pipeline and kudos to the team through the years from a marketing perspective and from a brand perspective, we have a great reputation with folks in the field and practitioners. And so customers still show up in the funnel. And they do end up, in many cases, still in front of our sales team, but with a product that isn't a perfect match for the things that they need to do or for their willingness to pay. So we see this from really removing some of the distraction for our sales team. We see it as an improvement to the conversion with the signals that we have. And then on the other side of it, we also believe that when these customers come in and we close them on the right type of product tier, the future retention for customers that come in on that product will be healthier as well.

And then real quick, the international expansion, it was growing kind of ahead of the Americas, but in recent times -- I'm just curious what you're thinking in terms of the -- how it plays into your Rule of 30 targets over the next couple of years?

Yes. I think -- good question, Jackson. I think the way we're thinking about on the Europe side, we're definitely keeping a very, I would say, consistent playbook that we have here in the U.S. If I think of like, hey, how do we want to go to market on the sub-$30K with the self-serve, how do we want to address and continue to invest in the upmarket. So I wouldn't say that there is a largely different strategy for the European business as there is for the Americas. So I would say very consistent strategies there.

Jackson...

There are no questions at this time. I will now turn the call back to Ryan Barretto, CEO, for closing remarks. Please go ahead.