Please stand by. We're about to begin. Good day, everyone, and welcome to Sprout Social's fourth quarter 2021 earnings conference call. Just a quick reminder, today's call is being recorded. After today's prepared remarks, we will have a question-and-answer session. To ask a question, please press star one at that time. Now at this time, I'll turn things over to Mr. Jason Rechel, Head of Investor Relations. Mr. Rechel, please go ahead. Thank you, operator. Welcome to Sprout Social's fourth quarter 2021 earnings call. We'll be discussing the results announced in our press release issued after 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, Justyn Howard, CFO, Joe Del Preto, and President, Ryan Barretto. 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. Forward-looking statements include, among others, statements concerning financial and business trends, our expected future business and financial performance and financial condition, performance against our multi-year financial framework, our market size and opportunity, our plans and objectives for future operations, growth initiatives or strategies, our guidance for the first quarter of 2022 and the full year 2022, and can be identified by words such as expect, anticipate, intend, plan, believe, seek, or will. These statements reflect our views as of today only, shouldn't be relied upon as representing our views at any subsequent date, and we don't 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 actual results, please refer to our annual report on Form 10-K for the fiscal year ended December 31, 2021, to be filed with the Securities and Exchange Commission, as well as any future quarterly and current reports that we file with the SEC. During the call, we'll discuss non-GAAP financial measures which aren't prepared in accordance with generally accepted accounting principles. Definitions of these non-GAAP financial measures, along with reconciliation to the most directly comparable GAAP financial measures, are included in our earnings press release, which has been furnished to the SEC and is available on our website at investors.sproutsocial.com. With that, let me turn the call over to Justyn. Thank you, Jason, and good afternoon, everyone. Thank you for joining us. We're very pleased to report a fantastic conclusion to a remarkable year for our company. Our teams continue to execute at a high level and our opportunity in 2022 is clear. As always, we appreciate your ongoing support and partnership as we forge towards leadership in the $100 billion market opportunity ahead. I plan to outline a few topics that stood out from the quarter and map to our investment priorities for 2022 before turning the call over to Ryan with additional detail and Joe for financials. We're pleased to have delivered greater than 40% revenue and ARR growth in 2021, with efficiency handily outperforming the rule of 40 benchmark. Our opportunity is fundamentally driven by the secular emergence of social media management, our unique go-to-market strategy, and the differentiation of our technology platform. We're seeing great progress across all segments of our market, with our focused investments in the mid-market enterprise leading to our strongest quarter as a public company. We shattered many of our own records and growth milestones during Q4, including a new high-water mark for net dollar retention and record net new ARR. We again added a record number of customers contributing more than $10,000 in ARR, up 56% year-over-year. We again added a record number of customers contributing more than $50,000 in ARR, up 91% year-over-year. We're very pleased to inform you of our first customer above the $1 million ACV threshold. Building on the recent free cash flow inflection in our business, the straight line from ARR growth to billings growth to RPO growth outlines an acceleration in the growth and commitment customers are making to social. These fantastic growth numbers and many of the financials that you'll hear from Joe underscore a clear trend. Customers are investing in Sprout more meaningfully and for longer because social has emerged as mission-critical to successful outcomes in the next evolution of business. For this reason, our customers large and small are expanding both their investments and use cases for social across their organizations as social becomes the preferred communication channel for global consumers. The 2021 Gartner Digital Marketing Survey found social marketing to be the number one most effective channel of the purchase funnel for brand awareness and for conversion to sales. These findings, along with many similar studies, reinforce a generational change that requires re-platforming of the enterprise tech stack. When we started as a company, social didn't even really have a seat at the table. Now social media leaders have executive roles, business strategy and social media strategy can't be compartmentalized, and the entire customer journey exists on social. This means our role in the market has expanded dramatically, and our opportunity with customers of all sizes continues to grow as social becomes even more mission-critical. It's why we believe our opportunity is growing as customers harness the power and utility of social across an ever-expanding set of use cases. We're making investments across the business to capitalize on this opportunity, but to fundamentally extend the foundation of our platform and to double down on our product strategy, we're planning to make our largest ever incremental R&D investment in 2022. This will represent a step function change from 2021, and we believe it will solidify our product and market leadership at a time when the industry is ours to execute against. We believe the barriers to entry in social have risen substantially. The competitive set is diminishing, and our advantages are compounding all at the right time. From a product perspective, we're expanding our capabilities to democratize social for new stakeholders and building deeper functionality for the most sophisticated users. The core investments in our platform are more critical than ever. We'll make the product even easier to adopt and use while also making meaningful advancements in social listening, premium analytics, social advocacy, and social customer care. We'll also be making strategic platform investments in social commerce, messaging, publishing, and reporting. The expansion of these capabilities is designed to create even more value for customers by providing users with the tools they need to excel in their specific workflow, spread horizontally across an organization, and empower the teams with the collaboration required to truly harness the power of social. Building on our product leadership, we're also planning to capitalize on multiple strategic leadership opportunities. The recent addition of WooCommerce to our social commerce ecosystem, the recent addition of Yelp to our reviews capabilities, and advancements in unified messaging with WhatsApp are a few examples. We're also deepening the functionality and data sources within our most sophisticated products like listening and analytics that we believe will make Sprout the single source of truth for social data. We expect you'll hear new partner announcements over the course of the next quarter or two as well. The technical foundation that we've laid to this point and the additive planned investments to our roadmap in 2022 have never been more compelling. We believe we have a true and unique opportunity to define our category, both as an overall platform and in each key product area, to become the horizontal social system of record, intelligence, and action for businesses of all sizes in all industries. Beyond product and technology, we're also redefining the way we work. We're in the midst of the largest workplace shift of our generation, and we intend to make Sprout a career destination across disciplines and an incredible place to be a customer at the same time. Productivity and execution is one of the things I'm most proud of as a leader of our company. Rain or shine, this team just delivers. We challenge ourselves with an ever higher bar. We do the work, and we constantly seek to get better. The resulting honors from workplace awards like Glassdoor's Best Places to Work in 2022, Battery Ventures' 25 Highest Rated Public Cloud Companies to Work For, where we ranked number 3, and a Best Workplace for Parents by Great Place to Work empowers us to remain thoughtful, deliberate, and intentional with the strategy. We're a different kind of company, and we're excited to create value for our employees, our customers, our communities, and you, our stakeholders, in 2022 and beyond. With that, I'll turn the call over to Ryan. Thanks, Justyn. Our collective teams really stepped up during Q4 and delivered a performance I'm incredibly proud of. With strong momentum in the business, the most exciting R&D roadmap we've ever had, and continued acceleration in our go-to-market hiring, we remain confident in our continued success in 2022. We spent the better part of last year speaking with you about our marketing focus in the mid-market and enterprise, our international sales and marketing investments, the expanding use cases of our platform, and the rising importance of the product-led sales motion. As these trends carry into this year, we expect to see both the value of an expanded platform with enhanced premium capabilities and the continuation of a social commerce inflection point. Most importantly, we plan to build on the compounding scale leading ratings from G2, TrustRadius, and others. Because we're product-led, we know that the incredibly exciting innovation that our R&D teams are working on will create tremendous value for customers and further enhance our competitive advantages. Our marketing team has doubled down on the content, strategies, and campaigns needed to target the most sophisticated buyers. We're building on our foundation of success here with better account-based marketing, the recent beta launch of a dedicated Sprout community for practitioners, and are growing our strategic accounts team to bolster outbound sales. Internationally, we continue to migrate high-performing content to local languages and to localize our messaging. Our India team continues to over-deliver. The recent addition of our APAC GM will help scale that business in 2022, and our recently hired LATAM leader will help us execute on our international playbook in that region. As Justin highlighted, the use cases for Sprout have continued to evolve from social publishing and marketing to social customer care, customer success, business intelligence, advocacy, product intelligence, sales, comms, investor relations, and more. Social is a pillar for how business is done in all these functional areas, and social commerce sits at the intersection of each. Commerce pulls the entire customer journey into social, demanding a platform like Sprout to make social marketing more measurable, social customer care more effective, and to deliver more accurate customer sales, product, and community feedback. Businesses are also being forced to meet the customer at the initial point of product discovery. It's no coincidence that a report from Accenture last month estimated that sales made through social commerce will triple by 2025 to more than $1.2 trillion. The investment in our product is designed to meet user demands head-on. The expansion of our platform will enable us to create value for specific subsets of enterprise users within each use case. Because we've built a platform with tightly integrated capabilities, we can address any or all of these demands with a unified solution. It's what makes our go-to-market motion so powerful, and it's why we remain the industry's highest-rated technology platform across major categories in each market segment, from SMB up through the enterprise, according to thousands of customer reviews from G2 and others. We're taking the friction out of customer adoption and accelerating our product-led sales motion to deliver an even more efficient go-to-market model, and we're doing it at scale. While our current execution remains incredibly strong, our enterprise and mid-market teams dropped the mic during Q4. Our investments in sales capacity, onboarding, and success have been well aligned to the inbound customer demand signals we see. The combination of increasing use cases, expanding seat counts, rising premium module attach rates, and steady expansion at market are each massive opportunities for us to execute against in our ACV growth strategy. In this quarter, the large customer growth trends jumped off the page. Social has become a team sport, and we believe we're the software best equipped to help these cross-functional teams win. A sample of the amazing brands that grew with us this quarter includes Square, Omnicom Media Group, Johnson & Johnson Medical Devices, Illumina, Marsh McLennan, Archer Daniels Midland, The Container Store, Rackspace, Red Hat, Agrium, the United Nations, and the YMCA. Now shifting to a couple of Sprout customer stories. We had the opportunity to expand our relationship this quarter with Atlassian. Kristin Roth, Social Media Manager of Atlassian, shared, "We needed to consolidate point solutions and centralize our social media strategy in a unified platform. The smart inbox has been game-changing to our social customer care team to improve engagement across all social handles. As the number of our Atlassian brands and footprint across markets has continued to grow, we've increasingly leaned on social listening for brand and competitive health. In consolidating these efforts with Sprout platform will improve collaboration across teams and streamline and uplevel our reporting capabilities to ensure we're fully optimizing our social strategy." Another incredible customer highlight from this past quarter was Gong, the leader in revenue intelligence. Udi Ledergor, the Chief Marketing Officer at Gong, shared, "We're a power user of Sprout's publishing and reporting capabilities to track campaign performance and engagement across different types of social content. Sprout's premium analytics offering helps us deeply understand our content trends and optimize custom reporting to uncover actionable insights for our business. Using Sprout, we experienced meaningful growth in engagement and followers over the course of 2021, unlocking even greater opportunities to advance the business impact of our social strategy in 2022." To bring it all together, we had another great quarter to cap off a fantastic year. I'm so energized by this special team and the opportunity to deliver value for our customers during a transformational time. New technology advancements in our platform, new stakeholders in social, and new strategic partnerships position our company for even more success in 2022. With that, I'll turn it over to Joe to run through the financials. Joe? Thanks, Ryan. I'll now walk you through our fourth quarter results in detail before moving on to guidance for the first quarter and full year 2022. We're very pleased to deliver greater than 40% revenue and ARR growth in 2021, with efficiency approaching the rule of fifty benchmark. Revenue for the fourth quarter was $53.3 million, representing 43% year-over-year growth. ARR exiting Q4 was $224.2 million, up 42% year-over-year. We're pleased to see very healthy new business as well as strong retention and expansion across our customer base. We added 1,057 net new customers in Q4 to finish the quarter with 31,762 customers, up 90% year-over-year. As always, we remain focused on high-quality revenue yield from our new customer cohorts, not the absolute volume of net addition. Our go-to-market efforts increasingly leaned into mid-market and enterprise customers this quarter. Our inbound demand remains very strong. We believe this gives us the ability to optimize for revenue yield while also delivering very healthy quarterly customer net additions, consistent with recent trends for the foreseeable future. The number of customers contributing more than $10,000 in ARR reached 4,917, up 56% from a year ago. The number of customers contributing more than $50,000 in ARR reached 610, up 91% from a year ago. When combined with our expansion efforts, new use cases, and a very strong year-end uptick in our premium module sales, our ACV growth was again very strong at 90% year-over-year, surpassing $7,000 for the first time and extending the rapid growth we discussed coming out of Q3. In discussing the remainder of the income statement, please note that unless otherwise stated, all references to our expenses, operating results, and share counts are on a non-GAAP basis to exclude stock-based compensation expense and are reconciled to our GAAP results in the earnings press release that was just issued before this call. In Q4, gross profit was $40.3 million, representing a gross margin of 75.7%. This is up 110 basis points compared to gross margin of 74.6% a year ago. Sales and marketing expenses for Q4 were $21.0 million or 39% of revenue, down from 42% a year ago. We are continuing to accelerate our pace of hiring across both our sales and marketing teams with an emphasis on content marketing and SEO on the marketing side and our mid-market enterprise and growth sales team. We were forced to hire aggressively during Q4, which positions our go-to-market teams well entering the year. Even as total expense growth accelerated for the sixth quarter in a row, we were again able to further improve year-over-year efficiency. Research and development expenses for Q4 were $10.9 million or 20% of revenue, consistent with 20% a year ago. Our R&D headcount and asset expenses again grew substantially this quarter as we accelerated hiring to meet an expanding set of product opportunities. We are planning our largest ever incremental investment in R&D in 2022, and as Justyn said, we expect this will extend our market leadership and further differentiate ourselves in the market. General and administrative expenses for Q4 were $11.0 million or 21% of revenue, down from 20% a year ago. We expect our G&A expenses to increase in 2022 as we enter a more normalized spending environment, but to decrease as a percentage of revenue. non-GAAP operating loss for Q4 was $2.6 million for a -4.8% operating margin. This is an improvement of 400 basis points compared with a -8.8% operating margin a year ago. We are pleased with the improving efficiency as we scale, and we surpassed our expectations due to revenue outperformance. Non-GAAP net loss for Q4 was $2.7 million, for a net loss of $0.05 per share based on 54.1 million weighted average shares of common stock outstanding, compared to a net loss of $3.4 million and $0.06 per share a year ago. Turning to the balance sheet and cash flow statement, we ended Q4 with $176.9 million in cash equivalents, and marketable securities, up from $175.0 million at the end of Q3 2021. Deferred revenue at the end of the quarter was $69.4 million, a record sequential increase and the fastest year-over-year billings growth rate in our history. This correlates closely to our strong enterprise momentum, which could lead to greater Q4 seasonality in years ahead for this metric. Looking at both our billed and unbilled contracts, our remaining performance obligations or RPO was approximately $107.8 million, up from $87.2 million as of Q3 2021 and up 67% year-over-year. We expect to recognize approximately 82% or $88.2 million of total RPO as revenue over the next 12 months. Operating cash flow in Q4 was positive $2.5 million compared to negative $0.2 million a year ago. Free cash flow was positive $2.2 million in Q4 for a positive 4% free cash flow margin compared to a negative $2.0 million and a negative 5% free cash flow margin a year ago. For the full year 2021, free cash flow was $13.9 million or 7% free cash flow margin compared to -12% free cash flow margin in 2020. In addition to improving efficiency, the ongoing shift to annual and multiyear contracts is having a positive impact on our free cash flow as we grow. In 2021, our overall dollar-based net retention rate was 112%, an improvement of 200 basis points compared with 110% in each of the past two years. Our dollar-based net retention rate excluding SMB customers was 118% in 2021, compared with 117% in 2020. We believe that increasing platform stickiness, shifting a mix of annual contracts, and investments we've made in onboarding and customer success are structurally improving our growth retention. The accelerating seat expansion, changing segment mix, and rising attach rates of our premium modules are each structurally improving our expansion rates. We believe there's a strong multi-year runway to further expand dollar-based net retention from current levels. Shifting to formal guidance. For the first quarter of fiscal 2022, we expect revenue in the range of $56.1 million-$56.2 million, or a growth rate of 38% at the midpoint. We expect non-GAAP operating loss in the range of $2.2 million-$1.8 million. This represents an anticipated operating margin of -3.6%, an improvement of more than 200 basis points year-over-year. We expect a non-GAAP net loss per share between $0.05 and $0.04, assuming approximately 54.2 million weighted average basic shares of common stock outstanding. For the full year fiscal 2022, we expect total revenue in the range of $249 million-$250 million. This is an expected overall reported growth rate of 33%, which we believe positions us favorably against our medium-term growth goals. For 2022, we expect non-GAAP operating loss in the range of $7.4 million-$6.0 million. This implies annual non-GAAP operating margin expansion of between 40 basis points and 100 basis points, pacing with our medium-term goals and highlighting the efficiency of our financial model. We're pleased to forecast margin expansion after more than 1,200 basis points of margin expansion in 2021 as we accelerate the pace of investment across many business units. We expect that we'll be aggressive with hiring during the first half of 2022. Given our product-led business model, we believe this positions us well to create even stronger value for our customers. We expect a non-GAAP net loss per share between $0.14 and $0.13, assuming approximately 54.5 million weighted average basic shares of common stock outstanding. For your GAAP modeling purposes, we expect stock-based compensation to trend in the mid- to high teens% of revenue, consistent with SaaS industry benchmarking. In summary, our Q4 financial performance was indicative of a rising strategic emphasis our customers are placing on social. Our balance sheet and free cash flow strength provide us with future optionality. Inbound demand remains strong, and our sales execution has been crisp. These strengths empower us to make meaningful investments in technology and go-to-market, which we believe will position Sprout to pull away and forge leadership in the $100 billion market opportunity ahead. With that, Justin, Ryan, and I are happy to take your questions. Operator? Thank you. Ladies and gentlemen, again, at this time, if you do have any questions or comments, simply press star one. If you are joining us today using a speakerphone, please pick up your handset before pressing star one. We'll take our first question this afternoon from Raimo Lenschow at Barclays. Please go ahead. Hey, thank you. Congrats from me on these amazing numbers. Two quick questions. Can you speak to what customers are doing with you if I look at like the higher end of your market because the deal sizes you mentioned that we haven't seen before, so that kind of looks very interesting, and there were some very interesting brands you mentioned there. Can you talk a little bit about the difference of how they are using it and then how you were used in the past? The second question goes kind of right in line with that, and it's more about the R&D investments that you talked about this year. It looks like there's a kind of broad expansion of the product coming this way. How is that going to help you in the, a better product market fit if you go, continue to go further up market? Thank you. Thanks for the question, Raimo. I'll go first on addressing the large brands. Yeah, we're extremely excited with the momentum and execution we've seen in mid-market and enterprise. A good portion of this is coming from a few different things. One, we've just seen an evolution in the way that social is being used by the enterprise. You know, years ago, what used to be just a marketing use case has evolved into marketing and across marketing. It's PR, it's content, it's brand, it's comms into things like social customer care and customer support, where today, as we know, as consumers, we're leaning heavily into going directly to social to get support versus picking up the 1-800 or emailing in. We've added over the last couple years some sophisticated products in terms of analytics and social listening, which is providing a tremendous amount of data back to these enterprises that they're leveraging to really make smart business decisions. Which markets do they want to go into? How should they evolve their marketing? How should they evolve the way that they're competing? How should they evolve the way that they're building their products? What we've been seeing in the enterprise is this explosion in terms of use cases. We're seeing more users than we ever did before, and we're seeing it really go across the enterprise. You combine that with the fact that our team from a marketing perspective has been investing more upmarket in enterprise-driven marketing strategies, and we've been adding enterprise AEs in terms of sales capacity to go execute against the opportunity. You're seeing that in the increase in large customer deals. I think the one that jumps off the page the most for me is the 50K being at a 90% growth right there. Yeah. This is Justyn. I'll chime in a little bit on the R&D side, you know, on how we're aligning those investments to kind of match the opportunity that we're seeing in the larger customers, the larger use cases. You know, to Ryan's point, a lot of that growth that we see has to do with the way that organizations are operationalizing social and taking it across larger teams with more users. So there's a lot of user growth baked in there. One of the things that we're doing on the R&D side to really lean into that is thinking about the kinds of tools and capabilities that larger teams need, the tools that they need to collaborate more effectively to work as large organizations with potentially many use cases and large volumes of messages. There's a good amount of work that goes into there. There's a good chunk of the roadmap that is dedicated toward just, those more sophisticated use cases generally. You know, are we building and expanding against the social listening, the more complex customer care needs, things that really speak to those organizations that are a little further in their maturity curve. Of course also, you know, as early as we feel that we are in this market and given where many customers are in terms of, where they are with maturity and adoption, we want to make sure that we're also carving out, plenty of time to make sure that the core use cases continue to get, expanded and enhanced. We don't consider those to be solved problems. Everything that we're investing in the kind of the bread-and-butter tools, you know, all of that is in the direct path of revenue, meaning the fact that the vast majority of our revenue comes from customers who actually try our product before they buy it. Everything that we do to improve all of those experiences has the opportunity to increase conversion rates, increase user counts, and start to lean into and help customers understand some of the additional use cases that they may want to adopt. You know, the broad way to think about it is all of our R&D investment goes into some aspect, some lever of our revenue growth, but certainly biased toward a lot of the more sophisticated use cases, the larger teams, and larger opportunities that we're seeing in the mid-market and in enterprise. Perfect. Thank you. Congrats. Thank you. We'll go next now to Parker Lane at Stifel. Yeah, thanks for taking the question, and congrats on the quarter. Maybe just a sort of a follow-up to the last question. Wondering if you can give us a little bit more on the profile of a customer that's spending $1 million plus on Sprout Social. Is a customer like that, you know, fully tapped in terms of what you're offering today? Or are there expansion opportunities even inside of that in the form of new users, new use cases, and even potentially the expansion of their social footprint to some of the newer channels out there that are emerging? Thanks. Yeah. Thanks for the question, Parker Lane. There is plenty of opportunity in that account. We're incredibly excited by that organization. It's a large technology organization. One of the things that I really appreciate about this is our team has been growing at that account for about 24 months. We took the initial footprint, and we've been doing the seed and grow approach that's worked really well for us, and that means that we're able to grow across brands and departments and geographies, as well as use cases. As you might imagine, as we've been getting up into the enterprise and we're working with these types of organizations, as you get that first footprint in the organization, you go through the hard parts of legal and procurement, and then you've got a trusted vendor. From there you're able to actually leverage those internal use cases, those internal advocates to move across the organization. We certainly see plenty of opportunity in this account and others like it in terms of going across more divisions and brands. To your point around social networks and other integrations that we'll add, there'll be more opportunity there. Even with the use cases that we've earned the business in, we still see plenty of upside. Got it. That makes a lot of sense. Then, Joe, one for you. A very nice growth year-over-year and sequentially on the bookings and deferred revenue front. Is that purely a reflection of this shift to the enterprise, maybe some longer durations there, or are there seasonal components that are now entering the business as the share of mid-market enterprise continues to expand that will sort of repeat on a going-forward basis? Thanks. Yeah. Parker, it's a little bit of both. Definitely as we've gotten in more of these mid-market enterprise deals, they come with longer terms. They're bigger commitments. These companies realize the importance of social. We talked about this a little bit in our prepared remarks. We definitely saw a little bit of the seasonality in Q4 with some of these larger enterprise deals. I think going forward, Parker, you're gonna see a combination of us continue to drive more annual deals over month-to-month, and you can assume more seasonality in Q4 as well. Appreciate it, and congrats again on the quarter. Thank you. We'll go next now to Arjun Bhatia at William Blair. Awesome. Thank you very much, and congrats on a great quarter, guys. I wanted to touch on maybe just the large customer metrics. You know, it clearly seems like there's a step-up and a trend that's been playing out over the last couple of years, especially when you look at the $10K and $50K customers. I'm curious how the landing point of customers has changed over the past year as social has evolved, and it's gotten, I think, maybe higher on the priority list for larger customers. Then as you look at these milestones that you're disclosing, you know, are those typical landing points for you now? Like, is a $10,000 deal a typical landing point or $50 if you're looking at enterprise deals? Thank you. Yeah. Thanks for the question, Arjun. In terms of the large customers and how it's changed over time, I think you're right that there has been an inflection in that we're into speaking to more senior level executives at these companies today. I think more and more people have realized, brands have realized the importance of social to their overall strategy, and we're seeing more executives pay attention. That means oftentimes they're joining demos. Oftentimes the practitioners that we're working with within the marketing department or customer care are producing reports, producing data and information that they're surfacing back up to these executives, oftentimes daily or weekly, to give them a really good sense of what's happening within social, how their brand is being represented, the sentiment on their brand and their competitors. I think that's one of the things that I just highlight, is that more and more in these conversations, we've got executive interest in how a brand is executing from their own social strategy and then what's happening in the marketplace. As you might imagine, as you're getting into those conversations, there's more gravity around the solution. There's more gravity around the partner that you're picking and focusing on innovation and where the technology is going. That's helped us a tremendous amount. If I think about just the typical landing place, that's also meant that the opportunity to close more of these larger deals continues to happen. In the mid-market and enterprise specifically, those companies coming in, they've got bigger problems. They've got bigger opportunities in front of them. They've got larger departments that are gonna need access to Sprout. With that, it gives us an opportunity to start at a larger user count and start at a larger profile, social profile level. Those things are all converging and providing a tremendous amount of opportunity for us, and we feel like there's a lot of positive tailwinds there. Awesome. Thanks, Ryan. Just maybe I wanted to touch on the product investments. I'm curious if you know, when you look at the competitive set, is there just where you're focusing these R&D investments? Is there just a gap in the market? Meaning, hey, you know, other players in the space are just not addressing the problems that you're seeing and that you're trying to solve for. Is that, y ou know, that the competitors are inefficient, and that, you know, your customers are really driving this innovation push and this R&D push. Yeah. I mean, I think it's a combination of things. You know, it's I think it has more to do with just the architecture and the customer experience with the tools versus, you know, specific gaps that might exist. Of course, that's gonna vary, you know, competitor to competitor, what the gaps are and which ones we really press on. I think, you know, a lot of the momentum that we've seen, and we've talked about this over several quarters, is the fact that we're getting customers in and we're proving out our value with the product itself in their hands just makes a monumental difference, right? It's one thing to solve the same set of problems on paper as a checkbox. It's a very different thing for the platform to actually solve the problem for the people behind the keyboard and allow them to do their day-to-day work. We're hands down the best in the business there. I think that is aligning more, not only with what our customers need and certainly where they felt pain elsewhere, but I think it also just aligns really well with where the market is going. You know, you've heard Ryan and I talk about this for a while now. The way that businesses will be evaluating and buying software in the future is shifting. Proving that value upfront is important, because we are product-led, because we are trial-led, we've had to put investment and focus in those kinds of experiences that really resonate that maybe others haven't spent as much time on. Got it. Very helpful. Thank you, and congrats again. Got it. Thank you. We go next now to Clarke Jeffries at Piper Sandler. Thank you for taking the question. You know, just another one here on standout enterprise activity in the quarter. I'd like to understand the context of the pipeline. You know, was this a progressive build into Q4, maybe even into Q4 with a particularly strong pipeline? Or was this an inflection in interest mid-quarter? And how should we think about, you know, the levels that you're exiting 2021 with from a pipeline perspective? Yeah. Thanks for the question, Clark. I think one of the things that's been a really big competitive advantage for us, and Justin touched on it a little bit, is just the inbound motion that still exists for our business today and the product-led motion which we apply even in the enterprise. Certainly, as you might imagine with mid-market and enterprise type of organizations, the way their budget cycles work and the way that they typically procure software tends to be heavier at the end of the year in Q4. We certainly had some deals that were lined up where we'd been talking to these customers and working with them through the year. The other benefit that we have here is with that inbound model, we still get a significant amount of pipeline in the enterprise every single month, which is setting up our teams to be able to execute. We're still running at a sales cycle that runs between 30-45 days on average, and we will see deals in the mid-market and enterprise that hit those timelines. It's a little bit of a combination. Ending the year and going into Q1, we felt like we saw continued progression and opportunity within the pipeline and with the opportunities in front of us. A lot of balance, I would say, and a lot of predictability around that pipeline. Because we're getting people into the product and using the product and using it in a 30-day trial, it creates a nice set of urgency because they're doing a lot of the work. They've built their processes and workflows in place that they don't wanna lose that after the 30-day trial, which creates rapid sales cycles for us. Great. Thank you. Then maybe one for Joe. You know, would you be able to help quantify the step function increase in R&D, and whether we should think about it really being G&A or go-to-market investments that might be seeing better leverage here in 2022, and absorb that step up in R&D while still driving the year-over-year improvement in margins? Yeah, Clarke, I think you would expect that most of the leverage in 2022 will come from the G&A line. I don't think you're gonna see right now, the investments we wanna make in R&D and even on the go-to-market side, you're not gonna see significant leverage in either one of those items. It'll come from G&A, Clarke, where in 2022. Great. Thank you very much. Yeah. Thank you. We go next now to Matt VanVliet at BTIG. Yeah. Thanks for taking the question, guys. Nice job on the quarter. I guess looking at the social commerce opportunity, you know, I think you mentioned that by 2025, estimates are there'll be, you know, well over $1 trillion in total sales out there. How should we think about, you know, your ability to monetize that, what it could impact the model from an actual revenue standpoint, you know, if we get anywhere near that $1.2 trillion level that you mentioned? You know, current thinking is that we intend to monetize the software behind it. You know, our focus is on making sure that our platform is capable of all of the things in and around the commerce process, that we're supporting brands that are selling through the social channels, giving all the tools they need to be successful there. But I've said this a couple times, you know, it's early days, so we don't wanna commit too specifically to what the revenue opportunities are there. Expect to see us initially monetize through just improvements in potentially conversion rates and ACVs in users and use cases, and what I would consider more like second order. I think it's also possible that there's a premium module around commerce that may come. Those are the things that we have our eyes on from a monetization perspective. I think maybe even a layer deeper than that, you know, this is another example of just more of the things that happen in the world around commerce and business moving to social channels. The number of people involved, the number of users involved, the number of workflows and processes, and all of those things that our customers need to be running through our platform just increases. Our value increases, our stickiness increases, et cetera. Substantial opportunity. Our focus right now is monetizing the software side of that business. All right. Very helpful. Then Ryan, as you look at the international growth, you mentioned EMEA continuing to be, you know, a just a true standout portion of the organization. Now you have, you know, regional heads in both LATAM and APAC. Maybe what are some of the learnings or, you know, lessons you can accelerate the time to value for those new heads in the other regions that you take from EMEA and just overall kind of what you've been doing on the international stage so far. And you know, how quickly do you think we should think about those two regions being more significant contributors? I think the biggest learning for us has just come from being on the ground in EMEA. I mean, a good portion of our international revenue really came from the foundation of what was built in North America through the inbound model and the very Western-centric, U.S.-centric marketing, and it created a lot of top of funnel that we were executing against from U.S. sales reps. Back in 2019, we opened that EMEA office, and we got a great team there that started very small and has continued to grow, and we've been really, really happy with the productivity that we've seen from the team. We've learned a lot about the hiring profile in the regions. We've learned a lot about just productivity and ramping outside of the U.S. We've also learned a lot about the localized marketing and the opportunity to think about how we approach those markets. With that learning in place, we're taking it across to APAC and LATAM. We hired our GM, Enrita in the summer, and she's just getting up and running with the team there. We've just hired our LATAM leader. A lot of the same learnings in terms of ramping AEs and adding sales capacity, running the right marketing plays within those regions. The piece that we're excited about that is still relatively nascent, but a big opportunity is just the indirect approach to how we manage resellers and channel opportunities in the future. I'd say over the next two years, you'll continue to see that grow. It'll still be led by EMEA, and then we'll see those other two regions really starting to come on later. All right. Great. Thank you. You're welcome. We'll go next now to DJ Hynes at Canaccord Genuity. Hey, guys. This is Luke on for DJ. Thank you for taking the question. Great to see retention here is holding strong. When we think about what's sort of driving NRR today, is that more a function of new, you know, but maybe you can expand on each of those drivers and whether sort of the algorithm that is driving NRR today has evolved as the platform has expanded and matured in the market. Thanks. Your audio cut out a bit, at least for me. I'll try and recap the question, and then lean on Ryan to give you some insight here. What I caught, it sounds like the question is just what are the contributing factors to the NRR numbers between the improvements in growth of existing accounts versus improvements in retention. Is that a good summary of the question there? Yeah. That's about right. Okay. Perfect. Thanks, Luke. There are a few things that go in place there that I think are just massive opportunities for us. One is the mid-market and enterprise opportunity that we see in front of us, and we're really starting to see acceleration within those businesses over the last 12-24 months. As we see that, we know that those larger customers are gonna come in, they're gonna land bigger. We also know that they typically are signing on for longer contracts. Moving mid-market enterprise is gonna be a big deal. Moving into more annual multi-year contracts across all of our segments is gonna be really big for us, both in terms of contraction and later on in terms of growth and expansion. Then a final piece is we've seen h ealthy success from our attach rates and our premium products. We've got this opportunity to go back to all of these customers and highlight some of the things that we've been doing over the last few years, specifically around premium analytics and listening. We've got a few different levers that we're putting in place here that we're really excited about. I mean, we've talked about in the past and on this call, just some great examples of customers that have grown with us. Atlassian is one of those great ones where, you know, we landed that one years ago from an acquired company in Trello, and then had the opportunity to really go across the organization and grow footprint across departments and divisions as well as use cases. That's a similar approach that we're taking everywhere. The last thing I'll maybe just add in is we've made a really healthy investment in customer success, and specifically in improving the ratios of our customer success teams to the customers we work with, as well as investing in onboarding resources to make sure that our customers get a ton of tender loving care at the beginning, and they get to ensure that their onboarding and their implementation is done really well so that they are driving adoption from the very beginning. A few different levers that are gonna go in place there that we're really excited about. Helpful. Thank you. You're welcome. Thank you. We'll go next now to Stan Zlotsky at Morgan Stanley. Hi, this is Elizabeth Porter on for Stan. Congrats on the quarter. I just wanted to dig in a little bit more on that NRR and, you know, how you see that expanding as we get into fiscal 2022, especially in the context of a lot of more premium modules and horizontal offerings that you guys have going on. How should we think about expansion as we get, you know, into the next year? Yeah. You know, a couple things that we think plays into that and it's gonna drive those trends over time, a few of which Ryan talked about, which is, the larger opportunities that we're landing, those are more inclined to grow. That provides some nice tailwinds to those numbers. There's also a shift just in the overall composition of the customer base, right? At 30,000+ customers, the shift today, in terms of the mix of enterprise and mid-market versus SMB and agency, etc., just continues to get healthier and healthier. When we look at the dynamics, the NRR dynamics among those cohorts and the way that the shift of the total customer composition is happening over time, that suggests to us that we've got a lot of headroom still. That's in addition to the work that we're doing to accelerate things like seat expansion, the purchase of add-on modules, et cetera. Those are a few of the things that play behind the scenes, and we think there's a great opportunity to continue to drive that forward. Got it. On the margin guidance for about 40-100 with expansion, you know, it sounds like a really big focus there is on R&D, but just more broadly, you know, what's the philosophy around revenue upside kind of flowing through versus investing? What are some of the puts and takes to get you to that higher or kinda lower end of the range? Yeah. On that one, I think for us, you know, when we're looking at the investments we're making, Elizabeth, to understand your question correctly, I still think you're gonna see us investing, you know, pretty heavily in sales and marketing. We've talked about the R&D investments, but I think what you're gonna see from us is as the year progresses, as we see opportunities, to invest more in the business, I think for us, we wanna make sure we're not backing off the investment opportunities that are in front of us right now. Justin talked about this in his prepared remarks, is we see a pretty big opportunity in this space. We're seeing more and more success up in the mid-market enterprise. As that momentum continues to grow over the year, and if we continue to see the success we've recently seen over the last 6-12 months, we're gonna keep, you know, investing in this business. That's why we wanted to give that little broader range of guidance on operating margin because we don't want to leave any opportunity on the table right now. Got it. Very helpful. Thank you. We'll go next now to Michael Turits at KeyBanc. Hi, this is Michael Turits from KeyBanc. Just a quick one for me. I guess are there any major technical areas or lack of certain feature sets in your offering today that you feel still notable headwinds to, I guess, landing larger customer deals? Or what's the biggest hurdle still? Yeah. I feel like we are, you know, and hopefully this has come through in a lot of the discussions that we've had around our momentum in the mid-market enterprise. We think we're well equipped for the deals that are out there. I think there are opportunities still as the market moves more toward social-centric customer service. We wanna do a lot of work there, where we've got an opportunity to really step into some large user populations and very strategically important initiatives for our customers. I think the opportunity around listening is still ripe for us, and one that we wanna continue to press on. Same goes for premium analytics. Just making sure that we're keeping up with network expansion, right? As there are new places that matter to consumers, those in turn matter to our customers, and we wanna make sure that we're doing things right to be ahead of the curve there and make sure that we're giving our customers the tools that they need to be all the places that they need to be. There's not anything that we would look to and put on the board as deficiencies, but certainly opportunities where we think we can continue to step into a lot of the progress that we've seen. Great. Thank you. Okay. We'll go next now to Scott Berg at Needham. Hi, everyone. Congrats on a good quarter. Metrics are great. I will go with one in the essence of time here. Take things on a slightly different track. I think when you look at the commentary out of one of the large social platforms like Meta recently on their quarter call, right, I think there seems to be a lot of shift of changing use cases around social media and, you know, certainly some of these customers or platforms are maybe trying to struggle or figure out how to work with changes like, you know, the IDFA changes in the Apple ecosystem. How do you all think about that, you know, kind of impacting your business over the next, you know, two to four years and how your customers are using your platform? Because I think the disruption, it seemed to catch some people by surprise, at least on that call. I think, and we've seen kind of varied results around IDFA across the varying network partners. I, you know, I think how that's gonna shake out from a revenue perspective for the networks themselves, you know, I think they're doing a good job discussing that narrative. But for us, what's interesting here is, you know, we don't participate in the ads business. The impact there is not something that is a big factor in terms of our strategy, in terms of our roadmap, et cetera. I think, you know, where it has potential to be a factor for us long term is that historically the organic side of social, the things that our customers spend all of their time doing in our platform, has essentially been seen as a hedge against the advertising efforts, right? It's if the advertising environment becomes tougher than organic and getting organic messages out and building and getting in front of your audience that way become important. As the shift from maybe advertising to off-site sales starts to move toward on-site transactions with social commerce, that'll change things up a bit. At the end of the day, our involvement kind of stays the same, which is the activity that's happening is happening on social networks. Advertising is just not part of our business. As long as the trends continue in the relationship between consumers and brands, and how the various networks respond to that will be different, then the value that we contribute is as strong as it's ever been. We have to make sure that we're continuing to deliver the value that our customers need in the midst of things that might be changing on them, such as where they're putting their ad dollars, et cetera, and that we can help them with all the tools that they need to back up their social strategy as it moves. The direct impacts just aren't a factor for this business. Super helpful. Thanks, and congrats again on the wonderful quarter. Yeah, thank you. Next now to Shrenik Kothari at Baird. Hey, yeah. This is Shrenik on for Rob. Really great quarter. I just have a quick one. On enterprise, mid-market, go-to-market, you mentioned about, of course, account-based marketing, growing strategic accounts to bolster like outbound sales. Can you talk a bit about the land and expand pipeline and trial conversion, and especially the larger pipeline. Anything changing that you see on the ground or maybe like looking out ahead, amid this macro uncertainty, just regarding these larger deals? Maybe for Ryan, since you have seen those macro effects, from your time at Salesforce. Yeah, just that. Yeah. Thanks for the question. I think there's a couple things in there. One, I would highlight just our dedicated focus. We have dedicated sales teams that are focused in on new business, so landing new logos. We have dedicated sales teams that are focused in on growing our footprint within the customer base. That expertise and focus has been really helpful for us, making sure that we are capitalizing on the full opportunity in front of us. Our growth teams that are selling to the customers have been doing a fantastic job building out the pipeline of opportunities for us. As you might imagine in those customers, we've got great reputations. We have customers with high adoption. We are able to get around those organizations and identify opportunities pretty quickly versus going outbound and cold calling. That opportunity for us continues. We also know that from a penetration rate, we're still fairly low in the grand scheme of the number of customers that we have, 30,000, and we're sort of mid-teens in terms of the attach rate with our premium products. We see quite a bit of pipeline in front of us. You pile on top of that just the use cases, right? A lot of our customers that have come in, the initial starting point typically is in the marketing department, and then it expands from there, oftentimes in the marketing department, going across brand and content and PR and comms and sometimes IR, but then also into customer support and customer care. The net of it is that no macro headwinds or changes for us in terms of the pipeline that we've seen. We've got a healthy number of customers that are come in that are a perfect target for us to continue to grow. We feel really great about the year ahead. Got it. That's really helpful. Thanks a lot. Welcome. Ladies and gentlemen, that will conclude today's question and answer session. Jim, I'll hand the conference back to you for any closing or concluding remarks. Great. Thank you. You know, as always, thank you all for your time. Thank you for the great questions and the support. The things that we've been talking about the last couple quarters have us just incredibly excited. 2022 is set up to be just a fantastic year, and we look forward to catching up with you all in various contexts. If we don't see you until the next one of these, then we'll talk to you then. Thank you. Have a great evening. Thank you. Again, ladies and gentlemen, that will conclude today's Sprout Social's fourth quarter earnings conference call. We'd like to thank you all for joining us, and again, wish you all a great evening. Goodbye.