All right, great. As people kind of keep filing in, we will get started here. So my name is Jackson Ader. I'm the enterprise and lead software analyst here at KeyBanc Capital Markets. Welcome to the second and final day of our 25th Technology Leadership Forum in Vail. So we're excited to have Sprout Social here. We've got Joe and Jason up on stage. We will let them introduce themselves and the company, kind of go through some highlights. I've got a number of questions that I'd like to ask, but then also, if anybody in the audience has any questions, be thinking of them. I'll ping you a couple of times, and we'll make it, you know, interactive, if it goes that way. But yeah, Joe and Jason, if you just want to introduce yourselves and the company, that'd be great. Yeah. Joe Del Preto, CFO here at Sprout Social. Been here a little over seven years now. Yeah, I'm Jason Rechel. I lead investor relations and corporate development for us, and I've been at Sprout almost five years, almost the entire time we've been public now. Great. Social media marketing, your core market, can we talk about, just, you know, that journey from where you've been, not just in the five and seven years- Yeah ... but since, like, Justyn's founding and where you are today? Yeah. And, I'll try to keep it so we don't spend-- I could probably spend the whole time talking about the journey- No. But I'll keep it at a high level. Yeah. Yeah. So, so the founding premise of the company, social media management, was that similar to the way that phone and email was a new communication channel between consumers and brands, that social media was gonna be that same change in communication. Like, their vision in the early days was, "Hey, this is just a consumer-facing idea right now, but at some point, this is gonna be something that all brands are gonna have to be able to manage, because this is where consumers are gonna go to learn about products, where they're gonna go to say good things about the products we're using or services, to complain." And so they, in the beginning, said, "Okay, this is gonna be a new communication channel, and we're gonna need, and businesses are gonna need a platform to manage that." And that's, like, the core premise. Back then, it was, Twitter had 20 employees, Facebook business pages had just started. Yeah. And so there's only a couple of networks. And you fast-forward it to today, and that concept is still very true, right? If you think about now that we integrate with over 36 networks, and the number of use cases that we're solving for, and this concept of communication is totally evolved. In the early days, the idea originally was, the original core use case of social media management was this outgoing marketing- Right ... very narrow use case. I'm just trying to publish, you know, my content, organic content, out on these various networks. Make it consistent, make sure you're targeting who you want to target. Yep. Correct. And making sure at a minimum, like, hey, if I... I don't wanna have to understand, even the early days, if I wanna post a message on Twitter, the way I post a message on Twitter is different than I post on LinkedIn or Facebook or Pinterest. And so I don't wanna learn how to every one of these networks, for example, how their APIs work, how do I publish it? How do I log in? And so the original premise was like: Hey, it's gonna be very hard to like, if I'm internally trying to manage all these networks, if I could just log into one place, put together one message, and then I choose where and when I wanna post that. Right ... that was, like, the early use case in the beginning days. Okay. So the last, call it, what, 12-24 months, been on a little bit of a journey moving upmarket. So what's the motivation behind that? Yeah. How has it gone? Yeah. So it's gone really well. So the motivation was, we noticed this a couple of years ago, probably two or three years ago, to your point, Jackson, which was a lot of the enterprise softwares that were upmarket had been built over the last 12 years via acquisition. They were heavy services, six to nine -month deployments, very hard-to-use pieces of software. And what happened was, because the use case had evolved over time, outside of just a couple, one or two power users, if you were to go back four, five, six years ago- Yeah ... and that was getting out into other parts of the marketing organization. It was getting to customer care. What we noticed was that customers out there wanted software that they could get up and running very easy. It didn't require all these services. So we started getting pulled into these deals. 'Cause one thing that Sprout did differently than anyone up in the enterprise is we built all our, the whole product on a single code base. Yeah. And so all 30,000 customers are on the same code base. So what does that mean? That means that the network makes a change on this end, all 30,000 customers get that change- Mm-hmm ... across the board. And so what we were noticing was, we started getting pulled into these deals because the incumbents in the space, their software was very hard to use. Right. New networks were coming on board, use cases were expanding. And we're like, "Wait a second, this software is not easy to deploy across hundreds of users. Mm-hmm. When it was just a couple of power users, it was really easy. They would get trained up, and so we started to get pulled into these deals. Yeah. And then we started to realize, well, wait a second- Mm ... we're having a lot of success with these enterprise customers. What are the products that we need to develop? And this was, like, three or four years ago, things like Premium Analytics, things like social listening, you know, areas, you know, advancements in social customer care. These are the things that these enterprise customers wanted. And so we made an investment in the product, you know, three, four years ago, to make sure those products were on par with the enterprise solutions that were out there. Mm. So you fast-forward to today, and our products now, all of those things are not on par, but actually the best, you know, products in the market. If you looked at our recent winning the best software in G2- Yep ... we're the number one rated software across the board. And so at this point, there's not a part of our product, there's not a, you know, a use case we can't solve for in the enterprise space. Where if you went back four or five years ago, we were missing some of these things, or we had them, but they were very probably low end. Yeah. That's probably the biggest, you know, evolution that we've seen. Why couldn't the platform companies figure it out? Like, why, why is Salesforce, you know, Social Studio winding down? Why hasn't Adobe been able to figure it out? Like, you know what I mean? Yeah. These are real companies. Yeah. Why can't they figure this out? Yeah, so you know, they all had products in the market 10, 11 years ago, and I think at the time when they got into the market, they thought very similar to the current products that were growing really fast for them. If you think about email marketing, CRM, all of these solutions that they had, the data was very static. It relied on a very unique identifier, like an email or a phone number. And And so all the workflows they built, the data was very easy to manage. They started getting to social, and they realized, "Well, wait a second, my LinkedIn data is different than my Facebook data, that's different than my, you know, Twitter data." And so what they realized was that this wasn't gonna be something that could sit right inside my CRM or my marketing automation software. It's gonna have to be its own product, because if you think about it, you've got to ingest all these different APIs from the network. We ingest over a billion messages a day, and every one of those APIs and data structures from the networks is different. And then you have to figure out how in the back, and then to put that all in front of a customer in a very, like, simple way. Yeah. What they realized was there was no economies of scale of the current systems they'd built. There was no way they could just take their email marketing system and then directly bring in all their social data, because it didn't sit the same way. Right. And so a lot of them, at that point, realized, "Well, wait a second, email marketing, CRM, all these other softwares were, like, going really quick," and so they put all the resources- Okay ... into those other products. What happened was, you wake up five, six, seven years later, and now there's three dozen networks and not just two, and they were pretty far, far behind. Well, I think the other difference, and Joe really alluded to the back-end technology limitations of social relative to some of these other platforms. But the other big difference is on the front end, where, you know, 10 years ago, social was thought of as primarily a marketing channel, right? And so the way that Adobe and Salesforce and other large companies, Oracle, thought about social was inside of their marketing clouds and another channel as a part of the future state of what marketing automation might look like. And we now know that social today is, yes, a marketing use case, but it's also a channel for sales and for customer service and for commerce and for data and analytics. And so you need to have built a horizontal technology platform that can solve different users, different use cases, different departments across the organization, and you had to have solved for the back end of, you know, a vast amount of unstructured data across many dozens of networks, and simultaneously, a horizontal front end that can solve across all those different use cases. And the other thing that's happened, I'll add one last point, in our market, and this is one of the huge, like, moats in our market. There hasn't been a new entrant in our space in probably, like, seven years. The reason is, not only is it technology on the back end that you need, but a lot of the major networks have downsized the number of vendors they want to give that data to because of privacy, GDPR. You'd notice, if you've seen these networks out there- Mm ... a lot of them are not expanding. They're saying, "Hey, by the way, we're kicking you out. We're trying to make sure we're working with less folks because we're very wary of what you're doing with our information. Right. And so because of that, it's really hard for anyone to kind of get into the space today because a lot of these networks, at least the major ones, are not looking to give their data to other people. They're actually shrinking- Yeah ... the folks that have access. That makes sense. Jason, just sticking with you, what was the investor perception or feedback when you initially kind of laid out, you know, moving up market, but that also meant shifting resources away from downmarket? So how did people react? Well, I guess, do you mind just giving us more detail on the resource shift originally- Yeah. -and then how people reacted to it? Yeah. So towards the end of 2022, we announced some structural pricing changes, a few go-to-market changes, and some changes with respect to how we deployed resources, both inside the product organization and then also the sales and customer success organizations. So we took, you know, roughly 20% of our customer success team had been deployed at our lowest-value customers, where retention was low, expansion was low, the unit economics of that business inside the install base were below what we would have liked long term, and we redeployed those folks to other areas of the business in mid-market enterprise that had structurally greater unit economics. At the same time, our go-to-market organization and marketing investments were all targeted towards more sophisticated customers up in primarily the mid-market and enterprise. At the same time, we also aligned our product investments to the points that Joe made earlier to make sure that we were building against the use cases that more sophisticated customers required. And some of those things manifest in, you know, quote, unquote, "sexy product integrations" that you all may care about, like our launch of customer care earlier this year, or advancements that we've made in AI and listening and analytics across the product. But a lot of those investments were also in, you know, things that are not as flashy to talk about, like enterprise governance and workflow and permissioning, the things that teams of hundreds to thousands of users require to go live inside of customers, like a Salesforce or a Honda, for example, right? And so that was the alignment that we made coming out of 2022 and into 2023. It's not been perfect as we, as we've evolved upmarket, but generally speaking, the investments, to Joe's points earlier, in product have allowed us to meaningfully pull ahead of our competitors in more sophisticated use cases. And we now have a go-to-market model that's really well-positioned to scale into our most sophisticated customers. So investor feedback has really kind of mirrored what we see in the business, which is enterprise customers have structurally higher unit economics. They have structurally higher gross retention and net retention, and so those are... You know, when we think about the long-term quality of the business, the long-term durability of our growth, and the long-term unit economics or profitability of the business, that's really where we're pivoting. Not pivoting is not the right word, but that's where we're prioritizing all of our investments and resources. And I think investor feedback on that strategy, focus has been really, really positive. And I think most folks are, you know, focused on, like, the outcomes that you all can see in our 50K customers, our 10K customers. We've more recently started talking about our 150K customer cohort, all as indicators of our success in that journey upmarket. Okay. Joe, do you mind running through the, kind of some of the changes in the first quarter? What happened? You know, you can talk about the numbers. You're the CFO. Yeah. You know, like, I really want to talk more about the changes to the go-to-market. Yeah. Yeah. ... Yeah, I think on that side, I think Ryan, at the time, maybe overplayed some of those go-to-market changes. I think in most years, those are pretty typical changes, like redoing territories for the mid-market enterprise team, making sure the team's getting trained on, you know, any new products that are coming up, like Tagger, verticalizing some of the sales team. Mm-hmm. I think at that time, when we were talking through earnings after Q1, we really wanted to own the things we could control. Yeah ... and didn't talk so much about some of the macro pressures around that were going on in the business. Those are things we normally do almost every year, so they weren't necessarily unique. I think the combination of those, along with the pressure from the macro- Got it ... really kind of put that pressure on Q1. I will tell you, like, all those changes are well done, like, over, and, like, the team is executing as they would in any normal year. So like every year, like, for example, and this is true with any sales team, every year at the end of the year, they redo sales territories based on how many accounts do I have? What does next year look like? Usually, you try to shrink them because there's more opportunity in your existing accounts. Mm-hmm. Like, we're always looking for opportunities to verticalize our sales team. Mm-hmm. You know, historically, we had been a very, you could sell any, in any vertical, but what we've noticed is, like, really strong trends in things like hospitality and higher ed and healthcare, where making sure you have some expertise in those areas has really moved the needle on- Yeah ... execution side, and so we'll continue to be doing those things in general. It should not be and will not be a disruption- Okay ... kind of on a go-forward basis. So I've got a quick follow-up to that, but, before I do, so after I ask this follow-up, if anybody else you know, first check in the audience, if you have a question, be thinking of it 'cause, I'll come to you after this. Is there... You know, could I draw, could I draw a line between the decision in 2022 to shift some resources, you know, from kind of lower end, maybe put people that were, I don't know, not, not necessarily fit for that job up into the mid-market and into the enterprise? And then we fast-forward about 12 months or, you know, 12-18 months later, and it's like, "Oh, we're making some more tweaks that impact our, our growth rate here in the first part of 2024." How do you make sure that these... You know, you kind of call them tweaks, right? Yeah. These are things you do all the time. Yeah. But sometimes, you know, some things are just happen to be more impactful than others- Yeah ... right? It's not all equal. Yeah. How do you make sure that, you know, in six months? Yeah ... and in 12 months- Yeah, mm-hmm ... we're not saying, like, again- Yeah ... we put people into jobs- Yeah ... that they weren't necessarily- Yeah ... prepared for? So what we do, and we do this every month, and we do it every quarter. So we have monthly meetings with each of the sales teams, with finance and the sales team. We have all sorts of metrics, from efficiency to, like, what's the new business number? What's conversion look like? And so we're constantly monitoring the success of each of those teams, the enterprise, mid-market, agency, and SMB team. Right. So we don't wait for, like, we don't wake up in 12 months and say, "Hey, did we make a wrong decision?" It's actually a real-time process that we're always going through to say, "Okay, hey, we're seeing opportunity here. Yeah. So if we're looking out six to 12 months, we're gonna, you know, we're gonna add a couple more AEs in the enterprise, or we're gonna add a couple more AEs in the mid-market, or maybe we need to get some more BDRs." So it's a process where we're always looking out six to 12 months, and so it's a more of an iterative process that we do with the sales team versus, like, we wait till once a year to kind of look at, "Hey, how does the sales team look? Mm, right. It doesn't really work that way. Okay. Yeah, and maybe two other examples I'd just add in there, Jackson. One, you know, historically, our bias has been to promote folks, right? If you join Sprout, you know, on the SMB sales team, for example, right, and you prove yourself, you crush your numbers for a year or two years, you prove your knowledge of the product, you prove that you can, you know, create customer value, you generally speaking, historically, would migrate up. Like, your promotion path is up into the mid-market, right? And a comparable trajectory for a mid-market AE, right? You prove yourself capable there, you prove your knowledge of the product, and you migrate onto the enterprise team. And so those things continue to be true, and part of what we did, you know, in 2022, 2023, was accelerate some of those promotion paths. But more specifically to some of the changes we talked about earlier this year, right, like, let's talk about the vertical sales team, right? We had experimented with a healthcare team in 2023, where we'd taken proven sales leaders and proven AEs from our enterprise team and put them in the healthcare vertical, and what we saw was higher new business conversion rates, higher new business ACVs, and higher sales productivity. So we had proven sellers into what we thought was a relatively then proven vertical model. You know, Ryan, our now incoming CEO, like, this is part of the evolution that he saw at Salesforce, where as you become larger, as you grow and scale, as you mature into larger, more sophisticated customers, building in specialization, whether it's geographic specialization or vertical or type of customer, is one way to increase sales productivity and efficiency as you scale. And so a lot of ways we're replicating that playbook that he has seen, and in the case of what we did with the other verticals we talked about in Q1, right, where we're talking about financial services and government and higher ed and retail CPG, it's the same idea where we experimented with healthcare, where we're taking a proven sales leader, proven AEs, who know that we know that they can sell Sprout and know Sprout well. Ideally, we've put them in a position to be even more successful than they'd already been. I actually have one quick follow-up before I'll come to the... I lied. But is it, is the internal promotion born almost out of necessity? Because it, it wouldn't necessarily be easy to port over a software salesperson who has been selling marketing software 'cause it's not quite just marketing software, right? Yeah. Like, it's care, and you know, enterprise software salespeople at ServiceNow aren't necessarily gonna be able to port over and now be able to sell- Yep. Like, is the internal promotion out of necessity, and when you need to go outside to hire an AE, you know, for, to- Yeah ... you know, what's like a, what does that profile look like that, that makes somebody successful selling Sprout? Yeah, it's not, it's not a necessity to have them move up. It's more about just giving people our strong provider. Because most software companies, like, we hire a lot of external folks, especially up in the enterprise. Okay. 'Cause, like, you know, some of these mid-market reps do move up, but the way we've been expanding in the enterprise, we need more than we can bring in. What we're looking for, however, there are certain characteristics we are looking for when we're looking at if we're gonna hire someone from ServiceNow or one of these other software companies. Yeah. One is, we want an enterprise AE that is used to getting into the software and leading with the software. Mm-hmm. Like, a lot of these enterprise software companies, they do demos and PowerPoints, they do a lot of talking about the software. Mm-hmm. We're, and even in our large enterprise deals, we want the customer using the software during the evaluation phase. So we want an enterprise AE that's comfortable saying, "Hey, man, I need you to get in the software. I need you to do X, Y, and Z. I need you..." You know what I'm trying- Right, yeah. I want you to actually use the software. I'm not gonna just try to sell you on something before you actually use it. Right. And so that's a big characteristic of the enterprise AEs we're looking for. And then we're also looking for, as you can imagine, someone that knows how to navigate a procurement, and finance, and like an RFP process at a larger organization. So that's an experience that sometimes a mid-market AE on our end might not necessarily have. And so those are a couple of the dynamics, you know, we're looking for. And the last thing I'll say is, because, like I said, we're trying to like these enterprise AEs, too, need to be able to close, like we have a velocity part of that business still today because we're still early, early innings in my even up in the enterprise, as far as like how mature we are in this market. And so we want an enterprise AE also that is used to closing multiple deals in any given month. Yeah. Not someone that closes 2 deals a year. Right. Like, that's just not the way, that's not where our market is right now. Right. And so we need someone that can do a high velocity of transactions. Okay. All right, any current questions from the audience? These guys. Sure, go ahead, Mike. Yeah. So just looking at market, as you look at, like, the investments in which you need to make, I guess, you talked about G2 having, you know, top-rated products and investments there. I guess, like, now, what do you need to invest in, or what's next on that portfolio? Yeah, I think there's a couple areas that, for us, are important. Number one is, you know, the customer care use case continues to expand, and these larger teams, and you're gonna see us continue to invest- Mm-hmm ... in the care side. I think that's an area that, even where we're at now, the volume of transactions and the number of companies coming to our doorstep on a social customer care is not slowing down, so that, so we're gonna be building out in that area. I think another area is on the influencer marketing side. You know, Tagger, we acquired almost over a year ago, and that market is still, and that product is still, like, early innings. And the amount of traction we're seeing in it, and the way we believe that influencer marketing over the next three to five years is gonna be a big part of a company's marketing strategy, I think the Tagger side is gonna be another area. And then the other two I would call out is on the integration side, right? We're constantly looking for and figuring out what are the other types of products that we want to integrate with. We, you know, recently talked about an integration into Canva. We integrate into all sorts of other, like the Zendesk, and Salesforce, and these other, you know, HubSpots. So I think the integration side of what we're getting is more and more inbound, and other types of folks that are kind of on the fringes. They're not in software, but there's companies out there that want to either see software information or data, so I think integration is another area. And then I think the fourth one is on the AI front. Like, we've stood up our own AI team that does things across the platform, which, you know, we can get into more, Jason can talk a little bit more about it. But that's an area where we think there's a large amount of opportunity for us in the space we're in, for a couple reasons. One is, we're one of the very few companies out there that has access to all this social media data, right? And so our ability to apply AI in a way that very few companies can, 'cause very few companies, like I said earlier, have actual access to these APIs- Mm-hmm ... and this amount of data on social. Mm-hmm. We think there's a huge opportunity there over the next three to five years to leverage AI in our product. Yeah, I would just add, too, I mean, in terms of incrementally monetizable product investments, it's probably gonna be on the care side and AI over the next six to 12-month window here, right? So I think those are the two investments that likely have the biggest impact on the business. And then we also just, from a product perspective, we just brought on our new Chief Product Officer two or three weeks ago now, who I think will have a discernible impact on the future product roadmap here. And Erica. So we've never had a Chief Product Officer at Sprout, and so a new hire for us. And Erica had led the Jira product family at Atlassian for a number of years prior to joining us, and she had led the Google Apps product portfolio inside Google, obviously, prior to her time at Atlassian. And so just a really, really capable product leader that is gonna help make sure that we're in the right spots here moving forward as well. Okay, we've got 70 seconds. We've got three topics we have to hit. How do you turn integrations into partnerships, like revenue-generating- Yep ... rather than just integration? Yeah. So the key there is very similar to the Salesforce and Service Cloud relationship, the go-to-market teams have to be aligned. So the key is when we're looking at these integrations, the question is, what's the go-to-market gonna look like? Historically, we'd always look at integrations just from a technical standpoint- Yeah ... which we have to do. So the key for us is, okay, we're gonna prioritize the integrations that come with a go-to-market strategy that can drive revenue. Okay. Versus just like, "Hey, this is a nice to have on the back. Right. Right. Yeah, integrations, they have to happen into the broader marketing and care platforms, but, like, turning it into revenue, I think- Yeah ... makes sense. Name names, competition. You mentioned competitive win rates are going up. Yep. Who is that coming at the expense of at the moment? Yeah, so the three we see are, and they've been the same three for a while, Sprinklr and Khoros when we're upmarket- Yeah ... and then Hootsuite when we're downmarket. Okay. Those are the three guys. Final topic, 10 seconds. New CEO, you know, what should we expect for some of the changes? You know, what's gonna stay the same? Yeah. What's gonna be the new Sprout? Yeah, I would not, and I'd love Ryan to answer this himself. I don't anticipate any major, major changes. I think Ryan was our president for the last couple of years- Yeah ... and him and Justyn are very aligned on the strategy. Ryan is internally and externally has a great reputation. Mm-hmm. He's a hands-on, he's a doer. Like, no one works harder than Ryan Barretto, I'll tell you right now, and the amount of information and the time he spends in our industry is phenomenal. So I think everyone's pretty excited at the organization. Great. Okay, we fit it all in. We did it. All right. Perfect. Thank you, Jared. Thank you, Jason. Thanks, guys. Thanks, everybody. Hey, thanks, Jared.