In a mixing bowl, beat the cream cheese and butter together until smooth and creamy.
Add powdered sugar and vanilla extract.
Mix until well combined and fluffy.
Stir in the sprinkles, being careful not to overmix (so the colors don’t bleed).
Transfer to a serving bowl and sprinkle a few extra sprinkles on top for decoration.
Chill in the refrigerator for at least 20 minutes before serving.