Step 1

Whisk flour, sugar, baking powder, baking soda, and salt together in a bowl.

Step 2

Combine buttermilk, egg, butter, and 1 1/2 teaspoon vanilla extract in a separate bowl. Beat to break up the egg. Pour over the flour mixture; stir until just combined. Stir 1/4 cup sprinkles gently into the batter. Allow batter to rest for 5 minutes.

Step 3

Whisk confectioners' sugar, heavy cream, 1 teaspoon vanilla extract, and salt together in a small bowl until smooth. Add 2 tablespoons sprinkles.

Step 4

Heat a large nonstick skillet over medium-low heat; coat with cooking spray. Drop 1/2 cup batter into the skillet. Spread with the back of a spoon to about 1/4-inch thick. Cook until bubbles form and the edges are dry, 2 to 3 minutes. Flip. Cook until second side is set, 1 to 2 minutes. Transfer to a plate. Repeat with remaining batter.

Step 5

Stir sprinkle sauce so sprinkles rise to the top. Serve pancakes with a generous drizzle of sprinkle sauce.