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Sprinklr, Inc. Stock Price: Quote, Forecast, Splits & News (CXM)

Finance

Company Profile

New

Sprinklr, Inc. Price & Performance (CXM)

Stock Performance

Updated Mar 21, 8:00 PM UTC

CXM:NYSE

$8.66USD

2.04% · $0.18

Open

$8.71

High

$8.88

Low

$8.57

Market Cap

$2.20B

P/E Ratio

19.7

Volume

3.30M

Year High

$14.32

Year Low

$6.91

News & Market Insights

Sprinklr Reports Promising FY25 Results Amid Strategic Shifts
today
Sprinklr posted a 9% revenue growth for FY25, reaching $796.4 million, with net income surging to $121.6 million. CEO Rory Read emphasized operational optimization and a refined go-to-market strategy as the company prepares for FY26, a transitional year focused on sustainable growth and improved margins.123
Stock Dip Highlights Investor Concerns for Sprinklr
Mar 18, 2025
Sprinklr's stock dropped by 4.1% recently, trading at $8.77, amid mixed analyst ratings. Despite strong FY25 financials, concerns persist over cautious FY26 guidance. Analysts have issued a consensus "Hold" rating, reflecting uncertainty as the company navigates its market transition and pricing model updates.425
Analysts React Positively to Sprinklr’s Margin Guidance
today
Sprinklr's FY26 non-GAAP operating margin guidance of 16% exceeded expectations, prompting Scotiabank to raise its stock target to $9. The company’s strategic workforce reduction and focus on its top 400 clients signal efforts to streamline operations and enhance profitability in the coming fiscal year.263

What's Happening

Peers

Earnings

Report Date

Mar 12, 2025

Reported Revenue

202.5M

Avg 1d Change

10.34%

Report Period

Q4 2025

Reported EPS

0.04

Implied Move 1d

11.84%

Transcript

12m 1s

You are directed to our press release and supplementary investor presentation for a reconciliation of such measures to GAAP. In addition, during today's call, we'll be making some forward looking statements about the business, and about the financial results of Sprinklr that involve many assumptions, risks, and uncertainties including our guidance for the first fiscal quarter and full fiscal year of 2026, the impact of our corporate strategies and changes to our leadership, benefits of our platform and our market opportunity. Our actual results might differ materially from such forward looking statements. Any forward looking statements that we make on this call are based our beliefs and assumptions as of today, and we disclaim any obligation to update them. For more details on the risks associated with these forward looking statements, please refer to our filings with the SEC also posted on our website. With that, let me turn it over to Rory. Thank you, Eric, and hello, everyone. It's nice to be with you today. I'll start by providing a few 4Q financial highlights before covering some of my thoughts on the progress we are making in transforming our business.

13m 11s

Fourth quarter total revenue grew 4% year over year to $202,500,000 and subscription revenue grew 3% year over year to $182,100,000 We generated $25,900,000 in non GAAP operating income, which resulted in 13% non GAAP operating margin for the quarter. I want to thank Sprinklr team members around the globe and our customers and partners for trusting us to help them solve some of their most important business needs. We believe we have a strong hand with growing markets a leading edge AI platform and gold standard customers with a mission to help them deliver next generation, unified engagement journeys that reimagine the customer experience. We now have the clear Ambidextra strategy and execution plan in place to reenergize and grow our Sprinklr core while hardening and expanding sprinkler service to enable our customers to realize the full value of our AI based unified customer experience platform. However, there is much more work to do on our journey. And FY 2026 will be an important transition year as we stabilize the business. As I have acknowledged, there are still challenges ahead as we strengthen our teams, simplify our offerings and resolve the operational and technical debt that has hindered us in the past.

14m 59s

While we still see important areas needing focus and the transformation of Sprinklr is well underway. We defined a well focused customer wide business strategy We've implemented a well established business management system, BMS, to track and drive execution. And we took swift action to optimize our expense base and rebalance our investment and resources. We have also redefined our go to market coverage model to land and develop our ideal customer set and enhancing our product innovation roadmaps. We have also strengthened our leadership team and board with accomplished leaders who have deep expertise and a strong track record of driving growth. In early January, we announced the appointment of Joy Corso, as our Chief Administrative Officer. Joy's extensive experience in the B2B tech industry efficiencies business transformation and scale, will be critical to supporting our next phase.

16m 20s

We also announced the addition of Jan Hauser and Steven Ward to our Board of Directors.

16m 26s

Jan will assume the Chair of our Audit Committee, and Steve brings a wealth of technology and enterprise experience to the Board. And as a member of our compensation committee. Each of these executives have technology and SaaSX experience with a long history of demonstrating results and building growth businesses at scale.

16m 51s

I'd also like to thank Ed Gilles, who is stepping down from the Board in June. For his service on the Board and dedication to Sprinklr. As we move into the next phase of our strategic plan, we are now taking critical steps designed transform our business for durable growth and improved profitability. On our 3Q call in December, we noted that you will first see an improvement in our operating margin given that this is in our direct control. This action would also create the capacity to reinvest and critical talent and refocus on areas to drive better performance. On February 6, we filed an eight ks with the SEC. Which detailed the decisive actions we took to better optimize and re balance our expense base. This has included an approximate 15% reduction in our workforce. While changes like these are hard to make, it is essential to allocate our investments, talents, and resources to better serve our customers and partners. Most actions associated with this workforce reduction are now complete with a few smaller areas to be completed in 2Q based on regulatory requirements. Manish will provide further financial details on this and his remarks in just a few minutes.

18m 32s

Sprinklr intends to deliver a portion of our cost savings to improve operating margins this year. We will also leverage some of this gained efficiency to hire and invest in prioritized areas. We will strategically add talent across the globe in such areas as go to market sales pods, customer implementations, AI, core product skills and service R and D skills. Which these may take one to three quarters to execute. Additionally, our new go to market coverage model was implemented at the beginning of our fiscal year in February and launched in detail during our sales kickoff three weeks ago. Territories are assigned, compensation plans are rolled out and coverage ratios are set. This structure will cultivate deeper customer relationships within the C suite. Our initial focus will be on our top 400 customers. We believe these efforts will enable us to deliver more value through year round engagement and deeper account planning. At the end of FY 2025, we had 149 customers generating at least $1,000,000 in annual subscription revenue. Which grew by 18% year over year. Furthermore, we had an impressive group of We have built sophisticated products that address complex needs of the world's largest companies.

20m 20s

It's clear that when we get it right, and execute effectively and consistently, our customers value these solutions and the expertise we provide. We are most successful in the enterprise segment with the Global 2,000 to Global 5,000 being our sweet spot. This will now be the primary focus of our go to market and marketing efforts, driven by the recent changes and initiatives I have mentioned previously. Now on the R and D front, we are maturing our operational rigor to continue to deliver innovation in a more Our FY 'twenty six technology and product innovation roadmaps are focused on improving product delivery, functionality, security and reliability of our broader platform. Additionally, we are still in early phases of revamping our pricing and packaging but our focus on solution selling with aligned incentives for multiyear deals and emphasis on the C suite. We believe the combination of the actions we have taken including one, establishing a clear ambidexor strategy two, implementing a well established business management system to track and drive execution three, optimize a more efficient cost structure allowing for sustained and improved four, realigning our go to market coverage model and five, strengthening our product delivery roadmaps will be a significant step forward in Sprinklr transformation plan.

22m 22s

Now I'd like to shift gears a little bit and talk about our customers. One of our most important and powerful assets here at Sprinklr Floor. I have met with approximately 100 customers in partners over the past three months.

22m 38s

And while we have experienced some inconsistent implementations, leading to pressure on customer renewals and satisfaction, we are actively addressing this. During the fourth quarter, we continued to land and expand with many leading brands, companies such as Delta Airlines, Ford Motor Company, MSCI, Live Nation, and Ralph Lauren to name a few. While we've had several large customer deals across Sprinklr Core and service this quarter I'd like to highlight two that demonstrate what we are capable of when we get it right.

23m 22s

We're excited about the work we are doing with one of the world's premier specialty coffee retailers. Through deep discovery, relationship building and tech validation, our platform's core offerings Sprinklr Social and Sprinklr Insights are already providing value to their international customer experience. We are delivering a scalable unified solution that meets their global business needs to proactively monitor their brand, protect brand reputation and through social publish and engagement effort, they are leveraging customer insights to inform and optimize their marketing performance. This is the kind of transformation we drive connecting brands with their customers in a smarter, more impactful way. Our second story is one of the largest technology companies in the world. We closed an 8 figure multiyear renewal with them this quarter. Which is a powerful testament to our longstanding partnership and relentless focus on innovation. Sprinklr has become mission critical for them to deliver seamless, scalable and highly personalized customer service. Our platform powers their shift from costly channels like voice and email to efficient AI driven support on digital channels. Accelerating their goal of 50% -plus call deflection by 2027. With Sprinklr, the company has already reduced their service costs by millions of dollars, while improving resolution speed and customer satisfaction.

25m 21s

And they continue to expand their investments with Sprinklr leveraging our full suite across marketing, social, and insights to drive engagement and operational efficiency at scale. We're working closely with them to push the boundaries of AI innovation, automation and digital transformation. Ensuring that they don't just stay ahead of the evolving landscape but in fact they define it. In closing, while there is plenty of work to do, and this transformation will take time, We are making real and tangible progress. With swift clear actions. Looking at FY 2026 as a transitional year, we intend to stabilize the company and burn in our execution over the first two quarters. Which we hope will drive better results throughout the year. It's never a perfectly straight line. And there will be challenges along the way. But I continue to be optimistic of the opportunity in front of us.

26m 34s

We have clarity about the way forward and what we have to fix. And we will get there step by step day by day quarter by quarter. The world is moving from transactional customer engagement to unified three sixty degree customer experiences. And we believe our vision to divine the world's ability to make every customer experience extraordinary position us well to capitalize on this opportunity. Sprinklr is the platform where it all comes together for customer activities around discovery, commerce, support and service. We will leverage our AI based unified platform execute an ambidextrous approach to reenergize and grow our Sprinklr core, while we harden and expand sprinkler service and our march on the rule of 40. Thank you again to the Sprinklr team members around the world who are passionate about our future and creating powerful value for our customers and embracing this transformational journey with urgency and commitment. Now I'd like to turn the call over to Manish to go through the numbers in a bit more detail. Manish? Thank you, Rohit, and good morning, everyone.

28m 2s

For the fourth quarter, total revenue was $202,500,000 up 4% year over year while subscription revenue was $182,100,000 up 3% year over year. Professional services came in at $20,500,000 All metrics beat the guidance range provided for the quarter. Our subscription revenue base met dollar expansion rates in the fourth quarter was 104%. Given the trailing nature of this calculation, this quarter's metrics reflects the full impact of elevated journey experience during FY 2025. At the end of the fourth quarter, we had 149 customers contributing 1,000,000 or more in subscription revenue over the preceding twelve months. Which is an 18% increase year over year.

28m 56s

We believe our continued success in winning and growing seven figure customers is a testament to the value of the platform we deliver for our customers. These are some of the leading enterprises in the world and a targeted focus of ours with the changes we have made in our go to market efforts. Regarding gross margins for the fourth quarter, on a non GAAP basis, our subscription gross margin was 79% and professional services gross margin was breakeven resulting in a total non GAAP gross margin of 71%. As noted on previous calls, we are experiencing higher data hosting costs as we launch new cloud environments in response to new business opportunities especially in Spectra Service. We acknowledge professional services margins are not optimal at this level we are working to address this as part of our overall work on becoming more efficient. Turning to profitability for the quarter. Non GAAP operating income was $25,900,000 or a 13% margin, which drove non GAAP net income of $0.1 per diluted share. I want to address one point regarding taxes and our non GAAP EPS number for the quarter. In Q4 FY twenty twenty five, based on recent and forecasted profitability in our Sprinklr U. S. Legal entity, we concluded that it is more likely than not that our U. S. Federal and state deferred tax assets are realizable.

30m 34s

And we have therefore released the valuation allowance on our U. S. Federal and state deferred tax assets. This valuation will result in a discrete U. S. GAAP non cash deferred tax benefit of approximately $87,000,000 We still have approximately $335,000,000 in U. S. Remaining for FY '26 and beyond. Given this, we do not expect a material near term impact on cash taxes paid. With respect to free cash flow, we generated $1,500,000 during the fourth quarter. This free cash flow generation contributed to our healthy balance sheet which now stands at 483,500,000.0 in cash and marketable securities with no debt outstanding. Calculated billings for the fourth quarter were $298,600,000 dollars an increase of 10% year over year.

31m 34s

As of 01/31/2025, total remaining performance obligations or RPO which represents revenue from committed customer contract that has not yet been recognized was 987,700,000.0 up 2% compared to the same period last year. And current RPO or CRPO was $612,500,000.0 up 4% year over year. Turning to a quick summary of financial results for the full year FY 2025. Total revenue was $796,400,000 up 9% year over year with subscription revenue of $717,900,000 up 7% versus the prior year. Calculated billings for the full year were $831,100,000 up 6% year over year. We reported non GAAP operating income for the full year of $84,800,000 equating to a non GAAP net income per diluted share of $0.35 and a non GAAP operating margin of 11%. In terms of free cash flow, we generated $59,200,000 in free cash flow for the year equating to a free cash flow margin of 7%. Before moving to guidance, I would like to provide more information on the restructuring we recently concluded as part of our overall efficiency efforts. We recently completed a company wide internal review of across product areas regions and support functions. We concluded that significant structural changes were necessary to better execute our ambidextra strategy and our objective to get to the Rule of 40.

33m 22s

As a result of this review, and as we disclosed in the eight ks filed with the SEC on February 6, 2025, we reduced our global workforce by approximately 15%. These reductions impacted teams and functions across every department. This restructuring is intended to help position the company for long term success by realigning employee costs with the current business and freeing up capital for incremental investments. We expect that these incremental investments will include hiring in key strategic areas that best align with our growth objectives, notably and R and D resources to both grow the core products and to harden our service product. Expenses related to this action are expected to be a part dollars We estimate $16,000,000 of these expenses will be booked as a restructuring charge here in Q1 FY twenty twenty six. The balance will be booked in Q2. These restructuring challenges are not included in the non GAAP guidance figures we provide here and going forward for FY twenty twenty six. Now moving to our official guidance. For Q1, we expect total revenue to be in the range of $201,500,000 to $202,500,000 representing 3% growth year over year at the midpoint. Within this, we expect subscription revenue to be in the range of $182,000,000 to 183,000,000 representing 3% growth year over year at the midpoint.

35m

The Q1 guide implies $19,500,000 in professional services revenue. As we have signaled on prior earnings calls, we will continue to invest in our professional services delivery capabilities and expect gross margins here to be approximately breakeven in Q1. We expect non GAAP operating income to be in the range of $31,500,000 to $32,500,000 resulting in non GAAP net income or diluted share of approximately $0.1 assuming $269,000,000 diluted weighted average shares outstanding. This equates to a 16% non GAAP operating margin at the midpoint. Note that we are now applying a 30% non GAAP tax rate for computation of the EPS number driven by the release of The U. S. Valuation allowance. However, it should be noted that the actual cash taxes paid are expected to be substantially lower given the NOL position described earlier. For full year FY 2026, we expect subscription revenue to be in the range of $741,000,000 to $743,000,000 representing 3% growth year over year at the midpoint. And we expect total revenue to be in the range of $821,500,000 to $823,500,000 representing 3% growth year over year at the midpoint. These guidance ranges imply a FY 2026 professional services revenue of $18,500,000 As we mentioned on prior earnings calls, we are experiencing higher data and hosting costs and expect that to continue into FY 'twenty six.

36m 50s

Our initial estimate is these incremental costs will negatively impact subscription gross margin by approximately 400 basis points or 4% for the full year FY 2026 and are baked into the guidance ranges provided. Our professional services gross margins are With respect to billings, we estimate total billings of a approximately $863,000,000 here in FY 2026, which would imply a billings growth rate of 4% year over year. For modeling purposes, we anticipated billings seasonality pattern in FY 2026 We similar to that of FY 'twenty five.

37m 33s

For the full year FY 2026, we estimate our non GAAP operating income to be in the range of $129,000,000 to $131,000,000 equating to non GAAP net income per diluted share of $0.38 to $0.39 assuming $277,000,000 diluted weighted average shares outstanding. This implies a 16% non GAAP operating margin at the midpoint. When modeling the spread of non GAAP operating income throughout the year, you can assume a midpoint of $32,000,000 for both Q1 and Q2, and then $33,000,000 each for Q3 and Q4. As part of the restructuring we just announced, we will see a lower OpEx level in the first half of the year but our investments will begin to ramp up in the second half. In terms of the operating expense profile, we expect both R and D and G and A to be approximately 10% of revenue with the remainder being for sales and marketing. In deriving the net income per share for modeling purposes, we estimate $16,000,000 in other income for the full year, with $4,000,000 of that to be earned here in Q1.

38m 48s

This other income line primarily consists of interest income. Furthermore, a $39,000,000 total non GAAP tax provision for the full year FY 2026 needs to be added to the non GAAP operating income ranges provided. We estimate a non GAAP tax provision of $9,600,000 here in Q1. Due to the recent release of The U. S. Valuation allowance, we are now applying a 30% tax rate on our non GAAP operating income. But as noted previously, given our NOLs we estimate our cash taxes paid to be significantly less than the non GAAP tax provision. We also expect to be GAAP net income consistent with our performance over the last two years. Regarding free cash flow, we believe we can achieve approximately a 15% free cash flow margin for 'twenty six which would equate to a free cash flow generation of approximately 120,000,000 the full year.

39m 53s

This excludes the cash outflow as part of the restructuring exercise announced earlier this year. This metric would be 100% increase in free cash flow generation versus FY 'twenty five. Note that we will not be providing a quarterly free cash flow guidance metric but will update this annual metric throughout the year as needed. Lastly, I would like to thank all our employees for their dedication and passion for what we are building at Sprinklr and I'm grateful for the confidence that our customers have placed in us.

40m 26s

And with that, let's open it up for questions. Operator?

40m 53s

Our first question is coming from Pinjalyn Bora from JPMorgan. Your line is now live.

40m 59s

Great. Thank you so much for taking the questions. Rory, you have obviously put a lot of changes in motion. It's great to see kind of the improvement in the operating margin that you saw in Q4 as well as what you're guiding towards. Maybe talk about the avenues that is driving the cost efficiency. I'm trying to understand how we should think about that cost efficiency versus growth Is that largely low hanging fruit? Or is there an element that it could actually be coming at an Yes, I hear that's a great question. Absolutely. We're focused 100% on making the business more a efficient. That's crucial. I think over the past several years, there was growth in that investments in areas and organizations kind of expand. It was time to really focus on where were our critical customers, where were the most important product structures, where did we have to make the right So we did an analytic and looked at the business end to end. That's how we began to redo the go to market. That's how we restructured into a pod coverage model. Then we did work on the roadmaps for this year to make sure the right innovations were prioritized first.

42m 21s

And we looked at where we were taking our marketing and our go to market dollars. Where is our ideal customer?

42m 29s

Our ideal customer is the top of commercial, to very large enterprise. So we understood that and then we optimized the business structure to capture that and to prioritize the investments in product areas.

42m 42s

So we streamline the business and we take a significant [indiscernible] out That's a tough decision and always difficult to do. And I want to to emphasize we did that with respect and care for everyone that was affected. And we spoke to every individual directly. What that allows us then do is to flow some of that return to the bottom line. Our business should be returning in that 15% to 20% range over the next couple of years. That's what it should look like as an enterprise To your question, did we sacrifice growth? Absolutely not. That's never what we want to do. You can improve the bottom line, And what we did was freed up additional dollars in this action that we're going to invest over the next one to three quarters in additional talent. Additional coverage to improve our product innovation, to accelerate activities to improve our delivery and implementation. Sprinklr has to become much more consistent with the way we deliver to our customers and how we implement our solutions the way we deliver our innovations, and how our customers receive them and even how we communicate with you. And our investors we need to make sure that we're executing in a very consistent way.

44m 9s

Growth in the rule of 40 is an important factor. So as you look you'll see us work through this FY '26 as a transitional year to position us to burn in our execution, improve our consistency, deliver on our better implementations, our better innovations and then to allow us to bend the business. It's all about driving durable long term growth. And we've freed up cash so that we can make those investments expenses throughout the year. So we have degrees of freedom to capture that as we uncover those opportunities and we see needs of the customers, And remember, when we get it right with our customers, as I mentioned in a couple of the examples in the prepared remarks, the solution is deeply valued. We've shot ourselves in the foot over the past several years with inconsistent execution, inconsistent delivery, inconsistent implementation. We are going to use FY '26 as the year to transition and to create very much more predictability and implementation. And that will then bend the business and return to growth. And to get to a rule of 40 into the 30s, we have to return to a better growth level. And we wanted to be prudent with our guidance There's a macro environment that's a bit choppy right now.

45m 33s

We have a pristine balance sheet. Let's make sure that we execute first two quarters and then position ourselves to bend throughout the year.

45m 44s

But again, to answer your question, no, we are definitely focused on taking the actions that sure improve the bottom line, That's the low hanging fruit that's easier to do, but it was with the intent to free up the ability to invest and to create that durable that bend in execution as well as investment to capture that longer term durable growth.

46m 9s

Thank you. Understood. Thanks for the clarity. And one for Manish. Manish, I was a little bit surprised with the 400 basis point negative impact it seems like to subscription gross margin. Is there a way to understand how much of that is coming from higher data cost versus hosting? [indiscernible] We don't break it out, but you'd remember in the Q3 call we spoke about renewing the Twitter license and I'd also mentioned that came with a cement rate increase Data costs across every vendor are going up. Only because you're using these data feeds for training AI models and such. And I think every data vendor is realized that there is value in the data that they provide. We don't really break down the hosting side either, but you'll also remember we've said as we've spun up new data centers, there's an initial setup cost to each one of these. It's close to $2,000,000 per BOP. So as we see more growth in sprinkler service, we're obviously going ahead and investing in the hosting capabilities and that all in the aggregate is what's impacting gross margins here in the short term.

47m 20s

Got it. Thank you very much.

47m 23s

Thank you. Next question is coming from Arjun Battia from William Blair. Your line is now live. Perfect. Thank you so much. Brian, I have one for you to start off with. As you think about the growth potentially going forward, it seemed like a lot of your commentary was focused on the the install base and some of the changes that you can make there. How are we thinking about focusing go to market resources and new customer acquisition versus the opportunity that exists within your existing customers? Is there one that's a bigger priority? And I'm curious how you're thinking about that. Thank you. Sure.

48m

I think the way to think about that in the tactic We want to solidify the base and we have huge opportunities to expand. A software company of our size to have $149,000,000 customers is pretty unusual. I mean, that's a big number. And then to have a group of those customers in the $1,020,000,000 dollars plus purchasing range is think extremely unusual. We have an opportunity to grow those customers. And we need to make sure that renewals improve and it's really about creating a go to market that nurtures and keeps those relationships three sixty five degrees. That moves up into the sea level. We're absolutely moving into more mission critical capabilities And as this convergence of the customer experience applications evolves, the platform play of unifying the social activities, across all vectors of engagement, discovery, commerce, support, service. That's why the CCaaS business is so important. And then using AI to knit that experience, and to create that value, that's going to grow. So yes, in the tactical timeframe, protect and stabilize the base, expand on that base, grow that 149 into larger accounts. You always want to feed the engine. So net new logos are super important.

49m 38s

But let's not go to the bottom and go to mom and pop stores and do $12,000 or $5,000 deals, that's going to be a distraction This is an enterprise software company with gold standard customers. Our top 500 accounts are the most important in the world. Adding a couple of mom and pop shops regional little plays, that's going to be a distraction. We can double back on that in a couple of years, Let's grow with the place that our ideal customer set is. Our customers value sprinkler when we knit these solutions together and we create a differentiated customer experience. That's why we're seeing this uptake. And if we execute FY '26, the transitional year to improve implementation and our delivery, we will see improved growth. That's 100%. So answer the question straightforward, Tactically and then the midterm focus on the base, solidify it, expand it. There's a lot of opportunity to grow it and we proved that when we get it right. They see value. Two, of course, speed the engine with net new but make sure it's those ideal customer sets. We want a great one that I mentioned in the prepared remark. I mean, that's a huge coffee player around the world.

51m 4s

And to get in there and to get in a significant way, think we can expand that four or five fold over the next three, four years. But we've got to continue to focus on the the base and get that solidified and then keep beating the engine with net new I'd slant it seventy-thirty toward the base right now. Perfect. That's great to hear. And then maybe just following up on that piece a little bit.

51m 36s

Mentioned, I think, historical implementation challenges a few times in your prepared remarks. Just curious how prevalent is that and how challenging is that to remedy? And as you go back to these customers where maybe you've [indiscernible] Is there an opportunity to go and up sell and cross sell as you're doing that? Or and I'm curious just like on a timing from a timing perspective as well how long this might long some of this might take with your new single base?

52m 10s

Sure. I think around implementation challenges, it's that the organization never really matured those functions. Those functions were almost done in a one off manner. If you got the right team, the implementation went very well.

52m 28s

If it was a new team or they didn't have the proper documentation, it might be a bit of an adventure. The [indiscernible] idea here and I've just I've moved the service and support function under me now. So I'm going to spend a fair amount of time on this. We need to trade treat implementations as a product. We have to productize it, sit get it consistent, have it very well documented, Our product documentation is getting up to speed. Documenting our implementations and then enabling our teams to do it consistently and have that training done time and time again. That's all work that's being done right now and there's part of this transitional East so it's really not going back and fix the old ones. They're up and running. It's the ones that are in motion right now is doubling down, making sure we get them through the successful and then creating that long term relationship with the new cover model, so we can continue to enhance and expand. Your question about is there an opportunity to upsell? Always. Every engagement with a customer is an opportunity to show value, and to show how they can use the rest of the sprinkler plant platform to expand.

53m 51s

That's why we're doing a very focused set of work around our top 400, 500 accounts. We call it Project Bear Hug. We're going to really target and build account plans across every one of those in the first and second quarter that will drive it. In parallel, we're working with our service teams to make sure that our implementations are almost productized and they're consistent. I think that will take two or three quarters to get there. I think but we're improving every day, could even take four quarters. We want to make sure we do it right. But every day, we're improving we're improving the knowledge base, we're sharing the experience, we're putting in the discipline so that it's much more predictable And that's how we've got to think about these implementation challenges. And in the short term, cover the accounts, make sure and I'm involved in a lot of them. So that's where I'm getting a lot of feedback and knowledge to understand exactly what it is. And when we have a challenge, get on top of it, solve that, get that customer to successfully implement. And I think the customer appreciates that we're getting better each day, We're not done.

55m 4s

We have work to do, no question. It took several years to get here. It's going to take more than three or four months to get it fixed, but we know what to do.

55m 15s

Very helpful. Thank you very much. Your next question today is coming from Elizabeth Porter from Morgan Stanley. Your line is now live.

55m 24s

Great. Thank you so much. I wanted to go back to the reinvestment in hiring, particularly around kind of the go to market strategy. And just how should we think about the timing of these hires? In the typical time period for a rep to ramp I'm really looking to get additional color on kind of what the implications are for when you feel like sales capacity will be durably operating at these higher levels? Thank you.

55m 48s

Yes, Elizabeth, that's a great question. One of the things that I'm trying to think about right now is what's my sales capacity for FY '27? It takes us about six to nine months to be at a rep to be ramped. So what we're trying to do now is actually hire in the second middle of the year kind of the hiring for the beginning of next year, because we want to bring them on now so that they're ready. We've tried to think about that and tried to make a structure Now, of course, you've got to deal with attrition and make sure there's performance. But our whole mindset is to be hiring in the late second quarter, early third quarter for FY 2027. So that we're building that out. What we want to see is an improvement year over year of our ramped AEs as we exit the year compared to the previous two or three years. The whole focus here and it's not just AEs, it's also about building the ratios within the coverage model. We will continue to invest We had some technical mismatches. It's a technical solution. And customers value the technical experience. If we slant too administratively in terms of skills in our success managers or in our solution architects, I think we missed the mark a bit.

57m 24s

So we've really tried to rebalance that. And I think you'll see us also invest in those parts of the pod as well. Both at the AE level to get ready for FY 2027, to make sure that we have the capacity in terms of the success managers. And I plan to add success managers most of the year, especially technical success managers that really have those right skills and then to add the solution architect. It's all in mind that we'll then have the products hardened and we'll have the implementation more consistent, so we can move to the third phase of the transformation to F, White's 'twenty seven, which we like to refer to as acceleration. I hope that helps, Elizabeth.

58m 11s

Yes, that definitely does. And just as a follow-up, I understand that really the focus right now is around company specific execution, but I did want to ask just about macro. It felt like exiting the year, we had a bit more clarity post election, some optimism. Certainly like the recent headlines around trade and tariffs had heightened some of the uncertainty So what are you guys hearing in terms of your conversations with customers or seeing in terms of deal cycles how should we think about the prioritization of prioritization of spend around customer experience?

58m 46s

Sure. So I think the macro environment is a bit unpredictable and a bit choppy right at the moment. Couple of the answers from our perspective, tariffs don't really affect us directly. So that's not the issue. Will customers look to be more prudent on their spending yes, that's possible. I think that people are a little bit of wait and see. There's a bit of a correct that's going on in the market right now. We've got a pristine balance sheet.

59m 21s

We've taken the cost actions and we've given you guidance that we think is very prudent. And we think that we can pretty much handle whatever the macro throws at us within reason. I mean, if there is some gigantic shock to the market, that affects everybody. But I think we've positioned how we've laid out this year and this is a transition conservative when there's a bit of uncertainty. But we're seeing a good pipeline. I mean, that's we're not seeing any huge issues there. Our issues there's plenty of businesses, there's not a gigantic company. I mean, it's just under $1,000,000,000 Our issue is making ourselves much more consistent, reliable and predictable. I think there's business to be one. I think it's both in our core as we reenergize and grow that And in the services space, we have plenty of demand, but we have to harden that to make sure that's consistently delivered. Yes, if there are going to be some chop in the macro, I think we've got the balance sheet at the right place. I think we've got our cost at the right place. And we set our guidance prudently so that we can move through this.

1h 41s

We're not seeing anything major at this point, but we'll watch it. We'll watch it. Thanks, Elizabeth. Thank you.

1h 50s

Thank you. Next question today is coming from Patrick Walravens from Citizens JMP. Your line is now live.

1h 58s

Great. Thank you.

1h 59s

And congratulations on the start, Rory. Can you address federal, like how big is the federal government for sprinkler if I just look on S. A. Spending, it looks like defense, commerce, NASA, health and human services all seem to to use Sprinklr in some place?

1h 1m 16s

And we're hearing from salespeople and some other companies, they can't even get their phone calls and emails returned from different portions federal government right now, given everything that's going on.

1h 1m 24s

So I'm just wondering if you could address what you're seeing that would be great.

1h 1m 29s

Yes. What I would comment on that is it's it's very small for our business pad. It's not material in any way. Very small. You're right, we do have toeholds in a couple of those spots. But because we're at the beginning of like a Fed ramp approval, that limits how far we can do. So you shouldn't factor that in any way as a a negative or positive for us. We are not exposed on the federal side. While we have a few relatively small implementations in the millions of dollars, it's not material.

1h 2m 16s

That's great. And then as a follow-up, can I ask, you had a very [indiscernible] coming into this role? Has anything been harder than we expected?

1h 2m 28s

No. I mean, what you see in transformations, it's pretty consistent. I mean, what's great about this company is the technology is quite good. The platforms I think, is highly scalable. The AI is real. And it's truly infused. It's been in place for eight years. I think that's kind of differentiated. I think the market is moving toward unified customer experiences. We see this in the demand of our CCAD solutions where it knits to [indiscernible] these are big brands and they see this as a truly differentiated experience. If get this right, it could be kind of a game changing play in that space. I think we're when you look at this business, the maturity of some of the execution and processes feels like a start up. Okay? And it's a complement to the team that they grew it so big with such amazing customers, but we have to clean up those processes, get consistent implementation so that's done get the documentation properly done, get the coverage model properly done. These are basic fixable things. I have not come across anything catastrophic Part of the reason we have some customer renewal pressure and sat the implementation wasn't as clean as others.

1h 4m 13s

But then on the other hand, when we get it right, the customer grows and grows and grows. So what we have to do is do it in a consistent way. This is that kind of we've done the first part, the business optimization that's phase one. All those five things I listed in the prepared remarks are done. And they're in the books now. Now we're moving to the second phase, which is burning in an improving execution the next two, six month periods are important. They're transitional. We've got to stabilize the go to market. We've got to improve the implementation processes. We've got to get the execution on the delivery of product. We have to make the right investments over the next one to three months. That should begin to bend the business on the performance side. We should leave this year performing better than we started the year and we should see an improvement on the rule of 20 as we move through the year, rule of 40 as we move through the year.

1h 5m 15s

Okay?

1h 5m 16s

I think that's really important. And I think moving into the 20s is something that we should try and do as soon as possible because then we get ourselves positioned for that better state.

1h 5m 29s

So So I think it's going pretty much to plan. There's a lot of work to do. There's going to be some unknowns that emerge. And we have we have to execute better every day and that takes time. This transformation will take time.

1h 5m 44s

But I feel good about where we are. I think we know what to do and we'll get there step by step month by month, quarter by quarter.

1h 6m

Thank you. Next question is coming from Jackson Edder from KeyBanc Capital Markets. Your line is now live. Great.

1h 6m 7s

Good morning, everybody. Thanks for taking our questions. The first one is just on the bookings activity in the fourth quarter. Were there any deals that maybe slipped or duration adjustments that you weren't expecting or were there any of the changes that you've been looking to implement Rory, that might have impacted some of the performance there in that fourth quarter?

1h 6m 33s

So Jackson, I think on the fourth quarter, the activity was stronger than expected. So I thought that was a good sign.

1h 6m 44s

We saw a good mix of of small and large deals expansion and new logos. And we saw them both in core and service.

1h 6m 53s

So I thought it was a good finish to the year. Nothing about that was an issue. As you go through changing the whole go to market, we have to watch that in 1Q and 2Q. That's obviously the period when you have the most change And we're I'm spending a truly disproportional amount of time in the field on the road in all three geographies. My frequent flyer miles are adding up. Because we need to manage that and work that during that transitional period as we improve our execution. So no, I didn't see anything about fourth quarter. It was a bit better than expected. But it really matters where we get to as we move through the next four quarters. Okay.

1h 7m 46s

And then I guess, relatedly, can you give us a sense for the pipeline of either large renewals or large deals in terms of like when they're coming up for renewal and the seasonality I don't want to lead the witness too much, but like if it's a big first half [indiscernible] renewal cycle, right, when you're implementing, as you said, when all these changes could potentially that are going into effect. You'd prefer kind of a later renewal cycle this year, but I'm curious what the seasonality would look like.

1h 8m 23s

Yes, the seasonality has been documented on this one. We do hundreds of millions of renewals each year. We're moving more and more to three year deals, but we have still a lot of one year deals. So you see that. Our largest amount of renewals are in the fourth quarter. And our second largest is in second quarter.

1h 8m 44s

And so so it's lightest in third quarter. But it doesn't look any different this year than each year. But the total number may be a little bit lower this year because of more three year deals. But we're trying to move more and more with the go to market team to the three year structure But that's a historical trend, looks very similar. We've changed our incentives this year for the sales team. To make sure that they're properly rewarded for renewals and renewals on time. Got it.

1h 9m 23s

Okay. Thank you.

1h 9m 25s

Yes.

1h 9m 25s

Thanks, Jackson. Thank you. In the interest of time, our final question today is coming from Parker Lane Lane. Your line is now live.

1h 9m 34s

Hi. Thanks guys for taking the question here.

1h 9m 37s

Rory, there's a lot of talk about go to market changes and what you're doing from implementation standpoint, but you also referenced technical debt and removing some of that from the platform. Just wondering if there's any particular area of the platform that you think that technical debt is most pronounced and what's the ideal timeline for resolving some of those issues and getting the platform eyes? Yes, that's a great question, Parker. And that was one of five areas we spent a lot of time on over the past three, four months. Working with Amitabh, the CTO and the team, We built the roadmaps for all towers and the platform We have roadmaps in place for this year. We have our metrics in place. We've improved our documentation. We're improving our test coverage. We're improving our PLM, our product lifecycle, and our new product introduction processes. You're going to see improvement as we go through the year. Some of the changes will take one two quarters, some will take the whole year. We'll We'll see improved delivery and execution as we move through this FY 2026 transitional year. You'll see the focus in the core being around innovation We're going to have a new product introduction with a very interesting innovation around a customer feedback management this year that's going to be very I think disruptive in the marketplace, really leveraging AI.

1h 11m 18s

I think you're going to see us continue to focus to add value in that space. In this space of CCaaS and service, it's really about completing the work around telephony so that we have expansive to technology telephony options both with partners and with our own voice connect solution. We have a large number of customers and agents already on our solution and we continue and expect to double that and triple that as we move forward. I think there's work that you're going to see throughout the year on workforce management which is I think we'll be in a very good space as we get through our July and November releases. I think there's work on reporting on that side. I think we made architectural decision that wasn't right. We created point to points reporting, which causes you almost have to write a report. I mean, seems like 1990 kind of a solution. We have to create more of a data lake and then a kind of a Tableau type solution on top of that so that people can easily do the point and click. We'll fix that this year. There's work around security and reliability that we'll build out throughout the year to make sure that we're robust and that we're highly scalable.

1h 12m 39s

But you should watch that. It'll be each quarter and as it will prove throughout this year and into next year. And we're making sure that we're not going crazy on the pipeline we're not going to take every deal we can take. I mean, we want to make sure we harden this before we add too many new major implementation. We're still taking good deals. We're still adding new winners, but we've got to do it in an orderly fashion. As we clean all of this debt up. It's this year, FY 2026 is the main focus. Got it.

1h 13m 20s

Thank you. We've reached the end of our question and answer session. Like to turn the floor back over for any further or closing comments.

1h 13m 27s

Well, I want to thank everyone for joining the call today. I appreciate everyone across the Sprinklr team around the globe and the hard work that they're doing. They're focused on creating value for our customers Hey, this is never a straight line. We have there will always be new challenges that emerge. But I believe that we've taken the right initial actions We're positioning ourselves to improve. We knew we know what to improve. We've improved the bottom line. We've now created the capacity to invest to move forward. And then we'll look at FY 2026 as a transitional year should see the business begin to bend and we want to improve our growth rate as we move through the year and into next year. It all comes down to better execution. When we get this right, our customers truly value the solutions we create and the AI solution we built here on this amazing platform. So give us time, let us focus on our execution, going to get there day by day. Quarter by quarter, and throughout this year. We know what to do and we're going to work on it. Thank you for everyone's time today. Have a great day.

1h 14m 41s

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Key Insights

Fourth quarter total revenue grew 4% year-over-year to $202.5 million, with subscription revenue increasing 3% year-over-year to $182.1 million. Non-GAAP operating income was $25.9 million, resulting in a 13% non-GAAP operating margin for the quarter.
FY 2026 is positioned as a transitional year, with a focus on stabilizing the business, improving execution, and addressing operational and technical debt. The company aims to improve implementation processes, product delivery, and customer satisfaction.
Guidance for Q1 FY 2026 includes total revenue of $201.5 million to $202.5 million (3% growth year-over-year) and subscription revenue of $182 million to $183 million. Non-GAAP operating income is expected to range from $31.5 million to $32.5 million, with a 16% non-GAAP operating margin at the midpoint.
Full-year FY 2026 guidance includes total revenue of $821.5 million to $823.5 million (3% growth year-over-year) and subscription revenue of $741 million to $743 million. Non-GAAP operating income is projected at $129 million to $131 million, with a 16% non-GAAP operating margin at the midpoint.
The company is implementing significant changes, including a 15% workforce reduction, restructuring go-to-market strategies, and reinvesting in key areas such as R&D, sales, and customer success. Free cash flow for FY 2026 is expected to reach approximately $120 million, representing a 15% free cash flow margin.

Recent Transcripts

Sprinklr focuses on transformation, improving margins, and stabilizing for FY 2026.

Income Statement

Revenue

	2021	2022	2023	2024	2025
Revenue	$387M	$492M	$618M	$732M	$796M
Cost of Revenue	$122M	$148M	$164M	$179M	$222M
Gross Profit	$265M	$345M	$454M	$553M	$574M
Gross Profit %	68%	70%	74%	76%	72%
R&D Expenses	$40M	$61M	$77M	$91M	$92M

2021

2022

2023

2024

2025

Revenue

$387M

$492M

$618M

$732M

$796M

Cost of Revenue

$122M

$148M

$164M

$179M

$222M

Gross Profit

$265M

$345M

$454M

$553M

$574M

Gross Profit %

68%

70%

74%

76%

72%

R&D Expenses

$40M

$61M

$77M

$91M

$92M

Cash Flow

Net Income

	2021	2022	2023	2024	2025
Net Income	-$41M	-$111M	-$56M	$51M	$122M
Dep. & Amort.	$5.7M	$8.1M	$12M	$15M	$19M
Def. Tax	$110K	$235K	$166K	-$2.7M	-$88M
Stock Comp.	$44M	$50M	$56M	$56M	$60M
Chg. in WC	-$6.7M	$6.3M	$19M	-$46M	$0

2021

2022

2023

2024

2025

Net Income

-$41M

-$111M

-$56M

$51M

$122M

Dep. & Amort.

$5.7M

$8.1M

$12M

$15M

$19M

Def. Tax

$110K

$235K

$166K

-$2.7M

-$88M

Stock Comp.

$44M

$50M

$56M

$60M

Chg. in WC

-$6.7M

$6.3M

$19M

-$46M

Balance Sheet

Cash

	2021	2022	2023	2024	2025
Cash	$68M	$321M	$188M	$164M	$145M
ST Investments	$213M	$211M	$390M	$499M	$338M
Cash & ST Inv.	$281M	$532M	$579M	$663M	$483M
Receivables	$117M	$167M	$210M	$276M	$286M
Inventory	$62M	$1	$0	$0	$0

2021

2022

2023

2024

2025

Cash

$68M

$321M

$188M

$164M

$145M

ST Investments

$213M

$211M

$390M

$499M

$338M

Cash & ST Inv.

$281M

$532M

$579M

$663M

$483M

Receivables

$117M

$167M

$210M

$276M

$286M

Inventory

$62M

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice. · See all tickers.

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News & Market InsightsNews & Market Insights
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RelatedRelated
EarningsEarnings
Income StatementIncome Statement
Cash FlowCash Flow
Balance SheetBalance Sheet

Earnings

Report Date

Mar 12, 2025

Reported Revenue

202.5M

Avg 1d Change

10.34%

Report Period

Q4 2025

Reported EPS

0.04

Implied Move 1d

11.84%

Transcript

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We also announced the addition of Jan Hauser and Steven Ward to our Board of Directors.

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And with that, let's open it up for questions. Operator?

40m 53s

Our first question is coming from Pinjalyn Bora from JPMorgan. Your line is now live.

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42m 21s

And we looked at where we were taking our marketing and our go to market dollars. Where is our ideal customer?

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We have a pristine balance sheet. Let's make sure that we execute first two quarters and then position ourselves to bend throughout the year.

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Got it. Thank you very much.

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We have work to do, no question. It took several years to get here. It's going to take more than three or four months to get it fixed, but we know what to do.

55m 15s

Very helpful. Thank you very much. Your next question today is coming from Elizabeth Porter from Morgan Stanley. Your line is now live.

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1h 41s

We're not seeing anything major at this point, but we'll watch it. We'll watch it. Thanks, Elizabeth. Thank you.

1h 50s

Thank you. Next question today is coming from Patrick Walravens from Citizens JMP. Your line is now live.

1h 58s

Great. Thank you.

1h 59s

1h 1m 16s

1h 1m 24s

So I'm just wondering if you could address what you're seeing that would be great.

1h 1m 29s

1h 2m 16s

That's great. And then as a follow-up, can I ask, you had a very [indiscernible] coming into this role? Has anything been harder than we expected?

1h 2m 28s

1h 4m 13s

1h 5m 15s

Okay?

1h 5m 16s

I think that's really important. And I think moving into the 20s is something that we should try and do as soon as possible because then we get ourselves positioned for that better state.

1h 5m 29s

1h 5m 44s

But I feel good about where we are. I think we know what to do and we'll get there step by step month by month, quarter by quarter.

1h 6m

Thank you. Next question is coming from Jackson Edder from KeyBanc Capital Markets. Your line is now live. Great.

1h 6m 7s

1h 6m 33s

So Jackson, I think on the fourth quarter, the activity was stronger than expected. So I thought that was a good sign.

1h 6m 44s

We saw a good mix of of small and large deals expansion and new logos. And we saw them both in core and service.

1h 6m 53s

1h 7m 46s

1h 8m 23s

1h 8m 44s

1h 9m 23s

Okay. Thank you.

1h 9m 25s

Yes.

1h 9m 25s

Thanks, Jackson. Thank you. In the interest of time, our final question today is coming from Parker Lane Lane. Your line is now live.

1h 9m 34s

Hi. Thanks guys for taking the question here.

1h 9m 37s

1h 11m 18s

1h 12m 39s

1h 13m 20s

Thank you. We've reached the end of our question and answer session. Like to turn the floor back over for any further or closing comments.

1h 13m 27s

1h 14m 41s

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Key Insights

Fourth quarter total revenue grew 4% year-over-year to $202.5 million, with subscription revenue increasing 3% year-over-year to $182.1 million. Non-GAAP operating income was $25.9 million, resulting in a 13% non-GAAP operating margin for the quarter.
FY 2026 is positioned as a transitional year, with a focus on stabilizing the business, improving execution, and addressing operational and technical debt. The company aims to improve implementation processes, product delivery, and customer satisfaction.
Guidance for Q1 FY 2026 includes total revenue of $201.5 million to $202.5 million (3% growth year-over-year) and subscription revenue of $182 million to $183 million. Non-GAAP operating income is expected to range from $31.5 million to $32.5 million, with a 16% non-GAAP operating margin at the midpoint.
Full-year FY 2026 guidance includes total revenue of $821.5 million to $823.5 million (3% growth year-over-year) and subscription revenue of $741 million to $743 million. Non-GAAP operating income is projected at $129 million to $131 million, with a 16% non-GAAP operating margin at the midpoint.
The company is implementing significant changes, including a 15% workforce reduction, restructuring go-to-market strategies, and reinvesting in key areas such as R&D, sales, and customer success. Free cash flow for FY 2026 is expected to reach approximately $120 million, representing a 15% free cash flow margin.

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Balance Sheet

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News & Market Insights

Earnings

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Reported Revenue

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