- Q3 Total Revenue of $157.3 million, up 24%
year-over-year
- Q3 Subscription Revenue up 27% year-over-year
- RPO and cRPO up 28% and 27% year-over-year,
respectively
- Continued improvement on operating margin leading to
non-GAAP profitability
- 107 $1 million customers, up 34% year-over-year
Sprinklr (NYSE: CXM), the unified customer experience management
(Unified-CXM) platform for modern enterprises, today reported
financial results for its third quarter ended October 31, 2022.
“We are very pleased with Sprinklr’s third quarter performance
and beat expectations across all key metrics. We remain focused on
our fundamentals during this challenging environment and generated
profitable revenue growth and continued operating margin
improvement. But we're most proud of the results the world's
largest brands are achieving with our platform and proprietary AI
including automation, faster response times, cost savings and
deeper customer insights,” said Ragy Thomas, Sprinklr Founder
and CEO.
Third Quarter Fiscal 2023 Financial Highlights
- Revenue: Total revenue for the third quarter was $157.3
million, up from $127.1 million one year ago, an increase of 24%
year-over-year. Subscription revenue for the third quarter was
$139.9 million, up from $109.9 million one year ago, an increase of
27% year-over-year.
- Operating Loss and Margin: Third quarter operating loss
was $4.6 million, compared to operating loss of $24.8 million one
year ago. Non-GAAP operating income was $6.9 million, compared to
non-GAAP operating loss of $12.0 million one year ago. For the
third quarter, GAAP operating margin was (3%) and non-GAAP
operating margin was 4%.
- Net Income (Loss) Per Share: Third quarter net loss per
share was $0.02, compared to net loss per share of $0.11 in the
third quarter of fiscal year 2022. Non-GAAP net income per share
for the third quarter was $0.02, compared to non-GAAP net loss per
share of $0.06 in the third quarter of fiscal year 2022.
- Cash, Cash Equivalents and Marketable Securities: Total
cash, cash equivalents and marketable securities as of October 31,
2022 was $544.1 million.
Board of Directors Update
Effective December 2, 2022, Kevin Haverty has been appointed to
the Sprinklr Board of Directors. Mr. Haverty is currently the
Senior Advisor to the CEO at ServiceNow. Previously he served as
the Chief Revenue Officer and the Executive Vice President of
Worldwide Sales and other senior positions from December 2011 to
the present at ServiceNow. Prior to that, Mr. Haverty held various
roles at other leading technology companies. Mr. Haverty holds a
B.A. degree in Political Science from Providence College and was a
member of Army ROTC and a Distinguished Military Graduate.
Effective as of the close of business on December 1, 2022,
Matthew Jacobson, a Partner at ICONIQ Capital stepped down from the
Sprinklr Board of Directors. Mr. Jacobson has served as a member of
our Board since December 2014.
“I am very excited to have Kevin join Sprinklr’s Board of
Directors to support our growth and global vision as a public
company. Kevin’s leadership and enterprise focus will be a great
benefit to our Go-To-Market strategy as we continue to pursue
expanded growth,” said Ragy Thomas, Sprinklr Founder and CEO. “I
also want to thank Matt for his counsel and support through the
years. ICONIQ joined as an investor in Sprinklr in the very early
days and helped chart our course of today. We are appreciative of
Matt’s contributions and wish him all the best in his future
endeavors," continued Thomas.
Financial Outlook
Sprinklr is providing the following guidance for the fourth
fiscal quarter ending January 31, 2023:
- Subscription revenue between $145.5 million and $146.5
million.
- Total revenue between $162.3 million and $163.3 million.
- Non-GAAP operating income between $6 million and $7
million.
- Non-GAAP net income per share between $0.01 and $0.02, assuming
264 million weighted average shares outstanding.
Sprinklr is providing the following guidance for the full fiscal
year ending January 31, 2023:
- Subscription revenue between $545.8 million and $546.8
million.
- Total revenue between $615.2 million and $616.2 million.
- Non-GAAP operating loss between $1.3 million and $2.3
million.
- Non-GAAP net loss per share between $0.04 and $0.05, assuming
260 million weighted average shares outstanding.
Non-GAAP Financial Measures
This press release and the accompanying tables contain the
following non-GAAP financial measures: non-GAAP gross profit and
non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss,
non-GAAP net loss per share, free cash flow, and adjusted free cash
flow. We define these non-GAAP financial measures as the respective
GAAP measures, excluding, as applicable, stock-based compensation
expense-related charges, amortization of acquired intangible
assets, purchase of property and equipment, capitalized
internal-use software, and litigation settlement payments. We
believe that it is useful to exclude these expenses in order to
better understand the long-term performance of our core business
and to facilitate comparison of our results to those of peer
companies over multiple periods. The principal limitation of these
non-GAAP financial measures is that they exclude significant
expenses that are required by GAAP to be recorded in Sprinklr’s
financial statements. In addition, they are subject to inherent
limitations, as they reflect the exercise of judgment by Sprinklr’s
management about which expenses are excluded or included in
determining these non-GAAP financial measures. A reconciliation is
provided below for each non-GAAP financial measure to the most
directly comparable financial measure stated in accordance with
GAAP.
Sprinklr has not reconciled its expectations as to non-GAAP
operating loss, or as to non-GAAP net loss per share, to their most
directly comparable GAAP measures as a result of the high
variability, complexity and low visibility with respect to the
charges excluded from these non-GAAP measures; in particular, the
measures and effects of stock-based compensation expense specific
to equity compensation awards that are directly impacted by
unpredictable fluctuations in our stock price. We expect the
variability of the above charges to have a significant, and
potentially unpredictable, impact on our future GAAP financial
results. Accordingly, reconciliation is not available without
unreasonable effort, although it is important to note that these
factors could be material to Sprinklr’s results computed in
accordance with GAAP.
Conference Call Information
Sprinklr will host a conference call today, December 6, 2022, to
discuss third quarter fiscal 2023 financial results, as well as the
fourth quarter and full year fiscal 2023 outlook, at 5:00 p.m.
Eastern Time, 2:00 p.m. Pacific Time. Investors are invited to join
the webcast by visiting: https://investors.sprinklr.com/. To access
the call by phone, dial 877-459-3955 (domestic) or 201-689-8588
(international). The conference ID number is 13734476. The webcast
will be available live, and a replay will be available following
completion of the live broadcast for approximately 90 days.
About Sprinklr Inc.
Sprinklr is a leading enterprise software company for all
customer-facing functions. With advanced AI, Sprinklr's unified
customer experience management (Unified-CXM) platform helps
companies deliver human experiences to every customer, every time,
across any modern channel. Headquartered in New York City with
employees around the world, Sprinklr works with more than 1,000 of
the world’s most valuable enterprises — global brands like
Microsoft, P&G, Samsung and more than 50% of the Fortune
100.
Forward-Looking Statements
This press release contains express and implied “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements regarding our financial
outlook for the fourth quarter and full year fiscal 2023. In some
cases, you can identify forward-looking statements by terms such as
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,”
“might,” “plan,” “project,” “will,” “would,” “should,” “could,”
“can,” “predict,” “potential,” “target,” “explore,” “continue,” or
the negative of these terms, and similar expressions intended to
identify forward-looking statements. By their nature, these
statements are subject to numerous uncertainties and risks,
including factors beyond our control, that could cause actual
results, performance, or achievement to differ materially and
adversely from those anticipated or implied in the statements,
including: our rapid growth may not be indicative of our future
growth; our revenue growth rate has fluctuated in prior periods;
our ability to achieve or maintain profitability; we derive the
substantial majority of our revenue from subscriptions to our
Unified-CXM platform; our ability to manage our growth and
organizational change; the market for Unified-CXM solutions is new
and rapidly evolving; our ability to attract new customers in a
manner that is cost-effective and assures customer success; our
ability to attract and retain customers to use our products; our
ability to drive customer subscription renewals and expand our
sales to existing customers; our ability to effectively develop
platform enhancements, introduce new products or keep pace with
technological developments; the market in which we participate is
new and rapidly evolving and our ability to compete effectively;
our business and growth depend in part on the success of our
strategic relationships with third parties; our ability to develop
and maintain successful relationships with partners who provide
access to data that enhances our Unified-CXM platform’s artificial
intelligence capabilities; the majority of our customer base
consists of large enterprises, and we currently generate a
significant portion of our revenue from a relatively small number
of enterprises; our investments in research and development; our
ability to expand our sales and marketing capabilities; our sales
cycle with enterprise and international clients can be long and
unpredictable; our business and results of operations may be
materially adversely affected by the ongoing COVID-19 pandemic or
other similar outbreaks; certain of our results of operations and
financial metrics may be difficult to predict; our ability to
maintain data privacy and data security; we rely on third-party
data centers and cloud computing providers; the sufficiency of our
cash and cash equivalents to meet our liquidity needs; our ability
to comply with modified or new laws and regulations applying to our
business; our ability to successfully enter into new markets and
manage our international expansion; the attraction and retention of
qualified employees and key personnel; our ability to effectively
manage our growth and future expenses and maintain our corporate
culture; our ability to maintain, protect, and enhance our
intellectual property rights; our ability to successfully defend
litigation brought against us; and unstable market and economic
conditions. Additional risks and uncertainties that could cause
actual outcomes and results to differ materially from those
contemplated by the forward-looking statements are or will be
discussed in our Quarterly Report on Form 10-Q for the quarter
ended July 31, 2022, filed with the SEC on September 8, 2022, under
the caption “Risk Factors,” and in other filings that we make from
time to time with the SEC. Forward-looking statements speak only as
of the date the statements are made and are based on information
available to Sprinklr at the time those statements are made and/or
management's good faith belief as of that time with respect to
future events. Sprinklr assumes no obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, except as required by law.
Key Business Metrics
RPO. RPO, or remaining performance obligations,
represents contracted revenue that have not yet been recognized,
and include deferred revenue and amounts that will be invoiced and
recognized in future periods.
cRPO. cRPO, or current RPO, represents contracted revenue
that have not yet been recognized, and include deferred revenue and
amounts that will be invoiced and recognized in the next 12
months.
Sprinklr, Inc.
Condensed Consolidated Balance
Sheets
(in thousands, except per
share data)
(unaudited)
October 31,
2022
January 31,
2022
Assets
Current assets
Cash and cash equivalents
$
156,025
$
321,426
Marketable securities
388,089
210,983
Accounts receivable, net of allowance for
doubtful accounts of $3.9 million and $2.7 million,
respectively
132,932
163,681
Prepaid expenses and other current
assets
80,557
109,167
Total current assets
757,603
805,257
Property and equipment, net
20,679
14,705
Goodwill and other intangible assets
50,489
50,706
Operating lease right-of-use assets
13,506
—
Other non-current assets
54,718
49,378
Total assets
$
896,995
$
920,046
Liabilities and stockholders’ equity
Liabilities
Current liabilities
Accounts payable
$
15,776
$
15,802
Accrued expenses and other current
liabilities
88,369
100,220
Operating lease liabilities, current
6,693
—
Deferred revenue
257,659
279,028
Total current liabilities
368,497
395,050
Deferred revenue less current portion
1,015
5,325
Deferred tax liability, long-term
1,089
1,101
Operating lease liabilities, long-term
7,601
—
Other liabilities, long-term
1,365
2,721
Total liabilities
379,567
404,197
Stockholders’ equity
Class A common stock
3
3
Class B common Stock
6
5
Treasury stock
(23,831)
(23,831)
Additional paid-in capital
1,045,399
982,122
Accumulated other comprehensive loss
(7,444)
(820)
Accumulated deficit
(496,705)
(441,630)
Total stockholders’ equity
517,428
515,849
Total liabilities and stockholders’
equity
$
896,995
$
920,046
Sprinklr, Inc.
Condensed Consolidated
Statements of Operations(1)
(in thousands, except per
share data)
(Unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Revenue:
Subscription
$
139,906
$
109,941
$
400,301
$
310,020
Professional services
17,345
17,115
52,558
46,708
Total revenue:
157,251
127,056
452,859
356,728
Costs of revenue:
Costs of subscription(2)
26,249
22,835
76,759
66,228
Costs of professional services(2)
14,271
15,865
47,641
41,520
Total costs of revenue
40,520
38,700
124,400
107,748
Gross profit
116,731
88,356
328,459
248,980
Operating expenses:
Research and development(2)
19,208
16,591
56,531
44,717
Sales and marketing(2)(3)
79,538
74,698
253,418
204,573
General and administrative(2)
22,588
21,833
67,916
63,364
Total operating expenses
121,334
113,122
377,865
312,654
Operating loss
(4,603)
(24,766)
(49,406)
(63,674)
Other expense, net
1,093
(1,119)
1,304
(4,744)
Loss before provision for income taxes
(3,510)
(25,885)
(48,102)
(68,418)
Provision for income taxes
2,350
1,823
6,973
6,132
Net loss
$
(5,860)
$
(27,708)
$
(55,075)
$
(74,550)
Net loss per share attributable to Class A
and Class B common stockholders, basic and diluted
$
(0.02)
$
(0.11)
$
(0.21)
$
(0.43)
Weighted average shares used in computing
net loss per share attributable to Class A and Class B common
stockholders, basic and diluted
260,285
255,195
258,677
174,497
(1) Sprinklr identified immaterial
corrections related to capitalization of costs to obtain customer
contract during the year ended January 31, 2022, which resulted in
revisions to prior year reported amounts within the consolidated
statements of operations with a decrease in net loss of $1.5
million and $2.6 million for the three and nine months ended
October 31, 2021, respectively.
(2) Includes stock-based compensation
expense, net of amounts capitalized, as follows:
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Costs of subscription
$
282
$
589
$
1,079
$
1,411
Costs of professional services
368
889
1,770
1,911
Research and development
2,204
2,186
7,700
4,915
Sales and marketing
5,071
4,997
18,736
13,963
General and administrative
3,284
3,760
10,635
15,753
Stock-based compensation expense, net of
amounts capitalized
$
11,209
$
12,421
$
39,920
$
37,953
(3) Includes amortization of acquired
intangible assets as follows:
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Sales and marketing
$
133
$
116
$
399
$
280
Total amortization of acquired intangible
assets
$
133
$
116
$
399
$
280
Sprinklr, Inc.
Condensed Consolidated
Statements of Cash Flows(1)
(in thousands)
(Unaudited)
Nine months ended October
31,
2022
2021
Cash flow from operating activities:
Net loss
(55,075)
(74,550)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization expense
8,727
5,638
Bad debt expense
1,161
47
Stock-based compensation expense
39,920
37,953
Non-cash interest paid in kind and
discount amortization
—
3,266
Non-cash lease expense
4,759
—
Deferred income taxes
—
1
Other non-cash items, net
(549)
(1,187)
Changes in operating assets and
liabilities:
Accounts receivable
29,358
12,741
Prepaid expenses and other current
assets
27,246
(2,395)
Other noncurrent assets
(5,782)
(3,151)
Accounts payable
(1,243)
(5,774)
Operating lease liabilities
(5,448)
—
Accrued expenses and other current
liabilities
(625)
16,413
Litigation settlement
(12,000)
—
Deferred revenue
(24,578)
(7,132)
Other liabilities
(1,285)
197
Net cash provided by (used in) operating
activities
4,586
(17,933)
Cash flow from investing activities:
Purchases of marketable securities
(640,173)
(61,758)
Sales of marketable securities
2,838
56,652
Maturities of marketable securities
459,026
197,555
Purchases of property and equipment
(2,923)
(5,197)
Capitalized internal-use software
(7,733)
(4,150)
Acquisitions, net of cash acquired
—
(3,625)
Net cash (used in) provided by investing
activities
(188,965)
179,477
Cash flow from financing activities:
Proceeds from issuance of common stock
upon initial public offering, net of
—
275,973
Proceeds from issuance of common stock
upon exercise of stock options
15,997
17,892
Proceeds from issuance of common stock
upon ESPP Purchases
6,213
—
Net cash provided by financing
activities
22,210
293,865
Effect of exchange rate fluctuations on
cash and cash equivalents
(3,232)
(1,060)
Net change in cash and cash
equivalents
(165,401)
454,349
Cash and cash equivalents at beginning of
period
321,426
68,037
Cash and cash equivalents at end of
period
$
156,025
$
522,386
(1) Sprinklr identified immaterial
corrections related to capitalization of costs to obtain customer
contract during the year ended January 31, 2022, which resulted in
revisions to prior year reported amounts within the consolidated
statements of cash flows with a decrease in net loss of $2.6
million for the nine months ended October 31, 2021, respectively,
as well as an increase in the related changes in operating assets
and liabilities associated with prepaid expenses and other current
assets of $1.3 million for the nine months ended October 31,
2021.
Sprinklr, Inc.
Reconciliation of Non-GAAP
Measures
(in thousands)
(Unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2022
2021
2022
2021
Non-GAAP gross profit and non-GAAP
gross margin:
GAAP gross profit
$
116,731
$
88,356
$
328,459
$
248,980
Stock-based compensation expense-related
charges(1)
682
1,478
2,925
3,434
Non-GAAP gross profit
$
117,413
$
89,834
$
331,384
$
252,414
Gross margin
74 %
70 %
73 %
70 %
Non-GAAP gross margin
75 %
71 %
73 %
71 %
Non-GAAP operating loss:(2)
GAAP operating loss
$
(4,603)
$
(24,766)
$
(49,406)
$
(63,674)
Stock-based compensation expense-related
charges(3)
11,341
12,647
40,659
39,371
Amortization of acquired intangible
assets
133
116
399
280
Non-GAAP operating income (loss)
$
6,871
$
(12,003)
$
(8,348)
$
(24,023)
Non-GAAP net loss and non-GAAP net
income (loss) per share:(2)
GAAP net loss:
$
(5,860)
$
(27,708)
$
(55,075)
$
(74,550)
Stock-based compensation expense-related
charges(3)
11,341
12,647
40,659
39,371
Amortization of acquired intangible
assets
133
116
399
280
Non-GAAP net income (loss) attributable to
Class A and Class B common stockholders
$
5,614
$
(14,945)
$
(14,017)
$
(34,899)
Weighted-average shares outstanding used
in computing net loss per share attributable to Class A and Class B
common stockholders - basic
260,285
255,195
258,677
174,497
Non-GAAP net income (loss) per common
share attributable to Class A and Class B common stockholders
$
0.02
$
(0.06)
$
(0.05)
$
(0.20)
Free cash flow:
Net cash provided by (used in) operating
activities
$
4,586
$
(17,933)
Purchase of property and equipment
(2,923)
(5,197)
Capitalized internal-use software
(7,733)
(4,150)
Free cash flow
(6,070)
(27,280)
Litigation settlement payments
12,000
—
Adjusted free cash flow
$
5,930
$
(27,280)
(1) Includes employer payroll tax related
to stock-based compensation expense for the three and nine months
ended October 31, 2022.
(2) Sprinklr identified immaterial
corrections related to capitalization of costs to obtain customer
contract during the year ended January 31, 2022, which resulted in
revisions to prior year reported amounts within decreases to the
respective GAAP measures of operating loss and net loss of $1.5
million and $2.6 million for the three and nine months ended
October 31, 2021, respectively.
(3) Includes $0.1 million and $0.7 million
of employer payroll tax related to stock-based compensation expense
for the three and nine months ended October 31, 2022,
respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221206006021/en/
Investor Relations: ir@sprinklr.com
Media & Press: Austin DeArman PR@sprinklr.com
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