- Q2 Total Revenue of $197.2 million, up 11% year-over-year
- Q2 Subscription Revenue of $177.9 million, up 9%
year-over-year
- Q2 net cash provided by operating activities of $21.3 million
and free cash flow* of $16.5 million
- RPO and cRPO up 10% and 9% year-over-year, respectively
- 145 $1 million customers, up 21% year-over-year
- Recorded a $10.1 million credit loss charge in Q2
Sprinklr (NYSE: CXM), the unified customer experience management
(Unified-CXM) platform for modern enterprises, today reported
financial results for its second fiscal quarter ended July 31,
2024.
"In the second quarter, we continued to expand our customer base
with our industry-recognized AI-powered platform and delivered our
7th consecutive quarter of free cash flow. As we work through
continued market challenges, we are taking decisive steps to
strengthen our foundation to reaccelerate growth and expand
margins—a process that will take several quarters. Despite these
challenges, we believe that Sprinklr remains uniquely positioned to
help large global enterprises unlock and deploy the power of AI
across the front office, as demonstrated by multiple global deals
won this quarter across all our product suites," said Ragy Thomas,
Sprinklr Founder and Co-CEO.
Second Quarter Fiscal 2025 Financial Highlights
- Revenue: Total revenue for the second quarter was $197.2
million, up from $178.5 million one year ago, an increase of 11%
year-over-year. Subscription revenue for the second quarter was
$177.9 million, up from $163.5 million one year ago, an increase of
9% year-over-year.
- Operating (Loss) Income and Margin*: Second quarter GAAP
operating loss was $0.1 million, compared to operating income of
$5.5 million one year ago. Non-GAAP operating income was $15.2
million, compared to non-GAAP operating income of $21.3 million one
year ago. For the second quarter, GAAP operating margin was 0% and
non-GAAP operating margin was 8% compared to GAAP operating margin
of 3% and non-GAAP operating margin of 12% in the second quarter of
fiscal year 2024.
- Net Income Per Share*: Second quarter GAAP net income
per share, diluted was $0.01, compared to net income per share,
diluted of $0.04 in the second quarter of fiscal year 2024.
Non-GAAP net income per share, diluted for the second quarter was
$0.06, compared to non-GAAP net income per share, diluted of $0.09
in the second quarter of fiscal year 2024.
- Cash, Cash Equivalents and Marketable Securities: Total
cash, cash equivalents and marketable securities as of July 31,
2024 was $468.5 million.
* Free cash flow, non-GAAP operating income, non-GAAP operating
margin and non-GAAP net income per share are non-GAAP financial
measures defined under “Non-GAAP Financial Measures,” and are
reconciled to net cash provided by operating activities, operating
(loss) income, net income or net income per share, as applicable,
the closest comparable GAAP measure, at the end of this
release.
Financial Outlook
Sprinklr is providing the following guidance for the third
fiscal quarter ending October 31, 2024:
- Subscription revenue between $177.5 million and $178.5
million.
- Total revenue between $196 million and $197 million.
- Non-GAAP operating income between $19 million and $20
million.
- Non-GAAP net income per share of approximately $0.08 assuming
266 million diluted weighted-average shares outstanding.
Sprinklr is providing the following guidance for the full fiscal
year ending January 31, 2025:
- Subscription revenue between $710.5 million and $712.5
million.
- Total revenue between $785 million and $787 million.
- Non-GAAP operating income between $80.5 million and $81.5
million.
- Non-GAAP net income per share between $0.32 and $0.33, assuming
270 million diluted weighted-average shares outstanding.
Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S.
GAAP, we believe that the following non-GAAP financial measures
associated with our condensed consolidated statements of operations
are useful in evaluating our operating performance:
- Non-GAAP gross profit and non-GAAP gross margin;
- Non-GAAP operating income and non-GAAP operating margin;
and
- Non-GAAP net income and non-GAAP net income per share.
We define these non-GAAP financial measures as the respective
U.S. GAAP measures, excluding, as applicable, stock-based
compensation expense and related charges and amortization of
acquired intangible assets. We believe that it is useful to exclude
stock-based compensation expense-related charges and amortization
of acquired intangible assets 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.
In addition, we believe that free cash flow is also a useful
non-GAAP financial measure. Free cash flow is defined as net cash
provided by operating activities less cash used for purchases of
property and equipment and capitalized internal-use software. We
believe that free cash flow is a useful indicator of liquidity as
it measures our ability to generate cash, or our need to access
additional sources of cash, to fund operations and investments. We
expect our free cash flow to fluctuate in future periods with
changes in our operating expenses and as we continue to invest in
our growth. We typically experience higher billings in the fourth
quarter compared to other quarters and experience higher
collections of accounts receivable in the first half of the year,
which results in a decrease in accounts receivable in the first
half of the year.
However, non-GAAP financial measures have limitations in their
usefulness to investors because they have no standardized meaning
prescribed by U.S. GAAP and are not prepared under any
comprehensive set of accounting rules or principles. In addition,
other companies, including companies in our industry, may calculate
similarly titled non-GAAP financial measures differently or may use
other measures to evaluate their performance, all of which could
reduce the usefulness of our non-GAAP financial measures as tools
for comparison. As a result, our non-GAAP financial measures are
presented for supplemental informational purposes only and should
not be considered in isolation or as a substitute for our
consolidated financial statements presented in accordance with U.S.
GAAP.
Sprinklr has not reconciled its financial outlook expectations
as to non-GAAP operating income or as to non-GAAP net income per
share to their respective most directly comparable U.S. 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
U.S. 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 U.S. GAAP.
Conference Call Information Sprinklr will host a
conference call today, September 4, 2024, to discuss second quarter
fiscal 2025 financial results, as well as the third quarter and
full year fiscal 2025 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 13748516. 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 1,800 valuable enterprises — global brands like
Microsoft, P&G, Samsung and more than 60% of the Fortune 100.
Sprinklr's value to the enterprise is simple: We un-silo teams to
make customers happier.
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 third quarter
and full year fiscal 2025, the impact of, and our ability to
execute, our corporate strategies and business initiatives, the
benefits of Sprinklr technology and features, and the ability of
customers to successfully implement Sprinklr technology and
accomplish their objectives. 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; 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; unstable
market and economic conditions, including as a result of
fluctuations in inflation rates, higher interest rates, bank
closures or instability, public health crises and geopolitical
actions, such as war and terrorism or the perception that such
hostilities may be imminent; and our ability to successfully defend
litigation brought against us. 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 April 30, 2024, filed with the SEC on June 5, 2024,
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 revenues 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
revenues 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)
July 31, 2024
January 31,
2024
Assets
Current assets:
Cash and cash equivalents
$
119,119
$
164,024
Marketable securities
349,332
498,531
Accounts receivable, net of allowance of
$12.5 million and $5.3 million, respectively
189,000
267,731
Prepaid expenses and other current
assets
84,158
70,690
Total current assets
741,609
1,000,976
Property and equipment, net
33,585
32,176
Goodwill and other intangible assets
49,957
50,145
Operating lease right-of-use assets
48,266
31,058
Other non-current assets
110,381
108,755
Total assets
$
983,798
$
1,223,110
Liabilities and stockholders’ equity
Liabilities
Current liabilities:
Accounts payable
$
25,154
$
34,691
Accrued expenses and other current
liabilities
64,371
93,187
Operating lease liabilities, current
6,286
5,730
Deferred revenue
363,480
374,552
Total current liabilities
459,291
508,160
Deferred revenue, non-current
3,030
506
Deferred tax liability, non-current
1,475
1,474
Operating lease liabilities,
non-current
44,919
27,562
Other liabilities, non-current
6,116
5,704
Total liabilities
514,831
543,406
Commitments and contingencies
Stockholders’ equity
Class A common stock
4
4
Class B common stock
4
4
Treasury stock
(23,831
)
(23,831
)
Additional paid-in capital
1,232,417
1,182,150
Accumulated other comprehensive loss
(4,251
)
(3,836
)
Accumulated deficit
(735,376
)
(474,787
)
Total stockholders’ equity
468,967
679,704
Total liabilities and stockholders’
equity
$
983,798
$
1,223,110
Sprinklr, Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share data)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Revenue:
Subscription
$
177,859
$
163,452
$
355,222
$
321,117
Professional services
19,349
15,013
37,944
30,711
Total revenue
197,208
178,465
393,166
351,828
Costs of revenue:
Costs of subscription (1)
34,306
27,783
66,876
55,259
Costs of professional services (1)
20,010
15,684
38,565
30,145
Total costs of revenue
54,316
43,467
105,441
85,404
Gross profit
142,892
134,998
287,725
266,424
Operating expense:
Research and development (1)
23,622
24,323
46,161
45,084
Sales and marketing (1)
80,497
80,118
167,981
169,320
General and administrative (1)
38,860
25,068
67,961
49,724
Total operating expense
142,979
129,509
282,103
264,128
Operating (loss) income
(87
)
5,489
5,622
2,296
Other income, net
6,414
7,237
13,914
11,996
Income before provision for income
taxes
6,327
12,726
19,536
14,292
Provision for income taxes
4,486
2,241
7,061
999
Net income
$
1,841
$
10,485
$
12,475
$
13,293
Net income per share, basic
$
0.01
$
0.04
$
0.05
$
0.05
Weighted average shares used in computing
net income per share, basic
260,830
268,900
266,187
267,271
Net income per share, diluted
$
0.01
$
0.04
$
0.04
$
0.05
Weighted average shares used in computing
net income per share, diluted
271,934
283,853
279,695
282,951
(1) Includes stock-based compensation
expense, net of amounts capitalized, as follows:
Three Months Ended July
31,
Six Months Ended July
31,
(in thousands)
2024
2023
2024
2023
Costs of subscription
$
327
$
290
$
610
$
590
Costs of professional services
364
405
681
808
Research and development
2,834
3,897
5,408
6,964
Sales and marketing
5,802
6,311
11,406
12,266
General and administrative
5,765
3,962
10,842
7,547
Stock-based compensation expense, net of
amounts capitalized
$
15,092
$
14,865
$
28,947
$
28,175
Sprinklr, Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended July
31,
2024
2023
Cash flow from operating activities:
Net income
$
12,475
$
13,293
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
9,118
7,329
Provision for credit losses
11,103
1,149
Stock-based compensation, net of amounts
capitalized
28,947
28,175
Non-cash lease expense
4,164
2,998
Deferred income taxes
(40
)
(3,402
)
Net amortization/accretion on marketable
securities
(7,436
)
(7,998
)
Other non-cash items, net
216
39
Changes in operating assets and
liabilities:
Accounts receivable
67,292
26,474
Prepaid expenses and other current
assets
(15,289
)
7,917
Other non-current assets
(1,473
)
(4,874
)
Accounts payable
(9,268
)
(7,897
)
Operating lease liabilities
(2,665
)
(2,896
)
Accrued expenses and other current
liabilities
(26,683
)
(25,632
)
Deferred revenue
(7,858
)
(2,156
)
Other liabilities
431
616
Net cash provided by operating
activities
63,034
33,135
Cash flow from investing activities:
Purchases of marketable securities
(136,136
)
(288,727
)
Proceeds from sales and maturities of
marketable securities
Proceeds from sales and maturities of
marketable securities
292,298
206,291
Purchases of property and equipment
(4,028
)
(4,413
)
Capitalized internal-use software
(6,291
)
(5,744
)
Net cash provided by (used in) investing
activities
145,843
(92,593
)
Cash flow from financing activities:
Proceeds from issuance of common stock
upon exercise of stock options
17,235
21,350
Proceeds from issuance of common stock
upon ESPP purchases
3,403
3,970
Payments for repurchase of Class A common
shares
(273,873
)
—
Net cash (used in) provided by financing
activities
(253,235
)
25,320
Effect of exchange rate fluctuations on
cash, cash equivalents and restricted cash
(1,247
)
(89
)
Net change in cash, cash equivalents and
restricted cash
(45,605
)
(34,227
)
Cash, cash equivalents and restricted cash
at beginning of period
172,429
188,387
Cash, cash equivalents and restricted cash
at end of period
$
126,824
$
154,160
Sprinklr, Inc.
Reconciliation of Non-GAAP
Measures
(in thousands)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2024
2023
2024
2023
Non-GAAP gross profit and non-GAAP
gross margin:
U.S. GAAP gross profit
$
142,892
$
134,998
$
287,725
$
266,424
Stock-based compensation expense and
related charges (1)
717
710
1,324
1,423
Non-GAAP gross profit
$
143,609
$
135,708
$
289,049
$
267,847
Gross margin
72
%
76
%
73
%
76
%
Non-GAAP gross margin
73
%
76
%
74
%
76
%
Non-GAAP operating income:
U.S. GAAP operating (loss) income
$
(87
)
$
5,489
$
5,622
$
2,296
Stock-based compensation expense and
related charges (2)
15,243
15,724
29,867
29,839
Amortization of acquired intangible
assets
50
50
100
100
Non-GAAP operating income
$
15,206
$
21,263
$
35,589
$
32,235
Operating margin
—
%
3
%
1
%
1
%
Non-GAAP operating margin
8
%
12
%
9
%
9
%
Free cash flow:
Net cash provided by operating
activities
$
21,322
$
14,575
$
63,034
$
33,135
Purchase of property and equipment
(1,483
)
(2,788
)
(4,028
)
(4,413
)
Capitalized internal-use software
(3,314
)
(3,061
)
(6,291
)
(5,744
)
Free cash flow
$
16,525
$
8,726
$
52,715
$
22,978
(1) Employer payroll tax related to
stock-based compensation for the periods ended July 31, 2024 and
2023 was immaterial as it relates to the impact to gross profit.
(2) Includes $0.1 million and $0.9 million of employer payroll tax
related to stock-based compensation for the three months ended July
31, 2024 and 2023, respectively, and $0.9 million and $1.7 million
of employer payroll tax related to stock-based compensation expense
for the six months ended July 31, 2024 and 2023, respectively.
Three Months Ended July
31,
2024
2023
(in thousands)
Per Share-Basic
Per Share-Diluted
(in thousands)
Per Share-Basic
Per Share-Diluted
Non-GAAP net income reconciliation to
net income
Net income
$
1,841
$
0.01
$
0.01
$
10,485
$
0.04
$
0.04
Add:
Stock-based compensation expense and
related charges
15,243
0.06
0.05
15,724
0.06
0.05
Amortization of acquired intangible
assets
50
0.00
0.00
50
0.00
0.00
Total additions, net
15,293
0.06
0.05
15,774
0.06
0.05
Non-GAAP net income
$
17,134
$
0.07
$
0.06
$
26,259
$
0.10
$
0.09
Weighted-average shares outstanding
260,830
271,934
268,900
283,853
Six Months Ended July
31,
2024
2023
(in thousands)
Per Share-Basic
Per Share-Diluted
(in thousands)
Per Share-Basic
Per Share-Diluted
Non-GAAP net income reconciliation to
net income
Net income
$
12,475
$
0.05
$
0.04
$
13,293
$
0.05
$
0.05
Add:
Stock-based compensation expense and
related charges
29,867
0.11
0.11
29,839
0.11
0.10
Amortization of acquired intangible
assets
100
0.00
0.00
100
0.00
0.00
Total additions, net
29,967
0.11
0.11
29,939
0.11
0.10
Non-GAAP net income
$
42,442
$
0.16
$
0.15
$
43,232
$
0.16
$
0.15
Weighted-average shares outstanding
266,187
279,695
267,271
282,951
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Investor Relations: ir@sprinklr.com
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