Sprinklr Announces Second Quarter Fiscal 2023 Results
Sprinklr (CXM) reported Q2 results with total revenue of $150.6 million, a 27% increase year-over-year. Subscription revenue rose 29% to $133.1 million. Improvement in operating margins was noted, with an operating loss of $21.7 million, reduced from $28.4 million last year. The net loss per share improved to $0.09 from $0.19. Sprinklr also announced a leadership change with Paul Ohls succeeding Luca Lazzaron as Chief Revenue Officer. Updated guidance projects Q3 total revenue between $155 million and $157 million.
- Total revenue increased by 27% year-over-year.
- Subscription revenue grew by 29% year-over-year.
- Operating loss decreased from $28.4 million to $21.7 million.
- Net loss per share improved from $0.19 to $0.09.
- Operating margin remains negative at (14%).
- Continued operating loss signals challenges in achieving profitability.
-
Q2 Total Revenue of
, up$150.6 million 27% year-over-year -
Q2 Subscription Revenue up
29% year-over-year -
RPO and cRPO up
33% and29% year-over-year, respectively - Continued improvement on operating margin with full year FY 23 operating margin much better than prior guidance
-
98
customers, up$1 million 32% year-over-year
“We are very pleased with Sprinklr’s performance in the second quarter, as we beat expectations across all key metrics. In today’s fast changing world, brands are looking for ways to stay close to their customers and we couldn't be more pleased that our platform is helping them deliver better customer experiences by unifying customer-facing functions and teams,” said
Thomas continued, “Our focus on operational excellence and increasing efficiency is having a great impact on our business. As a result, we are significantly improving our business outlook for fiscal 2023. We are increasingly confident in our ability to deliver an attractive combination of strong revenue growth and a clear path to non-GAAP profitability.”
Second Quarter Fiscal 2023 Financial Highlights
-
Revenue: Total revenue for the second quarter was
, up from$150.6 million one year ago, an increase of$118.7 million 27% year-over-year. Subscription revenue for the second quarter was , up from$133.1 million one year ago, an increase of$103.3 million 29% year-over-year. -
Operating Loss and Margin: Second quarter operating loss was
, compared to operating loss of$21.7 million one year ago. Non-GAAP operating loss was$28.4 million , compared to non-GAAP operating loss of$4.9 million one year ago. For the second quarter, GAAP operating margin was ($10.5 million 14% ) and non-GAAP operating margin was (3% ). -
Net Loss Per Share: Second quarter net loss per share was
, compared to net loss per share of$0.09 in the second quarter of fiscal year 2022. Non-GAAP net loss per share for the second quarter was$0.19 , compared to non-GAAP net loss per share of$0.03 in the second quarter of fiscal year 2022.$0.09 -
Cash,
Cash Equivalents and Marketable Securities : Total cash, cash equivalents and marketable securities as ofJuly 31, 2022 was .$540.9 million
CRO Transition
“Luca has been an incredible partner, leader, and team builder for
Financial Outlook
-
Subscription revenue between
and$137 million .$139 million -
Total revenue between
and$155 million .$157 million -
Non-GAAP operating (loss) income between
and$(1 million ) .$1 million -
Non-GAAP net loss per share between
and$0.01 , assuming 263 million weighted average shares outstanding.$0.02
-
Subscription revenue between
and$543 million .$547 million -
Total revenue between
and$616 million .$620 million -
Non-GAAP operating loss between
and$8 million .$12 million -
Non-GAAP net loss per share between
and$0.06 , assuming 261 million weighted average shares outstanding.$0.08
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, basic and diluted, 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.
Conference Call Information
About
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 second 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
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.
|
||||||
Condensed Consolidated Balance Sheets |
||||||
(in thousands, except per share data) |
||||||
(unaudited) |
||||||
|
|
|
||||
|
|
|
||||
Assets |
|
|
||||
Current assets |
|
|
||||
Cash and cash equivalents |
$ |
154,208 |
|
$ |
321,426 |
|
Marketable securities |
|
386,646 |
|
|
210,983 |
|
Accounts receivable, net of allowance for doubtful accounts of
|
|
143,730 |
|
|
163,681 |
|
Prepaid expenses and other current assets |
|
94,054 |
|
|
109,167 |
|
Total current assets |
|
778,638 |
|
|
805,257 |
|
Property and equipment, net |
|
19,460 |
|
|
14,705 |
|
|
|
50,584 |
|
|
50,706 |
|
Operating lease right-of-use assets |
|
13,094 |
|
|
— |
|
Other non-current assets |
|
49,508 |
|
|
49,378 |
|
Total assets |
$ |
911,284 |
|
$ |
920,046 |
|
|
|
|
||||
Liabilities and stockholders’ equity |
|
|
||||
Liabilities |
|
|
||||
Current liabilities |
|
|
||||
Accounts payable |
$ |
39,510 |
|
$ |
15,802 |
|
Accrued expenses and other current liabilities |
|
69,937 |
|
|
100,220 |
|
Operating lease liabilities, current |
|
6,525 |
|
|
— |
|
Deferred revenue |
|
276,218 |
|
|
279,028 |
|
Total current liabilities |
|
392,190 |
|
|
395,050 |
|
Deferred revenue less current portion |
|
1,263 |
|
|
5,325 |
|
Deferred tax liability, long-term |
|
1,093 |
|
|
1,101 |
|
Operating lease liabilities, long-term |
|
7,311 |
|
|
— |
|
Other liabilities, long-term |
|
1,412 |
|
|
2,721 |
|
Total liabilities |
|
403,269 |
|
|
404,197 |
|
Stockholders’ equity |
|
|
||||
Class A common stock |
|
3 |
|
|
3 |
|
Class B common Stock |
|
6 |
|
|
5 |
|
|
|
(23,831 |
) |
|
(23,831 |
) |
Additional paid-in capital |
|
1,027,849 |
|
|
982,122 |
|
Accumulated other comprehensive loss |
|
(5,167 |
) |
|
(820 |
) |
Accumulated deficit |
|
(490,845 |
) |
|
(441,630 |
) |
Total stockholders’ equity |
|
508,015 |
|
|
515,849 |
|
Total liabilities and stockholders’ equity |
$ |
911,284 |
|
$ |
920,046 |
|
|
||||||||||||
Condensed Consolidated Statements of Operations(1) |
||||||||||||
(in thousands, except per share data) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenue: |
|
|
||||||||||
Subscription |
$ |
133,075 |
|
$ |
103,307 |
|
$ |
260,395 |
|
$ |
200,079 |
|
Professional services |
|
17,555 |
|
|
15,385 |
|
|
35,213 |
|
|
29,593 |
|
Total revenue: |
|
150,630 |
|
|
118,692 |
|
|
295,608 |
|
|
229,672 |
|
Costs of revenue: |
|
|
|
|
||||||||
Costs of subscription(2) |
|
25,402 |
|
|
22,341 |
|
|
50,510 |
|
|
43,392 |
|
Costs of professional services(2) |
|
16,757 |
|
|
14,997 |
|
|
33,370 |
|
|
25,655 |
|
Total costs of revenue |
|
42,159 |
|
|
37,338 |
|
|
83,880 |
|
|
69,047 |
|
Gross profit |
|
108,471 |
|
|
81,354 |
|
|
211,728 |
|
|
160,625 |
|
Operating expenses: |
|
|
|
|
||||||||
Research and development(2) |
|
19,989 |
|
|
15,038 |
|
|
37,323 |
|
|
28,126 |
|
Sales and marketing(2)(3) |
|
86,942 |
|
|
69,402 |
|
|
173,880 |
|
|
129,874 |
|
General and administrative(2) |
|
23,215 |
|
|
25,323 |
|
|
45,328 |
|
|
41,531 |
|
Total operating expenses |
|
130,146 |
|
|
109,763 |
|
|
256,531 |
|
|
199,531 |
|
Operating loss |
|
(21,675 |
) |
|
(28,409 |
) |
|
(44,803 |
) |
|
(38,906 |
) |
Other expense, net |
|
(84 |
) |
|
(1,436 |
) |
|
211 |
|
|
(3,627 |
) |
Loss before provision for income taxes |
|
(21,759 |
) |
|
(29,845 |
) |
|
(44,592 |
) |
|
(42,533 |
) |
Provision for income taxes |
|
2,168 |
|
|
2,506 |
|
|
4,623 |
|
|
4,309 |
|
Net loss |
$ |
(23,927 |
) |
$ |
(32,351 |
) |
$ |
(49,215 |
) |
$ |
(46,842 |
) |
|
|
|
|
|
||||||||
Net loss per share attributable to Class A and Class B common stockholders, basic and diluted |
$ |
(0.09 |
) |
$ |
(0.19 |
) |
$ |
(0.19 |
) |
$ |
(0.35 |
) |
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted |
|
258,785 |
|
|
167,590 |
|
|
257,860 |
|
|
133,479 |
|
(1) |
||||||||||||
(2) Includes stock-based compensation expense, net of amounts capitalized, as follows: |
Three Months Ended |
Six Months Ended |
|||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|||||
Costs of subscription |
$ |
389 |
$ |
443 |
$ |
798 |
$ |
822 |
Costs of professional services |
|
779 |
|
737 |
|
1,402 |
|
1,022 |
Research and development |
|
3,148 |
|
1,501 |
|
5,496 |
|
2,729 |
Sales and marketing |
|
7,809 |
|
4,766 |
|
13,665 |
|
8,966 |
General and administrative |
|
4,072 |
|
9,179 |
|
7,350 |
|
11,993 |
Stock-based compensation expense, net of amounts capitalized |
$ |
16,197 |
$ |
16,626 |
$ |
28,711 |
$ |
25,532 |
(3) Includes amortization of acquired intangible assets as follows: |
Three Months Ended |
Six Months Ended |
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
|
2021 |
|
|
|
|
||||||
Sales and marketing |
$ |
133 |
$ |
82 |
$ |
265 |
|
$ |
164 |
Total amortization of acquired intangible assets |
$ |
133 |
$ |
82 |
$ |
265 |
|
$ |
164 |
|
||||||
Condensed Consolidated Statements of Cash Flows |
||||||
(in thousands) |
||||||
(Unaudited) |
||||||
|
Six months ended |
|||||
|
|
2022 |
|
|
2021 |
|
Cash flow from operating activities: |
|
|
||||
Net loss |
|
(49,215 |
) |
|
(46,842 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
||||
Depreciation and amortization expense |
|
5,502 |
|
|
3,451 |
|
Bad debt expense |
|
1,484 |
|
|
(226 |
) |
Stock-based compensation expense |
|
28,711 |
|
|
25,532 |
|
Non-cash interest paid in kind and discount amortization |
|
— |
|
|
3,267 |
|
Noncash lease expense |
|
3,002 |
|
|
— |
|
Deferred income taxes |
|
— |
|
|
1 |
|
Other noncash items, net |
|
577 |
|
|
(999 |
) |
Changes in operating assets and liabilities: |
|
|
||||
Accounts receivable |
|
18,452 |
|
|
11,810 |
|
Prepaid expenses and other current assets |
|
14,245 |
|
|
1,088 |
|
Other noncurrent assets |
|
(393 |
) |
|
(7,668 |
) |
Accounts payable |
|
22,618 |
|
|
(6,751 |
) |
Operating lease liabilities |
|
(3,730 |
) |
|
— |
|
Accrued expenses and other current liabilities |
|
(18,714 |
) |
|
(2,326 |
) |
Litigation settlement |
|
(12,000 |
) |
|
— |
|
Deferred revenue |
|
(6,280 |
) |
|
2,956 |
|
Other liabilities |
|
(1,285 |
) |
|
(154 |
) |
Net cash provided by (used in) operating activities |
|
2,974 |
|
|
(16,861 |
) |
Cash flow from investing activities: |
|
|
||||
Purchases of marketable securities |
|
(448,083 |
) |
|
(61,758 |
) |
Sales of marketable securities |
|
2,838 |
|
|
56,652 |
|
Maturities of marketable securities |
|
267,699 |
|
|
101,860 |
|
Purchases of property and equipment |
|
(2,352 |
) |
|
(3,862 |
) |
Capitalized internal-use software |
|
(5,016 |
) |
|
(2,481 |
) |
Net cash (used in) provided by investing activities |
|
(184,915 |
) |
|
90,411 |
|
Cash flow from financing activities: |
|
|
||||
Proceeds from issuance of common stock upon initial public offering, net of |
|
— |
|
|
276,001 |
|
Proceeds from issuance of common stock upon exercise of stock options |
|
10,429 |
|
|
16,659 |
|
Proceeds from issuance of common stock upon ESPP Purchases |
|
6,213 |
|
|
— |
|
Net cash provided by financing activities |
|
16,642 |
|
|
292,660 |
|
Effect of exchange rate fluctuations on cash and cash equivalents |
|
(1,919 |
) |
|
(257 |
) |
Net change in cash and cash equivalents |
|
(167,218 |
) |
|
365,953 |
|
Cash and cash equivalents at beginning of period |
|
321,426 |
|
|
68,037 |
|
Cash and cash equivalents at end of period |
$ |
154,208 |
|
$ |
433,990 |
|
(1) |
|
||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||
(in thousands) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Non-GAAP gross profit and non-GAAP gross margin: |
|
|
|
|
||||||||
GAAP gross profit |
$ |
108,471 |
|
$ |
81,354 |
|
$ |
211,728 |
|
$ |
160,625 |
|
Stock-based compensation expense-related charges(1) |
|
1,212 |
|
|
1,292 |
|
|
2,246 |
|
|
1,956 |
|
Non-GAAP gross profit |
$ |
109,683 |
|
$ |
82,646 |
|
$ |
213,974 |
|
$ |
162,581 |
|
Gross margin |
|
72 |
% |
|
69 |
% |
|
72 |
% |
|
70 |
% |
Non-GAAP gross margin |
|
73 |
% |
|
70 |
% |
|
72 |
% |
|
71 |
% |
|
|
|
|
|
||||||||
Non-GAAP operating loss:(2) |
|
|
|
|
||||||||
GAAP operating loss |
$ |
(21,675 |
) |
$ |
(28,409 |
) |
$ |
(44,803 |
) |
$ |
(38,906 |
) |
Stock-based compensation expense-related charges(3) |
|
16,615 |
|
|
17,818 |
|
|
29,319 |
|
|
26,724 |
|
Amortization of acquired intangible assets |
|
133 |
|
|
82 |
|
|
265 |
|
|
165 |
|
Non-GAAP operating loss |
$ |
(4,927 |
) |
$ |
(10,509 |
) |
$ |
(15,219 |
) |
$ |
(12,017 |
) |
|
|
|
|
|
||||||||
Non-GAAP net loss and non-GAAP net loss per share:(2) |
|
|
|
|
||||||||
GAAP net loss: |
$ |
(23,927 |
) |
$ |
(32,351 |
) |
$ |
(49,215 |
) |
$ |
(46,842 |
) |
Stock-based compensation expense-related charges(3) |
|
16,615 |
|
|
17,818 |
|
|
29,319 |
|
|
26,724 |
|
Amortization of acquired intangible assets |
|
133 |
|
|
82 |
|
|
265 |
|
|
165 |
|
Non-GAAP net loss attributable to Class A and Class B common stockholders |
$ |
(7,179 |
) |
$ |
(14,451 |
) |
$ |
(19,631 |
) |
$ |
(19,953 |
) |
Weighted-average shares outstanding used in computing net loss per share attributable to Class A and Class B common stockholders - basic |
|
258,785 |
|
|
167,590 |
|
|
257,860 |
|
|
133,479 |
|
Non-GAAP net loss per common share attributable to Class A and Class B common stockholders |
$ |
(0.03 |
) |
$ |
(0.09 |
) |
$ |
(0.08 |
) |
$ |
(0.15 |
) |
|
|
|
|
|
||||||||
Free cash flow: |
|
|
|
|
||||||||
Net cash provided by (used in) operating activities |
|
|
$ |
2,974 |
|
$ |
(16,861 |
) |
||||
Purchase of property and equipment |
|
|
|
(2,352 |
) |
|
(3,862 |
) |
||||
Capitalized internal-use software |
|
|
|
(5,016 |
) |
|
(2,481 |
) |
||||
Free cash flow |
|
|
|
(4,394 |
) |
|
(23,204 |
) |
||||
Litigation settlement payments |
|
|
|
12,000 |
|
|
— |
|
||||
Adjusted free cash flow |
|
|
$ |
7,606 |
|
$ |
(23,204 |
) |
||||
(1) Includes employer payroll tax related to stock-based compensation expense for the three and six months ended |
||||||||||||
(2) |
||||||||||||
(3) Includes |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220908006066/en/
Investor Relations:
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FAQ
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