Sprinklr Announces Second Quarter Fiscal 2024 Results
- Q2 total revenue increased by 18% YoY and subscription revenue increased by 23% YoY, indicating strong growth. Net cash provided by operating activities and free cash flow are positive at $14.6 million and $8.7 million, respectively. RPO and cRPO are also up, showing continued growth. Sprinklr provides positive guidance for Q3 and full fiscal year 2024.
- None.
-
Q2 Total Revenue of
$178.5 million 18% year-over-year -
Q2 Subscription Revenue of
$163.5 million 23% year-over-year -
Continued growth and operational improvements generate net cash provided by operating activities of
$14.6 million $8.7 million -
RPO and cRPO up
35% and22% year-over-year, respectively -
120
$1 million 22% year-over-year
“We had another solid quarter across the board with strength in Sprinklr Service product suite and a record level of profitability. Our teams continue to innovate across our unified-CXM platform with new features and enhancements to our AI+ strategy. We’re encouraged by customers’ growing demand to unify their front-office teams and technology leading to better customer experiences,” said Ragy Thomas, Founder and CEO at Sprinklr.
Second Quarter Fiscal 2023 Financial Highlights
-
Revenue: Total revenue for the second quarter was
$178.5 million $150.6 million 18% year-over-year. Subscription revenue for the second quarter was$163.5 million $133.1 million 23% year-over-year. -
Operating Income (Loss) and Margin*: Second quarter operating income was
$5.5 million $21.7 million $21.3 million $4.9 million 3% and non-GAAP operating margin was12% . -
Net Income (Loss) Per Share*: Second quarter net income per share, basic was
$0.04 $0.09 $0.10 $0.03 -
Cash, Cash Equivalents and Marketable Securities: Total cash, cash equivalents and marketable securities as of July 31, 2023 was
$628.4 million
* Free cash flow, Non-GAAP operating income (loss), non-GAAP operating margin and non-GAAP net income (loss) per share are non-GAAP financial measures defined under “Non-GAAP Financial Measures,” and are reconciled to Net cash provided by operating activities, operating income (loss), net income (loss) or income (loss) 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, 2023:
-
Subscription revenue between
$164 million $166 million -
Total revenue between
$179 million $181 million -
Non-GAAP operating income between
$15 million $17 million -
Non-GAAP net income per share between
$0.06 $0.07
Sprinklr is providing the following guidance for the full fiscal year ending January 31, 2024:
-
Subscription revenue between
$658 million $660 million -
Total revenue between
$719 million $721 million -
Non-GAAP operating income between
$65 million $67 million -
Non-GAAP net income per share between
$0.30 $0.31
Non-GAAP Financial Measures
This press release and the accompanying tables contain the following non-GAAP financial measures associated with our condensed consolidated statements of operations:
- Non-GAAP gross profit and non-GAAP gross margin
- Non-GAAP operating income (loss) and non-GAAP operating margin
- Non-GAAP net income (loss) and non-GAAP net income (loss) per share
We define these non-GAAP financial measures as the respective
In addition, the press release and the accompanying tables contain free cash flow which 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 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 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 most directly comparable
Conference Call Information
Sprinklr will host a conference call today, September 6, 2023, to discuss second quarter fiscal 2024 financial results, as well as the third quarter and full year fiscal 2024 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 13740665. 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
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 2024, our growth strategy and the ability of our platform to deliver a unified experience to address our customers’ demands. 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 increases in inflation rates, higher interest rates, recent 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, 2023, filed with the SEC on June 5, 2023, 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) |
|||||
|
|
|
|
||
|
July 31,
|
|
January 31,
|
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
147,683 |
|
$ |
188,387 |
Marketable securities |
|
480,725 |
|
|
390,239 |
Accounts receivable, net of allowance for doubtful accounts of |
|
177,442 |
|
|
205,038 |
Prepaid expenses and other current assets |
|
72,039 |
|
|
78,865 |
Total current assets |
|
877,889 |
|
|
862,529 |
Property and equipment, net |
|
27,622 |
|
|
22,885 |
Goodwill and other intangible assets |
|
50,254 |
|
|
50,349 |
Operating lease right-of-use assets |
|
30,094 |
|
|
15,725 |
Other non-current assets |
|
86,794 |
|
|
73,503 |
Total assets |
$ |
1,072,653 |
|
$ |
1,024,991 |
|
|
|
|
||
Liabilities and stockholders’ equity |
|
|
|
||
Liabilities |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
22,791 |
|
$ |
30,101 |
Accrued expenses and other current liabilities |
|
70,800 |
|
|
97,524 |
Operating lease liabilities, current |
|
6,868 |
|
|
7,134 |
Deferred revenue |
|
322,944 |
|
|
324,140 |
Total current liabilities |
|
423,403 |
|
|
458,899 |
Deferred revenue, non-current |
|
488 |
|
|
1,371 |
Deferred tax liability, non-current |
|
1,303 |
|
|
1,289 |
Operating lease liabilities, non-current |
|
24,984 |
|
|
9,633 |
Other liabilities, non-current |
|
5,189 |
|
|
4,467 |
Total liabilities |
|
455,367 |
|
|
475,659 |
Commitments and contingencies |
|
|
|
||
Stockholders’ equity |
|
|
|
||
Class A common stock |
|
4 |
|
|
3 |
Class B common stock |
|
4 |
|
|
6 |
Treasury stock |
|
(23,831) |
|
|
(23,831) |
Additional paid-in capital |
|
1,128,689 |
|
|
1,074,149 |
Accumulated other comprehensive loss |
|
(4,262) |
|
|
(4,384) |
Accumulated deficit |
|
(483,318) |
|
|
(496,611) |
Total stockholders’ equity |
|
617,286 |
|
|
549,332 |
Total liabilities and stockholders’ equity |
$ |
1,072,653 |
|
$ |
1,024,991 |
Sprinklr, Inc. |
|||||||||||
Condensed Consolidated Statements of Operations |
|||||||||||
(in thousands, except per share data) |
|||||||||||
(unaudited) |
|||||||||||
|
|
|
|
|
|
|
|
||||
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Revenue: |
|
|
|
|
|
|
|
||||
Subscription |
$ |
163,452 |
|
$ |
133,075 |
|
$ |
321,117 |
|
$ |
260,395 |
Professional services |
|
15,013 |
|
|
17,555 |
|
|
30,711 |
|
|
35,213 |
Total revenue |
|
178,465 |
|
|
150,630 |
|
|
351,828 |
|
|
295,608 |
Costs of revenue: |
|
|
|
|
|
|
|
||||
Costs of subscription (1) |
|
27,783 |
|
|
25,402 |
|
|
55,259 |
|
|
50,510 |
Costs of professional services (1) |
|
15,684 |
|
|
16,757 |
|
|
30,145 |
|
|
33,370 |
Total costs of revenue |
|
43,467 |
|
|
42,159 |
|
|
85,404 |
|
|
83,880 |
Gross profit |
|
134,998 |
|
|
108,471 |
|
|
266,424 |
|
|
211,728 |
Operating expense: |
|
|
|
|
|
|
|
||||
Research and development (1) |
|
24,323 |
|
|
19,989 |
|
|
45,084 |
|
|
37,323 |
Sales and marketing (1) |
|
80,118 |
|
|
86,942 |
|
|
169,320 |
|
|
173,880 |
General and administrative (1) |
|
25,068 |
|
|
23,215 |
|
|
49,724 |
|
|
45,328 |
Total operating expense |
|
129,509 |
|
|
130,146 |
|
|
264,128 |
|
|
256,531 |
Operating income (loss) |
|
5,489 |
|
|
(21,675) |
|
|
2,296 |
|
|
(44,803) |
Other income (expense), net |
|
7,237 |
|
|
(84) |
|
|
11,996 |
|
|
211 |
Income (loss) before provision for income taxes |
|
12,726 |
|
|
(21,759) |
|
|
14,292 |
|
|
(44,592) |
Provision for income taxes |
|
2,241 |
|
|
2,168 |
|
|
999 |
|
|
4,623 |
Net income (loss) |
$ |
10,485 |
|
$ |
(23,927) |
|
$ |
13,293 |
|
$ |
(49,215) |
Net income (loss) per share, basic |
$ |
0.04 |
|
$ |
(0.09) |
|
$ |
0.05 |
|
$ |
(0.19) |
Weighted average shares used in computing net income (loss) per share, basic |
|
268,900 |
|
|
258,785 |
|
|
267,271 |
|
|
257,860 |
Net income (loss) per share, diluted |
$ |
0.04 |
|
$ |
(0.09) |
|
$ |
0.05 |
|
$ |
(0.19) |
Weighted average shares used in computing net income (loss) per share, diluted |
|
283,853 |
|
|
258,785 |
|
|
282,951 |
|
|
257,860 |
(1) Includes stock-based compensation expense, net of amounts capitalized, as follows:
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
||||||||
(in thousands) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Costs of subscription |
$ |
290 |
|
$ |
389 |
|
$ |
590 |
|
$ |
798 |
Costs of professional services |
|
405 |
|
|
779 |
|
|
808 |
|
|
1,402 |
Research and development |
|
3,897 |
|
|
3,148 |
|
|
6,964 |
|
|
5,496 |
Sales and marketing |
|
6,311 |
|
|
7,809 |
|
|
12,266 |
|
|
13,665 |
General and administrative |
|
3,962 |
|
|
4,072 |
|
|
7,547 |
|
|
7,350 |
Stock-based compensation expense, net of amounts capitalized |
$ |
14,865 |
|
$ |
16,197 |
|
$ |
28,175 |
|
$ |
28,711 |
Sprinklr, Inc. |
|||||
Condensed Consolidated Statements of Cash Flows |
|||||
(in thousands) |
|||||
(unaudited) |
|||||
|
|
|
|
||
|
Six Months Ended July 31, |
||||
|
|
2023 |
|
|
2022 |
Cash flow from operating activities: |
|
|
|
||
Net income (loss) |
$ |
13,293 |
|
$ |
(49,215) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||
Depreciation and amortization expense |
|
7,329 |
|
|
5,502 |
Bad debt expense |
|
1,149 |
|
|
1,484 |
Stock-based compensation expense, net of amounts capitalized |
|
28,175 |
|
|
28,711 |
Non-cash lease expense |
|
2,998 |
|
|
3,002 |
Deferred income taxes |
|
(3,402) |
|
|
— |
Net amortization/accretion on marketable securities |
|
(7,998) |
|
|
577 |
Other non-cash items, net |
|
39 |
|
|
— |
Changes in operating assets and liabilities: |
|
|
|
||
Accounts receivable |
|
26,474 |
|
|
18,452 |
Prepaid expenses and other current assets |
|
7,917 |
|
|
14,245 |
Other non-current assets |
|
(4,874) |
|
|
(393) |
Accounts payable |
|
(7,897) |
|
|
22,618 |
Operating lease liabilities |
|
(2,896) |
|
|
(3,730) |
Accrued expenses and other current liabilities |
|
(25,632) |
|
|
(18,714) |
Litigation settlement |
|
— |
|
|
(12,000) |
Deferred revenue |
|
(2,156) |
|
|
(6,280) |
Other liabilities |
|
616 |
|
|
(1,285) |
Net cash provided by operating activities |
|
33,135 |
|
|
2,974 |
Cash flow from investing activities: |
|
|
|
||
Purchases of marketable securities |
|
(288,727) |
|
|
(448,083) |
Sales of marketable securities |
|
380 |
|
|
2,838 |
Maturities of marketable securities |
|
205,911 |
|
|
267,699 |
Purchases of property and equipment |
|
(4,413) |
|
|
(2,352) |
Capitalized internal-use software |
|
(5,744) |
|
|
(5,016) |
Net cash used in investing activities |
|
(92,593) |
|
|
(184,915) |
Cash flow from financing activities: |
|
|
|
||
Proceeds from issuance of common stock upon exercise of stock options |
|
21,350 |
|
|
10,429 |
Proceeds from issuance of common stock upon ESPP purchase |
|
3,970 |
|
|
6,213 |
Net cash provided by financing activities |
|
25,320 |
|
|
16,642 |
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash |
|
(89) |
|
|
(1,919) |
Net change in cash, cash equivalents and restricted cash |
|
(34,227) |
|
|
(167,218) |
Cash, cash equivalents and restricted cash at beginning of period |
|
188,387 |
|
|
321,426 |
Cash, cash equivalents and restricted cash at end of period |
$ |
154,160 |
|
$ |
154,208 |
Sprinklr, Inc. |
|||||||||||
Reconciliation of Non-GAAP Measures |
|||||||||||
(in thousands) |
|||||||||||
(unaudited) |
|||||||||||
|
|
|
|
|
|
|
|
||||
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Non-GAAP gross profit and non-GAAP gross margin: |
|
|
|
|
|
|
|
||||
|
$ |
134,998 |
|
$ |
108,471 |
|
$ |
266,424 |
|
$ |
211,728 |
Stock-based compensation expense-related charges (1) |
|
710 |
|
|
1,212 |
|
|
1,423 |
|
|
2,246 |
Non-GAAP gross profit |
$ |
135,708 |
|
$ |
109,683 |
|
$ |
267,847 |
|
$ |
213,974 |
Gross margin |
|
76 % |
|
|
72 % |
|
|
76 % |
|
|
72 % |
Non-GAAP gross margin |
|
76 % |
|
|
73 % |
|
|
76 % |
|
|
72 % |
|
|
|
|
|
|
|
|
||||
Non-GAAP operating income (loss): |
|
|
|
|
|
|
|
||||
|
$ |
5,489 |
|
$ |
(21,675) |
|
$ |
2,296 |
|
$ |
(44,803) |
Stock-based compensation expense-related charges (2) |
|
15,724 |
|
|
16,615 |
|
|
29,839 |
|
|
29,319 |
Amortization of acquired intangible assets |
|
50 |
|
|
133 |
|
|
100 |
|
|
265 |
Non-GAAP operating income (loss) |
$ |
21,263 |
|
$ |
(4,927) |
|
$ |
32,235 |
|
$ |
(15,219) |
Operating margin |
|
3 % |
|
|
(14) % |
|
|
1 % |
|
|
(15) % |
Non-GAAP operating margin |
|
12 % |
|
|
(3) % |
|
|
9 % |
|
|
(5) % |
|
|
|
|
|
|
|
|
||||
Free cash flow: |
|
|
|
|
|
|
|
||||
Net cash provided by operating activities |
$ |
14,574 |
|
$ |
5,884 |
|
$ |
33,135 |
|
$ |
2,974 |
Purchase of property and equipment |
|
(2,788) |
|
|
(1,714) |
|
|
(4,413) |
|
|
(2,352) |
Capitalized internal-use software |
|
(3,061) |
|
|
(2,728) |
|
|
(5,744) |
|
|
(5,016) |
Free cash flow |
$ |
8,725 |
|
$ |
1,442 |
|
$ |
22,978 |
|
$ |
(4,394) |
(1) Employer payroll tax related to stock-based compensation for the periods ended July 31, 2023 and 2022 was immaterial as it relates to the impact to gross profit.
(2) Includes
|
Three Months Ended July 31, |
||||||||||||||||
|
2023 |
|
2022 |
||||||||||||||
|
(in thousands) |
|
Per Share-Basic |
|
Per Share-Diluted |
|
(in thousands) |
|
Per Share-Basic |
|
Per Share-Diluted |
||||||
Non-GAAP Net Income (Loss) reconciliation to Net Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) |
$ |
10,485 |
|
$ |
0.04 |
|
$ |
0.04 |
|
$ |
(23,927) |
|
$ |
(0.09) |
|
$ |
(0.09) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Stock-based compensation expense-related charges |
|
15,724 |
|
|
0.06 |
|
|
0.05 |
|
|
16,615 |
|
|
0.06 |
|
|
0.06 |
Amortization of acquired intangible assets |
|
50 |
|
|
0.00 |
|
|
0.00 |
|
|
133 |
|
|
0.00 |
|
|
0.00 |
Total additions, net |
|
15,774 |
|
|
0.06 |
|
|
0.05 |
|
|
16,748 |
|
|
0.06 |
|
|
0.06 |
Non-GAAP Net Income (Loss) |
$ |
26,259 |
|
$ |
0.10 |
|
$ |
0.09 |
|
$ |
(7,179) |
|
$ |
(0.03) |
|
$ |
(0.03) |
Weighted-average shares outstanding used in computing net income (loss) per share, basic |
|
268,900 |
|
|
|
|
|
|
258,785 |
|
|
|
|
||||
Weighted average shares outstanding used in computing net income (loss) per share, diluted |
|
283,853 |
|
|
|
|
|
|
258,785 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Six Months Ended July 31, |
||||||||||||||||
|
|
2023 |
|
|
2022 |
||||||||||||
|
(in thousands) |
|
Per Share-Basic |
|
Per Share-Diluted |
|
(in thousands) |
|
Per Share-Basic |
|
Per Share-Diluted |
||||||
Non-GAAP Net Income (Loss) reconciliation to Net Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) |
$ |
13,293 |
|
$ |
0.05 |
|
$ |
0.05 |
|
$ |
(49,215) |
|
$ |
(0.19) |
|
$ |
(0.19) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Stock-based compensation expense-related charges |
|
29,839 |
|
|
0.11 |
|
|
0.10 |
|
|
29,319 |
|
|
0.11 |
|
|
0.11 |
Amortization of acquired intangible assets |
|
100 |
|
|
0.00 |
|
|
0.00 |
|
|
265 |
|
|
0.00 |
|
|
0.00 |
Total additions, net |
|
29,939 |
|
|
0.11 |
|
|
0.10 |
|
|
29,584 |
|
|
0.11 |
|
|
0.11 |
Non-GAAP Net Income (Loss) |
$ |
43,232 |
|
$ |
0.16 |
|
$ |
0.15 |
|
$ |
(19,631) |
|
$ |
(0.08) |
|
$ |
(0.08) |
Weighted-average shares outstanding used in computing net income (loss) per share, basic |
|
267,271 |
|
|
|
|
|
|
257,860 |
|
|
|
|
||||
Weighted average shares outstanding used in computing net income (loss) per share, diluted |
|
282,951 |
|
|
|
|
|
|
257,860 |
|
|
|
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230906182731/en/
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