Sprinklr Announces Third Quarter Fiscal 2025 Results

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The Q3 results show mixed performance with some concerning trends. Revenue growth of 8% year-over-year to $200.7 million and subscription revenue growth of 6% to $180.6 million represent a deceleration from previous quarters. The declining operating margins, with GAAP operating margin dropping to 4% from 7% and non-GAAP operating margin falling to 12% from 15%, signal pressure on profitability.

However, there are positive indicators: strong RPO growth of 17%, 20% increase in million-dollar customers to 147 and healthy cash position of $476.6 million. The company maintains positive free cash flow and operating income, though both metrics declined year-over-year. The Q4 guidance suggests flat sequential revenue growth, indicating continued near-term growth challenges.

The competitive landscape in the customer experience management space is intensifying, which may explain Sprinklr's decelerating growth. The 6% subscription revenue growth rate warrants attention as this is the company's core business segment. However, the 17% RPO growth suggests a healthy pipeline and future revenue potential.

The increase in $1 million customers demonstrates strong enterprise adoption and effective upmarket strategy. The new CEO's focus on becoming a Rule of 40 company (combined growth rate and profit margin exceeding 40%) shows strategic alignment with investor expectations, though current performance falls short of this target. The company's robust cash position provides flexibility for strategic investments and market expansion.

12/04/2024 - 04:05 PM

Q3 Total Revenue of $200.7 million, up 8% year-over-year
Q3 Subscription Revenue of $180.6 million, up 6% year-over-year
Q3 net cash provided by operating activities of $9.2 million and free cash flow* of $4.9 million
RPO and cRPO up 17% and 11% year-over-year, respectively
147 $1 million customers, up 20% year-over-year

NEW YORK--(BUSINESS WIRE)-- Sprinklr (NYSE: CXM), the unified customer experience management (Unified-CXM) platform for modern enterprises, today reported financial results for its third fiscal quarter ended October 31, 2024.

“Sprinklr’s third quarter results delivered a 12% non-GAAP operating margin and positive free cash flow,” said Rory Read, Sprinklr’s President and CEO. Read continued, “Since joining the company, I have seen first-hand the strengths that set us apart: our industry-leading technology, exceptional roster of customers and partners, and a strong market fit. While there is work ahead in becoming a Rule of 40 company, we are confident in our ability to accelerate growth and deliver meaningful margin expansion - creating value for our customers, partners and stockholders.”

Third Quarter Fiscal 2025 Financial Highlights

Revenue: Total revenue for the third quarter was $200.7 million, up from $186.3 million one year ago, an increase of 8% year-over-year. Subscription revenue for the third quarter was $180.6 million, up from $170.5 million one year ago, an increase of 6% year-over-year.
Operating Income and Margin*: Third quarter GAAP operating income was $7.9 million, compared to operating income of $13.2 million one year ago. Non-GAAP operating income was $23.3 million, compared to non-GAAP operating income of $27.4 million one year ago. For the third quarter, GAAP operating margin was 4% and non-GAAP operating margin was 12% compared to GAAP operating margin of 7% and non-GAAP operating margin of 15% in the third quarter of fiscal year 2024.
Net Income Per Share*: Third quarter GAAP net income per share, diluted was $0.04, compared to net income per share, diluted of $0.06 in the third quarter of fiscal year 2024. Non-GAAP net income per share, diluted for the third quarter was $0.10, compared to non-GAAP net income per share, diluted of $0.11 in the third quarter of fiscal year 2024.
Cash, Cash Equivalents and Marketable Securities: Total cash, cash equivalents and marketable securities as of October 31, 2024 was $476.6 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 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 fourth fiscal quarter ending January 31, 2025:

Subscription revenue between $180 million and $181 million.
Total revenue between $200 million and $201 million.
Non-GAAP operating income between $17.5 million and $18.5 million.
Non-GAAP net income per share of approximately $0.07 assuming 265 million diluted weighted-average shares outstanding.

Sprinklr is providing the following guidance for the full fiscal year ending January 31, 2025:

Subscription revenue between $715.9 million and $716.9 million.
Total revenue between $793.9 million and $794.9 million.
Non-GAAP operating income between $76.4 million and $77.4 million.
Non-GAAP net income per share between $0.31 and $0.32, assuming 275 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, December 4, 2024, to discuss third quarter fiscal 2025 financial results, as well as the fourth 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 13750163. 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 fourth quarter and full year fiscal 2025, the impact of, and our ability to execute, our corporate strategies and business initiatives, including our ability to accelerate growth and deliver meaningful margin expansion, our expectations regarding our free cash flow, stock-based compensation expense-related charges and amortization of acquired intangible assets. 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 and 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 July 31, 2024, filed with the SEC on September 4, 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)
(unaudited)

	October 31, 2024			January 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	93,239		$	164,024
Marketable securities		383,404			498,531
Accounts receivable, net of allowance of $9.0 million and $5.3 million, respectively		174,218			267,731
Prepaid expenses and other current assets		78,916			70,690
Total current assets		729,777			1,000,976
Property and equipment, net		33,146			32,176
Goodwill and other intangible assets		49,913			50,145
Operating lease right-of-use assets		47,467			31,058
Other non-current assets		109,998			108,755
Total assets	$	970,301		$	1,223,110

Liabilities and stockholders’ equity
Liabilities
Current liabilities:
Accounts payable	$	32,693		$	34,691
Accrued expenses and other current liabilities		67,923			93,187
Operating lease liabilities, current		7,228			5,730
Deferred revenue		311,009			374,552
Total current liabilities		418,853			508,160
Deferred revenue, non-current		2,737			506
Deferred tax liability, non-current		1,475			1,474
Operating lease liabilities, non-current		43,930			27,562
Other liabilities, non-current		6,282			5,704
Total liabilities		473,277			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		1,249,724			1,182,150
Accumulated other comprehensive loss		(4,031	)		(3,836	)
Accumulated deficit		(724,846	)		(474,787	)
Total stockholders’ equity		497,024			679,704
Total liabilities and stockholders’ equity	$	970,301		$	1,223,110

Sprinklr, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

	Three Months Ended October 31,				Nine Months Ended October 31,
	2024		2023		2024		2023
Revenue:
Subscription	$	180,634	$	170,464	$	535,856	$	491,581
Professional services		20,055		15,861		57,999		46,572
Total revenue		200,689		186,325		593,855		538,153
Costs of revenue:
Costs of subscription ⁽¹⁾		35,723		29,877		102,599		85,136
Costs of professional services ⁽¹⁾		22,098		16,571		60,663		46,716
Total costs of revenue		57,821		46,448		163,262		131,852
Gross profit		142,868		139,877		430,593		406,301
Operating expense:
Research and development ⁽¹⁾		23,280		23,146		69,441		68,230
Sales and marketing ⁽¹⁾		77,576		75,446		245,557		244,766
General and administrative ⁽¹⁾		34,123		28,096		102,084		77,820
Total operating expense		134,979		126,688		417,082		390,816
Operating income		7,889		13,189		13,511		15,485
Other income, net		5,495		6,328		19,409		18,324
Income before provision for income taxes		13,384		19,517		32,920		33,809
Provision for income taxes		2,929		2,550		9,990		3,549
Net income	$	10,455	$	16,967	$	22,930	$	30,260
Net income per share, basic	$	0.04	$	0.06	$	0.09	$	0.11
Weighted average shares used in computing net income per share, basic		253,807		271,202		262,030		268,596
Net income per share, diluted	$	0.04	$	0.06	$	0.08	$	0.11
Weighted average shares used in computing net income per share, diluted		261,972		288,121		275,109		285,985

⁽¹⁾Includes stock-based compensation expense, net of amounts capitalized, as follows:

	Three Months Ended October 31,				Nine Months Ended October 31,
(in thousands)	2024		2023		2024		2023
Costs of subscription	$	335	$	268	$	945	$	858
Costs of professional services		400		331		1,081		1,139
Research and development		2,896		2,128		8,304		9,092
Sales and marketing		5,091		6,132		16,497		18,398
General and administrative		6,508		5,071		17,350		12,618
Stock-based compensation expense, net of amounts capitalized	$	15,230	$	13,930	$	44,177	$	42,105

Sprinklr, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

	Nine Months Ended October 31,
	2024			2023
Cash flow from operating activities:
Net income	$	22,930		$	30,260
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		13,815			11,283
Provision for credit losses		12,413			3,370
Stock-based compensation, net of amounts capitalized		44,177			42,105
Non-cash lease expense		6,186			6,102
Deferred income taxes		38			(3,205	)
Net amortization/accretion on marketable securities		(9,830	)		(12,379	)
Other non-cash items, net		207			56
Changes in operating assets and liabilities:
Accounts receivable		80,653			47,876
Prepaid expenses and other current assets		(9,129	)		2,246
Other non-current assets		(1,867	)		(8,424	)
Accounts payable		(1,653	)		(8,878	)
Operating lease liabilities		(3,928	)		(6,098	)
Accrued expenses and other current liabilities		(21,929	)		(23,744	)
Deferred revenue		(60,462	)		(26,807	)
Other liabilities		604			399
Net cash provided by operating activities		72,225			54,162
Cash flow from investing activities:
Purchases of marketable securities		(329,258	)		(443,850	)
Proceeds from sales and maturities of marketable securities		453,863			362,797
Purchases of property and equipment		(5,000	)		(6,494	)
Capitalized internal-use software		(9,609	)		(8,791	)
Net cash provided by (used in) investing activities		109,996			(96,338	)
Cash flow from financing activities:
Proceeds from issuance of common stock upon exercise of stock options		18,919			32,331
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		(251,551	)		36,301
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash		(1,596	)		(1,648	)
Net change in cash, cash equivalents and restricted cash		(70,926	)		(7,523	)
Cash, cash equivalents and restricted cash at beginning of period		172,429			188,387
Cash, cash equivalents and restricted cash at end of period	$	101,503		$	180,864

Sprinklr, Inc.
Reconciliation of Non-GAAP Measures
(in thousands)
(unaudited)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2024			2023			2024			2023
Non-GAAP gross profit and non-GAAP gross margin:
U.S. GAAP gross profit	$	142,868		$	139,877		$	430,593		$	406,301
Stock-based compensation expense and related charges⁽¹⁾		740			612			2,064			2,035
Non-GAAP gross profit	$	143,608		$	140,489		$	432,657		$	408,336
Gross margin		71	%		75	%		73	%		75	%
Non-GAAP gross margin		72	%		75	%		73	%		76	%

Non-GAAP operating income:
U.S. GAAP operating income	$	7,889		$	13,189		$	13,511		$	15,485
Stock-based compensation expense and related charges ⁽²⁾		15,376			14,204			45,243			44,043
Amortization of acquired intangible assets		18			50			118			150
Non-GAAP operating income	$	23,283		$	27,443		$	58,872		$	59,678
Operating margin		4	%		7	%		2	%		3	%
Non-GAAP operating margin		12	%		15	%		10	%		11	%

Free cash flow:
Net cash provided by operating activities	$	9,191		$	21,027		$	72,225		$	54,162
Purchase of property and equipment		(972	)		(2,081	)		(5,000	)		(6,494	)
Capitalized internal-use software		(3,318	)		(3,047	)		(9,609	)		(8,791	)
Free cash flow	$	4,901		$	15,899		$	57,616		$	38,877

⁽¹⁾Employer payroll tax related to stock-based compensation for the periods ended October 31, 2024 and 2023 was immaterial as it relates to the impact to gross profit.

⁽²⁾Includes $0.1 million and $0.3 million of employer payroll tax related to stock-based compensation for the three months ended October 31, 2024 and 2023, respectively, and $1.1 million and $1.9 million of employer payroll tax related to stock-based compensation expense for the nine months ended October 31, 2024 and 2023, respectively.

	Three Months Ended October 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	$	10,455	$	0.04	$	0.04	$	16,967	$	0.06	$	0.06
Add:
Stock-based compensation expense and related charges		15,376		0.06		0.06		14,204		0.06		0.05
Amortization of acquired intangible assets		18		0.00		0.00		50		0.00		0.00
Total additions, net		15,394		0.06		0.06		14,254		0.06		0.05
Non-GAAP net income	$	25,849	$	0.10	$	0.10	$	31,221	$	0.12	$	0.11
Weighted-average shares outstanding				253,807		261,972				271,202		288,121

	Nine Months Ended October 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	$	22,930	$	0.09	$	0.08	$	30,260	$	0.11	$	0.11
Add:
Stock-based compensation expense and related charges		45,243		0.17		0.17		44,043		0.17		0.15
Amortization of acquired intangible assets		118		0.00		0.00		150		0.00		0.00
Total additions, net		45,361		0.17		0.17		44,193		0.17		0.15
Non-GAAP net income	$	68,291	$	0.26	$	0.25	$	74,453	$	0.28	$	0.26
Weighted-average shares outstanding				262,030		275,109				268,596		285,985

View source version on businesswire.com: https://www.businesswire.com/news/home/20241204028277/en/

Investor Relations:

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Media & Press:

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Source: Sprinklr

FAQ

What was Sprinklr's (CXM) revenue growth in Q3 2025?

Sprinklr's total revenue grew 8% year-over-year to $200.7 million in Q3 fiscal 2025.

How many $1 million customers does Sprinklr (CXM) have in Q3 2025?

Sprinklr reported 147 customers generating $1 million or more in revenue, representing a 20% increase year-over-year.

What is Sprinklr's (CXM) Q4 2025 revenue guidance?

Sprinklr expects total revenue between $200-201 million and subscription revenue between $180-181 million for Q4 fiscal 2025.

What was Sprinklr's (CXM) operating margin in Q3 2025?

Sprinklr reported a GAAP operating margin of 4% and non-GAAP operating margin of 12% in Q3 fiscal 2025.

Sprinklr Announces Third Quarter Fiscal 2025 Results

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What was Sprinklr's (CXM) revenue growth in Q3 2025?

How many $1 million customers does Sprinklr (CXM) have in Q3 2025?

What is Sprinklr's (CXM) Q4 2025 revenue guidance?

What was Sprinklr's (CXM) operating margin in Q3 2025?

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Sprinklr Announces Third Quarter Fiscal 2025 Results

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What was Sprinklr's (CXM) revenue growth in Q3 2025?

How many $1 million customers does Sprinklr (CXM) have in Q3 2025?

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What was Sprinklr's (CXM) operating margin in Q3 2025?

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