Sprinklr Announces Second Quarter Fiscal 2024 Results

  • Q2 Total Revenue of $178.5 million, up 18% year-over-year
  • Q2 Subscription Revenue of $163.5 million, up 23% year-over-year
  • Continued growth and operational improvements generate net cash provided by operating activities of $14.6 million and free cash flow* of $8.7 million in Q2
  • RPO and cRPO up 35% and 22% year-over-year, respectively
  • 120 $1 million customers, up 22% 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 second quarter ended July 31, 2023.

“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, up from $150.6 million one year ago, an increase of 18% year-over-year. Subscription revenue for the second quarter was $163.5 million, up from $133.1 million one year ago, an increase of 23% year-over-year.
  • Operating Income (Loss) and Margin*: Second quarter operating income was $5.5 million, compared to an operating loss of $21.7 million one year ago. Non-GAAP operating income was $21.3 million, compared to a non-GAAP operating loss of $4.9 million one year ago. For the second quarter, GAAP operating margin was 3% and non-GAAP operating margin was 12%.
  • Net Income (Loss) Per Share*: Second quarter net income per share, basic was $0.04, compared to net loss per share, basic of $0.09 in the second quarter of fiscal year 2023. Non-GAAP net income per share, basic for the second quarter was $0.10, compared to non-GAAP net loss per share, basic of $0.03 in the second quarter of fiscal year 2023.
  • 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 and $166 million.
  • Total revenue between $179 million and $181 million.
  • Non-GAAP operating income between $15 million and $17 million.
  • Non-GAAP net income per share between $0.06 and $0.07, assuming 274 million basic weighted-average shares outstanding.

Sprinklr is providing the following guidance for the full fiscal year ending January 31, 2024:

  • Subscription revenue between $658 million and $660 million.
  • Total revenue between $719 million and $721 million.
  • Non-GAAP operating income between $65 million and $67 million.
  • Non-GAAP net income per share between $0.30 and $0.31, assuming 273 million basic weighted-average shares outstanding.

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 U.S. GAAP measures, excluding, as applicable, stock-based compensation expense-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 periods of net loss, we calculate non-GAAP net income (loss) per share by using non-GAAP net income (loss) divided by basic weighted average shares for the period regardless of whether we are in a non-GAAP net income or (loss) position and assuming that all potentially dilutive securities are anti-dilutive.

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 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 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 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 New York City with employees around the world, Sprinklr works with more than 1,400 global enterprises — 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 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,
2023

 

January 31,
2023

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 $3.6 million and $3.2 million, respectively

 

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:

 

 

 

 

 

 

 

U.S. GAAP gross profit

$

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):

 

 

 

 

 

 

 

U.S. 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 $0.9 million and $0.4 million of employer payroll tax related to stock-based compensation expense for the three months ended July 31, 2023 and 2022, respectively, and $1.7 million and $0.6 million of employer payroll tax related to stock-based compensation expense for the six months ended July 31, 2023 and 2022, respectively.

 

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

 

 

 

 

 

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Source: Sprinklr