- Q3 Total Revenue of $186.3 million, up 18%
year-over-year
- Q3 Subscription Revenue of $170.5 million, up 22%
year-over-year
- Continued growth and operational improvements generate net cash
provided by operating activities of $21.0 million and free
cash flow* of $15.9 million in Q3
- RPO and cRPO up 34% and 19% year-over-year, respectively
- 123 $1 million customers, up 15% year-over-year
Sprinklr (NYSE: CXM), the unified customer experience management
(Unified-CXM) platform for modern enterprises, today reported
financial results for its third quarter ended October 31, 2023.
“We had another solid quarter across the board with record
levels of profitability supported by strength in our Sprinklr
Service product suite. We're committed to helping customers achieve
productivity gains across their front office through leveraging
generative AI, turning vast amounts of unstructured data into
actionable insights, and unifying their customer-facing teams that
result in superior customer experiences,” said Ragy Thomas, Founder
and CEO at Sprinklr.
Third Quarter Fiscal 2024 Financial Highlights
- Revenue: Total revenue for the third quarter was $186.3
million, up from $157.3 million one year ago, an increase of 18%
year-over-year. Subscription revenue for the third quarter was
$170.5 million, up from $139.9 million one year ago, an increase of
22% year-over-year.
- Operating Income (Loss) and Margin*: Third quarter GAAP
operating income was $13.2 million, compared to an operating loss
of $4.6 million one year ago. Non-GAAP operating income was $27.4
million, compared to a non-GAAP operating income of $6.9 million
one year ago. For the third quarter, GAAP operating margin was 7%
and non-GAAP operating margin was 15%.
- Net Income (Loss) Per Share*: Third quarter net income
per share, basic was $0.06, compared to net loss per share, basic
of $0.02 in the third quarter of fiscal year 2023. Non-GAAP net
income per share, basic for the third quarter was $0.12, compared
to non-GAAP net income per share, basic of $0.02 in the third
quarter of fiscal year 2023.
- Cash, Cash Equivalents and Marketable Securities: Total
cash, cash equivalents and marketable securities as of October 31,
2023 was $656.4 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 fourth
fiscal quarter ending January 31, 2024:
- Subscription revenue between $172.5 million and $174.5
million.
- Total revenue between $187.5 million and $189.5 million.
- Non-GAAP operating income between $20.3 million and $22.3
million.
- Non-GAAP net income per share between $0.08 and $0.09,
assuming 275 million basic weighted-average shares
outstanding.
Sprinklr is providing the following guidance for the full fiscal
year ending January 31, 2024:
- Subscription revenue between $664 million and $666
million.
- Total revenue between $725.5 million and $727.5 million.
- Non-GAAP operating income between $80 million and $82
million.
- Non-GAAP net income per share between $0.36 and $0.37, 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 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 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 6, 2023, to
discuss third quarter fiscal 2024 financial results, as well as the
fourth 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 13742711. 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
valuable enterprises — global brands like Microsoft, P&G,
Samsung and more than 50% 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 2024. 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 July 31, 2023, filed with the SEC on
September 6, 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)
October 31,
2023
January 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
172,462
$
188,387
Marketable securities
483,969
390,239
Accounts receivable, net of allowance of
$4.9 million and $3.2 million, respectively
153,660
205,038
Prepaid expenses and other current
assets
77,228
78,865
Total current assets
887,319
862,529
Property and equipment, net
30,597
22,885
Goodwill and other intangible assets
50,221
50,349
Operating lease right-of-use assets
27,576
15,725
Other non-current assets
92,001
73,503
Total assets
$
1,087,714
$
1,024,991
Liabilities and stockholders’ equity
Liabilities
Current liabilities:
Accounts payable
$
22,473
$
30,101
Accrued expenses and other current
liabilities
72,781
97,524
Operating lease liabilities, current
6,208
7,134
Deferred revenue
297,130
324,140
Total current liabilities
398,592
458,899
Deferred revenue, non-current
1,155
1,371
Deferred tax liability, non-current
1,300
1,289
Operating lease liabilities,
non-current
23,530
9,633
Other liabilities, non-current
4,933
4,467
Total liabilities
429,510
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
1,153,761
1,074,149
Accumulated other comprehensive loss
(5,383
)
(4,384
)
Accumulated deficit
(466,351
)
(496,611
)
Total stockholders’ equity
658,204
549,332
Total liabilities and stockholders’
equity
$
1,087,714
$
1,024,991
Sprinklr, Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share data)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Revenue:
Subscription
$
170,464
$
139,906
$
491,581
$
400,301
Professional services
15,861
17,345
46,572
52,558
Total revenue
186,325
157,251
538,153
452,859
Costs of revenue:
Costs of subscription (1)
29,877
26,249
85,136
76,759
Costs of professional services (1)
16,571
14,271
46,716
47,641
Total costs of revenue
46,448
40,520
131,852
124,400
Gross profit
139,877
116,731
406,301
328,459
Operating expense:
Research and development (1)
23,146
19,208
68,230
56,531
Sales and marketing (1)
75,446
79,538
244,766
253,418
General and administrative (1)
28,096
22,588
77,820
67,916
Total operating expense
126,688
121,334
390,816
377,865
Operating income (loss)
13,189
(4,603
)
15,485
(49,406
)
Other income, net
6,328
1,093
18,324
1,304
Income (loss) before provision for income
taxes
19,517
(3,510
)
33,809
(48,102
)
Provision for income taxes
2,550
2,350
3,549
6,973
Net income (loss)
$
16,967
$
(5,860
)
$
30,260
$
(55,075
)
Net income (loss) per share, basic
$
0.06
$
(0.02
)
$
0.11
$
(0.21
)
Weighted average shares used in computing
net income (loss) per share, basic
271,202
260,285
268,596
258,677
Net income (loss) per share, diluted
$
0.06
$
(0.02
)
$
0.11
$
(0.21
)
Weighted average shares used in computing
net income (loss) per share, diluted
288,121
260,285
285,985
258,677
(1) Includes stock-based compensation expense, net of amounts
capitalized, as follows:
Three Months Ended October
31,
Nine Months Ended October
31,
(in thousands)
2023
2022
2023
2022
Costs of subscription
$
268
$
282
$
858
$
1,079
Costs of professional services
331
368
1,139
1,770
Research and development
2,128
2,204
9,092
7,700
Sales and marketing
6,132
5,071
18,398
18,736
General and administrative
5,071
3,284
12,618
10,635
Stock-based compensation expense, net of
amounts capitalized
$
13,930
$
11,209
$
42,105
$
39,920
Sprinklr, Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended October
31,
2023
2022
Cash flow from operating activities:
Net income (loss)
$
30,260
$
(55,075
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization expense
11,283
8,727
Bad debt expense
3,370
1,161
Stock-based compensation expense, net of
amounts capitalized
42,105
39,920
Non-cash lease expense
6,102
4,759
Deferred income taxes
(3,205
)
—
Net amortization/accretion on marketable
securities
(12,379
)
—
Other non-cash items, net
56
(549
)
Changes in operating assets and
liabilities:
Accounts receivable
47,876
29,358
Prepaid expenses and other current
assets
2,246
27,246
Other non-current assets
(8,424
)
(5,782
)
Accounts payable
(8,878
)
(1,243
)
Operating lease liabilities
(6,098
)
(5,448
)
Accrued expenses and other current
liabilities
(23,744
)
(625
)
Litigation settlement
—
(12,000
)
Deferred revenue
(26,807
)
(24,578
)
Other liabilities
399
(1,285
)
Net cash provided by operating
activities
54,162
4,586
Cash flow from investing activities:
Purchases of marketable securities
(443,850
)
(640,173
)
Sales of marketable securities
5,375
2,838
Maturities of marketable securities
357,422
459,026
Purchases of property and equipment
(6,494
)
(2,923
)
Capitalized internal-use software
(8,791
)
(7,733
)
Net cash used in investing activities
(96,338
)
(188,965
)
Cash flow from financing activities:
Proceeds from issuance of common stock
upon exercise of stock options
32,331
15,997
Proceeds from issuance of common stock
upon ESPP purchase
3,970
6,213
Net cash provided by financing
activities
36,301
22,210
Effect of exchange rate fluctuations on
cash, cash equivalents and restricted cash
(1,648
)
(3,232
)
Net change in cash, cash equivalents and
restricted cash
(7,523
)
(165,401
)
Cash, cash equivalents and restricted cash
at beginning of period
188,387
321,426
Cash, cash equivalents and restricted cash
at end of period
$
180,864
$
156,025
Sprinklr, Inc.
Reconciliation of Non-GAAP
Measures
(in thousands)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Non-GAAP gross profit and non-GAAP
gross margin:
U.S. GAAP gross profit
$
139,877
$
116,731
$
406,301
$
328,459
Stock-based compensation expense-related
charges (1)
612
682
2,035
2,925
Non-GAAP gross profit
$
140,489
$
117,413
$
408,336
$
331,384
Gross margin
75
%
74
%
75
%
73
%
Non-GAAP gross margin
75
%
75
%
76
%
73
%
Non-GAAP operating income
(loss):
U.S. GAAP operating income (loss)
$
13,189
$
(4,603
)
$
15,485
$
(49,406
)
Stock-based compensation expense-related
charges (2)
14,204
11,341
44,043
40,659
Amortization of acquired intangible
assets
50
133
150
399
Non-GAAP operating income (loss)
$
27,443
$
6,871
$
59,678
$
(8,348
)
Operating margin
7
%
(3
)%
3
%
(11
)%
Non-GAAP operating margin
15
%
4
%
11
%
(2
)%
Free cash flow:
Net cash provided by operating
activities
$
21,027
$
1,612
$
54,162
$
4,586
Purchase of property and equipment
(2,081
)
(571
)
(6,494
)
(2,923
)
Capitalized internal-use software
(3,047
)
(2,717
)
(8,791
)
(7,733
)
Free cash flow
$
15,899
$
(1,676
)
$
38,877
$
(6,070
)
(1) Employer payroll tax related to stock-based compensation for
the periods ended October 31, 2023 and 2022 was immaterial as it
relates to the impact to gross profit.
(2) Includes $0.3 million and $0.1 million of employer payroll
tax related to stock-based compensation expense for the three
months ended October 31, 2023 and 2022, respectively, and $1.9
million and $0.7 million of employer payroll tax related to
stock-based compensation expense for the nine months ended October
31, 2023 and 2022, respectively.
Three Months Ended October
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)
$
16,967
$
0.06
$
0.06
$
(5,860
)
$
(0.02
)
$
(0.02
)
Add:
Stock-based compensation expense-related
charges
14,204
0.06
0.05
11,341
0.04
0.04
Amortization of acquired intangible
assets
50
0.00
0.00
133
0.00
0.00
Total additions, net
14,254
0.06
0.05
11,474
0.04
0.04
Non-GAAP Net Income
$
31,221
$
0.12
$
0.11
$
5,614
$
0.02
$
0.02
Weighted-average shares outstanding used
in computing net income (loss) per share, basic
271,202
260,285
Weighted average shares outstanding used
in computing net income (loss) per share, diluted
288,121
260,285
Nine Months Ended October
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)
$
30,260
$
0.11
$
0.11
$
(55,075
)
$
(0.21
)
$
(0.21
)
Add:
Stock-based compensation expense-related
charges
44,043
0.17
0.15
40,659
0.16
0.16
Amortization of acquired intangible
assets
150
0.00
0.00
399
0.00
0.00
Total additions, net
44,193
0.17
0.15
41,058
0.16
0.16
Non-GAAP Net Income (Loss)
$
74,453
$
0.28
$
0.26
$
(14,017
)
$
(0.05
)
$
(0.05
)
Weighted-average shares outstanding used
in computing net income (loss) per share, basic
268,596
258,677
Weighted average shares outstanding used
in computing net income (loss) per share, diluted
285,985
258,677
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231206680429/en/
Investor Relations: ir@sprinklr.com
Media & Press: pr@sprinklr.com
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