Donovan Jones is an IPO research specialist with 15 years of experience analyzing investment opportunities for U.S. IPOs.He also leads the investing group IPO Edge, which offers actionable information on growth stocks through first-look IPO filings, previews on upcoming IPOs, an IPO calendar for tracking what’s on the horizon, a database of U.S. IPOs, and a guide to IPO investing to walk you through the entire IPO lifecycle - from filing to listing to quiet period and lockup expiration dates. Learn moreAnal ...

Sprinklr Inc. (NYSE:CXM) is one of the Best Tech Stocks Under $10 to Buy, at least based on a bullish analysis report from Citizens. The analyst, who maintained Sprinklr’s Market Outperform rating and $17 price target on January 14, claimed that the company offers an “attractive opportunity for capital appreciation” as its transition phase involves AI investments and enhancements to the contact center offering, among others. Citizens is also bullish on Sprinklr Inc. (NYSE:CXM) CEO John Read’s structured th ...

Company Overview - Sprinklr is an enterprise cloud software company that provides software subscriptions and professional services to help clients manage customer interactions and marketing campaigns at scale [3] - The company offers solutions including customer experience management platforms and marketing tools to analyze and act on customer data across various channels [3] Insider Transactions - Yvette Kanouff, a Director at Sprinklr, executed a direct sale of 157,389 shares for approximately $1.2 million on December 8 and 9, 2025, following the conversion of Class B shares to Class A shares [5] - Despite selling shares, Kanouff's total holdings increased, as she retained 142,611 new shares after the transactions [2] - The sale reduced Kanouff's direct holdings by 39.61%, leaving her with 239,928 shares, which represent 0.0950% of Sprinklr's outstanding shares [4] Stock Performance - Sprinklr's stock has experienced a significant decline, falling about 55% since its IPO and closing 2025 with a second consecutive year of price decline [5][6] - Share prices fell 9% in 2025 and have already decreased by another 6.8% as of January 13, 2026 [6] - The company's Q3 2026 earnings report indicated a 77% drop in net income from the previous quarter, totaling $2.9 million, and it is projected to have a lower net income than FY 2025 [6] Market Sentiment - The market sentiment towards Sprinklr is currently neutral, with most of Wall Street observing the company's performance following recent executive leadership changes [6]

Core Insights - Sprinklr has been awarded in the Innovation Products Category of the 2026 BIG Innovation Awards for its AI-native platform focused on Unified Customer Experience Management [1][4] - The recognition highlights Sprinklr's commitment to scalable, responsible, and results-driven AI solutions, particularly its AI agents designed for enhancing customer experience [2][4] Company Overview - Sprinklr is positioned as a leading AI-native platform for Unified Customer Experience Management, enabling brands to deliver exceptional experiences across all customer touchpoints [7] - The platform integrates human intelligence with AI enhancements to foster trust and loyalty through personalized and efficient customer interactions [8] Innovation Recognition - The 2026 BIG Innovation Awards recognized 159 winners across various sectors, emphasizing that true innovation involves building intelligent platforms and automating workflows with a focus on trust, privacy, and security [3][4] - Sprinklr's AI agents are designed to operate autonomously within customer experience workflows, enhancing efficiency and consistency for enterprises [3][4] Market Impact - Over 1,900 enterprises, including major companies like Microsoft, P&G, and Samsung, utilize Sprinklr to provide consistent and trusted customer experiences globally, with 60% of the Fortune 100 relying on its solutions [9]

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Core Viewpoint - Sprinklr (CXM) shows potential for upside with a mean price target of $10.5, indicating a 32.9% increase from its current price of $7.9, following a 5.1% gain over the past four weeks [1]. Price Targets and Analyst Estimates - The mean estimate consists of eight short-term price targets with a standard deviation of $3.12, suggesting variability in analyst predictions. The lowest estimate is $8.00 (1.3% increase), while the highest is $17.00 (115.2% increase) [2]. - A low standard deviation indicates a high degree of agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [9]. Earnings Estimates and Analyst Sentiment - Analysts have shown increasing optimism about CXM's earnings prospects, with a strong consensus on revising EPS estimates higher, which correlates with potential stock price increases [11]. - The Zacks Consensus Estimate for the current year has risen by 6.8% over the past month, with two estimates increasing and no negative revisions [12]. - CXM holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential for near-term upside [13]. Caution on Price Targets - Solely relying on consensus price targets for investment decisions may not be wise, as analysts' ability to set unbiased targets has been questioned [3]. - Price targets can often mislead investors, and while they should not be ignored, they should be approached with skepticism [10].

Financial Performance - As of October 31, 2025, the Remaining Performance Obligation (RPO) was $857.6 million, with Current RPO (cRPO) at $562.2 million[150]. - The Net Dollar Expansion Rate (NDE) for the trailing 12-month period ending October 31, 2025, was 102.3%, down from 107.3% in the previous year, attributed to increased churn and down-selling[151]. - The company had 145 large customers as of October 31, 2025, compared to 147 large customers a year earlier, defined as those generating at least $1.0 million in subscription revenue[148]. - Subscription revenue for Q3 2025 reached $190,295, a 5% increase from $180,634 in Q3 2024, while professional services revenue increased by 43% to $28,773 from $20,055[170]. - Total revenue for the nine months ended October 31, 2025, was $636,608, up 7% from $593,855 in the same period of 2024[182]. - Gross profit for Q3 2025 was $145,486, compared to $142,840 in Q3 2024, with a gross margin for subscription decreasing to 76% from 80%[172][175]. - Total operating expenses for Q3 2025 were $133,935, a slight decrease from $134,951 in Q3 2024, resulting in an operating income of $11,551, up from $7,889[170]. - Non-GAAP operating income increased by $45.0 million (71%) to $108.5 million, with a non-GAAP operating margin of 17%[198]. - For the three months ended October 31, 2025, the company reported a net income of $2.9 million, down from $10.5 million in the same period of 2024, representing a decrease of 72.2%[199]. - Non-GAAP net income for the three months ended October 31, 2025, was $29.1 million, compared to $25.6 million in 2024, reflecting an increase of 13.5%[199]. Revenue and Cost Structure - Subscription revenue is recognized ratably over the contract term, which typically ranges from one to three years, with a significant portion of sales occurring in the fourth quarter[155]. - Gross margin on subscription revenue is significantly higher than that of professional services revenue, with expectations of a near-term decline due to rising data and hosting costs[160]. - The increase in costs of subscription revenue was primarily due to a $9,677 increase in costs, reflecting a 27% rise compared to the previous year[172]. - Subscription revenue costs increased by $28.2 million (27%) to $130.8 million, primarily due to a $25.9 million rise in third-party data and infrastructure costs[184]. - Professional services revenue costs rose by $12.5 million (21%) to $72.9 million, driven by higher subcontractor and personnel-related costs[185]. - Total costs of revenue increased by $40.7 million (25%) to $203.7 million, impacting overall gross margins[184]. - Gross margin for subscription decreased by 4 percentage points to 77%, while professional services gross margin improved by 5 percentage points to 1%[186]. Expenses and Investments - Research and development expenses are expected to increase in absolute dollars as the company invests in enhancing the Unified-CXM platform[162]. - Research and development expenses increased by 6% to $24,707 in Q3 2025, representing 11% of total revenue, compared to 12% in Q3 2024[176]. - Sales and marketing expenses are anticipated to rise as the company continues to drive business growth while seeking efficiencies[163]. - Sales and marketing expenses decreased by $26.7 million (11%) to $216.7 million, now 34% of revenue, due to reduced personnel-related costs[188]. - General and administrative expenses rose by $1.7 million (2%) to $103.7 million, accounting for 16% of revenue, influenced by increased personnel costs[189]. - Restructuring expenses surged by $12.9 million (435%) to $15.9 million, affecting 12% of the workforce[190]. Cash Flow and Liquidity - Free cash flow for the nine months ended October 31, 2025, was $126.0 million, significantly higher than $57.6 million in 2024, marking a growth of 118.5%[200]. - As of October 31, 2025, the company had $189.6 million in cash and cash equivalents and $290.8 million in highly liquid marketable securities, indicating strong liquidity[201]. - Cash provided by operating activities for the nine months ended October 31, 2025, was $138.5 million, compared to $72.2 million in 2024, an increase of 92.0%[211]. - The company expects to meet its working capital needs and capital expenditures for at least the next 12 months with existing cash and cash equivalents[201]. - The company has material cash requirements totaling $324.8 million in guaranteed purchase commitments through fiscal year 2030, with $107.1 million due within the next 12 months[204]. - The company experienced a $133.4 million decrease in accounts receivable due to collections outpacing billings for the nine months ended October 31, 2025[211]. - The company anticipates fluctuations in free cash flow in future periods due to changes in operating expenses and continued investments in growth[210]. - Cash provided by investing activities for the nine months ended October 31, 2025, was $39.2 million, primarily from $416.0 million in sales and maturities of marketable securities[213]. - Cash used in financing activities for the nine months ended October 31, 2025, was $135.6 million, including $152.3 million for the 2025 Share Repurchase Program[215]. Tax and Accounting - The provision for income taxes increased significantly by 392% to $14,410 in Q3 2025, primarily due to changes in the effective tax rate computation[181]. - Provision for income taxes increased by $22.3 million (223%) to $32.3 million, now 5% of revenue, due to changes in tax rate computations[192]. - The company’s critical accounting estimates include revenue recognition and stock-based compensation expense, which may materially impact financial statements[218]. - There have been no material changes to the company's critical accounting policies and estimates compared to those disclosed in the 2025 10-K[219]. - Market risk exposures include foreign exchange risk and interest rate risk, with no material changes since January 31, 2025[221]. Market and Economic Conditions - The company operates in over 80 countries and its AI-based platform recognizes over 150 languages, indicating a broad global reach[148]. - Macroeconomic conditions, including inflation and geopolitical events, may negatively impact business growth and customer spending on technology[152].

Group 1 - The sustainability of the sharp market rally in 2025 is a primary concern for many investors [1] - The article suggests that it may be the right time for investors to rotate out of recent investments [1] - Gary Alexander has extensive experience in covering technology companies and advising startups, contributing to insights on industry trends [1]

Core Viewpoint - Sprinklr, Inc. is a prominent player in the technology services sector, specializing in unified customer experience management, which positions the company competitively in the customer experience domain [1] Financial Performance - For the quarter ending October 2025, Sprinklr reported revenues of approximately $219.1 million, exceeding the estimated $210.4 million, and reflecting a 4.54% increase over the Zacks Consensus Estimate [2][3] - The company reported earnings per share (EPS) of $0.01 for Q3 2026, which did not meet the Zacks Consensus Estimate of $0.09 [2][4] - Sprinklr has consistently surpassed consensus revenue estimates over the past four quarters, indicating strong revenue performance [3][4] Financial Ratios - The company maintains a price-to-earnings (P/E) ratio of approximately 17.38, suggesting a reasonable market valuation of its earnings [3][4] - Sprinklr's price-to-sales ratio is about 2.36, indicating investor willingness to pay for each dollar of sales [3][4] - The company has a low debt-to-equity ratio of 0.087, demonstrating a conservative approach to debt and ensuring financial stability [3]

Financial Data and Key Metrics Changes - Total revenue for Q3 grew 9% year-over-year to $219.1 million, while subscription revenue increased 5% year-over-year to $190.3 million [4][16] - Non-GAAP operating income was $33.5 million, resulting in a 15% non-GAAP operating margin for the quarter [19][20] - Free cash flow generated in Q3 was $15.5 million, with a year-to-date total of $126 million [20] - Non-GAAP net income per diluted share was $0.12, with a projected range of $0.09 to $0.10 for Q4 [19][23] Business Line Data and Key Metrics Changes - Professional services revenue was $28.8 million, attributed to large CCaaS rollouts expected to translate into future subscription revenue [17] - Subscription revenue-based net dollar expansion rate was 102%, indicating stabilization [17][18] - The number of customers contributing $1 million or more in subscription revenue decreased by four to 145, but revenue from this cohort grew 9% year-over-year [18] Market Data and Key Metrics Changes - Total remaining performance obligations (RPO) were $857.6 million, down 5% year-over-year, while current RPO was $562.2 million, up 3% year-over-year [21] - Calculated billings for Q3 were $158.4 million, an increase of 7% year-over-year [21] Company Strategy and Development Direction - The company is focused on deepening engagement with its top 700 customers through Project Bear Hug, which aims to improve renewal rates and customer relationships [9][14] - The strategy includes leveraging AI-powered platforms for personalized customer engagement and enhancing operational efficiencies [5][6] - The company is in a transitional year, with plans to embed foundational changes into operations and culture for sustainable growth [8][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy and noted that while challenges remain, there are signs of improvement in key metrics and customer engagement [8][14] - The leadership team changes are complete, and management is focused on maintaining productivity and driving growth [42][44] - The company expects Q4 revenue to be in the range of $216.5 million to $217.5 million, representing 7% growth year-over-year at the midpoint [22][24] Other Important Information - The company has a strong balance sheet with $480.3 million in cash and marketable securities and no debt [20] - The company is investing in AI and R&D talent to enhance customer service and go-to-market capabilities [23][24] Q&A Session Summary Question: How sustainable is the revenue performance as the company heads into next year? - Management indicated that while Q3 performance was strong, it is essential to string several quarters together to assess sustainability [30][31] Question: What is at risk with Project Bear Hug and what outcomes can be expected? - Management noted that the initiative aims to deepen customer relationships and has shown positive results, with some accounts seeing reduced downsell risks [33][36] Question: How is the leadership team stabilizing after recent changes? - Management stated that the major leadership changes are complete and emphasized the importance of having experienced team members to drive the transformation [42][44] Question: How did renewals in Q3 compare to expectations? - Management reported that renewal rates were better than expected, with improved predictability in forecasting [50][51] Question: What is the status of the pricing and bundling strategy? - Management confirmed that the first phase of the new pricing and bundling strategy has been implemented with positive early feedback [58][59] Question: What is the progress on large deployments like Deutsche Telekom? - Management indicated significant improvements in execution and positive feedback from customers during the rollout of large implementations [60][61] Question: What are the expectations for AI capabilities and investments? - Management highlighted that AI is fundamental to the platform and will continue to be a focus for investment, with over 300 AI skills already in place [64][66]