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]

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 [5][16] - Non-GAAP operating income was $33.5 million, resulting in a 15% non-GAAP operating margin for the quarter [5][20] - Professional services revenue was $28.8 million, driven by large CCaaS rollouts, with a net dollar expansion rate of 102% [17][18] - Non-GAAP subscription gross margin was 77%, and total non-GAAP gross margin was 67% [19][20] Business Line Data and Key Metrics Changes - The company is focusing on Project Bear Hug, which aims to deepen engagement with the top 700 customers, representing over 80% of total revenue [9] - The revenue contributed by the $1 million customers' cohort increased by 9% year-over-year, with a net dollar expansion rate of 113% [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] - The company expects total billings of approximately $320 million for Q4, traditionally the strongest quarter [22] Company Strategy and Development Direction - The company is in a transformation phase, focusing on improving its position in the customer experience market and leveraging its AI-powered platform [6][8] - The strategy includes enhancing customer engagement through first-party data and personalized omnichannel experiences [6][14] - The leadership team has been strengthened with new appointments, including a new CFO and Chief Product and Corporate Strategy Officer [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and commitment to driving sustainable growth and long-term shareholder value [8][14] - The company is optimistic about improving renewal rates and customer engagement metrics, indicating a stronger position than at the start of the year [8][14] - Management acknowledged that transformation takes time and emphasized the importance of executing several quarters together to establish a solid foundation [30][75] Other Important Information - The company generated $15.5 million in free cash flow in Q3 and $126 million year-to-date, with a strong balance sheet of $480.3 million in cash and no debt [20] - The company raised its full-year revenue guidance, now expecting total revenue in the range of $853 million to $854 million, representing 7% growth year-over-year [24] Q&A Session Summary Question: How sustainable is the revenue performance as the company heads into next year? - Management indicated that while Q3 showed good performance, it is essential to string several quarters together to assess sustainability [29][30] Question: What is at risk with Project Bear Hug, and what outcomes can be expected? - Management explained that Bear Hug aims to deepen customer relationships, and successful engagement can lead to better renewal rates and reduced churn [32][36] Question: How is the company stabilizing its leadership bench amid recent changes? - Management stated that most senior leadership changes are complete, and the current team is experienced and aligned with the company's strategy [40][42] Question: How did renewals in Q3 compare to expectations, and what is anticipated for Q4? - Management reported that renewal rates met or exceeded expectations in Q3, and they are actively managing renewals for upcoming quarters [49][50] Question: Can you provide an update on pricing and bundling initiatives? - Management confirmed that the first phase of new pricing and bundling has been implemented with positive early feedback, and plans to expand this to existing customers are underway [58][60]

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 [4][19] - Free cash flow for Q3 was $15.5 million, with a year-to-date total of $126 million [19][24] - Subscription revenue-based net dollar expansion rate was 102%, showing stabilization [17] Business Line Data and Key Metrics Changes - Professional services revenue was $28.8 million, driven by large CCaaS rollouts expected to translate into future software subscription revenue [17] - 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 [20][21] - The company expects total billings of approximately $320 million for Q4, traditionally the strongest quarter [22] 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][31] - The strategy includes leveraging AI capabilities to enhance customer experience and operational efficiency [5][10] - The company is in a transitional year, with plans to embed operational changes and drive sustainable growth [8][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and noted improvements in key metrics, but emphasized the need for continued execution and patience [28][56] - The leadership team is aligned and focused on scaling the business with operational discipline [15][16] - Management anticipates that FY27 will provide clearer guidance as the company transitions into an acceleration phase [55] Other Important Information - The company has made significant operational improvements, including streamlining processes and enhancing cross-functional alignment [8] - The balance sheet remains strong, with $480.3 million in cash and marketable securities and no debt [19] Q&A Session Summary Question: How sustainable is the recent revenue performance as the company heads into next year? - Management indicated that while Q3 showed good performance, it is essential to string several quarters together to assess sustainability [28][29] Question: What is the expected impact of Project Bear Hug on troubled accounts? - Project Bear Hug aims to deepen customer relationships and has shown positive metrics, with a net dollar expansion rate of 113% for the $1 million-plus customer cohort [31][32] Question: How is the leadership team stabilizing after recent changes? - Management stated that most senior leadership changes are complete, and the team is experienced and focused on the transformation journey [33][36] Question: How did renewals in Q3 compare to expectations? - Renewals met or exceeded expectations, with improved predictability in metrics, and management is actively managing renewals for upcoming quarters [39][40] Question: What is the company's approach to AI capabilities and investments? - The company views its AI-native platform as critical for unifying customer experience and plans to continue investing in AI capabilities [49][52]