Core Insights - SoundHound AI, Inc. has been recognized as a Leader in Everest Group's 2025 PEAK Matrix® Assessment for Conversational AI and AI Agents in Customer Experience Management [2][5] - The evaluation highlights the evolution of conversational AI products into autonomous AI agents capable of managing multi-step tasks [3][4] Company Overview - SoundHound AI specializes in voice and conversational AI, providing solutions that enhance customer experiences across various industries including retail, financial services, healthcare, and automotive [8] - The company’s proprietary voice engine, Polaris, is noted for its superior word error rates and advanced conversational features [4][8] Product Features - The Amelia platform, particularly its latest version Amelia 7 launched in May 2025, offers agentic capabilities allowing AI agents to listen, reason, and act on complex tasks [5][6] - Amelia's AI agents can operate across multiple channels such as chat, text, and voice, utilizing advanced speech recognition technology [6][8] Technological Innovations - SoundHound AI's architecture integrates cognitive reasoning, orchestration, and execution to support complex enterprise AI use cases [5] - The platform includes a no-code agent designer for simplified deployment and a Supervisor AI layer for dynamic agent coordination [5] Market Position - The recognition from Everest Group underscores SoundHound AI's commitment to delivering innovative solutions that enhance customer interactions and operational efficiency [5][8]

Group 1 - TELUS Digital has been named a Leader in the Everest Group's CXM PEAK Matrix® for the Americas [1] - The recognition is attributed to TELUS Digital's capabilities in customer experience (CX) transformation, Fuel iX™, agentic AI, and automation [1]

Core Insights - Concentrix Corporation has been recognized as a Leader and Star Performer in Everest Group's Global Customer Experience Management (CXM) Services PEAK Matrix® Assessment 2025, marking a significant achievement for the company [1][4]. Company Performance - For over 20 years, Concentrix has been trusted by clients to design, build, and run brand experiences that surpass competition, showcasing a strong track record in customer experience transformations [2]. - The assessment evaluates top providers of digital customer experience solutions based on market impact, delivery capabilities, and commitment to data privacy and security [3]. Innovation and Strategy - Concentrix's success is attributed to its ability to combine scale, digital innovation, and global reach, supported by a large workforce and multiple acquisitions [4]. - The company emphasizes AI-first innovation and deep brand experience expertise to help clients transform their operating models and enhance customer engagement [4]. Market Position - Concentrix serves over 2,000 clients across various industries, providing integrated, end-to-end solutions that address complex business challenges [5]. - The company operates in over 70 markets, demonstrating its extensive global presence and capability to deliver differentiated outcomes [5].

Group 1 - Sprinklr (NYSE: CXM) has experienced revenue stagnation early in its journey as a customer experience management SaaS company, which is concerning given the generally supportive environment for AI-enabled SaaS products [1] - The stagnation in revenue growth may indicate challenges for the company in capitalizing on market opportunities [1] Group 2 - The article does not provide any specific financial metrics or performance data related to Sprinklr's revenue or growth rates [1]

Core Insights - Sprinklr (NYSE: CXM) has experienced revenue stagnation early in its journey as a customer experience management SaaS company, which is concerning given the generally supportive environment for AI-enabled SaaS products [1] Company Analysis - The stagnation in revenue growth for Sprinklr suggests potential challenges in capturing market opportunities within the customer experience management sector [1] - The current market conditions are favorable for AI-enabled SaaS products, making Sprinklr's performance particularly noteworthy [1]

Group 1 - The article discusses Sprinklr (NYSE: CXM) and previously assigned a hold rating due to concerns about revenue growth and net retention trends [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies to enhance the investment process [1] - The purpose of writing on Seeking Alpha is to track investment ideas and connect with like-minded investors [1] Group 2 - There is no disclosure of stock, options, or similar derivative positions in any mentioned companies, nor plans to initiate such positions in the near future [2] - The article expresses personal opinions and is not compensated beyond the Seeking Alpha platform [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [3]

Group 1 - The article discusses Sprinklr (NYSE: CXM) and previously assigned a hold rating due to concerns about revenue growth and net retention trends [1] - The author emphasizes a diverse investment approach, incorporating fundamental, technical, and momentum investing strategies [1] - The purpose of writing on Seeking Alpha is to track investment ideas and connect with like-minded investors [1] Group 2 - There is no disclosure of stock, options, or similar derivative positions in any mentioned companies, nor plans to initiate such positions in the near future [2] - The article expresses personal opinions and is not compensated beyond the Seeking Alpha platform [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [3]

Core Insights - The company is undergoing a transformation that is structured into three phases, with a clear game plan laid out for execution [1] Phase 1: Business Optimization - The first phase focuses on business optimization, which involves improving execution and establishing a robust business management system [2] - Key objectives include reducing costs, changing the company culture, and creating better road maps for execution [2] - This optimization phase is expected to be largely completed within the first 6 to 9 months of the transformation [2]

Summary of Sprinklr (CXM) 2025 Conference Call Company Overview - **Company**: Sprinklr - **Industry**: Software, specifically focusing on customer experience management (CXM) and customer engagement solutions Key Points and Arguments Transformation Strategy - **Three Phases of Transformation**: 1. **Business Optimization**: Focus on improving execution, cost reduction, and cultural change within the first six to nine months [3][4] 2. **Transition Phase**: Lasts four to six quarters, focusing on embedding changes and gaining team buy-in [4][5] 3. **Acceleration Phase**: Involves heavier investment in go-to-market strategies and marketing positioning [5][6] - **Current Status**: The company is in the transition phase, expecting to see a positive bend in business performance by Q3 or Q4 [6][12] Customer Engagement and Project Bearhug - **Project Bearhug**: A go-to-market initiative targeting the top 700 accounts, which represent 90% of revenue, aimed at improving customer engagement and renewal rates [10][11] - **Customer Feedback**: Over 250 customer meetings have provided insights for improvement, leading to better business management and metrics [6][10] Technology and Product Development - **AI-First Platform**: Sprinklr's platform is AI-native, leveraging unstructured social data and integrating various customer engagement capabilities [6][16] - **CCaaS Growth**: Significant growth in CCaaS (Contact Center as a Service) with large implementations, indicating a competitive edge against established players [16][19] Market Position and Growth Potential - **Valuation**: Currently trading at approximately 2 times revenue, indicating potential for significant upside if execution improves [26][28] - **Future Growth**: Potential to grow into a billion-dollar company with a focus on social platforms, digital support, and customer feedback management [28][29] Cultural Transformation - **Employee Engagement**: Aiming to increase employee buy-in from 45% to 55-60% to create a self-sustaining culture of change [31][32] - **Leadership Changes**: Ongoing recruitment for senior leadership roles to support the transformation [39][40] Challenges and Roadblocks - **Employee Resistance**: Some employees are resistant to change, requiring proof points and transparent communication to gain their support [34][36] Conclusion - **Long-Term Vision**: The CEO emphasizes the importance of patience and consistent progress, comparing the transformation to a baseball season where success accumulates over time [45][46] - **Customer-Centric Focus**: The goal is to create significant value for customers through improved execution and innovative solutions [46] Additional Important Content - **Market Dynamics**: The CEO discusses the evolving landscape of AI and its integration into existing technologies, asserting that AI will not displace traditional solutions but enhance them [20][22][24] - **Competitive Landscape**: Sprinklr's unique position allows it to offer a comprehensive view of customer interactions across various channels, setting it apart from competitors [25][26]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Sprinklr, Inc.'s unaudited condensed consolidated financial statements for the quarter ended July 31, 2025, covering balance sheets, income statements, cash flows, and detailed accounting notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show a decrease in total assets and total liabilities from January 31, 2025, to July 31, 2025, primarily driven by changes in cash and cash equivalents, accounts receivable, and deferred revenue | Metric | July 31, 2025 (in thousands) | January 31, 2025 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------ | | Total assets | $1,086,113 | $1,184,199 | | Total liabilities | $542,676 | $572,136 | | Total stockholders' equity | $543,437 | $612,063 | - Cash and cash equivalents decreased from **$145.3 million** on January 31, 2025, to **$125.4 million** on July 31, 2025[22](index=22&type=chunk) - Accounts receivable, net, decreased from **$285.7 million** to **$202.5 million**[22](index=22&type=chunk) - Deferred revenue (current and non-current) decreased from **$409.8 million** to **$397.1 million**[22](index=22&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Sprinklr reported increased total revenue for both the three and six months ended July 31, 2025, compared to the prior year periods, with net income significantly increasing for the three-month period but slightly decreasing for the six-month period | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $212,040 | $197,208 | $417,540 | $393,166 | | Gross profit | $144,602 | $143,241 | $287,471 | $288,074 | | Operating income (loss) | $16,272 | $(87) | $14,517 | $5,622 | | Net income | $12,615 | $1,841 | $11,047 | $12,475 | | Net income per share, basic | $0.05 | $0.01 | $0.04 | $0.05 | | Net income per share, diluted | $0.05 | $0.01 | $0.04 | $0.04 | - Subscription revenue increased by **6%** for the three months and by **5%** for the six months ended July 31, 2025, compared to the prior year periods[24](index=24&type=chunk) - Professional services revenue increased by **22%** for the three months and **18%** for the six months ended July 31, 2025, year-over-year[24](index=24&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for the three months ended July 31, 2025, was **$10.5 million**, a significant increase from **$2.8 million** in the prior year, driven by higher net income and reduced foreign currency adjustments | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $12,615 | $1,841 | $11,047 | $12,475 | | Foreign currency translation adjustments | $(1,970) | $652 | $2,425 | $58 | | Unrealized (losses) gains on investments, net of tax | $(120) | $321 | $(198) | $(473) | | Total comprehensive income, net of tax | $10,525 | $2,814 | $13,274 | $12,060 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%27%20Equity) Stockholders' equity decreased from **$612.1 million** at January 31, 2025, to **$543.4 million** at July 31, 2025, primarily due to **$141.4 million** in common stock repurchases, partially offset by stock-based compensation and net income | Metric (in thousands) | July 31, 2025 | January 31, 2025 | | :-------------------- | :------------ | :--------------- | | Total Stockholders' Equity | $543,437 | $612,063 | | Common stock repurchased, including accrued excise tax (6 months) | $(141,429) | $(273,064) | | Stock-based compensation - equity classified awards (6 months) | $43,805 | $29,629 | | Net income (6 months) | $11,047 | $12,475 | - The Company repurchased **16,494,694 shares** of Class A common stock for **$140.4 million** during the six months ended July 31, 2025, under the 2025 Share Repurchase Program[101](index=101&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended July 31, 2025, net cash provided by operating activities significantly increased to **$118.6 million**, up from **$63.0 million** in the prior year, driven by a decrease in accounts receivable, while investing activities shifted to a **$15.4 million** use of cash and financing activities decreased to **$125.1 million** used | Metric (in thousands) | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $118,567 | $63,034 | | Net cash (used in) provided by investing activities | $(15,443) | $145,843 | | Net cash used in financing activities | $(125,121) | $(253,235) | | Net change in cash, cash equivalents and restricted cash | $(19,702) | $(45,605) | - Operating cash flow benefited from an **$81.0 million** decrease in accounts receivable due to collections outpacing billings in 2025[206](index=206&type=chunk) - Investing activities in 2025 included **$269.7 million** in purchases of marketable securities and **$262.6 million** from sales and maturities of marketable securities[208](index=208&type=chunk) - Financing activities in 2025 were primarily impacted by **$140.8 million** in share repurchases, lower than the **$273.9 million** in 2024[210](index=210&type=chunk)[211](index=211&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail Sprinklr's accounting policies, financial statement components, and significant events, covering revenue, marketable securities, leases, stock-based compensation, income taxes, and restructuring [1. Organization and Description of Business](index=11&type=section&id=1.%20Organization%20and%20Description%20of%20Business) - Sprinklr, Inc. provides enterprise software products for **unified customer experience management (Unified-CXM)** using an **AI-native platform**[37](index=37&type=chunk) - The company was founded in **2009**, incorporated in Delaware in **2011**, and operates globally with **21 subsidiaries**[37](index=37&type=chunk)[38](index=38&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Financial statements are prepared in accordance with **U.S. GAAP** and **SEC interim reporting rules**, with certain footnotes condensed or omitted[39](index=39&type=chunk) - No **material changes** in significant accounting policies since the fiscal year ended January 31, 2025[41](index=41&type=chunk) - The company operates in **one operating segment**, as the CEO evaluates performance on a consolidated basis[43](index=43&type=chunk) | (in thousands) | July 31, 2025 | January 31, 2025 | | :--------------- | :------------ | :--------------- | | Cash and cash equivalents | $125,365 | $145,270 | | Restricted cash included in prepaid expenses and other current assets | $923 | $1,705 | | Restricted cash included in other non-current assets | $7,543 | $6,558 | | Total cash, cash equivalents and restricted cash | $133,831 | $153,533 | | (in thousands) | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------- | :----------------------------- | :----------------------------- | | Allowance, beginning of period | $8,059 | $5,267 | | Write-offs of uncollectible accounts, net | $(1,446) | $(3,518) | | Provision for expected credit losses | $2,468 | $10,743 | | Allowance, end of period | $9,081 | $12,492 | - No single customer accounted for more than **10%** of total revenue during the three and six months ended July 31, 2025 and 2024[50](index=50&type=chunk) [3. Revenue Recognition](index=13&type=section&id=3.%20Revenue%20Recognition) - Revenue is primarily derived from **subscription fees** for cloud-based software and **professional services** for configuration, optimization, and managed services[57](index=57&type=chunk) - Capitalized costs to obtain customer contracts were **$149.7 million** as of July 31, 2025, with **$25.0 million** amortized during the six months ended July 31, 2025[59](index=59&type=chunk)[60](index=60&type=chunk) - **Remaining Performance Obligation (RPO)** was **$923.8 million** as of July 31, 2025, with approximately **$597.1 million** expected to be recognized as revenue over the next 12 months[63](index=63&type=chunk) | (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Americas | $110,207 | $115,377 | $227,794 | $230,645 | | EMEA | $81,651 | $67,194 | $153,687 | $133,105 | | Other | $20,182 | $14,637 | $36,059 | $29,416 | | Total revenue | $212,040 | $197,208 | $417,540 | $393,166 | - The United States accounted for **$103.3 million** (3 months) and **$213.0 million** (6 months) of revenue in 2025, representing more than **10%** of total revenue[66](index=66&type=chunk) [4. Marketable Securities](index=14&type=section&id=4.%20Marketable%20Securities) | (in thousands) | Amortized Cost (July 31, 2025) | Fair Value (July 31, 2025) | Amortized Cost (January 31, 2025) | Fair Value (January 31, 2025) | | :--------------- | :----------------------------- | :------------------------- | :-------------------------------- | :---------------------------- | | Corporate bonds | $100,690 | $100,648 | $106,632 | $106,654 | | Municipal bonds | $3,351 | $3,348 | $12,752 | $12,745 | | U.S. government and agency securities | $163,248 | $163,144 | $120,032 | $120,008 | | Certificates of deposit | $27,508 | $27,502 | $34,584 | $34,611 | | Commercial paper | $54,018 | $53,984 | $64,180 | $64,171 | | Total Marketable securities | $348,815 | $348,626 | $338,180 | $338,189 | - Marketable securities are classified as **available-for-sale**, with maturities not exceeding **12 months**[67](index=67&type=chunk)[74](index=74&type=chunk) - Interest income from cash and marketable securities decreased to **$5.8 million** (3 months) and **$10.9 million** (6 months) in 2025, from **$7.0 million** and **$15.3 million** in 2024, respectively[67](index=67&type=chunk) [5. Fair Value Measurements](index=15&type=section&id=5.%20Fair%20Value%20Measurements) | (in thousands) | July 31, 2025 (Level 1) | July 31, 2025 (Level 2) | July 31, 2025 (Total) | January 31, 2025 (Level 1) | January 31, 2025 (Level 2) | January 31, 2025 (Total) | | :--------------- | :---------------------- | :---------------------- | :-------------------- | :------------------------- | :------------------------- | :----------------------- | | Money market funds | $23,419 | — | $23,419 | $57,158 | — | $57,158 | | Corporate bonds | — | $100,648 | $100,648 | — | $106,654 | $106,654 | | Municipal bonds | — | $3,348 | $3,348 | — | $12,745 | $12,745 | | U.S. government and agency securities | — | $163,144 | $163,144 | — | $120,008 | $120,008 | | Certificates of deposit | — | $27,502 | $27,502 | — | $34,611 | $34,611 | | Commercial paper | — | $53,984 | $53,984 | — | $64,171 | $64,171 | | Total financial assets | $23,419 | $348,626 | $372,045 | $57,158 | $338,189 | $395,347 | - Money market funds are classified as **Level 1**, while commercial paper, corporate and municipal debt securities, U.S. government and agency securities, and certificates of deposit are **Level 2**[73](index=73&type=chunk) [6. Balance Sheet Components](index=16&type=section&id=6.%20Balance%20Sheet%20Components) | (in thousands) | July 31, 2025 | January 31, 2025 | | :--------------- | :------------ | :--------------- | | Prepaid expenses and other current assets | $90,712 | $84,982 | | Capitalized commissions costs, current portion | $48,959 | $39,353 | | Contract assets | $4,286 | $1,860 | | (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation and amortization expense | $1,156 | $1,501 | $2,414 | $3,106 | | Amortization expense for capitalized internal-use software | $3,512 | $3,109 | $6,934 | $6,012 | | Capitalized internal-use software costs | $5,100 | $4,000 | $8,800 | $7,500 | | (in thousands) | July 31, 2025 | January 31, 2025 | | :--------------- | :------------ | :--------------- | | Accrued expenses and other current liabilities | $62,210 | $79,285 | | Bonuses | $14,993 | $20,463 | | Commissions | $6,885 | $15,549 | | Accrued restructuring costs | $1,426 | — | [7. Leases](index=17&type=section&id=7.%20Leases) - The Company leases corporate offices under **non-cancelable operating leases**, with no finance leases during the reported periods[83](index=83&type=chunk) | (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total lease cost | $3,522 | $3,772 | $6,970 | $7,105 | - The weighted average remaining lease term was **6.69 years** as of July 31, 2025, with a weighted average discount rate of **8.51%**[83](index=83&type=chunk) | (in thousands) | Total Minimum Lease Payments | | :--------------- | :--------------------------- | | Fiscal year ended January 31, 2026 (remaining six months) | $6,078 | | 2027 | $11,321 | | 2028 | $9,304 | | 2029 | $7,888 | | 2030 | $6,725 | | 2031 | $6,204 | | Thereafter | $16,490 | | Total minimum lease payments | $64,010 | [8. Commitments and Contingencies](index=18&type=section&id=8.%20Commitments%20and%20Contingencies) - The Company has cash collateral agreements totaling approximately **$1.1 million** with Silicon Valley Bank and **$7.3 million** with J.P. Morgan Bank as of July 31, 2025[87](index=87&type=chunk)[88](index=88&type=chunk) - A putative securities class action was filed in **August 2024**, alleging misleading statements, and a derivative action was filed in **March 2025**, asserting similar claims[91](index=91&type=chunk)[95](index=95&type=chunk) - Other contractual commitments include **non-cancelable minimum guaranteed purchase commitments** for data, hosting, and software services[96](index=96&type=chunk) [9. Stockholders' Equity](index=19&type=section&id=9.%20Stockholders%27%20Equity) - The Company completed its **$300 million** 2024 Share Repurchase Program during **Q2 FY2025**[97](index=97&type=chunk) - A new **2025 Share Repurchase Program** was authorized on **June 4, 2025**, for up to **$150 million** of Class A common stock through **June 30, 2026**[98](index=98&type=chunk) - During the three and six months ended July 31, 2025, the Company repurchased **16,494,694 shares** of Class A common stock for **$140.4 million**, including commissions, under the 2025 program[101](index=101&type=chunk) - As of **August 7, 2025**, the 2025 Share Repurchase Program was fully completed with an additional **$9.9 million** in repurchases[101](index=101&type=chunk) [10. Stock-Based Compensation](index=20&type=section&id=10.%20Stock-Based%20Compensation) - The Company has two equity incentive plans (**2021 Plan** and **2011 Plan**) and an **Employee Stock Purchase Plan (ESPP)**[104](index=104&type=chunk)[106](index=106&type=chunk) | Stock Option Activity (in thousands) | January 31, 2025 | July 31, 2025 | | :----------------------------------- | :--------------- | :------------ | | Outstanding | 18,572 | 14,757 | | Exercised | — | (2,753) | | Forfeited | — | (1,060) | | Weighted Average Exercise Price (Outstanding) | $6.60 | $6.64 | | Restricted Stock Unit Activity (in thousands) | January 31, 2025 | July 31, 2025 | | :-------------------------------------------- | :--------------- | :------------ | | Outstanding | 14,750 | 20,660 | | Granted | — | 11,408 | | Released | — | (2,989) | | Cancelled/forfeited | — | (2,509) | | Performance-Based Stock Units Activity (in thousands) | January 31, 2025 | July 31, 2025 | | :---------------------------------------------------- | :--------------- | :------------ | | Outstanding | 2,918 | 3,448 | | Granted | — | 810 | | Cancelled/forfeited | — | (280) | - As of July 31, 2025, **2,787,019** 2024 and 2025 PSUs were outstanding, with **100%** of performance conditions deemed probable to vest[113](index=113&type=chunk) | Stock-Based Compensation Expense (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total stock-based compensation | $21,692 | $15,723 | $43,889 | $30,129 | [11. Net Income Per Share](index=22&type=section&id=11.%20Net%20Income%20Per%20Share) - Basic and diluted net income per share are the same for **Class A** and **Class B** common stock due to identical liquidation and dividend rights[117](index=117&type=chunk) | Net Income Per Share (in thousands, except per share data) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income per common share, basic | $0.05 | $0.01 | $0.04 | $0.05 | | Weighted-average shares outstanding used in computing net income per share, basic | 254,391 | 260,830 | 255,501 | 266,187 | | Net income per common share, diluted | $0.05 | $0.01 | $0.04 | $0.04 | | Weighted-average shares outstanding used in computing net income per share, diluted | 263,201 | 271,934 | 264,442 | 279,695 | | Potentially Dilutive Securities Excluded (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | 3,870 | 5,364 | 3,870 | 5,171 | | PSUs | 697 | 780 | 697 | 780 | | RSUs | 10,481 | 3,212 | 12,408 | 1,426 | | ESPP | 121 | 84 | 121 | 92 | | Warrants to purchase common stock | 2,500 | — | 2,500 | — | | Total shares excluded from net income per share | 17,669 | 9,440 | 19,596 | 7,469 | [12. Income Taxes](index=23&type=section&id=12.%20Income%20Taxes) - Income tax provision for the three months ended July 31, 2025, was **$11.1 million**, up from **$4.5 million** in 2024, and for the six months, it was **$17.9 million**, up from **$7.1 million** in 2024[122](index=122&type=chunk) - The increase in tax provision for 2025 is primarily due to including **U.S. profit before tax** in the annual effective tax rate computation, unlike 2024 when a **full valuation allowance** was in place[123](index=123&type=chunk) - The Company recorded discrete income tax expense related to non-deductible stock-based compensation (**$1.5 million** for 3 months, **$4.5 million** for 6 months) and withholding tax (**$1.9 million** for 3 months, **$3.5 million** for 6 months) in 2025[123](index=123&type=chunk) - The **Inflation Reduction Act of 2022 (IRA)** resulted in **$1.9 million** in excise taxes paid during both the three and six months ended July 31, 2025, with an accrued **$1.0 million** for the 2025 Share Repurchase Program[125](index=125&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)**, enacted **July 4, 2025**, is being assessed for impact but is not expected to have a material effect on fiscal year 2026 tax provision[126](index=126&type=chunk) [13. Restructuring Charges](index=24&type=section&id=13.%20Restructuring%20Charges) - In **February 2025**, the Company implemented a global workforce restructuring, reducing headcount by approximately **12%** to realign costs and free up capital for investments[130](index=130&type=chunk) - For the six months ended July 31, 2025, restructuring costs totaled **$15.3 million**, including **$0.9 million** in stock-based compensation expense[130](index=130&type=chunk) - A reversal of restructuring costs of **$1.0 million** was incurred for the three months ended July 31, 2025[130](index=130&type=chunk) | (in thousands) | 2025 | 2024 | | :--------------- | :--- | :--- | | Accrual at January 1 | $— | $— | | Restructuring charges | $14,463 | $3,830 | | Cash Payments | $(13,037) | $(1,754) | | Accrual at July 31 | $1,426 | $2,076 | [14. Segment and Geographic Information](index=24&type=section&id=14.%20Segment%20and%20Geographic%20Information) - The Company operates as **one operating and reportable segment**, focusing on enterprise cloud software for **Unified Customer Experience Management**[132](index=132&type=chunk) - The CEO evaluates performance and allocates resources on a **consolidated basis** using net income[132](index=132&type=chunk) [15. Related Party Transactions](index=24&type=section&id=15.%20Related%20Party%20Transactions) - Sprinklr engaged **Lyearn Inc.**, a company wholly owned by its Founder and Chairman, **Ragy Thomas**, for digital training services[133](index=133&type=chunk) - The Company paid approximately **$0.1 million** to Lyearn for customer digital training services during each of the three and six months ended July 31, 2025 and 2024[134](index=134&type=chunk) - No payments were made to Lyearn for employee training services during the three months ended July 31, 2025 and 2024, and **nil** for the six months ended July 31, 2025 (compared to **$0.1 million** in 2024)[133](index=133&type=chunk)[134](index=134&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Sprinklr's financial condition and operational results, covering its Unified-CXM platform, key metrics, macroeconomic impacts, and capital resources [Overview](index=25&type=section&id=Overview) - Sprinklr's **Unified Customer Experience Management (Unified-CXM)** platform, powered by **AI**, enables customer-facing teams to collaborate across digital channels and deliver better customer experiences[139](index=139&type=chunk) - The platform includes **four main product suites**: Sprinklr Social, Sprinklr Insights, Sprinklr Marketing, and Sprinklr Service[139](index=139&type=chunk) - As of July 31, 2025, Sprinklr had **149 large customers** (defined as >**$1.0 million** in subscription revenue on a trailing 12-month basis), up from **145** as of July 31, 2024[143](index=143&type=chunk) [Key Business Metrics](index=25&type=section&id=Key%20Business%20Metrics) - **Remaining Performance Obligation (RPO)** was **$923.8 million** as of July 31, 2025, with **Current RPO (cRPO)** at **$597.1 million**[145](index=145&type=chunk) - **Net Dollar Expansion (NDE)** rate was **102.2%** for the 12-month period ending July 31, 2025, a decrease from **110.8%** in the prior year, driven by elevated churn and down-selling due to macroeconomic conditions[146](index=146&type=chunk) [Macroeconomic Considerations](index=26&type=section&id=Macroeconomic%20Considerations) - Unfavorable macroeconomic conditions, including **inflation**, **interest rate fluctuations**, and **geopolitical conflicts**, create global economic uncertainty[147](index=147&type=chunk) - Economic uncertainty may lead to **slower IT spending**, **longer collection cycles**, **increased credit losses**, and demands for financial concessions from customers[147](index=147&type=chunk) - While inflationary pressures on wages, rent, and data costs have been experienced, their net impact has **not been material** during the reporting periods[147](index=147&type=chunk) [Components of Results of Operations](index=26&type=section&id=Components%20of%20Results%20of%20Operations) - Revenue is generated from **subscriptions** to the Unified-CXM platform (recognized ratably over **1-3 year contract terms**) and **professional services** (configuration, optimization, managed services)[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - Costs of subscription revenue include **hosting, data, personnel**, and amortization of **capitalized internal-use software**, expected to increase with customer base expansion[152](index=152&type=chunk) - Costs of professional services revenue include **personnel, subcontractor costs**, and **allocated overhead**, expected to increase with partner use and headcount[153](index=153&type=chunk) - Gross margin on subscription revenue is **significantly higher** than professional services, and overall gross margin is expected to **decline in the near term** due to higher data, hosting, and service delivery costs[155](index=155&type=chunk) - Operating expenses include **R&D** (expected to increase with platform investment), **Sales & Marketing** (expected to decrease near-term due to restructuring, then increase long-term), **General & Administrative** (expected to decrease near-term due to cost savings, then increase long-term), and **Restructuring expenses**[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Sprinklr's results of operations show an **8%** increase in total revenue for the three months ended July 31, 2025, and a **6%** increase for the six months, driven by subscription and professional services growth, with operating income significantly improving for both periods [Comparison of the Three Months Ended July 31, 2025 and 2024](index=29&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20July%2031%2C%202025%20and%202024) | Revenue (in thousands) | 2025 | 2024 | $ Change | % Change | | :--------------------- | :----------- | :----------- | :----------- | :------- | | Subscription | $188,473 | $177,859 | $10,614 | 6 % | | Professional services | $23,567 | $19,349 | $4,218 | 22 % | | Total revenue | $212,040 | $197,208 | $14,832 | 8 % | - Subscription revenue growth was driven by increased revenue from existing customers purchasing additional solutions and new customer demand, partially offset by **down-selling and churn** due to macroeconomic challenges[166](index=166&type=chunk) - Professional services revenue increased due to growth in implementations and managed services related to **Contact Center as a Service (CCaaS)** delivery capabilities[167](index=167&type=chunk) | Costs of Revenue (in thousands) | 2025 | 2024 | $ Change | % Change | | :------------------------------ | :----------- | :----------- | :----------- | :------- | | Costs of subscription revenue | $43,177 | $34,306 | $8,871 | 26 % | | Costs of professional services revenue | $24,261 | $19,661 | $4,600 | 23 % | | Total costs of revenue | $67,438 | $53,967 | $13,471 | 25 % | | Gross margin - subscription | 77 % | 81 % | | -4 pp |\ | Gross margin - professional services | (3)% | (2)% | | -1 pp | - Sales and marketing expense decreased by **$6.9 million (9%)** primarily due to a **$5.5 million** decrease in personnel costs from restructuring activities[173](index=173&type=chunk) - General and administrative expense decreased by **$3.2 million (8%)** due to lower provision for credit losses (**$9.6 million** decrease), partially offset by increased personnel costs (**$7.0 million**) from stock compensation[174](index=174&type=chunk) - Restructuring expense decreased by **$4.8 million (126%)** due to a reversal of charges in **Q2 FY2026**, compared to costs incurred in **Q2 FY2025**[175](index=175&type=chunk) - Other income, net, increased by **$1.1 million (16%)** due to a **$2.4 million** increase in net foreign currency gains, partially offset by a **$1.2 million** decrease in interest income[176](index=176&type=chunk) - Provision for income taxes increased by **$6.6 million (148%)** due to the inclusion of **U.S. profit before tax** in the effective tax rate computation for 2025, and a **$1.5 million** discrete tax charge for non-deductible stock-based compensation[177](index=177&type=chunk) [Comparison of the Six Months Ended July 31, 2025 and 2024](index=31&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20July%2031%2C%202025%20and%202024) | Revenue (in thousands) | 2025 | 2024 | $ Change | % Change | | :--------------------- | :----------- | :----------- | :----------- | :------- | | Subscription | $372,600 | $355,222 | $17,378 | 5 % | | Professional services | $44,940 | $37,944 | $6,996 | 18 % | | Total revenue | $417,540 | $393,166 | $24,374 | 6 % | - Subscription revenue growth was driven by increased revenue from existing customers purchasing additional solutions and new customer demand, partially offset by **down-selling and churn** due to challenging macroeconomic conditions[178](index=178&type=chunk) - Professional services revenue increased due to growth in implementations and managed services related to **CCaaS** delivery capabilities[179](index=179&type=chunk) | Costs of Revenue (in thousands) | 2025 | 2024 | $ Change | % Change | | :------------------------------ | :----------- | :----------- | :----------- | :------- | | Costs of subscription revenue | $85,363 | $66,876 | $18,487 | 28 % | | Costs of professional services revenue | $44,706 | $38,216 | $6,490 | 17 % | | Total costs of revenue | $130,069 | $105,092 | $24,977 | 24 % | | Gross margin - subscription | 77 % | 81 % | | -4 pp |\ | Gross margin - professional services | 1 % | (1)% | | +2 pp | - Sales and marketing expense decreased by **$23.3 million (14%)** primarily due to an **$18.5 million** decrease in personnel-related costs from restructuring activities[184](index=184&type=chunk) - General and administrative expense increased by **$2.1 million (3%)** due to a **$12.3 million** increase in personnel-related costs (stock compensation), partially offset by an **$8.6 million** decrease in provision for credit losses and a **$1.6 million** decrease in professional fees[185](index=185&type=chunk) - Restructuring expense increased by **$11.5 million (300%)** due to a larger workforce reduction (**12%**) in **FY2026** compared to **FY2025 (3%)**[186](index=186&type=chunk) - Other income, net, increased by **$0.5 million (3%)** due to a **$5.1 million** increase in net foreign currency gains, partially offset by a **$4.4 million** decrease in interest income[187](index=187&type=chunk) - Provision for income taxes increased by **$10.8 million (153%)** due to the inclusion of **U.S. profit before tax** in the effective tax rate computation for 2025, and a **$4.5 million** discrete tax charge for non-deductible stock-based compensation[188](index=188&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) - **Non-GAAP financial measures** (gross profit, operating income, net income, and free cash flow) exclude stock-based compensation, amortization of acquired intangibles, restructuring charges, and other one-time items to provide a clearer view of core business performance[189](index=189&type=chunk)[190](index=190&type=chunk) | Non-GAAP Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Non-GAAP gross profit | $146,249 | $144,497 | $290,437 | $290,429 | | Non-GAAP gross margin | 69 % | 73 % | 70 % | 74 % | | Non-GAAP operating income | $38,246 | $19,575 | $74,986 | $40,450 | | Non-GAAP operating margin | 18 % | 10 % | 18 % | 10 % | | Non-GAAP net income | $33,829 | $21,503 | $66,145 | $47,303 | | Free Cash Flow (in thousands) | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :---------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $118,567 | $63,034 | | Purchase of property and equipment | $(654) | $(4,028) | | Capitalized internal-use software | $(7,459) | $(6,291) | | Free cash flow | $110,454 | $52,715 | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Sprinklr maintains strong liquidity with **$125.4 million** in cash and cash equivalents and **$348.6 million** in marketable securities as of July 31, 2025, expecting these resources to be sufficient for its working capital, capital expenditures, and financing obligations for the foreseeable future [Overview](index=37&type=section&id=Overview) - As of July 31, 2025, principal liquidity sources were **$125.4 million** in cash and cash equivalents and **$348.6 million** in marketable securities[196](index=196&type=chunk) - Existing liquidity is believed to be sufficient for **working capital, capital expenditures, and financing obligations** for at least the next **12 months** and long-term[196](index=196&type=chunk) [Cash Collateral Agreements and Restricted Cash](index=37&type=section&id=Cash%20Collateral%20Agreements%20and%20Restricted%20Cash) - Approximately **$1.1 million** in cash collateral agreements with Silicon Valley Bank and **$7.3 million** with J.P. Morgan Bank were outstanding as of July 31, 2025, classified as **restricted cash**[197](index=197&type=chunk)[198](index=198&type=chunk) [Material Cash Requirements](index=37&type=section&id=Material%20Cash%20Requirements) - Contractually obligated expenditures include **$324.8 million** in minimum guaranteed purchase commitments through **fiscal year 2030**, with **$107.1 million** due within **12 months** from January 31, 2025[199](index=199&type=chunk) - The **2025 Share Repurchase Program** for **$150 million** of Class A common stock was completed by **August 7, 2025**, with **$140.4 million** repurchased by July 31, 2025[200](index=200&type=chunk) [Future Funding Requirements](index=37&type=section&id=Future%20Funding%20Requirements) - Future capital requirements depend on **growth rate, sales force expansion, strategic relationships, international operations, R&D investments**, and **market acceptance**[202](index=202&type=chunk) - Acquisitions may be financed through **cash, debt, or stock**, with historical acquisitions primarily using cash and stock[202](index=202&type=chunk) - Inability to raise additional capital when needed could adversely affect **operating activities, capital expenditures, business, operating results, and financial condition**[203](index=203&type=chunk) [Cash Flows](index=39&type=section&id=Cash%20Flows) | (in thousands) | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $118,567 | $63,034 | | Net cash (used in) provided by investing activities | $(15,443) | $145,843 | | Net cash used in financing activities | $(125,121) | $(253,235) | - Operating cash flow for the six months ended July 31, 2025, was **$118.6 million**, driven by an **$81.0 million** decrease in accounts receivable[206](index=206&type=chunk) - Investing activities for the six months ended July 31, 2025, primarily involved **$269.7 million** in marketable securities purchases and **$262.6 million** in sales/maturities[208](index=208&type=chunk) - Financing activities for the six months ended July 31, 2025, included **$140.8 million** in share repurchases, offset by **$12.9 million** from stock option exercises and **$2.8 million** from ESPP purchases[210](index=210&type=chunk) [Critical Accounting Estimates](index=40&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates include **revenue recognition** and **stock-based compensation expense**, particularly historical common stock valuations and performance-based award valuations[213](index=213&type=chunk) - Estimates are evaluated continuously using historical experience and reasonable assumptions, with actual results potentially differing **materially**[213](index=213&type=chunk) [Recent Accounting Pronouncements](index=40&type=section&id=Recent%20Accounting%20Pronouncements) - **ASU 2023-09 (Income Taxes)** is effective for **fiscal year 2026**, requiring enhanced income tax disclosures[52](index=52&type=chunk) - **ASU 2024-03** and **ASU 2025-01 (Expense Disaggregation)** are effective for fiscal years beginning after **December 15, 2026**, and **2027**, respectively, requiring new disclosures for expense categories[53](index=53&type=chunk) - **ASU 2025-05 (Credit Losses for Accounts Receivable)** is effective for **fiscal year 2027**, introducing a practical expedient for estimating expected credit losses[56](index=56&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Sprinklr's market risk exposures primarily include foreign exchange risk from transactions and earnings in non-U.S. dollar currencies, and interest rate risk due to changes in interest rates on its assets - Primary market risk exposures are **foreign exchange risk** (non-U.S. dollar transactions) and **interest rate risk** (changes in asset interest rates)[216](index=216&type=chunk) - No **material changes** in market risks since January 31, 2025[216](index=216&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Sprinklr's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures as of July 31, 2025, and concluded they were effective, with no material changes in internal control over financial reporting during the three months ended July 31, 2025 - Disclosure controls and procedures were evaluated as **effective** by management, including the **CEO** and **CFO**, as of July 31, 2025[218](index=218&type=chunk) - No **material changes** in internal control over financial reporting occurred during the three months ended July 31, 2025[219](index=219&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 8, Commitments and Contingencies - Legal Matters, for a description of current legal proceedings, which include a putative securities class action and stockholder derivative actions - Current legal proceedings include a putative **securities class action** and **stockholder derivative actions**[91](index=91&type=chunk)[95](index=95&type=chunk) - The securities class action alleges **misleading statements** and failure to disclose risks related to Sprinklr Service, while derivative actions assert similar claims of **federal securities law violations** and **breaches of fiduciary duties**[91](index=91&type=chunk)[95](index=95&type=chunk) - The Company intends to **vigorously defend** against these lawsuits, and the ultimate outcome or potential loss cannot be predicted at this early stage[94](index=94&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various risks and uncertainties that could materially affect Sprinklr's business, financial condition, or results of operations, including growth, industry, IP, litigation, cybersecurity, tax, and public company risks [Summary of Selected Risk Factors Associated with Our Business](index=42&type=section&id=Summary%20of%20Selected%20Risk%20Factors%20Associated%20with%20Our%20Business) - Key risks include difficulty in sustaining **growth and profitability**, challenges in managing growth and organizational change, inability to develop platform enhancements or keep pace with technology, and **volatility in operating results and stock price**[224](index=224&type=chunk) - Risks also involve **market acceptance** of the Unified-CXM platform, **competition** in an evolving market, dependence on **customer renewals and expansion**, and operational/legal challenges from using **AI in products**[224](index=224&type=chunk) - Other risks include reliance on **third-party strategic relationships and data**, **intellectual property protection**, **data privacy and security compliance**, **cybersecurity breaches**, and the **concentrated voting control** of executive officers and directors[224](index=224&type=chunk) [Risks Related to Our Growth](index=44&type=section&id=Risks%20Related%20to%20Our%20Growth) - Past revenue growth may not indicate future performance, and the company's ability to sustain growth depends on attracting new customers, expanding platform functionality, effective implementations, international expansion, and successful acquisitions[226](index=226&type=chunk)[227](index=227&type=chunk) - The company has incurred significant net losses and an accumulated deficit (**$756.4 million** as of July 31, 2025) and may not achieve or maintain profitability due to substantial investments in R&D, infrastructure, sales, marketing, and international expansion[228](index=228&type=chunk)[229](index=229&type=chunk)[22](index=22&type=chunk) - Failure to effectively manage **growth, organizational change**, and increasing product complexity (e.g., CCaaS projects) could harm business and financial results, including customer dissatisfaction and revenue recognition delays[232](index=232&type=chunk)[242](index=242&type=chunk) - Attracting new customers, especially **governmental agencies**, presents challenges such as high competition, long sales cycles, and compliance with specific contracting requirements[233](index=233&type=chunk)[234](index=234&type=chunk) [Risks Related to Our Business and Industry](index=45&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) - Actual operating results may differ significantly from guidance, leading to **stock price volatility**, especially in periods of economic uncertainty[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) - Results of operations and financial metrics are difficult to predict due to factors like **payment terms, implementation success, new product introductions, customer renewal rates**, and **macroeconomic conditions**[238](index=238&type=chunk)[239](index=239&type=chunk) - Failure of the **Unified-CXM platform** to meet customer demands, achieve market acceptance, or adapt to technological changes could adversely affect the business[241](index=241&type=chunk)[242](index=242&type=chunk) - The rapidly evolving **Unified-CXM market**, **intense competition**, and potential for new disruptive technologies pose risks to demand and market position[243](index=243&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - Business depends on **customer renewals and expansion**; any decline in these rates due to satisfaction issues, pricing, or economic conditions would harm financial results[248](index=248&type=chunk)[249](index=249&type=chunk) - Revenue recognition over contract terms means sales fluctuations are **not immediately reflected**, making it difficult to rapidly increase revenue or adjust cost structures[250](index=250&type=chunk) - Failure to attract and retain **qualified talent**, especially in specialized areas like cloud software engineering, could hinder business strategy execution due to high competition and potential declines in equity award value[251](index=251&type=chunk) - Reliance on **third-party data centers and cloud providers** means service interruptions, data loss, or increased costs could impair platform delivery and harm the business[252](index=252&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk) - Inability to effectively develop platform enhancements, introduce new products, or keep pace with technological developments (e.g., mobile usage) could adversely affect business and financial condition[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) - Use of **AI in products and operations** presents risks including operational challenges, legal liability (e.g., intellectual property infringement, biased outputs), reputational concerns, and competitive disadvantages, especially given evolving regulatory landscapes[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - Dependence on **strategic relationships** with third-party technology companies and data providers means disruptions or changes in terms (e.g., with X/Twitter) could adversely affect service delivery and data access[266](index=266&type=chunk)[267](index=267&type=chunk) - Significant **R&D investments** may not translate into successful new solutions or enhancements, harming business if not used efficiently or if market demand shifts[268](index=268&type=chunk) - Failure to develop and maintain successful **channel partner relationships** could adversely affect revenue growth, especially in developing markets, and lead to collection issues[269](index=269&type=chunk)[270](index=270&type=chunk) - Inability to maintain and enhance **brand reputation** due to ineffective marketing, service quality issues, or negative publicity could adversely affect customer acquisition and retention[271](index=271&type=chunk)[272](index=272&type=chunk) - Acquisitions or investments in other companies may divert management attention, result in **integration difficulties, unforeseen expenditures**, and potential **dilution to stockholders**[273](index=273&type=chunk)[274](index=274&type=chunk) - International sales and operations face risks including **increased costs, compliance with diverse laws** (e.g., data privacy, anti-bribery), **currency fluctuations**, and difficulties in engaging non-U.S. customers[275](index=275&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk) [Risks Related to Our Intellectual Property](index=57&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - Use of **open source software** in the Unified-CXM platform may lead to litigation, requirements to disclose proprietary source code, or diversion of development resources due to ambiguous license terms or security risks[281](index=281&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - Failure to obtain, maintain, protect, defend, or enforce **intellectual property rights** (patents, copyrights, trademarks, trade secrets) could impair the ability to protect proprietary technology and brand, especially in foreign countries with weaker protections[286](index=286&type=chunk)[287](index=287&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk) - The company may face claims from third parties alleging **infringement, misappropriation**, or other violations of their intellectual property rights, leading to significant expenses, damages, licensing fees, or re-engineering requirements[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk) - Indemnity provisions in customer agreements and source code escrow arrangements could expose the company to **substantial liability** for intellectual property infringement or other losses, and risk **unauthorized disclosure of source code**[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) [Risks Related to Litigation, Regulatory Compliance and Governmental Matters](index=62&type=section&id=Risks%20Related%20to%20Litigation%2C%20Regulatory%20Compliance%20and%20Governmental%20Matters) - Pending or future **securities litigation** or **stockholder activism** could result in substantial costs, divert management attention, damage reputation, and negatively impact stock price[298](index=298&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk) - Compliance with governmental **export and import controls** and **economic sanctions laws** is critical; violations could lead to substantial fines, penalties, reputational harm, and loss of market access[302](index=302&type=chunk)[303](index=303&type=chunk) - Failure to comply with **anti-bribery, anti-corruption, and anti-money laundering laws** (e.g., FCPA, U.K. Bribery Act) could result in severe criminal or civil sanctions, reputational damage, and financial penalties[304](index=304&type=chunk) - Changes in laws and regulations related to the **Internet** (e.g., network neutrality) or **telecommunications industry** could adversely impact business by requiring platform modifications, increasing costs, or limiting service offerings[305](index=305&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) [Risks Related to Privacy, Information Technology and Cybersecurity](index=65&type=section&id=Risks%20Related%20to%20Privacy%2C%20Information%20Technology%20and%20Cybersecurity) - Interruptions or suboptimal performance of **technology and infrastructure** (e.g., service disruptions, outages, capacity constraints) could adversely affect business, brand, and customer retention, potentially leading to financial penalties or litigation[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk) - Stringent and changing **data privacy and security obligations** (e.g., CCPA, GDPR, HIPAA, PCI DSS) expose the company to regulatory investigations, litigation, fines, and reputational harm if not complied with[312](index=312&type=chunk)[313](index=313&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk)[317](index=317&type=chunk) - **Cross-border data transfer restrictions** (e.g., GDPR, U.S. Department of Justice rules) and **data localization requirements** could lead to operational disruptions, significant expenses, and regulatory actions[318](index=318&type=chunk) - Reliance on **third-party data suppliers** and the increased scrutiny on data sales pose compliance risks and potential limitations on data availability or increased costs[321](index=321&type=chunk) - **Cybersecurity breaches** or other security incidents (e.g., cyberattacks, ransomware, human error, supply-chain attacks) could compromise confidential information, disrupt operations, harm reputation, and incur significant liabilities[328](index=328&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk)[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk) [Risks Related to Tax and Accounting Matters](index=75&type=section&id=Risks%20Related%20to%20Tax%20and%20Accounting%20Matters) - The company may be required to collect **sales, VAT, GST, or similar taxes** in new jurisdictions, potentially leading to substantial tax liabilities, penalties, and interest if tax authorities assert additional obligations[343](index=343&type=chunk)[344](index=344&type=chunk)[345](index=345&type=chunk) - International operations subject the company to **adverse tax consequences** due to complex transfer pricing regulations and potential disagreements with taxing authorities, leading to additional taxes, interest, and penalties[346](index=346&type=chunk) - Uncertainties in **tax laws and regulations** (e.g., IRA, OECD's Two-Pillar framework) could materially affect tax obligations and effective tax rates, potentially increasing tax liability and compliance costs[347](index=347&type=chunk)[348](index=348&type=chunk) - **Tax examinations** by the IRS and other authorities could result in adverse outcomes, impacting results of operations and financial condition[349](index=349&type=chunk) - The ability to use **net operating losses (NOLs)** and other tax assets may be limited by expiration dates or ownership changes under **Section 382** of the Internal Revenue Code, adversely affecting future profitability[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) [Risks Related to Being a Public Company, Ownership of Our Class A Common Stock and Other General Risks](index=77&type=section&id=Risks%20Related%20to%20Being%20a%20Public%20Company%2C%20Ownership%20of%20Our%20Class%20A%20Common%20Stock%20and%20Other%20General%20Risks) - The market price of Class A common stock may be **volatile** due to various factors, including market fluctuations, company announcements, personnel changes, litigation, regulatory actions, and macroeconomic conditions[353](index=353&type=chunk)[354](index=354&type=chunk) - The **dual-class common stock structure** concentrates voting control with executive officers, directors, and their affiliates (**87.6% of voting power** as of July 31, 2025), limiting other stockholders' influence on corporate matters[355](index=355&type=chunk)[357](index=357&type=chunk) - Failure to maintain an effective system of **disclosure controls** and **internal control over financial reporting** could impair the ability to produce timely and accurate financial statements, leading to restatements, loss of investor confidence, and potential delisting[359](index=359&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk) - Unstable market and economic conditions, **catastrophic events** (e.g., natural disasters, wars, cybersecurity issues), and **trade disputes** could seriously impact business, financial condition, and share price by reducing demand, increasing costs, or disrupting operations[362](index=362&type=chunk)[363](index=363&type=chunk)[364](index=364&type=chunk)[365](index=365&type=chunk) - Delaware law and provisions in charter documents (e.g., classified board, restrictions on stockholder actions) could make **mergers, tender offers, or proxy contests difficult**, potentially depressing the market price of Class A common stock[366](index=366&type=chunk)[367](index=367&type=chunk) - Charter documents designate **Delaware state or federal courts** as the exclusive forum for most disputes, and federal district courts for Securities Act claims, potentially limiting stockholders' choice of judicial forum[368](index=368&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the Company's equity security activities, specifically detailing issuer purchases of Class A common stock under the 2025 Share Repurchase Program [Recent Sales of Unregistered Equity Securities](index=82&type=section&id=Recent%20Sales%20of%20Unregistered%20Equity%20Securities) - No **unregistered sales of equity securities** were reported during the period[372](index=372&type=chunk) [Issuer Purchases of Equity Securities](index=82&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) | Period | Total Number of Shares Purchased (thousands) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (thousands) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (millions) | | :------------------------- | :-------------------------------------------- | :--------------------------- | :-----------------------------------------