Financial Data and Key Metrics Changes - Total revenue for Q2 FY26 grew 8% year over year to $212 million, while subscription revenue increased 6% year over year to $188.5 million [4][18] - Non-GAAP operating income reached a record $38.2 million, resulting in an 18% non-GAAP operating margin for the quarter [4][21] - Free cash flow generated was $29.8 million, with a total of $123.5 million in the first half of FY26, excluding restructuring payments [21][28] Business Line Data and Key Metrics Changes - Professional services revenue was $23.6 million, driven by large CCaaS implementations [18] - Subscription revenue-based net dollar expansion rate was 102%, reflecting ongoing customer churn and downsell activity [18] - The number of customers generating at least $1 million in annual subscription revenue increased to 149, up by three from the previous quarter [17][19] Market Data and Key Metrics Changes - Total remaining performance obligations (RPO) was $923.8 million, up 4% year over year, while current RPO (CRPO) was $597.1 million, up 7% year over year [23] - Calculated billings for Q2 were $200.6 million, an increase of 4% year over year [22] Company Strategy and Development Direction - The company is in a transformation phase, focusing on business optimization and strategic investments to improve execution and customer service [5][6] - Investments are being made in AI functionality, enhanced video capabilities, and technical skills to better serve customers [8][9] - The company aims to strengthen its leadership team and improve customer engagement through initiatives like Project BearHug [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in renewals and customer churn, emphasizing the importance of improving customer satisfaction and engagement [10][11] - The company expects to see improvements in renewals and customer satisfaction metrics in the second half of FY26 and into FY27 [31][32] - Management remains optimistic about the transformational journey and the potential for growth in the coming quarters [17][32] Other Important Information - The CFO announced plans to step down, with the CEO assuming interim responsibilities while a search for a new CFO is conducted [4][5] - The company has completed a $150 million stock buyback program, purchasing 16.5 million shares [22] Q&A Session Summary Question: When will the company see a bend in the transformation journey? - Management indicated that improvements in renewals and customer satisfaction are expected in the second half of FY26, with metrics to watch including renewals and customer engagement [30][31] Question: Can you provide an example of a significant churn situation? - Management explained that churn has been influenced by inconsistent execution and customer engagement, but efforts like Project BearHug are aimed at improving these relationships [37][38] Question: What is the impact of AI-related investments on costs? - Management noted that increased costs are associated with the uptake of AI products, including hosting and support, but the growth in consumption is positive [40][41] Question: What are the drivers for unlocking demand in the CCaaS business? - Management highlighted the importance of successful large implementations and enhancing customer experience as key drivers for growth in the CCaaS segment [49][50] Question: How is the hybrid pricing model being received by customers? - Management stated that the new hybrid pricing model aims to simplify customer purchasing and improve satisfaction, with plans to expand it across the product portfolio [54][56] Question: What is the company's approach to new customer acquisition? - Management indicated a focus on expanding existing customer relationships while being cautious about introducing new logos until execution improves [80]

Core Insights - Sprinklr reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, and showing an increase from $0.06 per share a year ago, resulting in an earnings surprise of +30.00% [1] - The company achieved revenues of $212.04 million for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 3.16% and up from $197.21 million year-over-year [2] - Sprinklr has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise of +30.00% indicates strong performance relative to expectations, with a previous quarter surprise of +20% [1][2] - The current consensus EPS estimate for the upcoming quarter is $0.09, with projected revenues of $206.46 million, and for the current fiscal year, the EPS estimate is $0.40 on revenues of $826.2 million [7] Stock Performance and Outlook - Sprinklr shares have increased by approximately 1.8% since the beginning of the year, underperforming compared to the S&P 500's gain of 9.1% [3] - The company's Zacks Rank is currently 3 (Hold), suggesting that shares are expected to perform in line with the market in the near future [6] Industry Context - The Technology Services industry, to which Sprinklr belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Total RPO reached $924 million[4], with subscription revenue accounting for 78%[4] - The company achieved a net dollar expansion rate of 102%[4] - Q2 total revenue grew by 8% year-over-year[4] - LTM Q2 FY26 subscription revenue was $735.3 million, a 5% increase year-over-year[25] - LTM Q2 FY26 total revenue reached $820.8 million, reflecting a 6% year-over-year growth[25] - The company has 149 customers with over $1 million in revenue[4] Guidance - Q3 FY26 subscription revenue is projected to be between $186 million and $187 million, a 3% increase year-over-year at the midpoint[37] - Q3 FY26 total revenue is expected to be between $209 million and $210 million, a 4% increase year-over-year at the midpoint[37] - Full-year fiscal 2026 subscription revenue is guided to be between $746 million and $748 million, a 4% increase year-over-year at the midpoint[37] - Full-year fiscal 2026 total revenue is projected to be between $837 million and $839 million, a 5% increase year-over-year at the midpoint[37]

Revenue Performance - Total revenue for Q2 fiscal 2026 was $212.0 million, an increase of 8% year-over-year from $197.2 million[7] - Subscription revenue for Q2 was $188.5 million, up 6% year-over-year from $177.9 million[7] - Total revenue for the three months ended July 31, 2025, was $212.04 million, a 7.9% increase from $197.21 million in the same period of 2024[21] - Subscription revenue increased to $188.47 million for the three months ended July 31, 2025, compared to $177.86 million in 2024, reflecting a growth of 5.9%[21] - Guidance for Q3 includes total revenue between $209 million and $210 million and subscription revenue between $186 million and $187 million[8] Profitability Metrics - GAAP operating income for Q2 was $16.3 million, compared to an operating loss of $0.1 million in the same quarter last year[7] - Non-GAAP operating income for Q2 was $38.2 million, up from $19.6 million year-over-year[7] - GAAP net income per share for Q2 was $0.05, compared to $0.01 in the same quarter last year[7] - Non-GAAP net income per share for Q2 was $0.13, compared to $0.08 in the same quarter last year[7] - Operating income for the three months ended July 31, 2025, was $16.27 million, compared to a loss of $0.09 million in the same period of 2024[21] - Net income for the six months ended July 31, 2025, was $11.05 million, down from $12.48 million in 2024[23] - Non-GAAP net income for the three months ended July 31, 2025, was $33,829,000, representing an increase from $21,503,000 in the same period of 2024, reflecting a growth of 57.5%[26] - The net income for the six months ended July 31, 2025, was $66,145,000, compared to $47,303,000 for the same period in 2024, indicating a year-over-year increase of 39.8%[26] - The company reported a net income of $12,615,000 for the three months ended July 31, 2025, compared to $1,841,000 in 2024, marking a significant increase of 585.5%[26] Cash Flow and Expenses - Free cash flow for Q2 was $29.8 million, with net cash provided by operating activities at $34.8 million[6] - Free cash flow for the six months ended July 31, 2025, was $110.45 million, significantly higher than $52.72 million in 2024[25] - Total operating expenses for the three months ended July 31, 2025, were $128.33 million, a decrease from $143.33 million in 2024[21] - Cash, cash equivalents, and restricted cash at the end of the period were $133.83 million, compared to $126.82 million at the end of July 2024[23] - The company reported a net cash provided by operating activities of $118.57 million for the six months ended July 31, 2025, up from $63.03 million in 2024[23] Stock-Based Compensation and Other Costs - Stock-based compensation expense for the three months ended July 31, 2025, was $21.30 million, compared to $15.09 million in 2024[25] - Stock-based compensation expense for the three months ended July 31, 2025, was $21,450,000, up from $15,243,000 in 2024, which is a rise of 40.6%[26] - For the six months ended July 31, 2025, stock-based compensation expense was $42,214,000, compared to $29,867,000 in 2024, representing a growth of 41.2%[26] - The non-recurring litigation costs for the three months ended July 31, 2025, were $816,000, while there were no such costs reported in the same period of 2024[26] - Restructuring costs for the six months ended July 31, 2025, were $15,329,000, compared to $3,830,000 in 2024, indicating an increase of 300.5%[26] Customer Metrics and Leadership Changes - The company has 149 customers contributing $1 million or more in revenue, an increase of 3 customers quarter-over-quarter[6] - The company appointed Scott Millard as Chief Revenue Officer effective September 22, 2025[6] Share Metrics - The weighted-average shares outstanding for the three months ended July 31, 2025, were 254,391, compared to 263,201 in 2024, showing a decrease of 3.1%[26] - Total additions to non-GAAP net income for the three months ended July 31, 2025, amounted to $21,214,000, compared to $19,662,000 in 2024, reflecting an increase of 7.9%[26]

Core Viewpoint - The article discusses the investment outlook for Sprinklr (NYSE: CXM), maintaining a hold rating due to the expectation that valuation upside will not occur until the company delivers tangible results from initiatives led by the new CEO [1]. Group 1: Company Overview - Sprinklr is currently under the leadership of a new CEO, and the author emphasizes the need for the company to show concrete results from recent initiatives before any positive valuation changes can be anticipated [1]. Group 2: Investment Strategy - The author highlights a diverse investment background, utilizing various approaches such as fundamental, technical, and momentum investing to refine their investment process [1]. - The purpose of writing on Seeking Alpha is to track investment ideas and connect with like-minded investors [1].

Core Insights - Sprinklr reported revenue of $205.5 million for the quarter ended April 2025, marking a year-over-year increase of 4.9% and an EPS of $0.12 compared to $0.09 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $201.89 million by 1.79%, and the EPS surpassed the consensus estimate of $0.10 by 20% [1] Financial Performance Metrics - Gross Margin for Subscription was reported at 77%, above the five-analyst average estimate of 76.4% [4] - Gross Margin for Professional Services was 4%, compared to the two-analyst average estimate of -1% [4] - Subscription Revenue reached $184.13 million, exceeding the average estimate of $182.39 million by analysts, representing a year-over-year increase of 3.8% [4] - Professional Services Revenue was reported at $21.37 million, surpassing the average estimate of $19.49 million, reflecting a year-over-year change of 14.9% [4] Stock Performance - Sprinklr's shares have returned 17.1% over the past month, outperforming the Zacks S&P 500 composite's 5.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Revenue Performance - Total revenue for the three months ended April 30, 2025, was $205.5 million, an increase from $196.0 million in the same period of 2024, representing a growth of 4.8%[161] - Subscription revenue increased to $184.1 million in Q1 2025 from $177.4 million in Q1 2024, reflecting a growth of 3.8%[161] - Total revenue for the three months ended April 30, 2025, was $205.5 million, a 5% increase from $196.0 million in the same period of 2024[163] - Subscription revenue increased by 4% to $184.1 million, while professional services revenue rose by 15% to $21.4 million[163][164] Profitability and Expenses - Gross profit for the three months ended April 30, 2025, was $142.9 million, with a gross margin of approximately 69.5%[161] - Operating expenses totaled $144.6 million for Q1 2025, up from $139.1 million in Q1 2024, driven by increased sales and marketing expenses[161] - The company reported a net loss of $1.6 million for the three months ended April 30, 2025, compared to a net income of $10.6 million in the same period of 2024[161] - Research and development expenses were $22.8 million for Q1 2025, slightly up from $22.5 million in Q1 2024, reflecting ongoing investment in product development[161] - Sales and marketing expenses decreased to $71.1 million in Q1 2025 from $87.5 million in Q1 2024, due to recent restructuring efforts[161] - General and administrative expenses increased by 18% to $34.4 million, representing 17% of total revenue[171] - Restructuring expenses amounted to $16.3 million, constituting 8% of total revenue[172] - Non-GAAP net income for the three months ended April 30, 2025, was $32.3 million, or $0.13 per share, compared to $25.8 million, or $0.09 per share in 2024[181] Customer Metrics - The company had 146 large customers as of April 30, 2025, an increase from 138 large customers a year earlier, indicating growth in its enterprise customer base[139] Future Revenue Visibility - Remaining Performance Obligation (RPO) as of April 30, 2025, was $943.2 million, with Current RPO (cRPO) at $596.8 million, indicating strong future revenue visibility[141] Cash Flow and Liquidity - Cash provided by operating activities increased to $83.8 million in Q2 2025 from $41.7 million in Q2 2024, driven by a significant decrease in accounts receivable[192] - Free cash flow for the three months ended April 30, 2025, was $80.7 million, up from $36.2 million in the same period of 2024[190] - As of April 30, 2025, the company had $126.4 million in cash and cash equivalents and $443.8 million in marketable securities, indicating strong liquidity[182] Financial Obligations and Shareholder Returns - The company has contractually obligated expenditures totaling $324.8 million through fiscal year 2030, with $107.1 million due within the next twelve months[186] - A share repurchase program was authorized for up to $150 million of Class A common stock, reflecting the company's commitment to returning value to shareholders[187] Investment Activities and Future Outlook - Cash used in investing activities for the three months ended April 30, 2025, was $108.0 million, primarily due to purchases of marketable securities[194] - The company expects free cash flow to fluctuate in future periods due to changes in operating expenses and continued investments in growth[191] - The company may finance future acquisitions through cash, debt, or stock, maintaining financial flexibility for strategic growth initiatives[189] Market and Performance Metrics - Net Dollar Expansion Rate (NDE) for the trailing 12-month period ending April 30, 2025, was 101.8%, down from 114.6% in the previous year, attributed to increased churn and down-selling[142] - Total costs of revenue increased by 23% to $62.6 million, with subscription costs rising by 30% to $42.2 million[166] - Gross margin for subscription decreased from 82% to 77%, while gross margin for professional services improved from 0% to 4%[168] - Research and development expenses were $22.8 million, representing 11% of total revenue, a slight increase from 12% in the prior year[169] - Sales and marketing expenses decreased by 19% to $71.1 million, accounting for 35% of total revenue, down from 45%[170] - Other income decreased by 8% to $6.9 million, primarily due to a decline in interest income[173] - Provision for income taxes increased by 162% to $6.7 million, representing 3% of total revenue[174]

Core Viewpoint - Sprinklr's recent results indicate progress in its transformation, despite challenges with customer churn and down-sell activity [1][2]. Financial Performance - Total revenue reached $205.5 million, reflecting a 5% year-over-year increase, surpassing the Street estimate of $201.8 million and guidance of $201.5 million to $202.5 million [6]. - Subscription revenue increased by 4% year-over-year to $184.1 million, accounting for 90% of total revenue and exceeding consensus estimates by $1 million [6]. - Professional services revenue was $21.4 million, up 15% year-over-year, beating the analyst's estimate by approximately $2 million [6]. - Operating income stood at $36.7 million, representing an 18% margin, which exceeded the analyst estimate of $32.3 million (16% margin) and guidance of $31.5 million to $32.5 million [6]. - Adjusted EPS was 12 cents, beating the Street estimate of 10 cents [6]. Customer Dynamics - Net Revenue Retention (NRR) declined to 102% from 104% in the previous quarter, attributed to ongoing customer churn and down-sell activity [2]. - The number of customers generating over $1 million in subscription revenue grew by 6% year-over-year to 146, but saw a quarter-over-quarter decline from 149 due to limited renewals and reduced up-sell/cross-sell activity [2]. Strategic Initiatives - Management is focusing on reducing churn through the "Project Bear Hug" initiative, which has engaged over 200 of its top 500 customers and is showing positive results [3]. - Standardization of implementation processes has reached 80% consistency to enhance customer success [3]. - A comprehensive go-to-market overhaul, including new sales pod structures and enablement programs, is expected to gain momentum in the second half of 2026, positioning Sprinklr for potential acceleration in fiscal 2027 and 2028 [4]. Market Reaction - CXM shares increased by 0.55% to $9.11 during the last check on Thursday [5].

Group 1 - The article highlights Sprinklr, Inc. (NYSE: CXM) as a focus for investment analysis after several years, indicating it is a "busted IPO" that emerged during the IPO/SPAC wave of 2020/2021, driven by the Federal Reserve's zero interest rate policies [1] - The Busted IPO Forum, led by Bret Jensen, specializes in identifying small-cap stocks that have been public for 18 months to 6 years and are trading significantly below their initial offering price [1] Group 2 - The article does not provide specific financial metrics or performance data for Sprinklr, Inc. or the broader market context [1]

Group 1 - The stock market appears complacent regarding long-term macro risks, including potential recessionary impacts from tariffs and signs of strain in the bond market [1] - Emphasis is placed on value stocks over growth stocks in the current market environment [1] - Gary Alexander has extensive experience in technology companies and has been a contributor to Seeking Alpha since 2017, providing insights into industry trends [1]