Sprinklr(CXM)2024-12-04 21:20Financial Performance - Total revenue for the three months ended October 31, 2024, was 186,325 in the prior year[132]. - Subscription revenue for the three months ended October 31, 2024, was 170,464 in the same period of 2023[132]. - Professional services revenue increased by 26% to 15,861 in 2023[132]. - Total revenue for the nine months ended October 31, 2024, was 538,153,000 in the prior year[137]. - Subscription revenue for the nine months ended October 31, 2024, increased by 9% to 491,581,000 in the same period of 2023[137]. - Net income for the three months ended October 31, 2024, was 16,967 in the same period of 2023[134]. - Net income for the nine months ended October 31, 2024, was 30.3 million for the same period in 2023, reflecting a decrease of approximately 24.5%[153]. - Non-GAAP net income for the nine months ended October 31, 2024, was 74.5 million in 2023, representing a decline of about 8.5%[153]. Expenses and Costs - Total costs of revenue increased by 24% to 46,448 in 2023[134]. - Research and development expenses were 23,146 in 2023[134]. - Sales and marketing expenses increased by 3% to 75,446 in 2023[134]. - General and administrative expenses rose by 21% to 28,096 in 2023[134]. - Research and development expenses increased to 102,084,000, driven by increased personnel-related costs and consulting expenses[142]. - Costs of subscription revenue rose by 21% to 85,136,000, primarily due to increased third-party cloud infrastructure costs[138]. Profitability Metrics - Gross profit for the three months ended October 31, 2024, was 139,877 in the same period of 2023[134]. - Gross margin for subscription decreased by 2 percentage points to 81% due to higher costs associated with cloud infrastructure[140]. - Non-GAAP gross profit for the nine months ended October 31, 2024, was 58,872,000, with a non-GAAP operating margin of 10%[144]. Customer Metrics - The Net Dollar Expansion Rate (NDE) for the trailing 12-month period ending October 31, 2024, was 107.3%, down from 117.7% for the previous year, attributed to increased churn due to macroeconomic conditions[117]. - The company had 147 large customers as of October 31, 2024, compared to 123 large customers a year earlier[112]. Cash Flow and Liquidity - Cash provided by operating activities increased to 54.2 million in 2023, marking an increase of approximately 33.3%[156]. - Free cash flow for the nine months ended October 31, 2024, was 38.9 million in 2023, indicating a growth of about 47.9%[153]. - As of October 31, 2024, the company had 383.4 million in highly liquid marketable securities, ensuring liquidity for at least the next 12 months[147]. - Cash used in financing activities for the nine months ended October 31, 2024, was 271.0 million during the nine months ended October 31, 2024, under the 2024 Share Repurchase Program[150]. Market Conditions - Macroeconomic uncertainties, including inflation and geopolitical conflicts, may negatively impact business growth and customer spending on technology[118]. - The company operates in over 80 countries and its AI-powered platform recognizes over 150 languages, indicating a broad global reach[112]. Tax and Valuation - Provision for income taxes increased significantly by 181% to $9,990,000, influenced by customer withholding taxes and state taxes[142]. - The company has determined that it is more likely than not that its U.S. deferred tax assets will not be realizable as of October 31, 2024[160]. - The company maintains a full valuation allowance against its U.S. deferred tax assets as of October 31, 2024[160]. - There have been no material changes to the company's critical accounting policies and estimates compared to those disclosed in the 2024 10-K, except for estimates related to U.S. deferred tax assets[158]. Risk Factors - Market risk exposures include foreign exchange risk related to transactions and earnings in currencies other than the U.S. dollar, and interest rate risk due to changes in interest rates on assets[162]. - There were no material changes in market risks since January 31, 2024, as disclosed in the 2024 10-K[162].