Financial Data and Key Metrics Changes - Total revenue for Q1 2026 grew 5% year over year to $205.5 million, while subscription revenue increased 4% year over year to $184.1 million [6][22] - Non-GAAP operating income was $36.7 million, resulting in an 18% non-GAAP operating margin for the quarter [6][25] - Free cash flow generation reached a record $81 million for the quarter [6][26] - The subscription revenue base net dollar expansion rate was 102%, reflecting ongoing customer churn and downsell activity [22] Business Line Data and Key Metrics Changes - Professional services revenue was $21.4 million, contributing to the overall revenue growth [22] - Subscription gross margin was 78%, while professional services gross margin was 6%, leading to a total non-GAAP gross margin of 70% [24] - The number of customers generating at least $1 million in annual subscription revenue increased by 6% year over year to 146 [22][23] Market Data and Key Metrics Changes - The company noted that macroeconomic uncertainty has led to longer sales cycles and increased scrutiny of enterprise spending [9][28] - The core pipeline is reported to be at its highest level in the past 18 months, indicating a healthy market position [11][54] Company Strategy and Development Direction - The company is focused on transforming its business through an ambidextrous strategy, optimizing cost structures, and strengthening product delivery roadmaps [8][12] - Project Bearhug aims to engage the top 500 customers, representing approximately 80% of revenue, to improve customer relationships and drive ROI [14][15] - The company is committed to enhancing its AI-native platform to deliver unified customer experience management [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that FY 2026 is a transitional year with expected challenges due to past execution issues and macroeconomic factors [9][10] - There is optimism about future growth as the company works to improve execution and customer engagement [20][21] - The company maintains its guidance for FY 2026, expecting subscription revenue to be in the range of $741 million to $743 million, representing 3% growth year over year [33][34] Other Important Information - The company has authorized a new $150 million stock buyback program, expected to be completed by June 30, 2026 [26] - Total remaining performance obligations (RPO) increased by 2% year over year to $943.2 million [27] Q&A Session Summary Question: What is the timeline for the go-to-market strategy to reach its full potential? - Management indicated that FY 2026 is transitional, with expectations for improved sales execution and customer engagement in the latter half of the year [40][42] Question: What differentiates Sprinklr in the CCaaS market? - The AI capabilities of the platform are key differentiators, providing a unified experience for agents and customers [44][46] Question: Is the elongation in sales cycles broad-based across customers? - Management noted that the scrutiny is widespread, affecting all customers, but emphasized that the company is seeing opportunities in its pipeline [52][54] Question: What is driving logo churn and how should it be viewed through the year? - Management attributed churn to execution challenges and emphasized the need for improved customer engagement and implementation consistency [55][56] Question: What R&D activities are being pursued to help with renewals? - The company is focusing on improving user experience and exploring acquisition opportunities to enhance its core offerings [66][68]

Financial Data and Key Metrics Changes - Total revenue for the first quarter grew 5% year over year to $205.5 million, while subscription revenue increased 4% year over year to $184.1 million [5][22] - Non-GAAP operating income was $36.7 million, resulting in an 18% non-GAAP operating margin for the quarter [5][24] - Free cash flow generation reached a record $81 million for the quarter [5][25] - The subscription revenue base net dollar expansion rate was 102%, reflecting elevated customer churn and down-sell activity [22] Business Line Data and Key Metrics Changes - Professional services revenue was $21.4 million, contributing to the overall revenue growth [22] - Subscription gross margin was 78%, while professional services gross margin was 6%, leading to a total non-GAAP gross margin of 70% [23] Market Data and Key Metrics Changes - As of April 30, the company had 146 customers generating at least $1 million in annual subscription revenue, a 6% increase year over year [17][22] - The total remaining performance obligations (RPO) were $943.2 million, up 2% year over year, while current RPO was $596.8 million, up 5% year over year [27] Company Strategy and Development Direction - The company is focused on transforming its business through a clear ambidextrous strategy, optimizing its cost structure, and strengthening its product delivery roadmaps [7][12] - Project Bearhug aims to engage the top 500 customers, representing approximately 80% of revenue, to drive accelerated ROI [14] - The company is committed to improving customer implementation processes and post-sales support to enhance customer satisfaction and retention [10][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties leading to longer sales cycles and increased scrutiny of enterprise spending [9][28] - The company expects FY 2026 to be a transitional year with ongoing challenges but remains optimistic about future growth opportunities [20][33] - Guidance for Q2 indicates total revenue in the range of $205 million to $206 million, representing 4% growth year over year [31] Other Important Information - The company has authorized a new $150 million stock buyback program, expected to be completed by June 30, 2026 [26] - The company is experiencing higher data and hosting costs due to launching new cloud environments [23] Q&A Session Summary Question: How long until the go-to-market strategy reaches its full potential? - Management indicated that FY 2026 is a transitional year, with expectations for improved sales execution and customer engagement in the latter half of the year [39][41] Question: What differentiates Sprinklr in the CCaaS market? - The company highlighted its AI capabilities and unified platform as key differentiators, enabling a seamless experience for agents and customers [44][46] Question: Is the elongation in sales cycles broad-based across customers? - Management noted that the scrutiny is widespread, affecting all customers, but emphasized that the company is seeing opportunities in its core pipeline [51][53] Question: What is driving logo churn and how to address it? - Management attributed churn to past execution challenges and emphasized the need for improved customer engagement and consistent implementation processes [55][57] Question: What R&D activities are being pursued to help with renewals? - The company is focusing on improving user experience and exploring acquisition opportunities to enhance its core offerings [65][67] Question: What metrics are being used to measure the success of the new pod structure? - Management is implementing a collaborative approach within sales teams, emphasizing accountability and customer engagement to drive success [100][102]