Sprinklr(US:CXM)2025-03-12 13:32Financial Data and Key Metrics Changes - In Q4 FY 2025, total revenue grew 4% year over year to $202.5 million, while subscription revenue increased 3% year over year to $182.1 million [4][20] - Non-GAAP operating income for the quarter was $25.9 million, resulting in a 13% non-GAAP operating margin [4][23] - For the full year FY 2025, total revenue was $796.4 million, up 9% year over year, with subscription revenue of $717.9 million, up 7% [26] Business Line Data and Key Metrics Changes - The subscription revenue-based net dollar expansion rate in Q4 was 104, reflecting the impact of elevated churn experienced during FY 2025 [20] - The company had 149 customers generating at least $1 million in annual subscription revenue, an 18% increase year over year [21][12] - Professional services revenue for Q4 was $20.5 million, with gross margins for professional services at breakeven [20][22] Market Data and Key Metrics Changes - The company is focusing on the Enterprise segment, particularly the Global 2,000 to Global 5,000, as the primary target for go-to-market efforts [13] - The total remaining performance obligations (RPO) as of January 31, 2025, was $987.7 million, up 2% year over year [25] Company Strategy and Development Direction - The company is undergoing a transformation to improve efficiency and profitability, with a focus on optimizing the expense base and reallocating resources [5][9] - A new go-to-market coverage model has been implemented to enhance customer relationships and drive better performance [11][14] - The company aims to stabilize operations in FY 2026 while investing in key areas such as sales, customer implementations, and product innovation [10][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the operational and technical aspects but believes the transformation is well underway [6][18] - The macro environment is described as unpredictable, but the company has positioned itself to handle potential challenges [76][78] - FY 2026 is viewed as a transitional year, with expectations for improved execution and consistency in customer implementations [45][90] Other Important Information - The company has reduced its workforce by approximately 15% as part of its restructuring efforts [9][27] - Free cash flow for Q4 was $1.5 million, contributing to a healthy balance sheet with $483.5 million in cash and marketable securities [25][36] Q&A Session Summary Question: What avenues are driving cost efficiency? - Management emphasized a focus on making the business more efficient without sacrificing growth, optimizing investments in critical areas [39][44] Question: What is the impact of higher data costs on subscription gross margins? - Management noted that rising data costs and initial setup costs for new data centers are impacting gross margins [48][50] Question: How is the company balancing new customer acquisition with existing customer growth? - The strategy is to solidify the existing customer base while also pursuing new logos, focusing on significant enterprise accounts [55][59] Question: What are the challenges with implementation and how is the company addressing them? - Management acknowledged historical implementation challenges and is working to standardize and improve the process [61][66] Question: What is the hiring strategy for the go-to-market team? - The company plans to hire in the second half of the year to prepare for FY 2027, focusing on building a strong sales capacity [71][74] Question: How is the macro environment affecting customer spending? - Management indicated that while there is some uncertainty, the company is well-positioned to handle it and is seeing a good pipeline [76][78] Question: How significant is the federal government business for Sprinklr? - Management stated that the federal government business is very small and not material to overall operations [84]