- Q2 Total Revenue of $178.5 million, up 18%
year-over-year
- Q2 Subscription Revenue of $163.5 million, up 23%
year-over-year
- Continued growth and operational improvements generate net
cash provided by operating activities of $14.6 million and free
cash flow* of $8.7 million in Q2
- RPO and cRPO up 35% and 22% year-over-year,
respectively
- 120 $1 million customers, up 22% year-over-year
Sprinklr (NYSE: CXM), the unified customer experience management
(Unified-CXM) platform for modern enterprises, today reported
financial results for its second quarter ended July 31, 2023.
“We had another solid quarter across the board with strength in
Sprinklr Service product suite and a record level of profitability.
Our teams continue to innovate across our unified-CXM platform with
new features and enhancements to our AI+ strategy. We’re encouraged
by customers’ growing demand to unify their front-office teams and
technology leading to better customer experiences,” said Ragy
Thomas, Founder and CEO at Sprinklr.
Second Quarter Fiscal 2023 Financial Highlights
- Revenue: Total revenue for the second quarter was $178.5
million, up from $150.6 million one year ago, an increase of 18%
year-over-year. Subscription revenue for the second quarter was
$163.5 million, up from $133.1 million one year ago, an increase of
23% year-over-year.
- Operating Income (Loss) and Margin*: Second quarter
operating income was $5.5 million, compared to an operating loss of
$21.7 million one year ago. Non-GAAP operating income was $21.3
million, compared to a non-GAAP operating loss of $4.9 million one
year ago. For the second quarter, GAAP operating margin was 3% and
non-GAAP operating margin was 12%.
- Net Income (Loss) Per Share*: Second quarter net income
per share, basic was $0.04, compared to net loss per share, basic
of $0.09 in the second quarter of fiscal year 2023. Non-GAAP net
income per share, basic for the second quarter was $0.10, compared
to non-GAAP net loss per share, basic of $0.03 in the second
quarter of fiscal year 2023.
- Cash, Cash Equivalents and Marketable Securities: Total
cash, cash equivalents and marketable securities as of July 31,
2023 was $628.4 million.
* Free cash flow, Non-GAAP operating income (loss), non-GAAP
operating margin and non-GAAP net income (loss) per share are
non-GAAP financial measures defined under “Non-GAAP Financial
Measures,” and are reconciled to Net cash provided by operating
activities, operating income (loss), net income (loss) or income
(loss) per share, as applicable, the closest comparable GAAP
measure, at the end of this release.
Financial Outlook
Sprinklr is providing the following guidance for the third
fiscal quarter ending October 31, 2023:
- Subscription revenue between $164 million and $166
million.
- Total revenue between $179 million and $181 million.
- Non-GAAP operating income between $15 million and $17
million.
- Non-GAAP net income per share between $0.06 and $0.07, assuming
274 million basic weighted-average shares outstanding.
Sprinklr is providing the following guidance for the full fiscal
year ending January 31, 2024:
- Subscription revenue between $658 million and $660
million.
- Total revenue between $719 million and $721 million.
- Non-GAAP operating income between $65 million and $67
million.
- Non-GAAP net income per share between $0.30 and $0.31, assuming
273 million basic weighted-average shares outstanding.
Non-GAAP Financial Measures
This press release and the accompanying tables contain the
following non-GAAP financial measures associated with our condensed
consolidated statements of operations:
- Non-GAAP gross profit and non-GAAP gross margin
- Non-GAAP operating income (loss) and non-GAAP operating
margin
- Non-GAAP net income (loss) and non-GAAP net income (loss) per
share
We define these non-GAAP financial measures as the respective
U.S. GAAP measures, excluding, as applicable, stock-based
compensation expense-related charges and amortization of acquired
intangible assets. We believe that it is useful to exclude
stock-based compensation expense-related charges and amortization
of acquired intangible assets in order to better understand the
long-term performance of our core business and to facilitate
comparison of our results to those of peer companies over multiple
periods. In periods of net loss, we calculate non-GAAP net income
(loss) per share by using non-GAAP net income (loss) divided by
basic weighted average shares for the period regardless of whether
we are in a non-GAAP net income or (loss) position and assuming
that all potentially dilutive securities are anti-dilutive.
In addition, the press release and the accompanying tables
contain free cash flow which is defined as net cash provided by
operating activities less cash used for purchases of property and
equipment and capitalized internal-use software. We believe that
free cash flow is a useful indicator of liquidity as it measures
our ability to generate cash, or our need to access additional
sources of cash, to fund operations and investments. We expect our
free cash flow to fluctuate in future periods with changes in our
operating expenses and as we continue to invest in our growth. We
typically experience higher billings in the fourth quarter compared
to other quarters and experience higher collections of accounts
receivable in the first half of the year, which results in a
decrease in accounts receivable in the first half of the year.
However, non-GAAP financial measures have limitations in their
usefulness to investors because they have no standardized meaning
prescribed by GAAP and are not prepared under any comprehensive set
of accounting rules or principles. In addition, other companies,
including companies in our industry, may calculate similarly titled
non-GAAP financial measures differently or may use other measures
to evaluate their performance, all of which could reduce the
usefulness of our non-GAAP financial measures as tools for
comparison. As a result, our non-GAAP financial measures are
presented for supplemental informational purposes only and should
not be considered in isolation or as a substitute for our
consolidated financial statements presented in accordance with
GAAP.
Sprinklr has not reconciled its financial outlook expectations
as to non-GAAP operating income, or as to non-GAAP net income per
share, to their most directly comparable U.S. GAAP measures as a
result of the high variability, complexity and low visibility with
respect to the charges excluded from these non-GAAP measures; in
particular, the measures and effects of stock-based compensation
expense specific to equity compensation awards that are directly
impacted by unpredictable fluctuations in our stock price. We
expect the variability of the above charges to have a significant,
and potentially unpredictable, impact on our future GAAP financial
results. Accordingly, reconciliation is not available without
unreasonable effort, although it is important to note that these
factors could be material to Sprinklr’s results computed in
accordance with U.S. GAAP.
Conference Call Information Sprinklr will host a
conference call today, September 6, 2023, to discuss second quarter
fiscal 2024 financial results, as well as the third quarter and
full year fiscal 2024 outlook, at 5:00 p.m. Eastern Time, 2:00 p.m.
Pacific Time. Investors are invited to join the webcast by
visiting: https://investors.sprinklr.com/. To access the call by
phone, dial 877-459-3955 (domestic) or 201-689-8588
(international). The conference ID number is 13740665. The webcast
will be available live, and a replay will be available following
completion of the live broadcast for approximately 90 days.
About Sprinklr Inc. Sprinklr is a leading enterprise
software company for all customer-facing functions. With advanced
AI, Sprinklr's unified customer experience management (Unified-CXM)
platform helps companies deliver human experiences to every
customer, every time, across any modern channel. Headquartered in
New York City with employees around the world, Sprinklr works with
more than 1,400 global enterprises — brands like Microsoft,
P&G, Samsung and more than 50% of the Fortune 100.
Forward-Looking Statements This press release contains
express and implied “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995, including
statements regarding our financial outlook for the third quarter
and full year fiscal 2024, our growth strategy and the ability of
our platform to deliver a unified experience to address our
customers’ demands. In some cases, you can identify forward-looking
statements by terms such as “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “may,” “might,” “plan,” “project,” “will,”
“would,” “should,” “could,” “can,” “predict,” “potential,”
“target,” “explore,” “continue,” or the negative of these terms,
and similar expressions intended to identify forward-looking
statements. By their nature, these statements are subject to
numerous uncertainties and risks, including factors beyond our
control, that could cause actual results, performance, or
achievement to differ materially and adversely from those
anticipated or implied in the statements, including: our rapid
growth may not be indicative of our future growth; our revenue
growth rate has fluctuated in prior periods; our ability to achieve
or maintain profitability; we derive the substantial majority of
our revenue from subscriptions to our Unified-CXM platform; our
ability to manage our growth and organizational change; the market
for Unified-CXM solutions is new and rapidly evolving; our ability
to attract new customers in a manner that is cost-effective and
assures customer success; our ability to attract and retain
customers to use our products; our ability to drive customer
subscription renewals and expand our sales to existing customers;
our ability to effectively develop platform enhancements, introduce
new products or keep pace with technological developments; the
market in which we participate is new and rapidly evolving and our
ability to compete effectively; our business and growth depend in
part on the success of our strategic relationships with third
parties; our ability to develop and maintain successful
relationships with partners who provide access to data that
enhances our Unified-CXM platform’s artificial intelligence
capabilities; the majority of our customer base consists of large
enterprises, and we currently generate a significant portion of our
revenue from a relatively small number of enterprises; our
investments in research and development; our ability to expand our
sales and marketing capabilities; our sales cycle with enterprise
and international clients can be long and unpredictable; certain of
our results of operations and financial metrics may be difficult to
predict; our ability to maintain data privacy and data security; we
rely on third-party data centers and cloud computing providers; the
sufficiency of our cash and cash equivalents to meet our liquidity
needs; our ability to comply with modified or new laws and
regulations applying to our business; our ability to successfully
enter into new markets and manage our international expansion; the
attraction and retention of qualified employees and key personnel;
our ability to effectively manage our growth and future expenses
and maintain our corporate culture; our ability to maintain,
protect, and enhance our intellectual property rights; unstable
market and economic conditions, including as a result of increases
in inflation rates, higher interest rates, recent bank closures or
instability, public health crises and geopolitical actions, such as
war and terrorism or the perception that such hostilities may be
imminent; and our ability to successfully defend litigation brought
against us. Additional risks and uncertainties that could cause
actual outcomes and results to differ materially from those
contemplated by the forward-looking statements are or will be
discussed in our Quarterly Report on Form 10-Q for the quarter
ended April 30, 2023, filed with the SEC on June 5, 2023, under the
caption “Risk Factors,” and in other filings that we make from time
to time with the SEC. Forward-looking statements speak only as of
the date the statements are made and are based on information
available to Sprinklr at the time those statements are made and/or
management’s good faith belief as of that time with respect to
future events. Sprinklr assumes no obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, except as required by law.
Key Business Metrics
RPO. RPO, or remaining performance obligations,
represents contracted revenue that have not yet been recognized,
and include deferred revenue and amounts that will be invoiced and
recognized in future periods.
cRPO. cRPO, or current RPO, represents contracted revenue
that have not yet been recognized, and include deferred revenue and
amounts that will be invoiced and recognized in the next 12
months.
Sprinklr, Inc.
Condensed Consolidated Balance
Sheets
(in thousands, except per
share data)
(unaudited)
July 31, 2023
January 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
147,683
$
188,387
Marketable securities
480,725
390,239
Accounts receivable, net of allowance for
doubtful accounts of $3.6 million and $3.2 million,
respectively
177,442
205,038
Prepaid expenses and other current
assets
72,039
78,865
Total current assets
877,889
862,529
Property and equipment, net
27,622
22,885
Goodwill and other intangible assets
50,254
50,349
Operating lease right-of-use assets
30,094
15,725
Other non-current assets
86,794
73,503
Total assets
$
1,072,653
$
1,024,991
Liabilities and stockholders’ equity
Liabilities
Current liabilities:
Accounts payable
$
22,791
$
30,101
Accrued expenses and other current
liabilities
70,800
97,524
Operating lease liabilities, current
6,868
7,134
Deferred revenue
322,944
324,140
Total current liabilities
423,403
458,899
Deferred revenue, non-current
488
1,371
Deferred tax liability, non-current
1,303
1,289
Operating lease liabilities,
non-current
24,984
9,633
Other liabilities, non-current
5,189
4,467
Total liabilities
455,367
475,659
Commitments and contingencies
Stockholders’ equity
Class A common stock
4
3
Class B common stock
4
6
Treasury stock
(23,831)
(23,831)
Additional paid-in capital
1,128,689
1,074,149
Accumulated other comprehensive loss
(4,262)
(4,384)
Accumulated deficit
(483,318)
(496,611)
Total stockholders’ equity
617,286
549,332
Total liabilities and stockholders’
equity
$
1,072,653
$
1,024,991
Sprinklr, Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share data)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2023
2022
2023
2022
Revenue:
Subscription
$
163,452
$
133,075
$
321,117
$
260,395
Professional services
15,013
17,555
30,711
35,213
Total revenue
178,465
150,630
351,828
295,608
Costs of revenue:
Costs of subscription (1)
27,783
25,402
55,259
50,510
Costs of professional services (1)
15,684
16,757
30,145
33,370
Total costs of revenue
43,467
42,159
85,404
83,880
Gross profit
134,998
108,471
266,424
211,728
Operating expense:
Research and development (1)
24,323
19,989
45,084
37,323
Sales and marketing (1)
80,118
86,942
169,320
173,880
General and administrative (1)
25,068
23,215
49,724
45,328
Total operating expense
129,509
130,146
264,128
256,531
Operating income (loss)
5,489
(21,675)
2,296
(44,803)
Other income (expense), net
7,237
(84)
11,996
211
Income (loss) before provision for income
taxes
12,726
(21,759)
14,292
(44,592)
Provision for income taxes
2,241
2,168
999
4,623
Net income (loss)
$
10,485
$
(23,927)
$
13,293
$
(49,215)
Net income (loss) per share, basic
$
0.04
$
(0.09)
$
0.05
$
(0.19)
Weighted average shares used in computing
net income (loss) per share, basic
268,900
258,785
267,271
257,860
Net income (loss) per share, diluted
$
0.04
$
(0.09)
$
0.05
$
(0.19)
Weighted average shares used in computing
net income (loss) per share, diluted
283,853
258,785
282,951
257,860
(1) Includes stock-based compensation expense, net of amounts
capitalized, as follows:
Three Months Ended July
31,
Six Months Ended July
31,
(in thousands)
2023
2022
2023
2022
Costs of subscription
$
290
$
389
$
590
$
798
Costs of professional services
405
779
808
1,402
Research and development
3,897
3,148
6,964
5,496
Sales and marketing
6,311
7,809
12,266
13,665
General and administrative
3,962
4,072
7,547
7,350
Stock-based compensation expense, net of
amounts capitalized
$
14,865
$
16,197
$
28,175
$
28,711
Sprinklr, Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended July
31,
2023
2022
Cash flow from operating activities:
Net income (loss)
$
13,293
$
(49,215)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization expense
7,329
5,502
Bad debt expense
1,149
1,484
Stock-based compensation expense, net of
amounts capitalized
28,175
28,711
Non-cash lease expense
2,998
3,002
Deferred income taxes
(3,402)
—
Net amortization/accretion on marketable
securities
(7,998)
577
Other non-cash items, net
39
—
Changes in operating assets and
liabilities:
Accounts receivable
26,474
18,452
Prepaid expenses and other current
assets
7,917
14,245
Other non-current assets
(4,874)
(393)
Accounts payable
(7,897)
22,618
Operating lease liabilities
(2,896)
(3,730)
Accrued expenses and other current
liabilities
(25,632)
(18,714)
Litigation settlement
—
(12,000)
Deferred revenue
(2,156)
(6,280)
Other liabilities
616
(1,285)
Net cash provided by operating
activities
33,135
2,974
Cash flow from investing activities:
Purchases of marketable securities
(288,727)
(448,083)
Sales of marketable securities
380
2,838
Maturities of marketable securities
205,911
267,699
Purchases of property and equipment
(4,413)
(2,352)
Capitalized internal-use software
(5,744)
(5,016)
Net cash used in investing activities
(92,593)
(184,915)
Cash flow from financing activities:
Proceeds from issuance of common stock
upon exercise of stock options
21,350
10,429
Proceeds from issuance of common stock
upon ESPP purchase
3,970
6,213
Net cash provided by financing
activities
25,320
16,642
Effect of exchange rate fluctuations on
cash, cash equivalents and restricted cash
(89)
(1,919)
Net change in cash, cash equivalents and
restricted cash
(34,227)
(167,218)
Cash, cash equivalents and restricted cash
at beginning of period
188,387
321,426
Cash, cash equivalents and restricted cash
at end of period
$
154,160
$
154,208
Sprinklr, Inc.
Reconciliation of Non-GAAP
Measures
(in thousands)
(unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2023
2022
2023
2022
Non-GAAP gross profit and non-GAAP
gross margin:
U.S. GAAP gross profit
$
134,998
$
108,471
$
266,424
$
211,728
Stock-based compensation expense-related
charges (1)
710
1,212
1,423
2,246
Non-GAAP gross profit
$
135,708
$
109,683
$
267,847
$
213,974
Gross margin
76 %
72 %
76 %
72 %
Non-GAAP gross margin
76 %
73 %
76 %
72 %
Non-GAAP operating income
(loss):
U.S. GAAP operating income (loss)
$
5,489
$
(21,675)
$
2,296
$
(44,803)
Stock-based compensation expense-related
charges (2)
15,724
16,615
29,839
29,319
Amortization of acquired intangible
assets
50
133
100
265
Non-GAAP operating income (loss)
$
21,263
$
(4,927)
$
32,235
$
(15,219)
Operating margin
3 %
(14) %
1 %
(15) %
Non-GAAP operating margin
12 %
(3) %
9 %
(5) %
Free cash flow:
Net cash provided by operating
activities
$
14,574
$
5,884
$
33,135
$
2,974
Purchase of property and equipment
(2,788)
(1,714)
(4,413)
(2,352)
Capitalized internal-use software
(3,061)
(2,728)
(5,744)
(5,016)
Free cash flow
$
8,725
$
1,442
$
22,978
$
(4,394)
(1) Employer payroll tax related to stock-based compensation for
the periods ended July 31, 2023 and 2022 was immaterial as it
relates to the impact to gross profit.
(2) Includes $0.9 million and $0.4 million of employer payroll
tax related to stock-based compensation expense for the three
months ended July 31, 2023 and 2022, respectively, and $1.7 million
and $0.6 million of employer payroll tax related to stock-based
compensation expense for the six months ended July 31, 2023 and
2022, respectively.
Three Months Ended July
31,
2023
2022
(in thousands)
Per Share-Basic
Per Share-Diluted
(in thousands)
Per Share-Basic
Per Share-Diluted
Non-GAAP Net Income (Loss)
reconciliation to Net Income (Loss)
Net income (loss)
$
10,485
$
0.04
$
0.04
$
(23,927)
$
(0.09)
$
(0.09)
Add:
Stock-based compensation expense-related
charges
15,724
0.06
0.05
16,615
0.06
0.06
Amortization of acquired intangible
assets
50
0.00
0.00
133
0.00
0.00
Total additions, net
15,774
0.06
0.05
16,748
0.06
0.06
Non-GAAP Net Income (Loss)
$
26,259
$
0.10
$
0.09
$
(7,179)
$
(0.03)
$
(0.03)
Weighted-average shares outstanding used
in computing net income (loss) per share, basic
268,900
258,785
Weighted average shares outstanding used
in computing net income (loss) per share, diluted
283,853
258,785
Six Months Ended July
31,
2023
2022
(in thousands)
Per Share-Basic
Per Share-Diluted
(in thousands)
Per Share-Basic
Per Share-Diluted
Non-GAAP Net Income (Loss)
reconciliation to Net Income (Loss)
Net income (loss)
$
13,293
$
0.05
$
0.05
$
(49,215)
$
(0.19)
$
(0.19)
Add:
Stock-based compensation expense-related
charges
29,839
0.11
0.10
29,319
0.11
0.11
Amortization of acquired intangible
assets
100
0.00
0.00
265
0.00
0.00
Total additions, net
29,939
0.11
0.10
29,584
0.11
0.11
Non-GAAP Net Income (Loss)
$
43,232
$
0.16
$
0.15
$
(19,631)
$
(0.08)
$
(0.08)
Weighted-average shares outstanding used
in computing net income (loss) per share, basic
267,271
257,860
Weighted average shares outstanding used
in computing net income (loss) per share, diluted
282,951
257,860
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230906182731/en/
Investor Relations: ir@sprinklr.com
Media & Press: PR@sprinklr.com
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