Sprinklr Announces Third Quarter Fiscal 2023 Results
Q3 Total Revenue of $157.3 million, up 24% year-over-year
Q3 Subscription Revenue up 27% year-over-year
RPO and cRPO up 28% and 27% year-over-year, respectively
Continued improvement on operating margin leading to non-GAAP profitability
107 $1 million customers, up 34% year-over-year
NEW YORK, New York -- December 6, 2022-- Sprinklr (NYSE: CXM), the unified customer experience management (Unified-CXM) platform for modern enterprises, today reported financial results for its third quarter ended October 31, 2022.
“We are very pleased with Sprinklr’s third quarter performance and beat expectations across all key metrics. We remain focused on our fundamentals during this challenging environment and generated profitable revenue growth and continued operating margin improvement. But we're most proud of the results the world's largest brands are achieving with our platform and proprietary AI including automation, faster response times, cost savings and deeper customer insights,” said Ragy Thomas, Sprinklr Founder and CEO.
Third Quarter Fiscal 2023 Financial Highlights
Revenue: Total revenue for the third quarter was $157.3 million, up from $127.1 million one year ago, an increase of 24% year-over-year. Subscription revenue for the third quarter was $139.9 million, up from $109.9 million one year ago, an increase of 27%year-over-year.
Operating Loss and Margin: Third quarter operating loss was $4.6 million, compared to operating loss of $24.8 million one year ago. Non-GAAP operating income was $6.9 million, compared to non-GAAP operating loss of $12.0 million one year ago. For the third quarter, GAAP operating margin was (3%) and non-GAAP operating margin was 4%.
Net Income (Loss) Per Share: Third quarter net loss per share was $0.02, compared to net loss per share of $0.11 in the third quarter of fiscal year 2022. Non-GAAP net income per share for the third quarter was $0.02, compared to non-GAAP net loss per share of $0.06 in the third quarter of fiscal year 2022.
Cash, Cash Equivalents and Marketable Securities: Total cash, cash equivalents and marketable securities as of October 31, 2022 was $544.1 million.
Board of Directors Update
Effective December 2, 2022, Kevin Haverty has been appointed to the Sprinklr Board of Directors. Mr. Haverty is currently the Senior Advisor to the CEO at ServiceNow. Previously he served as the Chief Revenue Officer and the Executive Vice President of Worldwide Sales and other senior positions from December 2011 to the present at ServiceNow. Prior to that, Mr. Haverty held various roles at other leading technology companies. Mr. Haverty holds a B.A. degree in Political Science from Providence College and was a member of Army ROTC and a Distinguished Military Graduate.
Effective as of the close of business on December 1, 2022, Matthew Jacobson, a Partner at ICONIQ Capital stepped down from the Sprinklr Board of Directors. Mr. Jacobson has served as a member of our Board since December 2014.
“I am very excited to have Kevin join Sprinklr’s Board of Directors to support our growth and global vision as a public company. Kevin’s leadership and enterprise focus will be a great benefit to our Go-To-Market strategy as we continue to pursue expanded growth,” said Ragy Thomas, Sprinklr Founder and CEO. “I also want to thank Matt for his counsel and support through the years. ICONIQ joined as an investor in Sprinklr in the very early days and helped chart our course of today. We are appreciative of Matt’s contributions and wish him all the best in his future endeavors," continued Thomas.
Financial Outlook
Sprinklr is providing the following guidance for the fourth fiscal quarter ending January 31, 2023:
Subscription revenue between $145.5 million and $146.5 million.
Total revenue between $162.3 million and $163.3 million.
Non-GAAP operating income between $6 million and $7 million.
Non-GAAP net income per share between $0.01 and $0.02, assuming 264 million weighted average shares outstanding.
Sprinklr is providing the following guidance for the full fiscal year ending January 31, 2023:
Subscription revenue between $545.8 million and $546.8 million.
Total revenue between $615.2 million and $616.2 million.
Non-GAAP operating loss between $1.3 million and $2.3 million.
Non-GAAP net loss per share between $0.04 and $0.05, assuming 260 million weighted average shares outstanding.
Non-GAAP Financial Measures
This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit and non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share, free cash flow, and adjusted free cash flow. We define these non-GAAP financial measures as the respective GAAP measures, excluding, as applicable, stock-based compensation expense-related charges, amortization of acquired intangible assets, purchase of property and equipment, capitalized internal-use software, and litigation settlement payments. We believe that it is useful to exclude these expenses 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. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in Sprinklr’s financial statements. In addition, they are subject to inherent limitations, as they reflect the exercise of judgment by Sprinklr’s management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.
Sprinklr has not reconciled its expectations as to non-GAAP operating loss, or as to non-GAAP net loss per share, to their most directly comparable 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 GAAP.
Conference Call Information Sprinklr will host a conference call today, December 6, 2022, to discuss third quarter fiscal 2023 financial results, as well as the fourth quarter and full year fiscal 2023 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 13734476. 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 1,000 of the world’s most valuable enterprises — global brands like Microsoft, P&G, Samsung and more than 50% of the Fortune 100.
Forward-Looking StatementsThis 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 fourth quarter and full year fiscal 2023. 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; our business and results of operations may be materially adversely affected by the ongoing COVID-19 pandemic or other similar outbreaks; 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; our ability to successfully defend litigation brought against us; and unstable market and economic conditions. 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 July 31, 2022, filed with the SEC on September 8, 2022, 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.
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