• Total Revenue: $202.5 million, up 4% year-over-year.
• Subscription Revenue: $182.1 million, up 3% year-over-year.
• Professional Services Revenue: $20.5 million.
• Non-GAAP Operating Income: $25.9 million, with a 13% non-GAAP operating margin.
• Subscription Revenue Base Net Dollar Expansion Rate: 104%.
• Customers with $1 Million+ in Subscription Revenue: 149 customers, an 18% increase year-over-year.
• Non-GAAP Gross Margin: 71% total; 79% for subscription services.
• Non-GAAP Net Income per Diluted Share: $0.10.
• Free Cash Flow: $1.5 million for the fourth quarter.
• Cash and Marketable Securities: $483.5 million, with no debt outstanding.
• Calculated Billings: $298.6 million, up 10% year-over-year.
• Total Remaining Performance Obligations (RPO): $987.7 million, up 2% year-over-year.
• Current RPO (cRPO): $612.5 million, up 4% year-over-year.
• Full Year FY25 Total Revenue: $796.4 million, up 9% year-over-year.
• Full Year FY25 Subscription Revenue: $717.9 million, up 7% year-over-year.
• Full Year FY25 Non-GAAP Operating Income: $84.8 million, with an 11% non-GAAP operating margin.
• Full Year FY25 Free Cash Flow: $59.2 million, with a 7% free cash flow margin.
• FY26 Revenue Guidance: $821.5 million to $823.5 million, representing 3% growth year-over-year.
• FY26 Subscription Revenue Guidance: $741 million to $743 million, representing 3% growth year-over-year.
• FY26 Non-GAAP Operating Income Guidance: $129 million to $131 million, with a 16% non-GAAP operating margin.
• FY26 Free Cash Flow Margin Guidance: Approximately 15%, equating to $120 million for the full year.

• Warning! GuruFocus has detected 7 Warning Signs with SEAT.

Release Date: March 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sprinklr Inc (NYSE:CXM) reported a 4% year-over-year increase in total revenue for Q4, reaching $202.5 million.
• The company achieved a non-GAAP operating income of $25.9 million, resulting in a 13% non-GAAP operating margin for the quarter.
• Sprinklr Inc (NYSE:CXM) has a strong customer base with 149 customers generating at least $1 million in annual subscription revenue, an 18% increase year-over-year.
• The company is focusing on improving its operating margin and plans to reinvest cost savings into strategic areas such as go-to-market sales, AI, and R&D.
• Sprinklr Inc (NYSE:CXM) has a robust balance sheet with $483.5 million in cash and marketable securities and no debt outstanding.

Negative Points

• Subscription revenue growth was modest at 3% year-over-year, indicating potential challenges in accelerating growth.
• The company experienced elevated churn during FY25, impacting its subscription revenue base net dollar expansion rate, which stood at 104%.
• Sprinklr Inc (NYSE:CXM) is facing higher data hosting costs, which are expected to negatively impact subscription gross margins by approximately 400 basis points in FY26.
• The company underwent a significant restructuring, including a 15% reduction in its workforce, indicating operational challenges.
• There are ongoing challenges with inconsistent implementations, which have led to pressure on customer renewals and satisfaction.

Q & A Highlights

Q: Rory, you've implemented many changes, and it's great to see the improvement in operating margin. Can you discuss the avenues driving cost efficiency and whether this might come at the expense of growth? A: Rory Read, President and CEO: We're focused on making the business more efficient without sacrificing growth. We've streamlined operations, optimized investments, and restructured our go-to-market strategy. This has allowed us to reduce costs significantly while freeing up resources to invest in talent and innovation. Our goal is to drive durable long-term growth without compromising on efficiency.

Q: Manish, I was surprised by the 400 basis point negative impact on subscription gross margin. Can you explain how much of this is due to higher data costs versus hosting? A: Manish Sarin, CFO: We don't break it down specifically, but data costs have increased due to renewed licenses and the value of data for AI training. Hosting costs have also risen as we expand our data centers to support Sprinklr Service. These factors collectively impact gross margins in the short term.

Q: Rory, regarding growth potential, how are you balancing go-to-market resources between new customer acquisition and existing customer opportunities? A: Rory Read, President and CEO: Our focus is on solidifying and expanding our existing customer base, which includes 149 customers generating over $1 million annually. While new customer acquisition is important, our priority is to nurture and grow relationships with our top 500 accounts, which represent significant growth potential.

Q: Elizabeth, regarding reinvestment in hiring, particularly in go-to-market strategy, what is the timeline for these hires, and when will sales capacity be at higher levels? A: Rory Read, President and CEO: We're hiring now to prepare for FY27, as it takes six to nine months for a rep to ramp up. Our focus is on building sales capacity and ensuring we have the right skills in place, particularly technical success managers and solution architects, to support our growth objectives.

Q: Patrick, how significant is the federal government as a customer for Sprinklr, and are you experiencing any challenges in this sector? A: Rory Read, President and CEO: The federal government is a small part of our business and not material. We have some toeholds in defense, commerce, and other areas, but it's not a significant focus for us at this time.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.