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Sprinklr (CXM)
NYSE:CXM
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Sprinklr
(NYSE:CXM)
75Outperform
Positive Factors
Business Strategy
New CEO Rory Read has laid out a compelling plan to turn the business around through strategy realignment and operational changes.
Financial Performance
Sprinklr's fourth quarter was better than expected as subscription revenue grew 2.9% and beat the midpoint of guidance of 2.0%.
Negative Factors
Operational Challenges
Challenges such as elevated churn, longer sales cycles, and missed renewals have contributed to growth deceleration over the past several quarters.
Sprinklr (CXM) vs. S&P 500 (SPY)
Market Cap
$2.06B
Dividend YieldN/A
Average Volume (3M)1.74M
Price to Earnings (P/E)59.8
Beta (1Y)1.25
Revenue Growth12.02%
EPS Growth50.09%
CountryUS
Employees3,869
SectorTechnology
Sector Strength45
IndustrySoftware
Share Statistics
EPS (TTM)0.16
Shares Outstanding138,048,260
10 Day Avg. Volume2,217,598
30 Day Avg. Volume1,735,491
Financial Highlights & Ratios
PEG Ratio1.19
Price to Book (P/B)N/A
Price to Sales (P/S)2.61
Price to Cash Flow (P/CF)55.90
P/FCF Ratio104.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.61Price Target Upside12.63% Upside
Rating ConsensusHold
Number of Analyst Covering11
Sprinklr Business Overview & Revenue Model
Company DescriptionSprinklr Inc is engaged in providing enterprise software that enables every customer-facing function across the front office, from Customer Care to Marketing, to collaborate across internal silos, communicate across digital channels. Its products include Modern Marketing and Advertising, Morden Research, Modern Care, Core Platform, and Developer portal among others.
How the Company Makes MoneySprinklr makes money through a subscription-based revenue model by offering its cloud-based software platform to enterprises. Customers pay recurring fees for access to Sprinklr's suite of tools, which are designed to improve customer experience management across multiple digital touchpoints. The company generates revenue through its various product offerings, which include social engagement and listening, customer care, and marketing and advertising solutions. Additionally, Sprinklr may earn revenue from professional services such as consulting, implementation, and training to help clients maximize the value of their investment in Sprinklr's platform. Key revenue streams are driven by customer acquisition and retention, as well as upselling additional services and features to existing clients. Strategic partnerships and integrations with other technology platforms may also contribute to Sprinklr's earnings by expanding its reach and enhancing its service offerings.
Sprinklr Financial Statement Overview
Summary
Sprinklr demonstrates a positive financial trajectory with strong revenue and profit growth, a solid balance sheet, and excellent cash flow management. The low leverage and robust cash generation position it well for future growth opportunities.Income Statement
Sprinklr shows strong revenue growth with a substantial increase from $618 million to $788 million (TTM). Gross profit margin is robust at 73.2%, and net profit margin has turned positive, indicating enhanced profitability. EBIT and EBITDA margins are also healthy at 4.0% and 5.7% respectively, showing improved operational efficiency.82
Very Positive
Balance Sheet
The balance sheet reflects a solid equity position with stockholders' equity at 51.2% of total assets. The debt-to-equity ratio is low at 0.10, indicating minimal leverage risk. Return on equity is a modest 8.9%, suggesting room for improvement in generating returns on equity.75
Positive
Cash Flow
Sprinklr exhibits strong cash flow performance with a significant increase in free cash flow. The operating cash flow to net income ratio is favorable at 2.03, signifying effective cash generation from operations. Additionally, free cash flow has grown considerably, enhancing financial flexibility.88
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 788.06M | 732.36M | 618.19M | 492.39M | 386.93M | 324.28M | Gross Profit |
| 577.15M | 552.96M | 454.46M | 344.84M | 264.85M | 201.12M | EBIT |
| 31.87M | 33.95M | -51.22M | -87.47M | -28.79M | -35.53M | EBITDA |
| 45.27M | 49.41M | -39.17M | -82.84M | -19.89M | -31.11M | Net Income Common Stockholders |
| 44.07M | 51.40M | -55.74M | -111.47M | -41.18M | -39.78M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 476.64M | 662.55M | 578.63M | 532.41M | 280.69M | 10.47M | Total Assets |
| 970.30M | 1.22B | 1.02B | 920.05M | 585.89M | 268.26M | Total Debt |
| 51.16M | 33.29M | 16.77M | 0.00 | 78.85M | 0.00 | Net Debt |
| -42.08M | -130.73M | -171.62M | -321.43M | 10.81M | -10.47M | Total Liabilities |
| 473.28M | 543.41M | 475.66M | 404.20M | 403.16M | 290.61M | Stockholders Equity |
| 497.02M | 679.70M | 549.33M | 515.85M | 182.73M | -22.35M |
| Cash Flow | Free Cash Flow | ||||
| 69.88M | 51.14M | 10.21M | -45.33M | 827.00K | 13.80M | Operating Cash Flow |
| 89.53M | 71.47M | 26.66M | -32.92M | 7.31M | 18.97M | Investing Cash Flow |
| 95.76M | -110.57M | -193.49M | -15.65M | -219.46M | -11.67M | Financing Cash Flow |
| -263.77M | 24.09M | 34.97M | 303.13M | 269.78M | -7.53M |
Sprinklr Technical Analysis
Positive
9.42
Price Trends
8.72
Positive
8.43
Positive
8.66
Positive
Market Momentum
-0.08
Negative
62.71
Neutral
38.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CXM, the sentiment is Positive. The current price of 9.42 is above the 20-day moving average (MA) of 8.72, above the 50-day MA of 8.72, and above the 200-day MA of 8.66, indicating a bullish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 62.71 is Neutral, neither overbought nor oversold. The STOCH value of 38.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CXM.
Sprinklr Risk Analysis
Sprinklr disclosed 44 risk factors in its most recent earnings report. Sprinklr reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sprinklr Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.06B | 59.85 | 7.63% | ― | 12.02% | 50.09% | |
75 Outperform | $188.60B | 35.35 | 47.28% | ― | 11.02% | 4.96% | |
75 Outperform | $266.25B | 43.54 | 10.26% | 0.58% | 8.72% | 51.47% | |
72 Outperform | $166.53B | 123.26 | 16.53% | ― | 22.44% | -18.31% | |
68 Neutral | $15.28B | ― | -1.24% | ― | 7.32% | 88.51% | |
67 Neutral | $30.81B | 7,121.91 | 0.29% | ― | 21.07% | ― | |
58 Neutral | $21.35B | 9.96 | -19.72% | 2.38% | 5.03% | -22.83% |
* Technology Sector Average
Performance Comparison
CXM
Sprinklr
9.20
-4.33
-32.00%
ADBE
Adobe
377.84
-192.61
-33.76%
CRM
Salesforce
271.74
-30.29
-10.03%
NOW
ServiceNow
811.62
32.13
4.12%
HUBS
HubSpot
611.06
-18.95
-3.01%
TWLO
Twilio
94.90
34.01
55.85%
Sprinklr Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: 16.58% | Next Earnings Date: Jun 10, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed view of Sprinklr's performance and future outlook. While the company reported growth in revenue and an increase in million-dollar customers, it also faced challenges with elevated churn, increased costs, and the need for restructuring. The company's focus on improving consistency and execution in FY '26 suggests a transitional period ahead.Highlights
Revenue Growth in Q4
Fourth quarter total revenue grew 4% year-over-year to $202.5 million and subscription revenue grew 3% year-over-year to $182.1 million.
Improved Non-GAAP Operating Income
Generated $25.9 million in non-GAAP operating income, resulting in a 13% non-GAAP operating margin for the quarter.
Increase in Million-Dollar Customers
At the end of FY '25, Sprinklr had 149 customers generating at least $1 million in annual subscription revenue, which grew by 18% year-over-year.
Strategic Leadership Appointments
Announced the appointment of Joy Corso as Chief Administrative Officer, and the addition of Jan Hauser and Stephen Ward to the Board of Directors.
Successful Large Customer Deals
Closed an eight-figure multi-year renewal with one of the largest technology companies in the world, reducing their service costs by millions of dollars while improving resolution speed and customer satisfaction.
Lowlights
Professional Services Gross Margin
Professional services gross margin was break-even, which is acknowledged as not optimal and is being addressed.
Increased Data and Hosting Costs
Higher data and hosting costs are impacting subscription gross margins by approximately 400 basis points for FY '26.
Churn and Customer Renewal Pressure
The subscription revenue-based net dollar expansion rate was 104%, reflecting the full impact of elevated churn experienced during FY '25.
Workforce Reduction
Reduced the global workforce by approximately 15% as part of restructuring to better optimize and rebalance the expense base.
Challenges with Inconsistent Implementations
Experienced inconsistent implementations leading to pressure on customer renewals and satisfaction, which the company is actively addressing.
Company Guidance
During the Sprinklr Q4 Fiscal Year 2025 Earnings Call, the company provided guidance for the first fiscal quarter and full fiscal year 2026, highlighting several key financial metrics. For Q1, Sprinklr expects total revenue between $201.5 million and $202.5 million, representing 3% growth year-over-year, with subscription revenue projected at $182 million to $183 million. Non-GAAP operating income is anticipated to be between $31.5 million and $32.5 million, leading to a non-GAAP net income per diluted share of approximately $0.10. For the full fiscal year 2026, Sprinklr forecasts subscription revenue of $741 million to $743 million and total revenue of $821.5 million to $823.5 million, both reflecting 3% growth. The company aims for a non-GAAP operating income of $129 million to $131 million and a non-GAAP net income per diluted share of $0.38 to $0.39, with a 16% non-GAAP operating margin at the midpoint. Additionally, Sprinklr plans to achieve a 15% free cash flow margin, translating to approximately $120 million in free cash flow for the year.Sprinklr Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Sprinklr Expands Board with Key Leadership Appointments
Positive
Jan 30, 2025
On January 29, 2025, Sprinklr announced the expansion of its Board of Directors with the appointments of Jan R. Hauser and Stephen M. Ward, Jr. Hauser, a prominent finance leader, will join the Audit Committee and later succeed Ed Gillis as its Chair, while Ward, a former CEO of Lenovo, will be part of the Compensation Committee. Ed Gillis will resign from his position as Chair of the Audit Committee on March 31, 2025, and from the Board on June 12, 2025, after ten years of service. These strategic appointments are expected to bolster Sprinklr’s leadership and support its growth and innovation in the AI-powered customer experience management sector.
Executive/Board ChangesBusiness Operations and Strategy
Sprinklr Announces Key Leadership Changes and Appointments
Neutral
Jan 13, 2025
Sprinklr announced the transition of Diane Adams from her role as Chief Culture and Talent Officer to an advisory position, effective January 13, 2025, with her advisory role continuing until February 14, 2025. This transition is part of an agreement that includes severance benefits and stock option vesting. Concurrently, Sprinklr appointed Joy Corso as Chief Administrative Officer, a strategic decision aimed at strengthening market position, customer engagement, and advancing the company’s growth, leveraging her extensive experience in the B2B tech industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.