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Sprinklr (CXM)
NYSE:CXM
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Sprinklr
(NYSE:CXM)
75Outperform
Positive Factors
Financial Performance
Q3 revenue came in ~2% above guidance and flowed through to better profitability with operating margin of 12%, ahead of Street at 10%.
Leadership Change
New CEO Rory Read has laid out a compelling plan to turn the business around through strategy realignment and operational changes.
Negative Factors
Workforce Reduction
The firm is laying off 15% of the workforce, indicating a need to realign costs with current business conditions.
Sprinklr (CXM) vs. S&P 500 (SPY)
Market Cap
$2.08B
Dividend YieldN/A
Average Volume (3M)1.53M
Price to Earnings (P/E)52.0
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. Volume1,544,693
30 Day Avg. Volume1,531,930
Financial Highlights & Ratios
PEG Ratio1.04
Price to Book (P/B)N/A
Price to Sales (P/S)2.72
Price to Cash Flow (P/CF)58.30
P/FCF Ratio109.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.00Price Target Upside48.51% Upside
Rating ConsensusHold
Number of Analyst Covering4
Sprinklr Business Overview & Revenue Model
Company DescriptionSprinklr is a leading enterprise software company specializing in customer experience management (CXM) solutions. The company operates in the technology sector, providing a unified platform that helps businesses manage customer interactions across various digital channels, including social media, messaging, and email. Sprinklr's core services include social media management, advertising, marketing, research, and customer care, enabling organizations to enhance their customer engagement and drive business growth.
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
Negative
8.08
Price Trends
8.71
Negative
8.41
Negative
8.67
Negative
Market Momentum
-0.17
Positive
35.47
Neutral
25.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CXM, the sentiment is Negative. The current price of 8.08 is below the 20-day moving average (MA) of 8.70, below the 50-day MA of 8.71, and below the 200-day MA of 8.67, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 35.47 is Neutral, neither overbought nor oversold. The STOCH value of 25.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 | $2.08B | 52.03 | 7.63% | ― | 12.02% | 50.09% | |
75 Outperform | $188.60B | 34.95 | 36.31% | ― | 11.02% | 4.96% | |
73 Outperform | $266.25B | 42.89 | 10.26% | 0.59% | 8.72% | 51.47% | |
72 Outperform | $166.53B | 118.18 | 16.53% | ― | 22.44% | -18.31% | |
68 Neutral | $15.28B | ― | -1.24% | ― | 7.32% | 88.51% | |
64 Neutral | $30.81B | 6,884.27 | 0.29% | ― | 21.07% | ― | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% |
* Technology Sector Average
Performance Comparison
CXM
Sprinklr
8.08
-5.55
-40.72%
ADBE
Adobe
433.66
-145.48
-25.12%
CRM
Salesforce
277.05
-27.87
-9.14%
NOW
ServiceNow
808.40
18.84
2.39%
HUBS
HubSpot
590.67
-30.49
-4.91%
TWLO
Twilio
100.08
37.87
60.87%
Sprinklr Earnings Call Summary
Earnings Call Date: Dec 4, 2024 | % Change Since: -6.48% | Next Earnings Date: Mar 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with some positive metrics like revenue growth and a strong cash position, but also highlighted significant challenges such as negative professional services gross margins, decreased billings, and high churn. Management is focused on improving efficiency and addressing these challenges to achieve better growth and profitability.Highlights
Revenue Growth
3Q total revenue grew 8% year-over-year to $200.7 million, and subscription revenue grew 6% year-over-year to $180.6 million.
Increased Customer Base
Sprinklr has grown its customer base to well over 1,800 customers, with nearly 150 customers now contributing $1 million or more in subscription revenue, marking a 20% increase year-over-year.
Operating Income and Margin
Generated $23.3 million in non-GAAP operating income, resulting in a 12% non-GAAP operating margin for the quarter.
Strong Cash Position
The company has $477 million in cash and marketable securities with no debt outstanding.
Lowlights
Professional Services Gross Margin
Professional services gross margin was negative 8%, indicating an area needing improvement.
Decreased Billings
Calculated billings for the third quarter were $147.9 million, a decrease of 8% year-over-year.
Challenges with Churn
There is elevated churn from the past year, with efforts needed to improve the subscription revenue-based net dollar expansion rate.
Rule of 40 Performance
Currently operating below 20% on the Rule of 40, which is not considered acceptable by management.
Company Guidance
In the Q3 2025 earnings call for Sprinklr, the company provided guidance for the fourth fiscal quarter and full fiscal year of 2025. For Q4, Sprinklr expects total revenue to range between $200 million and $201 million, representing a 3% year-over-year growth at the midpoint, with subscription revenue projected between $180 million and $181 million, reflecting a 2% increase. The company anticipates a non-GAAP operating income of $17.5 million to $18.5 million and non-GAAP net income per diluted share of approximately $0.07. For the full year FY '25, Sprinklr raised its subscription revenue estimates to $715.9 million to $716.9 million, marking a 7% year-over-year growth, and total revenue guidance to $793.9 million to $794.9 million, an 8% increase. The expected non-GAAP operating income for the year is between $76.4 million and $77.4 million, equating to a 10% non-GAAP operating margin at the midpoint. Additionally, Sprinklr forecasts Q4 billings of approximately $294 million, implying a 9% growth year-over-year, while free cash flow for Q4 is expected to range from negative $5 million to breakeven.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.