Summary
Sprinklr reported FY2023 Q1 total revenue of $145.0 million, up 30.6% from $111.0 million in FY2022 Q1. Gross profit rose to $103.3 million from $79.3 million a year earlier. Gross margin was 71.2%, down from 71.4%. The bottom line moved in the opposite direction. Operating loss widened to $23.1 million from $10.5 million. Operating margin fell to negative 16.0% from negative 9.5%, a decline of 6.5 percentage points. Net loss widened to $25.3 million from $14.5 million. Diluted loss per share improved to $0.10 from $0.15. The company said it was very pleased with Q1 performance across its four product suites. Customers continued to use Sprinklr's platform to drive revenue, reduce costs and mitigate risks.
Cash flow showed a smaller outflow. Operating cash flow was negative $2.9 million, up from negative $10.4 million in the prior-year quarter. Capital expenditures were $0.6 million, down from $1.2 million. Free cash flow was negative $5.8 million, compared with negative $12.6 million a year earlier. Adjusted free cash flow was $6.2 million, compared with negative $12.6 million. Deferred revenue was $274.6 million at April 30, 2022. RPO was $585.8 million. The company held $530.9 million in cash, cash equivalents and marketable securities at the end of the quarter.
Operational metrics pointed to expansion. Net dollar expansion rate was 123%, compared with 114% for the trailing 12-month period a year earlier. Sprinklr had 90 large customers with at least $1.0 million in subscription revenue on a trailing 12-month basis, up from 69 a year earlier. cRPO was $412.5 million. The company's platform recognizes over 50 languages, and its customers are located in over 60 countries. Management said the revenue increase came from new customers and expansion from existing customers, as clients bought more of their current subscriptions and added other platform solutions. The company works with more than 1,000 enterprises and more than 50% of the Fortune 100.
Guidance for the second fiscal quarter ending July 31, 2022 calls for subscription revenue of $129.5 million to $131.5 million. The company expects a non-GAAP operating loss of $11 million to $13 million and non-GAAP net loss per share of $0.05 to $0.06, assuming 263 million weighted average shares outstanding. For the full fiscal year ending January 31, 2023, management guided to subscription revenue of $540.5 million to $546.5 million, a non-GAAP operating loss of $37 million to $41 million, and non-GAAP net loss per share of $0.18 to $0.20, assuming 263 million weighted average shares outstanding.
The main risks are the widening losses and the spending needed to support growth. The company remains unprofitable on a GAAP basis. Sprinklr cited risks tied to its rapid growth, the possibility that its revenue growth rate may fluctuate, competition, reliance on large enterprise customers, dependence on third-party data and cloud providers, and the need to attract and retain key personnel. It also flagged the ongoing COVID-19 pandemic as a source of uncertainty that could affect demand, sales cycles, renewals, collections and travel. The company said its sales cycle with enterprise and international clients can be long and unpredictable. The quarter included a litigation settlement payment, which the company excluded from adjusted free cash flow. Management also noted that the Unified-CXM market is new and rapidly evolving, and that it increased professional services capacity ahead of expected growth, which can result in low margins in the investment period.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2023 | Q4 FY2022 | QoQ | Q1 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $145.0M | $135.7M | +6.9% | — | — |
| Gross profit | $103.3M | $95.9M | +7.7% | — | — |
| Gross margin | 71.2% | 70.7% | +0.6 pp | — | — |
| Research & development | $17.3M | $15.8M | +10.0% | — | — |
| Sales & marketing | $86.9M | $79.9M | +8.8% | — | — |
| General & administrative | $22.1M | $21.4M | +3.4% | — | — |
| Total operating expenses | $126.4M | $129.0M | -2.1% | — | — |
| Operating income (loss) | -$23.1M | -$33.2M | +30.3% | — | — |
| Operating margin | -15.9% | -24.4% | +8.5 pp | — | — |
| Net income (loss) | -$25.3M | -$34.3M | +26.3% | — | — |
| Net margin | -17.4% | -25.3% | +7.8 pp | — | — |
| Diluted EPS | -$0.10 | -$0.18 | +$0.08 | — | — |
Risks
The company identified a material weakness in internal control over financial reporting related to the implementation of ASC 606 and capitalization of costs to obtain customer contracts. Remediation steps have been initiated but not yet completed, and failure to remediate could result in material misstatements.
Net loss widened to $25.3 million for the three months ended April 30, 2022, compared to $14.5 million in the prior year period, and operating loss widened to $23.1 million. Sales and marketing expense increased 44% to $86.9 million, representing 60% of revenue.
Professional services gross margin decreased by 19 percentage points to 6% for the three months ended April 30, 2022, due to increased personnel and subcontractor costs ahead of expected growth. This margin volatility could persist.
Top 10 customers accounted for 14% and 19% of subscription revenue in fiscal years ended January 31, 2022 and 2021, respectively. Loss of any large customer could disproportionately harm results.
Subscription revenue growth rates may be lower in the near term compared to comparable periods in the prior fiscal year. Revenue growth rate has fluctuated in prior periods and may decline again as the customer base matures.
The company depends on third-party data providers, including an agreement with Twitter that expires on February 28, 2025. Failure to renew or maintain such agreements on favorable terms could reduce platform functionality and harm results.
Unstable market and economic conditions, including inflation, higher interest rates, and Russia's incursion into Ukraine, could reduce customer spending and increase costs. Higher inflation may also increase labor and employee benefit costs.
The company has experienced greater than usual employee turnover in recent years and faces intense competition for skilled personnel. Loss of key employees or inability to attract and retain talent could harm growth.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from Sprinklr, Inc.'s SEC filings for Q1 FY2023 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.