Summary
Sprinklr's first quarter of fiscal 2026 produced top-line growth and a swing to GAAP losses. Total revenue for the quarter ended April 30, 2025 was $205.5 million, up 4.9% from $196.0 million in the prior-year quarter. The profit lines went the other way. GAAP operating income swung to an operating loss of $1.8 million from income of $5.7 million a year earlier. Operating margin fell to a negative 0.9% from 2.9%. Net income swung to a net loss of $1.6 million from net income of $10.6 million. Diluted loss per share was $0.01, compared with diluted earnings per share of $0.04 a year earlier.
Gross profit told a similar story. GAAP gross profit was $142.9 million, down 1.4% from a year earlier, and gross margin slipped to 69.5% from 73.9%, a decline of 4.4 percentage points. Management pointed to higher costs for third-party data, cloud and network infrastructure as the main driver, along with a revenue mix that leaned more on professional services. The company said it expects gross margin to decline in the near term because of higher data and hosting costs and to vary from period to period after that.
Cash was the bright spot. Net cash provided by operating activities was $83.8 million, up 100.8% from $41.7 million in the prior-year quarter, as collections ran ahead of billings. Capital expenditures fell 88.6% to $0.3 million. Free cash flow, a non-GAAP measure the company defines as operating cash flow less purchases of property and equipment and capitalized internal-use software, came to $80.7 million, up from $36.2 million a year ago. Deferred revenue, current portion only, rose 9.1% to $403.8 million. Remaining performance obligations were $943.2 million, up 2.2%.
The customer metrics show where the pressure sits. Net dollar expansion rate was 101.8% for the trailing twelve months ended April 30, 2025, down from 114.6% a year earlier. Management blamed elevated churn, down-selling among some existing customers and a tougher macroeconomic backdrop. Large customers, those spending at least $1.0 million in trailing twelve-month subscription revenue, numbered 146, up from 138. Current RPO was $596.8 million. A February 2025 restructuring cut sales headcount and lifted general and administrative costs, and it is the main reason GAAP results diverged so sharply from non-GAAP ones. Non-GAAP operating income was $36.7 million against $20.9 million a year ago, non-GAAP operating margin was 18% versus 11%, and non-GAAP diluted net income per share was $0.12 versus $0.09.
Guidance frames fiscal 2026 as a transition year. For the second quarter ending July 31, 2025, management guided subscription revenue of $184 million to $185 million, non-GAAP operating income of $33.5 million to $34.5 million, and non-GAAP net income per share of about $0.10 on roughly 270 million diluted shares. For the full fiscal year ending January 31, 2026, the company guided subscription revenue of $741 million to $743 million, non-GAAP operating income of $129 million to $131 million, and non-GAAP net income per share of $0.39 to $0.40 on about 277 million diluted shares. The board authorized a new $150 million share repurchase program in June 2025.
Risks are visible. Falling net dollar expansion, churn and down-selling all point to pressure on renewals. Macroeconomic uncertainty, tariffs and swings in inflation and interest rates could slow enterprise spending further. The company also carries minimum guaranteed purchase commitments with data and service providers totaling $324.8 million as of January 31, 2025, $107.1 million of which comes due within twelve months of that date. Longer collection cycles and higher provisions for credit losses are possible if conditions worsen, and higher data and hosting costs remain a direct threat to margin.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $205.5M | $202.5M | +1.5% | $196.0M | +4.9% |
| Gross profit | $142.9M | $143.7M | -0.6% | $144.8M | -1.4% |
| Gross margin | 69.5% | 71.0% | -1.4 pp | 73.9% | -4.4 pp |
| Research & development | $22.8M | $22.6M | +1.1% | $22.5M | +1.2% |
| Sales & marketing | $71.1M | $76.1M | -6.6% | $87.5M | -18.8% |
| General & administrative | $34.4M | $34.6M | -0.5% | $29.1M | +18.3% |
| Total operating expenses | $144.6M | $133.3M | +8.5% | $139.1M | +4.0% |
| Operating income (loss) | -$1.8M | $10.5M | -116.8% | $5.7M | -130.7% |
| Operating margin | -0.8% | 5.2% | -6.0 pp | 2.9% | -3.8 pp |
| Net income (loss) | -$1.6M | $98.7M | -101.6% | $10.6M | -114.7% |
| Net margin | -0.8% | 48.7% | -49.5 pp | 5.4% | -6.2 pp |
| Diluted EPS | -$0.01 | $0.36 | -$0.37 | $0.04 | -$0.05 |
Risks
Macroeconomic uncertainty, including tariffs, inflation, and geopolitical conflicts, is pressuring customer spending and contributed to the net dollar expansion rate declining to 101.8% for the trailing 12 months ended April 30, 2025 from 114.6% a year earlier.
Net dollar expansion rate declined to 101.8% for the twelve months ended April 30, 2025 from 114.6% for the prior-year period, driven by elevated churn and down-selling of certain existing customers, while RPO grew 2.2% year over year to $943.2 million in FY2026 Q1.
Gross margin decreased 4.4 percentage points in the quarter ended April 30, 2025, and subscription gross margin decreased five percentage points due to higher third-party data, cloud and network costs; management expects gross margin to decline in the near term.
Sprinklr uses generative AI in products and operations, and risks include flawed or biased outputs, customer reluctance in regulated industries, confidentiality leaks from third-party AI tools, and competitors incorporating AI more successfully despite significant investment.
Recent difficulties managing larger CCaaS implementations have resulted in increased customer dissatisfaction, loss of certain customers, and delays in recognizing revenue from those projects, and professional services growth depends on CCaaS delivery capabilities.
Emerging AI laws such as the EU AI Act and Colorado AI Act may require significant compliance resources and could restrict the use of AI or generative AI in products, with risks of fines, required model retraining, or algorithmic disgorgement.
Sprinklr relies on social media networks and data providers, and its agreement with X expires on December 31, 2026; if it is not renewed on similar terms, Sprinklr may be unable to provide the same level of Unified-CXM insights and results could be materially harmed.
Sprinklr recorded $16.3 million of restructuring expense in FY2026 Q1 for a global workforce reduction, and failure to manage the organizational change or realize expected cost savings could harm the business and results of operations.
Competition for technical and sales talent is high, and recent decreases in the stock price and market volatility may reduce the perceived value of equity awards; Sprinklr has issued additional equity and cash compensation to manage attrition, which may dilute stockholders or pressure results.
Management cautions that actual operating results may differ materially from guidance, noting that a higher-than-expected provision for credit losses in Q2 FY2025 caused certain operating results to fall below guidance ranges.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
RPO
cRPO
Summary, forecast, risks and KPIs are extracted from Sprinklr, Inc.'s SEC filings for Q1 FY2026 (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 1, 2026.