Sprinklr, Inc. Q1 FY2027 earnings

Sprinklr reported first quarter fiscal 2027 revenue of $219.5 million, up 7% from $205.5 million a year earlier. Subscription revenue grew 6% and professional services revenue grew 16%. Remaining performance obligations reached $1.04 billion, up 10%, and current RPO was $627.1 million. The net dollar expansion rate was 103.5% for the trailing 12 months ended April 30, 2026, against 101.8% a year earlier. Current deferred revenue was $414.2 million, up 2.6%. CEO Rory Read pointed to improving renewals and a healthy pipeline, and said more than $1 billion in total RPO supports durable growth.

Costs, not demand, drove the margin story. Gross profit was $143.0 million, flat against $142.9 million a year earlier, while gross margin slipped to 65.2% from 69.5%. Cost of subscription revenue rose 21% on higher third party cloud, data and network infrastructure costs of $5.7 million and personnel costs of $1.7 million. Cost of professional services revenue rose 25% on $3.2 million of subcontractor costs tied to complex implementations and $1.6 million of personnel costs. Subscription gross margin fell to 74% from 77%, and professional services gross margin went to (4)% from 4% a year earlier. Management expects gross margin to decline further in the near term.

The bottom line turned positive. Operating income was $10.6 million, a swing from an operating loss of $1.8 million a year earlier, and operating margin was 4.8%, up from -0.9%. Net income was $4.2 million, up from a net loss of $1.6 million, and diluted earnings per share were $0.02 against a loss per share of $0.01. A $0.7 million restructuring credit this quarter compares with $16.3 million of restructuring expense a year ago. The tax provision rose to $12.1 million, including a $3.8 million discrete charge for non-deductible stock-based compensation and $2.3 million related to uncertain tax positions at non-U.S. entities.

Non-GAAP results moved the other way. Non-GAAP operating income was $31.7 million against $36.7 million a year earlier, non-GAAP operating margin was 14% versus 18%, and non-GAAP diluted net income per share was $0.11 against $0.12. Operating cash flow was $70.4 million, down 16% from $83.8 million, and free cash flow was $65.8 million against $80.7 million. Capital expenditures were $0.3 million. The company spent $125 million under a $200 million repurchase authorization that runs through March 15, 2027, and ended the quarter with $442.8 million in cash, cash equivalents and marketable securities.

Guidance covers the second quarter ending July 31, 2026 and the full fiscal year ending January 31, 2027. For the second quarter, non-GAAP operating income is guided to $29.5 million to $30.5 million and non-GAAP net income per share to about $0.10 on 241 million diluted shares. For the full fiscal year, non-GAAP operating income is guided to $139 million to $141 million and non-GAAP net income per share to $0.48 to $0.49 on 242 million diluted shares. Both outlooks also set ranges for subscription revenue and total revenue.

Risks cluster around costs and demand. Sprinklr expects higher data, hosting and service delivery costs to keep pressure on gross margin. The 2026 Iran conflict disrupted Middle East operations and affected a third party data center in the United Arab Emirates, where the company flagged inaccessibility and potential loss of certain customer data. Growth came largely from existing customers, and the company cited non-renewals and smaller contract sizes among customers trimming budgets or deferring spending. Sprinklr serves customers in more than 90 countries with support for over 150 languages, and it depends on large enterprises, long and unpredictable sales cycles, and a rapidly evolving market where competition remains a listed risk.