Summary
Sprinklr reported FY2025 Q2 total revenue of $197.2 million, up 10.5% from the prior-year quarter. Gross profit was $142.9 million, up 5.8%. Gross margin slipped to 72.5%, down 3.2 percentage points, as costs tied to third-party cloud infrastructure and data rose. The quarter produced an operating loss of $0.09 million, a swing from positive operating income a year earlier and a 101.6% decline. Net income was $1.84 million, down 82.4%, and diluted EPS was $0.01, down 75.0%. The results show a business still growing but with little GAAP profit left after higher costs and a credit loss charge.
Cash generation held up better than earnings. Operating cash flow for the quarter was $21.3 million, up 46.3%, while capital expenditures were $1.5 million, down 46.8%. Free cash flow, a non-GAAP measure, was $16.5 million, and the company marked its 7th consecutive quarter of free cash flow. Year to date, operating cash flow was $63.0 million, up 90.2%. Current deferred revenue was $363.48 million, up 12.6% from the prior-year quarter. RPO was $887.1 million, up 10%. Current RPO was $557.8 million, up 9% year over year. Large customers, defined as those with at least $1.0 million in subscription revenue on a trailing 12-month basis, totaled 145 as of July 31, 2024, up 21% from 120 a year earlier. Net dollar expansion rate was 110.8% for the trailing 12-month period ending July 31, 2024, against 120.0% for the period ending July 31, 2023. That decline reflects elevated churn and a tougher macroeconomic environment.
Non-GAAP results were stronger than GAAP results. Non-GAAP operating income was $15.2 million, compared with $21.3 million a year earlier. Non-GAAP operating margin was 8%, compared with 12%. Non-GAAP net income per diluted share was $0.06, compared with $0.09. The gap between GAAP and non-GAAP figures remains wide, largely because stock-based compensation expense is significant. Management also pointed to a credit loss charge in the quarter and to restructuring actions completed in May 2024. General and administrative expense rose on higher reserves for accounts deemed uncollectible and on personnel costs. Sales and marketing expense included severance tied to the restructuring plan, while research and development expense benefited from lower headcount. These items explain much of the pressure on GAAP operating income and net income.
Guidance covers the third fiscal quarter ending October 31, 2024 and the full fiscal year ending January 31, 2025. For the quarter, management guided non-GAAP operating income between $19 million and $20 million and non-GAAP net income per share of approximately $0.08, assuming 266 million diluted weighted-average shares outstanding. For the full fiscal year, non-GAAP operating income is guided to between $80.5 million and $81.5 million, with non-GAAP net income per share between $0.32 and $0.33, assuming 270 million diluted weighted-average shares outstanding. The company does not reconcile these forward-looking non-GAAP measures to the closest GAAP measures, citing the variability of stock-based compensation, so GAAP profit expectations for the year remain unstated.
The main risks are familiar for a large-enterprise software vendor. Macroeconomic uncertainty can slow information technology spending, lengthen collection cycles and raise bad debt. Elevated churn already weighed on net dollar expansion. Management said the work to reaccelerate growth and expand margins will take several quarters. Competition in a new and rapidly evolving Unified-CXM market remains intense. Sprinklr depends on third-party data centers and cloud providers, and it must protect data privacy and security. Its large-enterprise sales cycles can be long and unpredictable. Execution on restructuring and cost controls will matter if GAAP profitability is to improve from the current quarter's near-breakeven operating loss. Deferred revenue and RPO both grew year over year, which offers some support, but the gap between GAAP and non-GAAP profit remains the central issue for valuation.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $197.2M | $196.0M | +0.6% | $178.5M | +10.5% |
| Gross profit | $142.9M | $144.8M | -1.3% | $135.0M | +5.8% |
| Gross margin | 72.5% | 73.9% | -1.5 pp | 75.6% | -3.2 pp |
| Research & development | $23.6M | $22.5M | +4.8% | $24.3M | -2.9% |
| Sales & marketing | $80.5M | $87.5M | -8.0% | $80.1M | +0.5% |
| General & administrative | $38.9M | $29.1M | +33.5% | $25.1M | +55.0% |
| Total operating expenses | $143.0M | $139.1M | +2.8% | $129.5M | +10.4% |
| Operating income (loss) | -$87.0K | $5.7M | -101.5% | $5.5M | -101.6% |
| Operating margin | -0.0% | 2.9% | -3.0 pp | 3.1% | -3.1 pp |
| Net income (loss) | $1.8M | $10.6M | -82.7% | $10.5M | -82.4% |
| Net margin | 0.9% | 5.4% | -4.5 pp | 5.9% | -5.0 pp |
| Diluted EPS | $0.01 | $0.04 | -$0.03 | $0.04 | -$0.03 |
Risks
MD&A states Q2 FY2025 general and administrative expense rose 55% due in part to a $9.1 million provision for credit losses for certain customers deemed uncollectible, and the six-month provision for credit losses increased $10.0 million. Risk Factors note this higher-than-expected Q2 FY2025 provision caused certain operating results to fall below prior guidance ranges.
The risk factors state the agreement with X for data supporting the Unified-CXM platform expires on February 28, 2025. If it is not renewed on the same or similar terms, or is terminated, Sprinklr may not be able to provide the same level of Unified-CXM insights and its business, results of operations and financial condition may be materially and adversely affected.
MD&A reports net dollar expansion rate fell to 110.8% for the trailing 12 months ended July 31, 2024 from 120.0% for the prior-year period, driven by elevated churn exacerbated by the macroeconomic environment. Macroeconomic considerations also cite inflation, higher interest rates, bank closures and the Russia-Ukraine and Israel-Hamas wars as pressures on IT spending and customer collections.
Gross margin decreased 3.2 percentage points in FY2025 Q2 and 2.5 percentage points year to date, and subscription gross margin decreased 2 percentage points in both periods. MD&A attributes the subscription decline primarily to higher third-party cloud infrastructure and data costs, including a $5.1 million quarter increase in data and hosting costs.
GAAP operating income was -$0.09 million in FY2025 Q2, down 101.6% from $5.49 million in FY2024 Q2 and swung to a loss, while net income fell 82.4% to $1.84 million. Risk Factors state actual operating results may differ significantly from guidance, and the Q2 credit loss provision caused some results to fall below prior guidance ranges.
The business depends on customers renewing subscriptions and expanding use of the Unified-CXM platform, and Risk Factors note customers may elect not to renew, may renew on less favorable terms or may reduce subscription scope. The decline in net dollar expansion rate and elevated churn indicate this risk is materializing.
Risk Factors expand on use of AI and Generative AI through third-party partners such as OpenAI, including flawed or biased outputs, leakage of sensitive information, intellectual property claims and regulatory uncertainty under the EU AI Act and FTC algorithmic disgorgement actions. If deployment fails or competitors incorporate Generative AI more successfully, Sprinklr could face reputational, legal and competitive harm.
Risk Factors say competition for executive, engineering, sales and other key talent is high, and recent decreases in stock price and market volatility can reduce the perceived value of equity awards, requiring additional equity or cash compensation. MD&A notes a May 2024 restructuring and $3.9 million of severance in Q2 FY2025 sales and marketing expense.
During the six months ended July 31, 2024, approximately 41% of sales were to customers outside the Americas, and the company expects to continue expanding internationally. Risk Factors cite compliance with non-U.S. data privacy laws, sanctions, tariffs, currency fluctuations, longer sales cycles and collection difficulties in foreign markets.
Risk Factors note customers may weaken or incorrectly configure security controls in their environments, which can lead to loss of confidentiality or integrity of customer data and potentially compromise Sprinklr systems. AI-enhanced attacks and customer misconfiguration could result in regulatory investigations, fines, customer termination and reputational harm.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
RPO
cRPO
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from Sprinklr, Inc.'s SEC filings for Q2 FY2025 (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.