Summary
Sprinklr's fiscal 2024 third quarter, ended October 31, 2023, produced $186.3 million in revenue, up 18% from $157.3 million in the prior-year quarter. The nine-month period reached $538.2 million, up 18.8% from $452.9 million. Gross profit of $139.9 million rose 19.8% in the quarter, and the gross margin of 75.1% was up from 74.2%. Year to date, gross profit of $406.3 million rose 23.7% and the gross margin of 75.5% compared with 72.5%.
The profit line is where the story changed. GAAP operating income of $13.2 million reversed an operating loss of $4.6 million in the year-ago quarter, and the operating margin of 7.1% compared with an operating margin of -2.9%. GAAP net income of $17.0 million replaced a net loss of $5.9 million, and diluted EPS of $0.06 reversed a loss per share of $0.02. The nine-month picture looks similar: operating income of $15.5 million against a loss of $49.4 million, net income of $30.3 million against a loss of $55.1 million, and diluted EPS of $0.11 against a loss per share of $0.21. Non-GAAP operating income was $27.4 million against $6.9 million, and non-GAAP net income per share, basic, was $0.12 against $0.02.
Cash flow followed the earnings. Operating cash flow for the quarter was $21.0 million, up from $1.6 million a year earlier, and $54.2 million for the nine months against $4.6 million. Free cash flow was $15.9 million in the quarter against negative $1.7 million, and $38.9 million for the nine months against negative $6.1 million. Capital expenditures were $2.1 million in the quarter and $6.5 million year to date, up from $0.6 million and $2.9 million.
Backlog grew faster than revenue. RPO was $774.5 million, up 32.1% from a year earlier, and deferred revenue was $297.1 million, up 15.3%. The MD&A discloses that prior-year RPO and cRPO figures were reduced to $576.7 million and $412.7 million from the $586.1 million and $420.2 million previously reported, correcting the treatment of an immaterial number of contracts. cRPO stood at $491.4 million. Sprinklr counted 123 customers with at least $1.0 million in subscription revenue on a trailing 12-month basis, up from 107 a year earlier. Net dollar expansion rate slipped to 117.7% from 124.5%.
Guidance for the fourth fiscal quarter ending January 31, 2024 puts subscription revenue between $172.5 million and $174.5 million. Non-GAAP operating income is guided to $20.3 million to $22.3 million and non-GAAP net income per share to $0.08 to $0.09 on 275 million basic weighted-average shares. For the full fiscal year ending January 31, 2024, the company guides subscription revenue of $664 million to $666 million, non-GAAP operating income of $80 million to $82 million, and non-GAAP net income per share of $0.36 to $0.37 on 273 million basic weighted-average shares.
The risk list is long. Management flags macroeconomic uncertainty, rising inflation, higher interest rates, recent bank closures, and geopolitical conflict including the Russia-Ukraine war and the Israel-Hamas war. Revenue leans on large enterprises, and a significant portion comes from a relatively small number of them. Sales cycles with enterprise and international clients can be long and unpredictable. The company also cites reliance on third-party data centers, competition in a new and rapidly evolving market, and the work of retaining and expanding customer subscriptions. Seasonality adds another wrinkle, since billings typically peak in the fourth quarter while collections are weighted to the first half of the year.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $186.3M | $178.5M | +4.4% | $157.3M | +18.5% |
| Gross profit | $139.9M | $135.0M | +3.6% | $116.7M | +19.8% |
| Gross margin | 75.1% | 75.6% | -0.6 pp | 74.2% | +0.8 pp |
| Research & development | $23.1M | $24.3M | -4.8% | $19.2M | +20.5% |
| Sales & marketing | $75.4M | $80.1M | -5.8% | $79.5M | -5.1% |
| General & administrative | $28.1M | $25.1M | +12.1% | $22.6M | +24.4% |
| Total operating expenses | $126.7M | $129.5M | -2.2% | $121.3M | +4.4% |
| Operating income (loss) | $13.2M | $5.5M | +140.3% | -$4.6M | +386.5% |
| Operating margin | 7.1% | 3.1% | +4.0 pp | -2.9% | +10.0 pp |
| Net income (loss) | $17.0M | $10.5M | +61.8% | -$5.9M | +389.5% |
| Net margin | 9.1% | 5.9% | +3.2 pp | -3.7% | +12.8 pp |
| Diluted EPS | $0.06 | $0.04 | +$0.02 | -$0.02 | +$0.08 |
Risks
The company identified a material weakness in its process to manage and record commission and bonus expense for the fiscal year ended January 31, 2023, related to insufficient user-acceptance testing, incomplete data elements, and inaccurate commission calculation inputs. Remediation controls are designed but not yet proven effective, which could lead to material misstatements or delayed reporting.
Use of AI and Generative AI via third-party partners such as OpenAI and large language model providers introduces risks of flawed or biased outputs, leakage of sensitive customer data, and regulatory exposure. The filing cites the Biden administration's AI executive order and proposed European AI regulation, and notes FTC algorithmic disgorgement actions.
The company's Unified-CXM platform depends on feedback data and API access from social media networks and other data providers. Its agreement with X (formerly Twitter) expires on February 28, 2025, and 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.
The business depends on customers renewing subscriptions and expanding use of the platform. Net dollar expansion rate on a trailing 12-month basis was 117.7% and 124.5% for the 12-month periods ending October 31, 2023 and 2022, respectively, and any decline in renewals or expansion would harm business, results of operations and financial condition.
General and administrative expense increased in the quarter and year to date partly due to bad debt expense largely related to one customer. The quarter included a $2.2 million bad debt increase, and the nine-month period included a $3.4 million bad debt increase, indicating customer credit concentration risk.
MD&A cites economic uncertainty from rising inflation, Federal Reserve interest rate increases, recent bank closures, the Russia-Ukraine war and the Israel-Hamas war. Customers may reduce information technology spending or require extended billing terms, and higher inflation could increase labor and employee benefit costs.
Gross margin for professional services decreased by 22 percentage points in the quarter, driven by investments in Sprinklr Service and the broader Contact Center as a Service offering. For the nine-month period, professional services gross margin decreased by 9 percentage points as revenue reduction outweighed cost reduction.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
RPO
cRPO
Non-GAAP Gross Margin
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from Sprinklr, Inc.'s SEC filings for Q3 FY2024 (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.