Summary
Sprinklr's fiscal 2026 third quarter showed a split between the top line and the bottom line. Total revenue rose 9.2% to $219.1 million. Gross profit was $145.5 million, up 1.9%, but gross margin fell to 66.4%, down 4.8 percentage points. Operating income climbed 46.4% to $11.6 million, and operating margin expanded to 5.3%, up 1.3 percentage points. Net income fell 72.2% to $2.9 million. Diluted EPS was $0.01, down 75%. Through the first nine months of fiscal 2026, revenue was $636.6 million, up 7.2%, while net income was $14.0 million, down 39.2%, and diluted EPS was $0.05, down 37.5%. Operating income grew faster than revenue, but net income and EPS moved sharply lower.
Cash generation was stronger. Operating cash flow for the quarter was $20.0 million, up 117.2%. Free cash flow, a non-GAAP measure, was $15.5 million. Capital expenditures were $0.2 million, down 81%. Year-to-date operating cash flow was $138.5 million, up 91.8%. Current deferred revenue was $332.2 million, up 6.8% year over year. RPO was $857.6 million, down 5.4%. cRPO was $562.2 million and rose 3% year over year. Total RPO fell while current RPO grew, and current deferred revenue increased. Customer metrics were mixed. Large customers with at least $1.0 million in subscription revenue on a trailing 12-month basis totaled 145, down from 147 a year earlier. Net dollar expansion rate was 102.3%, down from 107.3%. The MD&A attributed the lower expansion rate to elevated churn and down-selling of certain existing customers, partly tied to the macroeconomic environment.
Guidance frames the next step. For the fourth fiscal quarter ending January 31, 2026, Sprinklr guided non-GAAP operating income to $29 million to $30 million and non-GAAP net income per diluted share to $0.09 to $0.10. For the full fiscal year ending January 31, 2026, the company guided non-GAAP operating income to $137.5 million to $138.5 million and non-GAAP net income per diluted share to $0.43 to $0.44. The outlook assumes 254 million diluted weighted-average shares for the fourth quarter and 265 million for the full year. Sprinklr did not reconcile its non-GAAP operating income or non-GAAP EPS outlook to the closest GAAP measures, citing variability in stock-based compensation and related items.
The risk list remains long. Gross margin pressure came from higher third-party cloud infrastructure and data costs, and the MD&A expects gross margin to decline in the near term due to higher data, hosting, and service delivery costs. RPO fell 5.4% year over year. Net dollar expansion rate declined to 102.3% from 107.3%. Sprinklr has been restructuring. The first quarter of fiscal 2026 included a reduction affecting 12% of the workforce, compared with a 3% reduction in the second quarter of fiscal 2025. Macroeconomic risks in the filing include inflation and interest rate fluctuations, tariffs, the U.S. government shutdown, and geopolitical conflicts. The company also cites customer concentration, long and unpredictable enterprise sales cycles, data privacy and security obligations, reliance on third-party data centers, and competition in a rapidly evolving Unified-CXM market. Management said the quarter showed improving quality of customer engagements and that there is more work ahead. The guidance and the RPO trend frame the next quarter.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2026 | Q2 FY2026 | QoQ | Q3 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $219.1M | $212.0M | +3.3% | $200.7M | +9.2% |
| Gross profit | $145.5M | $144.6M | +0.6% | $142.9M | +1.8% |
| Gross margin | 66.4% | 68.2% | -1.8 pp | 71.2% | -4.8 pp |
| Research & development | $24.7M | $23.2M | +6.7% | $23.3M | +6.1% |
| Sales & marketing | $75.0M | $70.6M | +6.3% | $77.6M | -3.3% |
| General & administrative | $33.7M | $35.6M | -5.3% | $34.1M | -1.3% |
| Total operating expenses | $133.9M | $128.3M | +4.4% | $135.0M | -0.8% |
| Operating income (loss) | $11.6M | $16.3M | -29.0% | $7.9M | +46.4% |
| Operating margin | 5.3% | 7.7% | -2.4 pp | 3.9% | +1.3 pp |
| Net income (loss) | $2.9M | $12.6M | -77.0% | $10.5M | -72.2% |
| Net margin | 1.3% | 6.0% | -4.6 pp | 5.2% | -3.9 pp |
| Diluted EPS | $0.01 | $0.05 | -$0.04 | $0.04 | -$0.03 |
Risks
MD&A reports trailing 12-month net dollar expansion rate decreased to 102.3% for the period ending October 31, 2025 from 107.3% for the prior-year period, driven by elevated churn and down-selling of existing customers, partially due to macroeconomic conditions. Large customers declined to 145 from 147, and RPO was down 5.4% to $857.6 million versus the prior-year quarter.
Gross margin decreased to 66.4% in FY2026 Q3 from 71.2% in FY2025 Q3, down 4.8 percentage points, and subscription gross margin decreased four percentage points. MD&A expects gross margin to decline in the near term due to higher data and hosting costs and higher service delivery costs.
The platform depends on social listening APIs and negotiated data agreements; the X data agreement expires December 31, 2026, and non-renewal or termination could reduce Unified-CXM insights. Costs of subscription revenue rose 27% in FY2026 Q3, driven by third-party data, cloud and network infrastructure costs.
Risk factors state recent difficulties managing implementation of certain larger CCaaS projects increased customer dissatisfaction, caused loss of certain customers and delayed revenue recognition. Professional services revenue rose 43% in FY2026 Q3 partly from CCaaS delivery, raising execution pressure.
Extensive use of AI and generative AI in products and operations creates risks around IP protection, leakage of confidential data, erroneous outputs, customer reluctance, and evolving rules such as the EU AI Act and Colorado AI Act. Competitors may incorporate generative AI more successfully, impairing competitiveness.
MD&A cites inflation, interest rates, tariffs, Russia-Ukraine and Israel-Hamas wars, and a potential U.S. government shutdown as uncertainties that can slow IT spending, extend collection cycles and increase credit losses. Trade tensions and anti-U.S. sentiment may push non-U.S. customers toward local providers.
Provision for income taxes increased 392% to $14.4 million in FY2026 Q3, including a $3.3 million discrete charge for non-deductible stock-based compensation and a $6.2 million discrete charge for changes to uncertain tax positions. The company may become subject to Pillar Two rules, increasing tax obligations and compliance costs.
Competition for executive, engineering, sales and product talent is high, and recent decreases in stock price and volatility may reduce perceived equity value. The company has issued additional equity awards and increased cash compensation to manage attrition, which may dilute stockholders or affect results.
The FY2026 first quarter restructuring reduced the global workforce by 12%, and restructuring expense was $15.859 million for the nine months ended October 31, 2025, up 435% versus $2.965 million. Execution risk could disrupt operations or fail to deliver efficiencies.
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 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 2, 2026.