Summary
Sprinklr closed fiscal 2026 with fourth quarter revenue of $220.6 million, up 8.9% from the prior-year quarter, but the quality of that growth came under pressure below the top line. Gross profit was $144.8 million, up just 0.8%, and gross margin fell to 65.7% from 71.0%, a decline of 5.3 percentage points. Management points to higher third-party data, cloud and network infrastructure costs, and it expects gross margin to decline in the near term as those costs and service delivery costs rise. Operating expenses were better controlled. GAAP operating income was $14.2 million, up 35.5%, and operating margin improved to 6.4% from 5.2%. Sales and marketing spending fell sharply for the year as sales headcount came down following the restructuring. GAAP net income moved the other way: $8.95 million for the quarter, down 90.9% from $98.68 million a year earlier. The prior-year quarter carried a large income tax benefit from the release of U.S. federal and state valuation allowances, a one-time item that did not repeat.
Cash generation was the cleanest part of the quarter. Net cash provided by operating activities was $20.7 million, up 285.2% from $5.4 million in the prior-year quarter. Free cash flow, which the company defines as operating cash flow less purchases of property and equipment and capitalized internal-use software, was $15.9 million. For the full year, operating cash flow was $159.2 million, up 105.2%, and free cash flow was $141.9 million. Capital expenditures were small and shrinking: $0.54 million in the quarter, down 32.7%, and $1.38 million for the year, down 76.2%. The company bills more heavily in the fourth quarter and collects in the first half, so that seasonal pattern matters when the fiscal 2027 quarters arrive.
Backlog and customer metrics were mixed. Deferred revenue was $420.3 million, up 4.2%. Remaining performance obligations were $986.5 million, flat versus the prior year, while current RPO of $618.8 million rose 1.0% from $612.5 million. Total customers fell to 1,677 from 1,930, and large customers, those with at least $1.0 million in trailing twelve-month subscription revenue, slipped to 141 from 149. The net dollar expansion rate was 103.0% for the trailing twelve months, down from 103.6%. Churn and down-selling across parts of the installed base, partly tied to macro conditions, kept that metric in check, although the company says average subscription revenue per large customer rose. Full year fiscal 2026 revenue was $857.2 million, up 7.6%. Full year operating income was $40.2 million, up 67.9%, while full year net income fell 81.2% to $22.9 million and diluted EPS was $0.09 versus $0.44.
Guidance points to a slower start for fiscal 2027. For the first quarter ending April 30, 2026, the company guides subscription revenue of $193 million to $194 million, with non-GAAP operating income of $28.5 million to $29.5 million and non-GAAP net income per share of approximately $0.09 on 245 million diluted weighted-average shares. For the full fiscal year ending January 31, 2027, guidance is subscription revenue of $778 million to $780 million, non-GAAP operating income of $144 million to $146 million, and non-GAAP net income per share of $0.47 to $0.48 on 244 million diluted weighted-average shares. On capital return, the board authorized a new $200 million stock repurchase program in March 2026, and the company entered a $125 million accelerated share repurchase on March 13, 2026. Cash, cash equivalents and marketable securities stood at $502.5 million as of January 31, 2026.
Several risks frame the story. Gross margin is expected to decline in the near term, and the company says data and hosting costs with partners may rise. It carries minimum guaranteed purchase commitments to data and service providers of $117.2 million through fiscal 2029, with $70.9 million due within twelve months of January 31, 2026. Macro conditions remain a drag, including inflation, interest rates, tariffs and the 2025 U.S. government shutdown. The 2026 Iran conflict hurt Middle East operations, with disruption to business activity and inaccessibility and potential loss of customer data tied to a third-party data center in the United Arab Emirates. The fiscal 2026 restructuring cut 12% of the workforce, and management says it expects no further restructuring expense from the fiscal 2026 and 2025 reductions. Executives still flagged continued diligence given recent macro events while pointing to improving execution.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2026 | Q3 FY2026 | QoQ | Q4 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $220.6M | $219.1M | +0.7% | $202.5M | +8.9% |
| Gross profit | $144.8M | $145.5M | -0.5% | $143.7M | +0.8% |
| Gross margin | 65.7% | 66.4% | -0.8 pp | 71.0% | -5.3 pp |
| Research & development | $25.3M | $24.7M | +2.5% | $22.6M | +12.2% |
| Sales & marketing | $71.0M | $75.0M | -5.4% | $76.1M | -6.7% |
| General & administrative | $33.4M | $33.7M | -0.8% | $34.6M | -3.4% |
| Total operating expenses | $130.7M | $133.9M | -2.4% | $133.3M | -2.0% |
| Operating income (loss) | $14.2M | $11.6M | +22.7% | $10.5M | +35.5% |
| Operating margin | 6.4% | 5.3% | +1.2 pp | 5.2% | +1.3 pp |
| Net income (loss) | $9.0M | $2.9M | +208.3% | $98.7M | -90.9% |
| Net margin | 4.1% | 1.3% | +2.7 pp | 48.7% | -44.7 pp |
| Diluted EPS | $0.03 | $0.01 | +$0.02 | $0.36 | -$0.33 |
| Customers | 1,677 | — | — | 1,930 | -13.1% |
Risks
The 2026 Iran conflict damaged a third-party data center region in the United Arab Emirates on which Sprinklr relied, causing inaccessibility and potential loss of certain customer data. The company incurred costs and may incur additional unanticipated costs for emergency data transfers, hosting changes, and relocation of employees or operations.
Sprinklr's expanded use of generative and agentic AI in products and code development creates operational, legal, and competitive risks, including customer reluctance in regulated industries and potential EU AI Act fines of up to 35 million euros or 7% of worldwide annual turnover. Failure to deploy AI as intended could let competitors incorporate AI more successfully.
Reported gross margin fell to 65.7% in FY2026 Q4 from 71.0% in FY2025 Q4, down 5.3 percentage points, and fell to 67.4% year to date from 72.2%, down 4.8 percentage points. MD&A expects gross margin to decline in the near term due to higher data and hosting costs coupled with higher service delivery costs, with minimum data and service provider commitments of $117.2 million as of January 31, 2026.
Sprinklr's social listening functionality depends on APIs and negotiated data agreements, including an agreement with X that expires on December 31, 2026. If that agreement is not renewed on the same or similar terms or is terminated, Sprinklr may not provide the same level of Unified-CXM insights and its business, results of operations and financial condition may be materially and adversely affected.
Risk factors note recent difficulties managing implementations of certain larger CCaaS projects, resulting in increased customer dissatisfaction, loss of certain customers, and delays in recognizing revenue. MD&A attributes professional services revenue growth to CCaaS delivery capabilities, making execution critical.
Total customers decreased to 1,677 as of January 31, 2026 from 1,930 as of January 31, 2025, and large customers decreased to 141 from 149. Net dollar expansion rate was 103.0% for the 12 months ended January 31, 2026 versus 103.6% prior year, with continued churn and down-selling partly driven by macroeconomic conditions.
Remaining performance obligations were $986.5 million as of January 31, 2026, flat versus $987.7 million as of January 31, 2025, a decrease of 0.1%. Flat RPO despite revenue growth signals potential future bookings or backlog pressure.
Restructuring expense rose to $16.8 million in fiscal year 2026 from $2.8 million in fiscal year 2025, a 495% increase, due to a global workforce reduction impacting 12% of employees. The company faces high competition for engineers and sales talent and may need additional equity or cash compensation to manage attrition.
MD&A cites macroeconomic and geopolitical uncertainty from inflation, interest rates, tariffs, the Russia-Ukraine war, Middle East conflicts, and the 2025 U.S. government shutdown. These conditions may slow customer spending, cause longer collection cycles, increase credit losses, and lead customers to seek financial concessions.
Provision for income taxes increased to $43.9 million in fiscal year 2026 from a benefit of $(73.3) million in fiscal year 2025, primarily due to including U.S. profit before tax in the annual effective tax rate computation. The FY2026 provision includes a $7.0 million charge for uncertain tax positions and $5.1 million for non-deductible stock-based compensation, and Pillar Two may apply in the foreseeable future.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
RPO
cRPO
Non-GAAP Operating Income
Total customers
Summary, forecast, risks and KPIs are extracted from Sprinklr, Inc.'s SEC filings for Q4 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.