CXM — Sprinklr, Inc.

Summary of Sprinklr (CXM) Q3 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Revenue: $219.1 million, up 9% year-over-year.
• Subscription Revenue: $190.3 million, up 5% year-over-year.
• Non-GAAP Operating Income: $33.5 million, with a 15% operating margin.
• Net Dollar Retention Rate: 102%, stable sequentially.
• Customers Contributing $1 Million+: 145, a decrease of four from Q2.
• Free Cash Flow: $15.5 million for Q3, $126 million year-to-date.
• Gross Margins: Subscription gross margin at 77%, total non-GAAP gross margin at 67%.
• Calculated Billings: $158.4 million, up 7% year-over-year.
• Remaining Performance Obligations (RPO): $857.6 million, down 5% year-over-year.

2. Strategic Updates and Business Highlights

• Leadership Changes: New CFO Anthony Coletta and Chief Product and Corporate Strategy Officer Kartik Suri have joined the executive team to strengthen operations and drive growth.
• Project Bearhug: A key initiative aimed at enhancing engagement with the top 700 customers, which represent over 80% of total revenue. Early results show improved C-suite relationships and alignment with customer priorities.
• AI-Powered Platform: Emphasis on leveraging first-party data for personalized customer engagement, with ongoing investments in AI capabilities and R&D.
• Customer Success Stories: Notable expansions with a Latin American bank and a global streaming company highlight improvements in service delivery and customer satisfaction.

3. Forward Guidance and Outlook

• Q4 Revenue Guidance: Expected to be between $216.5 million and $217.5 million, representing 7% growth year-over-year.
• Full-Year FY 2026 Revenue Guidance: Total revenue expected to be between $853 million and $854 million, a $15.5 million increase from prior guidance.
• Non-GAAP Operating Income for FY 2026: Expected to be between $137.5 million and $138.5 million, with a 6% operating margin.
• Free Cash Flow: Maintaining an estimate of $110 million for the full year.

4. Bad News, Challenges, or Points of Concern

• Renewal Pressure: There has been ongoing downward pressure on renewals for over two years, although recent metrics show some stabilization.
• Customer Count Decline: The number of customers contributing over $1 million in revenue decreased by four, indicating challenges in retaining larger accounts.
• RPO Decline: Total RPO decreased by 5%, attributed to timing issues and previous large deals that inflated last year's baseline.
• Operational Challenges: Previous issues with service delivery and support have been highlighted, though management is actively addressing these through internal improvements.

5. Notable Q&A Insights

• Sustainability of Performance: CEO Rory Read emphasized the need for multiple quarters of consistent performance to validate recent improvements, indicating that the company is still in a transitional phase.
• Project Bearhug Outcomes: Read discussed the initiative's potential to mitigate downsells and enhance customer engagement, with a focus on creating value rather than merely renewing contracts.
• Leadership Stability: Read reassured investors about the stability of the leadership team and the alignment of their vision, aiming to minimize disruptions during the transformation.
• AI Investments: Read highlighted the importance of AI in enhancing customer experience and the ongoing commitment to invest in AI capabilities to drive future growth.

Overall, while Sprinklr showed positive growth in Q3 2026, challenges remain in customer retention and operational execution as the company navigates its transformation journey. The leadership is optimistic about future growth driven by strategic initiatives and improved customer engagement.