Sprinklr Announces Fourth Quarter and Full Year Fiscal 2022 Results

April 06, 2022 at 16:05 PM EDT

Q4 Total Revenue of $136 million, up 30% year-over-year

Q4 Subscription Revenue of $118 million, up 31% year-over-year

RPO up 36% year-over-year

Q4 NDE at 120%; steadily improving every quarter since IPO

82 $1 million customers, up 26% year-over-year

Sprinklr (NYSE: CXM), the unified customer experience management (Unified-CXM) platform for modern enterprises, today reported financial results for its fourth quarter and fiscal year ended January 31, 2022.

“Fiscal Year 2022 was a monumental year for Sprinklr. We accelerated our growth, went public, and created a new category called unified customer experience management for the world’s leading enterprise brands. Our results this quarter demonstrate our deep commitment to our customers and partners as we support their shift from a brand-centric past to a customer-centric future. We’re innovating faster than ever before to make our platform and leading artificial intelligence the foundation of our customer's success so we can continue our strong growth in Fiscal Year 2023,” said Ragy Thomas, Sprinklr Founder and CEO.

Fourth Quarter Fiscal 2022 Financial Highlights

Revenue: Total revenue for the fourth quarter was $135.7 million, up from $104.1 million one year ago, an increase of 30% year-over-year. Subscription revenue for the fourth quarter was $117.7 million, up from $90.1 million one year ago, an increase of 31% year-over-year.

Operating (Loss) Income and Margin: Fourth quarter operating loss was $35.8 million, compared to operating loss of $8.3 million one year ago. Non-GAAP operating loss was $11.5 million, compared to non-GAAP operating income of $4.2 million one year ago. For the fourth quarter, GAAP operating margin was (26%) and non-GAAP operating margin was (8%).

Net (Loss) Income Per Share: Fourth quarter net loss per share was $0.14, compared to net loss per share of $0.12 in the fourth quarter of fiscal year 2021. Non-GAAP net loss per share for the fourth quarter was $0.05, compared to non-GAAP net income per share of $0.00 in the fourth quarter of fiscal year 2021.

Cash, Cash Equivalents and Marketable Securities: Total cash, cash equivalents and marketable securities as of January 31, 2022 was $532.4 million.

Full Year Fiscal 2022 Financial Highlights

Revenue: Total revenue for fiscal year 2022 was $492.4 million, up from $386.9 million one year ago, an increase of 27% year-over-year. Subscription revenue for fiscal year 2022 was $427.7 million, up from $339.6 million one year ago, an increase of 26.0% year-over-year.

Operating (Loss) Income and Margin: Fiscal year 2022 operating loss was $99.5 million, compared to operating loss of $25.6 million one year ago. Non-GAAP operating loss was $35.5 million, compared to non-GAAP operating income of $20.1 million one year ago. For fiscal year 2022, GAAP operating margin was (20%) and non-GAAP operating margin was (7 %).

Net (Loss) Income Per Share: Fiscal year 2022 net loss per share was $0.57, compared to net loss per share of $0.42 in fiscal year 2021. Non-GAAP net loss per share for fiscal year 2022 was $0.24, compared to non-GAAP net income per share of $0.04 in fiscal year 2021.

Financial Outlook

Sprinklr is providing the following guidance for the first fiscal quarter ending April 30, 2022:

Subscription revenue between $123 million and $125 million.

Total revenue between $140 million and $142 million.

Non-GAAP operating loss between $14 million and $16 million.

Non-GAAP net loss per share between $0.06 and $0.07, assuming 260 million weighted average shares outstanding.

Sprinklr is providing the following guidance for the full fiscal year ending January 31, 2023:

Subscription revenue between $536 million and $544 million.

Total revenue between $607 million and $615 million.

Non-GAAP operating loss between $44 million and $48 million.

Non-GAAP net loss per share between $0.20 and $0.22, assuming 260 million weighted average shares outstanding.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the following non-GAAP financial measures:

Non-GAAP gross profit and non-GAAP gross margin

Non-GAAP operating (loss) income and non-GAAP operating margin

Non-GAAP net (loss) income and non-GAAP net (loss) income per share

We define these non-GAAP financial measures as the respective GAAP measures, excluding, as applicable, stock-based compensation expense-related charges, charges on litigation settlements and amortization of acquired intangible assets. We believe that it is useful to exclude stock-based compensation expense-related charges and amortization of acquired intangible assets in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies over multiple periods. We also exclude charges on litigation settlements that are considered to be non-ordinary course as we do not consider such losses to be indicative of our core business.

In addition, the press release and the accompanying tables contain free cash flow which is defined as net cash used in operating activities less cash used for purchases of property and equipment and capitalized internal-use software. We believe that free cash flow is a useful indicator of liquidity as it measures our ability to generate cash, or our need to access additional sources of cash, to fund operations and investments.

However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our consolidated financial statements presented in accordance with GAAP.

Sprinklr has not reconciled its expectations as to non-GAAP operating loss, or as to non-GAAP net loss per share, to their most directly comparable GAAP measures as a result of the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to Sprinklr’s results computed in accordance with GAAP.

Conference Call Information

Sprinklr will host a conference call today, April 6, 2022, to discuss fourth quarter and full year fiscal 2022 financial results, as well as the first quarter and full year fiscal 2023 outlook, at 5:00 p.m. Eastern Time, 2:00 p.m. Pacific Time. Investors are invited to join the webcast by visiting: https://investors.sprinklr.com/. To access the call by phone, dial 877-459-3955 (domestic) or 201-689-8588 (international). The conference ID number is 13728085. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 90 days.

About Sprinklr Inc.

Sprinklr is a leading enterprise software company for all customer-facing functions. With advanced AI, Sprinklr's Unified-CXM platform helps companies deliver human experiences to every customer, every time, across any modern channel. Headquartered in New York City with employees around the world, Sprinklr works with more than 1,000 of the world’s most valuable enterprises — global brands like Microsoft, P&G, Samsung and more than 50% of the Fortune 100.

Forward-Looking Statements

This press release contains express and implied “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the first quarter and full year fiscal 2023, our growth strategy and the ability of our platform to deliver a unified experience to address our customers’ demands. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “target,” “explore,” “continue,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance, or achievement to differ materially and adversely from those anticipated or implied in the statements, including: our rapid growth may not be indicative of our future growth; our revenue growth rate has fluctuated in prior periods; our ability to achieve or maintain profitability; we derive the substantial majority of our revenue from subscriptions to our Unified-CXM platform; our ability to manage our growth and organizational change; the market for Unified-CXM solutions is new and rapidly evolving; our ability to attract new customers in a manner that is cost-effective and assures customer success; our ability to attract and retain customers to use our products; our ability to drive customer subscription renewals and expand our sales to existing customers; our ability to effectively develop platform enhancements, introduce new products or keep pace with technological developments; the market in which we participate is new and rapidly evolving and our ability to compete effectively; our business and growth depend in part on the success of our strategic relationships with third parties; our ability to develop and maintain successful relationships with partners who provide access to data that enhances our Unified-CXM platform’s artificial intelligence capabilities; the majority of our customer base consists of large enterprises, and we currently generate a significant portion of our revenue from a relatively small number of enterprises; our investments in research and development; our ability to expand our sales and marketing capabilities; our sales cycle with enterprise and international clients can be long and unpredictable; our business and results of operations may be materially adversely affected by the ongoing COVID-19 pandemic or other similar outbreaks; certain of our results of operations and financial metrics may be difficult to predict; our ability to maintain data privacy and data security; we rely on third-party data centers and cloud computing providers; the sufficiency of our cash and cash equivalents to meet our liquidity needs; our ability to comply with modified or new laws and regulations applying to our business; our ability to successfully enter into new markets and manage our international expansion; the attraction and retention of qualified employees and key personnel; our ability to effectively manage our growth and future expenses and maintain our corporate culture; our ability to maintain, protect, and enhance our intellectual property rights; and our ability to successfully defend litigation brought against us. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are or will be discussed in our Quarterly Report on Form 10-Q for the quarter ended October 31, 2021, filed with the SEC on December 10, 2021, under the caption “Risk Factors”, and in other filings that we make from time to time with the SEC, including our Annual Report on Form 10-K for the year ended January 31, 2022. Forward-looking statements speak only as of the date the statements are made and are based on information available to Sprinklr at the time those statements are made and/or management's good faith belief as of that time with respect to future events. Sprinklr assumes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law.

Key Business Metrics

RPO. RPO, or remaining performance obligations, represents contracted revenues that had not yet been recognized, and include deferred revenues and amounts that will be invoiced and recognized in future periods.

NDE. NDE, or net dollar expansion rate, is calculated by dividing (i) subscription revenue in the trailing 12-month period from those customers who were on our platform during the prior 12-month period by (ii) subscription revenue from the same customers in the prior 12-month period.

Sprinklr, Inc.
Consolidated Balance Sheets ⁽¹⁾
(in thousands, except per share data)
(unaudited)

	January 31, 2022		January 31, 2021
Assets
Current assets
Cash and cash equivalents	$	321,426	$	68,037
Marketable securities		210,983		212,652
Accounts receivable, net of allowance for doubtful accounts of $2.7 million and $3.2 million, respectively		163,681		116,278
Prepaid expenses and other current assets		109,167		101,096
Total current assets		805,257		498,063
Property and equipment, net		14,705		9,011
Goodwill and other intangible assets		50,706		47,427
Other non-current assets		49,378		42,512
Total assets	$	920,046	$	597,013

Liabilities and stockholders’ equity
Liabilities
Current liabilities
Accounts payable	$	15,802	$	16,955
Accrued expenses and other current liabilities		100,220		63,170
Deferred revenue		272,381		221,439
Total current liabilities		388,403		301,564
Long term debt		—		78,848
Deferred revenue less current portion		11,972		19,873
Deferred tax liability, long-term		1,101		869
Other liabilities, long-term		2,721		2,006
Total liabilities		404,197		403,160
Commitments and contingencies
Stockholders’ equity
Convertible preferred stock		—		424,992
Class A common stock		3		—
Class B common Stock		5		—
Common stock		—		4
Treasury stock		(23,831)		(23,831)
Additional paid-in capital		982,122		122,061
Accumulated other comprehensive (loss) income		(820)		787
Accumulated deficit		(441,630)		(330,160)
Total stockholders’ equity		515,849		193,853
Total liabilities and stockholders’ equity	$	920,046	$	597,013

(1) Sprinklr identified immaterial corrections related to the capitalization of costs to obtain customer contracts which resulted in revisions to prior year reported amounts within the consolidated balance sheets with an increase to prepaid expenses and other current assets and other non-current assets of $5.3 million and $5.8 million, respectively, as well as a decrease in accumulated deficit of $11.1 million as of January 31, 2021.

Sprinklr, Inc.
Consolidated Statements of Operations ⁽¹⁾
(in thousands, except per share data)
(unaudited)

	Three Months Ended January 31,				Year Ended January 31,
		2022		2021		2022		2021
Revenue:
Subscription	$	117,693	$	90,079	$	427,713	$	339,586
Professional services		17,974		14,033		64,681		47,344
Total revenue:		135,667		104,112		492,394		386,930
Costs of revenue:
Costs of subscription ⁽²⁾		23,669		21,388		89,896		77,033
Costs of professional services ⁽²⁾		16,136		11,715		57,655		45,049
Total costs of revenue		39,805		33,103		147,551		122,082
Gross profit		95,862		71,009		344,843		264,848
Operating expenses:
Research and development ⁽²⁾		15,874		13,406		60,591		40,280
Sales and marketing ⁽²⁾⁽³⁾		82,389		49,765		286,963		185,797
General and administrative ⁽²⁾		21,396		16,112		84,759		64,348
Litigation settlement ⁽⁴⁾		12,000		—		12,000		—
Total operating expenses		131,659		79,283		444,313		290,425
Operating loss		(35,797)		(8,274)		(99,470)		(25,577)
Other expense, net		(338)		(2,667)		(5,084)		(8,616)
Loss before provision for income taxes		(36,135)		(10,941)		(104,554)		(34,193)
Provision for income taxes		783		889		6,916		3,777
Net loss		(36,918)		(11,830)		(111,470)		(37,970)
Deemed dividend in relation to tender offer		—		(600)		—		(600)
Net loss attributable to Sprinklr common stockholders	$	(36,918)	$	(12,430)	$	(111,470)	$	(38,570)

Net loss per share attributable to Class A and Class B common stockholders, basic and diluted	$	(0.14)	$	(0.12)	$	(0.57)	$	(0.42)
Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted		255,920		95,148		195,020		90,378

(2) Includes stock-based compensation expense, net of amounts capitalized, as follows:

	Three Months Ended January 31,				Year Ended January 31,
		2022		2021		2022		2021
	(in thousands)
Costs of subscription	$	383	$	1,157	$	1,794	$	2,012
Costs of professional services		538		782		2,448		1,658
Research and development		1,501		1,894		6,417		4,804
Sales and marketing		5,967		5,982		19,929		14,976
General and administrative		3,789		2,541		19,543		21,619
Stock-based compensation expense, net of amounts capitalized	$	12,178	$	12,356	$	50,131	$	45,069

(3) Includes amortization of acquired intangible assets as follows:

	Three Months Ended January 31,				Year Ended January 31,
		2022		2021		2022		2021
	(in thousands)
Sales and marketing	$	133	$	82	$	412	$	626
Amortization of acquired intangible assets	$	133	$	82	$	412	$	626

(4) On February 25, 2022, we and Opal Labs Inc. (“Opal”) agreed to settled all outstanding claims with respect to Opal’s complaints alleging breach of contract and violation of Oregon’s Uniform Trade Secrets Act, among other claims. The settlement amount was recorded as a one-time operating expense charge in fiscal year 2022.

Sprinklr, Inc.
Consolidated Statements of Cash Flows ⁽¹⁾
(in thousands)
(unaudited)
	Year ended January 31,
		2022		2021
Cash flow from operating activities:
Net loss	$	(111,470)	$	(37,970)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		8,058		5,690
Bad debt expense		(186)		689
Stock-based compensation expense		50,131		43,883
Litigation settlement		12,000		—
Non-cash interest paid in kind and discount amortization		3,266		5,523
Deferred income taxes		235		110
Other noncash items, net		(1,272)		(712)
Changes in operating assets and liabilities:
Accounts receivable		(47,094)		(9,781)
Prepaid expenses and other current assets		(8,220)		(28,709)
Other noncurrent assets		(6,764)		(7,082)
Accounts payable		(1,095)		6,077
Accrued expenses and other current liabilities		25,510		12,286
Deferred revenue		43,404		17,511
Other liabilities		575		(204)
Net cash (used in) provided by operating activities		(32,922)		7,311
Cash flow from investing activities:
Purchases of marketable securities		(267,826)		(212,973)
Sales of marketable securities		56,652		—
Maturities of marketable securities		211,555		—
Purchases of property and equipment		(6,148)		(2,701)
Capitalized internal-use software		(6,258)		(3,783)
Acquisitions, net of cash acquired		(3,625)		—
Net cash provided by (used in) investing activities		(15,650)		(219,457)
Cash flow from financing activities:
Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts, commissions and other offering costs		275,973		—
Proceeds from issuance of convertible preferred stock, net of issuance costs		—		191,752
Proceeds from Senior subordinated secured convertible notes		—		73,425
Proceeds from issuance of stock warrants		—		7,639
Repurchase of preferred stock		—		(12,416)
Deemed dividend on preferred stock		—		(600)
Proceeds from short-term borrowings		—		49,973
Repayments of short term borrowings		—		(49,973)
Payments of debt and equity issuance costs		—		(475)
Repurchase of common stock		—		(5,874)
Proceeds from issuance of common stock upon exercise of stock options		20,054		16,333
Proceeds from issuance of common stock upon ESPP purchase		7,105		—
Net cash provided by financing activities		303,132		269,784
Effect of exchange rate fluctuations on cash and cash equivalents		(1,171)		(71)
Net change in cash and cash equivalents		253,389		57,567
Cash and cash equivalents at beginning of period		68,037		10,470
Cash and cash equivalents at end of period	$	321,426	$	68,037

(1) Sprinklr identified immaterial corrections related to the capitalization of costs to obtain customer contracts which resulted in revisions to prior year reported amounts within the consolidated statements of cash flows with a decrease in net loss of $3.2 million for the year ended January 31, 2021 as well as increases in the related changes in operating assets and liabilities associated with prepaid expenses and other current assets and other non-current assets of $0.8 million and $2.4 million, respectively.

Sprinklr, Inc.
Reconciliation of Non-GAAP Measures
(in thousands)
(unaudited)

	Three Months Ended January 31,				Year Ended January 31,
		2022		2021		2022		2021
Non-GAAP gross profit:
GAAP gross profit	$	95,862	$	71,009	$	344,843	$	264,848
Stock-based compensation expense-related charges ⁽²⁾		921		1,939		4,355		3,670
Non-GAAP gross profit	$	96,783	$	72,948	$	349,198	$	268,518
Gross margin		71 %		68 %		70 %		68 %
Non-GAAP gross margin		71 %		70 %		71 %		69 %

Non-GAAP operating (loss) income:⁽¹⁾
GAAP operating loss	$	(35,797)	$	(8,274)	$	(99,470)	$	(25,577)
Stock-based compensation expense-related charges ⁽³⁾		12,180		12,356		51,552		45,069
Litigation settlement ⁽⁴⁾		12,000		—		12,000		—
Amortization of acquired intangible assets		133		82		412		626
Non-GAAP operating (loss) income	$	(11,484)	$	4,164	$	(35,506)	$	20,118
Operating margin		(26%)		(8%)		(20%)		(7%)
Non-GAAP operating margin		(8%)		4%		(7%)		5%

Non-GAAP net (loss) income and net (loss) income per share: ⁽¹⁾
GAAP net loss:	$	(36,918)	$	(12,430)	$	(111,470)	$	(38,570)
Stock-based compensation expense-related charges ⁽³⁾		12,180		12,356		51,552		45,069
Litigation settlement ⁽⁴⁾		12,000		—		12,000		—
Amortization of acquired intangible assets		133		82		412		626
Non-GAAP net (loss) income	$	(12,605)	$	8	$	(47,506)	$	7,125
Less: amounts allocated to participating securities		—		—		—		(3,884)
Non-GAAP net (loss) income attributable to Class A and Class B common stockholders	$	(12,605)	$	8	$	(47,506)	$	3,241
Weighted-average shares outstanding used in computing net (loss) income per share attributable to Class A and Class B common stockholders - basic		255,920		95,148		195,020		90,378
Non-GAAP net (loss) income per common share attributable to Class A and Class B common stockholders	$	(0.05)	$	0.00	$	(0.24)	$	0.04

Free cash flow:
Net cash (used in) provided by operating activities	$	(14,981)	$	(8,462)	$	(32,922)	$	7,311
Purchase of property and equipment		(952)		(623)		(6,148)		(2,701)
Capitalized internal-use software		(2,108)		(1,280)		(6,258)		(3,783)
Free cash flow	$	(18,041)	$	(10,365)	$	(45,328)	$	827

(2) Includes $0.1 million of employer payroll tax related to stock-based compensation expense for the year ended January 31, 2022.

(3) Includes $1.4 million of employer payroll tax related to stock-based compensation expense for the year ended January 31, 2022.

(4) On February 25, 2022, we and Opal agreed to settled all outstanding claims with respect to Opal’s complaints alleging breach of contract and violation of Oregon’s Uniform Trade Secrets Act, among other claims. The settlement amount was recorded as a one-time operating expense charge in fiscal year 2022.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220406005986/en/

Contacts

Investor Relations:

IR@sprinklr.com

Media Contact:

Austin DeArman

PR@sprinklr.com

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Sprinklr Announces Fourth Quarter and Full Year Fiscal 2022 Results

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