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Sprinklr, Inc. (CXM)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 delivered revenue of $205.5M (+5% YoY), non-GAAP EPS of $0.12, and an 18% non-GAAP operating margin, alongside record free cash flow of $80.7M; beats vs S&P Global consensus on revenue ($201.8M*) and EPS ($0.099*) .
  • FY26 guidance: total revenue raised to $825–$827M (prior $821.5–$823.5M), and non-GAAP EPS raised to $0.39–$0.40 (prior $0.38–$0.39); subscription revenue maintained at $741–$743M; Q2 guide broadly in-line with consensus (revenue $205–$206M vs $205.38M*, EPS ~$0.10 vs $0.100*); management reiterated transformation year framing .
  • 150M buyback authorized through June 30, 2026, underscoring strong liquidity ($570.2M cash, cash equivalents, and marketable securities) and robust FCF generation .
  • Near-term headwinds include renewal pressure (net dollar expansion 102%), churn/downsells, macro caution, and an estimated ~$10M FX-driven opex headwind; management expects offsets from savings and execution improvements .

What Went Well and What Went Wrong

What Went Well

  • Record free cash flow ($80.7M) and strong non-GAAP operating margin (18%) on improved expense discipline; CEO highlighted “record free cash flow in the quarter” and progress in transformation .
  • Pipeline momentum: “Sprinklr core remains strong and is at the highest level over the past 18 months” with numerous seven-figure service opportunities; “Project Bear Hug” is deepening engagement with top customers .
  • AI-native differentiation in CCaaS with LLM-agnostic architecture and reported agent containment rates of 30%–80%, positioning Sprinklr as a disruptor .

What Went Wrong

  • Sequential decline in $1M customers to 146 (from 149 in Q4) despite +6% YoY, reflecting downsell and churn impacts on the cohort .
  • Renewal pressure persists: subscription net dollar expansion at 102% (muted by churn/downsells), indicating near-term growth constraints within installed base .
  • Professional services non-GAAP gross margin at 6% dragged consolidated non-GAAP gross margin to 70%; restructuring charges of $16.3M weighed on GAAP results (GAAP operating loss of $1.8M) .

Financial Results

Quarterly performance vs prior periods

MetricQ3 FY25Q4 FY25Q1 FY26
Total Revenue ($USD Millions)$200.7 $202.5 $205.5
Subscription Revenue ($USD Millions)$180.6 $182.1 $184.1
Professional Services Revenue ($USD Millions)$20.1 $20.5 $21.4
Non-GAAP Operating Income ($USD Millions)$23.3 $25.9 $36.7
Non-GAAP Operating Margin (%)12% 13% 18%
Non-GAAP EPS (Diluted, $)$0.10 $0.10 $0.12
GAAP EPS (Diluted, $)$0.04 $0.37 $(0.01)
Non-GAAP Gross Margin (%)72% 71% 70%
Cash from Operations ($USD Millions)$9.2 $5.4 $83.8
Free Cash Flow ($USD Millions)$4.9 $1.5 $80.7

Segment breakdown (Q1 FY26)

SegmentRevenue ($USD Millions)Non-GAAP Gross Margin (%)
Subscription$184.1 78%
Professional Services$21.4 6%
Total$205.5 70%

KPIs and operating metrics

MetricQ3 FY25Q4 FY25Q1 FY26
Calculated Billings ($USD Millions)——$204.3
RPO ($USD Millions)——$943.2 (+2% YoY)
cRPO ($USD Millions)——$596.8 (+5% YoY)
$1M+ Customers (Count)147 149 146
Subscription Net Dollar Expansion (%)——102%
Cash + Marketable Securities ($USD Millions)$476.6 $483.5 $570.2

Results vs S&P Global consensus (Q1 FY26)

MetricConsensus*ActualDeltaBeat/Miss
Revenue ($USD Millions)$201.8*$205.5 +$3.7Bold beat
EPS (Primary/Diluted, $)$0.099*$0.12 +$0.021Bold beat
EBITDA ($USD Millions)$37.0*$15.8*–$21.2Miss

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Subscription Revenue ($USD Millions)FY26$741–$743 $741–$743 Maintained
Total Revenue ($USD Millions)FY26$821.5–$823.5 $825–$827 Bold raised
Non-GAAP Operating Income ($USD Millions)FY26$129–$131 $129–$131 Maintained
Non-GAAP EPS (Diluted, $)FY26$0.38–$0.39 $0.39–$0.40 Bold raised
Subscription Revenue ($USD Millions)Q2 FY26N/A$184–$185 New
Total Revenue ($USD Millions)Q2 FY26N/A$205–$206 New
Non-GAAP Operating Income ($USD Millions)Q2 FY26N/A$33.5–$34.5 New
Non-GAAP EPS (Diluted, $)Q2 FY26N/A~$0.10 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25, Q4 FY25)Current Period (Q1 FY26)Trend
AI/Technology initiativesStrong tech and market fit; non-GAAP margins expanding AI-native CCaaS differentiation; LLM-agnostic; 30–80% containment; continued investment focus Improving strategic clarity
Go-to-market and pod structureRe-defining GTM coverage; transformation underway Pod structure live; Bear Hug reaching 200 top clients; enablement 100/200/300/400-level classes Building execution momentum
Renewal pressure/churnNoted transformation need; cohort growth YoY Net dollar expansion 102%; sequential drop in $1M customers; focus on implementation maturity Challenged near term
Macro/FXGeneral macro monitoring Customers cautious; ~$10M FX opex headwind expected but offset through savings Headwind manageable
Professional ServicesGrowth and break-even targets not highlighted Gross margin ~6% in Q1; aiming ~break-even in Q2; more services investment Stabilizing
Billings/RPORPO+cRPO grew 17%/11% YoY (Q3) Billings $204.3M (+7% YoY); RPO $943.2M (+2% YoY); cRPO $596.8M (+5% YoY) Moderating growth

Management Commentary

  • “Our Q1 results reflect solid progress… We also generated record free cash flow in the quarter. While we recognize FY 26 is a transitional year… we believe we are well positioned…” — Rory Read, President & CEO .
  • “Sprinklr core remains strong and is at the highest level over the past 18 months… Our AI solution was one of the key reasons we are winning as a disruptor in service.” — Rory Read .
  • “Project Bear Hug… focused on deeply engaging our top 500 customers… we’ve had detailed engagements with well over 100 of our largest customers.” — Rory Read .
  • “We are maintaining our FY26 subscription revenue [and] non-GAAP operating income guidance… We now expect total revenue to be $825–$827M… driven by an increase in professional services.” — Manish Sarin, CFO .
  • “We estimate a $10 million negative impact on our non-GAAP operating expenses based on current FX rates… confident we will identify savings across the business to offset this headwind.” — Manish Sarin .

Q&A Highlights

  • Go-to-market trajectory: Pod structure expected to gain momentum in 2H; Bear Hug aims to reach 500–600 customers; enablement program rolling out in tiers to accelerate selling motions .
  • CCaaS differentiation: Unified platform with AI-native capabilities and copilot/agentic deflection; prioritizing hardening and workflow functionality before accelerating expansion .
  • Macro and FX: Caution on enterprise spending; ~$10M FX opex headwind anticipated but offset through efficiencies; most billings in USD reduce revenue FX sensitivity .
  • Renewal dynamics: Pressures broadly consistent across Social/Insights/Marketing components; focus on implementation maturity and partner ecosystem to improve renewal outcomes .
  • Profitability framework: Professional services gross margin targeted ~break-even in Q2; full-year non-GAAP OI maintained; FCF margin 15% ($125M) targeted for FY26 .

Estimates Context

  • Q1 FY26 vs S&P Global consensus: Revenue $205.5M vs $201.8M* (beat); EPS $0.12 vs $0.099* (beat); EBITDA $15.8M* vs $37.0M* (miss). Values retrieved from S&P Global.* .
  • Q2 FY26 guide vs S&P Global consensus: Revenue $205–$206M vs $205.38M*, EPS ~$0.10 vs $0.100* — essentially in-line. Values retrieved from S&P Global.* .

Key Takeaways for Investors

  • Transformation on track: Strong non-GAAP margin and record FCF show efficiency gains even as renewal and churn pressures temper near-term growth .
  • Guidance more constructive: FY26 total revenue and EPS raised; subscription revenue and non-GAAP OI maintained, indicating confidence in services uplift while core stabilizes .
  • Buyback supports downside: $150M program through June 2026, funded by robust cash/marketable securities ($570.2M) and FCF, potentially underpinning share price .
  • Watch KPIs: Net dollar expansion (102%), $1M customer count trajectory (146), and cRPO/RPO growth are critical to monitoring installed-base health and near-term momentum .
  • CCaaS opportunity: AI-native differentiation and cross-channel unification provide a path to medium-term acceleration once product hardening and implementation maturity advances .
  • Near-term risk: Macro caution and FX headwinds (~$10M opex) could constrain profitability; management plans offsets via savings without starving priority investments (AI, enablement, services) .
  • Trading lens: Be sensitive to updates on billings, renewal metrics, and professional services margins; catalysts include large CCaaS wins and continued execution on Bear Hug customer engagements .

Notes:

  • All consensus/estimate figures marked with an asterisk (*) are Values retrieved from S&P Global.