Executive Summary
Sprinklr reported QQ2 2025 total revenue of $197.2 million, up 11% year over year, with subscription revenue of $177.9 million (+9% YoY) and services of $19.3 million. NonâGAAP operating income was $15.2 million (8% margin), but this figure included a $10.1 million credit loss charge. Excluding the charge, nonâGAAP operating income would have been $25.3 million (13% margin), underscoring that the quarter benefited from solid topâline growth but was weighed down by a material credit loss incurred as Sprinklr expands into newer international markets and launches additional products. Free cash flow was $16.5 million, delivering an 8% FCF margin, and the company finished QQ2 with a robust cash position and no debt. Management highlighted a deliberate turnaround plan to reaccelerate growth and expand margins through pricing optimization, organizational changes (including a renewals team and revamped GTM), and more disciplined investments in CCaaS delivery and geographies. The guidance implies modest nearâterm growth and margin improvement, but remains exposed to macro softness and elevated churn, particularly in core suites. Sprinklr also emphasized AI as a core growth engine, illustrating meaningful customer outcomes (e.g., call deflection and AI selfâservice improvements) while acknowledging execution risks and the need to simplify the product portfolio and pricing.
Key Performance Indicators
QoQ: -101.52% | YoY:-101.58%
QoQ: -82.69% | YoY:-82.44%
QoQ: -81.84% | YoY:-81.79%
Key Insights
Revenue: total $197.2m (+11% YoY); subscription $177.9m (+9% YoY); services $19.3m. Gross margin (nonâGAAP) 73%; subscription gross margin 81%; services gross margin (nonâGAAP) â1%. Operating income (nonâGAAP) $15.2m; nonâGAAP margin 8% (includes $10.1m credit loss charge). Net income (GAAP) largely flat; net income (nonâGAAP) per diluted share $0.06. Cash flow: net cash provided by operating activities $21.3m; free cash flow $16.5m; capex $(4.8)m; free cash flow margin 8%. Liquidity...
Financial Highlights
Revenue: total $197.2m (+11% YoY); subscription $177.9m (+9% YoY); services $19.3m. Gross margin (nonâGAAP) 73%; subscription gross margin 81%; services gross margin (nonâGAAP) â1%. Operating income (nonâGAAP) $15.2m; nonâGAAP margin 8% (includes $10.1m credit loss charge). Net income (GAAP) largely flat; net income (nonâGAAP) per diluted share $0.06. Cash flow: net cash provided by operating activities $21.3m; free cash flow $16.5m; capex $(4.8)m; free cash flow margin 8%. Liquidity: cash and equivalents $468.5m; total debt $51.2m; net cash position ~ $417m. RPO $887.1m (+10% YoY); cRPO $557.8m (+9% YoY). Billings $192.8m (+8% YoY); weighted average diluted shares â 271.9m. Customers with $1m+ in subscription revenue over trailing 12 months: 145 (+21% YoY). Guidance: Q3 revenue $196â$197m; subscription $177.5â$178.5m; Q3 services gross margins about â15%; FY25 subscription $710.5â$712.5m; total revenue $785â$787m; FY25 services $74.5m; FY25 nonâGAAP operating income $80.5â$81.5m (~10% margin); FY25 free cash flow ~$55m. Management commentary on AI and CCaaS indicates both continued adoption benefits and ongoing execution challenges, with improvements expected from pricing/packaging and renewals modernization.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
197.21M |
10.50% |
0.64% |
| Gross Profit |
142.89M |
5.85% |
-1.31% |
| Operating Income |
-87.00K |
-101.58% |
-101.52% |
| Net Income |
1.84M |
-82.44% |
-82.69% |
| EPS |
0.01 |
-81.79% |
-81.84% |
Key Financial Ratios
operatingProfitMargin
-0.04%
operatingCashFlowPerShare
$0.08
freeCashFlowPerShare
$0.06
priceEarningsRatio
348.18
Management Commentary
- Strategy and execution: Sprinklr is reorienting its GTM toward selling the full platform, simplifying offerings, and rationalizing pricing and packaging to align with how customers buy today. The company also emphasized upgrading governance around AI-enabled workflows and tightening operational discipline to scale profitability. Quote: "pricing and packaging aimed at simplifying our product and solution offerings" and "we are sharpening our strategic focus to improve execution and scale." (Trac Pham)
- Market conditions and revenue quality: Management noted macro softness and persistent budgetary pressure affecting bookings and renewals, with Ragy Thomas noting that pricing pressure is "not getting any better, consistent with what we've seen in the past quarter and quarter before." (Ragy Thomas)
- AI and CCaaS as growth engines: Management showcased AI outcomes (e.g., call deflection improvements up to 35%, 60% selfâservice AI adoption at a major bank) and highlighted CCaaS as a growth vector while acknowledging brand recognition challenges. Quote: "we're seeing some pretty interesting numbers there" and "AI selfâservice increase to over 60%." (Ragy Thomas)
- Renewal discipline and GTM changes: Trac outlined building a renewals team to lift renewal rates and reduce churn, plus closer geographic deployment and preâsales alignment to focus on executive buyers. Quote: "we are reorienting our sales team with the support of our new renewals team to increase renewal rates and reduce churn." (Trac Pham)
- Operational execution and cost discipline: The company is pursuing cost optimization and process improvements across thirdâparty spend, deployments, and headcount alignment to fund growth initiatives, with early signs of success in large enterprise deals. Quote: "We are examining all areas of the company, including thirdâparty spending, for opportunities to increase productivity and efficiencies." (Trac Pham)
- Capital allocation: Sprinklr completed the full $300 million share buyback during QQ2, underscoring capital return flexibility. Quote: "we completed the full $300 million buyback that was authorized by the Board." (Manish Sarin)
We were continuing to see budgetary pressures. In terms of is it better or worse than last quarter, Iâd say itâs not getting any better. And so Iâd say kind of consistent with what weâve seen in the past quarter and quarter before.
â Ragy Thomas
We are reorienting our sales team with the support of our new renewals team to increase renewal rates and reduce churn.
â Trac Pham
Forward Guidance
Nearâterm outlook remains cautious amid macro softness and elevated churn, but Sprinklr provides a path to growth through a reâtuned GTM, improved renewals, and continued CCaaS investment. Key guidance points: Q3 revenue of $196â$197m, with subscription revenue of about $177.5â$178.5m (roughly flat to +4% YoY at the midpoint); services gross margins expected to be negative around 15% as CCaaS scales, with margins improving over time as utilization and pricing actions take hold. For FY25, subscription revenue of $710.5â$712.5m and total revenue of $785â$787m; services revenue raised to $74.5m; nonâGAAP operating income of $80.5â$81.5m (~10% margin) and nonâGAAP diluted EPS of $0.32â$0.33. Free cash flow is guided to approximately $55m for the full year. Risks to achievability include ongoing macro weakness, continued churn in core suites, and the lagged impact of cRPO adjustments. Investors should monitor: (1) trajectory of renewal rates and churn, (2) progression of CCaaS deal velocity and margin improvements in services, (3) NDE and sixâquarter visibility into ARR, and (4) progress on pricing/packaging and AI governance to sustain higherâquality revenue. Overall assessment: the company has a credible plan to reaccelerate growth and improve margins, but nearâterm results hinge on stabilization of bookings, successful execution of GTM and product simplification, and continued AIâdriven value realization for large enterprise customers.