CXM earnings analysis
What we found in CXM's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Sprinklr delivered modest revenue growth, with total revenue up 1% year over year to $213.743 million and subscription revenue up 3% to $194.845 million, but professional services revenue fell 20% to $18.898 million. Profitability weakened as GAAP operating margin declined to 4.7% from 7.7%, diluted EPS fell to $0.03 from $0.05, and management expects near-term gross-margin pressure from AI, data, and hosting costs. Liquidity remains strong at $452.9 million, but first-half operating cash flow and free cash flow declined materially year over year, while geopolitical disruption in the UAE introduces additional operational and data-security risk.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Subscription Revenue and RPO Grew
- Subscription revenue increased 3% year over year to $194.845 million, driven by expansion among existing customers and new customers. Remaining performance obligations were $1.0268 billion and current RPO was $614.1 million as of July 31, 2026.
- Revenue Increased Year Over Year
- Total revenue rose 1% year over year to $213.743 million from $212.040 million, while six-month revenue increased 4% to $433.222 million from $417.540 million.
- Company Remained GAAP Profitable
- GAAP operating income was $9.957 million, or 4.7% of revenue, versus $16.272 million, or 7.7%, in the prior-year quarter. GAAP diluted EPS was $0.03 versus $0.05.
- Strong Year-to-Date Cash Generation
- Operating cash flow was $88.546 million for the first six months, and free cash flow was $78.933 million after $701,000 of property and equipment purchases and $8.912 million of capitalized internal-use software.
- Substantial Liquidity Position
- Liquidity totaled $452.9 million, consisting of $231.4 million of cash and cash equivalents and $221.5 million of marketable securities. Management stated these resources and cash from operations should cover working capital, capital expenditures, and financing obligations for at least the next 12 months and over the long term.
- Net Dollar Expansion Improved
- Trailing-12-month net dollar expansion rate improved modestly to 102.4% from 102.2% in the prior-year period, indicating limited positive expansion from existing customers.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- AI and Hosting Costs Pressure Margins
- Overall gross margin declined to 65.1% from 68.2% in the prior-year quarter. Subscription gross margin fell to 74% from 77%, while professional-services gross margin deteriorated to negative 25% from negative 3%; management expects gross margin to decline further in the near term because of higher AI, data, hosting, and service-delivery costs.
- Cash Flow and Deferred Revenue Declined
- Operating cash flow declined to $88.546 million from $118.567 million in the prior-year six-month period, while free cash flow fell to $78.933 million from $110.454 million. The decline reflected a $33.7 million decrease in deferred revenue and a $35.9 million decrease in accrued expenses and other liabilities.
- Geopolitical and Third-Party Data Exposure
- The filing adds material exposure related to the 2026 Iran conflict: multiple UAE cloud availability zones were damaged, causing inaccessibility and potential loss of certain customer data. The company also identifies a third-party data agreement with X that expires on December 31, 2026, creating a risk to the level of Unified-CXM insights if it is not renewed.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.03
- Gross margin
- 65.1%
- Operating margin
- 4.7%
- Segment
- Subscription revenue: $194.845 million, up 3% year over year from $188.473 million.
- Segment
- Professional services revenue: $18.898 million, down 20% year over year from $23.567 million.
What they said about what is next.
The 10-Q does not provide quantitative revenue or EPS guidance. Quantitative outlook was provided in the September 2 earnings release rather than this filing.
The filing reads worse than the one before it.
What came before.
- 10-Q · June 4, 2026
- Sprinklr reported a strong Q1 2026 with revenue of $219.5 million, surpassing estimates of $215.9 million, and an EPS of $0.11 against an estimate of $0.08. However, gross margin declined to 66.4%, down from 71.2% in…
- 10-Q · September 4, 2025
- Sprinklr reported Q3 (three months ended July 31, 2025) revenue of $212,040,000, up $14,832,000 (7.5%) versus $197,208,000 in the prior-year quarter, and delivered GAAP diluted EPS of $0.05 versus $0.01 in the…
- 10-Q · June 5, 2025
- Sprinklr reported revenue of $205,500,000 for the three months ended April 30, 2025, up versus $195,958,000 a year ago, but posted an operating loss of $1,755,000 and diluted EPS of $(0.01). The quarter showed…
- 10-K · March 21, 2025
- Sprinklr presents a strategy focused on a Unified-CXM, AI-first platform that targets large enterprises and contact centers, positioning itself as a single-codebase solution across Service, Social, Insights and…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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