Sprinklr Inc. (CXM) reported fiscal second-quarter results that saw an earnings-per-share beat offset by a revenue miss, sending shares down roughly 2.8% in premarket trading to $7.39.
Non-GAAP earnings per diluted share came in at $0.11, topping the consensus estimate of $0.10 by a cent. Total revenue of $213.7 million rose just 1% year-over-year, falling short of the $215.56 million forecast. Subscription revenue grew 3% to $194.8 million, while professional services revenue fell to $18.9 million, below expectations and down significantly from a year earlier.
The company reported non-GAAP operating income of $31.3 million, yielding an operating margin of 15%. Subscription gross margin held at 74%, while services gross margin remained deeply negative at 22%, pulling the overall gross margin to 66%.
Remaining performance obligation crossed the $1 billion mark for the quarter at $1.03 billion, up 11% year-over-year. Current RPO stood at $614 million, up 3%. The subscription-based net dollar expansion rate was 102%, and the $1 million cohort’s net expansion rate held above 110% for a fifth consecutive quarter.
Free cash flow for the quarter was $13.1 million, bringing first-half free cash flow to $79 million. The balance sheet carried $453 million in cash equivalents and marketable securities with no debt.
Chief Executive Officer Rory Read said the company is "firmly in the transition and execution phase," comparing the progress to leading 1-nil at halftime of a World Cup match. He emphasized that subscription revenue growth remains the key priority.
On the operational front, Sprinklr cited more than 200 AI engagements underway and 40% year-over-year growth in AI-native SKU annual recurring revenue. The platform ingests over 180 billion customer conversations annually. The company also highlighted a multi-year strategic agreement with a major sports betting operator worth well over $20 million across 35 global brands, and a $4 million total contract value expansion with a financial software and services firm.
For the third quarter, Sprinklr guided total revenue of $215 million to $216 million, with subscription revenue of $196 million to $197 million and professional services revenue of $19 million. Non-GAAP operating income is expected to be $33.5 million to $34.5 million, with EPS of approximately $0.11.
Full-year guidance calls for revenue of $866.5 million to $868.5 million, subscription revenue of $782.5 million to $784.5 million, and non-GAAP operating income of $139 million to $141 million on a 16% margin. Free cash flow is projected at roughly $135 million, or about 16% of revenue.
