India March 2023 Sprinklr, the unified customer experience management (Unified-CXM) platform for modern enterprises, today reported financial results for its fourth quarter and fiscal year ending January 31, 2023.
“We are very pleased with Sprinklr’s fourth quarter performance, and overall strong results in FY23. Our Q4 non-GAAP profitability and free cash flow are a result of efficient execution, and creating business value for customers with our Unified-CXM platform. We are well positioned to be a disruptor in the contact center space with our AI-powered Sprinklr Service offering. We are also excited by our pace of innovation, notably the launch of self-serve Sprinklr Social, which extends our leadership in a category we created,” said Ragy Thomas, Sprinklr Founder, and CEO.
Fourth Quarter Fiscal 2023 Financial Highlights
• Revenue: Total revenue for the fourth quarter was $165.3 million, up from $135.7 million one year ago, an increase of 22% year-over-year. Subscription revenue for the fourth quarter was $148.3 million, up from $117.7 million one year ago, an increase of 26% year-over-year.
• Operating (Loss) Income and Margin*: Fourth quarter operating loss was $1.8 million, compared to an operating loss of $35.8 million one year ago. Non-GAAP operating income was $14.3 million, compared to a non-GAAP operating loss of $11.5 million one year ago. For the fourth quarter, the GAAP operating margin was (1)% and the non-GAAP operating margin was 9%.
• Net (Loss) Income Per Share*: Fourth quarter net loss per share was $0.00, compared to a net loss per share of $0.14 in the fourth quarter of the fiscal year 2022. Non-GAAP net income per share for the fourth quarter was $0.06, compared to non-GAAP net loss per share of $0.05 in the fourth quarter of the fiscal year 2022.
• Cash, Cash Equivalents, and Marketable Securities: Total cash, cash equivalents, and marketable securities as of January 31, 2023, was $578.6 million.
Full Year Fiscal 2023 Financial Highlights
• Revenue: Total revenue for the fiscal year 2023 was $618.2 million, up from $492.4 million one year ago, an increase of 26% year-over-year. Subscription revenue for the fiscal year 2023 was $548.6 million, up from $427.7 million one year ago, an increase of 28% year-over-year.
• Operating (Loss) Income and Margin*: The fiscal year 2023 operating loss was $51.2 million, compared to an operating loss of $99.5 million one year ago. Non-GAAP operating income was $6.0 million, compared to a non-GAAP operating loss of $35.5 million one year ago. For the fiscal year 2023, the GAAP operating margin was (8)% and the non-GAAP operating margin was 1%.
• Net (Loss) Income Per Share*: The fiscal year 2023 net loss per share was $0.21, compared to a net loss per share of $0.57 in the fiscal year 2022. Non-GAAP net income per share for the fiscal year 2023 was $0.01, compared to non-GAAP net loss per share of $0.24 in the fiscal year 2022.
* Non-GAAP operating (loss) income and non-GAAP operating (loss) income per share and non-GAAP operating margin are non-GAAP financial measures defined under “Non-GAAP Financial Measures,” and is reconciled to net loss or operating loss, as applicable, the closest comparable GAAP measure, at the end of this release.
Financial Outlook
Sprinklr is providing the following guidance for the first fiscal quarter ending April 30, 2023:
• Subscription revenue between $153 million and $155 million.
• Total revenue between $168 million and $170 million.
• Non-GAAP operating income between $3 million and $5 million.
• Non-GAAP net income per share between $0.00 and $0.01, assuming 268 million weighted average shares outstanding.
Sprinklr is providing the following guidance for the full fiscal year ending January 31, 2024:
• Subscription revenue between $644 million and $648 million.
• Total revenue between $710 million and $714 million.
• Non-GAAP operating income between $41 million and $45 million.
• Non-GAAP net income per share between $0.13 and $0.15, assuming 273 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 to better understand the long-term performance of our core business and to facilitate a 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 courses as we do not consider such losses to be indicative of our core business. We calculate non-GAAP net (loss) income per share by using non-GAAP net (loss) income divided by basic weighted average shares for the period regardless of whether we are in a non-GAAP net (loss) or income position and assuming that all potentially dilutive securities are anti-dilutive.
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, and adjusted free cash flow, which is defined as free cash flow plus cash adjusted for litigation settlement costs. We believe that free cash flow and adjusted free cash flow are useful indicators of liquidity as they measure 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.