Sprinklr Reports 11% Revenue Growth, Decline in Profitability and Restructuring Efforts

Sprinklr, Inc. reported its financial results for the three and six months ended July 31, 2024, showcasing a notable increase in revenue but a decline in profitability compared to the previous fiscal period. Total revenue for the three months reached $197.2 million, an 11% increase from $178.5 million in the same period of 2023. Subscription revenue also rose to $177.9 million, up 9% from $163.5 million, driven by increased purchases from existing customers and new customer demand. For the six months, total revenue was $393.2 million, a 12% increase from $351.8 million in the prior year.

Despite the revenue growth, the company experienced a significant drop in net income. For the three months ended July 31, 2024, net income was $1.8 million, down from $10.5 million in the same period of 2023. The six-month net income also decreased to $12.5 million from $13.3 million. The operating loss for the three months was $(87,000), a stark contrast to the operating income of $5.5 million reported in the previous year.

The company's total current assets decreased to $741.6 million as of July 31, 2024, from $1 billion at the end of January 2024. Total assets also fell to $983.8 million from $1.2 billion. The accumulated deficit increased to $(735.4 million) from $(474.8 million) during the same period. Total stockholders’ equity decreased to $469.0 million from $679.7 million.

Strategically, Sprinklr initiated a restructuring plan in May 2024, resulting in a workforce reduction of approximately 3% to lower operating costs. This follows a previous reduction of about 4% in February 2023. The company also completed a $300 million share repurchase program, repurchasing 25.5 million shares at a total cost of $271 million during the six months ended July 31, 2024.

The company’s cash and cash equivalents stood at $119.1 million, with total cash, cash equivalents, and restricted cash at $126.8 million. Net cash provided by operating activities for the six months was $63.0 million, significantly higher than $33.1 million in the same period of 2023. However, net cash used in financing activities was $(253.2 million), primarily due to the share repurchase program.

Overall, while Sprinklr demonstrated revenue growth, the decline in profitability and significant restructuring efforts highlight the challenges the company faces in the current economic environment.