Sprinklr, Inc.

Previous wording

Our customers include global enterprises across a broad array of industries and geographies, as well as marketing agencies and government departments along with non-profit and educational institutions. Our customers are located in over 80 countries, and our AI-based CXM platform recognizes over 150 languages. We define our large customers as customers with greater than or equal to $1.0 million in subscription revenue on a trailing 12-month basis, as of the period presented. As of April 30, 2025, we had 146 large customers, compared to 138 as of April 30, 2024.

Current wording

Our customers include global enterprises across a broad array of industries and geographies, as well as marketing agencies and government departments along with non-profit and educational institutions. Our customers are located in over 80 countries, and our AI-based CXM platform recognizes over 150 languages. We define our large customers as customers with greater than or equal to $1.0 million in subscription revenue on a trailing 12-month basis, as of the period presented. As of July 31, 2025, we had 149 large customers, compared to 145 as of July 31, 2024.

Previous wording

Remaining Performance Obligation (“RPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue and amounts that will be invoiced and recognized in future periods. Current RPO (“cRPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue and amounts that will be invoiced and recognized in the next 12 months. As of April 30, 2025, our RPO expected to be recognized as revenue was $943.2 million and our cRPO was $596.8 million.

Current wording

Remaining Performance Obligation (“RPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue and amounts that will be invoiced and recognized in future periods. Current RPO (“cRPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue and amounts that will be invoiced and recognized in the next 12 months. As of July 31, 2025, our RPO expected to be recognized as revenue was $923.8 million and our cRPO was $597.1 million.

Previous wording

We believe that net dollar expansion rate (“NDE”) is an indicator of the value that our platform delivers to customers. We calculate NDE to measure our ability to retain and expand subscription revenue from our existing customers. NDE compares our subscription revenue from the same set of customers across comparable periods and reflects customer renewals, expansion, contraction and churn. We calculate NDE by dividing (i) subscription revenue in the trailing 12-month period from those customers who were on our platform during the most recent prior 12-month period by (ii) subscription revenue from the same customers in the preceding prior 12-month period. This calculation is net of upsells, contraction, cancellation or expansion during the period but excludes subscription revenue from new customers. Our NDE, on a trailing 12-month basis, was 101.8% and 114.6% for the 12-month periods ending April 30, 2025 and 2024, respectively. The decrease year-over-year was driven by elevated churn, and down-selling of certain existing customers, exacerbated by the current macroeconomic environment.

Current wording

We believe that net dollar expansion rate (“NDE”) is an indicator of the value that our platform delivers to customers. We calculate NDE to measure our ability to retain and expand subscription revenue from our existing customers. NDE compares our subscription revenue from the same set of customers across comparable periods and reflects customer renewals, expansion, contraction and churn. We calculate NDE by dividing (i) subscription revenue in the trailing 12-month period from those customers who were on our platform during the most recent prior 12-month period by (ii) subscription revenue from the same customers in the preceding prior 12-month period. This calculation is net of upsells, contraction, cancellation or expansion during the period but excludes subscription revenue from new customers. Our NDE, on a trailing 12-month basis, was 102.2% and 110.8% for the 12-month periods ending July 31, 2025 and 2024, respectively. The decrease year-over-year was driven by elevated churn and down-selling of certain existing customers, partially driven by the current macroeconomic environment.

Previous wording

Costs of professional services revenue consists primarily of personnel-related expenses for our professional services personnel, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, subcontractor costs, travel expenses and allocated overhead expenses, including facilities costs, for our professional services organization. We expect that our costs of professional services revenue will increase in absolute dollars as we continue to increase our use of partners in the delivery of implementation services and expand our customer base.

Current wording

Costs of professional services revenue consists primarily of personnel-related expenses for our professional services personnel, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, subcontractor costs, travel expenses and allocated overhead expenses, including facilities costs, for our professional services organization. We expect that our costs of professional services revenue will increase in absolute dollars as we continue to increase our use of partners and increase headcount in the delivery of implementation services and expand our customer base.

Previous wording

Our gross margin on subscription revenue is significantly higher than our gross margin on professional services revenue, and as a result our gross margin may vary from period to period if our mix of revenue or costs of revenue fluctuates. In addition, because personnel-related expenses represent the largest component in costs of professional services revenue, we may experience changes in our professional services gross margin due to the timing of delivery of those services. We expect that our gross margin will decline in the near term due to higher data and hosting costs and, in the long term, will vary from period to period.

Current wording

Our gross margin on subscription revenue is significantly higher than our gross margin on professional services revenue, and as a result our gross margin may vary from period to period if our mix of revenue or costs of revenue fluctuates. In addition, because personnel-related expenses represent the largest component in costs of professional services revenue, we may experience changes in our professional services gross margin due to the timing of delivery of those services. We expect that our gross margin will decline in the near term due to higher data and hosting costs coupled with higher service delivery costs and, in the long term, will vary from period to period.

Previous wording

Provision for income taxes consists primarily of income taxes related to foreign and U.S. jurisdictions in which we conduct business. Our annual estimated effective tax rate differed from the U.S. federal statutory rate in fiscal 2026 primarily due to the impact of non-deductible items, stock-based compensation and foreign tax rate differential on non-U.S. income and witholding taxes. Our annual estimated effective tax rate differed from the U.S. federal statutory rate in fiscal 2025 primarily due primarily due to a full valuation allowance related to our U.S. deferred tax assets, partially offset by U.S. current state taxes and foreign tax rate differential on non-U.S. income and discrete items relating to releases of valuation allowances in certain foreign jurisdictions.

Current wording

Provision for income taxes consists primarily of income taxes related to foreign and U.S. jurisdictions in which we conduct business. Our annual estimated effective tax rate differed from the U.S. federal statutory rate in fiscal 2026 primarily due to the impact of non-deductible items, stock-based compensation and foreign tax rate differential on non-U.S. income and withholding taxes. Our annual estimated effective tax rate differed from the U.S. federal statutory rate in fiscal 2025 primarily due primarily due to a full valuation allowance related to our U.S. deferred tax assets, partially offset by U.S. current state taxes and foreign tax rate differential on non-U.S. income and discrete items relating to releases of valuation allowances in certain foreign jurisdictions.

Previous wording

The increase in professional services revenue was primarily due to growth in managed services related to Contact Center as a Service (“CCaaS”) delivery capabilities.

Current wording

The increase in professional services revenue was primarily due to growth in both implementations and managed services related to Contact Center as a Service (“CCaaS”) delivery capabilities.

Previous wording

The increase in costs of subscription revenue was primarily due to higher costs related to third-party data, cloud and network infrastructure, partially attributable to increased customer demand, which included a $9.3 million increase in our data and hosting costs.

Current wording

The increase in costs of subscription revenue was primarily due to a $8.4 million increase in third-party data, cloud and network infrastructure costs, partially attributable to increased customer demand as well as higher rates from our third-party providers.

Previous wording

The increase in costs of professional services revenue was primarily due to (i) a $1.6 million increase in subcontractor costs as a result of higher partner delivery costs associated with increased professional services revenue and (ii) higher personnel-related costs of $0.2 million driven by increased stock compensation expense, primarily related to new grants during fiscal year 2026.

Current wording

The increase in costs of professional services revenue was primarily due to (i) a $2.2 million increase in subcontractor costs as a result of higher partner delivery costs associated with increased professional services revenue and (ii) higher personnel-related costs of $2.1 million, partially driven by increased bonus accrual versus prior year.

Previous wording

Gross margin for subscription decreased by five percentage points, primarily driven by increased costs associated with third-party data, cloud and network infrastructure. Gross margin for professional services increased by four percentage points, largely driven by the timing of our continued investment in CCaaS.

Current wording

Gross margin for subscription decreased by four percentage points, primarily driven by increased costs associated with third-party data, cloud and network infrastructure. Gross margin for professional services increased by two percentage points, largely driven by timing differences between our investment in CCaaS projects and the completion of implementations associated with these projects.

Previous wording

The decrease in sales and marketing expense was primarily due to (i) a decrease in personnel-related costs of $13.0 million primarily due to lower sales headcount as a result of the restructuring activities we implemented in the first quarter of fiscal year 2026 and (ii) a $2.5 million decrease in marketing-related expenses.

Current wording

The decrease in sales and marketing expense was primarily due to a decrease in personnel-related costs of $18.5 million, primarily due to lower sales headcount as a result of the restructuring activities we implemented in the first quarter of fiscal year 2026. For additional information regarding restructuring charges, see Note 13, Restructuring Charges included in Part I, Item 1 of this Form 10-Q.

Previous wording

The increase in general and administrative expense was primarily due to a $5.3 million increase in personnel-related costs driven by increased stock compensation expense, primarily related to new grants during fiscal year 2026, as well as the fourth quarter of fiscal year 2025.

Current wording

The increase in general and administrative expense was primarily due to the net effect of (i) a $12.3 million increase in personnel-related costs driven by increased stock compensation expense, primarily related to new grants during fiscal year 2026, as well as the fourth quarter of fiscal year 2025, (ii) lower provision for credit losses of $8.6 million as a result of increased reserves for certain customers that we deemed to be uncollectible accounts during the second quarter of fiscal year 2025 and (iii) a decrease in professional and related fees of $1.6 million.

Previous wording

The restructuring expense during the three months ended April 30, 2025 was due to the reduction in global workforce implemented in the first quarter of fiscal year 2026. Refer to Note 13, Restructuring Charges, included in Part I, Item 1 of this Form 10-Q for additional information.

Current wording

The increase in restructuring expense was due to the reduction in global workforce implemented in the first quarter of fiscal year 2026 impacting 12% of our workforce versus a 3% impact to the workforce as a result of the reduction in global workforce implemented in the second quarter of fiscal year 2025. Refer to Note 13, Restructuring Charges, included in Part I, Item 1 of this Form 10-Q for additional information.

Previous wording

The decrease in other income, net was primarily attributable to a $3.2 million decrease in interest income from our money market and short-term investment accounts as a result of lower average balances in these accounts, as well as lower average interest rates, which was partially offset by a $2.6 million increase in net foreign currency gains.

Current wording

The increase in other income, net was primarily attributable to a $5.1 million increase in net foreign currency gains, partially offset by a $4.4 million decrease in interest income from our money market and short-term investment accounts as a result of lower average balances in these accounts and lower average interest rates.

Previous wording

(2)Includes $0.4 million and $0.8 million of employer payroll tax related to stock-based compensation expense for the three months ended April 30, 2025 and 2024, respectively.

Current wording

(2)Includes $0.1 million and $0.1 million of employer payroll tax related to stock-based compensation expense for the three months ended July 31, 2025 and 2024, respectively, and $0.5 million and $0.9 million of employer payroll tax related to stock-based compensation expense for the six months ended July 31, 2025 and 2024, respectively.

Previous wording

(4)Includes $0.7 million of employer payroll tax related to the February 2025 restructuring for the three months ended April 30, 2025.

Current wording

(4)Includes nil and $0.7 million of employer payroll tax related to the February 2025 restructuring for thethree and six months ended July 31, 2025, respectively.

Previous wording

(1)Includes $0.4 million and $0.8 million of employer payroll tax related to stock-based compensation expense for the three months ended April 30, 2025 and 2024, respectively.

Current wording

(1)Includes $0.1 million and $0.1 million of employer payroll tax related to stock-based compensation expense for the three months ended July 31, 2025 and 2024, respectively, and $0.5 million and $0.9 million of employer payroll tax related to stock-based compensation expense for the six months ended July 31, 2025 and 2024, respectively.

Previous wording

(2)Represents the Company’s current and deferred income tax expense commensurate with the non-GAAP measure of profitability using a non-GAAP tax rate of 26% for the three months ended April 30, 2025. The Company uses an annual projected tax rate in its computation of the non-GAAP income tax provision, and excludes the direct impact of stock-based compensation, employer tax costs related to stock-based compensation, intangible amortization expense, amortization of stock-based compensation expense - capitalized internal-use software, non-recurring litigation costs and restructuring costs.

Current wording

(2)Represents the Company’s current and deferred income tax expense commensurate with the non-GAAP measure of profitability using a non-GAAP tax rate of 26% for thethree and six months ended July 31, 2025. The Company uses an annual projected tax rate in its computation of the non-GAAP income tax provision, and excludes the direct impact of stock-based compensation, employer tax costs related to stock-based compensation, intangible amortization expense, amortization of stock-based compensation expense - capitalized internal-use software, non-recurring litigation costs and restructuring costs.

Previous wording

(4)Includes $0.7 million of employer payroll tax related to the February 2025 restructuring for the three months ended April 30, 2025.

Current wording

(4)Includes nil and $0.7 million of employer payroll tax related to the February 2025 restructuring for thethree and six months ended July 31, 2025, respectively.

Previous wording

As of April 30, 2025, our principal sources of liquidity were $126.4 million of cash and cash equivalents and $443.8 million of highly liquid marketable securities. We believe that our existing cash and cash equivalents, marketable securities and cash from operations will be sufficient to meet our working capital needs, capital expenditures and financing obligations for at least the next 12 months and over the long-term. The majority of our cash is held in the United States and we do not anticipate a need to repatriate cash held outside of the United States. Further, it is our intent to indefinitely reinvest these funds outside the United States, and, therefore, we have not provided for any United States income taxes.

Current wording

As of July 31, 2025, our principal sources of liquidity were $125.4 million of cash and cash equivalents and $348.6 million of highly liquid marketable securities. We believe that our existing cash and cash equivalents, marketable securities and cash from operations will be sufficient to meet our working capital needs, capital expenditures and financing obligations for at least the next 12 months and over the long-term. The majority of our cash is held in the United States and we do not anticipate a need to repatriate cash held outside of the United States. Further, it is our intent to indefinitely reinvest these funds outside the United States, and, therefore, we have not provided for any United States income taxes.

Previous wording

In April 2023, we entered into cash collateral agreements with Silicon Valley Bank (“SVB”) in lieu of a letter of credit facility, which are associated with certain leases. Approximately $1.3 million is outstanding on these cash collateral agreements as of April 30, 2025, which we have therefore classified within restricted cash. As of April 30, 2025, $0.3 million of this restricted cash is recorded within prepaid expenses and other current assets and $1.0 million is recorded within other non-current assets on the condensed consolidated balance sheets.

Current wording

In April 2023, we entered into cash collateral agreements with Silicon Valley Bank (“SVB”) in lieu of a letter of credit facility, which are associated with certain leases. Approximately $1.1 million is outstanding on these cash collateral agreements as of July 31, 2025, which we have classified within restricted cash. As of July 31, 2025, nil and $1.1 million of this restricted cash is recorded within prepaid expenses and other current assets and within other non-current assets, respectively, on the condensed consolidated balance sheets.

Previous wording

Starting in 2023, we entered into cash collateral agreements with J.P. Morgan Bank in lieu of a credit facility, through which approximately $7.3 million is outstanding as of April 30, 2025. As of April 30, 2025, $1.0 million of this restricted cash is recorded within prepaid expenses and other current assets and $6.3 million is recorded within other non-current assets on the condensed consolidated balance sheets.

Current wording

Starting in 2023, we entered into cash collateral agreements with J.P. Morgan Bank in lieu of a credit facility, through which approximately $7.3 million is outstanding as of July 31, 2025. As of July 31, 2025, $0.9 million of this restricted cash is recorded within prepaid expenses and other current assets and $6.4 million is recorded within other non-current assets on the condensed consolidated balance sheets.

Previous wording

On June 4, 2025, we announced that our board of directors had authorized and approved a share repurchase plan (the “2025 Share Repurchase Program”), whereby we intend to repurchase up to $150 million of Class A common stock. For additional information regarding the 2025 Share Repurchase Program, see Note 16, Subsequent Events, included in Part I, Item 1 of this Form 10-Q.

Current wording

On June 4, 2025, we announced that our board of directors had authorized and approved a share repurchase plan (the “2025 Share Repurchase Program”), whereby we intend to repurchase up to $150 million of Class A common stock. During the three and six months ended July 31, 2025, we repurchased 16,494,694 shares if our Class A common stock for a cost of $140.4 million including commissions. All of the shares repurchased have been returned to our authorized but unissued share reserve. As of July 31, 2025, the remaining amount available for repurchase under the 2025 Share Repurchase Program was $9.9 million. Between August 1, 2025 and August 7, 2025, we purchased an additional 1,121,854 shares of our Class A common stock for a cost of $9.9 million including commissions and completed the full purchase authorization of $150 million under the 2025 Share Repurchase Program. For additional information regarding the 2025 Share Repurchase Program, see “Issuer Purchases of Equity Securities” included in Part II, Item 2 of this Form 10-Q and Note 9, Stockholders’ Equity, included in Part I, Item 1 of this Form 10-Q.

Previous wording

Our net (loss) income and cash flows provided by operating activities are influenced significantly by our investments in headcount to support growth and in costs of revenue to deliver our services. Non-cash charges primarily include depreciation and amortization, provision for credit losses, stock-based compensation, non-cash lease expense, deferred income taxes and amortization/accretion on marketable securities. Our largest source of operating cash is cash collections from customers using our Unified-CXM platform and related services. Our primary uses of cash from operating activities are for employee-related costs, costs to deliver our revenue and marketing expenses.

Current wording

Our net income and cash flows provided by operating activities are influenced significantly by our investments in headcount to support growth and in costs of revenue to deliver our services. Non-cash charges primarily include depreciation and amortization, provision for credit losses, stock-based compensation, non-cash lease expense, deferred income taxes and amortization/accretion on marketable securities. Our largest source of operating cash is cash collections from customers using our Unified-CXM platform and related services. Our primary uses of cash from operating activities are for employee-related costs, costs to deliver our revenue and marketing expenses.

Previous wording

For the three months ended April 30, 2025, cash provided by operating activities was $83.8 million, which consisted of net loss of $1.6 million, adjusted for non-cash expenses of $31.7 million and $53.7 million of net cash flows provided as a result of changes in operating assets and liabilities. The $53.7 million of net cash flows provided as a result of changes in our operating assets and liabilities reflected an $81.2 million decrease in accounts receivable due to collections outpacing billings. This increase to cash flow from operations was partially offset by an $21.3 million decrease in accrued expenses and other current liabilities primarily due to the timing of bonus and commission payments.

Current wording

For the six months ended July 31, 2025, cash provided by operating activities was $118.6 million, which consisted of net income of $11.0 million, adjusted for non-cash expenses of $64.6 million and $42.9 million of net cash flows provided as a result of changes in operating assets and liabilities. The $42.9 million of net cash flows provided as a result of changes in our operating assets and liabilities reflected an $81.0 million decrease in accounts receivable due to collections outpacing billings. This increase to cash flow from operations was partially offset by (i) a $17.5 million decrease in accrued expenses and other current liabilities primarily due to the timing of commission and bonus payments and (ii) a $13.2 million decrease in deferred revenue as a result of recognized revenue exceeding billings.

Previous wording

For the three months ended April 30, 2024, cash provided by operating activities was $41.7 million, which consisted of net income of $10.6 million, adjusted for non-cash expenses of $16.6 million, and $14.5 million of net cash flows provided as a result of changes in operating assets and liabilities. The $14.5 million of net cash flows provided as a result of changes in our operating assets and liabilities reflected a $78.6 million decrease in accounts receivable due to reduced billings and increased collections. This increase to cash flows from operations was partially offset by (i) a $29.1 million decrease in accrued expenses and other current liabilities primarily due to the timing of bonus and commission payments, (ii) a $15.8 million increase in prepaid expenses and other current assets due to higher prepaid hosting and data costs, (iii) a $15.1 million decrease in accounts payable due to timing of vendor payments, and (iv) a $3.7 million decrease in deferred revenue as a result of recognized revenue exceeding billings.

Current wording

For the six months ended July 31, 2024, cash provided by operating activities was $63.0 million, which consisted of net income of $12.5 million, adjusted for non-cash expenses of $46.1 million, and $4.4 million of net cash flows provided as a result of changes in operating assets and liabilities. The $4.4 million of net cash flows provided as a result of changes in our operating assets and liabilities reflected a $67.3 million decrease in accounts receivable due to collections outpacing billings. This increase to cash flows from operations was partially offset by (i) a $26.7 million decrease in accrued expenses and other current liabilities primarily due to the timing of bonus and commission payments, (ii) a $15.3 million increase in prepaid expenses and other current assets due to higher prepaid hosting and data costs, (iii) a $9.3 million decrease in accounts payable due to timing of vendor payments, (iv) a $7.9 million decrease in deferred revenue as a result of recognized revenue exceeding billings and (v) a $2.7 million decrease in operating lease liabilities due to ongoing payments for leased properties.

Previous wording

For the three months ended April 30, 2025, cash used in investing activities was $108.0 million and primarily consisted of $236.7 million of purchases of marketable securities partially offset by $132.0 million of sales and maturities of marketable securities.

Current wording

For the six months ended July 31, 2025, cash used in investing activities was $15.4 million and primarily consisted of $269.7 million of purchases of marketable securities and $7.5 million in capitalized internal-use software costs. These decreases in cash flows from investing activities were partially offset by $262.6 million of sales and maturities of marketable securities.

Previous wording

For the three months ended April 30, 2024, cash provided by investing activities was $13.4 million and primarily consisted of $153.1 million of sales and maturities of marketable securities, partially offset by $134.2 million of purchases of marketable securities.

Current wording

For the six months ended July 31, 2024, cash provided by investing activities was $145.8 million and primarily consisted of $292.3 million of sales and maturities of marketable securities, partially offset by $136.1 million of purchases of marketable securities.

Previous wording

For the three months ended April 30, 2024, cash used in financing activities was $90.3 million, which consisted of payments for the 2024 Share Repurchase Program of $100.0 million, offset by $9.6 million of proceeds from the exercise of stock options.

Current wording

For the six months ended July 31, 2025, cash used in financing activities was $125.1 million, which consisted of payments for the 2025 Share Repurchase Program of $140.8 million, offset by $12.9 million of proceeds from the exercise of stock options and proceeds from the purchase of stock under our 2021 Employee Stock Purchase Plan (“ESPP”) of $2.8 million.