Sprinklr, Inc.

Previous wording

We do this with our evolving enterprise software – Unified Customer Experience Management (“Unified-CXM”) – that enables customer-facing teams, from Customer Service to Marketing, to collaborate across internal silos, communicate across digital channels, and leverage AI to deliver better customer experiences at scale – all on one unified, AI-based platform. Sprinklr has four main product suites: Sprinklr Social, Sprinklr Insights, Sprinklr Marketing and our newest offering, Sprinklr Service. We believe that these four suites enable the world’s largest and leading brands to better reach, engage and listen to their customers on the channel of their choice. We continue to invest in the unified platform and develop new features and enhancements to each suite as our customers’ needs evolve.

Current wording

Sprinklr has four main product suites: Sprinklr Social, Sprinklr Insights, Sprinklr Marketing, and Sprinklr Service. We believe that these four suites enable large and leading brands to more effectively reach, engage, and listen to their customers on the channel of their choice. We continue to invest in our Unified-CXM platform and develop new features and enhancements for each suite in response to evolving customer needs.

Previous wording

Our Unified-CXM platform utilizes an architecture purpose-built for managing Customer Experience Management (“CXM”) data and is powered by proprietary AI, collaborative workflow, seamless automation, broad-based listening and customer-led governance to help enterprises analyze massive amounts of unstructured and structured data.

Current wording

Our Unified-CXM platform utilizes an architecture purpose-built for managing Customer Experience Management (“CXM”) data and is powered by proprietary AI, collaborative workflow, automation, broad-based listening, and customer-led governance. This architecture is designed to help enterprises analyze massive amounts of unstructured and structured data.

Previous wording

We generate revenue from the sale of subscriptions to our Unified-CXM platform and related professional services. Our platform includes products that are licensed on a per-user basis as well as products that are licensed based on different tiers of volume.

Current wording

We generate revenue primarily from the sale of subscriptions to our Unified-CXM platform and related professional services. Our platform includes products that are licensed on a per-user basis as well as products that are licensed based on different volume tiers.

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 October 31, 2025, we had 145 large customers, compared to 147 as of October 31, 2024.

Current wording

Our customer base is diverse, spanning global enterprises across a broad array of industries and geographies, as well as marketing agencies, government departments, non-profit, and educational institutions. As of April 30, 2026, we have customers in more than 90 countries, with our platform supporting over 150 languages.

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 October 31, 2025, our RPO expected to be recognized as revenue was $857.6 million and our cRPO was $562.2 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 April 30, 2026, our RPO was $1,038.3 million, and our cRPO was $627.1 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 102.3% and 107.3% for the 12-month periods ending October 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.

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 103.5% and 101.8% for the 12-month periods ended April 30, 2026 and 2025, respectively.

Previous wording

Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, the Russia-Ukraine and Israel-Hamas wars and the recent and any future U.S. government shutdown, have led to economic uncertainty both in the United States and globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on information technology, which may impact our business and our customers’ businesses. While we have experienced growing inflationary pressures on the cost of wages, rent and data, the net result of inflationary impacts and our efforts to mitigate these impacts have not been material to us during the periods included in this report. In addition, general economic weakness may lead to longer collection cycles for payments due from our customers and an increase in customer provision for credit losses, as well as restructuring initiatives and associated expenses, and customers and potential customers may require extended financial concessions, which could result in adjustments to revenue recognition.

Current wording

While we have experienced growing inflationary pressures on the cost of wages, rent, and data, the net result of inflationary impacts and our efforts to mitigate these impacts have not been material to us during the periods included in this report. In addition, general economic weakness may lead to longer collection cycles for payments due from our customers and an increase in customer provision for credit losses, as well as restructuring initiatives and associated expenses, and customers and potential customers may require extended financial concessions, which could result in adjustments to revenue recognition.

Previous wording

The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors” included in Part II, Item 1A of this Form 10-Q and Part I, Item 1A of the 2025 10-K.

Current wording

The effect of macroeconomic and geopolitical conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition, and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see “Part II. Item 1A. Risk Factors” in this Form 10-Q and “Part I. Item 1A. Risk Factors” of the 2026 10-K.

Previous wording

Subscription revenue consists primarily of fees from customers accessing our proprietary Unified-CXM platform, as well as related support services. Subscription revenue is generally recognized ratably over the related contract term beginning on the commencement date of each contract, which is generally the date our service is made available to customers. Our subscriptions typically have a term of one to three years. Historically, we have experienced seasonality in our sales cycle, as a large percentage of our customers make their purchases in the fourth quarter of a given fiscal year and pay us in the first quarter of the subsequent year. This seasonality may be reflected to a much lesser extent, and sometimes may not be immediately apparent, in our revenue, due to the fact that we recognize subscription revenue over the term of the applicable subscription agreement.

Current wording

Subscription revenue consists primarily of fees for accessing our proprietary Unified-CXM platform, as well as related stand-ready services, and is generally recognized ratably over the committed subscription term. The majority of our subscription contracts have a term of two to three years. Historically, we have experienced seasonality in our sales cycle, as a large percentage of our customers make their purchases in the fourth quarter of a given fiscal year and pay us in the first quarter of the subsequent year. This seasonality may be reflected to a much lesser extent, and sometimes may not be immediately apparent, in our revenue, due to the fact that we recognize subscription revenue over the term of the applicable subscription agreement.

Previous wording

Costs of subscription revenue consists primarily of costs to host our software platform, data costs, including cost of third-party data utilized in our platform, personnel-related expenses for our subscription and support operations personnel, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, travel expenses, the amortization of our capitalized internal-use software and allocated overhead expenses, including facilities costs for our subscription and support operations. We expect that costs of subscription revenue will increase in absolute dollars as we expand our customer base and make continued investments in our cloud infrastructure and support organization.

Current wording

Cost of subscription revenue consists primarily of costs to host our software platform; data costs, including cost of third-party data utilized in our platform; personnel-related expenses for our subscription and support operations personnel, including salaries, benefits, bonuses and stock-based compensation; professional fees; software costs; travel expenses; the amortization of our capitalized internal-use software; and allocated overhead expenses, including facilities costs for our subscription and support operations. We expect that cost of subscription revenue will increase in absolute dollars as we expand our customer base and make continued investments in our cloud infrastructure and support organization. Furthermore, we estimate that data and hosting costs with various partners may rise in the near term.

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 and increase headcount in the delivery of implementation services and expand our customer base.

Current wording

Cost 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 cost of professional services may vary from period to period based on the project-based nature of this work, which could include increased use of partners and additional headcount for the delivery of implementation services.

Previous wording

Gross profit is total revenue less total costs of revenue. Gross margin is gross profit expressed as a percentage of total revenue. We expect that gross profit and gross margin will continue to be affected by various factors, including our pricing, our mix of revenues and the costs required to deliver those revenues.

Current wording

Gross profit is defined as total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of total revenue. We expect that gross profit and gross margin will continue to be affected by various factors, including our pricing, revenue mix and the costs required to deliver those revenues.

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 coupled with higher service delivery 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 cost of revenue fluctuates. In addition, because personnel-related expenses represent the largest component of cost 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

Research and development expense consists primarily of costs relating to the maintenance, continued development and enhancement of our cloud-based software platform and includes personnel-related expense for our research and development organization, including salaries, benefits, bonuses and stock-based compensation, professional fees, travel expenses and allocated overhead expenses, including facilities costs. Research and development expenses are expensed as incurred, except for internal-use software development costs that qualify for capitalization. We expect research and development expense to generally increase in absolute dollars as we continue to invest in enhancing and expanding the capabilities of our Unified-CXM platform.

Current wording

Research and development expenses consist primarily of costs relating to the maintenance, continued development and enhancement of our cloud-based software platform and includes personnel-related expense for our research and development organization, including salaries, benefits, bonuses and stock-based compensation, professional fees, travel expenses and allocated overhead expenses, including facilities costs. Research and development expenses are expensed as incurred, except for internal-use software development costs that qualify for capitalization. We expect research and development expenses to generally increase in absolute dollars as we continue to innovate and invest in enhancing and expanding the capabilities of our Unified-CXM platform.

Previous wording

Sales and marketing expense consists primarily of personnel-related expenses for our sales and marketing organization, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, advertising, marketing, promotional and brand awareness activities, travel expenses and allocated overhead expense, including facilities costs. Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer and are deferred and amortized on a straight-line basis over the expected period of benefit. We expect sales and marketing expense to generally increase in absolute dollars as we continue to drive the growth of our business. We continue to optimize our sales and marketing expense and seek efficiencies in our investments.

Current wording

Sales and marketing expenses consist primarily of personnel-related expenses for our sales and marketing organization, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, advertising, marketing, promotional and brand awareness activities, travel expenses and allocated overhead expense, including facilities costs. Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer and are deferred and amortized on a straight-line basis over the expected period of benefit. We expect sales and marketing expenses to generally increase in absolute dollars as we continue to drive the growth of our business. We continue to optimize our sales and marketing expenses and seek efficiencies in our investments.

Previous wording

General and administrative expense includes personnel-related expenses associated with administrative services, such as legal, human resources, information technology, accounting, and finance functions, as well as professional fees, software costs, travel expenses, provision for credit losses and allocated overhead expense, including facilities costs and any corporate overhead expenses not allocated to other expense categories.

Current wording

General and administrative expenses include personnel-related expenses associated with administrative services, such as legal, human resources, information technology, accounting, and finance functions, as well as professional fees, software costs, travel expenses, provision for credit losses and allocated overhead expense, including facilities costs and any corporate overhead expenses not allocated to other expense categories.

Previous wording

Restructuring expense includes costs associated with the global workforce reductions implemented in fiscal years 2026 and 2025. The majority of these costs consist of severance, benefits and the acceleration of equity awards.

Current wording

Restructuring expenses include costs associated with the global workforce reductions implemented in fiscal year 2026. The majority of these costs consist of severance, benefits and the acceleration of equity awards. We do not expect to incur any further restructuring expenses with respect to the workforce reductions implemented in fiscal year 2026.

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 withholding taxes, as well as changes in our uncertain tax positions. Our annual estimated effective tax rate differed from the U.S. federal statutory rate in fiscal 2025 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 year 2027 and 2026 primarily due to the impact of non-deductible items, stock-based compensation expense and the foreign tax rate differential on non-U.S. income and withholding taxes, as well as changes in our uncertain tax positions.

Previous wording

Costs of Revenue and Gross Margin

Current wording

Cost of Revenue and Gross Margin

Previous wording

The increase in costs of subscription revenue was primarily due to an increase of $25.9 million 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.

Current wording

The increase in cost of subscription revenue was primarily due to (i) an increase of $5.7 million in third-party cloud, data and network infrastructure costs, partially attributable to increased customer demand, as well as higher rates from our third-party providers, and (ii) higher personnel-related costs of $1.7 million, partially driven by increased headcount.

Previous wording

The increase in costs of professional services revenue was primarily due to (i) a $3.0 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 $2.4 million, partially driven by increased bonus accrual versus prior year.

Current wording

The increase in cost of professional services revenue was primarily due to (i) a $3.2 million increase in subcontractor costs as a result of higher partner delivery costs and (ii) higher personnel-related costs of $1.6 million, partially driven by increased headcount.

Previous wording

Gross margin for subscription decreased by four percentage points, primarily driven by increased costs associated with third-party cloud infrastructure and data. Gross margin for professional services increased by twelve percentage points, largely driven by the delivery and implementation of various CCaaS projects.

Current wording

Gross margin for subscription decreased by three percentage points, primarily driven by increased costs associated with third-party cloud, data, and network infrastructure. Gross margin for professional services decreased by eight percentage points, largely driven by higher delivery costs associated with complex implementations.

Previous wording

The increase in other income, net was primarily due to an increase of $1.2 million associated with net foreign currency gains, partially offset by a $1.0 million decrease in interest income from our money market and short-term investment accounts as a result of lower average interest rates and lower average balances in these accounts.

Current wording

The decrease in other income, net was primarily due to (i) lower interest income from money market and short-term investments, resulting from lower average balances and interest rates, and (ii) lower net foreign currency losses.

Previous wording

The increase in provision for income tax relates primarily to the impact of including U.S. profit before tax in the annual effective tax rate computation for the three months ended October 31, 2025. For the three months ended October 31, 2024, we were in a valuation allowance position and therefore did not include U.S. profit before tax in the annual effective tax rate computation. The provision for income tax for the three months ended October 31, 2025 also includes a $3.3 million discrete income tax charge for non-deductible stock-based compensation and a $6.2 million discrete income tax charge for changes to our uncertain tax positions related to our non-U.S. entities.

Current wording

The increase in provision for income tax relates primarily to increases in the income before provision for income taxes for the three months ended April 30, 2026 compared to the prior period. The provision for income tax for the three months ended April 30, 2026 also includes a $3.8 million discrete income tax charge for non-deductible stock-based compensation and a $2.3 million discrete income tax charge for changes to our uncertain tax positions related to our non-U.S. entities.

Previous wording

In addition to our results determined in accordance with U.S. GAAP, we believe that the following non-GAAP financial measures associated with our condensed consolidated statements of operations are useful in evaluating our operating performance:

Current wording

In addition to our results determined in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”), we believe that the following non-GAAP financial measures are useful in evaluating our operating performance:

Previous wording

We define these non-GAAP financial measures as the respective U.S. GAAP measures, excluding, as applicable, stock-based compensation expense and related charges, amortization of stock-based compensation expense associated with capitalized internal-use software, amortization of acquired intangible assets, release of U.S. federal and state valuation allowances, and the estimated tax effect related to the non-GAAP items, as well as other one-time charges, such as restructuring charges, costs associated with acquisitions, non-recurring litigation costs and facility exit costs. We believe that it is useful to exclude these items in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies over multiple periods.

Current wording

We define these non-GAAP financial measures as the respective U.S. GAAP measures, excluding, as applicable, stock-based compensation expense and related charges; amortization of stock-based compensation expense associated with capitalized internal-use software; amortization of acquired intangible assets; restructuring charges; costs associated with acquisitions; litigation, settlement, and related costs deemed unrelated to our core business operations; facility exit costs; and the estimated tax effect of these non-GAAP adjustments. We believe that it is useful to exclude these items in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies over multiple periods.

Previous wording

(1)Employer payroll tax related to stock-based compensation for the periods ended October 31, 2025 and 2024 was immaterial as it relates to the impact to gross profit.

Current wording

(1)Employer payroll tax related to stock-based compensation for the periods ended April 30, 2026 and 2025 was immaterial as to the impact to gross profit.

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 thethree and nine months ended October 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 associated with 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 both the three months ended April 30, 2026 and 2025. The Company uses an annual tax rate in its computation of the non-GAAP income taxprovision and excludes the direct impact of stock-based compensation expense, employer tax costs related to stock-based compensation, intangible amortization expense, amortization of stock-based compensation expense associated with capitalized internal-use software, non-recurring litigation costs, restructuring costs, and settlement of prior year tax positions.

Previous wording

As of October 31, 2025, our principal sources of liquidity were $189.6 million of cash and cash equivalents and $290.8 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 April 30, 2026, our principal sources of liquidity were $163.3 million of cash and cash equivalents and $279.5 million of highly liquid marketable securities. We believe that our existing cash, 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, cash equivalents, and marketable securities is held in the U.S., and we do not anticipate a need to repatriate cash held outside of the U.S. Further, it is our intent to indefinitely reinvest these funds outside the U.S., and, therefore, we have not provided for any U.S. income taxes.

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 were authorized to repurchase up to $150 million of Class A common stock. During the three and nine months ended October 31, 2025, the Company repurchased 1,121,854 and 17,616,548 shares, respectively, of its Class A common stock for an aggregate cost of $9.9 million and $150.4 million, respectively, including commissions. All of the shares repurchased have been returned to our authorized but unissued share reserve. During the third quarter of fiscal year 2026, the Company 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.

Current wording

For additional information regarding the 2026 Share Repurchase Program, including the ASR Agreement, see “Part II, Item 2. “Issuer Purchases of Equity Securities” of this Form 10-Q and Note 9, Stockholders’ Equity, included in “Part I, Item 1. Financial Statements” of this Form 10-Q.

Previous wording

Our expected material cash requirements consist of contractually obligated expenditures. We have agreements in place with data and service providers that require us to make certain minimum guaranteed purchase commitments through fiscal year 2030, which totaled $324.8 million as of January 31, 2025, of which $107.1 million is due within twelve months from January 31, 2025. In the normal course of business we may renew existing contracts throughout the year. In addition, we lease certain office facilities under operating lease arrangements that expire on various dates through fiscal year 2035. Refer to Note 7, Leases, included in Part I, Item 1 of this Form 10-Q for a discussion of our leases.

Current wording

Our expected material cash requirements include obligations under data and service provider agreements, operating leases and the 2026 Share Repurchase Program. We have agreements in place with data and service providers that require us to make certain minimum guaranteed purchase commitments through fiscal year 2029, which totaled $117.2 million as of January 31, 2026, of which $70.9 million is due within 12 months from January 31, 2026. In the normal course of business, we may renew existing contracts throughout the year. In addition, we lease certain office facilities under operating lease arrangements that expire on various dates through fiscal year 2036. Refer to Note 7, Leases, included in “Part I, Item 1. Financial Statements” of this Form 10-Q for a discussion of our leases. For additional information regarding the 2026 Share Repurchase Program and its expected funding sources, see “Share Repurchase Programs” above.

Previous 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.

Current wording

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

Previous wording

We expect our free cash flow to fluctuate in future periods with changes in our operating expenses and as we continue to invest in our growth. We typically experience higher billings in the fourth quarter compared to other quarters, primarily due to higher renewal activity, and experience higher collections of accounts receivable in the first half of the year, which results in a decrease in accounts receivable in the first half of the year.

Current wording

We expect our free cash flow to fluctuate in future periods as our operating expenses change and as we continue to invest in our growth. We typically experience higher billings in the fourth quarter compared to other quarters, primarily due to increased renewal activity. As a result, collections of accounts receivable are generally higher in the first half of the year, leading to a decrease in accounts receivable during that period.

Previous wording

For the nine months ended October 31, 2024, cash provided by operating activities was $72.2 million, which consisted of net income of $22.9 million, adjusted for non-cash expenses of $67.0 million and $17.7 million of net cash flows used as a result of changes in operating assets and liabilities. The $17.7 million of net cash flows used as a result of changes in our operating assets and liabilities reflected an $80.7 million decrease in accounts receivable due to collections outpacing billings. This increase to cash flows from operations was partially offset by (i) a $60.5 million decrease in deferred revenue as a result of recognized revenue exceeding billings, (ii) a $21.9 million decrease in accrued expenses and other current liabilities primarily due to the timing of bonus and commission payments, (iii) a $9.1 million increase in prepaid expenses and other current assets due to higher prepaid hosting and data costs, and (iv) a $3.9 million decrease in operating lease liabilities due to ongoing payments for leased properties.

Current wording

For the three months ended April 30, 2026, cash provided by operating activities was $70.4 million, which consisted of net income of $4.2 million, adjusted for non-cash expenses of $33.3 million and $32.9 million of net cash flows provided as a result of changes in operating assets and liabilities. The $32.9 million of net cash flows provided as a result of changes in our operating assets and liabilities reflected an $81.6 million decrease in accounts receivable due to collections outpacing billings. This increase to cash flows from operations was partially offset by (i) a $30.7 million decrease in accrued expenses and other liabilities primarily due to the timing of bonus and commission payments, (ii) a $7.2 million decrease in deferred revenue as a result of recognized revenue exceeding billings, and (iii) a $6.7 million increase in prepaid expenses and other assets due to higher deferred contract costs and prepaid marketing expenses, partially offset by the timing of vendor prepayments, lower contract asset balances, and reduced prepaid software costs.

Previous wording

For the nine months ended October 31, 2025, cash provided by operating activities was $138.5 million, which consisted of net income of $14.0 million, adjusted for non-cash expenses of $95.4 million and $29.2 million of net cash flows provided as a result of changes in operating assets and liabilities. The $29.2 million of net cash flows provided as a result of changes in our operating assets and liabilities reflected an $133.4 million decrease in accounts receivable due to collections outpacing billings. This increase to cash flow from operations was partially offset by (i) a $73.9 million decrease in deferred revenue as a result of recognized revenue exceeding billings, (ii) a $20.3 million increase in prepaid expenses and other current assets due to higher capitalized commissions, (iii) a $1.5 million increase in accrued expenses and other current liabilities primarily due to the timing of commission payments and (iv) a $6.2 million decrease in operating lease liabilities due to ongoing payments for leased properties.

Current 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 flows from operations was partially offset by a $21.5 million decrease in accrued expenses and other liabilities primarily due to the timing of bonus and commission payments.

Previous wording

For the nine months ended October 31, 2025, cash provided by investing activities was $39.2 million and primarily consisted of $416.0 million of sales and maturities of marketable securities. This increase in cash flows from investing activities was partially offset by $363.9 million of purchases of marketable securities and $11.7 million in capitalized internal-use software costs.

Current wording

For the three months ended April 30, 2026, net cash provided by investing activities was $55.3 million and primarily consisted of $128.9 million of sales and maturities of marketable securities. This increase in cash flows from investing activities was partially offset by $69.0 million of purchases of marketable securities.

Previous wording

For the nine months ended October 31, 2024, cash provided by investing activities was $110.0 million and primarily consisted of $453.9 million of sales and maturities of marketable securities, partially offset by $329.3 million of purchases of marketable securities.

Current wording

For the three months ended April 30, 2025, net 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.

Previous wording

For the nine months ended October 31, 2025, cash used in financing activities was $135.6 million, which consisted of payments for the 2025 Share Repurchase Program of $152.3 million, offset by $13.9 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.

Current wording

For the three months ended April 30, 2025, cash provided by financing activities was $2.8 million, which consisted solely of proceeds from the exercise of stock options.

Previous wording

Refer to Note 2, Basis of Presentation and Summary of Significant Accounting Policies, included in Part I, Item 1 of this Form 10-Q and Note 2, Basis of Presentation and Summary of Significant Accounting Policies, to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of the 2025 10-K for a discussion of our significant accounting policies. There have been no material changes to our critical accounting policies and accounting estimates as compared to those disclosed in the 2025 10-K.

Current wording

Refer to Note 2, Basis of Presentation and Summary of Significant Accounting Policies, included in “Part I, Item 1. Financial Statements” of this Form 10-Q and Note 2, Basis of Presentation and Summary of Significant Accounting Policies, included in “Part II, Item 8. Financial Statements” of the 2026 10-K for a discussion of our significant accounting policies. There have been no material changes to our critical accounting policies and accounting estimates as compared to those disclosed in the 2026 10-K.

Previous wording

Refer to Note 2, Basis of Presentation and Summary of Significant Accounting Policies, included in Part I, Item 1 of this Form 10-Q for more information regarding recently issued accounting pronouncements.

Current wording

Refer to Note 2, Basis of Presentation and Summary of Significant Accounting Policies, included in “Part I, Item 1. Financial Statements” of this Form 10-Q for more information regarding recently issued accounting pronouncements.