Sprinklr's (NYSE:CXM) Q4: Beats On Revenue, Next Quarter Growth Looks Optimistic

Customer experience software provider Sprinklr (NYSE:CXM) announced better-than-expected results in Q4 CY2023, with revenue up 17.5% year on year to $194.2 million. The company expects next quarter's revenue to be around $194.5 million, in line with analysts' estimates. It made a non-GAAP profit of $0.12 per share, improving from its profit of $0.06 per share in the same quarter last year.

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Initially focused only on social media management, Sprinklr (NYSE: CXM) is a leading provider of unified customer experience management software.

Customer Experience Software

The Internet has given customers more choice on whom to conduct business with and has also given them the power to easily share their experiences with other customers. These twin dynamics effectively have increased pressure on companies to both improve their customer service and also monitor their brand reputation online, driving the need for customer experience software offerings.

Sales Growth

As you can see below, Sprinklr's revenue growth has been strong over the last three years, growing from $104.1 million in Q4 2021 to $194.2 million this quarter.

This quarter, Sprinklr's quarterly revenue was once again up 17.5% year on year. We can see that Sprinklr's revenue increased by $7.88 million in Q4, which was roughly the same growth rate observed in Q3 CY2023. This steady quarter-on-quarter growth shows that the company can maintain its paced growth trajectory.

Next quarter's guidance suggests that Sprinklr is expecting revenue to grow 12.2% year on year to $194.5 million, slowing down from the 19.6% year-on-year increase it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $805 million at the midpoint, growing 9.9% year on year compared to the 18.5% increase in FY2024.

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Large Customers Growth

This quarter, Sprinklr reported 126 enterprise customers paying more than $1m annually, an increase of 3 from the previous quarter. That's in line with the number of contracts wins in the last quarter but quite a bit below what we've typically observed over the last year, suggesting that the sales slowdown we observed in the last quarter could continue.

Key Takeaways from Sprinklr's Q4 Results

It was good to see Sprinklr beat analysts' revenue expectations this quarter. We were also glad next quarter's revenue guidance came in higher than Wall Street's estimates. Full year revenue and operating profit guidance were both relatively in line with expectations--while not the most exciting result, it shows that the company is on track. Zooming out, we think this was still a decent quarter. The stock is up 2.2% after reporting and currently trades at $13.29 per share.

So should you invest in Sprinklr right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.