Sprinklr’s (NYSE:CXM) Q2 Sales Top Estimates, Provides Encouraging Quarterly Guidance
Customer experience software provider Sprinklr (NYSE:CXM) beat analysts’ expectations in Q2 CY2024, with revenue up 10.5% year on year to $197.2 million. Guidance for next quarter’s revenue was also better than expected at $196.5 million at the midpoint, 1.4% above analysts’ estimates. It made a non-GAAP profit of $0.06 per share, down from its profit of $0.09 per share in the same quarter last year.
Is now the time to buy Sprinklr? Find out by accessing our full research report, it’s free.
Sprinklr (CXM) Q2 CY2024 Highlights:
- Revenue: $197.2 million vs analyst estimates of $194.4 million (1.5% beat)
- Adjusted Operating Income: $15.21 million vs analyst estimates of $17.2 million (11.6% miss)
- EPS (non-GAAP): $0.06 vs analyst expectations of $0.07 (13.7% miss)
- The company slightly lifted its revenue guidance for the full year to $786 million at the midpoint from $780 million
- EPS (non-GAAP) guidance for the full year is $0.33 at the midpoint, missing analyst estimates by 20.1%
- Gross Margin (GAAP): 72.5%, down from 75.6% in the same quarter last year
- Free Cash Flow Margin: 8.4%, down from 18.5% in the previous quarter
- Customers: 145 customers paying more than $1m annually
- Market Capitalization: $2.28 billion
"In the second quarter, we continued to expand our customer base with our industry-recognized AI-powered platform and delivered our 7th consecutive quarter of free cash flow. As we work through continued market challenges, we are taking decisive steps to strengthen our foundation to reaccelerate growth and expand margins—a process that will take several quarters," said Ragy Thomas, Sprinklr Founder and Co-CEO.
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 21.6% annualized revenue growth over the last three years has been decent, and its sales came in at $197.2 million this quarter.
This quarter, Sprinklr’s quarterly revenue was once again up 10.5% year on year. However, its growth did slow down compared to last quarter as the company’s revenue increased by just $1.25 million in Q2 compared to $1.75 million in Q1 CY2024. While we’d like to see revenue increase by a greater amount each quarter, a one-off fluctuation is usually not concerning.
Next quarter’s guidance suggests that Sprinklr is expecting revenue to grow 5.5% year on year to $196.5 million, slowing down from the 18.5% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 2.8% over the next 12 months before the earnings results announcement.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Large Customers Growth
This quarter, Sprinklr reported 145 enterprise customers paying more than $1m annually, an increase of 7 from the previous quarter. That’s a bit fewer contract wins than last quarter but quite a bit above what we’ve typically seen over the last 12 months, suggesting that its sales momentum is healthy but softening after a tough comp quarter from last year.
Key Takeaways from Sprinklr’s Q2 Results
It was encouraging to see Sprinklr slightly beat analysts’ revenue expectations and raise its full-year sales guidance. On the other hand, its adjusted operating income and EPS missed, and its full-year earnings guidance fell short. Overall, this was a mixed quarter with encouraging top-line results but weaker bottom-line performance. The stock remained flat at $8.59 immediately after reporting.
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.
