Sprinklr (CXM) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue grew 11% year-over-year to $197.2M, with subscription revenue up 9% to $177.9M and 145 $1M+ customers, up 21% YoY.

• Non-GAAP operating income was $15.2M (8% margin), including a $10.1M credit loss charge; excluding this, operating income would have been $25.3M (13% margin).

• Free cash flow reached $16.5M (8% margin) in Q2, with $52.7M for the first half of FY25.

• Completed a $300M share buyback, repurchasing over 25M shares in the first half of FY25.

• Management is addressing execution challenges, elevated churn, and macroeconomic headwinds with a focus on enterprise customers and operational improvements.

Financial highlights

• Total revenue: $197.2M (+11% YoY); Subscription revenue: $177.9M (+9% YoY); Services revenue: $19.3M (+29% YoY).

• Non-GAAP gross margin: 73% (Subscription: 81%, Services: -1%); GAAP gross margin: 72%.

• Net dollar expansion rate: 110.8%–111% (trailing twelve months), expected to decline due to churn and lower new business.

• Cash, cash equivalents, and marketable securities: $468.5M as of July 31, 2024; no debt.

• Free cash flow margin: 8% (Q2); first half FY25 free cash flow was $52.7M (13% margin).

Outlook and guidance

• Q3 FY25 guidance: total revenue $196M–$197M (+5% YoY); subscription revenue $177.5M–$178.5M (+4% YoY); non-GAAP operating income $19M–$20M; net income per diluted share ~$0.08.

• FY25 guidance: total revenue $785M–$787M (+7% YoY); subscription revenue $710.5M–$712.5M (+6% YoY); non-GAAP operating income $80.5M–$81.5M (10% margin); net income per diluted share $0.32–$0.33.

• FY25 free cash flow expected at ~$55M.