Sprinklr (CXM) Q2 2027 Financial Results Summary
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Sprinklr (CXM) Q2 2027: Modest Growth Amid Declining Profitability — Cautiously Optimistic
Sprinklr (NYSE: CXM) reported its second quarter fiscal 2027 results, revealing a total revenue of $213.7 million, which represents an increase of $1.7 million or +1% year-over-year compared to $212.0 million in the same quarter last year. Subscription revenue also saw growth, reaching $194.8 million, up $6.3 million or +3% year-over-year from $188.5 million.
Despite the revenue growth, the quarter presents a mixed bag for shareholders. While the company managed to achieve slight revenue increases, the decline in profitability metrics raises concerns. The GAAP operating income fell to $10.0 million, down from $16.3 million a year ago, marking a decrease of $6.3 million or -38.7%. Similarly, the non-GAAP operating income decreased to $31.3 million, down from $38.2 million, a decline of $6.9 million or -18.1%. This trend is further reflected in the GAAP operating margin, which dropped to 5% from 8% year-over-year, and the non-GAAP operating margin, which fell to 15% from 18%.
Key Financial Metrics:
- Total Revenue: $213.7 million, up 1% YoY
- Subscription Revenue: $194.8 million, up 3% YoY
- GAAP Operating Income: $10.0 million, down 38.7% YoY
- Non-GAAP Operating Income: $31.3 million, down 18.1% YoY
- GAAP Net Income per Share: $0.03, down from $0.05 YoY
- Non-GAAP Net Income per Share: $0.11, down from $0.13 YoY
- Free Cash Flow: $13.1 million
- Remaining Performance Obligations (RPO): $1.03 billion, up 11% YoY
- Current RPO (cRPO): up 3% YoY
The decline in profitability metrics is concerning, especially given the backdrop of modest revenue growth. The company’s ability to convert revenue into profit appears to be weakening, which could be a red flag for investors. However, the increase in RPO indicates a healthy backlog of contracted revenue, suggesting that future revenue growth may be supported by existing customer commitments.
Dividend and Share Buyback
There were no announcements regarding dividends or share buybacks in this quarter's report. However, the company continues to maintain a robust cash position, with total cash, cash equivalents, and marketable securities amounting to $452.9 million as of July 31, 2026.
Guidance
Looking ahead, Sprinklr provided guidance for the third fiscal quarter ending October 31, 2026, projecting:
- Subscription Revenue: Between $196.0 million and $197.0 million
- Total Revenue: Between $215.0 million and $216.0 million
- Non-GAAP Operating Income: Between $33.5 million and $34.5 million
- Non-GAAP Net Income per Share: Approximately $0.11
For the full fiscal year ending January 31, 2027, the company expects:
- Subscription Revenue: Between $782.5 million and $784.5 million
- Total Revenue: Between $866.5 million and $868.5 million
- Non-GAAP Operating Income: Between $139.0 million and $141.0 million
- Non-GAAP Net Income per Share: Approximately $0.47
Analyst View
Overall, this quarter can be viewed as a cautious positive for shareholders. While revenue growth is a good sign, the significant drop in profitability metrics raises questions about the company's operational efficiency and cost management. The increase in RPO is encouraging, indicating potential future revenue, but the declining margins suggest that Sprinklr must focus on improving its profitability to enhance shareholder value.
Forward Catalyst
Investors should closely monitor the company's performance in the upcoming quarter, particularly how it manages costs and whether it can translate its revenue growth into improved profitability. Additionally, updates on AI innovations and enterprise adoption will be critical as they could drive future growth and operational improvements.
Here are the extracted tables from the press release in Markdown format:
Condensed Consolidated Balance Sheets (in thousands)
Note: The amounts in the following table are in thousands.
| Assets | July 31, 2026 | January 31, 2026 |
|---|---|---|
| Current assets: | ||
| Cash and cash equivalents | $231,415 | $162,969 |
| Marketable securities | $221,488 | $339,537 |
| Accounts receivable, net of allowance of | ||
| $7.5 million and $7.4 million, respectively | $172,555 | $278,081 |
| Prepaid expenses and other current assets | $114,739 | $107,393 |
| Total current assets | $740,197 | $887,980 |
| Property and equipment, net | $31,299 | $33,454 |
| Goodwill and other intangible assets | $56,145 | $50,144 |
| Operating lease right-of-use assets | $38,079 | $43,094 |
| Deferred tax asset, non-current | $60,161 | $70,400 |
| Other non-current assets | $125,898 | $119,989 |
| Total assets | $1,051,779 | $1,205,061 |
| Liabilities and stockholders’ equity | ||
| Liabilities | ||
| Current liabilities: | ||
| Accounts payable | $29,638 | $33,781 |
| Accrued expenses and other current liabilities | $59,052 | $91,538 |
| Operating lease liabilities, current | $7,295 | $8,433 |
| Deferred revenue | $380,014 | $420,339 |
| Total current liabilities | $475,999 | $554,091 |
| Deferred revenue, non-current | $15,864 | $12,824 |
| Operating lease liabilities, non-current | $34,057 | $38,299 |
| Other liabilities, non-current | $6,382 | $7,204 |
| Total liabilities | $532,302 | $612,418 |
| Commitments and contingencies | ||
| Stockholders’ equity | ||
| Class A common stock | 4 | 4 |
| Class B common stock | 3 | 3 |
| Treasury stock | — | -23,831 |
| Additional paid-in capital | $818,625 | $922,872 |
| Accumulated other comprehensive loss | -9,760 | -5,711 |
| Accumulated deficit | -289,395 | -300,694 |
| Total stockholders’ equity | $519,477 | $592,643 |
| Total liabilities and stockholders’ equity | $1,051,779 | $1,205,061 |
Condensed Consolidated Statements of Income (in thousands)
Note: The amounts in the following table are in thousands.
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| July 31, 2026 | July 31, 2025 | July 31, 2026 | July 31, 2025 | |
| Revenue | ||||
| Subscription revenue | $19,188 | $18,023 | $38,372 | $36,437 |
| Professional services | $21,471 | $23,389 | $43,510 | $44,366 |
| Total revenue | $40,659 | $41,412 | $81,882 | $80,803 |
| Cost of revenue | ||||
| Subscription | $10,693 | $10,027 | $20,830 | $19,603 |
| Professional services cost | $4,485 | $6,124 | $9,282 | $12,419 |
| Total cost of revenue | $21,178 | $21,304 | $40,412 | $42,584 |
| Gross profit | $19,481 | $20,108 | $41,470 | $38,219 |
| Operating expenses | ||||
| Sales and marketing | $10,926 | $10,027 | $20,830 | $19,603 |
| General and administrative | $4,046 | $4,204 | $8,220 | $8,090 |
| Total operating expenses | $14,972 | $14,231 | $29,051 | $27,693 |
| Operating income | $4,509 | $5,887 | $12,419 | $10,526 |
| Other income (expense) | -1,438 | 5,076 | -2,398 | -2,136 |
| Net income before tax | $3,071 | $10,963 | $10,021 | $8,390 |
| Income tax expense | -1,110 | -129 | -189 | -227 |
| Net income | $1,961 | $11,660 | $9,832 | $12,146 |
| Net income per share: | ||||
| Basic | $0.03 | $0.05 | $0.11 | $0.13 |
| Diluted | $0.03 | $0.05 | $0.11 | $0.13 |
| Weighted-average shares used total number of shares | 235,278 | 237,536 | 240,187 | 240,157 |
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