Sprinklr (NYSE:CXM) reported fourth-quarter fiscal 2026 results that management said came in ahead of expectations, while outlining a fiscal 2027 outlook that reflects ongoing investments and a more cautious stance amid a “fluid” macro and geopolitical backdrop.
Q4 revenue growth and profitability
For the fourth quarter, Sprinklr said total revenue increased 9% year-over-year to $220.6 million. Subscription revenue rose 6% to $193.4 million, while professional services revenue was $27.1 million, which CFO Anthony Coletta said was better than anticipated due to more hours logged on large global projects.
Sprinklr generated $15.9 million in free cash flow in Q4 and $142 million for the full year. Coletta attributed the full-year free cash flow improvement to cost discipline, strong collections, and improved cash conversion. The company ended the quarter with $502.5 million in cash and marketable securities and no debt.
Customer metrics and renewal commentary
CEO Rory Read said fiscal 2026 included higher churn than the company would have preferred, particularly in the first half, but he pointed to improving renewal performance in Q4. Read said Q4 delivered the best renewal rates over the past four quarters, and he expects continued improvement in Q1 and Q2.
In Q4, Sprinklr’s subscription revenue base net dollar expansion rate was 103%, which management described as a slight sequential increase. The company ended Q4 with 141 customers contributing $1 million or more in subscription revenue over the past 12 months, down by four from Q3 due to some customers falling below the $1 million trailing threshold. Coletta also highlighted that net dollar expansion for the $1 million customer cohort was 115% and average revenue per customer in that cohort is now above $3 million, adding that the company does not intend to disclose that average revenue metric quarterly going forward.
Read emphasized an increased focus on “bear hugging” the company’s top 900 customers, which he said represent about 90% of revenue, and said the company is working further ahead on renewals than it did previously. Coletta added that a majority of fiscal 2026 renewal dollars were multiyear deals, contributing to an increase in average contract length.
AI priorities and customer wins highlighted
Read framed fiscal 2027 as a “pivotal year,” arguing that customer experience is at an inflection point and that customers want AI capabilities built into trusted platforms rather than shifting budget away from core enterprise software. He said annual recurring revenue (ARR) from Sprinklr’s generative AI-native Sprinklr Service SKUs grew 50% year-over-year in fiscal 2026, driven by demand for AI agents, Contact Center Intelligence, and agent copilot capabilities.
Read outlined four innovation priorities for fiscal 2027:
- Unified customer intelligence, integrating surveys, social, messaging, videos, and reviews into a single insight engine
- Enterprise-wide automation, including scaling AI agents, no-code AI studio, and more than 100 connectors
- AI-driven marketing and commerce, including AI copilots, conversational interfaces, and real-time content generation
- Next-generation AI and insights, including LLM-based listening, generative engine optimization, and agentic commerce
Read also cited platform scale as a foundation for these efforts, referencing more than 180 billion customer conversations a year, language and intent modeling across 30+ channels, and coverage of more than 400 million websites.
On customer activity, Read described a “flagship partnership” with a leading global payments company operating in over 200 markets, where multiple teams—corporate communications, global brand, social care, and MarTech—will standardize on Sprinklr’s platform. He also highlighted a major U.S. telecommunications provider that expanded its relationship, with ARR doubling year-over-year and increasing six-fold over two years, and said Sprinklr helped restore continuity when the customer lost access to a critical social channel through its previous vendor.
Margins, costs, and services mix
In Q4, non-GAAP gross margins were 76% for subscription and 1% for professional services, resulting in total non-GAAP gross margin of 67%. Coletta said the company is experiencing higher data and hosting costs, tied to business opportunities in Sprinklr Service and expanded AI capabilities.
Management discussed the role of services going forward, with Read stating the company wants to build a partner ecosystem and does not want to “become a service business.” He reiterated prior commentary that elevated services activity in fiscal 2026 was driven by a large Global 50 implementation that is expected to wind down and transition into a more subscription-driven relationship. Coletta said the company expects a more “normalized” services revenue line as Bear Hug efforts require less services work and as productivity improves.
Guidance and capital return
For Q1 fiscal 2027, Sprinklr guided for total revenue of $215.5 million to $216.5 million and subscription revenue of $193 million to $194 million, both implying about 5% year-over-year growth at the midpoint. The company expects non-GAAP operating income of $28.5 million to $29.5 million and non-GAAP net income of approximately $0.09 per diluted share, assuming 245 million diluted weighted average shares outstanding.
For the full fiscal year 2027, Sprinklr guided for subscription revenue of $778 million to $780 million and total revenue of $869 million to $871 million. The outlook includes professional services revenue of $91 million. Sprinklr expects non-GAAP operating income of $144 million to $146 million, representing a 17% non-GAAP operating margin, and non-GAAP net income per diluted share of $0.47 to $0.48, assuming 244 million diluted weighted average shares outstanding. The company also said it expects full-year free cash flow of $150 million, including $40 million in Q1.
Management said the guide factors in continued investment, including expensing “Solidatech” in AI products, higher cloud and data costs, targeted hiring of AI and R&D talent (including forward-deployed engineers), added go-to-market capabilities, and the timing of a sales kickoff event in Q1. Read also pointed to geopolitical uncertainty, including developments in the Middle East, where he said the company has meaningful business and a good pipeline.
Separately, the company announced a $200 million share repurchase authorization expected to be completed by March 15, 2027, including a $125 million accelerated share repurchase to launch shortly, supplemented by open market repurchases.
About Sprinklr (NYSE:CXM)
Sprinklr, Inc (NYSE: CXM) is a leading enterprise software firm specializing in customer experience management. The company offers a unified, AI-driven platform designed to help organizations engage customers across multiple digital and social channels. By consolidating marketing, advertising, research, care and engagement functions into a single SaaS solution, Sprinklr enables brands to deliver consistent and personalized experiences at scale.
Sprinklr’s platform includes modules for social media management, customer service automation, social advertising and market research, supplemented by AI and machine learning capabilities.
