Sprinklr, Inc. — FY2024 Form 10-K Summary
Reporting period: Fiscal year ended January 31, 2024. The request labels the period “2023 Q4,” but this filing is an annual report covering FY2024, with FY2023 as the primary comparison. Sprinklr sells cloud subscriptions and professional services through its AI-powered Unified Customer Experience Management platform.
Financial performance and liquidity
| Metric | FY2024 | FY2023 | Change / context |
|---|---|---|---|
| Revenue | $732.4 million | $618.2 million | Up 18% |
| Subscription revenue | $668.5 million | $548.6 million | Up 22%; 91% of revenue |
| Professional services revenue | $63.8 million | $69.5 million | Down 8% |
| Gross profit / margin | $553.0 million / 76% | $454.5 million / 74% | Margin improved 2 percentage points |
| Operating income (loss) | $33.9 million | $(51.2) million | Returned to GAAP operating profitability |
| Net income (loss) | $51.4 million | $(55.7) million | Basic EPS $0.19; diluted EPS $0.18 |
| Operating cash flow | $71.5 million | $26.7 million | Improved; accounts receivable growth used $68.7 million of cash |
| Free cash flow (non-GAAP) | $51.1 million | $10.2 million | Defined as operating cash flow less capital expenditures and capitalized software |
Subscription gross margin was 83%, up from 81%; professional services gross margin fell to 1% from 12%, reflecting increased CCaaS delivery investment. GAAP operating margin was 5%, versus negative 8%. Non-GAAP operating income was $92.0 million, versus $6.0 million; this measure excludes stock-based compensation-related charges and other specified items. Stock-based compensation expense, net of amounts capitalized, was $55.8 million.
At year-end, cash and cash equivalents were $164.0 million and marketable securities were $498.5 million, totaling $662.6 million. Current assets were $1.001 billion and current liabilities were $508.2 million. The balance sheet reports no debt; the SVB credit facility was terminated in April 2023, and the prior convertible notes had converted to stock at the 2021 IPO. Deferred revenue was $375.1 million, including current and non-current balances. RPO was $966.6 million, of which $587.0 million was expected to be recognized over the next 12 months.
Material changes and management commentary
- Subscription growth came from expansion and add-on purchases by existing customers as well as new customer demand. Customers increased to 1,735 from 1,428; customers with at least $1 million of trailing-12-month subscription revenue increased to 126 from 108.
- Net dollar expansion rate declined to 117.7% from 123.9%. Management attributed the decrease to elevated churn, exacerbated by the macroeconomic environment.
- Sales and marketing expense decreased 4% to $321.8 million, while research and development increased 19% to $91.3 million and general and administrative expense increased 15% to $105.9 million. G&A included a $5.9 million increase in bad debt expense, largely related to one customer.
- Other income, net rose to $26.6 million from $3.8 million, primarily because interest income increased by $22.0 million amid higher rates and investment balances. Higher interest income materially contributed to the move to net income.
- The company incurred $4.3 million of restructuring costs during FY2024 following a workforce reduction of approximately 4% announced in February 2023; the costs were paid by year-end.
- Management stated that cash, marketable securities and operating cash flow should cover working capital, capital expenditures and financing needs for at least the next 12 months and over the long term. It provided no numerical forward guidance in this 10-K.
Risks, commitments and unusual items
- Key risks include customer renewals and expansion, competition, slower adoption of the Unified-CXM category, macroeconomic pressure on customer spending, and the company’s history of significant losses. FY2024 was profitable, but the accumulated deficit remained $474.8 million.
- Sprinklr relies on third-party cloud infrastructure, data sources and platform integrations. Its agreement with X, whose data supports the platform, expires February 28, 2025; a non-renewal or less favorable terms could affect service functionality.
- AI and generative AI introduce potential accuracy, bias, confidentiality, intellectual-property, cybersecurity and regulatory risks. The filing also highlights evolving privacy and data-security obligations and possible litigation, penalties and customer losses from noncompliance or security incidents.
- Minimum guaranteed commitments for data, hosting and software services totaled $131.1 million through FY2028, including $69.5 million due within 12 months. A signed 10-year New York headquarters lease had not commenced; annual payments are expected to be approximately $2.6 million after commencement.
- The board authorized $100 million of share repurchases through December 31, 2024. Sprinklr repurchased $29.6 million during FY2024 and $26.0 million through March 22, 2024; on March 26, 2024, the board approved an additional $100 million. Repurchases reduce available cash and are discretionary.
- No current legal matter was identified as expected to have a material adverse effect, and no litigation liability was accrued at year-end. The prior Opal litigation settlement was paid in FY2023.
- A previously reported material weakness in controls over commissions was reported remediated in FY2024. Management and KPMG concluded internal control over financial reporting was effective as of January 31, 2024; the financial-statement audit opinion was unqualified.
- Class B shares carry ten votes per share versus one vote for Class A, giving Class B holders approximately 89% of voting power at year-end and limiting other shareholders’ influence.
Important facts for investors to verify
- Whether customer retention and expansion stabilize after NDE fell to 117.7%, and whether churn remains elevated.
- Whether RPO growth converts into recognized subscription revenue and cash collections, given the $68.7 million increase in receivables and higher bad debt expense.
- How much FY2024 profitability is repeatable excluding the benefit of increased interest income, and how stock-based compensation affects ongoing economics and dilution.
- Whether professional services margins recover as CCaaS investment scales, and whether cloud, data and other minimum commitments remain economical.
- Whether the X data agreement is renewed on acceptable terms before its February 2025 expiration, and how privacy, AI and cybersecurity risks are managed.
- The pace and price of further share repurchases, the impact of the additional authorization on liquidity, and the implications of concentrated voting control.