Sprinklr delivered Q3 results that exceeded Wall Street’s revenue and profit expectations, reflecting ongoing operational improvements and the early impact of its transformation initiatives. Management credited the company’s performance to strengthened customer relationships, especially through Project Bearhug, and highlighted progress in stabilizing renewal rates and improving execution in large enterprise accounts. CEO Rory Read pointed to “early momentum” from these efforts, noting that Sprinklr is “in a stronger position today than at the start of the year,” while cautioning that real transformation remains a work in progress.
Is now the time to buy CXM? Find out in our full research report (it’s free for active Edge members).
Sprinklr (CXM) Q3 CY2025 Highlights:
- Revenue: $219.1 million vs analyst estimates of $209.6 million (9.2% year-on-year growth, 4.5% beat)
- Adjusted EPS: $0.12 vs analyst estimates of $0.09 (32% beat)
- Adjusted Operating Income: $33.52 million vs analyst estimates of $28.71 million (15.3% margin, 16.7% beat)
- Revenue Guidance for Q4 CY2025 is $217 million at the midpoint, above analyst estimates of $210.4 million
- Management raised its full-year Adjusted EPS guidance to $0.44 at the midpoint, a 2.4% increase
- Operating Margin: 5.3%, up from 3.9% in the same quarter last year
- Billings: $158.4 million at quarter end, up 7.1% year on year
- Market Capitalization: $1.99 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Sprinklr’s Q3 Earnings Call
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Jackson Ader (KeyBanc): Asked about the sustainability of this quarter’s performance heading into next year. CEO Rory Read replied that while Q3 showed positive trends, “it’s one quarter,” emphasizing the need to see several quarters of consistent improvements to confirm the transition is working.
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Elizabeth Porter (Morgan Stanley): Inquired about potential disruptions from recent leadership changes. Read responded that most major leadership transitions are now complete and sees no indication of productivity issues, highlighting a balanced team focused on customer relationships and operational efficiency.
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Elizabeth Porter (Morgan Stanley): Asked how margin trends might evolve as Sprinklr invests in growth. Read said the company is balancing profitability with targeted investments, aiming to maintain current margins unless a compelling growth opportunity arises.
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Catharine Trebnick (Rosenblatt Securities): Requested an update on the new pricing and bundling strategy. Read explained the phased rollout, with positive early feedback and plans to expand these changes across the customer base throughout next year.
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Arjun Bhatia (William Blair): Queried the impact of increased AI use on margins. Read described AI as core to the platform, noting ongoing investments in new capabilities, but acknowledged higher cloud costs could weigh on margins in the short term.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will be watching (1) the consistency of renewal rates and customer retention as Project Bearhug expands; (2) the rollout and adoption of new pricing and bundling strategies across both new and existing customers; and (3) the impact of continued investments in AI and operational improvements on both gross margins and customer satisfaction. Additional signposts include the stabilization of large enterprise accounts and successful execution of large-scale service implementations.
Sprinklr currently trades at $8.06, up from $7.54 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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