CXM · Research
Sprinklr Owns the Public Conversation but Not the Customer File
Sprinklr's revenue has stalled near 1% growth and buybacks run at almost five times the cash shareholders kept.
- Cash left for shareholders after capex, capitalized software and all stock pay
- $28.2M
- Buybacks against what shareholders kept
- 4.9 to 1
- Drop in customer count
- -13.1%
1. Our call: Avoid, because Sprinklr has stopped growing and buys back stock with cash it does not keep
Our call: Avoid. Sprinklr sells one software platform that large companies use to listen to customers on social media, run marketing campaigns, answer service requests in contact centers and measure customer feedback [1].
It sells mostly two to three year subscriptions, plus setup and consulting work [1].
Second quarter fiscal 2027 revenue, the quarter to Jul 31, 2026, rose 0.8% to $213.7M from $212.0M, our calculation [2][3]. Fiscal 2026 revenue, the year to Jan 31, 2026, was $857.2M, up 7.6%, our calculation [10].
The company guides fiscal 2027 revenue to $866.5M to $868.5M, growth of 1.1% to 1.3%, our calculation [3][10].
We measure owner cash, the cash left for shareholders: operating cash flow, less purchases of property and equipment, less capitalized software, less all stock pay. On that measure Sprinklr lost $4.6M in fiscal 2024 and $0.3M in fiscal 2025, kept $57.5M in fiscal 2026 and $28.2M over the twelve months to Jul 31, 2026, our calculation from SEC XBRL [10].
2. Research spending is about a ninth of revenue
| Metric | Value |
|---|---|
| R&D share of revenue | 11.2%, $96.0M on $857.2M, fiscal 2026, our calculation [10] |
| GAAP net margin | 2.7%, $22.9M on $857.2M, fiscal 2026, our calculation [1]. Fiscal 2025 net income of $121.6M included a $73.3M tax benefit [1][10] |
| Stock pay share of revenue | 7.5% in fiscal 2025, 9.8% in fiscal 2026, 9.3% in the six months to Jul 31, 2026, our calculation [10] |
| API quality | 3 of 5, our scoring: documented REST interfaces and more than 80 connectors to CRM, data and marketing systems, but the product is sold as a suite, not as a developer layer [1] |
| Toll-gate score | 0 of 4 pass, 2 partial, 2 fail (section 2b) |
2b. Sprinklr owns the public conversation, others own the customer file
Sprinklr pulls posts, reviews, messages and calls from social, messaging, chat, text, email and phone channels into one place, so a brand can see and answer what customers say [1]. That history is useful, but the customer record, the order and the service ticket usually live in a CRM or contact-center system that Sprinklr connects to rather than replaces [1].
| Test | Result | Evidence |
|---|---|---|
| Owns the record | Partial | Sprinklr stores listening data and conversation history, and offers data retention as a product, but the customer master record sits in CRM and ERP systems it integrates with [1]. |
| Owns the connection | Fail | The 10-K lists social media tools, contact-center software, CRM and ERP vendors and conversational agent makers as competitors, and many of them bundle similar features into products customers already own [1]. |
| Prices close to outcomes | Fail | Customers pay subscription fees by product and seat over two to three year terms, not by service cases resolved or sales won [1]. |
| R&D on the gate vs features | Partial | R&D rose only 4.8% to $96.0M in fiscal 2026 while the company spread it across four product suites; the 10-Q does not split spending between agents and older features [1][10]. |
No passes, two partials and two fails. The fail on the connection is the core of the case.
When a software agent answers a customer, it will sit inside whichever system holds the customer's account, and that is usually not Sprinklr [1]. The partial on the record reflects real value in years of listening data, but listening alone has not driven growth [1]
3. Growth has fallen from 18% to about 1%
| Measure | Value | Change |
|---|---|---|
| Fiscal 2023 revenue | $618.2M | Year to Jan 31, 2023 [10] |
| Fiscal 2024 revenue | $732.4M | +18.5%, our calculation [10] |
| Fiscal 2025 revenue | $796.4M | +8.7%, our calculation [10] |
| Fiscal 2026 revenue | $857.2M | +7.6%, our calculation [1][10] |
| Fiscal 2027 implied by guidance | $866.5M to $868.5M | +1.1% to +1.3%, our calculation [3][10] |
Fiscal 2026 growth flattered the business. Subscription revenue grew only 5.4% to $756.3M, while professional services rose 28.5% to $100.9M [1].
Services carry little or no margin, so the faster line was the less valuable one [1][2].
The guide points lower again. Third quarter revenue of $215.0M to $216.0M against $219.1M a year earlier implies a decline of 1.4% to 1.9%, our calculation [3][10].
Fiscal 2027 subscription guidance of $782.5M to $784.5M implies growth of 3.5% to 3.7% on $756.3M, our calculation [1][3].
Contracted revenue not yet recognized is the one bright line. It rose 11.1% to $1,026.8M at Jul 31, 2026, our calculation [2]
4. Fewer customers, and the big ones are shrinking too
Sprinklr had 1,677 customers at Jan 31, 2026 against 1,930 a year earlier, a drop of 13.1%, our calculation [1]. The company says it is focusing on top-tier enterprises [1].
Customers paying $1.0M or more a year fell to 141 from 149, though average subscription revenue in that group passed $3.0M [1].
Net dollar expansion, which compares subscription revenue from the same customers a year apart, was 102.4% for the twelve months to Jul 31, 2026 against 102.2% a year earlier [2]. A rate that close to 100% means existing customers are barely spending more, so with fewer customers there is little room for growth [2].
The workforce is mostly abroad. Of 3,258 employees at Jan 31, 2026, 1,956 were in India and 634 in the U.S. [1].
A 12% workforce cut in Feb 2025 cost $15.9M in restructuring charges in fiscal 2026 [2][10].
5. Subscription margins are falling
Gross margin was 65.1% in the second quarter against 68.2% a year earlier, our calculation [2][10]. Subscription gross margin fell to 73.9% from 77.1% as subscription cost rose 17.8% to $50.9M, our calculation [2].
Professional services revenue of $18.9M cost $23.7M to deliver, a loss of $4.8M, our calculation [2].
GAAP operating income fell to $10.0M in the quarter from $16.3M, and non-GAAP operating income fell to $31.3M from $38.2M [3]. Fiscal 2026 GAAP operating income was $40.2M, 4.7% of revenue, our calculation [10].
Net income of $7.1M in the quarter was down from $12.6M [2].
Fiscal 2025 profit is not a fair base. Net income of $121.6M that year included a $73.3M tax benefit, and fiscal 2026 net income of $22.9M carried a $43.9M tax charge [1][10].
6. What shareholders kept is small and shrinking
| Period | Operating cash flow | Capex and capitalized software | Stock pay | Cash left for shareholders |
|---|---|---|---|---|
| Fiscal 2024 | $71.5M | $20.3M | $55.8M | Minus $4.6M, our calculation [10] |
| Fiscal 2025 | $77.6M | $18.4M | $59.5M | Minus $0.3M, our calculation [10] |
| Fiscal 2026 | $159.2M | $17.3M | $84.4M | $57.5M, our calculation [1][10] |
| Six months to Jul 31, 2025 | $118.6M | $8.2M | $42.6M | $67.8M, our calculation [10] |
| Six months to Jul 31, 2026 | $88.5M | $9.6M | $40.4M | $38.5M, our calculation [2][10] |
| Twelve months to Jul 31, 2026 | $129.1M | $18.7M | $82.2M | $28.2M, our calculation [2][10] |
Free cash for investors was 3.2% of trailing revenue of $872.9M, our calculation [10]. The company's own free cash flow, which does not subtract stock pay, was $13.1M in the second quarter [3].
First-half cash leans on collecting fourth quarter billings, and receivables fell to $172.6M from $278.1M in the six months, which the company describes as its normal pattern [2][3].
Stock pay rose to $84.4M in fiscal 2026 from $59.5M, up 41.8%, our calculation [10]. The new chief accounting officer alone received a $2.0M stock award and a $220,000 signing bonus [8].
Stock pay rising while revenue stalls is the wrong direction for holders.
7. Buybacks run at almost five times what holders kept
Sprinklr repurchased $273.9M of stock in fiscal 2025, $152.3M in fiscal 2026 and $125.8M in the six months to Jul 31, 2026 [10]. Over the twelve months to Jul 31, 2026 buybacks were $137.3M against $28.2M of cash left for shareholders, a ratio of 4.9 to 1, our calculation [10].
The latest was a $125M accelerated repurchase with Citibank entered on Mar 13, 2026, which settled on Sep 1, 2026 for 22,118,413 shares [2].
The buybacks did shrink the count. Diluted weighted shares fell to 237.8M in the second quarter from 263.2M a year earlier, down 9.7%, our calculation [10].
About $75M remains under the 2026 program through Mar 15, 2027 [2].
The balance sheet paid for it. Cash and marketable securities fell to $452.9M at Jul 31, 2026 from $502.5M at Jan 31, 2026, our calculation [2][3].
Shrinking the share count with savings rather than earnings lifts each holder's slice of a business that is not growing [2]
8. The main risks are bundled rivals, contact-center spend and control
Bundled rivals: CRM, contact-center and enterprise software vendors can include similar listening, messaging and agent features in products customers already pay for, and the 10-K says some competitors can offer them at a lower price [1].
Contact-center spend: Sprinklr's newest growth area is service software for contact centers, a market where established vendors already hold the phone lines and agent desks [1]. Subscription margin falling three points in a year suggests it is paying more to serve that business.
The 10-Q ties $4.3M of the quarter's rise to cloud, network, data and model costs, partly from higher rates charged by outside providers, and says those costs may keep rising in the near term [2].
Control: Hellman & Friedman holds 49.5% of the vote and founder Ragy Thomas 42.0%, through Class B shares carrying ten votes each [4]. Holders of Class B stock control about 87.3% of the vote with 40.7% of the shares [1].
Outside holders of Class A stock have little say.
Turnover: since Nov 2024 the company has a new chief executive, finance chief, chief accounting officer, product chief and information chief, and its marketing chief left in Mar 2026
9. A stalled growth company in a turnaround
Sprinklr is past its growth stage. Revenue grew 18.5% in fiscal 2024 and is guided to about 1% in fiscal 2027 [3][10].
Rory Read, who ran Vonage, joined as chief executive in Nov 2024 to restructure the business [4].
Three choices mark the turnaround. The company cut 12% of staff, pruned smaller customers so the count fell 13.1%, and spent most of its cash on buybacks [1][2].
Read has also brought in former Vonage colleagues to run administration and information technology [4].
The test for this stage is whether the pruned base grows. If subscription growth recovers to 5% or more while net expansion climbs above 105%, the cleanup worked; if subscription growth stays near 3%, the business is shrinking in real terms [2][3].
10. Agents that answer customers will need the history, but may not need Sprinklr
The bull case is that software agents answering customers need years of conversation history across social, chat, email and voice, and that Sprinklr already holds that history for many of the world's largest brands [1]. Contracted revenue growth of 11.1% shows customers are still signing multi-year deals [2].
The bear case is that agents will run inside the CRM or contact-center system that holds the customer account, and that those vendors will bundle listening and messaging for free [1]. A customer count down 13.1% and revenue guided to fall in the third quarter fit that story [1][3].
The test sits in numbers Sprinklr already discloses. If agents lift demand, the twelve-month contracted figure should grow faster than 3% and net expansion should pass 105% in fiscal 2028 [2][3].
If agents bypass it, subscription growth will stay below 4% and subscription margin will keep falling [2]
11. A Vonage team at the top and a board tied to Hellman & Friedman, Booz Allen and Zendesk
Rory Read, chief executive since Nov 2024, ran Vonage from 2020 to 2024, was earlier chief executive of Advanced Micro Devices and chief operating officer at Lenovo after 23 years at IBM, and sits on the Booz Allen Hamilton board [4]. Chief administrative officer Joy Corso was Vonage's marketing chief, and chief information officer Sanjay Macwan was Vonage's information and security chief after 22 years at AT&T [4].
Finance chief Anthony Coletta, since Oct 2025, was SAP's chief investor relations officer and earlier held finance roles at Siemens and ThyssenKrupp [4]. Michele Meyers became chief accounting officer on Jan 5, 2026 after the same role at Coursera and Black Knight [8].
Karthik Suri, product and strategy chief since Oct 2025, came from Cornerstone OnDemand, Invitae and GE Digital [4]. Technology chief Amitabh Misra came from Adobe and general counsel Jacob Scott from Athenahealth [4].
Founder and chairman Ragy Thomas also chairs and co-runs UnifyApps since Oct 2025. Sprinklr paid about $0.2M to Lyearn, a training company he wholly owns, since Feb 2025
12. The questions we would ask management, and the calls we are tracking
Question one: why is third quarter revenue guided below the same quarter last year when contracted revenue grew 11%? [2][3]
Question two: what drove subscription cost up 17.8% while subscription revenue rose 3.4%? [2]
Question three: how many of the 253 customers lost in fiscal 2026 were cut on purpose, and how much revenue did they carry? [1]
Question four: will buybacks keep running above cash left for shareholders, and what cash floor does the board hold? [2]
Question five: what share of new contracts includes agent products for contact centers? That answer sets our conviction.
Prediction one: fiscal 2027 revenue lands inside the $866.5M to $868.5M guide or below it (70%). [3]
Prediction two: fiscal 2027 subscription revenue grows less than 4% (70%). [3]
Bottom line: Sprinklr has stopped growing and is buying back stock with savings
Sprinklr's revenue is guided up about 1% in fiscal 2027 and down in the third quarter, customers fell 13.1%, and net expansion sits at 102.4% [1][2][3]. Cash left for shareholders was $28.2M over the twelve months to Jul 31, 2026, while buybacks ran 4.9 to 1 against it and two holders control more than 90% of the vote [4][10].
We would move to Hold off if subscription growth reaches 5% for two quarters and net expansion passes 105%. A third straight year of lower cash left for shareholders would raise our conviction.
Our call: Avoid, conviction 3 of 5.
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