8-K
Sprinklr, Inc. (CXM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 30, 2022
Sprinklr, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40528 | 45-4771485 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
| 29 West 35th Street<br><br>7th Floor<br><br>New York, New York | 10001 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (917) 933-7800
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol | Name of each exchange<br>on which registered |
|---|---|---|
| Class A Common stock, par value $0.00003 per share | CXM | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On December 6, 2022, Sprinklr, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended October 31, 2022. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated herein by reference.
The information contained in Item 2.02 in this report, including Exhibit 99.1 attached hereto, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by the Company regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
|---|
Director Changes
On November 30, 2022, Matthew Jacobson notified the Company’s Board of Directors (the “Board”) of his decision to resign as a Class I director of the Company and as a member of the Audit Committee of the Board, effective as of the close of business on December 1, 2022. Mr. Jacobson’s decision was not the result of any disagreement between Mr. Jacobson and the Company, its management, the Board or any committees thereof on any matter relating to the Company’s operations, policies or practices.
The Company and the Board express their sincere appreciation for Mr. Jacobson’s service to the Company and his valuable contributions to the Board.
To fill the vacancy created by Mr. Jacobson’s departure, the Board, following the recommendation of the Nominating and Corporate Governance Committee of the Board, appointed Kevin Haverty to serve as a member of the Board and as a member of the Compensation Committee of the Board (the “Compensation Committee”), effective as of December 2, 2022. Mr. Haverty is a Class I director whose term will expire at the Company’s 2025 Annual Meeting of Stockholders. The Board has determined that Mr. Haverty is “independent” pursuant to the rules of The New York Stock Exchange (“NYSE”) and other governing laws and applicable regulations.
Mr. Haverty, age 57, is currently the Senior Advisor to the CEO at ServiceNow, Inc. Previously, he served as its Chief Revenue Officer, the Executive Vice President of Worldwide Sales and other senior positions from December 2011 to the present. From January 2010 to December 2011, Mr. Haverty served as Vice President, Americas Sales of the Backup Recovery Systems division of Dell EMC (formerly EMC Corporation). From June 2006 to January 2010, Mr. Haverty held senior positions at Data Domain (through its acquisition by EMC), including Vice President of Americas Sales. Mr. Haverty holds a B.A. degree in Political Science from Providence College and was a US Army ROTC Distinguished Military Graduate. He served ten years in the US Army National Guard and is a veteran of the Gulf War, Operation Desert Storm.
There is no arrangement or understanding between Mr. Haverty and any other person pursuant to which he was selected as a director, and there is no family relationship between Mr. Haverty and any of the Company’s other directors or executive officers. There are no transactions between Mr. Haverty and the Company that would be required to be reported under Item 404(a) of Regulation S-K.
As a non-employee director of the Company, Mr. Haverty is eligible to participate in the Company’s compensation arrangements for non-employee directors, which are described in more detail in the Company’s Amended and Restated Non-Employee Director Compensation Policy, a copy of which will be filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2022. Under the terms of those arrangements, Mr. Haverty will receive (i) an initial equity award of restricted stock units (“RSUs”) under the Company’s 2021 Equity Incentive Plan (the “Plan”), valued at $200,000, and (ii) on the date of each annual stockholder meeting, an annual equity award of RSUs under the Plan, valued at $200,000, for his service as a member of the Board, in each case based on the closing price of the Company’s Class A common stock on NYSE as of the respective grant date. Each initial or annual award will vest in full on the first anniversary of the respective grant, subject to Mr. Haverty’s continued service with the Company through such vesting date. In addition, Mr. Haverty will be paid a $35,000 annual cash retainer for his service on the Board, plus a $7,500 annual cash retainer for
his service on the Compensation Committee, plus additional amounts for service on any additional committee(s) to which he may be appointed, paid in equal quarterly installments, based on the date of the Company’s annual stockholder meeting, payable in arrears and pro-rated based on the number of actual days served by him during such quarter.
In connection with Mr. Haverty’s election to the Board, the Company and Mr. Haverty entered into the Company’s standard form of indemnification agreement (the “Indemnification Agreement”), a copy of which was filed as Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (File No. 333-256657), filed with the Securities and Exchange Commission on May 28, 2021. The Indemnification Agreement requires the Company to indemnify Mr. Haverty, to the fullest extent permitted by Delaware law, for certain liabilities to which he may become subject as a result of his affiliation with the Company.
Leadership Changes
On December 3, 2022, Bill LePage, the Company’s Senior Vice President, Strategy and Global Field Operations, notified the Company of his resignation from such position with the Company, effective January 6, 2023.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
| Exhibit No. | Description of Exhibits |
|---|---|
| 99.1 | Press Release datedDecemberq3fy23-earningsrelease.htm6, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: December 6, 2022 | Sprinklr, Inc. | |
|---|---|---|
| By: | /s/ Manish Sarin | |
| Manish Sarin | ||
| Chief Financial Officer |
4
Document
Sprinklr Announces Third Quarter Fiscal 2023 Results
•Q3 Total Revenue of $157.3 million, up 24% year-over-year
•Q3 Subscription Revenue up 27% year-over-year
•RPO and cRPO up 28% and 27% year-over-year, respectively
•Continued improvement on operating margin leading to non-GAAP profitability
•107 $1 million customers, up 34% year-over-year
NEW YORK, New York--December 6, 2022--Sprinklr (NYSE: CXM), the unified customer experience management (Unified-CXM) platform for modern enterprises, today reported financial results for its third quarter ended October 31, 2022.
“We are very pleased with Sprinklr’s third quarter performance and beat expectations across all key metrics. We remain focused on our fundamentals during this challenging environment and generated profitable revenue growth and continued operating margin improvement. But we're most proud of the results the world's largest brands are achieving with our platform and proprietary AI including automation, faster response times, cost savings and deeper customer insights,” said Ragy Thomas, Sprinklr Founder and CEO.
Third Quarter Fiscal 2023 Financial Highlights
•Revenue: Total revenue for the third quarter was $157.3 million, up from $127.1 million one year ago, an increase of 24% year-over-year. Subscription revenue for the third quarter was $139.9 million, up from $109.9 million one year ago, an increase of 27% year-over-year.
•Operating Loss and Margin: Third quarter operating loss was $4.6 million, compared to operating loss of $24.8 million one year ago. Non-GAAP operating income was $6.9 million, compared to non-GAAP operating loss of $12.0 million one year ago. For the third quarter, GAAP operating margin was (3%) and non-GAAP operating margin was 4%.
•Net Income (Loss) Per Share: Third quarter net loss per share was $0.02, compared to net loss per share of $0.11 in the third quarter of fiscal year 2022. Non-GAAP net income per share for the third quarter was $0.02, compared to non-GAAP net loss per share of $0.06 in the third quarter of fiscal year 2022.
•Cash, Cash Equivalents and Marketable Securities: Total cash, cash equivalents and marketable securities as of October 31, 2022 was $544.1 million.
Board of Directors Update
Effective December 2, 2022, Kevin Haverty has been appointed to the Sprinklr Board of Directors. Mr. Haverty is currently the Senior Advisor to the CEO at ServiceNow. Previously he served as the Chief Revenue Officer and the Executive Vice President of Worldwide Sales and other senior positions from December 2011 to the present at ServiceNow. Prior to that, Mr. Haverty held various roles at other leading technology companies. Mr. Haverty holds a B.A. degree in Political Science from Providence College and was a member of Army ROTC and a Distinguished Military Graduate.
Effective as of the close of business on December 1, 2022, Matthew Jacobson, a Partner at ICONIQ Capital stepped down from the Sprinklr Board of Directors. Mr. Jacobson has served as a member of our Board since December 2014.
“I am very excited to have Kevin join Sprinklr’s Board of Directors to support our growth and global vision as a public company. Kevin’s leadership and enterprise focus will be a great benefit to our Go-To-Market strategy as we continue to pursue expanded growth,” said Ragy Thomas, Sprinklr Founder and CEO. “I also want to thank Matt for his counsel and support through the years. ICONIQ joined as an investor in Sprinklr in the very early days and helped chart our course of today. We are appreciative of Matt’s contributions and wish him all the best in his future endeavors," continued Thomas.
Financial Outlook
Sprinklr is providing the following guidance for the fourth fiscal quarter ending January 31, 2023:
•Subscription revenue between $145.5 million and $146.5 million.
•Total revenue between $162.3 million and $163.3 million.
•Non-GAAP operating income between $6 million and $7 million.
•Non-GAAP net income per share between $0.01 and $0.02, assuming 264 million weighted average shares outstanding.
Sprinklr is providing the following guidance for the full fiscal year ending January 31, 2023:
•Subscription revenue between $545.8 million and $546.8 million.
•Total revenue between $615.2 million and $616.2 million.
•Non-GAAP operating loss between $1.3 million and $2.3 million.
•Non-GAAP net loss per share between $0.04 and $0.05, assuming 260 million weighted average shares outstanding.
Non-GAAP Financial Measures
This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit and non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share, free cash flow, and adjusted free cash flow. We define these non-GAAP financial measures as the respective GAAP measures, excluding, as applicable, stock-based compensation expense-related charges, amortization of acquired intangible assets, purchase of property and equipment, capitalized internal-use software, and litigation settlement payments. We believe that it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies over multiple periods. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in Sprinklr’s financial statements. In addition, they are subject to inherent limitations, as they reflect the exercise of judgment by Sprinklr’s management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.
Sprinklr has not reconciled its expectations as to non-GAAP operating loss, or as to non-GAAP net loss per share, to their most directly comparable GAAP measures as a result of the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these factors could be material to Sprinklr’s results computed in accordance with GAAP.
Conference Call Information Sprinklr will host a conference call today, December 6, 2022, to discuss third quarter fiscal 2023 financial results, as well as the fourth quarter and full year fiscal 2023 outlook, at 5:00 p.m. Eastern Time, 2:00 p.m. Pacific Time. Investors are invited to join the webcast by visiting: https://investors.sprinklr.com/. To access the call by phone, dial 877-459-3955 (domestic) or 201-689-8588 (international). The conference ID number is 13734476. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 90 days.
About Sprinklr Inc. Sprinklr is a leading enterprise software company for all customer-facing functions. With advanced AI, Sprinklr's unified customer experience management (Unified-CXM) platform helps companies deliver human experiences to every customer, every time, across any modern channel. Headquartered in New York City with employees around the world, Sprinklr works with more than 1,000 of the world’s most valuable enterprises — global brands like Microsoft, P&G, Samsung and more than 50% of the Fortune 100.
Forward-Looking Statements This press release contains express and implied “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the fourth quarter and full year fiscal 2023. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “target,” “explore,” “continue,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance, or achievement to differ materially and adversely from those anticipated or implied in the statements, including: our rapid growth may not be indicative of our future growth; our revenue growth rate has fluctuated in prior periods; our ability to achieve or maintain profitability; we derive the substantial majority of our revenue from subscriptions to our Unified-CXM platform; our ability to manage our growth and organizational change; the market for Unified-CXM solutions is new and rapidly evolving; our ability to attract new customers in a manner that is cost-effective and assures customer success; our ability to attract and retain customers to use our products; our ability to drive customer subscription renewals and expand our sales to existing customers; our ability to effectively develop platform enhancements, introduce new products or keep pace with technological developments; the market in which we participate is new and rapidly evolving and our ability to compete effectively; our business and growth depend in part on the success of our strategic relationships with third parties; our ability to develop and maintain successful relationships with partners who provide access to data that enhances our Unified-CXM platform’s artificial intelligence capabilities; the majority of our customer base consists of large enterprises, and we currently generate a significant portion of our revenue from a relatively small number of enterprises; our investments in research and development; our ability to expand our sales and marketing capabilities; our sales cycle with enterprise and international clients can be long and unpredictable; our business and results of operations may be materially adversely affected by the ongoing COVID-19 pandemic or other similar outbreaks; certain of our results of operations and financial metrics may be difficult to predict; our ability to maintain data privacy and data security; we rely on third-party data centers and cloud computing providers; the sufficiency of our cash and cash equivalents to meet our liquidity needs; our ability to comply with modified or new laws and regulations applying to our business; our ability to successfully enter into new markets and manage our international expansion; the attraction and retention of qualified employees and key personnel; our ability to effectively manage our growth and future expenses and maintain our corporate culture; our ability to maintain, protect, and enhance our intellectual property rights; our ability to successfully defend litigation brought against us; and unstable market and economic conditions. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are or will be discussed in our Quarterly Report on Form 10-Q for the quarter ended July 31, 2022, filed with the SEC on September 8, 2022, under the caption “Risk Factors,” and in other filings that we make from time to time with the SEC. Forward-looking statements speak only as of the date the statements are made and are based on information available to Sprinklr at the time those statements are made and/or management's good faith belief as of that time with respect to future events. Sprinklr assumes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law.
Key Business Metrics
RPO. RPO, or remaining performance obligations, represents contracted revenue that have not yet been recognized, and include deferred revenue and amounts that will be invoiced and recognized in future periods.
cRPO. cRPO, or current RPO, represents contracted revenue that have not yet been recognized, and include deferred revenue and amounts that will be invoiced and recognized in the next 12 months.
Investor Relations: ir@sprinklr.com
Media & Press: PR@sprinklr.com
| Sprinklr, Inc. | ||||||||
|---|---|---|---|---|---|---|---|---|
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands, except per share data) | ||||||||
| (unaudited) | ||||||||
| October 31,<br>2022 | January 31,<br>2022 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 156,025 | $ | 321,426 | ||||
| Marketable securities | 388,089 | 210,983 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $3.9 million and<br><br>$2.7 million, respectively | 132,932 | 163,681 | ||||||
| Prepaid expenses and other current assets | 80,557 | 109,167 | ||||||
| Total current assets | 757,603 | 805,257 | ||||||
| Property and equipment, net | 20,679 | 14,705 | ||||||
| Goodwill and other intangible assets | 50,489 | 50,706 | ||||||
| Operating lease right-of-use assets | 13,506 | — | ||||||
| Other non-current assets | 54,718 | 49,378 | ||||||
| Total assets | $ | 896,995 | $ | 920,046 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 15,776 | $ | 15,802 | ||||
| Accrued expenses and other current liabilities | 88,369 | 100,220 | ||||||
| Operating lease liabilities, current | 6,693 | — | ||||||
| Deferred revenue | 257,659 | 279,028 | ||||||
| Total current liabilities | 368,497 | 395,050 | ||||||
| Deferred revenue less current portion | 1,015 | 5,325 | ||||||
| Deferred tax liability, long-term | 1,089 | 1,101 | ||||||
| Operating lease liabilities, long-term | 7,601 | — | ||||||
| Other liabilities, long-term | 1,365 | 2,721 | ||||||
| Total liabilities | 379,567 | 404,197 | ||||||
| Stockholders’ equity | ||||||||
| Class A common stock | 3 | 3 | ||||||
| Class B common Stock | 6 | 5 | ||||||
| Treasury stock | (23,831) | (23,831) | ||||||
| Additional paid-in capital | 1,045,399 | 982,122 | ||||||
| Accumulated other comprehensive loss | (7,444) | (820) | ||||||
| Accumulated deficit | (496,705) | (441,630) | ||||||
| Total stockholders’ equity | 517,428 | 515,849 | ||||||
| Total liabilities and stockholders’ equity | $ | 896,995 | $ | 920,046 | ||||
| Sprinklr, Inc. | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Condensed Consolidated Statements of Operations(1) | ||||||||
| (in thousands, except per share data) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended October 31, | Nine Months Ended October 31, | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| Revenue: | ||||||||
| Subscription | $ | 139,906 | $ | 109,941 | $ | 400,301 | $ | 310,020 |
| Professional services | 17,345 | 17,115 | 52,558 | 46,708 | ||||
| Total revenue: | 157,251 | 127,056 | 452,859 | 356,728 | ||||
| Costs of revenue: | ||||||||
| Costs of subscription(2) | 26,249 | 22,835 | 76,759 | 66,228 | ||||
| Costs of professional services(2) | 14,271 | 15,865 | 47,641 | 41,520 | ||||
| Total costs of revenue | 40,520 | 38,700 | 124,400 | 107,748 | ||||
| Gross profit | 116,731 | 88,356 | 328,459 | 248,980 | ||||
| Operating expenses: | ||||||||
| Research and development(2) | 19,208 | 16,591 | 56,531 | 44,717 | ||||
| Sales and marketing(2)(3) | 79,538 | 74,698 | 253,418 | 204,573 | ||||
| General and administrative(2) | 22,588 | 21,833 | 67,916 | 63,364 | ||||
| Total operating expenses | 121,334 | 113,122 | 377,865 | 312,654 | ||||
| Operating loss | (4,603) | (24,766) | (49,406) | (63,674) | ||||
| Other expense, net | 1,093 | (1,119) | 1,304 | (4,744) | ||||
| Loss before provision for income taxes | (3,510) | (25,885) | (48,102) | (68,418) | ||||
| Provision for income taxes | 2,350 | 1,823 | 6,973 | 6,132 | ||||
| Net loss | $ | (5,860) | $ | (27,708) | $ | (55,075) | $ | (74,550) |
| Net loss per share attributable to Class A and Class B common stockholders, basic and diluted | $ | (0.02) | $ | (0.11) | $ | (0.21) | $ | (0.43) |
| Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted | 260,285 | 255,195 | 258,677 | 174,497 |
(1) Sprinklr identified immaterial corrections related to capitalization of costs to obtain customer contract during the year ended January 31, 2022, which resulted in revisions to prior year reported amounts within the consolidated statements of operations with a decrease in net loss of $1.5 million and $2.6 million for the three and nine months ended October 31, 2021, respectively.
(2) Includes stock-based compensation expense, net of amounts capitalized, as follows:
| Three Months Ended October 31, | Nine Months Ended October 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| Costs of subscription | $ | 282 | $ | 589 | $ | 1,079 | $ | 1,411 |
| Costs of professional services | 368 | 889 | 1,770 | 1,911 | ||||
| Research and development | 2,204 | 2,186 | 7,700 | 4,915 | ||||
| Sales and marketing | 5,071 | 4,997 | 18,736 | 13,963 | ||||
| General and administrative | 3,284 | 3,760 | 10,635 | 15,753 | ||||
| Stock-based compensation expense, net of amounts capitalized | $ | 11,209 | $ | 12,421 | $ | 39,920 | $ | 37,953 |
(3) Includes amortization of acquired intangible assets as follows:
| Three Months Ended October 31, | Nine Months Ended October 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| Sales and marketing | $ | 133 | $ | 116 | $ | 399 | $ | 280 |
| Total amortization of acquired intangible assets | $ | 133 | $ | 116 | $ | 399 | $ | 280 |
| Sprinklr, Inc. | ||||||||
| --- | --- | --- | --- | --- | ||||
| Condensed Consolidated Statements of Cash Flows(1) | ||||||||
| (in thousands) | ||||||||
| (Unaudited) | ||||||||
| Nine months ended October 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash flow from operating activities: | ||||||||
| Net loss | (55,075) | (74,550) | ||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization expense | 8,727 | 5,638 | ||||||
| Bad debt expense | 1,161 | 47 | ||||||
| Stock-based compensation expense | 39,920 | 37,953 | ||||||
| Non-cash interest paid in kind and discount amortization | — | 3,266 | ||||||
| Non-cash lease expense | 4,759 | — | ||||||
| Deferred income taxes | — | 1 | ||||||
| Other non-cash items, net | (549) | (1,187) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 29,358 | 12,741 | ||||||
| Prepaid expenses and other current assets | 27,246 | (2,395) | ||||||
| Other noncurrent assets | (5,782) | (3,151) | ||||||
| Accounts payable | (1,243) | (5,774) | ||||||
| Operating lease liabilities | (5,448) | — | ||||||
| Accrued expenses and other current liabilities | (625) | 16,413 | ||||||
| Litigation settlement | (12,000) | — | ||||||
| Deferred revenue | (24,578) | (7,132) | ||||||
| Other liabilities | (1,285) | 197 | ||||||
| Net cash provided by (used in) operating activities | 4,586 | (17,933) | ||||||
| Cash flow from investing activities: | ||||||||
| Purchases of marketable securities | (640,173) | (61,758) | ||||||
| Sales of marketable securities | 2,838 | 56,652 | ||||||
| Maturities of marketable securities | 459,026 | 197,555 | ||||||
| Purchases of property and equipment | (2,923) | (5,197) | ||||||
| Capitalized internal-use software | (7,733) | (4,150) | ||||||
| Acquisitions, net of cash acquired | — | (3,625) | ||||||
| Net cash (used in) provided by investing activities | (188,965) | 179,477 | ||||||
| Cash flow from financing activities: | ||||||||
| Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts | — | 275,973 | ||||||
| Proceeds from issuance of common stock upon exercise of stock options | 15,997 | 17,892 | ||||||
| Proceeds from issuance of common stock upon ESPP Purchases | 6,213 | — | ||||||
| Net cash provided by financing activities | 22,210 | 293,865 | ||||||
| Effect of exchange rate fluctuations on cash and cash equivalents | (3,232) | (1,060) | ||||||
| Net change in cash and cash equivalents | (165,401) | 454,349 | ||||||
| Cash and cash equivalents at beginning of period | 321,426 | 68,037 | ||||||
| Cash and cash equivalents at end of period | $ | 156,025 | $ | 522,386 |
(1) Sprinklr identified immaterial corrections related to capitalization of costs to obtain customer contract during the year ended January 31, 2022, which resulted in revisions to prior year reported amounts within the consolidated statements of cash flows with a decrease in net loss of $2.6 million for the nine months ended October 31, 2021, respectively, as well as an increase in the related changes in operating assets and liabilities associated with prepaid expenses and other current assets of $1.3 million for the nine months ended October 31, 2021.
| Sprinklr, Inc. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reconciliation of Non-GAAP Measures | ||||||||||||
| (in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended October 31, | Nine Months Ended October 31, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Non-GAAP gross profit and non-GAAP gross margin: | ||||||||||||
| GAAP gross profit | $ | 116,731 | $ | 88,356 | $ | 328,459 | $ | 248,980 | ||||
| Stock-based compensation expense-related charges(1) | 682 | 1,478 | 2,925 | 3,434 | ||||||||
| Non-GAAP gross profit | $ | 117,413 | $ | 89,834 | $ | 331,384 | $ | 252,414 | ||||
| Gross margin | 74 | % | 70 | % | 73 | % | 70 | % | ||||
| Non-GAAP gross margin | 75 | % | 71 | % | 73 | % | 71 | % | ||||
| Non-GAAP operating loss:(2) | ||||||||||||
| GAAP operating loss | $ | (4,603) | $ | (24,766) | $ | (49,406) | $ | (63,674) | ||||
| Stock-based compensation expense-related charges(3) | 11,341 | 12,647 | 40,659 | 39,371 | ||||||||
| Amortization of acquired intangible assets | 133 | 116 | 399 | 280 | ||||||||
| Non-GAAP operating income (loss) | $ | 6,871 | $ | (12,003) | $ | (8,348) | $ | (24,023) | ||||
| Non-GAAP net loss and non-GAAP net income (loss) per share:(2) | ||||||||||||
| GAAP net loss: | $ | (5,860) | $ | (27,708) | $ | (55,075) | $ | (74,550) | ||||
| Stock-based compensation expense-related charges(3) | 11,341 | 12,647 | 40,659 | 39,371 | ||||||||
| Amortization of acquired intangible assets | 133 | 116 | 399 | 280 | ||||||||
| Non-GAAP net income (loss) attributable to Class A and Class B common stockholders | $ | 5,614 | $ | (14,945) | $ | (14,017) | $ | (34,899) | ||||
| Weighted-average shares outstanding used in computing net loss per share attributable to Class A and Class B common stockholders - basic | 260,285 | 255,195 | 258,677 | 174,497 | ||||||||
| Non-GAAP net income (loss) per common share attributable to Class A and Class B common stockholders | $ | 0.02 | $ | (0.06) | $ | (0.05) | $ | (0.20) | ||||
| Free cash flow: | ||||||||||||
| Net cash provided by (used in) operating activities | $ | 4,586 | $ | (17,933) | ||||||||
| Purchase of property and equipment | (2,923) | (5,197) | ||||||||||
| Capitalized internal-use software | (7,733) | (4,150) | ||||||||||
| Free cash flow | (6,070) | (27,280) | ||||||||||
| Litigation settlement payments | 12,000 | — | ||||||||||
| Adjusted free cash flow | $ | 5,930 | $ | (27,280) |
(1) Includes employer payroll tax related to stock-based compensation expense for the three and nine months ended October 31, 2022.
(2) Sprinklr identified immaterial corrections related to capitalization of costs to obtain customer contract during the year ended January 31, 2022, which resulted in revisions to prior year reported amounts within decreases to the respective GAAP measures of operating loss and net loss of $1.5 million and $2.6 million for the three and nine months ended October 31, 2021, respectively.
(3) Includes $0.1 million and $0.7 million of employer payroll tax related to stock-based compensation expense for the three and nine months ended October 31, 2022, respectively.