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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                 to                
Commission File Number: 001-40528
Sprinklr, Inc.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware
(State or other Jurisdiction of
Incorporation or organization)
441 9th Avenue, 12th Floor
New York, NY
(Address of principal executive offices)

45-4771485
(IRS Employer
Identification No.)

10001
(Zip Code)
Registrant’s telephone number, including area code: (917) 933-7800
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class Trading Symbol(s) Name of each exchange on which registered
Class A common stock, par value $0.00003 per share
 CXM New York Stock Exchange
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒ No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 



Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 30, 2024, the registrant had 136,970,240 shares of Class A common stock and 116,498,241 shares of Class B common stock, each with a par value of $0.00003 per share, outstanding.




TABLE OF CONTENTS
PART I.FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II.OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.

WHERE YOU CAN FIND MORE INFORMATION
Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We also use Sprinklr’s blog and the following social media channels as a means of disclosing information about the Company, our products, our planned financials and other announcements and attendance at upcoming investor and industry conferences, and other matters. This is in compliance with our disclosure obligations under Regulation FD:
•Sprinklr Company Blog (http://sprinklr.com/blog)
•Sprinklr LinkedIn Page (http://www.linkedin.com/company/sprinklr)
•Sprinklr X (formerly known as Twitter) Account (https://x.com/sprinklr)
•Sprinklr Facebook Page (https://www.facebook.com/sprinklr/)
•Sprinklr Instagram Page (https://www.instagram.com/sprinklr)
In addition, investors and others can view Sprinklr videos on YouTube (https://www.YouTube.com/c/sprinklr).
Information posted through these social media channels may be deemed material. Accordingly, in addition to reviewing our press releases, SEC filings, public conference calls and webcasts, investors should monitor Sprinklr’s blog and its other social media channels. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. The channel list on how to connect with us may be updated from time to time and is available on https://www.sprinklr.com and our investor relations website.




2


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements.
These forward-looking statements include, but are not limited to, statements concerning the following:
•our expectations regarding our revenue, expenses and other operating results;
•our ability to acquire new customers and successfully engage new and existing customers;
•our ability to achieve and maintain our profitability;
•future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;
•our ability to collect accounts receivable or satisfy revenue recognition criteria, especially in emerging markets;
•the costs and success of our marketing efforts and our ability to promote our brand;
•our growth strategies for our Unified Customer Experience Management (“Unified-CXM”) platform and our Contact Center as a Service (“CCaaS”);
•our reliance on key talent and our ability to identify, recruit and retain skilled personnel;
•our ability to effectively manage our growth, including any international expansion;
•our ability to obtain, maintain, protect, defend or enforce our intellectual property or other proprietary rights and any costs associated therewith;
•the effects of global economic uncertainty, including as a result of increases in inflation rates, higher interest rates, recent bank closures, and the Russia-Ukraine and Israel-Hamas wars (including an escalation or geographical expansion of these conflicts), on our business, financial condition and share price;
•our ability to compete effectively with existing competitors and new market entrants; and
•the growth rates of the markets in which we compete.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Form 10-Q. And, while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Form 10-Q to reflect events or circumstances after the date of this Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.
Unless the context otherwise requires, the terms “Sprinklr,” “the Company,” “we,” “our,” “us” or similar references in this Form 10-Q refer to Sprinklr, Inc. and its subsidiaries.
3
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements.
SPRINKLR, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)

July 31, 2024January 31, 2024
Assets
Current assets:
Cash and cash equivalents$119,119 $164,024 
Marketable securities349,332 498,531 
Accounts receivable, net of allowance of $12.5 million and $5.3 million, respectively
189,000 267,731 
Prepaid expenses and other current assets84,158 70,690 
Total current assets741,609 1,000,976 
Property and equipment, net33,585 32,176 
Goodwill and other intangible assets49,957 50,145 
Operating lease right-of-use assets48,266 31,058 
Other non-current assets110,381 108,755 
Total assets$983,798 $1,223,110 
Liabilities and stockholders’ equity
Liabilities
Current liabilities:
Accounts payable$25,154 $34,691 
Accrued expenses and other current liabilities64,371 93,187 
Operating lease liabilities, current6,286 5,730 
Deferred revenue363,480 374,552 
Total current liabilities459,291 508,160 
Deferred revenue, non-current3,030 506 
Deferred tax liability, non-current1,475 1,474 
Operating lease liabilities, non-current44,919 27,562 
Other liabilities, non-current6,116 5,704 
Total liabilities514,831 543,406 
Commitments and contingencies (Note 8)
Stockholders’ equity:
Class A common stock, $0.00003 par value, 2,000,000,000 shares authorized; 136,840,484 and 151,136,870 shares issued and outstanding as of July 31, 2024 and January 31, 2024, respectively
4 4 
Class B common stock, $0.00003 par value, 310,000,000 shares authorized; 116,525,350 and 122,128,581 shares issued and outstanding as of July 31, 2024 and January 31, 2024, respectively
4 4 
Treasury stock, at cost, 14,130,784 and 14,130,784 shares as of July 31, 2024 and January 31, 2024, respectively
(23,831)(23,831)
Additional paid-in capital1,232,417 1,182,150 
Accumulated other comprehensive loss(4,251)(3,836)
Accumulated deficit(735,376)(474,787)
Total stockholders’ equity468,967 679,704 
Total liabilities and stockholders’ equity$983,798 $1,223,110 
See accompanying notes to the unaudited condensed consolidated financial statements

4

SPRINKLR, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Revenue:
Subscription$177,859$163,452 $355,222$321,117
Professional services19,34915,013 37,94430,711
Total revenue197,208 178,465 393,166 351,828
Costs of revenue:
Costs of subscription34,306 27,783 66,876 55,259
Costs of professional services20,010 15,684 38,565 30,145
Total costs of revenue54,316 43,467 105,441 85,404
Gross profit142,892 134,998 287,725 266,424
Operating expense:
Research and development23,622 24,323 46,161 45,084
Sales and marketing80,497 80,118 167,981 169,320
General and administrative38,860 25,068 67,961 49,724
Total operating expense142,979 129,509 282,103 264,128 
Operating (loss) income(87)5,489 5,622 2,296 
Other income, net
6,414 7,237 13,914 11,996
Income before provision for income taxes6,327 12,726 19,536 14,292 
Provision for income taxes
4,486 2,241 7,061 999 
Net income
$1,841 $10,485 $12,475 $13,293 
Net income per share, basic
$0.01 $0.04 $0.05 $0.05 
Weighted average shares used in computing net income per share, basic
260,830268,900266,187267,271
Net income per share, diluted
$0.01 $0.04 $0.04 $0.05 
Weighted average shares used in computing net income per share, diluted
271,934 283,853 279,695 282,951
See accompanying notes to the unaudited condensed consolidated financial statements
5

SPRINKLR, INC.
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Net income$1,841 $10,485 $12,475 $13,293 
Foreign currency translation adjustments652 (127)58 68 
Unrealized gains (losses) on investments, net of tax
321 (41)(473)54 
Total comprehensive income, net of tax
$2,814 $10,317 $12,060 $13,415 
See accompanying notes to the unaudited condensed consolidated financial statements
6

SPRINKLR, INC.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands)
(unaudited)
Class A and Class B Common StockAdditional Paid-in CapitalTreasury StockAccumulated Other
Comprehensive Loss		Accumulated Deficit
Total Stockholders’ Equity
SharesAmountSharesAmount
Balance at April 30, 2024
268,114 $8 $1,205,948 14,131 $(23,831)$(5,224)$(565,970)$610,931 
Stock-based compensation - equity classified awards— — 15,473 — — — — 15,473 
Exercise of stock options and vesting of restricted stock units1,917 — 7,593 — — — — 7,593 
Issuance of common shares upon ESPP purchases454 — 3,403 — — — — 3,403 
Common stock repurchased, including accrued excise tax(17,119)— — — — — (171,247)(171,247)
Other comprehensive income— — — — — 973 — 973 
Net income
— — — — — — 1,841 1,841 
Balance at July 31, 2024
253,366 $8 $1,232,417 14,131 $(23,831)$(4,251)$(735,376)$468,967 
Balance at April 30, 2023
267,531 $9 $1,100,571 14,131 $(23,831)$(4,094)$(493,803)$578,852 
Stock-based compensation - equity classified awards— — 15,489 — — — — 15,489 
Exercise of stock options and vesting of restricted stock units2,259 — 8,658 — — — — 8,658 
Issuance of common shares upon ESPP purchases528 — 3,970 — — — — 3,970 
Other adjustment— (1)1 — — — — — 
Other comprehensive loss— — — — — (168)— (168)
Net income— — — — — — 10,485 10,485 
Balance at July 31, 2023
270,318 $8 $1,128,689 14,131 $(23,831)$(4,262)$(483,318)$617,286 
See accompanying notes to the unaudited condensed consolidated financial statements





7

SPRINKLR, INC.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands)
(unaudited)
Class A and Class B Common StockAdditional Paid-in CapitalTreasury StockAccumulated Other
Comprehensive Loss		Accumulated Deficit
Total Stockholders’ Equity
SharesAmountSharesAmount
Balance at January 31, 2024
273,265 $8 $1,182,150 14,131 $(23,831)$(3,836)$(474,787)$679,704 
Stock-based compensation - equity classified awards— — 29,629 — — — — 29,629 
Exercise of stock options and vesting of restricted stock units5,106 — 17,235 — — — — 17,235 
Issuance of common shares upon ESPP purchases455 — 3,403 — — — — 3,403 
Common stock repurchased, including accrued excise tax(25,460)— — — — — (273,064)(273,064)
Other comprehensive loss— — — — — (415)— (415)
Net income— — — — — — 12,475 12,475 
Balance at July 31, 2024
253,366 $8 $1,232,417 14,131 $(23,831)$(4,251)$(735,376)$468,967 
Balance at January 31, 2023
263,741 $9 $1,074,149 14,131 $(23,831)$(4,384)$(496,611)$549,332 
Stock-based compensation - equity classified awards— — 29,219 — — — — 29,219 
Exercise of stock options and vesting of restricted stock units6,049 — 21,350 — — — — 21,350 
Issuance of common shares upon ESPP purchases528 3,970 — — — — 3,970 
Other adjustment— (1)1 — — — — — 
Other comprehensive income— — — — — 122 — 122 
Net income— — — — — — 13,293 13,293 
Balance at July 31, 2023
270,318 $8 $1,128,689 14,131 $(23,831)$(4,262)$(483,318)$617,286 
See accompanying notes to the unaudited condensed consolidated financial statements
8


SPRINKLR, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended July 31,
20242023
Cash flow from operating activities:
Net income$12,475 $13,293 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense9,118 7,329 
Provision for credit losses11,103 1,149 
Stock-based compensation, net of amounts capitalized28,947 28,175 
Non-cash lease expense4,164 2,998 
Deferred income taxes(40)(3,402)
Net amortization/accretion on marketable securities(7,436)(7,998)
Other non-cash items, net216 39 
Changes in operating assets and liabilities:
Accounts receivable67,292 26,474 
Prepaid expenses and other current assets(15,289)7,917 
Other non-current assets(1,473)(4,874)
Accounts payable(9,268)(7,897)
Operating lease liabilities(2,665)(2,896)
Accrued expenses and other current liabilities(26,683)(25,632)
Deferred revenue(7,858)(2,156)
Other liabilities431 616 
Net cash provided by operating activities63,034 33,135 
Cash flow from investing activities:
Purchases of marketable securities(136,136)(288,727)
Proceeds from sales and maturities of marketable securities
292,298 206,291 
Purchases of property and equipment(4,028)(4,413)
Capitalized internal-use software(6,291)(5,744)
Net cash provided by (used in) investing activities145,843 (92,593)
Cash flow from financing activities:
Proceeds from issuance of common stock upon exercise of stock options17,235 21,350 
Proceeds from issuance of common stock upon ESPP purchases3,403 3,970 
Payments for repurchase of Class A common shares(273,873)— 
Net cash (used in) provided by financing activities(253,235)25,320 
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash(1,247)(89)
Net change in cash, cash equivalents and restricted cash(45,605)(34,227)
Cash, cash equivalents and restricted cash at beginning of period172,429 188,387 
Cash, cash equivalents and restricted cash at end of period$126,824 $154,160 
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net of refunds$3,646 $2,999 
Supplemental disclosure for non-cash investing and financing:
Right-of-use assets obtained in exchange for operating lease liabilities$21,439 $17,345 
Accrued purchases of property and equipment$1,146 $1,008 
Stock-based compensation expense capitalized in internal-use software$1,182 $1,544 
Accrued asset retirement obligations$— $119 
Accrued excise tax on share repurchases$2,086 $— 
See accompanying notes to the unaudited condensed consolidated financial statements
9
SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements

1.Organization and Description of Business
Description of Business
Founded in 2009, Sprinklr, Inc. (“Sprinklr” or the “Company”) provides enterprise cloud software products that enable organizations to do marketing, advertising, research, care, sales and engagement across modern channels including social, messaging, chat and text through its Unified Customer Experience Management (“ Unified CXM”) software platform.
The Company was incorporated in Delaware in 2011 and is headquartered in New York, New York, USA with 20 operating subsidiaries globally.

2.Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, (“U.S. GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”), regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted, and accordingly the balance sheet as of January 31, 2024, and related disclosures, have been derived from the audited consolidated financial statements at that date but do not include all of the information required by U.S. GAAP for complete consolidated financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair presentation of the Company’s condensed consolidated financial information. The results of operations for the three and six months ended July 31, 2024 are not necessarily indicative of the results to be expected for the year ending January 31, 2025 or for any other interim period or for any other future year.
The accompanying interim unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended January 31, 2024 in the Company’s Annual Report on Form 10-K (the “2024 10-K”) filed with the SEC on March 29, 2024.
There have been no material changes in the significant accounting policies as described in the Company’s consolidated financial statements for the fiscal year ended January 31, 2024 included in the 2024 10-K.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, revenue recognition, fair value assumptions for stock-based compensation, software costs eligible for capitalization and the allowance on the Company’s accounts receivable. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and on assumptions that it believes are reasonable and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.
Segments
The Company operates in one operating segment because the Company’s offerings operate on its single Customer Experience Management Platform, the Company’s products are deployed in a similar way, and the Company’s chief operating decision maker (“CODM”), the co-chief executive officers, evaluates the Company’s financial information and assesses the performance of the Company on a consolidated basis. The CODM does not receive discrete financial information about asset allocation, expense allocation, or profitability by product or geography. Because the Company operates in one operating segment, all required financial segment information can be found in the condensed consolidated financial statements.
10
SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
Cash, Cash Equivalents and Restricted Cash
The following table reconciles cash, cash equivalents and restricted cash from the condensed consolidated balance sheets to amounts reported in the condensed consolidated statements of cash flows:
(in thousands)July 31, 2024January 31, 2024
Cash and cash equivalents$119,119 $164,024 
Restricted cash included in prepaid expenses and other current assets(1)
362 1,494 
Restricted cash included in other non-current assets(2)
7,343 6,911 
Total cash, cash equivalents and restricted cash$126,824 $172,429 
    
(1)At January 31, 2024, consisted primarily of cash that is restricted and is associated with certain credit card programs, which have been closed in the second quarter of fiscal year 2025.
(2) Consists primarily of collateral for letters of credit issued in lieu of deposits on certain leases and customer contracts.
Accounts Receivable and Allowance
Changes in the allowance account for the periods presented were as follows:
Six Months Ended July 31,
(in thousands)20242023
Allowance, beginning of period
$5,267 $3,156 
Write-offs of uncollectible accounts, net
(3,518)(423)
Provision for expected credit losses
10,743 907 
Allowance, end of period$12,492 $3,640 
Concentration of Risk and Significant Customers
The Company’s financial instruments that are potentially subject to credit risk consist primarily of cash and cash equivalents and accounts receivable. Although the Company deposits its cash with multiple financial institutions, its deposits generally exceed federally insured limits.
To manage credit risk related to accounts receivable, the Company maintains an allowance for credit losses. The allowance is determined by applying a loss-rate method based on an aging schedule using the Company’s historical loss rate. The Company also considers reasonable and supportable current and forecasted information in determining its estimated loss rates, such as external forecasts, macroeconomic trends, or other factors, including customers’ credit risk and historical loss experience. The Company’s accounts receivable at July 31, 2024 are derived from invoiced customers located primarily in North America and Asia (which includes the Middle East).
No single customer accounted for more than 10% of total revenue during the three and six months ended July 31, 2024 and 2023.
In addition, the Company relies upon third-party hosted infrastructure partners globally to serve customers and operate certain aspects of its services, such as environments for development testing, training, sales demonstrations, and production usage. Given this, any disruption of or interference at the Company’s hosted infrastructure partners would impact the Company’s operations and could adversely impact its business.
Recently Issued Accounting Pronouncements Pending Adoption
In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures (“ASU 2023-07”), requiring an enhanced disclosure of significant segment expenses on an annual and interim basis. ASU 2023-07 is effective for the Company’s annual periods beginning fiscal year 2025 and interim periods beginning in the first quarter of fiscal year 2026 on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact ASU 2023-07 will have on its disclosures within its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures (“ASU 2023-09”), requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for the Company’s annual periods beginning fiscal year 2026, on a prospective basis and retrospective application is permitted. The Company is currently evaluating the impact ASU 2023-09 will have on its disclosures within its consolidated financial statements.

11
SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
3. Revenue Recognition
The Company derives its revenues primarily from (i) subscription revenue, which consists of subscription fees from customers accessing the Company’s cloud-based software platform and applications, as well as related customer support services; and (ii) professional services revenue, which consists of fees associated with providing services that educate and assist the Company’s customers with the configuration and optimization of the Company’s software platform and applications. Professional services revenue also includes managed services fees where the Company’s consultants work as part of its customers’ teams to help leverage the subscription service to execute on their customer experience management goals.
Costs to Obtain Customer Contracts
Costs to obtain customer contracts, including commissions earned, that are considered incremental and recoverable are capitalized and amortized on a straight-line basis over the anticipated period of benefit. The Company determines the period of benefit by taking into consideration the length of its customer contracts, customer relationship period, technology lifecycle, and other factors. The Company currently estimates the period of benefit for which costs are amortized over to be five years. Sales commissions paid for renewals are not commensurate with commissions paid on the initial contract given the substantive difference in commission rates in proportion to their respective contract values. Amortization expense is recorded in sales and marketing expense within the Company’s condensed consolidated statement of operations.
Capitalized costs to obtain customer contracts as of July 31, 2024 were $132.9 million, of which $37.9 million is included in prepaid expenses and other current assets and $95.0 million within other non-current assets. Capitalized costs to obtain customer contracts as of January 31, 2024 were $135.8 million, of which $42.5 million is included in prepaid expenses and other current assets and $93.4 million within other non-current assets.
During the three months ended July 31, 2024 and 2023, the Company amortized $11.8 million and $12.2 million, respectively, of costs to obtain customer contracts, included in sales and marketing expense. During the six months ended July 31, 2024 and 2023, the Company amortized $23.8 million and $24.2 million, respectively, of costs to obtain customer contracts, included in sales and marketing expense.
Deferred Revenue
Deferred revenue consists primarily of customer billings made in advance of performance obligations being satisfied and revenue being recognized. The Company recognized revenue of $163.4 million and $148.3 million for the three months ended July 31, 2024, and 2023, respectively, and $282.6 million and $235.9 million for the six months ended July 31, 2024, and 2023, respectively, that was included in the deferred revenue balances at the beginning of the respective periods.
The Company receives payments from customers based on billing schedules as established in its contracts. Contract assets represent amounts for which the Company has recognized revenue in excess of billings pursuant to the revenue recognition guidance. At July 31, 2024 and January 31, 2024, contract assets were $3.7 million and $4.3 million, respectively, and were included in prepaid expenses and other current assets.
Remaining Performance Obligation
Remaining Performance Obligation (“RPO”) represents contracted revenues that had not yet been recognized and includes deferred revenues and amounts that will be invoiced and recognized in future periods. As of July 31, 2024, the Company’s RPO was $887.1 million, approximately $557.8 million of which the Company expects to recognize as revenue over the next 12 months and the remaining balance will be recognized thereafter.

12
SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
Disaggregation of Revenues
The Company disaggregates its revenue from contracts with customers by geographic region, as it believes that it best depicts how the nature, amount, timing, and uncertainty of its revenues and cash flows are affected by economic factors.
The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use the cloud-based software platform:
Three Months Ended July 31, Six Months Ended July 31,
(in thousands)2024202320242023
Americas$115,377 $105,275 $230,645 $210,917 
EMEA67,194 55,807 133,105 110,027 
Other14,637 17,383 29,416 30,884 
Total revenue
$197,208 $178,465 $393,166 $351,828 
The United States was the only country that represented more than 10% of the Company’s revenues, comprising $107.8 million and $101.3 million during the three months ended July 31, 2024 and 2023, respectively, and $214.8 million and $199.4 million during the six months ended July 31, 2024 and 2023, respectively.

4. Marketable Securities
The following is a summary of available-for-sale marketable securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheets:
July 31, 2024
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair value
Corporate bonds$62,553 $19 $(21)$62,551 
Municipal bonds997 — — 997 
U.S. government and agency securities131,244 — (98)131,146 
Certificates of deposit45,682 22 (3)45,701 
Commercial paper108,977 5 (45)108,937 
Marketable securities$349,453 $46 $(167)$349,332 
January 31, 2024
(in thousands)Amortized CostUnrealized GainsUnrealized LossesFair value
Corporate bonds$98,642 $71 $(10)$98,703 
Municipal bonds982 3 — 985 
U.S. government and agency securities185,464 140 (33)185,571 
Certificates of deposit46,496 48 (1)46,543 
Commercial paper166,595 155 (21)166,729 
Marketable securities$498,179 $417 $(65)$498,531 
As of July 31, 2024 and January 31, 2024, the maturities of available-for-sale marketable securities did not exceed 12 months. Interest income from cash and cash equivalents and marketable securities was $7.0 million and $15.3 million for the three and six months ended July 31, 2024, respectively, and $7.9 million and $13.9 million for the three and six months ended July 31, 2023, respectively.
There were 74 and 64 debt securities in an unrealized loss position as of July 31, 2024 and January 31, 2024, respectively. The estimated fair value of these debt securities, for which an allowance for credit losses has not been recorded, was $255.4 million and $178.7 million as of July 31, 2024 and January 31, 2024, respectively. There were no expected credit losses recorded against the Company’s investment securities as of July 31, 2024 and January 31, 2024.
13
SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
Unrealized losses on the Company’s debt securities are not considered to be credit-related based upon an analysis that considered the extent to which the fair value is less than the amortized basis of a security, adverse conditions specifically related to the security, changes to credit rating of the instrument subsequent to Company purchase, and the strength of the underlying collateral, if any.
Refer to Note 5, Fair Value Measurements, for information about the fair value of the Company’s fair value hierarchy for short-term marketable securities.

5. Fair Value Measurements
The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value on a recurring basis as of July 31, 2024 and January 31, 2024, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value:
July 31, 2024January 31, 2024
(in thousands)Level 1Level 2TotalLevel 1Level 2Total
Financial Assets:
Cash Equivalents:
Money market funds$53,014 $— $53,014 $52,647 $— $52,647 
Marketable Securities:
Corporate bonds— 62,551 62,551 — 98,703 98,703 
Municipal bonds— 997 997 — 985 985 
U.S. government and agency securities— 131,146 131,146 — 185,571 185,571 
Certificates of deposit— 45,701 45,701 — 46,543 46,543 
Commercial paper— 108,937 108,937 — 166,729 166,729 
Total financial assets$53,014 $349,332 $402,346 $52,647 $498,531 $551,178 
The Company classifies its highly liquid money market funds within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company classifies its commercial paper, corporate and municipal debt securities, U.S. government and agency securities and certificates of deposit within Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security which may not be actively traded.
The Company’s primary objective when investing excess cash is preservation of capital, hence the Company’s marketable securities consist primarily of U.S. government and agency securities, high credit quality corporate debt securities and commercial paper. The Company has classified and accounted for its marketable securities as available-for-sale securities, as it may sell these securities at any time for use in the Company’s current operations or for other purposes, even prior to maturity. As of July 31, 2024 and January 31, 2024, for fixed income securities that were in unrealized loss positions, the Company has determined that (i) it does not have the intent to sell any of these investments and (ii) it is not more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. In addition, as of July 31, 2024, the Company anticipates that it will recover the entire amortized cost basis of such fixed income securities before maturity.
The Company regularly reviews the changes to the rating of its debt securities by rating agencies as well as reasonably monitors the surrounding economic conditions to assess the risk of expected credit losses. As discussed in Note 4, Marketable Securities, as of July 31, 2024 and January 31, 2024, there were no securities that were in an unrealized loss position for more than 12 months. The Company has not recorded any impairments in the periods presented.

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SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
6. Balance Sheet Components
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
(in thousands)July 31, 2024January 31, 2024
Prepaid hosting and data costs$16,457 $1,673 
Prepaid software costs10,174 4,854 
Prepaid marketing1,735 1,208 
Capitalized commissions costs, current portion37,863 42,486 
Contract assets3,655 4,326 
Security deposits, short-term1,838 1,923 
Taxes recoverable2,922 3,561 
Restricted cash362 1,494 
Employee advances
2,563 2,614 
Other 6,589 6,551 
Prepaid expenses and other current assets$84,158 $70,690 
Depreciation and Amortization Expense
Depreciation and amortization expense consisted of the following:
Three Months Ended July 31, Six Months Ended July 31,
(in thousands)2024202320242023
Depreciation and amortization expense$1,501 $1,548 $3,106 $3,039 
Amortization expense for capitalized internal-use software$3,109 $2,262 $6,012 $4,290 
The Company capitalized internal-use software costs, including stock-based compensation, of $4.0 million and $3.9 million for the three months ended July 31, 2024 and 2023, respectively, and $7.5 million and $7.3 million for the six months ended July 31, 2024 and 2023, respectively.
15
SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
(in thousands)July 31, 2024January 31, 2024
Bonuses$10,919 $23,314 
Commissions7,825 18,502 
Employee liabilities (1)
15,796 19,019 
Purchased media costs (2)
2,062 1,683 
Accrued restructuring costs (3)
2,030 — 
Accrued sales and use tax liability6,750 8,522 
Accrued income taxes8,040 4,529 
Accrued deferred contract credits1,343 2,204 
Vendor and travel costs payable3,130 4,160 
Professional services1,263 1,142 
Asset retirement obligation267 400 
Withholding taxes payable1,296 944 
Other3,650 8,768 
Accrued expenses and other current liabilities$64,371 $93,187 
(1) Includes $1.0 million and $1.4 million of accrued employee contributions under the Company’s 2021 Employee Stock Purchase Plan (“ESPP”) at July 31, 2024 and January 31, 2024, respectively.
(2) Purchased media costs consist of amounts owed to the Company’s vendors for the purchase of advertising space on behalf of its customers.
(3) In May 2024, the Company implemented an approved plan for restructuring its global workforce by approximately 3% to reduce operating costs and better align its workforce with the needs of its business. Refer to Note 13, Restructuring Charges, for additional information.

7. Leases
The Company has leases for corporate offices under non-cancelable operating leases with various expiration dates. The Company did not have any finance leases during the three and six months ended July 31, 2024 and 2023.
On August 2, 2023, the Company entered into a 10-year operating lease agreement for a new corporate headquarters located in New York, NY. The Company has the option to extend the term for 60 months, which is not included in our right-of-use (“ROU”) assets and lease liabilities as the lease renewal is not reasonably certain to be exercised. The lease commenced on April 29, 2024, with payments beginning in December 2024.
The components of lease expense were as follows:
Three Months Ended July 31, Six Months Ended July 31,
(in thousands)2024202320242023
Operating lease cost$3,332 $2,888 $6,194 $5,283 
Variable lease cost319 307 648 609 
Short-term lease cost121 182 263 389 
Total lease cost$3,772 $3,377 $7,105 $6,281 

The weighted average remaining lease term and discount rate were as follows:
July 31, 2024January 31, 2024
Weighted average remaining lease term (years)7.406.20
Weighted average discount rate8.82 %10.11 %
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SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
The maturities of lease liabilities under non-cancelable operating leases, net of lease incentives, were as follows:
(in thousands)
Fiscal year ended January 31, 2025 (remaining six months)
$4,941 
202611,249 
202710,206 
20288,219 
20297,280 
20306,165 
Thereafter23,099 
Total minimum lease payments
71,159 
Less: imputed interest(19,954)
Total$51,205 

8. Commitments and Contingencies
Letters of Credit
In April 2023, the Company terminated its credit facility with Silicon Valley Bank (“SVB”), while keeping its existing letters of credit in lieu of deposits on certain leases. As the Company no longer has a credit facility with SVB, it was required to collateralize these letters of credit with cash, totaling approximately $1.3 million outstanding as of July 31, 2024 and January 31, 2024, which the Company has therefore classified within restricted cash. Due to its long-term nature, this restricted cash is recorded within other non-current assets on the condensed consolidated balance sheets.
During 2023, the Company entered into cash collateral agreements with J.P. Morgan Bank in lieu of a letter of credit facility, through which approximately $6.4 million and $5.4 million is outstanding as of July 31, 2024 and January 31, 2024, respectively. Due to its long-term nature, the majority of this restricted cash is recorded within other non-current assets on the condensed consolidated balance sheets.
Legal Matters
From time to time, the Company, various subsidiaries, and certain current and former officers may be named as defendants in various lawsuits, claims, investigations and proceedings arising from the normal course of business. The Company also may become involved with contract issues and disputes with customers. With respect to litigation in general, based on the Company’s experience, management believes that the amount of damages claimed in a case are not a meaningful indicator of the potential liability. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of cases. The Company believes that it has valid defenses with respect to the legal matters pending against the Company and intends to vigorously contest each of them.
The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. In management’s opinion, resolution of all current matters is not expected to have a material adverse impact on the Company’s condensed consolidated results of operations, cash flows or financial position. However, if an unfavorable ruling were to occur in any specific period, there exists the possibility of a material adverse impact on the results of operations for that period. At July 31, 2024, the Company had no provision for liability under existing litigation.
Other Contractual Commitments
Other contractual commitments consist primarily of non-cancelable minimum guaranteed purchase commitments for various data, hosting and software services, which the Company may renew as part of the normal course of business. During the six months ended July 31, 2024, the lease for the new corporate headquarters located in New York, NY commenced, which impacts the Company’s cash requirements. See Note 7 Leases for additional information. There were no other significant changes in the Company’s material cash requirements as compared to the material cash requirements from known contractual and other obligations described in the 2024 10-K.

17
SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
9. Stockholders’ Equity
On January 4, 2024, the Company announced that its board of directors authorized and approved a share repurchase plan (the “2024 Share Repurchase Program”), which authorized the Company to periodically repurchase up to $100 million of its Class A common stock through December 31, 2024. On both March 26, 2024 and June 3, 2024, the Company’s board of directors approved an additional $100 million of repurchases under the 2024 Share Repurchase Program, bringing the total amount authorized for purchase under the 2024 Share Repurchase Program to $300 million. Repurchases are executed from time to time, subject to general business and market conditions and other investment opportunities, through open market or negotiated off market purchases effected pursuant to a written trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.
During the three and six months ended July 31, 2024 the Company repurchased 17,119,411 and 25,460,052 shares, respectively, of its Class A common stock for a cost of $169.8 million and $271.0 million, respectively, including commissions. All of the Company’s repurchases are subject to a one percent excise tax enacted by the Inflation Reduction Act of 2022 (the “IRA”). The Company recorded excise taxes of $1.5 million and $2.1 million during the three and six months ended July 31, 2024, respectively, as part of the cost basis of shares acquired in its consolidated statement of stockholders’ equity. All of the shares repurchased have been returned to the Company’s authorized but unissued share reserve. As of July 31, 2024, the Company has completed the full purchase authorization amount of $300 million under the 2024 Share Repurchase Program.

10. Stock-Based Compensation
Equity Award Plans
The Company has two equity incentive plans, the Sprinklr, Inc. 2021 Equity Incentive Plan (the “2021 Plan”) and the Sprinklr, Inc. 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan was terminated as to future awards in June 2021 upon the adoption of the 2021 Plan, although it continues to govern the terms of any equity grants that remain outstanding under the 2011 Plan.
The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), performance-based stock units (“PSUs”), and other forms of awards to employees, directors and consultants, including employees and consultants of the Company’s affiliates, as permitted by law.
In June 2021, the Company also adopted its ESPP, under which employees can purchase common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the Class A common stock on (i) the first trading day of each offering period and (ii) the last trading day of each related offering period.
Summary of Stock Option Activity
A summary of the Company’s stock option activity for the six months ended July 31, 2024 is as follows:
Number of Stock Options
Weighted Average Exercise Price
Weighted Average Remaining Contractual Life
(in thousands)(in years)
Outstanding as of January 31, 2024
23,267 $6.66 5.9
Exercised (3,000)5.70 
Forfeited
(576)11.20 
Outstanding as of July 31, 2024
19,691 $6.68 5.2
Exercisable as of July 31, 2024
17,676 $6.13 5.0
Vested and expected to vest as of July 31, 2024
19,562 $6.66 5.2
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SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
Summary of Restricted Stock Unit Activity
A summary of the Company’s RSU activity for the six months ended July 31, 2024 is as follows:
Number of Restricted Stock Units
Weighted Average Grant Date Fair Value
(in thousands)
Outstanding as of January 31, 2024
9,259 $12.61 
Granted8,225 11.35 
Released (2,106)12.74 
Forfeited
(1,767)12.15 
Outstanding as of July 31, 2024
13,611 $11.88 
Performance-Based Stock Units
As of July 31, 2024, the Company had 780,000 PSUs outstanding. These awards vest over a five-year period if certain performance and market conditions are met. The performance condition was met in June 2021 and the market conditions have not yet been met as of July 31, 2024. If the market conditions are not met on or prior to January 28, 2026, the associated awards will not vest and will be subsequently cancelled.
Stock-Based Compensation Expense
Stock-based compensation expense included in operating results was allocated as follows:
Three Months Ended July 31, Six Months Ended July 31,
(in thousands)2024202320242023
Costs of subscription $327 $290 $610 $590 
Costs of professional services364 405 681 808 
Research and development2,834 3,897 5,408 6,964 
Sales and marketing5,802 6,311 11,406 12,266 
General and administrative5,765 3,962 10,842 7,547 
Stock-based compensation, net of amounts capitalized15,092 14,865 28,947 28,175 
Capitalized stock-based compensation631 874 1,182 1,544 
Total stock-based compensation$15,723 $15,739 $30,129 $29,719 

19
SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
11. Net Income Per Share
The Company has two classes of common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting, conversion and transfer rights. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net income per share attributable to common stockholders are, therefore, the same for both Class A and Class B common stock on both an individual and combined basis.
Basic net income per share is computed by dividing net income attributable to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. Diluted net income per share is calculated by giving effect to all potential dilutive common stock equivalents, which includes stock options, restricted stock units and other awards.
The following table sets forth the computation of basic and diluted net income per share:
Three Months Ended July 31, Six Months Ended July 31,
(in thousands, except per share data)
2024202320242023
Net income per share – basic:
Numerator:
Net income
$1,841 $10,485 $12,475 $13,293 
Denominator:
Weighted-average shares outstanding used in computing net income per share, basic260,830268,900266,187267,271 
Net income per common share, basic
$0.01 $0.04 $0.05 $0.05 
Net income per share – diluted:
Numerator:
Net income
$1,841 $10,485 $12,475 $13,293 
Denominator:
Weighted-average shares outstanding used in computing net income per share, basic
260,830 268,900 266,187 267,271 
Weighted-average effect of diluted securities:
Stock options7,953 11,259 9,021 11,128 
RSUs3,057 3,069 4,167 4,072 
Common stock warrants94 625 320 480 
Weighted-average shares outstanding used in computing net income per share, diluted
271,934 283,853 279,695 282,951 
Net income per common share, diluted
$0.01 $0.04 $0.04 $0.05 
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:
Three Months Ended July 31, Six Months Ended July 31,
(in thousands)2024202320242023
Stock options5,364 2,591 5,171 6,705 
PSUs
780 1,330 780 1,330 
RSUs3,212 650 1,426 692 
ESPP84 164 92 321 
Total shares excluded from net income per share
9,440 4,735 7,469 9,048 

12. Income Taxes
The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period. During the three months ended July 31, 2024 and 2023, the Company recorded an income tax provision of $4.5 million and $2.2 million, respectively. During the six months ended July 31, 2024 and 2023, the Company recorded an income tax provision of $7.1 million and $1.0 million, respectively.
20
SPRINKLR, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
The Company’s effective tax rate generally differs from the U.S. federal statutory tax rate primarily due to a full valuation allowance related to the Company’s U.S. deferred tax assets, partially offset by state taxes and the foreign tax rate differential on non-U.S. income. Additionally, following an assessment of the realizability of our deferred tax assets in Brazil and Japan, the Company released its previously established valuation allowances on these assets, resulting in a $3.3 million tax benefit being recorded during the six months ended July 31, 2023.
The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized. In making such a determination, the Company considers all available positive and negative evidence. As of July 31, 2024, the Company continues to maintain a full valuation allowance against the deferred tax assets of the U.S. entity only.
The IRA was signed into law on August 16, 2022. The bill was meant to address the high inflation rate in the U.S. through various climate, energy, healthcare, and other incentives. These incentives are meant to be paid for by the tax provisions included in the IRA, such as a new 15 percent corporate minimum tax, a new one percent excise tax on stock buybacks, additional IRS funding to improve taxpayer compliance, and other items. As of July 31, 2024, the Company has accrued $2.1 million of excise taxes associated with the 2024 Share Repurchase Program. At this time, none of the IRA tax provisions are expected to have a material impact to the Company’s fiscal year 2025 tax provision. The Company will continue to monitor for updates to the Company’s business along with guidance issued with respect to the IRA.

13. Restructuring Charges
In February 2023, the Company implemented an approved plan for restructuring its global workforce by approximately 4% to reduce operating costs and better align its workforce with the needs of its business. The majority of the associated costs, including severance and benefits, were incurred in the first half of fiscal year 2024. For the six months ended July 31, 2023, the Company incurred a total of $4.4 million in restructuring costs, of which $4.2 million and $0.2 million are recorded within sales and marketing expense and general and administrative expense, respectively, on the Company’s condensed consolidated statement of operations. As of January 31, 2024, all of these restructuring costs had been paid.
In May 2024, the Company implemented an approved plan for restructuring its global workforce by approximately 3% to reduce operating costs and better align its workforce with the needs of its business. The majority of the associated costs, including severance and benefits, were incurred in the second quarter of fiscal year 2025. For the three and six months ended July 31, 2024, the Company incurred a total of $3.8 million in restructuring costs, $3.0 million of which are recorded within sales and marketing expense on the Company’s condensed consolidated statements of operations and $0.4 million, $0.3 million, and $0.1 million being recorded within research and development, costs of professional services, and general and administrative, respectively. As of July 31, 2024, $1.8 million had been paid and the remaining $2.0 million is recorded within accrued expenses and other current liabilities and is expected to be paid in the second half of fiscal 2025.

14. Related Party Transactions
The Company engaged Lyearn Inc. (“Lyearn”), a learning management system company that is wholly owned by Ragy Thomas, our Founder, Chairman and Co-Chief Executive Officer, in connection with the provision of digital training services to the Company’s employees and certain Sprinklr customers. The Company paid approximately $0.1 million and $0.2 million to Lyearn in connection with the digital training services provided to employees during the six months ended July 31, 2024 and 2023, respectively. There were no payments in connection with the digital training services provided to employees during each of the three months ended July 31, 2024 and 2023. The Company paid approximately $0.1 million to Lyearn in connection with the digital training services provided to a customer during each of the three and six months ended July 31, 2024 and 2023.
The Company recognized expenses of $0.1 million during each of the three and six months ended July 31, 2024 and 2023 related to the arrangements. As of July 31, 2024 and January 31, 2024, the Company had outstanding payables of $0.1 million and $0.2 million, respectively, related to the arrangements.
With regard to the development of certain human productivity features for the Company, the Company is leveraging its collaborative relationship with Lyearn to serve Company imperatives in the areas of employee assessment, goal-setting, and activity measurement against goals, and other employee feedback and assessment, to assist and accelerate the Company’s efforts to identify the optimal tools and processes that will be deployed long-term to meet these business imperatives. These collaborative services are provided to the Company by Lyearn at no cost.
This related party transaction has been reviewed and approved by the audit committee of the Company’s board of directors.


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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”), and our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024 (the “2024 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2024. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Form 10-Q. You should review the disclosure under the heading “Risk Factors” in this Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Overview
Sprinklr empowers the world’s largest and most loved brands to make their customers happier.
We do this with a new category of enterprise software – Unified Customer Experience Management (“Unified-CXM”) – that enables every customer-facing function across the front office, from Customer Service to Marketing, to collaborate across internal silos, communicate across digital channels, and leverage a complete suite of capabilities to deliver better, more human customer experiences at scale – all on one unified, AI-powered platform. Sprinklr has four main product suites: Sprinklr Social, Sprinklr Insights, Sprinklr Marketing and, our newest offering, Sprinklr Service. We believe that these four suites enable the world’s largest and leading brands to better reach, engage and listen to their customers on the channel of their choice. We continue to invest in the unified platform and develop new features and enhancements to each suite as our customers’ needs evolve.
Our Unified-CXM platform utilizes an architecture purpose-built for managing Customer Experience Management (“CXM”) data and is powered by proprietary AI, collaborative workflow, seamless automation, broad-based listening and customer-led governance to help enterprises analyze massive amounts of unstructured and structured data.
We generate revenue from the sale of subscriptions to our Unified-CXM platform and related professional services. Our platform includes products that are licensed on a per-user basis as well as products that are licensed based on different tiers of volume.
We believe that our Unified-CXM platform is highly effective for organizations of all sizes, and we have a highly diverse group of customers across a broad array of industries and geographies. We focus primarily on selling our platform to large global enterprises, as we believe that we have significant competitive advantages attracting and serving such organizations given their complex needs and the broad capabilities our platform offers.
Our customers include global enterprises across a broad array of industries and geographies, as well as marketing agencies and government departments along with non-profit and educational institutions. Our customers are located in over 80 countries, and our AI powered CXM platform recognizes over 150 languages. We define our large customers as customers with greater than or equal to $1.0 million in subscription revenue on a trailing 12-month basis, as of the period presented. As of July 31, 2024, we had 145 large customers, compared to 120 as of July 31, 2023.
Key Business Metrics
We review a number of operating and financial metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.
RPO and cRPO
Remaining Performance Obligation (“RPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue and amounts that will be invoiced and recognized in future periods. Current RPO (“cRPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue and amounts that will be invoiced and recognized in the next 12 months. As of July 31, 2024, our RPO expected to be recognized as revenue was $887.1 million and our cRPO was $557.8 million.
Net Dollar Expansion Rate
We believe that net dollar expansion rate (“NDE”) is an indicator of the value that our platform delivers to customers. We calculate NDE to measure our ability to retain and expand subscription revenue from our existing customers. NDE compares our subscription revenue from the same set of customers across comparable periods and reflects customer renewals, expansion, contraction and churn. We calculate NDE by dividing (i) subscription revenue in the trailing 12-month period from those customers who were on our platform during the most recent prior 12-month period by (ii) subscription revenue from the same customers in the preceding prior 12-month period. This calculation is net of upsells, contraction, cancellation or expansion during the period but excludes subscription revenue from new customers. Our NDE, on a trailing 12-month basis, was 110.8% and 120.0% for the 12-month periods ending July 31, 2024 and 2023, respectively. The decrease year-over-year was driven by a combination of elevated churn exacerbated by the current macroeconomic environment.
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Macroeconomic Considerations
Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including fluctuations in inflation, the U.S. Federal Reserve raising interest rates, recent bank closures, and the Russia-Ukraine and Israel-Hamas wars (including an escalation or geographical expansion of these conflicts), have led to economic uncertainty globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on information technology, which may impact our business and our customers’ businesses. While we have experienced growing inflationary pressures on the cost of wages, rent and data, the net result of inflationary impacts and our efforts to mitigate these impacts have not been material to us during the periods included in this report. In addition, general economic weakness may lead to longer collection cycles for payments due from our customers and an increase in customer bad debt, as well as restructuring initiatives and associated expenses, and customers and potential customers may require extended financial concessions.
The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors” included in Part II, Item 1A of this Form 10-Q and Part I, Item 1A of the 2024 10-K.

Components of Results of Operations
Revenue
We generate revenue from the sale of subscriptions to our Unified-CXM cloud-based software platform and related professional services.
Subscription revenue consists primarily of fees from customers accessing our proprietary Unified-CXM platform, as well as related support services. Subscription revenue is generally recognized ratably over the related contract term beginning on the commencement date of each contract, which is generally the date our service is made available to customers. Our subscriptions typically have a term of one to three years. Historically, we have experienced seasonality in our sales cycle, as a large percentage of our customers make their purchases in the fourth quarter of a given fiscal year and pay us in the first quarter of the subsequent year. This seasonality may be reflected to a much lesser extent, and sometimes may not be immediately apparent, in our revenue, due to the fact that we recognize subscription revenue over the term of the applicable subscription agreement.
Professional services revenue consists of fees associated with providing services that assist our customers with the configuration and optimization of our Unified-CXM software. These fees also include managed services fees where our consultants work as part of our customers’ teams to help leverage the subscription services to execute on their customer experience management goals and enablement services which consist of initial design, configuration and education services.
Costs of Revenue
Costs of Subscription Revenue
Costs of subscription revenue consists primarily of costs to host our software platform, data costs, including cost of third-party data utilized in our platform, personnel-related expenses for our subscription and support operations personnel, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, travel expenses, the amortization of our capitalized internal-use software and allocated overhead expenses, including facilities costs for our subscription and support operations. We expect that costs of subscription revenue will increase in absolute dollars as we expand our customer base and make continued investments in our cloud infrastructure and support organization.
Costs of Professional Services Revenue
Costs of professional services revenue consists primarily of personnel-related expenses for our professional services personnel, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, subcontractor costs, travel expenses and allocated overhead expenses, including facilities costs, for our professional services organization. We expect that our costs of professional services revenue will increase in absolute dollars as we continue to increase our use of partners in the delivery of implementation services and expand our customer base.
Gross Profit and Gross Margin
Gross profit is total revenue less total costs of revenue. Gross margin is gross profit expressed as a percentage of total revenue. We expect that gross profit and gross margin will continue to be affected by various factors, including our pricing, our mix of revenues and the costs required to deliver those revenues.
Our gross margin on subscription revenue is significantly higher than our gross margin on professional services revenue, and, as a result, our gross margin may vary from period to period if our mix of revenue or costs of revenue fluctuates. In addition, because personnel-related expenses represent the largest component in costs of professional services revenue, we may experience changes in
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our professional services gross margin due to the timing of delivery of those services. We expect that our gross margin may vary from period to period.

Operating Expenses
Our operating expenses consist of research and development, sales and marketing and general and administrative expenses.
Research and Development Expense
Research and development expense consists primarily of costs relating to the maintenance, continued development and enhancement of our cloud-based software platform and includes personnel-related expense for our research and development organization, including salaries, benefits, bonuses and stock-based compensation, professional fees, travel expenses and allocated overhead expenses, including facilities costs. Research and development expenses are expensed as incurred, except for internal-use software development costs that qualify for capitalization. We expect research and development expense to generally increase in absolute dollars as we continue to invest in enhancing and expanding the capabilities of our Unified-CXM platform.
Sales and Marketing Expense
Sales and marketing expense consists primarily of personnel-related expenses for our sales and marketing organization, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, advertising, marketing, promotional and brand awareness activities, travel expenses and allocated overhead expense, including facilities costs. Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer and are deferred and amortized on a straight-line basis over the expected period of benefit. In the near term, we expect sales and marketing expense to decrease as we work to right size our costs. In the long term, we expect sales and marketing expense to generally increase in absolute dollars as we continue to drive the growth of our business. We continue to optimize our sales and marketing expense and seek efficiencies in our investments.
General and Administrative Expense
General and administrative expense includes personnel-related expenses associated with administrative services, such as legal, human resources, information technology, accounting, and finance functions, as well as professional fees, software costs, travel expenses, provision for credit losses and allocated overhead expense, including facilities costs and any corporate overhead expenses not allocated to other expense categories.
We expect our general and administrative expense to increase in absolute dollars as we continue to grow our business. We also anticipate that we will incur additional costs for employees and third-party consulting services, which may cause our general and administrative expense to fluctuate as a percentage of revenue from period to period.
Other Income, Net
Other income, net, consists of interest income on invested cash and cash equivalents and marketable securities, interest expense, foreign currency transaction gains and losses and other expenses and gains.
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes related to foreign and U.S. jurisdictions in which we conduct business. Our annual estimated effective tax rate differed from the U.S. federal statutory rate primarily due to a full valuation allowance related to our U.S. deferred tax assets, partially offset by U.S. current state taxes and foreign tax rate differential on non-U.S. income and discrete items relating to releases of valuation allowances in certain foreign jurisdictions.
24

Results of Operations
The following table sets forth our condensed consolidated statements of operations data for the periods indicated:
Three Months Ended July 31, Six Months Ended July 31,
(in thousands)2024202320242023
Revenue:
Subscription$177,859 $163,452 $355,222 $321,117 
Professional services19,349 15,013 37,944 30,711 
Total revenue197,208 178,465 393,166 351,828 
Costs of revenue:
  Costs of subscription (1)
34,306 27,783 66,876 55,259 
  Costs of professional services (1)
20,010 15,684 38,565 30,145 
Total costs of revenue54,316 43,467 105,441 85,404 
Gross profit142,892 134,998 287,725 266,424 
Operating expense:
  Research and development (1)
23,622 24,323 46,161 45,084 
  Sales and marketing (1)
80,497 80,118 167,981 169,320 
  General and administrative (1)
38,860 25,068 67,961 49,724 
Total operating expense142,979 129,509 282,103 264,128 
Operating (loss) income(87)5,489 5,622 2,296 
Other income, net
6,414 7,237 13,914 11,996 
Income before provision for income taxes6,327 12,726 19,536 14,292 
Provision for income taxes
4,486 2,241 7,061 999 
Net income
$1,841 $10,485 $12,475 $13,293 
(1) Includes stock-based compensation expense, net of amounts capitalized, as follows:
Three Months Ended July 31, Six Months Ended July 31,
(in thousands)2024202320242023
Costs of subscription $327 $290 $610 $590 
Costs of professional services364 405 681 808 
Research and development2,834 3,897 5,408 6,964 
Sales and marketing5,802 6,311 11,406 12,266 
General and administrative5,765 3,962 10,842 7,547 
Stock-based compensation expense, net of amounts capitalized$15,092 $14,865 $28,947 $28,175 
25

The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of total revenue (1):
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Three Months Ended July 31, Six Months Ended July 31,
2024202320242023
Revenue:
Subscription90 %92 %90 %91 %
Professional services10 %8 %10 %9 %
Total revenue100 %100 %100 %100 %
Costs of revenue:
Costs of subscription17 %16 %17 %16 %
Costs of professional services10 %9 %10 %9 %
Total costs of revenue27 %25 %27 %25 %
Operating expense:
Research and development12 %14 %12 %13 %
Sales and marketing41 %45 %43 %48 %
General and administrative20 %14 %17 %14 %
Total operating expense73 %73 %72 %75 %
Operating (loss) income0 %2 %1 %0 %
Other income, net
3 %4 %4 %3 %
Income before provision for income taxes3 %6 %5