Sprinklr, Inc.

ladies and gentlemen thank you for standing by and welcome to sprinkler's third quarter of fiscal 2022 earnings conference call joining us today are rajee thomas sprinkler's founder and ceo vivek kundra chief operating officer and chris lynch chief financial officer at this time all participants are in a listen-only mode after the speaker's remarks there will be a question and answer session please be advised that today's conference is being recorded I would now like to hand the conference over to your first speaker today, Mr. Chris Lynch, for introductory remarks. Please go ahead, Chris.

Thank you. And thanks to everyone for joining us today for Sprinklr's third quarter earnings call for the three-month period ending on October 31st. We issued our earnings release a short time ago, filing the associated 8K with the SEC, and we've also made that available on the investor relations section of our website. As a reminder, During today's call, we'll be making forward-looking statements about the business and about the financial results of Sprinklr that involve many assumptions, risks, and uncertainties, and our actual results might differ materially. Any forward-looking statements that we make on this call are based on our beliefs and assumptions as of today, and we disclaim any obligation to update them. For more details on the risks associated with these forward-looking statements, please refer to the text in the company's press release issued today and to our periodic reports filed with the SEC including our quarterly report on Form 10-Q for the quarter ended October 31st, 2021, that will be filed with the SEC. With that, let me turn the call over to Raji.

Thanks, Chris, and hello, everyone. It is wonderful to speak with all of you again. First and foremost, I'm really pleased to report a really, really excellent third quarter that exceeded guidance on all metrics. Q3 revenue grew 32% year over year to 127.1 million, and subscription revenue grew 29% year over year to $109.9 million. This is the fourth quarter that we have accelerated our revenue growth rate back to back, which is a continued validation from the world's largest enterprises. that there's a massive need to unify experiences across customer facing functions and teams from care to marketing on all modern channels. And the need is not just to unify customer experiences across functions and teams. It is to unify customer experiences across markets globally. And in many cases, the need is to even unify experiences across brands or business units for multi-brand and multi-business unit companies. Our vision and strategy hasn't changed since the company was founded 12 years ago. We're here to do three things. One, to lead a new category of enterprise software that we call Unified Customer Experience Management. Two, to build the world's most loved And I repeat, most loved enterprise software company. And three, to create a culture that obsesses about customers and treats one another like family. The sustained execution and results that you're seeing from us this quarter are simply a reflection of who we are and who we always have been. And with this renewed momentum, we have never been more excited about the opportunity in front of us. Our customers are telling us that they want to replace point solutions in the front office with a single platform. That they need that platform to be purpose-built for modern channels. And that it needs to integrate with other best of suite platforms that they already have. In short, They need more platforms that work well with each other and less point solutions that don't. This is the reason our net dollar expansion increased significantly this quarter. And we now have 80 customers with more than 1 million in trailing 12-month subscription revenues. It's clear that every large enterprise in the world is in the midst of their own digital transformation to being customer-centric, and everyone's trying to find ways to deliver a better, more unified customer experience. Most are still early in that journey, but for our million-plus customers like Honda and many others like them, they're moving much faster than others are. When you talk to our customers and companies like them, you will see a pattern. It's common for large companies to start with point solutions in modern channels and try and stitch it together. The problem is it never scales. And with point solutions, it's impossible for any company to improve the experiences that customers are having with them. It was the right thing to do five, 10 years ago, because there wasn't an alternative. They had to choose between best-of-breed point solutions or a platform with basic capabilities. Now, with Sprinklr, they don't. They can make a no-compromise decision with the 31 next-generation capabilities that they need across four major customer-facing functions from marketing to customer care, all on one platform where everything and everyone can work together. Unification on Sprinklr doesn't happen all at once. It happens in phases, land and expand. And with a unified platform as broad as ours, any of our 31 products across our four product suites can be the entry point. Some customers start by unifying social, maybe across markets and business units. Then they expand to unify all of marketing, where they have visibility across content and campaigns. And then they unify all of outbound engagement, bringing marketing and sales together. Sometimes customers come at it the other way, starting by unifying research, getting insights in one place, and followed by customer care. No matter what path they start, the pieces come together on Sprinklr, giving these companies something that they know they need, a single platform that could become the foundation for unifying the entire customer experience across all modern channels. Enterprises don't start with unified CXM. They arrive at it. Here are two examples. Let's start with Prada, an incredible, company, that's reimagining the future of luxury. During my last trip to Europe, I had the privilege of meeting Lorenzo Bertelli, who the company recently announced as their future CEO. It was fascinating to hear him describe his vision to unify each brand across in-person and digital channels in order to serve customers when and where they desire the best experience. Over the past 18 months, the Prada Group has been progressively unifying advertising and engagement and research and care all on Sprinklr to execute against their digital first strategy and to support the exponential growth that they're seeing on online channels. They started with Sprinklr's modern advertising and modern sales and engagement suites and pulling together five global brands for full visibility into campaign creation, publishing, and performance across modern channels. The group now manages 147 accounts with more than 5,000 messages published from Sprinklr this year. They then added our AI-powered modern research suite, tracking 92 million mentions across 183 broad topics with over more than 70 custom dashboards from where they get their insights in real time. And in Q3, they added our modern care and conversational commerce product, which enables proactive selling in the channels that customers prefer. Another great example is Honda Japan, who first partnered with Sprinklr in 2016 when its data science team adopted our listening product. to listen to brand-relevant conversations across social channels and get actionable insights. But then they added display, turning that data into interactive experiences for their employees. Today, Honda Japan has over 100 users on modern research, and they track over 100 car models, measuring marketing effectiveness, benchmarking social content and engagement against competitors, and detecting and monitoring for crisis. Honda then expanded the usage of Sprinklr to include modern advertising, modern care, and a modern sales and engagement suite. In Q3, they added voice as a channel for customer care and engagement. As the company's e-commerce business started gathering momentum, they are Sprinklr's first customer to implement voice in Japan, enabling their agents to seamlessly now engage with consumers however they choose to connect. As Honda's head of new e-commerce business, Yoshiaki-san, explained to us, our goal is to connect authentically across channels, and Sprinklr enables us to do that. Sprinklr is a customer-first company. One way that manifests is in our unmatched pace of innovation, which has always set us apart. This quarter was no different. We launched 600 new features and enhancements in the last 90 days that are going to benefit our customers. One of the more exciting innovations in this last release was our persona-based apps that include a homepage for each job role in the front office. This puts the insights and workflows that each user needs to do their specific job right at their fingertips. This and other usability innovations like this that we've rolled out in the past several years have consistently made Sprinklr easier and easier to use, even for the largest and the most complex use cases. We've always said that our key differentiator is our industry leading AI for unstructured public digital data. I'm proud to announce that we've been awarded two AI patents this quarter. The first one is for our smart responses, which uses AI to deeply understand the conversation between customers and agents and predict the best response to users questions by understanding the intent. And the second one is for a product insight, which gives brands highly granular insights into what their customers like and dislike about their products using super advanced artificial intelligence. Fueled by the strength of our research and development, modern care continues to be one of our fastest growing products and product suites. As evidenced by a number of care deals this quarter with brands like Honda and Lululemon and Nestle and Prada. This quarter, we released a powerful feature called compliance management to help banking, financial services, and insurance companies comply with regulatory requirements around the world and especially countries like Australia. Using our AI, compliance management helps these companies automatically identify a complaint and route it to the right agent or resource and auditing it to provide end-to-end accountability across 35 plus modern channels. In other product news, I'm sure you recall that we announced our first self-service product last quarter, our modern research light, to make it easier for our target customers to get started with Sprinklr. We're excited about the response we've seen so far and pleased with the positive impact on demand generation and the new prospects it's created in our pipeline. This quarter, I'm excited to announce the beta release of our next self-service product, Modern Care Light. Modern Care Light works with our modern research self-service product to provide fairly comprehensive care capabilities in an easy-to-use interface. Also, on the innovation front, we received the 2021 Best of Enterprise Connect Award for the best innovation in customer experience for our conversational commerce product. Our new engagement feature uses AI to guide customers from intent to purchase, helping them with product selection and evaluation along the way. This quarter, Amazon Web Services also awarded us the Government Competency Partner status. that reflects our expertise in delivering a unified platform to address the specific needs of civilian agencies, national defense and intelligence communities, state and local governments, and higher education institutions. On the culture and talent side, we were named to Inc. Magazine's 2021 Best Led Companies list. It's a testament to our focus in creating value for our customers and investing in our talent and our leadership. We also received Cigna's 2021 Wellbeing Award for our commitment to improving the well-being of our employees. For me personally, the best thing about being a public company in the last six months or so has been the incredible opportunity that I've had to meet with some of the smartest people in the world, from investors to customers across the entire enterprise software space. having done over 60 investor meetings and more than 50 customer meetings this quarter with the CIOs and CDOs and CMOs and the heads of customer care across tech and telco and healthcare and CPG and luxury retail and automotive and hospitality, I can tell you one thing. The message we're hearing is the same across industry and across these different functions and teams and executives. Point solutions are simply not sustainable. They're siloed, they're expensive, it's non-compliant. In closing, I'd like to summarize a couple of thoughts. First, we believe that every large company will need what we are building. And as a result, The rise of this category is inevitable. Second, we believe that with our focus on innovation and specifically customer-led innovation, Sprinklr will lead the way. I'd like to thank our customers, partners, and all of you who are investors for the trust you place in Sprinklr every day. And most of all, thank you to over 3,000