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spk12: Ladies and gentlemen, thank you for standing by and welcome to Sprinkler's fourth quarter and full year fiscal 2022 earnings conference call. 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 limit your questions to one so we'll have time to go through all the questions. 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. Eric Skro, Senior Vice President of Finance for Introductory Remarks. Please go ahead, Eric.
spk07: Thank you, Diego, and welcome everyone to Sprinkler's fourth quarter and full year 2022 results financial call. Joining us today are Raji Thomas, Sprinkler's founder and CEO, and Manish Saran, Chief Financial Officer. We issued our earnings release a short time ago, filing the associated 8K with the SEC, and we've made that... available on the investor relations section of our website, along with a supplementary investor presentation. With the call, let me please turn it over to Raji.
spk09: Thank you, Eric, and hello, everyone. It is wonderful to speak with you all again. Before I get into the numbers, I want to start by welcoming Manish, our new CFO to Sprinklr. I couldn't be more excited to have him and, frankly, his track record of scaling high-growth tech companies as we continue to position Sprinklr for the next chapter of scale, growth, and efficiency. I know he's looking forward to getting to know all of you. Manish will take you through our detailed financial results in a few minutes, but I wanted to start with some of the highlights. First and foremost, I'm pleased to report another strong quarter that exceeded guidance on all metrics. That includes Q4 total revenue, which grew 30% year-over-year to $135.7 million, and subscription revenue, which climbed to $117.7 million, which is an increase of 31% year-over-year. Coming off significant reacceleration that we drove over the past four quarters, this is now our second straight quarter delivering more than 30% in revenue growth. With the strength of that execution, we finished FY22 with $492.4 million in total revenue, which is an increase of 27% year over year. And that was primarily driven by $427.7 million in subscription revenue, which is up 26% year over year. Not only have we reaccelerated growth, We're also doing it at scale with nearly half a billion dollars in revenue for the year. A combination that we believe reflects the durable multi-year growth opportunity that we see for Sprinklr and our ability to win in a massive customer experience management category that we believe is only getting started. As you know, we have four product suites. for major customer-facing functions, including customer care, research, sales, and marketing, each of which have reached significant revenue scale for us and are leading solutions in their respective areas. I want to start with an update on our suite for the CCaaS space, which we call Modern Care. We're incredibly excited about the growth we continue to see in this suite, which included multiple Q4 deals near or about a million dollar mark in ARR. Phenomenal wins with new customers like Len Scott and Vroom and expansions with big names like Uber and Honda. Customer care represents a huge opportunity for us with both the world's largest and most established companies like Samsung and L'Oreal and a new class of emerging enterprise brands like Robinhood and Uber. The reason is very clear. If you run customer care at an established global enterprise, you've likely added one point solution after another over the years with one tool for email, another one for voice, another one for live chat, one for social media, and maybe a different one for communities. Your customers are moving across these traditional and modern channels in real time seamlessly, but your teams, they can't. asking customers to share the same information over and over again, which is filed away in some siloed system. You're always reacting, struggling to solve your customers' most basic issues with software that was built 10, 20 years ago. Meanwhile, the gap between the care you deliver and what modern customers expect has only widened, driven by a new wave of new digital companies that are unencumbered by the legacy technology of the past. Our CCAS solution wins with both groups. The enterprise is building care infrastructures from the ground up. They want one platform that can do everything they need across channels. And the enterprises that have been around for decades that need a bridge from the past infrastructure to the future. Great customer care is often the foundation for great customer experience management. And because of that, it serves as a natural entry point for new customers and an obvious expansion opportunity for existing customers at Sprinklr. A great example of that and a company that continues to grow with us on the CXM journey is Uber, who started working with us back in 2014 using our social engagement and sales suite to publish brand content from hundreds of accounts across multiple countries and continents. In 2018, as Uber saw exponential growth around the world, they added 600 more seats for community managers to handle the growing volume of customer inquiries. Uber then took it to the next level, adding our second suite for customer feedback and insights. so that a new rapid response team could proactively listen for critical safety and brand issues and use Sprinklr's advanced automation engine to triage the high priority ones. Recently, Uber went live with a third suite for customer care, ramping up to more than 1,000 agents around the globe, with Sprinklr AI identifying most important of the 4 million more than 4 million inbound messages Uber receives every year. Sprintler has already saved these agents thousands of hours since launch and is helping them respond to inquiries with an industry-leading average response time of under 45 minutes. Earlier this year, we highlighted a big win with one of the world's largest banks that signaled our arrival in the CCAS space. where we beat out some of the industry's bigger players thanks to our digital-first, AI-powered approach. And we replaced 10-plus point solutions there and enabled over 15,000 agents to serve customers across channels that included voice, email, live chat, WhatsApp, social media, and text message. In Q4, we continued that momentum with another big CCaaS win, At Lenscott, one of the world's fastest e-commerce brands that originated in India. As Lenscott has grown, so too has the number of cases coming in across channels from voice to live chat to social. With Sprinklr, the company will replace four point solutions all at once, enabling thousand agents across the US, Middle East and Asia to improve agent productivity and to deliver more proactive customer care. A second place customers frequently start their journey with Sprinklr is our product suite for customer feedback and insights, which we call modern research. We saw that trend continue in Q4 with large deals from new customers like Columbia Sports Fair and BWT Alpine F1 team and significant expansions with customers like Albertsons and Twitter. Listening to customers is the perfect place for you to start if you're looking to deliver exceptional customer experiences. And the Alpine F1 team is a great example of that. The iconic racing team will implement three of our four product suites to start with, beginning with the ability to listen to fans around the world in more than 50 different languages. The real differentiator for a solution, however, is the AI that powers it. which will enable them to turn those unstructured conversations into insights that they can act on. They'll also be able to create more personalized marketing content from the insights they get while simultaneously engaging with 10 times more fans across channels in real time. Social engagement and sales is the third suite that customers often land. And this quarter was no different as we closed multiple large deals and secured amazing new logos like Jaguar Land Rover, Hawaiian Airlines, and Doc Martens, and expanded with other global brands like Pepsi and Roche. Doc Martens is a great example of how customers land with us, in this case with two product suites. Following its IPO last year, the iconic European brand, You know, they entered a new key stage of growth. And as they look forward to becoming a digital-first direct-to-consumer company with global reach, they partnered with us to support that growth, to drive efficiency, visibility, and collaboration across their customer-facing teams, bringing them onto one platform and replacing multiple point solutions in the process. With more than 9 million followers across Instagram, Facebook, TikTok, and TikTok, Doc Martens will use Sprinklr to listen to its customers and inform how and where they connect with them. They'll also be able to engage that community more effectively, managing brand content across channels and benchmarking its performance against other best-in-class brands. We continue to see strong growth in our fourth product suite for marketing and advertising as well, expanding with customers like Lululemon TSB Bank, and US Marine Corps. As one of the leading banks in the UK, TSB is a great example of a company that's already unified CXM across all four of our product suites and continues to grow with us. When they first joined us in 2019, TSB started with three of our four suites to publish brand content across channels, benchmark against competitors, and to do customer service on Twitter and Facebook messengers. In 2020, TSB added our fourth suite for marketing and advertising, enabling internal teams and agency partners to coordinate campaigns across channels and easily measure the impact of their work. In Q4, TSB expanded their use of our modern marketing and advertising even further and tripled their social engagement and sales feed, enabling more teams to benefit from the unified CXM platform that we provide. Our unmatched pace of innovation is at the core of our ability to win in each of these customer-facing functions. Last year alone, we rolled out approximately 1,600 new features, enhancements, and products, including sprinkler voice to reduce call volume with a radically different contact center model, and Sprinklr AI Studio to empower users to create and customize AI models without having to write code. As you know, we also launched our first two self-service products, something that we are very excited about in the long run, Modern Research Lite and Modern Care Lite, which makes it easier for companies that aren't yet Sprinklr customers to try our platform. especially as we expand our footprint to our second vector of growth, which is focused on companies with $100 million to $1 billion in annual revenue. Just in a few months after launching our CareLite in beta, we are already closing new customers in this second vector. One of our first is the Mauritius-based telco group, Amtel, which was looking for an easy-to-use omni-channel platform for its care team. They found it in Sprinklr CareLite, which enabled MTEL to go live on day one with seamless integration and with no hardware or software installation. Since moving to our CareLite solution, MTEL's agents have been able to stop responding natively and handle thousands of tickets across five different channels, including email, WhatsApp, live chat, Facebook and Instagram, and again, all on one platform. We continue to be super excited about the early response we're seeing with these light products and the positive impact we're seeing on demand generation. As you heard in the examples I just shared, we're seeing two clear trends, and we're seeing it again and again. The first thing we see is that every customer-facing function, from care to research to sales to marketing, they face the exact same problem. You should talk to some of our customers and talk to any brand to realize what the problem is. Point solution chaos. Every one of these teams has its own disjointed set of tools, some newer, some older, but none of it built to work together. Inevitably, the leaders of these functions We'll look to replace these point solutions and unify the functions tech stack with the modern suite that delivers the experience that today's consumers expect. And when they do, many of them are turning to Sprinklr. The second thing we see is that once one customer-facing function comes on to Sprinklr, whether it's a brand, a business unit, or a team, and They put the foundation of governance and automation and analytics and AI that comes with an enterprise unified platform like ours. The other functions and other teams and other markets and other business units tend to follow. And that's when the true power of platform comes to life in a way that no point solution can ever demonstrate. When we founded Sprinklr in 2009, We knew that the world would eventually need one platform to unify the edge of the front office where your customer meets your brand. So we built for that future from the start with a single code base. So everything and everyone can work together to listen to, engage, and reach customers on any channels that they prefer, any channel that exists today, and any platform. that is gonna eventually come in the next months and years. You've heard me say this before. Enterprises don't start with unified CXM. They arrive at it. Today, as I meet with more and more C-suite executives than ever, it's clear that the vision we had more than a decade ago is increasingly becoming a reality. with the world's largest enterprises bringing multiple customer facing teams and functions together on Sprinklr to unify customer experience management. With that, let me turn it over to Manish.
spk08: Thank you, Raji, and good afternoon, everyone. It is great to be here today, and I'm excited to be at Sprinklr. I'm looking forward to working with all of you over the coming days and weeks. As you heard from Raji, we delivered another strong quarter across the board and were pleased with our ability to once again exceed expectations across all key financial metrics. During the fourth quarter, total revenue was $135.7 million, up 30% year over year, and above our previously announced guidance range of $129 million to $131 million. This was driven by subscription revenues of $117.7 million, which grew 31% year over year, and were also above our previously announced guidance range of $113 to $115 million. Q4 marked the fourth consecutive quarter of accelerating revenue growth for our subscription business. Turning to gross margins for the fourth quarter, On a non-GAAP basis, our subscription gross margins improved further to 80% as we begin to drive efficiencies in our cloud operations, leading to a total non-GAAP gross margin of 71%. Before we review operating expenses, I would like to make you aware that during the fourth quarter of FY22, subsequent to the guidance we provided on December 9, we identified certain immaterial corrections. These relate to the capitalization of costs to obtain customer contracts dating back to the initial adoption of ESC 606 in FY20. The net impact of these changes is to capitalize additional expenses each year and amortize these costs over the life of the customer. Additional details are outlined in our Form 10-K that will be filed in the coming days. It is important to note that this immaterial correction to prior periods has no impact to our previously reported revenues, revenue growth rates, gross margins, cash flow, or cash position. The net effect is a decrease to OPEX of 3.2 million in FY21 and a decrease of 2.6 million for Q1 through Q3 of FY22. We have included a slide in the current investor presentation on our investor relations website to clearly identify these changes and the impact to FY21 and FY22. Furthermore, the guidance that I will be discussing shortly reflects the impact of these changes. In terms of our operating expenses, we continue to invest in sales and marketing as well as research and development. to support our extensive product set and go-to-market initiatives. During the fourth quarter, total non-GAAP operating expenses increased 57% over the prior year to 108.2 million, representing 80% of revenues, up from 66% of revenues during the same period last year. This investment was partly a catch-up investment from the prior year, when we had curtailed incremental investments given the unknown impact from COVID as well as investing for future growth given the strong demand environment for our products as evidence in our subscription revenue growth numbers. Non-GAAP operating loss was 11.5 million or 5 cents per share. Recall our previously announced guidance range was an operating loss of 21 million to 23 million or eight to nine cents per share. The benefit in Q4 from the immaterial correction was approximately 1.5 cents per share. As a reminder, these numbers do not include the one-time litigation settlement of 12 million, which was accrued for in the fourth quarter, but was paid here in Q1 FY23. In terms of cash flow, we used 18 million in free cash flow during the fourth quarter compared to 10.4 million in the same period last year, underscoring the continued investments we are making in the business. I'm also happy to report that our subscription revenue-based net dollar expansion in the fourth quarter was 120%. This metric has grown consistently for every quarter in FY22 and demonstrates our ability to upsell and cross-sell our extensive product set to our installed base of mid and large enterprise customers. I would now like to dive into the billings topic and provide you additional insights from my perspective. Calculated billings for the fourth quarter were 186.2 million, which was an increase of 28% year-over-year. Calculated billings for the full year FY22 were 535.4 million, up 33% versus the prior year. Additionally, billings in the second half of FY22 were up 30% versus the first half, further demonstrating the strong momentum we are witnessing in our business. There are two distinct trends in our billings that investors need to be mindful of. Firstly, there is a seasonality within our billings, with Q4 being the highest billings quarter of the year, given the cyclical nature of demand inherent across the technology industry. Similarly, Q3 is our lowest billings quarter, driven by the timing of renewal activity. This billing pattern has remained consistent over the last several years. Secondly, we maintain a high degree of short-term billings in our business. Approximately 75% of contracts on a dollar basis are billed annually, with the remainder being a mix of monthly, quarterly, or semi-annually bills. given unique customer requirements in this regard. To be clear, we do enter into multi-year contracts with our customers, with contract terms ranging from one to three years, which is consistent with other enterprise software companies. However, the billing cadence for these contracts varies and often comes with a duration that is less than 12 months. This creates a dynamic whereby billing's growth is more volatile than revenue growth. During the pandemic, we worked constructively with our customers to accommodate their needs, further exacerbating this billing dynamic. Turning to a quick summary of financial results for the full year FY22, total revenue was $492.4 million, up 27% year-over-year, whereas subscription revenue was $427.7 million, up 26% for the full year. As stated earlier, calculated billings for the full year were $535.4 million, up 33% year-over-year. Billings growth in FY22 was higher than revenue growth in the year, but this was largely a result of the lower billings we experienced in FY21 driven by the pandemic. making the FY22 billings growth seem larger in comparison. As we revert to a more normalized demand environment, with aggregate billings duration expected to remain below 12 months, we anticipate there to be a delta between revenue growth and billings growth, with annual billings growth lagging revenue growth by approximately 5%, assuming all else stays the same. For the full year FY22, total non-GAAP operating expenses increased 55% over FY21, representing 78% of revenues up from 64% of revenues during FY21. As outlined earlier, this incremental investment during FY22 should be viewed in light of the strong demand environment we are experiencing as well as the continued investments to broaden our product portfolio and work with customers on their digital transformation projects. Non-GAAP operating loss for the full year was 35.5 million, equating to a net loss per share of 24 cents. As you recall, our previously announced guidance range for the full year was an operating loss of 48 to 50 million, or 30 to 31 cents per share. In terms of cash flow, we used $45.3 million in free cash flow for the full year with $33 million used in operating the business, $6.1 million in capital expenditures, and an additional $6.3 million in R&D costs that were capitalized on the balance sheet. We ended the year with $532.4 million in cash and short-term investments. As of the end of FY22, Total remaining performance obligations, or RPO, which represents revenue from committed customer contracts that has not yet been recognized, was $586.4 million, up 36% compared to the same period last year. And CRPO was $409.2 million, up 30% year over year. We continue to believe that subscription revenue, subscription revenue growth, RPO, and RPO growth represent the best metrics to evaluate the underlying health of the business. Our billings can fluctuate significantly relative to revenue based on the timing of invoicing, cadence of renewals, and the duration of customer contracts. And finally, we now have 82 customers contributing $1 million or more in subscription revenue over the last year, which is a 26% increase year over year. This momentum speaks to the strategic value that our platform creates for the world's largest and most valuable brands. As a reminder, we calculate this customer count using $1 million in recognized revenue from these customers for the duration of the year, as opposed to ARR. Regarding our customer count, we ended the fiscal year with 1,166 customers. Going forward, we will be disclosing this customer count metric on an annual basis only. Moving now to our Q1 and full-year fiscal 2023 guidance and business outlook. We firmly believe that companies will continue their digital transformation journey, and the move towards unified CXM will continue to take shape. Given that, we are projecting meaningful growth for our fiscal 2023 guidance. Starting with the first quarter of FY23, we expect total revenue for the first quarter to be in the range of $140 to $142 million, representing 27% growth year-over-year at the midpoint. Within this, we expect subscription revenues to be in the range of 123 to 125 million, representing 28% growth year over year at the midpoint. We expect a non-GAAP operating loss in the range of 14 million to 16 million and a non-GAAP net loss per share of six to seven cents, assuming 260 million weighted average shares outstanding. For the full year, fiscal 2023, which ends on January 31, 2023, we are providing the following initial guidance. We expect subscription revenues to be in the range of $536 to $544 million, representing 26% growth year-over-year at the midpoint. And we expect total revenues to be in the range of $607 to $615 million, representing 24% growth year-over-year at the midpoint. As a reminder, we have an easier compare in Q1 of this year from a revenue growth perspective, and the comparisons get more challenging in subsequent quarters given the strong and accelerating growth we have demonstrated over the last four quarters. We also anticipate the billing cadence to follow the same pattern as demonstrated with the recent fiscal year 22 results. For the full year, we expect a non-GAAP operating loss in the range of 44 to 48 million, equating to a non-GAAP net loss per share of 20 to 22 cents, assuming 260 million weighted average shares outstanding. In deriving the net loss per share, an incremental 7 million in tax provisions for FY23 needs to be added to the non-GAAP operating loss range just provided, with a de minimis amount accrued in Q1 and then building throughout the year. The non-GAAP operating loss outlined above is inclusive of a benefit of a couple million dollars related to the immaterial correction referenced earlier. As we scale the business and continue to demonstrate meaningful year-over-year growth, we are endeavoring to become more efficient. We estimate the quarterly non-GAAP operating losses to improve materially in the second half of FY23. In terms of free cash flow, while we intend to keep investing for growth given the market opportunity in front of us, we expect to get to a free cash flow break-even level during FY24. In summary, let me leave you with a few key takeaways from my perspective from my early tenure here at Sprinklr. I would like to start by thanking everyone at the company for delivering a strong Q4 and a great start to fiscal year 23 and for helping create a durable multi-year growth opportunity for the company. I have been very encouraged by all the people that I've met at Sprinklr, the breadth of our technology platform and our remarkable customer base. We are building a track record of successful execution with the opportunity for consistent, sustainable revenue growth coupled with prudent operating discipline across the business. We are excited to be on this journey with you. And with that, let's open it up for questions.
spk12: Operator? Thank you. And at this time, we will conduct our question and answer session. And please note, limit yourselves to one question each time you put yourself in the question queue. To ask a question, press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press the star key followed by the number two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Mark Murphy with JP Morgan. Please go ahead.
spk11: Yes, thank you very much and congratulations on a very strong finish to the fiscal year. Raji, I'm wondering what you're sensing in terms of business confidence from marketers and social media teams, especially in Europe, because the result in the guidance is quite strong. You're calling for a solid year of growth. Are the geopolitical events and the macroeconomic factors starting to cross their minds at all as they think about their budgets, or Do you sense relatively smooth pipeline building in Europe and good business confidence overall for this category?
spk09: Thank you, Mark. Good to talk to you again. We are actually sensing renewed confidence in the offering that we bring to the table. I just got back from a week in Europe where we met with over 75 customers And what was interesting was almost all of them that were using our customer feedback and insights product, our modern research product, had configured dashboards to understand the impact of what's going on in Ukraine and Russia to their business. Let me give you two specific stories. One customer I met with just told us that the previous week they discovered online conversations about their logo looking like the Russian army symbol. And it was picked up by Sprinklr's volumetric triggers, reflecting negative sentiment picking up. And in 72 hours, they saw that conversations go from tens to hundreds to thousands and tens of thousands. And because they were watching it grow, In the same 72 hours, they were able to make a business decision and remove their logo and replace it with text on all digital properties and then subsequently saw those conversations decline. I thought that was fascinating. We know another customer I visited basically was explaining how they discovered their logo look like the Ukrainian flag colors. And that was frankly attracting a different set of conversations. And they made the decision of engaging and responding and putting out their their their point of view on it, all based on strategic insights that we were delivering from the voice of the world. And another bank that I know of basically was planning to the CEO was going to make a decision and take a stance on it and discovered that using Sprinklr The other competitors of his did make their stances public and were negatively affected. So we're super encouraged by businesses making decisions. I mean, obviously because of Sprinklr, but making decisions that are based on the voice of the world and voice of the customer. So that's just the start. Businesses are moving digital. Direct-to-consumer is a huge deal. And we serve everything from conversational commerce to digital customer care. And I think the world is moving in our direction.
spk11: Well, those are wonderful anecdotes. Thank you for sharing that. And I will limit it to one question to comply with your instructions here. Thank you.
spk12: Thank you, Mark. Thank you. Our next question comes from Raimo Lenshao with Barclays. Please state your question.
spk06: Hey, this is Frank Anforaimo. Congrats to a strong end to the year here. Could you remind us of the rollout cadence or any early feedback you're getting around the light offerings and how is this baked into the guidance specifically for FY23? Thank you.
spk09: Thank you, Frank. We are not factoring major revenue from the light offering in our models. As I mentioned before in previous quarters, the Ability for us to make our platform in a self-service, very low touch, one day on getting up and running is a strategic multi-year plan for us. So we are very early. The results are very encouraging. We're watching clients get on board by themselves. I saw a client that had set up over 100 automation rules by themselves. and are up and running. So we know we are moving in the right direction. We know we're simplifying what is a fairly massive piece of technology in the front office. But they're all experiments for us for now, and the numbers aren't factored in.
spk06: Great. Thank you.
spk12: Thank you, Frank. The next question comes from Elizabeth Porter with Morgan Stanley. Please go ahead.
spk05: Great. Thank you so much, and congrats on the strong quarter. I had a question on the NRR improvement. Understanding it's a 12-month metric, so there's some COVID quarters probably falling off still. How should we think about the cadence of expansion? Do we start to normalize at this 120, or can cross-sell opportunity really accelerate further as customers expand into more seats?
spk09: Absolutely. Great question. You know, we have four product suites with a lot of functionality underneath it. If you look at our average revenue per customer per product suite, you're going to see that range from just below 100 to 150. If you look at what the largest customer in each one of those suites are paying us, you will see a very, very different number. You will see that Our largest customer in marketing and advertising pays us close to north of $6 million. Our largest customer in care pays us close to $4 million. Our largest customer in research pays us close to $8 million. And our largest customer in engagement pays us over $5 million. So it's super obvious to us that we've got a substantial TAM just within our customer base. And our first set of VectorOne clients, as we call it, are 10,000 of those. So we know that TAM's big. We know that our customers are expanding. It's our ability to deliver. We've taken the approach of land and expand in a very soft way. So we love to land with one product, prove our value, then expand into other business units, expand into other markets. In short, what I'm saying is we anticipate continuing to stabilize and grow on our expansion rate, and we think there's a lot of opportunity right there.
spk05: Great. Thank you so much.
spk12: Our next question comes from Michael Turretts with KeyBank. Please state your question.
spk01: Great. Thank you very much, and a wonderful quarter. Rajeev, can you drill down? You did some for us somewhat on the prepared remarks, but a little bit more on CCAS. Can you talk about whether you're – I don't know if you mentioned actually replacing other dedicated call center and CCAS vendors, and what some of the revenue uplift, coming from that, and conversely, Manish, if there is any headwind to gross margin profitability.
spk09: Absolutely, Michael. This is an exciting opportunity for us. You probably picked up from our focus in the last several quarters that we see CCAS, you know, the markets expanding 15% year-over-year in aggregate, is a great growing opportunity. What we are finding is our new set of clients that are coming to us are in fact replacing traditional care vendors. And it might be, you know, point solution care vendors like a live chat care vendor. I'm not going to name them or a regional voice vendor. But what we're finding in the case of Lanscott, there was a point solution that the inbound voice care team was using. It was a separate voice solution that the outbound sales team was using, and not to mention the other point solutions that digital teams were using, and all of those are getting replaced with the Sprinklr platform. Actually, what was exciting for me was with Lenscott, they insisted on implementing Sprinklr voice first before they rolled out the digital and the social capabilities, which is our original bread and butter solution. So we think it's very early. We have a couple of deployments that are fairly at scale, you know, the 15,000 agent deployment. And so we're going in with a lot of caution. As you know, this is an industry that's very old, right? You know, it's been around for 40, 50 years, and there's a lot of nuances. From a margin perspective, know that we're not getting into the deep stack, right, where we're not doing the the core voice part, we connect to services like Amazon Connect or Twilio or others and our value creation happens on the application layer where it should be very obvious to all of you that there is not one other care vendor that has the listening capabilities we do. So when you turn on Sprinklr Care, you're turning on Sprinklr Listening with it, which means your tickets start flowing in before you publish a one-attended number, which is fascinating, and that's a core differentiator. The second core differentiator is the fact that we are omnichannel by design. At the root, at the core of the architecture, it's not like we acquired different point solutions, stitch them together with the UI. No one else, to the best of our knowledge, has built a solid foundation of channel-agnostic customer care. Number three is our deep AI capability. I know that's a buzzword. I hate myself for using it, but we've spent seven, eight years with hundreds of consultants every single day training our AI models in over 100 languages. And we're using the same UI to voice to text and sentiment analysis and intent detection. All the things that we've done really well in digital, we're bringing that to voice and translating all of that into reducing call center wait times, reducing call center capacity needs and time to respond and the time to resolve. And the most important thing is we take the noise out. I was just talking to a customer that had 400,000 inbound requests out of which the Sprinklr AI model identified the 10,000 they should be engaging with that given day. And that before and after for this customer was like ROI on arrival.
spk12: Thank you. Thank you. Thank you. Our next question comes from Arjun Bhatia with William Blair. Please, your question.
spk03: Perfect. Thank you, and congrats on a strong close to the year. Raji, in your preferred remarks, I think you went through where customers are landing most frequently and where they expand into after that. Can you just give us a sense for how the landing point of the platform has changed for customers over the years as you've developed new capabilities and innovated across your suites? And then How frequently are customers now landing with multiple suites where they say, hey, I want to take advantage of the entire Sprinklr platform or at least a couple different product suites to unify my CXM strategy across multiple domains?
spk09: Hey, Arjun, good to talk to you again. We are... actually increasingly seeing our landing spots open up and it is a lot more across the board than it ever was. And you remember, you know, you and I have talked over the years and it used to be our sales and engagement or research and now we're seeing customers start with us for care and customers start with us for marketing and advertising. And I think what we're increasingly seeing is an acceptance that they all need to come together. So that's the first trend and Honestly, our product is pretty, and platform is very simple to understand, right? Everybody's selling, everybody's marketing, everybody is doing customer care. Everyone's trying to understand what customers want and get feedback in real time, right, without doing surveys. We just provide it in a unified way, and that's the key difference. So we're seeing that the deflection from pointed landing spots to diffused across our platform and product suite. Interestingly, what we're also seeing is The emergence of a new crop of next-generation companies, I'd say like the rooms in the Len Scott's or the Robin Hood's or the Uber's of the world, who are fearlessly coming in and saying, hey, listen, I don't want to, I want to just clean up. Len Scott is a great example where they said, I don't want inbound and outbound colliding with each other. Think about their business where people buy their classes like every, you know, twice every four years or three times. And, you know, they're calling in to get an order filled or have a question. And, you know, you've got outbound people trying to reach the same person and get them to buy again. And they were all getting in each other's way. And, you know, think about the market they serve. You know, someone's trying to reach you on WhatsApp, and then you want to get them on the phone to ask a question quickly or ask them to try out something. It was just getting all over the place. And you got a co-founder of the company going, I just want to, this is where my business is going to go, direct-to-consumer, next generation. I just can't afford to bring the Frankenstein of the past. And so we're seeing that breed of companies just fearlessly start with two, three, sometimes all four of us.
spk12: Very helpful. Thank you, Rajiv. Thank you. Our next question comes from Tyler Ratke with Citi. Please go ahead.
spk10: Yes, thanks for taking the question. Maybe I'll throw a question over to Manish if you're still on the line there. And congrats on the first earnings call here in a good quarter. Just a couple kind of housekeeping questions. So first, could you talk about the current RPO growth in the quarter? Apologies if I might have missed that. And then secondly, maybe just help us understand, as you took a look at the business and set guidance for the year, what are areas that may have changed from a guidance philosophy perspective relative to your predecessor? And how are you just kind of thinking about the inputs and level of conservatism in your guide? Thanks. Thanks.
spk08: Thank you for the question, and thank you for asking me a question. I was getting bored over here, so I really appreciate it. So I think the first question, RPO growth was 36%, so that is part of the prepared remarks. I think that number was $589.4 million. CRPO growth, the current portion was 30%, and I believe that number is $409.2 million. In terms of guidance philosophy, I don't think much is different except, as I was saying in my prepared remarks, several things have happened during the course of FY22. Firstly, we have invested significantly both in our go-to-market initiatives, product development, and all of that is beginning to bear fruit. The business is now a scaled business. I mean, at the midpoint of the range that I provided for the full year. We are, you know, $611 million. So definitely hitting a scale perspective and achieving growth at that perspective. The other thing we are obviously very well aware is given the investments we've made in FY22, we are going to be more efficient as we go through the arc of this particular year. So we are looking for operating losses to improve materially during the second half. And I also said, as you then stressed that out another year, we're looking to be free cash flow neutral in FY24. So I think maybe that probably is a little bit, you know, material input as you build out your models because we do believe the investments we've made are beginning to bear fruit and we can look to be more efficient as we keep up the space of growth. Thank you.
spk12: Thank you. Our next question comes from Parker Lane with Stiefel. Please go ahead.
spk00: Yeah, hi, guys. Thanks for taking the question. Raj, I'm wondering if you could comment on whether or not you've seen a change in the persona of the person bringing Sprinklr in with the launch of Lite. Are you seeing more and more line of business users that wouldn't historically have found Sprinklr as accessible pushing for their companies to adopt the solution? Thank you.
spk09: Thank you for the question, Parker. We are seeing, again, we've got hundreds of people trying out the light products, and they're usually practitioners whose segment of our prospects that we typically don't start with, right? We typically go to decision makers or the C-suite. What we're finding in the cases where they convert, though, there is so much excitement that they are internally bringing senior people in. I'll give you the example at MTEL. where – and also know that our light products, it's early, right? So we, as you know, we co-innovate with our customers, which has been a major differentiator for us. We talk to them all the time, ask them what they need, and turn around in a very agile fashion, roll it out almost like consumer software companies do. And so in the case of Emtel, they were – excited about what the product could do. They were excited about how agile and innovative we were. And the next thing we know, we are talking to the CIO who then proceeds to say, look, I want to bring sister companies in. But these are smaller teams, you know, 10, 15 folks that traditionally, like our sales folks, would not have pursued and tried to close. So it's very early to draw any conclusions, but we're seeing access to practitioners grow. So we are also seeing, which is very refreshing for me as I talk to customers, we're seeing customers move from one company to the other and just the first thing they do is bring Sprinklr in. So that's something that's creating some groundswell for us as well as we have self-service. So it's not like they gotta go convince management they can go try it out and show someone how good Sprinklr is with their new company.
spk12: Thank you. Our next question comes from Michael Turin with Wells Fargo. Please go ahead.
spk02: Hi, this is Michael Burgon from Michael Turin. Congrats on a great quarter, guys, and welcome to the team, Manish. Just a quick one from me. I noticed that you added two million-dollar-plus customers in the quarter, which is the lowest net new addition this year and even going back to last year. Is there anything to point to on that front? Because every other metric looks pretty strong from Billings to see an RPO acceleration, even DNBR improving. Anything to point to on the large customer front?
spk09: Michael, it's Rajeev. Let me speak for Manish. I'm sure he'll add to this. Look, those are metrics, while we disclose, those are metrics that the company is not super aligned and obsessed about. And you'll see that Manish is bringing a very different focus and discipline to billings like we've never had before. So you'll see us get more control over what that number should be. I can tell you there's no change in the quarter in terms of customers growing with us. Now they fall million one where we get them added. Also, remember, it's revenue, it's trailing. And so directionally, there's no change in the business. I can tell you that. And, you know, you know, while the numbers too, we're seeing the trend that we're always seeing.
spk08: Yeah. And just to add to that, I think this is what I had reiterated in my prepared remarks as well. I think the metric, the way we have defined it is actually a fairly high bar because most of the subscription companies talk about customers doing 1 million in ARR. So you could sign them on the last day of the quarter, as long as they are a big customer, they would make the grade. The way we've defined it is 1 million in subscription revenues for the year. So that is a much higher bar to clear. And again, I've just been here two months, so we're going to do a deep dive on a number of other metrics. And as the arc of the year progresses, we'll try to provide more clarity around some of these metrics. But I just wanted to point this out that this is a fairly high bar that we've set for ourselves.
spk02: Understood. Thank you very much and congrats again. Thank you.
spk12: Thank you. And there are no further questions at this time. I'll turn the call back to Raji Thomas for closing remarks. Thank you.
spk09: Well, I want to thank you all for participating and taking the time. We, as you can see, are pretty excited about the quarter, very proud of the team that came through for us. You heard from Manish how In the last year, we were pretty focused on making the investments, especially coming after COVID, you know, we were cash flow positive the year before that. So what you're seeing is the business that went from being conservative during COVID to correcting that in the last year. I'm thrilled about the expectations that we're setting internally and externally of being more efficient as we continue to grow at scale. I've always said that the... rise and growth of this industry is inevitable. And it's validated every time we speak to customers who, you know, talk to a large global brand, house of brands, CPG company that has 60 customer-facing brands that operate in, you know, 40 to 120 countries each running marketing and care and research and sales in every one of those markets and each one of those teams using different point solutions for different channels. It's just ridiculous. And where the customer meets the brand at the very edge when they see an ad or call a call center or speak to a sales guy, as I can attest with a much smaller company, it's painful. So we know that this is going to get resolved. We know that we've invested 12 years into creating an architecture and four product suites on a unified platform. And we think we have another, let's say, year or two of code to write before the full picture emerges. And we're very encouraged by where we are, and we think the best is yet to come.
spk12: Thank you.
spk09: Thank you all. Have a good evening.
spk12: And with that, that concludes today's conference. You may disconnect at this time. Have a good evening.
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