Sprinklr, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Sprinkler's second quarter fiscal 2023 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 question and one follow-up, 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, VP Finance, for introductory remarks. Please go ahead, Eric.

Thank you, Alex, and welcome everyone to Sprinkler's second quarter fiscal year 2023 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. filed the related Form 8K with the SEC, and we've made them available on the Investor Relations section of our website, along with the supplementary investor presentation. Please note that on today's call, management will refer to certain non-GAAP financial measures. While the company believes these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. You are directed to our press release and supplementary investor presentation for a reconciliation of such measures to GAAP. In addition, 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, including our guidance for the third fiscal quarter of 2023 and full fiscal year 2023. 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 our filings with the SEC, also posted on our website. With that, let me turn it over to Raji.

Thank you, Eric, and hello, everyone. Thank you for joining us today as we share the financial results of our second quarter in FY23. I'll get us started with a few highlights, including what I'm hearing from customers and some of our key wins. Manish will then share details of our financial results. But before I jump into the results of the quarter, I'd like to take a moment to share that Luca Lazzaron, our Chief Revenue Officer, has made the decision to step down from his position at Sprinklr after a tremendous five years of building and growth. Luca joined Sprinklr back in 2017. I'd asked him for a four-year commitment to bring structure, process, and discipline to scaling our sales operations. He achieved that and so much more, hiring great talent and preparing us for the IPO last year. I want to thank Luca personally for giving us that extra year and for all his contributions. We wish him the very best. Luca will be succeeded by Paul Old, who has actively been serving as our EVP of worldwide sales and success. Luca recruited Paul to join four years ago and has been preparing him for this role. Paul is an important member of our global leadership team with expedience in enterprise software sales, including a lot in customer expedience space. I speak on behalf of my entire leadership team when I say that we are very confident in Paul's ability to step into the CRO role and help take Sprinklr's growth to the next level. Paul will officially transition to his new role on October 1st, and Luca will stay on as an advisor until the end of the calendar year. Turning now to the quarter. I'm very pleased to report that Q2 was another strong quarter that exceeded guidance. Q2 total revenue grew 27% year-over-year to $150.6 million, and subscription revenue grew 29% year-over-year to $133.1 million. And with our commitment to operational efficiency, we generated $1.4 million in free cash flow for the quarter. And as Manish will walk you through shortly, we have significantly reduced our non-GAAP operating loss for the year due to prudent financial management and greater operational discipline company-wide. We continue to believe that Sprinklr is still at the early stages of a very long-term, durable growth opportunity as we capitalize on our leadership position in the unified customer experience management category. Over the course of the second quarter, I had the pleasure to visit with over 90 of our customers in North America, Europe, and Australia. These face-to-face interactions provide so much clarity on what our customers are trying to achieve and how important our platform has become to their business. And personally, These are very energizing for me as I get to see the results of the work that some of these biggest brands in the world are doing, getting by deploying Sprinklr's unified platform in their customer-facing functions. One of the consistent themes I'm hearing is how companies are seeking to better understand the needs of their customers in real time, especially in this radically changing environment. And Sprinklr is helping them not only to do this, but also to translate that understanding into better experiences across all customer-facing functions. With Sprinklr, companies have a single platform to unify their teams to reach, engage, and listen to customers in over 30 digital channels in a collaborative, secure, and compliant way. This has never been more relevant. In terms of our second quarter operating rhythm, the sales cycle was marginally elongated versus previous quarters. While the current demand continues to be robust, as we outlook last quarter, we remain watchful of the macro environment changes and its potential impacts on our business. In a more uncertain macro environment, companies strive to do more with less. The proliferation of social messaging and digital channels through the years has created point solution chaos for the world's largest enterprises. This is not sustainable. Our customers are looking for ways to consolidate the fragmented digital tech stack full of point solutions, generate efficiencies, and gain better visibility into their customers' journey. We're seeing a majority of our customers consolidate point solutions across customer-facing functions. and eliminate some vendors altogether. In fact, we benefited from exactly that in the quarter. We had a global pharmaceutical company, a global technology conglomerate, and a leading security company all either consolidate or significantly reduce the point solution spend and still increase revenue, decrease cost, and mitigate risk by using Sprinklr and our unified platforms. We believe that Sprinklr is a strategic platform investment that's helping our customers. And we're pleased with our position and our ability to deliver this meaningful and tangible ROI. During the second quarter, we continue to add new customers as well as expand with existing customers. World-class brands like Amgen, Banco Santander, Heineken, and C-Scaler are some of the many companies that selected or are expanding with SprintLib. As you know, customers don't start with unified CXM, but we believe that they will eventually end up there. I'd now like to provide you with some brief examples of use cases and customer wins from the quarter across our four product suites. But before I do, I'd like to point out that all four of our suites are Our care, our marketing, our research, and our social engagement suite are at scale and are growing. Let me start with Sprinklr Modern Care. This past quarter, the world's largest cosmetics company, L'Oreal, expanded its partnership with Sprinklr. We're now helping to power a digital transformation that will enable their 35-plus brands globally to support beauty advisors, in their one-on-one engagement with consumers to deliver more relevant, personalized, and transformational experiences at scale wherever their customers are on digital. Let me share another story, this one about our modern research suite. One of Sprinklr's first customers, as many of you know, is Microsoft, and they continue to expand with Sprinklr steadily. In Q2 alone, Sprinklr pulled in nearly 2.2 billion public mentions of the brand and its products through our digital listening product and delivered intelligent insights that now informs marketing and development decisions across their entire company. Microsoft's voice of customer innovation actually is helping Sprinklr as well to continuously evolve and enhance our platforms. Moving to our social engagement and sales suite, in Q2, the multinational banking and financial services company, Standard Chartered, renewed its partnership with Sprinklr. As the company continues its mission to make online banking simpler and faster for customers across 59 markets, it's leveraging Sprinklr to listen to and engage with customers on digital and social channels. with the goal of digitizing 70% of the conversations and converting that engagement into sales. Through the help of Sprinkler's AI, Standard Chartered has been able to achieve a 90% first response within 10 minutes and resolve 93% of their cases on their various social channels. And lastly, and excitingly, one of the world's largest pharmaceutical and biotech companies, Roche recently expanded its partnership with Sprinklr to include a modern marketing and advertising suite. As the company moves closer to its vision of One Roche, it will soon have consolidated more than 30 different point solutions in social, customer service, research, and now marketing onto one enterprise front office platform, which is Sprinklr. This enables more transparent and effortless collaboration from global to local teams and affiliates and increases efficiency by reducing the number of tools used and ensuring that everyone operates from a single source of truth for content and customer context. As Roche began to establish a global digital center of excellence, Our partnership will ensure that the company can reduce cost, protect its brand's reputation, and drive other business outcomes. All of these stories are made possible by our incredible engineering team, who continue to make great strides to differentiate the platform each and every day. Product innovation and core technology development, as you know, is at the heart of who we are. And this quarter alone, we launched over 500 new platform features and enhancements across our four suites, focused on innovation and enhanced usability. Whether it's to better track agent performance in real time in customer service, enhance voice capabilities, or shorten time to insights, just to name a few, we continue to build an AI-powered unified platform that serves teams in care, research, marketing, and social. Customers need a unifying operating system across the digital edge, which is where all the interactions are happening today. It's where the customer experiences a brand. It's where customer gives feedback and ask questions. It's where sales opportunities to grow your company exist. It's where your biggest risk as well. The Sprinklr unified platform is being architected from the ground up for large global brands to manage and optimize their digital edge. We innovate and grow with our customers and partners and we will continue to provide them a path to manage the next generation of customer-facing functions. With that, let me turn the call over to Manish. Manish.