Sprinklr, Inc.

Ladies and gentlemen, thank you for standing by. And welcome to Sprinkler's third 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 with 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 over the conference to our first speaker today, Mr. Eric Skroh, Vice President of Finance for Introductory Remarks. Please go ahead, sir.

Thank you, Diego, and welcome everyone to Sprinkler's third quarter fiscal 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 supplementary investor presentation. Please note that on today's call, management will refer to certain non-GAAP financial measures. While the company believes these 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 reconciliation of such measures to GAAP. With that, let me turn it over to Raji.

Thank you, Eric. And hello, everyone. Thanks for joining us today as we share the financial results of our third 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. Turning now to the quarter, I'm very pleased to report that Q3 was another strong quarter that exceeded guidance. Q3 total revenue grew 24% year-over-year to $157.3 million, and subscription revenue grew 27% year-over-year to $139.9 million. And with our commitment to operational efficiency, we generated $6.9 million in non-GAAP operating income for the quarter due to prudent financial management and greater operational discipline company-wide. Before providing key takeaways from this quarter, I'm excited to share that we have appointed the former Chief Revenue Officer of ServiceNow, Kevin Havaty, to our Board of Directors. Kevin joins us at an exciting time in Sprinklr's journey, and his experience will greatly benefit our go-to-market execution, something that we are very focused on now. Kevin currently serves as a senior advisor to the CEO at ServiceNow and has been a CRO there under three different CEOs. I also want to thank Matt Jacobson, partner at Iconic Capital, who has retired from our board after serving us for eight years. Iconic joined as an investor in Sprinklr in the very early days and helped chart our course back then. We are very appreciative of Matt's contribution and I wish him all the best. Now moving on to Q3, I was fortunate to meet with well over a hundred customers around the world from across the US to India. Singapore, South Korea, Dubai, Mexico, the excitement of brands transitioning from point solution chaos and customer-facing functions to Sprinklr's unified CXM platform is truly palpable if you talk to these customers. And the results they are seeing in terms of reducing customer service costs, increasing revenue by making their ad dollars and marketing dollars work harder, and innovating faster while mitigating risk by listening to customers in real time, it's truly inspiring. A new storyline that is clearly emerging in these conversations, especially from our newer clients, is how Sprinklr's AI is helping model and automate omni-channel journeys that can potentially eliminate the need for human service agents by up to 95% for some use cases, while improving customer satisfaction scores at the same time. This use case is real at Aramax, the largest multinational logistics provider in the Middle East that someone referred to me as the FedEx or the UPS of the Middle East. who recently consolidated their digital contact center stack onto Sprinklr. I met their group vice president of technology in Dubai. It was great to hear how they have been able to automate 95% of the resolution for several common customer inquiries using Sprinklr's AI and chatbot and automation while continuing, again, to improve CSAT scores. While we continue to win deals across all our four product suites, Across a variety of industries, more than a third of our bookings in Q3 came from our customer service suite or our modern care suite, where voice-led CCaaS was a key driver for us. We're pleased with the momentum in this space and are confident that technology And our pace of innovation will further differentiate us in this very interesting marketplace. We believe that you can't have great customer experience management without great customer service. However, the current macro environment is leading to delays in purchase decisions and longer sales cycles. And like many other enterprise software companies, we did experience additional pressure on deals in Q3 versus Q2, particularly in Europe. We expect these longer sales cycles and tightening of budgets to continue in light of global uncertainties. While we can control the macroclimate, we can control how we manage the fundamentals of our business. you will see us continue to focus on delivering value to our customers and generating a clear path to profitability for our shareholders as we go forward. Since founding Sprinklr, we've been clear that the market will move from point solutions that don't work well together to a handful of best-of-three platforms that become more and more tightly integrated. furthering our intention of becoming the third or fourth major front office platform for the enterprise. In Q3, we announced an expanded partnership with Salesforce and Accenture. Enterprise customers will now be able to incorporate their massive CX data set within Sprinklr with their CDP and CRM data sets inside Salesforce. And Accenture is a key partner in our go-to-market strategy. They are the experts in helping brands bring technology and data together to deliver best customer experiences as possible. We're also actively working with Salesforce to support customers through their transition from social studio to sprinkler. This work has been well underway this year and we're seeing positive momentum from those customers. During the third quarter, We continue to add new customers as well as expand with existing customers. Some examples of these world-class brands include Geico, HEMS, Honda, IPG Health, and Overstock. I'd like to provide a few examples of how customers are currently using Sprinklr across our product suite. As a reminder, these suites include our modern care suite, modern research suite, our social and sales suite, and our marketing and advertising suite. Let's start with our customer service offering, the Modern Care Suite. In Q3, one of the largest global consumer software and hardware players further expanded their partnership with Sprinklr by adding over 500 more care agents, doubling their current agent count to over 1,000. They are now supporting 60 of their product lines across 16 languages on modern channels using Sprinklr. And their agent support has gone from 90% coverage in one hour to 95% coverage in under 30 minutes. With Sprinklr's AI studio, they're also achieving over 95% accuracy, which has reduced manual processes significantly. Since first becoming a customer in 2014, they are now using 24 sprinkler products across all four product suites. Another great example of impressive customer service results for us is with one of the world's leading global streaming services. They conducted an extensive RFP process with 20 of today's leading CCaaS providers to select a technology partner that they could use to help transform their legacy CCaaS infrastructure that currently has around 5,000 agents. They chose Sprinklr, and in large part because of our full set of CCaaS capabilities on a single unified AI-based platform. and also our architectural flexibility to integrate with their large number of homegrown tools that exist currently. Turning to modern research, this quarter, one of the largest food and beverage companies in the U.S. expanded its partnership by adding product insights to their already expansive portfolio of sprinkler products. They chose our product insight solution to access competitive insights and better predict the success of the current and future product lines in the marketplace. By using our AI, they are creating a real-time closed-loop data that connects voice of the customer feedback to their product and their customer service teams. Moving to our social engagement and sales suite, in Q3, BMO, one of the largest banks in North America, expanded its partnership with us, adding over 2200 users on a distributed product. If you recall, a distributed product for us is a key product that's used in the financial services sector for advisors to engage with. and sell to their customers across modern digital channels in a compliant way. Very essential if you are in one of the regulated industries like financial services. In 2019, they unified seven point solutions onto Sprinklr and today they have scaled to nearly 8,000 distributed users and 25,000 seats for employee advocacy. BMO is a showcase of what can be done by a financial institution across social selling, employee and executive advocacy, and branch social enablement. Lastly, global technology leader Siemens expanded their partnership with Sprinklr this quarter by adding 150 modern marketing and advertising seats. Within four years, Siemens has consolidated eight siloed solutions into our unified CXM platform. Today, nearly 2,000 communicators in more than 60 countries work from the Sprinklr platform every day to plan, manage, distribute, and optimize content across social, web, blogs, and email. Rounding out on the product front, I'd also like to share that we continue to make progress with our light products in research and care. As we've stated previously, the goal for our light products is to accelerate and drive greater efficiency in our inbound demand generation efforts. This is a self-serve way for enterprises to try an easy-to-use, lightweight version of a platform free of charge, which we see as a gateway for companies that are at the earliest stage of their digital journeys. Before wrapping up, I'd like to applaud our customers for the work they're doing to improve their customers' experiences and for co-creating unified customer experience management as a category. I also want to celebrate Sprinklr's incredible engineering team who make all of this possible. They continue to innovate at a breakneck pace and speed that differentiates Sprinklr's platform in the marketplace. Whether it's improving our proprietary AI every day, or taking on a channel-like voice that has over 40 years of maturity in the CCaaS space or making user experience simpler, this team shows no fear regardless of how daunting the challenge is. In closing, I'd like to reiterate that we remain focused on the fundamentals in our business. We will continue to execute on our efficient growth strategy, balancing revenue growth and profitability while being disciplined about our strategic hiring and expense management. But we will also stop at nothing to provide the innovation our customers deserve. Our collective belief has never been stronger. Brands want a no compromise, unified approach to create better customer expediences at the edge of their brand. And that, the emergence of unified CXM as a category is inevitable. Thank you to all of you, our customers, partners, employees, and most importantly, investors, for believing in that vision. With that, let me hand over the call to Manish.