Sprinklr, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Sprinkler's first quarter fiscal 2024 earnings conference call. At this time, all participants are in 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 the conference over to your first speaker today, Mr. Eric Skro, Vice President of Finance, for introductory remarks. Please go ahead, Eric.

Thank you, Doug, and welcome, everyone, to Sprinkler's first quarter fiscal year 2024 financial results call. Joining us today are Raji Thomas, Sprinkler's founder and CEO, and Manish Sareen, 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 reconciliation of such measures to GAAP. With that, let me please turn it over to Raju Thomas.

Thank you, Eric. And hello, everyone. Thank you for joining us today. Before we jump to our quarterly results, there are a few things I'd like to share. First is that on July 12th, we will be hosting our first ever investor day at the New York Stock Exchange. We look forward to seeing many of you in person and sharing more details about Sprintler's vision and business strategy. The second, you saw the 8K we filed on May 15th about John Chambers, resigning from our board as of June 14th, but remaining as an advisor. We want to take a moment to publicly thank John for his contributions as a board member since joining our board in 2017. John is one of the most caring and hardest working executives I know, And if anyone deserves a little time back in his life, it would be him. While John will no longer have board commitments, we are grateful that he'll stay on as an advisor and continue to be a coach, a mentor, and a friend to all of us. Next, we are excited to welcome Track Sam to our board of directors. His appointment will become effective on June 15th, and TRAC will also be a member of our audit committee. TRAC most recently served as the CFO at Synopsys with a broad remit across finance, business development strategy, and IT. TRAC is a great culture fit for Sprinklr. And given its vast expedience scaling a multi-billion dollar business, a great addition to our boat. The management team and I are looking forward to working with him and tapping into his product expertise. So let's jump into the results of our first quarter. We are very, very pleased that Q1 was another strong quarter that exceeded guidance across all key metrics. Q1 total revenue grew 20% year-over-year to $173.4 million. and subscription revenue grew 24% year-over-year to $157.7 million. With our continued focus on operational efficiency, I'm also delighted to report that we generated $11 million in non-GAAP operating income for the quarter. These results are driven by a few key things that are top of mind for all of us. First, we believe we are creating a new category of enterprise software for the front office. We call it unified customer experience management. As we hear constantly from some of the best brands in the world, there's a clear need for a front office platform to eliminate siloed technology teams data and to create seamless customer experiences. As simple as it might appear, these seamless experiences are impossible to create across the multitude of channels, functions, business units, and markets that most large companies have and operate in today. Unified CXM is differentiated at its core by a unified AI-powered architecture that spans all of these different silos. And it's fueled by publicly available and mostly unstructured data and conversations. And that just cannot be supported by the current CRM and CDP relational database packets. This approach of unifying the front office benefits both customers and brands. Customer experiences improve and brands can reduce costs, mitigate risk, and increase productivity for growth. We recently hosted a first analyst summit in Dubai where approximately 20 well-respected industry analysts joined us and our customers. It was very encouraging to see them speak to our customers and validate our vision. We have made some of their codes and references available for you in the presentation on our IR website. But one code worth mentioning came from an IDC analyst who said, built on an already robust architectural framework, Sprinklr appears to be set up well to address its ambitious growth plan. The second point for us is that we are very, very excited to see AI finally become mainstream. As all of you who have been tracking us from the beginning and are at our IPO, you know that AI has been foundational to our platform from the very, very beginning. It's woven into every fabric of our unified platform. And if you read our IPO prospectus, it should be very clear that it was and always has been a key differentiator for us. Sprinklr is the system of record for unstructured external and conversational data for some of the best brands in the world. And we've been training over 2,000 AI models with over 100 million training data points in over 100 languages across over 70 industries and sub-industries for five years. And that accuracy that we're able to achieve with the training, I don't believe can be matched by any other company in our space in the short term. A recent announcement regarding Sprinklr AI Plus is the next evolution of our AI. Sprinklr AI Plus includes generative AI capabilities through an open AI integration across all our product suites. With generative AI, our AI becomes even more powerful. Delivered over 30 AI features in our last release, we have another 25 planned for our next. Some of these features include smarter responses, generated recommendations, content summarizations, which help customers with more relevant and specific auto responses and increase agent productivity. For example... One of our streaming customers improved the agent's acceptance of sprinkler smart responses, which are the suggested responses that we provide for agents, by 300% after we enabled AI+. You know, every company will embrace AI sooner or later. What I believe will separate winners from losers is whether AI is a feature for you or is it at the core of everything you do. So despite the macro environment, we are very pleased with how we're managing what's in our control with our go-to-market strategy, productivity, and execution. Specifically, we're excited about the progress we're making to make it easier to sell, which has been a top priority for the company. This past quarter, we made several key hires in the service overlay team to add expertise and depth to our CCaaS offering go-to-market, And we continue to verticalize to enable quicker time to value and faster deployments. We are now up and running for CCaaS with a couple of more key industries, including financial services and airlines. We're also doubling down on our partner ecosystem. And we've recently partnered with some amazing companies like Intellisys and FoundEver, which are beginning to result in deals that we've won together in the field. As you all know, partners are critical. especially in the contact center space, and we remain committed to training and onboarding them as rapidly as we can. And finally, last quarter, we discussed our self-serve offering, Sprinkler Social Advance. Feedback has been incredibly positive in terms of how easy it is to use, and the product is opening the door as we anticipate for larger deals. This past quarter, a very large media company, actually started with social advance and now in conversation with our sales team to expand to multiple geographies and product suites. I'd love to provide a brief update on Sprinklr service and our continued momentum as a disruptor in the CCaaS space. Our vision is to help customers transform the contact center from a voice-focused cost center to a more efficient and effective AI-powered omnichannel revenue center by unifying it with marketing and sales. IT buyers find Sprinklr to be a great fit for their needs as they consolidate point solutions in the contact center stack to a platform that's built on a single code base with a very extendable architecture. During the first quarter, we saw meaningful CCaaS deals close across all three of our primary theaters. During the first quarter, we continue to add new customers and expand with existing customers, including world-class brands like Avis, Garmin, Lululemon, Puma, Spirit Airlines, and Wilson. Let me give you a few examples of how customers are currently using Sprinklr, starting with service. And showcasing the power of the unified CXM platform is an expansion win in Q1 with a top five global technology company, which renewed and expanded their business to over $15 million in ARR with Sprinklr. They are now using 40 Sprinklr products across all of our product suites in over 13 languages. Sprinklr service is now a critical part of the deployment at this client, enabling guided workflows, knowledge bases for agents, customers, video chat, co-browsing, and AI-powered agent assist capabilities like smart comprehension, pairing, and responses. Through Sprinklr, this client can now detect issues within five minutes, as opposed to the 30 to 45 minutes it used to take previously enabling them to expand their support coverage and improve their SLAs through increased actionability, AI, and automation. Another service story is with Americana, one of the largest restaurant companies in the Middle East and Africa. Americana originally began partnering with Sprinklr to build out an actionable voice of the customer and customer service programs. This program gathers live, actionable voice of customer insights across all digital and voice sources to provide enhanced resolution. Our platform and implementation of it has helped Americana reduce response time now to minutes. With the expansion last quarter, Americana now has implemented Sprinklr across 10 brands in multiple countries across several thousand restaurants. Another example is a new logo, Hilti, a leading multinational manufacturing company with over 30,000 employees who signed, interestingly, a seven-year deal with Sprinklr as a new customer to use our inside social and marketing solutions. This is an amazing example and a testament to how strategic Unified CXM is for large enterprises. Another example is the expansion of a strategic partnership with Roche, one of the largest pharma companies in the world. Using Sprinklr, they have now laid the foundation for global intelligence teams to provide holistic insights across social, digital, and traditional media, including print and broadcasting stations. The consolidation and analytics based on real-time data display plays a key role in Roche's vision to become one Roche as it enables diverse siloed stakeholders across the pharma and diagnostic divisions in over 100 countries to make informed decisions and proactively respond in crisis situations. And obviously, it's driving growth and optimizing strategies. Before wrapping up, I'd like to take a moment to celebrate our incredible engineering team. who, as always, make all of this possible. Their speed of innovation and dedication continue to differentiate Sprinklr in the marketplace. In closing, we are very pleased with our start to FY24. We are encouraged by the engagement and momentum we're seeing from customers, industry analysts, influencers, around three things. First, a new category of front office software. We call it unified CXM, but the simple idea that teams and data and technology and customer journeys have to be unified at the architectural level and that a disconnected set of point solutions won't work. Two, AI is well on its way to being mainstream and customers are super excited with our AI first approach and generative AI plus integrations that give them what I think is customer-facing superpowers. And our focus, lastly, third, our focus on efficient execution, which is helping us drive strong momentum across our product suite. We remain committed to our vision of becoming the world's most loved enterprise software company, innovating for our customers, succeeding with our partners, and delivering shareholder value, and in the long term, executing for growth and continued profitability. Thanks to our customers, partners, and our employees for hard work and results. And thanks to our investors for believing in our vision. Let me hand the call over to Manish.