Sprinklr, Inc.

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

Thank you, Doug, and welcome everyone to Sprinkler's second quarter fiscal year 2024 financial results call. Joining us today are Raji Thomas, Sprinkler's founder and CEO, and Manish Sareen, Sprinkler's chief financial officer. We issued our earnings release a short time ago, followed 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 2024 and full fiscal year 2024, our strategy, our product capabilities, and our market opportunity. 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, which are also posted on our website. With that, I'll now turn it over to Raji.

Thank you, Eric, and hello, everyone. Thank you for joining us today. We are very pleased that Q2 is another strong quarter that exceeded guidance across all key metrics. Q2 total revenue grew 18% year-over-year to $178.5 million, and subscription revenue grew 23% year-over-year to $163.5 million. With our continued focus on operational efficiency, we generated $21.3 million in non-GAAP operating income for the quarter. Our key focus areas continue to be creating a new category that we call Unified CXM, innovating faster than our competitors by harnessing the power of AI and improving our operational efficiencies while focusing on measurable value for our customers. We are pleased with how Unified CXM is continuing to evolve as a category. and we are focused on mainstreaming our core product suite across the broader front office. In my travels around the world last quarter, the best brands in the world are continuing to ask us to help consolidate front office technologies, reduce their operating costs, help reduce risk, all while bringing people and data together to create better customer experiences. For large and complex enterprise brands, Seamless experiences are impossible to create across a multitude of channels, functions, business units, and markets that are traditionally operating in silos. Unified CXM is differentiated at its core with a single instance AI-powered architecture that simplifies this complexity. It also gives brands access to publicly available conversational and mostly unstructured data in a safe and privacy-compliant way that the current CRM and CDP relational databases cannot. The second topic on every customer's mind is AI. On the heels of announcing our AI Plus integration with OpenAI, we are now excited to announce the integration of the Sprinklr AI Plus platform with Google Cloud's Vertex AI. This means that Sprinklr AI Plus can now provide brands with even more generative AI capabilities that are pre-built for enterprise-level governance, security, and data privacy. More importantly, customers will now be able to bring along their own models from OpenAI, Vertex AI, create new ones, or integrate them as appropriate with our proprietary AI. We believe that every company will embrace AI eventually. Our assertion is that companies that approach AI as a foundational strategy will win against AI adopters and AI-enabled companies in the long run. As we shared with you during our investor day, Generative AI has given our proprietary AI wings, and Sprinklr's AI is the fastest way for customers and prospects to deploy AI across their entire front office. As we all know, the macro environment continues to be uncertain. However, we are diligently managing what's in our control with our go-to-market strategy, productivity improvement, and execution. This past quarter, we made a few more key hires in the service specialist team to add expertise and depth to selling our contact center offerings. And we continue to provide verticalized solutions to enable quicker time to value and faster deployment. This now includes financial services, airlines, CPG, technology, and retail. Regarding our partner ecosystem, we're also encouraged with some of our recent successes, including the launch of our new Unified Partners program. We have integrated several new types of partners, including independent consultants, referral partners, and technological solution brokers and business process outsourcing partners. Partners, as you all probably know, are especially critical in the contact center space, and we remain committed to training and onboarding them as rapidly as we can. Two of our largest CCaaS deals in Q2 were both sourced by partners. Furthermore, our technology solution brokers model is showing great momentum, providing us with almost 50 new opportunities in the past two months in the contact center space. And finally, we continue to make progress with our self-serve products. We've added dozens of new paying customers through this initiative in Q2. We believe that our investment in self-service products will help us expand access to Sprinklr products and enable companies of all sizes eventually to expedience the power of our front office platform. With decision making around product purchases becoming increasingly democratized, even inside of large companies, a self-service product provides easy access to teams and practitioners who eventually end up recommending it to senior stakeholders within their organization. With respect to sprinkler service, we have continued our momentum as a disruptor in the contact center as a service space. Our vision to help customers is to help customers transform the contact center from a legacy voice-focused cost center to a more efficient service AI-powered omni-channel revenue center by unifying it with marketing and sales. Sprinklr's AI-first unified CCaaS provides its customers and prospects with, one, more seamless, consistent customer experience across channels, two, a lower agent attrition rate, and three, a lower total cost of ownership. During the second quarter, we once again saw several meaningful CCAS deals close across all three of our primary theaters. And the majority of our service deals won with new logos. During the second quarter, we continued to add new customers and expand with existing customers. This includes world-class brands like Deutsche Telekom, LVMH, Nova Nordisk, Toyota, and TransUnion. Here are some examples. In Q2, one of the largest technology companies signed a multi-year $60 million plus ELA agreement, expanding its partnership with Sprinklr across all four of our product suites as it drives tech consolidation across its company-wide ecosystem. Sprinklr replaced two more competitors this time in the marketing and engagement space, onboarding hundreds of new users to the platform, enabling tighter collaboration between these teams, and saving the company significant dollars by replacing point solutions. The company also added 1,000 new Sprinklr social seats and unlimited listening from Sprinklr Insights. This customer has served as Sprinklr's definition partner for our AI product, and we look forward to a continued partnership with them. This past quarter, Deutsche Telekom expanded its partnership with Sprinklr further into the contact center. Europe's largest telco provider first partnered with us in 2022 when it implemented Sprinklr marketing and Sprinklr service to manage content marketing and social customer service in the German market. As a part of this latest expansion, Deutsche Telekom will move its entire European contact center operation across 11 countries onto Sprinklr's AI-powered customer service platform. Until now, the company's contact centers have each been using its own set of legacy solutions. A transition to Sprinklr's cloud-based solution will enable them to streamline operations and enhance efficiency while improving agent workflows and customers' experiences. The flexible architecture of Sprinklr's CCaaS solution will enable Deutsche Telekom to integrate its contact center ecosystem across Europe and drive its consolidation and innovation strategy across the region. By the end of next year, the company will have more than 40,000 customer service agents across 11 countries working from one unified platform. Another sprinkle service win this past quarter is with a company of a different profile than our traditional Global 2000 base. This North American delivery company facilitates same-day delivery of groceries and household essentials via its app and website. The company will replace six point solutions with Sprinklr's unified platform. And with help, it's over 700 agents to drive a more frictionless experience with customers. Sprinklr service will power best in class customer service to company's members and shoppers across voice, chat, email, SMS, and social in more than 250 metropolitan areas across the US. Sprinklr's platform will be integrated into the company's other backend systems, including their order management tool, and will help to future-proof their business by supporting new self-service features like chat and voice bots. Earlier this year, I told you about an exciting first-of-its-kind win in the public center when Sprinklr was selected by the Civil Services and Government Development Bureau of Qatar as its technology partner to transform how the government provides services to and engages with the public. Today, I have another exciting development in the public sector space. This time, the Emirate of Ajman, which is in the northern part of the United Arab Emirates. The Emirates leadership's futuristic vision is to transform the experience of its citizens, residents, and tourists. For this, the Digital Department of Ajman, or DDA, has been tasked with transforming the citizen and tourist experience across 17 local government entities. DDA selected Sprinklr as its future unified citizen experience management platform, offering government services seamlessly across social, digital, and voice channels to more than 500 citizens and residents and more than 300,000 tourists who visit the Emirates every year. Before wrapping up, I'd like to take a moment to celebrate our incredible engineering team who make all of this possible. Their speed of innovation and dedication continues to differentiate Sprinklr in the marketplace. In closing, we are pretty pleased with our quarter's results and even more excited about what is to come. We are encouraged by the engagement and the momentum we see from customers and the broader ecosystem. We believe that a unified platform, industry-leading AI, and efficient execution will set us apart in helping customers unify their teams, consolidate front office technology, increase productivity, lower cost, and mitigate brand risk. We remain committed to our vision of becoming the most loved enterprise software company, innovating for our customers, succeeding with our partners, delivering shareholder value, and executing for growth and continued profitability. Thanks to our customers, partners, and our employees for the hard work and results. And to all our investors, thank you for believing in the vision. I'll now hand over the call to Manish.