Sprinklr, Inc.

Greetings. Welcome to Sprinklr first quarter fiscal year 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this call is being recorded. It is now my pleasure to introduce Eric Skro, Vice President of Finance. Thank you. You may begin.

thank you operator and welcome everyone to sprinkler's first quarter fiscal year 2026 financial results call joining us today are rory reed sprinkler's president and ceo and manish serene sprinkler's 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 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 some 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 second fiscal quarter and full fiscal year of 2026, the impact of our corporate strategies and changes to our leadership, the benefits of our platform, and our market opportunity. Our actual results might differ materially from such forward-looking statements. 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, including Sprinkler's quarterly report on Form 10-Q for the quarter ended April 30th, 2025. With that, I'll now turn it over to Rory.

Thank you, Eric. And hello, everyone. It's nice to be with you today. I'll start by providing a few 1Q financial highlights before covering some of my thoughts on the progress we are making in transforming the Sprinklr business. First quarter total revenue grew 5% year over year to $205.5 million. And subscription revenue grew 4% year over year to $184.1 million. we generated $36.7 million in non-GAAP operating income, which resulted in an 18% non-GAAP operating margin for the quarter. I'd also like to highlight the record $81 million in free cash flow generation for the quarter. I want to thank Sprinklr team members from around the globe and our customers and partners for trusting us to help them solve some of their most important business needs. In April, we welcomed Sanjay Maquan as our Chief Information Officer. Sanjay's experience leading enterprise technology and information security at scale will help strengthen our security posture so we can deliver hardened world-class products while supporting our long-term vision to make every customer experience extraordinary. I expect we will make further leadership team additions as we move through FY26. Now I'd like to provide you with an update on Sprinklr's transformation. To date, we have established a clear ambidextrous strategy, implemented a business management system, optimized our cost structure, realigned our go-to-market coverage model, and strengthened our product delivery roadmaps. We are creating a foundation from which we will strategically invest and efficiently run Sprinklr to improve our business. While we saw positive improvements in the business in the quarter, particularly around non-GAAP operating income and free cash flow, We are still a work in progress and have significant work to do across our business to elevate the consistency of our execution, improve the predictability of our results, and drive future growth. As I have shared in our previous two earnings calls, FY26 is a transitional year for Sprinklr. We anticipated some near-term challenges as we implemented a series of strategic and operational changes to directly address past execution challenges and to position the company for the long term. During my many meetings with customers around the world, there are clear instances where some of them were not effectively implemented or properly supported. which understandably led to their dissatisfaction. In addition, the broader macroeconomic uncertainty has resulted in longer sales cycles and increased scrutiny of enterprise spending. This heightened scrutiny coupled with inconsistent operational execution and lingering technical debt from the past several years has continued to put pressure on our renewal cycles, resulting in more down-sell activity and, in some cases, logo churn. Addressing all forms of churn is a top priority in our transformational journey, and we are actively working to resolve these issues. As Manish will cover later in the call, we are maintaining our FY26 subscription revenue non-GAAP operating income guidance. However, we must continue to improve our execution to drive stronger financial performance in FY27 and beyond. Our commitment is to help our customers realize the full value of our AI native platform. This is why we are focused on taking steps to strengthen our implementation processes and increase our post-sale support. We believe these changes and our continued investment will help customers see faster time to value, deepen confidence in the value of our solutions, and unlock expansion opportunities aligned to our customers' critical priorities. We are also making changes to improve our day-to-day execution. Our new business management system provides a more comprehensive view of the business with clear understandings of potential risks and opportunities so we can take proactive steps to address them quickly. And our new sales pod structure, implemented in February, enables our sales, services, and product teams to operate in a more unified and collaborative way to support customers. We are getting closer to the C-suite customers and building champions with this within the CIO and CTO organizations to better align with our customers' technology roadmap and their business priorities. We continue to strengthen our sales teams with hires across our pod structures. With respect to the health of our pipeline, Sprinklr core remains strong and is at the highest level over the past 18 months. Re-energizing and growing the core is a key driver to durable growth for Sprinklr. Since our founding, Sprinklr has been an undisputed market leader in social media management for the world's largest iconic brands. We believe shifting trends in social media today, notably the advancements in AI, social commerce, immersive content experiences, and cross-functional content strategies play to Sprinklr's strength and positions us to win. And in service, we have a pipeline with numerous seven-figure opportunities to pursue and win. Our AI solution is one of the key reasons we are winning as a disruptor in service. We're witnessing a pivotal shift where AI is no longer confined to automating basic tasks. Instead, AI is driving real-time decision-making, and the depth and breadth of the Sprinklr platform is helping turn data into insights, and insights into actions. That's creating values for the brands we serve. LLM agnostic architecture is built on Sprinklr's proven automation and AI engine. This foundation enables seamless integration of AI agents into existing workflows. Customers are reporting containment rates ranging from 30% to as high as 80%, significantly reducing the need for human intervention. Now I'd like to cover Our Project Bear Hug, which was one of our key back-to-the-field initiatives focused on deeply engaging our top 500 customers. This group represents approximately 80% of our revenue. In the first few months of Project Bear Hug, we've had detailed engagements with well over 100 of our largest customers. We're encouraged by the early results. and new expanded use cases as we help companies drive accelerated ROI across the Sprinklr platform. This initiative brings together all functions of Sprinklr, sales, service, product, marketing, to bear hug our customers, enabling us to better understand their priorities and deliver better outcomes for their business. As many of you know, Product and technology innovation have always been at the core of our strategy and competitive advantage. This focus is earning us industry recognition. We are extremely proud to be highlighted in three top-tier analyst evaluations by Gardner and Forrester, showcasing our exceptional cross-product innovation and unified platform vision. These accolades validate our ambidextrous strategy to re-energize and grow the core while hardening and expanding our service offering to deliver the industry's most powerful AI native unified customer experience management platform. This momentum confirms our continued leadership in the MarTech space and as a form of disruptor, and challenger in the voice of the customer and CCaaS markets. Now I'd like to talk about some of our recent customer wins. During 1Q, we continued landing and expanding with many leading brands, companies such as Calvin Klein, LG Electronics, and Pepsi, to name just a few. As of April 30th, we now have 146 customers generating at least 1 million in annual subscription revenue, which is up 6% year over year. I'd like to highlight a couple examples that demonstrate how we're helping customers to win and deliver measurable results. This quarter, a Fortune 500 global medical technology leader replaced a five-year legacy vendor to reset their digital foundation for future growth. They needed a more innovative enterprise-ready platform. They chose Sprinklr in a highly competitive process for our ability to unify global operations, deliver best-in-class publishing capabilities, and support future growth across customer service, advertising, and listening, all on one AI native platform. Now with Sprinklr Social and Sprinklr Service, the company is transforming how it delivers content and customer experience across markets, equipping its customer service and global social media operations teams with AI-powered workflows, stronger governance, and smarter campaign execution. This win signals a strategic shift to unify and scale while positioning Sprinklr at the core of their long-term customer engagement strategy. Our next win is with a leading British retailer in the healthcare and wellness space. They were in search of a strategic partner to completely reimagine their contact center, transforming it from a cost center to driver of valuable insights and revenue growth. Following a competitive RFP process, they selected Sprinklr's unified platform to power a four-phase transformation, capturing the voice of the customer through advanced quality management and analytics, deflecting low-value contacts with intelligent knowledge management, deepening digital engagement via bots, live chat, and WhatsApp, and ultimately unifying voice, workforce optimization, and CX operations. This win signals a bold shift in how the brand views its services organizations. and Sprinklr as a heart of this evolution. A big congratulations to the bear hugging of cross-functional pods who helped win these customers in Q1. In closing, we're focused on building a better company, and we're making tangible progress in our transformation. We have acknowledged there will be challenges along the way, and we still have significant work to do. but we have clarity about where we are going, where we must improve, and how we will help our customers win. And I'm optimistic about the opportunity in front of us, but this will take some time. Sprinklr is the definitive AI native platform for unified customer experience management that empowers customer facing teams to deliver seamless and consistent experiences across every touchpoint of the customer journey. The world is moving from transactional customer engagement to unified 360-degree customer experiences. We will leverage our AI-based unified platform and execute an ambidextrous approach to re-energize and grow our leading sprinkler core business while hardening and expanding our disruptive Sprinklr service solution and our march towards the rule of 40. Thank you again, Sprinklr team members around the world who are passionate about our future. We are driven by a shared vision and commitment to innovation and aligned to our commitment to creating long-term value for our customers, partners, shareholders, and each other. Now I'd like to turn the call over to Manish to go through the numbers in a bit more detail. Manish?