Sprinklr Inc (CXM) Shares Plunge Over 20% After Q3 FY24 Results
Sprinklr Inc, a leading customer experience management platform, saw its shares drop by more than 20% following the announcement of its third-quarter fiscal year 2024 results. The company reported a revenue increase of 18% year-over-year to $186.3 million, surpassing the consensus estimate of $180.4 million.
Subscription revenue was a standout, rising by 22% year-over-year to $170.5 million in the quarter. Additionally, the company reported a 34% increase in remaining performance obligations (RPO) and a 19% increase in contract remaining performance obligations (cRPO) year-over-year.
One of the most significant highlights of the report was the significant increase in non-GAAP operating income, which rose to $27.4 million from $6.9 million in the same period last year. This resulted in an expansion of the operating margin to 15%.
Adjusted earnings per share (EPS) also surpassed expectations, coming in at $0.11 compared to the consensus estimate of $0.07.
In terms of cash flow, net operating cash flow for the quarter was $21.0 million, while free cash flow amounted to $15.9 million. As of October 31, 2023, the company held $656.4 million in cash, cash equivalents, and marketable securities.
Looking ahead, Sprinklr Inc provided its outlook for the fourth quarter, expecting revenue in the range of $187.5 million to $189.5 million, with adjusted EPS projected to be between $0.08 and $0.09. This is slightly below the estimated revenue of $188.26 million and in line with the estimated adjusted EPS of $0.08.
For the full fiscal year 2024, the company revised its revenue guidance to $725.5 million to $727.5 million, up from the previous range of $719 million to $721 million. The adjusted EPS guidance was also increased to $0.36 to $0.37, compared to the previous range of $0.30 to $0.31. The consensus estimate for adjusted EPS was $0.30.
Despite the positive outlook, the market reacted negatively to the Q3 results, with Sprinklr Inc shares dropping 21.50% to $13.10 in premarket trading.
Investors may be concerned about the company’s ability to maintain its growth rate and profitability, given the significant drop in share value. However, it is worth noting that Sprinklr Inc’s revenue and non-GAAP operating income both experienced substantial increases, indicating that the company is still performing well overall.
As with any investment, it is essential for investors to carefully evaluate the company’s financials, growth prospects, and market conditions before making any investment decisions.
