What They Do
Sprinklr operates a unified customer experience management (CXM) platform that helps large enterprises manage customer interactions across all digital channels — social media, messaging, email, web, and advertising. They serve major global brands who need to deliver consistent customer experiences at scale, generating revenue primarily through subscription-based software licenses and professional services for implementation.
Investment Thesis
**Stabilizing customer metrics**: Net dollar retention has stabilized at 102% after multi-year decline, with the top $1M+ customer cohort showing 9% YoY growth and 113% net dollar expansion**Strong profitability trajectory**: 67% gross margins with 16% operating margins, generating $126M in free cash flow YTD on $877M revenue run-rate**Blue-chip customer base**: Five most valued companies in both US and Europe use Sprinklr, providing sticky enterprise relationships in a mission-critical functionKey Risks
**Minimal revenue growth**: CY26 revenue growth of only 1.9% with flat-to-declining forward estimates suggests market saturation or competitive pressure**Customer base contraction**: Lost 4 customers in the $1M+ cohort last quarter, indicating potential churn among highest-value accountsGrowth Story
Revenue growth has decelerated significantly to high single digits, with CY26 estimated growth of just 1.9% on $870M revenue. The company is banking on "Project Bearhug" customer engagement initiative and new pricing/bundling models to reignite growth, while expanding AI capabilities with 300+ AI skills to capture the personalization trend driven by first-party data usage.
Profitability Profile
Sprinklr demonstrates strong unit economics with 67% gross margins and has achieved sustainable profitability at 16% operating margins. The company generates healthy free cash flow ($126M YTD) and maintains a fortress balance sheet with $480M cash and no debt, indicating mature financial profile despite growth challenges.
Competitive Position
Sprinklr holds a differentiated position as a unified CXM platform serving large enterprises, competing against point solutions and broader customer engagement platforms. Their moat stems from the complexity of integrating multiple customer touchpoints and the switching costs associated with enterprise-wide implementations, though slowing growth suggests competitive pressure may be intensifying.
Recent Momentum
Q3 results showed 9% YoY revenue growth that beat expectations by 1.7%, with management highlighting early signs of stabilization in customer metrics. The company raised FY2026 guidance and completed a leadership transformation with new CFO and CPO, signaling entry into "phase two" of their operational turnaround focused on execution.
What Wall Street Thinks
Analyst sentiment appears cautious given the company's consistent but modest earnings beats and decelerating growth trajectory. The forward revenue estimates show minimal growth expectations, suggesting analysts are waiting for evidence that the operational improvements and customer engagement initiatives can meaningfully re-accelerate growth.
The Bottom Line
Sprinklr is a profitable, cash-generative enterprise software company with blue-chip customers, but investors face the fundamental question of whether management's turnaround efforts can reignite meaningful growth from what appears to be a maturing business model.
