Sprinklr’s second quarter saw revenue and adjusted profitability come in above Wall Street expectations, but the market responded negatively as management highlighted ongoing churn pressures and the continued need for operational improvement. CEO Rory Read described the period as a transitional phase, noting that efforts such as Project BearHug are focused on repairing customer relationships and stabilizing renewal rates. The company’s recent initiatives have begun to show early signs of progress, but management acknowledged that inconsistent execution and technical debt remain hurdles.
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Sprinklr (CXM) Q2 CY2025 Highlights:
- Revenue: $212 million vs analyst estimates of $205.4 million (7.5% year-on-year growth, 3.2% beat)
- Adjusted EPS: $0.13 vs analyst estimates of $0.10 (29.9% beat)
- Adjusted Operating Income: $38.25 million vs analyst estimates of $33.75 million (18% margin, 13.3% beat)
- The company lifted its revenue guidance for the full year to $838 million at the midpoint from $826 million, a 1.5% increase
- Management raised its full-year Adjusted EPS guidance to $0.43 at the midpoint, a 7.6% increase
- Operating Margin: 7.7%, up from 0% in the same quarter last year
- Billings: $200.6 million at quarter end, up 4% year on year
- Market Capitalization: $1.92 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Sprinklr’s Q2 Earnings Call
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Willow Miller (William Blair): Asked when investors should expect to see tangible improvement (“the bend”) in business metrics. CEO Rory Read said improvements in renewals and customer satisfaction are expected in the second half and into next year, but emphasized the need for continued progress.
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Patrick Walravens (Citizens JMP): Requested details on churn situations. Read explained that most churn is downsell-related, especially from past over-purchasing or execution issues, and noted that Project BearHug is focused on converting challenged accounts into renewals.
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Elizabeth Porter (Morgan Stanley): Questioned the drivers behind decelerating revenue growth. Read attributed it to cleanup efforts and prudent guidance, stressing that growth should re-accelerate as transformation efforts take hold.
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Matt Dembley (Cantor Fitzgerald): Inquired about the new hybrid pricing model’s impact. Read explained that the model is designed for greater transparency, easier consumption, and should improve customer relationships and satisfaction over time.
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Parker Lane (Stifel): Asked about the scale and progress of challenged accounts in Project BearHug. Read noted a decline in the number of challenged accounts and highlighted weekly tracking as part of the company’s operational discipline.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will be watching (1) the effectiveness of Project BearHug in reducing churn and improving enterprise customer renewals, (2) the adoption and monetization of Sprinklr’s enhanced AI and Customer Feedback Management products, and (3) the impact of leadership changes on operational execution. Progress on simplifying pricing and sustaining margin improvement amid higher AI-related costs will also be important markers of success.
Sprinklr currently trades at $7.85, down from $8.62 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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