Q1 2026 Sprinklr Inc Earnings Call

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Operator: Greetings. Welcome to Sprinklr First Quarter Fiscal Year 2026 Earnings Call.

Greetings and welcome to the sprint clear 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 kind of some key pad.

Operator: At this time, all participants are in a listen-only mode.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad.

Operator: As a reminder, this call is being recorded.

A reminder, this call is being recorded and it's now my pleasure to introduce Eric Crowe Vice President Finance. Thank you you may begin.

Eric Scro: It is now my pleasure to introduce Eric Scro, Vice President of Finance. Thank you.

Eric Scro: You may Thank you, operator, and welcome, everyone, to Sprinklr's first quarter fiscal year 2026 financial results call.

Speaker Change: You operator, and welcome everyone to your sprinkler its first quarter of fiscal year 'twenty 'twenty six financial results call. Joining us today are Rory Reid sprinklers, President and CEO and many screen Sprinklers Chief Financial Officer, We issued our earnings release, a short time ago filed the related form 8-K, with the SEC and we've made them available on the.

Eric Scro: Joining us today are Rory Read, Sprinklr's president and CEO, and Manish Sarin, Sprinklr'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.

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 sprinkler that involve many assumptions risks and uncertainties, including our guidance.

Eric Scro: You are directed to our press release and supplementary investor presentation for a reconciliation of such measures to GAAP.

Eric Scro: 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 us.

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.

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 Sprinklers quarterly report on Form 10-Q for the quarter ended April 32025 with that I'll now turn it over.

Eric Scro: 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 Sprinklr's quarterly report on Form 10-Q for the quarter ended April 30, 2025.

Rory Read: With that, I'll now turn it over to Rory. Thank you, Eric. And hello, everyone. It's nice to be with you today.

To worry.

Speaker Change: Thank you, Eric and Hello, everyone, it's nice to be with you today.

Rory Read: 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'll start by providing a few one in Q financial highlights before covering some of my thoughts on the progress we are making in transforming the sprinkler 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.

And non-GAAP operating income, which resulted in an 18% non-GAAP operating margin for the quarter.

Rory Read: 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.

Speaker Change: I'd also like to highlight the record $81 million and free cash flow generation for the court.

I want to thank sprinkler 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.

Rory Read: In April, we welcomed Sanjay Mekwan 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.

In April we welcomed Sanjay Mcguire as our Chief Information Officer, Sanjay his experience, leading enterprise technology and information security at scale will help strengthen our security posture. So we can deliver harden world class products.

Supporting our long term vision to make every customer experience extraordinary.

Rory Read: I expect we will make further leadership team additions as we move through FY26.

I expect we will make further leadership team additions as we move through FY 'twenty six.

Rory Read: Now I'd like to provide you with an update on Sprinklr's transformation. Today, 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 roadmap. We are creating a foundation from which we will strategically invest and efficiently run Sprinklr to improve our business.

Now I'd like to provide you with an app on sprinklers transformation two.

To date, we have established a clear I am by Dexterous strategy.

Implemented a business management system optimize our cost structure.

Realized our go to market coverage model and strengthen our product delivery Roadmaps, we are creating a foundation from which we will strategically invest and efficiently run sprinkler to improve our business.

Rory Read: 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.

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.

Speaker Change: As I have shared in our previous two earnings calls FY 'twenty six as a transitional year for sprinkler, we anticipated some near term challenges as we implemented a series of strategic and operational changes to directly address paas execution challenges and to position.

<unk> the company for the long term.

Rory Read: During my many meetings with customers around the world, there are clear instances where some of them were not effectively implemented or properly supported.

During my many meetings with customers around the world.

There are clear instances, where some of them were not effectively implemented were properly supported.

Rory Read: which understandably led to their dissatisfaction. In addition, the broader macroeconomic uncertain 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 downsell activity and, in some cases, logo churn.

It's 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 cell activity and in some cases logo churn.

Rory Read: Addressing all forms of churn is a top priority in our transformational journey, and we are actively working to resolve these issues.

Addressing all forms of churn is a top priority in our transformational journey.

And we are actively working to resolve these issues.

Rory Read: As Manish will cover later in the call, we are maintaining our FY26 Subscription Revenue Non-GAAP Operating Income Guidance.

As many each will cover later in the call we are maintaining our FY 'twenty six subscription revenue non-GAAP operating income guidance. However, we must continue to improve our execution to drive stronger financial performance in FY 'twenty seven N be odd.

Rory Read: 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-sales 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.

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 increased our poorest post sales 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.

Rory Read: 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 For more information visit www.FEMA.gov 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 within the CIO and CTO organizations to better align with our customers' technology roadmap and their business priorities.

Speaker Change: 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 understanding of potential risk and opportunities. So we can take.

Proactive steps to address them quickly.

Speaker Change: And our new sales pods 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 CIL and C T.

Speaker Change: Oh organizations to better align with our customers' technology road map and their business priorities.

Rory Read: We continue to strengthen our sales teams with hires across our pod structure.

Speaker Change: We continued to strengthen our sales teams with hires across our pod structures.

Rory Read: With respect to the HealthAbout pipeline, Sprinklr core remains strong. and is at the highest level over the past 18 months.

Speaker Change: With respect to the health of our pipeline sprinkler core remained strong.

Speaker Change: And is at the highest level over the past 18 months.

Rory Read: reenergizing and growing the core is a key driver to durable growth for spring Since our founding, Sprinklr has been an undisputed market leader in social media management for the world's largest iconic brand. 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.

Speaker Change: Reenergizing and growing the core is a key driver to durable growth for sprinkler.

Speaker Change: Since our founding sprinkler 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.

Speaker Change: Experience is and cross functional content strategies play to sprinkler strength.

Speaker Change: And positions us to win.

Rory Read: 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 value for the brands we serve. Our LLM agnostic architecture is built on Sprinklr's proven automation and AI engine. This foundation enables seamless integration of AI agents into existing workflows.

Speaker Change: And then service we have a pipeline with numerous seven figure opportunities to pursue and win our AI solution that was one of the key reasons, we are winning as a disruptor in service.

Speaker Change: 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 sprinkler pipe warm is helping turn data into insights and insights into actions that is.

Speaker Change: Creating value for the blank brands we serve.

Speaker Change: R. L. L. M. Agnostic architecture is built on sprinklers proven automation and AI engine.

Speaker Change: 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.

Rory Read: Customers are reporting containment rates ranging from 30% to as high as 80%, significantly reducing the need for human intervention.

Rory Read: Now I'd like to cover our Project Bearhug, 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 AROI 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.

Speaker Change: 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.

Speaker Change: This group represents approximately 80% of our revenue.

Speaker Change: In the first few months of project Bear hug, we've had detailed engagement 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.

Speaker Change: Our ROI across the sprinkler platform.

Speaker Change: This initiative brings together all functions of sprinkler sales service product marketing to bear hug, our customers, enabling us to better understand their priorities and deliver better outcomes for their business.

Rory Read: 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 analysts evaluations by Gardner and Forrest. 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 offer. to deliver industry's most powerful AI native unified customer experience management platform.

Speaker Change: As many of you know product and technology innovation have always been at the core of our strategy and competitive advantage.

Speaker Change: This focus is earning us industry recognition.

Speaker Change: We are extremely proud to be highlighted in three top tier analyst evaluations by Gartner and Forrester showcasing our exceptional cross product innovation and unified platform vision.

Speaker Change: These accolades validate our and by Dexterous strategy to Reenergize and grow the core while hardening and expanding our service offering.

Speaker Change: To deliver the industry's most powerful AI Nader unified customer experience management platform.

Rory Read: This momentum confirms our continued leadership in the Martech space and as a formidable disruptor and challenger in the voice of the customer and CCAS market.

Speaker Change: This momentum confirms our continued leadership in the Mar Tech space.

Speaker Change: And as a former disruptor and challenger in the voice of the customer and see Kaz markets.

Rory Read: Now, I'd like to talk about some of our recent customer. 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.

Speaker Change: Now I'd like to talk about some of our recent customer wins.

Speaker Change: During <unk>, we continue landing and expanding with many leading brands companies such as Calvin Klein LG electronics and Pepsi today, just a few.

Speaker Change: As of April 30, we now have 146 customers generating at least 1 million in annual subscription revenue, which is up 6% year over year.

Rory Read: 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.

Speaker Change: I'd like to highlight a couple of examples that demonstrate how we're helping customers to win and deliver measurable results.

Speaker Change: This quarter, a fortune 500 global medical technology leader, we replaced our five year legacy vendor to reset their digital foundation for future growth.

Speaker Change: They needed a more innovative enterprise ready platform.

Speaker Change: They chose sprinkler and 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 NEDA.

Speaker Change: <unk> now.

Rory Read: 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 wins. signals a strategic shift to unify and scale while positioning Sprinklr at the core of their long-term customer engagement strategy.

Speaker Change: Now with sprinkler, social and sprinkler service the company is transforming how it delivers content and customer experience across markets equipping its customer service and so global social media operations teams with AI powered workflows stronger.

Speaker Change: Governance and smarter campaign execution. This win signal a strategic shift to unify and scale, while positioning sprinkle are at the core of their long term customer engagement strategy.

Rory Read: 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 context. 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.

Speaker Change: Our next win is with a leading British retailer in the health care and wellness space.

Speaker Change: They were in search of a strategic partner to completely re imagine their contact center transforming it from a cost center to driver a valuable insight and revenue growth following a competitive RFP process. They selected sprinklers unified.

Speaker Change: <unk> compound or four phase transformation, capturing the voice of the customer through advanced quality management and analytic lytic.

Speaker Change: Deflecting low value contacts with intelligent knowledge management.

Speaker Change: Deepening digital engagement via bots live chat and Whatsapp, and ultimately unifying voice workforce optimization and CX operations.

Rory Read: This win signals a bold shift in how the brand views its services organization. and Sprinklr as a heart of this evolution.

Speaker Change: This win signals a bold shift in how the brand views it services organization.

Speaker Change: And sprinkler as a heart of this evolution.

Rory Read: A big congratulations to the bear-hugging of cross-functional pods who helped win these customers in Q1.

Speaker Change: A big congratulations to the bear hugging of cross functional pod, who helped win these customers in Q1.

Rory Read: 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.

Speaker Change: 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.

Speaker Change: But we have clarity about where we're 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.

Rory Read: 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 experience. We will leverage our AI-based unified platform. and execute an ambidextrous approach to re-energize and grow our leading Sprinklr core business while hardening and expanding our disruptive Sprinklr service solution in our march towards the Rule of 40.

Speaker Change: Sprinkler is the definitive AI native platform for unified customer experience management that empowers customer facing teams to deliver a seamless and consistent experiences across every touch point of the customer journey.

Speaker Change: The World is moving from transactional customer engagement to unified 360 degree customer experiences, we will leverage our AI based unified platform.

Speaker Change: And execute an ambidextrous approach to reenergize and grow our leading sprinkler core business, while hardening and expanding our disruptive sprinkler service solution and our March towards the rule of 40. Thank.

Rory Read: Thank you again to 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.

Speaker Change: Thank you again sprinkler team members around the world, who are passionate about our future.

Speaker Change: 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.

Manish Sarin: Now I'd like to turn the call over to Manish to go through the numbers in a bit more detail. Thank you, Rory, and good morning. For the first quarter, total revenue was $205.5 million, up 5% year-over-year, while subscription revenue was $184.1 million, up 4% year-over-year. Professional services revenue came in at $21.4 million. Our subscription and revenue-based net dollar expansion rate in the first quarter was 102%. This reflects the ongoing impact from the elevated customer churn and downsell activity that we have experienced in the quarter and over the past 24 months. At the end of the first quarter, we had 146 customers contributing $1 million or more in subscription revenue over the preceding 12 months, which is a 6% increase year over year, but down slightly on a sequential basis versus Q4 of last year.

Speaker Change: Now I'd like to turn the call over to Mcneese to go through the numbers in a bit more detail minis.

Mcneese: Thank you Lori and good morning, everyone.

Mcneese: For the first quarter total revenue was $205 5 million up 5% year over year, while subscription revenue was $184 1 million up 4% year over year for.

Speaker Change: Professional services revenue came in at 21 $4 million.

Speaker Change: Our subscription revenue base net dollar expansion rate in the first quarter was 100%.

Speaker Change: This reflects the ongoing impact from the elevated customer churn and down sell activity that we've experienced in the quarter and over the past 24 months.

Speaker Change: At the end of the first quarter, we had 146 cost employers contributing $1 million.

Speaker Change: Subscription revenue over the preceding 12 months.

Speaker Change: 6% increase year over year, but down slightly on a sequential basis versus Q4 of last year.

Manish Sarin: The sequential decline reflects the cumulative impact from some of the downsell and customer churn challenges we have referenced in the past. This had led to some customers that were previously included in this metric falling below the $1 million. in trailing 12 months revenue and fewer customers expanding into the scope.

Speaker Change: This sequential decline reflects the cumulative impact from some of the down sell and customer churn challenges.

Speaker Change: Past year.

Speaker Change: This had led to some customers that were previously included in this metric falling below a $1 million.

Speaker Change: In trailing 12 months revenue and fewer customers expanding into this cohort we believe our focus on customers with the high end of the market should positively impact our seven figure customer accounts over time.

Manish Sarin: We believe our bearhug focus on customers at the high end of the market should positively impact our seven-figure customer count over time.

Manish Sarin: regarding gross margins for the first quarter. On a non-GAAP basis, our subscription gross margin was 78% and the professional services gross margin was 60%. resulting in a total non-GAAP gross margin of 70%.

Speaker Change: Regarding gross margins for the first quarter.

Speaker Change: On a non-GAAP basis, our subscription gross margin was 78% and the professional services gross margin was 6%, resulting in a total non-GAAP gross margin of 70%.

Manish Sarin: As noted on previous calls, we are experiencing higher data and hosting costs as we are launching new cloud environments in response to new business opportunities. especially in Sprinklr.

Speaker Change: As noted on previous calls we are experiencing higher data and hosting cost as we are launching new cloud environments in response to new business opportunities, especially in stainless Dennis.

Manish Sarin: Turning to profitability for the quarter, non-GAAP operating income was $36.7 million, or an 18% margin, which drove non-GAAP net income of $0.12 per diluted share. In the quarter, we booked $16.3 million in restructuring charges and paid out $11.8 million in cash related to the restructuring. We also incurred $0.8 million in litigation costs that we deemed to be non-core to the operations of the business. As a reminder, these restructuring charges and litigation costs are not included in our non-GAAP figure.

Speaker Change: Turning to profitability for the quarter non-GAAP operating income was $36 7 million.

Speaker Change: On an 18% margin.

Speaker Change: Drove non-GAAP net income of 12 cents per diluted share.

Speaker Change: In the quarter, we booked $16 3 million in restructuring charges and paid out $11 8 million in cash in the meeting.

Speaker Change: Restructuring.

Speaker Change: We also incurred 0.8 million in litigation costs that we deem to be non core to the operations of the business.

Speaker Change: As a reminder, these restructuring charges and litigation costs are not included in our non-GAAP figures.

Manish Sarin: With respect to free cash flow, we generated $80.7 million during the first quarter, which is a record percentage. And if you factor in the $11.8 million cash paid out for the restructuring, free cash flow would have been $92.5 million for the quarter. This was a good start to the year and positions as well. This strong message reflects our ongoing efficiency efforts. Better Expense Discipline and Improved Collection Process.

Speaker Change: With respect to free cash flow, we generated 87 million during the first quarter, which is a record for us.

Speaker Change: And if you factor in the 11 8 million cash paid out of the restructuring free cash flow would have been $92 5 million for the quarter.

Speaker Change: This was a good start to the year and positions us lap.

Speaker Change: This strong metrics reflects our ongoing efficiency efforts.

Speaker Change: Expense discipline and improved collection processes.

Manish Sarin: This free cash flow generation contributed to our healthy balance sheet, which now stands at $570.2 million in cash and marketable securities with no debt outstanding.

Speaker Change: This free cash flow generation contributor guar healthy balance sheet, which now stands at $572 million in cash and marketable securities with no debt outstanding.

Speaker Change: Hey.

Manish Sarin: As we disclosed in our earnings release, I'm happy to report that Sprinklr's board has authorized a new $150 million stock buyback program, and we intend to complete the full buyback by June 30, 2026. Given the strong cash flow generation in Q1, and the operational improvements we have been making, we believe this is a prudent use of cash at this time. Calculated billings for the first quarter were $204.3 million, an increase of 7% year-over-year. As of April 30, 2025, total remaining performance obligations, or RPO, which represents revenue from committed customer contracts that has not yet been recognized, was $943.2 million, up 2%, compared to the same period last year.

Speaker Change: As we disclosed in our earnings release I'm Happy to report that Sprinklers Board has authorized a new $150 million stock buyback program and we intend to complete the full buyback by June 30th 26.

Speaker Change: Given the strong cash flow generation in Q1, and the operational improvements we have been making we believe this is a prudent use of cash at this time.

Speaker Change: Calculated billings for the first quarter were $204 3 million, an increase of 7% year over year.

Speaker Change: As of April 30 of 2020.

Speaker Change: Total remaining performance obligations or RVO, which represents revenue from committed customer contracts. So that has not yet been recognized.

Speaker Change: $943 2 million up 2% compared to the same period last year.

Manish Sarin: And current RPO or CRPO was 596.8 million, up 5% year-over-year.

Speaker Change: And current RVO, RC IPO was $596 8 million up 5% year over year.

Manish Sarin: Before moving to guidance, I would like to comment on the macroenvironment. Since our last earnings call, it is clear the macro environment has been changing. While we continue to see a healthy pipeline, we think it is reasonable to expect customers to be more cautious and scrutinize their spending decisions for the remainder of the year.

Speaker Change: Before moving to guidance I would like to comment on the macro environment since our last earnings call. It is clear the macro environment has been changing.

Speaker Change: Why do we continue to see a healthy pipeline. We think it is reasonable to expect customers to be more cautious and scrutinize their spending decisions for the remainder of the year.

Manish Sarin: Furthermore, I want to address the potential impact on the volatility of the U.S. dollar on our business. given that most of our billings are in U.S. dollars. Changes in exchange rates do not materially impact our revenue. From an expense perspective, however, as a significant proportion of our employee population is based outside the U.S. and paid in local currency, we have a more significant impact on operating expenses.

Speaker Change: Furthermore, I want to address the potential impact on the volatility of the U S dollar on our business.

Speaker Change: Given that most of our billing on U S.

Speaker Change: Dollars.

Speaker Change: Changes in exchange rates do not materially impact our revenue.

Speaker Change: From an expense perspective, however, as a significant proportion of our employee population is based outside the U S and paid in local currency, we have a more significant impact on operating expenses.

Manish Sarin: At this point, we estimate a $10 million negative impact on our non-GAAP operating expenses based on current However, at this time, we are confident we will be able to identify savings across the business to offset this headwind. Our guidance reflects these assumptions.

Speaker Change: At this point, we estimated $10 million negative.

Speaker Change: On a non-GAAP operating expenses base.

Speaker Change: Capex rates.

Speaker Change: However at this time, we are confident we will be able to identify savings across the business to offset this headwind.

Speaker Change: Our guidance reflects these assumptions.

Manish Sarin: Now moving to the next. For Q2, we expect total revenue to be in the range of $205 million to $206 million, representing 4% growth year-over-year at the mid-term. Within this, we expect subscription revenue to be in the range of $184 million to $185 million, representing 4% growth year-over-year at the mid-term. The Q2 guide implies $21 million in professional services revenue, which is growing by 9% year-over-year. As we have signaled in prior earnings calls, we will continue to invest in our professional services delivery capabilities and expect professional services gross margin to be approximately breakeven in Q2.

Speaker Change: Now moving to the numbers.

Speaker Change: For Q2, we expect total revenue to be in the range of $205 million to $106 million, representing 4% growth year over year, but my point.

Speaker Change: Within this we expect subscription revenue to be in the range of $184 million to $185 million, representing 4% growth year over year at the midpoint.

Speaker Change: The Q2 guide implies 21 million and professional services revenue, which is growing by 9% year over yet.

Speaker Change: As we have signaled in prior calls we will continue to invest in our professional services.

Speaker Change: Abilities and expect professional services gross margin to be approximately breakeven in Q2.

Manish Sarin: With respect to billings, we estimate total billings of just under $200 million here in Cuba. We expect non-GAAP operating income to be in the range of 33.5 million to 34.5 million, resulting in non-GAAP net income per diluted share of approximately 10 cents, assuming 270 million diluted weighted average shares are standing. This equates to a 17% non-GAAP operating margin at the mid-term.

Speaker Change: With respect to Beijing, we estimate total billings of just under 200 million here in Q2.

Speaker Change: We expect non-GAAP operating income to be in the range of $33 5 million.

Speaker Change: $4 5 million, resulting in non-GAAP net income per diluted share of approximately <unk> 10.

Speaker Change: As you need 217 million diluted weighted average shares outstanding.

Speaker Change: This equates to a 17% non-GAAP operating margin at the midpoint.

Manish Sarin: As we discussed on the call in March, we began investing some of the capital freed up from our restructuring earlier this year. This includes hiring in key areas, such as go-to-market, R&D, and AI resources to both grow the core and harden our service product offering. For the full year FY26 We maintain our expectation for subscription revenue to be in the range of $741 million to $743 million, representing 3% growth year-over-year at the mid-term. As we previously shared, we continue to make progress in our transformation, but there is much more work still to do and challenges to overcome.

Speaker Change: As we discussed on the call in March we began investing some of the capital freed up from our restructuring earlier. This year. This includes hiring in key areas such as go to market R&D and AI resources to both grow the core and harden our service product offering.

Speaker Change: For the full year FY 'twenty six.

Speaker Change: Maintain our expectation for subscription revenue to be in the range of 741 million to $743 million, representing 3% growth year over year at the midpoint.

Speaker Change: As we previously shared we continue to make progress in our transformation, but there is much more work still to do and challenges to address we expect this transformation to continue across FY 'twenty six.

Manish Sarin: We expect this transformation to continue across FY26. We now expect total revenue to be in the range of $825 million to $827 million, representing 4% growth year-over-year at the mid-term. This is a $3.5 million increase from prior guidance, driven by an increase in our professional services revenue expectation to $84 million. For modeling purposes, you can assume approximately $21 million in professional services revenue for both Q3 and Q4. For the full year FY26, we are maintaining our non-GAAP operating income to be in the range of $129 million to $131 million. This equates to non-GAAP net income per diluted share of $0.39 to $0.40, assuming 277 million diluted weighted average shares are pending.

Speaker Change: We expect total revenue to be in the range of 825 million.

Speaker Change: $127 million, representing 4% growth year over year at the midpoint.

Speaker Change: This is a three and a half million dollars increase from prior guidance driven by any.

Speaker Change: Professional services revenue expectation to $84 million.

Speaker Change: For modeling purposes, you can assume approximately $21 million and professional services revenue for both Q3 and Q4.

Speaker Change: For the full year FY 'twenty six.

Speaker Change: Maintaining our non-GAAP operating income to be in that in India 129 million to $131 million.

Speaker Change: This equates to a non-GAAP net income per diluted share of 39.

Speaker Change: 240.

Speaker Change: <unk> 277 million diluted weighted average shares outstanding.

Manish Sarin: This implies a 16% non-GAAP operating margin at the midpoint. When modeling the spread of non-GAAP operating income for the second half of FY26, you can assume a midpoint of $30 million for both Q3 and Q4 as the investments flow through the income statement. In deriving the net income per share for modeling purposes, a total tax provision of approximately $39 million needs to be added to the non-GAAP profit before tax. To get to non-GAAP profit before tax, start with the non-GAAP operating income ranges provided and add an estimated $19 million in other income for the full year, with $4 million of that to be earned here in Q2.

Speaker Change: This implies a 16% non-GAAP operating margin at the midpoint.

Speaker Change: When modeling the spread up non-GAAP operating income for the second half of FY 96, you're going to assume a midpoint of $40 million for both Q3 and Q4 as the investments flow through the income statement.

Speaker Change: In driving that Bush.

Speaker Change: Sure for marketing purposes.

Speaker Change: The tax provision of approximately $39 million needs to be added to the non-GAAP profit before tax.

Speaker Change: To get to non-GAAP profit before <unk> start with the non-GAAP operating income ranges provided and add an estimated 19 million in other income for the full year with $4 million of that to be on hit in Q2.

Manish Sarin: This other income line primarily consists of interest income. We estimate a tax provision of $10 million here in Q2. This equates to approximately a 26% effective tax rate on our non-GAAP profit before tax for both the quarter and the year. We also expect to be GAAP net-incomposited for the full year FY26, consistent with our performance over the last two years.

Speaker Change: This other income line primarily consists of interest income.

Speaker Change: Estimated tax provision of 10 million here in Q2, this equates to approximately a 26% effective vaccinated on a non-GAAP profit before tax for both the quarter and the year.

Speaker Change: We also expect to be GAAP net income positive for the full year FY 'twenty six consistent with our performance over the last two years.

Manish Sarin: Regarding free cash flow, we're still tracking to achieve a 15% free cash flow margin in FY26, which would equate to free cash flow generation of approximately $125 million for the full Q1 coming in at 92.5 million gives us a strong start to this year.

Speaker Change: Regarding free cash flow, we're still tracking to achieve that 16% free cash flow margin in FY, 'twenty, six which would equate to a free cash flow generation of approximately $125 million for the full year.

Speaker Change: Q1, coming in at $92 5 million, giving us a strong start of this year.

Operator: Lastly, I would like to thank all our employees for their dedication and passion for what we are building at Sprinklr, and I am grateful for the confidence that our customers have placed in us. And with that, let's open it up for questions.

Speaker Change: Lastly, I would like to thank all our employees for their dedication and passion for what we are building at sprinkler and I'm grateful for the confidence that our customers have placed in us.

Speaker Change: And with that let's open it up for questions operator.

Operator: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker Change: Thank you and see you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue and for participants using speaker equipment may be necessary to pick up your handset before pressing.

Operator: And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: The Star Keys, one moment, while we poll for questions.

Operator: One moment while we poll for questions.

Arjun Bhatia: Our first question is from Arjun Bhatia with William Blair and Company. Please proceed. Perfect. Thank you so much.

Speaker Change: Our first question is from Arjun Bhatia with William Blair <unk> Company. Please proceed.

Arjun Bhatia: Perfect. Thank you so much maybe.

Rory Read: Maybe for you, Rory, to start out with. It seems like you're making progress on the go-to-market side with some of the changes that you're implementing. But as you point out, you know, we're still early in the journey and there's a lot of work still to be done. So I'm curious, how long is it before you think the go-to-market org can kind of reach its full potential and start firing on all cylinders with cross-sell, with up-sell, with customer retention, kind of getting to levels where you would be happy with it? Yeah, thanks, Arjun. That's a great question.

Speaker Change: For you we're already to start out with it.

Speaker Change: It seems like you're making progress on the go to market side with some of the changes that you're implementing but as you point out you know we're still early in the journey and there's a lot of work still to be done. So I'm curious how long is it before you think.

Speaker Change: They go to market or just how to reach its full potential and start firing on all cylinders with cross sell upsell with customer retention.

Speaker Change: Getting getting to levels, where you would be happy with it.

Speaker Change: Yeah. Thanks R. J. That's a great question, you know with the go to market as the fundamental component of the transformation I think we did a great job with the coverage model that we implemented in February.

Rory Read: You know, the go-to-market is a fundamental component of the transformation. I think we did a great job with the coverage model that we implemented in February. I think the pod structure and creating those teams and really having them over the right accounts is fundamental to this transformation. In terms of where we are, I think we're making good progress. But as I told you, FY26 would be a transitional year. I thought the first half would be choppier than the second half, and I'd look for more of a bend as I went through the year. The two things I think that are important about unlocking the go-to-market is, one, I think this push around Project Bearhug to get our team back in front of the customer every day, and a focus on sales execution and sales activity, driving that engagement with the customer.

Speaker Change: The pod structure and creating those teams and really having them over the right account is fundamental to this transformation in terms of where we are I think we're making good progress, but as I told you FY 'twenty six would be a transitional year I thought the first half would be choppy here.

Speaker Change: Then the second half and look for more of a band as they went through the year.

Speaker Change: Two things I think that are important about unlocking the go to market is one I think this push around project bear hug to get our team back in front of the customer every day and our focus on sales execution and sales activity driving that engage.

Speaker Change: <unk> met with the customer.

Rory Read: As we finish May, we've gotten to about 200 of our top clients through this Project Bearhug, and we're definitely seeing traction from that activity. So, I'm very encouraged. So, we have to get that. Bearhug Workout through about five, six hundred customers over the next two quarters. And that should put us into, you know, somewhere in 3Q. The second thing we have to do, Arjun, is we need to make sure we are creating a robust enablement program for our internal pods, as well as our partners, because we have to build out our partner ecosystem and our customer.

Speaker Change: As we finish May we've gotten to about 200 of our top clients through this project bear hug and we're definitely seeing traction from that activity. So I'm very encouraged so we have to get that.

Speaker Change: Bear hug work out through about $5 600 customers over the next two quarters and that should put us into.

Speaker Change: So somewhere in the <unk>. The second thing we have to do our job as we need to make sure. We are creating a robust enablement program for our internal pods as well as our partners because we get to build out our partner ecosystem and our customer.

Rory Read: That we're actually implementing this month. We're starting with a series of 100 level classes, 200 level classes, and then later in the summer, we're going to be training our teams on 300 and 400 level classes around our eight or nine selling motions. So teaching the pod exactly how to sell, what are the pain points of the customer, and how do we ramp them faster and create those use case models that help them sell. So I'd say as we move through this year, transitional FY26, I'll look for that sales, that sales force and that pod structure to really start reaching some of its momentum in the latter part of the second half.

Speaker Change: That we're actually implementing this month, we're starting with a series of 100 level classes 200 level classes and then later in the summer we're going to be training our teams on three and 400 level classes around our eight or nine selling motions. So teaching that part exactly how to sell what are.

Speaker Change: The pain points of the customer and how do we.

Speaker Change: Ramp them faster and create those use case models that help them sell so I'd say as we move through this year transitional FY 'twenty fit I'll look for that sales that sales force at that pod structure to really start reaching some of its momentum and the law.

Speaker Change: Part of the second half I think we should see that in <unk> and <unk> and then into FY 'twenty seven 'twenty H, which is your acceleration time period, that's what I'd look for in that does that help margin.

Rory Read: I think we should see that in 3Q and 4Q, and then into FY27-28, which is your acceleration time period. That's what I'd look for in that. Does that help, Bart? Yeah, perfect. That sounds very promising. Appreciate that.

Speaker Change: Yeah, perfect that sounds very promising and I appreciate that.

Rory Read: And then maybe the second one, just on CCAS, it sounds like you're making some progress there. We know it's a competitive market, but it sounds like what you're doing is resonating. So I'm curious what, from a product perspective, customers are coming to you, to Sprinklr, and saying, Hey, we really like this. This is differentiating the market. And then what's driving that edge in the CCAS service space?

Speaker Change: And then maybe the second one just on CCAR, so it sounds like you're making some progress there.

Speaker Change: We know it's a competitive market.

Speaker Change: But it sounds like what Youre doing is resonating so I'm curious what from a product perspective customers are coming to you to sprinkler and saying Hey, we really like this this is differentiated in the market.

Speaker Change: And what's driving that edge in the Steakhouse service space.

Rory Read: I think what is key in that, you know, what differentiates Sprinklr and why some of these iconic brands are looking to us and how we've made some really important inroads in that CCAS space. We only entered that market, what, two and a half years ago, but we have some really outstanding brands. It's because of the AI capability and this platform. Now, our CCAS customers have, their agents have an experience where they can see more robust. They don't have to switch screens. They can really pull in data about the customer from a unified perspective from the social and the listening and the insights world.

Speaker Change: I think what is key in that.

Speaker Change: [noise] differentiate spring color and why some of these iconic brands are looking to us and how we've made some really important inroads in that seat cafes, we only entered that market what two five years ago, but we have some really outstanding brands, it's because of the AI capability and this platform now.

Speaker Change: Now our R. R.

Speaker Change: <unk> customers have their agents have an experience where they can see more robust. They don't have to switch screens. They can really pulling data about the customer from a unified perspective from the social listening and the insights world. They had the robust kinds of capability with.

Rory Read: They have the robust kinds of capability with the right co-pilot, AI agentic deflection, and the social support around it. I think that's what they really like about it, the experience and the forward thinking of that AI native platform that we're creating. And then how we link the other components of Sprinklr onto that platform.

Speaker Change: The right co pilot AIA Gen ticked of flexion and our social support around it.

Speaker Change: That's what they really like about it the experience and the board thinking of that AI native platform that we're creating and then how we link the other components.

Speaker Change: Of sprinkler onto that platform, you're going to hear later in the year. Some of the you know.

Rory Read: You're going to hear later in the year, some of the, you know, the wins that we've had in that space at a global level. And I think that they're going to be very important in unlocking the future there.

Speaker Change: The wins that we've had in that space at a global level and I think that theyre going to be very important and unlocking the future. There now the challenge for US has been we have to mature that and that's what I talk about the strategy about hardening and expanding C cat I need.

Rory Read: Now, the challenge for us has been, we have to mature that. And that's when I talk about the strategy about hardening and expanding CCAS. I need to have that, this is a mission critical application. They love the experience. They love the solution and the platform and the AI nativity of it and the functionality around agentic AI co-pilot and our studio work. But we have to have robustness in terms of how we release product, how we support product. We need to be a mature enterprise software company.

Speaker Change: To have that this is a mission critical application they loved the experience they love the solution and the platform of the AI knit Nativity of it and the functionality around Gen tick AI co pilot at our studio work, but we have to have robustness in terms of how we run.

Speaker Change: Elyse product, how we support product we need to be a mature enterprise software company and that's something that will work across this whole year. So they love the solution. They like the idea, but we have to be better at implementing it and making sure that it's a great experience we have to harden it and we have to add some functions.

Rory Read: And that's something we'll work across this whole year. So, they love the solution. They like the idea. But we have to be better at implementing it and making sure that it's a great experience. We have to harden it and we have to add some functionality like in areas of workflow management that will enable us to have the full answer. And I think all of that's on track through the end of the year, through the beginning of next year.

Speaker Change: <unk> like in areas of workflow management that will enable us to have the full answer and I think all of that's on track through the end of the year through the beginning of next year and.

Rory Read: And I consciously not push the accelerator down there. We are still continuing to grow in that space and add new customers. But I want to get that hardened before I expand further. And spending a lot of time with our existing customers to make sure that's a good experience.

Speaker Change: <unk> consciously not push the accelerator down there we are still continuing to grow in that space and add new customers, but want to get that harden before I expand further and spending a lot of time with our existing customers to make sure that as a good experience.

Rory Read: All right, very good. Thank you.

Speaker Change: All right very good thank you.

Pinjalim Bora: Our next question is from Pinjalim Bora with J.P. Morgan. Please. Oh, thank you for taking the questions. Two quick questions.

Speaker Change: Our next question is from pendulum bar at J P. Morgan. Please proceed.

Speaker Change: Oh, Thank you for taking the questions.

Speaker Change: Two quick questions. The elongation in sales cycles and scrutiny that you highlighted wanted to ask you is that broad based across your customers or is that associated with certain geographies and certain verticals.

Rory Read: The elongation in sales cycles and scrutiny that you highlighted, I want to ask you, is that broad-based across your customers or is that associated with certain geographies and certain verticals? And maybe talk about what have you seen in terms of spending trends as you stepped into Q2.

Speaker Change: And maybe talk about what have you seen in terms of spending trends as you stepped into Q2 and the second question is the logo churn what is driving that how should how should we think about the dollar churn through the year. Thank you.

Rory Read: And the second question is, the logo churn, what is driving that and how should we think about the dollar churn through the year? Thank you. Yeah, so let's take the first one first. I think what you're seeing, there's definitely been pressure in terms of the macro and the uncertainty created by tariffs. It doesn't directly affect us, but I think everyone has, and I don't think it's vertical. I don't think it's geography-based. I think everyone's just focused on managing expense as effectively as they can and to make sure that they're investing in those areas that get returned.

Speaker Change: Yeah, So let's take the first one first I think what youre seeing.

Speaker Change: Theres definitely been pressure in terms of the macro and the uncertainty created by tariffs it doesn't directly affect us, but I think everyone has and I don't think it's vertical I don't think it's geography base I think everyone's just focused on managing expense as effectively.

Speaker Change: As they can and make sure that they're investing in those areas that get return, we're seeing plenty of opportunities I mentioned that were at the highest point in 18 months in terms of our core.

Rory Read: We're seeing plenty of opportunities. I mentioned that we're at the highest point in 18 months in terms of our core pipeline. I think that's a macro effect. I'd say it's across the planet. I'd say in terms of the impact to us, I'd put that in the 30%, plus or minus. I think more of our pressure has been over the past two years is on our execution, okay? I think everyone's gonna feel that scrutiny on expense management, but I don't think it's catastrophic. I just think there's more focus on it. Our key is getting better implementation and better execution, delivering on the commitments we make.

Speaker Change: Pipeline.

Speaker Change: I think that's a macro effect I would say it's across the planet.

Speaker Change: I'd say in terms of the impact to us.

Speaker Change: I put that in the 30, 30% plus or minus I think more of our pressure has been over the past two years is on our execution. Okay, I think everyone's going to feel that scrutiny on sell it.

Speaker Change: On expense management.

Speaker Change: But I don't think it's catastrophic I just think it.

Speaker Change: There's more focus on it our key is getting better implementation and better execution delivering on the commitments, we made and I can tell you the ones, where we're bear hugging and we're spending more time with the customer we're seeing tangible progress we just have to do it across so.

Rory Read: And I can tell you the ones where we're bear-hugging and we're spending more time with the customer, we're seeing tangible progress. We just have to do it across a wider swath of the customer set.

Speaker Change: A wider swath of the of the.

Speaker Change: Customer set now in terms of.

Rory Read: Now, in terms of renewals, we've seen renewal pressure and sprinkler long before I got here, I guess the past two-plus years. You know, I think, again, that's really driven by the need to make our company a mature enterprise software company, improve our implementation, engage the customer, make sure we do what we say and own what we do. If we make a customer commitment, deliver on it. When we do an implementation, do it effectively, and make sure you're in front of the customer every day. And now, each of those activities, we have specific actions with our sales pod, with Project Bear Hug, with our enablement, with our work to transform our implementations.

Speaker Change: Renewals, we've seen renewal pressure and sprinkler long before I got here I guess, the past two plus years.

Speaker Change: I think again, thats really driven by the need to make our company a mature enterprise software company improve our implementation engage the customer make sure. We do what we say and one what we do we make a customer commitment deliver on it when we see you do in <unk>.

Speaker Change: Mentation do it effectively and make sure you're in front of the customer every day and now each of those activities. We have specific actions with our sales pod with project bear hug within our enablement with our work to transform our implementations we want to move to have our.

Rory Read: We want to move to have our implementations be 80% consistent and 20% bespoke. And we want our partner ecosystem to grow significantly as we move forward. Today, too much of our implementations are unique, bespoke implementations, and not consistent enough. So in terms of that, you know, from quarter to quarter and predictability, we just are kind of in the same mode.

Speaker Change: <unk> mentation speak, 80%, consistent and 20% bespoke and we want our partner ecosystem to grow significantly as we move forward today too much of our implementations are you unique.

Speaker Change: Unique bespoke implementation and not consistent enough.

Speaker Change: So in terms of that.

Speaker Change: From quarter to quarter and predictability, we just they're kind of in the same mode I'm looking for the business to show a bend in the second half I'm looking for that the the changes that we're making in terms of the roadmap in terms of the enablement and Taylor.

Rory Read: I'm looking for the business to show a bend in the second half. I'm looking for the changes that we're making in terms of the roadmap, in terms of the enablement, in terms of the pods, in terms of the improvements to implementation, improvements to the enablement. That should all start to translate to a bend in the second half of the year. Now, plus or minus, we'll look at it. We're a work in progress. And all I'll continue to do is give you updates on this. The challenges of the past two years, plus two years, we're not going to fix in two quarters, but we're going to fix in a transitional year as we move forward.

Speaker Change: Pods in terms of the improvements to implementation improvements to the enablement that should all start to translate to a bend in the second half of the year now plus or minus we'll look at it. We're a work in progress and all I'll continue to do is give you updates on this.

Speaker Change: The challenges of the past two years plus two years, we're not going to fix in two quarters, but we're going to fix in a transitional year as we move forward and I think we're working on the right stuff I really do.

Rory Read: And I think we're working on the right stuff. I really do. Got it, thank you.

Speaker Change: Yeah.

Speaker Change: Got it thank you.

Catharine Trebnick: Our next question is from Catharine Trebnick with Rosenblatt Securities. Please proceed. Oh, thank you for taking my question and a good first quarter here.

Operator: Our next question is from Katherine from NEK with Rosenblatt Securities. Please proceed.

Katherine: Oh, Thank you for taking my question and good first quarter here. So could you delineate maybe between sprinkler marketing sprinkler insights and sprinkler. So so on the churn or any one of those having more of a particular problem on renewal and then the second follow on question would be you know.

Rory Read: So could you delineate maybe between Sprinklr marketing, Sprinklr insights and Sprinklr social on the turn? Are any one of those having more of a particular problem on renewal? And then the second follow on question would be, you know, what type of R&D activity are you putting into those projects to help with the renewal? Thank you.

Operator: What type of R&D activity are you putting into those projects to help with the renewal. Thank you.

Rory Read: Hey, thanks, Catharine. And Catharine, from a standpoint, you know, that whole social, that core MarTech stack space, I think the company, as it pivoted two and a half years ago towards CCAS, really neglected and really didn't focus there. And I think that's a fundamental part of our solution long term. We want to re-energize and grow that core. There's no question. We've changed our incentives this year to make sure, and we see that manifesting itself in a better pipeline. That's good news. I like that. I think what we're seeing in terms of renewal, there's not much variation between those three components that you referenced.

Operator: Hey, Thanks Catherine.

Operator: Katherine from a standpoint that whole social that core martech stack space.

Operator: The company as it pivoted, two and a half years ago towards C cat really neglected and really didn't focus there and I think that's a fundamental part of our solution long term, we want to Reenergize and grow that core there is no question, we've change our incentives this year to make sure.

Operator: And we see that manifesting itself in a better pipeline that's good news I like that.

Operator: What what we're seeing in terms of renewal.

Operator: Theres not much variation between those three components that you referenced.

Rory Read: You know, maybe one's three, four points higher or lower, and it can vary from quarter to quarter, but they're all in the same kind of space. When we engage the customer, and we work with them on a regular basis, and we help them grow and have the right insights, we see stickiness, we see activity, and we see, you know, buy-in. When we don't engage the customer, what would you expect? It atrophies. You don't get the impact. That's why we're pushing so hard in the go-to-market.

Operator: One three.

Operator: Three four points higher or lower and it can vary from quarter to quarter, but theyre all in the same kind of space.

Operator: When we engage the customer and we work with them on a regular basis and we help them grow and have the right insights we see stickiness we see.

Operator: Activity and we see.

Operator: Buy it when we don't engage the customer.

Operator: You expected.

Operator: It Atrophies, you don't get the impact that's why we're pushing so hard on the go to market now in terms of innovation, where about a project internally called project Tiger Shark and Tiger shark, what we're trying to do is really focus on all activities around the core to accelerate so we are focused on improving.

Rory Read: Now, in terms of innovation, we've got a project we internally call Project TigerShark. In TigerShark, what we're trying to do is really focus on all activities around the core to accelerate. So, we have focused on improving the user experience in the UI. We're around innovation and advancing, and we're looking externally, are there acquisition opportunities that can add different capabilities and functionality? And there's some interesting opportunities out there that we're going to continue to pursue. I think you're going to see us introduced in the customer feedback management space as a competitor to some of the traditional players in that space.

Operator: The user experience than they were.

Operator: Whereas around innovation and advancing and we're looking externally are there acquisition opportunities that can add different capabilities and functionality and there are some interesting opportunities out there that we're going to continue to pursue I think youre going to see us introduce it and the customer feedback management space.

Operator: As a competitor to some of the traditional players in that space I think we can be very disruptive theyre the <unk>.

Rory Read: I think we can be very disruptive there. The key, though, fundamentally, is being engaged with the customer. When we get it right, we grow. We just implemented a large multimillion-dollar core deal that went live. We sold it in 4Q. It was with a big healthcare retailer. It went live just the past couple days. Very, very powerful. The key here is engage the customer, continue to innovate, look for acquisitions that are small but meaningful, that allow us to continue to expand on that space. No big variation in the renewals between the three pieces of the stack, but we've definitely got an understanding of how to make that change, and we're executing it.

Operator: Key, though fundamentally is being engaged with the customer when we get it right. We grow we just implemented a large you know multimillion dollar core deal that went live we sold it in <unk>.

Operator: With a big health care retailer. It. It went live just the past couple of days very very powerful. The key here is engaged the customer continue to innovate look for acquisitions that are small, but meaningful that allow us to continue to explore.

Operator: And on that space no big variation in the renewals between the three pieces of the stack.

Operator: But we're definitely got it.

Operator: And understanding of how to make that change and we're executing that.

Rory Read: Thank you, Catherine.

Catherine: Thank you Catherine.

Jackson Adler: Thank you. Our next question is from Jackson Adler. with KeyBank Capital Markets, please. Good morning, guys. Thanks for taking our questions. On the Bearhug customers, so the 200 that you've identified, what was the rationale behind those 200? Is it just the largest 200? Is it the ones that were most at risk?

Catherine: Thank you.

Operator: Yeah.

Operator: Our next question is from Jackson out there.

Operator: With Keybanc capital markets. Please proceed.

Jackson: Hi, Good morning, guys. Thanks for taking our questions.

Operator: On the bare hub customers.

Operator: 200 that you've identified what was the rationale behind those 200 isn't just our largest 200 is it the ones that were most at risk.

Rory Read: How did you define 200 versus the other, you know, three to Yeah, what we did, that's a great question, Jackson, what we did is we started on the strategic accounts, the top 25 to 50 accounts, and then we're then expanded to the top 100 and 200. They're definitely based on size. So we wanted to capture that first. But at the same time, through our business management system, we're building more analytics into the accounts. And we're, one of the things Bearhug did, did a lot of AI analytics, around correlations. What things do we see in an account that has pressure?

Operator: Find 200 versus the others three to four.

Operator: Yeah, what we did and that's a great question Jackson I. What we did is we started on the strategic accounts the top 25% to 50 accounts and then we're then expand into the top 102 hundred they're definitely based on size. So we wanted to capture that first but at the same time through our business management system.

Operator: We're building more analytics into the accounts and we're one of the things bear hug did did a lot of AI analytics around correlations what things do we see an account that has pressure and so we're actually getting.

Rory Read: And so we're actually getting kind of like a health check on all our accounts. So we started Bearhug from largest to smallest, and we're going to move in that direction. But in parallel, we did this work to do the analytic, and we're really starting to understand, what are the factors? Are we seeing the right uptake? Are we seeing the engagement in the platform? Are we getting the right customer sales activity? For example, if we touch a customer 15 times or more in a year, whether that's through the website, a sales call, getting them to an event, we see their buying propensity increase by 25%.

Operator: Kind of like a health check on all our account. So we've started bear hug from largest to smallest and we're going to move in that direction, but in parallel we did this work to do the analytics and we're really starting to understand what are the factors are we seeing the right uptake are we seeing the engagement in.

Operator: The platform are we getting the right customer sales activity. For example, if we touch a customer 15 times or more end of the year, whether that's through the website.

Operator: Sales call getting them to an event, we see there Brian.

Operator: <unk> increased by 25%.

Rory Read: That's a big number. So we want to get sales activity up. And so in parallel, Bearhug goes top to bottom first, but then we're creating this kind of health analytic that's going to highlight that. And we are now looking 12 months in advance on account, so that we're managing way further ahead.

Operator: It's a big number so we want to get sales activity up and so in parallel bear hug is top top to bottom first but then we're creating this kind of health analytic that's gonna highlight that and we are now looking 12 months in advance on account so that we're mad.

Operator: Managing way further ahead when I got here in November they were talking about renewals that were going to happen that next month in December that's way way too late we have to be way ahead of that and what youre going to see as I answered. The question earlier on the call we've got to see that pod structure.

Rory Read: When I got here in November, they were talking about renewals that were going to happen that next month in December. That's way, way too late. We have to be way ahead of that.

Rory Read: And what you're going to see, as I answered the question earlier on the call, we've got to see that pod structure fundamentally change the sales culture as we move through the second half of this year. Does that help, Jackson? Yeah, yeah. Makes sense. Thank you.

Operator: Fundamentally change the sales culture as we move through the second half of this year.

Speaker Change: Does that help Jackson.

Operator: Yes.

Manish Sarin: Quick follow up, Manish. The $10 million FX headwind on non-gap EBIT or I guess, you know, the What are some of the areas that you think you can actually, you know, some of the levers you have to offset that $10 million in order to kind of keep your profitability metrics Yeah, thanks, Jackson. So, I mean, at this point, look, we're actively evaluating the situation. You know, as I think you've picked up, we've been pretty thoughtful in where we're spending our money. So I think everything's on the table. We, as we did our reduction earlier in the year, we did keep some dry powder to figure out where we would invest during the course of the year.

Operator: It makes sense. Thank you a quick follow up finished.

Operator: The $10 million FX headwind on non-GAAP, EBIT or I guess the.

Operator: To the expense base.

Operator: Or some of the areas that you think you can actually.

Operator: Some of the levers you have to offset that $10 million in order to to kind of keep your.

Operator: Profitability metrics in line.

Jackson: Yeah. Thanks, Jackson so I'm.

Jackson: I mean at this point look we're actively evaluating the situation.

Operator: I think you've picked up we've been pretty powerful and where we're spending our money. So I think everything's on the table.

Operator: We again I have to be.

Operator: Debt reduction earlier in the year, we did keep some dry powder to figure it out where we would invest during the course of the year. So we're just going to look toward fully yet the monies that we have and as I said in the prepared remarks, we are looking to maintain the guide that we've put out so we just look at where.

Manish Sarin: So we're just gonna look thoughtfully at the monies that we have. And as I said in the prepared remarks, we are looking to maintain the guide that we've put out. So we just look at where we can pull back and just be more thoughtful about our spending.

Operator: We can pull back and just be more thoughtful about our spending.

Rory Read: And Jack, I'd add a little bit of color on that one from an investment standpoint. We're not gonna save our way to prosperity here. We wanna run an efficient model. And I think we've done some good work on cost optimization. We have to continue to invest in innovation as we talked about with Catharine just a minute ago. But I also, I think there's key areas like AI. We have a real leadership product here. We need to continue to extend that. I need some tiger teams in the region so I can engage the customer faster. I think that's gonna be an area I'll look at.

Operator: And Jack I'd add a little bit of color on that one from an investment standpoint.

Operator: I'm not saving our we're not going to save our way to prosperity here, we want to run an efficient model and I'd say, we've done some good work on cost optimization, we have to continue to invest in innovation as we talked about with Catherine just a minute ago, but I also I think there are key areas like.

Operator: AI, we have a real leadership product here, we need to continue to expand and that I need some tiger teams in the region. So I can engage the customer faster I think that's going to be an area I'll look at another one is around this part and enablement structure I need them to come up to speed, we need them.

Rory Read: Another one is around this pot and enablement structure. I need them to come up to speed. We need them to come up to speed faster and really understand how to sell. And then our support and services and implementation, we have to transform some of that so that we're way better. I think we've been very prudent in where we've made our investments in the product area and improved the roadmap, but those are three areas.

Operator: To come up to speed faster and really understand how to sell and then our support and services and implementation we have to transform some of that so that we're way better I think we've been very prudent and where we've made our investments in the product area and improve the roadmap, but those are three areas and I wanted to make sure that <unk>.

Rory Read: And I wanna make sure that everyone knows that we are gonna continue to make those moves that put us in the position for long-term durable profitability and growth in 27 and 28. And that's what's most important. Those are the areas we're gonna look at.

Operator: One knows that we were going to continue to make those moves that put us in the position.

Operator: Position for long term durable profitability and growth and 27% and 28 and that's what's most important those are areas, we're going to look at.

Raimo Lenschow: Thank you. Our next question is from Raimo Lenshow with Barclays.

Operator: Thank you.

Raimo: Our next question is from Raimo <unk> with Barclays. Please proceed.

Rory Read: Please proceed. Perfect, thank you. Congrats for me as well, Rory and Manish, good early performance. The question I had on CCAS, there's obviously a big discussion in the industry about like what AI is going to do to them, to that space. And can you, so can you speak a little bit about your vision there, like how that will come together and how you are maybe slightly differently positioned than the classic CCAS vendors? Thank you.

Speaker Change: Perfect. Thank you.

Speaker Change: That's something as well.

Speaker Change: My name is good.

Speaker Change: Woman.

Speaker Change: Question I had on C costs, there's obviously.

Speaker Change: Discussion in the industry about like what he is going to do to them.

Speaker Change: To that space and can you. So can you speak a little bit about your vision there like how that will come together and how you are maybe slightly differently positioned them to classic retail centers. Thank you.

Rory Read: Raimo, I love that question. I love this disruption. I think this disruption has opened the door for Sprinklr. I think this AI transformation is 100% real. And this idea of digital deflection and agentic deflection and support is real. Do I think agents in the CCAS space are going to dramatically decline? You know, there's some people out there that say, you know, 90% of the agents will be gone in 10 years. That's not the case. That's not going to happen. But I think that you're going to see an important component of co-piloting and agentic work that's going to deflect a fair amount of work.

Speaker Change: Oh I love that question I Love. This disruption I think this disruption has opened the door for spring color I think this AI transformation is 100% real and this idea of <unk>.

Speaker Change: Digital deflection and adjourn tick deflection and support its real due I think agents in the CCAR space are going to dramatically decline theres. Some people out there that say, 90% of the agents will be gone in 10 years, that's not the case, that's not going to happen, but I think that you are.

Speaker Change: Going to see an important component of co piloting and adjourn tick work, that's going to deflect a fair amount of work youre going to see the digital support activities going to deflect a significant portion of the work I still see that space growing in total and I think that.

Rory Read: You're going to see the digital support activities going to deflect a significant portion of the work. I still see that space growing in total. And I think that you're going to see this kind of movement that's... occurring, that plays to our hand. We have that capability built in and this will drive this movement to a unified customer experience where you'll pull in the other activities around social and around digital and around voice that'll create an end-to-end solution. We're already selling it and we're seeing momentum in that space. It's now a question of when does it If you read some of my LinkedIn posts, you'll see that I talk about that.

Speaker Change: Youre going to see this this this kind of movement that's.

Speaker Change: Occurring that plays to our hand, we have that capability built in and this will drive this movement to a unified customer experience will you'll pull in the other activities around social and around digital and around voice that all to create an end to end solution.

Speaker Change: We're already selling it and we're seeing momentum in that space. It's now a question of when does it accelerate and then if you read some of my Linkedin posts Youll see that I talk about that.

Rory Read: I think that's what I love this disruption. I think it's spot on and that's one of the key reasons I believe in Sprinklr. Now the key for us to winning it is we've got a good platform. We've got it in the right space, but we have to mature this company. We have to get the right processes. We have to get the right sales motion. We have to get the right support function. That's what this year is about. You've got to give us time to fix those items and if we fix those items and we really can scale with these iconic brands and support this, we're in a very good position to capture a significant part of that business.

Speaker Change: Think that's what I love this disruption I think it is spot on and that's one of the key reasons I believe and sprinkler now the key for us to winning it is we've got a good platform. We've got it in the right space, but we have to mature. This company we have to get the right processes, we have to get the right sales.

Speaker Change: We have to get the right support function. That's what this year is about you've got to give us time to fix those items and if we fix those items and we really can scale with these iconic brands and support this we're in a very good position to capture a lot.

Speaker Change: A significant part of that business and I think we're very well positioned for it but we've got to fix the maturity and harden. The platform. This is an AR.

Rory Read: I think we're very well positioned for it, but we've got to fix the maturity and harden the platform. This isn't just a social listening platform anymore. This is a mission critical, unified, AI native customer experience platform. You have to behave like that if you're going to support the world's most iconic brands on their mission critical apps. That's what we have to do over the next six, nine, 12 plus months and if we do that, that transformation and that movement of the marketplace to our hand. I love that disruption. I want it to happen. But I need to mature at the same time.

Speaker Change: This isn't just a social listening platform anymore. This is a mission critical unified AI need of customer experience platform you have to behave like that if youre going to support the world's most iconic brands on their mission critical apps. That's what we have to do over the next six 912 plus months.

Speaker Change: And if we do that.

Speaker Change: That transformation and that movement of the marketplace to our hand, I love that that that this disruption I want it to happen.

Speaker Change: But I needed to mature at the same time, thanks Raimo, yes.

Raimo Lenschow: Thanks, Raimo.

Raimo Lenschow: Yeah. Makes sense.

Operator: Can I have just one quick follow-up?

Speaker Change: Can I have just one quick follow up here, maybe it's more of a niche. If you think about your new business information system. Please note it's great to see.

Raimo Lenschow: Maybe it's more for Manish. If you think about your new business information system that is in place now, it's great to see. They usually are things that you realize, oh my God, I know something that I didn't know and now I can act better.

Speaker Change: It usually are things that you realize Oh, my God I know something that I didn't know one now.

Manish Sarin: How comprehensive will that be for the organization? At the moment, you talk a lot about like, you know, sales, renewal, et cetera. Is that going, is it just more for that space or is it going broader than that?

Speaker Change: How comprehensive will that be for the organization at the moment you talked a lot about like sales wouldn't you want et cetera is that going just is it too small for that space or is it going broader than that thank you.

Manish Sarin: Thank you. Yeah, thanks, Raimo. So the BMS is way broader than that. So it's not just focused on renewals. It's everything from product delivery to enablement to how the sales teams are performing. Most BMS systems you would look at would tend to be just around what's happening in the go to market. And I think one of the things we realized was we were good at what we did, but more in silos. And so I think the BMS is really all around making sure everybody in the company has a full 360 view of what's going on and how do we perform better as a team versus in our own individual domain.

Speaker Change: Yeah. Thanks, so the BMS as way of broader than that so it's not just focused on renewals is everything from product delivery to enable meant to have our sales teams are performing well.

Speaker Change: Most Vms system, you would look at with tend to be just around what's happening in the go to market and I think one of the things. We realized was we were good in what we bid but more in silos and so I think the BMS is really all around making sure what everybody in the company.

Speaker Change: Has a full 360 view of what's going on and how do we perform better as a team forces are not on individual domains and what's the key here is raimo is you've got to create a 13 week cadence every quarter and you've got month, one month two months three and then you have biweekly component.

Manish Sarin: And what's the key here is, Raimo, is you've got to create a 13-week cadence every quarter. And you've got month one, month two, month three, and then you have biweekly components. We reviewed the roadmap. We reviewed the implementation. We do sales every week, the sales cadence. We do month one, which has a strategic deep dive. We get the entire leadership team together three times a quarter for, you know, two days. We're engaged and we have a, we look at product, we look at sales, we look at marketing, we look at people, how we're changing the culture.

Speaker Change: We reviewed the roadmap we review the implementation we do sales every week the sales cadence, we do month, one which has a strategic deep dive we get the entire leadership team together three times a quarter for.

Speaker Change: Two days, we're engaged and we have we look at product. We look at sales we look at marketing we look at people how we're changing the culture. We look at all of those components and across each 13 week cycle. We have a full calendar of events now we're burning that Ed and I think we're getting.

Manish Sarin: We look at all those components. And across each 13-week cycle, we have a full calendar of events. Now, we're burning that in. And I think we're getting, you know, if you think of Sprinklr like an airplane, when we got here, it had a couple of dials. You knew how fast it was flying and maybe what height we were. Now, we know oil pressure on the engines. We knew the temperature of the water. We know the airspeed. We know that we're starting to be able to see the weather that's coming in the future. And that's where you have to get the BMS to get proactive.

Speaker Change: If you think of sprinkler like an airplane when we got here. It had a couple of dials you knew how fast it was flying and maybe what height. We were now we know oil pressure on the engines. We view the temperature of the water. We know the airspeed, we know that we're starting to be able to see the weather.

Speaker Change: <unk>, that's coming in the future and that's where you have to get the BMS to get proactive, but again a work in progress you have to give us time to do the work to create the bed.

Manish Sarin: But again, a work in progress, you have to give us time to do the work to create the bend.

Manish Sarin: Yeah, makes sense. Thank you.

Speaker Change: Yeah makes sense. Thank you congrats.

Elizabeth Porter: Congrats. Our next question is from Elizabeth Porter with Morgan Stanley. Please proceed. Great, thank you so much for the question. I wanted to follow up on comments around the pod structure and just fundamentally changing the sales culture. Just understanding that culture may be hard to change.

Elizabeth Parker: Our next question is from Elizabeth Parker with Morgan Stanley. Please proceed.

Speaker Change: Great. Thank you so much for the question I wanted to follow up on comments around the pod structure and fundamentally changing the sales culture understanding that culture may be hard to change I wanted to better understand the receptiveness from the team kind of what incentives you're putting in place and what are the metrics you were looking at to really measure success and then you pop structure.

Rory Read: I wanted to better understand the receptiveness from the team, kind of what incentives you're putting in place and what are the metrics you're looking at to really measure success of the new pod structure. Thank you. Yeah, Elizabeth, that's a great question. So the, I think the first piece of work we did to launch in February was to get the new coverage model and really have this concept of a pot where you have the AE kind of running the quarterback of the play, you've got this solution consultant being the CTO, you know, the technical, you've got the technical success manager with the right technical skills to have the ongoing relationship to really build it.

Speaker Change: Yes, that's a great question so I.

Speaker Change: I think the first piece of work we did to launch in February was to get the new coverage model and really had this concept of a part where you have the a kind of running the quarterback of the play you've got this solution consultant being the CTO.

Speaker Change: Technical you've got the technical success manager with the right technical skills have the ongoing relationship to really build that you've got the Ram the renewal manager in there you've got the implementation and the managed service that they're behaving as a single unit and Theyre getting in front of the customer it creates that.

Rory Read: You've got, you know, the RAM, the renewal manager in there, you've got the implementation and the managed service, so they're behaving as a single unit, and they're getting in front of the customer. It creates that collaboration and teamwork, and we're bringing in product skills. So when we do a win report, you can see salespeople, product people, finance people, marketing people, all referenced as it takes a village. We've got to create this mindset that everyone's job is around the, you know, the around the customer. And our, the Sprinklr way is about this obsession with the customer around accountability.

Speaker Change: That collaboration and teamwork and we're bringing in products skills. So when we do with a win report you can see salespeople product people finance people marketing people. All referenced is it takes a village we've got to create this mindset that everyone's job is around.

Speaker Change: <unk>.

Speaker Change: About around the customer at our core the sprinkler way is about the sub section with the customer around accountability I do what I say and I own what I do and it's about.

Rory Read: I do what I say, and I own what I do. And it's about, you know, collaboration and teamwork. I do it as a group. We only succeed united. And then ultimately, it's about building trust. And remember, I love that book, The Speed of Trust. It's fundamental. If you build trust, you're going to be successful. In the culture of the sales, you want to create this ownership. We can't have a hit and run sales team. We need a team that's working. We live and die together. And we create this engagement with the customer and get the sales activity.

Speaker Change: Collaboration and teamwork I do it as a group we we only succeed United and then ultimately it's about building trust and remember I loved that book the speed of trust. It's fundamental if you build trust you'll be successful in the culture of the sales you want to create this one.

Speaker Change: Ownership, we can't have in hitting run sales team, we need a team that's working we live and die together and we've created this engagement the customer and get the sales activity because I referenced earlier, we get the touches our sales win rate increases by 25% you build better pipeline, we're creating.

Rory Read: Because I referenced earlier, we get the touches, our sales win rate increases by 25%. You build better pipeline. We're creating the incentives to encourage it. But you're right, it takes time. That's why I need to have a time to build that in. Now, good news is, we've had fair amount of attrition the past two years. So a lot of new people, so you can help train them and grow them. That's why we're spending time on enablement right now. And you've got to create this and winning begets winning. We're not all the way there. But we are highlighting where we have these great successes.

Speaker Change: The incentives to encourage it but youre right. It takes time, that's why I need time to have done that and the good news is we've had fair amount of attrition in the past two years. So a lot of new people. So you can help train them and grow them. That's why we're spending time on enablement right now and you've got to create this in winning begets, winning we're not.

Speaker Change: All the way there, but we are highlighting where we have these great successes and that's the kind of dichotomy of a sprinkle. It sometimes we have this renewal pressure that's been going on for two years and then other account. We just had these amazing unlocks and we're able to grow it and we're so fundamentally.

Rory Read: And that's the kind of dichotomy of Sprinklr. Sometimes we have this renewal pressure that's been going on for two years. And then other accounts, we just have these amazing unlocks. And we're able to grow it. And we're so fundamentally important to them.

Speaker Change: <unk> to them, how do we catch that lightning and show that team. That's how we changed the sales culture and the culture of the company and Thats what joy.

Rory Read: How do we catch that lightning and show that team? That's how we change the sales culture and the culture of the company. And that's what, you know, Joy Corso and her team is focused on. It's really creating that, you know, kind of cultural transformation.

Speaker Change: Joy Corso and her team is focused on it's really creating that.

Speaker Change: Kind of cultural transformation, but it will take.

Rory Read: But it'll take, you know, most of this year, culture always takes between 12 and 24 months to get there. Always.

Speaker Change: Most of this year culture always takes between 12 and 24 months to get there always.

Rory Read: Great, thank you. And then just as a quick follow up, after the 15% reduction in workforce and some of the reinvestment you're doing just in the right areas, how should we think about the puts and takes and what year-end headcount could be looking like? You know, I think plus or minus where we are today, I mean, maybe a little bit more.

Speaker Change: Great. Thank you and then just as a quick follow up after the 15% reduction in workforce.

Speaker Change: Reinvestment Youre doing just in the right areas, how should we think about the puts and takes and what Youre right head count could be lucky Mike.

Speaker Change: Yeah, I think plus or minus where we are today I mean, maybe a little bit more.

Speaker Change: I want to be prudent not really looking to upgrade our technical capability.

Rory Read: I want to be prudent on it. I'm really looking to upgrade our technical capability. I think we have, you know, maybe, you know, plus or plus or so, maybe 100, 100 and change, something like that. But I think it's in the ballpark.

Speaker Change: I think we have.

Speaker Change: Maybe.

Speaker Change: Plus or plus or so maybe 100 of 100 and change something like that but I think it's in the ballpark I think we ought to make sure. We don't get ahead of ourselves that we're very prudent I need continues to grow on the.

Rory Read: I think we ought to make sure we don't get ahead of ourselves, that we're very prudent. I need to continue to grow on the 300 plus AI skills that I have. I need to upgrade the technical capability of our success managers and in our solutions consultants. Those are two areas. I think we got to make some investment in the enablement. But I think there's clips and tapes. There's some other areas.

Speaker Change: 300, plus AI skills that I have I need to upgrade the technical capability of our success managers and in our solution sell.

Speaker Change: Sultan's those are two areas I think we got to make some investment in the enablement, but I think theres puts and takes there are some other areas I think we are in the general right ballpark.

Rory Read: I think we're in the general right ballpark, you know, and I think let's get revenue, you know, let's see a bend in the business and then we can kind of talk about where do we go from there. But I think we can be just as efficient.

Speaker Change: And I think let's get revenue, let's see a bend in the business and then we can kind of talk about where do we go from there, but I think we can be just as efficient.

Patrick Walravens: Thank you.

Speaker Change: Thank you.

Patrick Walravens: Our next question is from Patrick Walravens with Citizens J&P.

Speaker Change: Our next question is from Patrick Wall Ravens with citizens JMP. Please proceed.

Patrick Walravens: Please. Oh, great. Thank you.

Speaker Change: Oh, great. Thank you.

Rory Read: Hey, Rory, can we go back in time a little bit? When you were at and what I'm trying to get at here is sort of as you fix the the fundamentals of Sprinklr, the strategic value of this business. So Advantage, you were appointed in July of 2020 and Ericsson announced the acquisition in November 21. So that went really quick, right?

Speaker Change: Hey, Laurie can we go back in time, a little bit.

Speaker Change: When you were at and what I'm trying to get at here is sort of as you fix that.

Speaker Change: The fundamentals of sprinkler the strategic value of this business. So it advantage you were.

Speaker Change: You were appointed in July 2020, and Ericsson announced the acquisition on November 21, So that one really quick right can you just walk us through.

Rory Read: Can you just walk us through? how that played out and help us think about sort of what the strategic value of Sprinklr Yeah, I think as I've shared with you, Patrick, and the team, there's a particular approach that we go about when we take on one of these transformations and these kind of turnarounds. You know, the first phase is always around business optimization, and most of that work is done. That's where we reorganize the go-to-market and we get the pod structure. That's where we refocus the roadmaps to make sure that we have the right priorities.

Speaker Change: How that played out and help us think about sort of what the strategic value of sprinkler might be.

Speaker Change: Yeah, I think as I've shared with you Patrick and the team.

Speaker Change: <unk> approach that we go about when we take on one of these transformations and these kind of turnarounds.

Speaker Change: First phase is always around business optimization and most of that work is done and that's where we reorganize the go to market and we get the pod structure, that's where we refocused.

Speaker Change: The roadmap to make sure that we have the right priorities, we put in place the BMS, we get the right.

Rory Read: We put in place the BMS. We get the right strategic initiatives. Often, companies like this struggle with lack of clarity, and they can't kind of page like an old mainframe, right? They're so busy switching from idea to idea, they're not really doing any work. They're just paging workload in and out of memory and never getting there. Now, that shows how old I am because that's not the case how it works in computing anymore. But I think you do that optimization work, and most of that is all done. The BMS is in place. I highlighted that.

Speaker Change: <unk> initiatives often companies like this struggle with lack of clarity and they've got that can't kind of page like an old mainframe right. They're so busy switching from idea to idea they not really doing any work there just paging.

Speaker Change: Workload in and out of memory and never getting there that shows how old I am because that's not the case, how it works in computing anymore, but I think you do that optimization work and most of that is all done.

Speaker Change: <unk> is in place I highlighted that our strategy is clear then you go through a transition.

Rory Read: The strategy is clearer.

Rory Read: Then you go through a transitional phase. And that's somewhere between, say, 12 and 18 months. You know, that's why I talked about the first half of this year being, you know, that bumpy kind of period. And then you look for a bend as we go through the second half into FY27. And that puts you somewhere 18 to 24 months out. I think, you know, Vonage had the advantage of the COVID kind of acceleration that it caught the wind at the same time. But we followed the exact same structure. And then you move into an acceleration phase, whether that's, you know, 12 to 18 months in or whether that's, you know, 20 months in or 24 months.

Speaker Change: And that's somewhere between say 12 18 months.

Speaker Change: That's why I talked about the first half of this year being.

Speaker Change: That bumpy kind of period and then you look for a band as we go through the second half into FY 'twenty seven.

Speaker Change: That puts you somewhere 18 to 24 months out.

Speaker Change: I think.

Speaker Change: <unk> had the advantage of the Covid kind of acceleration that it caught the wind at the same time, but we follow the exact same structure and then you move into an acceleration phase whether that.

Speaker Change: 12 to 18 months in or whether that's <unk>.

Speaker Change: 20 months or 24, right, it's in that general period.

Rory Read: It's in that general period. It could be as short as 15 months. But, you know, that's what you're looking for. And then you start to build on it. So you do your optimization work. That's pretty much done here at Sprinkler. Now we've got clarity on the strategy. Now we use this transition year to fix the processes, the programs. We make some of the investment. We start to change the culture. And we move the whole thing in terms of maturation and maturity as a software company. And then that kind of puts us at the end of this year, beginning of next year sometime.

Speaker Change: Could be as short as 15 months, but <unk>.

Speaker Change: Thats, what Youre looking for and then you start to build on it. So you do your optimization work that's pretty much done here at sprinkler now we've got clarity on the strategy now we use this transition year to fix the processes. The programs, we make some of the investments we start to change the culture and we moved the whole thing in terms of maturation.

Speaker Change: And maturity as a software company.

Speaker Change: And then that kind of puts us at the end of this year beginning of next year sometime and then were where then we're trying to put more logs on the fire now youre trying to accelerate the business and grow and that's how you push toward the rule of 40.

Rory Read: And then we're trying to put more logs on the fire. Now you're trying to accelerate the business and grow. And that's how you push towards the Rule 40. You know, each one is a little bit different.

Speaker Change: Each one is a little bit different. So you can go look at Dell boomy or Dell virtuous stream or AMD or Lenovo, there's a whole long list of different companies that I've worked on.

Rory Read: So you can go look at Delbumi or Delverge Stream or AMD or Lenovo. You know, there's a whole long list of different companies that I've worked on. This is definitely the approach. That's how you should look at it, Patrick. And I think we're right where we should be at this point. Now this transition year is really fundamental. And I think we're doing the right things. Now we've got to see it, you know, each component. And I can tell you that we're a better Sprinkler than we were six months ago. And I expect to be a better Sprinkler in six months and a much better Sprinkler in 12 months.

Speaker Change: The this is definitely the approach that's how as you should look at it Patrick and I think we're right where we should be at this point now this transition year is really fundamental.

Speaker Change: Think we're doing the right things now we got to see it.

Speaker Change: Each component and I can tell you that we're a better sprinklers than we were six months ago, and I expect to be better sprinkler in six months and a much better sprinkler in 12 months.

Manish Sarin: Thank you.

Speaker Change: Thank you and many slides do a quick follow up which is I think I was looking for one of the three on the dollar expanse you guys came in at 102, so just.

Patrick Walravens: And Manish, can I do a quick follow-up, which is, I think I was looking for $103 on the dollar expanse. You guys came in at $102. What should happen... What should we expect going forward, just so we can sort of... Not be overestimating. Yeah, and I think so.

Speaker Change: Sure.

Speaker Change: What should we expect going forward just so we can sort of.

Speaker Change: Not be overestimating it.

Patrick: Yeah, and I think that's a good question Patrick.

Manish Sarin: So that's a good question, Patrick. I think where we are right now, the one or two, give or take, is probably where I expect it to be. Again, we don't make any predictions around it. It's hard to sort of estimate. But if you look at a full year growth rate of call it four odd percent on the subscription side. That would sort of put the one or two right around where you'd expect it to be, because some growth will come from new business sold during the year, and obviously a lot will come from upsells into the existing account.

Patrick: I think where we are right now the one or two give or take is probably where I expect it to be again, we don't make any predictions around it it's hard to sort of estimate.

Patrick: And.

Patrick: But if you look at our full year growth rate of call. It four odd percent on the subscription side.

Patrick: That would sort of put the one or two right around where you would expect it to be because some growth will come from new business sold during the year and obviously a lot will come from upsells into the existing accounts.

Manish Sarin: So, I would expect this number to be kind of where it is right now, again, give or take a couple of points about that. Yeah, until we see the best.

Patrick: So I would expect this number to be.

Patrick: Kind of with where it is right now again give or take a couple of points that yeah until we see the bet.

Patrick: Yep.

Patrick Walravens: Thank you.

Patrick: Okay.

Operator: That's it, Patrick. I appreciate it. I think we're good now, right, Eric? I think we're at the top of the time.

Speaker Change: That's it Patrick I appreciate that I think we're good now right Eric I think we're at the top at a time operator, if you have anything else otherwise.

Rory Read: Operator, if you have anything else, otherwise, Rory, any last remarks from you? Well, first of all, I'd just like to thank everyone for joining. I appreciate everyone's interest in the company.

Speaker Change: Any last remarks, well first of all I'd just like to thank everyone for joining I appreciate everyone's interest in the company I do want to thank the sprinkler team members around the world for their passion and energy and ask you to continue to.

Rory Read: I do want to thank the Sprinklr team members around the world for their passion and energy. I'd ask you to continue to, you know, track us as we go through. We'll give you updates in a very open, transparent way so you can track where we're going. This is a work in progress, but I think we're in the right place at the right time. We're dealing with some of the challenges of the past. We're making the right changes, and we're looking for the company to see a bend sometime in the second half of the year. But at this point, we're a work in progress.

Speaker Change: Track Us as we go through we'll give you updates in the very open transparent way. So you can track, where we're going as a work in progress, but I think we're in the right place at the right time, we're dealing with some of the challenges of the past, we're making the right changes and we're looking for the company to see event sometime in the second half of the year.

Speaker Change: But at this point, we're a work in progress, let's keep focused on making a better sprinkler and gives us a bit of time I appreciate everyone's interest and thank you Sherry for hosting the call today.

Rory Read: Let's keep focused on making a better Sprinklr and give us a bit of time.

Operator: I appreciate everyone's interest, and thank you, Sherry, for hosting the call today.

Operator: Thank you.

Operator: This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.

Speaker Change: Thank you. This will conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Okay.

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Operator: Thanks for watching!

Speaker Change: Yes.

Operator: Copyright © Element Animation 2015 So yeah.

Speaker Change: [music].