Sprinklr(CXM)2024-06-06 01:02Financial Data and Key Metrics - Q1 total revenue grew 13% YoY to 177.4 million [22] - Non-GAAP operating income was 10.6 million, or 36.2 million, representing an 18% free cash flow margin [68] - Total remaining performance obligations (RPO) were 570.4 million, up 19% YoY [39] Business Line Data and Key Metrics - Subscription revenue-based net dollar expansion rate (NDE) was 115% in Q1, though it is expected to decline in the coming quarters due to lower new business and heightened renewal pressures [66] - The company added new customers and expanded relationships with existing ones, including Alibaba, Audi, IAG Hotels & Resorts, Lululemon, and Vodafone [32] - Sprinklr Surveys, a new product, entered the customer feedback management market, leveraging generative AI-powered surveys [14] Market Data and Key Metrics - The company signed a new partnership agreement with Reddit, enabling enterprise customers to leverage Reddit for social listening and ad campaign management [16] - Forrester named Sprinklr a strong performer in conversational AI for customer service, validating its AI-driven customer experience strategy [15] Company Strategy and Industry Competition - The company is transitioning its go-to-market strategy, focusing on leadership changes and operational improvements to address lower net bookings and increased customer churn [5][6] - Sprinklr is investing in scalable onboarding experiences to improve customer retention and growth opportunities [26] - The company is positioning itself as a unified front-office platform, consolidating multiple point solutions and leveraging AI for long-term growth [33] Management Commentary on Operating Environment and Future Outlook - The macro environment has softened, with longer sales cycles and heightened budgetary scrutiny, leading to increased churn in core product suites [35] - Management expects elevated churn to continue through FY '25 and has lowered revenue guidance for the year [7][43] - The company is confident in its long-term vision, supported by new leadership and an AI-powered platform [25] Other Important Information - The company repurchased 8.3 million shares of Class A common stock for 100 million share buyback program [38] - A workforce restructuring in May reduced the global workforce by approximately 3%, with related expenses of $4 million to be booked in Q2 [41] Q&A Session Summary Question: Macro Environment and Sales Execution [48] - Management noted a more pronounced budget squeeze compared to the past two years, with companies tightening spending controls [49][79] - The second half of FY '25 is expected to see slower growth due to macro softness and elevated churn [51][81] Question: Leadership and Co-CEO Structure [89][90] - The Co-CEO structure was implemented to address operational execution gaps, with Ragy Thomas focusing on product and innovation, and Trac Pham on operational execution [89][90] Question: Contact Center Trends and Competitive Positioning [94][95] - Sprinklr is replacing multiple contact center point solutions with a unified system, leveraging AI and a single code base [94][95] - The company is seen as a disruptor in the CCaaS market, with strong traction in modern care solutions [94] Question: AI Impact on Seat-Based Models [113][114] - AI is expected to improve productivity, but the company is preparing for potential pricing compression and seat count reductions [113][114] Question: Go-to-Market Changes and Stabilization [109] - The company is in the early stages of a 4-6 quarter transition to improve go-to-market execution, with leadership upgrades and operational focus [109] Question: Strategic Acquisitions and Long-Term Vision [138][139] - Sprinklr is focused on building a long-term independent platform but acknowledges its potential as a complementary partner for larger companies [138][139]