8-K: Sprinklr Q2 Revenue Up 8%; CFO Out, New CRO In

Sprinklr reported strong Q2 fiscal 2026 financial results with 8% total revenue growth, announced the departure of its CFO, and appointed a new Chief Revenue Officer.

Summary

• Total revenue for the second fiscal quarter ended July 31, 2025, was $212.0 million, an 8% increase year-over-year.
• Subscription revenue for Q2 FY2026 was $188.5 million, up 6% year-over-year.
• GAAP operating income reached $16.3 million (8% margin) in Q2 FY2026, a significant improvement from a $0.1 million operating loss (0% margin) in Q2 FY2025.
• Non-GAAP operating income for Q2 FY2026 was $38.2 million (18% margin), up from $19.6 million (10% margin) in Q2 FY2025.
• GAAP diluted net income per share was $0.05, and non-GAAP diluted net income per share was $0.13 for Q2 FY2026.
• Net cash provided by operating activities was $34.8 million, and free cash flow was $29.8 million for Q2 FY2026.
• Remaining Performance Obligations (RPO) increased 4% year-over-year, and Current RPO (cRPO) increased 7% year-over-year.
• The company now serves 149 customers with $1 million or more in annual spend, adding 3 new customers quarter-over-quarter.
• Manish Sarin, the company's Chief Financial Officer, will depart on September 19, 2025, with CEO Rory Read assuming the interim CFO role.
• Scott Millard has been appointed Chief Revenue Officer, effective September 22, 2025, joining from Dell Technologies.

Sentiment

Score: 7

Explanation: The company reported strong financial performance with significant improvements in profitability and cash flow, alongside strategic management appointments. However, the CFO departure introduces some uncertainty, and subscription revenue growth is slightly lower than total revenue growth.

Positives

• Total revenue grew by a robust 8% year-over-year to $212.0 million in Q2 FY2026.
• GAAP operating income significantly improved to $16.3 million (8% margin) from a prior year operating loss, indicating enhanced operational efficiency.
• Non-GAAP operating income nearly doubled to $38.2 million (18% margin) from $19.6 million (10% margin) year-over-year, showcasing strong underlying business performance.
• Generated positive net cash from operating activities of $34.8 million and free cash flow of $29.8 million, reflecting healthy liquidity.
• Current RPO (cRPO) increased by 7% year-over-year, signaling continued demand and future contracted revenue.
• The number of $1 million+ customers grew to 149, adding 3 new large enterprise clients during the quarter.
• The appointment of Scott Millard as Chief Revenue Officer, with his extensive experience from Dell Technologies, is expected to strengthen sales leadership and go-to-market strategy.

Negatives

• Subscription revenue growth of 6% year-over-year is lower than the total revenue growth, suggesting a greater reliance on professional services for overall revenue expansion.
• The departure of Manish Sarin, the Chief Financial Officer, principal financial officer, and principal accounting officer, creates a leadership void and potential for disruption, despite the stated reason not being a disagreement.
• CEO Rory Read assuming the interim CFO role adds significant responsibilities to his plate during a period the company describes as a 'transformation journey'.
• The company incurred $15.329 million in restructuring costs for the six months ended July 31, 2025, related to a February 2025 restructuring.
• Non-recurring litigation costs of $1.585 million were incurred for the six months ended July 31, 2025.

Risks

• Rapid growth may not be indicative of future growth, and the revenue growth rate has fluctuated in prior periods.
• The ability to achieve or maintain profitability is uncertain.
• The company derives the substantial majority of its revenue from subscriptions to its Unified-CXM platform.
• Challenges in managing growth and organizational change.
• The market for Unified-CXM solutions is new and rapidly evolving, requiring continuous adaptation and effective competition.
• Ability to attract new customers cost-effectively and assure customer success.
• Ability to drive customer subscription renewals and expand sales to existing customers.
• Need to effectively develop platform enhancements, introduce new products, or keep pace with technological developments.
• Dependence on strategic relationships with third parties and partners who provide access to data that enhances AI capabilities.
• The majority of the customer base consists of large enterprises, with a significant portion of revenue from a relatively small number of enterprises.
• Investments in research and development may not yield expected returns.
• Ability to expand sales and marketing capabilities, as sales cycles with enterprise and international clients can be long and unpredictable.
• Difficulty in predicting certain results of operations and financial metrics.
• Maintaining data privacy and data security, and reliance on third-party data centers and cloud computing providers.
• Sufficiency of cash and cash equivalents to meet liquidity needs.
• Compliance with modified or new laws and regulations applying to the business.
• Ability to successfully enter new markets and manage international expansion.
• Attraction and retention of qualified employees and key personnel.
• Effectively managing growth, future expenses, and maintaining corporate culture.
• Maintaining, protecting, and enhancing intellectual property rights.
• Unstable economic, political, and market conditions, including public health crises, fluctuations in inflation and interest rates, tariffs, or geopolitical actions.
• Ability to successfully defend litigation brought against the company.

Future Outlook

Sprinklr projects Q3 FY2026 subscription revenue between $186 million and $187 million, and total revenue between $209 million and $210 million. Non-GAAP operating income is expected to be between $28.5 million and $29.5 million, with non-GAAP net income per share of approximately $0.09. For the full fiscal year ending January 31, 2026, the company anticipates subscription revenue between $746 million and $748 million, total revenue between $837 million and $839 million, non-GAAP operating income between $131 million and $133 million, and non-GAAP net income per share between $0.42 and $0.43.

Management Comments

• "Our Q2 results reflect the continued and intentional progress we are making in our transformation to better serve our customers and partners. And while we still have work to do, we are encouraged by the increasing quality of our customer engagements, and upcoming impactful R&D innovations." Rory Read, President and CEO.
• "We remain focused on improving our execution and delivering business value to the iconic brands we serve through our AI-native, Unified CXM platform." Rory Read, President and CEO.
• "I'd like to welcome Scott Millard as our new Chief Revenue Officer. Scott will join us from Dell Technologies where he was SVP Global AI Sales and brings deep expertise, a proven track record of driving growth at scale, and a passion for building high-performing teams that we believe are all critical as we continue our transformation journey." Rory Read, President and CEO.
• "I want to thank our CFO, Manish Sarin, who will be departing Sprinklr. Manish has been an important member of the Executive Leadership Team, and I want to recognize all of his contributions during his three and a half years at the company." Rory Read, President and CEO.
• "I'm excited to join Sprinklr at such a pivotal time in the company's journey. The company's transformation is well underway, and I believe momentum is building." Scott Millard, Chief Revenue Officer.
• "As Sprinklr works to expand their reach into larger enterprises, deepen customer relationships, and accelerate growth, I'm inspired by the opportunity to help guide an organization that is rooted in customer obsession, accountability, teamwork, and trust." Scott Millard, Chief Revenue Officer.

Industry Context

Sprinklr operates in the rapidly evolving Unified Customer Experience Management (Unified-CXM) market, leveraging advanced AI to help enterprises manage customer-facing functions across modern channels. The appointment of a Chief Revenue Officer with a background in Global AI Sales from Dell Technologies suggests a strategic focus on AI-driven solutions and expanding reach into larger enterprises, aligning with broader industry trends of AI adoption and digital transformation in customer engagement.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to global benchmarks.

Management Changes

Corporate Governance

Legal Proceedings

• The company incurred non-recurring litigation costs of $816 thousand for the three months ended July 31, 2025, and $1.585 million for the six months ended July 31, 2025.

Related Party Transactions

• There are no transactions between Mr. Read (interim CFO) and the Company that would be required to be reported under Item 404(a) of Regulation S-K.

Stakeholder Impact

• Shareholders: Positive financial results and outlook could lead to increased investor confidence. The CFO departure introduces uncertainty, but the new CRO appointment is a strategic positive.
• Employees: Changes in executive leadership (CFO departure, CRO appointment) may impact morale or strategic direction. The company incurred restructuring costs related to a February 2025 event, indicating past employee impact.
• Customers: The company's continued focus on 'transformation to better serve our customers and partners' and 'delivering business value' through its Unified CXM platform, along with the new CRO's aim to deepen customer relationships, suggests a positive impact.
• Management: CEO Rory Read takes on additional interim CFO responsibilities. New CRO Scott Millard is expected to drive sales and go-to-market strategy.

Next Steps

• The company expects to enter into a transition, separation, and release of claims agreement with Mr. Sarin, which will be filed with its Quarterly Report on Form 10-Q for the quarter ending October 31, 2025.
• Sprinklr has initiated a search for a permanent Chief Financial Officer.
• Continue the 'transformation journey' and focus on improving execution and delivering business value through the AI-native, Unified CXM platform.
• Expand reach into larger enterprises, deepen customer relationships, and accelerate growth under the new Chief Revenue Officer.

Key Dates

Recommendation

Sprinklr delivered a strong Q2 fiscal 2026, demonstrating significant improvements in profitability, cash flow, and revenue growth. The appointment of a seasoned Chief Revenue Officer is a strategic positive, signaling a renewed focus on sales execution and market expansion. However, the departure of the Chief Financial Officer, even if amicable, introduces a degree of uncertainty regarding financial leadership continuity, especially as the CEO assumes the role on an interim basis during a stated 'transformation journey.' While the financial performance is encouraging, the leadership transition warrants a cautious approach. Investors should monitor the search for a permanent CFO and the execution of the new CRO's strategy before making a more aggressive move.

Keywords

Sprinklr, Unified-CXM, Customer Experience Management, Enterprise Software, AI, Financial Results, Q2 2026, Revenue, Subscription Revenue, Operating Income, Net Income, Free Cash Flow, CFO Departure, CRO Appointment, Management Change, Financial Outlook, NYSE: CXM