Customer experience management platform Sprinklr (NYSE: CXM) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 8.9% year on year to $220.6 million. The company expects next quarter’s revenue to be around $216 million, close to analysts’ estimates. Its non-GAAP profit of $0.13 per share was 34.7% above analysts’ consensus estimates.
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Sprinklr (CXM) Q4 CY2025 Highlights:
- Revenue: $220.6 million vs analyst estimates of $216.9 million (8.9% year-on-year growth, 1.7% beat)
- Adjusted EPS: $0.13 vs analyst estimates of $0.10 (34.7% beat)
- Adjusted Operating Income: $37.73 million vs analyst estimates of $28.99 million (17.1% margin, 30.1% beat)
- Revenue Guidance for Q1 CY2026 is $216 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for the upcoming financial year 2027 is $0.48 at the midpoint, in line with analyst estimates
- Operating Margin: 6.4%, up from 5.2% in the same quarter last year
- Free Cash Flow Margin: 7.2%, similar to the previous quarter
- Market Capitalization: $1.39 billion
“The fourth quarter capped a pivotal year in our transformation. We strengthened the quality of our customer engagements, advanced our innovation leadership, expanded operating margins, and delivered strong free cash flow,” said Sprinklr President and CEO, Rory Read.
Company Overview
With a proprietary AI engine processing 450 million data points daily across 30+ digital channels, Sprinklr (NYSE: CXM) provides cloud-based software that helps large enterprises manage customer experiences across social, messaging, chat, and voice channels.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Sprinklr grew its sales at a 17.2% compounded annual growth rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the software sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Sprinklr’s recent performance shows its demand has slowed as its annualized revenue growth of 8.2% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, Sprinklr reported year-on-year revenue growth of 8.9%, and its $220.6 million of revenue exceeded Wall Street’s estimates by 1.7%. Company management is currently guiding for a 5.1% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 2.8% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds.
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Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
It’s relatively expensive for Sprinklr to acquire new customers as its CAC payback period checked in at 107.3 months this quarter. The company’s slow recovery of its sales and marketing expenses indicates it operates in a highly competitive market and must invest to stand out, even if the return on that investment is low.
Key Takeaways from Sprinklr’s Q4 Results
It was encouraging to see Sprinklr beat analysts’ revenue expectations this quarter. Adjusted operating also nicely exceeded expectations. Looking ahead, Q1 revenue guidance and full-year EPS guidance were both roughly in line with Wall Street’s estimates. Overall, this was a decent quarter. The stock traded up 4.6% to $5.88 immediately following the results.
Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
