Sprinklr's (NYSE:CXM) Q1 Sales Top Estimates, Quarterly Revenue Guidance Slightly Exceeds Expectations
Is now the time to buy Sprinklr? Find out in our full research report.
Revenue: $205.5 million vs analyst estimates of $201.8 million (4.9% year-on-year growth, 1.8% beat)
Adjusted EPS: $0.12 vs analyst estimates of $0.10 (21.6% beat)
Adjusted Operating Income: $36.74 million vs analyst estimates of $31.9 million (17.9% margin, 15.2% beat)
The company slightly lifted its revenue guidance for the full year to $826 million at the midpoint from $822.5 million
Management raised its full-year Adjusted EPS guidance to $0.40 at the midpoint, a 2.6% increase
Operating Margin: -0.9%, down from 2.9% in the same quarter last year
Free Cash Flow Margin: 39.3%, up from 0.8% in the previous quarter
Market Capitalization: $2.20 billion
'Our Q1 results reflect solid progress in our transformation to better serve our customers and partners. We are deeply focused on improving our execution and delivering business value to the brands we serve with our AI-native CXM platform. We also generated record free cash flow in the quarter,' said Rory Read, Sprinklr President and CEO.
Initially focused only on social media management, Sprinklr (NYSE: CXM) is a leading provider of unified customer experience management software.
Reviewing a company's long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Sprinklr grew its sales at a 15.3% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the software sector, which enjoys a number of secular tailwinds.
This quarter, Sprinklr reported modest year-on-year revenue growth of 4.9% but beat Wall Street's estimates by 1.8%. Company management is currently guiding for a 4.2% 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 three years. This projection doesn't excite us and implies its products and services will see some demand headwinds.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
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 168.9 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.
We were impressed by how Sprinklr raised its full-year revenue and EPS guidance, which blew past analysts' expectations. We were also glad its revenue, EPS, and adjusted operating income exceeded Wall Street's estimates. Overall, we think this was a solid "beat-and-raise" quarter. The stock traded up 3.9% to $8.89 immediately following the results.
Sprinklr had an encouraging quarter, but one earnings result doesn't necessarily make the stock a buy. Let's see if this is a good investment. 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.
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