CXM Posts Strong Q3 Non-GAAP Earnings, Grows Revenue 9% with Solid Cash Flow

Non-GAAP Operating Margin Climbs as Subscription Revenue Sets a Record

Sprinklr (NYSE: CXM) delivered third quarter fiscal 2026 results that underscore ongoing transformation efforts. The company's total revenue reached $219.07 million, marking a 9% year-over-year gain, driven mainly by subscription revenue—which climbed 5% to $190.30 million. Sprinklr also recorded net cash provided by operating activities of $20.00 million and free cash flow of $15.52 million in the quarter.

Profitability Metrics Show Clear Progress

Operating leverage improved across key metrics. Non-GAAP operating income jumped to $33.52 million from $23.00 million a year ago, pushing the non-GAAP operating margin up to 15% from 11% last year. Meanwhile, non-GAAP net income per diluted share increased to $0.12, beating last year’s $0.10.

The table below summarizes the headline Q3 metrics and comparisons:

Balance Sheet Remains Robust as Cash Position Expands

Sprinklr ended the quarter with $480.35 million in cash, cash equivalents, and marketable securities, reflecting continued liquidity improvement. Accounts receivable dropped sharply from $285.66 million to $150.19 million, improving overall working capital efficiency.

Guidance Implies Consistent Momentum into FY2026 Close

Management expects fourth quarter subscription revenue of $191–192 million and total revenue between $216.50–217.50 million. For the full fiscal year ending January 2026, Sprinklr projects total revenue between $853–854 million and non-GAAP net income per diluted share in the $0.43–0.44 range, reflecting steady performance improvements and a focus on expanding profitability.

These targets, coupled with a rising non-GAAP operating margin, position Sprinklr to sustain growth while making disciplined investments in R&D and go-to-market efforts.

Customer Base Expansion and Cash Generation Underpin Stability

With 145 customers now spending more than $1 million annually and over 1,900 enterprise clients globally—including Microsoft, P&G, and Samsung—Sprinklr continues to entrench itself as a mission-critical provider for leading brands. The robust free cash flow for the quarter ($15.52 million) demonstrates ongoing improvements in operational efficiency and business quality.

Risks and Takeaways: Guidance Strong, But Watch Execution

While results point to operational progress, investors should monitor execution against stated guidance—particularly as the company continues its transition toward higher quality revenue and sustained profitability. Potential risks include longer enterprise sales cycles and unpredictable impacts from macroeconomic headwinds or further industry consolidation.

Overall, Sprinklr’s third quarter marks a meaningful step forward in its path to building a more profitable, cash-generative platform business—backed by strong customer loyalty and growing enterprise adoption. The company’s year-end outlook offers a test of whether this positive trend can continue into fiscal 2027.

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