Sprinklr, Inc.
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Item 1. Business
Who We Are
Sprinklr provides a Unified Customer Experience Management (“Unified-CXM”) platform that helps organizations manage customer interactions across channels and teams. Our artificial intelligence (“AI”)‑native platform enables customer-facing teams, from Customer Service to Marketing, to collaborate across internal silos, communicate with customers across digital and traditional channels, and leverage AI to deliver better customer experiences at scale. Our mission is to empower companies to deliver next generation, unified journeys that reimagine the customer’s experience.
Overview
Companies are increasingly moving from transactional to unified customer experiences. This has been driven by a shift from traditional channels, like email and phone, to an ever-expanding universe of digital channels, like messaging, chat, text and social. Consumer experiences today are shaped by each interaction they have with a brand, which include physical, in-person engagements, as well as digital engagements through online customer support, websites, social media or AI tools. And, given how people connect and transact today, companies face challenges when customer interactions occur across disparate systems. To elevate the consumer experience, they seek to unify every touchpoint along the customer journey and strive to ensure seamless and consistent customer experiences in person and online. They want to instantly communicate with consumers who move fluidly across dozens of channels and resolve customer pain points in real-time and in personalized ways. For large enterprises, reliance on customer relationship management (“CRM”) systems and backward-looking customer information like names, addresses and birthdates is not sufficient to meet today’s demands for seamless conversational experiences or prepare for the future of 360-degree immersive experiences.
Sprinklr’s purpose is to provide an AI-native unified platform purpose-built to help enterprises unify Customer Experience Management (“CXM”) and bridge silos across the customer journey, tap into structured and unstructured signals and utilize AI to create a single view of customer engagement at scale. We do this by providing customer-facing teams with the capabilities they need to serve customers, share actionable insights and work together to improve customer experience outcomes. For more than a decade, we have worked with hundreds of the world’s most valuable and, in many cases, iconic brands to support their efforts to improve customer experiences, brand awareness and productivity, manage costs and mitigate brand-related risks.
As of January 31, 2026, we had 1,677 customers, including 59% of the Fortune 100 companies, compared to 1,930 customers as of January 31, 2025. While our total number of customers for the fiscal year ended January 31, 2026 decreased as compared to the prior fiscal year, the decrease was partly related to a strategic refinement of our customer profile and our increased focus on top-tier enterprise customers. As of January 31, 2026, we had 141 large customers with subscription revenue equal to or greater than $1.0 million for the trailing 12-month period, compared to 149 as of January 31, 2025. While the total number of customers with subscription revenue equal to or greater than $1.0 million also decreased year-over-year, the average subscription revenue per customer in the $1.0 million cohort has increased and exceeded $3.0 million for the most recent fiscal year.
Our customers include global enterprises across a broad array of industries and geographies, as well as marketing agencies, government departments, non-profit organizations and educational institutions. Our customers are located in more than 90 countries, and our AI-native Unified-CXM platform recognizes over 150 languages. We believe there is a significant opportunity to grow within our existing customer base as customers increase usage of existing products and/or add additional products across business units and geographies. The breadth of our platform also positions us to scale across more customer-facing teams to attract new buyers beyond traditional social media roles, such as the technology buying center, call center operations and data and insights teams, to name a few. Our operations are supported by an experienced global management team and a culture focused on the success of our customers, partners, stockholders and each other. Culture at Sprinklr is shaped by our core values, which underlie our framework for leadership and behaviors centered on customer obsession, teamwork, trust and accountability. These core values not only define how we work, but also enable us to attract and develop top talent that strives to deliver a premium experience for our customers.
Key Advantages of Our Unified-CXM Platform
Our expansive access to data, the unified customer context that powers our AI engine and the breadth of offerings across customer lifecycle enable us to transform insights into action. These three core differentiators serve as the foundation for our unified, AI-native, enterprise-grade platform. Our platform is built using a single codebase architecture and is powered by AI purpose-built for customer experience. We believe that Sprinklr AI combines the best of classical machine learning-based AI techniques, third-party large language models (“LLMs”) and in-house specialized LLMs to power end-to-end customer journeys. Our core differentiators are:
•UNIFIED data and customer context. We have created a unified platform architecture that allows organizations to listen to customers and prospects, learn from them, deliver customer service and create more personalized experiences across more than 30 channels, including messaging, live chat, text, social media and hundreds of millions of forums, blogs, news and review sites, as well as traditional channels such as voice and email. We believe that we are the only Unified-CXM platform
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that can persistently carry customer context across a variety of channels and every stage of the customer lifecycle – from discovery to purchase to care. Because all interactions run through a single unified platform and common codebase, brands gain a continuous, connected view of the customer rather than fragmented moments across disconnected systems. The architecture enables teams to orchestrate seamless journeys across marketing, feedback and care, while applying the more advanced and accurate AI techniques. The result is faster, more accurate insights with the governance, compliance and security enterprises require – delivered through a platform designed to build once and deploy everywhere.
•PURPOSE-BUILT AI for Customer Experience Management. With over a decade of development, we offer a broad set of AI capabilities leveraging traditional machine learning-based techniques, as well as generative and agentic AI. Sprinklr’s AI capabilities are designed to be purpose-built for Customer Experience Management, grounded in unified customer context across the enterprise. By capturing every interaction across channels and teams in a single platform and common data foundation, our AI understands customers holistically. We believe that this unified context enables a more accurate and complete class of AI. Sprinklr has spent more than a decade developing a comprehensive portfolio of machine learning, generative AI and agentic capabilities, tuned for the nuances of specific industries, languages and enterprise requirements. Today, we offer over 100 customer experience-focused AI capabilities, from autonomous agents and copilots to automated intelligence, root-cause analysis and next-best-action recommendations. Because these capabilities span the entire customer journey, organizations can manage the full spectrum of digital and traditional use cases in one platform. Sprinklr enables broad-based listening, cross-functional collaboration, skills-based workflows and customer-led guidance, all of which empower teams to make faster, more informed decisions, ultimately delivering consistent, extraordinary experiences at every level.
•ADVANCED listening, built for digitally led, real-time and conversational data, yielding actionable insights. Our platform was designed from the ground up to handle a massive scale of unstructured data. The platform captures over 450 million conversations and makes over 8 billion AI predictions every day, publishes over 160 million brand messages, including those published over live chat, and handles more than 200 million contact center interactions every month, while also tracking over 40,000 brands and influencers and managing over 4 billion profiles across all digital channels. We believe that the scale of our AI predictions, the scope of our digital identity management and our conversational capabilities are unmatched in the industry.
•SCALABLE enterprise-grade platform. We empower the largest global enterprises to serve their customers 24/7. Our architecture is designed to be scalable and flexible to meet the demands of today’s digital enterprises or organizations and to be deployed at scale to ingest massive amounts of data. Our Unified-CXM platform is designed to meet the industry security controls. For example, we are certified in International Organization for Standardization (“ISO”) 27001, maintain annual American Institute of CPAs (“AICPA”) System and Organization Controls (“SOC”) 1, SOC 2, and SOC 3 Type II reports and have an environment that is assessed under Payment Card Industry Data Security Standard (“PCI-DSS”) as Service Provider Level 1. We also assess specific features for compliance with the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”), security and privacy controls and procure an AICPA accredited auditor report under Statements on Standards for Attestation Engagements (“SSAE”) 21. Our data privacy measures are designed to meet the requirements under applicable data protection laws such as the General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”) (collectively, “CCPA”). We have been granted a Federal Risk and Authorization Management Program (“FedRAMP”) LI-SaaS Authority to Operate (“ATO”) to operate our solutions for United States federal agencies.
Sprinklr is recognized by leading industry analysts, including Gartner, Forrester, and IDC, across various customer experience and enterprise software categories. We are a Leader in the Gartner® Magic Quadrant™ for Content Marketing Platforms, Gartner® Magic Quadrant™ for Voice of the Customer Solutions, Forrester Wave™: Social Suites and Forrester Wave™: Digital Customer Interaction Solutions. Additionally, we have received strong rankings in Gartner® Magic Quadrant™ for Conversational AI, Forrester Wave™: Contact Center as a Service, Forrester Wave™: Customer Feedback Management, IDC Contact Center as a Service MarketScape, IDC Voice of the Customer MarketScape and the IDC MarketScape for Social Marketing Platforms.
Our Artificial Intelligence – Sprinklr AI
The core of our technology is Sprinklr AI, which is the foundation of our AI-native unified platform and integrated across a highly scalable and flexible architecture that powers every Sprinklr solution. We believe that our Unified-CXM platform is the first purpose-built, AI-native platform for the enterprise, designed with the security, compliance and governance measures large enterprises require. Over more than a decade, we’ve developed deep machine learning algorithms that automate insights and interactions, enabling our AI engine to process millions of structured and unstructured data points from countless channels and applications in real time. We believe that what differentiates Sprinklr is the unified customer context and unified data foundation underneath. By carrying signals across the entire lifecycle – solicited and unsolicited, unstructured and structured, across 70+ industries, dozens of functions, and 150+ languages – Sprinklr AI gains a uniquely comprehensive understanding of our brands’ customers. We believe that the breadth and continuity
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make our AI particularly well-suited for context-rich customer experience use cases that single-workflow or single channel systems cannot yet support.
Our AI is differentiated in the following ways:
•UNIFIED AI-READY data. Our platform ingests, processes and analyzes unstructured conversational data at massive scale – spanning social, digital and the open web – with over 450 million data points ingested. In addition to this, Sprinklr processes over 9 trillion tokens every month through its in-house LLMs and powers more than 160 million brand messages and 200 million contact center interactions monthly. All of this conversational data is already unified and connected within the Sprinklr platform by a shared and common taxonomy, enabling enterprises to get consistent insights at scale across all channels and customer touchpoints.
•MODEL-DYNAMIC approach to AI. We leverage a combination of traditional AI techniques, best-in-class third-party LLMs and in-house LLMs to power end-to-end customer and user journeys. Sprinklr aims to match the best model to every task, unlocking relevance, personalization and automation at scale. While we prescribe the most optimal model-mix, prompts and deployment strategies, more advanced enterprises can leverage AI+ Studio – the central AI console and configuration layer – to manage models and providers, control the prompt engineering layer, configure guardrails and personally identifiable information masking and manage their AI workflows across the Sprinklr platform.
•SELF-IMPROVING feedback loops. Sprinklr AI gets smarter with every interaction – learning from outcomes, continuously evaluating its own performance and generating recommendations for improvement. These insights are used to autonomously update prompts, standard operating procedures and knowledge, while keeping humans in the loop. Because Sprinklr operates on a unified model for humans and AI, both share the same context, switch fluidly between roles and learn from each other’s interactions.
•SPECIALIZED AI capabilities. We have highly specialized AI models across more than 60 industry verticals and sub-verticals and natively annotated across more than 150 languages. In addition to this, we have developed specialized in-house LLMs to power use cases such as sentiment analysis (platform-wide), conversational analytics, automated quality management and many others. This has led to improved accuracy, significant cost savings, improved operational efficiency with easier maintenance and faster turnaround time.
Our Product Suites
With the rise of digital channels, customers are connected and empowered like never before. Every customer-facing team needs to think differently as a result:
•Customers volunteer feedback 24/7 on public channels – research can be actionable and real-time.
•How you care for customers determines what they say about you – customer service is the new marketing.
•Customers trust each other more than brands and want to be recognized as people, not purchasers – marketing is what they say, not what you say, so be personal.
•Customers buy based on their experience with a brand – engagement drives sales.
•The convergence of technology waves is changing how people connect and transact – with customers preferring to engage digitally, shoppers transacting on social media and purchasing decisions influenced by AI.
These new realities guide what we have built, providing solutions and capabilities that large enterprises can no longer afford to live without. Sprinklr offers four major product suites:
•Sprinklr Service. A suite of AI-based products and solutions that transforms fragmented interactions across voice, digital and social channels into cohesive, channel-less experiences powered by intelligent human-AI collaboration at enterprise scale.
•Sprinklr Social. A suite of AI-based products and solutions that unifies social media management across publishing, engagement, influencers, employee advocacy and analytics across 30+ channels – enabling enterprise-grade security, governance and automation.
•Sprinklr Insights.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”), and our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 (the “2026 10-K”), filed with the Securities and Exchange Commission (the “SEC”) on March 19, 2026. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy, and plans and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Form 10-Q. You should review the disclosure under the heading “Risk Factors” in this Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Overview
Sprinklr provides a Unified Customer Experience Management (“Unified-CXM”) platform designed to help organizations manage customer interactions across multiple channels and teams. Our AI-native platform enables customer-facing teams, from Customer Service to Marketing, to collaborate across internal silos, communicate with customers across digital and traditional channels, and leverage AI to deliver improved customer experiences at scale.
Sprinklr has four main product suites: Sprinklr Social, Sprinklr Insights, Sprinklr Marketing, and Sprinklr Service. We believe that these four suites enable large and leading brands to more effectively reach, engage, and listen to their customers on the channel of their choice. We continue to invest in our Unified-CXM platform and develop new features and enhancements for each suite in response to evolving customer needs.
Our Unified-CXM platform utilizes an architecture purpose-built for managing Customer Experience Management (“CXM”) data and is powered by proprietary AI, collaborative workflow, automation, broad-based listening, and customer-led governance. This architecture is designed to help enterprises analyze massive amounts of unstructured and structured data.
We generate revenue primarily from the sale of subscriptions to our Unified-CXM platform and related professional services. Our platform includes products that are licensed on a per-user basis as well as products that are licensed based on different volume tiers.
Our customer base is diverse, spanning global enterprises across a broad array of industries and geographies, as well as marketing agencies, government departments, non-profit, and educational institutions. As of April 30, 2026, we have customers in more than 90 countries, with our platform supporting over 150 languages.
Key Business Metrics
We review a number of operating and financial metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.
RPO and cRPO
Remaining Performance Obligation (“RPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue and amounts that will be invoiced and recognized in future periods. Current RPO (“cRPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue and amounts that will be invoiced and recognized in the next 12 months. As of April 30, 2026, our RPO was $1,038.3 million, and our cRPO was $627.1 million.
Net Dollar Expansion Rate
We believe that net dollar expansion rate (“NDE”) is an indicator of the value that our platform delivers to customers. We calculate NDE to measure our ability to retain and expand subscription revenue from our existing customers. NDE compares our subscription revenue from the same set of customers across comparable periods and reflects customer renewals, expansion, contraction, and churn. We calculate NDE by dividing (i) subscription revenue in the trailing 12-month period from those customers who were on our platform during the most recent prior 12-month period by (ii) subscription revenue from the same customers in the preceding prior 12-month period. This calculation is net of upsells, contraction, cancellation, or expansion during the period, but excludes subscription revenue from new customers. Our NDE, on a trailing 12-month basis, was 103.5% and 101.8% for the 12-month periods ended April 30, 2026 and 2025, respectively.
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Macroeconomic and Geopolitical Considerations
Unfavorable economic conditions in the United States (“U.S.”) and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic and geopolitical events, including fluctuations in inflation, interest, and foreign currency rates, the imposition of tariffs in the U.S. and abroad, the Russia-Ukraine war, the 2026 Iran conflict and other military conflicts in the Middle East, and the 2025 U.S. government shutdown, have led to economic uncertainty both in the U.S. and globally. Historically, during periods of economic and geopolitical uncertainty and downturns, businesses may slow spending on information technology, which may impact our business and our customers’ businesses.
While we have experienced growing inflationary pressures on the cost of wages, rent, and data, the net result of inflationary impacts and our efforts to mitigate these impacts have not been material to us during the periods included in this report. In addition, general economic weakness may lead to longer collection cycles for payments due from our customers and an increase in customer provision for credit losses, as well as restructuring initiatives and associated expenses, and customers and potential customers may require extended financial concessions, which could result in adjustments to revenue recognition.
Further, geopolitical events, such as Russia-Ukraine war, the 2026 Iran conflict, and other military or security-related events globally, may adversely affect our business. For example, our operations in the Middle East have been affected by the 2026 Iran conflict, including disruptions to our business activities in the region and inaccessibility, and potential loss, of certain customer data in connection with a third-party data center infrastructure in the United Arab Emirates on which we relied. Such events may result in a decrease in customer demand for our services, increased scrutiny from customers and regulators, and damage our reputation, which could adversely affect our business, financial condition, and results of operations. Further, we may incur significant and unanticipated expenses to mitigate the possibility of further harm, including through emergency data transfers, temporary changes to data processing locations, increased infrastructure costs, or as through the relocation of our employees or data to other regions not affected by the conflict.
The effect of macroeconomic and geopolitical conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition, and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see “Part II. Item 1A. Risk Factors” in this Form 10-Q and “Part I. Item 1A. Risk Factors” of the 2026 10-K.
Components of Results of Operations
Revenue
We generate revenue from the sale of subscriptions to our Unified-CXM cloud-based software platform and related professional services.
Subscription revenue consists primarily of fees for accessing our proprietary Unified-CXM platform, as well as related stand-ready services, and is generally recognized ratably over the committed subscription term. The majority of our subscription contracts have a term of two to three years. Historically, we have experienced seasonality in our sales cycle, as a large percentage of our customers make their purchases in the fourth quarter of a given fiscal year and pay us in the first quarter of the subsequent year. This seasonality may be reflected to a much lesser extent, and sometimes may not be immediately apparent, in our revenue, due to the fact that we recognize subscription revenue over the term of the applicable subscription agreement.
Professional services revenue consists primarily of fixed-fee arrangements to provide implementation and managed services for our Unified-CXM platform. For managed services, our consultants work alongside our customers’ teams to help them realize their CXM goals, including platform configuration, ongoing education and ad-hoc support.
Cost of Revenue
Cost of subscription revenue consists primarily of costs to host our software platform; data costs, including cost of third-party data utilized in our platform; personnel-related expenses for our subscription and support operations personnel, including salaries, benefits, bonuses and stock-based compensation; professional fees; software costs; travel expenses; the amortization of our capitalized internal-use software; and allocated overhead expenses, including facilities costs for our subscription and support operations. We expect that cost of subscription revenue will increase in absolute dollars as we expand our customer base and make continued investments in our cloud infrastructure and support organization. Furthermore, we estimate that data and hosting costs with various partners may rise in the near term.
Cost of professional services revenue consists primarily of personnel-related expenses for our professional services personnel, including salaries, benefits, bonuses and stock-based compensation; professional fees; software costs; subcontractor costs; travel expenses; and allocated overhead expenses, including facilities costs, for our professional services organization. We expect that our cost of professional services may vary from period to period based on the project-based nature of this work, which could include increased use of partners and additional headcount for the delivery of implementation services.
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Gross Profit and Gross Margin
Gross profit is defined as total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of total revenue. We expect that gross profit and gross margin will continue to be affected by various factors, including our pricing, revenue mix and the costs required to deliver those revenues.
Our gross margin on subscription revenue is significantly higher than our gross margin on professional services revenue, and as a result, our gross margin may vary from period to period if our mix of revenue or cost of revenue fluctuates. In addition, because personnel-related expenses represent the largest component of cost of professional services revenue, we may experience changes in our professional services gross margin due to the timing of delivery of those services. We expect that our gross margin will decline in the near term due to higher data and hosting costs, coupled with higher service delivery costs, and, in the long term, will vary from period to period.
Operating Expenses
Our operating expenses consist of research and development, sales and marketing, general and administrative and restructuring expenses.
Research and Development Expenses
Research and development expenses consist primarily of costs relating to the maintenance, continued development and enhancement of our cloud-based software platform and includes personnel-related expense for our research and development organization, including salaries, benefits, bonuses and stock-based compensation, professional fees, travel expenses and allocated overhead expenses, including facilities costs. Research and development expenses are expensed as incurred, except for internal-use software development costs that qualify for capitalization. We expect research and development expenses to generally increase in absolute dollars as we continue to innovate and invest in enhancing and expanding the capabilities of our Unified-CXM platform.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of personnel-related expenses for our sales and marketing organization, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, advertising, marketing, promotional and brand awareness activities, travel expenses and allocated overhead expense, including facilities costs. Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer and are deferred and amortized on a straight-line basis over the expected period of benefit. We expect sales and marketing expenses to generally increase in absolute dollars as we continue to drive the growth of our business. We continue to optimize our sales and marketing expenses and seek efficiencies in our investments.
General and Administrative Expenses
General and administrative expenses include personnel-related expenses associated with administrative services, such as legal, human resources, information technology, accounting, and finance functions, as well as professional fees, software costs, travel expenses, provision for credit losses and allocated overhead expense, including facilities costs and any corporate overhead expenses not allocated to other expense categories.
Restructuring Expenses
Restructuring expenses include costs associated with the global workforce reductions implemented in fiscal year 2026. The majority of these costs consist of severance, benefits and the acceleration of equity awards. We do not expect to incur any further restructuring expenses with respect to the workforce reductions implemented in fiscal year 2026.
Other Income, Net
Other income, net, consists of interest income on invested cash and cash equivalents and marketable securities, foreign currency transaction gains and losses and other expenses and gains.
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes related to foreign and U.S. jurisdictions in which we conduct business. Our annual estimated effective tax rate differed from the U.S. federal statutory rate in fiscal year 2027 and 2026 primarily due to the impact of non-deductible items, stock-based compensation expense and the foreign tax rate differential on non-U.S. income and withholding taxes, as well as changes in our uncertain tax positions.
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Results of Operations
The following table sets forth our condensed consolidated statements of operations data for the periods indicated:
| Three Months Ended April 30, | ||||||||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Subscription | $ | 194,789 | $ | 184,127 | ||||||||||||||||
| Professional services | 24,690 | 21,373 | ||||||||||||||||||
| Total revenue | 219,479 | 205,500 | ||||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||
Subscription (1) | 50,854 | 42,186 | ||||||||||||||||||
Professional services (1) | 25,594 | 20,445 | ||||||||||||||||||
| Total cost of revenue | 76,448 | 62,631 | ||||||||||||||||||
| Gross profit | 143,031 | 142,869 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
Research and development (1) | 23,360 | 22,811 | ||||||||||||||||||
Sales and marketing (1) | 74,931 | 71,071 | ||||||||||||||||||
General and administrative (1) | 34,785 | 34,429 | ||||||||||||||||||
Restructuring (1) | (654) | 16,313 | ||||||||||||||||||
| Total operating expenses | 132,422 | 144,624 | ||||||||||||||||||
| Operating income (loss) | 10,609 | (1,755) | ||||||||||||||||||
| Other income, net | 5,689 | 6,930 | ||||||||||||||||||
| Income before provision for income taxes | 16,298 | 5,175 | ||||||||||||||||||
| Provision for income taxes | 12,117 | 6,743 | ||||||||||||||||||
| Net income (loss) | $ | 4,181 | $ | (1,568) | ||||||||||||||||
| Three Months Ended April 30, | ||||||||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||
| Subscription | $ | 348 | $ | 265 | ||||||||||||||||
| Professional services | 778 | 392 | ||||||||||||||||||
| Research and development | 4,174 | 3,886 | ||||||||||||||||||
| Sales and marketing | 4,797 | 6,295 | ||||||||||||||||||
| General and administrative | 9,904 | 9,576 | ||||||||||||||||||
Restructuring | — | 866 | ||||||||||||||||||
| Stock-based compensation expense, net of amounts capitalized | $ | 20,001 | $ | 21,280 | ||||||||||||||||
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The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of total revenue (1):
| Three Months Ended April 30, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Subscription | 89 | % | 90 | % | ||||||||||||||||
| Professional services | 11 | % | 10 | % | ||||||||||||||||
| Total revenue | 100 | % | 100 | % | ||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||
| Subscription | 23 | % | 21 | % | ||||||||||||||||
| Professional services | 12 | % | 10 | % | ||||||||||||||||
| Total cost of revenue | 35 | % | 30 | % | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | 11 | % | 11 | % | ||||||||||||||||
| Sales and marketing | 34 | % | 35 | % | ||||||||||||||||
| General and administrative | 16 | % | 17 | % | ||||||||||||||||
| Restructuring | 0 | % | 8 | % | ||||||||||||||||
| Total operating expenses | 60 | % | 70 | % | ||||||||||||||||
| Operating income (loss) | 5 | % | (1) | % | ||||||||||||||||
| Other income, net | 3 | % | 3 | % | ||||||||||||||||
| Income before provision for income taxes | 7 | % | 3 | % | ||||||||||||||||
| Provision for income taxes | 6 | % | 3 | % | ||||||||||||||||
| Net income (loss) | 2 | % | (1) | % | ||||||||||||||||
(1) Totals may not foot due to rounding
Comparison of the Three Months Ended April 30, 2026 and 2025
Revenue
| Three Months Ended April 30, | |||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||
| Subscription | $ | 194,789 | $ | 184,127 | $ | 10,662 | 6 | % | |||||||||||||
| Professional services | 24,690 | 21,373 | 3,317 | 16 | % | ||||||||||||||||
| Total revenue | $ | 219,479 | $ | 205,500 | $ | 13,979 | 7 | % | |||||||||||||
The increase in subscription revenue was primarily attributable to growth from existing customers, driven by customers expanding their use of our platform, both by increasing their subscription volumes and adding new features. These gains were partially offset by non-renewals and reductions in contract size, particularly among customers adjusting budgets or deferring investments in response to broader economic pressures.
The increase in professional services revenue was primarily due to implementation services provided in connection with large-scale enterprise projects.
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Cost of Revenue and Gross Margin
| Three Months Ended April 30, | |||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||
| Subscription | $ | 50,854 | $ | 42,186 | $ | 8,668 | 21 | % | |||||||||||||
| Professional services | 25,594 | 20,445 | 5,149 | 25 | % | ||||||||||||||||
| Total cost of revenue | $ | 76,448 | $ | 62,631 | $ | 13,817 | 22 | % | |||||||||||||
| Gross margin - subscription | 74 | % | 77 | % | |||||||||||||||||
| Gross margin - professional services | (4) | % | 4 | % | |||||||||||||||||
The increase in cost of subscription revenue was primarily due to (i) an increase of $5.7 million in third-party cloud, data and network infrastructure costs, partially attributable to increased customer demand, as well as higher rates from our third-party providers, and (ii) higher personnel-related costs of $1.7 million, partially driven by increased headcount.
The increase in cost of professional services revenue was primarily due to (i) a $3.2 million increase in subcontractor costs as a result of higher partner delivery costs and (ii) higher personnel-related costs of $1.6 million, partially driven by increased headcount.
Gross margin for subscription decreased by three percentage points, primarily driven by increased costs associated with third-party cloud, data, and network infrastructure. Gross margin for professional services decreased by eight percentage points, largely driven by higher delivery costs associated with complex implementations.
Research and Development Expenses
| Three Months Ended April 30, | |||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||
| Research and development | $ | 23,360 | $ | 22,811 | $ | 549 | 2 | % | |||||||||||||
| % of revenue | 11 | % | 11 | % | |||||||||||||||||
Research and development expenses remained relatively flat compared to the prior year period.
Sales and Marketing Expenses
| Three Months Ended April 30, | |||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||
| Sales and marketing | $ | 74,931 | $ | 71,071 | $ | 3,860 | 5 | % | |||||||||||||
| % of revenue | 34 | % | 35 | % | |||||||||||||||||
The increase in sales and marketing expenses was primarily due to an increase in personnel costs of $5.3 million, including higher amortization expense resulting from previously capitalized sales commissions, and was partially offset by lower operational costs.
General and Administrative Expenses
| Three Months Ended April 30, | |||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||
| General and administrative | $ | 34,785 | $ | 34,429 | $ | 356 | 1 | % | |||||||||||||
| % of revenue | 16 | % | 17 | % | |||||||||||||||||
General and administrative expenses remained relatively flat compared to the prior year period.
28
Restructuring Expenses
| Three Months Ended April 30, | |||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||
Restructuring | $ | (654) | $ | 16,313 | $ | (16,967) | (104) | % | |||||||||||||
| % of revenue | N.M. | 8 | % | ||||||||||||||||||
N.M. - not meaningful
The decrease in restructuring expenses was primarily attributable to workforce reduction initiatives implemented in the first quarter of fiscal year 2026, which were substantially completed during fiscal year 2026, whereas no comparable workforce reduction initiatives were undertaken in the first quarter of fiscal year 2027. Refer to Note 13, Restructuring Charges, included in “Part I. Item 1. Financial Statements” of this Form 10-Q for additional information related to our restructuring charges.
Other Income, Net
| Three Months Ended April 30, | |||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||
Other income, net | $ | 5,689 | $ | 6,930 | $ | (1,241) | (18) | % | |||||||||||||
| % of revenue | 3 | % | 3 | % | |||||||||||||||||
The decrease in other income, net was primarily due to (i) lower interest income from money market and short-term investments, resulting from lower average balances and interest rates, and (ii) lower net foreign currency losses.
Provision for Income Taxes
| Three Months Ended April 30, | |||||||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | |||||||||||||||||
| Provision for income taxes | $ | 12,117 | $ | 6,743 | $ | 5,374 | 80 | % | |||||||||||||
| % of revenue | 6 | % | 3 | % | |||||||||||||||||
The increase in provision for income tax relates primarily to increases in the income before provision for income taxes for the three months ended April 30, 2026 compared to the prior period. The provision for income tax for the three months ended April 30, 2026 also includes a $3.8 million discrete income tax charge for non-deductible stock-based compensation and a $2.3 million discrete income tax charge for changes to our uncertain tax positions related to our non-U.S. entities.
29
Non-GAAP Financial Measures
In addition to our results determined in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”), we believe that the following non-GAAP financial measures are useful in evaluating our operating performance:
•Non-GAAP gross profit and non-GAAP gross margin;
•Non-GAAP operating income and non-GAAP operating margin; and
•Non-GAAP net income and non-GAAP net income per share.
We define these non-GAAP financial measures as the respective U.S. GAAP measures, excluding, as applicable, stock-based compensation expense and related charges; amortization of stock-based compensation expense associated with capitalized internal-use software; amortization of acquired intangible assets; restructuring charges; costs associated with acquisitions; litigation, settlement, and related costs deemed unrelated to our core business operations; facility exit costs; and the estimated tax effect of these non-GAAP adjustments. We believe that it is useful to exclude these items in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies over multiple periods.
In addition, we believe that free cash flow is also a useful non-GAAP financial measure. Free cash flow is defined as net cash provided by operating activities less cash used for purchases of property and equipment and capitalized internal-use software. We believe that free cash flow is a useful indicator of liquidity as it measures our ability to generate cash, or our need to access additional sources of cash, to fund operations and investments. We expect our free cash flow to fluctuate in future periods with changes in our operating expenses and as we continue to invest in our growth. We typically experience higher billings in the fourth quarter compared to other quarters and experience higher collections of accounts receivable in the first half of the year, which results in a decrease in accounts receivable in the first half of the year.
However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by U.S. GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our condensed consolidated financial statements presented in accordance with U.S. GAAP.
A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP:
| Three Months Ended April 30, | ||||||||||||||||||||
(in thousands) | 2026 | 2025 | ||||||||||||||||||
| Non-GAAP gross profit and gross margin: | ||||||||||||||||||||
| U.S. GAAP gross profit | $ | 143,031 | $ | 142,869 | ||||||||||||||||
Stock-based compensation expense and related charges(1) | 1,152 | 670 | ||||||||||||||||||
Amortization of stock-based compensation expense - capitalized internal-use software | 637 | 649 | ||||||||||||||||||
| Non-GAAP gross profit | $ | 144,820 | $ | 144,188 | ||||||||||||||||
| Gross margin | 65 | % | 70 | % | ||||||||||||||||
| Non-GAAP gross margin | 66 | % | 70 | % | ||||||||||||||||
| Non-GAAP operating income and operating margin: | ||||||||||||||||||||
| U.S. GAAP operating income (loss) | $ | 10,609 | $ | (1,755) | ||||||||||||||||
Stock-based compensation expense and related charges(2) | 20,495 | 20,764 | ||||||||||||||||||
Amortization of stock-based compensation expense - capitalized internal-use software | 637 | 649 | ||||||||||||||||||
Litigation costs(3) | 648 | 769 | ||||||||||||||||||
Restructuring costs(4) | (654) | 16,313 | ||||||||||||||||||
| Non-GAAP operating income | ||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-22 | Scott Jacob | GENERAL COUNSEL AND CORP. SEC. | Sell | -2,724 | $4.97 | -$13,538 |
| 2026-06-16 | Scott Jacob | GENERAL COUNSEL AND CORP. SEC. | Sell | -16,380 | $5.30 | -$86,814 |
| 2026-06-17 | Suri Karthik | Chief Product & CSO | Sell | -41,852 | $5.14 | -$215,119 |
| 2026-06-16 | Suri Karthik | Chief Product & CSO | Sell | -23,507 | $5.30 | -$124,587 |
| 2026-06-16 | Misra Amitabh | Chief Technology Officer | Sell | -29,180 | $5.30 | -$154,654 |
| 2026-06-16 | READ RORY P | President & CEO | Sell | -143,654 | $5.30 | -$761,366 |
| 2026-06-16 | Corso Joy | Chief Administrative Officer | Sell | -33,635 | $5.30 | -$178,266 |
| 2026-06-16 | Macwan Sanjay | Chief Information Officer | Sell | -27,277 | $5.30 | -$144,568 |
| 2026-06-16 | Thomas Ragy | Director | Sell | -6,086 | $5.30 | -$32,256 |
| 2026-06-01 | Misra Amitabh | Chief Technology Officer | Sell | -45,127 | $5.92 | -$267,152 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-09-04 10-Q expected by 2026-09-08 (in 69 days)
- ~2026-12-04 10-Q expected by 2026-12-08 (in 160 days)
- ~2027-03-13 10-K expected by 2027-03-15 (in 259 days)
- ~2027-06-04 10-Q expected by 2027-06-08 (in 342 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-04 10-Q Quarterly Report
- 2026-06-03 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-01 DEF 14A Proxy Statement
- 2026-04-29 8-K Officer/Director Change
- 2026-03-19 10-K Annual Report
- 2026-03-11 8-K Earnings Release; Other Events; Financial Statements and Exhibits
- 2026-01-20 8-K Other Events
- 2025-12-18 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-12-04 10-Q Quarterly Report
- 2025-12-03 8-K Earnings Release; Financial Statements and Exhibits
- 2025-11-12 8-K Other Events
- 2025-10-07 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-09-04 10-Q Quarterly Report
- 2025-09-03 8-K Earnings Release; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-08-11 8-K Officer/Director Change