Dj Sprinklr Price Target Maintained With A $9.00/Share By Da Davidson

Customer experience management platform Sprinklr reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 9.2% year on year to $219.1 million. On top of that, next quarter’s revenue guidance ($217 million at the midpoint) was surprisingly good and 3.1% above what analysts were expecting. Its non-GAAP profit of $0.12 per share was 32% above analysts’ consensus estimates.

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Sprinklr (CXM) Q3 CY2025 Highlights:

• Revenue: $219.1 million vs analyst estimates of $209.6 million (9.2% year-on-year growth, 4.5% beat)
• Adjusted EPS: $0.12 vs analyst estimates of $0.09 (32% beat)
• Adjusted Operating Income: $33.52 million vs analyst estimates of $28.71 million (15.3% margin, 16.7% beat)
• Revenue Guidance for Q4 CY2025 is $217 million at the midpoint, above analyst estimates of $210.4 million
• Management raised its full-year Adjusted EPS guidance to $0.44 at the midpoint, a 2.4% increase
• Operating Margin: 5.3%, up from 3.9% in the same quarter last year
• Market Capitalization: $1.90 billion

StockStory’s Take

Sprinklr delivered Q3 results that exceeded Wall Street’s revenue and profit expectations, reflecting ongoing operational improvements and the early impact of its transformation initiatives. Management credited the company’s performance to strengthened customer relationships, especially through Project Bearhug, and highlighted progress in stabilizing renewal rates and improving execution in large enterprise accounts. CEO Rory Read pointed to “early momentum” from these efforts, noting that Sprinklr is “in a stronger position today than at the start of the year,” while cautioning that real transformation remains a work in progress.

Looking ahead, Sprinklr’s guidance is informed by its focus on embedding operational changes, expanding AI-powered customer experience offerings, and further scaling Project Bearhug to more accounts. Management acknowledged the transition phase will extend into next year, aiming for sustained improvements in renewal rates and efficiency. CEO Rory Read stated, “We need to see several quarters in a row… when we see how 4Q, 1Q, and 2Q perform, that’s when we’ll know how sustainable this all is,” reflecting an emphasis on consistency and measured optimism around ongoing transformation efforts.

Key Insights from Management’s Remarks

Management attributed Q3’s performance to enhanced customer engagement, efficiency gains from operational initiatives, and ongoing investments in leadership and technology, while emphasizing the importance of durable improvements for future growth.

• Project Bearhug expansion: The initiative targeting Sprinklr’s largest customers has driven deeper engagement and improved renewal rates, with management reporting a 9% year-over-year increase in revenue from this cohort and a net dollar expansion rate of 113%. The program is being extended to cover more accounts, representing a larger share of revenue.

• Leadership team overhaul: Significant changes to the executive bench were nearly complete, introducing new CFO Anthony Coletta and Chief Product and Corporate Strategy Officer Kartik Suri. Management expects this stability and new expertise to support the next phase of transformation and growth.

• Operational improvements: Sprinklr implemented new processes and modernized systems, including better tracking of service projects and the use of advanced technology for project management. The company also reported enhanced cross-functional alignment and more consistent delivery in customer implementations.

• AI-powered platform investments: Sprinklr continued to focus on AI and analytics capabilities, aiming to drive hyper-personalization and real-time customer engagement. Management sees the AI-native platform as a key differentiator, with over 300 AI engineering skills already deployed and plans for further skill additions.

• Service and support transformation: The company is migrating its own support functions onto the Sprinklr platform and standardizing implementation practices, aiming for improved customer satisfaction and more predictable outcomes in large-scale deployments.

Drivers of Future Performance

Sprinklr’s outlook centers on sustaining operational momentum, scaling customer engagement programs, and balancing margin expansion with ongoing investments in AI and service capabilities.

• Renewal and retention focus: Management prioritized stabilizing and improving renewal rates, particularly within the largest enterprise accounts. Early signs of predictability were reported, but executives stressed the need for several consecutive quarters of consistent results to confirm lasting improvement.

• AI and technology investment: Sprinklr plans to continue investing in its AI-driven platform, expanding both technical capabilities and in-region support for customers. Management believes these investments are essential for long-term differentiation but noted they come with higher data and hosting costs that may impact margins in the near term.

• Pricing and bundling evolution: The company is rolling out new pricing and bundling strategies across its product suite, starting with new customers and expanding to the existing Martech (marketing technology) base, with further extension into service offerings later next year. Management expects these changes to drive adoption and improve monetization as they are implemented more broadly.

Catalysts in Upcoming Quarters

Going forward, the StockStory team will be watching (1) the consistency of renewal rates and customer retention as Project Bearhug expands; (2) the rollout and adoption of new pricing and bundling strategies across both new and existing customers; and (3) the impact of continued investments in AI and operational improvements on both gross margins and customer satisfaction. Additional signposts include the stabilization of large enterprise accounts and successful execution of large-scale service implementations.

Sprinklr currently trades at $7.68, up from $7.54 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).

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