Sprinklr Inc-A (NYSE:CXM) Beats Q2 FY2026 Estimates Despite Tepid Market Reaction

Sprinklr Inc-A (NYSE:CXM) reported second-quarter fiscal 2026 results that surpassed analyst expectations on both revenue and earnings per share, though the market reaction in pre-market trading suggests a more nuanced investor response to the company's performance and outlook.

Quarterly Performance Versus Estimates

The enterprise software company posted revenue of $212.0 million for the quarter ended July 31, 2025, exceeding the consensus estimate of $207.5 million. This represents an 8% year-over-year increase from the $197.2 million reported in the same quarter last year. Subscription revenue, which constitutes the bulk of Sprinklr's business, reached $188.5 million, up 6% from the prior year period.

Key financial highlights from the quarter include:

• GAAP operating income of $16.3 million, a significant improvement from the operating loss of $0.1 million in Q2 FY2025
• Non-GAAP operating income of $38.2 million, nearly double the $19.6 million from a year ago
• Non-GAAP diluted earnings per share of $0.13, surpassing the $0.10 analyst estimate

Market Reaction and Guidance Analysis

Despite the earnings beat, shares declined approximately 2.8% in pre-market trading following the announcement. This reaction appears to reflect investor concerns about the company's forward-looking guidance rather than disappointment with the quarterly results.

For the third quarter, Sprinklr provided subscription revenue guidance of $186-187 million and total revenue guidance of $209-210 million, falling slightly below analyst expectations of $208.7 million in total revenue. The company's non-GAAP operating income projection of $28.5-29.5 million and EPS guidance of approximately $0.09 also suggest potential margin compression in the coming quarter.

Full-year guidance indicates subscription revenue between $746-748 million and total revenue between $837-839 million, compared to analyst estimates of $834.2 million for the full year.

Strategic Developments and Leadership Changes

The earnings release highlighted several significant corporate developments, including the appointment of Scott Millard as Chief Revenue Officer. Millard joins from Dell Technologies where he served as SVP of Global AI Sales, bringing substantial experience in scaling sales operations and building high-performance teams.

CEO Rory Read emphasized the company's "continued and intentional progress" in its transformation journey, noting improved customer engagement quality and upcoming R&D innovations. The company continues to focus on its AI-native Unified Customer Experience Management platform, serving major enterprise clients including Microsoft, P&G, Samsung and 60% of Fortune 100 companies.

Financial Position and Operational Metrics

Sprinklr maintained a strong balance sheet with $474.0 million in cash, cash equivalents and marketable securities as of July 31, 2025. The company's operational metrics show continued enterprise adoption of its unified platform, though specific customer count or retention metrics were not provided in the release.

The company's transition to profitability on a GAAP basis represents a significant milestone, with GAAP net income of $12.6 million for the quarter compared to $1.8 million in the prior year period.

For more detailed earnings information and future estimates, readers can review additional data on Sprinklr's earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or recommendation to buy or sell any securities. Readers should conduct their own research and consult with a qualified financial advisor before making investment decisions.