Sprinklr 2026 Q3 Earnings Beats Revenue Estimates, EPS Drops 75%

Sprinklr (CXM) reported Q3 2026 earnings with revenue exceeding expectations but a significant decline in net income. The company raised full-year guidance amid robust subscription growth, though EPS underperformed forecasts, signaling mixed investor sentiment.

Revenue

Driven by subscription revenue growth, Sprinklr's total revenue reached $219.07 million, up 9.2% year-over-year. Subscription revenue, the core of its business, grew to $190.29 million, reflecting a 5% increase, while professional services contributed $28.77 million, a 43.5% year-over-year jump. This performance underscores the company's ability to expand its recurring revenue streams and diversify offerings.

Earnings/Net Income

The company's EPS fell sharply to $0.01 in Q3 2026 from $0.04 in the prior year, a 75% decline. Net income also dropped by 72.2% to $2.90 million, highlighting margin pressures and operational challenges. The earnings shortfall underscores the need for improved cost management to align with revenue growth.

Post-Earnings Price Action Review

The strategy of buying CXM when it beats revenue and holding for 30 days yielded a -45.31% return, significantly underperforming the benchmark's 52.45% gain. While the backtest showed no significant drawdowns, the strategy's high volatility (51.28%) and negative Sharpe ratio (-0.27) indicate inconsistent performance and elevated risk, deterring risk-averse investors.

CEO Commentary

Rory Read, CEO, emphasized progress in customer retention and AI-driven platform modernization, including Project Bear Hug for top 700 accounts. Despite challenges in execution and technical debt, Read expressed cautious optimism about entering a "second phase of transformation" and achieving sustainable growth.

Guidance

Sprinklr raised Q4 2026 revenue guidance to $216.5–$217.5 million (7% YoY growth), with subscription revenue projected at $191–$192 million. Full-year FY 2026 revenue is now expected at $853–$854 million, with non-GAAP operating income of $137.5–$138.5 million, reflecting confidence in AI investments and operational efficiency.

Additional News

1. Expanded SAMY Partnership: Sprinklr deepened its collaboration with SAMY to integrate real-time social data into marketing strategies for global brands like Diageo.

2. C-Level Hires: The company appointed Anthony Coletta as CFO, signaling a focus on financial restructuring and margin improvement.

3. AI-First Strategy: CEO Rory Read highlighted AI-native platform advancements to enhance hyper-personalization, a key differentiator in competitive CX markets.