Sprinklr 2026 Q3 Earnings Revenue Beats Estimates, Net Income Plummets 72%

Sprinklr (CXM) reported mixed results for Q3 2026, with revenue exceeding expectations but net income declining sharply. The company raised full-year guidance, signaling improved demand for its customer experience platform despite margin pressures.

Revenue

Sprinklr’s total revenue surged 9.2% year-over-year to $219.07 million in Q3 2026, outperforming the $200.69 million recorded in the same period the previous year. Subscription revenue, the company’s core business, accounted for $190.29 million, reflecting a 5% year-over-year increase. Professional services revenue contributed $28.77 million, marking a significant 43.5% growth compared to the prior year. The performance underscores robust demand for Sprinklr’s AI-driven customer engagement solutions, particularly in subscription-based services.

Earnings/Net Income

The company’s earnings per share (EPS) declined sharply to $0.01 in Q3 2026, down 75% from $0.04 in Q3 2025. Net income also fell to $2.90 million, a 72.2% drop from $10.46 million in the prior-year period. The earnings shortfall highlights ongoing margin pressures, driven by rising AI and cloud infrastructure costs. Despite non-GAAP EPS of $0.12 beating estimates, the GAAP results reflect persistent challenges in maintaining profitability.

Post-Earnings Price Action Review

The strategy of buying CXM when it beats revenue and holding for 30 days underperformed the benchmark, with a -45.31% return versus 52.45%. While the backtest showed no significant drawdowns, the high volatility of 51.28% and a Sharpe ratio of -0.27 indicate inconsistent performance and elevated risk. Investors remain cautious, balancing optimism over revenue growth with concerns about earnings sustainability.

CEO Commentary

Rory Read, Sprinklr’s CEO, emphasized progress in its transformation to better serve customers and partners. He noted improved customer engagement quality and a focus on closing the year with momentum to establish a strong foundation for FY27.

Guidance

Sprinklr raised its full-year 2026 revenue guidance to $853–854 million, up from previous expectations. For Q4 2026, the company expects total revenue of $216.5–217.5 million and non-GAAP EPS of $0.09–$0.10, reflecting confidence in its AI-driven CXM platform’s scalability.

Additional News

1. Expanded Partnership with SAMY: Sprinklr announced a deeper collaboration with SAMY, integrating its Unified-CXM platform with SAMY’s social-first marketing services. This partnership aims to leverage real-time social data for brands like Diageo, enhancing actionable insights for product and marketing decisions.

2. AI-Driven CX Growth Narrative: The company reinforced its narrative around AI-powered customer experience management, highlighting how partnerships like SAMY’s validate its market position. Analysts noted that while revenue growth remains strong, margin pressures from AI infrastructure costs could test long-term profitability.

3. Quantum Computing and AI Synergy: Sprinklr’s focus on AI aligns with broader industry trends, including quantum computing advancements. However, rising infrastructure costs may challenge its ability to maintain margins amid competitive pricing pressures.