Sprinklr's Accelerating Growth Trajectory: A Deep Dive into Profitability and Revenue Momentum

Sprinklr (NYSE: CXM) has emerged as a compelling case study in the SaaS sector, demonstrating a clear acceleration in both revenue growth and profitability. As of Q2 2026, the company reported total revenue of $212.0 million, an 8% year-over-year increase from $197.2 million in Q2 2025 [1]. This growth is underpinned by a 6% rise in subscription revenue to $188.5 million, reflecting the company’s ability to retain and expand its customer base despite macroeconomic headwinds.

Revenue Momentum: Subscription-Driven Growth

Sprinklr’s subscription revenue has consistently outpaced total revenue growth, accounting for 89% of total revenue in Q2 2026. This trend underscores the company’s shift toward recurring revenue streams, a critical metric for SaaS firms. For context, in Q2 2025, subscription revenue grew 9% year-over-year to $177.9 million [1], while the full fiscal year 2025 saw a 7% increase in subscription revenue to $717.9 million [1]. The acceleration in subscription growth—from 4% in Q4 2025 to 6% in Q2 2026—suggests improved customer retention and upselling efforts.

Notably, Sprinklr’s customer base has expanded significantly. As of Q3 2025, the company reported 147 customers spending over $1 million annually, a 20% year-over-year increase [1]. This metric highlights the company’s success in penetrating large enterprises, a segment critical for long-term scalability.

Profitability Improvements: From Margins to Free Cash Flow

Profitability metrics have shown marked improvement, particularly in non-GAAP reporting. In Q2 2026, non-GAAP operating income surged to $38.2 million, a 94% increase from $19.6 million in Q2 2025 [1]. This represents a 18% non-GAAP operating margin, up from 12% in Q3 2025 [1]. GAAP operating income also turned positive, reaching $16.3 million compared to a $0.1 million loss in the prior-year period [1].

Free cash flow has similarly strengthened. Q2 2026 saw $474.0 million in cash reserves [1], while Q2 2025 generated $16.5 million in free cash flow [1]. For the full fiscal year 2025, free cash flow reached $80.7 million [2], demonstrating the company’s ability to convert revenue into liquidity.

Strategic Shifts and Leadership Changes

Sprinklr’s recent leadership changes further signal a strategic pivot toward growth. The appointment of Scott Millard as Chief Revenue Officer in Q2 2026 [1] reflects a focus on sales and customer acquisition, while the departure of CFO Manish Sarin may indicate a restructuring of financial priorities. These moves align with the company’s broader goal of scaling operations without compromising margins.

Risks and Considerations

While the data paints an optimistic picture, investors should remain cautious. GAAP operating margins remain modest at 3% for the full fiscal year 2025 [1], and Q4 2025 saw a dip in total revenue growth to 4% year-over-year [1]. However, the subsequent recovery in Q2 2026 suggests that these were temporary challenges rather than structural issues.

Conclusion

Sprinklr’s accelerating growth trajectory is supported by robust subscription revenue, improving profitability, and a strong cash position. With a 9% year-over-year total revenue increase in fiscal 2025 [1] and a 18% non-GAAP operating margin in Q2 2026 [1], the company is well-positioned to capitalize on the expanding customer experience management (CXM) market. For investors, the key will be monitoring how effectively Sprinklr balances growth investments with margin preservation in the coming quarters.

Source:
[1] Sprinklr Announces Second Quarter Fiscal 2026 Results [https://www.businesswire.com/news/home/20250903190612/en/Sprinklr-Announces-Second-Quarter-Fiscal-2026-Results]
[2] Earnings call transcript: Sprinklr Q2 2025 beats estimates [https://www.investing.com/news/transcripts/earnings-call-transcript-sprinklr-q2-2025-beats-estimates-stock-surges-7-93CH-4080871]