Why Sprinklr Stock Rocked the Market on Wednesday
Key Points
It posted satisfying growth on both the top and bottom lines in the fourth quarter.
Both metrics also topped the average analyst estimates.
Sprinklr (NYSE: CXM) was spraying gains on its shareholders in a prosperous Wednesday trading session. On a generally forgettable day for the stock market, the customer experience management solutions company was an outperformer, posting an over 6% increase. That was in reaction to a very well-received earnings report.
A shower of good results
Well before market open that day, Sprinklr took the lid off its fourth quarter and full-year fiscal 2026 figures. In the prior period, the company earned revenue of just under $221 million, up 9% year over year. That was on the back of a 6% rise in subscription revenue to over $193 million. The specialized tech company's net income not under generally accepted accounting principles (GAAP) leaped 16% to almost $32 million, or $0.13 per share.
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Both line items easily topped the consensus analyst estimates of $215.5 million for revenue and $0.09 per share for non-GAAP (adjusted) net income.
In recent times, Sprinklr has been pivoting from social media management solutions to a purveyor of artificial intelligence (AI)-powered customer experience tools. The company quoted CEO Rory Read as saying that the quarter "capped a pivotal year" in this transformation.
More growth anticipated
Sprinklr proffered guidance for its current (first) quarter and the entirety of fiscal 2027. For the year, the company anticipates booking $869 million to $871 million in revenue, fueled by subscription revenue that should come in at $778 million to $780 million. Per-share, adjusted net income should be $0.47 to $0.48.
Both ranges sit above the fiscal 2026 results of $857 million on the top line and the adjusted profitability of $0.37 per share. The consensus analyst estimates for the pair of metrics are almost $882 million and $0.47, respectively.
That revenue estimate doesn't compare well to the company's guidance, but I wouldn't be too worried about that. Fourth-quarter growth was satisfying, and management is clearly anticipating that momentum will continue. It feels like Sprinklr's transformation wasn't just a smart idea, it was (and is) a successful one. I think the market's Wednesday bullishness was entirely justified.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.