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What changed in Sprinklr, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Sprinklr, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+425 added−502 removedSource: 10-K (2023-04-03) vs 10-K (2022-04-11)

Top changes in Sprinklr, Inc.'s 2023 10-K

425 paragraphs added · 502 removed · 335 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

72 edited+9 added−11 removed53 unchanged
Biggest changeCustomers choose from the following Modern Care products: • Self-Service Community – Improve cross-platform customer experiences and reduce agent caseloads by letting customers share knowledge in digital communities which can be customized and quickly moderated, all in a single application. • Live Chat – Connect with customers quickly, provide personalized 1:1 support to resolve incoming requests, and collect valuable data to inform better agent-led resolutions. • Conversational AI & Bots – Shift customers from IVR to cost-effective digital channels like web chat, SMS, email, and WhatsApp where conversational AI bots create faster and more reliable experiences. • Contact Center Intelligence – Unlock AI-powered, real-time contact center analytics — and uncover the actionable insights to trigger improvements in proactive customer care and reduce inbound contact volume. • Contact Center Automation – Access powerful tools that automate contact center workflows and processes, making it easier to solve customer conversations during the first contact. • Knowledge Base – Help agents find the right knowledge articles and reduce handle time with AI intents that surface the most relevant directly within the Agent Console or use it on your website, mobile app, or community to offer customers quick, direct access to the right information. • Agent Assist – Analyze every conversation instantly to surface the best suggestions, predictions, and warnings agents need to improve productivity and solve customer issues faster. 8 • Modern Care Lite – A simple to use and deploy, yet premium, customer service solution for channel unification across 13+ of the most widely used channels including social, messaging, chat, email and voice. • Sprinklr Voice – Unify your approach to customer service by pairing complete digital coverage with a modern Contact Center as a Service (“CCaaS”) solution that integrates everything enterprises need to deliver personalized experiences, including embedded AI, workflow automation, voice bots, and speech analytics.
Biggest changeCustomers choose from the following Sprinklr Service products: • Self-Service Community – Improve cross-platform customer experiences and reduce agent caseloads by letting customers share knowledge in digital communities that can be customized and quickly moderated, all in a single application. • Live Chat – Connect with customers quickly, provide personalized 1:1 support to resolve incoming requests, and collect valuable data to inform better agent-led resolutions. • Conversational AI & Bots – Shift customers from IVR to cost-effective digital channels like web chat, SMS, email, and WhatsApp where conversational AI bots create faster and more reliable experiences. • Contact Center Intelligence – Unlock AI-powered, real-time contact center analytics on 100% of customer conversations across all channels — and uncover the actionable insights to trigger improvements in proactive customer service and reduce inbound contact volume. • Contact Center Automation – Access powerful tools that automate contact center workflows and processes, making it easier to solve customer conversations during the first contact.
In addition to the Sprinklr Way, the company invests and focuses on the following initiatives that build trust and happiness across all regions: • Employee Delight Assurance Program (EDAP): EDAP is part of our company operating rhythm and consists of the following three components: Goals Planning process; Employee Happiness Index; and Learn2Grow plans.
In addition to the Sprinklr Way, the company invests and focuses on the following initiatives that build trust and happiness across all regions: • Employee Delight Assurance Program (EDAP): EDAP is part of our company operating rhythm and consists of the following three components: employee happiness index, goals planning process and Learn2Grow plans.
Key use cases for Social Engagement & Sales include: • Turning social into a revenue driver by capitalizing on conversations on modern messaging channels to increase sales and seamless commerce. • Getting more from social media managers by using AI to understand where and when to engage, and by automating publishing consistently across all channels. • Protecting brand reputation by limiting the risk of off-brand engagement with a global regulatory compliance framework for approvals, governance rules and moderation processes.
Key use cases for Sprinklr Social include: • Turning social into a revenue driver by capitalizing on conversations on modern messaging channels to increase sales and seamless commerce. • Getting more from social media managers by using AI to understand where and when to engage, and by automating publishing consistently across all channels. • Protecting brand reputation by limiting the risk of off-brand engagement with a global regulatory compliance framework for approvals, governance rules and moderation processes.
Many of our key partners are also customers of our Unified-CXM platform which is a benefit to our shared customers. • Global system integrators are certified implementation consultants that bring a full suite of capabilities to help our customers accelerate Unified-CXM and drive net new ARR: Deloitte and Accenture. • Regional system integrators offer local service and language support: HGS Digital, Mindtree, Thundercat Technology, Techvista, Veripark, Arena Analytics, Carahsoft, ThinkInnovation and many more. • Agencies are media, creative and PR companies trained to co-sell our Unified-CXM platform and its benefits: Publicis Group, Omnicom Group, Havas, Golin, Dentsu, Fleishman Hillard, IPG and WPP. • Technology and Cloud partners are go-to-market partners that help brands connect Sprinklr to third-party software systems to enhance crucial business processes: Adobe, AWS, Microsoft, Oracle, SAP, ServiceNow and Google. • Social Channel Partners work with Sprinklr to help centralize marketing, advertising, research, customer care, engagement and sales in a single, unified platform: Twitter, Facebook, Instagram, WhatsApp, LinkedIn, Pinterest and many others.
Many of our key partners are also customers of our Unified-CXM platform, which is a benefit to our shared customers. • Global system integrators are certified implementation consultants that bring a full suite of capabilities to help our customers accelerate Unified-CXM and drive net new ARR: Deloitte and Accenture. • Regional system integrators offer local service and language support: HGS Digital, Mindtree, Thundercat Technology, Techvista, Veripark, Arena Analytics, Carahsoft, ThinkInnovation and many more. • Agencies are media, creative and PR companies trained to co-sell our Unified-CXM platform and its benefits: Publicis Group, Omnicom Group, Havas, Golin, Dentsu, Fleishman Hillard, IPG and WPP. • Technology and Cloud partners are go-to-market partners that help brands connect Sprinklr to third-party software systems to enhance crucial business processes: Adobe, AWS, Microsoft, Oracle, Salesforce, SAP, ServiceNow and Google. • Social Channel Partners work with Sprinklr to help centralize marketing, advertising, research, customer service, engagement and sales in a single, unified platform: Twitter, Facebook, Instagram, WhatsApp, LinkedIn, Pinterest and many others.
The same components are reused between multiple training, and inference pipelines, enabling our data scientists to build and deploy new use-cases rapidly. • High accuracy of predicting consumer behavior and preferences: Our AI engine is built on top of highly sophisticated and customizable machine learning algorithms that result in more than 10 billion predictions per day.
The same components are reused between multiple training, and inference pipelines, enabling our data scientists to build and deploy new use-cases rapidly. 5 • High accuracy of predicting consumer behavior and preferences: Our AI engine is built on top of highly sophisticated and customizable machine learning algorithms that result in more than 10 billion predictions per day.
Our interactive Wellbeing platform offers captivating opportunities to participate in a range of healthy eating, mental, financial and physical challenges — all on the way to each of us becoming our healthiest self. • Giving Back: Our employees around the world have a deep and passionate sense of community and give back in extraordinary ways.
Our interactive Wellbeing platform offers captivating opportunities to participate in a range of healthy eating, mental, financial and physical challenges — all on the way to each of us becoming our healthiest self. 14 • Giving Back: Our employees around the world have a deep and passionate sense of community and give back in extraordinary ways.
Our partner ecosystem extends our geographic coverage, accelerates the usage and adoption of our platform, promotes thought leadership and provides complementary implementation resources. We work with agencies and partners such as Microsoft, Accenture, Deloitte, SAP, ServiceNow, Adobe, Oracle and others in these capacities. • Selectively pursue acquisitions.
Our partner ecosystem extends our geographic coverage, accelerates the usage and adoption of our platform, promotes thought leadership and provides complementary implementation resources. We work with agencies and partners such as Microsoft, Accenture, Deloitte, Salesforce, SAP, ServiceNow, Adobe, Oracle and others in these capacities. • Selectively pursue acquisitions.
Our Unified-CXM Platform provides the following common features and capabilities, which are shared across all products: • Sandbox – Sprinklr Sandbox offers an isolated test environment that mimics your live production environment, allowing you to practice with precision, create without consequences, and change with confidence. • Integrations – Sprinklr marketplace integrations include 70+ out-of-the-box connectors with CRMs, CDPs, DAMs, Data Visualization, and with other enterprise platforms like Microsoft, Salesforce, Adobe, Google, Oracle, SAP, and ServiceNow. • APIs – Sprinklr provides a robust list of Restful web service application programming interfaces (“APIs”) to integrate data and execute processes with any external system.
Our Unified-CXM Platform provides the following common features and capabilities, which are shared across all products: • Sandbox – Sprinklr Sandbox offers an isolated test environment that mimics your live production environment, allowing you to practice with precision, create without consequences, and change with confidence. • Integrations – Sprinklr marketplace integrations include 90+ out-of-the-box connectors with CRMs, CDPs, DAMs, Data Visualization, and with other enterprise platforms like Microsoft, Salesforce, Adobe, Google, Oracle, SAP, and ServiceNow. • APIs – Sprinklr provides a robust list of Restful web service application programming interfaces (“APIs”) to integrate data and execute processes with any external system.
We collaboratively work with our customers to ensure that targets are hit and recommendations are discussed on how to excel, based on best practices and industry expertise. • The CHI (Customer Happiness Index) is a core internal metric for success at Sprinklr.
We collaboratively work with our customers to ensure that targets are hit and recommendations are discussed on how to excel, based on best practices and industry expertise. 11 • The CHI (Customer Happiness Index) is a core internal metric for success at Sprinklr.
We have a significant percentage of our development talent based in India and have had a very strong presence in India for the last decade. We believe this is a competitive advantage for us as we have access to a strong and deep bench of talent at a significant cost advantage to comparable talent elsewhere in the world.
We have a significant percentage of our development talent based in India and have had a very strong presence in India for the last decade. We believe that this is a competitive advantage for us, as we have access to a strong and deep bench of talent at a significant cost advantage to comparable talent elsewhere in the world.
Every part of the front office needs to think differently as a result: • Customers volunteer feedback 24/7 on public channels – research can be actionable and real-time. • How you care for customers determines what they say about you – care is the new marketing. • Customers trust each other more than brands and want to be recognized as people, not purchasers – marketing is what they say, not what you say, so be personal. • Customers buy based on their experience with a brand – engagement drives sales.
Every part of the front office needs to think differently as a result: • Customers volunteer feedback 24/7 on public channels – research can be actionable and real-time. • How you care for customers determines what they say about you – customer service is the new marketing. • Customers trust each other more than brands and want to be recognized as people, not purchasers – marketing is what they say, not what you say, so be personal. • Customers buy based on their experience with a brand – engagement drives sales.
The manner in which existing laws and regulations are applied to 13 SaaS businesses, whether they apply to us at all, and how they may relate to our business in particular, both in the United States and internationally, often are unclear.
The manner in which existing laws and regulations are applied to SaaS businesses, whether they apply to us at all, and how they may relate to our business in particular, both in the United States and internationally, often are unclear.
We do this by providing every customer-facing team with the modern capabilities they need to serve modern customers and enabling the entire front office to work together and deliver a more unified customer experience.
We do this by providing every customer-facing team with the capabilities they need to serve customers and enabling the entire front office to work together to deliver a more unified customer experience.
Build and refine all AI models with zero coding. Modern Research Modern Research enables our customers to listen, learn from and act on insights gleaned from modern channels. This helps enterprises to stop guessing their brand equity metrics by gaining real-time understanding of brand awareness, product perception, customer loyalty and user satisfaction.
Build and refine all AI models with zero coding. Sprinklr Insights Sprinklr Insights enables our customers to listen, learn from and act on insights gleaned from modern channels. This helps enterprises to stop guessing their brand equity metrics by gaining real-time understanding of brand awareness, product perception, customer loyalty and user satisfaction.
Key use cases of Modern Research include: • Growing business by improving products and services by listening to what customers and prospects are saying and applying AI to turn insights into action. • Improving customer experience by optimizing marketing investments and customer experiences across all channels and touchpoints while benchmarking across industries and competitors. • Protecting brand reputation by mitigating PR crises through AI-based issue detection and alerts, and by automating stakeholder communication on brand sentiment trends and anomalies.
Key use cases of Sprinklr Insights include: • Growing business by improving products and services by listening to what customers and prospects are saying and applying AI to turn insights into action. • Improving customer experience by optimizing marketing investments and customer experiences across all channels and touchpoints while benchmarking across industries and competitors. • Protecting brand reputation by mitigating PR crises through AI-based issue detection and alerts and by automating stakeholder communication on brand sentiment trends and anomalies.
We do this with a new category of enterprise software – Unified Customer Experience Management (“Unified-CXM”) – that enables every customer-facing function across the front office, from Customer Care to Marketing, to collaborate across internal silos, communicate across digital channels, and leverage a complete suite of modern capabilities to deliver better, more human customer experiences at scale – all on one unified, AI-powered platform.
We do this with a new category of enterprise software – Unified Customer Experience Management (“Unified-CXM”) – that enables every customer-facing function across the front office, from Customer Service to Marketing, to collaborate across internal silos, communicate across digital channels, and leverage a complete suite of capabilities to deliver better, more human customer experiences at scale – all on one unified, AI-powered platform.
For more than a decade, we have helped hundreds of the world’s most valuable and iconic brands rise to the challenge of making their customers happier, while helping them increase revenue, reduce costs, and mitigate brand reputation risks.
For more than a decade, we have helped hundreds of the world’s most valuable and iconic brands rise to the challenge of making their customers happier, while helping them increase revenue, decrease costs, and mitigate brand reputation risks.
Our architecture ensures that our customers are always utilizing the latest and most accurate AI models, providing insights to our customers with cutting-edge speed, accuracy, and security. • MODERN listening, built for digitally led, real-time and conversational data, yielding actionable insights: Our single codebase platform was designed from the ground up to handle a massive scale of unstructured data.
Our architecture ensures that our customers are always utilizing the latest and most accurate AI models, providing insights to our customers with cutting-edge speed, accuracy, and security. 4 • ADVANCED listening, built for digitally led, real-time and conversational data, yielding actionable insights: Our single codebase platform was designed from the ground up to handle a massive scale of unstructured data.
Through this process we have an executive review, escalate support and provide product focus to ensure customer retention and satisfaction. Competition CXM is a rapidly developing, fragmented and competitive category of enterprise software. We believe that we are the only platform that completely addresses the complex Unified-CXM needs of enterprise-scale organizations.
Through this process we have an executive review, escalate support and provide product focus to ensure customer retention and satisfaction. Competition The CXM industry is rapidly developing, fragmented and competitive. We believe that we are the only platform that completely addresses the complex Unified-CXM needs of enterprise-scale organizations.
The Sprinklr Way provides the framework for leadership, behaviors and values, and is composed of our Cultural Aspiration; Core Beliefs; Core Values; Leadership Expectations and Operating Principles.
The Sprinklr Way provides the framework for leadership, behaviors and values, and is comprised of our cultural aspiration; core beliefs; core values; leadership expectations and operating principles.
Customers choose from the following Modern Research products: • Social Listening – Hear the real-time voice of your customers and listen to topics of interest across social, digital, and traditional channels then use AI to enrich that data and surface actionable insights. • Competitive Insights & Benchmarking – Analyze the performance of posts, engagement of audiences, and key characteristics of content against competitors or other best-in-class brands including which of your competitors’ messages lead the pack and why. 7 • Product Insights – Leverage AI to gather actionable data on how customers feel about your products surfacing insights from reviews, social channels, or any data source with SKU- or brand-level feedback. • Location Insights – Discover what brings in-store customers back – or drives them away – at everything from individual locations to global regions with real-time feedback that spotlights how customers feel when they meet your brand face-to-face. • Visual Insights – Reveal how consumers interact with your brand and act immediately on visual intelligence (including tracking and detecting any misuse of brand logos or likeness) to power more meaningful communication across digital channels. • Media Monitoring & Analytics – Gain a comprehensive measure of earned media and connect stories across social and news channels by using Sprinklr’s proprietary AI engine to monitor and analyze media coverage. • Modern Research Lite – Discover the quick and easy way to start exploring business-critical insights, including standardized reports specific to your business.
Customers choose from the following Sprinklr Insights products: • Social Listening – Hear the real-time voice of your customers and listen to topics of interest across social, digital, and traditional channels then use AI to enrich that data and surface actionable insights. • Competitive Insights & Benchmarking – Analyze the performance of posts, audience engagement, and key characteristics of content against competitors or other best-in-class brands, including understanding which of your competitors’ messages lead the pack and why. • Product Insights – Leverage AI to gather actionable data on how customers feel about your products by surfacing insights from reviews, social channels, or any data source with SKU- or brand-level feedback. • Location Insights – Discover what brings in-store customers back – or drives them away – at everything from individual locations to global regions with real-time feedback that spotlights how customers feel when they meet your brand face-to-face. 7 • Visual Insights – Reveal how consumers interact with your brand and act immediately on visual intelligence (including tracking and detecting any misuse of brand logos or likeness) to power more meaningful communication across digital channels. • Media Monitoring & Analytics – Gain a comprehensive measure of earned media and connect stories across social and news channels by using Sprinklr’s proprietary AI engine to monitor and analyze media coverage.
Our core differentiators are: • UNIFIED architecture, built to address modern channel proliferation: We have created a platform that allows organizations to listen to customers and prospects, learn from them, deliver care and create more personalized experiences across more than 30 digital channels, including messaging, live chat, text, social media and hundreds of millions of forums, blogs, news, and review sites.
Our core differentiators are: • UNIFIED architecture, built to address the proliferation of online channels: We have created a platform that allows organizations to listen to customers and prospects, learn from them, deliver customer service and create more personalized experiences across more than 30 digital channels, including messaging, live chat, text, social media and hundreds of millions of forums, blogs, news and review sites.
Certain features of our platform, however, compete in various segments of the overall experience management market.
Certain components of our platform, however, compete in various segments of the overall experience management market.
During the year ended January 31, 2022 and 2021, we generated 36% and 34%, respectively, of our revenue outside the Americas. We foresee a significant opportunity to further expand the use of our platform in other regions globally. • Broaden and deepen our partner ecosystem.
During the years ended January 31, 2023 and 2022, we generated 36% and 36%, respectively, of our revenue outside the Americas. We foresee a significant opportunity to further expand the use of our platform in other regions globally. • Broaden and deepen our partner ecosystem.
We create an environment of happier employees by building a values-based culture with rich communications, manager and employee action planning, competitive pay and benefits, and a culture where all employees feels like they belong and are valued. We recruit, retain and invest in the development of the best talent in the world.
We create an environment of happier employees by building a values-based culture with rich communications, manager and employee action planning, competitive total rewards, and a culture where all employees feel like they belong and are valued. We recruit, retain and invest in the development of the best talent in the world.
We believe that we have a significant first-mover advantage, helping us establish and maintain a global leadership position in Enterprise Unified-CXM AI. • COMPLETE, built for modern organizations with the full consumer lifecycle in mind: We offer a broad range of digital use cases across the front office, ranging across Research, Care, Marketing & Advertising, and Sales & Engagement.
We believe that we have a significant first-mover advantage, helping us establish and maintain a global leadership position in Enterprise Unified-CXM AI. • COMPLETE, built for modern organizations with the full consumer lifecycle in mind: We offer a broad range of digital use cases across the front office.
We apply the right mix of advisory and hands-on support across people and process optimization to make sure customers are successful in their digital transformation journey. Through our Implementation, Training and always-on Managed Services, we ensure that our customers realize value from Day 1 and throughout the Sprinklr journey. Our global, certified implementation consultants design, configure, educate and empower customers.
We apply the right mix of advisory and hands-on support across people and process optimization to make sure that customers are successful in their digital transformation journey. Through our Implementation, Training and always-on Managed Services, we ensure that our customers realize value from Day 1 and throughout the Sprinklr journey.
We also model end-to-end dialogues for improving customer care agent productivity.
We also model end-to-end dialogues for improving customer service agent productivity.
As of January 31, 2022, we had a customer base of 1,166 organizations. We believe that this represents only a small fraction of our total addressable customer base.
As of January 31, 2023, we had a customer base of 1,428 organizations. We believe that this represents only a small fraction of our total addressable customer base.
As of January 31, 2022, we owned 30 issued U.S. patents and 15 pending or provisional U.S. patent applications. These patents and patent applications seek to protect our proprietary inventions relevant to our business.
As of January 31, 2023, we owned 36 issued U.S. patents and 11 pending or provisional U.S. patent applications. These patents and patent applications seek to protect our proprietary inventions relevant to our business.
“We Care” teams around the world encourage inclusivity and serve as resource groups for our employees. Approximately 33% of our employees are women, and women represent approximately 13% of our leadership team (vice president and above) and nearly 22% of our board of directors.
“We Care” teams around the world encourage inclusivity and serve as resource groups for our employees. Approximately 31.5% of our employees are women, and women represent approximately 13.5% of our leadership team (vice president and above) and 25.0% of our board of directors.
The four key product suites that align to the needs of enterprises managing the customer journey are: • Modern Research; • Modern Care; • Modern Marketing & Advertising; and • Social Engagement & Sales. The Sprinklr Unified-CXM architecture was built to manage all of these products on a single platform.
The four key product suites that align to the needs of enterprises managing the customer journey are: • Sprinklr Insights; • Sprinklr Service; • Sprinklr Marketing; and • Sprinklr Social. The Sprinklr Unified-CXM architecture was built to manage all of these products on a single platform.
Our unified platform enables broad-based listening, seamless collaboration across the entire customer journey, skills-based workflow, customer-led governance, and timely decision-making. • RAPID deployment generates tangible, immediate ROI: Our ability to leverage our highly verticalized pre-built AI models to quickly bring high-value enterprise AI models into production use provides rapid time to value.
Our unified platform enables broad-based listening, seamless collaboration across the entire customer journey, skills-based workflow, customer-led governance and timely decision-making. • RAPID deployment generates tangible, immediate ROI: Our ability to leverage our highly verticalized pre-built AI models to quickly bring high-value enterprise AI models into production use provides rapid time to value. • SCALABLE enterprise-grade platform: We empower the largest global enterprises to serve their customers 24/7.
For additional information, see “Risk Factors—Risks Related to Litigation, Regulatory Compliance and Government Matters" and “ —Risks Related to Information Technology and Cybersecurity.” Human Capital Management As of January 31, 2022, we had 3,245 employees. Of these employees, 933 are based in the United States and 2,312 are based internationally, including 1,580 in India.
For additional information, see “Risk Factors—Risks Related to Litigation, Regulatory Compliance and Government Matters" and “ —Risks Related to Privacy, Information Technology and Cybersecurity.” 13 Human Capital Management As of January 31, 2023, we had 3,511 employees. Of these employees, 806 are based in the United States and 2,705 are based internationally, including 1,908 in India.
Our customers are located in more than 60 countries and use our platform in more than 100 languages. We see significant opportunity to grow within our existing customer base as our customers increase usage of existing products and/or add additional products. Our success and innovation is driven by a world-class management team and extraordinary culture.
We see significant opportunity to grow within our existing customer base as our customers increase usage of existing products and/or add additional products. Our success and innovation is driven by a world-class management team and extraordinary culture.
Our Artificial Intelligence The core of our technology is our proprietary AI engine, which has a highly scalable and flexible architecture purpose-built for large enterprises.
Our Artificial Intelligence The core of our technology is our proprietary AI engine, which has a highly scalable and flexible architecture purpose-built for large enterprises. We believe that our platform is the first ever purpose-built customer experience AI engine.
The key differentiators for CXM offerings include: • product features, quality, functionality and design; • AI capabilities; • strength of product vision and rapidity of innovation; • strong ecosystem of third-party integrations; 12 • accessibility across several devices, operating systems and applications; • ease of use; • overall platform experience; • governance, security and privacy; • return on investment and scalable pricing; • corporate reputation and awareness of our brand; • strength of sales and marketing efforts; • proven track record of execution and business value realization at enterprise scale; and • strength of post-sale support and customer success.
The key differentiators for Unified-CXM offerings include: • product features, quality, functionality and design; • scalable, flexible and open architecture; • supports integrations of any customer system or industry solution; • AI capabilities; • strength of product vision and rapid innovation; • strong ecosystem of third-party integrations; • accessibility across several devices, operating systems and applications; • ease of use; • overall platform experience; • governance, security and privacy; • return on investment and scalable pricing; • corporate reputation and awareness of our brand; • strength of sales and marketing efforts; • proven track record of execution and business value realization at enterprise scale; and • strength of post-sale support and customer success. 12 We believe that we compete favorably with respect to all these factors.
These new realities guide each of the modern products that we have built, providing solutions and capabilities that large enterprises can no longer afford to live without: • Modern Research – listen to and learn from the market, customers, and competitors to act in real-time; • Modern Care – serve customers on the channels they choose, increasing satisfaction, driving loyalty and reducing costs; • Modern Marketing & Advertising – personalize ads with content that is relevant, authentic, timely and effective; and • Social Engagement & Sales – engage with and sell to customers on the channels they use most. 6 Although all of our product suites are available to customers on our Sprinklr Unified-CXM platform, each can also be purchased individually.
These new realities guide each of the products that we have built, providing solutions and capabilities that large enterprises can no longer afford to live without: • Sprinklr Insights – listen to and learn from the market, customers, and competitors to act in real-time; • Sprinklr Service – serve customers on the channels they choose, increasing satisfaction, driving loyalty and reducing costs; • Sprinklr Marketing – personalize ads with content that is relevant, authentic, timely and effective; and • Sprinklr Social – engage with and sell to customers on the channels they use most.
Our platform captures over 500 million conversations and makes over 10 billion AI predictions every day, publishes over 25 million brand messages, and handles more than 15 million customer cases every month, while also tracking 35,000 brands and influencers and managing over 2.5 billion profiles across all digital channels.
Our platform captures over 500 million conversations and makes over 10 billion AI predictions every day, publishes over 100 million brand messages, including those published over live chat, and handles more than 40 million customer cases every month, while also tracking 40,000 brands and influencers and managing over 3.0 billion profiles across all digital channels.
Our platform utilizes a single codebase architecture purpose-built for managing CXM data, is powered by sophisticated, proprietary AI, and enables a wide range of customer user cases.
Key Advantages of Our Platform Our architecture, AI, enterprise-grade platform and large repository of public digital data are key competitive differentiators. Our platform utilizes a single codebase architecture purpose-built for managing CXM data, is powered by sophisticated, proprietary AI, and enables a wide range of customer user cases.
That culture is defined by both the “The Sprinklr Way,” which provides our framework for leadership, behaviors, and values, and the deep and genuine way we care about the success of our customers and employees.
That culture is defined by both the “The Sprinklr Way,” which provides our framework for leadership, behaviors, and values, and the deep and genuine way we care about the success of our customers and employees. The Sprinklr Way enables us to attract and retain a diverse and talented team to provide a premium experience for our customers.
Sprinklr Unified-CXM Platform One single, unified platform with 4 product suites: Purpose-built to analyze unstructured customer experience data, built to scale across future and modern channels, and integrates all stages of the customer journey.
Although all of our product suites are available to customers on our Sprinklr Unified-CXM platform, each can also be purchased individually. 6 Sprinklr Unified-CXM Platform One single, unified platform with 4 product suites: Purpose-built to analyze unstructured customer experience data, built to scale across future and modern channels, and integrates all stages of the customer journey.
From 2010 to 2017 we expanded our platform from Social Engagement & Sales to include Modern Research, Modern Marketing & Advertising and Modern Care. Given our unified and scalable architecture we have the ability to build our platform to address new channels in a short period of time. • Grow customer base.
Since our inception, we have expanded our platform from Sprinklr Social to include Sprinklr Insights, Sprinklr Marketing and Sprinklr Service. Given our unified and scalable architecture, we have the ability to build our platform to address new channels in a short period of time. • Grow customer base.
The pledge strengthens our social responsibility initiatives through inclusion efforts with community partners, empowering volunteerism, and support for nonprofits. Compensation and Benefits We consider a number of measures and objectives in managing our human capital assets, including, among others, employee engagement, development, and training, talent acquisition and retention, employee safety and wellness, diversity and inclusion, and compensation and pay equity.
Compensation and Benefits We consider a number of measures and objectives in managing our human capital assets, including, among others, employee engagement, development, and training, talent acquisition and retention, employee safety and wellness, diversity and inclusion, and compensation and pay equity.
Our teams provide a mix of virtual and instructor-led sessions to enable customers to become platform champions, while our Managed Services consultants are the long-term partners who help provide continuous platform optimization, consultancy and coaching to ensure that customers maximize the benefits of Sprinklr. 11 Customer Success At Sprinklr, realizing value for our customers is at the heart of everything we do.
Our global, certified implementation consultants design, configure, educate and empower customers. Our teams provide a mix of virtual and instructor-led sessions to enable customers to become platform champions, while our Managed Services consultants are the long-term partners who help provide continuous platform optimization, consultancy and coaching to ensure that customers maximize the benefits of Sprinklr.
Additionally, approximately 29% of our U.S. 14 employees are racially or ethnically diverse and, in 2021, approximately 31% of our new hires were racially or ethnically diverse. • Recognition: Our peer recognition program allows all employees to recognize a colleague for living one or more aspects of The Sprinklr Way anytime they see the right behaviors in action.
In fiscal year 2023, approximately 95% of our U.S. new hires chose to voluntarily disclose their race and/or ethnicity to us, of which approximately 23.0% were racially or ethnically diverse. • Recognition: Our peer recognition program allows all employees to recognize a colleague for living one or more aspects of The Sprinklr Way anytime they see the right behaviors in action.
To do so, they must communicate instantly with consumers who move fluidly across dozens of channels and resolve customer pain-points in a personalized way. For large enterprises, meeting these expectations is a challenging new reality. As enterprises scale, they become increasingly siloed.
To do so, they must communicate instantly with consumers who move fluidly across dozens of channels and resolve customer pain-points in a personalized way.
We plan to selectively pursue acquisitions of complementary businesses, technologies and teams that would allow us to accelerate the pace of our innovation while broadening our customer reach. 10 Our Go-To-Market Strategy We generate sales, primarily, through a direct sales organization, which includes Sales Development Reps, Account Executives, Solutions Consultants, and Customer & Product Success personnel who are organized by geography and three customer groups: Global Strategic Accounts, Large Enterprise Accounts and Enterprise Accounts.
Our Go-To-Market Strategy We generate sales, primarily, through a direct sales organization, which includes Sales Development Reps, Account Executives, Solutions Consultants and Customer & Product Success personnel who are organized by geography and two primary customer groups: Global Strategic Accounts and Large Enterprise Accounts.
Social Engagement & Sales Social Engagement & Sales helps customers listen to, triage, engage and analyze conversations across more modern channels than any other competitor on the market.
Sprinklr Social Sprinklr Social helps customers listen to, triage, engage and analyze conversations across more modern channels than any other competitor on the market. Sprinklr has been recognized as the only leader in the Forrester Wave™ Social Suites, as well as a clear leader in the Forrester Wave™ Social Sales Engagement Solutions.
Overview The way the world communicates has changed, driven by a shift from traditional channels, like email and phone, to an ever-expanding universe of modern channels, like messaging, chat, text, and social, used by more than 4.6 billion people every day. Customer expectations have changed, too – reset by digital-first brands like Amazon, Uber and Airbnb.
Overview The way the world communicates has changed, driven by a shift from traditional channels, like email and phone, to an ever-expanding universe of modern channels, like messaging, chat, text and social.
Our Customer Success team is a critical partner in achieving our customers’ business outcomes through Sprinklr.
Customer Success At Sprinklr, realizing value for our customers is at the heart of everything we do. Our Customer Success team is a critical partner in achieving our customers’ business outcomes through Sprinklr.
Our competitors, including, but not limited to, HubSpot, Qualtrics, Sprout Social, LivePerson, and Zendesk, mainly consist of consumer-grade point solutions in the following categories: • experience management solutions, including social media management solutions; • home-grown solutions and tools; • adjacent CXM solutions such as social messaging; • customer care and support solutions; • traditional marketing, advertising and consulting firms; and • CRM and ERP solutions.
Our current and potential competitors offer or may develop consumer-grade point solutions in the following areas: • experience management solutions, including social media management solutions; • home-grown solutions and tools; • adjacent CXM solutions such as social messaging; • customer service, contact center and support solutions; • traditional marketing, advertising and consulting firms; and • CRM and ERP solutions.
Key use cases of Modern Care include: • Increasing CSAT and reducing churn by anticipating customer issues, optimizing processes, and providing proactive brand risk early warning notifications. • Decreasing costs by leveraging AI and automation to improve self-service option on lower cost digital channels. • Increasing revenue by matching agents to customers for upsell opportunities, proactively engaging customers during their purchase journey, and offering tools to increase conversions Modern Marketing & Advertising Modern Marketing & Advertising enables global brands to plan, create, publish, optimize and analyze their organic/owned marketing content and paid advertising campaigns across modern channels all in one platform, without spreadsheets or disparate systems.
Key use cases of Sprinklr Service include: • Increasing customer satisfaction and reducing churn by anticipating customer issues, optimizing processes, and providing proactive brand risk early warning notifications. • Decreasing costs by leveraging AI and automation to improve self-service options on lower cost digital channels. 8 • Increasing revenue by matching agents to customers for upsell opportunities, proactively engaging customers during their purchase journey, and offering tools to increase conversions. • Increasing revenue by predicting the profitability of sales, upsell and cross-sell for each customer interaction.
Sprinklr has been recognized as the only leader in the Forrester Wave™ Social Suites, as well as a clear leader in the Forrester Wave™ Social Sales Engagement Solutions. 9 Customers choose from the following Social Engagement & Sales products: • Social Publishing & Engagement – Plan, publish, and manage brand content across multiple channels from a single platform — then measure and respond to customer engagement efficiently with automated workflows, intuition moderation, and engagement dashboards that can be shared across teams. • Distributed – Empower Distributed teams (Sales, Location Managers, Field Agents) with a lightweight yet powerful branded experience to engage customers on the digital and social channels they prefer. • Ratings & Reviews – Capture reviews for content and monitor ratings for additional consumer insights, then integrate Ratings and Reviews at the point of purchase on your website or mobile app to drive even more conversions. • Advocacy – Empower employees to leverage a multi-purpose library of shareable content, tailored for advocates, that can easily be amplified across social channels to generate leads and help build pipeline for your brand. • Gallery – Enable brands to activate the very best user generated content on websites and mobile apps to create engaging social shopping and brand experiences.
Customers choose from the following Sprinklr Social products: • Social Publishing & Engagement – Plan, publish, and manage brand content across multiple channels from a single platform — then measure and respond to customer engagement efficiently with automated workflows, intuition moderation, and engagement dashboards that can be shared across teams. • Distributed – Empower Distributed teams (Sales, Location Managers, Field Agents) with a lightweight yet powerful branded experience to engage customers on the digital and social channels they prefer. • Advocacy – Empower employees to leverage a multi-purpose library of shareable content, tailored for advocates, that can easily be amplified across employees’ social channels to generate leads and help build pipeline for your brand. 9 • Conversational Commerce – Integrate 1:1 chat-based commerce platform that enables sales teams to offer personalized customer experience and provide access to products and other information that creates direct sales opportunities.
We also engage with industry research firms to educate them on our platform and its transformational impact on enterprises and have developed go-to-market partnerships that extend the reach of our platform such as Channels, GSIs and Agencies. We anticipate that we will continue to develop select third-party relationships to help grow our business.
We utilize both online and offline marketing initiatives, including our participation in industry and partner conferences, digital marketing, case studies and customer testimonials. 10 We also engage with industry research firms to educate them on our platform and its transformational impact on enterprises and have developed go-to-market partnerships that extend the reach of our platform such as Channels, GSIs and Agencies.
Our marketing efforts are focused on promoting our brand, generating awareness of our platform, supporting our community of customers, and creating sales leads. We utilize both online and offline marketing initiatives, including our participation in industry and partner conferences, digital marketing, case studies and customer testimonials.
Our marketing efforts are focused on promoting our brand, generating awareness of our platform, supporting our community of customers and creating sales leads.
Our 24-4-Others program awards employees a day away from the office to give their time and expertise to meaningful organizations and to help those less fortunate. • We have subscribed to the Pledge 1% movement and from time to time may fund this commitment in a variety of ways, including issuing shares of our capital stock, which, in the aggregate, we do not expect to exceed 1% of our outstanding capital stock.
Our 24-4-Others program awards employees a day away from the office to give their time and expertise to meaningful organizations and to help those less fortunate.
At any given instance, our AI engine can process millions of unstructured and structured data points ingested from myriads of channels and software applications.
We have spent nearly a decade developing sophisticated, deep machine learning algorithms that automate techniques to predict consumer intent and sentiment in real-time. At any given instance, our AI engine can process millions of unstructured and structured data points ingested from myriads of channels and software applications.
Our 24-4-U program gives all employees a day away from the office to focus on the personal or professional development of their choice. The documented EDAP process has driven increased operational effectiveness, provided clearer understanding of accountabilities, and driven quarter-over-quarter improvements in employee happiness.
The documented EDAP process has driven increased operational effectiveness, provided clearer understanding of accountabilities, and driven quarter-over-quarter improvements in employee happiness.
Integrate third-party data to unlock powerful full-funnel insights in a single, consolidated view. • Advocacy – Encourage employees to share and affirm brand positioning with an advocacy site featuring exclusive content and experiences — then measure program performance and optimize with reporting insights. • Social Advertising – Increase ROAS against business outcomes and across siloed teams using integrations, AI, and automation that fuel collaboration, unify reporting, and manage brand risk via approval processes, structured roles, and enterprise governance.
Integrate web analytics, non-traditional metrics like share-of-voice and sentiment, and data from third-party sources such as CRM to unlock powerful full-funnel insights in a single, consolidated view. • Social Advertising – Increase return on ad spend against business outcomes and across siloed teams using automation that fuels collaboration, unifies reporting, and manages brand risk via approval processes, structured roles, enterprise governance, and AI-powered optimization.
We have deployed enterprise AI models into production use in as little as two days. • SCALABLE enterprise-grade platform: We empower the largest global enterprises to serve their customers 24/7. Our architecture is scalable and flexible to meet the demands of the modern enterprise and can be deployed quickly at scale to ingest massive amounts of data.
Our architecture is scalable and flexible to meet the demands of the modern enterprise and can be deployed quickly at scale to ingest massive amounts of data. Our Unified-CXM platform is designed to comply with the standard industry security controls to serve large enterprises and public sector customers.
How consumers choose to apply their newfound influence and who they decide to do business with are the result of one thing: their experience – a feeling shaped by every interaction they have with a brand. Today, companies compete primarily on the basis of customer experience.
As the experiences of consumers today are shaped by each interaction they have with a brand, brand reputation is significantly impacted by the far-reaching influence of consumers on public platforms. As a result, companies compete primarily on the basis of customer experience.
Customers choose from the following Modern Marketing & Advertising products: • Campaign Planning & Content Marketing – Increase the ROI of content with AI-powered integrated insights and reuse; save time by enabling agile marketing with automated workflows; and manage brand risk with enterprise governance. • Marketing Analytics – Get a comprehensive view of campaign performance across 30+ digital channels, including social, web, email, and more.
Customers choose from the following Sprinklr Marketing products: • Campaign Planning & Content Marketing – Save content production costs and time with a single platform for planning and publishing marketing campaigns across digital and traditional channels, powered by a robust workflow engine that is highly customizable to fit any organization and enterprise brand governance to manage compliance and brand risk. • Marketing Analytics – Get a comprehensive view of campaign performance across social channels.
As of January 31, 2022, we had 82 customers with subscription revenue equal to or greater than $1.0 million for the trailing 12-month period. Our customers include global enterprises across a broad array of industries and geographies, as well as marketing agencies and government departments along with non-profit and educational institutions.
Our customers include global enterprises across a broad array of industries and geographies, as well as marketing agencies and government departments along with non-profit and educational institutions. Our customers are located in more than 70 countries and use our platform in more than 100 languages.
We have a history of selective acquisitions that increase the breadth of our offerings and markets.
We have a history of selective acquisitions that increase the breadth of our offerings and markets. We plan to selectively pursue acquisitions of complementary businesses, technologies and teams that would allow us to accelerate the pace of our innovation while broadening our customer reach.
With a training data set of over 100 million data points, we are able to power more than 1,250 pre-built and custom-built AI models with very high accuracy.
With a training data set of over 100 million data points, we are able to provide efficiencies to our customers..
The result: greater efficiency and reduced production costs, increased ROI driven by AI, and actionable insights to improve marketing performance in real time.
The result: centralized and streamlined publishing across channels, greater efficiency and reduced production costs, automated and unified reporting across channels for organic and paid initiatives, AI-powered and rule-based optimization and actionable insights to improve advertising performance in real time.
Partnerships The Sprinklr Global Alliance Program delivers training, go-to-market support, and a certification program to an ecosystem of technology organizations, systems integrators, agencies, and social media channels. Sprinklr’s partner program helps brands collaborate across marketing, sales, and care to meet the needs of the modern customer. Sprinklr’s average deal size is doubled when involving a strategic alliance partner.
We anticipate that we will continue to develop select third-party relationships to help grow our business. Partnerships The Sprinklr Global Alliance Program delivers training, go-to-market support and a certification program to an ecosystem of technology organizations, systems integrators, agencies, and social media channels.
Our data privacy measures are designed to meet the requirements set forth under the General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act (“CCPA”). We have achieved Federal Risk and Authorizations Management Program readiness status to sell our solutions to United States federal agencies.
Our data privacy measures are designed to meet the requirements under applicable data protection laws such as the General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CPRA”) (collectively, “CCPA”).
Our Unified-CXM platform is designed to comply with the highest standards of security to serve large enterprises and public sector customers. We are certified in AICPA SOC 1 and SOC 2 and have a security framework that is PCI compliant.
We are certified in ISO 27001, maintain annual AICPA SOC 1 and SOC 2 reports and have a security environment that is PCI compliant.
Different customer-facing departments and lines of business emerge, each with their own fragmented view of the customer, often stored in a customer relationship management (“CRM”) system. These legacy systems are limited by a narrow set of structured, backward-looking customer information like names and addresses.
For large enterprises with legacy customer relationship management (“CRM”) systems, massive amounts of unstructured, real-time data that customers expect to inform their experiences are ignored and lost to a narrow set of structured, backward-looking customer information like names and addresses.
We believe that global enterprises are only beginning to understand the power of using a unified technology platform to manage their customer experience across customer-facing functions, and as a result, we expect our market opportunity to expand. Our effective go-to-market strategy has enabled us to grow rapidly, attracting 1,166 customers, including more than two-thirds of the Fortune 100.
Our effective go-to-market strategy has enabled us to grow rapidly, attracting 1,428 customers as of January 31, 2023, including more than two-thirds of the Fortune 100. As of January 31, 2023, we had 108 customers with subscription revenue equal to or greater than $1.0 million for the trailing 12-month period.
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Connected, empowered, and with more choices than ever before, today’s consumers expect to be listened to, known, and served – not as data points, but as people – on demand, and on the channels they prefer. They advocate and criticize on public platforms, with nearly unlimited reach, where a single comment or review can make or break a brand’s reputation.
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We have been granted a Federal Risk and Authorizations Management Program (“FedRAMP”) Authority to Operate (“ATO”) to sell our solutions to United States federal agencies.
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CRM systems ignore the massive amounts of unstructured, real-time data that customers expect to inform their experiences – the truly important, contextual and human insights customers share freely about themselves and their preferences.
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Sprinklr Service Sprinklr Service is a comprehensive, cloud-based, AI-powered Contact Center as a Service (“CCaaS”) platform that enables customer service agents to seamlessly service customers across digital, social and voice channels and empowers the leadership with complete visibility into contact center operations to drive transformation.
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We estimate the total addressable market for our Unified-CXM platform to be in excess of $60 billion as of January 31, 2022, based on industry data and our analysis of sales to our existing customers.
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Identify opportunities for agent improvement with AI powered Quality Monitoring Automation. • Knowledge Base – Help agents find the right knowledge articles and reduce handle time with AI intents that surface the most relevant directly within the Agent Console or use it on your website, mobile app, or community to offer customers quick, direct access to the right information. • Agent Assist – Analyze every conversation instantly to surface the best suggestions, predictions, and warnings agents need to improve productivity and solve customer issues faster. • Self-serve version of Sprinklr Service – A simple to use and deploy, yet premium, customer service solution for channel unification across 13+ of the most widely used channels including social, messaging, chat, email and voice. • Sprinklr Voice – Unify your approach to customer service by pairing complete digital coverage with a CCaaS solution that integrates everything enterprises need to deliver personalized experiences, including embedded AI, workflow automation, voice bots, and speech analytics.
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The Sprinklr Way enables us to attract and retain a diverse and talented team to provide a premium experience for our customers. 4 Key Advantages of Our Platform Our architecture, AI, enterprise-grade platform, and data scale are key competitive differentiators.
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Sprinklr Marketing Sprinklr Marketing enables brands to streamline their marketing operations across the campaign lifecycle without the need for spreadsheets or disparate systems, while giving them differentiated ability to derive insights and optimize their marketing and advertising strategies at scale.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFactors that could cause fluctuations in the trading price of our Class A common stock include the following: • price and volume fluctuations in the overall stock market from time to time; • announcements of new products, solutions or technologies, commercial relationships, acquisitions or other events by us or our competitors; • changes in how enterprises perceive the benefits of our Unified-CXM platform and products; • departures of key personnel; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • fluctuations in the trading volume of our shares or the size of our public float; • sales of large blocks of our common stock; • market manipulation, including coordinated buying or selling activities; • actual or anticipated changes or fluctuations in our results of operations; • whether our results of operations meet the expectations of securities analysts or investors; • changes in actual or future expectations of investors or securities analysts; • actual or perceived significant data breach involving our Unified-CXM platform; • litigation involving us, our industry or both; • governmental or regulatory actions or audits; • regulatory developments in the United States, foreign countries or both; • general economic, political and market conditions and overall fluctuations in the financial markets in the United States and abroad, including as a result of the ongoing COVID-19 pandemic and the Russian incursion into Ukraine; and • “flash crashes,” “freeze flashes” or other glitches that disrupt trading on the securities exchange on which we are listed. 49 In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the trading price of our Class A common stock could decline for reasons unrelated to our business, results of operations or financial condition.
Biggest changeThe market price of our Class A common stock may fluctuate or decline substantially depending on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance, including: • price and volume fluctuations in the overall stock market from time to time; • announcements of new products, solutions or technologies, commercial relationships, acquisitions or other events by us or our competitors; • changes in how enterprises perceive the benefits of our Unified-CXM platform and products; • departures of key personnel; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • fluctuations in the trading volume of our shares or the size of our public float; • sales of large blocks of our common stock; 49 • market manipulation, including coordinated buying or selling activities; • actual or anticipated changes or fluctuations in our results of operations; • whether our results of operations meet the expectations of securities analysts or investors; • changes in actual or future expectations of investors or securities analysts; • actual or perceived significant data breach involving our Unified-CXM platform; • litigation involving us, our industry or both; • governmental or regulatory actions or audits; • regulatory developments in the United States, foreign countries or both; • general economic, political and market conditions and overall fluctuations in the financial markets in the United States and abroad, including as a result of recent bank closures, public health crises or geographical tensions and wars, such as Russia’s ongoing war with Ukraine; and • “flash crashes,” “freeze flashes” or other glitches that disrupt trading on the securities exchange on which we are listed.
In particular, as we rely on the availability and accuracy of various forms of customer feedback and input data, the acquisition of any such data providers or sources by our competitors could affect our ability to continue accessing such data. Furthermore, we are also subject to the risk of future disruptive technologies.
In particular, as we rely on the availability and accuracy of various forms of customer feedback and input data, the acquisition of any such data providers or sources by our competitors could affect our ability to continue accessing such data. Furthermore, we also are subject to the risk of future disruptive technologies.
If we were to lose access to significant amounts of the data that enables our people-based framework, our ability to provide products and services to our customers could be materially and adversely impacted, which could be materially adverse to our business, operating results and financial condition.
If we were to lose access to significant amounts of the data that enables our people-based framework, our ability to provide products and services to our customers could be materially and adversely impacted, which could be materially adverse to our business, operating results and financial condition.
While we monitor our use of open source software and try to ensure that none is used in a manner that would require us to disclose source code that we have decided to maintain as proprietary or that would otherwise breach the terms or fail to meet the conditions of an open source license or third-party contract, such use could inadvertently occur, or could be claimed to occurred, in part because open source license terms are often ambiguous.
While we monitor our use of open source software and try to ensure that none is used in a manner that would require us to disclose source code that we have decided to maintain as proprietary or that would otherwise breach the terms or fail to meet the conditions of an open source license or third-party contract, such use could inadvertently occur, or could be claimed to have occurred, in part because open source license terms are often ambiguous.
These rules and regulations to make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to maintain the same or similar coverage.
These rules and regulations make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to maintain the same or similar coverage.
Our international operations also subject us to a variety of additional risks and challenges, including: • increased management, travel, infrastructure and legal compliance costs associated with having operations and developing our business in multiple jurisdictions; • providing our Unified-CXM platform and operating our business across a significant distance, in different languages, among different cultures and time zones, including the potential need to modify our Unified-CXM platform and products to ensure that they are culturally appropriate and relevant in different countries; • compliance with non-U.S. data privacy, protection and security laws, rules and regulations, including data localization requirements, and the risks and costs of non-compliance; • longer payment cycles and difficulties enforcing agreements, collecting accounts receivable or satisfying revenue recognition criteria, especially in emerging markets; • hiring, training, motivating and retaining highly-qualified personnel, while maintaining our unique corporate culture; • increased financial accounting and reporting burdens and complexities; • longer sales cycle and more time required to educate enterprises on the benefits of our Unified-CXM platform outside of the United States; • requirements or preferences for domestic products; • limitations on our ability to sell our Unified-CXM platform and for our solution to be effective in non-U.S. markets that have different cultural norms and related business practices that de-emphasize the importance of positive customer and employee experiences; • differing technical standards, existing or future regulatory and certification requirements and required features and functionality; • political and economic conditions and uncertainty in each country or region in which we operate and general economic and political conditions and uncertainty around the world; 33 • changes in a specific country’s or region’s political or economic conditions, including in the United Kingdom as a result of the United Kingdom exiting the European Union; • compliance with laws and regulations for non-U.S. operations, including anti-bribery laws, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell our Unified-CXM platform and develop our business in certain non-U.S. markets, and the risks and costs of non-compliance; • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact our financial condition and result in restatements of our consolidated financial statements; • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact our financial condition and result in restatements of our consolidated financial statements; • fluctuations in currency exchange rates and related effects on our results of operations; • difficulties in repatriating or transferring funds from or converting currencies in certain countries; • communication and integration problems related to entering new markets with different languages, cultures and political systems; • new and different sources of competition; • differing labor standards, including restrictions related to, and the increased cost of, terminating employees in some countries; • the need for localized subscription agreements; • the need for localized language support and difficulties associated with delivering support, training and documentation in languages other than English; • increased reliance on channel partners; • reduced protection for intellectual property rights in certain non-U.S. countries and practical difficulties of obtaining, maintaining, protecting and enforcing such rights abroad; and • compliance with the laws of numerous foreign taxing jurisdictions, including withholding tax obligations, and overlapping of different tax regimes.
Our international operations also subject us to a variety of additional risks and challenges, including: • increased management, travel, infrastructure and legal compliance costs associated with having operations and developing our business in multiple jurisdictions; • providing our Unified-CXM platform and operating our business across a significant distance, in different languages, among different cultures and time zones, including the potential need to modify our Unified-CXM platform and products to ensure that they are culturally appropriate and relevant in different countries; • compliance with non-U.S. data privacy, protection and security laws, rules and regulations, including data localization requirements, and the risks and costs of non-compliance; • longer payment cycles and difficulties enforcing agreements, collecting accounts receivable or satisfying revenue recognition criteria, especially in emerging markets; • hiring, training, motivating and retaining highly-qualified personnel, while maintaining our unique corporate culture; • increased financial accounting and reporting burdens and complexities; • longer sales cycle and more time required to educate enterprises on the benefits of our Unified-CXM platform outside of the United States; • requirements or preferences for domestic products; • limitations on our ability to sell our Unified-CXM platform and for our solution to be effective in non-U.S. markets that have different cultural norms and related business practices that de-emphasize the importance of positive customer and employee experiences; • differing technical standards, existing or future regulatory and certification requirements and required features and functionality; • political and economic conditions and uncertainty in each country or region in which we operate and general economic and political conditions and uncertainty around the world; • changes in a specific country’s or region’s political or economic conditions, including in the United Kingdom as a result of the United Kingdom exiting the European Union; • compliance with laws and regulations for non-U.S. operations, including anti-bribery laws, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell our Unified-CXM platform and develop our business in certain non-U.S. markets, and the risks and costs of non-compliance; • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact our financial condition and result in restatements of our consolidated financial statements; • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact our financial condition and result in restatements of our consolidated financial statements; • fluctuations in currency exchange rates and related effects on our results of operations; • difficulties in repatriating or transferring funds from or converting currencies in certain countries; 34 • communication and integration problems related to entering new markets with different languages, cultures and political systems; • new and different sources of competition; • differing labor standards, including restrictions related to, and the increased cost of, terminating employees in some countries; • the need for localized subscription agreements; • the need for localized language support and difficulties associated with delivering support, training and documentation in languages other than English; • increased reliance on channel partners; • reduced protection for intellectual property rights in certain non-U.S. countries and practical difficulties of obtaining, maintaining, protecting and enforcing such rights abroad; and • compliance with the laws of numerous foreign taxing jurisdictions, including withholding tax obligations, and overlapping of different tax regimes.
The risks we face in connection with these transactions include: • the issuance of additional equity securities that would dilute our existing stockholders and adversely affect the value of our Class A common stock; • the use of substantial portions of our available cash and other resources that we may need in the future to operate our business; • issuance of large charges or substantial liabilities; • diversion of management’s attention from other business concerns; • lack of or insufficient security, intellectual property, and privacy controls within entities involved in these transactions, leading to cascading failures in our own portfolio; • issuance of debt on terms unfavorable to us or that we are unable to repay; 32 • harm to our existing relationships with customers and partners as a result of the transaction; • claims and disputes from stockholders and third parties, including intellectual property and data privacy claims and disputes; • difficulties retaining key employees or customers of the acquired business or integrating diverse software codes or business cultures; and • adverse tax consequences, substantial depreciation deferred compensation charges or other unfavorable accounting treatment.
The risks we face in connection with these transactions include: • the issuance of additional equity securities that would dilute our existing stockholders and adversely affect the value of our Class A common stock; • the use of substantial portions of our available cash and other resources that we may need in the future to operate our business; • issuance of large charges or substantial liabilities; • diversion of management’s attention from other business concerns; • lack of or insufficient security, intellectual property, and privacy controls within entities involved in these transactions, leading to cascading failures in our own portfolio; • issuance of debt on terms unfavorable to us or that we are unable to repay; • harm to our existing relationships with customers and partners as a result of the transaction; • claims and disputes from stockholders and third parties, including intellectual property and data privacy claims and disputes; • difficulties retaining key employees or customers of the acquired business or integrating diverse software codes or business cultures; and • adverse tax consequences, substantial depreciation deferred compensation charges or other unfavorable accounting treatment.
In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • vacancies on our board of directors may be filled only by our board of directors and not by stockholders; • our board of directors is classified into three classes of directors with staggered three-year terms; • our stockholders may only take action at a meeting of stockholders and may not take action by written consent for any matter; • a special meeting of our stockholders may only be called by a majority of our board of directors, the chairperson of our board of directors or our Chief Executive Officer; 50 • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • our amended and restated certificate of incorporation does not provide for cumulative voting; • our amended and restated certificate of incorporation will allow stockholders to remove directors only for cause; • certain amendments to our amended and restated certificate of incorporation will require the approval of the holders of at least 66 2⁄3% of our then-outstanding common stock; • authorize undesignated preferred stock, the terms of which may be established and shares of which may be issued by our board of directors, without further action by our stockholders; and • certain litigation against us can only be brought in Delaware.
In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • vacancies on our board of directors may be filled only by our board of directors and not by stockholders; • our board of directors is classified into three classes of directors with staggered three-year terms; • our stockholders may only take action at a meeting of stockholders and may not take action by written consent for any matter; • a special meeting of our stockholders may only be called by a majority of our board of directors, the chairperson of our board of directors or our Chief Executive Officer; • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • our amended and restated certificate of incorporation does not provide for cumulative voting; • our amended and restated certificate of incorporation will allow stockholders to remove directors only for cause; • certain amendments to our amended and restated certificate of incorporation will require the approval of the holders of at least 66 2⁄3% of our then-outstanding common stock; 51 • authorize undesignated preferred stock, the terms of which may be established and shares of which may be issued by our board of directors, without further action by our stockholders; and • certain litigation against us can only be brought in Delaware.
Externally, we have been recognized as a best place to work by several national media outlets. As our organization grows and evolves, we may need to implement more complex organizational management structures or adapt our corporate culture and work environments to ever-changing circumstances, such as during times of a natural disasters or pandemics, including the COVID-19 pandemic.
Externally, we have been recognized as a best place to work by several national media outlets. 37 As our organization grows and evolves, we may need to implement more complex organizational management structures or adapt our corporate culture and work environments to ever-changing circumstances, such as during times of a natural disasters or pandemics, including the COVID-19 pandemic.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
We expect that our costs will increase over time and our losses will continue, as we expect to invest significant additional funds in our business and incur costs relating to operating as a public company. To date, we have financed our operations principally through subscription payments by customers for use of our Unified-CXM platform and equity and debt financings.
We expect that our costs will increase over time and our losses may continue, as we expect to invest significant additional funds in our business and incur costs relating to operating as a public company. To date, we have financed our operations principally through subscription payments by customers for use of our Unified-CXM platform and equity and debt financings.
The existence of any material weakness in our internal control over financial reporting also could result in errors in our financial statements that could present us from accurately or timely reporting our financial condition or 47 results of operations, which may adversely affect our ability to operate our business and investors’ views of us and, as a result, the value of our Class A common stock.
The existence of any material weakness in our internal control over financial reporting also could result in errors in our financial statements that could present us from accurately or timely reporting our financial condition or results of operations, which may adversely affect our ability to operate our business and investors’ views of us and, as a result, the value of our Class A common stock.
There can be no assurance that our tax positions and methodologies are accurate or that the outcomes of ongoing and future tax examinations will not have an adverse effect on our results of operations and financial condition. Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
There can be no assurance that our tax positions and methodologies are accurate or that the outcomes of ongoing and future tax examinations will not have an adverse effect on our results of operations and financial condition. 46 Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
Despite our efforts to identify and remediate vulnerabilities, if any, in our information technology systems (including our products), our efforts may not be successful. Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents.
Despite our efforts to identify and remediate vulnerabilities in our information technology systems (including our products), our efforts may not be successful. Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities. Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents.
In particular, the applicability of sales taxes to our products and services in various jurisdictions is unclear. Furthermore, an increasing number of states have considered or adopted laws that attempt to impose tax collection obligations on out-of-state companies. The Supreme Court of the United States ruled in South Dakota v.
In particular, the applicability of sales taxes to our products and services in various jurisdictions is unclear. 45 Furthermore, an increasing number of states have considered or adopted laws that attempt to impose tax collection obligations on out-of-state companies. The Supreme Court of the United States ruled in South Dakota v.
A successful 44 assertion by one or more states, localities or non-U.S. jurisdictions requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest.
A successful assertion by one or more states, localities or non-U.S. jurisdictions requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest.
You should not rely on our revenue for any prior quarterly or annual periods as an indication of our future revenue or revenue growth. We have incurred significant net losses in recent years, we expect to incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain profitability.
You should not rely on our revenue for any prior quarterly or annual periods as an indication of our future revenue or revenue growth. We have incurred significant net losses in recent years, we may incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain profitability.
We evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our operating performance and the condition of the capital markets at the time we seek financing. We may not be able to timely secure 18 additional equity or debt financing on favorable terms, or at all.
We evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our operating performance and the condition of the capital markets at the time we seek financing. We may not be able to timely secure additional equity or debt financing on favorable terms, or at all.
A key element of our strategy is to invest significantly in our research and development efforts to improve and develop new technologies, features and functionality for our Unified-CXM platform. For each of the years ended January 31, 2022 and 2021, our research and development expenses were at least 10% of our revenue.
A key element of our strategy is to invest significantly in our research and development efforts to improve and develop new technologies, features and functionality for our Unified-CXM platform. For each of the years ended January 31, 2023, 2022 and 2021, our research and development expenses were at least 10% of our revenue.
These changes could have an adverse impact on our corporate culture. We also expect to continue to hire aggressively as we expand, but if we do not continue to maintain our corporate culture as we grow, we may be unable to foster the innovation, creativity and teamwork that we believe we need to support our growth.
These changes could have an adverse impact on our corporate culture. We also expect to continue to hire as we expand, but if we do not continue to maintain our corporate culture as we grow, we may be unable to foster the innovation, creativity and teamwork that we believe we need to support our growth.
Further, our contractual arrangements may not effectively prevent disclosure of our trade secrets or confidential information or 38 provide an adequate remedy in the event of unauthorized disclosure of our trade secrets or confidential information, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, such trade secrets, confidential information and other intellectual property rights.
Further, our contractual arrangements may not effectively prevent disclosure of our trade secrets or confidential information or provide an adequate remedy in the event of unauthorized disclosure of our trade secrets or confidential information, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, such trade secrets, confidential information and other intellectual property rights.
Bribery Act or other applicable anti-bribery, anti-corruption laws and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, severe criminal or civil sanctions or suspension or debarment from U.S. government contracts, substantial diversion of management’s attention, a decline in the market price of our Class A common stock or overall adverse consequences to our reputation and business, all of which may have an adverse effect on our results of operations and financial condition. 40 Our business could be adversely impacted by changes in laws and regulations related to the Internet or changes in access to the Internet generally.
Bribery Act or other applicable anti-bribery, anti-corruption laws and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, severe criminal or civil sanctions or suspension or debarment from U.S. government contracts, substantial diversion of management’s attention, a decline in the market price of our Class A common stock or overall adverse consequences to our reputation and business, all of which may have an adverse effect on our results of operations and financial condition. 41 Our business could be adversely impacted by changes in laws and regulations related to the Internet or changes in access to the Internet generally.
Any failure to maintain effective disclosure controls and internal control over financial reporting could have an adverse effect on our business, results of operations and financial condition and could cause a decline in the market price of our Class A common stock. We have identified a material weakness in our internal control over financial reporting.
Any failure to maintain effective disclosure controls and internal control over financial reporting could have an adverse effect on our business, results of operations and financial condition and could cause a decline in the market price of our Class A common stock. 48 We have identified a material weakness in our internal control over financial reporting.
We may rely upon third-party service providers and technologies to operate critical business systems to process confidential information in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, content delivery to customers, and other functions.
We rely upon third-party service providers and technologies to operate critical business systems to process confidential information in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, content delivery to customers, and other functions.
Such an “ownership change” generally occurs if there is a greater than 50 percentage point change (by value) in its equity ownership by one or more stockholders or groups of stockholders who own at least 5% of our stock over a three-year period.
Such an “ownership change” generally occurs if there is a greater than 50 percentage point change (by value) in our equity ownership by one or more stockholders or groups of stockholders who own at least 5% of our stock over a three-year period.
We also rely on our employees and key personnel to meet the demands of our customers and run our day-to-day operations. In the event of a catastrophic event, the functionality of our employees could be negatively impacted, which could have an 36 adverse effect on our business, financial condition and results of operations.
We also rely on our employees and key personnel to meet the demands of our customers and run our day-to-day operations. In the event of a catastrophic event, the functionality of our employees could be negatively impacted, which could have an adverse effect on our business, financial condition and results of operations.
The SVB Credit Facility contains customary affirmative and negative covenants that either limit our ability to, or, if we make future draws, require a mandatory prepayment in the event we, incur additional indebtedness and liens, merge with other companies or consummate certain changes of control, acquire other companies, engage in new lines of business, make certain investments, pay dividends, transfer or dispose of assets, amend certain material agreements and enter into various specified transactions.
The SVB Credit Facility contains customary affirmative and negative covenants that either limit our ability to, or, if we make future draws, require a mandatory prepayment in the event we, incur additional indebtedness and liens, merge with other companies or consummate certain changes of control, acquire other companies, engage in new lines of business, make certain investments, pay dividends, share repurchases, transfer or dispose of assets, amend certain material agreements and enter into various specified transactions.
Any of the foregoing could adversely affect our business, results of operations and financial condition. In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights.
Any of the foregoing could adversely affect our business, results of operations and financial condition. 39 In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights.
In the event that these large customers 25 discontinue the use of our Unified-CXM platform or use our Unified-CXM platform in a more limited capacity, our business, results of operations and financial condition could be adversely affected.
In the event that these large customers discontinue the use of our Unified-CXM platform or use our Unified-CXM platform in a more limited capacity, our business, results of operations and financial condition could be adversely affected.
It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as our Unified-CXM platform becomes more complex and our user 41 traffic increases.
It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as our Unified-CXM platform becomes more complex and our user traffic increases.
Similarly, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our products and services) or the third-party information technology systems that support us and our services.
Moreover, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems (including our products and services) or the third-party information technology systems that support us and our services.
Overall growth of our revenue depends on a number of factors, including our ability to: • price our products effectively so that we are able to attract new customers and expand sales to our existing customers; • expand the functionality and use cases for the products we offer on our unified customer experience management, or Unified-CXM, platform; • provide our customers with support that meets their needs; • continue to introduce our products to new markets outside of the United States; • successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our Unified-CXM platform; and • increase awareness of our brand on a global basis and successfully compete with other companies.
Overall growth of our revenue depends on a number of factors, including our ability to: • price our products effectively so that we are able to attract new customers and expand sales to our existing customers; • expand the functionality and use cases for the products we offer on our Unified-CXM platform; • provide our customers with support that meets their needs; • continue to introduce our products to new markets outside of the United States; • successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our Unified-CXM platform; and • increase awareness of our brand on a global basis and successfully compete with other companies.
Identifying and negotiating these transactions can be time-consuming, difficult and expensive, and our ability to complete these transactions may often be subject to approvals that are beyond our control. We cannot predict the number, timing or size of these transactions. Our prior acquisitions have been relatively small, and we are relatively inexperienced in effectively implementing another business with our own.
Identifying and negotiating these transactions can be time-consuming, difficult and expensive, and our ability to complete these transactions may often be subject to approvals that are beyond our control. We cannot predict the number, timing or size of these transactions. Our prior acquisitions have been relatively small, and we are relatively inexperienced in effectively integrating another business with our own.
Even if we are successful in establishing and maintaining these relationships, we cannot assure you that they will result in improved results of operations. 24 We depend and rely upon SaaS technologies from third parties to operate our business, and interruptions or performance problems with these technologies may adversely affect our business and results of operations.
Even if we are successful in establishing and maintaining these relationships, we cannot assure you that they will result in improved results of operations. 25 We depend and rely upon SaaS technologies from third parties to operate our business, and interruptions or performance problems with these technologies may adversely affect our business and results of operations.
As a result, we may not be able to engage in any of the foregoing transactions unless we obtain the consent of our lender or prepay any outstanding amount under the SVB Credit Facility. The SVB Credit Facility also contains certain financial covenants, including minimum revenue and cash balance requirements, and financial reporting requirements.
As a result, we may not be able to engage in any of the foregoing transactions unless we obtain the consent of our lender or prepay any outstanding amount under the SVB Credit Facility. The SVB Credit Facility also contains certain financial covenants, including cash balance requirements, and financial reporting requirements.
We create an environment of happier employees by building a values-based culture with rich communications, manager and employee action planning, competitive pay and benefits, and a culture where everyone feels like they belong and are valued. We recruit, retain and invest in the development of the best talent in the world.
We create an environment of happier employees by building a values-based culture with rich communications, leader and employee action planning, competitive pay and benefits, and a culture where everyone feels like they belong and are valued. We recruit, retain and invest in the development of the best talent in the world.
We may not be able to take any of these actions, and even if we are, these actions may be insufficient to permit us to meet our scheduled debt service obligations. In addition, in the event of our breach of the SVB Credit Facility, we may be required to repay any outstanding amounts earlier than anticipated.
We may not be able to take any of these actions, and even if we are, these actions may be insufficient to permit us to meet our scheduled debt service obligations. In addition, in the event of our breach of the SVB Credit Facility or any replacement facility, we may be required to repay any outstanding amounts earlier than anticipated.
Risks Related to Information Technology and Cybersecurity Interruptions in availability or suboptimal performance associated with our technology and infrastructure may adversely affect our business, results of operations and financial condition. We seek to use modern well-architected systems and appropriate security controls to maintain the availability of our products.
Risks Related to Privacy, Information Technology and Cybersecurity Interruptions in availability or suboptimal performance associated with our technology and infrastructure may adversely affect our business, results of operations and financial condition. We seek to use well-architected systems and appropriate security controls to maintain the availability of our products.
Business partners and other third parties with a strong influence on how consumers interact with our products, such as Apple, Google, Facebook and Mozilla, may create new privacy controls or restrictions on their products and platforms, limiting the effectiveness of our services.
Business partners and other third parties with a strong influence on how consumers interact with our products, such as Apple, Google, Meta and Mozilla, may create new privacy controls or restrictions on their products and platforms, limiting the effectiveness of our services.
Our main competitors include, among others, experience management solutions, including solution media solutions, home-grown solutions and tools, adjacent Unified-CXM solutions, such as social messaging, customer care and support solutions, traditional marketing, advertising and consulting firms and customer relationship management and enterprise resource planning solutions.
Our main competitors include, among others, experience management solutions, including solution media solutions, home-grown solutions and tools, adjacent Unified-CXM solutions, such as social messaging, customer service and support solutions, traditional marketing, advertising and consulting firms and customer relationship management and enterprise resource planning solutions.
For example, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the rules and regulations of the SEC and the listing standards of the New York Stock Exchange.
For example, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2022 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the rules and regulations of the SEC and the listing standards of the New York Stock Exchange.
Should any of these statements prove to be untrue or be perceived as untrue, even through circumstances beyond our reasonable control, we may face litigation, disputes, claims, investigations, inquiries or other proceedings by the U.S.
Should any of these statements prove to be untrue or be perceived as untrue, even though circumstances beyond our reasonable control, we may face litigation, disputes, claims, investigations, inquiries or other proceedings by the U.S.
We have in the past and may in the future be subject to cybersecurity attacks by third parties seeking unauthorized access to our or our customers’ confidential information or to disrupt our ability to provide our Unified-CXM platform.
We have in the past and may in the future be subject to attempted or successful cybersecurity attacks by third parties seeking unauthorized access to our or our customers’ confidential information or to disrupt our ability to provide our Unified-CXM platform.
Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences. If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences.
Such notifications are costly, and the notifications or the failure to comply with such requirements could lead to adverse consequences. If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences.
Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act and other anticorruption, anti-bribery and anti-money laundering laws in the jurisdictions in which we do business, both domestic and abroad.
Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act and other anti-corruption, anti-bribery and anti-money laundering laws in the jurisdictions in which we do business, both domestic and abroad.
With laws, rules, regulations and other obligations relating to data privacy and security imposing new and stringent obligations, and with substantial uncertainty over the interpretation and application of these and other obligations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so.
With obligations relating to data privacy and security imposing new and stringent obligations, and with substantial uncertainty over the interpretation and application of these and other obligations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so.
In the ordinary course of our business, we may collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (commonly known as processing) proprietary and confidential data, including personal data, intellectual property, and trade secrets (collectively, confidential information).
In the ordinary course of our business, we may collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (commonly known as processing) proprietary and confidential data, including personal data, intellectual property, and trade secrets, of ours or our customers (collectively, confidential information).
We have not always been able in the past and may be unable in the future to detect vulnerabilities in our information technology systems (including our products) because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after a security incident has occurred.
Additionally, we have not always been able in the past and may be unable in the future to detect vulnerabilities in our information technology systems (including our products) because such vulnerabilities change frequently, are often sophisticated in nature, and may not be detected until after a security incident has occurred.
As a result of such foreign currency exchange rate fluctuations, it could be more difficult to detect underlying trends in our business and results of operations. We currently do not maintain a program to hedge transactional exposures in foreign currencies, but intend to so in the near future.
As a result of such foreign currency exchange rate fluctuations, it could be more difficult to detect underlying trends in our business and results of operations. We currently do not maintain a program to hedge transactional exposures in foreign currencies, but we may do so in the future.
Any failure or perceived failure by us or our third-party service providers to comply with our applicable internal and external policies or notices relating to data privacy or security, our contractual or other obligations to customers or other third parties, or any of our other legal obligations relating to data privacy or security, may result in governmental investigations or inquiries (which have occurred in the past and may occur in the future), enforcement actions, litigation, disputes or other claims, indemnification requests, restrictions on providing our services, claims or public statements against us by privacy advocacy groups or others, adverse press and widespread negative publicity, reputational damage, significant liability or fines and the loss of the trust of our customers, any of which could have a material adverse effect on our business, results of operations and financial condition.
Any failure or perceived failure by us or our third-party service providers to comply with our data privacy or security obligations to customers or other third parties, or any of our other legal obligations relating to data privacy or security, may result in governmental investigations or inquiries (which have occurred in the past and may occur in the future), enforcement actions, litigation, disputes or other claims, indemnification requests, restrictions on providing our services, claims or public statements against us by privacy advocacy groups or others, adverse press and widespread negative publicity, reputational damage, significant liability or fines and the loss of the trust of our customers, any of which could have a material adverse effect on our business, results of operations and financial condition.
Our revenue was $492.4 million and $386.9 million for the years ended January 31, 2022 and 2021, respectively. You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance.
Our revenue was $618.2 million, $492.4 million and $386.9 million for the years ended January 31, 2023, 2022 and 2021, respectively. You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance.
Our top 10 customers accounted for 14% and 19% of our subscription revenue in fiscal years ended January 31, 2022 and 2021, respectively. The majority of our customer base consists of large enterprises, many of which have high subscription amounts to our Unified-CXM platform.
Our top 10 customers accounted for 14% and 14% of our subscription revenue in fiscal years ended January 31, 2023 and 2022, respectively. The majority of our customer base consists of large enterprises, many of which have high subscription amounts to our Unified-CXM platform.
While Virginia and Colorado’s new laws shares similarities with the CCPA and CPRA, these laws, as well as other similar state or federal laws and other future changes in laws or regulations relating to data privacy and security, particularly any new or modified laws or regulations that require enhanced protection of certain types of data or new obligations with regard to data retention, transfer or disclosure, are significant, may result in further uncertainty with respect to data privacy and security issues, and will require us to incur additional costs and expenses in an effort to comply.
While these new laws share similarities with the CCPA, these laws, as well as other similar state or federal laws and other future changes in laws or regulations relating to data privacy and security, particularly any new or modified laws or regulations that require enhanced protection of certain types of data or new obligations with regard to data retention, transfer or disclosure, are significant, may result in further uncertainty with respect to data privacy and security issues, and will require us to incur additional costs and expenses in an effort to comply.
In addition, we operate globally, sell subscriptions in more than 60 countries, and have established subsidiaries in Australia, Brazil, Canada, China, Denmark, Dubai, France, Germany, India, Italy, Japan, Netherlands, Singapore, South Korea, Spain, Switzerland and the United Kingdom.
In addition, we operate globally, sell subscriptions in more than 70 countries, and have established subsidiaries in Australia, Brazil, Canada, China, Denmark, Dubai, France, Germany, India, Italy, Japan, Netherlands, Singapore, South Korea, Spain, Sweden, Switzerland and the United Kingdom.
Similarly, many non-U.S. jurisdictions have considered or adopted laws that impose value added, digital service, or similar taxes, on companies despite not having a physical presence in the non-U.S. jurisdiction. We collect sales, value added or similar transaction taxes in a number of jurisdictions.
Similarly, many non-U.S. jurisdictions have considered or adopted laws that impose VAT, digital service, or similar taxes, on companies despite not having a physical presence in the non-U.S. jurisdiction. We collect sales, VAT or similar transaction taxes in a number of jurisdictions.
Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. • We have incurred significant net losses in recent years, we expect to incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain profitability. • If we fail to effectively manage our growth and organizational change, our business and results of operations could be harmed. • We derive, have derived and expect to continue to derive the substantial majority of our revenue from subscriptions to our Unified-CXM platform.
Our rapid growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. • We have incurred significant net losses in recent years, we may incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain profitability. • If we fail to effectively manage our growth and organizational change, our business and results of operations could be harmed. • We derive, have derived and expect to continue to derive the substantial majority of our revenue from subscriptions to our Unified Customer Experience Management (“Unified-CXM”) platform.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” its ability to use its pre-change net operating loss carryforwards to offset its post-change taxable income or tax liability may be limited.
In addition, under Section 382 of the Internal Revenue Code of 1986 (the “Code”), as amended, if a corporation undergoes an “ownership change,” its ability to use its pre-change net operating loss carryforwards and other tax attributes to offset its post-change taxable income or tax liability may be limited.
It is possible, however, that we could face sales tax, VAT, or GST audits and that our liability for these taxes could exceed our estimates as state, local, and non-U.S. tax authorities could still assert that we are obligated to collect additional tax amounts from our customers and remit those taxes to those authorities.
It is possible, however, that we could face sales tax, VAT, GST or similar tax audits and that our liability for these taxes could exceed our estimates if state, local, and non-U.S. tax authorities assert that we are obligated to collect additional tax amounts from our customers and remit those taxes to those authorities.
Any defects that cause interruptions to the availability of our Unified-CXM platform or other performance issues could result in, among other things: • lost revenue or delayed market acceptance and sales of our Unified-CXM platform; • early termination of customer agreements or loss of customers; • credits or refunds to customers; • product liability lawsuits and other claims against us; • diversion of development resources; • increased expenses associated with remedying any defect, including increased technical support costs; • injury to our brand and reputation; and • increased maintenance and warranty costs.
Any defects that cause interruptions to the availability of our Unified-CXM platform or other performance issues could result in, among other things: • lost revenue or delayed market acceptance and sales of our Unified-CXM platform; • exposure to damages for breach of contract, early termination of customer agreements, or loss of customers; 26 • loss of trust; • credits or refunds to customers; • product liability lawsuits and other claims against us; • diversion of development resources; • increased expenses associated with remedying any defect, including increased technical support costs; • injury to our brand and reputation; and • increased maintenance and warranty costs.
Ransomware attacks, including by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of data and 20 income, reputational harm, and diversion of funds.
In particular, ransomware attacks, including by organized criminal threat actors, nation-states, and nation-state-supported actors, are prevalent and severe and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds.
Enforcement of these requirements has increased, and a new regulation in the European Union, known as the ePrivacy Regulation, may make these requirements, as well as requirements around tracking technologies, such as cookies, more stringent and increase the penalties for violating them.
Enforcement of these requirements has increased, and a new regulation proposed in the European Union, known as the ePrivacy Regulation, makes these requirements, as well as requirements around tracking technologies, such as cookies, more stringent and increase the penalties for violating them.
If our agreement with Twitter expires, is not renewed on the same or similar terms or at all, or if it is terminated for our failure to perform our obligations thereunder, we may not be able to provide the same level of Unified-CXM insights to our customers and our business, results of operations and financial condition may be materially and adversely affected.
If our agreement with Twitter expires, is not renewed on the same or similar terms or at all, or if it is terminated due to the failure or unwillingness of either party to perform its obligations thereunder, we may not be able to provide the same level of Unified-CXM insights to our customers and our business, results of operations and financial condition may be materially and adversely affected.
As a result, our directors, executive officers and holders of 5% or more of our outstanding capital stock, and their respective affiliates, if acting together, are able to determine or significantly influence all matters requiring stockholder approval, including the elections of directors, amendments of our organizational documents and approval of any merger, sale of assets or other major corporate transaction.
As a result, our directors, executive officers and their respective affiliates, if acting together, are able to determine or significantly influence all matters requiring stockholder approval, including the elections of directors, amendments of our organizational documents and approval of any merger, sale of assets or other major corporate transaction.
The costs of compliance with, and other burdens imposed by, laws, rules, regulations and other obligations relating to data privacy and security applicable to the businesses of our customers may adversely affect our customers’ ability and willingness to use, collect, manage, disclose, handle, store, transmit and otherwise process information from their employees, customers and partners, which could limit the use, effectiveness and adoption of our Unified-CXM platform and reduce overall demand.
The costs of compliance with, and other burdens imposed by, laws, rules, regulations and other obligations relating to data privacy and security applicable to the businesses of our customers may adversely affect our customers’ ability and willingness to process information from their employees, customers and partners, which could limit the use, effectiveness and adoption of our Unified-CXM platform and reduce overall demand.
Any decline in our customer renewals or expansion would harm our business, results of operations and financial condition. • If we or our third-party service providers experience a cybersecurity breach or other security incident or unauthorized parties otherwise obtain access to our customers’ data, our data or our Unified-CXM platform, our Unified-CXM platform may be perceived as not being secure, our reputation may be harmed, demand for our Unified-CXM platform may be reduced and we may incur significant liabilities. • The market in which we participate is new and rapidly evolving, and if we do not compete effectively, our results of operations and financial condition could be harmed. • Our business and growth depend in part on the success of our strategic relationships with third parties, as well as on the continued availability and quality of feedback data from third parties over whom we do not have control. • Our business and results of operations may be materially adversely affected by the ongoing COVID-19 pandemic or other similar outbreaks. • Certain of our results of operations and financial metrics may be difficult to predict. • Any failure to obtain, maintain, protect, defend or enforce our intellectual property rights could impair our ability to protect our proprietary technology and our brand and adversely affect our business, financial condition and results of operations. • We are subject to stringent and changing obligations related to data privacy and security.
Any decline in our customer renewals or expansion would harm our business, results of operations and financial condition. • If we or our third-party service providers experience a cybersecurity breach or other security incident or unauthorized parties otherwise obtain access to our customers’ data, our data or our Unified-CXM platform, our Unified-CXM platform may be perceived as not being secure, our reputation may be harmed, demand for our Unified-CXM platform may be reduced and we may incur significant liabilities. • The market in which we participate is new and rapidly evolving, and if we do not compete effectively, our results of operations and financial condition could be harmed. • Our business and growth depend in part on the success of our strategic relationships with third parties, as well as on the continued availability and quality of feedback data from third parties over whom we do not have control. • Certain of our results of operations and financial metrics may be difficult to predict. • Unstable market and economic conditions may have serious adverse consequences on our business, financial conditions and share price. • Any failure to obtain, maintain, protect, defend or enforce our intellectual property rights could impair our ability to protect our proprietary technology and our brand and adversely affect our business, financial condition and results of operations. • We are subject to stringent and changing obligations related to data privacy and security.
Further, in order to successfully manage our growth, our organizational structure has become, and may continue to become, more complex. We may need to scale and adapt our operational, financial and management controls further, as well as our reporting systems and procedures to manage this complexity and our increased responsibilities as a public company.
Further, in order to successfully manage our growth, our organizational structure has become, and may continue to become, more complex. We may need to scale and adapt our operational, financial and management controls further, as well as our reporting systems and procedures to manage this complexity.
Furthermore, because data security and privacy is a critical competitive factor in our industry, we make numerous statements in our privacy policies and terms of service, through our certifications to certain industry standards and in our marketing materials providing assurances about the security of our Unified-CXM platform, including detailed descriptions of security measures we employ.
Furthermore, because data security and privacy are critical competitive factors in our industry, we make numerous statements in our privacy policies and terms of service, through our certifications to certain industry standards and in our marketing materials providing assurances about the security and privacy practices of our Unified-CXM platform, including detailed descriptions of security measures we employ.
We have incurred significant net losses in recent years, including net losses of $111.5 million and $38.0 million for the years ended January 31, 2022 and 2021, respectively. We had an accumulated deficit of $441.6 million as of January 31, 2022.
We have incurred significant net losses in recent years, including net losses of $55.7 million, $111.5 million and $38.6 million for the years ended January 31, 2023, 2022 and 2021, respectively. We had an accumulated deficit of $496.6 million and $441.6 million as of January 31, 2023 and 2022, respectively.
If we do not successfully maintain and enhance our brand or incur substantial expenses in unsuccessful attempts to promote and maintain our brand, our business may not grow, we may have reduced pricing power relative to competitors and we could lose customers and key employees or fail to attract potential customers or talented personnel, all of which would adversely affect our business, results of operations and financial condition. 30 We recognize revenue over the term of our customers’ contracts.
If we do not successfully maintain and enhance our brand or incur substantial expenses in unsuccessful attempts to promote and maintain our brand, our business may not grow, we may have reduced pricing power relative to competitors and we could lose customers and key employees or fail to attract potential customers or talented personnel, all of which would adversely affect our business, results of operations and financial condition.
Wayfair, Inc. et al (“ Wayfair ”), that online sellers can be required to collect sales and use tax despite not having a physical presence in the buyer’s state or “economic nexus.” In response to Wayfair , or otherwise, states or local governments may adopt, or begin to enforce, laws requiring us to calculate, collect, and remit taxes on sales in their jurisdictions.
Wayfair, Inc. et al (“Wayfair”), that online sellers can be required to collect sales and use tax despite not having a physical presence in the buyer’s state or “economic nexus.” In response to Wayfair, or for other reasons, states or local governments have adopted and begun to enforce, and other states or local governments may adopt, or begin to enforce, laws requiring us to calculate, collect, and remit taxes on sales in their jurisdictions.
We have expended and expect to continue to expend substantial financial and other resources on: • our Unified-CXM platform, including investing in our research and development team, developing or acquiring new products, features and functionality and improving the scalability, availability and security of our Unified-CXM platform; • our technology infrastructure, including expansion of our activities with public cloud service providers, enhancements to our network operations and infrastructure design, and hiring of additional employees for our operations team; • sales and marketing, including expansion of our direct sales organization and marketing efforts; and • additional international expansion in an effort to increase our customer base and sales.
We have expended and expect to continue to expend substantial financial and other resources on: • our Unified-CXM platform, including investing in our research and development team, developing or acquiring new products, features and functionality and improving the scalability, availability and security of our Unified-CXM platform; • our technology infrastructure, including expansion of our activities with public cloud service providers, enhancements to our network operations and infrastructure design, and hiring of additional employees for our operations team; • sales and marketing, including expansion of our direct sales organization and marketing efforts; and • additional international expansion in an effort to increase our customer base and sales. 17 These investments may be more costly than we expect and may not result in increased revenue or growth in our business.
Such an event may result in public disclosures and negative publicity for us and such customer, which may have a negative impact on our ability to achieve our corporate goals and could adversely affect our business, reputation, results of operations and financial condition.
Such an event also may result in a compromise to our information technology systems or a security incident public disclosures and negative publicity for us and such customer, which may have a negative impact on our ability to achieve our corporate goals and could adversely affect our business, reputation, results of operations and financial condition.
Our number of customers has grown from 1,014 as of January 31, 2021 to 1,166 as of January 31, 2022, an increase of 15%. In addition, we may attempt to further grow our business by selling our Unified-CXM platform to U.S. federal, state, and local, as well as foreign, governmental agency customers.
Our number of customers has grown from 1,166 as of January 31, 2022 to 1,428 as of January 31, 2023. In addition, we have expanded and may attempt to further grow our business by selling our Unified-CXM platform to U.S. federal, state, and local, as well as foreign, governmental agency customers.
For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown and extreme volatility in the capital markets. Similarly, Russia’s recent military invasion of Ukraine has created extreme volatility in the global capital markets and is expected to have further global economic consequences, including disruptions of the global supply chain and energy markets.
For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown and extreme volatility in the capital markets. Similarly, Russia’s ongoing incursion into Ukraine has also added to the extreme volatility in the global capital markets and is expected to have further global economic consequences, including disruptions of the global supply chain and energy markets.
We have U.S. federal and state net operating loss (“NOL”) carryforwards as a result of prior period losses, some of which, if not utilized will begin to expire in fiscal year 2031 and fiscal year 2022, respectively, for federal and state purposes, respectively.
We have U.S. federal and state net operating loss (“NOL”) carryforwards as a result of prior period losses, some of which, if not utilized, may expire. Certain of our federal NOLs will begin to expire in fiscal year 2032 and our state NOLs began to expire in fiscal year 2023, respectively, for federal and state purposes, respectively.
The current or future U.S. presidential administration could propose or enact changes to U.S. tax laws that we cannot currently predict and that could materially affect our business, results of operations and financial condition.
It is possible that the Inflation Reduction Act could increase our tax liability. The current or future U.S. presidential administration could propose or enact changes to U.S. tax laws that we cannot currently predict and that could materially affect our business, results of operations and financial condition.
Violations of laws or our policies by our employees, contractors, partners or agents could result in delays in revenue recognition, financial reporting misstatements, enforcement actions, disgorgement of profits, fines, civil and criminal penalties, damages, injunctions, other collateral consequences and increased costs, including the costs associated with defending against such actions, or the prohibition of the importation or exportation of our Unified-CXM platform and related services, each of which could adversely affect our business, results of operations and financial condition. 34 We believe that our success depends on continuing to invest in the growth of our worldwide operations by entering new geographic markets.
Violations of laws or our policies by our employees, contractors, partners or agents could result in delays in revenue recognition, financial reporting misstatements, enforcement actions, disgorgement of profits, fines, civil and criminal penalties, damages, injunctions, other collateral consequences and increased costs, including the costs associated with defending against such actions, or the prohibition of the importation or exportation of our Unified-CXM platform and related services, each of which could adversely affect our business, results of operations and financial condition.
The existence of any material weakness, including our existing material weakness regarding capitalization of costs to obtain customer contracts, or significant deficiency requires management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner.
The existence of any material weakness, including our existing material weakness regarding our process to manage and record commission expense, or significant deficiency requires management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner.
Furthermore, due to our limited experience selling direct to mid-sized enterprises through our sales force, the results of any such efforts are difficult to predict and may result in diverted financial and management resources without a corresponding increase in revenue. Our business will be harmed if our sales expansion efforts do not generate a significant increase in revenue.
Furthermore, due to our limited experience selling direct to mid-sized enterprises through our sales force, the results of any such efforts are difficult to predict and may result in diverted financial and management resources without a corresponding increase in revenue.
We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
We and the third parties upon which we rely may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), volumetric or application-level denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, misconfiguration, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, adverse weather events, man-made disasters and other similar threats.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our principal executive offices are located in New York, NY, USA where we lease approximately 32,000 square feet of office space under a lease that expires in December 2023. We have other domestic offices, including San Francisco, Austin, and Portland, and international offices including London, Gurgaon, Bangalore, Paris, Singapore, Tokyo and Dubai.
Biggest changeItem 2. Properties Our principal executive offices are located in New York, NY, USA where we lease approximately 32,000 square feet of office space under a lease that expires in December 2023. We have other domestic offices, including Austin and San Francisco, and international offices including Bangalore, Dubai, Gurgaon, London, Paris, Singapore and Tokyo.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeExcept as described in Note 9, Commitments and Contingencies, Legal Matters, to our consolidated financial statements included elsewhere in this Form 10-K, we are not aware of any legal proceedings that we believe could have, individually or in the aggregate, a material adverse effect on our business, results of operations, cash flows or financial position. Item 4.
Biggest changeWe are not aware of any legal proceedings that we believe could have, individually or in the aggregate, a material adverse effect on our business, results of operations, cash flows or financial position. Item 4. Mine Safety Disclosures None. 53 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant. 53 Stock Performance Graph The graph below shows the cumulative total return to our stockholders between June 23, 2021 (the first day on which our Class A common stock traded on the New York Stock Exchange) through January 31, 2022 in comparison to the S&P 500 Index and the S&P 500 Information Technology Index.
Biggest changeAny future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant.
The above performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or incorporated by reference into any of our filings under the Exchange Act, or the Securities Act. Recent Sales of Unregistered Equity Securities None.
The above performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or incorporated by reference into any of our filings under the Exchange Act, or the Securities Act. 54 Recent Sales of Unregistered Equity Securities None.
There has been no material change in the planned use of proceeds from our IPO from those disclosed in our final prospectus that forms a part of the Registration Statement and was filed with the SEC, pursuant to Rule 424(b)(4) under the Securities Act, on June 24, 2021. Issuer Purchases of Equity Securities None. 54 Item 6. [Reserved]
There has been no material change in the planned use of proceeds from our IPO from those disclosed in our final prospectus that forms a part of the Registration Statement and was filed with the SEC, pursuant to Rule 424(b)(4) under the Securities Act, on June 24, 2021. Issuer Purchases of Equity Securities None. Item 6. [Reserved] 55
Holders of Record As of January 31, 2022, there were 554 and 820 stockholders of record of our Class A and Class B common stock, respectively. We believe that a substantially greater number of beneficial owners hold shares through brokers, banks and other nominees. Dividend Policy We have never declared or paid cash dividends on our capital stock.
Holders of Record As of January 31, 2023, there were 394 and 632 stockholders of record of our Class A and Class B common stock, respectively. We believe that a substantially greater number of beneficial owners hold shares through brokers, banks and other nominees. Dividend Policy We have never declared or paid cash dividends on our capital stock.
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Stock Performance Graph The graph below shows the cumulative total return to our stockholders between June 23, 2021 (the first day on which our Class A common stock traded on the New York Stock Exchange) through January 31, 2023 in comparison to the S&P 500 Index and the S&P 500 Information Technology Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table sets forth our consolidated statements of operations data for the periods indicated: Year Ended January 31, 2022 2021 2020 (in thousands) Revenue: Subscription $ 427,713 $ 339,586 $ 278,459 Professional services 64,681 47,344 45,817 Total revenue: 492,394 386,930 324,276 Costs of revenue: Costs of subscription (1) 89,896 77,033 77,796 Costs of professional services (1) 57,655 45,049 45,363 Total costs of revenue 147,551 122,082 123,159 Gross profit 344,843 264,848 201,117 Operating expenses: Research and development (1) 60,591 40,280 32,481 Sales and marketing (1)(2) 286,963 185,797 163,994 General and administrative (1) 84,759 64,348 40,171 Litigation settlement 12,000 — — Total operating expenses 444,313 290,425 236,646 Operating loss (99,470) (25,577) (35,529) Other expense, net (5,084) (8,616) (927) Loss before provision for income taxes (104,554) (34,193) (36,456) Provision for income taxes 6,916 3,777 3,325 Net loss (111,470) (37,970) (39,781) Net loss attributable to redeemable noncontrolling interests — — 27 Net loss attributable to Sprinklr (111,470) (37,970) (39,754) Deemed dividend in relation to tender offer — (600) — Net loss attributable to Sprinklr common stockholders $ (111,470) $ (38,570) $ (39,754) 58 (1) Includes stock-based compensation expense, net of amounts capitalized, as follows: Year Ended January 31, 2022 2021 2020 (in thousands) Cost of subscription $ 1,794 $ 2,012 $ 156 Cost of professional services 2,448 1,658 357 Research and development 6,417 4,804 1,430 Sales and marketing 19,929 14,976 4,173 General and administrative 19,543 21,619 4,050 Stock-based compensation expense, net of amounts capitalized $ 50,131 $ 45,069 $ 10,166 (2) Includes amortization of acquired intangible assets as follows: Year Ended January 31, 2022 2021 2020 (in thousands) Sales and marketing $ 412 $ 626 $ 203 Amortization of acquired intangible assets $ 412 $ 626 $ 203 59 The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenue: Year Ended January 31, 2022 2021 2020 (in thousands) Revenue: Subscription 87 % 88 % 86 % Professional services 13 % 12 % 14 % Total revenue: 100 % 100 % 100 % Costs of revenue: Costs of subscription 18 % 20 % 24 % Costs of professional services 12 % 12 % 14 % Total costs of revenue 30 % 32 % 38 % Gross profit Operating expenses: Research and development 12 % 10 % 10 % Sales and marketing 58 % 48 % 51 % General and administrative 17 % 17 % 12 % Litigation settlement 2 % 0 % 0 % Total operating expenses 88 % 75 % 73 % Operating loss (20) % (7) % (11) % Other expense, net (1) % (2) % 0 % Loss before provision for income taxes (21) % (9) % (11) % Provision for income taxes 1 % 1 % 1 % Net loss (23) % (10) % (12) % Net loss attributable to redeemable noncontrolling interests 0 % 0 % 0 % Net loss attributable to Sprinklr (23) % (10) % (12) % Deemed dividend in relation to tender offer 0 % 0 % 0 % Net loss attributable to Sprinklr common stockholders (23) % (10) % (12) % 60 Comparison of Fiscal Years Ended January 31, 2022, and 2021 Revenue Year Ended January 31, 2022 2021 $ Change % Change (dollars in thousands) Subscription $ 427,713 $ 339,586 $ 88,127 26 % Professional services 64,681 47,344 17,337 37 % Total Revenues: $ 492,394 $ 386,930 $ 105,464 27 % Total revenues increased $105.5 million, or 27%, in fiscal year 2022, compared to fiscal year 2021, and was comprised of an increase in subscription revenue of $88.1 million, or 26%, and an increase in professional services of $17.3 million, or 37%.
Biggest changeOur annual estimated effective tax rate differed from the U.S. federal statutory rate primarily due to a full valuation allowance related to our U.S. deferred tax assets, partially offset by U.S. current state taxes and foreign tax rate differential on non-U.S. income. 59 Results of Operations The following table sets forth our consolidated statements of operations data for the periods indicated: Year Ended January 31, (in thousands) 2023 2022 2021 Revenue: Subscription $ 548,649 $ 427,713 $ 339,586 Professional services 69,541 64,681 47,344 Total revenue 618,190 492,394 386,930 Costs of revenue: Costs of subscription (1) 102,276 89,896 77,033 Costs of professional services (1) 61,449 57,655 45,049 Total costs of revenue 163,725 147,551 122,082 Gross profit 454,465 344,843 264,848 Operating expense: Research and development (1) 76,658 60,591 40,280 Sales and marketing (1)(2) 336,719 286,963 185,797 General and administrative (1) 92,312 84,759 64,348 Litigation settlement — 12,000 — Total operating expense 505,689 444,313 290,425 Operating loss (51,224) (99,470) (25,577) Other income (expense), net 3,756 (5,084) (8,616) Loss before provision for income taxes (47,468) (104,554) (34,193) Provision for income taxes 8,274 6,916 3,777 Net loss (55,742) (111,470) (37,970) Deemed dividend in relation to tender offer — — (600) Net loss attributable to Sprinklr common stockholders $ (55,742) $ (111,470) $ (38,570) (1) Includes stock-based compensation, net of amounts capitalized, as follows: Year Ended January 31, (in thousands) 2023 2022 2021 Cost of subscription $ 1,528 $ 1,794 $ 2,012 Cost of professional services 2,249 2,448 1,658 Research and development 10,678 6,417 4,804 Sales and marketing 26,651 19,929 14,976 General and administrative 14,411 19,543 21,619 Stock-based compensation, net of amounts capitalized $ 55,517 $ 50,131 $ 45,069 (2) Includes amortization of acquired intangible assets as follows: Year Ended January 31, (in thousands) 2023 2022 2021 Sales and marketing $ 475 $ 412 $ 626 Amortization of acquired intangible assets $ 475 $ 412 $ 626 60 The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenue: Year Ended January 31, 2023 2022 2021 Revenue: Subscription 89 % 87 % 88 % Professional services 11 % 13 % 12 % Total revenue 100 % 100 % 100 % Costs of revenue: Costs of subscription 17 % 18 % 20 % Costs of professional services 10 % 12 % 12 % Total costs of revenue 26 % 30 % 32 % Operating expense: Research and development 12 % 12 % 10 % Sales and marketing 54 % 58 % 48 % General and administrative 15 % 17 % 17 % Litigation settlement 0 % 2 % 0 % Total operating expense 82 % 88 % 75 % Operating loss (8) % (20) % (7) % Other income (expense), net 1 % (1) % (2) % Loss before provision for income taxes (8) % (21) % (9) % Provision for income taxes 1 % 1 % 1 % Net loss (9) % (23) % (10) % Deemed dividend in relation to tender offer 0 % 0 % 0 % Net loss attributable to Sprinklr common stockholders (9) % (23) % (10) % Comparison of Fiscal Years Ended January 31, 2023 and 2022 Revenue Year Ended January 31, (in thousands) 2023 2022 $ Change % Change Subscription $ 548,649 $ 427,713 $ 120,936 28 % Professional services 69,541 64,681 4,860 8 % Total revenue $ 618,190 $ 492,394 $ 125,796 26 % Total revenue increased $125.8 million, or 26%, in fiscal year 2023, compared to fiscal year 2022, and was comprised of an increase in subscription revenue of $120.9 million, or 28%, and an increase in professional services of $4.9 million, or 8%.
Costs of Revenue Costs of Subscription Revenue Costs of subscription revenue consists primarily of costs to host our software platform, data costs, including cost of third-party data utilized in our platform, personnel-related expenses for our subscription and support operations personnel, including salaries, benefits, bonuses, and stock-based compensation professional fees, software costs, travel expenses, the amortization of our capitalized internal-use software and allocated overhead expenses, including facilities costs for our subscription and support operations.
Costs of Revenue Costs of Subscription Revenue Costs of subscription revenue consists primarily of costs to host our software platform, data costs, including cost of third-party data utilized in our platform, personnel-related expenses for our subscription and support operations personnel, including salaries, benefits, bonuses, stock-based compensation, professional fees, software costs, travel expenses, the amortization of our capitalized internal-use software and allocated overhead expenses, including facilities costs for our subscription and support operations.
Other Expense, Net Other expense, net, consists of interest expense, interest income on invested cash and cash equivalents and marketable securities, foreign currency transaction gains and losses and other expenses and gains. Provision for Income Taxes Provision for income taxes consists primarily of income taxes related to foreign and U.S. jurisdictions in which we conduct business.
Other Income (Expense), Net Other income (expense), net, consists of interest income on invested cash and cash equivalents and marketable securities, interest expense, foreign currency transaction gains and losses and other expenses and gains. Provision for Income Taxes Provision for income taxes consists primarily of income taxes related to foreign and U.S. jurisdictions in which we conduct business.
We expect our free cash flow to fluctuate in future periods with changes in our operating expenses and as we continue to invest in our growth.
We expect our free cash flow to fluctuate in future periods with changes in our operating expenses and as we continue to invest in our growth.
Operating Activities For the fiscal year 2022, cash used in operating activities was $32.9 million resulting from net loss of $111.5 million offset by net non-cash expenses of $72.2 million and $6.3 million net cash flow provided as a result of changes in operating assets and liabilities.
For the fiscal year 2022, cash used in operating activities was $32.9 million resulting from net loss of $111.5 million offset by net non-cash expenses of $72.2 million and $6.3 million net cash flow provided as a result of changes in operating assets and liabilities.
Sales of additional equity could 69 result in dilution to our stockholders. If we raise funds by borrowing from third parties, the terms of those financing arrangements would require us to incur interest expense and may include negative covenants or other restrictions on our business that could impair our operating flexibility.
Sales of additional equity could result in dilution to our stockholders. If we raise funds by borrowing from third parties, the terms of those financing arrangements would require us to incur interest expense and may include negative covenants or other restrictions on our business that could impair our operating flexibility.
On June 25, 2021, we completed our IPO, in which we issued and sold 16,625,000 shares of our Class A common stock at a public offering price of $16.00 per share. On July 1, 2021, underwriters’ option to purchase 1,662,500 additional shares of Class A common stock was exercised in full.
On June 25, 2021, we completed our IPO, in which we issued and sold 16,625,000 shares of our Class A common stock at a public offering price of $16.00 per share. On July 1, 2021, the underwriters’ option to purchase 1,662,500 additional shares of Class A common stock was exercised in full.
Revenue Recognition At times, revenue recognition requires significant judgment, especially for our arrangements that include multiple performance obligations, or deliverables, such as arrangements that include promises to transfer multiple subscription services, premium support, professional services and managed services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct.
Revenue Recognition At times, revenue recognition requires judgment, especially for our arrangements that include multiple performance obligations, or deliverables, such as arrangements that include promises to transfer multiple subscription services, premium support, professional services and managed services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct.
The increase was related to a higher foreign income tax liability on our non-U.S. subsidiaries. 66 Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance: • Non-GAAP gross profit and non-GAAP gross margin • Non-GAAP operating (loss) income and non-GAAP operating margin • Non-GAAP net (loss) income and non-GAAP net (loss) income per share We define these non-GAAP financial measures as the respective GAAP measures, excluding, as applicable, stock-based compensation expense-related charges, charges on litigation settlements and amortization of acquired intangible assets.
The increase was related to higher foreign income tax liability on our non-U.S. subsidiaries. 63 Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance: • Non-GAAP gross profit and non-GAAP gross margin • Non-GAAP operating (loss) income and non-GAAP operating margin • Non-GAAP net (loss) income and non-GAAP net (loss) income per share We define these non-GAAP financial measures as the respective GAAP measures, excluding, as applicable, stock-based compensation expense-related charges, charges on litigation settlements and amortization of acquired intangible assets.
General and Administrative Expenses General and administrative expenses include personnel costs associated with administrative services, such as legal, human resources, information technology, accounting, and finance functions, as well as professional fees, software costs, travel expenses and allocated overhead expense, including facilities costs and any corporate overhead expenses not allocated to other expense categories.
General and Administrative Expense General and administrative expense includes personnel costs associated with administrative services, such as legal, human resources, information technology, accounting, and finance functions, as well as professional fees, software costs, travel expenses and allocated overhead expense, including facilities costs and any corporate overhead expenses not allocated to other expense categories.
We do this with a new category of enterprise software – Unified Customer Experience Management (“Unified-CXM”) – that enables every customer-facing function across the front office, from Customer Care to Marketing, to collaborate across internal silos, communicate across digital channels, and leverage a complete suite of modern capabilities to deliver better, more human customer experiences at scale – all on one unified, AI-powered platform.
We do this with a new category of enterprise software – Unified Customer Experience Management (“Unified-CXM”) – that enables every customer-facing function across the front office, from Customer Service to Marketing, to collaborate across internal silos, communicate across digital channels, and leverage a complete suite of capabilities to deliver better, more human customer experiences at scale – all on one unified, AI-powered platform.
Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment. 71 Subscription services are distinct as such offerings are often sold separately.
Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require judgment. Subscription services are distinct as such offerings are often sold separately.
We believe that it is useful to exclude stock-based compensation expense-related charges and amortization of acquired intangible assets in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies over multiple pe riods.
We believe that it is useful to exclude stock-based compensation expense-related charges and amortization of acquired intangible assets in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies over multiple periods.
We expect our general and administrative expenses to increase in absolute dollars as we continue to grow our business. We also anticipate that we will incur additional costs for employees and third-party consulting services as we operate as a public company, which may cause our general and administrative expenses to fluctuate as a percentage of revenue from period to period.
We expect our general and administrative expense to increase in absolute dollars as we continue to grow our business. We also anticipate that we will incur additional costs for employees and third-party consulting services, which may cause our general and administrative expense to fluctuate as a percentage of revenue from period to period.
We calculate NDE by dividing (i) subscription revenue in the trailing 12-month period from those customers who were on our 55 platform during the prior 12-month period by (ii) subscription revenue from the same customers in the prior 12-month period.
We calculate NDE by dividing (i) subscription revenue in the trailing 12-month period from those customers who were on our platform during the most recent prior 12-month period by (ii) subscription revenue from the same customers in the preceding prior 12-month period.
Research and Development Expenses Research and development expenses consist primarily of costs relating to the maintenance, continued development and enhancement of our cloud-based software platform and include personnel-related expenses for our research and development organization, professional fees, travel expenses and allocated overhead expenses, including facilities costs.
Research and Development Expense Research and development expense consists primarily of costs relating to the maintenance, continued development and enhancement of our cloud-based software platform and includes personnel-related expense for our research and development organization, professional fees, travel expenses and allocated overhead expenses, including facilities costs.
The increase in subscription revenue for the fiscal year 2022, compared to the fiscal year 2021, was due primarily to increased demand for our solutions from new customers and an increase in revenue from existing customers driven by the purchase of additional quantities of current subscription solutions and the purchase of additional solutions within our platform.
The increase in subscription revenue for the fiscal year 2023, compared to the fiscal year 2022, was due primarily to (i) increased demand for our solutions from new customers and (ii) an increase in revenue from existing customers driven by the purchase of additional quantities of current subscription solutions and additional add-on solutions within our platform.
Our customers include global enterprises across a broad array of industries and geographies, as well as marketing agencies and government departments along with non-profit and educational institutions. Our customers are located in over 60 countries and use our AI powered CXM platform in over 50 languages.
Our customers include global enterprises across a broad array of industries and geographies, as well as marketing agencies and government departments along with non-profit and educational institutions. Our customers are located in over 70 countries and use our platform in over 100 languages.
Our gross margin on subscription revenue is significantly higher than our gross margin on professional services revenue, so our gross margin may vary from period to period if our mix of revenue or costs of revenue fluctuates.
Our gross margin on subscription revenue is significantly higher than our gross margin on professional services revenue, and as a result our gross margin may vary from period to period if our mix of revenue or costs of revenue fluctuates.
The settlement amount was recorded as a one-time operating expense charge in fiscal year 2022. 68 Liquidity and Capital Resources Overview As of January 31, 2022, our principal sources of liquidity were $321.4 million of cash and cash equivalents, $211.0 million of highly liquid marketable securities and an available line of credit of $50.0 million under our revolving credit facility.
The settlement amount was recorded as a one-time operating expense charge in fiscal year 2022, which was paid in fiscal year 2023. 65 Liquidity and Capital Resources Overview As of January 31, 2023, our principal sources of liquidity were $188.4 million of cash and cash equivalents, $390.2 million of highly liquid marketable securities and an available line of credit of $50.0 million under our revolving credit facility.
As of January 31, 2022, we had 1,166 customers spanning organizations of a broad range of sizes and industries, including more than 50% of the Fortune 100 companies, compared to 1,014 customers as of January 31, 2021.
As of January 31, 2023, we had 1,428 customers spanning organizations of a broad range of sizes and industries, including more than two-thirds of the Fortune 100 companies, compared to 1,166 customers as of January 31, 2022.
We define our large customers as customers with greater than or equal to $1.0 million in subscription revenue on a trailing 12-month basis, as of the period presented. As of January 31, 2022, we had 82 large customers compared to 65 as of January 31, 2021.
We define our large customers as customers with greater than or equal to $1.0 million in subscription revenue on a trailing 12-month basis, as of the period presented.
The increase in cost of subscription revenue was due primarily to higher costs related to third-party cloud infrastructure necessary to meet our increased customer demand, which included a $6.5 million increase in the costs to host our software platform, and a $3.7 million increase in our data costs, as well as a $1.8 million increase in personnel costs.
The increase in cost of subscription revenue was due primarily to higher costs related to third-party cloud infrastructure necessary to meet our increased customer demand, which included a combined $10.6 million increase in costs to host our software platform and our data costs.
We expect that gross profit and gross margin will continue to be affected by various factors, including our pricing, our mix of revenues and the costs required to deliver those revenues.
Gross Profit and Gross Margin Gross profit is total revenue less total costs of revenue. Gross margin is gross profit expressed as a percentage of total revenue. We expect that gross profit and gross margin will continue to be affected by various factors, including our pricing, our mix of revenues and the costs required to deliver those revenues.
As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our consolidated financial statements presented in accordance with GAAP. 67 A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP : Year Ended January 31, 2022 2021 2020 (in thousands) Non-GAAP gross profit: GAAP gross profit $ 344,843 $ 264,848 $ 201,117 Stock-based compensation expense-related charges (1) 4,355 3,670 513 Non-GAAP gross profit $ 349,198 $ 268,518 $ 201,630 Gross margin 70 % 68 % 62 % Non-GAAP gross margin 71 % 69 % 62 % Non-GAAP operating (loss) income: GAAP operating loss $ (99,470) $ (25,577) $ (35,529) Stock-based compensation expense-related charges (2) 51,552 45,069 10,166 Litigation settlement (3) 12,000 — — Amortization of acquired intangible assets 412 626 203 Non-GAAP operating (loss) income $ (35,506) $ 20,118 $ (25,160) Operating margin (20) % (7) % (11) % Non-GAAP operating margin (7) % 5 % (8) % Non-GAAP net (loss) income and net (loss) income per share: GAAP net loss: $ (111,470) $ (38,570) $ (39,754) Stock-based compensation expense-related charges (2) 51,552 45,069 10,166 Litigation settlement (3) 12,000 — — Amortization of acquired intangible assets 412 626 203 Non-GAAP net (loss) income $ (47,506) $ 7,125 $ (29,385) Less: amounts allocated to participating securities — (3,884) — Non-GAAP net (loss) income attributable to Class A and Class B common stockholders $ (47,506) $ 3,241 $ (29,385) Weighted-average shares outstanding used in computing net (loss) income per share attributable to Class A and Class B common stockholders - basic 195,020 90,378 84,343 Non-GAAP net (loss) income per common share attributable to Class A and Class B common stockholders $ (0.24) $ 0.04 $ (0.35) Free cash flow: Net cash (used in) provided by operating activities $ (32,922) $ 7,311 $ 18,966 Purchases of property and equipment (6,148) (2,701) (2,633) Capitalized internal-use software (6,258) (3,783) (2,533) Free cash flow $ (45,328) $ 827 $ 13,800 (1) I ncludes $0.1 million of employer payroll tax related to stock-based compensation expense for the year ended January 31, 2022 .
As a result, our non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered in isolation or as a substitute for our consolidated financial statements presented in accordance with GAAP. 64 A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP: Year Ended January 31, (in thousands) 2023 2022 2021 Non-GAAP gross profit: GAAP gross profit $ 454,465 $ 344,843 $ 264,848 Stock-based compensation expense and related charges (1) 3,861 4,355 3,670 Non-GAAP gross profit $ 458,326 $ 349,198 $ 268,518 Gross margin 74 % 70 % 68 % Non-GAAP gross margin 74 % 71 % 69 % Non-GAAP operating (loss) income: GAAP operating loss $ (51,224) $ (99,470) $ (25,577) Stock-based compensation expense and related charges (2) 56,704 51,552 45,069 Litigation settlement (3) — 12,000 — Amortization of acquired intangible assets 475 412 626 Non-GAAP operating (loss) income $ 5,955 $ (35,506) $ 20,118 Operating margin (8) % (20) % (7) % Non-GAAP operating margin 1 % (7) % 5 % Non-GAAP net (loss) income and net (loss) income per share: GAAP net loss: $ (55,742) $ (111,470) $ (38,570) Stock-based compensation expense and related charges (2) 56,704 51,552 45,069 Litigation settlement (3) — 12,000 — Amortization of acquired intangible assets 475 412 626 Non-GAAP net (loss) income $ 1,437 $ (47,506) $ 7,125 Less: amounts allocated to participating securities — — (3,884) Non-GAAP net (loss) income attributable to Class A and Class B common stockholders $ 1,437 $ (47,506) $ 3,241 Weighted-average shares outstanding used in computing net (loss) income per share attributable to Class A and Class B common stockholders, basic and diluted 259,530 195,020 90,378 Non-GAAP net (loss) income per common share attributable to Class A and Class B common stockholders, basic and diluted $ 0.01 $ (0.24) $ 0.04 Free cash flow: Net cash (used in) provided by operating activities $ 26,660 $ (32,922) $ 7,311 Purchases of property and equipment (6,091) (6,148) (2,701) Capitalized internal-use software (10,358) (6,258) (3,783) Free cash flow $ 10,211 $ (45,328) $ 827 Litigation settlement (3) 12,000 — — Adjusted free cash flow $ 22,211 $ (45,328) $ 827 (1) I ncludes $0.1 million and $0.1 million of employer payroll tax related to stock-based compensation expense for the years ended January 31, 2023 and 2022, respectively.
Our significant accounting policies are more fully described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, in our consolidated financial statements included elsewhere in this Form 10-K.
Actual results could differ materially from those estimates and assumptions. Our significant accounting policies are more fully described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies , in our consolidated financial statements included elsewhere in this Form 10-K.
You should review the disclosure under the heading “Risk Factors” in this Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Overview Sprinklr empowers the world’s largest and most loved brands to make their customers happier.
You should review the disclosure under the heading “Risk Factors” in this Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
For the fiscal year 2021, net cash used in investing activities of $219.5 million was related to $213.0 million of cash paid for marketable securities, purchase of property and equipment of $2.7 million and the capitalization of internal-use software of $3.8 million.
These cash outflows were largely offset by $211.6 million of cash from maturities of marketable securities and $56.7 million of sales of marketable securities. 67 For the fiscal year 2021, net cash used in investing activities of $219.5 million was related to $213.0 million of cash paid for marketable securities, purchase of property and equipment of $2.7 million and the capitalization of internal-use software of $3.8 million.
NDE compares our subscription revenue from the same set of customers across comparable periods and reflects customer renewals, expansion, contraction and churn.
We calculate NDE to measure our ability to retain and expand subscription revenue from our existing customers. NDE compares our subscription revenue from the same set of customers across comparable periods and reflects customer renewals, expansion, contraction and churn.
The increase was primarily due to a $21.0 million increase in research and development personnel costs primarily due to increased headcount of research and development employees as we continue to add to and enhance our product, which included as $2.3 million increase in stock-based compensation, as well as a $1.0 million increase in software-related expenses.
The increase was primarily due to a $18.6 million increase in research and development personnel costs driven by increased headcount of research and development employees as we continue to add to and enhance our product, which included a $6.1 million increase in stock-based compensation.
Costs of subscription revenue was $89.9 million for the fiscal year 2022, compared to $77.0 million for the fiscal year 2021.
Costs of subscription revenue was $102.3 million for the fiscal year 2023, compared to $89.9 million for the fiscal year 2022.
Key Business Metrics We review a number of operating and financial metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.
As of January 31, 2023, we had 108 large customers compared to 82 as of January 31, 2022. 56 Key Business Metrics We review a number of operating and financial metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.
We also exclude charges on litigation settlements that are considered to be non-ordinary course as we do not consider such losses to be indicative of our core business. In addition, we believe free cash flow is also a useful non-GAAP financial measure.
We also exclude charges on litigation settlements that are considered to be non-ordinary course as we do not consider such losses to be indicative of our core business.
Valuations of our common stock were prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.
Valuations of our common stock were determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation .
These cash outflows were largely offset by $211.6 million of cash from maturities of marketable securities and $56.7 million of sales of marketable securities.
These cash outflows were largely offset by $636.8 million of cash from maturities of marketable securities and $2.8 million of sales of marketable securities.
The increase was primarily due to a $60.5 million increase in personnel costs primarily due to increased headcount of sales and marketing employees to support growth, which included a $5.0 million increase in stock-based compensation, a $12.4 million increase in commissions expense associated with an increase in customer contracts and revenue growth, a $15.3 million increase in marketing expenses, a $3.6 million increase in software-related expenses, a $3.0 million increase in recruiting-related costs, $2.3 million increase in insurance costs and a $1.7 million increase in meetings and travel-related expenses.
The increase was primarily due to a $38.1 million increase in personnel costs driven by increased headcount of sales and marketing employees to support growth, which included a $7.2 million increase in benefits, a $6.7 million increase in stock-based compensation and a $4.5 million increase in commissions and bonuses associated with an increase in customer contracts and revenue growth.
Critical accounting estimates are those estimates that, in accordance with GAAP, involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our consolidated financial statements. Management has determined that our most critical accounting estimates are those relating to revenue recognition, stock-based compensation expense, common stock valuations and income taxes.
Critical accounting estimates are those estimates that, in accordance with GAAP, involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our consolidated financial statements.
We generally invoice our customers in annual installments at the beginning of each year in the subscription period. Historically, we have experienced seasonality in our sales cycle, as a large percentage of our customers make their purchases in the fourth quarter of a given fiscal year and pay us in the first quarter of the subsequent year.
Our subscriptions typically have a term of one to three years. Historically, we have experienced seasonality in our sales cycle, as a large percentage of our customers make their purchases in the fourth quarter of a given fiscal year and pay us in the first quarter of the subsequent year.
Non-cash charges primarily include depreciation and amortization, stock-based compensation, non-cash interest associated with our convertible debt and deferred taxes. Our largest source of operating cash is cash collections from customers using our Unified-CXM Platform and related services. Our primary uses of cash from operating activities are for employee-related costs, costs to deliver our revenue and marketing expenses.
Our largest source of operating cash is cash collections from customers using our Unified-CXM Platform and related services. Our primary uses of cash from operating activities are for employee-related costs, costs to deliver our revenue and marketing expenses.
Provision for Income Taxes Year Ended January 31, 2022 2021 $ Change % Change (dollars in thousands) Provision for income taxes $ 6,916 $ 3,777 $ 3,139 83 % Provision for income taxes increased $3.1 million, or 83%, in fiscal year 2022, compared to fiscal year 2021.
Provision for Income Taxes Year Ended January 31, (in thousands) 2023 2022 $ Change % Change Provision for income taxes $ 8,274 $ 6,916 $ 1,358 20 % Provision for income taxes increased $1.4 million, or 20%, in fiscal year 2023, compared to fiscal year 2022.
Costs of Professional Services Revenue Costs of professional services revenue consists primarily of personnel-related expenses for our professional services personnel, professional fees, software costs, subcontractor costs, travel expenses and allocated overhead expenses, including facilities costs, for 56 our professional services organization.
Costs of Professional Services Revenue Costs of professional services revenue consists primarily of personnel-related expenses for our professional services personnel, professional fees, software costs, subcontractor costs, travel expenses and allocated overhead expenses, including facilities costs, for our professional services organization. We expect that our costs of professional services revenue will increase in absolute dollars as we expand our customer base.
For the fiscal year 2020, net cash used in investing activities of $11.7 million was related to $6.5 million of cash paid to acquire a privately held company, purchases of property and equipment of $2.6 million and the capitalization of internal-use software costs of $2.5 million.
For the fiscal year 2022, net cash used in investing activities of $15.7 million was related to $267.8 million of purchases of marketable securities, $6.3 million in capitalized internal-use software costs, $6.1 million in capital expenditures, and $3.6 million of cash paid to acquire a privately held company.
Cash Flows The following table shows a summary of our cash flows for the periods indicated: Year Ended January 31, 2022 2021 2020 Net cash (used in) provided by operating activities $ (32,922) $ 7,311 $ 18,966 Net cash used in investing activities (15,650) (219,457) (11,666) Net cash provided by (used in) financing activities 303,132 269,784 (7,529) Our net loss and cash flows provided by operating activities are influenced significantly by our investments in headcount to support growth and in costs of revenue to deliver our services.
If we are unable to raise additional capital when needed, we would be required to curtail our operating activities and capital expenditures, and our business operating results and financial condition would be adversely affected. 66 Cash Flows The following table shows a summary of our cash flows for the periods indicated: Year Ended January 31, (in thousands) 2023 2022 2021 Net cash provided by (used in) operating activities $ 26,660 $ (32,922) $ 7,311 Net cash used in investing activities $ (193,494) $ (15,650) $ (219,457) Net cash provided by financing activities $ 34,971 $ 303,132 $ 269,784 Our net loss and cash flows provided by (used in) operating activities are influenced significantly by our investments in headcount to support growth and in costs of revenue to deliver our services.
For the fiscal year 2020, cash provided by operating activities was $19.0 million resulting from $42.9 million net cash flow provided as a result of changes in operating assets and liabilities and net non-cash expenses of $15.8 million, partially offset by net loss of $39.8 million.
Operating Activities For the fiscal year 2023, cash provided by operating activities was $26.7 million resulting from net loss of $55.7 million offset by net non-cash expenses of $75.7 million and $6.7 million net cash flows provided as a result of changes in operating assets and liabilities.
(2) I ncludes $1.4 million of employer payroll tax related to stock-based compensation expense for the year ended January 31, 2022 . (3) On February 25, 2022, we and Opal agreed to settle all outstanding claims with respect to Opal’s complaints alleging breach of contract and violation of Oregon’s Uniform Trade Secrets Act, among other claims.
(3) On February 25, 2022, we and Opal agreed to settle all outstanding claims with respect to Opal’s complaints alleging breach of contract and violation of Oregon’s Uniform Trade Secrets Act, among other claims.
These increases were partially offset by a $3.2 million increase in research and development costs that were capitalized.
The increase to research and development personnel costs was partially offset by a $4.1 million increase in research and development costs that were capitalized.
These revisions ensure comparability across all periods reflected herein. Refer to Note 2, Basis of Presentation and Summary of Significant Accounting Policies, included elsewhere in this Form 10-K for more information regarding immaterial corrections to prior periods.
Recent Accounting Pronouncements Refer to Note 2, Basis of Presentation and Summary of Significant Accounting Policies , included elsewhere in this Form 10-K for more information regarding recently issued accounting pronouncements. 69
Sales and Marketing Expenses Year Ended January 31, 2022 2021 $ Change % Change (dollars in thousands) Sales and marketing $ 286,963 $ 185,797 $ 101,166 54 % % of revenue 58 % 48 % Sales and marketing expenses increased $101.2 million, or 54%, in fiscal year 2022, compared to fiscal year 2021.
Sales and Marketing Expense Year Ended January 31, (in thousands) 2023 2022 $ Change % Change Sales and marketing $ 336,719 $ 286,963 $ 49,756 17 % % of revenue 54 % 58 % Sales and marketing expense increased $49.8 million, or 17%, in fiscal year 2023, compared to fiscal year 2022.
(“Opal”) with respect to Opal’s complaints alleging breach of contract and violation of Oregon’s Uniform Trade Secrets Act, among other claims, and the matter was dismissed with prejudice on March 1, 2022. The settlement was in the amount of $12.0 million, which we recorded as a one-time operating expense charge in fiscal year 2022.
(“Opal”) with respect to Opal’s complaints alleging breach of contract and violation of Oregon’s Uniform Trade Secrets Act. The settlement was recorded as a one-time operating expense charge in the fiscal year 2022. There were no litigation settlements accrued for during fiscal year 2023.
SVB Credit Facility We maintain a credit agreement with Silicon Valley Bank (the “SVB Credit Facility”). Under the terms of the SVB Credit Facility, we can borrow up to $50.0 million on our revolving credit loan facility at the higher of prime interest rate plus 0.25% or federal funds effective rate plus 0.50% plus 0.25%.
Under the most recent amended terms of the SVB Credit Facility, we can borrow up to $50.0 million on our revolving credit loan facility at the higher of prime interest rate or federal funds effective rate plus 0.50%, provided that in no event shall the total interest rate be less than 5.50%.
Costs of professional services were $57.7 million for the fiscal year 2022, compared to $45.0 million for the fiscal year 2021. The increase in cost of professional services was due primarily to increases in personnel costs of $9.9 million due to increased headcount of professional services employees and a $1.5 million increase in subcontractor costs.
The increase in cost of professional services revenue was due primarily to increases in personnel costs of $1.7 million due to increased headcount of professional services employees and a $1.1 million increase in subcontractor costs. Gross margin for subscription increased by 2 percentage points, primarily driven by the year-over-year growth in subscription revenue.
As our go-to-market strategies evolve, we may modify our pricing strategies in the future, which could result in changes to SSP. There were no material changes in the estimates or assumptions used to recognize revenue during the year ended January 31, 2022.
As our go-to-market strategies evolve, we may modify our pricing strategies in the future, which could result in changes to SSP.
Sales and Marketing Expenses Sales and marketing expenses consist primarily of personnel-related expenses for our sales and marketing organization, professional fees, software costs, advertising, marketing, promotional and brand awareness activities, travel expenses and allocated overhead expense, including facilities costs.
We expect research and development expenses to increase in absolute dollars as we continue to invest in enhancing and expanding the capabilities of our Unified-CXM platform. 58 Sales and Marketing Expense Sales and marketing expense consists primarily of personnel-related expenses for our sales and marketing organization, professional fees, software costs, advertising, marketing, promotional and brand awareness activities, travel expenses and allocated overhead expense, including facilities costs.
We have agreements in place with data and service providers which require us to make certain minimum guaranteed purchase commitments through fiscal year 2026 which totaled $156.3 million as of January 31, 2022. In addition, we lease certain office facilities under operating lease arrangements that expire on various dates through fiscal year 2027.
Material Cash Requirements Our expected material cash requirements comprise of contractually obligated expenditures. We have agreements in place with data and service providers that require us to make certain minimum guaranteed purchase commitments through fiscal year 2026 which totaled $220.9 million as of January 31, 2023.
The $42.9 million of net cash flows provided as a result of changes in our operating assets and liabilities reflected an $88.9 million increase in deferred revenue resulting primarily from increased billings for subscriptions and an increase of $7.0 million in accrued expenses and other current liabilities.
The $6.7 million of net cash flows provided as a result of changes in operating assets and liabilities reflected a $41.5 million increase in deferred revenue resulting primarily from increased billings for subscriptions, a $29.1 million decrease in prepaid expenses and other current assets driven by larger prepaid contracts in the prior fiscal year and a $14.5 million increase in accounts payable largely due to the timing of payments due.
In the determination of the SSP, we use information that includes contractually stated prices, size of the arrangement, market conditions, costs, renewal contracts, list prices, internal discounting tables and other observable inputs.
In the determination of the SSP, we use information that includes contractually stated prices, size of the arrangement, renewal contracts, list prices and internal discounting tables. Based on these results, the estimated SSP is set for each distinct product or service delivered to customers.
Research and development expenses are expensed as incurred, except for internal-use software development costs that qualify for capitalization. We expect research and development expenses to increase in absolute dollars as we continue to invest in enhancing and expanding the capabilities of our Unified-CXM platform.
Research and development expenses are expensed as incurred, except for internal-use software development costs that qualify for capitalization.
Remaining Performance Obligation Remaining Performance Obligation ("RPO") represents contracted revenues that had not yet been recognized, and include deferred revenues and amounts that will be invoiced and recognized in future periods. The aggregate transaction price of RPO expected to be recognized as revenue were $586.4 million and $431.8 million as of January 31, 2022 and 2021, respectively.
RPO and cRPO Remaining Performance Obligation (“RPO”) represents contracted revenues that had not yet been recognized, and include deferred revenues and amounts that will be invoiced and recognized in future periods. Current RPO (“cRPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue and amounts that will be invoiced and recognized in the next 12 months.
Subscription revenue is generally recognized ratably over the related contract term beginning on the commencement date of each contract, which is generally the date our service is made available to customers. Our subscriptions typically have a term of one to three years with an average term of approximately 18 months.
Subscription revenue consists primarily of fees from customers accessing our proprietary Unified-CXM platform, as well as related support services. Subscription revenue is generally recognized ratably over the related contract term beginning on the commencement date of each contract, which is generally the date our service is made available to customers.
Free cash flow is defined as net cash used in operating activities less cash used for purchases of property and equipment and capitalized internal-use software. We believe that free cash flow is a useful indicator of liquidity as it measures our ability to generate cash, or our need to access additional sources of cash, to fund operations and investments.
We believe that free cash flow and adjusted free cash flow are useful indicators of liquidity as they measure our ability to generate cash, or our need to access additional sources of cash, to fund operations and investments.
Costs of Revenue and Gross Margin Year Ended January 31, 2022 2021 $ Change % Change (dollars in thousands) Costs of subscription revenue $ 89,896 $ 77,033 $ 12,863 17 % Costs of professional services revenue 57,655 45,049 12,606 28 % Total costs of revenues $ 147,551 $ 122,082 $ 25,469 21 % Gross margin - subscription 79 % 77 % Gross margin - professional services 11 % 5 % Total costs of revenues increased $25.5 million, or 21%, in fiscal year 2022, compared to fiscal year 2021, and was comprised of an increase in costs of subscription revenue of $12.9 million, or 17%, and an increase in costs of professional services of $12.6 million, or 28%.
The increase in professional services revenues for the fiscal year 2023, compared to the fiscal year 2022, was primarily due to an increase in implementation and managed services performed during the fiscal year 2023, compared to the fiscal year 2022. 61 Costs of Revenue and Gross Margin Year Ended January 31, (in thousands) 2023 2022 $ Change % Change Costs of subscription revenue $ 102,276 $ 89,896 $ 12,380 14 % Costs of professional services revenue 61,449 57,655 3,794 7 % Total costs of revenue $ 163,725 $ 147,551 $ 16,174 11 % Gross margin - subscription 81 % 79 % Gross margin - professional services 12 % 11 % Total costs of revenue increased $16.2 million, or 11%, in fiscal year 2023, compared to fiscal year 2022, and was comprised of an increase in costs of subscription revenue of $12.4 million, or 14%, and an increase in costs of professional services of $3.8 million, or 7%.
Components of Results of Operations Revenue We generate revenue from the sale of subscriptions to our Unified-CXM cloud-based software platform and related professional services. Subscription revenue consists primarily of fees from customers accessing our proprietary Unified-CXM platform, as well as related support services.
For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors.” 57 Components of Results of Operations Revenue We generate revenue from the sale of subscriptions to our Unified-CXM cloud-based software platform and related professional services.
We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.
Management has determined that our most critical accounting estimates are those relating to revenue recognition and stock-based compensation expense, including historical common stock valuations and performance-based award valuations. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate.
NDE, on a trailing 12-month basis, was 119.8% and 118.4% for the 12-month periods ending January 31, 2022 and 2021, respectively.
This calculation is net of upsells, contraction, cancellation or expansion during the period but excludes subscription revenue from new customers. NDE, on a trailing 12-month basis, was 123.9% and 119.8% for the 12-month periods ending January 31, 2023 and 2022, respectively.
The increase was primarily due to a $11.3 million increase in general and administrative employee personnel costs, a $5.6 million increase in legal costs, as a result of costs incurred in connection with an outstanding legal matter and increased professional service costs as a result of becoming a public company, a $1.2 million increase in software-related costs, and a $0.8 million increase in travel-related costs. 62 Litigation Settlement Year Ended January 31, 2022 2021 $ Change % Change (dollars in thousands) Litigation settlement $ 12,000 $ — $ 12,000 n/m % of revenue 2 % — % On February 25, 2022, we agreed to settle all outstanding claims with Opal Labs Inc.
Litigation Settlement Year Ended January 31, (in thousands) 2023 2022 $ Change % Change Litigation settlement $ — $ 12,000 $ (12,000) N/M % of revenue — % 2 % In 2022 we agreed to settle all outstanding claims for a total amount of $12.0 million with Opal Labs Inc.
General and Administrative Expenses Year Ended January 31, 2021 2020 $ Change % Change (dollars in thousands) General and administrative $ 64,348 $ 40,171 $ 24,177 60 % % of revenue 17 % 12 % General and administrative expenses increased $24.2 million, or 60%, in the fiscal year 2021, compared to fiscal year 2020.
Research and Development Expense Year Ended January 31, (in thousands) 2023 2022 $ Change % Change Research and development $ 76,658 $ 60,591 $ 16,067 27 % % of revenue 12 % 12 % Research and development expense increased $16.1 million, or 27%, in fiscal year 2023, compared to fiscal year 2022.
Other Expense, net Year Ended January 31, 2022 2021 $ Change % Change (dollars in thousands) Other expense, net $ (5,084) $ (8,616) $ 3,532 (41) % % of revenue (1) % (2) % Other expense, net decreased $3.5 million, or 41%, in fiscal year 2022, compared to fiscal year 2021.
Other Income (Expense), Net Year Ended January 31, (in thousands) 2023 2022 $ Change % Change Other income (expense), net $ 3,756 $ (5,084) $ 8,840 (174) % % of revenue 1 % (1) % Other income of $3.8 million in fiscal year 2023 was primarily attributable to $8.2 million of interest income, net earned on money market and short-term investment accounts, partially offset by $4.7 million in net foreign currency transaction losses.
These increases were partially offset by a $11.6 million increase in accounts receivable due to increased billings, a $22.3 million increase in prepaid expenses primarily associated with higher prepayments for data center operations costs and data costs, a $10.2 million decrease in accounts payable and a $9.9 million increase in other noncurrent assets. 70 Investing Activities For the fiscal year 2022, net cash used in investing activities of $15.7 million was related to $267.8 million of purchases of marketable securities, $6.3 million in capitalized internal-use software costs, $6.1 million in capital expenditures, and $(3.6) million of cash paid to acquire a privately held company.
Investing Activities For the fiscal year 2023, net cash used in investing activities of $193.5 million was related to $816.7 million of purchases of marketable securities, $10.4 million in capitalized internal-use software costs and $6.1 million in capital expenditures.
We received net proceeds of $276.0 million after deducting underwriting discounts and commissions and other offering expenses. In May 2020, we issued senior subordinated convertible notes for an aggregate principal amount of $75.0 million, with an initial maturity date of May 20, 2025 (the “Initial Notes”).
We received net proceeds of $276.0 million after deducting underwriting discounts and commissions and other offering expenses. SVB Credit Facility We maintain a credit agreement with Silicon Valley Bank (the “SVB Credit Facility”).
The increase was primarily attributable to a $5.7 million increase in interest expense primarily due to non-cash interest expense incurred on our senior subordinated convertible notes issued in May 2020 and a $0.9 million increase in foreign currency translation losses.
Other expense in fiscal year 2022 was primarily attributable to $3.2 million of paid in kind interest expense related to the historical senior subordinated convertible notes and $1.6 million in foreign currency transaction losses.
Net Dollar Expansion Rate We believe that net dollar expansion rate ("NDE") is an indicator of the value that our platform delivers to customers. We calculate NDE to measure our ability to retain and expand subscription revenue from our existing customers.
RPO as of January 31, 2022 has been reduced from $586.4 million previously reported to $569.5 million in order to correct the treatment of an immaterial number of contracts included in the calculation of RPO. Net Dollar Expansion Rate We believe that net dollar expansion rate (“NDE”) is an indicator of the value that our platform delivers to customers.
In recent periods, our net loss generally has been greater than our use of cash for operating activities due to our subscription-based revenue model in which billings occur in advance of revenue recognition, as well as the amount of non-cash charges that we incur.
In fiscal year 2023, our net loss improved as a result of our increased subscription revenue and related billings, as well as the amount of non-cash charges that we incur. Non-cash charges primarily include depreciation and amortization, stock-based compensation, and non-cash lease expense.
Removed
Impact of COVID-19 In response to the ongoing COVID-19 pandemic, we have taken broad actions to mitigate the impact of this public health crisis on our business, including, among other measures, implementing a temporary work from home policy across all offices globally, new operating guidelines for our offices based on local conditions, restrictions on work-related travel, and additional wellness benefits for employees.
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This section of our Form 10-K discusses our financial condition and results of operations for the fiscal years ended January 31, 2023, 2022 and 2021 and year-to-year comparisons between fiscal 2023 and fiscal 2022.
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In addition, our customers and partners have similarly been impacted, all of which have the potential to result in a significant disruption to how we operate our business.
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Year-to-year comparisons between fiscal 2022 and fiscal 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2022, filed on April 11, 2022.
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Although we believe that our business is well-suited to navigate the current environment, the ultimate duration and extent of the COVID-19 pandemic, including with respect to variants of COVID-19, cannot be accurately predicted at this time, and the direct or indirect impact on our business, results of operations, and financial condition will depend on future developments that are highly uncertain.
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Overview Sprinklr empowers the world’s largest and most loved brands to make their customers happier.
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We have experienced, and may continue to experience, an adverse impact on certain parts of our business.
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The aggregate transaction price of RPO expected to be recognized as revenue was $719.5 million and $569.5 million as of January 31, 2023 and 2022, respectively. The transaction price of cRPO to be recognized as revenue in the next 12 months was $485.2 million and $395.0 million as of January 31, 2023 and 2022, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA majority of our agreements have been and we expect will continue to be denominated in U.S. dollars. A hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies would not have had a material effect on operating results for fiscal 2022, 2021 and 2020.
Biggest changeA majority of our agreements have been and we expect will continue to be denominated in U.S. dollars. A hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies would not have had a material effect on operating results for fiscal 2023, 2022 and 2021.
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations. 73
Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations. 70
A hypothetical 10% change in interest rates would not have had a material effect on operating results for fiscal 2022, 2021 and 2020. Inflation Risk We do not believe that inflation has had a material effect on our business, financial condition or results of operations.
A hypothetical 10% change in interest rates would not have had a material effect on operating results for fiscal 2023, 2022 and 2021. Inflation Risk We do not believe that inflation has had a material effect on our business, financial condition or results of operations.
Interest Rate Sensitivity We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. As of January 31, 2022, we had $321.4 million of cash and cash equivalents, which consisted primarily of bank deposits and money market funds and $211.0 million of highly liquid marketable securities.
Interest Rate Sensitivity We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. As of January 31, 2023, we had $188.4 million of cash and cash equivalents, which consisted primarily of bank deposits and money market funds and $390.2 million of highly liquid marketable securities.

Other CXM 10-K year-over-year comparisons