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What changed in Sprinklr, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Sprinklr, Inc.'s 2024 and 2025 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 2025 report.

+500 added−446 removedSource: 10-K (2025-03-21) vs 10-K (2024-03-29)

Top changes in Sprinklr, Inc.'s 2025 10-K

500 paragraphs added · 446 removed · 369 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

81 edited+21 added−31 removed50 unchanged
Biggest changeCustomers choose from the following Sprinklr Insights products: • Social Listening – Enables enterprises to understand unstructured data from 15+ digital channels, automatically surface themes/trends/anomalies, share reports and act, all within a single AI-drive platform. • Competitive Insights & Benchmarking – Allows companies and organizations to benchmark their social performance against competition and monitor influencers across eight social channels. • Product Insights – Provides historical review coverage across 900+ e-commerce websites, 15+ digital channels and 5M + web and traditional media channels, as well as 60+ verticalized AI and natural language processing models to capture actionable data on how customers feel about products and services in real-time. • Location Insights – Enables enterprises to gather real-time customer feedback at a local, regional and global level from 20+ location-specific data sources to proactively fix issues, manage online reputation, drive business growth, and enhance customer experience. • Visual Insights – Helps brands uncover visual brand mentions and user-generated content across news, print, broadcast, social and digital channels in real-time to track and detect brand use or misuse and power more meaningful communication across channels. • Media Monitoring & Analytics – Provides brands and organizations with the ability to measure the performance of their PR initiatives by monitoring 800K+ online news sources, 4M+ blogs, print and broadcast media outlets and enhancing this with social listening data.
Biggest changeLeverage specialized AI models across over 60 sectors to provide actionable intelligence and recommendations. • Location Insights – Enables enterprises to gather real-time customer feedback at a local, regional and global level from 20+ location-specific data sources to proactively fix issues, manage online reputation, drive business growth, and enhance customer experience. • Visual Insights – Helps brands uncover visual brand mentions and user-generated content across news, print, broadcast, social and digital channels in real-time to track and detect brand use or misuse and power more meaningful communication across channels.
Customers choose from the following Sprinklr Service products, sold individually and in bundles: • Sprinklr Voic e – Enables enterprises to modernize their contact center with AI-powered inbound and outbound voice capabilities, including Interactive Voice Response, Automatic Call Distribution, Pairing and Routing, Call Controls, Agent Assist, AI-driven Nudges and Predictive Dialers, Omnichannel Workflows, Campaign Management and Contact Center Monitoring. 7 • Social Customer Service – Allows companies and organizations to deliver a unified customer service experience across 15+ social media channels with Intelligent Routing, Channel Prioritization and Deflection, and seamless integrations with CRM systems, such as Salesforce. • Live Chat Support – Helps customers reduce their support costs and Average Handle Time by delivering prompt customer service and resolving queries in the first interaction on websites and mobile applications through text, video and co-browsing. • Conversational AI : Chatbots – Our simplified bot development, use case library and industry-specific/intent-based bot workflows combined with AI-powered workflows and seamless agent handoff, empowers brands to deploy chatbots across 25+ channels to improve customer service and grow revenue. • Conversational AI : Voice Bots – Utilizing the same capabilities as Chatbots, voice bots enable human-like, seamless omni-channel service with features such as auto modulations, dynamic pacing and expressive text-to-speech. • Conversational Analytics – Unlocks insights on why customers are contacting Customer Support with data across 30+ channels including Top Contact Drivers, Impact Analysis, Smart Themes, Real-time Alerts and Transcription, and PCI Compliance. • Smart AI Intents – Customized AI capability that breaks down inbound customer messages to identify a customer's primary intention, as well as other useful conversational ingredients to support an agent or automated dialog. • Sprinklr AI+ Service – Boosts agent productivity by leveraging generative AI to deliver capabilities such as Auto Case Summarization, Reply Assistance, Knowledge Base, Agent Adherence and Auto Case Disposition. • Community – Enables companies and organizations to build and manage a customizable forum for customers to easily interact with each other, share solutions and recommend product improvements through capabilities including Gamification, Polls, Contests, Peer-to-Peer Assistance and Integrated Chat. • Knowledge Base – Helps agents find appropriate articles to reduce case handling time.
Customers choose from the following Sprinklr Service products, sold individually and in bundles: • Sprinklr Voic e – Enables enterprises to modernize their contact center with AI-based inbound and outbound voice capabilities, including Interactive Voice Response, Automatic Call Distribution, Pairing and Routing, Call Controls, AI 7 Agent Assist, AI-driven Nudges and Predictive Dialers, Omnichannel Workflows, Campaign Management and Contact Center Monitoring. • Social Customer Service – Allows companies and organizations to deliver a unified customer service experience across 15+ social media channels with Intelligent Routing, Channel Prioritization and Deflection, AI Agent Assist and seamless integrations with CRM systems, such as Salesforce. • Live Chat Support – Helps customers reduce their support costs and Average Handle Time by delivering prompt customer service and resolving queries in the first interaction on websites and mobile applications through text, video and co-browsing. • Conversational AI : Chatbots – Our simplified bot development, use case library and industry-specific/intent-based bot workflows, Generative AI-powered conversations, combined with AI-based workflows and seamless agent handoff, empowers brands to deploy chatbots across 25+ channels to improve customer service and grow revenue. • Conversational AI : Voice Bots – Utilizing the same capabilities as Chatbots, including Generative AI, voice bots enable human-like, seamless omnichannel service with features such as auto modulations, dynamic pacing and expressive text-to-speech. • Conversational Analytics – Unlocks insights from every interaction on why customers are contacting Customer Support with data across 30+ channels including Top Contact Drivers, Impact Analysis, Smart Themes, Real-time Alerts and Transcription, and PCI Compliance. • Smart AI Intents – Customized AI capability that breaks down inbound customer messages to identify a customer's primary intention, as well as other useful conversational ingredients to support an agent or automated dialog. • Sprinklr AI+ Service – Boosts agent productivity by leveraging generative AI to deliver capabilities such as Auto Case Summarization, Reply Assistance, Knowledge Base, Agent Adherence and Auto Case Disposition. • Community – Enables companies and organizations to build and manage a customizable forum for customers to easily interact with each other, share solutions and recommend product improvements through capabilities including Gamification, Polls, Contests, Peer-to-Peer Assistance and Integrated Chat. • Knowledge Base – Helps agents find appropriate articles to reduce case handling time.
For more information regarding the risks relating to intellectual property, see “ Risk Factors—Risks Related to Our Intellectual Property .” Regulatory Matters We are subject to a variety of laws, rules and regulations in the United States and internationally, including laws regarding data privacy, protection, security, retention, consumer protection, accessibility, sending and storing of electronic messages (and related traffic data where applicable), intellectual property, human resource services, employment and labor laws, workplace safety, consumer protection laws, anti-bribery and anti-corruption laws, import and export controls, immigration laws, federal securities laws and tax regulations, all of which are continuously evolving and developing.
For more information regarding the risks relating to intellectual property, see “ Risk Factors—Risks Related to Our Intellectual Property .” 13 Regulatory Matters We are subject to a variety of laws, rules and regulations in the United States and internationally, including laws regarding data privacy, protection, security, retention, consumer protection, accessibility, sending and storing of electronic messages (and related traffic data where applicable), intellectual property, human resource services, employment and labor laws, workplace safety, consumer protection laws, anti-bribery and anti-corruption laws, import and export controls, immigration laws, federal securities laws and tax regulations, all of which are continuously evolving and developing.
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 brands the ability to differentiate, derive insights and optimize their marketing and advertising strategies at scale. 9 The result: centralized and streamlined planning and 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.
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 brands the ability to differentiate, derive insights and optimize their marketing and advertising strategies at scale. 9 The result: centralized and streamlined planning and publishing across channels, greater efficiency and reduced production costs, automated and unified reporting across channels for organic and paid initiatives, AI-based and rule-based optimization, and actionable insights to improve advertising performance in real time.
Our Unified-CXM Platform provides the following common features and capabilities, which are shared across the platform and all products: • Sprinklr AI – Sprinklr’s proprietary AI built against customer experience (CX) use cases with CX models based on CX data. • Sprinklr AI+ – An AI-everywhere offering that unifies proprietary AI from Sprinklr with generative AI powered by integrations with OpenAI, Google Cloud’s Vertex AI and Microsoft Azure OpenAI.
Our Unified-CXM Platform provides the following common features and capabilities, which are shared across the platform and all products: • Sprinklr AI – Sprinklr’s proprietary AI built against customer experience (“CX”) use cases with CX models based on CX data. • Sprinklr AI+ – An AI-everywhere offering that unifies proprietary AI from Sprinklr with Generative AI powered by integrations with OpenAI, Google Cloud’s Vertex AI and Microsoft Azure OpenAI.
Customers choose from the following Sprinklr Marketing products: • Campaign Planning & Content Marketing – Enables brands to manage content planning, production, distribution and analytics on a single platform to reduce content production costs and accelerate campaign launches through capabilities such as Request Management, Editorial Planning, Collaboration, Production, Digital Asset Management, Brand Governance, Cross-Channel Publishing/Distribution and Sprinklr AI+-driven Ideation, Briefing, Copy Assistance and Localization. • Social Advertising – Helps enterprises streamline advertising campaign management across 10 social channels with features like Workflows, AI-powered Optimization, comprehensive Cross-channel Reporting and enterprise-grade Governance, all on Sprinklr’s AI-powered Unified-CXM platform. • Ads Comment Moderation – By managing comments on paid posts at scale, brands can moderate testimonials, product feedback, and urgent customer service queries that would otherwise go unnoticed.
Customers choose from the following Sprinklr Marketing products: • Campaign Planning & Content Marketing – Enables brands to manage content planning, production, distribution and analytics on a single platform to reduce content production costs and accelerate campaign launches through capabilities such as Request Management, Editorial Planning, Collaboration, Production, Digital Asset Management, Brand Governance, Cross-Channel Publishing/Distribution and Sprinklr AI+-driven Ideation, Briefing, Copy Assistance and Localization. • Social Advertising – Helps enterprises streamline advertising campaign management across 10 social channels with features like Workflows, AI-based Optimization, comprehensive Cross-channel Reporting and enterprise-grade Governance, all on Sprinklr’s AI-based Unified-CXM platform. • Ads Comment Moderation – By managing comments on paid posts at scale, brands can moderate testimonials, product feedback, and urgent customer service queries that would otherwise go unnoticed.
We are committed to ethical employment and apply ethical standards to all operations. 14 • Governance : T o generate value through sustainable business solutions, we seek to design and deliver end-to-end solutions that meet the challenges of today’s digital economy, including security, data privacy and ethical and responsible AI practices, by emphasizing corporate governance, ethics, compliance and risk management.
We are committed to ethical employment and apply ethical standards to all operations. • Governance : T o generate value through sustainable business solutions, we seek to design and deliver end-to-end solutions that meet the challenges of today’s digital economy, including security, data privacy, and responsible AI practices by emphasizing corporate governance, ethics, compliance, and risk management.
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 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. 11 Through our Implementation, Training and always-on Managed Services, we ensure that our customers realize value from Day 1 and throughout the Sprinklr journey.
The market and category, Unified-CXM, 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. Intellectual Property We believe that our intellectual property rights are valuable and important to our business.
The market and category, Unified-CXM, in which we participate is rapidly evolving, and if we do not compete effectively, our results of operations and financial condition could be harmed. Intellectual Property We believe that our intellectual property rights are valuable and important to our business.
For additional information, see “ Risk Factors—Risks Related to Litigation, Regulatory Compliance and Government Matters ” and “ —Risks Related to Privacy, Information Technology and Cybersecurity .” Environmental, Social and Governance We recognize our corporate responsibility to implement and support a high standard of ethical and environmentally responsible business practices.
For additional information, see “ Risk Factors—Risks Related to Litigation, Regulatory Compliance and Government Matters ” and “ —Risks Related to Privacy, Information Technology and Cybersecurity .” Environmental, Social and Governance We recognize our corporate responsibility to implement and support a high standard of ethical and responsible business practices.
We rely on trademarks, patents, copyrights, trade secrets, license agreements, intellectual property assignment agreements, confidentiality procedures, non-disclosure agreements 13 and invention assignment agreements to establish and protect our intellectual property and proprietary rights.
We rely on trademarks, patents, copyrights, trade secrets, license agreements, intellectual property assignment agreements, confidentiality procedures, non-disclosure agreements and invention assignment agreements to establish and protect our intellectual property and proprietary rights.
These are done at an appropriate cadence to ensure that at no point is there a question as to the business value Sprinklr is bringing.
These are done at an appropriate cadence to help ensure that at no point is there a question as to the business value Sprinklr is bringing.
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 80 countries, and our AI-powered Unified-CXM platform recognizes over 150 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 more than 80 countries, and our AI-based Unified-CXM platform recognizes over 150 languages.
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.
Our Go-To-Market Strategy We generate sales, primarily, through a direct sales organization, which includes Account Executives, Sales Development Reps, Solutions Consultants, Customer & Product Success personnel and Professional Services Personnel who are organized by geography and two primary customer groups: Global Strategic Accounts and Large Enterprise Accounts.
We believe that we are the only Unified-CXM platform that offers a single codebase architecture, designed to provide a seamless, unified experience for our customers. A single codebase architecture supports our ability to seamlessly integrate channels, unify journeys across functions, and innovate faster in a “build once, deploy across” way.
We believe that we are the only Unified-CXM platform that offers a single codebase architecture, designed to provide a unified experience for our customers. A single codebase architecture supports our ability to integrate channels, unify journeys across functions, and innovate faster in a “build once, deploy across” way.
Ads Comment Moderation capabilities include Unified Engagement Dashboards, Rules Engine and Advanced Message Tagging. • Marketing Analytics – Allows companies to measure, analyze and optimize their paid and organic marketing performance across 30+ digital and social channels from a single, comprehensive, AI-powered dashboard.
Ads Comment Moderation capabilities include Unified Engagement Dashboards, Rules Engine and Advanced Message Tagging. • Marketing Analytics – Allows companies to measure, analyze and optimize their paid and organic marketing performance across 30+ digital and social channels from a single, comprehensive, AI-based dashboard.
As AI and machine learning grow across industries, this flywheel approach has become a cornerstone and competitive differentiator at Sprinklr. Our Product Suites With the rise of modern channels, customers are connected and empowered like never before.
As AI and machine learning grow across industries, this flywheel approach has become a cornerstone and competitive differentiator at Sprinklr. Our Product Suites With the rise of digital channels, customers are connected and empowered like never before.
This strategy enables us to better manage the diverse areas that are important to our company and our stakeholders.
This strategy enables us to better manage the areas that are important to our company and our stakeholders.
AI monitors conversations and suggests the most relevant pre-configured workflows. • Workforce Management – Helps contact center managers analyze historical data to accurately predict workforce needs, meet service targets and improve efficiency with capabilities such as Automated Scheduling, Shift Bidding, Time-off Management, Approval Automation, AI-driven Forecasting, Capacity Planning and Staffing Simulation. • Quality Management – Identifies opportunities to improve agent performance and empower supervisors to spend time on personalized agent coaching rather than evaluations through Live Coaching, Automated Sampling, Calibration, Case History, Real-time Insights and more. • Service Command Center – Delivers on-brand displays for real-time contact center monitoring to manage agent and business performance and drive overall productivity.
AI monitors conversations and suggests the most relevant pre-configured workflows. • Workforce Management – Helps contact center managers analyze historical data to accurately predict workforce needs, meet service targets and improve efficiency with capabilities such as Automated Scheduling, Shift Bidding, Time-off Management, Approval Automation, AI-driven Forecasting, Capacity Planning and Staffing Simulation. • Quality Management – Identifies opportunities to improve agent performance and empower supervisors to spend time on personalized agent coaching rather than evaluations through Live Coaching, Automated case audits, AI-based scoring, Case History, Real-time Insights and more. • Service Command Center – Delivers on-brand displays for real-time contact center monitoring to manage agent and business performance and drive overall productivity.
Key use cases of Sprinklr Service include: • Reducing the total cost of ownership in the contact center by eliminating point solutions; • Improving revenue and increasing customer satisfaction by enabling channel-less customer service; • Reducing costs by uncovering actionable insights into what is driving contact center volume; and • Increasing efficiency and improving scalability by utilizing self-service and peer-to-peer capabilities on digital channels.
Key use cases of Sprinklr Service include: • Reducing the total cost of ownership in the contact center by eliminating point solutions; • Improving revenue and increasing customer satisfaction by enabling channel-less customer service; • Reducing costs by uncovering actionable insights into what is driving contact center volume; and • Increasing efficiency and improving scalability by utilizing self-service, agent assist and peer-to-peer capabilities on digital and voice channels.
Compensation and Benefits We consider several 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 several 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, inclusion and belonging, compensation, benefits and pay equity.
We also now work with several new types of partners including independent consultants, Referral Partners, Technological Solution Brokers (TSBs) and Business Process Outsourcing (BPO) partners. The Sprinklr partner ecosystem is one of the most diverse across the industry to serve customers and their unique needs from around the world. • Selectively pursue acquisitions .
We also now work with several new types of partners, including independent consultants, Referral Partners, Technological Solution Brokers and Business Process Outsourcing (“BPOs”) partners. The Sprinklr partner ecosystem is one of the most diverse across the industry to serve customers and their unique needs from around the world. • Selectively pursue acquisitions .
As of January 31, 2024, we owned 38 issued U.S. patents and 10 pending non-provisional 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, 2025, we owned 38 issued U.S. patents and 10 pending non-provisional or provisional U.S. patent applications. These patents and patent applications seek to protect our proprietary inventions relevant to our business.
This fully automated AI engine provides actionable insights built on deep machine learning that requires no human involvement and is designed to make accurate predictions across a wide range of products offered by our Unified-CXM platform. • Powerful and dynamic natural language processing and generation: We have developed advanced text analytics capabilities with technology that can look at the context, grammar and co-references of a sentence to associate opinions, thoughts, preferences and feedback with respective brands and products.
This fully automated AI engine provides actionable insights built on deep machine learning and is designed to make accurate predictions without human input across a wide range of products offered by our Unified-CXM platform. • Powerful and dynamic natural language processing and generation: We have developed advanced text analytics capabilities with technology that can look at the context, grammar and co-references of a sentence to associate opinions, thoughts, preferences and feedback with respective brands and products.
The meeting confirms the use cases that support the value, the metrics associated to those use cases, and locks in commitment from the stakeholders on the deployment and the customer’s Success Engagement Process. • The VRCI (Value Realization Check In) is designed to be a regular touch base, bi-weekly or as appropriate, in which we, collaboratively, identify and coordinate issue resolution; measure value realized to date through embedded use-case-based, value realization dashboards; and continually align the Sprinklr platform with our customers’ desired business outcomes and priorities. • The EBR (Executive Business Review) is designed to be a more strategic meeting with executive representation on both sides, where alignment is discussed, along with a roadmap, and corporate and strategic objectives.
The meeting confirms the use cases that support the value, the metrics associated to those use cases, and locks in commitment from the stakeholders on the deployment and the customer’s Success Engagement Process. • The COPM (Customer Outcome Planning Meeting) is designed to be a regular touch base, bi-weekly or as appropriate, in which we, collaboratively, identify and coordinate issue resolution; measure value realized to date through embedded use-case-based, value realization dashboards; and continually align the Sprinklr platform with our customers’ desired business outcomes and priorities. • The EBR (Executive Business Review) is designed to be a more strategic meeting with executive representation on both sides, where alignment is discussed, along with a roadmap and corporate and strategic objectives.
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 across nine different partner categories including System Integrators (SI), Transformational partners and Resellers which includes partners such as Microsoft, Accenture, Deloitte, Salesforce, SAP, ServiceNow, Adobe, Oracle and others in these capacities.
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 across nine different partner categories, including System Integrators, Transformational partners and Resellers, which includes partners such as Microsoft, Accenture, Deloitte, Salesforce, SAP, ServiceNow, Adobe, Oracle and others.
Our architecture is designed to be scalable and flexible to meet the demands of today’s digital enterprises or organizations and to be deployed quickly—at scale—to ingest massive amounts of data. Our Unified-CXM platform is designed to comply with the industry security controls.
Our architecture is designed to be scalable and flexible to meet the demands of today’s digital enterprises or organizations and to be deployed at scale to ingest massive amounts of data. Our Unified-CXM platform is designed to meet the industry security controls.
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 engagement.
During the years ended January 31, 2024 and 2023, we generated 41% 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 .
During the years ended January 31, 2025 and 2024, we generated 41% and 41%, respectively, of our revenue outside the Americas. We foresee a significant opportunity to further expand the use of our platform in other regions globally. 10 • Broaden and deepen our partner ecosystem .
Our platform captures over 450 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 50 million customer cases every month, while also tracking over 40,000 brands and influencers and managing over 3 billion profiles across all digital channels.
Our platform captures over 450 million conversations and makes over 10 billion AI predictions every day, publishes over 130 million brand messages, including those published over live chat, and handles more than 110 million customer cases every month, while also tracking over 40,000 brands and influencers and managing over 4 billion profiles across all digital channels.
Our architecture is designed to ensure that our customers are always utilizing the latest and most accurate AI models, providing insights to our customers with speed, accuracy, governance, compliance 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.
Our architecture enables customers to utilize the latest and most accurate AI models, providing insights to our customers with speed, accuracy, governance, compliance 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.
In addition, we have conducted employee surveys to gauge employee engagement and identify areas of future focus for our human capital practices and benefits offerings. Corporate Information We were incorporated in Delaware in August 2011. Our principal executive offices are located at 29 West 35th Street, New York, New York 10001, and our telephone number is (917) 933-7800.
In addition, we have conducted employee surveys to gauge employee engagement and identify areas of future focus for our human capital practices and compensation and benefits offerings. Corporate Information We were incorporated in Delaware in August 2011. Our principal executive offices are located at 441 9th Avenue, New York, New York 10001, and our telephone number is (917) 933-7800.
We also assess our environments for applicable Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”) security and privacy control and procure an AICPA accredited auditor report under Statements on Standards for Attestation Engagements (“SSAE”) 21.
We also assess specific features for compliance with the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”) security and privacy control and procure an AICPA accredited auditor report under Statements on Standards for Attestation Engagements (“SSAE”) 21.
Customers choose from the following Sprinklr Social products: • Social Publishing & Engagement – Enables enterprises to plan, publish and manage brand content across multiple channels with digital asset management, editorial calendaring, UGC management and omnichannel publishing – then measure and 8 respond to customer engagement efficiently with automated workflows, AI-driven moderation & routing and engagement dashboards that can be shared across teams. • Distributed – Empowers Distributed teams (Sales, Location Managers, Field Agents) to drive awareness, scale localized engagement and convert more leads across digital channels — all while ensuring complete brand and legal compliance. • Employee Advocacy – Enables enterprises to use their employees to amplify their brand, improve awareness, generate leads and attract talent — all while ensuring compliance.
Sprinklr AI+ supports this through channel-specific Content Suggestions, Hashtag Recommendation, Campaign Ideas, Campaign Brief Generation, Content Localization, Content Paraphraser and Content Tonality. 8 Customers choose from the following Sprinklr Social products: • Social Publishing & Engagement – Enables enterprises to plan, publish and manage brand content across multiple channels with digital asset management, editorial calendaring, UGC management and omnichannel publishing – then measure and respond to customer engagement efficiently with automated workflows, AI-driven moderation & routing and engagement dashboards that can be shared across teams. • Distributed – Empowers Distributed teams (Sales, Location Managers, Field Agents) to drive awareness, scale localized engagement and convert more leads across digital channels — all while ensuring complete brand and legal compliance. • Employee Advocacy – Enables enterprises to use their employees to amplify their brand, improve awareness, generate leads and attract talent — all while ensuring compliance.
Sprinklr AI+ incorporates generative AI powered by integrations with OpenAI, Google Cloud’s Vertex AI and Microsoft Azure OpenAI Service. • COMPLETE, built for organizations with the full consumer lifecycle in mind : We offer a broad range of digital and traditional use cases across customer-facing teams.
Today, Sprinklr supports OpenAI, Google Cloud’s Vertex AI and Microsoft Azure OpenAI Service. • COMPLETE, built for organizations with the full consumer lifecycle in mind : We offer a broad range of digital and traditional use cases across customer-facing teams.
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 and productivity, decrease 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 improving customer experiences, while helping them increase revenue and productivity, decrease costs and mitigate brand reputation risks.
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. • The CHI (Customer Health Index) is a core internal metric for success at Sprinklr. We continuously survey and monitor a series of metrics of customer health.
This is based on a sustainability model with three pillars – environment, social and governance – where all business areas work together as an integrated management system to ensure that objectives, activities and results are met. • Environment : S upporting a transition to low carbon economy, we seek to improve the efficiency and resilience of our operations by reducing our emissions and aligning around sustainable practices and operation.
This is based on a sustainability model with three pillars – environment, social and governance – where business areas work together as an integrated management system to ensure that objectives, activities and results are met. • Environment : We seek to improve the efficiency and resilience of our operations by working to reduce our emissions and aligning around sustainable operation.
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 quickly add or remove channels in a short period of time. 10 • 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 quickly add or remove channels in a short period of time. • Grow customer base . As of January 31, 2025, we had a customer base of 1,930 organizations.
Our go-to-market strategy has enabled us to grow rapidly, attracting 1,735 customers as of January 31, 2024, including more than 60% of the Fortune 100. As of January 31, 2024, we had 126 customers with subscription revenue equal to or greater than $1.0 million for the trailing 12-month period.
Our go-to-market strategy has enabled us to grow through the year, attracting 1,930 customers as of January 31, 2025, including 60% of the Fortune 100. As of January 31, 2025, we had 149 customers with subscription revenue equal to or greater than $1.0 million for the trailing 12-month period.
We do this by providing customer-facing teams with the capabilities they need to serve customers, share insights and work together to deliver a more unified customer experience.
We do this by providing customer-facing teams with the capabilities they need to serve customers, share insights and work together to deliver extraordinary experiences.
Every customer-facing team 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.
Every customer-facing team 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 convergence of technology waves is changing how people connect and transact – with customers preferring to engage digitally, shoppers transacting on social media, and purchasing decisions influenced by AI.
We do this with a new category of enterprise software – Unified Customer Experience Management (“Unified-CXM”) – that enables customer-facing teams, 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 customer experiences at scale – all on one unified, AI-powered platform.
We do this with our evolving enterprise software – Unified Customer Experience Management (“Unified-CXM”) – that enables customer-facing teams, from Customer Service to Marketing, to collaborate across internal silos, communicate across digital channels, and leverage AI to deliver better customer experiences at scale – all on one unified AI-based platform.
Of these employees, 787 are based in the United States and 3,082 are based internationally, including 2,276 in India. 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.
Of these employees, 740 were based in the United States and 2,849 were based internationally, including 2,106 in India. 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.
Build and refine all AI models with zero coding. Sprinklr Service Sprinklr Service is a comprehensive, cloud-based, AI-powered 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.
Sprinklr Service Sprinklr Service is a comprehensive, cloud-native, AI-based customer service platform that enables agents to seamlessly serve customers across digital, social and voice channels and empowers the leadership with complete visibility into contact center operations to drive transformation and impact.
The breadth of our platform also positions us to scale across more customer-facing teams to attract new buyers beyond traditional social media roles, such as the technology buying center, call center operations, and data and insights teams to name a few. Our success and innovation are driven by an experienced global management team and extraordinary culture.
The breadth of our platform also positions us to scale across more customer-facing teams to attract new buyers beyond traditional social media roles, such as the technology buying center, call center operations, and data and insights teams, to name a few.
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; • Artificial Intelligence point solutions; 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; • Artificial Intelligence point solutions; and • CRM and ERP solutions. 12 We expect competition as industry trends continue to favor the adoption of modern channels and the digital transformation of CXM.
Sprinklr was founded to solve this problem: a software-as-a-service platform purpose-built to help enterprises break down information and organization silos across the customer journey, tap into unstructured digital data and utilize AI to create a persistent, unified view of each customer – at scale.
Sprinklr was founded to solve this problem: an AI-based unified platform purpose-built to help enterprises unify information and organize silos across the customer journey, tap into unstructured digital data and utilize AI to create a single view of each customer – at scale.
Our models are built on customer experience data, each delivered in the native language (149 languages), help our global customers derive insights around brand equity, inform content strategy and allocate resources. These proprietary models also drive customer interactions to understand consumer intent in real-time, triage customer issues and empower customer service agents to improve customer experience.
Our models are built on customer experience data, each trained in the native language (149 languages), help our global customers derive insights around conversations and brand, and inform CX strategies resource allocation. Sprinklr’s AI also drives customer interactions to understand consumer intent in real-time, triage customer issues and empower customer service agents to improve customer experience.
As a result, companies must consider every touch point along the customer journey and ensure seamless and consistent customer experiences in person and online. They must communicate instantly with consumers who move fluidly across dozens of channels and resolve customer pain-points in a personalized way.
They must unify every touchpoint along the customer journey and ensure seamless and consistent customer experiences in person and online. They want to instantly communicate with consumers who move fluidly across dozens of channels and resolve customer pain-points in real-time and in personalized ways.
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. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
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. Sprinklr has a global presence, with employees covered by collective bargaining agreements in several jurisdictions in accordance with applicable law.
Our Growth Strategy We intend to capitalize on our growing market opportunity by executing on the following key elements to our growth strategy: • Scale Sprinklr Service . W e are transforming the contact center from a voice-focused cost center to an omni-channel revenue center by unifying marketing and sales for more efficient customer service.
W e are transforming the contact center from a voice-focused cost center to an omni-channel revenue center by unifying marketing and sales for more efficient customer service.
Although all of our product suites are available to customers on our Sprinklr Unified-CXM platform, each can also be purchased individually. Sprinklr Unified-CXM Platform One single, unified platform with 4 product suites : Purpose-built to consolidate listening and insights, social media management, campaign lifecycle management, paid advertising and customer service in one unified platform.
Sprinklr Unified-CXM Platform One single, unified platform with four product suites : Purpose-built to consolidate listening and insights, social media management, campaign lifecycle management, paid advertising and customer service in one unified platform.
We have been granted a Federal Risk and Authorizations Management Program (“FedRAMP”) Authority to Operate (“ATO”) to operate our solutions for United States federal agencies. Sprinklr has been widely recognized by industry analyst firms including Gartner, Forrester, Omdia, Ventana, IDC and Everest in a multitude of customer experience and SaaS technology markets.
We have been granted a Federal Risk and Authorizations Management Program (“FedRAMP”) LI-SaaS Authority to Operate (“ATO”) to operate our solutions for United States federal agencies. Sprinklr is recognized by leading industry analysts, including Gartner, Forrester, and IDC, across various customer experience and enterprise software categories.
Our website address is www.sprinklr.com . Information contained on, or that can be accessed through, our website is not incorporated by reference into this Form 10-K, and you should not consider information on our website to be part of this Form 10-K.
Information contained on, or that can be accessed through, our website is not incorporated by reference into this Form 10-K, and you should not consider information on our website to be part of this Form 10-K. 15 Available Information Our Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendment to these reports are filed with the SEC.
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.
Among other benefits, Sprinklr Cares enables charitable donations through Sprinklr’s annual Giving Tuesday campaign and allows for organized volunteer opportunities. 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.
These metrics used as part of EDAP serve as an opportunity for continued engagement with our employees, but not a formal measure to evaluate employee compensation. • We Belong: At Sprinklr, our goal is to ensure that all employees feel like they belong and are operating in a judgment-free zone regardless of gender, race, ethnicity, age, and lifestyle preference, among others.
These metrics used as part of EDAP serve as an opportunity for continued engagement with our employees, but not a formal measure to evaluate employee compensation. • We Belong: At Sprinklr, we are committed to maintaining a workplace where every employee feels valued, included and respected – regardless of gender, race, ethnicity, age or background.
We believe that we have a significant first-mover advantage, helping us establish and maintain a global leadership position in offering enterprise-level AI to meet governance, compliance and security requirements. • CUSTOMER-DRIVEN Sprinklr AI+ for improving productivity : We combine our proprietary Sprinklr AI with generative AI models to drive new levels of productivity across customer-facing functions – we call this Sprinklr AI+.
We believe that the depth of our early and sustained focus on AI, while delivering governance, compliance, and security at enterprise scale, has empowered us to secure and maintain a global leadership position. • CUSTOMER-DRIVEN Sprinklr AI+ for improving productivity : We combine “traditional” AI techniques with generative AI to drive new levels of productivity across customer-facing functions — we call this Sprinklr AI+.
We are focused on measuring and reducing sources of emissions and waste and implementing measures to reduce energy and water reduction. • Social : We are committed to creating and supporting an inclusive, diverse and equitable workforce and providing all employees with the development opportunities they need to be successful and happy.
We are focused on assessing sources of emissions and waste and working to implement measures to reduce energy and water consumption. • Social : We are committed to creating and supporting a workforce where every employee feels valued, included, and respected and providing all employees with development opportunities to be successful and engaged.
As a result, we have developed an advisory team that leads our Environmental, Social, and Governance (“ESG”) program and drives these initiatives company-wide.
As a result, we have developed an advisory team that leads our Environmental, Social, and Governance (“ESG”) program and drives these initiatives company-wide. This cross-functional team, overseen by sponsors from Sprinklr’s Executive Leadership team, works with an external sustainability consultant to implement a multi-year strategy for our ESG program.
Available Information Our Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendment to these reports are filed with the SEC. Such reports and other information filed by us with the SEC are available free of charge on our website at www.sprinklr.com when such reports are available on the SEC’s website.
Such reports and other information filed by us with the SEC are available free of charge on our website at www.sprinklr.com when such reports are available on the SEC’s website. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov .
Hundreds of recognitions have been awarded around the world for everything from collaboration, to living our core values. • Wellbeing: Our comprehensive Wellbeing program is another way we invest in our employees, designed to keep our employees rejuvenated and happy throughout their career journey at Sprinklr. A special certification program advances their proficiency in important areas like mindfulness and relaxation.
Hundreds of recognitions have been awarded globally for achievements ranging from customer-focused wins and cross-team collaboration, to embodying specific aspects of our core values. • Wellbeing: Our Wellbeing program is another way we invest in our employees and is designed to keep our employees engaged and supported throughout their career journey at Sprinklr.
As we expand our product offerings and extend our technology leadership, we also plan to continue to invest in sales and marketing to grow our customer base. • Increase revenue from existing customers . The mission-critical nature of our platform and enterprise-wide applicability drives adoption within additional divisions of enterprises and the cross-sale of more products.
We believe that this represents only a small fraction of our total addressable customer base. As we expand our product offerings and extend our technology leadership, we also plan to continue to invest in sales and marketing to grow our customer base. • Increase revenue from existing customers .
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 mission is to empower companies to deliver next generation, unified engagement journeys that reimagine the customer’s experience. Overview The world is moving from transactional to unified customer experiences. This has been driven by a shift from traditional channels, like email and phone, to an ever-expanding universe of digital channels, like messaging, chat, text and social.
Sprinklr also supports seamless integrations with other industry-leading Generative AI models to offer customers the broadest choice for their personal AI needs.
Our platform utilizes a single codebase architecture purpose-built for managing customer experience data and is powered by AI, foundational to our platform and purpose-build for customer experience. Sprinklr also supports seamless integrations with other industry-leading generative artificial intelligence (“Generative AI”) models to offer customers the broadest choice for their personal AI needs.
Our Artificial Intelligence – Sprinklr AI The core of our technology is our proprietary AI, which is integrated across a highly scalable and flexible architecture and available across all Sprinklr product suites. We believe that our Unified-CXM platform is the first ever purpose-built, AI-powered platform for the enterprise designed to account for the security, compliance and governance measures they require.
Our Artificial Intelligence – Sprinklr AI The core of our technology is our proprietary AI, which is the foundation of our AI-based unified platform and integrated across a highly scalable and flexible architecture across all Sprinklr solutions.
Consumers’ experiences today are shaped by each interaction they have with a brand, which includes physical, in-person engagements, as well as digital engagements through online customer support, websites or social media. And, given the expansive digital landscape for businesses today, brand reputation is significantly impacted by the far-reaching influence of consumers on public, digital platforms.
Consumer experiences today are shaped by each interaction they have with a brand, which include physical, in-person engagements, as well as digital engagements through online customer support, websites or social media. And, given how people connect and transact today, companies cannot afford to deliver disjointed customer engagements using disparate systems.
Our AI deep machine learning algorithms work via eight distinct and powerful layers, which aggregate all different unstructured data types across more than 30 digital channels with structured first- and second-party traditional channel data and convert them into actionable structured insights and interactions. • Industry leading purpose-built Unified-CXM platform to ingest and analyze customer engagement data across all addressable/available channels: Our platform is architected to ingest unstructured and structured data from more than 30 digital channels in real-time, including audio, video and images.
Our AI deep machine learning algorithms utilize advanced techniques like natural language processing, natural language generation, Generative AI, computer vision, automatic speech recognition and predictive analysis on structured and unstructured data in a myriad of formats, including speech, text and images, to drive extraordinary outcomes. • Industry leading purpose-built Unified-CXM platform to ingest and analyze customer engagement data across all addressable/available channels: Our platform is architected to ingest unstructured and structured data from more than 30 digital channels in real-time, including audio, video and images.
Sprinklr has been named a Leader in Gartner’s Content Marketing Platforms Magic Quadrant™, the Forrester Wave™ for Social Suites and Ventana Customer Experience Management Value Index. The company has been evaluated with strong results in Gartner’s Enterprise Conversational AI Platforms Magic Quadrant™, Omdia Customer Engagement Platforms Universe, and IDC Voice of the Customer MarketScape.
We are a Leader in the Gartner® Magic Quadrant™ for Content Marketing Platforms, Forrester Wave™: Social Suites, and Forrester Wave™: Digital Customer Interaction Solutions. Additionally, we have received strong rankings in Forrester Wave™: Conversational AI for Customer Service, Forrester Wave™: Customer Feedback Management, IDC Contact Center as a Service MarketScape, and IDC Voice of the Customer MarketScape.
Further, our references to website URLs are intended to be inactive textual references only. 16
The information contained on the websites referenced in this Form 10-K is not incorporated by reference into this filing. Further, our references to website URLs are intended to be inactive textual references only. 16
We believe that our employee relations are good, and we have not experienced any work stoppages. Our Culture Building a culture where everyone is happier and can thrive personally and professionally at Sprinklr is the cornerstone of our philosophy.
We believe that our employee relations are good, and we have not experienced any work stoppages. 14 Our Culture At Sprinklr, our core values – customer obsession, trust, accountability and teamwork – shape our culture and how we work together.
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.
In addition to our core values, we invest and focus on the following initiatives that build trust and enable collective success across all regions: • Engagement, Development, and Alignment Process (EDAP): EDAP is part of our company operating rhythm and consists of the following three components: understanding how engaged our workforce is, aligning individual performance with our strategic objectives and investing in the development of our employees.
We have spent over a decade developing sophisticated, deep machine learning algorithms that automate techniques to deliver insights and drive interactions.
We believe that our Unified-CXM platform is the first ever purpose-built, AI-based platform for the enterprise, and we strive to account for the security, compliance and governance measures they require. We have spent over a decade developing sophisticated, deep machine learning algorithms that automate insights and interactions.
Item 1. Business Who We Are Sprinklr empowers the world’s largest and most loved brands to make their customers happier.
Item 1. Business Who We Are Sprinklr is redefining the world’s ability to make every customer experience extraordinary.
We value and celebrate our sense of belonging and fervently believe that every employee matters, and should be respected, listened to, and have opportunities to contribute to the magic of Sprinklr. We have taken action to support social justice and deliver training in diversity, inclusion and unconscious bias. Our employee resource groups, a.k.a.
We value and celebrate our sense of belonging and believe that every employee should be respected, listened to and have opportunities to contribute to what we're building together. As part of this commitment, our Employee Resource Groups, known as We Care Teams, serve as vital support networks for our global workforce.
Our Diversity, Equity, Inclusion & Belonging are organized around the key objectives of recruiting, investing and educating, and captivating. We emphasize human capital development and leadership training and supports eight employee resource groups that form part of our We Care philosophy.
Through leadership training, human capital development and active support of employee resource groups (We Care), we cultivate a culture of belonging that is at the heart of our philosophy.
Sprinklr AI+ leverages generative AI in all four Sprinklr product suites to offer AI-powered omnichannel contact center as a service (“CCaaS”), social media management, marketing & advertising, and research tools.
Sprinklr AI+ allows enterprises to drive personalized customer engagement at scale, create more effective content, improve feedback management and surface insights and even next best actions. Sprinklr AI+ leverages Generative AI across products to offer AI-based omnichannel contact center as a service (“CCaaS”), social media management, advertising, content, and campaign lifecycle management and research tools.
This informal survey serves as an opportunity for continued engagement with our customers, but not a formal measure of our ongoing performance. 12 • The CDAP (Customer Delight Assurance Program) applies when our strategic customers’ CHI falls, or consumption begins to trend downward.
This serves as an opportunity for continued engagement with our customers, but not a formal measure of our ongoing performance. • Operation Bear Hug is targeted at ensuring that the needs of our strategic customers are met and that we continue to serve them the best we can.
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, addresses and birthdates.
For large enterprises with legacy customer relationship management (“CRM”) systems, backward-looking customer information like names, addresses and birthdates do not support today’s demands for seamless conversational experiences or prepare for the future of 360-degree immersive experiences.
Our giving initiatives — under the umbrella of “Sprinklr Cares” — sponsor relief efforts around the world and give employees the opportunity to contribute to their personal causes. Among other benefits, Sprinklr Cares enables charitable donations when employees recruit new talent and allows for organized volunteer opportunities.
Our interactive Wellbeing platform provides resources and challenges focused on healthy eating, mental well-being, financial health, and physical fitness, helping employees prioritize their overall wellness. • Giving Back: Our giving initiatives — under the umbrella of “Sprinklr Cares” — sponsor relief efforts around the world and give employees the opportunity to contribute to their personal causes.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFactors that may cause fluctuations in our results of operations include, without limitation, those listed below: • variability in our sales cycle, including as a result of the budgeting cycles and internal purchasing priorities of our customers; • the payment terms and subscription term length associated with sales of our Unified-CXM platform and their effect on our bookings and free cash flow; • the addition or loss of large customers, including through acquisitions or consolidations; • the timing of sales and recognition of revenue, which may vary as a result of changes in accounting rules and interpretations; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; 19 • network outages or actual or perceived security breaches or other incidents; • general economic, market and political conditions; • customer renewal rates; • increases or decreases in the number of elements of our services or pricing changes upon any renewals of customer agreements; • changes in our pricing policies or those of our competitors; • the mix of services sold during a period; • the timing of our recognition of stock-based compensation expense for our equity awards, particularly in cases where awards covering a large number of our shares are tied to a specific event or date; and • the timing and success of introductions of new platform features and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners.
Biggest changeFactors that may cause fluctuations in our results of operations include, without limitation, those listed below: • the payment terms and subscription term length associated with sales of our Unified-CXM platform and their effect on our bookings and free cash flow; • our ability to successfully implement the software systems we sell; • the timing and success of introductions of new platform features and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners; • increases or decreases in the number of elements of our services or pricing changes upon any renewals of customer agreements; • variability in our sales cycle, including as a result of the budgeting cycles and internal purchasing priorities of our customers; • pricing adjustments made to existing customer agreements; • the addition or loss of large customers, including through acquisitions or consolidations; • customer renewal rates; • changes in our pricing policies or those of our competitors; • the mix of services sold during a period; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; • our ability to collect on accounts receivable; • the timing of our recognition of stock-based compensation expense for our equity awards, particularly in cases where awards covering a large number of our shares are tied to a specific event or date; • the timing of sales and recognition of revenue, which may vary as a result of changes in accounting rules and interpretations; • network outages or actual or perceived security breaches or other incidents; and • general economic, market and political conditions.
If services are interrupted at any of these facilities or providers, such agreements are terminated, or we are unable to renew these agreements on commercially reasonable terms or at all, or if one of our data center or cloud computing providers is acquired or encounters financial difficulties, including bankruptcy, we may be required to transfer our servers and other infrastructure to new data centers and cloud computing providers, and we may incur significant costs and possible service interruptions in connection with doing so.
If services are interrupted at any of these facilities or providers, such agreements are terminated, or we are unable to renew these agreements on commercially reasonable terms or at all, or if one of our data center or cloud computing providers is acquired or encounters financial difficulties, including bankruptcy, we may be required to transfer our data, servers and other infrastructure to new data centers and cloud computing providers, and we may incur significant costs and possible service interruptions in connection with doing so.
In addition, our use of Generative AI may also lead to novel and urgent cybersecurity risks (such as if a bad actor “poisons” the Generative AI with bad inputs or logic), including the misuse of personal or business confidential data, which may adversely affect our operations and reputation.
In addition, use of generative AI may also lead to novel and urgent cybersecurity risks (such as if a bad actor “poisons” the generative AI with bad inputs or logic), including the misuse of personal or business confidential data, which may adversely affect our operations and reputation.
We also may be unable to reduce our cost structure in line with a significant deterioration in sales. In addition, a significant majority of our costs are expensed as incurred, while revenue is recognized over the term of the agreements with our customers.
We also may be unable to reduce our cost structure in line with a significant deterioration in sales. In addition, a majority of our costs are expensed as incurred, while revenue is recognized over the term of the agreements with our customers.
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; • 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; • 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 26 • 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; • 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; • fluctuations in currency exchange rates and related effects on our results of operations; 28 • 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.
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; 41 • 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; • 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; • 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.
As a result, we may fail to meet or exceed the expectations of investors or securities analysts, which could cause our stock price to decline. • Any failure of our Unified Customer Experience Management (“Unified-CXM”) platform to satisfy customer demands, achieve increased market acceptance or adapt to changing market dynamics would adversely affect our business, results of operations, financial condition and growth prospects. • The market for Unified-CXM solutions is new and rapidly evolving, and if this market develops more slowly than we expect or declines, develops in a way that we do not expect, or if we do not compete effectively, our business could be adversely affected. • Our business depends on our customers renewing their subscriptions and on us expanding our sales to existing customers.
As a result, we may fail to meet or exceed the expectations of investors or securities analysts, which could cause our stock price to decline. • Any failure of our Unified Customer Experience Management (“Unified-CXM”) platform to satisfy customer demands, achieve increased market acceptance or adapt to changing market dynamics would adversely affect our business, results of operations, financial condition and growth prospects. • The market for Unified-CXM solutions is rapidly evolving, and if this market develops more slowly than we expect or declines, develops in a way that we do not expect, or if we do not compete effectively, our business could be adversely affected. • Our business depends on our customers renewing their subscriptions and on us expanding our sales to existing customers.
Any decline in our customer renewals or expansion would harm our business, results of operations and financial condition. • We use artificial intelligence in our products, which may result in operational challenges, legal liability, reputational concerns and competitive risks. • 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. • 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. • We use artificial intelligence in our products, which may result in operational challenges, legal liability, reputational concerns and competitive risks. • 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. • 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 and the third parties with whom we work are subject to stringent and changing obligations related to data privacy and security.
To the extent that we do not effectively address capacity constraints, upgrade our systems and data centers as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology or an increased user base, we may experience service interruptions and performance issues, which may result in a disruption of our products, delay the development of new products and features, result in a loss of current and future revenue, result in negative publicity and harm to our reputation, require us to pay significant penalties or fines or subject us to litigation, claims or other disputes, any of which could have an adverse effect on our business, results of operations and financial condition.
To the extent that we do not effectively address capacity constraints, upgrade our systems and data centers as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology or an increased user base, we may experience service interruptions and performance issues, which may result in a disruption of our products, delay the development of new products and features, result in a loss of current and future revenue, result in negative publicity and harm to our 35 reputation, require us to pay significant penalties or fines or subject us to litigation, claims or other disputes, any of which could have an adverse effect on our business, results of operations and financial condition.
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 31 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.
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.
Our customer renewal rates, as well as the rate at which our customers expand their use of our Unified-CXM platform, may decline or fluctuate as a result of a number of factors, including the customers’ satisfaction with our Unified-CXM platform, defects or performance issues, our customer and product support, our prices, mergers and acquisitions affecting our customer base, the effects of global economic conditions, the entrance of new or competing technologies and the pricing of such competitive offerings or reductions in the enterprises’ spending levels for any reason.
Our customer renewal rates, as well as the rate at which our customers expand their use of our Unified-CXM platform, may decline or fluctuate as a result of a number of factors, including the customers’ satisfaction with our Unified-CXM platform, defects or performance issues, our customer and product implementation and support, our prices, mergers and acquisitions affecting our customer base, the effects of global economic conditions, the entrance of new or competing technologies and the pricing of such competitive offerings or reductions in the enterprises’ spending levels for any reason.
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 37 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.
Additionally, our insurance policies may be insufficient to cover a claim made against us by any such customers affected by any 32 errors, defects or other infrastructure problems. In some instances, we may not be able to rectify, remediate or even identify the cause or causes of these performance issues within an acceptable period of time.
Additionally, our insurance policies may be insufficient to cover a claim made against us by any such customers affected by any errors, defects or other infrastructure problems. In some instances, we may not be able to rectify, remediate or even identify the cause or causes of these performance issues within an acceptable period of time.
If the equity and credit markets continue to deteriorate, including as a result of recent bank closures, public health crises, or political unrest, war or a global or domestic recession or the fear thereof, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.
If the equity and credit markets continue to deteriorate, including as a result of bank closures, public health crises, or political unrest, war or a global or domestic recession or the fear thereof, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive.
However, we may not be able to obtain such a license on commercially reasonable terms or at all. Even if we were able to obtain a 29 license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments.
However, we may not be able to obtain such a license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments.
Our access to protected health information for specific agreed use cases on behalf of those customers that are covered entities and therefore subject to the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”), may subject us to HIPAA’s specific requirements relating to the privacy, security, and transmission of protected health information.
Our access to protected health information for specific agreed upon use cases on behalf of those customers that are covered entities and therefore subject to the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”), may subject us to HIPAA’s specific requirements relating to the privacy, security, and transmission of protected health information.
Moreover, these agreements may not provide an adequate remedy for breaches or the unauthorized use or disclosure of our confidential information or technology or infringement of our intellectual property. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-how is difficult, expensive, and time-consuming, and the outcome is unpredictable.
Moreover, these agreements may not provide an adequate remedy for breaches or the unauthorized use or disclosure of 30 our confidential information or technology or infringement of our intellectual property. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-how is difficult, expensive, and time-consuming, and the outcome is unpredictable.
Any 40 failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
Our ability to use our net operating losses and other tax assets to offset future taxable income or tax liability be subject to certain limitations. 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.
Our ability to use our net operating losses and other tax assets to offset future taxable income or tax liability could be subject to certain limitations. 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.
If a court were to find the exclusive-forum provision in our charter documents to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations. Item 1B. Unresolved Staff Comments None. 42
If a court were to find the exclusive-forum provision in our charter documents to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our results of operations. Item 1B. Unresolved Staff Comments None.
These investments may be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving and maintaining profitability or positive cash flow on a consistent basis.
These investments may be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from maintaining profitability or positive cash flow on a consistent basis.
We may not be able to attract new customers to our Unified-CXM platform for a variety of reasons, including as a result of their use of traditional approaches to customer experience management, their 18 internal timing or budget or the pricing of our Unified-CXM platform compared to products and services offered by our competitors.
We may not be able to attract new customers to our Unified-CXM platform for a variety of reasons, including as a result of their use of traditional approaches to customer experience management, their internal timing or budget or the pricing of our Unified-CXM platform compared to products and services offered by our competitors.
The use of Generative AI processes at scale is relatively new and may lead to challenges, concerns and risks that are significant or that we may not be able to predict, especially if our use of these technologies in our products and services becomes more important to our operations over time.
The use of generative AI technology and processes at scale is relatively new and may lead to challenges, concerns and risks that are significant or that we may not be able to predict, especially if our use of these technologies in our products and services becomes more important to our operations over time.
For example, on February 25, 2022, we agreed to settle all outstanding claims with Opal Labs Inc. (“Opal”) with respect to Opal’s complaints alleging breach of contract and violation of Oregon’s Uniform Trade Secrets Act, among other claims, and, on March 1, 2022, the court dismissed those claims with prejudice.
For example, on February 25, 2022, we agreed to settle all outstanding claims with Opal Labs Inc. (“Opal”) with respect to Opal’s complaints alleging breach of contract and violation 31 of Oregon’s Uniform Trade Secrets Act, among other claims, and, on March 1, 2022, the court dismissed those claims with prejudice.
UK and EEA data privacy regulations in relation to electronic communications also require opt-in consent to send marketing emails or other electronic communications to individuals or for the use of cookies and the data obtained using cookies and similar technologies for advertising, analytics and certain other purposes – activities on which our products and marketing strategies rely.
UK and EEA data privacy regulations in relation to electronic communications also require opt-in consent to send certain unsolicited marketing emails or other electronic communications to individuals or for the use of cookies and the data obtained using cookies and similar technologies for advertising, analytics and certain other purposes – activities on which our products and marketing strategies rely.
The market for Unified-CXM solutions is new and rapidly evolving, and if this market fails to grow or grows more slowly than we currently anticipate, demand for our Unified-CXM platform could be adversely affected. The Customer Experience Management (“CXM”) market also is subject to rapidly changing user demand and trends.
The market for Unified-CXM solutions is rapidly evolving, and if this market fails to grow or grows more slowly than we currently anticipate, demand for our Unified-CXM platform could be adversely affected. The Customer Experience Management (“CXM”) market also is subject to rapidly changing user demand and trends.
If we expend a significant amount of resources on research and development and our efforts do not lead to the successful introduction or improvement of solutions that are competitive in our current or future markets, our business and results of operations would be adversely affected.
If we expend a significant amount of resources on research and development and our efforts do not lead to the successful 26 introduction or improvement of solutions that are competitive in our current or future markets, our business and results of operations would be adversely affected.
We rely on third-party data centers and cloud computing providers, and any interruption or delay in service from these facilities could impair the delivery of our Unified-CXM platform and harm our business. We currently serve our customers from third-party data centers and cloud computing providers located around the world.
We rely on third-party data centers and cloud computing providers, and any interruption or delay in service from these facilities could impair the delivery of our Unified-CXM platform and harm our business. 22 We currently serve our customers from third-party data centers and cloud computing providers located around the world.
If the mobile solutions we have developed for our Unified-CXM platform do not meet the needs of current or prospective customers, or if our solutions are difficult to access, customers or users may reduce their usage of our Unified-CXM platform or cease using our Unified-CXM platform altogether and our business could suffer.
If the mobile solutions we have developed for our Unified-CXM platform do not meet the needs of current or prospective customers, or if our solutions are difficult to access or use, customers or users may reduce their usage of our Unified-CXM platform or cease using our Unified-CXM platform altogether and our business could suffer.
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. These transactions, even if announced, may not be completed.
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 27 are beyond our control. We cannot predict the number, timing or size of these transactions. These transactions, even if announced, may not be completed.
In some cases, we rely on negotiated agreements with social media networks and other data providers. These negotiated agreements may provide increased access to application programming interfaces (“APIs”) and data that allow us to provide 23 a more comprehensive solution for our customers.
In some cases, we rely on negotiated agreements with social media networks and other data providers. These negotiated agreements may provide increased access to application programming interfaces (“APIs”) and data that allow us to provide a more comprehensive solution for our customers.
As part of our growth strategy, we expect to continue to expand our international operations, which may include opening additional offices in new 25 jurisdictions and providing our Unified-CXM platform in additional languages and on-boarding new customers outside the United States.
As part of our growth strategy, we expect to continue to expand our international operations, which may include opening additional offices in new jurisdictions and providing our Unified-CXM platform in additional languages and on-boarding new customers outside the United States.
Additionally, errors in inventorship or ownership can sometimes also impact priority claims, and if 28 we were to lose our ability to claim priority for certain patent filings, intervening art or other events may preclude us from issuing patents.
Additionally, errors in inventorship or ownership can sometimes also impact priority claims, and if we were to lose our ability to claim priority for certain patent filings, intervening art or other events may preclude us from issuing patents.
The market for Unified-CXM solutions is new and rapidly evolving, and if this market develops more slowly than we expect or declines, develops in a way that we do not expect, or if we do not compete effectively, our business could be adversely affected.
The market for Unified-CXM solutions is rapidly evolving, and if this market develops more slowly than we expect or declines, develops in a way that we do not expect, or if we do not compete effectively, our business could be adversely affected.
If we are not able to compete successfully against our current and future competitors, our business, results of operations and financial condition may be adversely affected. Our business depends on our customers renewing their subscriptions and on us expanding our sales to existing customers.
If we are not able to compete successfully against our current and future competitors, our business, results of operations and financial condition may be adversely affected. 21 Our business depends on our customers renewing their subscriptions and on us expanding our sales to existing customers.
The Company and Opal finalized the settlement on March 15, 2022, and it was paid on March 30, 2022. As we face increasing competition and become increasingly high profile, the possibility of receiving a larger number of intellectual property claims against us grows.
We and Opal finalized the settlement on March 15, 2022, and it was paid on March 30, 2022. As we face increasing competition and become increasingly high profile, the possibility of receiving a larger number of intellectual property claims against us grows.
Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contracts, and other obligations that govern the processing of confidential information by us and on our behalf.
Our data processing activities subject us to numerous global data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contracts, and other obligations that govern the processing of confidential information by us and on our behalf.
Additionally, the California Delete Act requires the California Privacy Protection Agency to establish by January 1, 2026 a mechanism to allow California consumers to submit a single, verifiable request to delete all of their personal data held by all registered data brokers and their service providers.
Additionally, the California Delete Act requires the California Privacy Protection Agency to establish by January 1, 2026 a mechanism to allow California consumers to submit a single, 37 verifiable request to delete all of their personal data held by all registered data brokers and their service providers.
Similarly, the Russia-Ukraine war has also added to, and the Israel-Hamas war and related regional tensions may add 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.
The Russia-Ukraine war has also added to, and the Israel-Hamas war and related regional tensions may add 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.
If our actual results of operations fall below the expectations of investors or securities analysts, the price of our Class A common stock could decline substantially. Our results of operations and financial metrics may be difficult to predict.
If our actual results of operations fall below the expectations of investors or securities analysts, the price of our Class A common stock could decline substantially. 19 Our results of operations and financial metrics may be difficult to predict.
We do not have sufficient operating history to know 24 whether our brand promotion activities will ultimately be successful or yield increased revenue, and, if they are not successful, our business may be adversely affected.
We do not have sufficient operating history to know whether our brand promotion activities will ultimately be successful or yield increased revenue, and, if they are not successful, our business may be adversely affected.
Further, certain of our customer agreements contain provisions permitting the customer to become a party to, or a beneficiary of, a source code escrow agreement under which we place the proprietary source code for certain of our solutions in escrow with a third party.
Further, certain of our customer agreements contain provisions permitting the customer to become a party to, or a beneficiary of, a source code escrow agreement under which we place the proprietary source code for certain of our solutions in escrow with a third 32 party.
Our privacy policies and other statements regarding data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair, or misrepresentative of our actual practices.
Our privacy policies and other statements regarding data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair, misleading, or misrepresentative of our actual practices.
Material risks that may adversely affect our business, financial condition or results of operations include, but are not limited to, the following: • Our recent rapid growth may not be indicative of our future growth.
Material risks that may adversely affect our business, financial condition or results of operations include, but are not limited to, the following: • Our recent growth may not be indicative of our future growth.
This exclusive forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
This exclusive forum 45 provision will not apply to any causes of action arising under the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
We also may incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the data centers that we use.
We also may incur significant costs for using alternative equipment or taking other actions in preparation for, or in reaction to, events that damage the data centers and equipment that we use.
Moreover, third-party data suppliers have recently been subject to increased 34 litigation under various claims of violating certain state privacy laws.
Moreover, third-party data suppliers have recently been subject to increased litigation under various claims of violating certain state privacy laws.
If we cannot use AI or Generative AI, or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.
However, if we cannot use AI or generative AI, or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates, higher interest rates, disruptions in access to bank deposits or lending commitments due to bank failures and uncertainty about economic stability.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, fluctuations in inflation and interest rates, disruptions in access to bank deposits or lending commitments due to bank failures and uncertainty about economic stability.
Additionally, if the third parties we work with, including our vendors or third-party service providers, violate applicable laws, rules or regulations or our policies, such violations also may put our or our customers’ data at risk and could in turn have an adverse effect on our business.
Additionally, if the third parties with whom we work with, including our vendors or third-party service providers, violate applicable laws, rules or regulations or our policies, such violations may put our or our customers’ data at risk and could in turn have an adverse effect on our business.
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, 2024 and 2023, 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, 2025 and 2024, our research and development expenses were at least 10% of our revenue.
Our international sales and operations, including our planned business development activities outside of the United States, subject us to additional risks and challenges that can adversely affect our business, results of operations and financial condition. During the year ended January 31, 2024, approximately 41% of our sales were to customers outside of the Americas.
Our international sales and operations, including our planned business development activities outside of the United States, subject us to additional risks and challenges that can adversely affect our business, results of operations and financial condition. During the year ended January 31, 2025, approximately 41% of our sales were to customers outside of the Americas.
We cannot predict the actions that the FCC may take, whether any new FCC order or state initiatives regulating providers will be modified, overturned, or vacated by legal action, federal legislation, or the FCC itself, or the degree to which further regulatory action - or inaction - may adversely affect our business.
We cannot predict the actions that the FCC may take, whether any new FCC order or state initiatives regulating providers will be modified, overturned, or vacated by legal action, federal legislation, or the FCC itself, or the degree to which additional federal or state regulatory action – or inaction – may adversely affect our business.
In addition, rising inflation and other macroeconomic pressures in the U.S. and the global economy could exacerbate extreme volatility in the global capital markets and heighten unstable market conditions. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely.
In addition, fluctuations in inflation and other macroeconomic pressures in the U.S. and the global economy could exacerbate extreme volatility in the global capital markets and heighten unstable market conditions. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely.
These consequences may include: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing confidential information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms.
These consequences may include: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); regulatory investigations or requests for information; additional reporting requirements and/ 40 or oversight; restrictions on processing confidential information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms.
Our business could be adversely impacted by changes in laws and regulations related to the Internet or changes in access to the Internet generally. The future success of our business depends upon the continued use of the Internet as a primary medium for communication, business applications and commerce.
Our business could be adversely affected by changes in laws and regulations related to the Internet or changes in access to the Internet generally. The future success of our business depends upon the continued use of the Internet as a primary medium for communication, business applications and commerce.
Actual results will vary from the guidance and the variations may be material. Investors should also recognize that the reliability of any forecasted financial data will diminish the farther in the future that the data is forecasted. Actual operating results may be different from our guidance, and such differences may be adverse and material.
Investors should also recognize that the reliability of any forecasted financial data will diminish the farther in the future that the data is forecasted. Actual operating results may be different from our guidance, and such differences may be adverse and material.
For example, various privacy laws and other obligations may require us to obtain consents to process personal data in certain circumstances. For example, some of our data processing practices may be challenged under wiretapping laws, as we obtain customer information from third parties through various methods, including chatbot and session replay providers, or via third-party marketing pixels.
For example, some privacy laws and other obligations require us or our customers to obtain consent to process personal data in certain circumstances. Some of our data processing practices may be challenged under wiretapping laws, as we obtain customer information from third parties through various methods, including chatbot and session replay providers, or via third-party marketing pixels.
Any impairment of our or our customers’ data or interruptions in the functioning of our Unified-CXM platform, whether due to damage to, or failure of, third-party data centers, cloud computing providers or the cloud computing providers of our customers or unsuccessful data transfers, may reduce our revenue, result in significant fines, cause us to issue credits or pay penalties, subject us to claims for indemnification and other claims, litigation or 21 disputes, result in regulatory investigations or other inquiries, cause our customers to terminate their subscriptions and adversely affect our reputation, renewal rates and our ability to attract new customers.
Any impairment of our or our customers’ data or interruptions in the functioning of our Unified-CXM platform, whether due to damage to, or failure of, third-party data centers, cloud computing providers or the cloud computing providers of our customers or unsuccessful data transfers, may reduce our revenue, increase our operations costs, result in significant fines, cause us to issue credits or pay penalties, subject us to claims for indemnification and other claims, litigation or disputes, result in regulatory investigations or other inquiries, cause our customers to terminate their subscriptions and adversely affect our reputation, renewal rates and our ability to attract new customers.
Any failure or perceived failure by us or our third party partners 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 and mass arbitration demands, 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 the third parties with whom we work 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 and mass arbitration demands, 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.
Other jurisdictions may also adopt stringent data localization and cross-border data transfer requirements and, in some circumstances, these may be requirements outside of the scope of privacy law, including industry-specific or national security requirements.
Other jurisdictions may also adopt stringent data localization and cross-border data transfer requirements and, in many circumstances, these may be requirements outside of the scope of privacy law, including industry-specific or national security requirements.
Although there are currently various mechanisms that may be used to enable the transfer of personal data from the European Economic Area (“EEA”) and UK to the United States in compliance with the law, such as the EU-US Data Privacy Framework and the UK extension thereto (to which we are an active participant) and the EU’s standard contractual clauses, these mechanisms are subject to legal challenges, and there is no continued assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States or other countries with “inadequate” data protection regimes without the potential for future challenge.
With respect to data transfers under the GDPR, although there are currently various mechanisms that may be used to enable the transfer of personal data from the European Economic Area (“EEA”) and UK to the United States in compliance with the law, such as the EU-US Data Privacy Framework and the UK extension thereto (to which we are an active participant) and the EU’s standard contractual clauses, these mechanisms continue to be subject to legal challenges, and there is no continued assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States or other countries with “inadequate” data protection regimes without the potential for future challenge.
In addition, as the Internet continues to experience growth in the numbers of users, frequency of use and amount of data transmitted, the use of the Internet as a business tool could be adversely affected due to delays in the development or adoption of new standards and protocols to handle increased demands of Internet activity, security, reliability, cost, ease-of-use, accessibility and quality of service.
In addition, as 34 the Internet continues to experience growth in the number of users, frequency of use and amount of data transmitted, the use of the Internet as a business tool could be adversely affected due to delays in the development or adoption of new standards and protocols to handle increased demands of Internet activity, security, reliability, cost, ease-of-use, accessibility and quality of service.
We may as a result be subject to claims for breach of contract, infringement of intellectual property rights, or indemnity, required to release our proprietary source code, pay damages, royalties, or license fees or other amounts, seek licenses, re-engineer our applications, discontinue sales in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from our development efforts, any of which could adversely affect our business.
We may as a result be subject to claims for breach of contract, infringement of intellectual property rights, or indemnity, required to release our proprietary source code, pay damages, incur additional internal compliance costs, royalties, or license fees or other amounts, seek licenses, re-engineer our applications, discontinue sales in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from our development efforts, any of which could adversely affect our business.
In addition, government agencies and private organizations have imposed, and may in the future impose, additional taxes, fees or other charges for accessing the Internet or commerce conducted via the Internet.
In addition, federal and state government agencies and private organizations have imposed, and may in the future impose, additional taxes, fees or other charges for accessing the Internet or commerce conducted via the Internet.
The federal government is also considering comprehensive privacy legislation. In addition, as we continue to expand our business activities, we are accessing additional types and greater volumes of potentially confidential information that may subject us to additional privacy and security laws and obligations.
The federal government is also still considering comprehensive privacy legislation. In addition, as we continue to expand our business activities, we are accessing additional types and greater volumes of potentially confidential or sensitive information that may subject us to additional privacy and security laws and obligations.
Business partners and other third parties with a strong influence on how consumers interact with our products, such as Apple, Google, Meta, Microsoft, 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, Microsoft and Mozilla, have and may continue to create new privacy controls or restrictions on their products and platforms, limiting the effectiveness of our services.
If our agreement with X (formerly known as 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.
If our agreement with X 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.
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.
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 effective and efficient implementations, as well as on-going 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.
Generative AI features and services leverage existing and widely available technologies, such as those owned by OpenAI or alternative large language model providers.
Generative AI features and services leverage existing and widely available technologies, such as those owned by Microsoft Azure, OpenAI or alternative large language model providers.
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit and share (which we collectively refer to as “process”) proprietary and confidential data, including personal data, intellectual property, and trade secrets, of ours or our customers (collectively, “confidential information”).
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, share and conduct other activities with (which we collectively refer to as “process”) proprietary and confidential data, including personal data, intellectual property, and trade secrets, of ours or our customers (collectively, “confidential information”).
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.
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 the past and we may not be able to generate sufficient revenue to achieve and maintain profitability.
As of January 31, 2024, we owned 38 U.S. issued patents and 10 pending non-provisional or provisional U.S. patent applications.
As of January 31, 2025, we owned 38 U.S. issued patents and 10 pending non-provisional or provisional U.S. patent applications.
In the past, securities class action litigation often has been brought against a company following a decline in the market price of its securities.
In the past, securities class action litigation have often been brought against a company following a decline in the market price of its securities.
The 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; • 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 the Russia-Ukraine war and the Israel-Hamas war (including any escalation or geographical expansion of these conflicts); and • “flash crashes,” “freeze flashes” or other glitches that disrupt trading on the securities exchange on which we are listed.
The 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, including as a result of any future share repurchase program implemented by the company; • 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; 42 • 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; • our involvement in any litigation, including class action lawsuits; • governmental or regulatory actions or audits; • regulatory or political developments in the United States, foreign countries or both, including potential implications from the recent elections in the United States; • general economic, political and market conditions and overall fluctuations in the financial markets in the United States and abroad, including as a result of public health crises or geographical tensions and wars, such as the Russia-Ukraine war and the Israel-Hamas war (including any escalation or geopolitical expansion of these conflicts); and • “flash crashes,” “freeze flashes” or other glitches that disrupt trading on the securities exchange on which we are listed.
Our customers may weaken or incorrectly configure security controls provided by us to maintain the security of their environments, resulting in a loss of confidentiality or integrity of such customer’s data or processes.
In certain cases, our customers may reject, weaken or incorrectly configure security controls provided by us to maintain the security of their environments, resulting in a loss of confidentiality or integrity of such customer’s data or processes.
As a result, the integration of Generative AI into our products and operations may not be successful despite expending significant time and monetary resources to attempt to do so. Our investments in deploying such technologies may be substantial, and they may be more expensive than anticipated.
As a result, the integration of generative AI into our products and operations may not be successful despite expending significant time and monetary resources to attempt to make it successful. Our investments in deploying such technologies may be substantial, and they may be more expensive than anticipated.
Further, intellectual property ownership and liability for violation of open source licenses, infringement or misappropriation of intellectual property and violation of privacy or publicity rights are issues arising from the use of AI technologies that legislators are still attempting to establish and with which courts are still grappling.
Further, intellectual property ownership and liability for violation of terms of use, open-source license obligations, infringement or misappropriation of intellectual property and violation of privacy or publicity rights are issues arising from the use of AI technologies that legislators are still attempting to establish and with which courts are still grappling.
Therefore, the use of AI technologies in connection with our products or operations may result in the inability to establish ownership of intellectual property or exposure to claims relating to the foregoing.
Therefore, the use of AI technologies in connection with our products or operations may impact our business model or result in the inability to establish ownership of intellectual property or exposure to claims relating to the foregoing.
If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions, outside of the origin territory, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the prohibition on further transfers, the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions outside of the origin territory, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the prohibition on further transfers (including remote access by employees in support teams in certain regions), the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CISO, who reports to our General Counsel and has the primary responsibility for our cybersecurity risk assessment and management processes, has over a decade of experience as CISO for public companies, as well as in U.S. government security compliance, architecture and design, and systems and standards development.
Biggest changeOur VP, Product Security, who reports to our GC and also supports the management team’s cybersecurity risk assessment and management processes, has twenty years of cyber experience, as well as in product security, program development and software development.
Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider.
Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment 46 designed to help identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider.
Our information security and enterprise risk management function, led by our Chief Information Security Officer (“CISO”) and Chief Compliance Officer (“CCO”), helps identify, assess and manage the Company’s cybersecurity threats and risks, including through the use of the Company’s information security risk register.
Our information security and enterprise risk management function, led by the roles of Chief Information Security Officer (“CISO”) and Chief Compliance Officer (“CCO”), helps identify, assess and manage the Company’s cybersecurity threats and risks, including through the use of the Company’s information security risk register.
Our CISO is responsible for hiring appropriate personnel, managing the security budget, helping to integrate cybersecurity risk considerations into our overall risk management strategy, communicating key priorities to relevant personnel, providing security and 43 security-related risk guidance to leadership relating to product management, development, and operations, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
The CISO role is responsible for hiring appropriate personnel, managing the security budget, helping to integrate cybersecurity risk considerations into our overall risk management strategy, communicating key priorities to relevant personnel, providing security and security-related risk guidance to leadership relating to product management, development, and operations, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Risk Factors” in this Form 10-K, including “If we or the third parties upon which we rely 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.” Governance Our board of directors addresses our cybersecurity risk management as part of its general oversight function.
Risk Factors” in this Form 10-K, including “If we or the third parties upon which we rely experience a cybersecurity breach or other security incident, any vulnerabilities are identified, 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.” Governance Our board of directors addresses our cybersecurity risk management as part of its general oversight function.
The audit committee receives periodic reports from the CISO concerning any significant cybersecurity threats and risks and the processes we have implemented to address them. The audit committee also has access to various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
The audit committee receives periodic reports from management concerning any significant cybersecurity threats and risks and the processes we have implemented to address them. The audit committee also has access to various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
The board of directors’ audit committee is responsible for overseeing our cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of management, including our CISO, Chief Compliance Officer and General Counsel.
The board of directors’ audit committee is responsible for overseeing our cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain roles within our management, including the roles of CISO, CCO and General Counsel (“GC”).
Our incident response and crisis communications plans are designed to escalate certain cybersecurity incidents to members of the crisis management team depending on the circumstances, which includes our CISO, Chief Compliance Officer, General Counsel, corporate communications team and executive leadership as needed.
Our incident response and crisis communications plans are designed to escalate certain cybersecurity incidents to members of the crisis management team depending on the circumstances, which includes the following roles: CISO, CCO, GC, and the corporate communications team and executive leadership as needed.
Added
The CISO role reports to our GC and is the role with the primary responsibility for our cybersecurity risk assessment and management processes.
Added
Additionally, as part of our governance of cybersecurity, if a role on the management team relevant to our cybersecurity risk assessment and management processes is or becomes vacant, another senior member of the applicable functional team is designated to support our cybersecurity risk assessment and management processes on an interim basis, as needed.

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 14,000 square feet of office space under a lease that expires in June 2024. We have other domestic offices, including in Austin and San Francisco, and international offices, including in Brazil, England, France, Germany, India, Japan, Singapore, Spain, and United Arab Emirates.
Biggest changeItem 2. Properties Our principal executive offices are located in New York, NY, USA where we lease approximately 24,000 square feet of office space under a lease that expires in December 2034. We have one other domestic office in Austin, and international offices, including in England, France, Germany, India, Japan, Singapore, Spain, and United Arab Emirates.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect our future results of operations, cash flows, or financial position.
Biggest changeThe outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect our future results of operations, cash flows, or financial position. Refer to Note 9, Commitments and Contingencies - Legal Matters, to our Consolidated Financial Statements included in “Part II, Item 8.
Removed
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. Mine Safety Disclosures None. 44 Part II
Added
Financial Statements” of this Form 10-K for a description of current legal proceedings. Item 4. Mine Safety Disclosures None. 47 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe 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. 45 Recent Sales of Unregistered Equity Securities None.
Biggest changeThe 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. 48 Issuer Purchases of Equity Securities None.
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, 2024 in comparison to the S&P 500 Index and the S&P 500 Information Technology Index.
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, 2025 in comparison to the S&P 500 Index and the S&P 500 Information Technology Index.
Holders of Record As of January 31, 2024, there were 389 and 472 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, 2025, there were 360 and 472 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.
Removed
Issuer Purchases of Equity Securities The following table sets forth information concerning our company’s purchase of its Class A common stock during the three months ended January 31, 2024: Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (in thousands) November 1, 2023 through November 30, 2023 — $ — — $ — December 1, 2023 through December 31, 2023 — $ — — $ — January 1, 2024 through January 31, 2024 2,400 $ 12.31 2,400 $ 70,419 (1) On January 4, 2024, we announced that our board of directors had approved a program to periodically repurchase up to $100 million of our Class A common stock in open market purchases, including through Rule 10b5-1 plans (the “2024 Share Repurchase Program”).
Removed
The 2024 Share Repurchase Program expires December 31, 2024. For additional information related to share repurchases, see Note 11, Stockholders’ Equity , to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of this Form 10-K. (2) Average price paid per share includes direct acquisition costs. Item 6. [Reserved] 46

Item 7. Management's Discussion & Analysis

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

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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 and discrete items relating to releases of valuation allowances in certain foreign jurisdictions. 49 Results of Operations The following table sets forth our consolidated statements of operations data for the periods indicated: Year Ended January 31, (in thousands) 2024 2023 2022 Revenue: Subscription $ 668,541 $ 548,649 $ 427,713 Professional services 63,819 69,541 64,681 Total revenue 732,360 618,190 492,394 Costs of revenue: Costs of subscription (1) 116,032 102,276 89,896 Costs of professional services (1) 63,369 61,449 57,655 Total costs of revenue 179,401 163,725 147,551 Gross profit 552,959 454,465 344,843 Operating expense: Research and development (1) 91,292 76,658 60,591 Sales and marketing (1) 321,849 336,719 286,963 General and administrative (1) 105,873 92,312 84,759 Litigation settlement — — 12,000 Total operating expense 519,014 505,689 444,313 Operating income (loss) 33,945 (51,224) (99,470) Other income (expense), net 26,577 3,756 (5,084) Income (loss) before provision for income taxes 60,522 (47,468) (104,554) Provision for income taxes 9,119 8,274 6,916 Net income (loss) $ 51,403 $ (55,742) $ (111,470) (1) Includes stock-based compensation expense, net of amounts capitalized, as follows: Year Ended January 31, (in thousands) 2024 2023 2022 Costs of subscription $ 1,130 $ 1,528 $ 1,794 Costs of professional services 1,450 2,249 2,448 Research and development 11,566 10,678 6,417 Sales and marketing 24,477 26,651 19,929 General and administrative 17,134 14,411 19,543 Stock-based compensation expense, net of amounts capitalized $ 55,757 $ 55,517 $ 50,131 50 The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenue (1) : Year Ended January 31, 2024 2023 2022 Revenue: Subscription 91 % 89 % 87 % Professional services 9 % 11 % 13 % Total revenue 100 % 100 % 100 % Costs of revenue: Costs of subscription 16 % 17 % 18 % Costs of professional services 9 % 10 % 12 % Total costs of revenue 24 % 26 % 30 % Operating expense: Research and development 12 % 12 % 12 % Sales and marketing 44 % 54 % 58 % General and administrative 14 % 15 % 17 % Litigation settlement 0 % 0 % 2 % Total operating expense 71 % 82 % 88 % Operating income (loss) 5 % (8) % (20) % Other income (expense), net 4 % 1 % (1) % Income (loss) before provision for income taxes 8 % (8) % (21) % Provision for income taxes 1 % 1 % 1 % Net income (loss) 7 % (9) % (23) % (1) Totals may not foot due to rounding. 51 Comparison of Fiscal Years Ended January 31, 2024 and 2023 Revenue Year Ended January 31, (in thousands) 2024 2023 $ Change % Change Subscription $ 668,541 $ 548,649 $ 119,892 22 % Professional services 63,819 69,541 (5,722) (8) % Total revenue $ 732,360 $ 618,190 $ 114,170 18 % The increase in subscription revenue was primarily due to (i) 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 and (ii) an increase in demand for our solutions from new customers.
Biggest changeResults of Operations The following table sets forth our consolidated statements of operations data for the periods indicated: Year Ended January 31, (in thousands) 2025 2024 2023 Revenue: Subscription $ 717,923 $ 668,541 $ 548,649 Professional services 78,471 63,819 69,541 Total revenue 796,394 732,360 618,190 Costs of revenue: Costs of subscription (1) 140,730 116,032 102,276 Costs of professional services (1) 81,348 63,369 61,449 Total costs of revenue 222,078 179,401 163,725 Gross profit 574,316 552,959 454,465 Operating expense: Research and development (1) 91,999 91,292 76,658 Sales and marketing (1) 321,658 321,849 336,719 General and administrative (1) 136,689 105,873 92,312 Total operating expense 550,346 519,014 505,689 Operating income (loss) 23,970 33,945 (51,224) Other income, net 24,322 26,577 3,756 Income (loss) before provision for income taxes 48,292 60,522 (47,468) (Benefit) provision for income taxes (73,317) 9,119 8,274 Net income (loss) $ 121,609 $ 51,403 $ (55,742) (1) Includes stock-based compensation expense, net of amounts capitalized, as follows: Year Ended January 31, (in thousands) 2025 2024 2023 Costs of subscription $ 1,323 $ 1,130 $ 1,528 Costs of professional services 1,387 1,450 2,249 Research and development 11,404 11,566 10,678 Sales and marketing 21,331 24,477 26,651 General and administrative 24,072 17,134 14,411 Stock-based compensation expense, net of amounts capitalized $ 59,517 $ 55,757 $ 55,517 53 The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenue (1) : Year Ended January 31, 2025 2024 2023 Revenue: Subscription 90 % 91 % 89 % Professional services 10 % 9 % 11 % Total revenue 100 % 100 % 100 % Costs of revenue: Costs of subscription 18 % 16 % 17 % Costs of professional services 10 % 9 % 10 % Total costs of revenue 28 % 24 % 26 % Operating expense: Research and development 12 % 12 % 12 % Sales and marketing 40 % 44 % 54 % General and administrative 17 % 14 % 15 % Total operating expense 69 % 71 % 82 % Operating income (loss) 3 % 5 % (8) % Other income, net 3 % 4 % 1 % Income (loss) before provision for income taxes 6 % 8 % (8) % (Benefit) provision for income taxes (9) % 1 % 1 % Net income (loss) 15 % 7 % (9) % (1) Totals may not foot due to rounding. 54 Comparison of Fiscal Years Ended January 31, 2025 and 2024 Revenue Year Ended January 31, (in thousands) 2025 2024 $ Change % Change Subscription $ 717,923 $ 668,541 $ 49,382 7 % Professional services 78,471 63,819 14,652 23 % Total revenue $ 796,394 $ 732,360 $ 64,034 9 % The increase in subscription revenue was primarily due to increased revenue from existing customers driven by the purchase of additional quantities of current subscription solutions and additional add-on solutions within our platform, as well as demand for our solutions from new customers.
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.
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.
In periods of net loss, we calculate non-GAAP net income (loss) per share by using non-GAAP net income (loss) divided by basic weighted average shares for the period regardless of whether we are in a non-GAAP net income or (loss) position and assuming that all potentially dilutive securities are anti-dilutive.
In periods of net loss, we calculate non-GAAP net income per share by using non-GAAP net income divided by basic weighted average shares for the period regardless of whether we are in a non-GAAP net income or loss position and assuming that all potentially dilutive securities are anti-dilutive.
In addition, we believe that free cash flow is also a useful non-GAAP financial measure. Free cash flow is defined as net cash provided by (used in) operating activities less cash used for purchases of property and equipment and capitalized internal-use software.
In addition, we believe that free cash flow is also a useful non-GAAP financial measure. Free cash flow is defined as net cash provided by operating activities less cash used for purchases of property and equipment and capitalized internal-use software.
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 U.S.
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 U.S. GAAP.
Operating Activities For the fiscal year 2024, cash provided by operating activities was $71.5 million, which consisted of net income of $51.4 million, adjusted for non-cash expenses of $65.9 million and $45.8 million of net cash flows used as a result of changes in operating assets and liabilities.
For the fiscal year 2024, cash provided by operating activities was $71.5 million, which consisted of net income of $51.4 million, adjusted for non-cash expenses of $65.9 million and $45.8 million net cash flows used as a result of changes in operating assets and liabilities.
These decreases to cash flows from operations were partially offset by (i) a $49.8 million increase in deferred revenue resulting primarily from increased billings for subscriptions, (ii) a $8.7 million decrease in prepaid expenses and other current assets driven by larger prepaid contracts in the prior fiscal year, and (iii) a $3.3 million increase in accounts payable largely due to an overall increase in spend and the timing of payments due.
These decreases to cash flows from operations were partially offset by (i) a $49.8 million increase in deferred revenue resulting primarily from increased billings for subscriptions, (ii) an $8.7 million decrease in prepaid expenses and other current assets driven by larger prepaid contracts in the prior fiscal year and (iii) a $3.3 million increase in accounts payable largely due to an overall increase in spend and the timing of payments due.
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 flow provided as a result of changes in operating assets and liabilities.
For the fiscal year 2023, cash provided by operating activities was $26.7 million resulting from net loss of $55.7 million offset by non-cash expenses of $75.7 million and $6.7 million net cash flow provided as a result of changes in operating assets and liabilities.
The $6.7 million of net cash flows provided as a result of changes in operating assets and liabilities reflected (i) a $41.5 million increase in deferred revenue resulting primarily from increased billings for subscriptions, (ii) a $29.1 million decrease in prepaid expenses and other current assets driven by larger prepaid contracts in the prior fiscal year, (iii) a $14.5 million increase in accounts payable largely due to the timing of payments due, and (iv) a $6.7 million increase in accrued expenses and other current liabilities.
The $6.7 million of net cash flows provided as a result of changes in our operating assets and liabilities reflected (i) a $41.5 million increase in deferred revenue resulting primarily from increased billings for subscriptions, (ii) a $29.1 million decrease in prepaid expenses and other current assets driven by larger prepaid contracts in the prior fiscal year, (iii) a $14.5 million increase in accounts payable largely due to the timing of payments due, and (iv) a $6.7 million increase in accrued expenses and other current liabilities.
The $45.8 million of net cash flows used as a result of changes in our operating assets and liabilities reflected a (i) $68.7 million increase in accounts receivable due to increased billings and the timing of invoices billed, (ii) a $25.6 million increase in other non-current assets driven by an increase in capitalized commissions, and (iii) an $8.0 million decrease in operating lease liabilities due to ongoing payments for leased properties.
The $45.8 million of net cash flows used as a result of changes in operating assets and liabilities reflected (i) a $68.7 million increase in accounts receivable due to increased billings and the timing of invoices billed, (ii) a $25.6 million increase in other non-current assets driven by an increase in capitalized commissions, and (iii) an $8.0 million decrease in operating lease liabilities due to ongoing payments for leased properties.
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 56 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.
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 , to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of this Form 10-K.
Actual results could differ materially from those estimates and assumptions. 60 Our significant accounting policies are more fully described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies , to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of this Form 10-K.
Research and development expenses are expensed as incurred, except for internal-use software development costs that qualify for capitalization. We expect research and development expense 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. We expect research and development expense to generally increase in absolute dollars as we continue to invest in enhancing and expanding the capabilities of our Unified-CXM platform.
RPO and cRPO Remaining Performance Obligation (“RPO”) represents contracted revenue that had not yet been recognized and includes deferred revenue 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.
RPO and cRPO Remaining Performance Obligation (“RPO”) represents contracted revenue that has not yet been recognized and includes deferred revenue 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.
The assumptions used, including (i) fair value of the underlying common stock, (ii) expected volatility, (iii) expected term, (iv) risk-free interest rate and (v) dividend yield, and how they are estimated is detailed within Note 12, Stock-Based Compensation , to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of this Form 10-K.
The assumptions used, including (i) fair value of the underlying common stock, (ii) expected volatility, (iii) expected term, (iv) risk-free interest rate and (v) dividend yield, and how they are estimated is detailed within Note 11, Stock-Based Compensation , to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of this Form 10-K.
Financing Activities For the fiscal year 2024, net cash provided by financing activities was $24.1 million, which consisted of proceeds from the exercise of stock options of $43.3 million and proceeds from the purchases of stock under our ESPP of $7.4 million , partially offset by payments for the repurchase of Class A common shares of $26.7 million.
For the fiscal year 2024, net cash provided by financing activities was $24.1 million, which consisted of proceeds from the exercise of stock options of $43.3 million and proceeds from the purchase of stock under our ESPP of $7.4 million, partially offset by payments for the repurchase of Class A common shares of $26.7 million.
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 80 countries, and our AI-powered CXM platform recognizes over 150 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 80 countries, and our AI-based CXM platform recognizes over 150 languages.
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.
Other Income, Net Other income, net, consists of interest income on invested cash and cash equivalents and marketable securities, foreign currency transaction gains and losses and other expenses and gains. 52 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.
This section of our Form 10-K discusses our financial condition and results of operations for the fiscal years ended January 31, 2024, 2023, and 2022 and year-to-year comparisons between fiscal 2024 and fiscal 2023.
This section of our Form 10-K discusses our financial condition and results of operations for the fiscal years ended January 31, 2025, 2024, and 2023 and year-to-year comparisons between fiscal 2025 and fiscal 2024.
GAAP, we believe that the following non-GAAP financial measures associated with our consolidated statement of operations are useful in evaluating our operating performance: • Non-GAAP gross profit and non-GAAP gross margin • Non-GAAP operating income (loss) and non-GAAP operating margin; and • Non-GAAP net income (loss) and non-GAAP net income (loss) per share We define these non-GAAP financial measures as the respective U.S.
GAAP, we believe that the following non-GAAP financial measures associated with our consolidated statements of operations are useful in evaluating our operating performance: • Non-GAAP gross profit and non-GAAP gross margin • Non-GAAP operating income and non-GAAP operating margin; and • Non-GAAP net income and non-GAAP net income per share We define these non-GAAP financial measures as the respective U.S.
GAAP. 54 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) 2024 2023 2022 Non-GAAP gross profit and non-GAAP gross margin: U.S.
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) 2025 2024 2023 Non-GAAP gross profit and non-GAAP gross margin: U.S.
Performance-Based Award Valuations For awards granted that vest upon the achievement of certain performance conditions and market conditions, we estimated the grant date fair value of these units using a Monte Carlo Simulation. The simulation modeled multiple stock price paths in order to estimate the grant date fair value of those with market conditions .
Performance and Market-Based Award Valuations For awards granted that vest upon the achievement of market conditions, we estimate the grant date fair value of these units using a Monte Carlo Simulation. The simulation models multiple stock price paths in order to estimate the grant date fair value of those with market conditions.
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, 2024, we had 126 large customers compared to 108 as of January 31, 2023.
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, 2025, we had 149 large customers compared to 126 as of January 31, 2024.
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.
General and Administrative Expense General and administrative expense includes personnel-related expenses associated with administrative services, such as legal, human resources, information technology, accounting, and finance functions, as well as professional fees, software costs, travel expenses, provision for credit losses and allocated overhead expense, including facilities costs and any corporate overhead expenses not allocated to other expense categories.
Historical Common Stock Valuations For all periods prior to the IPO, the fair values of our common stock were determined by our board of directors, with input from management and taking into account our most recent valuations from an independent third-party valuation specialist.
Historical Common Stock Valuations For all periods prior to the Initial Public Offering (“IPO”), the fair values of our common stock were determined by our board of directors, with input from management and taking into account our most recent valuations from an independent third-party valuation specialist.
Year-to-year comparisons between fiscal 2023 and fiscal 2022 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 Form 10-K for the fiscal year ended January 31, 2023, filed on April 3, 2023.
Year-to-year comparisons between fiscal 2024 and fiscal 2023 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 Form 10-K for the fiscal year ended January 31, 2024, filed on March 29, 2024.
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.
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, including salaries, benefits, bonuses and stock-based compensation, professional fees, travel expenses and allocated overhead expenses, including facilities costs.
We expect that costs of subscription revenue will increase in absolute dollars as we expand our customer base and make continued investments in our cloud infrastructure and support organization. 48 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 costs of subscription revenue will increase in absolute dollars as we expand our customer base and make continued investments in our cloud infrastructure and support organization. 51 Costs of Professional Services Revenue Costs of professional services revenue consists primarily of personnel-related expenses for our professional services personnel. including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, subcontractor costs, travel expenses and allocated overhead expenses, including facilities costs, for our professional services organization.
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods.
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods.
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.
Sales and Marketing Expense Sales and marketing expense consists primarily of personnel-related expenses for our sales and marketing organization, including salaries, benefits, bonuses and stock-based compensation, professional fees, software costs, advertising, marketing, promotional and brand awareness activities, travel expenses and allocated overhead expense, including facilities costs.
As of January 31, 2024, we had 1,735 customers spanning organizations of a broad range of sizes and industries, including more than 60% of the Fortune 100 companies, compared to 1,428 customers as of January 31, 2023.
As of January 31, 2025, we had 1,930 customers spanning organizations of a broad range of sizes and industries, including 60% of the Fortune 100 companies, compared to 1,735 customers as of January 31, 2024.
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.
Material Cash Requirements Our expected material cash requirements consist 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 2028, which totaled $131.1 million as of January 31, 2024, of which $69.5 million is due within twelve months.
Material Cash Requirements Our expected material cash requirements consist 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 2030, which totaled $324.8 million as of January 31, 2025, of which $107.1 million is due within twelve months from January 31, 2025.
Cash Flows The following table shows a summary of our cash flows for the periods indicated: Year Ended January 31, (in thousands) 2024 2023 2022 Net cash provided by (used in) operating activities $ 71,465 $ 26,660 $ (32,922) Net cash used in investing activities $ (110,570) $ (193,494) $ (15,650) Net cash provided by financing activities $ 24,086 $ 34,971 $ 303,132 Our net income (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.
Cash Flows The following table shows a summary of our cash flows for the periods indicated: Year Ended January 31, (in thousands) 2025 2024 2023 Net cash provided by operating activities $ 77,590 $ 71,465 $ 26,660 Net cash provided by (used in) investing activities $ 154,126 $ (110,570) $ (193,494) Net cash (used in) provided by financing activities $ (248,158) $ 24,086 $ 34,971 Our net income (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.
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 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 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 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.
Recent Accounting Pronouncements Refer to Note 2, Basis of Presentation and Summary of Significant Accounting Policies , to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of this Form 10-K for more information regarding recently issued accounting pronouncements.
See Note 13, Income Taxes , to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of this Form 10-K for additional information. Recent Accounting Pronouncements Refer to Note 2, Basis of Presentation and Summary of Significant Accounting Policies , to our Consolidated Financial Statements included in “Part II, Item 8.
As of January 31, 2024, our RPO was $966.6 million and our cRPO was $587.0 million. As of January 31, 2023, our RPO was $719.5 million and our cRPO was $485.2 million. 47 Net Dollar Expansion Rate We believe that net dollar expansion rate (“NDE”) is an indicator of the value that our platform delivers to customers.
As of January 31, 2025, our RPO was $987.7 million and our cRPO was $612.5 million. As of January 31, 2024, our RPO was $966.6 million and our cRPO was $587.0 million. 50 Net Dollar Expansion Rate We believe that net dollar expansion rate (“NDE”) is an indicator of the value that our platform delivers to customers.
While we have experienced growing inflationary pressures on the cost of wages, rent, and data, the net result of inflationary impacts and our efforts to mitigate these impacts have not been material to us during the periods included in this report. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods.
While we have experienced growing inflationary pressures on the cost of wages, rent and data, the net result of inflationary impacts and our efforts to mitigate these impacts have not been material to us during the periods included in this report.
Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer and are deferred and amortized on a straight-line basis over the expected period of benefit. We expect sales and marketing expense to increase in absolute dollars as we continue to drive the growth of our business.
Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer and are deferred and amortized on a straight-line basis over the expected period of benefit. In the near term, we expect sales and marketing expense to decrease as we work to right size our costs.
In addition, because personnel-related expenses represent the largest component in costs of professional services revenue, we may experience changes in our professional services gross margin due to the timing of delivery of those services. We expect that our gross margin may vary from period to period and increase modestly in the long term.
In addition, because personnel-related expenses represent the largest component in costs of professional services revenue, we may experience changes in our professional services gross margin due to the timing of delivery of those services.
We estimate the grant date fair value of each common stock option using the Black-Scholes Merton method, which requires the input of subjective assumptions and management’s best estimates.
Stock-Based Compensation We measure and record the expense related to stock-based awards based upon the fair value at the date of grant. We estimate the grant date fair value of each common stock option using the Black-Scholes Merton method, which requires the input of subjective assumptions and management’s best estimates.
We expect that our costs of professional services revenue will increase in absolute dollars as we expand our customer base. 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 our costs of professional services revenue will increase in absolute dollars as we continue to increase our use of partners in the delivery of implementation services and expand our customer base. Gross Profit and Gross Margin Gross profit is total revenue less total costs of revenue.
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 believe that it is useful to exclude these items 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.
GAAP operating income (loss): $ 33,945 $ (51,224) $ (99,470) Stock-based compensation expense and related charges (2) 57,902 56,704 51,552 Litigation settlement (3) — — 12,000 Amortization of acquired intangible assets 200 475 412 Non-GAAP operating income (loss) $ 92,047 $ 5,955 $ (35,506) Operating margin 5 % (8) % (20) % Non-GAAP operating margin 13 % 1 % (7) % (1) Employer payroll tax related to stock-based compensation for the years ended January 31, 2024, 2023, and 2022 was immaterial as to the impact to gross profit.
GAAP operating income (loss): $ 23,970 $ 33,945 $ (51,224) Stock-based compensation expense and related charges (2) 60,663 57,902 56,704 Amortization of acquired intangible assets 118 200 475 Non-GAAP operating income $ 84,751 $ 92,047 $ 5,955 Operating margin 3 % 5 % (8) % Non-GAAP operating margin 11 % 13 % 1 % (1) Employer payroll tax related to stock-based compensation for the years ended January 31, 2025, 2024, and 2023 was immaterial as to the impact to gross profit.
If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed.
The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed.
GAAP gross profit $ 552,959 $ 454,465 $ 344,843 Stock-based compensation expense and related charges (1) 2,625 3,861 4,355 Non-GAAP gross profit $ 555,584 $ 458,326 $ 349,198 Gross margin 76 % 74 % 70 % Non-GAAP gross margin 76 % 74 % 71 % Non-GAAP operating income (loss): U.S.
GAAP gross profit $ 574,316 $ 552,959 $ 454,465 Stock-based compensation expense and related charges (1) 2,750 2,625 3,861 Non-GAAP gross profit $ 577,066 $ 555,584 $ 458,326 Gross margin 72 % 76 % 74 % Non-GAAP gross margin 72 % 76 % 74 % Non-GAAP operating income: U.S.
For the fiscal year 2023, cash provided by financing activities was $35.0 million, which consisted of proceeds from the exercise of stock options of $24.7 million and proceeds from the purchase of stock under our ESPP of $10.2 million.
For the fiscal year 2023, cash provided by financing activities was $35.0 million, which consisted of proceeds from the exercise of stock options of $24.7 million and proceeds from the purchase of stock under our ESPP of $10.2 million. Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with U.S. GAAP.
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.
We do this with our evolving enterprise software – Unified Customer Experience Management (“Unified-CXM”) – that enables customer-facing teams, from Customer Service to Marketing, to collaborate across internal silos, communicate across digital channels, and leverage AI to deliver better customer experiences at scale – all on one unified, AI-based platform.
This calculation is net of upsells, contraction, cancellation or expansion during the period but excludes subscription revenue from new customers. Our NDE, on a trailing 12-month basis, was 117.7% and 123.9% for the 12-month periods ending January 31, 2024 and 2023, respectively.
This calculation is net of upsells, contraction, cancellation or expansion during the period but excludes subscription revenue from new customers. Our NDE, on a trailing 12-month basis, was 103.6% and 117.7% for the 12-month periods ended January 31, 2025 and 2024, respectively. The decrease year-over-year was driven by elevated churn, exacerbated by the current macroeconomic environment.
Other Income (Expense), Net Year Ended January 31, (in thousands) 2024 2023 $ Change % Change Other income, net $ 26,577 $ 3,756 $ 22,821 608 % % of revenue 4 % 1 % The increase in other income, net was primarily attributable to a $22.0 million increase in interest income from our money market and short-term investment accounts as a result of higher interest rates and higher average balances in our money market and short-term investment accounts.
Other Income, Net Year Ended January 31, (in thousands) 2025 2024 $ Change % Change Other income, net $ 24,322 $ 26,577 $ (2,255) (8) % % of revenue 3 % 4 % The decrease in other income, net was primarily attributable to a $4.2 million decrease in interest income from our money market and short-term investment accounts as a result of lower average balances in these accounts, partially offset by higher average interest rates.
Costs of Revenue and Gross Margin Year Ended January 31, (in thousands) 2024 2023 $ Change % Change Costs of subscription revenue $ 116,032 $ 102,276 $ 13,756 13 % Costs of professional services revenue 63,369 61,449 1,920 3 % Total costs of revenue $ 179,401 $ 163,725 $ 15,676 10 % Gross margin - subscription 83 % 81 % Gross margin - professional services 1 % 12 % The increase in costs of subscription revenue was primarily due to (i) higher costs related to third-party cloud infrastructure necessary to meet our increased customer demand, which included a $10.3 million increase in our data and hosting costs and (ii) a $3.6 million increase in the amortization of capitalized research and development costs.
Costs of Revenue and Gross Margin Year Ended January 31, (in thousands) 2025 2024 $ Change % Change Costs of subscription revenue $ 140,730 $ 116,032 $ 24,698 21 % Costs of professional services revenue 81,348 63,369 17,979 28 % Total costs of revenue $ 222,078 $ 179,401 $ 42,677 24 % Gross margin - subscription 80 % 83 % Gross margin - professional services (4) % 1 % The increase in costs of subscription revenue was primarily due to (i) higher costs related to third-party cloud infrastructure necessary to meet our increased customer demand, which included a $19.8 million increase in our data and hosting costs and (ii) a $3.2 million increase in the amortization of capitalized research and development costs.
Year Ended January 31, 2024 2023 2022 (in thousands) Per Share-Basic Per Share-Diluted (in thousands) Per Share-Basic Per Share-Diluted (in thousands) Per Share-Basic Per Share-Diluted Non-GAAP net income reconciliation to net income (loss) Net income (loss) $ 51,403 $ 0.19 $ 0.18 $ (55,742) $ (0.21) $ (0.21) $ (111,470) $ (0.57) $ (0.57) Add: Stock-based compensation expense-related charges 57,902 0.22 0.20 56,704 0.22 0.22 51,552 0.26 0.26 Litigation settlement — 0.00 0.00 — 0.00 0.00 12,000 0.07 0.07 Amortization of acquired intangible assets 200 0.00 0.00 475 0.00 0.00 412 0.00 0.00 Total additions, net 58,102 0.22 0.20 57,179 0.22 0.22 63,964 0.33 0.33 Non-GAAP net income (loss) $ 109,505 $ 0.41 $ 0.38 $ 1,437 $ 0.01 $ 0.01 $ (47,506) $ (0.24) $ (0.24) Weighted-average shares outstanding used in computing net income (loss) per share, basic 269,974 259,530 195,020 Weighted average shares outstanding used in computing net income (loss) per share, diluted 287,093 259,530 195,020 55 Year Ended January 31, (in thousands) 2024 2023 2022 Free cash flow: Net cash (used in) provided by operating activities $ 71,465 $ 26,660 $ (32,922) Purchases of property and equipment (8,548) (6,091) (6,148) Capitalized internal-use software (11,777) (10,358) (6,258) Free cash flow $ 51,140 $ 10,211 $ (45,328) Liquidity and Capital Resources Overview As of January 31, 2024, our principal sources of liquidity were $164.0 million of cash and cash equivalents and $498.5 million of highly liquid marketable securities.
(2) I ncludes $1.1 million , $2.1 million and $1.2 million of employer payroll tax related to stock-based compensation expense for the years ended January 31, 2025, 2024 and 2023, respectively . 57 Year Ended January 31, 2025 2024 2023 (in thousands) Per Share-Basic Per Share-Diluted (in thousands) Per Share-Basic Per Share-Diluted (in thousands) Per Share-Basic Per Share-Diluted Non-GAAP net income reconciliation to net income (loss) Net income (loss) $ 121,609 $ 0.47 $ 0.44 $ 51,403 $ 0.19 $ 0.18 $ (55,742) $ (0.21) $ (0.21) Add: Stock-based compensation expense and related charges 60,663 0.23 0.22 57,902 0.22 0.20 56,704 0.22 0.22 Amortization of acquired intangible assets 118 0.00 0.00 200 0.00 0.00 475 0.00 0.00 Release of U.S. federal and state valuation allowances (87,058) (0.33) (0.31) — 0.00 0.00 — 0.00 0.00 Total additions, net (26,277) (0.10) (0.09) 58,102 0.22 0.20 57,179 0.22 0.22 Non-GAAP net income $ 95,332 $ 0.37 $ 0.35 $ 109,505 $ 0.41 $ 0.38 $ 1,437 $ 0.01 $ 0.01 Weighted-average shares outstanding 260,241 274,773 269,974 287,093 259,530 259,530 Year Ended January 31, (in thousands) 2025 2024 2023 Free cash flow: Net cash provided by operating activities $ 77,590 $ 71,465 $ 26,660 Purchases of property and equipment (5,802) (8,548) (6,091) Capitalized internal-use software (12,631) (11,777) (10,358) Free cash flow $ 59,157 $ 51,140 $ 10,211 Liquidity and Capital Resources Overview As of January 31, 2025, our principal sources of liquidity were $145.3 million of cash and cash equivalents and $338.2 million of highly liquid marketable securities.
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.
Our primary uses of cash from operating activities are for employee-related costs, costs to deliver our revenue and marketing expenses. 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.
For the fiscal year 2022, cash used in operating activities was $32.9 million resulting from net loss of $111.5 million offset by 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.
Operating Activities For the fiscal year 2025, cash provided by operating activities was $77.6 million, which consisted of net income of $121.6 million, adjusted for non-cash expenses of $2.5 million and $41.6 million of net cash flows used as a result of changes in operating assets and liabilities.
For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors” included in Part I, Item 1A of this Form 10-K and the Annual Report on Form 10-K for the fiscal year ended January 31, 2023.
For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors” included in Part I, Item 1A of this Form 10-K. 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 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.
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.
As our go-to-market strategies evolve, we may modify our pricing strategies in the future, which could result in changes to SSP.
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, 2025.
During 2023, we entered into cash collateral agreements with J.P. Morgan Bank in lieu of a credit facility, through which approximately $5.4 million is outstanding as of January 31, 2024. Due to its long-term nature, this restricted cash is recorded within other non-current assets on the consolidated balance sheets.
Morgan Bank in lieu of a credit facility, through which approximately $6.9 million is outstanding as of January 31, 2025. As of January 31, 2025, $1.0 million of this restricted cash is recorded within prepaid expenses and other current assets and $5.9 million is recorded within other non-current assets on the condensed consolidated balance sheets.
Gross margin for subscription increased by 2 percentage points, primarily driven by the growth in subscription revenue. Gross margin for professional services decreased by 11 percentage points as we increased our investment in CCaaS service delivery personnel in fiscal 2024 to support future growth in our CCaaS solutions.
Gross margin for subscription decreased by three percentage points, primarily driven by increased costs associated with third-party cloud infrastructure and data. Gross margin for professional services decreased by five percentage points as we increased our investment in CCaaS delivery partners and personnel in fiscal year 2025 to support future growth in our CCaaS solution.
We had no material changes to these purchase commitments during fiscal 2024. In addition, we lease certain office facilities under operating lease arrangements that expire on various dates through fiscal year 2029. Refer to Note 9, Leases, to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of this Form 10-K for a discussion of our leases.
In the normal course of business we may renew existing contracts throughout the year. In addition, we lease certain office facilities under operating lease arrangements that expire on various dates through fiscal year 2035. Refer to Note 8, Leases , to our Consolidated Financial Statements included in “Part II, Item 8.
We continue to optimize our sales and marketing expense and seek efficiencies in our investments.
In the long term, we expect sales and marketing expense to generally increase in absolute dollars as we continue to drive the growth of our business. We continue to optimize our sales and marketing expense and seek efficiencies in our investments.
Provision for Income Taxes Year Ended January 31, (in thousands) 2024 2023 $ Change % Change Provision for income taxes $ 9,119 $ 8,274 $ 845 10 % % of revenue 1 % 1 % The increase in the tax provision for the year ended January 31, 2024 compared to the year ended January 31, 2023 was primarily related to an increase in foreign tax provisions of approximately $4.0 million relating to higher taxable income in our non-US jurisdictions, offset by a $3.3 million release of the valuation allowance in certain foreign subsidiaries. 53 Non-GAAP Financial Measures In addition to our results determined in accordance with U.S.
(Benefit) Provision for Income Taxes Year Ended January 31, (in thousands) 2025 2024 $ Change % Change (Benefit) provision for income taxes $ (73,317) $ 9,119 $ (82,436) (904) % % of revenue (9) % 1 % The decrease in (benefit) provision for income taxes was primarily related to the impact of an $87.1 million valuation allowance release of the Company’s U.S. federal and state deferred tax assets recorded in the year ended January 31, 2025. 56 Non-GAAP Financial Measures In addition to our results determined in accordance with U.S.
The increase in costs of professional services revenue was partially due to (i) higher personnel-related costs of $2.7 million resulting from an increase in headcount, (ii) increased travel and entertainment expenses of $0.8 million and (iii) an increase in rent and facilities-related costs of $0.7 million. These increases were partially offset by a $2.6 million decline in subcontractor costs.
The increase in costs of professional services revenue was primarily due to (i) an $11.7 million increase in subcontractor costs as a result of higher partner delivery costs associated with increased professional services revenue and (ii) higher personnel-related costs of $5.0 million as a result of increased headcount.
During the year ended January 31, 2024 we repurchased approximately 2.4 million shares of our Class A common stock for a cost of $29.6 million. As of January 31, 2024, the remaining amount authorized for share repurchase under the 2024 Share Repurchase Program was $70.4 million.
On both March 26, 2024 and June 3, 2024, our board of directors approved an additional $100 million of repurchases under the 2024 Share Repurchase Program, bringing the total amount authorized for purchase under the 2024 Share Repurchase Program to $300 million. 58 During the year ended January 31, 2024, we repurchased 2,400,338 shares of our Class A common stock for an aggregate cost of $29.6 million, including commissions.
General and Administrative Expense Year Ended January 31, (in thousands) 2024 2023 $ Change % Change General and administrative $ 105,873 $ 92,312 $ 13,561 15 % % of revenue 14 % 15 % The increase in general and administrative expense was primarily due to (i) $5.9 million in bad debt expense, largely related to one customer, as well as an overall increase in accounts receivable, (ii) an increase of $3.9 million associated with personnel-related costs driven by increased stock compensation expense primarily related to new grants during fiscal year 2024 and (iii) an increase of $2.0 million related to consulting and professional fees.
General and Administrative Expense Year Ended January 31, (in thousands) 2025 2024 $ Change % Change General and administrative $ 136,689 $ 105,873 $ 30,816 29 % % of revenue 17 % 14 % The increase in general and administrative expense was primarily due to (i) a $15.5 million increase in personnel-related costs driven by higher general and administrative headcount, as well as increased stock compensation expense , primarily related to new grants during fiscal year 2025, (ii) a $10.3 million increase in consulting costs primarily related to strategic projects and (iii) a $5.7 million increase in provision for credit losses due to increased reserves for certain customers that we deemed to be uncollectible accounts, as well as higher calculated loss rates applied to outstanding receivables.
The $6.3 million of net cash flows used as a result of changes in our operating assets and liabilities reflected a $43.4 million increase in deferred revenue resulting primarily from increased billings for subscriptions and a $25.5 million increase in accrued expenses and other current liabilities, partially offset by a $47.1 million increase in accounts receivable due to increased billings and a $6.8 million increase in other non-current assets. 57 Investing Activities For the fiscal year 2024, net cash used in investing activities was $110.6 million and primarily consisted of $604.6 million of purchases of marketable securities, partially offset by $514.4 million of sales and maturities of marketable securities.
For the fiscal year 2024, net cash used in investing activities was $110.6 million and primarily consisted of $604.6 million of purchases of marketable securities, partially offset by $514.4 million of sales and maturities of marketable securities.
Federal Reserve raising interest rates, recent bank closures, and the Russia-Ukraine and Israel-Hamas wars (including any escalation or geographical expansion of these conflicts), have led to economic uncertainty globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on information technology, which may impact our business and our customers’ businesses.
Historically, during periods of economic uncertainty and downturns, businesses may slow spending on information technology, which may impact our business and our customers’ businesses.
The decrease year-over-year was driven by a combination of elevated churn exacerbated by the macroeconomic environment during fiscal 2024. Macroeconomic Considerations Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including the COVID-19 pandemic, rising inflation, the U.S.
Macroeconomic Considerations Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including fluctuations in inflation and interest rates and the Russia-Ukraine and Israel-Hamas wars, have led to economic uncertainty globally.
GAAP measures, excluding, as applicable, stock-based compensation expense-related charges, charges on litigation settlements, and amortization of acquired intangible assets.
GAAP measures, excluding, as applicable, stock-based compensation expense and related charges, amortization of acquired intangible assets and release of U.S. federal and state valuation allowances, as well as other one-time charges and benefits, such as restructuring charges, costs associated with acquisitions, litigations and facility exit costs.
Research and Development Expense Year Ended January 31, (in thousands) 2024 2023 $ Change % Change Research and development $ 91,292 $ 76,658 $ 14,634 19 % % of revenue 12 % 12 % The increase in research and development expense was primarily due to (i) a $11.3 million increase in research and development personnel-related costs resulting from an increase in headcount of research and development employees as we continue to add to and enhance our product and (ii) a $1.8 million increase in rent and facilities-related costs. 52 Sales and Marketing Expense Year Ended January 31, (in thousands) 2024 2023 $ Change % Change Sales and marketing $ 321,849 $ 336,719 $ (14,870) (4) % % of revenue 44 % 54 % The decrease in sales and marketing expense was primarily due to (i) a $15.1 million decline in personnel costs as a result of lower headcount and (ii) a $1.6 million reduction in recruiting fees .
Research and Development Expense Year Ended January 31, (in thousands) 2025 2024 $ Change % Change Research and development $ 91,999 $ 91,292 $ 707 1 % % of revenue 12 % 12 % The increase in research and development expense was primarily due to (i) an increase in software subscription costs of $1.3 million and (ii) an increase in rent and facilities expenses of $0.5 million.
In August 2023, we signed a 10-year lease for a new corporate headquarters in New York, NY, which has not yet commenced. The annual lease payments will be approximately $2.6 million once the lease commences. On January 8, 2024, we entered into the 2024 Share Repurchase Program, whereby we may repurchase up to $100 million of Class A common stock.
Share Repurchase Program On January 8, 2024, we entered into an approved share repurchase program (the “2024 Share Repurchase Program”), whereby we could repurchase up to $100 million of our Class A common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” and Note 11, Stockholders’ Equity, to our Consolidated Financial Statements included in “Part II, Item 8, Financial Statements” of this Form 10-K.
During the second quarter of fiscal year 2025, we completed the full purchase authorization of $300 million under the 2024 Share Repurchase Program. For additional information regarding the 2024 Share Repurchase Program, see Note 10, Stockholders’ Equity, to our Consolidated Financial Statements included in “Part II, Item 8. Financial Statements” of this Form 10-K.
In fiscal year 2024, our shift into net income was the result of our increased subscription revenue and related billings and increased interest income from our marketable securities, as well as the amount of non-cash charges that we incur. Non-cash charges primarily include depreciation and amortization, amortization/accretion on marketable securities, stock-based compensation, and non-cash lease expense.
Non-cash charges primarily include depreciation and amortization, provision for credit losses, stock-based compensation, non-cash lease expense, deferred income taxes and amortization/accretion on marketable securities. Our largest source of operating cash is cash collections from customers using our Unified-CXM platform and related services.
Operating Expenses Our operating expenses consist of research and development, sales and marketing and general and administrative expenses.
We expect that our gross margin will decline in the near term due to higher data and hosting costs and, in the long term, will vary from period to period. Operating Expenses Our operating expenses consist of research and development, sales and marketing and general and administrative expenses.
For the fiscal year 2022, cash provided by financing activities was $303.1 million, which consisted of proceeds from our IPO of $276.0 million, after deducting underwriting discounts and commissions and other offering expenses, proceeds from the exercise of stock options of $20.1 million, and proceeds from the purchase of stock under our ESPP of $7.1 million.
Financing Activities For the fiscal year 2025, net cash used in financing activities was $248.2 million, which consisted of payments for the 2024 Share Repurchase Program of $273.9 million, offset by $19.9 million of proceeds from the exercise of stock options and $5.8 million of proceeds from the purchase of stock under our 2021 Employee Stock Purchase Plan (“ESPP”).
Letters of Credit and Restricted Cash In April 2023, we terminated our credit facility with Silicon Valley Bank (“SVB”), while keeping our existing letters of credit in lieu of deposits on certain leases.
Cash Collateral Agreements and Restricted Cash In April 2023, we entered into cash collateral agreements with Silicon Valley Bank in lieu of a letter of credit facility, which are associated with certain leases. Approximately $1.3 million is outstanding on these cash collateral agreements as of January 31, 2025, which we have therefore classified within restricted cash.
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Overview Sprinklr empowers the world’s largest and most loved brands to make their customers happier.
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Overview Sprinklr is redefining the world’s ability to make every customer experience extraordinary.
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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.

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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 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 2024, 2023 and 2022. 59 Interest Rate Sensitivity We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities.
Biggest changeA majority of our agreements have been and we expect will continue to be denominated in U.S. dollars. A hypothetical 10% change in foreign exchange rates during the period presented would not have had a material impact on our consolidated financial statements. Interest Rate Sensitivity We are exposed to market risks in the ordinary course of our business.
As a result, our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the British Pound Sterling, Euro, Indian Rupee, Japanese Yen and Brazilian Real.
As a result, our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the British Pound Sterling, Euro, Indian Rupee, Japanese Yen, Brazilian Real and Emirati Dirham.
Our inability or failure to do so could harm our business, financial condition and results of operations. 60
Our inability or failure to do so could harm our business, financial condition and results of operations. 62
As of January 31, 2024, we had $164.0 million of cash and cash equivalents, which consisted primarily of bank deposits and money market funds and $498.5 million of highly liquid marketable securities. Such interest-earning instruments carry a degree of interest rate risk; however, historical fluctuations of our interest income have not been significant.
These risks primarily include interest rate sensitivities. As of January 31, 2025, we had $145.3 million of cash and cash equivalents, which consisted primarily of bank deposits and money market funds and $338.2 million of highly liquid marketable securities. Such interest-earning instruments carry a degree of interest rate risk; however, historical fluctuations of our interest income have not been significant.
We have not been exposed nor do we anticipate being exposed to material risks due to changes in interest rates. A hypothetical 10% change in interest rates would not have had a material effect on operating results for fiscal 2024, 2023 and 2022.
We have not been exposed nor do we anticipate being exposed to material risks due to changes in interest rates. A hypothetical 10% change in interest rates during the period presented would not have had a material impact on our consolidated financial statements.
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A majority of our agreements have been and we expect will continue to be denominated in U.S. dollars.

Other CXM 10-K year-over-year comparisons