Sprinklr Eyes Long-Term Growth With 'Project Bear Hug' Despite Customer Churn Concerns: Analyst

Rosenblatt analyst Catharine Trebnick maintained Sprinklr CXM with a Buy and a $12 price target on Thursday.

Sprinklr’s results demonstrated progress and its ongoing transformation, Trebnick said. The company reported:

• Total revenue of $205.5 million (+5% Y/Y), beating the Street estimate of $201.8 million and coming in above guidance of $201.5 million-$202.5 million.
• A 4% Y/Y increase in Subscription revenue to $184.1 million, surpassing consensus estimates by $1 million and generating 90% of total revenue, he said.
• Professional services revenue was $21.4 million, up 15% Y/Y (versus 18% Q/Q), beating Trebnick’s estimate by ~$2 million.
• Operating income of $36.7 million (18% margin), exceeding the analyst estimate of $32.3 million (16% margin) and above guidance of $31.5 million-$32.5 million,
• Adjusted EPS of 12 cents, which beats the Street estimate of 10 cents.

Also Read: Sprinklr Rises On Solid Earnings, Raised Outlook, And New $150 Million Buyback Plan

Trebnick says the company grapples with elevated customer churn and down-sell activity, which has persisted over the past 24 months.

NRR declined to 102% from 104% last quarter. This trend reflects ongoing customer churn and down-sell activity due to inconsistent operational execution, ineffective implementations, and accumulated technical debt.

While customers generating over $1 million in subscription revenue grew 6% Y/Y to 146, the Q/Q decline from 149 reflects customers falling below the $1 million threshold amid limited renewals and reduced up-sell/cross-sell activity.

Management has prioritized churn reduction through the “Project Bear Hug” initiative, which has engaged over 200 of its top 500 customers and is showing tangible traction. To enhance customer success, management has also standardized implementation processes to 80% consistency, he said.

This comprehensive go-to-market overhaul, including new sales pod structures and enablement programs, is expected to gain momentum in the second half of 2026 and position Sprinklr for potential acceleration in fiscal 2027 and 2028, Trebnick said.

These early proof points and management’s ability to deliver solid financial results while executing strategic initiatives encouraged the analyst.

Trebnick projected second-quarter revenue of $205.5 million and EPS of $0.10.

Price Action: CXM shares are up 0.55% at $9.11 at the last check Thursday.

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