United States securities and exchange commission logo
April 9, 2021
Ragy Thomas
Chief Executive Officer
Sprinklr, Inc.
29 West 35th Street, 7th Floor
New York, NY 10001
Re: Sprinklr, Inc.
Draft Registration
Statement on Form S-1
Submitted March 12,
2021
CIK: 0001569345
Dear Mr. Thomas:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Prospectus Summary, page 1
1. You state that you have
a "Proven ROI of more than 5.0x..." and that your platform has
"over 80% accuracy."
Please provide the basis for these statements and additional
context regarding these
statistics. For example, explain whether the 5.0x ROI is based on
all money spent by your
customers, or only for customers on certain aspects of your
platform.
Ragy Thomas
FirstName LastNameRagy Thomas
Sprinklr, Inc.
Comapany
April NameSprinklr, Inc.
9, 2021
April 29, 2021 Page 2
Page
FirstName LastName
Overview, page 2
2. Where you present a non-GAAP net operating loss insure that you
provide the most
directly comparable GAAP measure with equal or greater prominence. We
refer you to
Regulation S-K, Item 10(e)(1)(i).
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
73
3. For each period presented, please disclose the percentage of revenue
that is generated by
your large customers, which you define as customers with greater than
or equal to $1.0
million in subscription revenue on a training 12 month basis, to
provide appropriate
context regarding the change is large customers. Further, clarify the
significance of the
customers you reference on page 112. For example, explain whether the
71 customers out
of the top 100 companies on the Forbes 2020 World's Most Valuable
Brands List are all
large customers that generate at least $1.0 million in subscription
revenue.
4. Please revise your overview section to provide a balanced discussion
regarding the
material challenges, risks and opportunities focused on by your
management. For
example, discuss any material trends related to your two largest
products, Modern Sales
& Engagement and Modern Research and Insights, and any fluctuations in
revenue. Also,
discuss any trends and/or uncertainties related to the three market
segments, Global
Strategic Accounts, Large Enterprise Accounts and Enterprise Accounts.
For further
guidance, please refer to Item 303(a) of Regulation S-K and SEC
Release No. 33-8350.
Expand Sales to Existing Customers, page 76
5. We note your disclosure that the net dollar expansion rate captures
customer renewals,
expansion, contraction and churn. Please tell us if any of those
underlying metrics are key
metrics relied upon by management to evaluate the business. If so,
provide a discussion of
each metric and include quantified disclosure for each metric for each
period presented.
6. In your definition of customer, you include customers with which you
are negotiating a renewal contract. To the extent the number of
customers currently in
negotiations is significant to this metric, please tell us when
contract renewals typically
occur (i.e., before or after the expiration of the existing contract),
whether
the customer agreements have renewal periods or automatic renewals,
and at which point
an entity would no longer be considered a customer during the
negotiation period.
7. You state that the net dollar expansion rate was greater than a
certain percentage in the
last eight quarters. Please specify the net dollar-based retention
rate for each quarter and
discuss any material trends over that period.
Ragy Thomas
FirstName LastNameRagy Thomas
Sprinklr, Inc.
Comapany
April NameSprinklr, Inc.
9, 2021
April 39, 2021 Page 3
Page
FirstName LastName
Business
Overview, page 93
8. Please disclose the material facts and underlying assumptions that
support your internal
estimate that your total addressable market will be approximately than
$49 billion in 2021
and revise to include a discussion regarding the market in which you
operate.
Our Artificial Intelligence, page 99
9. You state that your "platform ingests, processes and analyzes consumer
data and behavior
from the one of the largest publicly available datasets, with over 500
million data points
accessed and ingested monthly." Please revise to provide additional
disclosure regarding
this publicly available dataset including the material terms of any
agreements to access the
data, and any limitations on use.
Customer Success, page 114
10. It appears that the Customer Happiness Index, Customer Delight
Assurance Program,
Employee Happiness Index and Product Happiness Index are measures used
by
management. To the extent material, please revise to provide a
discussion regarding how
those measures are utilized and the specifics of how each measure is
calculated.
Culture and Employees, page 117
11. We note that as of January 31, 2021, you had 1,435 employees outside
the United States
compared to 725 who are based in the United States even though you
generate the
majority of your revenues from customers in the United States. To the
extent you have a
material concentration of employees in any one country, please
discuss.
Principal Stockholders, page 145
12. Please revise the footnotes to identify the natural persons with
voting and/or investment
control over the beneficial owners listed in the table. Refer to Item
403 of Regulation S-
K.
Financial Statements
Costs to Obtain Customer Contracts, page F-16
13. Tell us and disclose whether additional sales commissions are paid
upon contract renewal
and, if so, whether such amounts are commensurate with the initial
commissions. Refer to
ASC 340-40-35-1 and 50-2.
Note 3. Revenue Recognition
Contracts with Multiple Performance Obligations, page F-16
14. We note you identify the factors that you consider in evaluating the
best estimate of
standalone selling price. Please expand your disclosure to clarify the
approach that you
Ragy Thomas
Sprinklr, Inc.
April 9, 2021
Page 4
use to estimate standalone selling price. Refer to ASC 606-10-32-31
through 32-35.
Note 10. Stock-based Compensation
Determining Fair Value of Stock Options, page F-25
15. As a significant assumption, please disclose the fair value of your
shares of common stock
used as the input in the determination of the fair value of your stock
options for each
period presented. Please refer to ASC 718-10-50-2(f)(2).
Note 13. Geographic Information, page F-31
16. Please disclose the amount of long-lived assets located in the United
States. Refer to ASC
280-10-50-41.b.
General
17. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Ryan Rohn, Senior Staff Accountant, at (202) 551-3739
or Craig
Wilson, Senior Advisor, at (202) 551-3226 if you have questions regarding
comments on the
financial statements and related matters. Please contact Matthew Derby, Staff
Attorney, at (202)
551-3334 or Jan Woo, Legal Branch Chief, at (202) 551-3453 with any other
questions.
Sincerely,
FirstName LastNameRagy Thomas
Division of
Corporation Finance
Comapany NameSprinklr, Inc.
Office of
Technology
April 9, 2021 Page 4
cc: Jaime Chase
FirstName LastName