In its second quarter as a public company, Qualtrics, the subsidiary of SAP AG that brands itself as the customer experience management platform, reported Q2 revenue that topped expectations by 3%, and a surprise profit where analysts had expected a loss. The company’s forecast for this quarter, and the full year, is higher as well.
The report sent Qualtrics stock up about 2% in late trading.
“It was an outstanding quarter for us,” said CEO Zig Serafin in an interview with ZDNet via telephone. “What you’re seeing is that the technology that we provide has never been more relevant, more impactful.”
Serafin pointed to evidence of that relevance in the company’s 38% rate of revenue growth, year over year, and the company’s 48% rate of subscription revenue growth. “This is building on strong growth in the first quarter,” he said. “You’re seeing an acceleration in demand.”
Qualtrics’s net dollar retention rate, how much it makes from customers, on average, versus the prior-year period, was 122%. That was up from 120% in the prior quarter.
Customers are using Qualtrics’s program to “tune in better into the needs of their existing employees, but also attract new candidates and employees that could be coming into their company,” says CEO Zig Serafin.
Qualtrics
Qualtrics is known as a program for managing the interaction with customers, from first attracting customers to maintaining the relationship.
However, Serafin said the software is increasingly helping companies to attract new employees as well.
Customers are using Qualtrics’s program to “tune in better into the needs of their existing employees, but also attract new candidates and employees that could be coming into their company,” said Serafin.
“Our research is showing that about 50% of people will be out there looking for a new job in the next twelve months,” said Serafin. The software can aid in companies luring of talent, said Serafin, based on “how people leverage the employee experience management product portfolio on top of our platform, helping companies to listen and take action on the changing nature of work.”
Also: Qualtrics Q1 report, forecast top Wall Street expectations: The C-suite is buying in, says CEO
That includes companies using the software to “design the physical work space and the digital space,” he said.
Revenue in the three months ended in June rose to $249.3 million, yielding a net profit of 4 cents a share, excluding some costs.
“We have a unique opportunity to invest, and we will continue to do so,” says CFO Rob Bachman.
Qualtrics
Analysts had been modeling $241.7 million and a 2-cent net loss per share.
Profit was helped in part by reduced expenses such as travel and entertainment, but “the majority of the outperformance is due to the outperformance on the revenue,” CFO Rob Bachman told ZDNet in the same phone call.
For the current quarter, the company sees revenue of $257 million to $259 million, and net loss in a range of 1 cents to 3 cents, again, excluding some costs. That compares to consensus for $246.6 million and a 5-cent loss per share.
For the full year, the company sees revenue in a range of $1.007 billion to $1.011 billion, and EPS in a range from breakeven to negative 2 cents per share. That compares to consensus of $984 million and an 11-cent net loss per share.
Regarding the forecast, Serafin told ZDNet that “what is most exciting to me is that our guidance is putting us on track to surpass one billion dollars in revenue in 2021, which puts us in a very different league of SaaS companies,” said Serafin.
The company plans to continue to invest in the business, said both Bachman and Serafin. Qualtrics hired 400 people in the quarter, and plans to keep spending.
“We will continue invest deeply in the business,” said Bachman. “We have a unique opportunity to invest, we will continue to do so.”