Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 24, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39952 | |
Entity Registrant Name | QUALTRICS INTERNATIONAL INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-1754215 | |
Entity Address, Address Line One | 333 West River Park Drive | |
Entity Address, City or Town | Provo | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84604 | |
City Area Code | 385 | |
Local Phone Number | 203-4999 | |
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |
Trading Symbol | XM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001747748 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 167,560,111 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 423,170,610 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 731,724 | $ 1,014,511 | |
Accounts receivable, net of allowances | [1] | 325,396 | 461,830 |
Deferred contract acquisition costs, net | 71,471 | 60,455 | |
Prepaid expenses and other current assets | 72,924 | 68,887 | |
Total current assets | 1,201,515 | 1,605,683 | |
Non-current assets: | |||
Property and equipment, net | 201,763 | 192,327 | |
Right-of-use assets from operating leases | 216,342 | 227,320 | |
Goodwill | 1,117,915 | 1,118,768 | |
Other intangible assets, net | 223,644 | 264,500 | |
Deferred contract acquisition costs, net of current portion | 160,020 | 145,952 | |
Deferred tax assets | 734 | 96 | |
Other assets | 29,556 | 27,577 | |
Total assets | 3,151,489 | 3,582,223 | |
Current liabilities: | |||
Lease liabilities | 17,291 | 18,898 | |
Accounts payable | [1] | 68,989 | 84,053 |
Accrued liabilities | 124,631 | 167,402 | |
Liability-classified, stock-based awards | 1,021 | 4,519 | |
Deferred revenue | 677,621 | 748,145 | |
Total current liabilities | 889,553 | 1,023,017 | |
Non-current liabilities: | |||
Lease liabilities, net of current portion | 258,114 | 263,307 | |
Deferred revenue, net of current portion | 14,752 | 6,698 | |
Deferred tax liabilities | 4,440 | 23,653 | |
Other liabilities | 66,579 | 78,848 | |
Total liabilities | 1,233,438 | 1,395,523 | |
Commitments and contingencies | |||
Equity (deficit) | |||
Preferred stock, par value $0.0001 per share; authorized 100,000,000 shares; no shares outstanding | 0 | 0 | |
Additional paid-in capital | 5,193,649 | 4,645,800 | |
Accumulated other comprehensive loss | (12,626) | (1,244) | |
Accumulated deficit | (3,263,031) | (2,457,913) | |
Total equity | 1,918,051 | 2,186,700 | |
Total liabilities and equity | 3,151,489 | 3,582,223 | |
Class A Common Stock | |||
Equity (deficit) | |||
Common stock | 17 | 15 | |
Class B Common Stock | |||
Equity (deficit) | |||
Common stock | $ 42 | $ 42 | |
[1]Includes amounts from related parties. See Note 13 for further details. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets - (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 167,328,522 | 147,309,254 |
Common stock, shares outstanding (in shares) | 167,328,522 | 147,309,254 |
Class B Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 423,170,610 | 423,170,610 |
Common stock, shares outstanding (in shares) | 423,170,610 | 423,170,610 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 377,531 | $ 271,634 | $ 1,069,543 | $ 759,622 |
Cost of revenue: | ||||
Total cost of revenue | 111,664 | 66,843 | 315,379 | 193,387 |
Gross profit | 265,867 | 204,791 | 754,164 | 566,235 |
Operating expenses: | ||||
Research and development | 98,333 | 83,875 | 320,488 | 226,552 |
Sales and marketing | 225,124 | 161,570 | 663,098 | 449,446 |
General and administrative | 182,280 | 236,810 | 572,954 | 637,944 |
Total operating expenses | 505,737 | 482,255 | 1,556,540 | 1,313,942 |
Operating loss | (239,870) | (277,464) | (802,376) | (747,707) |
Other non-operating income (expense), net | 3,058 | (3,160) | 4,239 | (6,091) |
Loss before income taxes | (236,812) | (280,624) | (798,137) | (753,798) |
Provision (benefit) for income taxes | (3,264) | 5,409 | 6,981 | (4,424) |
Net loss | $ (233,548) | $ (286,033) | $ (805,118) | $ (749,374) |
Net loss per share attributable to common stockholders, basic (in USD per share) | $ (0.40) | $ (0.56) | $ (1.38) | $ (1.49) |
Net loss per share attributable to common stockholders, diluted (in USD per share) | $ (0.40) | $ (0.56) | $ (1.38) | $ (1.49) |
Subscription | ||||
Revenue: | ||||
Total revenue | $ 314,765 | $ 220,314 | $ 896,151 | $ 611,748 |
Cost of revenue: | ||||
Total cost of revenue | 51,087 | 23,802 | 143,454 | 65,865 |
Professional services and other | ||||
Revenue: | ||||
Total revenue | 62,766 | 51,320 | 173,392 | 147,874 |
Cost of revenue: | ||||
Total cost of revenue | $ 60,577 | $ 43,041 | $ 171,925 | $ 127,522 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (233,548) | $ (286,033) | $ (805,118) | $ (749,374) |
Other comprehensive loss: | ||||
Foreign currency translation loss | (5,412) | (2,015) | (11,382) | (3,822) |
Comprehensive loss | $ (238,960) | $ (288,048) | $ (816,500) | $ (753,196) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit |
Beginning balance (in shares) at Dec. 31, 2020 | 6,000,000 | 423,170,610 | ||||
Beginning balance at Dec. 31, 2020 | $ (268,902) | $ 1 | $ 42 | $ 1,126,631 | $ 3,191 | $ (1,398,767) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 764,273 | 764,273 | ||||
Issuance of common stock upon settlement of restricted stock units (RSUs) (in shares) | 4,140,522 | |||||
Issuance of common stock for employee stock purchase plan (in shares) | 571,681 | |||||
Issuance of common stock for employee stock purchase plan | 16,586 | 16,586 | ||||
Common stock withheld related to net share settlement of equity awards | (27,800) | (27,800) | ||||
Modification of cash-settled awards into equity settled awards | 206,669 | 206,669 | ||||
Capital contribution from SAP | 115,000 | 115,000 | ||||
Sales of Class A Common Stock, net of issuance cost (in shares) | 81,968,387 | |||||
Sales of Class A Common Stock, net of issuance cost | 2,238,579 | $ 8 | 2,238,571 | |||
Class A common stock option exercised | 119,999 | 119,999 | ||||
Dividend Declared | (2,392,280) | (2,392,280) | ||||
Net loss | (749,374) | (749,374) | ||||
Foreign currency translation adjustment | (3,822) | (3,822) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 92,680,590 | 423,170,610 | ||||
Ending balance at Sep. 30, 2021 | 18,928 | $ 9 | $ 42 | 2,167,649 | (631) | (2,148,141) |
Beginning balance (in shares) at Jun. 30, 2021 | 91,035,764 | 423,170,610 | ||||
Beginning balance at Jun. 30, 2021 | 35,265 | $ 9 | $ 42 | 1,895,938 | 1,384 | (1,862,108) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 277,737 | 277,737 | ||||
Issuance of common stock upon settlement of restricted stock units (RSUs) (in shares) | 1,073,145 | |||||
Issuance of common stock upon exercise of stock options (in shares) | 571,681 | |||||
Issuance of common stock upon exercise of stock options | 16,586 | 16,586 | ||||
Common stock withheld related to net share settlement of equity awards | (22,968) | (22,968) | ||||
Modification of cash-settled awards into equity settled awards | 356 | 356 | ||||
Net loss | (286,033) | (286,033) | ||||
Foreign currency translation adjustment | (2,015) | (2,015) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 92,680,590 | 423,170,610 | ||||
Ending balance at Sep. 30, 2021 | 18,928 | $ 9 | $ 42 | 2,167,649 | (631) | (2,148,141) |
Beginning balance (in shares) at Dec. 31, 2021 | 147,309,254 | 423,170,610 | ||||
Beginning balance at Dec. 31, 2021 | 2,186,700 | $ 15 | $ 42 | 4,645,800 | (1,244) | (2,457,913) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 784,769 | 784,769 | ||||
Issuance of common stock upon settlement of restricted stock units (RSUs) (in shares) | 17,909,815 | |||||
Issuance of common stock upon settlement of restricted stock units (RSUs) | $ 0 | $ 2 | (2) | |||
Issuance of common stock upon exercise of stock options (in shares) | 257,000 | 256,810 | ||||
Issuance of common stock upon exercise of stock options | $ 1,470 | 1,470 | ||||
Issuance of common stock for employee stock purchase plan (in shares) | 1,852,643 | |||||
Issuance of common stock for employee stock purchase plan | 32,521 | 32,521 | ||||
Common stock withheld related to net share settlement of equity awards | (270,909) | (270,909) | ||||
Net loss | (805,118) | (805,118) | ||||
Foreign currency translation adjustment | (11,382) | (11,382) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 167,328,522 | 423,170,610 | ||||
Ending balance at Sep. 30, 2022 | 1,918,051 | $ 17 | $ 42 | 5,193,649 | (12,626) | (3,263,031) |
Beginning balance (in shares) at Jun. 30, 2022 | 162,175,986 | 423,170,610 | ||||
Beginning balance at Jun. 30, 2022 | 1,920,535 | $ 16 | $ 42 | 4,957,174 | (7,214) | (3,029,483) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 249,999 | 249,999 | ||||
Issuance of common stock upon settlement of restricted stock units (RSUs) (in shares) | 3,953,586 | |||||
Issuance of common stock upon settlement of restricted stock units (RSUs) | 0 | $ 1 | (1) | |||
Issuance of common stock upon exercise of stock options (in shares) | 117,273 | |||||
Issuance of common stock upon exercise of stock options | 786 | 786 | ||||
Issuance of common stock for employee stock purchase plan (in shares) | 1,081,677 | |||||
Issuance of common stock for employee stock purchase plan | 12,141 | 12,141 | ||||
Common stock withheld related to net share settlement of equity awards | (26,450) | (26,450) | ||||
Net loss | (233,548) | (233,548) | ||||
Foreign currency translation adjustment | (5,412) | (5,412) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 167,328,522 | 423,170,610 | ||||
Ending balance at Sep. 30, 2022 | $ 1,918,051 | $ 17 | $ 42 | $ 5,193,649 | $ (12,626) | $ (3,263,031) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (805,118) | $ (749,374) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 72,358 | 24,011 |
Loss on disposal of property and equipment | 232 | 1,525 |
Change in fair value of distribution liability for tax sharing agreement | (10,500) | 0 |
Reduction of right-of-use assets from operating leases | 22,254 | 16,571 |
Stock-based compensation expense, including cash settled | 778,592 | 764,592 |
Amortization of deferred contract acquisition costs | 51,628 | 35,977 |
Deferred income taxes | (17,086) | (5,544) |
Changes in assets and liabilities: | ||
Accounts receivable, net | 135,453 | 37,261 |
Prepaid expenses and other current assets | (5,558) | (5,043) |
Deferred contract acquisitions costs | (84,547) | (54,986) |
Other assets | (1,203) | (13,104) |
Lease liabilities | (17,250) | (10,369) |
Accounts payable | (16,858) | 14,875 |
Accrued liabilities | (39,124) | (8,232) |
Deferred revenue | (61,366) | 18,837 |
Other liabilities | (3,152) | (985) |
Settlement of stock-based payments liabilities | (4,749) | (76,875) |
Net cash flows used in operating activities | (5,994) | (10,863) |
Cash flows from investing activities | ||
Purchases of property and equipment | (36,203) | (29,711) |
Cash paid for business combination, net of cash acquired | 0 | (25,000) |
Net cash flows used in investing activities | (36,203) | (54,711) |
Cash flows from financing activities | ||
Proceeds from capital contributions from SAP | 0 | 115,000 |
Proceeds from issuance of class A common stock, net of underwriting discounts and commissions | 0 | 2,244,322 |
Payment of costs related to issuance of class A common stock | 0 | (3,081) |
Repayment of promissory note | 0 | (1,892,280) |
Payments for taxes related to net share settlement of equity awards | (270,909) | (27,800) |
Issuance of class A common stock through Employee Stock Purchase Plan | 32,521 | 16,586 |
Proceeds from exercise of stock options | 1,470 | 0 |
Net cash flows (used in) provided by financing activities | (236,918) | 452,747 |
Effect of changes in exchange rates on cash and cash equivalents | (3,672) | (1,118) |
Net (decrease) increase in cash and cash equivalents | (282,787) | 386,055 |
Cash and cash equivalents, beginning of period | 1,014,511 | 203,891 |
Cash and cash equivalents, end of period | 731,724 | 589,946 |
Supplemental cash flow disclosures | ||
Cash paid for income taxes | 36,226 | 7,848 |
Cash paid for operating leases, net of incentives received | 18,610 | 10,008 |
Modification of cash-settled stock-based compensation awards into equity-settled awards | 0 | 206,669 |
Non-cash investing and financing activities | ||
Capital expenditures incurred but not yet paid | 1,944 | 208 |
Right-of-use assets obtained in exchange for lease obligations | 17,508 | 1,374 |
Note payable issued for dividend declared | 0 | 500,000 |
Expiration of contingency associated with Class A common stock option exercised | $ 0 | $ 120,000 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Business and Significant Accounting Policies | SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of Business Qualtrics International Inc. (“Qualtrics” or “the Company”) was incorporated in the state of Delaware in September 2014. Qualtrics has built the first experience management platform (“XM Platform”) to design and manage customer, employee, product, and brand experiences. The Company sells subscriptions to its XM Platform and provides professional services primarily consisting of research services, implementation services, and engineering services. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated balance sheet as of September 30, 2022, and the condensed consolidated statements of operations, comprehensive loss, and stockholders' equity (deficit) for the three and nine months ended September 30, 2022 and 2021, and condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021, are unaudited. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments necessary to fairly state the Company's financial position as of September 30, 2022, and its results of operations for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine months ended September 30, 2022 and 2021. The financial data and the other financial information disclosed in the notes to these condensed consolidated financial statements related to the three and nine month periods are also unaudited. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2022 or for any other future year or interim period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2021, included in the Company's Annual Report on Form 10-K. Use of Estimates The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. The Company’s most significant estimates and judgments involve revenue recognition with respect to the determination of the standalone selling prices for the Company’s services, deferred contract acquisition costs, the period of benefit generated from deferred contract acquisition costs, valuation of the Company’s equity and cash settled stock-based compensation, valuation of certain intangible assets that were acquired as part of business combinations, valuation of the distribution liability related to the tax sharing agreement with SAP, valuation of deferred income tax assets, uncertain tax positions, contingencies, the determination of whether a contract contains a lease, determining the incremental borrowing rate for the calculation of the present value of lease liabilities, and litigation accruals. Actual results could differ from those estimates. Foreign Currency Transactions The assets and liabilities of the Company’s foreign subsidiaries are translated from their respective functional currencies into U.S. dollars at the rates in effect at the balance sheet date and revenue and expense amounts are translated at the average exchange rate for the period. Foreign currency translation gains and losses are recorded in other comprehensive loss. Exchange rate differences resulting from translation adjustments are accounted for as a component of accumulated other comprehensive loss. Gains and losses, whether realized or unrealized, from foreign currency transactions (those transactions denominated in currencies other than the entities’ functional currency) are included in other non-operating income (expense), net. Revenue Recognition The Company recognizes revenue from its service/product lines when control is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the services. Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenue. The Company accounts for revenue contracts with customers by applying the requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606 – Revenue from Contracts with Customers (Topic 606), which includes the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in a contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied Classes of Revenue The Company derives revenue from two service/product lines: Subscription Revenue The Company generates revenue primarily from sales of subscriptions to access its XM Platform, together with related support services to its customers. Arrangements with customers do not provide the customer with the right to take possession of the software operating the XM Platform at any time. Instead, customers are granted continuous access to the XM Platform over the contractual period. The Company’s subscription contracts generally have annual contractual terms while some have multi-year contractual terms. The Company generally bills annually in advance with net 30 payment terms. The Company’s agreements generally cannot be canceled for a refund. Professional Services and Other Revenue Professional services and other revenue mainly includes two types of services: research services and professional services. Research services is a solution provided to existing subscription customers with arrangements which are distinct from subscription revenue services. In addition, the Company provides professional services associated with new and expanding customers requesting implementation, integration services, and other ancillary services. These services are distinct from subscription revenue services. Recognition of Revenue Access to the Company’s XM Platform represents a series of distinct services as the Company continually provides access to and fulfills its obligation to the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is generally recognized on a straight-line basis over the contract term, beginning on the date that the service is made available to the customer. Revenue from professional services and other revenue related to research services is recognized upon completion because completion and delivery of the results is considered a separate performance obligation satisfied at a point in time. Revenue from professional services and other revenue related to customized software coding is recognized upon completion, because the customer consumes the intended benefit and assumes control upon final completion of the custom coding. Revenue from professional services and other revenue related to implementation and other ancillary services is recognized as the services are performed, because the customer consumes the benefit as the services are provided. Judgment is required to determine whether revenue is to be recognized at a point in time or over time. For performance obligations satisfied over time, we measure progress using the method that best reflects Qualtrics’ performance. All judgments and estimates mentioned above can significantly impact the timing and amount of revenue to be recognized. Contract Balances The Company bills in advance for annual contracts, and at times enters into non-cancelable multi-year deals. Non-cancelable multi-year deals typically include price escalations each year. The Company recognizes revenue on a straight-line basis over the non-cancelable term and accounts for the difference between straight-line revenue and revenue from invoiced amounts as a contract asset. The current and noncurrent portion of contract assets included in prepaid and other current assets and other assets as of September 30, 2022 were $23.0 million and $17.5 million, respectively. The current and noncurrent portion of contract assets included in prepaid and other current assets and other assets as of December 31, 2021 were $18.1 million and $14.0 million, respectively. The Company records contract liabilities to deferred revenue when cash payments are received or due in advance of performance. Deferred revenue primarily relates to the advance consideration received from the customer prior to the related performance obligation being fulfilled. In certain circumstances, we receive consideration from customers in advance of a specific service being identified. Total consideration received in advance of a specific service being identified totaled $28.5 million and $33.0 million as of September 30, 2022 and December 31, 2021, respectively, and is included in deferred revenue. The following table shows the amount of revenue included in prior period deferred revenue for each of the Company’s revenue generating solutions: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Subscription revenue: Revenue included in prior period deferred revenue $ 128,932 $ 93,347 $ 519,574 $ 386,916 Revenue generated from same period billings 185,833 126,967 376,577 224,832 Total subscription revenue $ 314,765 $ 220,314 $ 896,151 $ 611,748 Professional services and other revenue: Revenue included in prior period deferred revenue $ 16,175 $ 11,699 $ 62,204 $ 51,513 Revenue generated from same period billings 46,591 39,621 111,188 96,361 Total professional services and other revenue $ 62,766 $ 51,320 $ 173,392 $ 147,874 Remaining Performance Obligations Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. Amounts of a customer contract’s transaction price that are allocated to the remaining performance obligations represent contracted revenue that has not yet been recognized. They include amounts recognized as contract liabilities and amounts that are contracted but not yet due. The future estimated revenue related to unsatisfied performance obligations as of September 30, 2022 was $1,894.7 million, of which approximately $1,047.2 million is expected to be recognized as revenue over the next twelve months. The future estimated revenue related to unsatisfied performance obligations as of December 31, 2021 was $1,732.8 million. This estimate is based on the Company’s best judgment, as it needs to consider estimates of possible future contract modifications. The amount of transaction price allocated to the remaining performance obligations, and changes in this amount over time, are impacted by, among others, currency fluctuations and the contract period of our cloud contracts remaining at the balance sheet date and thus, by the timing of contract renewals. Disaggregation of Revenue The following table summarizes the revenue by region based on the address of customers who have contracted to use the Company’s cloud platform: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 United States $ 261,421 $ 192,114 $ 745,055 $ 537,632 International 116,110 79,520 324,488 221,990 Total revenue $ 377,531 $ 271,634 $ 1,069,543 $ 759,622 No single country outside the United States accounted for 10% or more of revenue during the three and nine months ended September 30, 2022 and 2021. Stock-Based Compensation, including cash settled Equity Awards The Company records stock-based compensation based on the grant date fair value of the awards and recognizes the fair value of those awards as expense using the straight-line method over the requisite service period of the award. For restricted stock units that contain performance conditions, the Company recognizes expense using the accelerated attribution method if it is probable the performance conditions will be met. The Company estimates the grant date fair value of RSUs based on the closing stock price of the Company’s publicly traded Class A common stock on the grant date. The Company estimates the grant date fair value of purchase rights issued under our Employee Stock Purchase Plan, or ESPP, based on the Black-Scholes option-pricing model using the estimated number of awards as of the beginning of the offering periods. The Company estimated the fair value of the converted Clarabridge options based on the intrinsic value of the awards on the acquisition date. Cash Awards The Company measures and recognizes compensation expense for stock-based payment cash awards based on the fair value of the awards each quarter until settlement. The fair value of the awards are estimated based on the fair value of the underlying stock price of SAP SE. The fair value of stock-based compensation cash awards that vest solely on a service-based condition is recognized on a straight-line basis over the period during which services are provided in exchange for the award. Awards which contain both service-based and performance conditions are recognized using the accelerated attribution method once the performance condition is probable of occurring. All awards that were not exchanged into Qualtrics RSUs are paid out in cash upon vesting. The Company accounts for forfeitures as they occur; therefore, stock-based compensation expense has been calculated based on actual forfeitures in the Company’s consolidated statements of operations. Net Loss per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. As there are no potentially dilutive securities, diluted earnings per share attributable to common stockholders has not been presented. For purposes of calculating earnings per share, the Company uses the two-class method. Because both classes of common stock share the same rights in dividends, basic and diluted earnings per share was the same for both common stock classes. Accounts Receivable and Allowances Accounts receivable are recorded at the invoiced amount, net of allowances. Accounts receivable are typically due within 30 days from the date of invoice. Customer balances outstanding longer than the contractual payment terms are considered past due. The Company establishes allowances for bad debt and cancellations based on historical collection data and customer specific circumstances. The allowance for bad debt, as needed, is established with a charge to bad debt expense in the consolidated statements of comprehensive loss. The Company’s allowance for bad debt was $6.1 million and $1.5 million as of September 30, 2022 and December 31, 2021, respectively. Bad debt expense was $2.0 million and not material during the three months ended September 30, 2022 and 2021, respectively. Bad debt expense was $5.0 million and not material during the nine months ended September 30, 2022 and 2021, respectively. The Company’s allowance for cancellations was $20.3 million and $17.5 million as of September 30, 2022 and December 31, 2021, respectively. During the three months ended September 30, 2022 and 2021, $1.3 million and $(1.2) million of net additions (reductions) were charged to revenue, respectively, and $0.6 million and $(5.0) million of net additions (reductions) were charged to deferred revenue, respectively. During the nine months ended September 30, 2022 and 2021, $1.4 million and $(3.5) million of net additions (reductions) were charged to revenue, respectively, and $1.4 million and $(16.5) million of net additions (reductions) were charged to deferred revenue, respectively. The allowance for cancellations is established with a reduction to revenue and deferred revenue. In the event of lack of payment due to a bankruptcy or other credit-related issues of a customer, the Company writes off the related accounts receivable with a reduction to the allowance for bad debt. In the event of lack of payment from a customer for issues unrelated to credit risk, the Company cancels the customer’s subscription access or service and writes off the corresponding accounts receivable with reductions to the allowance for cancellations. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, and accounts receivable. The Company performs credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. No customer accounted for more than 10% of accounts receivable at September 30, 2022 and December 31, 2021. No single customer accounted for 10% or more of total revenue during the three and nine months ended September 30, 2022 and 2021. Deferred Contract Acquisition Costs, net Deferred contract acquisition costs, net is stated at gross deferred contract acquisition costs less accumulated amortization. Sales commissions and related payroll taxes for initial software-as-a-service (SaaS) subscription contracts earned by the Company’s sales force are considered to be incremental and recoverable costs of obtaining a contract with a customer. As a result, these amounts have been capitalized as deferred contract acquisition costs on the consolidated balance sheets. The Company capitalized additional deferred contract acquisition costs of $31.7 million and $21.1 million during the three months ended September 30, 2022 and 2021, respectively, and $84.5 million and $55.0 million during the nine months ended September 30, 2022 and 2021, respectively. Sales commissions for renewal contracts are not considered commensurate with the commissions paid for the acquisition of an initial SaaS subscription contract, given the substantive difference in commission rates in proportion to their respective contract values. After the conclusion of the initial contract period, commissions paid on subsequent renewals are commensurate year after year. As such, the Company expenses renewal commissions as incurred. Deferred contract acquisition costs are amortized over an estimated period of benefit of five years. The period of benefit was estimated by considering factors such as estimated average customer life, the rate of technological change in the subscription service, and the impact of competition in its industry. As the Company’s average customer life significantly exceeded the rate of change in its technology, the Company concluded that the rate of change in the technology underlying the Company’s subscription service was the most significant factor in determining the period of benefit for which the asset relates. In evaluating the rate of change in the technology, the Company considered the competition in the industry, its commitment to continuous innovation, and the frequency of product, platform, and technology updates. The Company determined that the impact of competition in the industry is reflected in the period of benefit through the rate of technological change. Amortization of deferred contract acquisition costs were $18.5 million and $12.8 million for the three months ended September 30, 2022 and 2021, respectively, and $51.6 million and $36.0 million for the nine months ended September 30, 2022 and 2021, respectively. Amortization of deferred contract acquisition costs are included in sales and marketing expense in the accompanying consolidated statements of operations. There was no impairment loss in relation to the deferred costs for any period presented. Leases Right-of-use (“ROU”) assets and lease liabilities are recognized at commencement based on the present value of the minimum lease payments over the lease term. The Company utilizes certain practical expedients and policy elections available under Topic 842. Leases with a one-year term or less are not recognized on the balance sheet. Internal-use Software The Company capitalizes certain development costs incurred in connection with its internal-use software. These capitalized costs are primarily related to the software platforms that are hosted by the Company and accessed by its customers on a subscription basis. Costs incurred in the preliminary stages of development are expensed as incurred as research and development costs. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized costs are recorded as part of property and equipment. Maintenance and training costs are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life of 24 months. The Company recognized amortization expenses of $5.1 million and $3.3 million related to capitalized internal-use software for the three months ended September 30, 2022 and 2021, respectively, and $13.5 million and $10.0 million for the nine months ended September 30, 2022 and 2021, respectively, within cost of subscription revenue. Income Taxes Income taxes as presented in the consolidated financial statements of Qualtrics attribute current and deferred income taxes of SAP to the Company’s standalone financial statements in a manner that is systematic, rational and consistent with the asset and liability method prescribed by FASB ASC Topic 740: Income Taxes (“ASC 740”). Accordingly, the Company’s income tax provision was prepared following the separate return method prior to deconsolidation in October 2021 for U.S. federal income tax purposes, and the separate return method continues to apply for other jurisdictions where we file returns as part of a SAP Tax Group. The separate return method applies ASC 740 to the standalone financial statements of each member of the consolidated group as if the group members were a separate taxpayer and a standalone enterprise. As a result of deconsolidation for U.S. federal income tax purposes, we have updated our reported tax attributes in certain jurisdictions to reflect the tax attributes available for future use by the Qualtrics tax reporting entity that files returns separate from a SAP Tax Group. Certain operations of Qualtrics have historically been included in a consolidated return with other SAP entities. Current obligations for taxes in certain jurisdictions where the Company files a consolidated tax return with SAP, are deemed settled with SAP for purposes of these consolidated financial statements. Current obligations for tax in jurisdictions where the Company does not file a consolidated return with SAP, including certain foreign and domestic jurisdictions, are recorded as accrued liabilities. Deferred income tax balances reflect the effects of temporary differences between the financial reporting and tax bases of the Company’s assets and liabilities using enacted tax rates expected to apply when taxes are actually paid or recovered. In addition, deferred tax assets are recorded for net operating loss (“NOL”) and credit carryforwards for Qualtrics. A valuation allowance is provided against deferred tax assets unless it is more likely than not that they will be realized based on all available positive and negative evidence. Such evidence includes, but is not limited to, recent cumulative earnings or losses, expectations of future taxable income by taxing jurisdiction, and the carry-forward periods available for the utilization of deferred tax assets. The Company uses a two-step approach to recognizing and measuring uncertain income tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of pre-tax book income or loss. Significant judgment is required to evaluate uncertain tax positions. Although the Company believes that it has adequately reserved for its uncertain tax positions, it can provide no assurance that the final tax outcome of these matters will not be materially different. The Company evaluates its uncertain tax positions on a regular basis and evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of an audit, and effective settlement of audit issues. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and results of operations. Fair Value Measurement The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions, and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Recently Issued Accounting Pronouncements Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new standard requires that entities recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, which creates an exception to the general recognition and measurement principles of ASC 805. The standard will result in companies recognizing contract assets and liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. The standard is effective for public companies for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years with early adoption permitted. The Company has not early adopted the standard and the impact will be dependent upon the occurrence and magnitude of any future acquisitions. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 9 Months Ended |
Sep. 30, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS Cash and cash equivalents consisted of the following: As of September 30, As of December 31, in thousands 2022 2021 Cash $ 349,990 $ 123,906 Money market mutual funds 381,734 890,605 Total cash and cash equivalents $ 731,724 $ 1,014,511 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS See Note 1, “Summary of Business and Significant Accounting Policies” for additional details related to fair value measurements. Cash and cash equivalents The Company’s cash equivalents with regards to the money market mutual funds are classified within Level 1 of the fair value hierarchy. Tax sharing liability Since the SAP Acquisition, we have been included in SAP America’s consolidated group for U.S. federal income tax purposes. In October 2021, we deconsolidated from the SAP Tax Group for U.S. federal income tax purposes. We expect to remain a member of the SAP Tax Group for certain state filings. Pursuant to the tax sharing agreement with SAP, for taxable periods beginning after December 31, 2020, we will make tax sharing payments to SAP related to certain share based payment awards that existed prior to or were granted at the time of the IPO, the Pre-IPO Awards. Upon deconsolidation from the SAP Tax Group, the initial tax sharing liability was recorded as a distribution payable to SAP in accounts payable and other liabilities and as a reduction to additional paid-in capital. Changes in the fair value of the tax sharing liability are recorded through other non-operating income (expense), net. As of September 30, 2022 and December 31, 2021, the Company’s distribution liability for the tax sharing agreement with SAP based on an estimated fair value totaled $61.0 million and $71.5 million, respectively. The tax sharing agreement liability is estimated based on the estimated future tax benefits associated with the Pre-IPO Awards. The liability is classified within Level 3 of the fair value hierarchy and is based on the discounted estimated future cash flows of the liability. The primary assumptions used in the valuation include the amount of the estimated future tax deductions related to the Pre-IPO Awards, the Company’s estimated future taxable income or loss excluding the Pre-IPO Awards, including the ability and timing of when the Company will be able to utilize the tax deductions from the Pre-IPO Awards using a hypothetical with and without tax calculation, and the estimated discount rate, which is based on current market rates for unsecured liabilities with similar maturities and credit quality. Estimating the tax sharing liability balance requires significant estimates and assumptions which are inherently uncertain and therefore actual results could differ from those estimates. During the three and nine months ended September 30, 2022, the Company had no transfers in or out of Level 3 fair value measurements. The changes in the fair value of the tax sharing liability were as follows: in thousands Balance as of December 31, 2021 $ (71,500) Change in the fair value reported in other non-operating income (expense), net 10,500 Balance as of September 30, 2022 $ (61,000) |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following: As of September 30, As of December 31, in thousands 2022 2021 Internal-use software $ 42,899 $ 29,047 Server equipment 20,388 28,176 Leasehold improvements 86,537 80,301 Computer equipment 25,177 21,470 Land 13,383 13,383 Buildings 61,345 61,346 Furniture and fixtures 3,073 2,857 Software 3,034 3,252 Construction in progress 15,506 10,717 Total property and equipment $ 271,342 $ 250,549 Accumulated depreciation and amortization (69,579) (58,222) Property and equipment, net $ 201,763 $ 192,327 The Company recognized depreciation and amortization expense related to its property and equipment as follows: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Cost of revenue $ 7,227 $ 5,132 $ 19,853 $ 15,343 Research and development 1,462 864 4,561 2,307 Sales and marketing 2,228 1,508 6,399 4,174 General and administrative 426 343 1,469 897 Total depreciation and amortization expense $ 11,343 $ 7,847 $ 32,282 $ 22,721 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | LEASES The Company has operating leases for corporate offices under non-cancelable operating leases with various expiration dates. There are no finance leases. The leases have remaining terms of 1 to 14 years. Options to extend for up to 10 years have not been included because they are not reasonably certain to be exercised. The components of lease expense were as follows: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Operating lease cost $ 7,341 $ 5,388 $ 22,254 $ 16,513 Variable and short-term lease cost 2,678 2,031 7,098 5,498 Other information related to leases was as follows: As of September 30, As of December 31, 2022 2021 Weighted average remaining lease term 10.9 years 11.9 years Weighted average discount rate 2.08 % 2.07 % As of September 30, 2022, the maturities of lease liabilities under non-cancelable operating leases, net of lease incentives, were as follows: As of September 30, in thousands 2022 Remainder of 2022 3,087 2023 14,190 2024 28,241 2025 30,396 2026 31,038 Thereafter 203,591 Total minimum lease payments $ 310,543 Less: imputed interest (35,138) Total $ 275,405 |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | BUSINESS COMBINATIONS Clarabridge, Inc. On October 1, 2021, the Company acquired all outstanding stock of Clarabridge, Inc. (“Clarabridge”), a customer experience management software company headquartered in Reston, Virginia, pursuant to an Agreement and Plan of Reorganization and Merger (“Merger Agreement”). The acquisition was completed to strengthen the Company’s omnichannel conversational analytics and experience management platform. Pursuant to the terms of the Merger Agreement, all outstanding shares of Clarabridge capital stock were cancelled in exchange for consideration in the form of shares of Class A common stock of the Company and cash, as provided by the Merger Agreement. The number of shares of Class A common stock issued to the sellers was fixed at 24,142,065 shares (“Acquisition Shares”) valued at $43.88 per share (the Company’s stock price on the acquisition date). The acquisition date fair value of the consideration transferred for Clarabridge consisted of the following: in thousands Cash, net of cash acquired $ 81,189 Fair value of shares issued 1,059,354 Fair value of stock options assumed 127,139 Total $ 1,267,682 Below is the allocation of the purchase price: in thousands Clarabridge Accounts receivable 18,538 Prepaid expenses and other assets 2,888 Property and equipment 6,414 Customer relationships 101,160 Developed technology 151,530 Tradenames 1,240 Goodwill 1,064,002 Total assets acquired 1,345,772 Accounts payable (2,724) Accrued liabilities (9,455) Deferred revenue (36,421) Deferred tax liabilities (25,133) Other liabilities (4,357) Total assets acquired, net $ 1,267,682 Estimating the fair value of the acquired intangible assets requires significant estimates and assumptions which are inherently uncertain and therefore actual results could differ from those estimates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. Most of the net tangible assets were valued at their respective carrying amounts as of the acquisition date, as the Company believes that these amounts approximate their fair values, with the exception of deferred revenue, which was reduced to its fair value as of the acquisition date. Adjustments in purchase price allocations during the nine months ended September 30, 2022 related to tax adjustments on pre-acquisition net operating losses and decreased deferred tax liabilities by $1.3 million with a corresponding decrease to goodwill. The goodwill arising from the acquisition consists largely of the synergies the Company is expected to achieve from combining the acquired assets and operations with its existing operations. Goodwill related to Clarabridge is not deductible for tax purposes. Other acquisitions On July 20, 2021, the Company acquired all of the outstanding stock of Usermind, Inc. (“Usermind”) in exchange for cash, net of cash acquired. The acquisition was completed to strengthen the Company’s experience orchestration and management platform. The assets, liabilities, and operating results of Usermind are reflected in the Company’s consolidated financial statements from the date of acquisition. On December 3, 2021, the Company acquired all of the outstanding stock of SurveyVitals, Inc. (“SurveyVitals”), in exchange for primarily cash, net of cash acquired. The acquisition was completed to strengthen the Company’s healthcare experience offerings. The assets, liabilities, and operating results of SurveyVitals are reflected in the Company’s consolidated financial statements from the date of acquisition. The aggregate purchase price of these two acquisitions was $61.9 million, net of cash acquired. The allocation of the purchase price for the Usermind and SurveyVitals acquisitions is as follows: in thousands Usermind and SurveyVitals Developed technology $ 5,070 Customer relationships 8,440 Licenses and certifications 6,350 Tradenames 100 Goodwill 47,204 Other assets, net 947 Total assets acquired 68,111 Other liabilities, net (6,168) Total assets acquired, net $ 61,943 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill Changes in the carrying amount of goodwill were as follows: in thousands Balance as of December 31, 2021 $ 1,118,768 Adjustments in purchase price allocations (853) Balance as of September 30, 2022 $ 1,117,915 The measurement periods for the valuation of assets acquired and liabilities assumed end as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available, but do not exceed 12 months. Adjustments in purchase price allocations may require a change in the amounts allocated to goodwill and acquired assets and liabilities assumed during the periods in which the adjustments are determined. Other intangible assets, net Other intangible assets, net consisted of the following: As of September 30, As of December 31, in thousands 2022 2021 Patents $ 751 $ 751 Developed technology 159,670 159,665 Customer relationships 111,700 111,965 Developed content 400 400 Tradename 1,890 1,915 Licenses and certifications 6,350 6,845 License agreements 1,500 1,500 Total intangible assets $ 282,261 $ 283,041 Accumulated amortization (58,617) (18,541) Other intangible assets, net $ 223,644 $ 264,500 The Company recognized amortization expense related to its acquired intangible assets as follows: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Cost of revenue $ 7,452 $ 442 $ 22,529 $ 973 Sales and marketing 5,531 74 16,589 176 General and administrative 320 47 958 141 Total amortization of acquired intangible assets 13,303 563 40,076 1,290 Estimated amortization expense for intangible assets for the next five years consists of the following: As of September 30, in thousands 2022 Remainder of 2022 13,228 2023 51,002 2024 50,885 2025 49,934 2026 41,366 Thereafter 17,229 Total $ 223,644 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following: As of September 30, As of December 31, in thousands 2022 2021 Accrued wages, bonuses and commissions $ 72,793 $ 93,021 Accrued payroll taxes 6,426 7,295 Other accrued expenses 34,481 44,037 Accrued income taxes 10,931 23,049 Total accrued liabilities $ 124,631 $ 167,402 |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company is a party to a variety of claims, lawsuits, and proceedings which arise in the ordinary course of business, including claims of alleged infringement of intellectual property rights. The Company records a liability when it believes that it is probable that a loss will be incurred, and the amount of loss or range of loss can be reasonably estimated. Given the unpredictable nature of legal proceedings, the Company bases its estimate on the information available at the time of the assessment. As additional information becomes available, the Company reassesses the potential liability and may revise the estimate. The Company is not presently a party to any litigation the outcome of which, it believes, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on its business, operating results, or financial condition. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | STOCK-BASED COMPENSATION Stock-based compensation expense, including cash settled, for the three and nine months ended September 30, 2022 and 2021 was recorded as follows: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Cost of subscription revenue $ 4,905 $ 2,516 $ 13,783 $ 8,522 Cost of professional services and other revenue 9,445 6,977 25,754 18,161 Research and development 28,722 33,697 115,553 89,410 Sales and marketing 55,622 36,651 155,540 94,917 General and administrative 148,582 196,979 467,962 553,582 Total stock-based compensation expense, including cash settled 247,276 276,820 778,592 764,592 Cash Awards During the three months ended September 30, 2022 and 2021, less than 0.1 million Qualtrics Rights and Move SAP RSUs vested and were settled for $0.7 million and $2.9 million in cash, respectively. During the nine months ended September 30, 2022 and 2021, less than 0.1 million and 1.8 million Qualtrics Rights and Move SAP RSUs vested and were settled for $4.7 million and $76.9 million in cash, respectively. The unrecognized expense related to Qualtrics Rights and Move SAP RSUs was $0.7 million and $4.4 million as of September 30, 2022 and December 31, 2021, respectively, and will be recognized over a remaining vesting period of up to two years. Equity Awards Qualtrics RSUs The following table sets forth the outstanding Qualtrics RSUs and related activity for the nine months ended September 30, 2022: Number of RSUs (in thousands) Weighted-Average Grant Date Fair Value Outstanding as of December 31, 2021 82,164 $ 43.11 Granted 32,117 21.69 Vested (28,824) 42.03 Forfeited/Canceled (5,208) 37.19 Outstanding as of September 30, 2022 80,249 $ 35.31 The total fair value of RSUs that vested during the three months ended September 30, 2022 and 2021 was $20.2 million and $15.3 million, respectively. The total fair value of RSUs that vested during the nine months ended September 30, 2022 and 2021 was $704.0 million and $184.4 million, respectively. As of September 30, 2022, there was $2,251.0 million of unrecognized stock-based compensation expense related to outstanding Qualtrics RSUs, which is expected to be recognized over a weighted-average period of 2.6 years. Qualtrics Options On October 1, 2021, in connection with the acquisition of Clarabridge, the Company assumed the outstanding Clarabridge stock option plans and converted all outstanding stock options into Qualtrics options. The following table sets forth the outstanding common stock options and related activity for the nine months ended September 30, 2022: Number of Options (in thousands) Weighted-Average Exercise Price per Share Weighted-Average Remaining Term (years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2021 1,855 $ 4.84 6.3 $ 56,684 Exercised (257) 4.11 Forfeited/Expired (27) 6.34 Outstanding as of September 30, 2022 1,571 $ 4.93 5.4 $ 8,238 Vested and exercisable at September 30, 2022 787 $ 4.61 5.4 $ 4,387 The intrinsic value represents the excess of the estimated fair value of the Company's common stock on the date of exercise over the exercise price of each option. The intrinsic value of options as of September 30, 2022 is based on the market closing price of the Company's Class A common stock on that date. The aggregate intrinsic value of options exercised was $1.1 million and $4.3 million for the three and nine months ended September 30, 2022, respectively. As of September 30, 2022, there was $11.8 million of unrecognized stock-based compensation expense related to outstanding stock options which is expected to be recognized over a weighted-average period of 2 years. Qualtrics Employee Stock Purchase Plan In December 2020, the Company's board of directors approved the 2021 Qualtrics International Inc. Employee Stock Purchase Plan (the “ESPP”), which became effective in January 2021. Each employee who is a participant in the ESPP may purchase shares by authorizing contributions at a minimum of 1% up to a maximum of 20% of his or |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS The following table sets forth the calculation of basic net loss per share attributable to common stockholders during the periods presented: in thousands (except share amount) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Net loss attributable to common shareholders $ (233,548) $ (286,033) $ (805,118) $ (749,374) Denominator: Weighted-average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic and diluted 586,850,097 515,212,996 581,664,521 503,781,082 Net loss per share attributable to common stockholders, basic and diluted $ (0.40) $ (0.56) $ (1.38) $ (1.49) Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. The following table discloses securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share because to do so would have been antidilutive for all periods presented: As of September 30, 2022 As of December 31, 2021 Qualtrics restricted stock units 80,248,895 82,163,894 Qualtrics options 1,570,517 1,854,965 Qualtrics employee stock purchase program 992,769 687,000 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company has an effective tax rate of 1.4% and (1.9)% for the three months ended September 30, 2022 and 2021, respectively, and (0.9)% and 0.6% for the nine months ended September 30, 2022 and 2021, respectively. The Company has incurred U.S. operating losses and has minimal profits in its foreign jurisdictions. Our effective tax rate is affected by tax rates in both U.S. and foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses, such as share-based compensation, and changes in our valuation allowance. In prior years, the Company had calculated the income taxes in its consolidated financial statements on a separate return basis. However, the Company was in actuality included in the consolidated, combined or unitary U.S. federal and state income tax returns with SAP America, Inc. and its affiliates. As a result of the federal tax deconsolidation from SAP in the fourth quarter of 2021, net operating losses and credits were updated to reflect actual attributes available for use by the Company. The Company is now required to file separate U.S. federal tax returns for each of its U.S. taxable entities. The Company is subject to a tax sharing agreement with SAP that requires the Company to reimburse SAP, or be reimbursed by SAP, for the Company's taxable income, or loss in the case of reimbursement, that is included on consolidated tax returns with SAP, such as certain combined or unitary state returns, subject to adjustments for hypothetical tax attributes and certain simplifying conventions. The Company has evaluated all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and has determined that it is more likely than not that the net deferred tax assets for some of the Company’s U.S. entities will not be realized. Due to uncertainties surrounding the realization of the deferred tax assets in these entities, the Company maintains a full valuation allowance against its net U.S. deferred tax assets. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Since the SAP acquisition in 2019, SAP and its affiliates are related parties to the Company. The Company has entered into certain arrangements for services and products with SAP and its affiliates. The consolidated statements of operations and comprehensive loss include all revenue and costs directly attributable and/or allocable to the Company, including costs for facilities, functions, and services used by Qualtrics. The condensed consolidated statement of operations also includes expenses of SAP directly charged to Qualtrics for certain functions provided by SAP, including, but not limited to, sales organization costs, insurance, employee benefits, human resources and usage of data centers. The Company directly charges SAP for certain functions provided to SAP, including sales support. These charges were determined based on actual expenses incurred on Qualtrics’ or SAP’s behalf or by usage. During the three months ended September 30, 2022 and 2021, the Company recognized revenue of $10.6 million and $6.0 million, respectively, from SAP and its affiliates in exchange for services and products. During the nine months ended September 30, 2022 and 2021, the Company recognized revenue of $31.6 million and $16.8 million, respectively, from SAP and its affiliates in exchange for services and products. Total costs charged from SAP and its affiliates to the Company were $12.1 million and $13.3 million during the three months ended September 30, 2022 and 2021, respectively, and $34.0 million and $40.5 million during the nine months ended September 30, 2022 and 2021, respectively. Total costs charged from the Company to SAP and its affiliates were $3.7 million and $5.5 million during the three months ended September 30, 2022 and 2021, respectively, and $11.8 million and $14.6 million during the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the outstanding receivable and payable balance with SAP and its affiliates was $17.9 million and $8.5 million, respectively. As of December 31, 2021, the outstanding receivable and payable balance with SAP and its affiliates was $42.0 million and $13.3 million, respectively. Because of the SAP Acquisition, we had been included in SAP America’s consolidated group for U.S. federal income tax purposes. In October 2021, we deconsolidated from the SAP Tax Group for U.S. federal income tax purposes. We expect to remain a member of the SAP Tax Group for certain state filings. Pursuant to the tax sharing agreement with SAP, for taxable periods beginning after December 31, 2020, we will make certain tax sharing payments to SAP. As of September 30, 2022, the Company’s distribution liability for the tax sharing agreement with SAP totaled $78.0 million, consisting of $17.0 million based on our separate tax liability included on SAP Tax Group returns and $61.0 million based on an estimated fair value of the liability related to Pre-IPO Awards. As of December 31, 2021, the Company’s distribution liability for the tax sharing agreement with SAP totaled $88.5 million, consisting of $17.0 million based on our separate tax liability included on SAP Tax Group returns and $71.5 million based on an estimated fair value of the liability related to Pre-IPO Awards. In January 2021, and in connection with the initial public offering, the Company declared a $2,392 million dividend in the form of two promissory notes payable from Qualtrics to SAP AMERICA, INC. Promissory Note 1 was issued with a principal amount of $1,892 million and paid in full on February 1, 2021. Promissory Note 2 was issued with a principal amount of $500 million and interest rate of 1.35% compounded semi annually. The outstanding principal of $500 million and accrued interest related to Promissory Note 2 was paid in full on November 9, 2021. Certain Board members of the Company and certain Supervisory Board and Executive Board members of SAP SE currently hold, or held within the last year, positions of significant responsibility with other entities. We have relationships with certain of these entities in the ordinary course of business. During the three and nine months ended September 30, 2022, and 2021, revenue and charges from these related parties were immaterial. In December 2020, Ryan Smith, our Founder and Executive Chair, acquired a majority interest in the Utah Jazz basketball franchise, the associated venue, and certain related sports teams and operations and business interests. In 2019, the Company entered into multi-year agreements with the Utah Jazz related to ticket purchases, advertising, sponsorships, and the Utah Jazz Five for the Fight Campaign, under which we were billed $0.3 million and $0.4 million during the three months ended September 30, 2022 and 2021, respectively, and $2.6 million and $4.2 million during the nine months ended September 30, 2022 and 2021, respectively. |
Summary of Business and Signi_2
Summary of Business and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The accompanying condensed consolidated balance sheet as of September 30, 2022, and the condensed consolidated statements of operations, comprehensive loss, and stockholders' equity (deficit) for the three and nine months ended September 30, 2022 and 2021, and condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021, are unaudited. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments necessary to fairly state the Company's financial position as of September 30, 2022, and its results of operations for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine months ended September 30, 2022 and 2021. The financial data and the other financial information disclosed in the notes to these condensed consolidated financial statements related to the three and nine month periods are also unaudited. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2022 or for any other future year or interim period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2021, included in the Company's Annual Report on Form 10-K. |
Use of Estimates | The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. The Company’s most significant estimates and judgments involve revenue recognition with respect to the determination of the standalone selling prices for the Company’s services, deferred contract acquisition costs, the period of benefit generated from deferred contract acquisition costs, valuation of the Company’s equity and cash settled stock-based compensation, valuation of certain intangible assets that were acquired as part of business combinations, valuation of the distribution liability related to the tax sharing agreement with SAP, valuation of deferred income tax assets, uncertain tax positions, contingencies, the determination of whether a contract contains a lease, determining the incremental borrowing rate for the calculation of the present value of lease liabilities, and litigation accruals. Actual results could differ from those estimates. |
Foreign Currency Transactions | The assets and liabilities of the Company’s foreign subsidiaries are translated from their respective functional currencies into U.S. dollars at the rates in effect at the balance sheet date and revenue and expense amounts are translated at the average exchange rate for the period. Foreign currency translation gains and losses are recorded in other comprehensive loss. Exchange rate differences resulting from translation adjustments are accounted for as a component of accumulated other comprehensive loss. Gains and losses, whether realized or unrealized, from foreign currency transactions (those transactions denominated in currencies other than the entities’ functional currency) are included in other non-operating income (expense), net. |
Revenue Recognition | The Company recognizes revenue from its service/product lines when control is transferred to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the services. Sales and other taxes collected from customers to be remitted to government authorities are excluded from revenue. The Company accounts for revenue contracts with customers by applying the requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606 – Revenue from Contracts with Customers (Topic 606), which includes the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in a contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied Classes of Revenue The Company derives revenue from two service/product lines: Subscription Revenue The Company generates revenue primarily from sales of subscriptions to access its XM Platform, together with related support services to its customers. Arrangements with customers do not provide the customer with the right to take possession of the software operating the XM Platform at any time. Instead, customers are granted continuous access to the XM Platform over the contractual period. The Company’s subscription contracts generally have annual contractual terms while some have multi-year contractual terms. The Company generally bills annually in advance with net 30 payment terms. The Company’s agreements generally cannot be canceled for a refund. Professional Services and Other Revenue Professional services and other revenue mainly includes two types of services: research services and professional services. Research services is a solution provided to existing subscription customers with arrangements which are distinct from subscription revenue services. In addition, the Company provides professional services associated with new and expanding customers requesting implementation, integration services, and other ancillary services. These services are distinct from subscription revenue services. Recognition of Revenue Access to the Company’s XM Platform represents a series of distinct services as the Company continually provides access to and fulfills its obligation to the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. Accordingly, the fixed consideration related to subscription revenue is generally recognized on a straight-line basis over the contract term, beginning on the date that the service is made available to the customer. Revenue from professional services and other revenue related to research services is recognized upon completion because completion and delivery of the results is considered a separate performance obligation satisfied at a point in time. Revenue from professional services and other revenue related to customized software coding is recognized upon completion, because the customer consumes the intended benefit and assumes control upon final completion of the custom coding. Revenue from professional services and other revenue related to implementation and other ancillary services is recognized as the services are performed, because the customer consumes the benefit as the services are provided. Judgment is required to determine whether revenue is to be recognized at a point in time or over time. For performance obligations satisfied over time, we measure progress using the method that best reflects Qualtrics’ performance. All judgments and estimates mentioned above can significantly impact the timing and amount of revenue to be recognized. Contract Balances |
Share-based Compensation, including cash settled | Equity Awards The Company records stock-based compensation based on the grant date fair value of the awards and recognizes the fair value of those awards as expense using the straight-line method over the requisite service period of the award. For restricted stock units that contain performance conditions, the Company recognizes expense using the accelerated attribution method if it is probable the performance conditions will be met. The Company estimates the grant date fair value of RSUs based on the closing stock price of the Company’s publicly traded Class A common stock on the grant date. The Company estimates the grant date fair value of purchase rights issued under our Employee Stock Purchase Plan, or ESPP, based on the Black-Scholes option-pricing model using the estimated number of awards as of the beginning of the offering periods. The Company estimated the fair value of the converted Clarabridge options based on the intrinsic value of the awards on the acquisition date. Cash Awards The Company measures and recognizes compensation expense for stock-based payment cash awards based on the fair value of the awards each quarter until settlement. The fair value of the awards are estimated based on the fair value of the underlying stock price of SAP SE. The fair value of stock-based compensation cash awards that vest solely on a service-based condition is recognized on a straight-line basis over the period during which services are provided in exchange for the award. Awards which contain both service-based and performance conditions are recognized using the accelerated attribution method once the performance condition is probable of occurring. All awards that were not exchanged into Qualtrics RSUs are paid out in cash upon vesting. The Company accounts for forfeitures as they occur; therefore, stock-based compensation expense has been calculated based on actual forfeitures in the Company’s consolidated statements of operations. |
Net Loss Per Share Attributable to Common Stockholders | Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. As there are no potentially dilutive securities, diluted earnings per share attributable to common stockholders has not been presented. For purposes of calculating earnings per share, the Company uses the two-class method. Because both classes of common stock share the same rights in dividends, basic and diluted earnings per share was the same for both common stock classes. |
Accounts Receivable and Allowances | Accounts receivable are recorded at the invoiced amount, net of allowances. Accounts receivable are typically due within 30 days from the date of invoice. Customer balances outstanding longer than the contractual payment terms are considered past due. The Company establishes allowances for bad debt and cancellations based on historical collection data and customer specific circumstances. The allowance for bad debt, as needed, is established with a charge to bad debt expense in the consolidated statements of comprehensive loss. The Company’s allowance for bad debt was $6.1 million and $1.5 million as of September 30, 2022 and December 31, 2021, respectively. Bad debt expense was $2.0 million and not material during the three months ended September 30, 2022 and 2021, respectively. Bad debt expense was $5.0 million and not material during the nine months ended September 30, 2022 and 2021, respectively. The Company’s allowance for cancellations was $20.3 million and $17.5 million as of September 30, 2022 and December 31, 2021, respectively. During the three months ended September 30, 2022 and 2021, $1.3 million and $(1.2) million of net additions (reductions) were charged to revenue, respectively, and $0.6 million and $(5.0) million of net additions (reductions) were charged to deferred revenue, respectively. During the nine months ended September 30, 2022 and 2021, $1.4 million and $(3.5) million of net additions (reductions) were charged to revenue, respectively, and $1.4 million and $(16.5) million of net additions (reductions) were charged to deferred revenue, respectively. The allowance for cancellations is established with a reduction to revenue and deferred revenue. In the event of lack of payment due to a bankruptcy or other credit-related issues of a customer, the Company writes off the related accounts receivable with a reduction to the allowance for bad debt. In the event of lack of payment from a customer for issues unrelated to credit risk, the Company cancels the customer’s subscription access or service and writes off the corresponding accounts receivable with reductions to the allowance for cancellations. |
Concentration of Credit Risk | Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, and accounts receivable. The Company performs credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. |
Deferred Contract Acquisition Costs, net | Deferred contract acquisition costs, net is stated at gross deferred contract acquisition costs less accumulated amortization. Sales commissions and related payroll taxes for initial software-as-a-service (SaaS) subscription contracts earned by the Company’s sales force are considered to be incremental and recoverable costs of obtaining a contract with a customer. As a result, these amounts have been capitalized as deferred contract acquisition costs on the consolidated balance sheets. Sales commissions for renewal contracts are not considered commensurate with the commissions paid for the acquisition of an initial SaaS subscription contract, given the substantive difference in commission rates in proportion to their respective contract values. After the conclusion of the initial contract period, commissions paid on subsequent renewals are commensurate year after year. As such, the Company expenses renewal commissions as incurred. Deferred contract acquisition costs are amortized over an estimated period of benefit of five years. The period of benefit was estimated by considering factors such as estimated average customer life, the rate of technological change in the subscription service, and the impact of competition in its industry. As the Company’s average customer life significantly exceeded the rate of change in its technology, the Company concluded that the rate of change in the technology underlying the Company’s subscription service was the most significant factor in determining the period of benefit for which the asset relates. In evaluating the rate of change in the technology, the Company considered the competition in the industry, its commitment to continuous innovation, and the frequency of |
Leases | Right-of-use (“ROU”) assets and lease liabilities are recognized at commencement based on the present value of the minimum lease payments over the lease term. The Company utilizes certain practical expedients and policy elections available under Topic 842. Leases with a one-year term or less are not recognized on the balance sheet. |
Internal-use Software | The Company capitalizes certain development costs incurred in connection with its internal-use software. These capitalized costs are primarily related to the software platforms that are hosted by the Company and accessed by its customers on a subscription basis. Costs incurred in the preliminary stages of development are expensed as incurred as research and development costs. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized costs are recorded as part of property and equipment. Maintenance and training costs are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life of 24 months. |
Income Taxes | Income taxes as presented in the consolidated financial statements of Qualtrics attribute current and deferred income taxes of SAP to the Company’s standalone financial statements in a manner that is systematic, rational and consistent with the asset and liability method prescribed by FASB ASC Topic 740: Income Taxes (“ASC 740”). Accordingly, the Company’s income tax provision was prepared following the separate return method prior to deconsolidation in October 2021 for U.S. federal income tax purposes, and the separate return method continues to apply for other jurisdictions where we file returns as part of a SAP Tax Group. The separate return method applies ASC 740 to the standalone financial statements of each member of the consolidated group as if the group members were a separate taxpayer and a standalone enterprise. As a result of deconsolidation for U.S. federal income tax purposes, we have updated our reported tax attributes in certain jurisdictions to reflect the tax attributes available for future use by the Qualtrics tax reporting entity that files returns separate from a SAP Tax Group. Certain operations of Qualtrics have historically been included in a consolidated return with other SAP entities. Current obligations for taxes in certain jurisdictions where the Company files a consolidated tax return with SAP, are deemed settled with SAP for purposes of these consolidated financial statements. Current obligations for tax in jurisdictions where the Company does not file a consolidated return with SAP, including certain foreign and domestic jurisdictions, are recorded as accrued liabilities. Deferred income tax balances reflect the effects of temporary differences between the financial reporting and tax bases of the Company’s assets and liabilities using enacted tax rates expected to apply when taxes are actually paid or recovered. In addition, deferred tax assets are recorded for net operating loss (“NOL”) and credit carryforwards for Qualtrics. A valuation allowance is provided against deferred tax assets unless it is more likely than not that they will be realized based on all available positive and negative evidence. Such evidence includes, but is not limited to, recent cumulative earnings or losses, expectations of future taxable income by taxing jurisdiction, and the carry-forward periods available for the utilization of deferred tax assets. The Company uses a two-step approach to recognizing and measuring uncertain income tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of pre-tax book income or loss. Significant judgment is required to evaluate uncertain tax positions. Although the Company believes that it has adequately reserved for its uncertain tax positions, it can provide no assurance that the final tax outcome of these matters will not be materially different. The Company evaluates its uncertain tax positions on a regular basis and evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of an audit, and effective settlement of audit issues. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and results of operations. |
Fair Value Measurement | The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions, and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Recently Issued Accounting Pronouncements Not Yet Adopted | In October 2021, the FASB issued ASU 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new standard requires that entities recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, which creates an exception to the general recognition and measurement principles of ASC 805. The standard will result in companies recognizing contract assets and liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. The standard is effective for public companies for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years with early adoption permitted. The Company has not early adopted the standard and the impact will be dependent upon the occurrence and magnitude of any future acquisitions. |
Summary of Business and Signi_3
Summary of Business and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Revenue Included In Prior Period Deferred Revenue | The following table shows the amount of revenue included in prior period deferred revenue for each of the Company’s revenue generating solutions: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Subscription revenue: Revenue included in prior period deferred revenue $ 128,932 $ 93,347 $ 519,574 $ 386,916 Revenue generated from same period billings 185,833 126,967 376,577 224,832 Total subscription revenue $ 314,765 $ 220,314 $ 896,151 $ 611,748 Professional services and other revenue: Revenue included in prior period deferred revenue $ 16,175 $ 11,699 $ 62,204 $ 51,513 Revenue generated from same period billings 46,591 39,621 111,188 96,361 Total professional services and other revenue $ 62,766 $ 51,320 $ 173,392 $ 147,874 |
Revenue from External Customers by Geographic Areas | The following table summarizes the revenue by region based on the address of customers who have contracted to use the Company’s cloud platform: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 United States $ 261,421 $ 192,114 $ 745,055 $ 537,632 International 116,110 79,520 324,488 221,990 Total revenue $ 377,531 $ 271,634 $ 1,069,543 $ 759,622 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash and cash equivalents consisted of the following: As of September 30, As of December 31, in thousands 2022 2021 Cash $ 349,990 $ 123,906 Money market mutual funds 381,734 890,605 Total cash and cash equivalents $ 731,724 $ 1,014,511 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Changes In The Fair Value Of The Tax Sharing Liability | The changes in the fair value of the tax sharing liability were as follows: in thousands Balance as of December 31, 2021 $ (71,500) Change in the fair value reported in other non-operating income (expense), net 10,500 Balance as of September 30, 2022 $ (61,000) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property and equipment, net consisted of the following: As of September 30, As of December 31, in thousands 2022 2021 Internal-use software $ 42,899 $ 29,047 Server equipment 20,388 28,176 Leasehold improvements 86,537 80,301 Computer equipment 25,177 21,470 Land 13,383 13,383 Buildings 61,345 61,346 Furniture and fixtures 3,073 2,857 Software 3,034 3,252 Construction in progress 15,506 10,717 Total property and equipment $ 271,342 $ 250,549 Accumulated depreciation and amortization (69,579) (58,222) Property and equipment, net $ 201,763 $ 192,327 The Company recognized depreciation and amortization expense related to its property and equipment as follows: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Cost of revenue $ 7,227 $ 5,132 $ 19,853 $ 15,343 Research and development 1,462 864 4,561 2,307 Sales and marketing 2,228 1,508 6,399 4,174 General and administrative 426 343 1,469 897 Total depreciation and amortization expense $ 11,343 $ 7,847 $ 32,282 $ 22,721 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense were as follows: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Operating lease cost $ 7,341 $ 5,388 $ 22,254 $ 16,513 Variable and short-term lease cost 2,678 2,031 7,098 5,498 |
Assets And Liabilities, Lessee | Other information related to leases was as follows: As of September 30, As of December 31, 2022 2021 Weighted average remaining lease term 10.9 years 11.9 years Weighted average discount rate 2.08 % 2.07 % |
Lessee, Operating Lease, Liability, Maturity | As of September 30, 2022, the maturities of lease liabilities under non-cancelable operating leases, net of lease incentives, were as follows: As of September 30, in thousands 2022 Remainder of 2022 3,087 2023 14,190 2024 28,241 2025 30,396 2026 31,038 Thereafter 203,591 Total minimum lease payments $ 310,543 Less: imputed interest (35,138) Total $ 275,405 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Net Assets Acquired | The acquisition date fair value of the consideration transferred for Clarabridge consisted of the following: in thousands Cash, net of cash acquired $ 81,189 Fair value of shares issued 1,059,354 Fair value of stock options assumed 127,139 Total $ 1,267,682 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Below is the allocation of the purchase price: in thousands Clarabridge Accounts receivable 18,538 Prepaid expenses and other assets 2,888 Property and equipment 6,414 Customer relationships 101,160 Developed technology 151,530 Tradenames 1,240 Goodwill 1,064,002 Total assets acquired 1,345,772 Accounts payable (2,724) Accrued liabilities (9,455) Deferred revenue (36,421) Deferred tax liabilities (25,133) Other liabilities (4,357) Total assets acquired, net $ 1,267,682 in thousands Usermind and SurveyVitals Developed technology $ 5,070 Customer relationships 8,440 Licenses and certifications 6,350 Tradenames 100 Goodwill 47,204 Other assets, net 947 Total assets acquired 68,111 Other liabilities, net (6,168) Total assets acquired, net $ 61,943 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill were as follows: in thousands Balance as of December 31, 2021 $ 1,118,768 Adjustments in purchase price allocations (853) Balance as of September 30, 2022 $ 1,117,915 |
Schedule of Finite-Lived Intangible Assets | Other intangible assets, net consisted of the following: As of September 30, As of December 31, in thousands 2022 2021 Patents $ 751 $ 751 Developed technology 159,670 159,665 Customer relationships 111,700 111,965 Developed content 400 400 Tradename 1,890 1,915 Licenses and certifications 6,350 6,845 License agreements 1,500 1,500 Total intangible assets $ 282,261 $ 283,041 Accumulated amortization (58,617) (18,541) Other intangible assets, net $ 223,644 $ 264,500 The Company recognized amortization expense related to its acquired intangible assets as follows: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Cost of revenue $ 7,452 $ 442 $ 22,529 $ 973 Sales and marketing 5,531 74 16,589 176 General and administrative 320 47 958 141 Total amortization of acquired intangible assets 13,303 563 40,076 1,290 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense for intangible assets for the next five years consists of the following: As of September 30, in thousands 2022 Remainder of 2022 13,228 2023 51,002 2024 50,885 2025 49,934 2026 41,366 Thereafter 17,229 Total $ 223,644 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: As of September 30, As of December 31, in thousands 2022 2021 Accrued wages, bonuses and commissions $ 72,793 $ 93,021 Accrued payroll taxes 6,426 7,295 Other accrued expenses 34,481 44,037 Accrued income taxes 10,931 23,049 Total accrued liabilities $ 124,631 $ 167,402 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense, including cash settled, for the three and nine months ended September 30, 2022 and 2021 was recorded as follows: Three Months Ended September 30, Nine Months Ended September 30, in thousands 2022 2021 2022 2021 Cost of subscription revenue $ 4,905 $ 2,516 $ 13,783 $ 8,522 Cost of professional services and other revenue 9,445 6,977 25,754 18,161 Research and development 28,722 33,697 115,553 89,410 Sales and marketing 55,622 36,651 155,540 94,917 General and administrative 148,582 196,979 467,962 553,582 Total stock-based compensation expense, including cash settled 247,276 276,820 778,592 764,592 |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | The following table sets forth the outstanding Qualtrics RSUs and related activity for the nine months ended September 30, 2022: Number of RSUs (in thousands) Weighted-Average Grant Date Fair Value Outstanding as of December 31, 2021 82,164 $ 43.11 Granted 32,117 21.69 Vested (28,824) 42.03 Forfeited/Canceled (5,208) 37.19 Outstanding as of September 30, 2022 80,249 $ 35.31 |
Share-Based Payment Arrangement, Option, Activity | The following table sets forth the outstanding common stock options and related activity for the nine months ended September 30, 2022: Number of Options (in thousands) Weighted-Average Exercise Price per Share Weighted-Average Remaining Term (years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2021 1,855 $ 4.84 6.3 $ 56,684 Exercised (257) 4.11 Forfeited/Expired (27) 6.34 Outstanding as of September 30, 2022 1,571 $ 4.93 5.4 $ 8,238 Vested and exercisable at September 30, 2022 787 $ 4.61 5.4 $ 4,387 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the calculation of basic net loss per share attributable to common stockholders during the periods presented: in thousands (except share amount) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Net loss attributable to common shareholders $ (233,548) $ (286,033) $ (805,118) $ (749,374) Denominator: Weighted-average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic and diluted 586,850,097 515,212,996 581,664,521 503,781,082 Net loss per share attributable to common stockholders, basic and diluted $ (0.40) $ (0.56) $ (1.38) $ (1.49) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table discloses securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share because to do so would have been antidilutive for all periods presented: As of September 30, 2022 As of December 31, 2021 Qualtrics restricted stock units 80,248,895 82,163,894 Qualtrics options 1,570,517 1,854,965 Qualtrics employee stock purchase program 992,769 687,000 |
Summary of Business and Signi_4
Summary of Business and Significant Accounting Policies - Professional Services and Other Revenue (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Contract assets, current | $ 23 | $ 18.1 |
Contract asset, noncurrent | 17.5 | 14 |
Deferred revenue | $ 28.5 | $ 33 |
Summary of Business and Signi_5
Summary of Business and Significant Accounting Policies - Revenue Included in Prior Period Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Subscription | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue included in prior period deferred revenue | $ 128,932 | $ 93,347 | $ 519,574 | $ 386,916 |
Revenue generated from same period billings | 185,833 | 126,967 | 376,577 | 224,832 |
Total revenue | 314,765 | 220,314 | 896,151 | 611,748 |
Professional services and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue included in prior period deferred revenue | 16,175 | 11,699 | 62,204 | 51,513 |
Revenue generated from same period billings | 46,591 | 39,621 | 111,188 | 96,361 |
Total revenue | $ 62,766 | $ 51,320 | $ 173,392 | $ 147,874 |
Summary of Business and Signi_6
Summary of Business and Significant Accounting Policies - Remaining Performance Obligation (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 1,894.7 | $ 1,732.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 1,047.2 | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Summary of Business and Signi_7
Summary of Business and Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 377,531 | $ 271,634 | $ 1,069,543 | $ 759,622 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 261,421 | 192,114 | 745,055 | 537,632 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 116,110 | $ 79,520 | $ 324,488 | $ 221,990 |
Summary of Business and Signi_8
Summary of Business and Significant Accounting Policies - Accounts Receivable and Allowances (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Allowance for bad debt expense | $ 6.1 | $ 1.5 | ||||
Bad debt expense | $ 2 | $ 0 | $ 5 | $ 0 | ||
Allowance for cancellations | $ 20.3 | $ 17.5 | ||||
Deferred Revenue | ||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Allowances decrease | 0.6 | (5) | 1.4 | (16.5) | ||
Revenue | ||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||
Allowances decrease | $ 1.3 | $ (1.2) | $ 1.4 | $ (3.5) |
Summary of Business and Signi_9
Summary of Business and Significant Accounting Policies - Deferred Contract Acquisition Costs, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||||
Deferred contract acquisitions costs | $ 31,700 | $ 21,100 | $ 84,500 | $ 55,000 |
Amortization period of deferred contract acquisition costs (in years) | 5 years | 5 years | ||
Amortization of deferred contract acquisition costs | $ 18,500 | $ 12,800 | $ 51,628 | $ 35,977 |
Summary of Business and Sign_10
Summary of Business and Significant Accounting Policies - Internal-use Software (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 5.1 | $ 3.3 | $ 13.5 | $ 10 |
Internal-use software | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Useful life (in years) | 24 months |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Abstract] | ||
Cash | $ 349,990 | $ 123,906 |
Money market mutual funds | 381,734 | 890,605 |
Total cash and cash equivalents | $ 731,724 | $ 1,014,511 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Related party transaction, tax sharing payments, fair value | $ 61 | $ 71.5 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ (71,500) |
Change in the fair value in other non-operating income (expense), net | 10,500 |
Ending balance | $ (61,000) |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 271,342 | $ 250,549 |
Accumulated depreciation and amortization | (69,579) | (58,222) |
Property and equipment, net | 201,763 | 192,327 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 42,899 | 29,047 |
Server equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 20,388 | 28,176 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 86,537 | 80,301 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 25,177 | 21,470 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 13,383 | 13,383 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 61,345 | 61,346 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,073 | 2,857 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,034 | 3,252 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 15,506 | $ 10,717 |
Property and Equipment, Net -_2
Property and Equipment, Net - Schedule of Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Accumulated depreciation and amortization | $ 11,343 | $ 7,847 | $ 32,282 | $ 22,721 |
Cost of revenue | ||||
Property, Plant and Equipment [Line Items] | ||||
Accumulated depreciation and amortization | 7,227 | 5,132 | 19,853 | 15,343 |
Research and development | ||||
Property, Plant and Equipment [Line Items] | ||||
Accumulated depreciation and amortization | 1,462 | 864 | 4,561 | 2,307 |
Sales and marketing | ||||
Property, Plant and Equipment [Line Items] | ||||
Accumulated depreciation and amortization | 2,228 | 1,508 | 6,399 | 4,174 |
General and administrative | ||||
Property, Plant and Equipment [Line Items] | ||||
Accumulated depreciation and amortization | $ 426 | $ 343 | $ 1,469 | $ 897 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Sep. 30, 2022 |
Lessee, Lease, Description [Line Items] | |
Option to extend, term (in years) | 10 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term (in years) | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term (in years) | 14 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 7,341 | $ 5,388 | $ 22,254 | $ 16,513 |
Variable and short-term lease cost | $ 2,678 | $ 2,031 | $ 7,098 | $ 5,498 |
Leases - Other Information (Det
Leases - Other Information (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 10 years 10 months 24 days | 11 years 10 months 24 days |
Weighted average discount rate | 2.08% | 2.07% |
Leases - Operating Lease Maturi
Leases - Operating Lease Maturity Schedule (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Remainder of 2022 | $ 3,087 |
2023 | 14,190 |
2024 | 28,241 |
2025 | 30,396 |
2026 | 31,038 |
Thereafter | 203,591 |
Total minimum lease payments | 310,543 |
Less: imputed interest | (35,138) |
Total | $ 275,405 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Oct. 01, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Adjustments in purchase price allocations | $ (853) | |||
Other assets | (1,203) | $ (13,104) | ||
Other liabilities | 3,152 | $ 985 | ||
Goodwill | 1,117,915 | $ 1,118,768 | ||
Clarabridge, Inc. | ||||
Business Acquisition [Line Items] | ||||
Shares issued upon acquisition (in shares) | 24,142,065 | |||
Business acquisition, share price (in dollars per share) | $ 43.88 | |||
Total assets acquired, net | $ 1,267,682 | |||
Adjustments in purchase price allocations | (1,300) | |||
Goodwill | $ 1,064,002 | |||
Usermind and Survey Vitals | ||||
Business Acquisition [Line Items] | ||||
Total assets acquired, net | 61,943 | |||
Adjustments in purchase price allocations, decrease in intangible assets | 800 | |||
Adjustments in purchase price allocations | 800 | |||
Other assets | 100 | |||
Other liabilities | 400 | |||
Goodwill | $ 500 | $ 47,204 |
Business Combinations - Acquisi
Business Combinations - Acquisition Date Fair Value of the Consideration Transferred (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Oct. 01, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | |||
Cash, net of cash acquired | $ 0 | $ 25,000 | |
Clarabridge, Inc. | |||
Business Acquisition [Line Items] | |||
Cash, net of cash acquired | $ 81,189 | ||
Purchase price | 1,267,682 | ||
Clarabridge, Inc. | Common Stock | |||
Business Acquisition [Line Items] | |||
Fair value of stock options assumed | 1,059,354 | ||
Clarabridge, Inc. | Options | |||
Business Acquisition [Line Items] | |||
Fair value of stock options assumed | $ 127,139 |
Business Combinations - Schedul
Business Combinations - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Oct. 01, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,117,915 | $ 1,118,768 | |
Clarabridge, Inc. | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 18,538 | ||
Prepaid expenses and other assets | 2,888 | ||
Property and equipment | 6,414 | ||
Goodwill | 1,064,002 | ||
Total assets acquired | 1,345,772 | ||
Accounts payable | (2,724) | ||
Accrued liabilities | (9,455) | ||
Deferred revenue | (36,421) | ||
Deferred tax liabilities | (25,133) | ||
Other liabilities | (4,357) | ||
Total assets acquired, net | 1,267,682 | ||
Clarabridge, Inc. | Customer relationships | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | 101,160 | ||
Clarabridge, Inc. | Developed technology | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | 151,530 | ||
Clarabridge, Inc. | Tradename | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | $ 1,240 |
Business Combinations - Allocat
Business Combinations - Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Goodwill | $ 1,117,915 | $ 1,118,768 |
Usermind and Survey Vitals | ||
Business Acquisition [Line Items] | ||
Goodwill | $ 500 | 47,204 |
Other assets, net | 947 | |
Total assets acquired | 68,111 | |
Other liabilities, net | (6,168) | |
Total assets acquired, net | 61,943 | |
Usermind and Survey Vitals | Developed technology | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets | 5,070 | |
Usermind and Survey Vitals | Customer relationships | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets | 8,440 | |
Usermind and Survey Vitals | Licenses and certifications | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets | 6,350 | |
Usermind and Survey Vitals | Tradename | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets | $ 100 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net - Changes in Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2021 | $ 1,118,768 |
Adjustments in purchase price allocations | (853) |
Balance as of September 30, 2022 | $ 1,117,915 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 282,261 | $ 283,041 |
Accumulated amortization | (58,617) | (18,541) |
Total | 223,644 | 264,500 |
Patents | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 751 | 751 |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 159,670 | 159,665 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 111,700 | 111,965 |
Developed content | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 400 | 400 |
Tradename | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 1,890 | 1,915 |
Licenses and certifications | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 6,350 | 6,845 |
License agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 1,500 | $ 1,500 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, Net - Amortization Expense Related to its Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 13,303 | $ 563 | $ 40,076 | $ 1,290 |
Cost of revenue | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | 7,452 | 442 | 22,529 | 973 |
Sales and marketing | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | 5,531 | 74 | 16,589 | 176 |
General and administrative | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 320 | $ 47 | $ 958 | $ 141 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets, Net - Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2022 | $ 13,228 | |
2023 | 51,002 | |
2024 | 50,885 | |
2025 | 49,934 | |
2026 | 41,366 | |
Thereafter | 17,229 | |
Total | $ 223,644 | $ 264,500 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued wages, bonuses and commissions | $ 72,793 | $ 93,021 |
Accrued payroll taxes | 6,426 | 7,295 |
Other accrued expenses | 34,481 | 44,037 |
Accrued income taxes | 10,931 | 23,049 |
Total accrued liabilities | $ 124,631 | $ 167,402 |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock-based Compensation Expense, Including Cash Settled (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense, including cash settled | $ 247,276 | $ 276,820 | $ 778,592 | $ 764,592 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense, including cash settled | 28,722 | 33,697 | 115,553 | 89,410 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense, including cash settled | 55,622 | 36,651 | 155,540 | 94,917 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense, including cash settled | 148,582 | 196,979 | 467,962 | 553,582 |
Subscription | Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense, including cash settled | 4,905 | 2,516 | 13,783 | 8,522 |
Professional services and other | Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense, including cash settled | $ 9,445 | $ 6,977 | $ 25,754 | $ 18,161 |
Stock-based Compensation - Cash
Stock-based Compensation - Cash Awards (Details) - Qualtrics Rights And Move SAP RSUs - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vested shares (less than) (in shares) | 0.1 | 0.1 | 0.1 | 1.8 | |
Cash used to settle awards | $ (0.7) | $ 2.9 | $ (4.7) | $ (76.9) | |
Unrecognized stock-based compensation expense | $ 0.7 | $ 0.7 | $ 4.4 | ||
Period for recognition (in years) | 2 years |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock Units and Related Activity (Details) - Restricted Stock Units - Qualtrics RSU Plan | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Number of Shares | |
Outstanding, beginning balance (in shares) | shares | 82,164,000 |
Granted (in shares) | shares | 32,117,000 |
Vested (in shares) | shares | (28,824,000) |
Forfeited/ Canceled (in shares) | shares | (5,208,000) |
Outstanding, ending balance (in shares) | shares | 80,249,000 |
Weighted-Average Grant Date Fair Value | |
Outstanding, beginning balance (in USD per share) | $ / shares | $ 43.11 |
Granted (in USD per share) | $ / shares | 21.69 |
Vested (in USD per share) | $ / shares | 42.03 |
Forfeited/Canceled (in USD per share) | $ / shares | 37.19 |
Outstanding, ending balance (in USD per share) | $ / shares | $ 35.31 |
Stock-based Compensation - Equi
Stock-based Compensation - Equity Awards (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate intrinsic value of options exercised | $ 1,100 | $ 4,300 | |||
Option, unrecognized stock-based compensation expense | 11,800 | 11,800 | |||
Stock-based compensation expense, including cash settled | 247,276 | $ 276,820 | 778,592 | $ 764,592 | |
Restricted Stock Units | Qualtrics RSU Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total fair value of RSUs that vested | 20,200 | 15,300 | 704,000 | 184,400 | |
Unrecognized stock-based compensation expense | 2,251,000 | $ 2,251,000 | |||
Period for recognition (in years) | 2 years 7 months 6 days | ||||
Share-based Payment Arrangement, Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Period for recognition (in years) | 2 years | ||||
Employee Stock | Qualtrics Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Minimum contribution percentage (per period) | 1% | ||||
Maximum contribution percentage (per period) | 20% | ||||
Purchase price of common stock, percent of market price | 85% | ||||
Maximum value of shares per employee | $ 15 | ||||
Maximum value of shares that may be purchased by employees | $ 25 | ||||
Stock-based compensation expense, including cash settled | $ 9,300 | $ 4,300 | $ 19,600 | $ 11,900 |
Stock-based Compensation - Outs
Stock-based Compensation - Outstanding common stock options and related activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning balance (in shares) | shares | 1,855,000 | |
Exercised (in shares) | shares | (257,000) | |
Forfeited/Expired (in shares) | shares | (27,000) | |
Ending balance (in shares) | shares | 1,571,000 | 1,855,000 |
Vested and exercisable (in shares) | shares | 787,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding, weighted average exercise price, beginning balance (in dollars per share) | $ / shares | $ 4.84 | |
Exercised (in dollars per share) | $ / shares | 4.11 | |
Forfeited/Expired (in dollars per share) | $ / shares | 6.34 | |
Outstanding, weighted average exercise price, ending balance (in dollars per share) | $ / shares | 4.93 | $ 4.84 |
Vested and exercisable (in dollars per share) | $ / shares | $ 4.61 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted average remaining contractual term (in years) | 5 years 4 months 24 days | 6 years 3 months 18 days |
Vested and exercisable, weighted average remaining contractual term (in years) | 5 years 4 months 24 days | |
Options, outstanding, aggregate intrinsic value | $ | $ 8,238 | $ 56,684 |
Vested and exercisable, options, aggregate intrinsic value | $ | $ 4,387 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Calculation of Basic Net Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net loss attributable to common shareholders | $ (233,548) | $ (286,033) | $ (805,118) | $ (749,374) |
Denominator: | ||||
Net loss per share attributable to common stockholders, basic (in USD per share) | $ (0.40) | $ (0.56) | $ (1.38) | $ (1.49) |
Net loss per share attributable to common stockholders, diluted (in USD per share) | $ (0.40) | $ (0.56) | $ (1.38) | $ (1.49) |
Class A Common Stock | ||||
Denominator: | ||||
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 586,850,097 | 515,212,996 | 581,664,521 | 503,781,082 |
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 586,850,097 | 515,212,996 | 581,664,521 | 503,781,082 |
Class B Common Stock | ||||
Denominator: | ||||
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 586,850,097 | 515,212,996 | 581,664,521 | 503,781,082 |
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 586,850,097 | 515,212,996 | 581,664,521 | 503,781,082 |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Weighted-average Impact of Potentially Dilutive Securities (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 80,248,895 | 82,163,894 |
Share-based Payment Arrangement, Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,570,517 | 1,854,965,000 |
Employee Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 992,769 | 687,000,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 1.40% | (1.90%) | (0.90%) | 0.60% |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Nov. 09, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Feb. 01, 2021 USD ($) | Jan. 31, 2021 USD ($) promissoryNote | |
Related Party Transaction [Line Items] | ||||||||
Related party transaction, tax sharing payments, total amount | $ 78,000 | $ 88,500 | ||||||
Related party transaction, tax sharing payments, tax provision | 17,000 | 17,000 | ||||||
Related party transaction, tax sharing payments, fair value | 61,000 | 71,500 | ||||||
Repayment of promissory note | 0 | $ 1,892,280 | ||||||
Promissory Note Due to SAP | Loans Payable | ||||||||
Related Party Transaction [Line Items] | ||||||||
Note payable issued for dividend declared | $ 2,392,000 | |||||||
Number of promissory notes issued | promissoryNote | 2 | |||||||
Promissory Note 1 Due to SAP | Loans Payable | ||||||||
Related Party Transaction [Line Items] | ||||||||
Principal amount | $ 1,892,000 | |||||||
Promissory Note 2 Due to SAP | Loans Payable | ||||||||
Related Party Transaction [Line Items] | ||||||||
Principal amount | $ 500,000 | |||||||
Interest rate | 1.35% | |||||||
Repayment of promissory note | $ 500,000 | |||||||
Principal Owner | SAP SE | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue from related parties | $ 10,600 | $ 6,000 | 31,600 | 16,800 | ||||
Related party costs | 12,100 | 13,300 | 34,000 | 40,500 | ||||
Due from related parties | 17,900 | 17,900 | 42,000 | |||||
Due to related parties | 8,500 | 8,500 | $ 13,300 | |||||
Principal Owner | SAP SE | Costs incurred on behalf of related party | ||||||||
Related Party Transaction [Line Items] | ||||||||
Amounts of transaction | 3,700 | 5,500 | 11,800 | 14,600 | ||||
Executive Officer | Utah Jazz | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction, selling, general, and administrative expenses | $ 300 | $ 400 | $ 2,600 | $ 4,200 |