Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 16, 2023 | Jun. 30, 2022 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1.4 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement relating to its 2023 Annual Meeting of Stockholders, or the 2023 Proxy Statement, are incorporated by reference into Part III of this Form 10-K where indicated. Such 2023 Proxy Statement will be filed with the United States Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates. | ||
Entity Central Index Key | 0001747748 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A common stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 179,285,701 | ||
Class B common stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 423,170,610 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Salt Lake City, Utah |
Auditor Firm ID | 185 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Current assets: | |||
Cash and cash equivalents | $ 719,892 | $ 1,014,511 | |
Accounts receivable, net of allowances | [1] | 537,037 | 461,830 |
Deferred contract acquisition costs, net | 81,130 | 60,455 | |
Prepaid expenses and other current assets | 68,224 | 68,887 | |
Total current assets | 1,406,283 | 1,605,683 | |
Non-current assets: | |||
Property and equipment, net | 215,645 | 192,327 | |
Right-of-use assets from operating leases | 216,514 | 227,320 | |
Goodwill | 1,117,915 | 1,118,768 | |
Other intangible assets, net | 210,415 | 264,500 | |
Deferred contract acquisition costs, net of current portion | 183,741 | 145,952 | |
Deferred tax assets | 9,625 | 96 | |
Other assets | 35,713 | 27,577 | |
Total assets | 3,395,851 | 3,582,223 | |
Current liabilities: | |||
Lease liabilities | 17,081 | 18,898 | |
Accounts payable | [1] | 142,293 | 84,053 |
Accrued liabilities | 155,291 | 167,402 | |
Liability-classified, stock-based awards | 1,053 | 4,519 | |
Deferred revenue | 858,186 | 748,145 | |
Total current liabilities | 1,173,904 | 1,023,017 | |
Non-current liabilities: | |||
Lease liabilities, net of current portion | 261,097 | 263,307 | |
Deferred revenue, net of current portion | 16,717 | 6,698 | |
Deferred tax liabilities | 12,447 | 23,653 | |
Other liabilities | [1] | 27,666 | 78,848 |
Total liabilities | 1,491,831 | 1,395,523 | |
Commitments and contingencies | |||
Equity | |||
Preferred stock | 0 | 0 | |
Additional paid-in capital | 5,428,297 | 4,645,800 | |
Accumulated other comprehensive loss | (4,945) | (1,244) | |
Accumulated deficit | (3,519,391) | (2,457,913) | |
Total equity | 1,904,020 | 2,186,700 | |
Total liabilities and equity | 3,395,851 | 3,582,223 | |
Class A common stock | |||
Equity | |||
Common stock | 17 | 15 | |
Class B common stock | |||
Equity | |||
Common stock | $ 42 | $ 42 | |
[1]Includes amounts from related parties. See Note 16 for further details. |
Consolidated Balance Sheets - (
Consolidated Balance Sheets - (Parenthetical) - $ / shares | Dec. 31, 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) | 170,687,065 | 147,309,254 |
Common stock, shares outstanding (in shares) | 170,687,065 | 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 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | |||
Total revenue | $ 1,458,628 | $ 1,075,664 | $ 763,522 |
Cost of revenue: | |||
Total cost of revenue | 429,950 | 285,272 | 198,487 |
Gross profit | 1,028,678 | 790,392 | 565,035 |
Operating expenses: | |||
Research and development | 427,179 | 324,158 | 212,795 |
Sales and marketing | 892,022 | 643,333 | 431,794 |
General and administrative | 758,452 | 876,734 | 175,499 |
Total operating expenses | 2,077,653 | 1,844,225 | 820,088 |
Operating loss | (1,048,975) | (1,053,833) | (255,053) |
Other non-operating income (expense), net | 8,398 | 6,652 | (972) |
Loss before income taxes | (1,040,577) | (1,047,181) | (256,025) |
Provision for income taxes | 20,901 | 11,965 | 16,477 |
Net loss | $ (1,061,478) | $ (1,059,146) | $ (272,502) |
Net loss per share attributable to common stockholders, basic (in USD per share) | $ (1.82) | $ (2.05) | $ (0.64) |
Net loss per share attributable to common stockholders, diluted (in USD per share) | $ (1.82) | $ (2.05) | $ (0.64) |
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 584,285,678 | 516,869,588 | 423,334,994 |
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 584,285,678 | 516,869,588 | 423,334,994 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | $ (3,701) | $ (4,435) | $ 4,119 |
Comprehensive loss | (1,065,179) | (1,063,581) | (268,383) |
Subscription | |||
Revenue: | |||
Total revenue | 1,223,725 | 870,705 | 575,397 |
Cost of revenue: | |||
Total cost of revenue | 196,871 | 105,836 | 62,671 |
Professional services and other | |||
Revenue: | |||
Total revenue | 234,903 | 204,959 | 188,125 |
Cost of revenue: | |||
Total cost of revenue | $ 233,079 | $ 179,436 | $ 135,816 |
Consolidated Statements of Stoc
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, 2019 | 0 | 423,170,610 | |||||
Beginning balance at Dec. 31, 2019 | $ (540,520) | $ 0 | $ 42 | $ 586,631 | $ (928) | $ (1,126,265) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Capital contribution from SAP | 540,000 | 540,000 | |||||
Sales of Class A common stock (in shares) | [1] | 6,000,000 | |||||
Sales of Class A common stock | [1] | 1 | $ 1 | ||||
Issuance of common stock related to business combinations | 0 | ||||||
Net loss | (272,502) | (272,502) | |||||
Foreign currency translation adjustment | 4,119 | 4,119 | |||||
Ending balance (in shares) at Dec. 31, 2020 | 6,000,000 | 423,170,610 | |||||
Ending balance at Dec. 31, 2020 | (268,902) | $ 1 | $ 42 | 1,126,631 | 3,191 | (1,398,767) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Capital contribution from SAP | 115,000 | 115,000 | |||||
Sales of Class A common stock (in shares) | [1] | 109,349,339 | |||||
Sales of Class A common stock | [1] | 3,353,169 | $ 11 | 3,353,158 | |||
Stock-based compensation | $ 1,056,337 | 1,056,337 | |||||
Issuance of common stock upon settlement of restricted stock units (RSUs) (in shares) | 5,005,742 | ||||||
Issuance of common stock upon exercise of stock options (in shares) | 1,344,000 | 1,343,537 | |||||
Issuance of common stock upon exercise of stock options | $ 5,649 | 5,649 | |||||
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 | (47,783) | (47,783) | |||||
Modification of cash-settled awards into equity settled awards | 206,669 | 206,669 | |||||
Expiration of contingency associated with Class A common stock option exercised | [1] | 119,999 | 119,999 | ||||
Issuance of common stock related to business combinations (in shares) | 25,038,955 | ||||||
Issuance of common stock related to business combinations | 1,187,812 | $ 3 | 1,187,809 | ||||
Distribution declared to SAP for tax sharing agreement | (101,975) | (101,975) | |||||
Dividend declared (2) | [2] | (2,392,280) | (2,392,280) | ||||
Net loss | (1,059,146) | (1,059,146) | |||||
Foreign currency translation adjustment | (4,435) | (4,435) | |||||
Ending balance (in shares) at Dec. 31, 2021 | 147,309,254 | 423,170,610 | |||||
Ending 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 | 1,044,119 | 1,044,119 | |||||
Issuance of common stock upon settlement of restricted stock units (RSUs) (in shares) | 21,172,481 | ||||||
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) | 353,000 | 352,687 | |||||
Issuance of common stock upon exercise of stock options | $ 1,701 | 1,701 | |||||
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 | (293,123) | (293,123) | |||||
Issuance of common stock related to business combinations | 0 | ||||||
Distribution declared to SAP for tax sharing agreement | (2,719) | (2,719) | |||||
Net loss | (1,061,478) | (1,061,478) | |||||
Foreign currency translation adjustment | (3,701) | (3,701) | |||||
Ending balance (in shares) at Dec. 31, 2022 | 170,687,065 | 423,170,610 | |||||
Ending balance at Dec. 31, 2022 | $ 1,904,020 | $ 17 | $ 42 | $ 5,428,297 | $ (4,945) | $ (3,519,391) | |
[1]See Note 12 “Sale of Class A Common Stock” for further detail[2]See Note 11 “Promissory Notes” for further detail |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | |||
Net loss | $ (1,061,478) | $ (1,059,146) | $ (272,502) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | |||
Depreciation and amortization | 97,540 | 46,009 | 26,457 |
Loss on disposal of property and equipment | 787 | 1,498 | 0 |
Change in fair value of distribution liability for tax sharing agreement | (6,500) | (13,500) | 0 |
Reduction of right-of-use assets from operating leases | 29,280 | 23,078 | 17,202 |
Stock-based compensation expense, including cash settled | 1,034,174 | 1,057,140 | 224,013 |
Amortization of deferred contract acquisition costs | 71,623 | 50,038 | 32,098 |
Deferred income taxes | (18,482) | (11,654) | 13,200 |
Changes in assets and liabilities, excluding the effect of business combinations: | |||
Accounts receivable, net of allowances | (77,247) | (146,966) | (103,692) |
Prepaid expenses and other current assets | (554) | (20,975) | (10,773) |
Deferred contract acquisitions costs | (133,234) | (99,869) | (111,686) |
Other assets | (6,941) | (18,308) | (7,592) |
Lease liabilities | (22,516) | (15,528) | 24,741 |
Accounts payable | 50,182 | 24,333 | (282) |
Accrued liabilities | (10,031) | 55,316 | 22,546 |
Deferred revenue | 121,647 | 215,444 | 114,331 |
Other liabilities | (45,003) | (4,712) | 9,826 |
Settlement of stock-based payments liabilities | (5,344) | (79,397) | (388,609) |
Net cash flows provided by (used in) operating activities | 17,903 | 2,801 | (410,722) |
Cash flows from investing activities | |||
Cash paid for business combinations, net of cash acquired | 0 | (141,792) | 0 |
Purchases of property and equipment | (51,200) | (103,823) | (89,518) |
Net cash flows used in investing activities | (51,200) | (245,615) | (89,518) |
Cash flows from financing activities | |||
Proceeds from capital contributions from SAP | 0 | 115,000 | 540,000 |
Proceeds from issuance of class A common stock, net of underwriting discounts and commissions | 0 | 3,359,822 | 120,000 |
Repayment of promissory note | 0 | (2,392,280) | 0 |
Payment of costs related to issuance of class A common stock | 0 | (3,351) | 0 |
Payments for taxes related to net share settlement of equity awards | (293,123) | (47,783) | 0 |
Issuance of Common Stock of Employee Stock Purchase Plan | 32,521 | 16,586 | 0 |
Proceeds from exercise of stock options | 1,701 | 5,649 | 0 |
Net cash flows provided by (used in) financing activities | (258,901) | 1,053,643 | 660,000 |
Effect of changes in exchange rates on cash and cash equivalents | (2,421) | (209) | 1,664 |
Net increase (decrease) in cash and cash equivalents | (294,619) | 810,620 | 161,424 |
Cash and cash equivalents, beginning of period | 1,014,511 | 203,891 | 42,467 |
Cash and cash equivalents, end of period | 719,892 | 1,014,511 | 203,891 |
Supplemented cash flow disclosures | |||
Cash paid for income taxes, net of tax refunds | 38,292 | 12,213 | 11,356 |
Cash paid for operating leases, net of incentives received | 25,148 | 13,396 | 18,579 |
Modifications of liability based awards to equity awards | 0 | 206,669 | 0 |
Non-cash investing and financing activities | |||
Capital expenditures incurred but not yet paid | 5,754 | 545 | 741 |
Right-of-use assets obtained in exchange for lease obligations | 17,774 | 75,382 | 26,494 |
Stock-based compensation capitalized as internal-use software | 12,192 | 3,226 | 0 |
Expiration of contingency associated with Class A common stock option exercised | 0 | 119,999 | 0 |
Fair value of common stock issued and stock options assumed as consideration for a business combinations | 0 | 1,187,812 | 0 |
Distribution declared to SAP for tax sharing agreement | $ 2,719 | $ 101,975 | $ 0 |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | DESCRIPTION OF THE BUSINESSQualtrics International Inc. (“Qualtrics” or “the Company”) was incorporated in the state of Delaware in September 2014. Qualtrics pioneered a new category of software, experience management, or XM, that enables organizations to find and fix broken experiences and drive operational improvements to improve customer loyalty, increase employee retention, and become a brand that people love. The Company’s technology helps organizations find and keep customers, retain and engage employees, and improve their competitive position in their product categories and talent markets. The XM Platform helps organizations listen to their employees and customers, understand their feedback, and then take action in response. The Company sells subscriptions to its XM Platform and provides professional services primarily consisting of research services, implementation services and engineering services. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements, which include the accounts of the Company and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on December 31. 2020 Stock Split and Capital Reorganization On December 21, 2020, the Company amended its restated certificate of incorporation to create new classes of preferred stock, Class A and Class B common stock. The Company’s previously 423,170,610 outstanding shares of common stock issued on January 23, 2019 upon the completion of the SAP SE (“SAP”) Acquisition of the Company, were converted into shares of Class B common stock. SAP holds all of the shares of the new Class B common stock. The ownership rights of Class A and Class B common stockholders are the same except with respect to voting, the election of directors, conversion, and certain actions that require the consent of holders of Class B and other protective provisions. See Note 12 for further details related to the terms and conditions of the new equity of the Company. The amended and restated certificate of incorporation effectuated a 4,231,706.1-for-one stock split of the new Class B common stock. The capitalization of the Company, including all share and per share data has been retroactively adjusted back to January 23, 2019, the date of the SAP Acquisition, to reflect the recapitalization. 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, 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, and valuation of deferred income tax assets. Actual results could differ from those estimates. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The Company’s CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one operating and one reportable segment. Foreign Currency Transactions The functional currencies of the Company’s foreign subsidiaries are the respective local currencies. All assets and liabilities of the Company’s foreign subsidiaries are translated from their respective functional currencies into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rate for the period, and equity balances are translated using historical exchange rates. The cumulative effect of translation adjustments arising from the use of differing exchange rates from period to period is included in accumulated other comprehensive loss within the consolidated balance sheets. Changes in the foreign currency translation adjustment are reported in the consolidated statements of stockholders’ equity and the consolidated statements of comprehensive loss. Transactions denominated in currencies other than the functional currency are remeasured at the end of the period and when the related receivable or payable is settled, which may result in transaction gains or losses. Foreign currency transaction gains and losses, whether realized or unrealized, are included in other non-operating income (expense), net in the consolidated statements of comprehensive loss. 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. Identification of a Contract For accounting purposes, the Company treats multiple contracts entered into with the same customer as a single contract if they are entered into at or near the same time and are economically interrelated. The Company does not combine contracts with closing days more than three months apart because they are not considered entered into near the same time. The Company evaluates whether various contracts are interrelated, which includes considerations as to whether they were negotiated as a package with a single commercial objective, whether the amount of consideration on one contract is dependent on the performance of the other contract or if some or all goods in the contracts are a single performance obligation. New arrangements with existing customers can be either a new contract or the modification of prior contracts with the customer. The Company considers whether there is a connection between the new arrangement and the pre-existing contracts, whether the goods and services under the new arrangement are highly interrelated with the goods and services sold under prior contracts, and how the goods and services under the new arrangement are priced. In determining whether a change in transaction price represents a contract modification or a change in variable consideration, the change in price is examined to determine whether it results from new or changes in existing enforceable rights and obligations or from applying unchanged existing contract provisions. Identification of Performance Obligations Some contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. Typically, the products and services outlined in the Classes of Revenue section qualify as separate performance obligations and the portion of the contractual fee allocated to them is recognized separately. In particular for Qualtrics’ professional services and implementation activities, the Company evaluates whether such services significantly integrate, customize, or modify the subscription service to which they relate. In this context, the nature of the services and their volume are considered relative to the volume of the subscription service to which they relate. In general, the implementation services for the Company’s subscription services go beyond pure setup activities and qualify as separate performance obligations. Non-distinct goods and services are combined into one distinct bundle of goods and services (combined performance obligation). Determination of Transaction Price The Company applies judgment in determining the amount to which Qualtrics expects to be entitled in exchange for transferring promised goods or services to a customer. Prices are generally fixed at contract inception; therefore, the Company’s contracts do not contain a significant amount of variable consideration, however, the Company considers whether and to what extent subsequent concessions or payments may be granted to customers and whether the customer is expected to pay the contractual fees. In this assessment, Qualtrics’ history is considered both with the respective customer and more broadly. Allocation of Transaction Price The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines standalone selling prices considering market conditions and based on overall pricing objectives, such as observable standalone selling prices and other factors. Where standalone selling prices for an offering are observable and reasonably consistent across customers (that is, not highly variable), Qualtrics’ standalone selling price estimates are derived from the Company’s respective pricing history. The Company has established thresholds of pricing variability to determine whether the historical pricing of goods and services is highly variable across customers. Where sales prices for an offering are not directly observable or highly variable across customers, judgment is required to estimate standalone selling prices. For renewable offerings with highly variable pricing across customers, the Company’s estimate considers the individual contract’s expected renewal price as far as this price is substantive based on renewal history. Typically, the Company’s subscription offerings follow this approach. For Qualtrics’ professional and other services, these estimations typically follow a cost-plus-margin approach. The Company reviews the standalone selling prices periodically, or whenever facts and circumstances change, to ensure the most objective input parameters available are used. 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 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. For performance obligations satisfied over time, the Company recognizes revenue using the method that best reflects the timing of transfer of control to the customer and satisfaction of the Company’s performance obligation. 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 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 December 31, 2022 were $22.3 million and $19.9 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 increase in contract assets is due to a higher number of multi-year deals in 2022 compared to 2021. 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, the Company receives consideration from customers in advance of a specific service being identified. Total consideration received in advance of a specific service being identified totaled $31.3 million and $33.0 million as of December 31, 2022 and 2021, respectively and is included in deferred revenue. The following table shows the amount of revenue included in prior period deferred revenue and revenue generated from same period billings for each of the Company’s revenue generating solutions: Year Ended December 31, in thousands 2022 2021 2020 Subscription revenue: Revenue included in prior period deferred revenue $ 655,448 $ 463,609 $ 337,299 Revenue generated from same period billings 568,277 407,096 238,098 Total subscription revenue $ 1,223,725 $ 870,705 $ 575,397 Professional services and other revenue: Revenue included in prior period deferred revenue $ 70,786 $ 57,866 $ 39,253 Revenue generated from same period billings 164,117 147,093 148,872 Total professional services and other revenue $ 234,903 $ 204,959 $ 188,125 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 expected future revenue related to unsatisfied performance obligations as of December 31, 2022 was $2,174.6 million, of which approximately $1,202.3 million is expected to be recognized as revenue over the next twelve months. The expected future revenue related to unsatisfied performance obligations as of December 31, 2021 and December 31, 2020 was $1,732.8 million and $1,144.4 million, respectively. 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 the Company’s cloud contracts remaining at the balance sheet date and thus, by the timing of contract renewals. Disaggregation of Revenue The following table summarizes revenue by region based on the address of customers who have contracted to use the Company’s cloud platform: Year Ended December 31, in thousands 2022 2021 2020 United States $ 1,020,670 $ 758,997 $ 552,221 International 437,958 316,667 211,301 Total revenue $ 1,458,628 $ 1,075,664 $ 763,522 No single country outside the United States accounted for 10% or more of revenue during the years ended December 31, 2022, 2021, and 2020. Stock-Based Compensation, including cash settled Equity Awards The Company records stock-based compensation based on the grant date fair value of the awards. The Company recognizes the fair value of restricted stock awards that do not contain a performance condition 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 based on the probability that 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 the Qualtrics 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 or some are valued at $35.00. 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 fair value of cash awards is recognized as a liability on the balance sheet, with changes to fair value each period being recognized through the income statement. 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 comprehensive loss. 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. Since the Company was in a net loss position for all periods presented, the inclusion of potentially dilutive shares would have been antidilutive. Accordingly, basic net loss per share and diluted net loss per share are the same. For purposes of calculating net loss per share, the Company uses the two-class method. Because both classes of common stock share the same rights in dividends, basic and diluted net loss per share was the same for both common stock classes. Cost of Revenue Cost of revenue includes expenses related to operating the Company’s cloud platform in data centers, depreciation of the Company’s data center equipment, the amortization of the Company’s capitalized internal-use software and acquired technology, and third-party vendor costs to fulfill contracts with customers. Cost of revenue also includes employee-related costs, including salaries, bonuses, equity and cash settled stock-based compensation expense, and employee benefit costs associated with the Company’s customer support, cloud operations, and delivery of professional services. Additionally, the Company makes allocations of certain overhead costs, primarily based on headcount. Advertising and Promotional Expense Advertising and promotional expenses are expensed as incurred. Advertising and promotional expenses for the years ended December 31, 2022, 2021, and 2020 were $5.0 million, $5.7 million, and $4.6 million, respectively. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less from the date of purchase. The Company maintains cash and cash equivalents at financial institutions, which at times may not be federally insured or may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risks on such accounts. Cash and cash equivalents are recorded at fair value. 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 te rms 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 $8.6 million and $1.5 million as of December 31, 2022 and 2021, respectively. Bad debt expense was $7.7 million,$1.4 million during the years ended December 31, 2022 and 2021 and not material during the year ended 2020. The Company’s allowance for cancellations was $28.8 million and $17.5 million as of December 31, 2022 and 2021, respectively. During the years ended December 31, 2022, 2021, and 2020, $3.2 million, $(2.4) million and $3.0 million of net additions (reductions) were charged to revenue, respectively, and $8.1 million, $(10.3) million, and $15.2 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 December 31, 2022 and 2021. No single customer accounted for 10% or more of total revenue during the years ended December 31, 2022, 2021, and 2020 . 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 $133.2 million and $99.9 million during the years ended December 31, 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 $71.6 million, $50.0 million, and $32.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. Amortization of deferred contract acquisition costs are included in sales and marketing expense in the accompanying consolidated statements of comprehensive loss. The carrying amount of the deferred contract acquisition costs is periodically reviewed for impairment. In performing this review, the Company considers whether the carrying amount of the deferred contract acquisitions cost will be recovered. In estimating the amount of consideration Qualtrics expects to receive in the future related to deferred contract acquisition costs, the Company considers factors such as attrition rates, economic factors, and industry developments, among other factors. If it is determined that deferred contract acquisition costs are impaired, an impairment loss is recognized for the amount by which the carrying amount and the anticipated costs that relate directly to providing the future services exceed the consideration that has been received and that is expected to be received in the future. There was no impairment loss in relation to the deferred costs for any period presented. Property and Equipment, net Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated asset lives. Routine maintenance and repairs are charged to expense when incurred. Expenditures that materially increase values, change capacities, or extend the useful lives of the respective assets are capitalized. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. The estimated useful lives by asset classification are generally as follows: Computer equipment 3-5 years Furniture and fixtures 5-10 years Server equipment 5 years Vehicles 3 years Internal-use software 2 years Buildings 25 years Leasehold improvements Lesser of useful life or remaining lease term Property and equipment subject to depreciation is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If indicators of impairment exist, recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. There was no impairment of property and equipment during the years ended December 31, 2022, and 2021, and 2020. The following table sets forth property and equipment by geographic area: As of December 31, in thousands 2022 2021 United States $ 183,892 $ 168,145 International 31,753 24,182 Total property and equipment, net $ 215,645 $ 192,327 No single country outside the United States had a property and equipment balance greater than 10% of total property and equipment, net, as of December 31, 2022 and 2021. Leases The Company determines if an arrangement is a lease at inception, and leases are classified at commencement as either operating or finance leases. As of December 31, 2022 and 2021, the Company had no finance 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 consolidated balance sheets. Additionally, the Company has elected to combine non-lease components with lease components for the purposes of calculating the ROU asset and liabilities, to the extent they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease costs. The Company uses the incremental borrowing rate based on information available at the commencement date in determining the present value of future lease payments. The rate is an estimate of the collateralized borrowing rate the Company would incur on future lease payments over a similar term. The Company leases facilities under non-cancelable operating lease agreements. Certain of the operating lease agreements contain rent concessions and rent escalations which are included in the present value calculation of minimum lease payments. Topic 842 requires that operating leases recognize expense on a straight-line basis over the lease term. The lease term begins on the date the Company has the right to use the leased property. Lease terms may include options to extend or terminate the lease. These options are included in the ROU asset and lease liability when it is reasonably certain that the option will be exercised. The Company’s lease agreements do not contain residual value guarantees or covenants. 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 $19.4 million, $13.5 million, and $12.5 million related to capitalized internal-use software for the years ended December 31, 2022, 2021, and 2020, respectively, within cost of subscription revenue. Business Combinations The Company applies the acquisition method of accounting for those transactions that qualify as a business acquisition, resulting in recording assets and liabilities acquired at their respective fair values. Goodwill is determined based on the difference between the fair value of consideration paid and the fair value of the assets acquired and liabilities assumed. The Company uses its best estimates and assumptions to a |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTSCash and cash equivalents consisted of the following: As of December 31, in thousands 2022 2021 Cash $ 589,948 $ 123,906 Money market mutual funds 129,944 890,605 Total cash and cash equivalents $ 719,892 $ 1,014,511 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS See Note 2, “Summary of Significant Accounting Policies”, for additional details related to fair value measurements. Cash and cash equivalents The Company’s cash equivalents with regards to money market mutual funds are classified within Level 1 of the fair value hierarchy and are reported at their fair value on the balance sheet as of December 31, 2022 and 2021. Tax sharing liability From the date of the SAP Acquisition, Qualtrics was included in SAP America’s consolidated group for U.S. federal income tax purposes. In October 2021, the Company deconsolidated from the SAP Tax Group for U.S. federal income tax purposes. The Company continues to be 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, Qualtrics 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 (current portion) and other liabilities (non-current portion) 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 December 31, 2022 and 2021, the Company’s distribution liability for the tax sharing agreement with SAP based on an estimated fair value totaled $65.0 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. The changes in the fair value of the tax sharing liability were as follows: in thousands Balance as of October 1, 2021 $ (85,000) Change in the fair value reported in other non-operating income (expense), net 13,500 Balance as of December 31, 2021 (71,500) Change in the fair value reported in other non-operating income (expense), net 6,500 Balance as of December 31, 2022 $ (65,000) During the years ended December 31, 2022 and 2021, the Company had no transfers in or out of Level 3 fair value measurements. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following: As of December 31, in thousands 2022 2021 Internal-use software $ 50,488 $ 29,047 Server equipment 19,192 28,176 Leasehold improvements 88,254 80,301 Computer equipment 25,999 21,470 Land 13,383 13,383 Buildings 61,345 61,346 Furniture and fixtures 3,158 2,857 Software 3,034 3,252 Construction in progress 27,533 10,717 Total property and equipment $ 292,386 $ 250,549 Accumulated depreciation and amortization (76,741) (58,222) Property and equipment, net $ 215,645 $ 192,327 The Company recognized depreciation and amortization expense related to its property and equipment as follows: Year Ended December 31, in thousands 2022 2021 2020 Cost of revenue $ 27,865 $ 20,946 $ 18,588 Research and development 5,969 3,456 2,010 Sales and marketing 8,552 6,105 3,667 General and administrative 1,849 1,372 738 Total depreciation and amortization expense $ 44,235 $ 31,879 $ 25,003 |
Leases
Leases | 12 Months Ended |
Dec. 31, 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 less than 1 to 13 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: As of December 31, in thousands 2022 2021 2020 Operating lease cost $ 29,280 $ 23,078 $ 24,420 Variable and short-term lease cost $ 10,274 $ 7,280 $ 6,171 Other information related to leases was as follows: As of December 31, 2022 2021 Weighted average remaining lease term 10.7 years 11.9 years Weighted average discount rate 2.08 % 2.07 % As of December 31, 2022, the maturities of lease liabilities under non-cancelable operating leases, net of lease incentives, were as follows: in thousands As of December 31, 2022 2023 $ 12,068 2024 29,363 2025 31,521 2026 32,168 2027 29,427 Thereafter 177,875 Total minimum lease payments $ 312,422 Less: imputed interest (34,244) Total $ 278,178 |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 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, the Company registered the Acquisition Shares for resale on a registration statement which was declared effective on October 12, 2021 and agreed to maintain effectiveness for 12 months from closing, or such earlier time as all of the Acquisition Shares have been sold or are no longer outstanding. In addition, pursuant to the terms of the Merger Agreement, (i) the Clarabridge stock plans have been assumed, amended and restated by the Company, (ii) the options to purchase shares of Clarabridge stock outstanding under the Clarabridge stock plans have been assumed by the Company and converted into corresponding Qualtrics options to purchase, in the aggregate, 3,203,885 shares of Class A Common Stock, and (iii) the Company granted equity incentive awards to certain continuing employees of Clarabridge and its subsidiaries under the 2021 Qualtrics Employee Omnibus Equity Plan. The value of the assumed options was allocated to purchase consideration and stock compensation expense based on the pre and post service conditions. 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 Adjustments in purchase price allocations during the year ended December 31, 2022 related to tax adjustments on pre-acquisition net operating losses, which decreased deferred tax liabilities by $1.3 million with a corresponding decrease to goodwill. Below is the final 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 Customer relationships represent the fair value of the underlying relationships with Clarabridge customers. Developed technology represents the fair value of Clarabridge’s experience management technologies. The estimated fair value of the intangible assets acquired was determined by the Company. The Company engaged a third‑party expert to assist with the valuation analysis. The Company used a with and without method to estimate the fair value of the customer relationships asset and a multi-period excess earnings method to estimate the fair value of the developed technology asset. Critical estimates in valuing the intangible assets include: • future expected cash flows, including projected revenue, from subscription and professional services contracts and from acquired developed technologies; • estimated technology obsolescence rates; • assumptions about the period of time acquired tradenames will continue to be used in the Company’s offerings; • discount rates; • tax balances and tax-related valuation allowances assumed; and • fair value of assumed equity awards. 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. 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. Acquisition-related costs totaled $13.3 million and were expensed as incurred and included in general and administrative expenses. Pro forma information The following unaudited pro forma operating results give effect to the Clarabridge acquisition, as if it had been completed as of January 1, 2020. These pro forma amounts are not necessarily indicative of the operating results that would have occurred if the acquisition had occurred on such date. The pro forma adjustments are based on certain assumptions that the Company believes are reasonable including adjustments to revenue related to the fair value of deferred revenue, adjustments related to the amortization of acquired intangible assets, adjustments for stock-based compensation expense related the assumed and revested awards and awards issued in conjunction with the acquisition, and the tax impact of such adjustments. Year Ended December 31, in thousands 2021 2020 Revenue $ 1,160,641 $ 835,147 Net loss $ (1,112,339) $ (362,274) 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. Adjustments in purchase price allocations during the year ended December 31, 2022 related to adjustments to the intangible asset valuation models and decreased intangible assets by $0.8 million, tax adjustments from pre-acquisition research and development tax credits and decreased other assets, net by $0.1 million, and tax adjustments from a change in the pre-acquisition tax balances and decreased other liabilities, net by $0.4 million, with a corresponding total increase to goodwill of $0.5 million. The final 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 | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill Goodwill represents the excess of the purchase price of a business combination over the fair value of net assets acquired. The changes in the carrying amount of goodwill were as follows (in thousands): Balance as of December 31, 2020 $ 6,709 Acquisition of Clarabridge, Inc. 1,065,335 Acquisitions of Usermind and SurveyVitals 46,724 Balance as of December 31, 2021 $ 1,118,768 Adjustments in purchase price allocations (853) Balance as of December 31, 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. The adjustments in 2022 represent measurement period adjustments for business combinations from the prior year. Other intangible assets, net Other intangible assets, net consisted of the following: 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 (71,846) (18,541) Other intangible assets, net $ 210,415 $ 264,500 The Company recognized amortization expense related to its acquired intangible assets as follows: Year Ended December 31, in thousands 2022 2021 2020 Cost of revenue $ 29,914 $ 8,243 $ 1,062 Sales and marketing 22,121 5,441 204 General and administrative 1,270 446 188 Total amortization of acquired intangible assets $ 53,305 $ 14,130 $ 1,454 Estimated amortization expense for intangible assets for the next five years and thereafter consists of the following: As of December 31, in thousands 2022 2023 $ 51,002 2024 50,885 2025 49,934 2026 41,366 2027 17,156 Thereafter 72 Total $ 210,415 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following: As of December 31, in thousands 2022 2021 Accrued wages, bonuses and commissions $ 79,518 $ 93,021 Accrued payroll taxes 9,087 7,295 Other accrued expenses 32,590 25,855 Employee Stock Purchase Plan (“ESPP”) liability 18,924 18,182 Accrued income taxes 15,172 23,049 Total accrued liabilities $ 155,291 $ 167,402 |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 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 most current information available. 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. |
Promissory Notes
Promissory Notes | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Promissory Notes | PROMISSORY NOTES 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 International Inc. to SAP America. Promissory Note 1 was issued with a principal amount of $1,892 million and interest rate of 0.14% compounded semiannually. The principal balance and accrued interest was due and paid in full on February 1, 2021, the date of the closing of the initial public offering. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Common Stock | COMMON STOCK On December 21, 2020, the Company amended its restated certificate of incorporation to create new shares of preferred stock, Class A common stock, and Class B common stock. The following description summarizes certain important terms of Qualtrics capital stock and of Qualtrics amended and restated certificate of incorporation and amended and restated bylaws. Class A Common Stock and Class B Common Stock Dividend Rights Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of Qualtrics Class A common stock and Class B common stock are entitled to receive dividends, out of assets legally available, sharing equally in all such dividends on a per share basis, at the times and in the amounts that the Company’s board of directors may determine from time to time. Voting Rights Except that holders of Class A common stock are entitled to one vote per share while holders of Class B common stock are entitled to ten votes per share on all matters to be voted on by Qualtrics stockholders and except with respect to the conversion, certain corporate actions that require the consent of holders of Class B common stock and other protective provisions, the holders of Class A common stock and Class B common stock have identical rights. Subject to any rights of any series of preferred stock to elect directors, the holders of Qualtrics Class A common stock and the holders of Qualtrics Class B common stock, voting together as a single class, are entitled to elect all directors to the Company’s board of directors. In the event that the rights of any series of preferred stock would preclude the holders of Qualtrics Class A common stock and the holders of Qualtrics Class B common stock, voting together as a single class, from electing at least one director, the board of directors will increase the number of directors prior to the issuance of that preferred stock to the extent necessary to allow these stockholders to elect at least one director. Right to Receive Liquidation Distributions Upon the Company’s liquidation, dissolution or winding-up, the holders of Qualtrics Class A common stock and Class B common stock are entitled to share equally in all of the Company’s assets remaining after payment of all liabilities and the liquidation preferences of any outstanding preferred stock. Conversion Prior to any distribution of Class B common stock by SAP to any party that is not beneficially owned by SAP (a “Distribution”), all shares of Class B common stock will automatically be converted into shares of Class A common stock upon the transfer of such shares of Class B common stock. If a Distribution has not occurred, each share of Class B common stock will also automatically convert into a share of Class A common stock at such time as the number of shares of common stock owned by SAP (and its affiliates) falls below 20% of the outstanding shares of Qualtrics common stock. All conversions will be effected on a share-for-share basis. Preferred Stock The Company’s board of directors is authorized, subject to the approval of Qualtrics Class B stockholders and subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further vote or action by Qualtrics stockholders. The Company has no current plan to issue any shares of preferred stock. Sale of Class A Common Stock In December 2020, Qualtrics entered into a stock purchase agreement with Q II, LLC (“Q II”), an entity controlled by Ryan Smith, the Company’s founder and executive chair, pursuant to which Q II purchased 6,000,000 shares of Qualtrics Class A common stock at a price of $20.00 per share for an aggregate purchase price of $120 million. The shares are redeemable at the option of the Company for the 60-day period following June 30, 2021 unless the following conditions had been met: (i) the closing of the Company’s underwritten public offering had occurred prior to that date and (ii) Ryan Smith remained employed by the Company on that date or his employment had been terminated prior to that date by the Company without cause or by him with good reason. Such conditions occurred as of June 30, 2021 and the shares are therefore not redeemable at the option of the Company. Based on the terms of purchase agreement, the funds received from the Q II purchase were reported within accrued liabilities until the redemption options expired on June 30, 2021, resulting in the $120 million purchase consideration being reclassified from accrued liabilities to additional paid in capital. On December 23, 2020, Silver Lake Partners VI DE (AIV), L.P. (“Silver Lake”) agreed to purchase $550 million of shares of Class A common stock, comprising (a) 15,018,484 shares at $21.64 per share and (b) $225 million of shares at the initial public offering price of $30.00 per share, in a concurrent private placement transaction (the “Silver Lake investment”). On February 1, 2021, the Company closed its private placement transaction with Silver Lake. On February 1, 2021, the Company closed its initial public offering (“IPO”), in which it issued and sold 59,449,903 shares of Class A common stock at $30.00 per share for aggregate net proceeds of $1,688 million, after deducting underwriters' discounts and offering expenses payable by the Company. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | STOCK-BASED COMPENSATION Stock-based compensation expense, including cash settled, for the years ended December 31, 2022, 2021, and 2020 was recorded as follows: Year Ended December 31, in thousands 2022 2021 2020 Cost of subscription revenue $ 18,798 $ 12,148 $ 4,632 Cost of professional services and other revenue 34,022 25,299 6,737 Research and development 154,972 128,779 68,355 Sales and marketing 208,958 136,532 37,877 General and administrative 617,424 754,382 106,412 Total stock-based compensation expense, including cash settled $ 1,034,174 $ 1,057,140 $ 224,013 Cash Awards In Conjunction with the SAP acquisition, previous unvested Restricted Share Awards (“RSAs”), Restricted Share Units (“RSUs”) and options held by employees of Qualtrics were exchanged into stock-based cash awards (Qualtrics Rights). During 2019 and 2020, SAP granted to certain Qualtrics employees virtual shares representing a contingent right to receive a cash payment determined by the SAP share price and the number of share units that ultimately vest (Move SAP RSUs). During the years ended December 31, 2022, 2021, and 2020, less than 0.1 million, 1.9 million, and 8.1 million units of Qualtrics Rights and Move SAP RSUs vested and were settled for $5.3 million, $79.4 million, and $388.6 million in cash, respectively. No cash settled awards were granted during the years ended December 31, 2022 and 2021, respectively. There were 0.9 million shares granted during the year ended December 31, 2020. The carrying amount of the liability related to the Qualtrics Rights and Move SAP RSUs was $1.1 million and $4.6 million as of December 31, 2022 and 2021, respectively. The unrecognized expense related to Qualtrics Rights and Move SAP RSUs was $0.5 million as of December 31, 2022 and will be recognized over a remaining vesting period of less than one year. Equity Awards Qualtrics RSUs In December 2020, the board of directors approved the 2021 Qualtrics International Inc. Employee Omnibus Equity Plan, pursuant to which the Company reserved shares of Class A common stock to be used for grants of equity awards to officers, employees, directors, and other key persons, including consultants. The plan provides that on January 1, 2022, and each January 1 thereafter, through and including January 1, 2031, the number of shares reserved and available for issuance under the plan is cumulatively increased by a number of shares of Class A common stock equal to up to 5% of the number of shares of Class A common stock and Class B common stock of issued and outstanding on the immediately preceding December 31, as approved by board, and further provides for increases to the number of shares of Class A common stock that may be granted thereunder based on shares underlying any awards that expire, are forfeited, or are otherwise terminated. In August 2021, the board of directors approved the 2021 Qualtrics International Inc. Inducement Equity Plan, pursuant to which the Company reserved shares of Class A common stock to be used for grants of equity-based awards to individuals who were not previously employees or directors of the Company. As of December 31, 2022, there were 10.1 million shares remaining to be issued under these two plans. In January 2021, the Company completed a voluntary exchange offer pursuant to which 5.4 million cash-settled Qualtrics Rights and 1.3 million cash-settled SAP RSU awards were exchanged and modified into 12.8 million equity-settled Qualtrics RSU awards, representing 93% of the outstanding Qualtrics Rights and SAP RSU awards. In September 2021, the Company completed an additional voluntary exchange offer for certain employees in Australia that were not eligible for the January 2021 exchange, pursuant to which less than 0.1 million cash-settled Qualtrics Rights and SAP RSU awards were exchanged and modified into equity-settled Qualtrics RSU awards. In January 2021, the board of directors authorized the issuance of new RSU awards representing approximately 61.4 million shares of Qualtrics Class A common stock. These awards were granted to eligible employees and the executive officers of the Company on January 28, 2021. Approximately 44.2 million of the RSU awards are subject to time-based vesting, with 25% vesting on February 1, 2022 and ratably thereafter for twelve quarters, such that this portion of the RSUs will be fully vested on the fourth anniversary of their vesting commencement date. The remaining 17.2 million RSU awards vest in four equal annual installments based on the achievement of certain performance conditions, as established by the Company’s board of directors and measured annually, with vesting of 100% of each installment in the event that the performance targets are achieved and ratable downward adjustments in the event that the performance targets are partially achieved. In January 2021, the board of directors approved a one-time optional salary adjustment program that provided eligible employees with the opportunity to reduce their annual cash base salary, effective as of February 1, 2021 and on an ongoing basis, in exchange for a one-time RSU grant valued at a multiple of the cash forgone as a result of an employee’s participation in the program. RSUs granted pursuant to this program totaled 2.5 million and vest quarterly over four years, with a vesting commencement date of February 1, 2021. In November 2021, the board of directors authorized the issuance of new RSU awards representing approximately 2,227,679 million shares of Qualtrics Class A common stock. These awards were granted to eligible employees of Clarabridge. The RSU awards are subject to time-based vesting, with 25% vesting on November 1, 2022 and ratably thereafter for twelve quarters, such that this portion of the RSUs will be fully vested on the fourth anniversary of their vesting commencement date. The following table sets forth the outstanding Qualtrics RSUs and related activity for the years ended December 31, 2022 and 2021: Number of RSUs (in thousands) Weighted-Average Grant Date Fair Value Outstanding as of December 31, 2020 — $ — Exchanged from Qualtrics Rights and SAP RSU Awards 12,872 30.04 Granted 77,652 44.28 Vested (6,124) 31.14 Forfeited/Canceled (2,236) 41.28 Outstanding as of December 31, 2021 82,164 $ 43.11 Granted 35,490 20.69 Vested (33,967) 41.53 Forfeited/Canceled (7,014) 35.01 Outstanding as of December 31, 2022 76,673 $ 34.17 The total fair value of RSUs that vested during the year ended December 31, 2022 and 2021 was $770.7 million and $222.7 million. As of December 31, 2022, there was $1,986.4 million of unrecognized stock-based compensation expense related to outstanding Qualtrics RSUs, which is expected to be recognized over a weighted-average period of 2.4 years. Qualtrics Options On October 1, 2021, in connection with the acquisition of Clarabridge, Inc., the Company assumed the outstanding Clarabridge stock option plans and converted all outstanding stock options into Qualtrics options. The majority of the assumed options were either fully vested or partially vested as of the acquisition date and had a strike price well below the value of the awards at the conversion date. Certain awards to Clarabridge employees had their vesting periods extended for up to three years after the acquisition date. The conversion date fair value of the stock options was determined to be approximate to the intrinsic value of the awards. The value of the assumed options was allocated to purchase consideration and stock compensation expense based on the pre and post service conditions. See Note 7 “Business Combinations” for additional information. The following table sets forth the outstanding common stock options and related activity for the years ended December 31, 2022 and 2021: 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, 2020 — $ — Assumed awards from Clarabridge Acquisition 3,204 4.52 Exercised (1,344) 4.22 Forfeited/Expired (5) 7.08 Outstanding as of December 31, 2021 1,855 $ 4.84 6.3 $ 56,684 Exercised (353) 4.62 Forfeited/Expired (34) 6.06 Outstanding as of December 31, 2022 1,468 $ 4.87 5.1 $ 8,091 Vested and exercisable at December 31, 2022 938 $ 4.62 5.0 $ 5,407 The aggregate intrinsic value of options exercised was $4.7 million and $51.2 million for the years ended December 31, 2022 and 2021. 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 December 31, 2022 and 2021 are based on the market closing price of the Company's Class A common stock on those dates. As of December 31, 2022, there was $9.9 million of unrecognized stock-based compensation expense related to outstanding stock options which is expected to be recognized over a weighted-average period of 1.6 years. Own SAP Plan (Own) Starting in July 2019 under Own, employees had the opportunity to purchase, on a monthly basis, SAP shares without any required holding period. The investment per each eligible employee is limited to a percentage of the respective employee’s monthly base salary. The Company matched the employee investment by 40% and added a subsidy equivalent of €20 per month for non-executives. In connection with the completion of the Company’s initial public offering employees are no longer able to participate in Own. No shares were purchased under this plan during the year ended December 31, 2022. The number of shares purchased under this plan was 17,440 and 185,709 during the years ended December 31, 2021 and 2020, respectively. No compensation expense was recognized associated with this plan during the year ended December 31, 2022. The Company recognized compensation expense associated with the match of $0.7 million and $7.2 million during the years ended December 31, 2021 and 2020, respectively. Qualtrics Employee Stock Purchase Plan In December 2020, the Company's board of directors approved the 2021 Qualtrics International Inc. Employee Stock Purchase Plan (ESPP), which became effective in January 2021. The ESPP initially reserved and authorized the issuance of up to a total of 12,000,000 shares of Class A common stock to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and ending on (and including) January 1, 2030 by the lowest of: (i) 2% of the number of shares of Qualtrics Class A common stock reserved for issuance under the ESPP, (ii) 1% of the outstanding number of shares of Qualtrics Class B and Class A common stock on the immediately preceding December 31, and (iii) such lesser number of shares as determined by the Company’s compensation committee. The share reserve is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of December 31, 2022, there were 9.8 million shares remaining to be issued under the ESPP. 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 her compensation for each pay period. Accumulated contributions are used to purchase shares on the last business day of the offering period at a price equal to 85% of the fair market value of the shares on the first business day of the offering period or the last business day of the offering period, whichever is lower, provided that no more than the number of shares of Class A common stock determined by dividing $15,000 by the fair market value of the shares on the first business day of the offering period may be purchased by any one employee during each purchase period. An employee may also purchase no more than $25,000 worth of shares of Class A common stock for each calendar year in which a purchase right is outstanding. The Company recognized compensation expense associated with the ESPP of $26.3 million and $16.4 million during the years ended December 31, 2022 and 2021. As of December 31, 2022, there was $2.2 million of unrecognized stock-based compensation expense associated with the ESPP, which is expected to be recognized over a weighted-average period of 0.1 years. Sale of Class A Common Stock As discussed in Note 12, regarding the sale of Class A common stock to Q II, the 6,000,000 shares had certain vesting conditions including the completion of the Company’s IPO and the continued employment of Ryan Smith through June 30, 2021. Based on the terms of purchase agreement, the sale of Class A common stock to Q II is accounted for as an early exercise of a stock option award. The IPO is considered a performance condition that upon occurring in January 2021 results in a cumulative catch-up of recognizing expense of the fair value of the option for the pro-rata portion of the vesting period that had occurred and the remaining expense has been recorded over the remaining vesting period, which ended on June 30, 2021. The Company recognized compensation expense associated with the award of $20.9 million during the year ended December 31, 2021. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 12 Months Ended |
Dec. 31, 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) Year Ended December 31, 2022 2021 2020 Numerator: Net loss attributable to common shareholder $ (1,061,478) $ (1,059,146) $ (272,502) Denominator: Weighted-average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic and diluted 584,285,678 516,869,588 423,334,994 Net loss per share attributable to common stockholders, basic and diluted $ (1.82) $ (2.05) $ (0.64) The net loss per share amounts are the same for Class A and Class B common stock because the holders of each class are legally entitled to equal per share distributions, whether through dividends or in liquidation. 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 antidilutive. 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 December 31, 2022 2021 2020 Qualtrics restricted stock units 76,672,908 82,163,894 — Qualtrics options 1,467,828 1,854,965 — Qualtrics employee stock purchase program 2,144,827 687,000 — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For the years ended December 31, 2022, 2021, and 2020, the Company’s loss before income taxes was as follows: Year Ended December 31, in thousands 2022 2021 2020 Domestic $ (1,122,995) $ (1,076,281) $ (297,724) Foreign 82,418 29,100 41,699 Loss before income taxes $ (1,040,577) $ (1,047,181) $ (256,025) The federal, state and foreign income tax provisions are summarized as follows: Year Ended December 31, in thousands 2022 2021 2020 Current taxes: Federal $ 15,848 $ 19,886 $ — State 1,008 515 166 Foreign 22,527 3,218 6,970 Total current taxes $ 39,383 $ 23,619 $ 7,136 Deferred taxes: Federal $ (11,253) $ (12,582) $ — State (10,008) (1,829) — Foreign 2,779 2,757 9,341 Total deferred taxes (18,482) (11,654) 9,341 Total $ 20,901 $ 11,965 $ 16,477 A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, in % 2022 2021 2020 Tax at U.S. statutory rates 21.0 % 21.0 % 21.0 % State tax, net of federal tax effect 0.9 (3.8) 3.4 Foreign taxes (2.4) (1.0) (3.2) Items not deductible for tax 0.2 (0.1) (0.3) Equity compensation (16.9) (13.4) (0.3) Tax credits 1.3 1.2 6.7 Changes in valuation allowance (7.7) (6.4) (27.6) Changes in tax reserves 0.1 1.6 (5.0) Tax rate change 1.6 0.1 (0.6) Other items, net (0.1) (0.3) (0.5) Effective income tax rate (2.0) % (1.1) % (6.4) % Significant components of the Company’s deferred tax assets (liabilities) are as follows: As of December 31, in thousands 2022 2021 Deferred tax assets: Investment in partnership $ — $ 203,480 Tax credits 34,521 34,718 Reserves, accruals and other 18,712 8,304 Deferred revenue 206,457 — Stock compensation 57,879 8,088 Net operating loss carryovers 78,684 74,127 Lease liability 79,023 32,414 R&D capitalization and amortization 57,377 — Gross deferred tax assets 532,653 361,131 Valuation allowance (339,912) (262,919) Net deferred tax assets 192,741 98,212 Deferred tax liabilities: Compensation accruals (79,055) (17,785) Intangible assets (41,095) (71,125) Leases - ROU asset (62,497) (31,312) Other (12,916) (1,547) Total net deferred tax liabilities $ (2,822) $ (23,557) The Company had historically 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 deconsolidation from SAP during 2021, net operating losses and credits were updated to reflect actual attributes available for use by the Company. Qualtrics is subject to a tax sharing agreement with SAP that requires the Company to reimburse SAP for the Company's taxable income, or be reimbursed by SAP in cases of taxable loss, which is included on the consolidated tax returns with SAP, subject to adjustments for hypothetical tax attributes and certain simplifying conventions. The Company has conducted the majority of its operations through a limited liability company that is wholly owned within the consolidated group and has been treated as a partnership for U.S. income tax purposes. Accordingly, the outside basis difference in the limited liability company has been reflected as a deferred tax asset, shown as “investment in partnership.” During 2020, the Company effectuated an internal restructuring, which removed certain foreign entities from the limited liability company ownership structure. As a result, the deferred tax balances of those foreign entities were presented separately from the partnership deferred tax asset during 2020 and 2021. During 2022, the Company effectuated another internal restructuring and the wholly-owned limited liability company became a single-member limited liability company, disregarded from its parent company for U.S. income tax purposes. As such, the Company is reporting its deferred tax balances for 2022 based on the tax basis of each relevant item, rather than the outside basis difference of the investment in the partnership. ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. In assessing the need for a valuation allowance, the Company considered all available evidence, both positive and negative, including historical levels of income or loss, legislative developments, expectations, and risks associated with estimates of future taxable income, and prudent and feasible tax planning strategies. The Company has evaluated this evidence and 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, the Company maintains a full valuation allowance against its net U.S. deferred tax assets in these entities. The valuation allowance for deferred tax assets was $339.9 million and $262.9 million at December 31, 2022 and 2021, respectively. During 2022, the valuation allowance increased by $77.0 million primarily due to increases in deferred revenue and the new Sec. 174 R&D capitalization and amortization rules in the United States. As of December 31, 2022, the Company had approximately $237.1 million of consolidated federal net operating loss carryforwards and $549.8 million of state net operating loss carryforwards available to offset future taxable income, respectively. If unused, federal net operating loss carryforwards of $93.0 million will expire between 2025 and 2036. $144.1 million of federal net operating loss carryforwards can be carried forward indefinitely. If unused, state net operating loss carryforwards of $316.4 million will expire between 2023 and 2042. $233.4 million of state net operating loss carryforwards can be carried forward indefinitely. The Company has $2.4 million of foreign jurisdiction net operating loss carryforwards that can be carried forward indefinitely. The Company has federal research tax credit carryforwards of $0.5 million and Utah research tax credit carryforwards of $4.1 million, which if not utilized, will expire between 2032 and 2042, and 2026 and 2036, respectively. The Company has foreign tax credit carryforwards of $15.1 million which will expire between 2023 and 2028, if not utilized. Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to approximately $142 million at December 31, 2022. Those earnings are considered to be indefinitely reinvested; accordingly, no provision for state, local and foreign withholding income taxes has been provided hereon. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company could be subject to withholding taxes payable to the various foreign countries. Determination of the amount of unrecognized deferred income tax liability is not practicable due to the complexities associated with its hypothetical calculation. ASC 740 requires the Company to recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. The following table summarizes the activity related to unrecognized tax benefits for the periods December 31, 2022 and 2021: As of December 31, in thousands 2022 2021 Beginning balance $ 12,364 $ 28,130 Additions for tax positions related to current year 3,905 9,852 Additions for tax positions related to prior year 89 1,032 Reductions for tax positions related to prior year (2,572) (26,162) Cumulative translation adjustment (560) (488) Ending balance $ 13,226 $ 12,364 The Company does not anticipate material changes within 12 months of the reporting date to its unrecognized tax benefits as of December 31, 2022. At December 31, 2022, the Company had $13.2 million of total unrecognized tax benefits, of which, if recognized, $11.7 million would impact the Company’s effective tax rate. Of the $13.2 million of 2022 unrecognized tax benefits, $1.5 million is offset to deferred tax assets and the remaining $11.7 million is recorded as a long term liability. At December 31, 2021, the Company had $12.4 million of total unrecognized tax benefits, of which, if recognized, $10.0 million would impact the Company’s effective tax rate. Of the $12.4 million of 2020 unrecognized tax benefits, $2.4 million is offset to deferred tax assets and the remaining $10.0 million is recorded as a long term liability. The Company recognizes interest and penalties related to unrecognized tax benefits as part of pre-tax book income or expense, which totaled $0.1 million, $(1.1) million, and $1.5 million for 2022, 2021, and 2020, respectively. The Company’s accrual for interest and penalties totaled $1.4 million and $0.2 million at December 31, 2022 and 2021, respectively. The Company files federal, state, and foreign income tax returns in various jurisdictions such as Australia, Belgium, Ireland, the United Kingdom, and the United States, with varying statutes of limitations. The tax years from 2019 forward remain subject to examination for the Company and its U.S. subsidiaries. Tax filings for the Company’s foreign subsidiaries remain subject to examination by local tax authorities from 2017 and onward. The German Anti-Tax Avoidance Directive Implementation Law entered into force on July 1, 2021. This legislation is intended to combat hybrid mismatch arrangements and deny deduction of certain expenses accruing after December 31, 2019, and impacts the deductibility of expenses incurred in the Company’s German subsidiary during tax year 2020. As a result of this legislation, the Company recorded a $6.5 million uncertain tax liability during the year ended December 31, 2021. In the current year, the Germany tax return for tax year 2020 was filed and a $1.6 million decrease to the uncertain tax liability was recorded to account for the impact of the true ups on the filed tax return. The U.K. Finance Act 2021 was passed on June 10, 2021. This legislation refined and clarified the country’s hybrid mismatch rules, which previously cast doubt on the deductibility of expenses incurred in the Company’s U.K. subsidiary during tax years 2017-2020. As a result of the favorable new legislation, the Company reversed an $11.0 million uncertain tax liability during the year ended December 31, 2021. No further adjustments were made for the year ended December 31, 2022. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 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 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 consolidated statements of comprehensive loss 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 years ended December 31, 2022, 2021 and 2020, the Company recognized revenue of $40.8 million, $26.4 million, and $11.8 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 $48.9 million, $56.8 million, and $38.4 million respectively, during the years ended December 31, 2022, 2021 and 2020. Total costs charged from the Company to SAP and its affiliates were $15.5 million, $27.7 million, and $20.2 million respectively, for the years ended December 31, 2022, 2021, and 2020. As of December 31, 2022, the outstanding receivable and payable balance with SAP and its affiliates was $19.2 million and $15.2 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, Qualtrics had been included in SAP America’s consolidated group for U.S. federal income tax purposes. In October 2021, the Company deconsolidated from the SAP Tax Group for federal tax purposes. The Company continues to be 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, the Company will make certain tax sharing payments to SAP. As of December 31, 2022, the Company’s distribution liability for the tax sharing agreement with SAP totaled $84.7 million, consisting of $7.7 million based on 2021 actual tax return activity, $12.0 million based on the Company’s 2022 tax provision and $65.0 million based on an estimated fair value. Of the $84.7 million, $72.0 million is recorded within accounts payable and the remaining $12.7 million is recorded within other liabilities on the balance sheet as of December 31, 2022. 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 the Company’s 2021 tax provision and $71.5 million based on an estimated fair value. Of the $88.5 million, $21.5 million is recorded within accounts payable and the remaining $67.0 million is recorded within other liabilities on the balance sheet as of December 31, 2021. 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 International Inc. to SAP America. 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 semiannually. The outstanding principal of $500 million and accrued interest of $5.3 million related to the Company’s promissory note was paid in full on November 9, 2021. See Note 11, “Promissory Notes”, for further details. 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. The Company has relationships with certain of these entities in the ordinary course of business. During the years ended December 31, 2022 and 2021, revenue and charges from these related parties were immaterial. In December 2020, Ryan Smith, the Company’s 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 the Company was billed $7.7 million and $5.1 million during the years ended December 31, 2022 and December 31, 2021, respectively. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | DEFINED CONTRIBUTION PLAN The Company offers a 401(k) plan covering all U.S. full-time or part-time employees. The 401(k) plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). From July 1, 2019 through September 30, 2021, the Company had a 401(k) plan administered by SAP, with employer contributions funded by the Company. Since October 1, 2021, the Company’s 401(k) plan has been administered by Qualtrics. During this time, eligible employees were able to contribute up to 25% of their compensation to the 401(k) plan each pay period, and then the Company automatically made partial matching contributions of up to 4.5% of their compensation. The employer matching contributions partially vested after two years and fully vested after three years of employee service. Starting on January 1, 2022, employees are able to contribute up to 90% of their compensation to the 401(k) plan each period and the Company automatically makes full matching contributions of up to 5% of the employee’s compensation, with immediate vesting in the employer contributions. The immediate vesting was also applied retroactively to 401(k) employer contributions prior to January 1, 2022. The maximum employer contributions per employee are $15,250 in 2022, $13,050 in 2021, and $12,825 in 2020. The Company’s contributions to the 401(k) plans for the years ended December 31, 2022, 2021 and 2020 totaled $33.3 million, $21.3 million, and $16.7 million, respectively. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS In January 2023, the Company committed to a plan to eliminate approximately 270 roles across the Company globally that do not align with the Company’s highest priorities for 2023. This represents less than 5% of the Company’s workforce. These actions are expected to be substantially completed by the end of the first quarter of 2023. As a result of these actions, the Company expects to incur total pre-tax charges of approximately $5.8 million in connection with the headcount reductions, primarily consisting of severance payments, notice pay (where applicable), employee benefits contributions and related costs. On January 26, 2023, SAP SE (“SAP”), the controlling stockholder of the Company, issued a press release indicating its intent to explore a sale of its stake in Qualtrics. No decision has been made and SAP is in the exploratory phase of the potential sale. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | The accompanying consolidated financial statements, which include the accounts of the Company and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). All intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year ends on December 31. |
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, 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, and valuation of deferred income tax assets. Actual results could differ from those estimates. |
Segments | Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The Company’s CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one operating and one reportable segment. |
Foreign Currency Transactions | The functional currencies of the Company’s foreign subsidiaries are the respective local currencies. All assets and liabilities of the Company’s foreign subsidiaries are translated from their respective functional currencies into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rate for the period, and equity balances are translated using historical exchange rates. The cumulative effect of translation adjustments arising from the use of differing exchange rates from period to period is included in accumulated other comprehensive loss within the consolidated balance sheets. Changes in the foreign currency translation adjustment are reported in the consolidated statements of stockholders’ equity and the consolidated statements of comprehensive loss. Transactions denominated in currencies other than the functional currency are remeasured at the end of the period and when the related receivable or payable is settled, which may result in transaction gains or losses. Foreign currency transaction gains and losses, whether realized or unrealized, are included in other non-operating income (expense), net in the consolidated statements of comprehensive loss. |
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. Identification of a Contract For accounting purposes, the Company treats multiple contracts entered into with the same customer as a single contract if they are entered into at or near the same time and are economically interrelated. The Company does not combine contracts with closing days more than three months apart because they are not considered entered into near the same time. The Company evaluates whether various contracts are interrelated, which includes considerations as to whether they were negotiated as a package with a single commercial objective, whether the amount of consideration on one contract is dependent on the performance of the other contract or if some or all goods in the contracts are a single performance obligation. New arrangements with existing customers can be either a new contract or the modification of prior contracts with the customer. The Company considers whether there is a connection between the new arrangement and the pre-existing contracts, whether the goods and services under the new arrangement are highly interrelated with the goods and services sold under prior contracts, and how the goods and services under the new arrangement are priced. In determining whether a change in transaction price represents a contract modification or a change in variable consideration, the change in price is examined to determine whether it results from new or changes in existing enforceable rights and obligations or from applying unchanged existing contract provisions. Identification of Performance Obligations Some contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately, if they are distinct. Typically, the products and services outlined in the Classes of Revenue section qualify as separate performance obligations and the portion of the contractual fee allocated to them is recognized separately. In particular for Qualtrics’ professional services and implementation activities, the Company evaluates whether such services significantly integrate, customize, or modify the subscription service to which they relate. In this context, the nature of the services and their volume are considered relative to the volume of the subscription service to which they relate. In general, the implementation services for the Company’s subscription services go beyond pure setup activities and qualify as separate performance obligations. Non-distinct goods and services are combined into one distinct bundle of goods and services (combined performance obligation). Determination of Transaction Price The Company applies judgment in determining the amount to which Qualtrics expects to be entitled in exchange for transferring promised goods or services to a customer. Prices are generally fixed at contract inception; therefore, the Company’s contracts do not contain a significant amount of variable consideration, however, the Company considers whether and to what extent subsequent concessions or payments may be granted to customers and whether the customer is expected to pay the contractual fees. In this assessment, Qualtrics’ history is considered both with the respective customer and more broadly. Allocation of Transaction Price The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines standalone selling prices considering market conditions and based on overall pricing objectives, such as observable standalone selling prices and other factors. Where standalone selling prices for an offering are observable and reasonably consistent across customers (that is, not highly variable), Qualtrics’ standalone selling price estimates are derived from the Company’s respective pricing history. The Company has established thresholds of pricing variability to determine whether the historical pricing of goods and services is highly variable across customers. Where sales prices for an offering are not directly observable or highly variable across customers, judgment is required to estimate standalone selling prices. For renewable offerings with highly variable pricing across customers, the Company’s estimate considers the individual contract’s expected renewal price as far as this price is substantive based on renewal history. Typically, the Company’s subscription offerings follow this approach. For Qualtrics’ professional and other services, these estimations typically follow a cost-plus-margin approach. The Company reviews the standalone selling prices periodically, or whenever facts and circumstances change, to ensure the most objective input parameters available are used. 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 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. For performance obligations satisfied over time, the Company recognizes revenue using the method that best reflects the timing of transfer of control to the customer and satisfaction of the Company’s performance obligation. Contract Balances |
Stock-Based Compensation, including cash settled | Equity Awards The Company records stock-based compensation based on the grant date fair value of the awards. The Company recognizes the fair value of restricted stock awards that do not contain a performance condition 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 based on the probability that 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 the Qualtrics 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 or some are valued at $35.00. 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 fair value of cash awards is recognized as a liability on the balance sheet, with changes to fair value each period being recognized through the income statement. 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 comprehensive loss. |
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. Since the Company was in a net loss position for all periods presented, the inclusion of potentially dilutive shares would have been antidilutive. Accordingly, basic net loss per share and diluted net loss per share are the same. For purposes of calculating net loss per share, the Company uses the two-class method. Because both classes of common stock share the same rights in dividends, basic and diluted net loss per share was the same for both common stock classes. |
Cost of Revenue | Cost of revenue includes expenses related to operating the Company’s cloud platform in data centers, depreciation of the Company’s data center equipment, the amortization of the Company’s capitalized internal-use software and acquired technology, and third-party vendor costs to fulfill contracts with customers. Cost of revenue also includes employee-related costs, including salaries, bonuses, equity and cash settled stock-based compensation expense, and employee benefit costs associated with the Company’s customer support, cloud operations, and delivery of professional services. Additionally, the Company makes allocations of certain overhead costs, primarily based on headcount. |
Advertising and Promotional Expense | Advertising and promotional expenses are expensed as incurred. |
Cash and cash equivalents | Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less from the date of purchase. The Company maintains cash and cash equivalents at financial institutions, which at times may not be federally insured or may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risks on such accounts. Cash and cash equivalents are recorded at fair value. |
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 te rms 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 $8.6 million and $1.5 million as of December 31, 2022 and 2021, respectively. Bad debt expense was $7.7 million,$1.4 million during the years ended December 31, 2022 and 2021 and not material during the year ended 2020. The Company’s allowance for cancellations was $28.8 million and $17.5 million as of December 31, 2022 and 2021, respectively. During the years ended December 31, 2022, 2021, and 2020, $3.2 million, $(2.4) million and $3.0 million of net additions (reductions) were charged to revenue, respectively, and $8.1 million, $(10.3) million, and $15.2 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 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. |
Property and Equipment, net | Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated asset lives. Routine maintenance and repairs are charged to expense when incurred. Expenditures that materially increase values, change capacities, or extend the useful lives of the respective assets are capitalized. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. |
Leases | The Company determines if an arrangement is a lease at inception, and leases are classified at commencement as either operating or finance leases. As of December 31, 2022 and 2021, the Company had no finance 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 consolidated balance sheets. Additionally, the Company has elected to combine non-lease components with lease components for the purposes of calculating the ROU asset and liabilities, to the extent they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease costs. The Company uses the incremental borrowing rate based on information available at the commencement date in determining the present value of future lease payments. The rate is an estimate of the collateralized borrowing rate the Company would incur on future lease payments over a similar term. The Company leases facilities under non-cancelable operating lease agreements. Certain of the operating lease agreements contain rent concessions and rent escalations which are included in the present value calculation of minimum lease payments. Topic 842 requires that operating leases recognize expense on a straight-line basis over the lease term. The lease term begins on the date the Company has the right to use the leased property. Lease terms may include options to extend or terminate the lease. These options are included in the ROU asset and lease liability when it is reasonably certain that the option will be exercised. The Company’s lease agreements do not contain residual value guarantees or covenants. |
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. |
Business Combinations | The Company applies the acquisition method of accounting for those transactions that qualify as a business acquisition, resulting in recording assets and liabilities acquired at their respective fair values. Goodwill is determined based on the difference between the fair value of consideration paid and the fair value of the assets acquired and liabilities assumed. The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain. For fair values that are preliminary due to the Company still being in the process of obtaining additional information, during the measurement periods, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period, which is not more than one year from the acquisition date. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of comprehensive loss. |
Goodwill and Other Intangible Assets | The Company records goodwill when consideration paid in a business acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company has determined that there is a single reporting unit for the purpose of goodwill impairment tests, which are performed annually on October 1st or more frequently if certain indicators are present. In performing the goodwill impairment test, the Company first performs a qualitative assessment, which requires that the Company considers events or circumstances including macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in management or key personnel, changes in strategy, changes in customers, changes in the composition or carrying amount of a reporting unit’s net assets and changes in the Qualtrics stock price. If, after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair value of the Qualtrics reporting unit is greater than the carrying amount, then the quantitative goodwill impairment test is not performed. If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its fair value. There was no impairment of goodwill for the years ended December 31, 2022, 2021, and 2020. Other intangible assets, consisting of developed technology, customer relationships, tradenames, purchased license agreements, developed content, certifications and purchased patents, are stated at cost less accumulated amortization. All intangible assets have been determined to have definite lives and are amortized on a straight-line basis over their estimated remaining economic lives. The Company recognized amortization expense over the estimated useful lives related to its acquired intangible asset as follows with the related weighted-average remaining amortization period as of December 31, 2022: Estimated Useful Lives Weighted-Average Amortization Period Cost of revenue Developed technology 1 to 6 years 4.4 years Licenses and certifications 5 years 3.9 years Purchased license agreements 4 years 0 years Developed content 4 years 0 years Sales and marketing Customer relationships 1 to 9 years 3.8 years General and administrative Tradenames 1 to 5 years 0.1 years Purchased patents 9 to 16 years 5.8 years |
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”). Historically, 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 Qualtrics files returns as part of an 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, the Company has updated the Qualtrics 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 an 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. 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. |
Warranty and Indemnifications | The Company includes service level commitments to its customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event that the Company fails to meet those levels. To date, the Company has not incurred any material costs related to such commitments. The Company’s contracts include provisions indemnifying customers against liabilities if its products infringe a third-party’s intellectual property rights. The Company has not incurred any costs as a result of such indemnification and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet AdoptedIn 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 Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 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 and revenue generated from same period billings for each of the Company’s revenue generating solutions: Year Ended December 31, in thousands 2022 2021 2020 Subscription revenue: Revenue included in prior period deferred revenue $ 655,448 $ 463,609 $ 337,299 Revenue generated from same period billings 568,277 407,096 238,098 Total subscription revenue $ 1,223,725 $ 870,705 $ 575,397 Professional services and other revenue: Revenue included in prior period deferred revenue $ 70,786 $ 57,866 $ 39,253 Revenue generated from same period billings 164,117 147,093 148,872 Total professional services and other revenue $ 234,903 $ 204,959 $ 188,125 |
Schedule of Revenue from External Customers by Geographic Areas | The following table summarizes revenue by region based on the address of customers who have contracted to use the Company’s cloud platform: Year Ended December 31, in thousands 2022 2021 2020 United States $ 1,020,670 $ 758,997 $ 552,221 International 437,958 316,667 211,301 Total revenue $ 1,458,628 $ 1,075,664 $ 763,522 |
Schedule of Property, Plant and Equipment | The estimated useful lives by asset classification are generally as follows: Computer equipment 3-5 years Furniture and fixtures 5-10 years Server equipment 5 years Vehicles 3 years Internal-use software 2 years Buildings 25 years Leasehold improvements Lesser of useful life or remaining lease term Property and equipment, net consisted of the following: As of December 31, in thousands 2022 2021 Internal-use software $ 50,488 $ 29,047 Server equipment 19,192 28,176 Leasehold improvements 88,254 80,301 Computer equipment 25,999 21,470 Land 13,383 13,383 Buildings 61,345 61,346 Furniture and fixtures 3,158 2,857 Software 3,034 3,252 Construction in progress 27,533 10,717 Total property and equipment $ 292,386 $ 250,549 Accumulated depreciation and amortization (76,741) (58,222) Property and equipment, net $ 215,645 $ 192,327 The Company recognized depreciation and amortization expense related to its property and equipment as follows: Year Ended December 31, in thousands 2022 2021 2020 Cost of revenue $ 27,865 $ 20,946 $ 18,588 Research and development 5,969 3,456 2,010 Sales and marketing 8,552 6,105 3,667 General and administrative 1,849 1,372 738 Total depreciation and amortization expense $ 44,235 $ 31,879 $ 25,003 |
Schedule of Property and Equipment by Geographic Areas | The following table sets forth property and equipment by geographic area: As of December 31, in thousands 2022 2021 United States $ 183,892 $ 168,145 International 31,753 24,182 Total property and equipment, net $ 215,645 $ 192,327 |
Schedule of Finite-Lived Intangible Assets | The Company recognized amortization expense over the estimated useful lives related to its acquired intangible asset as follows with the related weighted-average remaining amortization period as of December 31, 2022: Estimated Useful Lives Weighted-Average Amortization Period Cost of revenue Developed technology 1 to 6 years 4.4 years Licenses and certifications 5 years 3.9 years Purchased license agreements 4 years 0 years Developed content 4 years 0 years Sales and marketing Customer relationships 1 to 9 years 3.8 years General and administrative Tradenames 1 to 5 years 0.1 years Purchased patents 9 to 16 years 5.8 years Other intangible assets, net consisted of the following: 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 (71,846) (18,541) Other intangible assets, net $ 210,415 $ 264,500 The Company recognized amortization expense related to its acquired intangible assets as follows: Year Ended December 31, in thousands 2022 2021 2020 Cost of revenue $ 29,914 $ 8,243 $ 1,062 Sales and marketing 22,121 5,441 204 General and administrative 1,270 446 188 Total amortization of acquired intangible assets $ 53,305 $ 14,130 $ 1,454 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | Cash and cash equivalents consisted of the following: As of December 31, in thousands 2022 2021 Cash $ 589,948 $ 123,906 Money market mutual funds 129,944 890,605 Total cash and cash equivalents $ 719,892 $ 1,014,511 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures (Tables) | 12 Months Ended |
Dec. 31, 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 October 1, 2021 $ (85,000) Change in the fair value reported in other non-operating income (expense), net 13,500 Balance as of December 31, 2021 (71,500) Change in the fair value reported in other non-operating income (expense), net 6,500 Balance as of December 31, 2022 $ (65,000) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | The estimated useful lives by asset classification are generally as follows: Computer equipment 3-5 years Furniture and fixtures 5-10 years Server equipment 5 years Vehicles 3 years Internal-use software 2 years Buildings 25 years Leasehold improvements Lesser of useful life or remaining lease term Property and equipment, net consisted of the following: As of December 31, in thousands 2022 2021 Internal-use software $ 50,488 $ 29,047 Server equipment 19,192 28,176 Leasehold improvements 88,254 80,301 Computer equipment 25,999 21,470 Land 13,383 13,383 Buildings 61,345 61,346 Furniture and fixtures 3,158 2,857 Software 3,034 3,252 Construction in progress 27,533 10,717 Total property and equipment $ 292,386 $ 250,549 Accumulated depreciation and amortization (76,741) (58,222) Property and equipment, net $ 215,645 $ 192,327 The Company recognized depreciation and amortization expense related to its property and equipment as follows: Year Ended December 31, in thousands 2022 2021 2020 Cost of revenue $ 27,865 $ 20,946 $ 18,588 Research and development 5,969 3,456 2,010 Sales and marketing 8,552 6,105 3,667 General and administrative 1,849 1,372 738 Total depreciation and amortization expense $ 44,235 $ 31,879 $ 25,003 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease, Cost | The components of lease expense were as follows: As of December 31, in thousands 2022 2021 2020 Operating lease cost $ 29,280 $ 23,078 $ 24,420 Variable and short-term lease cost $ 10,274 $ 7,280 $ 6,171 |
Schedule of Assets And Liabilities, Lessee | Other information related to leases was as follows: As of December 31, 2022 2021 Weighted average remaining lease term 10.7 years 11.9 years Weighted average discount rate 2.08 % 2.07 % |
Schedule of Lessee, Operating Lease, Liability, Maturity | As of December 31, 2022, the maturities of lease liabilities under non-cancelable operating leases, net of lease incentives, were as follows: in thousands As of December 31, 2022 2023 $ 12,068 2024 29,363 2025 31,521 2026 32,168 2027 29,427 Thereafter 177,875 Total minimum lease payments $ 312,422 Less: imputed interest (34,244) Total $ 278,178 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 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 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 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Below is the final 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 |
Schedule of Pro Forma Information | The following unaudited pro forma operating results give effect to the Clarabridge acquisition, as if it had been completed as of January 1, 2020. These pro forma amounts are not necessarily indicative of the operating results that would have occurred if the acquisition had occurred on such date. The pro forma adjustments are based on certain assumptions that the Company believes are reasonable including adjustments to revenue related to the fair value of deferred revenue, adjustments related to the amortization of acquired intangible assets, adjustments for stock-based compensation expense related the assumed and revested awards and awards issued in conjunction with the acquisition, and the tax impact of such adjustments. Year Ended December 31, in thousands 2021 2020 Revenue $ 1,160,641 $ 835,147 Net loss $ (1,112,339) $ (362,274) |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill were as follows (in thousands): Balance as of December 31, 2020 $ 6,709 Acquisition of Clarabridge, Inc. 1,065,335 Acquisitions of Usermind and SurveyVitals 46,724 Balance as of December 31, 2021 $ 1,118,768 Adjustments in purchase price allocations (853) Balance as of December 31, 2022 $ 1,117,915 |
Schedule of Finite-Lived Intangible Assets | The Company recognized amortization expense over the estimated useful lives related to its acquired intangible asset as follows with the related weighted-average remaining amortization period as of December 31, 2022: Estimated Useful Lives Weighted-Average Amortization Period Cost of revenue Developed technology 1 to 6 years 4.4 years Licenses and certifications 5 years 3.9 years Purchased license agreements 4 years 0 years Developed content 4 years 0 years Sales and marketing Customer relationships 1 to 9 years 3.8 years General and administrative Tradenames 1 to 5 years 0.1 years Purchased patents 9 to 16 years 5.8 years Other intangible assets, net consisted of the following: 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 (71,846) (18,541) Other intangible assets, net $ 210,415 $ 264,500 The Company recognized amortization expense related to its acquired intangible assets as follows: Year Ended December 31, in thousands 2022 2021 2020 Cost of revenue $ 29,914 $ 8,243 $ 1,062 Sales and marketing 22,121 5,441 204 General and administrative 1,270 446 188 Total amortization of acquired intangible assets $ 53,305 $ 14,130 $ 1,454 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense for intangible assets for the next five years and thereafter consists of the following: As of December 31, in thousands 2022 2023 $ 51,002 2024 50,885 2025 49,934 2026 41,366 2027 17,156 Thereafter 72 Total $ 210,415 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: As of December 31, in thousands 2022 2021 Accrued wages, bonuses and commissions $ 79,518 $ 93,021 Accrued payroll taxes 9,087 7,295 Other accrued expenses 32,590 25,855 Employee Stock Purchase Plan (“ESPP”) liability 18,924 18,182 Accrued income taxes 15,172 23,049 Total accrued liabilities $ 155,291 $ 167,402 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense, including cash settled, for the years ended December 31, 2022, 2021, and 2020 was recorded as follows: Year Ended December 31, in thousands 2022 2021 2020 Cost of subscription revenue $ 18,798 $ 12,148 $ 4,632 Cost of professional services and other revenue 34,022 25,299 6,737 Research and development 154,972 128,779 68,355 Sales and marketing 208,958 136,532 37,877 General and administrative 617,424 754,382 106,412 Total stock-based compensation expense, including cash settled $ 1,034,174 $ 1,057,140 $ 224,013 |
Schedule of Share-based Payment Arrangement, Restricted Stock Unit, Activity | The following table sets forth the outstanding Qualtrics RSUs and related activity for the years ended December 31, 2022 and 2021: Number of RSUs (in thousands) Weighted-Average Grant Date Fair Value Outstanding as of December 31, 2020 — $ — Exchanged from Qualtrics Rights and SAP RSU Awards 12,872 30.04 Granted 77,652 44.28 Vested (6,124) 31.14 Forfeited/Canceled (2,236) 41.28 Outstanding as of December 31, 2021 82,164 $ 43.11 Granted 35,490 20.69 Vested (33,967) 41.53 Forfeited/Canceled (7,014) 35.01 Outstanding as of December 31, 2022 76,673 $ 34.17 |
Schedule of Share-based Payment Arrangement, Option, Activity | The following table sets forth the outstanding common stock options and related activity for the years ended December 31, 2022 and 2021: 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, 2020 — $ — Assumed awards from Clarabridge Acquisition 3,204 4.52 Exercised (1,344) 4.22 Forfeited/Expired (5) 7.08 Outstanding as of December 31, 2021 1,855 $ 4.84 6.3 $ 56,684 Exercised (353) 4.62 Forfeited/Expired (34) 6.06 Outstanding as of December 31, 2022 1,468 $ 4.87 5.1 $ 8,091 Vested and exercisable at December 31, 2022 938 $ 4.62 5.0 $ 5,407 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | in thousands (except share amount) Year Ended December 31, 2022 2021 2020 Numerator: Net loss attributable to common shareholder $ (1,061,478) $ (1,059,146) $ (272,502) Denominator: Weighted-average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic and diluted 584,285,678 516,869,588 423,334,994 Net loss per share attributable to common stockholders, basic and diluted $ (1.82) $ (2.05) $ (0.64) |
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 December 31, 2022 2021 2020 Qualtrics restricted stock units 76,672,908 82,163,894 — Qualtrics options 1,467,828 1,854,965 — Qualtrics employee stock purchase program 2,144,827 687,000 — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | For the years ended December 31, 2022, 2021, and 2020, the Company’s loss before income taxes was as follows: Year Ended December 31, in thousands 2022 2021 2020 Domestic $ (1,122,995) $ (1,076,281) $ (297,724) Foreign 82,418 29,100 41,699 Loss before income taxes $ (1,040,577) $ (1,047,181) $ (256,025) |
Schedule of Components of Income Tax Expense (Benefit) | The federal, state and foreign income tax provisions are summarized as follows: Year Ended December 31, in thousands 2022 2021 2020 Current taxes: Federal $ 15,848 $ 19,886 $ — State 1,008 515 166 Foreign 22,527 3,218 6,970 Total current taxes $ 39,383 $ 23,619 $ 7,136 Deferred taxes: Federal $ (11,253) $ (12,582) $ — State (10,008) (1,829) — Foreign 2,779 2,757 9,341 Total deferred taxes (18,482) (11,654) 9,341 Total $ 20,901 $ 11,965 $ 16,477 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, in % 2022 2021 2020 Tax at U.S. statutory rates 21.0 % 21.0 % 21.0 % State tax, net of federal tax effect 0.9 (3.8) 3.4 Foreign taxes (2.4) (1.0) (3.2) Items not deductible for tax 0.2 (0.1) (0.3) Equity compensation (16.9) (13.4) (0.3) Tax credits 1.3 1.2 6.7 Changes in valuation allowance (7.7) (6.4) (27.6) Changes in tax reserves 0.1 1.6 (5.0) Tax rate change 1.6 0.1 (0.6) Other items, net (0.1) (0.3) (0.5) Effective income tax rate (2.0) % (1.1) % (6.4) % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets (liabilities) are as follows: As of December 31, in thousands 2022 2021 Deferred tax assets: Investment in partnership $ — $ 203,480 Tax credits 34,521 34,718 Reserves, accruals and other 18,712 8,304 Deferred revenue 206,457 — Stock compensation 57,879 8,088 Net operating loss carryovers 78,684 74,127 Lease liability 79,023 32,414 R&D capitalization and amortization 57,377 — Gross deferred tax assets 532,653 361,131 Valuation allowance (339,912) (262,919) Net deferred tax assets 192,741 98,212 Deferred tax liabilities: Compensation accruals (79,055) (17,785) Intangible assets (41,095) (71,125) Leases - ROU asset (62,497) (31,312) Other (12,916) (1,547) Total net deferred tax liabilities $ (2,822) $ (23,557) |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to unrecognized tax benefits for the periods December 31, 2022 and 2021: As of December 31, in thousands 2022 2021 Beginning balance $ 12,364 $ 28,130 Additions for tax positions related to current year 3,905 9,852 Additions for tax positions related to prior year 89 1,032 Reductions for tax positions related to prior year (2,572) (26,162) Cumulative translation adjustment (560) (488) Ending balance $ 13,226 $ 12,364 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - 2020 Stock Split and Capital Reorganization (Details) - Class B common stock | Dec. 21, 2020 shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares |
Class of Stock [Line Items] | |||
Common stock, shares outstanding (in shares) | 423,170,610 | 423,170,610 | 423,170,610 |
Conversion ratio | 4,231,706.1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Segments (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Professional Services and Other Revenue (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Contract assets, current | $ 22.3 | $ 18.1 |
Contract asset, noncurrent | 19.9 | 14 |
Deferred revenue | $ 31.3 | $ 33 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies - Revenue Included in Prior Period Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subscription | |||
Disaggregation of Revenue [Line Items] | |||
Revenue included in prior period deferred revenue | $ 655,448 | $ 463,609 | $ 337,299 |
Revenue generated from same period billings | 568,277 | 407,096 | 238,098 |
Total revenue | 1,223,725 | 870,705 | 575,397 |
Professional services and other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue included in prior period deferred revenue | 70,786 | 57,866 | 39,253 |
Revenue generated from same period billings | 164,117 | 147,093 | 148,872 |
Total revenue | $ 234,903 | $ 204,959 | $ 188,125 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Remaining Performance Obligation (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 2,174.6 | $ 1,732.8 | $ 1,144.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 1,202.3 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 1,458,628 | $ 1,075,664 | $ 763,522 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,020,670 | 758,997 | 552,221 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 437,958 | $ 316,667 | $ 211,301 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Stock-Based Compensation, including cash settled (Details) | Dec. 31, 2022 $ / shares |
Accounting Policies [Abstract] | |
Fair value of underlying common stock (in Euros per share) | $ 35 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Advertising and Promotional (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Advertising and promotional expense | $ 5,000 | $ 5,700 | $ 4,600 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Accounts Receivable and Allowances (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowance for bad debt | $ 8.6 | $ 1.5 | |
Bad debt expense | 7.7 | 1.4 | $ 0 |
Allowance for cancellations | 28.8 | 17.5 | |
Deferred Revenue | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowances increase (decrease) | 8.1 | (10.3) | 15.2 |
Revenue | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowances increase (decrease) | $ 3.2 | $ (2.4) | $ 3 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Deferred Contract Acquisition Costs, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Deferred contract acquisitions costs | $ (133,234) | $ (99,869) | $ (111,686) |
Amortization period of deferred contract acquisition costs (in years) | 5 years | ||
Amortization of deferred contract acquisition costs | $ 71,623 | 50,038 | 32,098 |
Impairment loss | $ 0 | $ 0 | $ 0 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Impairment | $ 0 | $ 0 | $ 0 |
Property and equipment, net | 215,645,000 | 192,327,000 | |
United States | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | 183,892,000 | 168,145,000 | |
International | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | $ 31,753,000 | $ 24,182,000 | |
Computer equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (in years) | 3 years | ||
Computer equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (in years) | 5 years | ||
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (in years) | 5 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (in years) | 10 years | ||
Server equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (in years) | 5 years | ||
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (in years) | 3 years | ||
Internal-use software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (in years) | 2 years | ||
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (in years) | 25 years |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Internal-use Software (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 19.4 | $ 13.5 | $ 12.5 |
Internal-use software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 24 months |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 4 years 4 months 24 days | ||
Developed technology | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 1 year | ||
Developed technology | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 6 years | ||
Licenses and certifications | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Weighted-Average Amortization Period | 3 years 10 months 24 days | ||
License agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 4 years | ||
Weighted-Average Amortization Period | 0 years | ||
Developed content | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 4 years | ||
Weighted-Average Amortization Period | 0 years | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 3 years 9 months 18 days | ||
Customer relationships | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 1 year | ||
Customer relationships | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 9 years | ||
Tradename | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 1 month 6 days | ||
Tradename | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 1 year | ||
Tradename | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Amortization Period | 5 years 9 months 18 days | ||
Patents | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 9 years | ||
Patents | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Lives | 16 years |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Abstract] | ||
Cash | $ 589,948 | $ 123,906 |
Money market mutual funds | 129,944 | 890,605 |
Total cash and cash equivalents | $ 719,892 | $ 1,014,511 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Related party transaction, tax sharing payments, fair value | $ 65,000 | $ 71,500 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ (85,000) | |
Change in the fair value reported in other non-operating income (expense), net | $ 13,500 | $ 6,500 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other non-operating income (expense), net | Other non-operating income (expense), net |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 292,386 | $ 250,549 |
Accumulated depreciation and amortization | (76,741) | (58,222) |
Property and equipment, net | 215,645 | 192,327 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 50,488 | 29,047 |
Server equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 19,192 | 28,176 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 88,254 | 80,301 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 25,999 | 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 | 3,158 | 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 | $ 27,533 | $ 10,717 |
Property and Equipment, Net -_2
Property and Equipment, Net - Schedule of Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | $ 44,235 | $ 31,879 | $ 25,003 |
Cost of revenue | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | 27,865 | 20,946 | 18,588 |
Research and development | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | 5,969 | 3,456 | 2,010 |
Sales and marketing | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | 8,552 | 6,105 | 3,667 |
General and administrative | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization expense | $ 1,849 | $ 1,372 | $ 738 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Dec. 31, 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) | 13 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating lease cost | $ 29,280 | $ 23,078 | $ 24,420 |
Variable and short-term lease cost | $ 10,274 | $ 7,280 | $ 6,171 |
Leases - Other Information (Det
Leases - Other Information (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted average remaining lease term | 10 years 8 months 12 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 | Dec. 31, 2022 USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2023 | $ 12,068 |
2024 | 29,363 |
2025 | 31,521 |
2026 | 32,168 |
2027 | 29,427 |
Thereafter | 177,875 |
Total minimum lease payments | 312,422 |
Less: imputed interest | (34,244) |
Operating lease liability | $ 278,178 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Oct. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Adjustments in purchase price allocations | $ (853) | |||
Other assets | (6,941) | $ (18,308) | $ (7,592) | |
Other liabilities | 45,003 | $ 4,712 | $ (9,826) | |
Acquisition of Clarabridge, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquired shares effectiveness period (in months) | 12 months | |||
Shares issued upon acquisition (in shares) | 24,142,065 | |||
Business acquisition, share price (in dollars per share) | $ 43.88 | |||
Adjustments in purchase price allocations | (1,300) | |||
Acquisition related costs | 13,300 | |||
Total assets acquired, net | $ 1,267,682 | |||
Acquisition of Clarabridge, Inc. | Class A common stock | ||||
Business Acquisition [Line Items] | ||||
Shares converted to stock options | 3,203,885 | |||
Acquisitions of Usermind and SurveyVitals | ||||
Business Acquisition [Line Items] | ||||
Adjustments in purchase price allocations | 800 | |||
Acquisition related costs | 2,100 | |||
Total assets acquired, net | 61,943 | |||
Adjustments in purchase price allocations, decrease in intangible assets | 800 | |||
Other assets | 100 | |||
Other liabilities | 400 | |||
Goodwill period increase | $ 500 |
Business Combinations - Acquisi
Business Combinations - Acquisition date fair value of the consideration transferred (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Oct. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Cash, net of cash acquired | $ 0 | $ 141,792 | $ 0 | |
Acquisition of Clarabridge, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash, net of cash acquired | $ 81,189 | |||
Total | 1,267,682 | |||
Acquisition of Clarabridge, Inc. | Common Stock | ||||
Business Acquisition [Line Items] | ||||
Fair value of stock options assumed | 1,059,354 | |||
Acquisition of 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 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 01, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,117,915 | $ 1,118,768 | $ 6,709 | |
Acquisition of 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 | |||
Acquisition of Clarabridge, Inc. | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | 101,160 | |||
Acquisition of Clarabridge, Inc. | Developed technology | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | 151,530 | |||
Acquisition of Clarabridge, Inc. | Tradename | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | $ 1,240 |
Business Combinations - Pro For
Business Combinations - Pro Forma Information (Details) - Acquisition of Clarabridge, Inc. - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Revenue | $ 1,160,641 | $ 835,147 |
Net loss | $ (1,112,339) | $ (362,274) |
Business Combinations - Allocat
Business Combinations - Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,117,915 | $ 1,118,768 | $ 6,709 |
Acquisitions of Usermind and SurveyVitals | |||
Business Acquisition [Line Items] | |||
Goodwill | 47,204 | ||
Other assets, net | 947 | ||
Total assets acquired | 68,111 | ||
Other liabilities, net | (6,168) | ||
Total assets acquired, net | 61,943 | ||
Acquisitions of Usermind and SurveyVitals | Developed technology | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | 5,070 | ||
Acquisitions of Usermind and SurveyVitals | Customer relationships | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | 8,440 | ||
Acquisitions of Usermind and SurveyVitals | Licenses and certifications | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible assets | 6,350 | ||
Acquisitions of Usermind and SurveyVitals | 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) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 1,118,768 | $ 6,709 |
Adjustments in purchase price allocations | (853) | |
Goodwill, ending balance | 1,117,915 | 1,118,768 |
Acquisition of Clarabridge, Inc. | ||
Goodwill [Roll Forward] | ||
Goodwill, acquired during period | 1,065,335 | |
Adjustments in purchase price allocations | (1,300) | |
Acquisitions of Usermind and SurveyVitals | ||
Goodwill [Roll Forward] | ||
Goodwill, acquired during period | $ 46,724 | |
Adjustments in purchase price allocations | 800 | |
Goodwill, ending balance | $ 47,204 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 282,261 | $ 283,041 |
Accumulated amortization | (71,846) | (18,541) |
Total | 210,415 | 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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total amortization of acquired intangible assets | $ 53,305 | $ 14,130 | $ 1,454 |
Cost of revenue | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total amortization of acquired intangible assets | 29,914 | 8,243 | 1,062 |
Sales and marketing | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total amortization of acquired intangible assets | 22,121 | 5,441 | 204 |
General and administrative | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total amortization of acquired intangible assets | $ 1,270 | $ 446 | $ 188 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets, Net - Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2023 | $ 51,002 | |
2024 | 50,885 | |
2025 | 49,934 | |
2026 | 41,366 | |
2027 | 17,156 | |
Thereafter | 72 | |
Total | $ 210,415 | $ 264,500 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued wages, bonuses and commissions | $ 79,518 | $ 93,021 |
Accrued payroll taxes | 9,087 | 7,295 |
Other accrued expenses | 32,590 | 25,855 |
Employee Stock Purchase Plan (“ESPP”) liability | 18,924 | 18,182 |
Accrued income taxes | 15,172 | 23,049 |
Total accrued liabilities | $ 155,291 | $ 167,402 |
Promissory Notes (Details)
Promissory Notes (Details) $ in Thousands | 12 Months Ended | |||||
Nov. 09, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Feb. 01, 2021 USD ($) | Jan. 31, 2021 USD ($) exchangeRatio | |
Debt Instrument [Line Items] | ||||||
Repayment of promissory note | $ 0 | $ 2,392,280 | $ 0 | |||
Promissory Note Due to SAP | Loans Payable | ||||||
Debt Instrument [Line Items] | ||||||
Note payable issued for dividend declared | $ 2,392,000 | |||||
Number of promissory notes issued | exchangeRatio | 2 | |||||
Promissory Note 1 Due to SAP | Loans Payable | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 1,892,000 | |||||
Interest rate | 0.14% | |||||
Promissory Note 2 Due to SAP | Loans Payable | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 500,000 | |||||
Interest rate | 1.35% | |||||
Repayment of promissory note | $ 500,000 | |||||
Payment of accrued interest | $ 5,300 |
Common Stock (Details)
Common Stock (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | ||||
Nov. 09, 2021 USD ($) $ / shares shares | Feb. 01, 2021 USD ($) $ / shares shares | Dec. 23, 2020 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | Dec. 31, 2022 vote director | |
Class of Stock [Line Items] | |||||
Number of elected board of directors | director | 1 | ||||
Promissory Note 2 Due to SAP | Loans Payable | |||||
Class of Stock [Line Items] | |||||
Repayments of debt | $ 505,300 | ||||
Class A common stock | |||||
Class of Stock [Line Items] | |||||
Votes per share | vote | 1 | ||||
Class A common stock | Private Placement | Q II | |||||
Class of Stock [Line Items] | |||||
Number of shares issued in transaction | shares | 6,000,000 | ||||
Common stock, par value (in USD per share) | $ / shares | $ 20 | ||||
Redemption period (in days) | 60 days | ||||
Purchase consideration | $ 120,000 | ||||
Common stock, shares issued | $ 120,000 | ||||
Class A common stock | Private Placement | Silver Lake Partners | |||||
Class of Stock [Line Items] | |||||
Common stock, shares issued | $ 550,000 | ||||
Class A common stock | Private Placement | Silver Lake Partners | Share Price 1 | |||||
Class of Stock [Line Items] | |||||
Number of shares issued in transaction | shares | 15,018,484 | ||||
Common stock, par value (in USD per share) | $ / shares | $ 21.64 | ||||
Class A common stock | Private Placement | Silver Lake Partners | Share Price 2 | |||||
Class of Stock [Line Items] | |||||
Common stock, par value (in USD per share) | $ / shares | $ 30 | ||||
Common stock, shares issued | $ 225,000 | ||||
Class A common stock | IPO | |||||
Class of Stock [Line Items] | |||||
Number of shares issued in transaction | shares | 27,380,952 | 59,449,903 | |||
Common stock, par value (in USD per share) | $ / shares | $ 42 | $ 30 | |||
Common stock, shares issued | $ 1,114,600 | $ 1,688,000 | |||
Class B common stock | |||||
Class of Stock [Line Items] | |||||
Votes per share | vote | 10 | ||||
Conversion threshold | 20% |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense, including cash settled | $ 1,034,174 | $ 1,057,140 | $ 224,013 |
Cost of revenue | Subscription | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense, including cash settled | 18,798 | 12,148 | 4,632 |
Cost of revenue | Professional services and other | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense, including cash settled | 34,022 | 25,299 | 6,737 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense, including cash settled | 154,972 | 128,779 | 68,355 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense, including cash settled | 208,958 | 136,532 | 37,877 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense, including cash settled | $ 617,424 | $ 754,382 | $ 106,412 |
Stock-based Compensation - Cash
Stock-based Compensation - Cash Awards (Details) - USD ($) $ in Thousands, shares in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Settlement of stock-based payments liabilities | $ (5,344) | $ (79,397) | $ (388,609) |
Share grants (in shares) | 0.9 | ||
Qualtrics Rights [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vested shares (less than) (in shares) | 0.1 | 1.9 | 8.1 |
Carrying amount liability | $ 1,100 | $ 4,600 | |
Unrecognized stock-based compensation expense | $ 500 | ||
Period for recognition (in years) | 1 year |
Stock-based Compensation - Equi
Stock-based Compensation - Equity Awards (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Sep. 13, 2021 shares | Jan. 28, 2021 installment shares | Nov. 30, 2021 shares | Jan. 31, 2021 USD ($) shares | Jul. 31, 2019 EUR (€) | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Aggregate intrinsic value of options exercised | $ | $ 4,700 | $ 51,200 | ||||||
Option, unrecognized stock-based compensation expense | $ | 9,900 | |||||||
Stock-based compensation expense, including cash settled | $ | $ 1,034,174 | $ 1,057,140 | $ 224,013 | |||||
Qualtrics options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Period for recognition (in years) | 1 year 7 months 6 days | |||||||
Qualtrics options | Maximum | Acquisition of Clarabridge, Inc. | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period (in years) | 3 years | |||||||
Qualtrics employee stock purchase program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Period for recognition (in years) | 1 month 6 days | |||||||
Qualtrics Employee Omnibus Equity Plan | Class A common stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares remaining to be issued (in shares) | 10,100,000 | |||||||
Qualtrics Rights [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exchanged into qualtrics equity awards (in shares) | 100,000 | 5,400,000 | ||||||
Unrecognized stock-based compensation expense | $ | $ 500 | |||||||
Period for recognition (in years) | 1 year | |||||||
Move SAP Plan [Member] | Qualtrics restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exchanged into qualtrics equity awards (in shares) | 100,000 | 1,300,000 | ||||||
Qualtrics RSU Plan | Qualtrics restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exchanged from qualtrics rights and SAP RSU awards (in shares) | 12,800,000 | 12,872,000 | ||||||
Shares authorized (in shares) | 2,227,679 | 61,400,000 | ||||||
RSU awards (in shares) | 76,673,000 | 82,164,000 | 0 | |||||
Award vesting rights percentage | 25% | |||||||
Total fair value of RSUs that vested | $ | $ 770,700 | $ 222,700 | ||||||
Unrecognized stock-based compensation expense | $ | $ 1,986,400 | |||||||
Period for recognition (in years) | 2 years 4 months 24 days | |||||||
Qualtrics RSU Plan | Qualtrics restricted stock units | Time based vesting | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
RSU awards (in shares) | 44,200,000 | |||||||
Award vesting rights percentage | 25% | |||||||
Qualtrics RSU Plan | Qualtrics restricted stock units | Performance vesting | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
RSU awards (in shares) | 17,200,000 | |||||||
Award vesting rights percentage | 100% | |||||||
Number of installments per year | installment | 4 | |||||||
Qualtrics RSU Plan | Qualtrics employee stock purchase program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Option, unrecognized stock-based compensation expense | $ | $ 2,200 | |||||||
Qualtrics Rights and SAP RSU Awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of outstanding stock | 0.93 | |||||||
Salary Adjustment Program | Qualtrics restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 2,500,000 | |||||||
Award vesting period (in years) | 4 years | |||||||
Own SAP Plan | Qualtrics employee stock purchase program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Employer matching contribution percentage | 0.40 | |||||||
Subsidy equivalent per month (in Euros) | € | € 20 | |||||||
Shares purchased under plan (in shares) | 0 | 17,440 | 185,709 | |||||
Stock-based compensation expense, including cash settled | $ | $ 700 | $ 7,200 | ||||||
Qualtrics Employee Stock Purchase Plan | Qualtrics employee stock purchase program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense, including cash settled | $ | $ 26,300 | $ 16,400 | ||||||
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 contribution | $ | $ 25 | |||||||
Qualtrics Employee Stock Purchase Plan | Class A common stock | Qualtrics employee stock purchase program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares remaining to be issued (in shares) | 9,800,000 | |||||||
Shares authorized (in shares) | 12,000,000 | |||||||
Shares reserved for future issuance (in shares) | 12,000,000 | |||||||
Annual increase in available shares (as a percentage) | 0.02 | |||||||
Qualtrics Employee Stock Purchase Plan | Class A and B Common Stock | Qualtrics employee stock purchase program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Annual increase in available shares (as a percentage) | 0.01 |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock Units and Related Activity (Details) - Qualtrics restricted stock units - Qualtrics RSU Plan - $ / shares | 12 Months Ended | ||
Jan. 28, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | |||
Outstanding, beginning balance (in shares) | 82,164,000 | 0 | |
Exchanged from qualtrics rights and SAP RSU awards (in shares) | 12,800,000 | 12,872,000 | |
Granted (in shares) | 35,490,000 | 77,652,000 | |
Vested (in shares) | (33,967,000) | (6,124,000) | |
Forfeited/ Canceled (in shares) | (7,014,000) | (2,236,000) | |
Outstanding, ending balance (in shares) | 76,673,000 | 82,164,000 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding, beginning balance (in USD per share) | $ 43.11 | $ 0 | |
Exchanged from Qualtrics Rights and SAP RSU Awards (in USD per share) | 30.04 | ||
Granted (in USD per share) | 20.69 | 44.28 | |
Vested (in USD per share) | 41.53 | 31.14 | |
Forfeited/Canceled (in USD per share) | 35.01 | 41.28 | |
Outstanding, ending balance (in USD per share) | $ 34.17 | $ 43.11 |
Stock-based Compensation - Outs
Stock-based Compensation - Outstanding common stock options and related activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning balance (in shares) | 1,855,000 | 0 |
Assumed awards from Clarabridge Acquisition (in shares) | 3,204,000 | |
Exercised (in shares) | (353,000) | (1,344,000) |
Forfeited/Expired (in shares) | (34,000) | (5,000) |
Ending balance (in shares) | 1,468,000 | 1,855,000 |
Vested and exercisable (in shares) | 938,000 | |
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) | $ 4.84 | $ 0 |
Assumed awards from Clarabridge Acquisition (in dollars per share) | 4.52 | |
Exercised (in dollars per share) | 4.62 | 4.22 |
Forfeited/Expired (in dollars per share) | 6.06 | 7.08 |
Outstanding, weighted average exercise price, ending balance (in dollars per share) | 4.87 | $ 4.84 |
Vested and exercisable (in dollars per share) | $ 4.62 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted average remaining contractual term (in years) | 5 years 1 month 6 days | 6 years 3 months 18 days |
Vested and exercisable, weighted average remaining contractual term (in years) | 5 years | |
Options, outstanding, aggregate intrinsic value | $ 8,091 | $ 56,684 |
Vested and exercisable, options, aggregate intrinsic value | 5,407 | |
Aggregate intrinsic value of options exercised | 4,700 | $ 51,200 |
Option, unrecognized stock-based compensation expense | $ 9,900 | |
Qualtrics options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Period for recognition (in years) | 1 year 7 months 6 days |
Stock-based Compensation - Sale
Stock-based Compensation - Sale of Class A Common Stock (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense, including cash settled | $ 1,034,174 | $ 1,057,140 | $ 224,013 | |
Class A common stock | Private Placement | Q II | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued in transaction | 6,000,000 | |||
Q II | Class A common stock | Private Placement | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense, including cash settled | $ 20,900 |
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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss attributable to common shareholder, Basic | $ (1,061,478) | $ (1,059,146) | $ (272,502) |
Net loss attributable to common shareholder, Diluted | $ (1,061,478) | $ (1,059,146) | $ (272,502) |
Denominator: | |||
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 584,285,678 | 516,869,588 | 423,334,994 |
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 584,285,678 | 516,869,588 | 423,334,994 |
Net loss per share attributable to common stockholders, basic (in USD per share) | $ (1.82) | $ (2.05) | $ (0.64) |
Net loss per share attributable to common stockholders, diluted (in USD per share) | $ (1.82) | $ (2.05) | $ (0.64) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Weighted-average Impact of Potentially Dilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Qualtrics 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) | 76,672,908 | 82,163,894 | 0 |
Qualtrics options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,467,828 | 1,854,965 | 0 |
Qualtrics employee stock purchase program | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,144,827 | 687,000 | 0 |
Income Taxes - Income (Loss) fr
Income Taxes - Income (Loss) from Continuing Operations Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (1,122,995) | $ (1,076,281) | $ (297,724) |
Foreign | 82,418 | 29,100 | 41,699 |
Loss before income taxes | $ (1,040,577) | $ (1,047,181) | $ (256,025) |
Income Taxes - Tax Provisions (
Income Taxes - Tax Provisions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current taxes: | |||
Federal | $ 15,848 | $ 19,886 | $ 0 |
State | 1,008 | 515 | 166 |
Foreign | 22,527 | 3,218 | 6,970 |
Total current taxes | 39,383 | 23,619 | 7,136 |
Deferred taxes: | |||
Federal | (11,253) | (12,582) | 0 |
State | (10,008) | (1,829) | 0 |
Foreign | 2,779 | 2,757 | 9,341 |
Total deferred taxes | (18,482) | (11,654) | 9,341 |
Provision for income taxes | $ 20,901 | $ 11,965 | $ 16,477 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Tax at U.S. statutory rates | 21% | 21% | 21% |
State tax, net of federal tax effect | 0.90% | (3.80%) | 3.40% |
Foreign taxes | (2.40%) | (1.00%) | (3.20%) |
Items not deductible for tax | 0.20% | (0.10%) | (0.30%) |
Equity compensation | (16.90%) | (13.40%) | (0.30%) |
Tax credits | 1.30% | 1.20% | 6.70% |
Changes in valuation allowance | (7.70%) | (6.40%) | (27.60%) |
Changes in tax reserves | 0.10% | 1.60% | (5.00%) |
Tax rate change | 1.60% | 0.10% | (0.60%) |
Other items, net | (0.10%) | (0.30%) | (0.50%) |
Effective income tax rate | (2.00%) | (1.10%) | (6.40%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Investment in partnership | $ 0 | $ 203,480 |
Tax credits | 34,521 | 34,718 |
Reserves, accruals and other | 18,712 | 8,304 |
Deferred revenue | 206,457 | 0 |
Stock compensation | 57,879 | 8,088 |
Net operating loss carryovers | 78,684 | 74,127 |
Lease liability | 79,023 | 32,414 |
R&D capitalization and amortization | 57,377 | 0 |
Gross deferred tax assets | 532,653 | 361,131 |
Valuation allowance | (339,912) | (262,919) |
Net deferred tax assets | 192,741 | 98,212 |
Deferred tax liabilities: | ||
Compensation accruals | (79,055) | (17,785) |
Intangible assets | (41,095) | (71,125) |
Leases - ROU asset | (62,497) | (31,312) |
Other | (12,916) | (1,547) |
Total net deferred tax liabilities | $ (2,822) | $ (23,557) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance for deferred tax assets | $ 339,912 | $ 262,919 | |
Valuation allowance decrease | 77,000 | ||
Undistributed earnings of foreign subsidiaries | 142,000 | ||
Unrecognized tax benefits | 13,226 | 12,364 | $ 28,130 |
Unrecognized tax benefits that would impact effective tax rate | 11,700 | 10,000 | |
Unrecognized tax benefits, penalties and interest expense | 100 | (1,100) | $ 1,500 |
Unrecognized tax benefits, penalties and interest accrued | 1,400 | 200 | |
Tax Year Expiring In 2032, 2042 And 2026 And 2036 | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforward | 4,100 | ||
Deferred Income Tax Asset | |||
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits | 1,500 | 2,400 | |
Noncurrent Liabilities | |||
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits | 11,700 | 10,000 | |
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 237,100 | ||
Tax credit carryforward | 500 | ||
Domestic Tax Authority | Tax Year Between 2025 and 2036 | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 93,000 | ||
Domestic Tax Authority | Tax Year To Be Carried Forward Indefinitely | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 144,100 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 549,800 | ||
State and Local Jurisdiction | Tax Year To Be Carried Forward Indefinitely | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 233,400 | ||
State and Local Jurisdiction | Tax Years Between 2023 And 2040 | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 316,400 | ||
Foreign Tax Authority | Her Majesty's Revenue and Customs (HMRC) | |||
Operating Loss Carryforwards [Line Items] | |||
Uncertain tax liability | 11,000 | ||
Foreign Tax Authority | Federal Ministry of Finance, Germany | |||
Operating Loss Carryforwards [Line Items] | |||
Uncertain tax liability | (1,600) | $ 6,500 | |
Foreign Tax Authority | Tax Year Will Expire Beginning In 2040 | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 2,400 | ||
Foreign Tax Authority | Tax Years Expiring Between 2023 And 2038 | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforward | $ 15,100 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Beginning balance | $ 12,364 | $ 28,130 |
Additions for tax positions related to current year | 3,905 | 9,852 |
Additions for tax positions related to prior year | 89 | 1,032 |
Reductions for tax positions related to prior year | (2,572) | (26,162) |
Cumulative translation adjustment | (560) | (488) |
Ending balance | $ 13,226 | $ 12,364 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 12 Months Ended | |||||
Nov. 09, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Feb. 01, 2021 USD ($) | Jan. 31, 2021 USD ($) exchangeRatio | |
Related Party Transaction [Line Items] | ||||||
Related party transaction, tax sharing payments, total amount | $ 84,700 | $ 88,500 | ||||
Related party transaction, tax sharing payments, tax provision | 7,700 | 17,000 | ||||
Related party, tax sharing agreement, distribution liability, actual tax return | 12,000 | |||||
Related party transaction, tax sharing payments, fair value | 65,000 | 71,500 | ||||
Accounts Payable | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, tax sharing payments, total amount | 72,000 | 21,500 | ||||
Other Liabilities | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, tax sharing payments, total amount | 12,700 | 67,000 | ||||
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 | exchangeRatio | 2 | |||||
Promissory Note 1 Due to SAP | Loans Payable | ||||||
Related Party Transaction [Line Items] | ||||||
Principal amount | $ 1,892,000 | |||||
Interest rate | 0.14% | |||||
Promissory Note 2 Due to SAP | Loans Payable | ||||||
Related Party Transaction [Line Items] | ||||||
Principal amount | $ 500,000 | |||||
Interest rate | 1.35% | |||||
Payment of accrued interest | $ 5,300 | |||||
Principal Owner | SAP SE | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | 40,800 | 26,400 | $ 11,800 | |||
Related party costs | 48,900 | 56,800 | 38,400 | |||
Due from related parties | 19,200 | 42,000 | ||||
Due to related parties | 15,200 | 13,300 | ||||
Principal Owner | SAP SE | Related Party Transaction, Costs Incurred On Behalf of Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Amounts of transaction | 15,500 | 27,700 | $ 20,200 | |||
Executive Officer | Utah Jazz | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, selling, general, and administrative expenses | $ 7,700 | $ 5,100 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | 12 Months Ended | 27 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Retirement Benefits [Abstract] | ||||
Maximum annual contributions per employee, percent | 90% | 25% | ||
Employer matching contribution, percent of employees' compensation | 5% | 4.50% | ||
Plan partial vesting period (in years) | 2 years | |||
Plan vesting period (in years) | 3 years | |||
Maximum employer contribution | $ 15,250 | $ 13,050 | $ 12,825 | |
Contribution costs | $ 33,300,000 | $ 21,300,000 | $ 16,700,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Jan. 31, 2023 USD ($) role |
Subsequent Event [Line Items] | |
Defined benefit plan, number of roles | role | 270 |
Defined benefit plan, percentage Of workforce | 5% |
Defined benefit plan, benefit obligation | $ | $ 5.8 |