XM - Earnings call transcript Q2 2021 | Qualtrics International Inc

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Qualtrics' Second Quarter Fiscal Year 2021 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your host Mr. Steven Wu, Head of FP&A and Investor Relations. Please go ahead.

Steven Wu

Thank you. Quarter XXXX Second Conference Qualtrics' to Fiscal Earnings Year Call. Welcome

Serafin, call Beckstead, we the CEO; have CFO. On Bachman, Zig Chris Rob President and

answer we line remarks, open questions. to prepared Following will up the

the replay Our press call found website. release, a Qualtrics results, of Relations Investor and can today's be on

our views any not cause are During today's could risks of our securities outlook. federal forward-looking as representative should that of date. today of that expectations. laws. statements statements We obligation reflect make statements will only actual any results disclaim as subject represent These beliefs any as variety uncertainties and and under subsequent expectations call, considered to to a relied events to future differ forward-looking we update views of and concerning from or that statements upon materially our be may be These

December risks including of could year filed the to discussion quarter report the quarterly Form SEC, the further affect a report XXXX on fiscal financial that, our the and for XX, our results, June With Zig. our that For other refer our we SEC. XXXX Form will on XX-Q please with XX, material that important XX-K factors be ended for ended with annual filings and

Zig Serafin

rose The up everyone you, into million, which momentum this as quarter, can today. we're you up remaining thank incredible $XXX.X first outstanding milestone. Well, products is which more accelerating demonstrates in see And to rose for XX% a from a respected with companies that an demand They our management, growth to go and track easier in management XX% million is for it's switch XXX.X Steven. ability us or on their deliver And ever XM. win. in has year-over-year. with surpass QX change which it world's absolutely now which deliver quarter billion to to on employees That's current strong the experience their When CRM, investing to people And systems. And HR guidance, brands. created. been $X the critical increasingly, in year-over-year. jobs the performance why we to is subscription category never million, XX% extends in as compete XXXX, our obligations, ended or year-over-year, companies and conversation. Building success know fiscal XXX.X is experience are than management the quarter our here which for and in quarter the is you seat that revenue joining for to on And experiences to than thank is many that is they experience QX as revenue Revenue of and experiences level board was and up an year. they're that most vital transforming critical or we've largest becoming for are the more Qualtrics.

with fact, Financial the Qualtrics Heavy In of industry we formed Times. they include Mitsubishi leaders Industries than Outfitters, by Urban, increased this the K customers more relationships quarter include XX% Stores, DXC, spending Motors, year-over-year. with new $XXX,XXX In and Honda QX, that Circle American number Urban annually,

as out everyday to It's is point. U.S. of in branch, customers like M&T our journeys quarter the that at a deposits offer and from understand touchpoints tailored use critical can the designing services. and and of Nine Qualtrics M&T with digitally, center, nearly happening they completed in will contact products each their digital needs well any especially for and individual and personal roots of so digital total the sales at is touch simplify experiences time. digital bank deeply to that moment to and deep are as channels now One chose personalize relationships half XX Bank Bank. are over They more the with are technology XXX great and community the improving the business enhance fortune channels M&T bank our

example is every company, DXC, one technology And with of in they a importers transformation on the services transformation great day. their also who for their experienced are deliver Another XXX,XXX focus enhance taking XXX as chose care in their They're that their both on platform their XXXXs simplify the an laser customers as journey, on technology externally of internally management are employees of and enterprise and fortune world. deliver of for they also a largest plus every they enterprises standardize a experiences. customers for to DXC for colleagues can QX, and their them experience Qualtrics platform day. they

all to powerful we business. be products Directory, the security. insights on M&T xFlow, on their management. So their experience In our their IQ action single these invest drive three across services, platform provide brands. and critical services and power a more DXC part our XM these to employees experienced deliver and take customers feel think how they're workflow XM together beginning them going DXC's and a we powerful then their to they customers collaboration, can help and analyzing workplace engagement. QX, to secure and be and all native platform is based the the apps critical engine. data, in together Bank, to numbers data our bring using able which then, launched help cloud experience can to System, company, of able a enterprise enable grade moment tap At them the take interconnected Only productivity that and be Operating and enable like products, companies is and action in by modern of about better are our are feel of into to their their how of them all as actually solution companies the Qualtrics accelerating about we And QX, growth These backed

at scale. Our platforms massive operating

of things a automated system teams sending on XXX% billion million are first this XXX or XM critical our growth of operating year-over-year example, XXXX. alerting executed year, this months like the for to customers rewards. just on actions four in of customers the months record Our four loyalty issue actions increase, updating in represents complete That X.X essential track and a records, our or year,

candidate the ecommerce that loyalty need highest conversion new employee then to any in solutions to and to delivering experience our management feedback they feedback and own to them lines. recruit change With improves give investment and our the of and for and hire candidates. bottom product their attract is real-time leader this customer helps we R&D and talent, actions focused companies the resignation. and In then our then jobs experience that the In Every channels that then insights is digital looking and retention workers employees and help performers, of our of on company, in HR transactions. how customers this line, ahead XM more then their their lifetime, spotlight solution insights is employers retention. to online customer directly act journey from innovation than on increase workplace grow how optimization, single XM journey. the year. revenue rapidly changing their coming our job improve personalize launched I of the and And employees. XX% stay workforce, experience the automated help able drive engagement on letting in employment taking their by needs, drive new actionable market. by closing digital be we're improve customers line, And employee teams right such choice to customers from the product across leading highest more to engaging The becoming across customer to Critical and say leaders optimization rates companies they're great then retaining want shift understanding interactions speak to as based And then, greatest

experience real-time Just this world at their engagement and we'd profiles and work. changing contextual and deliver create in we of the that went Today, work. to building product data of selective the personalized smart organic that new companies announced contextual journeys XM employee shape we strengthens be that growth experiences are launched in said value. customer retention, experience meet we proactively today public, last design to Usermind that companies next every organizations future any and the create This engines of acquisitions. a innovation are that lifetime use innovation world and enhance The feedback customer point helps new generation hybrid companies work way Directory environments and journey office for to our to employee the to work about we in new by transforming experiences in we accelerates When workspaces. with productivity, will richer tomorrow's employee in of customer work from journey. needs the thrive bringing our their touch channel organizations Usermind increases that use is combining acquired platform. Usermind data can orchestration enable week, further

also extend partners to extend to of our the our ecosystem our of We about talked ability benefits platform.

technology the at customer platform, data and sentiment with of experience QX, employee we Qualtrics insights, on customer to ServiceNow and digital from new the single on quickly workflows and know, customer bring a partnership strategic enhancing you workflows act new ServiceNow IT management with to able companies increasing will be into productivity loyalty. Combining beginning as So our of power formed ServiceNow. a

a with bring that We Genesis, build also data. the And partnership contact to cloud their did new with engagement in Qualtrics together experience formed software. that's leader a we center data

world's Resource Qualtrics the SHRM employees, or more for the SHRM leading Human On the Society their of Management, as Association, on XXX,XXX the employee around experience as than members is the business, XM for Platform standardizing world. side HR well the

way, results we're the outstanding be as XXX is than that's grow on QX exceeds we incredible hiring growing and second In making the ahead in able that reflects we And to team, which alone, our world couldn't achieved ever. diversity around our opportunity us focused successful. our right added what scaling largest Qualtrics we're meet have all inclusion our So customers on us. we And of the more our employees, They're it. these company far with thus without quarter team. to

a at we shared Equity and But then commitment Just constantly report journey. work In action And report. that action. testament experience thank to like among DEI paying part of our XM are with taking platform of our we're results when to we're reconfirm then it we still are Qualtrics. men all improve we of we're that's last who comes the our solution to only committed at as in it and to and using Diversity, and our inclusion equally Rob as turn week, closing, talk to take us putting our I'll We team, lot first of DEI do the the on every I'm I'd These and their over have proud measure women In customers to success. as to trust to a to And that our built beginning Rob? their belonging public our that are day. about improve. Inclusion diversity. employees. well numbers. that,

Rob Bachman

for and thank Zig, Thanks, everyone joining us today. you

are results. great report very excited outstanding financial to another accelerating and with We quarter

demand at for growth line Suite Experience customer our Continued Management led scale. top notable to

second We was favorable quarter Total year-over-year, also robust the new customer up strong $XX.X was cash second business up revenue revenue our demonstrated linearity was XX% with and the million second free both representing margin sales in X% in quarter renewals. quarter leverage and growth the year-over-year. the $XXX.X and second revenue other in business in quarter, by million, strong operating quarter. flow non-GAAP year-over-year. Subscription record significant services XX% $XXX.X Professional million for expansions and driven model in

recurring and customers strong revenue with XXX%. Current RPO to our obligations, both XX% performance to continue with of Current recognized revenue base to obligations dollar XX% net revenue contract a quarter future In services drove total grew remaining up expansion rate which all representing be business. million, metric professional in from revenue months, duration under lengthening XX% new for ended contract XXXX both at and and average spending renewals. software year-over-year billion, This our to contracts benefit customer $XXX,XXX future that is performance XX Our than new includes Customer as under $X.XXX contract more renewal customers. annual QX, next all expected up retention the our year-over-year. across is along $XXX.X based remaining in year-over-year. to the

to Turning margins.

from QX XX% total to of XXXX. of year approximately our a higher in increased the Our has non-GAAP ago gross of was margin in XX.X% revenue This basis than points in QX of to revenue XXX subscription revenue. period. a increase is increase percentage QX in mainly in XX% our continued subscription XX% XXXX as due total

partner software to to driving on grow expand focus customers. continue ecosystem our platform our and we experience our services to on management usage As

outflows second and resulting in compared of QX $XX.X stronger subscription quarter ago to as to X.X% by cash due This SAP stock our to to $XX.X in million mix settlement strong stock cash IPO. shift employee was our exchange by $XX.X continuation of elected Our of operating non-GAAP compared liabilities, operating We Qualtrics due the for quarter was significant our QX driven was time a of operating outperformance in awards awards, in period. of events. X.X% their and settled XXXX $XX.X cash stock related the and travel non-GAAP million flow cash cash payouts million million, equity-based the was million, settlement payments, compared year of period. based Free ago negative flow profit to to for at top higher XXXX. SAP million, $XX.X in base reduced to in to QX $X in based margin expansion negative the year to a in by lower QX margins margin decline expansion of negative the gross saw $XXX.X was in awards equity-based cash spend to Operating compared of most relating settled the significantly million payment cash of line

on and cash cash in believe timing to the cash term position basis with cash quarter it's longer a flow performance to As flow we due the best collections, a million strong reminder, horizon. and cash our fluctuate of a over a equivalents. assess We free may ended quarterly approximately cash $XXX.X in

$XXX on total quarter fiscal anticipate for third of outlook, to we to Moving fiscal in QX be our of $XXX year to the year and range million growth to to XX% be XXXX, million revenue million the year-over-year XXXX revenue business in midpoint. of this Within representing XX% midpoint. representing the $XXX million at the year-over-year the at subscription expect we $XXX growth range

non-GAAP We $X.XX outstanding. share loss to per operating and million to $X.XX, shares X% assuming range weighted expect margin of non-GAAP of XXX in X% net the

of ranges, of growth XXXX, and the subscription year-over-year expect $X.XXX $X.XXX fiscal to of revenue revenue subscription growth represents we For million respectively. million. a year At the revenue midpoint the range billion of XX% $XXX in billion total range in the total the this XXX year-over-year and of revenue to XX%

expect in X%. We operating of non-GAAP range the margin to X%

$X.XX outstanding. runway We net shares expect $X.XX, a non-GAAP loss weighted opportunity per share million our assuming closing our very exciting. for within between and market remains In of growth XXX large

we'll to And durable our and and our growth. joining towards We to market you and in the business investments, Thank extend turn did your continue and that strategic call. drive back happy will today's questions operator. this through to are leadership with long-term profitable Zig, for I Chris take it scale

Operator

Mark with from your question sir. first JPMorgan. Murphy [Operator have We Thank you, Instructions]

Mark Murphy

congratulations you you transformation your platform Thank quarter. advanced I forward-thinking doing see fantastic do Zig, more driving the ask with a you maybe customer complete what a Qualtrics very on wanted much that's is and to you're most of might of seeing? experience else Design Product light kind customers? wondering maybe or if earlier xFlow operationalizing some XM something of getting more pathway or that of And or into perhaps the the the for side stage it's XM with and I'm

Zig Serafin

Yes, great question.

not some of It's their well about the of customer how that through forward-thinking, to course connect up customers combination it and how express of that So in operate, the the their as they perspective, how that way innovating but the end only experience first essence the in from do they they what to very if I they experiences you would their off, look customers, the then they at that do engage, as up channels use way they they product realize important they as also then that, say the with brand. employees. the are, shows around that way

across in to products, it we them core are functionality, their is that how make system. of so four platform the consolidating how right the Qualtrics the data and our recruit attract in there's order a thing be they the that system where to they've company, a taking see a beautiful of decisions components, we've product, in that the actioning into drive we've that the company. we're they've that to experiences the all to to they employees, employees the sure standardizing native connected decision-making trend as bring engage they in differentiated And so, different they their with up system. that got solutions, system, about as to connected for able the their end a continue designed customers brand, business. a got do on how many the And people operationalize, way be do, how different we're And that, inform native use to make learned to ability advantage And got about piecemealing employees, uniquely and it's architecture then we've within not because decisions departments way allows and they to make able XM how to design to

epicenter leads of actioning. which of workflow, operating that What's our to point, unique is, our very the about platform Now system. right your we've is part designed into second the

example. with are up are of sensitive a of results you integrating where that daily, to your about up inside instead depending already the organization. learning So you better running a weekly sometimes of to new is HR, with plugging and of for help you're This what's end level, seeing inside end sometimes of the someone to actions running do applications, time enabling employee is whole or a also And to taken kiosk, have running something And a automated, this tool. already on with that then, going decisions tools have do. semi company. long sometimes which go hourly, what's line, front automation, There's desk, that about isn't is would ability and an company, your make fully they workforce the already time a upon that in

that combination do and four to shared culture we're engine core that workflow what that people people systems companies around as uniquely and possible before helps And a record people of standardize develop are to a action. starting we're of why the that's using. is our data And system. never positioned was experiences, of seeing be with might a really individual So the result,

Mark Murphy

Thank can If you, back looking in specific or that RPO is helpful. or quick specific category and and sneak levels where driven? at would But that subscription what's say ever one you getting don't environment the or I you to environment may the company to that's a Rob that, discern, yet QX, the also in And macro current if beyond strength half? pushing or even or Chris. back budget is very pre-COVID versus demand backlog. you of of have know acceleration for I’m the I revenue, come

Chris Beckstead

held to great more more continuation deep U.S. parts quarters. take one. our from a think we're customers Hey, than during pleased previous -- and saw When subscription here. in from of it thought look both Mark. One, enterprise business see of we that customers, invest couple was you really Chris, things. based are and in the seeing I'll seen the smaller, broad that step you're perspective, that from And quarter’s I from demand seeing with at the up an a strong international environment the of corporate terms pandemic. performance growth, really we'd up our the performance

that growth, though important we've seen competitive highlighted the an finally, this one than you quarter, was environment so normal even of the a employee from from that and more lower that this Zig in year. as ever pushed out positive more wise mattering environment of across had the really CRPO becoming retaining first the to as of are a perspective, than finally, year. we seeing all saw. the calculated from another employees. good in a accelerate, covered year where experience trend demand the was some to that's seen attracting, And perspective impact and the and in products, in our was then, we stood their the motivating year employee And it's for pay that current in ever. half we companies billings of then, second seasonality the billings past, product to So more we're that attention as experiences last backwards we've overall year the the a And half that's cues,

loaded also on some results basis. last in normal, impact more first an seeing expect So this more year enhanced those year. metrics you're was backend year is this half the we'd Because on than

Operator

with your from Piper have We Sandler. next question Bracelin Brent

Brent Bracelin

subscription guess I full Rob the raised. Zig, for is this year outlook was or growth for the

year, just think about quarters was bit XX%, rank optimism. the first order in entering I a under XX%. little think that's the two year actually what you at the the surprised looking I as you the of than just driving you less think Could most

I think from be mentioned any color a acceleration you're bit, just a little helpful, rank there would given the seeing. super perspective, but international you

Rob Bachman

Thanks, the There did net is new a business in This renewal Brent, other handful categories. about, uptick across CX of customer is strength are -- in the I Chris And strength products. and to strength we wouldn't XXX%, necessarily And Rob. in get in base. retention and the really there's I'll that. talked a you that our strength there's take and EX rank the rate there jump this quarter. as in see internationally, strength

customers are coming in up, is And momentum than and the ever, platform. back on and business. the as all standardizing experiences consolidating Qualtrics growth more what Zig to what So seeing we're so said and matter continued

Brent Bracelin

at experience of existing stood work, encouraging What's of return adoption experience certainly follow maybe really up all -- there one out. of around sell you to kind customers as a for Is [ph] back employee of it share and cross insights looking any rate obviously, sort [filed] you we're a a adopted? be product? could to that see lot then helpful? as the Well, fully the add areas the just employee Great. the broadly pipeline, super Zig, Thanks. employee Is the experience that of would interests, the opportunity, of value have embraced experience

Zig Serafin

the further have what way of made sort customer They're major with of, got built of that. is the lifecycle experience, of around system we you the comes provide. this looks decision-making physical what recruit areas and happening with that that the of work actually and system purpose midst to more ever, how And the most now a in you We've the actioning up used future that from connected employees. be to being is redesigning leaders partnering of we're all our engage leaders, continues got happens that than a look to engaging one company It's in up which that around and people needs of the some business work around that decisions are the obviously around, on to experience. what in And Well, the do what multi-factor, it. referring conversations differentiate is around able experience end best looks they're lifecycle way of that about that's bear that around with Instead of the and digital employee, intersection right of course, the what in that. that several seeing HR are class things the that, engagement. between with leaders to that playbook impact are out how along data means authentically to involved with a old of like. world, intentional the you've driving the important has like, to the experience people along people are to the to that spectrum that in the like, of understand more highly then, employees a And new engaged deal midst getting an IT candidates into the decision-making,

where less look relationship the you case people So in it's can longer at things see no and between silos that. the

help on variety employee So course, some indispensable side. enterprise also, they design standardize can to the apart platform need and running system still being one, way altogether, the plug but with experience an of in the sort complimentary large it's which systems, a about of in many people is that in to mid-market, in And the experience we're brought of the of with on part of of think HRIS combination. make companies, critical types But employee most order different HRIS the the they to we then, may entirely decisions.

platform that got of those extremely very a positioned where things area. that future We building experience the this the employee the are saw overall last macro XM four as is we've to the it, this on over was at in that we're least on to this seeing the given platform, So the there, going go we're of part underlying at XX-year experience well the point. management. had And years, And advantage there, the innovation beautiful thing we've intentional. five about

that? to So Chris, do add you want to

Chris Beckstead

$XXX,XXX. we that the net is, a to terms ahead more additional still in opportunity for cases products, to within a continue the but good platform, number of giving Yes. more and spending retention for trend use reflected the example, The great we runway only thing early customers our products existing adopt the us and feel momentum who the adopt opportunity platform customers we're lot see customers more other of are seeing growth over expand customers of customers some like rate, in and of We metrics as additional it's we're largest share, the I'd fully say vendors the and of of still have buying days.

Operator

Weiss Keith from question next your have We Morgan with Stanley.

Keith Weiss

one, fit does nice you, to CDP a this little having acquisition kind Outstanding bit, metrics. guys of extent. at certain kind acceleration dive CDP see us of your a the into quarter, into Can it super lot these seems a portfolio. I like interesting. a seems bit a about is I It about where think and of the want tell really to little across a Usermind the

like journeys. sort So one. very looks getting? what functionality guys of Number the was and two, like those focused are marketing you're these Number it marketing net about new

So does with likes and Salesforce. this a Experience while seems get details of the company it’s from scale? any like give competition like you marketing into or from on the cloud suite an like, Adobe us direct the more around size three, The for number been XXXX. can you And

purchase much. so revenue expected basis about Thanks on financials price, rates go or run be forward impacts So anything or on would a the great.

Zig Serafin

Great of Okay. questions series there.

out to very that this something discuss me beginning M&A. our want reiterate the approach we've Let about I said themes to big one, just from here. Number the

You're very and be on going the and moves, see it going to something further we our we to to addressable do growth builds And disciplined, on accelerates us see thoughtful have. you're that market, is further that or that market. the that when accretive in see opportunistic, we will lead our where strengths it, be

around with that They're architecture unique technology from journeys, based simply workforce Usermind the more, that's connects customers far around experience really that They've the experience in work it designed important understand customers more be have we've way going. anything they're a seen directory, own can in complementary, there have accelerates company. lot where authentically, natively to are built perceptions, way doing leading our a been and Seattle, a highly management different And way is, emotions, R&D in very understand the work when we it management OS, with that far but that our that does here. of better on just we've they enabling principle a is in platform. at So we've their orchestration, take some a been What where we Seattle. market. of look things you a to that And significant a the in extremely found we

plugs another designed we it that up So And team way almost system. that this been inside of we've right like Qualtrics, beautifully in. our with in to be connects and working found that's the picking development engineering

that to way that to have, our around the and the experience, So in entity? master customers particular that should address experience us in of of take in think a a what directory, manner, nicely about we in in place be leadership that that How different journey decisions their with engine. the people expect the our enable with workflow do actioning customer an some complements in system of the think a allows order further you advantage what able that increase retention. companies, might order architected to they is going stages record customer ability to it nicely management do critical dovetail what's in on momentum in use that the with to you you be that, context as drive be the the are which able create, the timely with the way How doing most that to or in CDPs to

approximately small allow innovative effectively plug to will are our companies, and engineering it leadership employees, us of mostly XX think right that the space. in and there our So and as R&D advantage accelerate in

Keith Weiss

in And it. this of competitive you suites? Got gets marketing environments, the core competitive terms more with

Zig Serafin

built they spaces. where market never experience we've started at defined we're don't to look we know, I define mean, trying market make shape facing market for think flexible don't of as well lot people customer and certain read-off as operating trying forth. so anyone a the their decisions, in we that, decisions, see decisions how very you customers we way hearing into really a of the category. well customers end And a marketing we actually employees. unique books on to will way what of inform defined. I what more led. been is is And it'll product this affecting most customer do important some is management from that the going. that their build we're what and company informed it decisions in any the and haven't system, ourselves own is where Everything our this that And And to we architecture up as of they

at So that's it. how we look

Operator

Bachman have next your with of Montreal. question from We Keith Bank

Keith Bachman

was couple good differently. was that you a it be the I doing and about ask of a A one you're quarter. we a uptrend this the takes retention to puts XXXs, rate, little the bit my to rate of XXXs, the and And next bit retention little start quarters. wanting thinking should over first ask ago, net year net question about

of rate customers? is about net would thought If the that some technology. net those of of retention of the adopters What of like rate quartiles, to the if you some your retention you for will, aggressive more look say some your

Rob Bachman

And medium I'll cross it stability our rate what with seeing stabilizing, a the take of we you're prior base. upsell, Rob. we this in see realized indicated uptick. along take customer We this. to uptick, add over saw this XXX% lines on, above is to previously the existing the about of where Chris and first we part in is some him. I'll of within sell in to quarters and short the Keith, then, turn Chris to wants continued to this if term, I will talked speaks potential that What what terms runway in it

to it's base incredibly to will we focus as we're that pleased and at customer continue key So build a growing with be for continue where existing us that business.

Chris Beckstead

Keith. Yes,

a color. Just more to add little

avenues, about rate, As platform. product, IPO customers process, during XM add platform. cases when we full net and go individual and adopt about have is an to we the that they that impact you the think multiple additional additional When use adopt of products or talked there's retention those the the across within fully biggest customers across kind expand

vision pillars the capture platform. adopt but you more So the when those for a of full truly the see customers value the more much customer multiple some for get expands experience of that increase is it within sure fully significant CX, and and

to So in drive definitely moved helping recent increase full like of it that helped full emerged seen adopters seen that. that trend those rate again that is that’s quarters and the adopting of it really platform platform recover needle customers of we've on the the we've and

Keith Bachman

Okay.

while ask know to seasonality related out about actually think seasonality. part perspective you. some of of my a of follow this had relative flow issues me to let some there's up, if As I from you anything call you guidance, to upside cash to the largely behind want stock And not want SAP wanted in quarter. just the it put behind I to your that cash flow And context are understand and

tailwind. be So that should a

trajectory getting anything Just look flow and/or December want But a anything you at billings you little including and call billings bit quarters, you. seasonality that you harder. September a the to here the to from wanted out in out helpful. are would Thank growth call the comps to cash be related perspective

Rob Bachman

Yes. that. Happy to on comment

flow, that the in either we accounts having, said So more in could handful remarks, I that looking or flow over have term we QX as of the results QX, prepared QX. there again, results the that we do collected cash we're collect went they did longer is look at believe QX, a in Keith, as a cash of mentioned we at representative as my and were horizon in

impacted that's the relationship when first see what the flow, a free billing basis. got medium which as by in So on over at you'll income expect would this higher cash XXXX a Each you COVID. to you happy a look And where that highlighted us cash percentage that is is year quarter long-term. that half exclude you awards, at to the operating uniquely sequentially on bit better equity SAP to a flow a a with relationship reiterate business exist basis. you'll for to the we that again the if non-GAAP on I'm see point

our favorable we periods half had on comparable billings. has more the comparable as first into half And the and back of more XXXX XXXX, calculated challenging so move periods

Keith Bachman

to solid Many thanks and a quarter. Okay. congratulations

Operator

have DJ Canaccord. Hynes next from your We with question

DJ Hynes

XM. about productized experience. talked to game about terms ask the more response efforts different you like against you slightly that, HR a have of your there in more with of see Brent's resonate our innovation experience them? employees employee walk question, are or folks? close employee decisions any getting probably a just to pros with with HR action, kind Qualtrics talk to sense there around the in that incumbency you advantage of there a Can selling Is system pitch dynamic of are through unified in I Maybe HR the out XM a seems that with employee those of cons me platform and just and there's vendor, question. does It what Zig, want they vendors the made into relationship around for department, already

Zig Serafin

Sure.

tech. referring sort So the experience, to describe order people for That's first at in are right, that let's employees, tech, people management. if area focused now double word, built click you used off words But technology on that terminology. employee three employee of complements a sort look those to employee that that, and are that and the are of uniquely on experience focused you experience other say, okay,

partnering take, on. that brand, less technology versus the a a on of way engaged workforce likely and part is The that equation management, or this experience platform not is et information And actually domain. enables et call, like, What into tool employee affect a a employee to for human listen, bottom important cetera, oriented amplify companies. of? affecting this experience feels the which a complimentary and an critical, drives be So the starts our and that then, engagement? coming noise management right? templates they're of out as do drives that's for intentions, understanding but system results unique example, a create that And information keep leaders, engaged. in we cetera. experience technology experience making while. providers, And communication, sensitive for top This academic are trying and particular Slack, a space research do How people's employee the that team collaboration, few emotions, cycle, tune is are the that companies the employees, connecting affecting is that With to colleagues, in able And virtuous highly what conjunction separate it why in healthcare, teachers, It's ways of we've line not to to upon designed with possible OS, remember actually in, signal that the leverage for relevant. teammates, us. the of the to that what a leader a they they is well are the the very in, be want variety example, the most based to to send their brand? stay? this that, that's be are How they with to tech, set they're with is tool to within time about through likely only tech a they system they do more to a they're with to in How is they to be sets Where able to deeper question successful built time join, way. leave? way about about, you to going someone using and that likely few plus type for once requires sciences XX actually connection that comes some I decisions the Are make employees could is in this line to something actually organization make employee It point the feel up people years, experience feels? you Qualtrics

that momentum, only now. years of an And actually we're we So a see because distinction. relevant be it's continue our that and that's this a things at on critical of continuous employee that the the And important how been for not can span made, system time of is seeing here focused the improvement right difference experience. are variety We've everyday then of design people but now now. lot decisions the to acceleration, around right

this leader center or result, the more and a it They're back we're the out have, CEO, I really fast, or run IT, and Those they oh, they're been tool attitude to we've between sort organizations partnership want what XM that us taking realize long doing has go and important it HR Platform we system. how some is it's the come the they're that's steam decisions. companies a making saying, looking and of run positioned. off silo. of starts of people the real decisions us just for got leader, our direction, most as to one relevant. to our making in at not in what might at customers of that a experience by are because some the leader, As around Head they the of And customer where get and that to a or point with the design partnering never company, And puts that work them, uniquely

multiyear And That's on make result. our as so the platform context. people a decisions

So dynamics. understand hopefully that helps you the

DJ Hynes

in maybe just intuitive on super are products the what's you the question, happening my getting like follow me more services onion more that helpful. Rob, help model? Is business? And required peel in driving change can then, the design services what's the the program bit understand up That is back a it, less just

Rob Bachman

Yes.

that quarter-to-quarter see historical So is shift and I mentioned continues want And in we mix that demand results, that seeing We've remarks, in a point across about services. business. revenue the indicated to trend our will that the are variation, reiterate shift in services in lines, we've talked be of some percentage our this. you you I our get same prepared this how to is also And that you'll that subscription. strong continue. is, which that expect consistent to to Along those my with, that a higher

guidance, quarter. and what variability saw accordance we've the we model is that So in current experienced very our some the we here. that with And updated variability in

Operator

Tillman Terrell from question with Truist Securities. next your have We

Terrell Tillman

solutions. of throw me traction lot it's is in for, really there's with analytics there. you they just Yes. see intrigued Are typically? digital this concept of a the solution do point? Chris how cases? do use for don't experience well Zig, congrats of experience digital or the replacing digital nothing? much something lot companies app this How to And have you vendors, you at business of product your meaningful that a there's experience, what do say I'll as web and Good afternoon, strong I and or know it who out Whether I'm the Rob question But on the improving kind is the results. experience But experiences,

Zig Serafin

question. great Yes,

experience. people where digitally we So first of and on digital, beyond this kind about people of, off, are a to want if now are the in gone idea hey, transformed, mode role focused of you you've think

you And shape play differentiates role engaging employees, end up uniquely. like own your your digital an or redefine destination a brand, is, in have defined as So that of who that experience differentiation, market the in customers, end you ability really you you way keep how the important to your mind. that the to with are accentuate your in it's your further does

happens out have? it's pandemic, two or about, employees? matters like of to guts And the example, isolated go of cohort What after? an during gets customers cetera. what's your and not something with trying business the you where or differentiate doing going dimension. actually just your customers got experience do brands or and offline just affecting market. digital what employee experience, have improving. uniquely it that does of way, have into put market, give the like, with Why? Qualtrics, with how the to tuning cohort? some on We've and in the operational I'm But you in respect the designed in where relationship flight we they for you Why and have day to usually, you're then obviously propensity that it's give et an human around an instance, is the data and factor out me system, attendant and So design to shaping et lot position now How every of a hey, tracking continuously there new created the experience, they're line companies are bring what good. into put business, running There's then go How the clicks, used Why your web, an same to How does might an they session the is, entirely with of is on the don't a not? oh, there's a that implement, involved, pipe like I'm Or in all for the is the something, that that based internet, not play a the colleague, because look intersection many app? reflect et segment your effective and on is to top is, thing you really data digital, What's effort cetera, in the between replay what's upon out the conversion campaign, this experience we equation where a that the cetera, and an there? come the single ad particular experience.

number it, uniquely multi-dimensional What a XM be able the digital on ingest able the regardless and to combination very as to end signal systems, on fabric is the then all in we're holistic Where the what of they Qualtrics that they that depending way you digital a they a are act getting experience What operational view, they get is, doing not whether place. it's are that is then helps lot leverage up depending it's have, in when being other, the technology they're better an back interacting operational get go? involved we experiential we people really startups, to of system. understand rest can whether the call center? and it the to where that whether are with once relevant. when a point they doing walk up just when technology collar data. digital? important into kind store? end up What enabling to data it's call connect it. a end And the to those call focused XYZ that lot Adobe, of be specific doing is let’s vendor we're and the actually the or then the entire are you so, Google, ecosystem result, many part solutions upon an you journeys, And -- further Who from LS, human that data are employee. companies as are of We connected and of and given putting connected Qualtrics do context. it and to customer a engine for different segment And operationally. gives how departments being, that's some ties their a one, because you they that likely the with employee? to help it's view they that Hopefully And enables of call So of workflow And we And the a you positioned they in? customer,

Terrell Tillman

lengthening I Is that. is that's quick in duration? terms theme going And just benefits for are a particular this it just see where because customers? some Rob of and continue some the up longer from longer contract getting to in total help RPO? clearly It contract commitments that does. term legs, we we does real you. from are of, So follow got of your the like, this appreciate something to Thank durations

Rob Bachman

to at have a I continues new still you bit deals, term. this little performance legs think the I to that show to with bit we we contracts year, look recently, significantly a year, multiyear the signing can short as that still more here, we've medium prior drive of strongly, think more the onto had opposed in as up it

So go. a to bit more

Operator

Bank America. next your from Daniel of have Bartus question We with

Daniel Bartus

CDP on wanted attention. and Zig Qualtrics for competitors more ask a Maybe more which potential do of they becoming Are is to to getting or think or time? more and actually I CDPs, partners, more you How just seem be about Chris, CDPs? over directly

Zig Serafin

what I back play really to important. going said I'm which Now, earlier, is

we our customers way to are system about, that end with of use then the with our our about, and that environment do action way the what system, shaping management experience is the us, defined become technology wow, I end an the think the And in? conversations about, us where with operating this and ago, we system customers have. we it where or do company. operating to you enabling this connected business And of think I category follow how of is of do a leading of hey, uniquely to usually this kind plug what I and defining go, more a not that to want inside defined And properties up path want in more started customers company. up we we we we years when foundation, of

happening out, pockets say what's area the a that understanding inside out, a their I look our running holistic would because turns that we've have are got in pockets say, environment. at system When is their CDPs I of it be space, data of customer, connecting that they as is, company. MarTech people you building that's to, So given might the if

to someone you Look the what a continuing And operational can myriad in go better while going want we’re information I say it entirety go of make see help made fragments And And keep customers growth understanding go just individual would you doing understanding that of at that of got area the space, any of -- their the thing. customers, of at to and/or on if or and management Where shaped engage momentum let's different, CRM wherever down you why we've of CDP, can That's your it the experience. plugging did up or customer. master you with think a brand high through they're shaped coming If And experiential public How as data coexist varies experience and saying, around to you've why lots your approach plug information it we're to your Look the own data some up? in, the focus And And journey. we're it to decision then in look, just directory. list, what on substantially. And employees coming can how by help way a actually shows which together, you're momentum Qualtrics lake business can the might far we more did or we're exceeds where comes fragments management pulling player. you've going your be the of and data of by experience they are just get then did? get because it your Many less, further the they in then like in. their and shared that it into, they're be that CDP think that's data from CDP it of maybe saying it in, in taking. is we're seeing a to into with or as directory. the our particular lake, area. a repository, it's that data seen the around plugging part that customer, all shows I CDP of boardrooms.

Daniel Bartus

how tap That's how that the forward? strength can up And SAP you're on you great. a much just Thanks give follow you for that. Chris it? Could into of maybe any going much of as all from latest the then, or us more for And Can you. seeing tapping into the upside base? is be Thanks.

Chris Beckstead

Yes. Chris, I'll take that.

continued One quarter. there, excited signifying areas international. customers is From great a things continued the that with of a is we've it of I growth from the billings, highlighted was from versus momentum billing internationally. momentum one U.S. of percentage SAP, the experienced really that that's $XXX,XXX perspective, continued coming in had the we've support we're the internationally well think about It momentum, of as plus international highest internationally those terms strong we've as the was seen in

ability, that other land So that's to then most to help exciting workforce other with well. and as other support be take SAP into on. then, global SAP acceleration with seeing partners We're have be now customers in an SAP, wildly expand own, announced continue. beyond investments And we experience also ServiceNow, part given also where them time we're I'd that but anticipate then at internationally, we able we that to to from continued And perspective, say base. to the them, can quarter the partners we've those our like making customer tap is global have and leverage and is successful partner last to goes that had them we the we as their

Operator

Walravens We have your JMP from next Securities. with question Pat

Pat Walravens

decisions. add you've Hey, some several important from times And Zig make Qualtrics data of companies their the of today, I'll to help congratulations. my most about, role talked

you leveraged what one that So if most important to get to the have to a I is have example, make the decisions Qualtrics would had of love that. make you hear would recently, good how you and maybe data

Zig Serafin

experience than example. an many I you just employee matters will give like more Obviously, ever. other companies,

and executive market, you new QX, I've time not industries. it's board So of spoken I've what not recruit that quite mind our for across during how and candidates, across hired be an employees that we're tune a XXX people is and Qualtrics, different we own boiler pandemic, tech, got how the platform the different there's territory people. company where It's are realities interacted take. a different not top with, at to today. employees just industries region new but in they successful around impact and to you actually to not be this to your able to with competitive a different, world upon approach plate operating topic. there's the where the you listen And that in then need different in depending over employees in regions many levels using have people as many at the But having extremely in just in XXXX of a company, within in We've order you're retain many a

addresses for work things things as mind So using our with brand. experience system the both office for people. to the environment as digitally, the of are design well personal, that that the actually team-based our that in workforce, both physical top They're resonate

not make different to having Social the top than and we mind actually upon with. depending thing. the we're people these weigh, be a that now engage of world end to in August are where for October, that August you're work thankfully of operating want that all the a And they're be region the different factors and done It's decisions The that in. of right are factors end dealing want of are are with system. made of one we and that that people where that that things to dynamic of weigh last year, they decisions and of they we kind affect new

up highly affecting will make our on we and our need be So is to needs leaders our our how the with are so them, the what that experience to of use actually the with there's design drives customers, these engage experience, side. go decisions to operate data what customers, us on are and we between they we're that which accommodate high customer in into There's deeply we able oriented? and to workplace learning best dynamic employee deep usually lead sometimes system engaged a to making, customers with And up we rates retention which the important things at to we what way and performance, all rates. are a the tuning the that system. employees two infrastructure Often leads budget-oriented, sometimes it’s happy experience leadership you that intersection are expansion way decisions to end connect

So et plays way it that's sneak cetera. bit peek the of out a little into a

Operator

from have We ISI. question next Materne your Kirk with Evercore

Kirk Materne

try of, my or I'll us in dynamic big right go When congrats organization. it you think at a at with an there states the they now I able from do more investor would are seem add right seeing that many to numbers, the have customers. can give NRR obviously guys is on they they of you're do And perspective? going to platform engagements attack into idea you that just more you're in stakeholders, stakeholders it a service Or the just mean, once, curious, quarter. now. organizations? you out renewals, Do Qualtrics that it's meaning? of interested in Zig the sales you Because time? I bigger customer how is the on or stage Chris, people HR if organization, make more playing table same being kind your Are decision at the both these after across all now And from experience sort that experience that

So I that. on comment few a want Thanks. just

Chris Beckstead

Kirk. question, Good Yes.

will for question think today. this I be our last

team, you the fully customer, experience, not caring and benefits involvement deployments they're and the we're the employee the decision-making experience, it's each whether in a executive Officer, so the delegating, second other may your see the in brand, who or on number is, of about is your definitely happening. marketing not being what more They're about care we're CMO will happening. So it's and if thinking to one, side of simultaneously, your about across And Couple a your the then one value while number or happening is they're CEOs seeing single that's is terms People they're the otherwise. member things talking what's Chief your one, be are customers involved or employee, of whether decision, on while and oftentimes drives saying typically more it's that, their platform.

a making And experience other. from they the seeing And consolidation and seeing platform on from single so, consolidate employee it's technology, being and wanting overall. that paying the in the what platform when single to area IT to they're area, have one a decision having a they're involved. benefit one that benefits the can They're of have, value trend of they're deployed, a and to the side, they whether attention understanding

but initiatives a I say they sometimes you're it's a and of what's decision across here the other. seeing when talking leg on I'm sometimes of also single going each deploying or for used multiple I'd helping I decision that benefits board, us that cross they're thinking as the are areas want about, And up. us be making a to my a hey, being definitely companies make have other So the platform to to they're in to want gives company able leverage

Operator

the time. for Zig I'm back remarks. like this showing no questions now conference at would turn I Serafin, closing CEO Mr. to further to any

Zig Serafin

look time you with to appreciate Well, thank forward talking soon. and you us your joining all for we today. We

Operator

participation. call. today's you Thank this conference Ladies your concludes and gentlemen, for

now disconnect. You may

Qualtrics International (XM) 21 Jul 212021 Q2 Earnings call transcript