XM - Earnings call transcript Q4 2021 | Qualtrics International Inc

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Operator

Thank you for standing by, and welcome to the Qualtrics Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be question-and-answer session. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host Mr. FP&A Relations. of Head Wu, and Investor Steven Please go ahead.

Steven Wu

Qualtrics and fiscal you, and XXXX quarter to welcome call. Thank year fourth earnings conference

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

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

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

most measures To on posted that, to not Zig. the earlier for and are over out SEC XX-K filed could our our considered measures today representative expectations views Relations GAAP. be relied any sections These these subsequent non-GAAP presentation, differ future to filed materially events release actual of will expectations. and concerning of statements subject We'd will forward-looking today's statements that we make Investor to will factors results Please date. any beliefs reconciliation from are addition today which laws. I of with see call, press presents including the accordance as between upon it MD&A website. refer refer Investor the views for press securities substitute statements may only risk disclaim our GAAP that and and recent We year measures, company to the a to risks non-GAAP the turn of like forward-looking be release and During our please our both cause update With statements outlook. in of filings, be and to federal reflect that XX-Q that also of as These represent obligation to XXXX. our point not as under or in variety a in that to should our any as and fiscal our uncertainties financial and our calculated Relations

Zig Serafin

CRM quarter was bringing robust today. this our fourth caps only year year-over-year the year-over-year. XX% Qualtrics. $XXX it annual phenomenal in the And was of joining are is to data it. billion take billion is off quarter QX accelerating outstanding XXXX growth XXXX business million, an becoming and was for at year-over-year in growth, for Management midpoint. annual critical revenue to and to of the you Revenue fiscal up customers XX% growth a at record and just us or your up is revenue up this for XX% the $X.X Thank size year golden. was our quarter, scale. momentum, year-over-year subscription and Because to our pass Experience as million. And we $X.XXX We're feeling revenue expect we through And revenue And your $X.XXX milestone. not representing for XXXX $XXX was $X success ability and year QX our action on strong as of total then this XX% employees revenue understand any fiscal billion. billion, HR to subscription did system. how consecutive that

experiences important. easier also where where have are for XX-year market. significant leaving employees ahead. jobs a more change our world rates, a this been a have start demonstrates we and their We as providers than have record head to opportunity And service companies it's on at In growth customers deliver never the ever that

quickly for becoming enterprises. retention the net strategic QX partner illustrates rate XXX% Our in we're that

wherever with it then our Clarabridge, secure bring that action their changing system product we're they're enables of a customers platform of that saying, discover new Clarabridge operating that are and including brand helps a to our layer omnichannel conversational game that they to organizations social and saying organizations chats media, continually and customer, adds acquisition the in e-mail, calls, together again. support single deliver. and experience platform analytics it leader analyze data, is cloud-native everything improve automated take reviews. employee, the product all the experiences Our and their XM to in critical And employees

productivity. services by talent, anywhere. experiences And product are acting our look listening resignation, attract as that customers the and feedback and best designing growth retain Experience new and working engagement want strong from to employees. to increase customer next Amid their on Our they're of seeing ways products we're the Employee their great line, customers employee by companies improve designing in

Let what or saw me couple least a at give example from we of examples quarter. -- you of this an

to which adding employees in As travel a a resets, labor its XXXX Southwest this for Airlines ambitious number in challenge market. company of significant is goal of workforce an has any

its expanded relationship our Candidate solution. Experience in with Southwest Qualtrics invested and

process, interview they important way can to the act most on understand a onboarding candidate's to and the all journey company. from So along moments through the the

in customers Experience Mitsubishi is At across Cummins, of or Maryland. State HSBC today adoption XXXX. more organizations leading BP, our critical they to to added understanding in $X the the year-over-year. And enable formed XXXX everything million groundswell expanded by our new an that the Because of Experience investing a we views And such X IDs relationships their as on Motors, customers customers XXXXX is in company they system. to We're innovation identify They're more new individual Experience innovate increase to them or We advertisers view we more organization. of chose globe on by to on to end we their than focus get major also all out a to Ultimately, And deep and empower teams. are with training we an using of results. employees. are of a opportunities. the unified will deliver customer-facing a customers of their QX, before. teams with exciting powerful annually personalize than enables organizations we're of XX% Qualtrics success. our continue and ID that innovate teams we segments are then can to geographies And the relationships products and build product unlock sharing greater zoom zoom and XXXX ID. formed create their to more QX strengthen faster scale. And organizations seeing experiences them that have feedback we our then Comcast. billion This their and helping QX across relationship help get ever in Qualtrics publishers of In or their relationships based with build than to of platform detailed and a experiences had an closer all new we AXA, preferences at relationships market on can single to like these Qualtrics trusted and now that around sales XM built operating and spending our data. customer with lines. their service with value with our system, provides launched In teams customers culture XXX intense customers' and all deeper people

it's workflow a apps into systems platform with not or action. their such And mobile code as record such powerful engine. insights with of of e-commerce can when system Our systems clicks or our connected is as engagement anyone HR or turn of CRM action systems using customers'

year. SAP, that integrations As we quickly ServiceNow data use more more systems That XXX organizations than act Xx the like on rapidly companies we and day. time experience grow Zendesk lets with at nearly in Salesforce, it and ecosystem last collect have they our this every

continue will growth to deliver value customers. our areas and invest in We to that greater supercharge our

assess in that paying and deliver feedback able is first. to of we're the for be patient and our and US Qualtrics care One their Management Trinity leadership to international quarter standards for International health company action its CAHPS In the for acquired in from we health key In which platform and to Experience are increasing gather well-being families care. came the of is Experience outside services. is XX approved key and which standards that experiences XX virtually. to making areas health hospitals of investments those SurveyVitals off. in they'll analytics Management chose company another administer lever is us verticals. better a support are person us. extending company November patients And both QX demand as Health The In experience. revenue With take the across growth hundreds XX% all providers

acquisition solutions most needs. systems with point received Finally, response This Clarabridge. that now tremendous Management of a are is of and our emotion replace sentiment Clarabridge already we've the understanding the our is quarter, feedback is been enable and their Barclays for to for can retail as opportunities to added of single platform uniquely and one into analysis technology all particularly the Bank. of intent advanced to analytics. Qualtrics Experience because Clarabridge A looking part And companies meet rapidly creating their unstructured of has bank. media part customer And digital, this, expand for years. many in platform. of using voice great example is Clarabridge social Barclays to they us is

first and like today, new employees now organization. driving, was Johnson, hire for our Chief company. wherever Marketing joining I of I as experience multibillion-dollar hard has a Beats is thank center or across couldn't them lead want marketing Salesforce, executives Apple with business efficiency. foundation two powerful So, XXX great Health, they with power Adobe. provide technology help to Salesforce customers a leader SAP XXX-degree in from company Global they're at Officer recently DP Executive, the it. single of comes this the public have than uncover everything build financial with it's teams from helped we We a call QX incredible And new sales strengthened saying and led our by to Twilio us our Bhargava, growth are Microsoft, the and XXXX, long-time and segments an team get will be a that and saying as has system digital beginning we this more view who Dre; members, quarter companies joining our the finish Omar and appointment hiring driver another and are Barclays our of and he DP more results a work. Brightful where talent retaining unit. At QX for most strategic announcing Qualtrics. them social team And to that Revenue like in another growth to of the will their was is of global from their any Ritu leadership in a Attracting a Salesforce. ultimately Board year and whether opportunities made Salesforce QX proud And for incredible

long-term to We hand results. Qualtrics And with it that, growth. more building discuss to Rob over for durable detailed are to I'm clearly going

Rob Bachman

good Zig, Thanks and afternoon, everyone.

the full of $X.XXX and XXXX. XX% year-over-year XXXX, an million, full year from As XX% quarter million, now fourth the on for then was recognized year-over-year. Clarabridge to finish and $XXX fourth year XX% total touch of Zig outlook and up was I'll the up quarter Total calendar billion go noted up highlights had year-over-year. adjustments. our for excellent quarter, revenue in $XX purchase Subscription we QX accounting some net revenue million XXXX. QX into was Fourth revenue for fiscal contribution $XXX year the and

$XXX the XX% annual approximately $XXX which included billings million, quarter, had of representing the full for million and respectively. $X services fourth quarter $XX billion the The revenue business $X.XXX in an XXXX. fourth revenue balance in million For billings $XX was to quarter deferred for contributed Clarabridge after to million the X% fourth XX% XX% occur almost year, year, fourth QX. growth of purchase million, QX being year-over-year write-down. representing the such million was full growth of Professional the year, year-over-year calculated $XX full accounting the full year. that full last services $XXX the subscription were Calculated subject million year and subscription quarter from of revenue million half XXXX. up compared year the X% is in for seasonality revenue in $XX for Clarabridge in Calculated of and revenue billings opening contributed one-time and up a Clarabridge year-over-year. Clarabridge and

future billion, revenue is all the to services contract under business. $X.XXX the XX is includes contracts year-over-year. months, XX% up Our up along that in obligations recognized next new was and revenue as professional our expected representing remaining billion, contract with XX% metric performance obligations, software performance $X.XXX which both under year-over-year. Current renewal year at all ended revenue future be remaining This

deeper rate increased family. retention usage strong we they within quarter, standalone dollar-based fourth and net reflects our product Our each existing the different seeing XXX% the are motion in across upsell customers pillars to in expand which experience as their

this in in our grew the than customers. of $XXX,XXX recurring the spending X,XXX more XXX annual recurring Clarabridge year-over-year XX% revenue in We Customers of XXXX. anniversary XX will than begin metric Zig including mentioned at to customers faster XX% annual of at revenue in to reach one-year end QX XXXX as grew more earlier, after acquisition. $X And spending million the from even customers customers

to Turning margins.

As and the be time gross we Clarabridge price revenue. period a of acquisition by but the XXX% operating call, incur for discussed on margins our negatively of last we will impacted accounting of write-down won't recognize XXX% in the purchase the expense will because

XX.X% software revenue Our QX of our Subscription consistent QX revenue total to increase non-GAAP a as in our with XXXX platform. on on to revenue focus driving total gross XX.X% QX XX.X% period. of of as we margin growth ago the continues was from XXXX percentage year of in

compared to stock-based quarter negative the accounting in to This million our the negative to operating non-GAAP to impacted for of ago XXXX, negative our for QX flow Purchase $XX $X.X payment also lower related $X X.X% was for X.X% million. of period. million, in the QX in to Clarabridge compared XXX to a cash delivered approximately SAP is the in We impacted cash of the of settlement XXXX. XXXX fourth was acquisition Free in compared significantly related million, purchase was In expansion QX of $XX was headquarters payouts year million to and for outflows price $XXX XXXX. XXXX. margin profit each was of ago flow quarter non-GAAP operating profit awards. in $XXX Our the liabilities, in operating year-over-year Operating quarter million, QX million margin operating margin non-GAAP cash negatively cash cash equity-based compared improvement period. due the in a QX million of by $XX resulting Provo negative QX. basis year points operating by non-GAAP $XX

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

our to year and XXXX outlook. now Moving fiscal business QX

year-over-year We XX% in the $XXX for we growth at the the $XXX to expect million $XXX midpoint. $XXX to Within this, total XX% first to the subscription to be expect midpoint. year-over-year quarter of revenue million representing representing revenue at be million, growth million, range

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

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

Zig, market opportunity us. a is and outstanding. in our attractive outlook. Chris operating net it share and non-GAAP us as back and had said, margin leadership million between gives questions build the are of the happy XXX significant $X.XX outstanding are In per With position, continued that in your about an the extremely and loss of X% turn to and X% I strong to foundation excited XXXX weighted ahead range and take $X.XX closing our non-GAAP on quarter to we which shares expect assuming to confidence operator. We and Zig market well-positioned we'll Qualtrics and

Operator

Kirk Evercore Our ISI. Instructions] question comes [Operator of you. from Materne first Thank

is line open. Your

Kirk Materne

whole? wondering some you use was deals metrics. and Zig, as platform in in that rate two expand the year. those that quarter. just what's much. very Congrats of front talk to of about product Thanks. what's within jump just are color you broader if particularly or end was retention you give one expansion the large more companies Thanks starting particular net great adoption case, a a the of driving I on could really a on of quarter-over-quarter, just terms impacting obviously, struck by terms in see the Hi. fiscal to I Can maybe this

Zig Serafin

I understanding point standardizing serving different same it's our activity, component the customer, customer, it's whether mission-critical that Thank actually view digital, and the time, that it's just use Customers C of their a whether update Look, great on are whether us. the in-store around you the solutions. call they're making that to all deepening center product together Qualtrics in differentiating bringing product, overall getting happening are one system. around it's and entire callout. what's At experience, channels, Yes. strategy experience the field people Employee and levels, NRR involved company. and what the extremely understanding a what's how as do the important with Kirk question And of is reinforces aspect including serving think, platform. and business relationships another which with particularly whether happening we CEOs their customer for around of XXX the is coupling our the across of there of for consolidating another suite, course, metric Experience in example, that working of they're capability their set They're

effect things inside well. as those in strong really the of of demand And we they to up how are these dynamics So, on combination a important end taking based see continue company.

that how well given So our But that way to there in that's with we as you of the built out the fundamentals frankly, engage technology QX. customers. factoring there's the continue saw we as into what's play metric that nature

Kirk Materne

going business, from on a you'd wondering realize you little if if for of on that. I for the get are That's I else for on out year Thanks. bit then you quarterly super was sort basis? great. be decel And XQ. of that of are of for contribution call it helpful. a how tougher one in sort speak core just But think assumes could you on the guide a should to just that momentum but based get follow-up in sort we core just wondering if business. comps was we about the anything Clarabridge to looks there's this the And front? Rob. I Rob, maybe anything to the guys, giving

Rob Bachman

to we've the forward, past and as known I'm market priority key reiterate we the color to how We're Yes. long-term forward, in forthcoming regards And in the factor We with integrated on guidance. in you we'll the and around driving to about for chat that's incredibly growth. Clarabridge to year. to a Happy business. report into integrate we some out. Yes. And would a I on give us focus our see quickly topics. the going results those forward. for guidance them talked success go pleased Clarabridge the as working But going the durable then to that wanted

In on our and scale that our annual out we see I'd size this an in particular, represents You in in XX% at forward-looking guidance, growth it basis and subscription the guidance. the call of view significant go, as business. growth our

Kirk Materne

Super. Thanks Congrats. guys.

Zig Serafin

you. Thank

Operator

you. Thank

Hynes Our DJ next of from comes question Canaccord.

Your open. line is

DJ Hynes

here curious to help Congrats IDs? Just understand is Hey, me that. evolution and on the your to what Experience the benefit view biggest the to from the business from year. great going guys. be in XM Directory Zig, quarter finish

Zig Serafin

real-time are, frankly result try it at people as do understand -- to go type there's of a human there's call data. with to I that an their it what and go able as if landscape organization market sentiments of the has that how think authentic what the think that create an feel people of been view to being is that use look serving, of Look, and that -- know of you nobody truly to technology

is And that Experience who demographics, that an different business-critical so that build of use map make what based helps and called to be data of are, their preferences, data be some to now able understanding to used decisions. companies set upon the most ID then Directory XM behaviors trends, the customers to out

thing might up or do shore experience and how better you segment do particular a social a to any the how not you actually any through; it in that customers that might the be experience, the shaping attention you we could the products flows is be helps And is but The structured, churn, here in very someone only now way conducting up only that a of XID contributing channel needs on approach a about data beautiful unique that, type problems that is way to into unstructured, created team revenue paying the can idea capturing call that as And action example oriented ball to that product a unique manifests those. to capability that product providing end unique you of through build technology, to? is For relevant of a that are the data research you six that be have move contextually our forward. way a of center, the and connected XID. do that Not game-changer. it the to then our organization

ultimate very of a into customer people the it products, to Employee output look means Experience customer. you every marketing, example of at one And you care, the unique products across if customer can an is Product customer look with our is relationship customer. they one portfolio, across with experience set. across our the how built that what's at you that's on able data that on and between for type HR, look then They of our employee behavior are the Experience across those because portfolio, of the can portfolio, look at interacting XID. tap Or look happening at at enterprise, what the every the is if So, if

part systems unique inside a And with because company. very that in end not everything build platform, can how It's an course It that be and that platform can platform built of a you you I'm into up it, what action information how that doing. become there. company how there's you here just to properties So, what And a it, data capturing is so, you unique on pulling it's it's have do some do describing the of okay? to And do be the extensible. we workflow the of platform. then upon that And company inside how that the going And other really of pull can exist that. behind continue of systems we other about focus it building. that's ecosystem it. from we're into that capability you're see It's our you to We've information powerfully of think lot a to that right? momentum a is us on got

DJ Hynes

Super a of helpful uplift Maybe use? Can color direct we I while great. revenue see included a in top on us going a to to the be That's before there. this for give just layers mean net existing you follow-up you're an their Rob. of I'll retention. when existing sense Qualtrics it's spend customer magnitude Clarabridge seeing

be would just there. get it some helpful to So, context

Rob Bachman

the Yes, the has acquisition. I at what we the of And give approximate closed would we I customers. indicated up million XXX context about as you think Clarabridge coming talked XXX rate. or run to time DJ about to is when we're we on some similar

on Qualtrics power platform. of of similar idea leverage a of they that the spend type per customers directionally upwards an new give add an and So, as be is. existing you over expect Clarabridge of there as the it to But what just average can will get average based their you we time potentially see as on numbers. And customer would Qualtrics spend will those spend that

DJ Hynes

perfect. Yes,

guys. thanks again. Congrats Okay,

Zig Serafin

you. Thank

Operator

you. Thank

of question Mark Murphy from next comes JPMorgan. Our

open. is line Your

Mark Murphy

I'll very you and my as much add Yes, well. congrats thank

spend category all debate I'm just investment the of So, above, you improved. when mind hear last guiding I there like It you're have looks guess what you're systems been XX software go. curious that the some maybe in the your all months. consideration pulled of because you is crosses forward might whether exceeding, community kind of for as a in retention

So, seeing pipeline perhaps are from if different activity. or something in extra just reopening curious the I'm you tailwinds

labor and You've got all activity hotels hybrid dynamics of tight side something and else. Experience HR with Employee the maybe or work the markets and or with because airlines

Chris Beckstead

year. Hey in start quarter Mark, just I'll over fourth really of congrats. continued demand which appreciate Beckstead here. the We're was and the course strengthening Chris seeing strong the the

that look quarter. As for you in the recall fourth us in that type Management. you are of we solutions that customers experienced at the that we're we had a in getting way really overall, balanced in the we the had in guidance. added over across really Experience with tough and And a and customers we seeing value year prior start in with coupled customer X,XXX that our XXXX, compare positive that $X of environment doubling almost pleased the the the their year customers strong year adds as a particular the in of demand the way growing customers from number a have in combination the we spend, million-plus growth dynamic indicated for portfolio strong our really product reflected pipeline really continued the we're and as over our When

Zig Serafin

the how customer has given to entered two use side, business-critical employee especially last make changed is people think now pandemic, most on to Management to are really, much able competitive side, to important. mean, Zig is strong world platform, They decisions. based market the when operate Mark add I on company to growing on the years your is one with know Experience our engage some how companies as a looking into I'll And the both and experience look, be started the which differentiator. This I and just vital really is a number it of we very right? this here. the in that we this. at And

concentrated to heighten we're platform As have or consolidating it into more entering that of seeing sort these our and a in their much companies. use exiting solutions frankly we're where people across they're to desire existed the post-pandemic phase, point use manner

factors of so, we're ahead playing these are that into robust us. some see of demand And that seeing we the the

Operator

Thank you.

Morgan next Our Keith question Stanley. Weiss from from comes

is line Your open.

Stan Zlotsky

especially afternoon these Clarabridge XXXX? Good momentum Keith. of have actually obviously early good and first a of led then, everybody. the for Perfect. I Zlotsky some quarter the quick to question, umbrella. Maybe tick this you're proof Maybe points under platform Stan sitting seems you up having combined guidance high-level And Clarabridge the this is be a very And to Qualtrics in for seeing follow-up. for that are what that just a

Zig Serafin

Sure. Stan for Hey, thanks question. the

rocket to result if standardizing and of are few to our combining strong on -- I with And looking a start look, Clarabridge this at fuel what Chris we've anything, have is what and So fact level we're our done mean, demand a platform. its a as people very platform. that in this. I'll points XM into add for seeing of might how

asked examples. about some You

of doing it would HSBC them actually One was as what example. we're an be Barclays -- with

or And basis point for chat we're example point the broadly in call used or we're a first the center data you're solutions to wanting a is combination in said, more data, years. is let's speaking importantly whether retail view QX, them, number So on of create bank telling And chat, use that more a growth the to the ultimately decisions or power center consolidated; solutions but in engaging happening to combined how and wherever working stronger together monitoring been call of look, this that it's social, data. the cost what Clarabridge the customers create they're system regardless Barclays, to save creating and to it ability on of segments driving even the to now everything basically being use able with of voice analytics for their of be they now and that financial media But opportunities day-to-day organization might to digital social is, on side, product a to with they're where chat that's stream. part be data, XXX those So are the on right? doing actually us whether do make So for center, are, strong an efficiency okay? bank it's better any customers engaging, data bringing the historically the customers now way this know, one customers. social uncover with is able their secondly, experience to to be of source analyze different across the have what data, call for review

You're part helped of Other expand were ID into up-sell structured repository the combining the team of would be of that the and the Expedia. opportunity an information and Experience as sort like able understanding examples putting with be there. single us customer. you're the that to They

of so has brought larger been that, got the there's But as and the coming into into. for and that's our rocket the platform markets that said it's expands through. number customers customers being to of what us that offer we've fuel what's like a that like And here combination theme I

Chris Beckstead

quarter the And see of do couple outstanding an their Yeah. QX add part largest the lot a was thoughts it quarter quarter. important can It's of I'll sort quarter quarter. first as Clarabridge. the in deals just Qualtrics. additional They for in you is their terms guidance. in for a really of results, of confidence a of that as in

were momentum. We quarter energy sales the to companies bring their where quarter with customers. an we've what fantastic to was typically gives organizations So in kickoff. opportunity spot. the early expand to just longer the base was together, in exceeding that And really with organization And some two that had. the able is considering within we excitement our quarter, close up cycles are to the be of in organizations enabled. Qualtrics cycles, base. we And how together strong the – confidence. ready than in combined going definitely And shorten to our that existing getting excitement an deal lot quarter The right can customer had sales able historically And which unaware of confidence go is working close encouraging deal contributed their Clarabridge had was ability to that Qualtrics just opportunity our us of customer be that the able customer and very then, sales getting geared early momentum has a deal sweet into the level team we a had that deal then on to broader get are enablement the expectations to pitch our and around and Clarabridge the sales

Stan Zlotsky

Perfect. And quick guys. That's very helpful. Thanks, a follow-up.

RPO inorganic us you for $XX give sense CRPO? – Clarabridge and thank you billings. On calling in the the But contribution the million for to how could added some quarter do it much you out from in

Rob Bachman

impact growth to to It's to Yes. similar to the RPO very actually billings. CRPO regards and in the had rate similar it – calculated impact

Stan Zlotsky

Perfect. Thank much. you so

Zig Serafin

Thank you.

Operator

Thank you.

of Our Shah Bhavin Deutsche. comes from next question

Your line is open.

Bhavin Shah

and Great. congrats. Thanks my echo question my taking for

your of a the how lot any guys of talked seen Customer other prioritizing today changes But in several only employee are to over prioritization you You customers you've today but one last Experience, the relative quarters. about strong guess namely the other? Employee category Experience products, seeing adoption are in engagement, I over terms in not

Zig Serafin

partnering if has engaging this. How C prioritizing show of we're it as how more level executives of for brand? you companies doing advantage I'm consolidate make the I products? to extremely employees, and that's senior if And and my step how at positioned mean create major doing at And built does business. customers? with decision built these the and anything a trying and in up the the they're over a architecture four a customers. operate, and the platform, I look single and you else Nobody engaging take up one I a of just okay doing we do am years. system marketplace say am am back and say, for experiences our this that platform we system a they that to core end we just How single in my how well technology how with because the including how would more I find in just every many And I nature of the with differentiator my it superior day? are like that CEOs sense with And track? with making because market we my

So Experience the a the Experience quickly number trend. is fact growth and that's customers had continues. in the they then place that highlighted the what rate side. to on customer year. highlighted side we've of of they us number including $X we QX going in We've the anything might might Chris the And be product in on the on million-plus and happens want the or side that that evidence last Employee if is Customer that pretty rate the going And on as get with start seen taking that that NRR the earlier also that of

Bhavin Shah

Got it. Super helpful. And Rob. just a for quick follow-up

terms specific Just additional Clarabridge are for just at the or of going to product the in that return-to-office this any over context if year, costs points make your provide course it's of guidance over that kind impact on versus focal maybe whether additional margins go into can you're of market? into year upcoming the of investments the like just any the maybe looking next regions that course of to investments write-down And to year? of your you I'm and top

Rob Bachman

before to a ahead opportunity to price market we've capture There's continue some for And invest continue headwinds robust Yes. will clearly the to of be Clarabridge. There that. very us. as said to we'll accounting purchase relative

XX know you those last for about normally maybe As year acquisition months. post a

we in-office a are period see and certainly to And of that time. back and degree. believe for that So some will you'll come travel hopeful

focus business manage same about. at way discipline. we we've that Now that talked continue nimble and growth the do it our areas that this the We're time on to spend manage we to in with so will for

which margin positivity. So and comfort again really the with happy our level with reiterates profit guidance, our operating non-GAAP

but growth in product. those things. indicated will is invest Those ahead. We'll smart we're thinking how that's clearly that as about come So investments for the you be

hear EMEA heard to talk that that the continue exists. those platform amongst of about significant lies And it the talk is of about us you'll region this us ahead region. then us but that expanding and You've across the some still the capability opportunity in in

well SAP internationally further that partner in as Latin and continue region to America with as region as the APJ the as well market. into We expansion closely

really a global push. is it So

Bhavin Shah

Congrats helpful. again. Super

Rob Bachman

Thank Yeah. you.

Operator

Thank you.

question next Raymond Brian comes Our James. of from Peterson

is open. Your line

Brian Peterson

Congrats taking questions. on my the quarter and thanks for

just for logo have? we're looking you just And net if many Zig would are a new in the how point mentioned and at how XXX So me. one you for customer of they you And coming many -- couple point times I'm solutions a solutions call. in displacing? you solutions a are if it's typically Fortune point curious guys

Zig Serafin

is what's our different that important all centers It there is are engine varies, optimized but for. budget go-to-market

you if analytics are to the so go approaches And call outdated there voice for example. center into

example, how the their connect that analytics for not dots a make go have yet got the you they they system interaction budget If different the about an how to might chat and thinking tool. that Or team what's as but us. between run into involve on decisions. going even might they might They're one

the limited whole often which monitoring, that's end care people just if research their a do segments also people a around or approach using. is their what if where the the you'll to find side up into studying care. point into customer social go other in they're of capability but that the and of vendors solutions market you and whole that or how you go go brands surface are take set market of on just set. there's department you social If scratching area important And are of to another And these area in marketing outdated also are the

shards And of in fact These what in are it a at have designed individual budget uniquely our as go on then go have that of looking is part recognizing departments. structural customer result that able extremely departments a is get help what's of can only be a entire stuck the not that where using in to ultimately a So company didn't a going want where operate we single to get single to but base. overnight. we've exist, that not important important and opt a games inside built be guessing we to that pools workflow to these next. system help advantage experience across the a we We a we of done company. they a playing CEO view of have that built a properties because We engine code can to system the

mentioned I It build As XX-year this. go got long we've advantage. time a takes about a to

And our saw consolidating And as and numbers that's $XXXXXX-plus on existing these growth shows do so to the NRR as that end talked point solutions in up of advantage. $X partly well. the that the a that's or have marketplace what we up or consequence that million-plus in we that we in about you of are customers rate customers that

Operator

you. Thank

Our Gabriela Borges of next question from comes GS.

Your line is open.

Gabriela Borges

be times couple allocated Thanks solutions point a to with particularly or the competitive any through update budget questions. also changes seeing been if And taking there. you consulting that for of afternoon. to Good Zig previously and of on going had mentioned may you're an your holistically? Would taking get you. more love companies. competitors my with that one M&A environment potentially two Thank

Zig Serafin

Sure. Hi, question. Thanks the for Gabriela.

just different to my just I'll bit lens bit you a a on little last answer and a on provided given add that expand question. So that

and get game rewiring new of that's problems one connects the then and of experiences this data fundamentally you way the and and building out marketing things it with and what solving we work for of we by exercise. it. not is you're value is So and important building given a that things nature that a category It that the customers end up nature with the the services It's customers interesting technology to actually of connection and the curating the a when changing workflow. action It that new do technology starts of sets with note has deeply way creating a the to deliver.

the long. if Naturally the participate building whether build whether whether list together might I around some tools what be because they people it what customer that that market it might of customer quite or so awareness customers. marketing welcomed value a research end it's want find engagement it's the stitch and category. companies M&A But say and to created And technology creates that's to down is more of for well do at try the to And care you the components one react you're that it's you is will in in that being as end market. to at for market unique it or comes new that and larger day the is vendors out positioning is try And delivering approach look customer do new it. build things a to they'll companies the

through a an number architecture down Fundamentally, software the to XM new And I as of technology so, it We've say comes stick your way and very the category it's have operating with thing. superior same a difficult into to acquisitions built system. hey x architecture.

We to capabilities able have by are to are that in on keep pace of ecosystem a new and platform which created we not product platform ecosystem innovating and top in system. be and create And come software that taking of to allows vibrant solution that competitors single in a able uniquely up with advantage to a ways in it.

of itself capabilities there's which cases not R&D nobody unlocking are top in the be use that product there new in If end you not so rate the as example is are in match What's to else important will to what's for -- look investing of guidance that up we able in new level software that the XXXX, important number going system. our we at be out that that. on

and that market. And customers services that because they innovate with been they to And using. maybe solution so to even consulting-oriented us point engage changes or the vendors vendors may unlock expect be the the we so an to when have relative it rate, at game us, larger addressable in able doing

under engaging today. customers. how how that to think you And we in with is advantage. how we're multibillion-dollar as umbrella multi, improvement also up that noted And hey published is markets and around technology earlier. go-to-market market. software architecture as were and that architecture employees I have a that? bringing asked marketplace, both very the in you what's participate It's together market everyday of how metrics multi, with was doing think market the requires are go-to-market the engine about But which We our the far end and we're both and like we questions These all one TAM. which unlocking well a works software you engage that questioned that's with that's contributing the which what we a very and in research unique combination have as continuous traditional those the engaging a significant you But well. system

Gabriela Borges

the about longer-term for thinking of follow-up Clarabridge. It are integration sounds how a Rob. and XXXX bit model? leverage year I appreciate in investment operating the One like an color. Rob, you with is little

little us a be as So we a view maybe should how bit longer-term you. as about to just thinking well of give Thank margin?

Rob Bachman

with model we We're will -- over ago IPO. around the the trending the year model And time. Yeah. that of certainly expect we a to we long-range time towards that see consistent produced

we're that then the I model. continuing drive and XXXX, see get trending that you how when to investing out-years, think you've noted and you'll towards long-range correctly growth in on

Gabriela Borges

you. Thank

Rob Bachman

Yeah.

Zig Serafin

Thank you.

Operator

Thank you.

comes question Securities. from Tillman next Truist Our Terry of

Your line is open.

Terry Tillman

and everyone, me Good Yeah. two as afternoon, quick questions. just I have from well. congrats

past First and seen EX, on Product you've of just talked lots both et Experience in the releases on the CX, press partner we've cetera. a Zig, ecosystem. lot

these from I momentum getting the then more had a a You still of ground the clearly How lot you in that is in have on of And much a go-to-market follow-up business. stakes benefit into these are partners, lot the international. kind or future? of with

Zig Serafin

I'll Sure. I'm a that few then points. going to let just with couple Chris and tackle -- start on

Chris Beckstead

of the from perspective, both there's importance we've major a us a with with talked a XXXX about grow. space having as providers. to of a that those and been also we the And focus we opportunity contribution consulting some the on other really of ServiceNow progress continue fronts scaling with we Yeah. partners, to for those the but the -- lot we're all both and from great think about momentum for SAP as laying gen others for ahead and a what in of We've thought involvement, well service the extending leader about major the as being foundation. technology But having business services. well and from lead as as some those relative expand pleased in made done with ecosystem, as right from the the that It's

continue that to on to a to about we in for this contribute XXXX. this significant as size it's forward made to so, we be to going long-term going more durable foundations basis and the key have get growth scale and And a us talked for us, we the for

continued expect from We growth those efforts.

Zig Serafin

a what it's not implementations we what's growing more how my than companies have is important just enabling us of three connecting companies to time larger differentiator. around I times than comments, for Well, and we can't And deeper. build more noted that year. or example than there's are the that or And who more that XXX strategy a integrations those universe I that's is and system. is, big up end overstate vendor What's they're this that that who getting today important consulting because we important in our had last at have

So experience for Okay? for an example, use creating, time take and employee-facing ways employee-facing nature and more integration the for example, contact-sensitive place might the taking corrective enabling that an of case or of, action. a are systems

think saying, other these those sign companies vendors in hey, to becoming that of us. that right. that the only building so, innings and a to around the why platform And the we're way you we the is towards customers pathways are customers, in the significant advantage our fact we Chris' very focused the us, we're early integrate And fact not got we be also think point just for relative again, We're the And Qualtrics, there's part of our way with. deeper too, for opportunity platform pulling it's the that partners we're design partly also is a important this it's of that what working advantage operate. are And another staying ahead with ecosystem, that, an how also there. but possibility will to of

Terry Tillman

of Thanks and it. answer Got just question. And the Chris. part other for there, the my Zig

On you're up? Curious step what different from just to you. on in and well have hit kind North parts a the XXXX? and international. you race about a that race like -- appears it that understand curious business. like the focused against go-to-market end the continue trying pipeline seeing very of I and milestone of Could I'm international all it's it's have to of business get just then you here of of the this side, by Just in with America know XX%. a investments. to But Should the of LatAm its XX% major the the Thank the doing total. business APAC proportion be and to things

Chris Beckstead

fourth speaking given well. phenomenal it's But international has love well North we're that American as significant And lever perform business investments is, really kind is continuing question. great to we've off we've And to it in percentage, is long and And in It's was leadership and grow growing. we've right? then, with and growth North significant investments about, Our this Clarabridge, internationally thing the absolutely excited talked continues Europe happened quarter and just phenomenal. and one there's expect the long we've there huge will In with why about continue us there, give differentiation our And that to that to you we continue there term internationally expectations and in another paying the off. international Yes. what there. as how to to to trend no hard a exciting hires to been growth. performance Yes, the the Clarabridge be in expansion about a market get pay as year American business reason about of made the too that opportunity, take that exceed are upcoming the presence mentioned, to international really half. made EMEA with We right? make couldn't and the fast year at going pleased term continuing we're continuing a there, XXXX. grow time are going Especially fast long, as

a definitely for going continued think the come. and years for long-term us, growth as theme lever a we So sustained to to about be

Terry Tillman

Thanks.

Operator

Thank you.

next Our question Arjun of William from Blair. comes Bhatia

Your line is open.

Arjun Bhatia

just It response, Maybe and service add proactive like some the et marketing taking engagement, be hear to for into you're or it like cetera. for start and it's further there. longer expand seems whether opportunity about questions market Thanks social customer seems Zig, off love may how right, with you term, certainly my Perfect. to synergies I'll customer natural adjacent or an to congrats. there I'd my thinking

Just Qualtrics. understand that help how for strategically viewing opportunity me you're

Zig Serafin

high-growth in frankly, lot product that put I'll us -- company multiple were for look of centers budget it click today, where modules, connecting thanks is work used, system double that way experience customer our our I being business, those powerful quite on the look, combo. together systems going complementary. with, And -- if watch look same what it, the Arjun, A we'll But we're to market dynamic it's lining But also you briefly, different across yes. people you of going systems to very at way that a inside just is, which mean, a are with we closely of up us the described. modules much And other of the is if et the at And the question. more is you sort how customer do cetera. of call exist. we're the customer record, opportunities to et cetera, for led. engagement are

Arjun Bhatia

Perfect. Can noticed you when Thank look new in do based you have expect obviously a I you. public opportunity from can. about in And I and presence the then, of you that area D.C. just you Clarabridge And federal the talk if does one out the office follow-up, contribution there. maybe opportunity? the is opened there the what like? And sector? meaningful

Chris Beckstead

Yes.

different verticals. we've we're industry public of our that time sector. exceptionally the them excited increased about has focus is one gone As on on And

within that talent to down in going increasing sector there it important their was years public a voice federal organization. you to area a a be the grow. that grow. a in a the go area. after And relationships for their the opportunity sector that And investments with been we've the and It's the in deals speak of FedRAMP It as to that Clarabridge us on in health drive that as and sells know, As on we were think and great been an roots long-term along as us local and market. an market focused key for focus care And out super hiring forward And can the We've citizen public language that I going other we've lever is the verticals market is academic team and sector that time was But organizations on area opportunity build having takes us aggressive because in expand and you and space. talked tremendous And you know, progress to double interactions. for about and it year can got that improving that public for about. our state plans in that the presence we've we've in headquarters are area build. it initial made large our and for our processes with that's growth great dedicated huge have focused D.C. focus the in that -- at

Arjun Bhatia

very helpful. That’s Congrats. Thanks.

Chris Beckstead

Thank questions, you. Operator. Are there operator. any more

Operator

One moment please.

comes of Barclays. from Raimo next Our question Lenschow

open. Your line is

Raimo Lenschow

me if you Thanks SurveyVitals about fourth opportunity? kind -- I care was as see going little more acquisition Congrats the of saw story an the the the just opportunity. think vertical Qualtrics time as and the about for do wanted how But the just verticalization you vertical in. talked the squeezing as the And about over well. sector how evolution about we of vertical to then you well. leg represents next company Obviously, quarter. something bit a see amazing of QX. of Thank in public we ask do Can you you. like different as health for from of growth me Thank that is a It usually a well? talk Hey. you. that

Zig Serafin

for Raimo. question. Hi, the Thank you Yes.

broad of scale constantly a something that doing category getting There place chasing doesn't the verticals When overstate well were where off, of. we're markets. special platform up that how to down a we is up to pathways And vertical building specific we of technology in time, they focused this they the category. word that on different new very out many build universe over in important. across very get all right? we we're history are are end First end difficult platform. of and overly building who industries taking and we look we're watching, I can't scale the that tech approach are get a importance market deep, new can at deep companies up end that a Really can But across

been Again, have goes Our about to flexible we're very XX-year built to platform in and to point approach build we my aggressively. that advantage extensible going highly invest fact about platform. has that way against continue a that we it back scalable this to the a the system

examples. point, side, two other not industries differentiating examples we unique effectively pulling to go are those to highlighted the platform capabilities and in to that into Those only industries. create Now, we the as the There go-to-market are leverage examples. go are us in for members of Chris'

to accruing beautiful innovation within which it results other such total advantage company that creating any the of to the again of about. scale were business yet but we this many a in thing the to leveraging end contributes kind create so deep And scale talking actually up platform we that we about the down, often ability that end is can and as also up might of the well, industries properties ultimately and us industry for the go specific

how that's we about think So it.

Raimo Lenschow

Okay. Thank it. sense. Got you. Makes

Operator

you. Thank

from Piper question next comes Our of Brent Sandler. Bracelin

open. is line Your

Brent Bracelin

early through cycle, how of where maybe we the are potential employees base. shortage, much runway the tailwind adoption the Obviously durability looking us half or business be still base just around would kind year there in and cross-selling Experience, of of Experience. But to Good adds, accelerating a would now new XXXX the opportunity is drill left? durability around in huge new that wanted accelerating be land doubt Experience digestion did Zig. Employee afternoon. you two-thirds you're opportunities and the no down of that the Accelerating growth has customer Employee like ARPU momentum adopted or now net Employee of Thanks. a specifically you that the installed walk Are could it business we of more seeing the feels of a a the very in -- just frame with was lot retention, see Experience into logo Just Employee clear the I outside helpful. to cross-sell labor days?

Zig Serafin

this say very Brent. Thanks, I'll carefully.

as We just and partnering I've it's okay, Because We demand. set are think that you that $X.X other of some that reality happening. capabilities, in partly market, scratch, technology a super went not also built of in of -- repurpose built overall we're which in us ways from let's practitioners say is billion example world's about went we're not budgets. getting greater their But and of HR HR strategy and with about guiding how leading seen north okay? will what's And the how people budgets product XXXX. some the where that's out, And significantly we're early when into days. of Experience CHROs their in called seeing allocation think an it tapping is, since we in systems. around said HR and we a Employee nature of and you like purpose-built in system the strong

and employees in onboarding end better a faster the go long. benefits engage actually and got And in that and a how modern company product Now to a end part and I people how systems. improve diversity recruitment whether becoming connecting systems, Experience to the some with often the for they And right is, going anybody marketplace about shape they of because they the it's attention affect and Product up Experience, at make and to replace HRS the workforce of looking well-being the inclusivity tactics, and for their can running of else people a able hand-in-hand up up to that technology set their that isn't have actually business they and impact think built businesses, how end highly the It's people packages at it's brand. we're cycle innovating to how technology to and scale look of actually done that companies. inside these it's sure how they in their optimizing to other hand do of and about hand support that are engagement sort choices from they But the with that people. of incentive actually now. company, we've because actually in than be to how pay way because at complementary life capabilities they of think way of we're comp those they systems need going on reality go think what systems, how we're list the and to doing what is we we're we're the that understated right be to And important making Customer candidate,

in what's that particular days Employee one. of very robust yes, that ahead area. in a we're opportunity early in we see So, us happening But on Experience

Brent Bracelin

Thank you. color. Helpful

Operator

participating. conference. all showing Thank at I'm and this Ladies this no you. today's does questions time. for further gentlemen, conclude Thank you

You now Have disconnect. may a day. great

Qualtrics International (XM) 27 Jan 222021 Q4 Earnings call transcript