Experience Management specialist Qualtrics surprised Wall Street yesterday with a non-GAAP Q2 profit and increased full year guidance of north of $1 billion.
Revenue for the three months to the end of June rose 38% year-on-year to $249.3 million, with subscription revenue up 48% year-on-year to $204.5 million. Non-GAAP net income was $22.3 million, against non-GAAP net loss of $5.6 million for the comparable period last year.
The number of customers spending more than $100,000 annually increased by 38% year-on-year. New customer wins included American Honda Motors, Urban Outfitters, Circle K Stores, Mitsubishi Heavy Industries and the Financial Times.
Qualtrics CEO Zig Serafin picked out some exemplars of what organizations are tapping into, beginning with M&T Bank:
It's a Fortune 500 bank with deep community roots in the US. M&T will use our technology to simplify and enhance critical touchpoints like the branch, the contact center, and especially digital channels for personal and business services. Nine out of 10 deposits are completed digitally, and nearly half of total sales are now happening over digital channels. M&T Bank is designing and improving experiences at each digital touch point. They chose Qualtrics to more deeply understand their customers so that they can personalize everyday journeys with the bank and as well as offer products that are tailored to the individual needs at any moment in time.
He also pointed to DXC:
They are a Fortune 500 technology services company, one of the largest importers in the world, and they deliver technology as a platform for thousands of enterprises every day. They're also on a transformation journey, with a laser focus on taking care of their customers and their colleagues who deliver for them every day. DXC chose to standardize on Qualtrics in Q2 as their Experience Management platform both internally for their 130,000 plus employees and externally for their enterprise customers also that they can enhance and simplify their experiences. So our platform is going to be a critical part of DXC's modern workplace solution to help drive better collaboration, productivity and engagement.
The Qualtrics pitch
Overall, he said, companies are looking to Qualtrics Experience Management platform as an increasingly important business solution:
The experiences that companies deliver have never been more critical to their success and increasingly Experience Management is a ‘seat on a board’ level conversation. When it's easier than ever for employees to change jobs or for people to go to switch products or brands, they know that the experiences that they deliver are absolutely vital to their ability to compete and win. That's why Experience Management is becoming as critical as CRM or HR systems.
Only Qualtrics can provide these companies a single secure cloud native platform and then enable them to be able to bring together all of their experience data. We help them tap into how their customers and their employees think and feel about their company, how they feel about their products and their brands, and then, we enable them to be able to take action across the business.
There's a trend that we continue to see where people are consolidating and standardizing on Qualtrics XM as a platform in order to drive the four core experiences of their business. As they do so they end up taking advantage of products, functionality, solutions for many different departments across the company. The beautiful thing about the way we've designed our system is that it allows them to be able to use the data that they've learned about customers to then operationalize how they make decisions in product, how they make decisions in their brand, how to inform the way that they engage with their employees, how to make sure that they've got the right employees within the company, how to attract and recruit employees - it’s all a connected system.
The employee experience aspect is increasingly prominent, Serafin suggested, as organizations tear up the playbook on the Future of Work:
That means that people are in the midst of re-designing the physical work experience. They're in the midst of being more intentional about what the digital experience needs to look like. IT leaders are getting involved in that. They're partnering up with HR leaders. You’ve got conversations happening right now, more than ever, around the intersection between highly-engaged employees and the impact that that actually has on the customer experience.
It's no longer the case where people look at things in silos and you can see the relationship between that. We're being brought in to help on the experience design side. It’s also sort of an indispensable part of the way that people think about the employee system altogether and entirely complementary to the HRIS platform. Many companies are still running variety of different types of HRIS systems. We can plug in with combination.
The partnership between the people leader, the HR leader, and the customer experience leader in a company, or the Head of IT, or the CEO, has never been more relevant. And it's what puts us at the center of some of the most important decisions that companies and organizations are making.
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