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Qualtrics CEO on Q4: 'This kind of growth at our size and scale is quite significant'

Qualtrics, the subsidiary of SAP that brands itself as "a business operating system for Experience Management," reported Q4 revenue that surpassed Wall Street's expectations.
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Written by Tiernan Ray, Contributing Writer on

Qualtrics, the subsidiary of SAP that brands itself as "a business operating system for Experience Management," this afternoon reported Q4 revenue that comfortably surpassed Wall Street's expectations, but a profit that fell short. It offered a higher outlook for this quarter's revenue and the full year as well. 

The report sent Qualtrics shares up 5% in late trading.

In an interview with ZDNet by telephone, CEO Zig Serafin remarked, "We passed the one-billion-dollar revenue milestone, and if you couple that with a fourth consecutive quarter of robust growth, that's quite remarkable."

Added Serafin, "This kind of growth at our size and scale is quite significant." 

He said the company is "growing fast" because the software the company sells, "experience management," is "becoming as important as HR systems and CRM systems" for companies.

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"There's a whole ecosystem that's beautifully expanding around our platform; they're innovating on our platform," says CEO Zig Serafin.

Qualtrics

Asked about this year's priorities, Serafin said the company is placing special emphasis on extending its partnerships. "There's a whole ecosystem that's beautifully expanding around our platform, they're innovating on our platform," said Serafin.

International expansion is also a priority. "We're just scratching the surface of possibility on the international front," said Serafin. "There's a lot of growth opportunity there."

Another priority is continuing to increase the company's appeal to employees. "We grow and we scale by making this one of the best workplaces, so that builds on our culture, and that's also an important priority," he said. The Qualtrics software, used internally, "helps our employees be successful," he noted.

Qualtrics added over 400 employees during the quarter. The company also named two new members to its board of directors.

Also: Qualtrics shares jump 7% as Q3 results top expectations, forecast higher

Revenue in the three months ending in December rose 48%, to $316 million, yielding a net loss of 7 cents a share, excluding some costs.

Analysts had been modeling $298 million and negative 2 cents per share.

Qualtrics's growth has sped up from one report to the next. The rate of growth in the quarter of revenue, 48%, was up from 41% growth the prior quarter; subscription revenue rose by 61%, up from the 49% level in Q3. 

Qualtrics's net-dollar-retention rate, a measure of how much customers spend on average versus their spending a year earlier, rose to 128% from 125% in the previous quarter. 

"You're seeing CEOs and other C-levels directly getting involved in implementing this type of platform across their entire company," said Serafin. He noted that the number of million-plus customers in the quarter rose 93%, year over year, to total 143. 

For the current quarter, the company sees revenue of $324 million to $326 million, and EPS in a range of breakeven to a 2-cent loss per share. 

That compares to consensus for $315 million and a 1-cent loss per share.

For the full year 2022, the company sees revenue in a range of $1.402 billion to $1.406 billion, and full-year EPS in a range of breakeven to a 2-cent loss per share. That compares to consensus of $1.359 billion and a 1-cent loss per share.

Regarding board appointments, Qualtrics said Omar Johnson will join as independent director, serving on the board's audit committee. Johnson is founder of professional services firm ØPUS United and served as a marketing director for the Beats by Dre product line from Apple. 

SAP chief product officer Ritu Bhargava will join as an SAP-appointed director to the board. 

With the existing board members, the new appointments brings the total on the board to eleven up from nine, with six being representatives of SAP.

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