Qualtrics International Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Qualtrics fourth quarter and fiscal year 2020 earnings conference call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Stephen Wu, head of FP&A and Investor Relations. Please go ahead.

Welcome to Qualtrics' fourth quarter fiscal 2020 earnings conference call. Following prepared remarks, we will open the lineup to answer questions. Our results, press release, SEC filings, and a replay of today's call can be found on the Qualtrics Investor Relations website. During today's call, we will make statements that represent our expectations and beliefs concerning future events that may be considered forward-looking under federal securities law. These statements reflect our views only as of today and should not be considered representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or outlook. These statements are subject to a variety of risks and uncertainties that can cause actual results to differ materially from expectations. For a further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our annual report or Form 10-K for the fiscal year ended December 31st, 2020. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Qualtrics performance. These non-GAAP measures should be considered in addition to, and not as a substitute for, isolation of this GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results in our earnings press release and investor presentation on our investor relations website. The webcast replay of this call will be available on our company website under the investor relations link. Unless otherwise stated, all financial comparisons discussed on this call will be your results for the comparable period of our 2019 fiscal year. And with that, I would now like to turn the call over to Zig Serafin, CEO.

Thank you, Steven, and thank you all for joining us for our first quarterly earnings call. And I'm here today with our president, Chris Beckstead, and our CFO, Rob Bachman. First off, I hope all of you and your families are healthy and well. As you saw in our numbers in our earnings release, Q4 was an outstanding quarter. capping off a very strong year of growth for Qualtrics and highlighting the continued momentum of the XM category. In line with our pre-IPO flash numbers, our total revenue rose to $214 million in Q4, which is up 24% year-over-year, and subscription revenue grew to $160 million, which is an increase of 33% year-over-year. We also ended the year with more than $645 million in current remaining performance obligations for the next 12 months, which is up 49% over the same period last year. We're pleased to have achieved outstanding results both in Q4 and in fiscal year 2020. Coming into 2021, we're continuing to build on this momentum as Qualtrics is becoming increasingly mission critical in every business. The next normal has already begun. With the acceleration of digital, all it takes to switch jobs or service providers is a few clicks. Organizations who don't actively design and continuously improve their everyday product, customer, and employee experience will simply not be competitive. And that's why experience management, the category that we continue to pioneer, is one of the fastest-growing markets in software with a $60 billion total addressable market. Experience management is becoming as critical to business success as any CRM or HR system. And experience data is becoming the most valuable data within an organization. We have a 10-year head start on this market. And we've also got a significant opportunity ahead. We built the operating system for experience management. And our XM operating system is a single, secure, cloud-native platform that that enables our customers to bring together all of the experience data, analyze it, and then easily take action with workflows to continually improve the experiences that they deliver. And our customers are designing new ways of working by listening to their employees and acting on their feedback. And they're able to attract and retain the best talent, increasing employee engagement and improving productivity. And they're using customer feedback to design products, services, and experiences that their customers want next. And the result is decreased customer return, increased lifetime value, and reducing cost to serve. We now have more than 13,500 customers who are using Qualtrics to shape and act on the most important business experiences in customer, employee, product, and brand. In Q4, we formed new relationships and expanded with global organizations like Adobe, HSBC, Cardinal Health, Geico Insurance, and YKK Group in Japan. They all chose Qualtrics to help design and improve the products and services and experiences that their customers and employees want next. And these recent wins are just the tip of the iceberg. We have many more potential new customers that are going to benefit from the Qualtrics XM platform, as well as opportunities that dramatically expand the solutions that we're providing to our existing customers. Just look at how we've leveraged our platform to deliver innovative solutions to help our customers navigate the pandemic. More than 200 state and local governments are now using Qualtrics for contact tracing, symptom checking, and patient assessment. And in Q4, we launched our Vaccine Navigator to help governments like the state of Missouri put their resident experience at the center of their vaccination process. I'm extremely proud of our team for responding so quickly to the changing needs of our customers, both with these COVID solutions as well as in the pace of innovation across our entire portfolio. We're releasing new products and innovation faster than in any time in the history of this company. For example, in Q4, we launched Employee XM for IT, which helped companies understand how well their IT systems are working. We helped them pinpoint where employees are experiencing technology gaps that reduce their productivity, and then we enabled them to take action on closing those gaps. And if you look at a customer experience product line, we've introduced a new suite of products to help our customers master their digital and remote experiences, including Customer XM for Digital, Customer Care, Account Management, and many more. Because all of our products are built on the foundation of our XM platform with a single code base, we're able to innovate faster than our competition, and we're able to deliver more value to our customers. And this gives our customers a competitive advantage and enables them to unlock value faster than ever before. Our partnership with SAP also continues to perform very well. We're accelerating our joint product innovation and our go-to-market motion every quarter. Together in Q4, we closed Qualtrics' first eight-figure expansion with one of the world's largest technology companies. This customer is moving away from using a variety of fragmented point solutions to running one end-to-end system on Qualtrics to manage all of their customer, employee, brand, and product experiences. And we expect to see more large deals like this in the future. Look, I get to hear from a lot of customers, hundreds of customers every quarter. And I can tell you that our strategy and our products are resonating deeply with the world's most respected brands. The world's largest organizations are turning to Qualtrics, and one of the most exciting parts of the journey is how we're enabling a vast ecosystem of partners for quickly and easily building solutions on our cloud platform. By the end of 2020, we surpassed 300 partners in the XM ecosystem, and we're seeing partners build entire business practices around experience management. Our platform is a system of actions. And when it's connected with an organization's systems of record, such as their CRM or their HR systems, anyone can turn insights into action with clicks, not code. So we now have more than 100 integrations with companies like SAP, Salesforce, ServiceNow, Zendesk, as part of our experience flow automation action engine. And so our customers are using this to be able to collect experience data and then quickly act on it in the systems that they're using every day. And then key strategic partners like Accenture, Bain, Deloitte, E&Y, Korn Ferry, along with amazing delivery partners are helping us make our experience management vision a reality for our customers. So, for example, we expanded our partnership with Deloitte in Q4, and we saw great success working together to help CIOs expand the adoption of experience management in their own organizations. Our IPO in late January was an incredible milestone on our journey. And as a public company with greater resources and brand recognition, we'll now be able to deliver more organic and inorganic innovation to our customers, expand our ecosystem of partners, and continue to build the best team in tech. In the lead up to the IPO, we expanded our leadership team with new positions, and we welcomed some phenomenal leaders to Qualtrics. These are people who've helped grow and scale some of the best technology companies in the world. They include Microsoft, people from Microsoft, Salesforce, Twilio, and Adobe. Attracting and retaining talent like this has helped us build an incredible foundation for our company. So to close, I want to thank our nearly 3,500 employees all around the world who are all in on the XM vision. They made it possible for the outstanding results and the guidance that our CFO, Rob Bachman, is now going to share in more detail. Rob, over to you.