Qualtrics International Inc.

Good day. Thank you for standing by. Welcome to the Qualtrics first quarter fiscal year 2021 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 will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Steven Wu, head of FP&A, and investor relations. Please go ahead.

Welcome to Qualtrics first quarter of fiscal year 2020 earnings conference call. On the call, we have Zig Serafin, CEO, Chris Beckset, President, and Rob Bachman, CFO. Following prepared remarks, we will open the lineup to answer questions. Our results, press release, 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 laws. These statements reflect our views only as of today and should not be relied upon as 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 could 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 on Form 10-K for the fiscal year ended December 31, 2020, and our quarterly report on Form 10-Q for the quarter ended March 31, 2021, that will be filed with the SEC. 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 or in isolation from 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 presentations on our investor relations websites. 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 the call will be to our results for the comparable period of our 2020 fiscal year. And with that, I would now like to turn the call over to Zig Serafin, CEO.

All right. Thank you, Stephen, and thank you all for joining our earnings call. So as you saw in our numbers, Q1 was an outstanding quarter for Qualtrics, and it was a powerful start for our fiscal year. Revenue in the quarter rose to $238.6 million, which is up 36% year-over-year, and subscription revenue rose to $186.9 million, which is up 46% year-over-year. And we ended the quarter with more than $677 million in current remaining performance obligations It is up 53% over the same period last year. And what we're seeing in our results here is that Qualtrics has never been more relevant or impactful, and there's a massive market and category opportunity that's ahead of us. Organizations around the world are in the middle of an important shift, and it's bigger than a digital transformation. In fact, it's an experience transformation is what we're seeing. In 2020, 82% of all businesses had to design a remote work experience. And to some, these changes, to put some of these changes into context, at the beginning of last year, only 7% of the retailers had curbside pickup. And by August, that number was 44%. And in today's digital world, where it's easier than ever for employees to switch jobs or customers to change service providers, every business leader I talk to is trying to figure out how to better retain and engage their employees. and to more consistently find new customers and strengthen the relationships to keep the ones that they already have. And as you can see in our results, companies are choosing Qualtrics to accomplish these two very important business objectives, finding and keeping customers and employees. And no one knows the importance of finding new customers and designing new services than the travel and hospitality industry. Take Royal Caribbean International, which expanded the use of Qualtrics in Q1. Very few industries were hit by the pandemic, as hard as travel and hospitality, and Royal Caribbean had to rewrite their playbook. And rather than pulling back like some of their competitors, what Royal Caribbean did is they chose to lean in and invest. With Qualtrics, they can now understand how their current and prospective customers are thinking and feeling, and then they can design the right offerings to get them back on cruises. Another great customer example is is UPS. UPS is focused on customer-first, people-led, and innovation-driven strategy. And we're proud that they chose Qualtrics in Q1. Qualtrics will be their experience management platform, enabling them to listen across the company, take action to lead on critical customer and employee experiences globally. And so with Qualtrics, UPS is able to understand their customers and their employees at scale and take action to deliver what matters. And these are just a couple of examples of how Qualtrics is helping companies transform experiences for their most valuable stakeholders. This quarter, we also formed new relationships and expanded our work with leading organizations around the world that include Bank of Montreal, Singapore Post, Stanford Healthcare, DocuSign, the UK Department of Health and Social Care, and many more. And we increasingly see that large organizations like these are looking to consolidate their experience management programs. And experience management becomes even more critical to every organization. And as it happens, in Q1, the number of customers spending more than $100,000 annually with us rose by 119. That's an increase of 35% year over year. So our results continue to validate that a platform that enables experience management across a company is what the market wants next. Experience management is becoming as critical business success as any CRM or HR system. And experience data is becoming the most valuable data within an organization. And we have a 10-year head start on this market. And we see significant opportunity ahead. Only Qualtrics gives customers a single, secure, cloud-native experience management platform. And we enable them to bring together all of their experience data, what their customers and employees are telling them about their company and their brands. and we help them analyze it and use workflows to take action. And we continue to innovate across our platform with speed and scale. In Q1, we introduced a new diversity, equity, and inclusion solution to address a critical priority of organizations across all industries and segments. We're enabling HR leaders to measure and improve employees' experiences to create a more diverse and inclusive workforce. We also launched new customer XM solutions that give organizations opportunities a holistic view of the health of their B2B and B2C customer relationships, and take automated action to design and continuously improve the experiences that they provide at every touchpoint of the customer journey. And just last week, we unveiled new innovations across our XM operating system to make it easier than ever for organizations to quickly understand their customers' and employees' needs. And these innovations help our customers both design and improve experiences in real time, to lead in times of disruption. Central to these innovations are new design XM offerings, which consists of powerful new research and testing solutions for designing new customer, product, and brand experiences. And so to help our customers turn insights into actions that drive impact, we've expanded the capabilities of Qualtrics Xflow with 24 pre-built, these are new pre-built workflow templates, that gives anyone in an organization the ability to create a call tricks workflow with clicks and not code. So from automatically creating a Zendesk ticket when a customer submits negative feedback to immediately notifying an HR representative of specific words like safety concerns are detected in employee feedback. I mentioned to you in our last call that being independent would give us the opportunity to form exciting new partnerships, and we continue to deepen our partnerships in Q1 with global leaders like Bain, Deloitte, and E&Y. And we also formalized a new partnership with Korn Ferry to extend the power of our diversity, equity, and inclusion solution. And Q2 is starting out strong with an exciting new partnership with ServiceNow. We're bringing together the leader in experience management with the leader in business workflows to enable our joint customers to quickly and effortlessly bring experience data from Qualtrics together with the ServiceNow platform. And this helps any customer to take action in the moment and deliver incredible service experiences. So as we work together to emerge from the pandemic, the best organizations are running their experience transformations by discovering what customers and employees want right now and in the future and then taking action. And they're already building the next chapter of great customer, employee, product, and brand experiences, and they're doing it with Qualtrics. So I couldn't be more excited about the opportunity ahead of us, and I'm deeply grateful for our team's hard work in Q1. And I'm grateful for the thousands of customers that are choosing Qualtrics to manage their experience transformations. Now I'll turn it over to Rob Bachman, our CFO, to get into the numbers. Rob.