Qualtrics International Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Qualtrics second quarter fiscal year 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and if you would like to ask a question during the session, you will need to press star 1 on your telephone keypad. If anyone should require assistance during the conference, please press star 0. I would now like to hand the conference over to your host, Mr. Stephen Wu. head of FP&A and investor relations. Please go ahead.

Thank you. Welcome to Qualtrics' second quarter fiscal year 2021 earnings conference call. On the call, we have Zig Serafin, CEO, Chris Beckstead, President, and Rob Bachman, CFO. Following prepared remarks, we will open the lineup to answer questions. Our results, press releases, and the 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 further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with SEC. Include our annual report on Form 10-K for the fiscal year ended December 31st, 2020, and our quarterly report on Form 10-Q for the quarter ended June 30, 2021. That will be filed with SEC. With that, thank you.

Well, thank you, Stephen, and thank you, everyone, here for joining us for today. Q2 was an outstanding quarter, and it extends our momentum into this fiscal year. Revenue in the quarter rose to $249.3 million, which is up 38% year over year. And subscription revenue rose $204.5 million, which is up 48% year over year. And we ended the quarter with more than $754.8 million in current remaining performance obligations, which is up 61% year over year. And as you can see from our guidance, We're now on track to surpass $1 billion in revenue in 2021, which is an incredible milestone. Building on our strong growth in the first quarter, Q2 demonstrates accelerating demand for experience management, which is the category that we've created. The experiences that companies deliver have never been more critical to their success, and increasingly, experience management is a C-level and a board-level conversation. When it's easier than ever for employees to be able to change jobs or for people to be able to switch products or brands, they know that the experiences that they deliver are absolutely vital to their ability to compete and win. And that's why experience management is becoming as critical as CRM or HR systems. And many of the world's largest and most respected companies are investing in XM and they're transforming with Qualtrics. In fact, this quarter... the number of customers spending more than $100,000 annually with Qualtrics increased by 38% year-over-year. In Q2, we formed new relationships with industry leaders that include American Honda owners, they include Urban, Urban Outfitters, Circle K stores, DXC, Mitsubishi Heavy Industries, and the Financial Times. One of our great relationships from the quarter is M&T Bank. It's a Fortune 500 bank with deep community roots in the U.S. 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 ten deposits are completed digitally, and nearly half of total sales are now happening over digital channels. And M&T Bank is designing and improving experiences at each digital touchpoint. 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. Another great example of an experience transformation is DXC. They're a Fortune 500 technology services company. They're one of the largest employers 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, all so 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 provide better collaboration, productivity, and engagement. In Q2, our growth numbers are actually accelerating as more companies like M&T Bank and DXC invest in experience management. 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. At the beginning of Q2, we launched the XM operating system, which is based on three powerful services, the XM Directory, IQ, and XFlow. And together, these power all of our apps and products, and they're all backed by enterprise-grade securities. These interconnected services are analyzing experience data to deliver critical insights that our customers can take action on in the moment using a powerful workflow engine. Our platform is operating at massive scale. Our customers executed 450 million automated actions on our XM operating system in just the four months of this year, the first four months of this year. Things like, for example, alerting teams of a critical issue or updating essential records or sending loyalty rewards. That growth represents 640% year-over-year increase, and our customers are on track to complete a record 1.5 billion actions in 2021. With the highest R&D investment of any experience management company, we're delivering innovation that helps our customers stay ahead of their own customer and employee needs and then drive loyalty and retention, and then improve their bottom lines. In our customer XM product line, we launched new solutions for companies to be able to increase conversion rates across their digital channels, such as e-commerce experience optimization to help customers grow online revenue by closing more transactions, and then digital journey optimization to help companies personalize the interactions across the customer journey. The rapidly changing workplace is leading to the greatest employment shift in our lifetime, the great resignation. And more than 50% of workers say that they're looking to change jobs in the coming year. Every single leader I speak to is focused on retaining their highest performers, engaging their workforce, and then becoming employers of choice in this market. Critical to this is understanding that employees need and want and then taking the right actions to attract talent, drive engagement, and then improve retention. In the employee XM product line, our new candidate experience solution improves how customers recruit and how they hire by letting them act on feedback directly from job candidates. And then our spotlight insights give HR teams and leaders automated and actionable insights based on real-time feedback from employees. Just this last week, we launched experience design for hybrid work and workspaces. This new product helps organizations use employee feedback to create new work experiences and office environments that enhance productivity, innovation, and growth in the new world of work. The companies that are building their employee experience engines today to meet the changing needs of the future of work are the companies that will thrive in tomorrow's world of work. When we went public, we said we'd be selective about combining our organic innovation with smart acquisitions. Today, we announced that we've acquired UserMind, a next-generation journey orchestration platform. UserMind is transforming the way companies can use contextual data to proactively shape customer journeys in real time that increases customer retention, engagement, and lifetime value. UserMind further strengthens and accelerates our XM directory by bringing in contextual data from any channel to create richer customer and employee profiles that enable organizations to deliver personalized experiences at every touchpoint in their journey. We also talked about our ability to expand our ecosystem of partners to extend the benefits of our platform. So as you know, at the beginning of Q2, we formed a new strategic partnership with ServiceNow combining the power of ServiceNow digital workflows with our experience management technology on a single platform. And new companies will be able to bring sentiment data from Qualtrics into ServiceNow customer and IT workflows to quickly act on customer insights, increasing employee productivity and enhancing customer loyalty. We also formed a new partnership with Genesys, a leader that's in the cloud contact center software. And we did that to be able to bring together their engagement data with Qualtrics experience data. On the employee experience side of the business, the world's leading HR association, the Society for Human Resource Management, SHRM, is standardizing on the Qualtrics XM platform for their employees as well as more than 300,000 members around the world. So, look, we couldn't have achieved these outstanding results without our incredible Qualtrics team. They're all in on making our customers successful. And we're scaling our company to be able to meet the opportunity that's ahead of us. In Q2 alone, we added more than 400 employees, which is our second largest hiring quarter ever. And as we grow our team, we're focused on growing the right way with diversity that reflects the world around us and inclusion that far exceeds it. Just last week, we shared our first public diversity equity and inclusion report as part of our commitment to take action and then constantly improve. In that report, we reconfirmed that we are paying men and women equally at Qualtrics, and we're only at the beginning of our DEI journey. We still have a lot of work to do when it comes to diversity, but we're committed to taking action. I'm proud that we are using a DEI solution It's built on our XM platform to measure and then improve the inclusion and belonging experience among our employees. In closing, I'd like to thank our team as well as all of our customers who are putting their trust in us every day. These results are a testament to their success. And with that, I'll turn it over to Rob to talk about the numbers. Rob.