Qualtrics International Inc.

The conference will begin shortly. To raise your hand during Q&A, you can dial star 1. Thank you for standing by, and welcome to Qualtrics' second quarter fiscal year 2022 conference call. At this time, all participants are in a 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. I would now like to hand the call over to Steven Wu, head of FP&A and investor relations.

Please go ahead. Welcome to Qualtrics second quarter fiscal year 2022 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 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 for 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 forelooking statements or outlooks. 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 filing with the SEC, including our quarterly report on Form 10-Q for the quarter ending June 30, 2022 that will be filed with the SEC. With that, I'll hand the call over to Zig.

Well, thanks, Stephen, and thank you all for joining us today. As you can see in the numbers, Q2 was another outstanding quarter of revenue growth and a solid quarter across the board, even in light of the current macro environment. Revenue for the quarter grew 43% year-over-year to $356 million, and subscription revenue was up 47% year-over-year to $301 million. And so while we continue to see strong demand for Qualtrics in the current environment, we are slightly lowering our FY22 revenue guidance to $1.424 billion at the midpoint of the range to reflect further macroeconomic uncertainty. Our customer relationships remain extremely strong, which is highlighted in our 126% net retention rate and in the number of customers spending more than $100,000 annually, which is an increase of 37% year-over-year. Our Q2 non-GAAP operating margin increased to 2%, up 80 basis points from Q1. And this is our second quarter of sequential operating margin improvement as we continue toward our long-term guidance. and we're confident in our ability to deliver long-term durable growth in both the top and bottom line. In our two decades as a company, we've seen that in uncertain times, companies focus their investments on what will help them win in their markets. And I've been on the road with customers in the U.S. and across Europe, and the themes are all very consistent. Companies want to quickly understand where the greatest friction points are in their businesses. They want to retain and engage their top talent. They want to know that they have the right products and services in the market, and they want to deliver them in a way that's efficient and convenient for their customers, especially now as consumer and business priorities are rapidly shifting. Qualtrics gives them the ultimate advantage. We help them understand what matters most so they can uncover unmet needs and deliver the products, services, and experiences that keep customers and employees coming back instead of going to a competitor. And we help them do that with empathy, speed, and scale. And as a result, we're seeing strong customer adoption across our product lines. In Q2, we expanded or formed new relationships with leading organizations, including Repsol, Roche, the PGA Tour, the New York City Department of Education, Toyota, and many more. One of the world's largest hotel chains selected Qualtrics to improve its customers' digital and support experiences. Qualtrics' advanced AI capabilities will help them improve service call resolution and make it easier for their customers to purchase reservations online, driving more digital revenue while reducing services costs. We're also increasingly seeing customers embrace multiple products. bringing more of their experience of data and applications onto Qualtrics. A great example is PNC Bank, one of the largest financial institutions in the U.S. PNC has been working with Qualtrics to develop a deeper understanding of their customers and deliver more unique and personal banking experiences across every touchpoint. In the quarter, they added EmployeeXM to better understand the drivers of employee engagement to increase productivity and retain their top talent. Like many of our customers, PNC understands that engaged employees deliver better customer experiences, and only Qualtrics can manage the full lifecycle of customer and employee experiences on a single platform. We continue to innovate and deliver new functionality across our product lines, And because all of our products are built on the foundation of our XM platform, our customers are able to unlock value faster. One of our key differentiators is experience ID, a single unified view of everything customers and employees have shared with a company over time. Experience ID ultimately helps our customers build deep, trusted relationships at scale. And this is a game changer. We now have more than 7.1 billion experience IDs in our system. That's a growth rate of 51% year over year. In the quarter, we introduced employee journey analytics, a new innovation powered by experience ID. This capability quickly unlocks new value for employee experience customers by helping them understand how individual moments in an employee's journey impact each other. Things like hiring, onboarding, manager interactions, technology experiences so with these insights they can take timely and contextually relevant actions to drive employee performance and retention and in customer experience we released the new quality management solution that helps improve agent effectiveness in the call center by capturing and analyzing voice and chat feedback from every interaction This helps organizations boost customer satisfaction and agent retention while reducing operational and compliance risks. We also launched Social Connect, a new digital customer service and social listening solution that enables companies to capture, analyze, and respond to the millions of customer service requests that they receive through chat, email, and social media. With intelligent routing and self-service automations, Social Connect helps customer teams achieve higher satisfaction and resolve more cases in less time. Our platform is operating at an incredible scale. In just the first six months of 2022, our customers executed more than 800 million automated actions on the XM platform. And XM Discover analyzed more than a billion feedback records. The more data and actions that our customers are entrusting to the XM platform, the more value they get with Qualtrics. We're also co-innovating with our partners to drive customer success. In Q2, we announced Qualtrics XM Discover for SAP Service Cloud, which uses advanced AI and machine learning to advance and analyze all structured and unstructured data coming into the Service Cloud, from agent notes and support conversations to chats and product reviews. Together, we'll give organizations a 360-degree view of their customers' purchases, their interactions, experiences, and feedback so they can take timely actions that help them resolve more cases faster, which improves costs and customer satisfaction. We also announced a joint solution with ServiceNow. that gives IT and customer service agents a single view of employee and customer experience data side-by-side with their operational data. The Qualtrics Embedded Insights app will help service desk agents and managers better understand not only how quickly they are solving customer and employee issues, but also how they feel about their experiences when engaging with a service desk on the international front. As we said last quarter, this is a critical time to extend our category leadership and to continue to invest with discipline in attractive market opportunities. And those investments are already paying off. Leaders like ABN Amro, Felron, Lloyds Bank, Merck in Germany, AirAsia, and Tata all chose Qualtrics to serve their customers and employees. Let me give you a bit more detail on Tata. With the demand for digital services driving economic growth in India, Tata expanded with Qualtrics to power all the customer insights for the Tata New Super App, which serves more than 120 million users. So to close, we delivered strong results in Q2 as more organizations turned to Qualtrics to help them find and keep customers and retain their top talent in these challenging times. And despite the uncertainty of macroeconomic environment, we continue to see strong forward indicators while we continue to manage for long-term durable growth. We're still in the early innings of an incredibly important category, and we're focused on building a great business that's not only a leader today or a year from now, but five, 10 plus years too. I'd like to thank our customers, our partners, as well as our employees who are delivering innovation and driving customer success with agility and focus. And with that, I'll hand it over to Rob to discuss more detailed results.