Qualtrics International (NASDAQ:XM)which bills itself as the leader and creator of the experience management (XM) category, is expected to report its fourth quarter and full year 2021 results after market close on Wednesday, January 26. A conference call with analysts is scheduled to follow at 5 p.m. ET.
Qualtrics has comfortably beaten Wall Street earnings estimates in the four quarters it has released since its initial public offering (IPO) in January 2021. Indeed, in the last quarter, it even posted a surprise adjusted profit as well as an acceleration in analyst earnings forecasts. . (The company’s IPO was a spinoff from the German software giant SAPwhich retained a majority stake.)
Given that track record, investors are likely optimistic that Qualtrics will release another quarterly report that tops Street’s consensus estimate. However, even better than expected results and forecasts do not necessarily mean that the stock will rise after the release. Tech stocks have been under pressure recently due to the expectation that the Federal Reserve will raise interest rates several times this year.
As for the stock, it closed at $26.38 on Tuesday, January 18. That’s just a slight drop from its IPO price of $30, but down significantly – 37% – from its opening price of $41.85 on the first day of trading.
Here’s what to watch for in Qualtrics’ upcoming Q4 report.
Qualtrics Quarterly Key Figures
|Metric||Q4 2020 result||Qualtrics Guidance for Q4 2021||Wall Street consensus estimate for the fourth quarter of 2021||The Projected Change of Wall Street|
$296 million to $298 million
Adjusted earnings (loss) per share
($0.04) at ($0.02)
|($0.02)||N / A|
Qualtrics revenue will grow in the fourth quarter thanks to its $1.1 billion acquisition of Clarabridge, which closed on October 1, 2021. Clarabridge is said to be a leader in omnichannel conversational analytics.
For context, in the third quarter, Qualtrics’ total sales increased 41% year-over-year to $271.6 million, driven by a 49% increase in subscription revenue at 220, $3 million.
For the third quarter, net loss under generally accepted accounting principles (GAAP) was $286 million, or $0.56 per share, compared to net loss of $85.7 million, or $0.20 per share. share, at the same time last year. Adjusted for one-time items, net income was $5.9 million, or $0.01 per share, compared to a net loss of $0.4 million, or $0.00 (break-even) per share, in the quarter of the previous year.
Wall Street was looking for an adjusted value loss of $0.02 per share on revenue of $258.2 million. Thus, Qualtrics’ third quarter results easily exceeded both expectations. He also ran under his own guidelines, which targeted income between $257 million and $259 million and an adjusted loss per share of between $0.03 and $0.01.
Besides the usual numbers or headlines, investors should also focus on key customer metrics. Management discussed these measures during the earnings call.
Last quarter, the number of customers spending more than $100,000 in annual recurring revenue increased 38% year over year to 1,668 customers. And Qualtrics’ net dollar retention rate was 125%. This means that existing customers have increased their spend on the company’s offerings by an average of 25% over the prior year.
The market’s reaction to Qualtrics’ earnings release will likely depend more on the forecast than on the fourth quarter results.
Wall Street currently forecasts first-quarter revenue to rise 32% year-over-year to $314.7 million. Adjusted for one-time items, analysts expect a loss of $0.01, compared to a profit of $0.01 a year earlier.
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Beth McKenna has no position in the stocks mentioned. The Motley Fool recommends SAP SE. The Motley Fool has a disclosure policy.
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