Q1 2021 Medallia Inc Earnings Call
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First quarter fiscal 2021 earnings.
At this time all participants are in listen only mode. After the speaker's remarks, there'll be a question and answer session to ask the question you need to press Star. One. Please be advised today's conference is being recorded if you're quite air for their assistance. Please press star Zero I'd like turn the conference over to your Speaker today, Roxanne Holeman Chief Financial Officer. Please go ahead.
Well.
First quarter.
21.
We issued our earnings release.
And then related form 8-K C.
The press release, please see the Investor Relations section of our website with me on the call today Lovely stretch president and CEO medallion.
Before we begin please remember during the course of this call we will make forward looking statements about the operation and the future results of medallions that may vary and involve many assumptions risks and uncertainties, including those related to the Tobin 19 pandemic [noise].
Excellent possible are forward looking statements seat to take into account the impact.
2019, however, the crisis that this pandemic has created is very fluid and situation.
The evolving if any of the risks or uncertainties related to this forward looking statements itself or any of the assumptions related to the forward looking statements prove incorrect actual results could differ materially and those firms I was expressed or implied from are forward looking statements.
Our discussion of our risk factors associated with forward looking statements. Please refer to the test in the company's press release issued today and to our periodic reports filed with the FCC, including our form 10-K dated March 19th Twentytwenty, we disclaim any obligation to update any forward.
Looking statements.
On today's call, we will refer to both GAAP and non-GAAP financial measures. The non revenues financial figures discussed our non-GAAP unless stated that the measure as a GAAP number. Please refer to today's press release for the reconciliation of GAAP to non-GAAP financial performance and additional disclosures we go.
Already these measures. Additionally in conjunction with the release of our earnings report, we have posted on our website at medallion dotcom under the Investor Relations section additional charts that identified trended metric performance at Revaluating, our performance overtime now I'll turn the call over to Leslie.
Thank you wrote some.
Your prepared remarks by wishing everyone of those are the especially like to thank each and every medallion for their responsiveness and flexibility through Q1, as we sold a pandemic and pull apart.
Notably hospitality travel and bricks and mortar refill business segments, where the hardest hit on the short came quickly and cannot possibly be overstated. However, our company pivoted to work remotely and one day and we began serving our customers completely virtually.
We beat our outlook on our Q1 revenue was a record our operating income was well above our full cost too.
Our performance was backed up by solid cash collections on long term renewals, our digital signals increasing importance in some sectors grew daily use and feedback volumes significantly.
As you know we previously shared with you that last year, we generated approximately 60% of bookings from medallions existing customer base.
It's easier to sell to existing customers obscene seeing the ROI and the value at the medallion provides so we pivoted some of our go to market efforts focused on Upsells and cross sells through our existing customer base as you'd expect.
Other sectors, which were frankly on large support in March and April so a customer feedback decline with business activity as you'd expect.
I believe working alongside those sectors, most deeply affected will bode well for the long term however, whilst we address that.
Heightened appetite for feedback commerce, telco and media and other organizations engaged in virtual business.
Our own usage metrics reveal some important trends, but I'd like to highlight.
For example from early March to the end of May we've seen an increase in overall fee.
Well the care verticals with retail digits.
So.
In addition, Vicki.
Let's see an increase in messages during this.
Sounds great.
We opened its in Q1 over the year ago cool.
Order routing our team's ability to successfully deliver for our customers remotely.
Our remote working capability, coupled with the increased automation and our vertical best practice packs enables customers to got like quickly with sophisticated operational feedback systems.
Turning to review our direct Cobot 19 initiatives, we established a pandemic topic sets in our theme explore technology for every major customer to produce a heightened detection capability to surface cobot related issues concerns and ideas feedback data.
We established the idea and Crowdsourcing platform in the UK for testing methods Twentytwenty and just 24 hours unemployment implementation that would normally to require six weeks of set up work.
Lord vessel the under Secretary of State for National Health Service said and I quote this particular pro <unk>.
The innovation and cobot testing.
Let's see.
We provided modality experience cloud to the World Health organization in the International Chamber of Commerce to pull 45 million businesses on cobot 19 issues on reopening and startup plans to date W.H.O. has received more geographically disbursed feedback than ever before and its history.
We also joined apart.
Partnership with the public sector Commission in Western Australia to create I think for employees to collaborate on projects the benefit communities and civic life in the region. We I think community has now become a key tool in Western Australia is fight against the pandemic more than 4000 people are actively engaged in collecting covert 19 problems. So.
We've seen traction in the public so sector healthcare and life Sciences. These these initiatives are new from Italia income adjusted Rightside.
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To address the new normal.
Customers are using single to provide contact with services enough.
Now their feedback through their websites and mobile applications, our new market diversity replaces the old.
School customer focus group and the socially distant environment. This virtual capability provides great return on them.
Batsmen.
This is one of the many activities, but I believe will endure both today and tomorrow.
Now with these technologies companies can make their entire customer base their focus group and see and here not just read their feedback.
With the acquisition of BOCI, we introduced medallion speech, incorporating bogies best in class technology into our experience cloud platform, creating an industry, leading speech solution, combining coal transcription speech analytics and artificial intelligence. It opens up a whole new market in the contact center that is important for our enterprise customers we're seeing.
Early traction and pipeline development.
I'm in Q1, we launched Quickstart solutions, which are enterprise grade pre packaged offerings, which can be deployed in days without I T. Support. We currently offer several versions to understand customer employee expenses as well as specific interactions tailored to specific use cases across multiple industries. These offerings are clearly differentiates. It does include pre.
To find signal capture and reporting as well as text analytics and video feedback. They also offer an easy upgrade path to our enterprise offerings.
As you know Medallia, primarily serves the lot, although even the largest companies are not immune.
We believe they are well positioned to whether this downturn.
The same time, we do see strengthen opportunity in the Midmarket.
Turning to our recent new logos in the quarter selected recent wins include honest debts goods any gas in Italy, Hitachi Bonterra Highland software Myrisk in partnership with Upsells, and that's a safety Pandora jewelry, Panera bread Pinsent Masons, Q idea and shipped amongst others one of our new customers I'd like to highlight.
Here is shipped a membership based shopping and delivery service ships business has experienced a rapid acceleration and this moment shipped as embedding medallion their mobile application as they recognize that as mission critical to effectively manage and invest in the experiences they deliver to members and shoppers. We're thrilled to be a key partner in this mission and look forward.
Delivering to delivering great ROI.
Expansions in the quarter included BA see credit domestic in Latin America, and sharp communications in the U.S.
Turning to a review of our experience conference and our ongoing digital market.
Prince experience for over 7700 participants prospects and customers continue to view the virtual content generated by the event I was pleased with the production quality and the impact of this event, we generated positive pipeline and awareness of our new initiatives and new products at the conference.
A number of marquee customers shared their return on investment stories.
Including Bank of America idea say farm and the Veterans Association.
Moving to a quick review of our channel alliances are alliances business focuses on partnerships with systems integrators, like Accenture and Deloitte strategic cloud businesses like Salesforce, Salesforce, Servicenow, Adobe and workday and vertical players now like Amadeus Viva and are important market research partnership that I mean.
And with at sauce.
The quarter, we're pleased to extend our relationship with our newest partner Microsoft.
The value went live on the Microsoft is your application Gallery.
We also announced recently a partnership with Veeva in May but are you joined the Veeva technology partner program for a tighter integration between our experience management platform and Veeva CRM. This partnership between the two leading platforms in their respective categories has the potential to drive significant value for the life Sciences industry.
In May we joined the Guidewire Partnerconnect solutions, along as program, which provides property and casualty insurance running guidewire access to a curated group of third party solutions.
We recently integrated living lens with zoo. This integration provides a valuable video asset management platform, allowing companies to video record research sessions, enabling the researcher to generate show rules for sharing during our experience conference Atlassians demonstrated how they are using this powerful combination to provide a single secure home for recorded.
Research sessions, allowing them to organize data and performed fast search on valuable video assets.
I want us, but spend a little bit of time talking about communicating return on investment and the virtual world.
Solutions that demonstrate clear and sustainable ROI, our maniac will focus of Medallia.
Navigating the virtual world, we pivoted to selling and implementing remotely as I mentioned.
My own customer interactions have increased saving time and money is I traveled the world virtually we no longer have to wait for a country tour to penetrate overseas markets.
I'm very pleased with our team's ability to sell virtually salespeople, who are waiting for returned to pre cobot conditions and who depend on physical meetings will not do well in the new World Order and I'm happy to report the our sellers have embraced remote working and virtu selling and we've already seen in tar campaigns develop and close virtually.
Customers, who actually listen to as many sources of feedback as they can I use to use intelligent technology to analyze feedback at scale established strong relationships.
From relationships underpin healthy economic activity, leading to material return on investment.
Let's now turn to look at our outlook.
It's actually exciting to see some of the most challenged businesses showing early signs of recovery.
Including improved occupancy increased travel and more digital transactions in Q2 was we'll see some continued pandemic impact we do benefit from the predictable recurring SaaS business, the broad solutions portfolio and diverse vertical and geographic markets. We have a number of situation relevant propositions single messaging.
Living lens video and tried to steeper ideas, our new medallion speech technology is proving mission critical in contact center situations and other speech to text applications. While staple was negatively impacted we have had a stronger start in Q2, we've already closed several deals that pushed out of April and to make including a financial services business the renewed.
Five year $14 million for zero million dollars deal, including a small up sell components on a global retailer the renewed a seven figure contract alongside again, a small up sell components. Both of these deals included employee experience emphasizing the return on investment of staying connected to your teams at this time.
We still expect some challenge customers and also challenges around new business acquisition as everyone becomes more accustomed to.
Building and sustaining virtual relationships. However, I'm personally excited at the velocity and volume initiatives that are possible and virtual business engagement.
On the bottom line, we're benefiting from much reduced travel expenses, we see more value and carefully crafted digital marketing battalion, masterclass medallia extra on demand and so on customer Webinars and we'll continue to invest in these initiatives. The same time, we are critically reviewing our present and future real estate needs as the opportunities or virtual work.
Come fully realized.
We think the full year picture still hard to predict and whilst we are hopeful of a solid second half of the year, we think it prudent to guide quarter by quarter for now.
Last year, we added 40% productive sales capacity over the prior year, we will continue to selectively ourselves talent would put product and vertical markets skills through the year I do believe we can maintain our profitable growth profile through this financial year and beyond.
Our teams are fully staffed and we have plenty of product to sell.
For now and for the remainder of that's why 21, our focus is on execution and the support of our customers on our critical employees I will now hand over to Roxanne for more color on the financials.
Thank you likely and good afternoon, everyone. We recorded strong financial results in Q1. Please record total revenue record South revenue as a quick reminder, unless otherwise noted all numbers, except revenue you mentioned during my remarks today, our non-GAAP you find a reconciliation from GAAP to non-GAAP results.
Today's press release.
Total revenue for Q1 was 100 from $12.7 million and increased 19.1 million a 20% over Q1 fiscal 2020.
In Q1 sounds good afternoon, with $89 million and increased to 17.3 million at 25% year over year.
Recurring revenues consisted of SAP and managed service continues to be at 90% of total revenue.
Professional services revenue was 23.94 corner, which increased 8% year over year I professional services teams have worked out just weren't any remote environment.
Work from home restrictions did not impact or services organizations ability to implement our platform.
Luckily noted we completed 40% more deployments from Q1 over Q1 prior year.
Recurring recurring managed services revenue accounts for more than 60% of our total professional services revenue, which has been consistent.
Turning to some key metrics.
Our new customer growth Islam, we ended the quarter with 782 enterprise customers, an increase of 38% year over here.
Medallion provide high ROI to our customers as evidenced by our strong renewal rates.
For the 12 month ended April 32020, our dollar base net retention rate was 117%.