Q2 2021 Qualtrics International Inc Earnings Call

July 20, 2021

[music].

Yeah.

Ladies and gentlemen, thank you for standing by and welcome to the call tweaks second quarter fiscal year 'twenty 'twenty, 1 earnings conference call.

Time, all participants are in a listen only mode.

<unk> will conduct a question and answer session and if people would like to ask a question. During the session you will need to press star 1 on your telephone keypad.

If anyone should acquire assistance during the conference. Please press Star zero.

I would now like to hand, the conference over to your host Mr. Stephen will head of F. P N E and Investor Relations. Please go ahead.

Thank you welcome.

Welcome to <unk> second quarter fiscal year 2021 earnings conference call.

On the call, we have <unk> CEO, Chris <unk>, President and Rob Bachman CFO. Following prepared remarks, we will open the lineup to answer your questions. Our results press release and a replay of today's call can be found on the <unk> 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 required relied upon as representative of our views as of any subsequent date we.

We disclaim any at all.

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 the SEC Inc.

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 June 32021.

That will be filed with the FCC with that stake.

Well, thank you Steven and thank you everyone here for joining us for today Q2.

Was an outstanding quarter.

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 240, $204.5 million, which is up 48% year over year.

And we ended the quarter with more than $754.8 million.

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 experienced management, which is the category that we've created.

The experiences that companies deliver have never been more critical to their success and increasingly experienced management as 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 go to switch products or brands because they know that the experience that they deliver are absolutely vital to their.

Our ability to compete and win that's why experience management is becoming a critical as CRM or HR systems and many of the world's largest and most respected companies are investing in <unk> and they're transforming what quadrex in fact this quarter.

The number of customers spending more than $100000 annually with <unk> increased by 38% year over year.

In Q2.

We formed new relationships with industry leaders that include American Honda Motors. They include urban.

Urban Outfitters circle, K stores, Dx see Mitsubishi heavy industries and the financial times.

1 of our great relationships from the quarter is M. N T Bank, it's a fortune 500 bank, but deep community roots in the U S.

And then Qi will use our technology to simplify and enhance critical touch points like the branch the contact center, and especially digital channels for personal and business services 9 out of 10 deposits are completely are completed digitally and nearly half of total sales are now happening over digital channels and <unk>.

<unk> Bank is.

Is designing and improving experiences that each digital touch point, they chose quadrex to more deeply understand their customers. So that they can personalize every day journeys with the bank and as well as offer products that are tailored to the individual's needs at any moment in time.

Another Great example of an experienced transformation is dx either a fortune 500 technology services company.

1 of the largest employers in the world and they deliver technology.

As a platform for thousands of enterprises everyday they're also on our transformation journey with a laser focus on taking care of their customers and their colleagues who deliver for them every day.

<unk> chose to standardize on Quadrex in Q2.

As they are experienced management platform, both internally for their 130000, 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 Dx 6 modern workplace solution to help drive better collaboration productivity and engagement.

In Q2.

Our growth numbers are actually accelerating as more companies like M T Bank and DXP invest in experience management.

Only <unk> 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.

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 3 powerful services victim directory.

Q and ex slow.

And together the power of all of our apps and products and Theyre all backed by enterprise grade security.

These interconnected services are analyzing experienced 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 <unk> operating system and just the 4 months of this year. The first 4 months of this year things.

Things like for example, alerting teams are a critical issue or updating our central records or send anything 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 experienced 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.

And our customer access 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.

Great resignation.

More than 50% of workers today 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.

The <unk> product line.

Our new candidate experience solution improves saw customers recruit and how the higher 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 designed for hybrid work and Workspaces. This new product helps organizations use employee feedback to create new work experiences in office environments that enhanced 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 required user mind, a next generation journey orchestration platform.

User mine is transforming the way companies can use contextual data.

Proactively shape customer journeys in real time that increases customer retention engagement and lifetime value.

User mind 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 touch point in their journey.

We also talked about our ability and our ecosystem of partners and extend the benefits of our platform. So as you know at the beginning of Q2.

We formed a new strategic partnership with service now.

Combining the power of service now digital workflows with our experienced management technology on a single platform a new companies will be able to bring sentiment data quadrex.

Into service now customer and key workflows.

To quickly act on customer insights, increasing employee productivity and enhancing customer loyalty.

We also formed a new partnership with Genesis.

A leader a cloud leader that's in the cloud contact Center software.

And we did that to build to bring together their engagement data with cultural experience data.

On the employee experience side of the business the world's leading HR Association the.

The society for human resource management.

<unk> is standardizing on the corporate sector and platform for their employees.

As well as more than 300 member 300000 members around the world.

So look we couldn't have achieved these outstanding results without our incredible Patrick's 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 thus far exceed that.

Just last week, we shared our first public diversity equity and inclusion report as part of our commitment to take action and then constantly improved in that report.

We confirm we reconfirm that we are paying men and women equally at Quadrex and we're only at the beginning of our <unk> 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 were using a <unk> solution.

It's built on our axon platform to measure and then improve the inclusion and belonging experience among our employees.

In closing I'd like to thank our team as.

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.

Thanks, <expletive> and thank you everyone for joining US today, we are very excited to report another great quarter with outstanding and accelerating financial results continued customer demand for our experienced management suite led to notable top line growth at scale. We also demonstrated significant leverage in our business model with robust non-GAAP.

Operating margin and record free cash flow in the second quarter.

Ascription revenue in the second quarter was $204.5 million up 48% year over year, driven by both strong new business sales and expansions favorable in quarter linearity and strong customer renewals professional services and other revenue was $44.8 million for the second quarter, representing 5% growth.

The year over year.

Total revenue was $249.3 million in the second quarter up 38% year over year, our remaining performance obligations, representing all future revenue under contract ended the quarter at 1 point to $96 billion up 76% year over year. This metric includes.

Both new and renewal software contracts, along with our professional services business.

Current remaining performance obligations, which is all future revenue under contract that is expected to be recognized as revenue in the next 12 months was $754.8 million up 61% year over year.

Current and total <unk> continued to benefit from a lengthening of average contract duration for both new customers and renewals.

In Q2 strong expansion across our customer base drove our dollar based net retention rate to 122% customers spending more than $100000 in annual recurring revenue grew 38% year over year to 1564 customers.

Turning to margins our non-GAAP gross margin was 78, 2% in Q2, approximately 215 basis points higher than 76% in the year ago period. This increase is mainly due to a continued increase in subscription revenue as a percentage of our total revenue subscription has increased from 70%.

6% of our total revenue in Q2 of 2020.

282% in Q2 of 2021, as we focus on driving software usage on our platform and continue to grow our partner ecosystem.

I'd expanded experienced management services to our customers are.

Our non-GAAP operating profit for the second quarter was $11.5 million, resulting in a non-GAAP operating margin of 4.6% compared to negative 1.9% in Q2 of 2020. This expansion was driven by our strong top line outperformance by stronger gross margins due to higher subscription mix shift.

And by a continuation of reduced spend in travel and events.

Operating cash flow for Q2 was $58.8 million compared to negative $95 million in the year ago period free cash flow in the quarter was $53.7 million compared to negative $107.2 million in Q2 of 2020 due to operating margin expansion and.

Significantly lower cash payouts relating to equity based awards.

$2 million of cash outflows in Q2 was related to the cash settlement of stock based payment liabilities compared to $88.8 million in the year ago period, we saw a significant decline in cash settlement of stock based payments as most of our employee base elected to exchange their cash settled.

Equity based awards to stock settled <unk> awards at the time of our IPO.

As a reminder, free cash flow may fluctuate on a quarterly basis due to the timing of cash collections and we believe it's best to assess our cash flow performance over a longer term horizon.

We ended the quarter in a strong cash position with approximately $635.1 million in cash and cash equivalents.

Moving onto our Q3 and fiscal year 2021 business outlook for the third quarter of fiscal year 2021, we anticipate total revenue to be in the range of $257 million to $259 million, representing 34% growth year over year at the midpoint.

Within this we expect subscription revenue to be in the range of $209 million to $211 million, representing 42% growth year over year at the midpoint, we expect non-GAAP operating margin in the range of zero percent to 1% and non-GAAP net loss per share of <unk> 2.1.

Assuming 515 million weighted shares outstanding.

For the fiscal year 2021, we expect total revenue in the range of 1.007 billion to $1.011 billion and.

<unk> revenue in the range of $813 million to $817 million at the midpoint of the ranges. This represents a subscription revenue growth of 42% year over year and total revenue growth of 32% year over year, respectively. We.

We expect non-GAAP operating margin in the range of zero to 1%, we expect a non-GAAP net loss per share of between <unk> and zero cents, assuming 510 million weighted shares outstanding.

In closing our runway for growth within our large market opportunity remains very exciting we will continue to scale our business through strategic investments extend our leadership in this market and drive towards long term profitable and durable growth.

Thank you for joining today's call and with that Big Chris and I are happy to take your questions and we'll turn it back to the operator.

Thank you Sir at this time I would like to remind everyone in order to ask a question. Please press star 1 on your telephone keypad again that is star 1 to ask a question.

We have your first question from Mark Murphy with J P. Morgan Your line is open.

So thank you very much and congratulations on a fantastic quarter Zig I wanted to ask you what do you see your most advanced forward thinking customers doing with the quality of the platform, that's maybe driving more of a complete.

Experienced transformation.

And might kind of late that pathway for some of the earlier stage customers and I'm wondering if it's more of the operationalize them.

With X slow or maybe getting into design XM or product X M side, or perhaps something else that you're seeing.

Yes, great question.

So first off.

If you look at some of the customers are that are I would say forward thinking they realize how important experiences to the very essence of the way that they connect with their customers.

As well as their employees the combination and then of course as they do that then how they express what they do about it through not only how they operate from a customer experience perspective, the channels that they use to engage but also the way they ended up innovating around product.

That shows up in their brand and.

So there was a trend that we continue to see.

Where people are consolidating and standardizing on Quadrex ex some of the platform in order to drive the 4 core experiences of their business.

And as they do so they end up taking advantage of product functionality solutions for many different departments across the company.

And the beautiful thing about the way we've designed our system as it allows them to be able to use the data that they've learned about customers.

Then operationalize all of this.

Make decisions and product how they make decisions in their brand.

Now to inform the way that they engage with their employees how to make sure that we've got the right employees within the company how to attract and recruit employees. It's all of the connected system and we're uniquely dip.

Differentiated and the ability to do that because we're not piece mealing different components.

We've got a native system, we've got a native architecture that is designed to be able to bring that into connected decision, making and actioning system now that leads to the second part of your point, which is actually.

What's very unique about our platform is we've designed workflow.

Right into the epicenter of our operating system.

You have the ability to make time sensitive decisions and actions.

Sometimes they're fully automated instead of a company and they end up integrating with applications tools that are already running inside of our company. This isn't about going and learning a whole new tool.

About plugging in to what's already running with you helped us what's already running with your HR or front of line.

Workforce kiosks for example.

And then you.

End up seeing the results of that on a daily sometimes hourly sometimes weekly level, depending upon where someone is inside of an organization. There's also semi automation, which is your better enabling the employee to do something that would have taken a long time to go do so that's what we're seeing people do is the combination of.

The 4 core experiences shared data and a workflow engine that helps companies to develop a culture of action.

And that was never possible before with individual systems of record that people might be using right and as a result, we're very uniquely positioned.

Why people are starting to standardize standardize around our system.

Thank you that's very helpful. If I may sneak in a quick 1.

For Robert Chris.

I'm looking at the strength of Q2, where you have acceleration of subscription revenue.

And also the current RP O or backlog and I don't know if you can ever discern what's company specific versus category specific or macro driven but would you say that the demand environment and budget environment is getting back to pre.

Pre COVID-19 levels or even pushing beyond that or is that yet to come in the back half.

Hey, Mark Chris here I'll take that 1.

When you look at the quarter's performance in terms of subscription growth I think youre seeing a couple of things 1 really pleased pleased with the.

The broad based demand environment that we're seeing from our customers. Both from an international perspective, we saw really strong performance from our our U S corporate business and saw a continuation from the enterprise held up more during during the deep parts of the pandemic and it was great to see customers that are smaller step.

Up and invest more than we'd seen in previous quarters. So that was another positive trend that we saw and then finally.

So experiences mattering more than ever they highlighted the employee experience and the current environment. We're in from an employee perspective, that's a product that we've seen accelerate even though we've seen a good demand across all of our product that is 1 that really stood out in the quarter as it's becoming more important than ever in this <unk>.

<unk> environment for companies to pay attention to attracting retaining and motivating their employees.

And then finally in that overall growth you are seeing the impact from a more normal year. This year and last year seasonality wise was went backwards skus as we covered in the past where the first half of the year with lower from a <unk> and a calculated billings perspective, as we had some of the billings pushed to the second half of the year. So you are also seeing some impact.

The in the first half results on those metrics on a on an enhanced basis.

Does this shows more normal last year was more backend loaded than we'd expect this year.

Okay excellent. Thank you very much for taking my questions.

We have your next question from Brent bracelet with Piper Sandler Your line is open.

Thank you and good afternoon, I guess this is for Rob or Zig.

The subscription growth outlook for the full year was raised I think 42% I think entering the year. It was actually looking at less than just a little bit under 30% could you just rank order as you think about what surprised you. The most in the first 2 quarters of the year, that's driving the optimism I think you meant.

<unk> international a little bit, but any color there from a ramp perspective would be super helpful. Just given the acceleration youre seeing.

Yeah.

Thanks, Brent I'll jump in and take that this is Rob I wouldn't necessarily ranked b, we really did get strength across a handful of categories. There is strength in the new business and their strength in the customer renewal base and you see that in the net retention rate uptick to 122%. This.

Quarter, and as Chris talked about Theres, a strength internationally their strength in our <unk> and other <unk> products. So all of what we're seeing is continued momentum and growth in the business and coming back to what <unk> said is experiences matter more so than ever and custom.

We're standardizing and consolidating on the culture platform.

Okay, great well, it's certainly encouraging to see and then maybe as a follow up for zig.

Obviously, we're all looking at a return back to work you flagged employee experience as 1 of the areas that kind of really stood out.

What's the adoption rate of existing customers that have embraced fully embraced experience.

The employee experience product is it broadly adopted as there are a lot of cross sell opportunity any sort of insights you could share around just the pipeline the interest the value add of employee experience would be super helpful. Thanks.

Well look.

This is obviously 1 of several major areas of our business that continues to differentiate what we provide we've got a.

Purpose built system that is around understand.

<unk> engaged with employees.

It's a system that's connected to the lifecycle of what happens in and around the way that you recruit.

New candidates into our company to the way that you ended up driving further engagement.

In terms of some of the most.

Important decisions that are made along the lifecycle of an employee which is a multi factor.

Decision, making.

The spectrum of things that people have to deal with from our leaders are engaging to Irwin.

What best in class looks like and the data that used to be able to do that in the decision making that comes along with it and then of course actioning around that.

And we're seeing all around the world people, referring out the old playbook.

Around.

What the future of the work experience looks like and that means that people are in the midst of redesigning the physical work experience. They are in the midst of.

Being more intentional about what the digital experience needs to look like it leaders are getting involved in that they are partnering up with HR leaders.

Conversations happening right now more than ever around the intersection between highly engaged employees and the impact that that actually has on the customer experience. So it's no longer.

Less the case, where people look at things in silos.

You can see the relationship between that.

We're being brought in to help on the experienced design side, but it's also sort of an indispensable part of the way that people think about the employee system altogether.

It's highly complementary to the HRS platforms, with which you know.

Many companies.

Large enterprise is still running.

We have different types of HR systems, we can plug in with combinations.

And then of course in the mid market. They standardize on 1 but they need the employee experience parts in order to make some of the most critical decisions. So those are the macro things that we're seeing in the employee experience area and we're extremely well positioned there given the innovation that we've had there over the last 4 to 5 years very intensely we saw the future.

Sure of where this was going to go as part of overall experienced management and the beautiful thing about it is building on the platform underlying XM platform that we've got at least the 10 year advantage on at this point so Chris do you want to add to that.

Yes, the only other thing I'd say is as we are.

And some of the metrics we share for example, the net retention rate the number of customers spending over $100000. We see the trend of customers that more fully adopt the platform are larger spender margaret's largest vendors and we're seeing good momentum and growth of customers buying more and more products, but it's still a lot of runway.

Runway ahead in terms of the opportunity we have for customers to adopt additional products and additional use cases within the platform, giving us a great opportunity to continue to expand our existing customers and feel like we're still early days.

I appreciate the color. Thank you.

We have your next question from Keith Weiss with Morgan Stanley. Your line is open.

Excellent. Thank you guys for taking the question and outstanding quarter.

Nice to see the acceleration across a lot of these metrics I wanted to dive into.

Do you use your mind acquisition.

But it seems to be Super interesting.

Could you 1 tell us a little bit about kind of where does this fit into the portfolio. It seems like a CDP.

CDP and then I kind of think about you guys as having a CDP.

At a certain extent, so what looks like the net new functionality Youre getting number 1 number 2 it looks like these guys are very marketing focus in about sort of those those marketing journeys. So does this get you into more direct competition with the likes of like an adobe experience cloud or the marketing suite from Salesforce and number 3 can you give us any.

Details on the size and scale of the company. It seems like they've been around for a while from like 2013, so anything about purchase price or the revenue run rates are expected impacts on financials on a go forward basis would be great. Thanks, so much.

Okay.

Great series of questions. There, let me, let me just kind of tease out the big the big themes here number 1.

I want to reiterate something that.

We've said from the very beginning about our approach to M&A.

Youre going to see us be very disciplined thoughtful.

Opportunistic.

On where we see moves that will further our lead in the market.

And when we do it you're going to see it be something that is accretive to our addressable market.

Or growth that further accelerates and build on the strengths that we have.

Okay. So that's a really important principle here.

And when you take a look at our experience management.

The work that we have been leading 1 with experience manager directory.

Enabling customers to better understand their own customers.

Or more authentically.

In a way where they can understand perceptions emotions.

And where things are going.

What.

User mind does is it just simply accelerate some of the work that we've been doing there around journeys around orchestration, but in.

And in a way that natively connected with a lot of the way that we've designed our platform.

They are a very unique company.

They've built a technology architecture that is extremely different from anything that youre seeing in the market.

And we found it to be highly complementary they're based in Seattle.

We have a significant R&D workforce in Seattle.

So it plugs right in.

And we found this to be almost like picking up another development and engineering team that's been working inside of Quadrex that beautiful connected with the way that we've designed our system. So what you should expect is that our ability to further the leadership and the advantage that we have.

We.

Momentum around experience man is the directory.

Customers use that in order to be able to create.

Think of it as a master record or an experience that nicely complements what people are doing with CDP is in order to address some of the most.

Critical decisions that take place in companies.

It's going to drive.

No increase.

Customer retention.

You think about that in the context of <unk>.

Current stages in which a customer might be in their journey with <unk>.

That particular entity, how do you enable actioning.

Timely manner.

The way they'd be architected the system allows us to be able to likely dovetail that in with our workflow engine. So there is a small innovative company approximately 30.30 employees think of it as mostly R&D and engineering.

Effectively will allow us to plug right in and accelerate our leadership in our advantage in this space.

Got it and in terms of the competitive environment that does this.

It gives you more competitive with the core marketing suites.

Uh huh.

I don't think we don't look at the market. We've never built this company in a way, where we're trying to shape ourselves into any 1 way in how the market is defined as.

As you very well know, we started and redefine the experience management category.

And we haven't been trying to read off of any books of what people would define a certain market spaces.

Everything we do is customer led and what we're hearing from customers is want to build on the unique architecture of our system and this is where they see it going and it'll actually end up affecting some of the most important decisions that they make for their own customers as well as our employees and.

Matt.

Thanks will inform marketing decisions that will inform customer facing operating decisions a lot more product decisions and so forth. So that's how we look at it.

Got it alright, thank you guys.

Sure.

We have your next question from Keith Bachman with Bank of Montreal. Your line is open.

Hi, Thank you very much I was wanted to start my first question and ask a little bit about the net retention rate it was a good.

Trend this this quarter.

A year ago, you were doing 124 is 125, what are the puts and takes that we should be thinking about.

The net retention rate over the next couple of quarters and to ask it a little bit differently. If you thought about some of the courthouse. If you will of the net retention rate that is to say some of your.

More aggressive adopters of your technology, what would the net retention rate look like for some of those customers.

I'll take the first part.

Kate This is Rob I'll take this and then if Chris wants to add I'll turn it over to him.

What youre seeing is along the lines of what we indicated in prior quarters, where we saw this stabilizing and with a potential uptick we realize that uptick we see continued stability in this rate above 120% in the short to medium term.

Speaks to some of what Chris talked about previously in terms of the runway.

For upsell cross sell within our existing customer base. So we're incredibly pleased with where it's at and growing that existing customer rates will continue to be a key focus for us as we continue to build that business.

Yes, Keith Chris to add a little more color.

As we talked about during the.

The IPO process.

Multiple avenues, we have to expand customers across additional used cases within an individual product or when they go across and add additional products and adopt the <unk> platform. When you think about that net retention rate.

The biggest impact is those customers that fully adopt the platform. So you get some you know some increase for sure when a customer more fully expand with MTX, but it is much more significant for those customers that truly captured the vision and see the value of the multiple pillars of experienced and adopt a full platform so that trend.

Thats emerged again of customers adopting the full platform that we've that we've seen.

In recent quarters, it's definitely helped drive that rate and helping it to recover an increase like we've seen it those full adopters of the platform really moved the needle on that.

Okay as my follow up let me ask about seasonality and I want to put it in the context of you actually had.

Some upside relative to cash flow.

This quarter and while not part of your guidance just wanted to know if theres anything you want to call out from a seasonality perspective related to cash flow and understand that some of the issues behind SAP destock I think are largely behind us so that should be a tailwind.

Just anything you wanted to call out including.

The billings growth trajectory that you look out here in the September and December quarters, the comps are getting a little bit harder.

But anything you wanted to call out from a seasonality perspective related to cash flow and billings would be helpful. Thank you.

Yeah happy to comment on that.

So again, Keith as we look at the cash flow and as I said in my prepared remarks, we do believe looking at the cash flow results over a longer term horizon is more representative of the results that we're having.

<unk> went into in Q1, we mentioned that there were a handful of accounts that could have collected either in Q1 or Q2. They did collect in Q2. So when you look at the first half cash flow what you'll see on that if you exclude the.

Equity Awards Youll see a relationship to the non-GAAP operating income where the free cash flow is a bit higher on a percentage basis and thats a relationship that we would expect to exist again over the medium to long term.

We're happy to reiterate this point that you highlighted which is in 2020 with that uniquely impacted year by COVID-19 each quarter sequentially got better for us as a business on a billings basis and so as we move into 2021, the first half had more favorable comparable period.

And our back half of 2021 has more challenging comparable periods on the calculated billing.

Okay, great. Many thanks, and congratulations to a solid quarter.

Thank you.

We have your next question from DJ Hynes with Canaccord Your line.

Hey, Thanks, guys and I'll Echo the congrats.

You talked about employee experience and your response to Brian's question I want to ask a slightly different question. It seems to me like there are more and more <unk>.

Our vendors getting into the game with product guys efforts around employee experience can you just talk about what you see in terms of selling against them is there any incumbency.

Advantage there in the sense that Exxon.

<unk> decisions for our employees are made out of the HR department, they probably have a close relationship already with our HR vendor or.

There is a call tricks pitch around <unk>.

Innovation unified platform system of action does that resonate with those folks maybe just walk through kind of the pros and cons of that dynamic with employee comp.

Sure So first off the word.

Employee experience Tech those 3 words are sort of used in order to describe technology built for employees right that people are referring to that terminology.

But if you double click on that and you say, okay. Now, let's look at the people that are focused on employee experience management.

<unk> uniquely sort of focused area that complements other employee experience Tac. So like take for example, slack that's an employee experience technology tool that enables collaboration communication information call et cetera et cetera.

We're exploit experience management.

As the system comes into the equation as understanding People's intentions emotions.

What drives engagement.

What drives a deeper connection to our brand how well do you think how well do employees feel they are set up to be successful within the organization that they joined are they likely to stay are they likely to leave how is the leader actually affecting the way that a particular team or a workforce yields about the brand that they are part of.

How is the technology that they're using actually affecting the way that that employee fields, where are they likely to be more engaged versus less engaged.

And I could keep going on and on the point it is.

Is that this is a.

Very unique domain it starts with research sciences it requires.

The type of platform that we built for 10 plus years.

This is not about.

Cute template that you send out a few question to someone once in a while.

This is about making it possible for people to make some of the most.

Important time critical human oriented decisions that actually affect the topline and bottomline results for companies.

And we've designed this system based upon our experience man it's been OLS.

Only tune in and listen remember to the information that's coming in through a variety of ways of connecting with.

Employees colleagues teammates.

<unk> and health care for example, teachers academic leaders, but then be able to separate the noise actually amplify the signal and do something in a time sensitive way and you create this virtuous cycle right.

It's highly complementary to inflate experienced tech, which is why companies and the employee experience Tech space are partnering with us and they wanted to be able to leverage quadrex in conjunction with what theyre trying to do to make their tool sets relevant.

So thats the difference here and it's an important.

Distinction.

We've been out this for years now and we continue to see not only a lot of momentum, but we are actually seeing acceleration.

Because of how relevant our system is right now around the design of the employee experience and then the continuous every day.

Improvement decisions that can be made.

Span a variety of time critical things that people are focused on right now.

As a result, the partnership between the people leader the HR leader.

The customer experienced leader in the company or the head of it.

Or the CEO.

Never been more relevant and it's what puts us at the center of some of the most important decisions that companies and organizations are making because what they're doing is.

We're making excellent platform decisions and they're not.

Looking at it and saying Oh, I want someone off tool.

To sort of work in a silo those that have or.

It might go that direction as it starts to get real for them.

Realize that they run out of steam really fast and they come back to us.

And that's where we're uniquely positioned and we've got to this point by partnering with our customers taking a long run attitude around how we've designed our system.

And so people make multi year decisions on our platform as a result.

That's the context, hopefully that Jim is yes.

Super helpful.

And then Rob maybe my follow up question can you just peel back the onion a bit more on what's happening in the services business is it.

But the products getting more intuitive that program design services are less required just help me understand like what's driving the change in the model.

Yeah.

So.

To reiterate this point that I mentioned in my prepared remarks, which is you are seeing that shift that mix shift to a higher percentage of our revenue in subscription.

And that is consistent with how we've talked about this and that is a trend that we can that we expect to continue along those same lines you will get some variation quarter to quarter in the services business. We've also indicated that and youll see that in our historical results.

Demand continues to be strong across our services. So what we saw is some variability here and we've updated the model and our guidance in accordance with that very variability that we experienced in the current quarter.

Okay perfect. Thanks, guys Congrats again.

Thank you.

We have your next question from Terry Tillman with Chris <unk>. Your line is open.

Yes, good afternoon, Zig Christen Robin Congrats as well from me on the strong results.

I don't know if this question's for I'll just throw it out there but.

I'm really intrigued with the concept of digital experience solutions, whether it's kind of improving the web experience or the in app experiences theres a lot of product analytics vendors. There's a lot of companies that say they do digital experience how much traction do you have at this point and how meaningful to the business is your digital experience solution use cases.

What do you see typically are you, replacing something or nothing.

Yes, great question.

First off.

If you think about the role of digital.

People are in a mode, now where you've kind of gone beyond.

This idea of Hey, we want a digitally transformed and people were focused on experience.

So like the end destination is have you defined and experience.

That differentiates you in your own market uniquely right and how does the role of digital play and your ability to.

Redefine who you are as a brand or further accentuate your differentiation shaped the way that you ended up engaging with your customers your employees.

Really important to keep that in mind. So it's not just about hey, I'm going to give you the cost to the system give you some pipe implement and then like Oh I'm all good what really matters now have you design and experience that uniquely differentiate your position in the market. We've got brands that during the pandemic have created an entirely new business for instance.

And they have used Quadrex design experience and then they put it into the market and they're tuning. It every single day.

Continuously improving.

There's a lot of companies out there that obviously.

Our tracking operational data around experience, how many quakes what's the.

Replay of this session.

On the Internet on the lab with your App.

What's the conversion metric data look like based upon an AD that you put out there how effective has your campaign et cetera, et cetera, et cetera et cetera.

But where we come into the equation as we bring in the human factor dimension why does this cohort why is the segment doing something where do they propensity, what's the propensity to do something or not why.

How does that actually reflect on where your topline business might go with a particular cohort of customers you're trying to go after.

<unk> customers you don't have.

How does that same thing play out with respect to employees.

And what is the intersection of the 2 because it's not like just running in an isolated way with digital usually there is a relationship between digital and what happens in an offline experience where an employee or.

<unk>.

A colleague.

Or a flight attendant gets involved for example in affecting in shaping the experience. So it's a multi dimensional system.

We're uniquely positioned as we're getting connected in with a lot of the other call. It digital fabric that people are putting in place.

And we end up being involved as part of a number 1 understand the customer journey.

Where are they likely to go.

Who are they depending upon the segment that they're in.

And how do you get a holistic view not just digital what are they doing when they call. The call center what are they doing when they walk into the store.

What are they doing when they end up interacting with an employee.

And so.

That's really important because a lot of the rest of the technology ecosystem as point specific solutions focused operationally, we come in we hope to be able to connect and view that entire experience for a human.

Human beings right, our customer and employee.

Then given the workflow engine that we have it enables you to be able to.

Ingest the data from those digital call it operational systems.

And then act on the data once you actually get better signal and corporates is connected to it and as a result, regardless of what technology vendor of companies that on whether it's Google whether it's adobe, whether it's xyz startups.

<unk> is very relevant.

And all of that ties back to the X MLS and the way that we ended up enabling many different departments to leverage the combination of experiential and operational data. So hopefully that helps and it gives you some further context.

It does I appreciate that and just a real quick follow up for Rob is just the theme of longer contract durations and getting longer term commitments from your customers is this something thats got some legs to it because it clearly does help.

That total <unk>, so like where are we in terms of are we going to continue to see some benefits from this lengthening of the contract duration. Thank you.

I think we still have a little bit of legs here as you look at the performance that we've had recently it continues to stroke show strongly with significantly more new contracts. This year signing onto multiyear deals as opposed to the prior year I think we can still drive that up a bit more in the short to medium term.

So a bit more to go.

We have your next question from Daniel Bartus with Bank of America. Your line is open.

Great Hey, guys. Thanks for taking the question here.

Maybe first for you Chris I actually wanted to just ask more directly on cdp's, which seem to be getting more and more attention. How do you think about CDP or the potential competitors or partners and its culture, its becoming more of a CDP overtime.

Yes look I'm going to play back what I said earlier, which is really important.

I think that that when we follow the path of where customers want us to go we ended up uniquely leading with in defining this category and this technology Foundation and the way that we have.

We started it years ago, we defined what experience management is about we've defined the properties of what we think is an operating system.

For enabling the system of action inside of our company and our.

Our conversations with customers usually are not about hey, where do I kind of plug you in and more about.

Wow, how do I.

Use this system to become.

More connected to the way that our customers want to do business with US and then end up shaping the operating environment of our company. So as it turns out whats happening is people are connecting our system to I would say pockets of CDP that might be running inside their company and I say that pocket just because.

Are you looking at that space.

<unk>.

The more tech area, that's building out.

Call it holistic understanding of our customer given the data they have in their environment because of the CRM space.

They're doing their own thing right and if you go you just got to keep going down through the list, while you've got the myriad of different I would say fragments of understanding of customers. We're coming into we're saying look let's just focus on the experience.

Look at the entirety of the journey.

Look at what made someone make a decision to want to engage with your business more or less how do they get shaped by what your employees at <unk>.

How did it get shaped by the way your brand shows up.

And then that data can be going into.

Think of it as a data lake or maybe a CDP repository it varies substantially and Thats why youre seeing lots of fragrance and that CDP area, where contracts comes in as we're saying look we can help to master the experiential information.

And then you can plug it in.

And it can coexist <unk> help to further your better understanding of your customer.

Many customers are actually plugging in their operational data around the customer with wherever it might be coming from ADP or just a data lake in which they're pulling that information together and then plugging it into quadrant.

That's where it all shows up as part of our experienced management directory and it's why you've seen the momentum and I think we've shared some public data around the momentum.

The experienced management directory.

It far exceeds that of any particular individual PD people here and we're continuing to see high growth in that area because of the approach that we're taking.

That's great. Thanks, Thanks for all that and then maybe as a follow up for Chris or any of you can you just give us the latest on how much of the strength Youre seeing is from tapping into the base and how much more can you tap into it could that be upside going forward. Thanks.

Yeah, Chris I'll take that.

1 of the things. We're excited about is that the we've seen continued momentum with the support from S. A P. I think 1 of the areas that is highlighted is that continued momentum.

Experienced internationally it was a really strong international quarter.

From a billings perspective, it was the highest percentage of billings internationally versus the U S that we've had signifying continued momentum there as well as great growth and internationally in terms of those $100000 plus customers.

Coming from international So that's where we're seeing it the most is continued.

Television internationally.

From an S E T support perspective, given their global customer base.

And I'd say, we anticipate that continue we're also making investments in our own global workforce to be able to then take those customers that we have.

To land them, but then also expand them and help them to be wildly successful.

As time goes on.

And then and then the other exciting part is the ability we have to partner beyond that like we announced last quarter with service now another other partners that we can now tap into.

And leverage that experience, we've had with S&P.

Other partners as well.

Great. Thanks, so much guys.

We have your next question from Pat Wall Ravens with JMP Securities. Your line is open.

Oh, great. Thank you I'll add my congratulations.

Hey is it several times today, you've talked about the role of data from from Qual tricks to help companies make some of their most important decisions.

So if you have a good example, I would love to hear what 1 of the most important decisions is that Qualcomm mix had to make recently and how you would have maybe leverage the data you get to make that.

Yeah, I'll give you an example, obviously.

Just like many other companies employee experience matters more than ever.

So how you recruit new candidates, we hired 400, new employees just in Q2.

And then how you retain people in your company.

During.

Time, where it's an extremely competitive market.

In fact, but across many different industries.

It does not.

Executive across many different industries I've spoken with Theres not a board that I've interacted with where this is at the top of mind topic, but within quadrants.

We're using our own platform to tune in and listen to.

Please around what they need in order to be able to be successful in many different regions of the world today, We've got over 4000 employees of the company.

And the reality that people are quite different depending upon the region in territory Youre operating in.

The pandemic actually having impact almost for people.

Not.

A boiler plate approach that you have to take so using our system to design experience for our workforce both digitally.

Well as in the physical office work environment.

That addresses the things that are top of mind for people.

They are both personal team based.

Things that actually resonate with the brand.

Social factors actually are top of mind for people that effect that they way that comes your way where it can engage and all of these things are not a 1 and done thing. It's a dynamic system. The decisions that we made in August of last year are different and the decisions that we're having to make right now and where we want to be.

August where we want to be end of October. It frankly, there's 2 factors that people are dealing with and there are different depending upon the region a world of the world that Youre operating in.

We use our employee experience system.

To design the workplace experience to make decisions on what drives performance what are the needs that our leaders.

You need to be able to best accommodate them, sometimes they are budget oriented other things or leadership oriented.

There's infrastructure decisions that we're making to dynamic system and all of these things actually end up affecting the way, we engage with our customers.

It was deeply important to us in the way that go up with our customers and how we operate.

<unk> connect that data.

With what we are learning a tuning into on the customer experience side.

Often there is a deep intersection between the 2 highly engaged employees.

You usually lead to happy customers.

The high retention rates and expansion rates.

So that's that's a little bit of a sneak peek into the way it plays out et cetera.

Yeah, that's great. Thank you.

We have your next question from Kirk <unk> with Evercore.

Evercore ISI your line is open.

Okay. Thanks, very much and I'll add my congrats on the quarter.

Zig or Chris can you guys just give us an idea if you have many more stakeholders I think interested in experience right now with investors big customers when youre going into these bigger engagements or renewals.

Are you seeing that meaning are there more people at the table from both the HR organization. The sales service organizations, if they make a decision on quadrex from a platform perspective do they pack it all at once meaning do they try to do experienced say customer at the same time or is that stage now so just kind of curious how that.

That sort of dynamic is playing out right now because in your <unk> numbers. It would seem that you're obviously being able to go after more stakeholders across the organization. So I was just wondering if you could comment on that thanks.

Yeah, Great question Kirk I think this will be our last question for today. So what we're seeing in terms of customers is number 1 why are there typically is a member of the executive team who drives.

The decision, whether whether it's employee experience oftentimes. It's your <unk> Your chief people officer is on the marketing side, it will be a CMO or otherwise.

A couple of things, we're seeing number 1 Ceos are involved more and more in the decision, making and and care about whats happening there not fully delegating theyre carrying about the experience whether that's across your customer your brand and your employees so their involvement.

It is happening and then the second 1 is that while you may not see the deployments happening simultaneously they are definitely talking to each other and thinking about that.

Value and benefits of being on a single platform and so when they're making a decision in 1 area whether it's on the employee experience side. They are paying attention to what they have deployed and understanding the benefits that they can have from 1 area to the other and that consolidation trend in the benefit they're seeing of a single platform from a technology.

LNG being involved they're wanting to consolidate and seeing the value of having a single platform. Overall, so I would say, sometimes you're seeing companies that are deploying across the board. Some time they have multiple initiatives going on that they are talking to each other and it's definitely helping us when they're thinking about hey, I want to make it just didn't hear but I also.

Want to be able to leverage the cross benefits of a single platform.

As I am making a decision from Meyer, what what's being used in other areas of the company and gives us a leg up.

Okay. That's helpful. Thanks, guys.

I am showing no further questions at this time I would now like to turn the conference back to Mr. Ziggs Sarafin CEO for any closing remarks, well. Thank you all for joining US today. We appreciate your time.

And we look forward to talking with you soon.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

[music].

Ladies and gentlemen, thank you for standing by and welcome to the call tricks second quarter fiscal year 'twenty 'twenty 1 earnings conference call. At this time, all participants are in a listen only mode.

Later, we'll conduct a question and answer session and if he would like to ask a question. During the session you will need to press star 1 on your telephone keypad.

And then once you did quite assistance during the conference. Please press Star zero.

I would now like to hand, the contents over to your host Mr. Stephen will head of F. P N E and Investor Relations. Please go ahead.

Thank you welcome to <unk> second quarter fiscal year 2021 earnings conference call on.

On the call, we had zig Sarafin CEO, Chris back debt, President and Rob Bachman CFO. Following our prepared remarks, we will open the lineup to answer your questions. Our results press release and a replay of today's call can be found on the culture its 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 required relied upon as representative of our views as of any subsequent date we.

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 that said include 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 June 32021.

That will be filed with us with that.

Well thank you Steven.

Thank you everyone 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 240, $204.5 million, which is up 48% year over year.

And we ended the quarter with more than $754.8 million.

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 experienced management, which is the category that we've created.

We experienced that companies deliver has never been more critical to their success and increasingly experienced management as 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 go to switch products or brands because they know that the experience that they deliver are absolutely vital to their.

Our ability to compete and win and that's why experienced management is becoming a critical as CRM or HR systems and many of the world's largest and most respected companies are investing in <unk>.

And theyre transforming what Quadrex in fact this quarter.

The number of customers spending more than $100000 annually with contracts increased by 38% year over year.

In Q2.

We formed new relationships with industry leaders that include American Honda Motors anchored urban.

Urban Outfitters circle, K stores Dx seat, Mitsubishi heavy industry and the financial times.

1 of our great relationships from the quarter as LNG Bank, It's a fortune 500 bank, but deep community roots in the U S.

<unk> digitally and nearly half of total sales are now happening over digital channels and MN keybanc.

Is designing and improving experiences that each digital touch point, they chose quadrex 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 experienced transformation as DXP. There are fortune 500 technology services company and 1 of the largest employers in the world and they deliver technology.

As a platform for thousands of enterprises everyday.

There are also on our transformation journey with a laser focus on taking care of their customers and their colleagues who deliver for them every day DXP chose to standardize on Quadrex in Q2 as they are experienced management platform both internally.

130000, 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 Dxp's modern workplace solution.

To help drive better collaboration productivity and engagement.

In Q2.

Our growth numbers are actually accelerating as more companies like Keybanc and DXP invest in experience management.

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 <unk> operating system, which is based on 3 powerful services, the XM directory IQ and ex slow.

And together the power of all of our apps and products and they are all backed by enterprise grade security.

Interconnected services are analyzing experienced 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 <unk> operating system and just the 4 months of this year. The first 4 months of this year things.

Things like for example, alerting teams are a critical issue or updating our central records or send anything 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 experienced 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.

And our customer X M 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.

Great resignation.

More than 50% of workers today that they're looking to change jobs in the coming year.

The employee at some product lines.

Our new candidate experience solution improves how customers recruit and how the higher 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 experienced design for hybrid work and Workspaces. This new product helps organizations use employee feedback to create new work experiences in office environments that enhanced 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 required user mind, a next generation journey orchestration platform.

User mind is transforming the way companies can use contextual data to <unk>.

Proactively shape customer journey in real time that increases customer retention engagement and lifetime value.

User mind 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 touch point in their journey.

We also talked about our ability and our ecosystem of partners and extend the benefits of our platform. So as you know at the beginning of Q2.

We formed a new strategic partnership with service now.

Combining the power of service now digital workflows with our experienced management technology on a single platform a new companies will be able to bring sentiment data quadrex.

Into service now customer and key workflows.

To quickly act on customer insights, increasing employee productivity and enhancing customer loyalty.

We also formed a new partnership with Genesis.

A leader a cloud leader that's in the cloud contact Center software.

And we did that to build to bring together their engagement data with cultural experience data.

On the employee experience side of the business the world's leading HR Association the.

The society for human resource management.

<unk> is standardizing on the <unk> platform for their employees.

As well as more than 300 member 300000 members around the world.

So look we couldn't have achieved these outstanding results without our incredible <unk> team, they're all in on making our customer successful.

And we are 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 thus far exceed that.

Just last week, we shared our first public diversity equity and inclusion report as part of our commitment to take action and then constantly improved in that report.

We confirm we reconfirm that we are paying men and women equally at Quadrex and we're only at the beginning of our 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 <unk> solution.

Built on our <unk> platform can 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.

Operating margin and record free cash flow in the second quarter.

Subscription revenue in the second quarter was $204.5 million up 48% year over year, driven by both strong new business sales and expansions favorable in quarter linearity and strong customer renewals professional services and other revenue was $44.8 million for the second quarter, representing 5% growth.

With year over year.

Total revenue was $249.3 million in the second quarter up 38% year over year, our remaining performance obligations, representing all future revenue under contract ended the quarter at $1.2.96 billion up 76% year over year. This metric includes.

Both new and renewal software contracts, along with our professional services business.

Current remaining performance obligations, which is all future revenue under contract that is expected to be recognized as revenue in the next 12 months with $754.8 million up 61% year over year.

Current and total <unk> continued to benefit from a lengthening of average contract duration for both new customers and renewals.

6% of our total revenue in Q2 of 2020.

282% in Q2 of 2021, as we focus on driving software usage on our platform and continue to grow our partner ecosystem.

Experienced management services to our customers are.

And by a continuation of reduced spend in travel and events.

Operating cash flow for Q2 with $58.8 million compared.

Compared to negative $95 million in the year ago period free cash flow in the quarter was $53.7 million compared to negative $107.2 million in Q2 of 2020 due to operating margin expansion and significantly lower cash payouts relating to S&P equity based awards.

<unk>.

<unk> to stock settled <unk> awards at the time of our IPO.

As a reminder, free cash flow may fluctuate on a quarterly basis due to the timing of cash collections and we believe it's best to assess our cash flow performance over a longer term horizon.

We ended the quarter in a strong cash position with approximately $635.1 million in cash and cash equivalents.

Moving on to our Q3 and fiscal year 2021 business outlook for the third quarter of fiscal year 2021, we anticipate total revenue to be in the range of $257 million to $259 million, representing 34% growth year over year at the midpoint.

Assuming 515 million weighted shares outstanding.

For the fiscal year 2021, we expect total revenue in the range of 1.007 billion to $1.011 billion and subscription revenue in the range of $813 million to $817 million at the midpoint of the ranges. This represents a subscription revenue growth of.

42% year over year, and total revenue growth of 32% year over year, respectively. We expect non-GAAP operating margin in the range of zero to 1%, we expect a non-GAAP net loss per share of between <unk> and zero cents, assuming 510 million weighted shares outstanding.

Thank you for joining today's call and with that Big Chris and I are happy to take your questions and we'll turn it back to the operator.

Thank you Sir at this time I would like to remind everyone in order to ask a question. Please press star 1 on your telephone keypad again that is star 1 to ask a question.

We have your first question from Mark Murphy with Jpmorgan. Your line is open.

So thank you very much and congratulations on a fantastic quarter Zig I wanted to ask you what do you see your most advanced forward thinking customers doing with a quality platform, that's maybe driving more of a complete.

Experience transformation.

And might kind of light that pathway for some of the earlier stage customers and I'm wondering if it's more of the operationalize them.

With X slow or maybe getting into design X them or product X M side, or perhaps something else that you're seeing.

Yes, great question.

So first off.

If you look at some of the customers are that are I would say forward thinking they realized how important experiences to the very essence of the way that they connect with their customers.

As well as their employees the combination and then there are of course as they do that then how they express what they do about it through not only how they operate from a customer experience perspective, the channels that they use to engage but also the way they end up innovating around product and the way that that shows up in their brand.

And so.

So there was a trend that we continue to see.

Where people are consolidating and standardizing on Quadrex ex some of the platform in order to drive the 4 core experiences of their business.

And as they do so they end up taking advantage of product functionality solutions for many different departments across the company.

And the beautiful thing about the way we've designed our system because it allows them to be able to use the data that they've learned about customers.

Then operationalize.

Make decisions and product how they make decisions in their brand.

Differentiated and the ability to do that because we're not piecemeal or different components.

What's very unique about our platform is we've designed workflow.

Right into the epicenter of our operating system.

You have the ability to make time sensitive decisions and actions.

Sometimes they are fully automated inside of our company and they end up integrating with applications tools that are already running inside of our company. This isn't about going and learning a whole new tool.

About plugging in to what's already running with you helped us what's already running with your HR or front of line.

Workforce kiosks for example.

And then.

And seeing the results of that on a daily sometimes hourly sometimes weekly level, depending upon where someone is inside of an organization. There's also semi automation, which is your better enabling be employee to do something that would have taken a long time to go do so that's what we're seeing people do is the combination of.

The 4 core experiences shared data and a workflow engine that helps companies to develop a culture of action.

And that was never possible before with individual systems of record that people might be using right and as a result, we're very uniquely positioned.

Why people are starting to standardize standardize around our system.

Thank you that's very helpful. If I may sneak in a quick 1.

For Robert Chris.

I'm looking at the strength of Q2, where you have acceleration of subscription revenue.

Pre COVID-19 levels or even pushing beyond that or is that yet to come in the back half.

Hey, Mark Chris here I'll take that 1.

When you look at the quarter's performance in terms of subscription growth I think youre seeing a couple of things 1 really pleased with the.

The broad based demand environment that we're seeing from our customers. Both from an international perspective, we saw really strong performance from our our U S corporate business and saw continuation from the enterprise held up more during during the deep parts of the pandemic and it was great to see customers that are smaller step.

Up and invest more than we'd seen in previous quarters. So that was another positive trend that we saw and then finally.

So experiences mattering more than ever they highlighted the employee experience and the current environment. We're in from an employee perspective that the product that we've seen accelerate even though we've seen a good demand across all of our product that is 1 that really stood out in the quarter as it's becoming more important than ever in this competitive environment for company.

To pay attention to attracting retaining and motivating their employees.

In the first half results on those metrics on a on an enhanced basis.

This shows more normal last year was more backend loaded than we would expect this year.

Okay excellent. Thank you very much for taking my questions.

We have your next question from Brent <unk> with Piper Sandler Your line is open.

Thank you and good afternoon, I guess this is for Rob or Zig.

International a little bit, but any color there from a ramp perspective would be super helpful. Just given the acceleration youre seeing.

Thanks, Brent I'll jump in and take that this is Rob I wouldn't necessarily rank. The we really did get strength across a handful of categories. There is strength in the new business and their strength in the customer renewal base and you see that in the net retention rate uptick to 102.

2% this quarter and as Chris talked about Theres strength internationally, there strength in our <unk> and other <unk> products. So all up what we're seeing is continued momentum and growth in the business and coming back to what <unk> said is experiences matter more so than ever.

And customers are standardizing and consolidating on the culture platform.

Okay, great well, it's certainly encouraging to see and then maybe as a follow up for zig.

Obviously, we're all looking at a return back to work you flagged employee experience as 1 of the areas that kind of really stood out.

What's the adoption rate of existing customers that have embraced fully embraced experience.

Employee experience product is it broadly adopted as there are a lot of cross sell opportunity any sort of insights you could share around just the <unk>.

Pipeline the interest the value add of employee experience would be super helpful. Thanks.

Well look.

This is obviously 1 of several major areas of our business. There continues to differentiate what we provide we've got.

Purpose built system that is around understaffed.

<unk> engaged with employees.

It's a system that's connected to the lifecycle of what happens in and around the way that you recruit.

New candidates into our company to the way that you ended up driving further engagement.

And some of them some.

Some of the most.

Important decisions that are made along the lifecycle of an employee which is a multi factor.

Decision, making.

Sort of spectrum of things that people have to deal with from our leaders are engaging to bear with.

Best in class looks like and the data that used to be able to do that in the decision making that comes along with it and then of course actioning around that.

And.

We're seeing all around the world people, referring out the old playbook.

Around.

What's the future of the work experience looks like and that means that people are in the midst of redesigning the physical work experience. They are in the midst of.

Being more intentional about what the digital experience needs to look like it leaders are getting involved in that they are partnering up with HR leaders, you've got conversations happening right now more than ever around the intersection between highly engaged employees and the impact that that actually has on the customer experience. So it's no longer.

Less the case, where people look at things in silos.

We see the relationship between that so we're being brought in to help on the experienced design side, but it's also sort of an indispensable part of the way that people think about the employee system altogether.

Really complementary to the HRS platform, which many companies.

Large enterprise is still running variety of different types of HR systems, we can plug in with combinations.

And then of course in the mid market and they standardize on 1 but they need the employee experience parts in order to make some of the most critical decisions.

Those are the macro things that we're seeing in the employee experience area and we're extremely well positioned there given the innovation that we've had there over the last 4 to 5 years very intensively.

We saw the future of where this was going to go as part of overall experienced management and the beautiful thing about it is building on the platform the underlying XM platform that we've got at least a 10 year advantage on at this point so Chris do you want to add to that.

Yeah. The only other thing I'd say is as reflected in some of the metrics. We share for example, the net retention rate the number of customers spending over $100000.

We see the trend of customers that more fully adopt the platform are our larger standard lager floaters vendors and we're seeing good momentum and growth of customers buying more and more products, but it's still a lot of runway.

Runway ahead in terms of the opportunity we have per customer to adopt additional products and additional use cases within the platform, giving us a great opportunity to continue to expand our existing customers and feel like we're still early days.

I appreciate the color. Thank you.

We have your next question from Keith Weiss with Morgan Stanley. Your line is open.

Excellent. Thank you guys for taking the question and outstanding quarter.

Nice to see the acceleration across a lot of these metrics I wanted to dive into.

Do you use your mind acquisition.

A little bit.

Super interesting.

Could you tell us a little bit about kind of where does this fit into the portfolio. It seems like a <unk>.

And then I kind of think about you guys as having a CDP.

At a certain extent, so what looks like the net new functionality Youre getting number 1 number 2 it looks like these guys are very marketing focus and the balance sort of those those marketing journeys. So does this get you into more direct competition with the likes of like an adobe experience cloud or the marketing suite from Salesforce and number 3 can you give us any.

Details on the size and scale of the company. It seems like they've been around for a while from like 2013, so anything about purchase price or the revenue run rates or expected impact on our financials on a go forward basis would be great. Thanks, so much.

Okay.

Great series of questions. There, let me, let me just kind of tease out the big the big themes here number 1.

I want to reiterate something.

That we've said from the very beginning about our approach to M&A.

Are going to see us be very disciplined thoughtful and opportunistic.

Where we see moves that will further our lead in the market.

And when we do it you're going to see it be something that is accretive to our addressable market.

Our growth that further accelerate and build on the strengths that we have.

Okay. So that's a really important principle here.

Yeah.

When you take a look at our experience management.

The work that we have been leading 1 with experienced manager directory.

Enabling customers to better understand their own customers.

Far more authentically far more in a way where they can understand perceptions emotions and where things are going.

What.

User mine does.

It just simply accelerate some of the work that we've been doing there around journeys around orchestration, but in a way that natively connected with a lot of the way that we've designed our platform.

They are a very unique company.

They built a technology architecture that is extremely different from anything that we've seen in the market.

And we found it to be highly complementary they're based in Seattle.

We have a significant R&D workforce in Seattle.

It plugs right in.

And we found this to be almost like picking up another development and engineering team that's been working inside of Quadrex that beautifully connects and with the way that we've designed our system. So what you should expect is that our ability to further the leadership and the advantage that we have.

We are.

Momentum around the experience management directory, where the customers use that in order to be able to create.

Think of it as a master record or an experience that nicely complements what people were doing with CDP is in order to address some of the most.

Critical decisions that take place in companies.

What's going to drive.

Increase.

Customer retention.

Do you think about that in the context of different stages in which a customer might be in their journey.

With that particular entity, how do you enable actioning.

In a timely manner.

The way they'd be architected the system allows us to be able to likely dovetail that in with our workflow engine.

So there is a small innovative company approximately 30.30 employees think of it as mostly R&D and engineering.

That effectively will allow us to plug right in and accelerate our leadership in our advantage in this space.

Got it and in terms of the competitive environment that does this.

It gives you more competitive with the core marketing suites.

Hi.

I don't think we don't look at the market. We have never built this company in a way, where we're trying to shape ourselves into any 1 way in how the market is defined I mean.

As you very well know, we started and redefine the experience management category.

And we haven't been trying to read off of any books of what people would define a certain market spaces.

Everything we do is customer led and.

What we're hearing from customers, who want to build on the unique architecture of our system and this is where they see it building it it'll actually end up affecting some of the most important decisions that they make.

Theyre on customers as well as our employees.

<unk>.

Pat.

<unk> will inform marketing decisions that will inform customer facing operating decisions that will have more product decisions and so forth. So that's how we look at it.

Got it alright, thank you guys.

Thank you.

We have your next question from Keith Bachman with Bank of Montreal. Your line is open.

Hi, Thank you very much I was wanted to start my first question and ask a little bit about the net retention rate it was a good.

Trend this this quarter.

A year ago, you were doing $124.125, what are the puts and takes that we should be thinking about that.

Retention rate over the next couple of quarters and to ask it a little bit differently. If you thought about some of the courthouse. If you will of the net retention rate that is to say some of your more.

Breath of adopters of your technology, what was the net retention rate look like for some of those customers.

I'll take the first part and then Kate This is Rob I'll take this and then if Chris wants to add I'll turn it over to him what Youre seeing is along the lines of what we indicated in prior quarters, where we saw this stabilizing and with a potential uptick we realize that uptick we see continued stability in this rate.

Above 120% in the short to medium term.

<unk> to some of what Chris talked about previously in terms of the runway both upsell cross sell within our existing customer base. So we're incredibly pleased with where it's at.

Growing that existing customer base will continue to be a key focus for us as we continue to build that.

Business.

Yes, Keith.

Add a little more color as we talked about during the IPO process.

Most of all avenues, we have to expand customers across additional used cases within an individual product or when they go across and add additional products and adopt the <unk> platform. When you think about that net retention rate the.

The biggest impact that those customers that fully adopt the platform. So you get some some increase for sure when a customer more fully expand with MTX, but it is much more significant for those customers that truly captured the vision and see the value of the multiple pillars of experienced and adopt a full platform so that trend it did.

Emerged again of customers adopting the full platform that we've seen.

In recent quarters is definitely helped drive that rate and helping it to recover and increase like we've seen it full adopters of the platform really move the needle on that.

Okay as my follow up let me ask about seasonality and I want to put it in the context of you actually had.

Some upside relative to cash flow.

This quarter and while not part of your guidance just wanted to know if there's anything you wanted to call out from a seasonality perspective related to cash flow and understand that some of the issues behind SAP destock I think are largely behind us so that should be a tailwind.

Just anything you wanted to call out including.

The billings growth trajectory that you look out here in the September and December quarters, the comps are getting a little bit harder.

But anything you wanted to call out from a seasonality perspective related to cash flow and billings would be helpful. Thank you.

Yeah happy to comment on that.

So again as we look at the cash flow and as I said in my prepared remarks, we do believe looking at the cash flow results over a longer term horizon is more representative of the results that we're having.

We went into in Q1, we mentioned that there were a handful of accounts that could have collected either in Q1 or Q2. They did collect in Q2. So when you look at the first half cash flow what youll see on that if you exclude the.

And our back half of 2021 has more challenging comparable periods on the calculated billing.

Okay, great. Many thanks, and congratulations to a solid quarter.

Thank you.

We have your next question from DJ Hynes with Canaccord. Your line is open.

Hey, Thanks, guys and I'll Echo the congrats.

You talked about employee experience and your response to Brian's question I want to ask a slightly different question. It seems to me like there are more and more.

Our vendors getting into the game with product guys efforts around employee experience can you just talk about what you see in terms of selling against and is there any incumbency advantage there in the sense that.

<unk> decisions for our employees are made out of the HR department, they probably have closer relationship already with our HR vendor or.

There is a call tricks pitch around.

The innovation unified platform system of action does that resonate with those folks maybe just walk through kind of the pros and cons of that dynamic with employee comp.

Sure So first off the word.

Employee experience Tech those 3 words are sort of used in order to describe technology built for employees right that people are referring to that terminology.

But if you double click on that and you say, okay. Now, let's look at the people that are focused on employee experience management.

That's a uniquely sort of focused area that complements other employee experienced tax so like take for example, slack. That's an employee experience technology tool that enables collaboration communication information call et cetera et cetera.

We're exploit experienced management.

As the system comes into the equation as understanding People's intention emotions.

What drives engagement.

How is the technology that they are using actually affecting the way that that in place deals where are they likely to be more engaged versus less engaged.

And I could keep going on and on appointed.

Is that this is a.

A very unique domain it starts with research sciences it requires.

The type of platform that we built for 10 plus years.

This is not about.

<unk> template that you send out a few question to someone once in a while.

This is about making it possible for people to make some of the most.

Important time critical human oriented decisions that actually affect topline and bottomline results for companies.

And we've designed this system based upon our experience man it's been OLS.

Not only tune in and listen remember to the information that's coming in through a variety of ways of connecting with <unk>.

Employees colleagues teammates providers and health care for example, teachers academic leaders, but then be able to separate the noise actually amplify the signal.

And do something in a time sensitive way and you create this virtuous cycle right.

It's highly complementary to inflate experienced tack, which is why companies and the employee experience tech space are partnering with us and they want to be able to leverage quadrex in conjunction with what theyre trying to do to make their tool sets relevant.

So that's the difference here and it's an important.

Extinction.

We've been out this for years now and we continue to see not only a lot of momentum, but we're actually seeing acceleration.

Because of how relevant our system is right now around the design of the employee experience and then the continuous every day.

Improvement decisions that can be made.

Span a variety of time critical things that people are focused on right now as.

As a result, the partnership between the people leader the HR leader.

The customer experienced leader in the company or the head of it.

Or the CEO.

Never been more relevant.

And it's what puts us at the center of some of the most important decisions that companies and organizations are making because what they're doing is.

We're making excellent platform decisions and they're not looking at it and saying Oh I want someone off tool.

To sort of work in a silo those that have or might go that direction as it starts to get real for them.

<unk> is that they run out of steam really fast and they come back to us.

That's where we're uniquely positioned and we got to this point by partnering with our customers taking a long run attitude around how we've designed our system.

And so people make multiyear decisions on our platform as a result.

The context, hopefully that generous yes, I know.

Got it Super helpful.

And then Rob maybe my follow up question can you just peel back the onion a bit more on what's happening in the services business is it.

Our products getting more intuitive that program design services are less required just help me understand like what's driving the change in the model.

Yeah.

I want to reiterate this point that I mentioned in my prepared remarks, which is you are seeing that shift that mix shift to a higher percentage of our revenue in subscription.

To be strong across our services.

What we saw is some variability here and we've updated the model and our guidance in accordance with that very variability that we experienced in the current quarter.

Okay perfect. Thanks, guys Congrats again.

Thank you.

We have your next question from Terry Tillman with Chris <unk>. Your line is open.

Yes, good afternoon, Zig, Chris and Rob Congrats as well from me on the strong results.

I don't know who this question is for I'll just throw it out there but.

No I'm really intrigued with the concept of digital experience solutions, whether it's kind of improving the web experience or the in app experiences theres a lot of product analytics vendors. There's a lot of companies that say they do digital experience how much traction do you have at this point and how meaningful to the business is your digital experienced solution use cases.

And what do you see typically are you, replacing something or nothing.

Yes, great question.

So first off.

If you think about the role of digital people are in a mode now where you've kind of gone beyond.

This idea of Hey, we want a digitally transformed and people were focused on experience.

So like the end destination is have you defined an experience.

That differentiates you in your own market uniquely right and how does the role of digital play and your ability to.

Redefine who you are as a brand or further accentuate your differentiation shape. The way that you ended up engaging with your customers your employees.

Really important to keep that in mind. So it's not just about hey, I'm going to give you the gas to the system give you some pipe implement and then like Oh I'm all good what really matters. Now is have you designed and experienced that uniquely differentiate your position in the market. We've got brands that during the pandemic have created an entirely new business for instance.

They have used Quadrex design.

Design experience and then they put it into the market and they're tuning it every single day and.

And continuously improving.

There's a lot of companies out there that obviously.

Our tracking operational data around experience how many quakes.

The replay out of recession.

On the Internet on the lab with your App.

What's the conversion metric data look like based upon an AD that you put out there how effective has your campaign et cetera, et cetera, et cetera et cetera.

Where we come into the equation as we bring in the human factor dimension why does this cohort why is the segment doing something where do they propensity, what's the propensity to do something or not why.

How does that actually reflect on where your topline business might go with a particular cohort of customers you are trying to go after.

Customers you don't have.

How does that same thing play out with respect to employees.

Okay.

A colleague.

We're a flight attendant gets involved for example in effecting in shaping the experience. So it's a multi dimensional system.

We're uniquely positioned as we're getting connected in with a lot of the other call. It digital fabric that people are putting in place and we end up being involved as part of a number 1 understand the customer journey.

Where are they likely to go who are they depending upon the segment that they're in.

And how do you get a holistic view not just digital what are they doing when they call. The call center what are they doing when they walk into the store what are they doing when they end up interacting with an employee.

And so.

That's really important because a lot of the rest of the technology ecosystem as point specific solutions focused operationally, we come in we hope to be able to connect and do that entire experience for humans.

Human beings right, our customer and employee and then given the workflow engine that we have it enables you to be able to.

Ingest the data from those digital call it operational systems.

<unk> is very relevant.

And all of that ties back to the X MLS and the way that we end up enabling many different departments to leverage the combination of experiential and operational data. So hopefully that helps you and gives you some further context.

That total ARPA, so like where are we in terms of are we going to continue to see some benefits from this lengthening of the contract duration. Thank you.

So.

A bit more to go.

We have your next question from Daniel Bartus with Bank of America. Your line is open.

Great Hey, guys. Thanks for taking the question here.

Yes look I'm going to play back what I said earlier, which is really important.

I think that that when we follow the path of where customers want us to go we ended up uniquely leading with in defining this category and this technology Foundation and the way that we have.

We started it years ago, we defined what experience management is about we've defined the properties of what we think is an operating system.

For enabling the system of action inside of our company and our.

<unk> with customers, usually are not about hey, where do I kind of plug you in and more about.

Wow, how do I use this system to become <unk>.

Looking at that space.

Got it.

The <unk> area the building out.

Call it holistic understanding of our customer given the data they have in their environment because of the CRM space.

And they're doing their own thing right.

Go you.

Keep going down through the list.

You've got the myriad of different I would say fragments of understanding of customers, we're coming into we're saying look let's just focus on the experience.

Look at the entirety of the journey.

Look at what made someone make a decision to want to engage with your business more or less how do they get shaped by what your employees.

How did it get shaped by the way your brand shows up.

And then that data can be going into.

Think of it as a data lake or maybe a CDP repository it very substantially and that's why you're seeing lots of fragrance and that CDP area, where contracts comes in as we're saying look we can help to master the experiential information.

And then you can plug it in.

And it can coexist <unk> help to further your better understanding of your customer.

That's where it all shows up as part of our experienced management directory and it's why you've seen the momentum and I think we've shared some public data around the momentum.

The experienced management directory.

It far exceeds that of any particular individual people here and we're continuing to see high growth in that area because of the approach that we're taking.

Yeah, Chris I'll take that.

1 of the things. We're excited about is that the we've seen continued momentum with the support from S. A P. I think 1 of the areas that is highlighted is that continued momentum.

Experienced internationally it was a really strong international quarter.

Coming from international So that's where we're seeing it the most.

<unk>.

Salaries and internationally.

From an SAP perspective, given their global customer base.

And I'd say, we anticipate that continue we're also making investments in our own global workforce to be able to then take those customers that we have.

To land them, but then also expand them and help them to be wildly successful.

As time goes on.

And then and then the other exciting part is the ability we have to partner beyond that like we announced last quarter with service now another other partners that we can now tap into.

And leverage that experience, we've had with S&P.

Other partners as well.

Great. Thanks, so much guys.

We have your next question from Pat Wall Ravens with JMP Securities. Your line is open.

Oh, great. Thank you I'll add my congratulations.

Hey, there several times a day, you've talked about the role of data from from Qual tricks to help companies make some of their most important decisions.

So if you have a good example, I would love to hear what 1 of the most important decisions is that <unk> had to make recently and how you would have maybe leverage the data you get to make that.

Yeah, I'll give you an example, obviously.

Just like many other companies employee experience matters more than ever.

So how you recruit new candidates, we hired 400, new employees just in Q2.

And then how you retain people in your company.

During a time, where it's an extremely competitive market.

In fact, but across many different industries.

And.

It does not.

Executive across many different industries I've spoken with Theres not aboard that I've interacted with where this is at the top of mind topic, but were there any quadrants.

We're using our own platform to tune in and listen.

Please around what they need in order to be able to be successful.

In different regions of the World today, we've got over 4000 employees of the company.

And the reality that people are quite different depending upon the region or territory Youre operating in the pandemic actually having impact almost for people.

Not.

A boiler plate approach that you have to take so using our system to design experience for our workforce both digitally.

Well as in the physical office work environment.

That addresses the things that are top of mind for people.

They are both personal team based.

Things that actually resonate with the brand.

August where we want to be end of October. It frankly, there's 2 factors that people are dealing with and there are different depending upon the region in the world of the world that you're operating in.

We use our employee experience system.

To design the workplace experience to make decisions on what drives performance what are the needs that our leaders.

Need to be able to best accommodate them, sometimes they are budget oriented other claims or leadership oriented.

There is infrastructure decisions that we're making to dynamic system and all of these things actually end up affecting the way, we engage with our customers.

There was deeply important to us in the way that go up with our customers and how we operate.

<unk> connect that data.

With what we are learning a tuning into on the customer experience side.

Often there is a deep intersection between the 2 highly engaged employees.

Usually lead to happy customers, which leads to higher retention rates and expansion rates.

So that's a little bit of a sneak peek into the way it plays out et cetera.

Yeah, that's great. Thank you.

We have your next question from Kirk <unk> with Evercore.

Evercore ISI your line is open.

Okay. Thanks, very much and I'll add my congrats on the quarter.

Zig or Chris can you guys just give us an idea if you have many more stakeholders I think interesting experience right now with investors big customers when youre going into these bigger engagements or renewals.

Are you seeing that meaning are there more people at the table from both the HR organization. The sales service organizations and if they make a decision on quadrex from a platform perspective do they pack it all at once meaning do they try to do experience say customer at the same time or is that stage now so just kind of curious how that.

The decision, whether whether it's employer experienced oftentimes it's your <unk>.

People officer, it's on the marketing side, it will be a CMO or otherwise.

Happening and then the second 1 is that while you may not see the deployments happening simultaneously. They are definitely talking to each other and thinking about the value and benefits of being on a single platform and so when they're making a decision in 1 area whether it's on the employee experience side, they are paying attention to what they have dipped.

Lloyd and understanding the benefits that they can have from 1 area to the other and that consolidation trend in the benefit they're seeing of a single platform from a technology being involved they're wanting to consolidate and seeing the value of having a single platform overall, so I would say sometimes youre seeing.

Companies that are deploying across the board some time they have multiple initiatives going on that they are talking to each other and it's definitely helping us when they're thinking about hey, I want to make it just didn't hear but I also want to be able to leverage the cross benefits of a single platform.

As I am making a decision from Meyer, what what's being used in other areas of the company and gives us a leg up.

Okay. That's helpful. Thanks, guys.

I am showing no further questions at this time I would now like to turn the conference back to Mr. Ziggs Serfin CEO for any closing remarks, well. Thank you all for joining US today. We appreciate your time.

And we look forward to talking with you soon.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Q2 2021 Qualtrics International Inc Earnings Call

Request a DemoDemo

Qualtrics International

Earnings