(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 6. | ||||||||
As of March 31, | As of December 31, | ||||||||||
2023 | 2022 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance (1) | |||||||||||
Deferred contract acquisition costs, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Non-current assets: | |||||||||||
Property and equipment, net | |||||||||||
Right-of-use assets from operating leases | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Deferred contract acquisition costs, net of current portion | |||||||||||
Deferred tax assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and equity | |||||||||||
Current liabilities: | |||||||||||
Lease liabilities | $ | $ | |||||||||
Accounts payable (1) | |||||||||||
Accrued liabilities | |||||||||||
Liability-classified, stock-based awards | |||||||||||
Deferred revenue | |||||||||||
Total current liabilities | |||||||||||
Non-current liabilities: | |||||||||||
Lease liabilities, net of current portion | |||||||||||
Deferred revenue, net of current portion | |||||||||||
Deferred tax liabilities | |||||||||||
Other liabilities (1) | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Equity | |||||||||||
Preferred stock, par value $ | |||||||||||
Class A common stock, par value $ | |||||||||||
Class B common stock, par value $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Accumulated deficit | ( | ( | |||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenue: | |||||||||||
Subscription | $ | $ | |||||||||
Professional services and other | |||||||||||
Total revenue | |||||||||||
Cost of revenue: | |||||||||||
Subscription | |||||||||||
Professional services and other | |||||||||||
Total cost of revenue | |||||||||||
Gross profit | |||||||||||
Operating expenses: | |||||||||||
Research and development | |||||||||||
Sales and marketing | |||||||||||
General and administrative | |||||||||||
Total operating expenses | |||||||||||
Operating loss | ( | ( | |||||||||
Other non-operating income, net | |||||||||||
Loss before income taxes | ( | ( | |||||||||
Provision for income taxes | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Net loss per share attributable to common stockholder, basic and diluted | $ | ( | $ | ( | |||||||
Weighted-average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic and diluted | |||||||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation gains (losses) | ( | ||||||||||
Comprehensive loss | $ | ( | $ | ( |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Class A common stock | Class B common stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit | Total equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon settlement of restricted stock units (RSUs) | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Common stock withheld related to net share settlement of equity awards | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ |
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Class A common stock | Class B common stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit | Total equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon settlement of restricted stock units (RSUs) | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for employee stock purchase plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Common stock withheld related to net share settlement of equity awards | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities | |||||||||||
Depreciation and amortization | |||||||||||
Gain on disposal of property and equipment | ( | ( | |||||||||
Change in fair value of distribution liability for tax sharing agreement | ( | ||||||||||
Reduction of right-of-use assets from operating leases | |||||||||||
Stock-based compensation expense, including cash settled | |||||||||||
Amortization of deferred contract acquisition costs | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable, net | |||||||||||
Prepaid expenses and other current assets | ( | ( | |||||||||
Deferred contract acquisitions costs | ( | ( | |||||||||
Other assets | ( | ( | |||||||||
Lease liabilities | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Accrued liabilities | ( | ( | |||||||||
Deferred revenue | ( | ||||||||||
Other liabilities | ( | ||||||||||
Settlement of stock-based payments liabilities | ( | ( | |||||||||
Net cash flows provided by operating activities | |||||||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Cash paid for intangible assets | ( | ||||||||||
Net cash flows used in investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Payments of tax sharing liabilities to SAP (1) | ( | ||||||||||
Payments for taxes related to net share settlement of equity awards | ( | ( | |||||||||
Issuance of common stock of Employee Stock Purchase Plan | |||||||||||
Proceeds from exercise of stock options | |||||||||||
Net cash flows provided by (used in) financing activities | ( | ||||||||||
Effect of changes in exchange rates on cash and cash equivalents | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents as of 1 January | |||||||||||
Cash and cash equivalents as of 31 March | $ | $ | |||||||||
Supplemental cash flow disclosures | |||||||||||
Cash paid for income taxes | $ | $ | |||||||||
Cash paid for operating leases, net of incentives received | $ | $ | |||||||||
Non-cash investing and financing activities | |||||||||||
Capital expenditures incurred but not yet paid | $ | $ | |||||||||
Stock-based compensation capitalized as internal-use software | $ | $ | |||||||||
Right-of-use assets obtained in exchange for lease obligations | $ | $ |
Three Months Ended March 31, | |||||||||||
in thousands | 2023 | 2022 | |||||||||
Subscription revenue: | |||||||||||
Revenue included in prior period deferred revenue | $ | $ | |||||||||
Revenue generated from same period billings | |||||||||||
Total subscription revenue | $ | $ | |||||||||
Professional services and other revenue: | |||||||||||
Revenue included in prior period deferred revenue | $ | $ | |||||||||
Revenue generated from same period billings | |||||||||||
Total professional services and other revenue | $ | $ |
Three Months Ended March 31, | |||||||||||
in thousands | 2023 | 2022 | |||||||||
United States | $ | $ | |||||||||
International | |||||||||||
Total revenue | $ | $ |
As of March 31, | As of December 31, | ||||||||||
in thousands | 2023 | 2022 | |||||||||
Cash | $ | $ | |||||||||
Money market mutual funds | |||||||||||
Total cash and cash equivalents | $ | $ |
in thousands | |||||
Balance as of December 31, 2022 | $ | ( | |||
Change in the fair value reported in other non-operating income, net | ( | ||||
Payments of tax sharing liabilities based on estimated fair value to SAP (1) | |||||
Balance as of March 31, 2023 | $ | ( |
As of March 31, | As of December 31, | ||||||||||
in thousands | 2023 | 2022 | |||||||||
Internal-use software | $ | $ | |||||||||
Server equipment | |||||||||||
Leasehold improvements | |||||||||||
Computer equipment | |||||||||||
Land | |||||||||||
Buildings | |||||||||||
Furniture and fixtures | |||||||||||
Software | |||||||||||
Construction in progress | |||||||||||
Total property and equipment | $ | $ | |||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Three Months Ended March 31, | |||||||||||
in thousands | 2023 | 2022 | |||||||||
Cost of revenue | $ | $ | |||||||||
Research and development | |||||||||||
Sales and marketing | |||||||||||
General and administrative | |||||||||||
Total depreciation and amortization expense | $ | $ |
Three Months Ended March 31, | |||||||||||
in thousands | 2023 | 2022 | |||||||||
Operating lease cost | $ | $ | |||||||||
Variable and short-term lease cost |
As of March 31, | As of December 31, | ||||||||||
2023 | 2022 | ||||||||||
Weighted average remaining lease term | |||||||||||
Weighted average discount rate | % | % |
As of March 31, | |||||
in thousands | 2023 | ||||
Remainder of 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total minimum lease payments | $ | ||||
Less: imputed interest | ( | ||||
Total | $ |
As of March 31, | As of December 31, | ||||||||||
in thousands | 2023 | 2022 | |||||||||
Patents | $ | $ | |||||||||
Developed technology | |||||||||||
Customer relationships | |||||||||||
Developed content | |||||||||||
Tradename | |||||||||||
Licenses and certifications | |||||||||||
License agreements | |||||||||||
Total intangible assets | $ | $ | |||||||||
Accumulated amortization | ( | ( | |||||||||
Other intangible assets, net | $ | $ |
Three Months Ended March 31, | |||||||||||
in thousands | 2023 | 2022 | |||||||||
Cost of revenue | $ | $ | |||||||||
Sales and marketing | |||||||||||
General and administrative | |||||||||||
Total amortization of acquired intangible assets | $ | $ |
As of March 31, | |||||
in thousands | 2023 | ||||
Remainder of 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total |
As of March 31, | As of December 31, | ||||||||||
in thousands | 2023 | 2022 | |||||||||
Accrued wages, bonuses and commissions | $ | $ | |||||||||
Accrued payroll taxes | |||||||||||
Other accrued expenses | |||||||||||
Employee Stock Purchase Plan (“ESPP”) liability | |||||||||||
Accrued income taxes | |||||||||||
Total accrued liabilities | $ | $ |
Three Months Ended March 31, | |||||||||||
in thousands | 2023 | 2022 | |||||||||
Cost of subscription revenue | $ | $ | |||||||||
Cost of professional services and other revenue | |||||||||||
Research and development | |||||||||||
Sales and marketing | |||||||||||
General and administrative | |||||||||||
Total stock-based compensation expense | $ | $ |
Number of RSUs (in thousands) | Weighted-Average Grant Date Fair Value | ||||||||||
Outstanding as of December 31, 2022 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited/Canceled | ( | ||||||||||
Outstanding as of March 31, 2023 | $ |
Number of Options (in thousands) | Weighted-Average Exercise Price per Share | Weighted-Average Remaining Term (years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding as of December 31, 2022 | $ | $ | |||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Forfeited/Expired | ( | ||||||||||||||||||||||
Outstanding as of March 31, 2023 | $ | $ | |||||||||||||||||||||
Vested and exercisable at March 31, 2023 | $ | $ |
in thousands (except share amount) | Three Months Ended March 31, | ||||||||||
2023 | 2022 | ||||||||||
Numerator: | |||||||||||
Net loss attributable to common shareholders | $ | ( | $ | ( | |||||||
Denominator: | |||||||||||
Weighted-average Class A and Class B shares used in computing net loss per share attributable to common stockholders, basic and diluted | |||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | ( | $ | ( |
As of March 31, 2023 | As of December 31, 2022 | ||||||||||
Qualtrics restricted stock units | |||||||||||
Qualtrics options | |||||||||||
Qualtrics employee stock purchase program |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Revenue: | |||||||||||
Subscription | $ | 339,803 | $ | 280,808 | |||||||
Professional services and other | 69,967 | 54,839 | |||||||||
Total revenue | 409,770 | 335,647 | |||||||||
Cost of revenue(1)(2): | |||||||||||
Subscription | 54,671 | 44,774 | |||||||||
Professional services and other | 68,511 | 54,493 | |||||||||
Total cost of revenue | 123,182 | 99,267 | |||||||||
Gross profit | 286,588 | 236,380 | |||||||||
Operating expenses(1)(2): | |||||||||||
Research and development | 108,975 | 105,999 | |||||||||
Sales and marketing | 252,772 | 218,330 | |||||||||
General and administrative | 178,672 | 202,589 | |||||||||
Total operating expenses | 540,419 | 526,918 | |||||||||
Operating loss | (253,831) | (290,538) | |||||||||
Other non-operating income, net | 1,655 | 674 | |||||||||
Loss before income taxes | (252,176) | (289,864) | |||||||||
Provision for income taxes | 6,788 | 2,461 | |||||||||
Net loss | $ | (258,964) | $ | (292,325) |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Cost of subscription revenue | $ | 5,063 | $ | 4,544 | |||||||
Cost of professional services and other revenue | 8,593 | 8,066 | |||||||||
Research and development | 40,646 | 41,275 | |||||||||
Sales and marketing | 52,196 | 49,053 | |||||||||
General and administrative | 125,472 | 165,323 | |||||||||
Total stock-based compensation, including cash settled | $ | 231,970 | $ | 268,261 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Cost of revenue | $ | 7,358 | $ | 7,572 | |||||||
Sales and marketing | 5,531 | 5,527 | |||||||||
General and administrative | 42 | 318 | |||||||||
Total amortization of acquired intangible assets | $ | 12,931 | $ | 13,417 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(as a % of revenue) | |||||||||||
Revenue: | |||||||||||
Subscription | 83 | 84 | |||||||||
Professional services and other | 17 | 16 | |||||||||
Total revenue | 100 | % | 100 | % | |||||||
Cost of revenue: | |||||||||||
Subscription | 13 | 13 | |||||||||
Professional services and other | 17 | 16 | |||||||||
Total cost of revenue | 30 | 29 | |||||||||
Gross profit | 70 | 71 | |||||||||
Operating expenses: | |||||||||||
Research and development | 27 | 32 | |||||||||
Sales and marketing | 62 | 65 | |||||||||
General and administrative | 43 | 60 | |||||||||
Total operating expenses | 132 | 157 | |||||||||
Operating loss | (62) | (86) | |||||||||
Other non-operating income, net | — | — | |||||||||
Loss before income taxes | (62) | (86) | |||||||||
Provision for income taxes | 2 | 1 | |||||||||
Net loss | (64) | % | (87) | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Subscription revenue | $ | 339,803 | $ | 280,808 | $ | 58,995 | 21 | % | |||||||||||||||
Professional services and other revenue | 69,967 | 54,839 | 15,128 | 28 | % | ||||||||||||||||||
Total revenue | $ | 409,770 | $ | 335,647 | $ | 74,123 | 22 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Cost of subscription revenue | $ | 54,671 | $ | 44,774 | $ | 9,897 | 22 | % | |||||||||||||||
Cost of professional services and other revenue | 68,511 | 54,493 | 14,018 | 26 | % | ||||||||||||||||||
Total cost of revenue | 123,182 | 99,267 | 23,915 | 24 | % | ||||||||||||||||||
Subscription gross profit | 285,132 | 236,034 | 49,098 | 21 | % | ||||||||||||||||||
Professional services and other gross profit | 1,456 | 346 | 1,110 | 321 | % | ||||||||||||||||||
Total gross profit | $ | 286,588 | $ | 236,380 | $ | 50,208 | 21 | % | |||||||||||||||
Subscription gross margin | 84 | % | 84 | % | |||||||||||||||||||
Professional services and other gross margin | 2 | % | 1 | % | |||||||||||||||||||
Total gross margin | 70 | % | 70 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Research and development | $ | 108,975 | $ | 105,999 | $ | 2,976 | 3 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Sales and marketing | $ | 252,772 | $ | 218,330 | $ | 34,442 | 16 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
General and administrative | $ | 178,672 | $ | 202,589 | $ | (23,917) | (12) | % |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Net cash flows provided by in operating activities | $ | 104,279 | $ | 23,103 | |||||||
Net cash used in investing activities | (23,861) | (13,173) | |||||||||
Net cash flows provided by (used in) financing activities | 5,863 | (187,926) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 545 | (67) | |||||||||
Net increase (decrease) in cash and cash equivalents | $ | 86,826 | $ | (178,063) |
As of March 31, | As of December 31, | ||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Next 12 Months | $ | 1,206,026 | $ | 1,202,260 | |||||||
Thereafter | 929,035 | 972,378 | |||||||||
Total | $ | 2,135,061 | $ | 2,174,638 |
Exhibit Number | Description | |||||||
2.1* | ||||||||
2.2* | ||||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104* | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
QUALTRICS INTERNATIONAL INC. | |||||
By: | /s/ Zig Serafin | ||||
Zig Serafin | |||||
Chief Executive Officer (Principal Executive Officer) |
By: | /s/ Rob Bachman | ||||
Rob Bachman | |||||
Chief Financial Officer (Principal Financial and Accounting Officer) |
Date: May 1, 2023 | By: | /s/ Zig Serafin | ||||||||||||
Name: | Zig Serafin | |||||||||||||
Title: | Chief Executive Officer | |||||||||||||
(Principal Executive Officer) |
Date: May 1, 2023 | By: | /s/ Rob Bachman | ||||||||||||
Name: | Rob Bachman | |||||||||||||
Title: | Chief Financial Officer | |||||||||||||
(Principal Accounting and Financial Officer) |
Date: May 1, 2023 | /s/ Zig Serafin | |||||||
Zig Serafin | ||||||||
Chief Executive Officer (Principal Executive Officer) | ||||||||
/s/ Rob Bachman | ||||||||
Rob Bachman | ||||||||
Chief Financial Officer (Principal Accounting and Financial Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 183,127,510 | 170,687,065 |
Common stock, shares outstanding (in shares) | 183,127,510 | 170,687,065 |
Class B Common Stock | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 423,170,610 | 423,170,610 |
Common stock, shares outstanding (in shares) | 423,170,610 | 423,170,610 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Revenue: | ||
Total revenue | $ 409,770 | $ 335,647 |
Cost of revenue: | ||
Total cost of revenue | 123,182 | 99,267 |
Gross profit | 286,588 | 236,380 |
Operating expenses: | ||
Research and development | 108,975 | 105,999 |
Sales and marketing | 252,772 | 218,330 |
General and administrative | 178,672 | 202,589 |
Total operating expenses | 540,419 | 526,918 |
Operating loss | (253,831) | (290,538) |
Other non-operating income, net | 1,655 | 674 |
Loss before income taxes | (252,176) | (289,864) |
Provision for income taxes | 6,788 | 2,461 |
Net loss | $ (258,964) | $ (292,325) |
Net loss per share attributable to common stockholder, basic (in USD per share) | $ (0.43) | $ (0.51) |
Net loss per share attributable to common stockholder, diluted (in USD per share) | $ (0.43) | $ (0.51) |
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholder, basic (in shares) | 599,314,127 | 575,700,568 |
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholder, diluted (in shares) | 599,314,127 | 575,700,568 |
Other comprehensive income (loss): | ||
Foreign currency translation gains (losses) | $ 751 | $ (448) |
Comprehensive loss | (258,213) | (292,773) |
Cost of subscription revenue | ||
Revenue: | ||
Total revenue | 339,803 | 280,808 |
Cost of revenue: | ||
Total cost of revenue | 54,671 | 44,774 |
Cost of professional services and other revenue | ||
Revenue: | ||
Total revenue | 69,967 | 54,839 |
Cost of revenue: | ||
Total cost of revenue | $ 68,511 | $ 54,493 |
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands |
Total |
Common Stock
Class A Common Stock
|
Common Stock
Class B Common Stock
|
Additional paid-in capital |
Accumulated other comprehensive loss |
Accumulated deficit |
---|---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2021 | 147,309,254 | 423,170,610 | ||||
Beginning balance at Dec. 31, 2021 | $ 2,186,700 | $ 15 | $ 42 | $ 4,645,800 | $ (1,244) | $ (2,457,913) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 270,089 | 270,089 | ||||
Issuance of common stock upon settlement of restricted stock units (RSUs) (in shares) | 10,658,728 | |||||
Issuance of common stock upon settlement of restricted stock units (RSUs) | 0 | $ 1 | (1) | |||
Issuance of common stock upon exercise of stock options (in shares) | 123,171 | |||||
Issuance of common stock upon exercise of stock options | 614 | 614 | ||||
Issuance of common stock for employee stock purchase plan (in shares) | 770,966 | |||||
Issuance of common stock for employee stock purchase plan | 20,380 | 20,380 | ||||
Common stock withheld related to net share settlement of equity awards | (208,920) | (208,920) | ||||
Net loss | (292,325) | (292,325) | ||||
Foreign currency translation adjustment | (448) | (448) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 158,862,119 | 423,170,610 | ||||
Ending balance at Mar. 31, 2022 | 1,976,090 | $ 16 | $ 42 | 4,727,962 | (1,692) | (2,750,238) |
Beginning balance (in shares) at Dec. 31, 2022 | 170,687,065 | 423,170,610 | ||||
Beginning balance at Dec. 31, 2022 | 1,904,020 | $ 17 | $ 42 | 5,428,297 | (4,945) | (3,519,391) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 236,027 | 236,027 | ||||
Issuance of common stock upon settlement of restricted stock units (RSUs) (in shares) | 10,596,029 | |||||
Issuance of common stock upon settlement of restricted stock units (RSUs) | $ 0 | $ 1 | (1) | |||
Issuance of common stock upon exercise of stock options (in shares) | 116,000 | 116,278 | ||||
Issuance of common stock upon exercise of stock options | $ 866 | 866 | ||||
Issuance of common stock for employee stock purchase plan (in shares) | 1,728,138 | |||||
Issuance of common stock for employee stock purchase plan | 19,965 | 19,965 | ||||
Common stock withheld related to net share settlement of equity awards | (2,849) | (2,849) | ||||
Net loss | (258,964) | |||||
Foreign currency translation adjustment | 751 | 751 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 183,127,510 | 423,170,610 | ||||
Ending balance at Mar. 31, 2023 | $ 1,899,816 | $ 18 | $ 42 | $ 5,682,305 | $ (4,194) | $ (3,778,355) |
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
3 Months Ended | |||
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Cash flows from operating activities | ||||
Net loss | $ (258,964) | $ (292,325) | ||
Adjustments to reconcile net loss to net cash provided by operating activities | ||||
Depreciation and amortization | 26,368 | 23,355 | ||
Gain on disposal of property and equipment | (25) | (17) | ||
Change in fair value of distribution liability for tax sharing agreement | 5,432 | (1,500) | ||
Reduction of right-of-use assets from operating leases | 6,626 | 7,501 | ||
Stock-based compensation expense, including cash settled | 231,970 | 268,261 | ||
Amortization of deferred contract acquisition costs | 22,439 | 15,812 | ||
Deferred income taxes | (971) | (227) | ||
Changes in assets and liabilities: | ||||
Accounts receivable, net | 152,267 | 95,414 | ||
Prepaid expenses and other current assets | (9,752) | (7,259) | ||
Deferred contract acquisitions costs | (34,716) | (26,809) | ||
Other assets | (1,149) | (1,033) | ||
Lease liabilities | (4,598) | (3,723) | ||
Accounts payable | 5,540 | (13,472) | ||
Accrued liabilities | (25,318) | (40,146) | ||
Deferred revenue | (12,543) | 1,969 | ||
Other liabilities | 2,667 | (16) | ||
Settlement of stock-based payments liabilities | (994) | (2,682) | ||
Net cash flows provided by operating activities | 104,279 | 23,103 | ||
Cash flows from investing activities | ||||
Purchases of property and equipment | (21,811) | (13,173) | ||
Cash paid for intangible assets | (2,050) | 0 | ||
Net cash flows used in investing activities | (23,861) | (13,173) | ||
Cash flows from financing activities | ||||
Payments of tax sharing liabilities to SAP | [1] | (12,119) | 0 | |
Payments for taxes related to net share settlement of equity awards | (2,849) | (208,920) | ||
Issuance of common stock of Employee Stock Purchase Plan | 19,965 | 20,380 | ||
Proceeds from exercise of stock options | 866 | 614 | ||
Net cash flows provided by (used in) financing activities | 5,863 | (187,926) | ||
Effect of changes in exchange rates on cash and cash equivalents | 545 | (67) | ||
Net increase (decrease) in cash and cash equivalents | 86,826 | (178,063) | ||
Cash and cash equivalents as of 1 January | 719,892 | 1,014,511 | ||
Cash and cash equivalents as of 31 March | 806,718 | 836,448 | ||
Supplemental cash flow disclosures | ||||
Cash paid for income taxes | 6,460 | 673 | ||
Cash paid for operating leases, net of incentives received | 4,573 | 5,662 | ||
Non-cash investing and financing activities | ||||
Capital expenditures incurred but not yet paid | 251 | 759 | ||
Stock-based compensation capitalized as internal-use software | 4,416 | 2,193 | ||
Right-of-use assets obtained in exchange for lease obligations | $ 1,928 | $ 15,761 | ||
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Summary of Business and Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Business and Significant Accounting Policies | SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of Business Qualtrics International Inc. (“Qualtrics” or “the Company”) was incorporated in the state of Delaware in September 2014. Qualtrics pioneered a new category of software, experience management, or XM, that enables organizations to find and fix broken experiences and drive operational improvements to improve customer loyalty, increase employee retention, and become a brand that people love. The Company’s technology helps organizations find and keep customers, retain and engage employees, and improve their competitive position in their product categories and talent markets. The XM Platform helps organizations listen to their employees and customers, understand their feedback, and then take action in response. The Company sells subscriptions to its XM Platform and provides professional services primarily consisting of research services, implementation services and engineering services. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated balance sheet as of March 31, 2023, and the condensed consolidated statements of comprehensive loss, stockholders' equity, and cash flows for the three months ended March 31, 2023 and 2022 are unaudited. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments necessary to fairly state the Company's financial position as of March 31, 2023 and its results of operations and cash flows for the three months ended March 31, 2023 and 2022. The financial data and the other financial information disclosed in the notes to these condensed consolidated financial statements related to the three-month periods are also unaudited. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2023 or for any other future year or interim period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2022, included in the Company's Annual Report on Form 10-K. Use of Estimates The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. The Company’s most significant estimates and judgments involve revenue recognition with respect to the determination of the standalone selling prices for the Company’s services, valuation of the distribution liability related to the tax sharing agreement with SAP, and valuation of deferred income tax assets. Actual results could differ from those estimates. Revenue The Company derives revenue from two service/product lines: Subscription Revenue The Company generates revenue primarily from sales of subscriptions to access its XM Platform, together with related support services to its customers. Arrangements with customers do not provide the customer with the right to take possession of the software operating the XM Platform at any time. Instead, customers are granted continuous access to the XM Platform over the contractual period. The Company’s subscription contracts generally have annual contractual terms while some have multi-year contractual terms. The Company generally bills annually in advance with net 30 payment terms. The Company’s agreements generally cannot be canceled for a refund. Professional Services and Other Revenue Professional services and other revenue mainly includes two types of services: research services and professional services. Research services is a solution provided to existing subscription customers with arrangements which are distinct from subscription revenue services. In addition, the Company provides professional services associated with new and expanding customers requesting implementation, integration services, and other ancillary services. These services are distinct from subscription revenue services. Contract Balances The Company bills in advance for annual contracts, and at times enters into non-cancelable multi-year deals. Non-cancelable multi-year deals typically include price escalations each year. The Company recognizes revenue on a straight-line basis over the non-cancelable term and accounts for the difference between straight-line revenue and invoiced amounts as a contract asset. The current and noncurrent portion of contract assets included in prepaid expenses and other current assets and other assets as of March 31, 2023 were $22.1 million and $21.7 million, respectively. The current and noncurrent portion of contract assets included in prepaid expenses and other current assets and other assets as of December 31, 2022 were $22.3 million and $19.9 million, respectively. The Company records contract liabilities to deferred revenue when cash payments are received or due in advance of performance. Deferred revenue primarily relates to the advance consideration received from the customer prior to the related performance obligation being fulfilled. In certain circumstances, the Company receives consideration from customers in advance of a specific service being identified. Total consideration received in advance of a specific service being identified totaled $30.0 million and $31.3 million as of March 31, 2023 and December 31, 2022, respectively and is included in deferred revenue. The following table shows the amount of revenue included in prior period deferred revenue and revenue generated from same period billings for each of the Company’s revenue generating solutions:
Remaining Performance Obligations Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. Amounts of a customer contract’s transaction price that are allocated to the remaining performance obligations represent contracted revenue that has not yet been recognized. They include amounts recognized as contract liabilities and amounts that are contracted but not yet due. The expected future revenue related to unsatisfied performance obligations as of March 31, 2023 was $2,135.1 million, of which approximately $1,206.0 million is expected to be recognized as revenue over the next twelve months. The amount of transaction price allocated to the remaining performance obligations and changes in this amount over time are impacted by, among others, currency fluctuations and the contract period of the Company’s cloud contracts remaining at the balance sheet date and thus, by the timing of contract renewals. Disaggregation of Revenue The following table summarizes revenue by region based on the address of customers who have contracted to use the Company’s cloud platform:
No single country outside the United States accounted for 10% or more of revenue during the three months ended March 31, 2023 and 2022. Stock-Based Compensation, including cash settled Equity Awards The Company records stock-based compensation based on the grant date fair value of the awards. The Company recognizes the fair value of restricted stock awards that do not contain a performance condition as expense using the straight-line method over the requisite service period of the award. For restricted stock units that contain performance conditions, the Company recognizes expense using the accelerated attribution method based on the probability that the performance conditions will be met. The Company estimates the grant date fair value of RSUs based on the closing stock price of the Company’s publicly traded Class A common stock on the grant date. The Company estimates the grant date fair value of purchase rights issued under the Qualtrics Employee Stock Purchase Plan, or ESPP, based on the Black-Scholes option-pricing model using the estimated number of awards as of the beginning of the offering periods. Accounts Receivable and Allowances Accounts receivable are recorded at the invoiced amount, net of allowances. Accounts receivable are typically due within 30 days from the date of invoice. Customer balances outstanding longer than the contractual payment terms are considered past due. The Company establishes allowances for bad debt and cancellations based on historical collection data, customer specific circumstances and expected losses. The allowance for bad debt, as needed, is established with a charge to bad debt expense in the consolidated statements of comprehensive loss. The Company’s allowance for bad debt was $8.3 million and $8.6 million as of March 31, 2023 and December 31, 2022, respectively. Bad debt expense was $3.4 million during the three months ended March 31, 2023 and not material during the three months ended March 31, 2022. The Company’s allowance for cancellations was $25.1 million and $28.8 million as of March 31, 2023 and December 31, 2022, respectively. During the three months ended March 31, 2023, $(3.4) million of net additions (reductions) were charged to revenue and $(0.3) million of net additions (reductions) were charged to deferred revenue. During the three months ended March 31, 2022, $(0.4) million of net additions (reductions) were charged to revenue and $(3.0) million of net additions (reductions) were charged to deferred revenue. The allowance for cancellations is established with a reduction to revenue and deferred revenue. In the event of lack of payment due to a bankruptcy or other credit-related issues of a customer, the Company writes off the related accounts receivable with a reduction to the allowance for bad debt. In the event of lack of payment from a customer for issues unrelated to credit risk, the Company cancels the customer’s subscription access or service and writes off the corresponding accounts receivable with reductions to the allowance for cancellations. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, and accounts receivable. The Company performs credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. No customer accounted for more than 10% of accounts receivable at March 31, 2023 and December 31, 2022. No single customer accounted for 10% or more of total revenue during the three months ended March 31, 2023 and 2022. Deferred Contract Acquisition Costs, net Deferred contract acquisition costs, net is stated at gross deferred contract acquisition costs less accumulated amortization. Sales commissions and related payroll taxes for initial software-as-a-service (SaaS) subscription contracts earned by the Company’s sales force are considered to be incremental and recoverable costs of obtaining a contract with a customer. As a result, these amounts have been capitalized as deferred contract acquisition costs on the consolidated balance sheets. The Company capitalized additional deferred incremental costs of obtaining a contract of $34.7 million and $26.8 million during the three months ended March 31, 2023 and 2022, respectively. Amortization of deferred contract acquisition costs were $22.4 million and $15.8 million for the three months ended March 31, 2023 and 2022, respectively. Amortization of deferred contract acquisition costs are included in sales and marketing expense in the accompanying consolidated statements of comprehensive loss. There was no impairment loss in relation to the deferred costs for any period presented. Internal-use Software The Company capitalizes certain development costs incurred in connection with its internal-use software. These capitalized costs are primarily related to the software platforms that are hosted by the Company and accessed by its customers on a subscription basis. The Company recognized amortization expenses of $7.4 million and $3.9 million related to capitalized internal-use software for the three months ended March 31, 2023 and 2022, respectively, within cost of subscription revenue. The Company capitalized $17.0 million and $6.8 million of expenses to internal-use software during the three months ended March 31, 2023 and 2022, respectively. Recently Adopted Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new standard requires that entities recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, which creates an exception to the general recognition and measurement principles of ASC 805. The standard will result in companies recognizing contract assets and liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. The standard is effective for public companies for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years with early adoption permitted. The Company adopted the standard as of January 1, 2023. The impact will be dependent upon the occurrence and magnitude of any future acquisitions.
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Cash and Cash Equivalents |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS Cash and cash equivalents consisted of the following:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS Cash and cash equivalents The Company’s cash equivalents with regards to money market mutual funds are classified within Level 1 of the fair value hierarchy and are reported at their fair value on the consolidated balance sheets as of March 31, 2023 and December 31, 2022. Tax sharing liability From the date of the SAP Acquisition, Qualtrics has been included in SAP America’s consolidated group for U.S. federal income tax purposes. In October 2021, the Company deconsolidated from the SAP Tax Group for U.S. federal income tax purposes. The Company continues to be a member of the SAP Tax Group for certain state filings. Pursuant to the tax sharing agreement with SAP, for taxable periods beginning after December 31, 2020, Qualtrics will make tax sharing payments to SAP related to certain share based payment awards that existed prior to or were granted at the time of the IPO, the Pre-IPO Awards. Upon deconsolidation from the SAP Tax Group, the initial tax sharing liability was recorded as a distribution payable to SAP in accounts payable (current portion) and other liabilities (non-current portion) and as a reduction to additional paid-in capital. Changes in the fair value of the tax sharing liability are recorded through other non-operating income, net. As of March 31, 2023 and December 31, 2022, the Company’s distribution liability for the tax sharing agreement with SAP based on an estimated fair value totaled $66.0 million and $65.0 million, respectively. The tax sharing agreement liability is estimated based on the estimated future tax benefits associated with the Pre-IPO Awards. The liability is classified within Level 3 of the fair value hierarchy and is based on the discounted estimated future cash flows of the liability. The primary assumptions used in the valuation include the amount of the estimated future tax deductions related to the Pre-IPO Awards, the Company’s estimated future taxable income or loss excluding the Pre-IPO Awards, including the ability and timing of when the Company will be able to utilize the tax deductions from the Pre-IPO Awards using a hypothetical with and without tax calculation, and the estimated discount rate, which is based on current market rates for unsecured liabilities with similar maturities and credit quality. We are using an estimated discount rate of 10%, we have utilized the current stock price as of March 31, 2023 as the best estimate of the future vest date value, and we estimate that the deductions will be utilized in the next one to three years based on the Company's current forecasts. Estimating the tax sharing liability balance requires significant estimates and assumptions, which are inherently uncertain and therefore actual results could differ from those estimates. During the three months ended March 31, 2023 the Company had no transfers in and out of Level 3 fair value measurements. The changes in the fair value of the tax sharing liability were as follows:
(1) See Note 12 for additional details on the full payment of tax sharing liabilities.
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Property and Equipment, Net |
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Property and Equipment, Net | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following:
The Company recognized depreciation and amortization expense related to its property and equipment as follows:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES The Company has operating leases for corporate offices under non-cancelable operating leases with various expiration dates. There are no finance leases. The leases have remaining terms of less than 1 to 13 years. Options to extend for up to 10 years have not been included because they are not reasonably certain to be exercised. The components of lease expense were as follows:
Other information related to leases was as follows:
As of March 31, 2023, the maturities of lease liabilities under non-cancelable operating leases, net of lease incentives, were as follows:
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Other Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Intangible Assets, Net | OTHER INTANGIBLE ASSETS, NET Other intangible assets, net consisted of the following:
The Company recognized amortization expense related to its acquired intangible assets as follows:
Estimated amortization expense for intangible assets for the next five years and thereafter consists of the following:
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Accrued Liabilities |
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Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following:
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Commitment and Contingencies |
3 Months Ended |
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Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company is a party to a variety of claims, lawsuits, and proceedings which arise in the ordinary course of business, including claims of alleged infringement of intellectual property rights. The Company records a liability when it believes that it is probable that a loss will be incurred, and the amount of loss or range of loss can be reasonably estimated. Given the unpredictable nature of legal proceedings, the Company bases its estimate on the most current information available. As additional information becomes available, the Company reassesses the potential liability and may revise the estimate. The Company is not presently a party to any litigation the outcome of which, it believes, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on its business, operating results, or financial condition. Merger Expenses As previously disclosed, on March 12, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Quartz Holdco, LLC, a Delaware limited liability company (“Parent”), and Quartz MergerCo, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Parent and Merger Sub are affiliates of Silver Lake (“Silver Lake”). During the three months ended March 31, 2023, the Company has incurred $16.3 million in Merger-related expenses, $7.1 million of which have been paid. The remaining $9.2 million is included in accounts payable.
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Stock-based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION Stock-based compensation expense for the three months ended March 31, 2023 and 2022 was recorded as follows:
Equity Awards Qualtrics RSUs The following table sets forth the outstanding Qualtrics RSUs and related activity for the three months ended March 31, 2023:
The total fair value of RSUs that vested during the three months ended March 31, 2023 and 2022 was $176.0 million and $529.8 million, respectively. As of March 31, 2023, there was $1,952.4 million of unrecognized stock-based compensation expense related to outstanding Qualtrics RSUs which is expected to be recognized over a weighted-average period of 2.4 years. Qualtrics Options The following table sets forth the outstanding common stock options and related activity for the three months ended March 31, 2023:
The aggregate intrinsic value of options exercised was $1.5 million and $3.0 million for the three months ended March 31, 2023 and 2022. The intrinsic value represents the excess of the estimated fair value of the Company's common stock on the date of exercise over the exercise price of each option. The intrinsic value of options as of March 31, 2023 is based on the market closing price of the Company's Class A common stock on that date. As of March 31, 2023, there was $10.4 million of unrecognized stock-based compensation expense related to outstanding stock options which is expected to be recognized over a weighted-average period of 1.5 years. Qualtrics Employee Stock Purchase Plan (ESPP) The Company recognized compensation expense associated with the ESPP of $4.5 million and $5.1 million during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, there was $4.7 million of unrecognized stock-based compensation expense associated with the ESPP, which is expected to be recognized over a weighted-average period of 0.3 years.
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Net Loss Per Share Attributable to Common Stockholders |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share Attributable to Common Stockholders | NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS The following table sets forth the calculation of basic net loss per share attributable to common stockholders during the periods presented:
The net loss per share amounts are the same for the Class A and Class B common stock because the holders of each class are legally entitled to equal per share distributions, whether through dividends or in liquidation. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been antidilutive. The following table discloses securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share because to do so would have been antidilutive for all periods presented:
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Income Taxes |
3 Months Ended |
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Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company has an effective tax rate of (2.7)% and (0.8)% for the three months ended March 31, 2023 and 2022, respectively. The Company has incurred U.S. book operating losses and has minimal profits in its foreign jurisdictions. Our effective tax rate is affected by tax rates in both U.S. and foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses, such as share-based compensation, and changes in our valuation allowance. The Company had historically calculated the income taxes in its consolidated financial statements on a separate return basis. However, the Company was in actuality included in the consolidated, combined or unitary U.S. federal and state income tax returns with SAP America, Inc. and its affiliates. As a result of deconsolidation from SAP during 2021, net operating losses and credits were updated to reflect actual attributes available for use by the Company. Qualtrics is subject to a tax sharing agreement with SAP that requires the Company to reimburse SAP for the Company's taxable income, or be reimbursed by SAP in cases of a taxable loss, which is included on the consolidated tax returns with SAP, subject to adjustments for hypothetical tax attributes and certain simplifying conventions. ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. In assessing the need for a valuation allowance, the Company considered all available evidence, both positive and negative, including historical levels of income or loss, legislative developments, expectations, and risks associated with estimates of future taxable income, and prudent and feasible tax planning strategies. The Company has evaluated this evidence and determined that it is more likely than not that the net deferred tax assets for some of the Company’s U.S. entities will not be realized. Due to uncertainties surrounding the realization of the deferred tax assets, the Company maintains a full valuation allowance against its net U.S. deferred tax assets in these entities.
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Since the SAP acquisition in 2019, SAP and its affiliates are related parties to the Company. The Company has entered into certain arrangements for services and products with SAP and its affiliates. The consolidated statements of comprehensive loss include all revenue and costs directly attributable and/or allocable to the Company, including costs for facilities, functions, and services used by Qualtrics. The consolidated statements of comprehensive loss also includes expenses of SAP directly charged to Qualtrics for certain functions provided by SAP, including, but not limited to, sales organization costs, insurance, employee benefits, human resources and usage of data centers. The Company directly charges SAP for certain functions provided to SAP, including sales support. These charges were determined based on actual expenses incurred on Qualtrics’ or SAP’s behalf or by usage. During the three months ended March 31, 2023 and 2022, the Company recognized revenue of $8.6 million and $10.0 million, respectively, from SAP and its affiliates in exchange for services and products. Total costs charged from SAP and its affiliates to the Company were $8.2 million and $12.0 million during the three months ended March 31, 2023 and 2022, respectively. Total costs charged from the Company to SAP and its affiliates were $0.8 million and $4.8 million during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the outstanding receivable and payable with SAP and its affiliates was $10.7 million and $18.0 million, respectively. As of December 31, 2022, the outstanding receivable and payable with SAP and its affiliates was $19.2 million and $15.2 million, respectively. Because of the SAP Acquisition, Qualtrics had been included in SAP America’s consolidated group for U.S. federal income tax purposes. In October 2021, the Company deconsolidated from the SAP Tax Group for federal tax purposes. The Company continues to be a member of the SAP Tax Group for certain state filings. Pursuant to the tax sharing agreement with SAP, for taxable periods beginning after December 31, 2020, the Company will make certain tax sharing payments to SAP. As of March 31, 2023, the Company’s distribution liability for the tax sharing agreement with SAP totaled $78.0 million, consisting of $12.0 million based on our separate tax liability included on SAP Tax Group returns and $66.0 million based on an estimated fair value of the liability related to Pre-IPO Awards. Of the $78.0 million, $57.2 million is recorded within accounts payable and the remaining $20.8 million is recorded within other liabilities on the condensed consolidated balance sheet as of March 31, 2023. As of December 31, 2022, the Company’s distribution liability for the tax sharing agreement with SAP totaled $84.7 million, consisting of $7.7 million based on 2021 actual tax return activity, $12.0 million based on the Company’s 2022 tax provision and $65.0 million based on an estimated fair value. Of the $84.7 million, $72.0 million is recorded within accounts payable and the remaining $12.7 million is recorded within other liabilities on the condensed consolidated balance sheet as of December 31, 2022. For the three months ended March 31, 2023, the Company made a payment of the distribution tax liability to SAP of $12.1 million, of which $4.4 million was based on the estimated fair value, which is disclosed in Note 3, “Fair Value Measurements”. Certain Board members of the Company and certain Supervisory Board and Executive Board members of SAP SE currently hold, or held within the last year, positions of significant responsibility with other entities. The Company has relationships with certain of these entities in the ordinary course of business. During the three months ended March 31, 2023 and 2022, revenue and charges from these related parties were immaterial. On March 12, 2023, concurrently with the execution of the Merger Agreement, the Company and SAP SE (“SAP”) entered into a Separation Agreement (the “Separation Agreement”), which governs, among other things, the terms of the separation of the Company’s business from SAP and its affiliates (other than the Company and its subsidiaries). The Separation Agreement requires the parties to use commercially reasonable efforts to take certain actions between the signing of the Merger Agreement and the closing of the Merger in respect of separating certain shared operations and resources of the Company and SAP so that the Company can operate on a standalone basis independent of SAP and its affiliates (other than the Company and its subsidiaries) following the closing of the Merger (the “Separation”). If the Separation has not been fully completed prior to the closing of the Merger, the Company and SAP will enter into a customary transition services agreement on mutually agreed terms under which SAP will continue providing certain support services and assistance to the Company on a transitional basis as necessary after closing of the Merger.In December 2020, Ryan Smith, the Company’s Founder and Executive Chair, acquired a majority interest in the Utah Jazz basketball franchise, the associated venue, and certain related sports teams and operations and business interests. In 2019, the Company entered into multi-year agreements with the Utah Jazz related to ticket purchases, advertising, sponsorships, and the Utah Jazz Five for the Fight Campaign which were amended in Q1 2023, under which the Company was billed $0.7 million and $1.2 million during the three months ended March 31, 2023 and 2022, respectively.I
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Summary of Business and Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | The accompanying condensed consolidated balance sheet as of March 31, 2023, and the condensed consolidated statements of comprehensive loss, stockholders' equity, and cash flows for the three months ended March 31, 2023 and 2022 are unaudited. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments necessary to fairly state the Company's financial position as of March 31, 2023 and its results of operations and cash flows for the three months ended March 31, 2023 and 2022. The financial data and the other financial information disclosed in the notes to these condensed consolidated financial statements related to the three-month periods are also unaudited. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2023 or for any other future year or interim period. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2022, included in the Company's Annual Report on Form 10-K.
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Use of Estimates | The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of revenue and expenses during the reporting period. The Company’s most significant estimates and judgments involve revenue recognition with respect to the determination of the standalone selling prices for the Company’s services, valuation of the distribution liability related to the tax sharing agreement with SAP, and valuation of deferred income tax assets. Actual results could differ from those estimates. |
Revenue | The Company derives revenue from two service/product lines: Subscription Revenue The Company generates revenue primarily from sales of subscriptions to access its XM Platform, together with related support services to its customers. Arrangements with customers do not provide the customer with the right to take possession of the software operating the XM Platform at any time. Instead, customers are granted continuous access to the XM Platform over the contractual period. The Company’s subscription contracts generally have annual contractual terms while some have multi-year contractual terms. The Company generally bills annually in advance with net 30 payment terms. The Company’s agreements generally cannot be canceled for a refund. Professional Services and Other Revenue Professional services and other revenue mainly includes two types of services: research services and professional services. Research services is a solution provided to existing subscription customers with arrangements which are distinct from subscription revenue services. In addition, the Company provides professional services associated with new and expanding customers requesting implementation, integration services, and other ancillary services. These services are distinct from subscription revenue services. Contract Balances The Company bills in advance for annual contracts, and at times enters into non-cancelable multi-year deals. Non-cancelable multi-year deals typically include price escalations each year. The Company recognizes revenue on a straight-line basis over the non-cancelable term and accounts for the difference between straight-line revenue and invoiced amounts as a contract asset.The Company records contract liabilities to deferred revenue when cash payments are received or due in advance of performance. Deferred revenue primarily relates to the advance consideration received from the customer prior to the related performance obligation being fulfilled. In certain circumstances, the Company receives consideration from customers in advance of a specific service being identified.Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods. Amounts of a customer contract’s transaction price that are allocated to the remaining performance obligations represent contracted revenue that has not yet been recognized. They include amounts recognized as contract liabilities and amounts that are contracted but not yet due. The expected future revenue related to unsatisfied performance obligations as of March 31, 2023 was $2,135.1 million, of which approximately $1,206.0 million is expected to be recognized as revenue over the next twelve months. The amount of transaction price allocated to the remaining performance obligations and changes in this amount over time are impacted by, among others, currency fluctuations and the contract period of the Company’s cloud contracts remaining at the balance sheet date and thus, by the timing of contract renewals.
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Share-based Compensation, including cash settled | Equity Awards The Company records stock-based compensation based on the grant date fair value of the awards. The Company recognizes the fair value of restricted stock awards that do not contain a performance condition as expense using the straight-line method over the requisite service period of the award. For restricted stock units that contain performance conditions, the Company recognizes expense using the accelerated attribution method based on the probability that the performance conditions will be met. The Company estimates the grant date fair value of RSUs based on the closing stock price of the Company’s publicly traded Class A common stock on the grant date. The Company estimates the grant date fair value of purchase rights issued under the Qualtrics Employee Stock Purchase Plan, or ESPP, based on the Black-Scholes option-pricing model using the estimated number of awards as of the beginning of the offering periods.
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Accounts Receivable and Allowances | Accounts receivable are recorded at the invoiced amount, net of allowances. Accounts receivable are typically due within 30 days from the date of invoice. Customer balances outstanding longer than the contractual payment terms are considered past due. The Company establishes allowances for bad debt and cancellations based on historical collection data, customer specific circumstances and expected losses. The allowance for bad debt, as needed, is established with a charge to bad debt expense in the consolidated statements of comprehensive loss. The Company’s allowance for bad debt was $8.3 million and $8.6 million as of March 31, 2023 and December 31, 2022, respectively. Bad debt expense was $3.4 million during the three months ended March 31, 2023 and not material during the three months ended March 31, 2022. The Company’s allowance for cancellations was $25.1 million and $28.8 million as of March 31, 2023 and December 31, 2022, respectively. During the three months ended March 31, 2023, $(3.4) million of net additions (reductions) were charged to revenue and $(0.3) million of net additions (reductions) were charged to deferred revenue. During the three months ended March 31, 2022, $(0.4) million of net additions (reductions) were charged to revenue and $(3.0) million of net additions (reductions) were charged to deferred revenue. The allowance for cancellations is established with a reduction to revenue and deferred revenue. In the event of lack of payment due to a bankruptcy or other credit-related issues of a customer, the Company writes off the related accounts receivable with a reduction to the allowance for bad debt. In the event of lack of payment from a customer for issues unrelated to credit risk, the Company cancels the customer’s subscription access or service and writes off the corresponding accounts receivable with reductions to the allowance for cancellations.
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Concentration of Credit Risk | Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, and accounts receivable. The Company performs credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers. |
Deferred Contract Acquisition Costs, net | Deferred contract acquisition costs, net is stated at gross deferred contract acquisition costs less accumulated amortization. Sales commissions and related payroll taxes for initial software-as-a-service (SaaS) subscription contracts earned by the Company’s sales force are considered to be incremental and recoverable costs of obtaining a contract with a customer. As a result, these amounts have been capitalized as deferred contract acquisition costs on the consolidated balance sheets. The Company capitalized additional deferred incremental costs of obtaining a contract of $34.7 million and $26.8 million during the three months ended March 31, 2023 and 2022, respectively. Amortization of deferred contract acquisition costs were $22.4 million and $15.8 million for the three months ended March 31, 2023 and 2022, respectively. Amortization of deferred contract acquisition costs are included in sales and marketing expense in the accompanying consolidated statements of comprehensive loss. There was no impairment loss in relation to the deferred costs for any period presented.
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Internal-use Software | The Company capitalizes certain development costs incurred in connection with its internal-use software. These capitalized costs are primarily related to the software platforms that are hosted by the Company and accessed by its customers on a subscription basis. |
Recently Adopted Accounting Pronouncements | In October 2021, the FASB issued ASU 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new standard requires that entities recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, which creates an exception to the general recognition and measurement principles of ASC 805. The standard will result in companies recognizing contract assets and liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date. The standard is effective for public companies for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years with early adoption permitted. The Company adopted the standard as of January 1, 2023. The impact will be dependent upon the occurrence and magnitude of any future acquisitions. |
Summary of Business and Significant Accounting Policies (Tables) |
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Schedule of Revenue Included In Prior Period Deferred Revenue | The following table shows the amount of revenue included in prior period deferred revenue and revenue generated from same period billings for each of the Company’s revenue generating solutions:
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Revenue from External Customers by Geographic Areas | The following table summarizes revenue by region based on the address of customers who have contracted to use the Company’s cloud platform:
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Cash and Cash Equivalents (Tables) |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | Cash and cash equivalents consisted of the following:
|
Fair Value Measurement (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Changes In The Fair Value Of The Tax Sharing Liability | The changes in the fair value of the tax sharing liability were as follows:
(1) See Note 12 for additional details on the full payment of tax sharing liabilities.
|
Property and Equipment, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property and equipment, net consisted of the following:
The Company recognized depreciation and amortization expense related to its property and equipment as follows:
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | The components of lease expense were as follows:
|
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Assets And Liabilities, Lessee | Other information related to leases was as follows:
|
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Lessee, Operating Lease, Liability, Maturity | As of March 31, 2023, the maturities of lease liabilities under non-cancelable operating leases, net of lease incentives, were as follows:
|
Other Intangible Assets, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | Other intangible assets, net consisted of the following:
The Company recognized amortization expense related to its acquired intangible assets as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense for intangible assets for the next five years and thereafter consists of the following:
|
Accrued Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following:
|
Stock-based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expense | Stock-based compensation expense for the three months ended March 31, 2023 and 2022 was recorded as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Restricted Stock Unit, Activity | The following table sets forth the outstanding Qualtrics RSUs and related activity for the three months ended March 31, 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Option, Activity | The following table sets forth the outstanding common stock options and related activity for the three months ended March 31, 2023:
|
Net Loss Per Share Attributable to Common Stockholders (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the calculation of basic net loss per share attributable to common stockholders during the periods presented:
|
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table discloses securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share because to do so would have been antidilutive for all periods presented:
|
Summary of Business and Significant Accounting Policies - Professional Services and Other Revenue (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Accounting Policies [Abstract] | ||
Contract assets, current | $ 22.1 | $ 22.3 |
Contract asset, noncurrent | 21.7 | 19.9 |
Deferred revenue | $ 30.0 | $ 31.3 |
Summary of Business and Significant Accounting Policies - Revenue Included in Prior Period Deferred Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Cost of subscription revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue included in prior period deferred revenue | $ 270,659 | $ 228,216 |
Revenue generated from same period billings | 69,144 | 52,592 |
Revenue | 339,803 | 280,808 |
Cost of professional services and other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue included in prior period deferred revenue | 43,069 | 23,790 |
Revenue generated from same period billings | 26,898 | 31,049 |
Revenue | $ 69,967 | $ 54,839 |
Summary of Business and Significant Accounting Policies - Remaining Performance Obligation (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 2,135.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 1,206.0 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Summary of Business and Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 409,770 | $ 335,647 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 286,367 | 236,642 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 123,403 | $ 99,005 |
Summary of Business and Significant Accounting Policies - Accounts Receivable and Allowances (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowances for bad debt expense | $ 8.3 | $ 8.6 | |
Bad debt expense | 3.4 | $ 0.0 | |
Allowance cancellation | 25.1 | $ 28.8 | |
Deferred Revenue | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowances decrease | (0.3) | (3.0) | |
Revenue | |||
Financing Receivable, Allowance for Credit Loss [Line Items] | |||
Allowances decrease | $ (3.4) | $ (0.4) |
Summary of Business and Significant Accounting Policies - Deferred Contract Acquisition Costs, net (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Accounting Policies [Abstract] | ||
Deferred contract acquisitions costs | $ 34,700 | $ 26,800 |
Amortization of deferred contract acquisition costs | $ 22,439 | $ 15,812 |
Summary of Business and Significant Accounting Policies - Internal-use Software (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Accounting Policies [Abstract] | ||
Amortization expense | $ 7.4 | $ 3.9 |
Capitalized computer software | $ 17.0 | $ 6.8 |
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Cash and Cash Equivalents [Abstract] | ||
Cash | $ 501,081 | $ 589,948 |
Money market mutual funds | 305,637 | 129,944 |
Total cash and cash equivalents | $ 806,718 | $ 719,892 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Estimated fair value | $ (66,000) | $ (65,000) |
Fair Value Measurements - Fair Value (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ (65,000) |
Change in the fair value reported in other non-operating income, net | (5,432) |
Payments of tax sharing liabilities based on estimated fair value to SAP | 4,432 |
Ending balance | $ (66,000) |
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 310,031 | $ 292,386 |
Accumulated depreciation and amortization | (86,703) | (76,741) |
Property and equipment, net | 223,328 | 215,645 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 64,093 | 50,488 |
Server equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 19,058 | 19,192 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 108,458 | 88,254 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 26,580 | 25,999 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 13,383 | 13,383 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 61,345 | 61,345 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,191 | 3,158 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,034 | 3,034 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 10,889 | $ 27,533 |
Property and Equipment, Net - Schedule of Amortization (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization | $ 13,437 | $ 9,938 |
Cost of revenue | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization | 9,279 | 6,097 |
Research and development | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization | 1,490 | 1,364 |
Sales and marketing | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization | 2,285 | 2,005 |
General and administrative | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization | $ 383 | $ 472 |
Leases - Narrative (Details) |
Mar. 31, 2023 |
---|---|
Lessee, Lease, Description [Line Items] | |
Option to extend, term (in years) | 10 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term (in years) | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term (in years) | 13 years |
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Leases [Abstract] | ||
Operating lease cost | $ 6,626 | $ 7,501 |
Variable and short-term lease cost | $ 3,378 | $ 2,449 |
Leases - Other Information (Details) |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 10 years 4 months 24 days | 10 years 8 months 12 days |
Weighted average discount rate | 2.08% | 2.08% |
Leases - Operating Lease Maturity Schedule (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
|
---|---|
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Remainder of 2023 | $ 7,639 |
2024 | 29,880 |
2025 | 32,052 |
2026 | 32,656 |
2027 | 29,939 |
Thereafter | 178,324 |
Total minimum lease payments | 310,490 |
Less: imputed interest | (33,071) |
Total | $ 277,419 |
Other Intangible Assets, Net - Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 284,511 | $ 282,261 |
Accumulated amortization | (84,777) | (71,846) |
Total | 199,734 | 210,415 |
Patents | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 751 | 751 |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 161,920 | 159,670 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 111,700 | 111,700 |
Developed content | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 400 | 400 |
Tradename | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 1,890 | 1,890 |
Licenses and certifications | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 6,350 | 6,350 |
License agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 1,500 | $ 1,500 |
Other Intangible Assets, Net - Amortization Expense Related to its Acquired Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 12,931 | $ 13,417 |
Cost of revenue | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 7,358 | 7,572 |
Sales and marketing | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 5,531 | 5,527 |
General and administrative | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 42 | $ 318 |
Other Intangible Assets, Net - Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2023 | $ 39,009 | |
2024 | 52,009 | |
2025 | 50,122 | |
2026 | 41,366 | |
2027 | 17,156 | |
Thereafter | 72 | |
Total | $ 199,734 | $ 210,415 |
Accrued Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued wages, bonuses and commissions | $ 71,739 | $ 79,518 |
Accrued payroll taxes | 5,501 | 9,087 |
Other accrued expenses | 30,236 | 32,590 |
Employee Stock Purchase Plan (“ESPP”) liability | 7,128 | 18,924 |
Accrued income taxes | 15,779 | 15,172 |
Total accrued liabilities | $ 130,383 | $ 155,291 |
Commitment and Contingencies (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Merger-related expenses | $ 16.3 |
Merger-related expenses paid | 7.1 |
Accounts Payable | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Merger-related expenses | $ 9.2 |
Stock-based Compensation - Schedule of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense, including cash settled | $ 231,970 | $ 268,261 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense, including cash settled | 40,646 | 41,275 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense, including cash settled | 52,196 | 49,053 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense, including cash settled | 125,472 | 165,323 |
Cost of subscription revenue | Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense, including cash settled | 5,063 | 4,544 |
Cost of professional services and other revenue | Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense, including cash settled | $ 8,593 | $ 8,066 |
Stock-based Compensation - Restricted Stock Units and Related Activity (Details) - Restricted Stock Units - Qualtrics RSU Plan |
3 Months Ended |
---|---|
Mar. 31, 2023
$ / shares
shares
| |
Number of Shares | |
Outstanding, beginning balance (in shares) | shares | 76,673,000 |
Granted (in shares) | shares | 15,980,000 |
Vested (in shares) | shares | (10,601,000) |
Forfeited/ Canceled (in shares) | shares | (1,910,000) |
Outstanding, ending balance (in shares) | shares | 80,142,000 |
Weighted-Average Grant Date Fair Value | |
Outstanding, beginning balance (in USD per share) | $ / shares | $ 34.17 |
Granted (in USD per share) | $ / shares | 16.32 |
Vested (in USD per share) | $ / shares | 38.53 |
Forfeited/Canceled (in USD per share) | $ / shares | 28.71 |
Outstanding, ending balance (in USD per share) | $ / shares | $ 30.18 |
Stock-based Compensation - Outstanding Common Stock Options and Related Activity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning balance (in shares) | 1,468,000 | |
Exercised (in shares) | (116,000) | |
Forfeited/Expired (in shares) | (6,000) | |
Ending balance (in shares) | 1,346,000 | 1,468,000 |
Vested and exercisable (in shares) | 850,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding, weighted average exercise price, beginning balance (in dollars per share) | $ 4.87 | |
Exercised (in dollars per share) | 4.27 | |
Forfeited/Expired (in dollars per share) | 6.79 | |
Outstanding, weighted average exercise price, ending balance (in dollars per share) | 4.91 | $ 4.87 |
Vested and exercisable (in dollars per share) | $ 4.68 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding, weighted average remaining contractual term (in years) | 4 years 10 months 24 days | 5 years 1 month 6 days |
Vested and exercisable, weighted average remaining contractual term (in years) | 4 years 10 months 24 days | |
Options, outstanding, aggregate intrinsic value | $ 17,388 | $ 8,091 |
Vested and exercisable, options, aggregate intrinsic value | $ 11,173 |
Stock-based Compensation - Equity Awards (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate intrinsic value of options exercised | $ 1,500 | $ 3,000 |
Option, unrecognized stock-based compensation expense | 10,400 | |
Stock-based compensation expense, including cash settled | 231,970 | 268,261 |
Restricted Stock Units | Qualtrics RSU Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total fair value of RSUs that vested | 176,000 | 529,800 |
Unrecognized stock-based compensation expense | $ 1,952,400 | |
Period for recognition (in years) | 2 years 4 months 24 days | |
Qualtrics options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Period for recognition (in years) | 1 year 6 months | |
Employee Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Period for recognition (in years) | 3 months 18 days | |
Employee Stock | Qualtrics Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense, including cash settled | $ 4,500 | $ 5,100 |
Employee Stock | Qualtrics RSU Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option, unrecognized stock-based compensation expense | $ 4,700 |
Net Loss Per Share Attributable to Common Stockholders - Calculation of Basic Net Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Numerator: | ||
Net loss attributable to common shareholders | $ (258,964) | $ (292,325) |
Denominator: | ||
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholder, basic (in shares) | 599,314,127 | 575,700,568 |
Weighted average Class A and Class B shares used in computing net loss per share attributable to common stockholder, diluted (in shares) | 599,314,127 | 575,700,568 |
Net loss per share attributable to common stockholder, diluted (in USD per share) | $ (0.43) | $ (0.51) |
Net loss per share attributable to common stockholder, basic (in USD per share) | $ (0.43) | $ (0.51) |
Net Loss Per Share Attributable to Common Stockholders - Weighted-average Impact of Potentially Dilutive Securities (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Qualtrics restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 80,141,929 | 76,672,908 |
Qualtrics options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,346,011 | 1,467,828,000 |
Qualtrics employee stock purchase program | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 494,762 | 2,144,827,000 |
Income Taxes (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (2.70%) | (0.80%) |
Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|||
Related Party Transaction [Line Items] | |||||
Related party transaction, tax sharing payments, total amount | $ 78,000 | $ 84,700 | |||
Related party transaction, tax sharing payments, tax provision | 12,000 | 7,700 | |||
Related party transaction, tax sharing payments, fair value | 66,000 | $ 65,000 | 12,000 | ||
Payments of tax sharing liabilities to SAP | [1] | (12,119) | 0 | ||
Payments of tax sharing liabilities based on estimated fair value to SAP | 4,432 | ||||
Accounts Payable | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, tax sharing payments, total amount | 57,200 | 72,000 | |||
Other Liabilities | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, tax sharing payments, total amount | 20,800 | 12,700 | |||
SAP SE | Principal Owner | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 8,600 | 10,000 | |||
Related party costs | 8,200 | 12,000 | |||
Due from related parties | 10,700 | 19,200 | |||
Due to related parties | 18,000 | $ 15,200 | |||
SAP SE | Principal Owner | Costs incurred on behalf of related party | |||||
Related Party Transaction [Line Items] | |||||
Amounts of transaction | 800 | 4,800 | |||
Utah Jazz | Executive Officer | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction, selling, general, and administrative expenses | $ 700 | $ 1,200 | |||
|
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