PROVO, Utah and SEATTLE, April 21,
2021 /PRNewswire/ -- Qualtrics (NASDAQ: XM), the
world's No. 1 Experience Management (XM) provider and creator
of the XM category, today announced financial results for the first
quarter ended March 31, 2021.
"Q1 was an outstanding quarter for Qualtrics, and a powerful
start to our fiscal year," said Qualtrics CEO Zig Serafin. "Organizations around the world are
in the middle of an important transformation—an experience
transformation—and Qualtrics has never been more relevant or
impactful."
First Quarter 2021 Financial Highlights:
- Revenue: Total revenue for the first quarter was
$238.6 million, up from $176.1 million one year ago, an increase of 36%
year-over-year. Subscription revenue for the first quarter was
$186.9 million, up from $128.3 million one year ago, an increase of 46%
year-over-year.
- Operating Income (Loss) and Margin: First quarter
operating loss was $(196.6) million,
compared to $(36.9) million one year
ago. Non-GAAP operating income (see discussion of non-GAAP
operating income (loss) and margin measures below) was $6.8 million, compared to non-GAAP operating loss
of $(24.1) million one year ago. For
the first quarter, GAAP operating margin was (82)% and non-GAAP
operating margin was 3%.
- Net Income (Loss) and Net Income (Loss) Per Share: First
quarter net loss was $(199.9)
million, or $(0.41) per share,
compared to $(44.8) million, or
$(0.11) per share in the first
quarter of fiscal year 2020. Non-GAAP net income (see discussion of
the non-GAAP net income (loss) measure below) for the first quarter
was $5.3 million, or $0.01 per share, compared to non-GAAP net loss of
$(31.9) million, or $(0.08) per share in the first quarter of fiscal
year 2020.
- Cash and Cash Equivalents: Total cash and cash
equivalents as of March 31, 2021 was
$586.5 million.
Financial Outlook:
Qualtrics is providing guidance for its second quarter ending
June 30, 2021 as follows:
- Total revenue between $240 and
$242 million.
- Subscription revenue between $190
and $192 million.
- Non-GAAP operating margin between (1)% and 0%.
- Non-GAAP net loss per share between $(0.03) and $(0.01)
assuming 515 million weighted shares outstanding.
Qualtrics is updating its guidance for its full year ending
December 31, 2021 as follows:
- Total revenue between $980 and
$984 million.
- Subscription revenue between $768
and $772 million.
- Non-GAAP operating margin between (3)% and (2)%.
- Non-GAAP net loss per share between $(0.13) and $(0.11)
assuming 512 million weighted shares outstanding.
The guidance provided above are forward-looking statements and
actual results may differ materially. Refer to the "Forward-Looking
Statements" safe harbor section below for information on the
factors that could cause our actual results to differ materially
from these forward-looking statements.
Non-GAAP operating income (loss), non-GAAP operating margin,
non-GAAP net income (loss), and non-GAAP net income (loss) per
share are non-GAAP financial measures. Additional information on
Qualtrics' reported results, including a reconciliation of the
non-GAAP financial measures to their most comparable GAAP measures,
is included in the financial tables below. A reconciliation of
non-GAAP guidance measures to corresponding GAAP measures is not
available on a forward-looking basis without unreasonable effort
due to the uncertainty of expenses that may be incurred in the
future, although it is important to note that these factors could
be material to Qualtrics' results computed in accordance with
GAAP.
A supplemental financial presentation and other information can
be accessed through Qualtrics' investor relations website at
https://www.qualtrics.com/investors/.
Qualtrics Earnings Call
Qualtrics plans to host a
conference call today to review its fiscal first quarter 2021
financial results and to discuss its financial outlook. The call is
scheduled to begin at 3:00 p.m.
MT/5:00 p.m. ET. Investors are
invited to join the webcast by visiting:
https://qualtrics.com/investors/events. The webcast will be
available live, and a replay will be available following completion
of the live broadcast for approximately 90 days.
About Qualtrics
Qualtrics, the leader in customer
experience and creator of the Experience Management (XM) category,
is changing the way organizations manage and improve the four core
experiences of business, customer, employee, product, and brand.
Over 13,500 organizations around the world are using Qualtrics to
listen, understand, and take action on experience data (X-data™)
the beliefs, emotions, and intentions that tell you why things are
happening, and what to do about it. The Qualtrics XM Platform™ is a
system of action that helps businesses attract customers who stay
longer and buy more, engage employees who build a positive culture,
develop breakthrough products people love, and build a brand people
are passionate about. To learn more, please visit
qualtrics.com.
Forward-Looking Statements
This press release contains
express and implied "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, including
statements regarding our financial outlook for the second quarter
of 2021 and full year 2021, Qualtrics' growth strategy and business
aspirations, its market position, and the continued impact of
COVID-19 on its business and operations. In some cases, you can
identify forward-looking statements by terms such as "anticipate,"
"believe," "estimate," "expect," "intend," "may," "might," "plan,"
"project," "will," "would," "should," "could," "can," "predict,"
"potential," "target," "explore," "continue," or the negative of
these terms, and similar expressions intended to identify
forward-looking statements. By their nature, these statements are
subject to numerous uncertainties and risks, including factors
beyond our control, that could cause actual results, performance,
or achievement to differ materially and adversely from those
anticipated or implied in the statements, including: our future
financial performance, including our revenue, cost of revenue,
gross profit, operating expenses, ability to generate positive cash
flow, and ability to be profitable; our ability to grow at or near
historical growth rates; anticipated technology trends, such as the
use of and demand for experience management software; our ability
to attract and retain customers to use our products; our ability to
respond to and overcome challenges brought by the COVID-19
pandemic; our ability to attract enterprises and international
organizations as customers for our products; our ability to expand
our network with content consulting partners, delivery partners,
and technology partners; the evolution of technology affecting our
products and markets; our ability to introduce new products and
enhance existing products and to compete effectively with
competitors; our ability to successfully enter into new markets and
manage our international expansion; the attraction and retention of
qualified employees and key personnel; our ability to effectively
manage our growth and future expenses and maintain our corporate
culture; our anticipated investments in sales and marketing and
research and development; our ability to maintain, protect, and
enhance our intellectual property rights; our ability to
successfully defend litigation brought against us; our ability to
maintain data privacy and data security; the sufficiency of our
cash and cash equivalents to meet our liquidity needs; our ability
to comply with modified or new laws and regulations applying to our
business; and our reduced ability to leverage resources at SAP as
an independent company from SAP. Additional risks and uncertainties
that could cause actual outcomes and results to differ materially
from those contemplated by the forward-looking statements are
and/or will be included under the caption "Risk Factors" and
elsewhere in Qualtrics' Annual Report on Form 10-K filed with the
Securities and Exchange Commission and any subsequent public
filings. Forward-looking statements speak only as of the date the
statements are made and are based on information available to
Qualtrics at the time those statements are made and/or management's
good faith belief as of that time with respect to future
events. Qualtrics assumes no obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, except as required by law.
Non-GAAP Financial Measures
To supplement our
financial results, which are prepared and presented in accordance
with GAAP, we use certain non-GAAP financial measures, as described
below, to understand and evaluate our core operating performance.
These non-GAAP financial measures, which may be different than
similarly-titled measures used by other companies, are presented to
enhance investors' overall understanding of our financial
performance and should not be considered a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP.
We believe that these non-GAAP financial measures provide useful
information about our financial performance, enhance the overall
understanding of our past performance and future prospects, and
allow for greater transparency with respect to important metrics
used by our management for financial and operational
decision-making. We are presenting these non-GAAP measures to
assist investors in seeing our financial performance using a
management view, and because we believe that these measures provide
an additional tool for investors to use in comparing our core
financial performance over multiple periods with other companies in
our industry. You should consider non-GAAP results alongside other
financial performance measures and results presented in accordance
with GAAP. In addition, in evaluating non-GAAP results, you should
be aware that in the future we will incur expenses such as those
that are the subject of adjustments in deriving non-GAAP results
and you should not infer from our non-GAAP results that our future
results will not be affected by these expenses or any unusual or
non-recurring items.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP
operating income (loss), non-GAAP operating margin, non-GAAP net
income (loss), non-GAAP net income (loss) per share, free cash
flow, free cash flow margin: We define these non-GAAP financial
measures as the respective GAAP measures, excluding equity and cash
settled stock-based compensation expenses, amortization of acquired
intangible assets, and the tax impact of the non-GAAP adjustments.
When evaluating the performance of our business and making
operating plans, we do not consider these items (for example, when
considering the impact of equity award grants, we place a greater
emphasis on overall stockholder dilution rather than the accounting
charges associated with such grants). We believe it is useful to
exclude these expenses in order to better understand the long-term
performance of our core business and to facilitate comparison of
our results to those of peer companies and over multiple
periods.
Investor Relations:
Steven
Wu
Head of FP&A and Investor Relations
investors@qualtrics.com
Public Relations:
Gina
Sheibley
Chief Communications Officer
press@qualtrics.com
Qualtrics
International Inc.
|
Consolidated
Balance Sheets
|
(Unaudited, in
thousands, except share and par value)
|
|
|
As of March 31,
2021
|
|
As of December 31,
2020
|
|
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents....................................................................................................
|
$
|
586,536
|
|
|
$
|
203,891
|
|
Accounts receivable,
net of
allowance...................................................................................
|
258,838
|
|
|
296,148
|
|
Deferred contract
acquisition costs,
net................................................................................
|
45,108
|
|
|
43,429
|
|
Prepaid expenses and
other current
assets.........................................................................
|
46,572
|
|
|
48,130
|
|
Total current
assets.......................................................................................................................
|
937,054
|
|
|
591,598
|
|
Non-current
assets:
|
|
|
|
Property and
equipment,
net........................................................................................................
|
119,263
|
|
|
116,120
|
|
Right-of-use assets
from operating
leases.................................................................................
|
190,697
|
|
|
195,372
|
|
Goodwill.........................................................................................................................................
|
6,709
|
|
|
6,709
|
|
Other intangible
assets,
net.........................................................................................................
|
3,596
|
|
|
3,959
|
|
Deferred contract
acquisition costs, net of current
portion......................................................
|
115,381
|
|
|
115,837
|
|
Deferred tax
assets........................................................................................................................
|
260
|
|
|
92
|
|
Other
assets...................................................................................................................................
|
16,582
|
|
|
9,368
|
|
Total
assets....................................................................................................................................
|
$
|
1,389,542
|
|
|
$
|
1,039,055
|
|
|
|
|
|
Liabilities and
deficit
|
|
|
|
Current
liabilities:
|
|
|
|
Lease
liabilities.........................................................................................................................
|
$
|
12,677
|
|
|
$
|
7,125
|
|
Accounts
payable.....................................................................................................................
|
20,416
|
|
|
30,452
|
|
Accrued
liabilities.....................................................................................................................
|
197,891
|
|
|
225,046
|
|
Liability-classified,
stock-based
awards................................................................................
|
5,310
|
|
|
209,286
|
|
Deferred
revenue......................................................................................................................
|
492,654
|
|
|
495,638
|
|
Total current
liabilities...................................................................................................................
|
728,948
|
|
|
967,547
|
|
Non-current
liabilities:
|
|
|
|
Lease liabilities,
net of current
portion........................................................................................
|
230,167
|
|
|
235,620
|
|
Liability-classified,
stock-based awards, net of current
portion...............................................
|
2,360
|
|
|
76,627
|
|
Deferred revenue, net
of current
portion.....................................................................................
|
4,253
|
|
|
5,477
|
|
Note
payable..................................................................................................................................
|
501,181
|
|
|
—
|
|
Deferred tax
liabilities....................................................................................................................
|
5,358
|
|
|
5,970
|
|
Other
liabilities...............................................................................................................................
|
16,661
|
|
|
16,716
|
|
Total
liabilities................................................................................................................................
|
$
|
1,488,928
|
|
|
$
|
1,307,957
|
|
Commitments and
contingencies
|
|
|
|
Equity
(deficit)
|
|
|
|
Preferred stock, par
value $0.0001 per share; authorized 100,000,000 shares; no shares
outstanding.................................................................................................................................
|
—
|
|
|
—
|
|
Class A common stock,
par value $0.0001 per share; authorized 2,000,000,000 shares;
issued and outstanding 89,281,956 and 6,000,000 shares as of March
31, 2021 and December 31,
2020.....................................................................................................................
|
9
|
|
|
1
|
|
Class B common stock,
par value $0.0001 per share; authorized 1,000,000,000 shares;
issued and outstanding 423,170,610 and 423,170,610 as of March 31,
2021 and December 31,
2020.....................................................................................................................
|
42
|
|
|
42
|
|
Additional paid in
capital.............................................................................................................
|
1,497,779
|
|
|
1,126,631
|
|
Accumulated other
comprehensive
income...............................................................................
|
1,405
|
|
|
3,191
|
|
Accumulated
deficit.......................................................................................................................
|
(1,598,621)
|
|
|
(1,398,767)
|
|
Total
deficit.....................................................................................................................................
|
(99,386)
|
|
|
(268,902)
|
|
Total liabilities and
deficit.............................................................................................................
|
$
|
1,389,542
|
|
|
$
|
1,039,055
|
|
Qualtrics
International Inc.
|
Consolidated
Statements of Operations
|
(Unaudited, in
thousands, except share and per share data)
|
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Revenue:
|
|
|
|
Subscription.........................................................................................................................
|
$
|
186,896
|
|
|
$
|
128,265
|
|
Professional services
and
other........................................................................................
|
51,747
|
|
|
47,799
|
|
Total
revenue.............................................................................................................................
|
238,643
|
|
|
176,064
|
|
Cost of
revenue:
|
|
|
|
Subscription.........................................................................................................................
|
20,370
|
|
|
13,716
|
|
Professional services
and
other........................................................................................
|
41,411
|
|
|
34,208
|
|
Total cost of
revenue................................................................................................................
|
61,781
|
|
|
47,924
|
|
Gross
profit...............................................................................................................................
|
176,862
|
|
|
128,140
|
|
Operating
expenses:
|
|
|
|
Research and
development...............................................................................................
|
62,806
|
|
|
35,489
|
|
Sales and
marketing...........................................................................................................
|
136,181
|
|
|
107,095
|
|
General and
administrative................................................................................................
|
174,449
|
|
|
22,487
|
|
Total operating
expenses........................................................................................................
|
373,436
|
|
|
165,071
|
|
Operating
loss..........................................................................................................................
|
(196,574)
|
|
|
(36,931)
|
|
Other non-operating
income (expense),
net...................................................................
|
(1,740)
|
|
|
485
|
|
Loss before income
taxes........................................................................................................
|
(198,314)
|
|
|
(36,446)
|
|
Provision for income
taxes................................................................................................
|
1,540
|
|
|
8,389
|
|
Net
loss......................................................................................................................................
|
$
|
(199,854)
|
|
|
$
|
(44,835)
|
|
|
|
|
|
Net loss per share
attributable to common stockholder,
basic............................................
|
$
|
(0.41)
|
|
|
$
|
(0.11)
|
|
Weighted-average
Class A and Class B shares used in computing net loss per share
attributable to common stockholder,
basic.............................................................................
|
482,260,465
|
|
|
423,170,610
|
|
Operating expenses includes:
Stock-based compensation expense as follows:
|
Three Months Ended
March 31,
|
in
thousands
|
2021
|
|
2020
|
Cost of subscription
revenue.............................................................................................
|
$
|
2,624
|
|
$
|
169
|
Cost of professional
services and other
revenue............................................................
|
4,430
|
|
89
|
Research and
development...............................................................................................
|
21,332
|
|
1,964
|
Sales and
marketing...........................................................................................................
|
22,777
|
|
3,783
|
General and
administrative................................................................................................
|
151,836
|
|
6,497
|
Total stock-based
compensation expense, including cash
settled(a)............................
|
$
|
202,999
|
|
$
|
12,502
|
|
|
(a)
|
As a result of the
SAP Acquisition, our stock-based compensation expense reflects the
recognition of both equity-classified awards and
liability-classified awards. Liability-classified awards are
settled in cash in accordance with SAP's employee equity
compensation programs. Our stock-based compensation expense for the
three months ended March 31, 2021 consisted of $203.0 million of
liability-classified and equity-classified awards. During the three
months ended March 31, 2021 awards of $72.0 million were settled in
cash. Our stock-based compensation expense for the three months
ended March 31, 2020 consisted of $12.5 million of
liability-classified awards. During the three months ended March
31, 2020 awards of $98.3 million were settled in cash.
Liability-classified awards are recorded according to
mark-to-market accounting.
|
Amortization of acquired intangible assets as follows:
|
Three Months Ended
March 31,
|
in
thousands
|
2021
|
|
2020
|
Cost of subscription
revenue.............................................................................................
|
$
|
266
|
|
|
$
|
266
|
|
Sales and
marketing............................................................................................................
|
51
|
|
|
51
|
|
General and
administrative................................................................................................
|
47
|
|
|
47
|
|
Total amortization of
acquired intangible
assets..............................................................
|
$
|
364
|
|
|
$
|
364
|
|
Qualtrics
International Inc.
|
Consolidated
Statements of Cash Flows
|
(Unaudited, in
thousands)
|
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Cash flows from
operating activities
|
|
|
|
Net
loss......................................................................................................................................
|
$
|
(199,854)
|
|
|
$
|
(44,835)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
Depreciation and
amortization................................................................................................
|
7,572
|
|
|
6,028
|
|
Loss on disposal of
property and
equipment.......................................................................
|
129
|
|
|
—
|
|
Reduction of
right-of-use assets from operating
leases......................................................
|
5,704
|
|
|
3,981
|
|
Stock-based
compensation expense, including cash
settled.............................................
|
202,999
|
|
|
12,502
|
|
Amortization of
deferred contract acquisition
costs.............................................................
|
11,213
|
|
|
6,747
|
|
Deferred income
taxes.............................................................................................................
|
(554)
|
|
|
160
|
|
Changes in assets and
liabilities:
|
|
|
|
Accounts receivable,
net.....................................................................................................
|
37,072
|
|
|
48,817
|
|
Prepaid expenses and
other current
assets.....................................................................
|
(1,138)
|
|
|
(8,984)
|
|
Deferred contract
acquisitions
costs................................................................................
|
(13,519)
|
|
|
(30,384)
|
|
Other
assets.........................................................................................................................
|
(7,415)
|
|
|
(3,082)
|
|
Lease
liabilities....................................................................................................................
|
(743)
|
|
|
(2,459)
|
|
Accounts
payable................................................................................................................
|
(10,855)
|
|
|
(975)
|
|
Accrued
liabilities................................................................................................................
|
(25,731)
|
|
|
(10,714)
|
|
Deferred
revenue.................................................................................................................
|
(4,208)
|
|
|
(14,568)
|
|
Other
liabilities.....................................................................................................................
|
1,240
|
|
|
4,278
|
|
Settlement of
stock-based payments
liabilities......................................................................
|
(71,997)
|
|
|
(98,268)
|
|
Net cash flows used
in operating
activities...........................................................................
|
(70,085)
|
|
|
(131,756)
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Purchases of property
and
equipment...................................................................................
|
(11,149)
|
|
|
(9,073)
|
|
Net cash flows used
in investing
activities............................................................................
|
(11,149)
|
|
|
(9,073)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from capital
contributions from
SAP......................................................................
|
115,000
|
|
|
145,000
|
|
Proceeds from
issuance of class A common stock, net of underwriting discounts and
commissions.............................................................................................................................
|
2,244,322
|
|
|
—
|
|
Payment of costs
related to initial public
offering.................................................................
|
(2,557)
|
|
|
—
|
|
Repayment of
promissory
note...............................................................................................
|
(1,892,280)
|
|
|
—
|
|
Net cash flows
provided by financing
activities....................................................................
|
464,485
|
|
|
145,000
|
|
|
|
|
|
Effect of changes in
exchange rates on cash and cash
equivalents..................................
|
(606)
|
|
|
1,780
|
|
Net increase
(decrease) in cash and cash
equivalents........................................................
|
382,645
|
|
|
5,951
|
|
Cash and cash
equivalents at the beginning of the
period.................................................
|
203,891
|
|
|
42,467
|
|
Cash and cash
equivalents at the end of the
period............................................................
|
$
|
586,536
|
|
|
$
|
48,418
|
|
Qualtrics
International Inc.
|
Reconciliation of
GAAP to Non-GAAP Measures
|
(Unaudited, in
thousands)
|
|
Non-GAAP Gross
Profit and Margin
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
|
(In
thousands)
|
GAAP gross
profit..............................................................................................................................................
|
$
|
176,862
|
|
|
$
|
128,140
|
|
Add: Stock-based
compensation expense, including cash
settled(1).........................................................................................................................................
|
7,054
|
|
|
258
|
|
Add: Amortization of
acquired intangible
assets............................................................................................................................................
|
266
|
|
|
266
|
|
Non-GAAP gross
profit..............................................................................................................................................
|
$
|
184,182
|
|
|
$
|
128,664
|
|
Non-GAAP gross
margin...........................................................................................................................................
|
77
|
%
|
|
73
|
%
|
We calculate non-GAAP gross profit, as GAAP gross profit
excluding equity and cash settled stock-based compensation expense
allocated to cost of revenue and amortization of acquired
intangible assets allocated to cost of revenue. Non-GAAP gross
margin is calculated as non-GAAP gross profit divided by total
revenue.
Non-GAAP Operating
Income (Loss) and Margin
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
|
(In
thousands)
|
GAAP operating
loss................................................................................................................................................
|
$
|
(196,574)
|
|
|
$
|
(36,931)
|
|
Add: Stock-based
compensation expense, including cash
settled(1).........................................................................................................................................
|
202,999
|
|
|
12,502
|
|
Add: Amortization of
acquired intangible
assets............................................................................................................................................
|
364
|
|
|
364
|
|
Non-GAAP operating
income
(loss).............................................................................................................................................
|
$
|
6,789
|
|
|
$
|
(24,065)
|
|
Non-GAAP operating
margin...........................................................................................................................................
|
3
|
%
|
|
(14)
|
%
|
We calculate non-GAAP operating income (loss), as GAAP operating
loss excluding equity and cash settled stock-based compensation
expense and amortization of acquired intangible assets. Non-GAAP
operating margin is calculated as non-GAAP operating loss divided
by total revenue.
Non-GAAP Net
Income (Loss) and Net Income (Loss) Per Share
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
|
(In thousands,
except share and per share data)
|
GAAP net
loss................................................................................................................................
|
$
|
(199,854)
|
|
|
$
|
(44,835)
|
|
Add: Stock-based
compensation expense, including cash
settled(1)......................................
|
202,999
|
|
|
12,502
|
|
Add: Amortization of
acquired intangible
assets........................................................................
|
364
|
|
|
364
|
|
Add: Tax impact of
the non-GAAP
adjustments.........................................................................
|
1,763
|
|
|
119
|
|
Non-GAAP net income
(loss).......................................................................................................
|
$
|
5,272
|
|
|
$
|
(31,850)
|
|
|
|
|
|
Weighted-average
Class A and Class B shares used in computing non-GAAP net income
(loss) per share attributable to common stockholder, basic and
diluted.................................
|
482,260,465
|
|
|
423,170,610
|
|
Non-GAAP net income
(loss) per share attributable to common stockholder, basic and
diluted.............................................................................................................................................
|
$
|
0.01
|
|
|
$
|
(0.08)
|
|
We calculate non-GAAP net income (loss) as GAAP net loss
excluding equity and cash settled stock-based compensation expense,
amortization of acquired intangible assets, and the tax impact of
the non-GAAP adjustments. Non-GAAP net income (loss) per share is
calculated as non-GAAP net income (loss) divided by the
weighted-average Class A and Class B shares attributable to common
stockholders.
Free Cash Flow and
Margin
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
|
(In
thousands)
|
Net cash used in
operating
activities........................................................................................................................................
|
$
|
(70,085)
|
|
|
$
|
(131,756)
|
|
Less: Capital
expenditures.................................................................................................................................
|
(11,149)
|
|
|
(9,073)
|
|
Free cash
flow................................................................................................................................................
|
(81,234)
|
|
|
(140,829)
|
|
Free cash flow
margin...........................................................................................................................................
|
(34)
|
%
|
|
(80)
|
%
|
We calculate free cash flow as net cash provided by operating
activities less capital expenditures. Free cash flow margin is
calculated as free cash flow divided by total revenue. We incurred
significant cash outflows in connection with the settlement of
liability-classified, stock-based awards in accordance with SAP's
employee equity compensation programs. Our free cash flow for
the three months ended March 31, 2021
and 2020 includes $72.0 million and
$98.3 million, respectively, in cash
outflows related to the settlement of liability-classified,
stock-based awards.
(1)
|
Our stock-based
compensation expense reflects the recognition of both
equity-classified awards and liability-classified awards.
Liability-classified awards are settled in cash in accordance with
SAP's employee equity compensation programs. Liability-classified
awards are recorded according to mark-to-market accounting. On
January 28, 2021, the Company completed a voluntary exchange offer
pursuant to which 5.4 million cash-settled legacy RSAs, RSUs,
and options (Qualtrics Rights) and 1.3 million cash-settled
SAP restricted stock unit (RSU) awards were exchanged into
12.8 million equity-settled Qualtrics RSU awards, representing
93% of the outstanding Qualtrics Rights and SAP RSU
awards.
|
1
|
Remaining
performance obligations represent all 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.
|
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SOURCE Qualtrics