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Cloud Software Vendor Qualtrics Files For IPO

The qualitrics are about to go public, which is real at this time.

The cloud software vendor, which was acquired by SAP two years before the planned IPO, filed its S-1 papers with the Securities and Exchange Commission on Monday to continue as an independent company. The initial price range of $ 20 to $ 24 per share will value Qualtrics at $ 12 billion to $ 14.4 billion, up from $ 8 billion SAP paid.

Qualtrics will trade on Nasdaq under the ticker “XM.”

What Qualtrics Does?

Qualtrics sells software that helps businesses measure how customers use their products to improve their offerings. Ryan Smith founded the company in 2002 with his brother and father, giving the family a 40% share at the time of adoption. Smith, who recently bought the NBA’s Utah Jazz, will remain chairman of the company, with headquarters in Provo, Utah and Seattle. Zig Serafin is the CEO.

Qualtrics Chairman Ryan Smith

Qualtrics aims to take advantage of the growing demand for the fastest-growing software companies, the hottest market prior to the epidemic and gain more momentum in businesses that invest in remote work tools and services. At least 10 subscription software companies have doubled in value this year, including Zoom, Twilio and Datadog, while the cloud data storage vendor is approaching nearly $ 90 billion after its September IPO.

Former SAP CEO Bill McDermott arranged for a Qualtrics contract before leaving the company last year to take up a senior job at ServiceNow. Under new CEO Christian Klein, the German software giant is changing course and going in the opposite direction of Salesforce, which early this month agreed to buy Slack for $27.7 billion, its largest deal ever.

SAP’s Involvement

In July, SAP announced its plans to roll out Qualtrics while retaining its ownership in bulk, at least temporarily, which means it could generate significant profits in stock circles. Following the IPO, expected in early January, SAP will have 80% of the remaining shares.

Qualtrics said in the file that the private company Silver Lake will buy a little more than 4% of the stock for $ 550 million, while Smith buys 1% for $ 120 million. Silver Lake’s Egon Durban joins the board, along with Zoom CFO Kelly Steckelberg.

Qualtrics continued to grow in the short term under the SAP umbrella. Revenue increased by more than 30% in the first three quarters of 2020 to 550 million, from $ 413.4 million in the same period last year and to $ 289.6 million in 2018, just before the acquisition.

The filing shows the company recorded an operating loss of $244.1 million for the first nine months of the year, but $218 million of that was due to stock-based compensation. Excluding that number, the operating loss narrowed to $24.9 million from $30.9 million in the same period a year earlier.

Qualtrics has a total of 3,370 full-time employees, up from 1,866 prior to sales to SAP. In a recent interview with CNBC, Smith said Utah is attracting a lot of technical talent, especially to people from the Bay Area, a trend taken over by Covid-19.

“I think we are at a time when we are riding one of the biggest waves of technology, the biggest waves in the industry. And Utah’s at the forefront,” Smith, 42, said. “You can’t even find a house right now because everyone’s moving here.”

Synopsis

Qualtrics revenue has increased by more than 30% from the first three quarters of 2019.

In its IPO prospectus, Qualtrics said it will sell shares at $20 to $24 each, valuing the company at $12 billion to $14.4 billion.

As it was initially preparing to go public in 2018, SAP came in and acquired Qualtrics for $ 8 billion.

Shaheer Ansari

Shaheer is passionate about living a life seeking un-ending knowledge, philomath, as you may think of him. He's a student of Finance and a keen observer of Business and Indian-Political scenario who takes pleasure to pen down his views and opinions on the same. As his guiding mantra to life, ‘Come what may , life goes on’ helps.

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