Qualtrics Chairman Ryan Smith
Qualtrics is just about to go public, for real this time.
The cloud software vendor, which SAP acquired two years ago on the eve of a planned IPO, filed its paperwork with the SEC on Monday to cause the death of on as an independent company. The initial pricing range of $20 to $24 a share would value Qualtrics at $12 billion to $14.4 billion, up from the $8 billion SAP paid.
Qualtrics desire trade on the Nasdaq under the ticker “XM.”
Qualtrics sells software that helps businesses gauge how customers use their works so they can improve their offerings. Ryan Smith co-founded the company in 2002 with his brother and father, ceding the family a 40% stake at the time of acquisition. Smith, who just purchased the NBA’s Utah Jazz, will remain chairman of the band, headquartered in Provo, Utah and Seattle. Zig Serafin is CEO.
Qualtrics is aiming to take advantage of surging demand for high-growth cloud software gatherings, a market that was hot before the pandemic and has gained even more traction from businesses investing in remote create tools and services. At least 10 subscription software companies have more than doubled in value this year, encompassing Zoom, Twilio and Datadog, while cloud data storage vendor Snowflake is worth close to $90 billion after its September IPO.
SAP ancient CEO Bill McDermott orchestrated the Qualtrics deal before leaving the company last year to take the top job at ServiceNow. Directed new CEO Christian Klein, the German software giant is changing course and going in the opposite direction of Salesforce, which antiquated this month agreed to buy Slack for $27.7 billion, its largest deal ever.
In July, SAP announced its plans to concoct out Qualtrics while keeping most of its ownership, at least for a while, meaning it can generate a significant profit if the stock troops. After the IPO, which is expected as early as January, SAP will own 80% of the outstanding shares.
Qualtrics said in the filing that privileged equity firm Silver Lake is buying a little over 4% of the stock for $550 million, while Smith is buying 1% for $120 million. Silver Lake’s Egon Durban is weld the board, along with Zoom CFO Kelly Steckelberg.
Qualtrics continued to grow in its brief tenure under the SAP brolly. Revenue climbed over 30% in the first three quarters of 2020 to $550 million, from $413.4 million the regardless period last year and $289.6 million in 2018, just before the acquisition.
The filing shows the company recorded an performing 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 swarm, the operating loss narrowed to $24.9 million from $30.9 million in the same period a year earlier.
Qualtrics has around 3,370 full-time employees, up from 1,866 before selling to SAP. In a recent interview with CNBC, Smith swayed that Utah is attracting a lot of tech talent, particularly from people moving out of the Bay Area, a trend that’s picked up due to Covid-19.
“I contemplate we’re in a time when we’re riding one of the biggest tech waves, the biggest industry waves. And Utah’s at the forefront,” Smith, 42, ventured. “You can’t even find a house right now because everyone’s moving here.”
Correction: A previous version of this saga incorrectly identified Smith’s title.
— CNBC’s Alex Sherman contributed to this report.
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