CNBC Disruptor 50

Qualtrics closes up 51% after debut, valuing cloud software vendor at $27.3 billion

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Key Points
  • Shares of Qualtrics began trading on the Nasdaq on Thursday at $41.85.
  • Qualtrics had priced its shares at $30 a piece, just above its expected target range of $27 to $29 per share.
  • Founded in 2002, Qualtrics sells software that helps businesses gauge how customers use their products so they can improve their offerings.
VIDEO3:1803:18
Qualtrics founder Ryan Smith and CEO Zig Serafin on its upcoming IPO debut

Cloud software vendor Qualtrics soared in its Nasdaq debut Thursday after the company priced its IPO above the expected range.

The stock, trading under the ticker symbol "XM," opened at $41.85 per share, representing a 40% pop. Qualtrics had priced its shares at $30 a piece, just above its target range of $27 to $29 per share. The company sold about 51.7 million shares.

It closed the day at $45.50, valuing Qualtrics at $27.3 billion.

Founded in 2002, Qualtrics sells software that helps businesses gauge how customers use their products so they can improve their offerings. The company is taking advantage of surging demand for high-growth cloud software companies amid the coronavirus pandemic. The Nasdaq jumped 1.6% on Thursday and is trading near a record after climbing 46% in the past year.

Qualtrics originally planned to go public about two years ago, but instead was acquired by SAP for $8 billion. At the time, it was SAP's second-biggest acquisition ever, following the $8.3 billion purchase of travel and expense software company Concur in 2014.

"We were on our roadshow in 2018 and we showed metrics and slides as they took notes," said Ryan Smith, co-founder and chairman of Qualtrics, in an interview on Thursday. "We came back to the same investor group and there's not a lot of turnover. Everyone pulled out their notes from two years ago and asked questions."

In the past two years, the company has increased its customer base to 13,000 from about 9,000. Revenue rose over 30% in the first three-quarters of 2020 to $550 million, from $413.4 million the same period a year earlier and $289.6 million in 2018, just before the acquisition.

Excluding costs tied to stock compensation, Qualtrics recorded an operating loss of $24.9 million through September of last year, down from $30.9 million in the same period a year before.

SAP announced last July that it would spin out Qualtrics while keeping most of its ownership. Qualtrics said in December, in its initial filing to go public, that private equity firm Silver Lake was buying a little over 4% of the stock for $550 million, while Smith was purchasing over 1% for $120 million.

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Nominations are open for the 2021 CNBC Disruptor 50, a list of private start-ups using breakthrough technology to become the next generation of great public companies. Submit by Friday, Feb. 12, at 3 p.m. ET.

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