Qualtrics International Inc. is taking well to the single life.

The experience management platform provider, which recently split from SAP SE, posted a surprise second-quarter profit today as it topped Wall Street’s expectations on revenue for the second quarter in a row.

The company reported a profit before certain costs such as stock compensation of four cents per share on revenue of $249.3 million, up 38% from a year ago. The results came as a surprise to analysts, who had been looking for a loss of 2 cents per share on revenue of just $241.7 million.

The company also updated its end-of-year guidance, saying it now expects to top $1 billion in annual sales.

Qualtrics Chief Executive Zig Serafin (pictured) said his company has never been more relevant than it is now thanks to the growing importance that enterprises are placing on people’s experiences.

“Today the experiences companies deliver are absolutely vital to staying competitive,” he said. “Every company is going through an experience transformation, and they’re turning to Qualtrics to help them deliver breakthrough experiences for their employees and customers.”

Qualtrics’ cloud-based experience management software is a rather niche product that companies use to collect feedback from their various stakeholders. For example, human resources departments rely on Qualtrics to ask employees their opinions on topics such as the effectiveness of the new-hire onboarding process. Product teams also use Qualtrics to measure customer satisfaction and find new market opportunities.

In an interview with ZDNet following today’s earnings call, Zerafin pointed to numbers such its 48% subscription revenue growth and its 122% net dollar retention rate growth. The latter metric is a measure of how much money the company makes from each customer, on average.

One of the reasons for this growth, Zerafin said, is that Qualtrics is evolving from being a tool that’s primarily used to manage interactions with customers into one that’s also used to manage employee experiences.

The Qualtrics platform, Zerafin explained, helps customers “tune in better to the needs of existing employees and also attract new candidates and employees.”

For all of the growing interest in Qualtrics’ platform, the company will need to be attentive to the rate at which its burning through cash, said analyst Holger Mueller of Constellation Research Inc. The analyst praised Qualtrics for its strong growth, but noted that its operating loss during the quarter was higher than its revenue, which is usually not a good sign of healthy development. He said Qualtrics will need to rein in its spending soon.

“The company only has around two-and-a-half quarters’ worth of cash to hand at its current rate of spending,” Mueller said. “So the management will either need to control those costs better or find an additional source of funding from somewhere.”

Looking ahead, Qualtrics believes it will stay relevant for some time to come. For the current quarter, the company is forecasting a loss of between one and three cents per share on revenue of $257 million to $259 million. That’s better than Wall Street’s forecast of a five-cent per share loss on revenue of $246.6 million.

The company said it’s now expecting full-year revenue of between $1.007 billion and $1.011 billion, compared with Wall Street’s consensus of $984 million in full year sales.

Qualtrics’ stock rose almost 5% in after-hours trading.

Photo: SiliconANGLE