Experience management software firm Qualtrics International Inc. saw its stock fall in extended trading today after reporting a second-quarter loss that came below expectations.

The company reported a net loss of $279.2 million for the quarter, resulting in a loss before certain costs such as stock compensation of four cents per share. Revenue jumped by 43% from the year ago period, to $356.4 million. The results were therefore a mixed bag, with Wall Street analysts looking for the company to break even on lower revenue of just $345 million.

Qualtrics’ stock came crashing down in the wake of the report, falling by as much as 10% at one stage, only to reclaim some of that lost ground. The stock was down just over 5% at the time of writing, having made an impressive 8% gain during the regular trading session.

Qualtrics, which is a subsidiary of German enterprise software giant SAP SE, has created a cloud-based platform that enterprises use to collect feedback from employees and customers. The platform is especially popular with human resources departments, as they can use it to obtain feedback from their employees on topics such as the effectiveness of training programs, onboarding processes and more. Product teams also use Qualtrics’ platform to assess customer satisfaction and try to pinpoint new market opportunities.

Given the unique nature of its software, Qualtrics sees itself as the pioneer of an emerging “experience management” industry, and it says it’s becoming more important for enterprises.

Qualtrics Chief Executive Zig Serafin (pictured) backed up this claim, pointing out that the company once again posted strong revenue growth of more than 40%. “We continue to see robust demand for our experience management platform as companies look to Qualtrics to help them navigate the uncertain macro-environment and win in their markets,” he added.

Qualtrics is certainly in demand, with subscription revenue for the quarter rising by 47% to $300.6 million. In addition, the company said, it had total remaining performance obligations of $1.79 billion, up 38% from a year earlier. Qualtrics’ RPO represents all contracted future revenue that has not yet been realized, including both deferred sales and noncancelable contracted amounts to be invoiced in future.

Analyst Holger Mueller of Constellation Research Inc. said profitability remains elusive for Qualtrics because its costs are growing faster than its revenue. He noted that its costs of subscriptions grew more than double compared to one year ago, for example.

“With Qualtrics’ professional services losing money, its core revenue engine is unable to keep up with its research and development, sales and marketing and general and administrative expenses,” Mueller said. “In the last quarter, the company was only able to reduce its G&A expenses, shaving off just $10 million for the first six months of the year, meaning it broke the $1 billion barrier in operational expenses for the first time. To reach its full-year target of a loss of between seven and nine cents per share, a lot of good things will need to happen on the revenue and cost side. That’s even more challenging with the potential of a recession in the months to come.”

Looking to the third quarter, Qualtrics said it expects adjusted earnings of between two and four cents per share on revenue of $358 million to $360 million. Wall Street’s consensus is for the company to break even on sales of $359 million.

Photo: SiliconANGLE