How does pricing work for Qualtrics

SAP brings Qualtrics to the stock exchange

As announced in July, SAP filed with the Securities & Exchange Commission (SEC) yesterday afternoon for an IPO of its subsidiary Qualtrics, in which the shares are valued at 20 to 24 dollars apiece. Pricing is tentative and the number of shares to sell has not yet been determined.

The company's shares are said to be traded on the Nasdaq under the ticker symbol "XM". Morgan Stanley and JP Morgan are the lead managers of the offering. The IPO is something of a déjà vu: SAP bought Qualtrics in cash in 2019 from a group of venture capital firms, including Accel Partners, Sequoia Capital and Insight Venture Management, for $ 8 billion just before Qualtrics went public went.

After the IPO, SAP will still own the vast majority of Qualtrics stock. SAP said in July that it had no intention of outsourcing the company and that the acquisition would be a great success. SAP presented the IPO in such a way that it should help "increase Qualtrics' autonomy and enable the company to expand its presence both within the SAP customer base and beyond."

Qualtrics software is for what the company calls Experience Management (XM). The company claims that experience management software is a new category of software that, according to Qualtrics, "enables organizations to thrive in today's experience economy."

"Our XM platform helps organizations design and improve the experiences that turn their customers into fanatics, employees into ambassadors, products into obsessions, and brands into religions," the company says. The software comprises four modules called “CustomerXM”, “EmployeeXM”, “ProductXM” and “BrandXM”.

Qualtrics states more than 12,000 customers and 3,300 employees in the prospectus. The company's sales rose by over 36 percent to $ 723 million in the twelve months to September, it says. For the nine months to September, the company lost $ 258 million on a net basis on sales of $ 550 million.

As part of the IPO, Qualtrics said, venture funds affiliated with Silver Lake Technology Management LLC agreed to purchase $ 550 million worth of shares.