December 03, 2020

Medallia Reports Record Third Quarter Fiscal 2021 Revenue

  • Q3 Subscription Revenue of $96.9 Million, Up 22% Year-over-Year
  • Q3 Total Revenue of $121.0 Million, Up 17% Year-over-Year

SAN FRANCISCO–(BUSINESS WIRE)–December 3, 2020–Medallia, Inc. (NYSE: MDLA), the global leader in experience management, today announced financial results for the quarter ended October 31, 2020.

“I was very pleased with our execution in Q3. We added the most new customers in any quarter. Our wins included major enterprise brands across verticals and geographies. We added more than a dozen new go-to-market partners and hired more strong talent to support our growth. With two full virtual quarters behind us, we are confident in our future prospects for Q4 and for fiscal year 2022,” said Leslie Stretch, president and CEO of Medallia.

“IDC research shows that customer experience is critical. It’s actually an increasing priority for the C-Suite post-COVID – according to our research it is the second most important thing behind resilient business operations,” said Alan Webber, vice president for Digital Strategy and Customer Experience, IDC. “CEOs and CFOs recognize the importance of customer experience because they are paying attention to the numbers.”

Financial Highlights for the Third Quarter of Fiscal 2021

  • Subscription revenue was $96.9 million, an increase of 22% from the same period last year. Total revenue for the quarter was $121.0 million, an increase of 17% from the same period last year.
  • Loss from operations for the quarter was $29.5 million, compared to loss from operations of $41.7 million in the same period last year. Non-GAAP income from operations for the third quarter was $2.1 million, compared to a loss of $2.0 million in the same period last year.
  • Net loss for the quarter was $32.2 million, or ($0.22) per share, basic and diluted, compared to net loss of $39.6 million, or ($0.31) per share, basic and diluted, in the same period last year. Non-GAAP net income was $1.1 million, or $0.01 per share, diluted, compared to a non-GAAP net loss of $932,000, or ($0.01) per share, basic and diluted, in the same period last year.
  • Cash and cash equivalents, current and noncurrent marketable securities were $657.1 million as of October 31, 2020.

For information regarding the non-GAAP financial measures discussed in this press release, please see the section titled “Non-GAAP Financial Measures.” Reconciliations between GAAP and non-GAAP financial measures are provided in the tables of this press release.

Recent Company Highlights

  • Recent wins include: Agency for Clinical Innovation, BlueVine Capital, Canadian Tire, Chargify, Corrigo, ENSEK, FEMA, GSA, Innova Sport, Noodles & Company, PODS®, Radisson Hotel Group US, Sales Benchmark Index, TBK Bank, Uncle Julio’s, Validators, Woodside Homes and Zinklar.
  • Acquired Stella Connect, a real-time feedback, coaching and quality management platform for customer service teams.
  • Acquired Sense360, a behavioral consumer intelligence and benchmarking leader, to help brands understand where, how, and why buyers and non-buyers spend their time and money.
  • Integrated Medallia LivingLens with Zoom Video Communications, enabling research and insights teams to capture powerful feedback from video sessions.
  • Launched Medallia Closed Loop Service for Salesforce on Salesforce AppExchange, empowering customers to enhance their contact center by closing the loop on customer service interactions.
  • Partnered with Tableau, bringing together Medallia’s best-in-class experience insights with Tableau’s advanced analytics and data visualization capabilities.
  • Partnered with Five9, providing call center and customer experience leaders with rich insights.
  • Announced a planned integration with Oracle CX Service.

Financial Outlook

Medallia is providing the following guidance for the fourth quarter ending January 31, 2021.

  • Subscription revenue in the range of $100.5 million to $101.5 million.
  • Total revenue in the range of $123.5 million to $125.5 million.
  • GAAP loss from operations in the range of $38.7 million to $31.7 million.
  • Non-GAAP income from operations in the range of $200,000 to $700,000.

Conference Call

Medallia will host a conference call at 1:30 p.m. PT (4:30 p.m. ET) today to discuss the third quarter of fiscal 2021 and our outlook for the fourth quarter of fiscal 2021. The conference call will be available via live webcast and replay at the Investor Relations section of Medallia’s website:

About Medallia

Medallia (NYSE: MDLA) is the pioneer and market leader in Experience Management. Medallia’s award-winning SaaS platform, the Medallia Experience Cloud, leads the market in the understanding and management of experience for customers, employees and citizens. Medallia captures experience signals created on daily journeys in person, on calls and digital channels, over video and social media and IoT interactions and applies proprietary AI technology to reveal personalized and predictive insights that can drive action with tremendous business results. Using Medallia Experience Cloud, customers can reduce churn, turn detractors into promoters and buyers, create in-the-moment cross-sell and up-sell opportunities and drive revenue-impacting business decisions, providing clear and potent returns on investment.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release and the accompanying tables contain, and the conference call will contain, non-GAAP financial measures, including non-GAAP gross profit and gross margin, non-GAAP subscription revenue gross profit and gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) and weighted average basic and diluted shares. Our management uses these non-GAAP financial measures internally in analyzing our financial results and believes they are useful to investors, as a supplement to the corresponding GAAP financial measures, in evaluating our ongoing operational performance and trends and in comparing our financial measures with other companies in the same industry, many of which present similar non-GAAP financial measures to help investors understand the operational performance of their businesses. However, it is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry. In addition, other companies may utilize metrics that are not similar to ours.

The non-GAAP financial information is presented for supplemental informational purposes only and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results. Management encourages investors and others to review Medallia’s financial information in its entirety and not rely on a single financial measure.

We adjust the following items from one or more of our non-GAAP financial measures:

Stock-based compensation. We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. In particular, companies calculate stock-based compensation expense using a variety of valuation methodologies and subjective assumptions.

Employer payroll tax expense related to stock-based compensation. We exclude cash expenses for employer payroll taxes related to stock-based compensation, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. In particular, this expense is tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of exercise or vesting, which may vary from period to period independent of the operating performance of our business.

Amortization of acquired intangible assets. We exclude amortization of acquired intangible assets, which is a non-cash expense, from certain of our non-GAAP financial measures. Our expenses for amortization of intangible assets are inconsistent in amount and frequency because they are significantly affected by the timing, size of acquisitions and the inherent subjective nature of purchase price allocations. We exclude these amortization expenses because we do not believe these expenses have a direct correlation to the operation of our business.

Acquisition-related costs. We exclude costs related to acquisitions from our non-GAAP financial measures. These costs include legal and transactional costs associated with acquisition activities.

Restructuring and other. We exclude restructuring and other from certain of our non-GAAP financial measures. Restructuring and other primarily consists of lease exit costs related to our office facilities.

Amortization of debt discount and issuance costs. We exclude costs related to the amortization of debt discount together with the issuance costs of the debt from certain of our non-GAAP financial measures. Under GAAP, we are required to separately account for liability (debt) and equity (conversion option) components of the convertible senior notes that were issued in a private placement in September 2020 and recognize the effective interest expense on our convertible senior notes and amortize the issuance costs over the term of these notes. The expense for the amortization of debt discount and debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense will provide for a more useful comparison of our operational performance in different periods.

Income tax benefits. We exclude tax benefits related to acquisitions from our non-GAAP financial measures. These tax benefits realized consist of the change in the valuation allowance resulting from acquisitions. In addition, we exclude tax benefits related to our stock option exercise deductions.

Non-GAAP Supplemental Financial Information

Subscription billings: We define subscription billings, a non-GAAP financial measure, as total subscription revenue plus the change in subscription deferred revenue and contract assets, excluding acquired contract assets.

Note on Forward-Looking Statements

The forward-looking statements included in this press release and in the accompanying conference call, including for example, the quotations of management, the statements under the heading “Financial Outlook” above, the information provided in the “Financial Outlook” section of the tables below, strategies, discussion of our commercial prospects, partnerships, estimates of future revenues, operating income/loss and expenses, stock-based compensation expense and related employer payroll tax expense, amortization of acquired intangible assets, acquisitions and acquisition-related costs, restructuring and other expenses, amortization of debt discount and issuance costs and income tax benefits, reflect management’s best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, potential disruption of customer purchase decisions resulting from global economic conditions including from an economic downturn or recession in the United States or in other countries around the world, timing and size of orders, relative growth of our recurring revenue, potential decreases in customer spending, including as a result of the COVID-19 pandemic and related public health measures, uncertainty regarding purchasing trends in the cloud software market, customer cancellations or non-renewal of maintenance contracts or on-demand services, developments in and the duration of the COVID-19 pandemic and the resulting impact on our business and operations, and the business of our customers and partners, including the economic impact of safety measures to mitigate the impacts of COVID-19, our potential inability to manage effectively any growth we experience, our ability to develop new products and services, increased competition or new entrants in the marketplace, potential impact of acquisitions and investments, changes in staffing levels, and other risks detailed in registration statements and periodic reports we filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed with the SEC on March 19, 2020 and our Quarterly Report on Form 10-Q filed with the SEC on September 9, 2020, which may be obtained on the Investor Relations section of Medallia’s website ( Additionally, these forward-looking statements involve risk, uncertainties, and assumptions, including those related to the impacts of COVID-19 on our business and global economic conditions. Many of these assumptions relate to matters that are beyond our control and are changing rapidly, including, but not limited to, the timeframes for and severity of social distancing and other mitigation requirements, the impact of COVID-19 on our customers’ purchasing decisions and the length of our sales cycles, particularly for customers in certain industries highly affected by COVID-19. Significant variation from the assumptions underlying our forward-looking statements could cause our actual results to vary, and the impact could be significant. All forward-looking statements in this press release are based on information available to us as of the date hereof. We undertake no obligation, and do not intend, to update the information contained in this press release or the accompanying conference call, except as required by law.

© 2020 Medallia, Inc. All rights reserved. Medallia®, the Medallia logo, and the names and marks associated with Medallia’s products are trademarks of Medallia. All other trademarks are the property of their respective owners.

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Investor Relations
Carolyn Bass

PR Contact:
+1 (650) 400-7833