Cloud Stocks: Medallia Acquires To Expand Digital Experience Analytics


According to a Markets and Markets report, the customer experience management market is estimated to grow from $8.5 billion in 2020 to $14.9 billion by 2025 at a CAGR of 11.8%. Medallia (NYSE: MDLA), a leading player in the market, recently announced its fourth quarter results that surpassed market expectations.

Medallia’s Financials

Fourth quarter revenues grew 16% to $128 million, ahead of the market’s forecast of $124.6 million. Adjusted net loss was $1.4 million or $(0.01) per share, equivalent to the market’s estimates.

By segment, revenues from subscription services grew 20% to $103.8 million and revenues from professional services grew from $23.9 million last year to $24.2 million.

For the fiscal year, Medallia’s revenues grew 19% to $477.2 million and EPS was $0.02.

It expects to end the current quarter with revenues of $126-$128 million. The Street was looking for revenues of $127.39 million for the quarter.

Medallia’s Acquisition

During the quarter, Medallia continued to grow inorganically. It announced the acquisition of London-based Decibel for an estimated $160 million. Founded in 2014 by Ben Harris and Timothy de Paris, Decibel processes behavioral metrics, allowing companies to get an understanding of what the user’s on-page experience is like. Its digital experience analytics solution captures and quantifies experience data to identify revenue-impacting problem areas on both websites and apps.

With this acquisition, Medallia plans to improve its customer experience and engagement platform that will include always-on, unsolicited digital feedback. Organizations will be able to get a single view of the journey followed by its customers and prospective customers across various channels of interaction.

According to an IDC report, companies are expected to spend over $1.6 trillion this year in accelerating their digital transformation. A significant portion of this spend is expected to go toward improving the overall customer experience. Medallia’s acquisition of Decibel will help companies improve their digital journeys.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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