The global customer experience management market is expected to grow at 15.5% CAGR to $27.12 billion by 2028. CX leader Qualtrics (NYSE: XM) recently acquired Clarabridge, a leader in conversational analytics, for $1.125 billion.

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Qualtrics’ Financials

For the second quarter of fiscal 2021, Qualtrics reported revenue of $249.3 million, up 38%. GAAP net loss was $263.5 million, compared to GAAP net loss of $127.5 million a year ago. Non-GAAP net income per share was $0.04, compared to non-GAAP net loss per share of $0.34 a year ago. The market was looking for revenues of $227.4 million and non GAAP loss of $0.03 per share.

By segment, Subscription revenues grew 47.7% to $204.5 million, and professional services revenues grew 5.3% to $44.8 million.

For the third quarter of fiscal 2021, the company expects revenues of $257 million to $259 million and non-GAAP net loss per share of $0.03 to $0.01.

For the full fiscal year 2021, Qualtrics expects revenues of $1.007 billion to $1.011 billion, with a net loss per share between $0.02 and $0.00.

Qualtrics’s Clarabridge Acquisition

Recently, Qualtrics completed the acquisition of Virginia-based Clarabridge for $1.125 billion. Founded in 2006 by Gene Sohn, Jurriaan Persyn, Justin Langseth, and Sid Banerjee, Clarabridge uses advanced text analytics, enterprise surveys, and robust engagement to transform customer feedback into decisive actions for businesses. The acquisition will allow Qualtrics to provide companies with the power to build relationships with their customers and employees, while also delivering experiences that appeal to everyone. Qualtrics plans to leverage the acquisition to provide conversational analytics to its platform for engaging with customers and employees. Clarabridge’s sophisticated AI-powered platform allows companies to discover and analyze customer feedback from indirect sources such as support conversations, chat, social media posts, review sites, and others.

Prior to the acquisition, Clarabridge had raised $124.9 million in seven rounds of funding from Yuchun Lee, General Catalyst, Summit Partners, Grotech Ventures, Boulder Ventures, Harbert Growth Partners, and Intersouth Partners. I had met with Sid Banerjee, one of the co-founders, a few years ago. He had walked me through the various use cases of Clarabridge’s data analytics capabilities.

Qualtrics is already leveraging the acquisition by announcing new products. It recently revealed Experience ID, a solution that will enable companies to personalize experiences at scale. Customers will be able to gain insights about individuals, as well as views by segments, such as teams, geographies, and verticals, to identify new emerging trends and market opportunities.

Qualtrics’s stock is currently trading at $46.10 with a market cap of $23.8 billion. It had touched a high of $57.28 in February. It had fallen to a low of $29.36 in May.