Cloud Stocks: Medallia Continues To Acquire

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According to a Verified Research Market report, the global customer experience management market is expected to grow at 17% CAGR to $17.5 billion by 2027. Analysts believe that the increased demand for personalized experience by customers across different industries and the adoption of technological advancements within cloud, big data analytics, and AI will help drive this growth.

Medallia (MDLA) announced its fiscal third quarter results last month and the company is leveraging acquisitions and integrations to meet the growing demand.

Medallia’s Financials

Revenues for the third quarter grew 17% to $121 million, ahead of the market’s forecast of $116.9 million. The adjusted net income of $1.1 million, or $0.01 per share, was significantly better than the market’s forecast of a loss of $0.01 per share for the quarter.

By segment, revenues from subscription services grew 21.5% to $96.9 million, and revenues from professional services grew 3% to $24.02 million. It expects to end the fourth quarter with revenues of $123.5-$125.5 million. The Street was looking for revenues of $124.59 million for the quarter.

Medallia’s Acquisition and Integration

During the quarter, Medallia announced the acquisition of contact center platform, Stella Connect, for $100 million. Stella Connect is a real-time feedback, coaching, and quality management platform for customer service teams. It drives improved return on investment by automating the process of coaching interactions in the contact center and increasing focus on customer experience for higher customer retention and cross-sell.

With the acquisition, Medallia is adding several capabilities to the virtual service center, including a feedback connection with the contact center’s live-time environment. The new solution has been well-received by the market and Medallia has already been able to sell the new solution into the e-commerce division of three large retail customers, one of the largest game publishers, and one of the fastest growing e-commerce companies.

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This segment is a part in the series: Cloud Stocks.

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