Medallia Looks To Verticalized Offerings And Acquisitions

According to a Grand View Research report published earlier this year, the global customer experience management market is expected to grow at 18% CAGR to reach $23.6 billion by 2027 driven by the continued adoption of digital technologies. Medallia (NYSE: MDLA) announced its fiscal first-quarter results last month, but despite the optimistic industry outlook, the company failed to impress the market.

Medallia’s Financials

Revenues for the quarter grew 20% to $112.7 million, ahead of the market’s forecast of $107 million. Adjusted net income of $3.1 million or $0.02 per share was significantly better than the market’s forecast of a loss of $0.02 per share for the quarter.

By segment, revenues from subscription services grew 24% over the year to $89 million and revenues from professional services grew from $21.9 million last year to $23.7 million.

But the company failed to meet the market’s expectations on the outlook. It did not provide an outlook for the year, but it expects to end the second quarter with revenues of $109-$111 million. The Street was looking for revenues of $113 million for the quarter.

Medallia’s Growing Partnerships

Medallia continued to drive growth by extending its partnerships with other technology services providers. During the last quarter, it added Guidewire and Veeva Systems to its partner network.

Its partnership with Veeva Systems will let them deliver an integrated solution with Veeva CRM Suggestions that will put customer insights into the hands of sales reps during critical sales moments. The integration between Medallia and Veeva will help sales reps deliver meaningful and powerful dialogues based on practitioner insights. Medallia has been focused on building vertical focused offerings, and the tie-up with Veeva will help it expand its medical services offerings.

Last quarter it also joined the Guidewire PartnerConnect Solution’s Alliance Program that provides property and casualty insurers running Guidewire access to a curated group of third-party solutions.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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