Shares of Medallia (MDLA) have plummeted today, down by 11% as of 12:50 p.m. EST, after the company reported third-quarter earnings. The results topped expectations, yet investors were still disappointed.
Revenue in the third quarter was $121 million, ahead of the $116.9 million in sales that Wall Street analysts were looking for. That top line included subscription revenue of $96.9 million. That resulted in adjusted net income of $1.1 million, or $0.01 per share. The consensus estimate had called for an adjusted net loss per share of $0.01. The enterprise software-as-a-service (SaaS), which leverages artificial intelligence to gauge customer experiences, finished the quarter with $657.1 million in cash.
"We added the most new customers in any quarter. Our wins included major enterprise brands across verticals and geographies," CEO Leslie Stretch said in a statement. "We added more than a dozen new go-to-market partners and hired more strong talent to support our growth."
Medallia's outlook also came in strong, with revenue in the fiscal fourth quarter expected in the range of $123.5 million to $125.5 million. That should include subscription revenue of $100.5 million to $101.5 million. Analysts are currently modeling for $122.8 million in sales next quarter.
On the conference call with analysts, CFO Roxanne Oulman provided additional details, forecasting adjusted operating income of $200,000 to $700,000. Medallia expects to spend $5 million in capital expenditures to upgrade its data centers.