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SurveyMonkey Announces Second Quarter 2020 Financial Results

Company reports record revenue, strong growth in enterprise customers

Company generated $19.1 million of free cash flow in the quarter

SAN MATEO, Calif. — August 6, 2020 — SurveyMonkey (Nasdaq: SVMK), a leader in agile software solutions for customer experience, market research, and survey feedback, today reported second quarter financial results for the period ended June 30, 2020.

“SurveyMonkey delivered another quarter of strong financial results that exceeded our guidance. Revenue was $90.9 million, a 21% year-over-year increase, and we ended the quarter with more than 7,200 enterprise customers, up 51% from Q2 2019,” said Zander Lurie, chief executive officer of SurveyMonkey. “World-class organizations like ZoomInfo, GitHub, Big Brothers Big Sisters of America, Korn Ferry, Stitch Fix, thredUP, and Vanguard Charitable are choosing SurveyMonkey to accelerate their digital transformation.”

Q2 2020 Key Results

  • Revenue was $90.9 million, an increase of 21% year-over-year.
  • Enterprise sales represents approximately 28% of total revenue, up from approximately 20% in Q2 2019. We ended the quarter with more than 7,200 enterprise sales customers, up 51% from approximately 4,800 in Q2 2019.
  • Deferred revenue was $159.5 million, an increase of 28% year-over-year. Remaining performance obligations were $178.1 million, an increase of 27% year-over-year.
  • Paying users totaled 781,000, an increase of more than 88,500, or 13% from 692,500 in Q2 2019, and an increase of 34,800 paying users from Q1 2020. Approximately 86% of our paying users were on annual plans, up from 80% a year ago.
  • Average revenue per user was $478, up 8% from $442 in Q2 2019.
  • GAAP operating margin was (22.6%) and non-GAAP operating margin was 2.5%.
  • GAAP net loss was $22.9 million and GAAP basic and diluted net loss per share was $0.17. Non-GAAP net loss was $0.2 million and non-GAAP basic and diluted net loss per share was approximately $0.00.
  • Net cash provided by operating activities was $21.9 million and free cash flow was $19.1 million for 24.0% and 21.0% margin, respectively.
  • Cash and cash equivalents totaled $176.8 million and total debt was $214.6 million for net debt of $37.8 million as of June 30, 2020.

Q2 2020 Company Highlights

SurveyMonkey announced its vendor diversity initiative, an ongoing commitment to advancing diversity, equity, and inclusion. SurveyMonkey teamed up with fifteen major tech companies including Slack, Zoom, Box, and Intuit, and partnered with The Justice Collective to create a survey template that goes beyond minority ownership to include the makeup of a vendor’s leadership team, employee base, and DEI practices.

Launched resources for advancing racial equity, including a statement on how SurveyMonkey is pursuing racial justice within the company and in the broader business community. 

  • SurveyMonkey is enhancing its existing diversity hiring goals and internal programs, offering mental health support to employees of color, conducting company-wide anti-racism training, and offering expanded allyship educational resources. 
  • SurveyMonkey is donating $100,000 to organizations selected by our employee group dedicated to Black employees and double-matching donations to select nonprofits focused on racial equity through the YourCause platform. The company is also adding several racial justice nonprofits to the SurveyMonkey Contribute platform. The company will also focus on using vendors, agencies and partners that prioritize diversity, and provide a 25% discount on SurveyMonkey products to nonprofits working for racial equity.

Listed among Parity.org’s Best Companies for Women to Advance for 2020 and a San Francisco Business Times Top Corporate Philanthropists.

Published its 2020 Market Research Survival Guide and a study that finds that 70% of market research professionals say they are likely to transition to more do-it-yourself market research tools in the next year.

United its customer experience (CX) solutions under the GetFeedback Suite brand to accelerate its CX strategy. SurveyMonkey will continue to offer both GetFeedback and Usabilla to organizations globally while working to integrate the two product lines into a multi-channel CX offering.

Launched return to work solutions for enterprise customers, including leadership check-in survey templates, HIPAA-compliant features for health monitoring surveys, and professional services. The solution gives leaders a deeper understanding of the health and well-being of employees, and helps organizations turn feedback into an action plan for their employees' safe return to work.

Announced new features and updates to its app integration with Microsoft Teams, Microsoft’s unified communications and collaboration platform with more than 75 million active daily users.

Hosted its third annual virtual Curiosity Conference which featured general sessions to help organizations understand how to stay connected, featuring tracks across Marketing, Human Resources, CX, Market Research, and Education.

SurveyMonkey posted a shareholder letter with complete second quarter 2020 financial results and management commentary on its investor relations website at investor.surveymonkey.com.

Financial Outlook 

For the third quarter of 2020, SurveyMonkey currently expects the following:

Q3 2020
Revenue$93 million - $96 million19% YoY growth at mid-point
Non-GAAP operating margin1% to 3%

The Company expects basic and diluted weighted average shares outstanding to be approximately 141 million for the third quarter of 2020. For a detailed explanation of the Company’s non-GAAP measures, please refer to the appendix section of this press release.

Conference Call Information

SurveyMonkey senior management will host a conference call today to discuss the Company’s Q2 2020 financial results. This call is scheduled to begin at 2:00 pm PT / 5:00 pm ET and can be accessed by dialing (866) 417-2046 or (409) 217-8231. To listen to a live audio webcast, please visit SurveyMonkey’s Investor Relations website at investor.surveymonkey.com. A replay of the audio webcast will be available on the same website following the call. A telephonic replay will be available through August 13, 2020 by dialing (855) 859-2056 or (404) 537-3406 and entering passcode 5748539#.

About SurveyMonkey

SurveyMonkey is a leader in agile software solutions for customer experience, market research, and survey feedback. The company’s platform empowers over 17 million active users to analyze and act on feedback from employees, customers, website and app users, and market research respondents. SurveyMonkey’s products, enterprise solutions, and integrations enable more than 335,000 organizations to deliver better customer experiences, increase employee retention​, and unlock growth and innovation. Ultimately, SurveyMonkey's vision is to raise the bar for human experiences by amplifying individual voices.

Investor Relations Contact:
Gary J. Fuges, CFA
ir@surveymonkey.com

Media Contact:
Lara Sasken
lsasken@surveymonkey.com

Source: SVMK Inc.

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