SurveyMonkey Inc. (“SurveyMonkey”), a leading global survey
software company, announced today that its parent company, SVMK
Inc. (Nasdaq: SVMK, and collectively with SurveyMonkey referred to
as “SVMK”, “we” or “us”), reported second quarter 2019 financial
results for the period ended June 30, 2019, and posted a
shareholder letter with complete second quarter 2019 financial
results and management commentary on its investor relations website
at investor.surveymonkey.com.
Q2 2019 Key Results
- Revenue was $75.1 million for 20% year-over-year
growth.
- Paying users totaled 692,455 compared to 616,111 in Q2 2018,
for 12% year-over-year growth, and up 21,593 paying users from Q1
2019, for 3% quarter-over-quarter growth. Approximately 80% of our
paying users were on annual plans, up from 75% in Q2 2018 and 78%
in Q1 2019.
- Average revenue per user was $442 compared to $410 in Q2 2018,
for 8% year-over-year growth, and up from $423 in Q1 2019, for 4%
quarter-over-quarter growth.
- Enterprise sales revenue was approximately 20% of total
revenue, up from approximately 11% in Q2 2018 and 16% in Q1
2019. We ended the quarter with 4,777 enterprise sales customers,
up from 2,990 in Q2 2018, for 60% year-over-year growth, and an
increase of 868 customers from Q1 2019. This includes a one-time
increase of approximately 400 net new enterprise sales customers
following the closing of the Usabilla acquisition.
- GAAP operating margin was (21%) and non-GAAP operating margin
was 2%.
- GAAP net loss was ($18.5) million and Adjusted EBITDA was $10.3
million.
- GAAP basic and diluted net loss per share was ($0.14). Non-GAAP
basic and diluted net loss per share was ($0.01).
- Net cash provided by operating activities was $13.9 million,
free cash flow was $9.8 million, and unlevered free cash flow was
$13.3 million, for 19%, 13%, and 18% margin,
respectively.
- Cash and cash equivalents was $154.5 million and total debt was
$216.5 million for net debt of $62.0 million.
“With revenue growing 20% year-over-year, our Q2 financial
results demonstrate that we continue to execute well against our
key growth strategies -- selling our enterprise-grade solutions
directly to organizations, driving adoption of our collaborative
self-serve Teams plans, and expanding our international footprint,”
said Zander Lurie, chief executive officer at SurveyMonkey. “Our
second quarter results include several key highlights: enterprise
sales revenue grew 110% year-over-year; our overall paying user
base is now 80% annual; and we opened our cloud-based European data
center to accelerate our global expansion. We are entering the
second half of this year with incredible momentum and we’re more
confident than ever about the opportunity ahead.”
Financial Outlook
Q3 2019 |
Revenue |
$77 million - $78 million |
18% - 20% YoY growth |
Non-GAAP operating margin |
Approximately breakeven |
|
FY 2019 |
Revenue |
$302 million - $306 million |
19% - 20% YoY growth |
Non-GAAP operating margin |
Approximately breakeven |
|
Unlevered free cash flow |
$50 million - $53 million |
17% margin |
Building on the strong performance in the first half of 2019,
we’re increasing our revenue guidance for the full year 2019. Our
growth investments continue to yield strong results. We are
continuing to invest in efforts that drive enterprise sales, fuel
growth in our self-serve channel, and expand our international
business.
We will host a conference call today to discuss our Q2 2019
business and 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 8, 2019 by dialing (855)
859-2056 or (404) 537-3406 and entering passcode 2160748#.
Upcoming Events
Management will be presenting at the 2019 Raymond James SMID Cap
Growth Conference in Chicago, IL on Wednesday, August 21,
2019.
About SurveyMonkey
SurveyMonkey is a leading global survey software company on a
mission to power the curious. The company’s People Powered Data
platform empowers over 17 million active users to measure and
understand feedback from employees, customers, website and app
users, and the market. SurveyMonkey’s products, enterprise
solutions and integrations enable 335,000+ organizations to solve
daily challenges, from delivering better customer experiences to
increasing employee retention. With SurveyMonkey, organizations
around the world can transform feedback into business intelligence
that drives growth and innovation.
Investor Relations Contact:Karim
Damjiinvestors@surveymonkey.com
Media Contact:Lara
Sasken lsasken@surveymonkey.com
Source: SurveyMonkey Inc.
|
|
SVMK INC.CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited) (1) |
|
|
|
(in thousands) |
|
June 30, 2019 |
|
|
December 31, 2018 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
154,546 |
|
|
$ |
153,807 |
|
Accounts receivable, net of allowance |
|
|
11,102 |
|
|
|
7,336 |
|
Deferred commissions, current |
|
|
2,636 |
|
|
|
1,981 |
|
Prepaid expenses and other current assets |
|
|
9,772 |
|
|
|
7,081 |
|
Total current assets |
|
|
178,056 |
|
|
|
170,205 |
|
Property and equipment, net |
|
|
42,526 |
|
|
|
117,718 |
|
Operating lease right-of-use
assets |
|
|
61,478 |
|
|
|
— |
|
Capitalized internal-use
software, net |
|
|
34,445 |
|
|
|
33,280 |
|
Acquisition intangible assets,
net |
|
|
21,456 |
|
|
|
9,324 |
|
Goodwill |
|
|
409,772 |
|
|
|
336,861 |
|
Deferred commissions,
non-current |
|
|
4,823 |
|
|
|
3,317 |
|
Other assets |
|
|
8,607 |
|
|
|
8,643 |
|
Total assets |
|
$ |
761,163 |
|
|
$ |
679,348 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
3,037 |
|
|
$ |
2,804 |
|
Accrued expenses and other current liabilities |
|
|
11,833 |
|
|
|
9,692 |
|
Accrued compensation |
|
|
15,066 |
|
|
|
20,070 |
|
Deferred revenue |
|
|
124,334 |
|
|
|
101,236 |
|
Operating lease liabilities, current |
|
|
6,910 |
|
|
|
— |
|
Debt, current |
|
|
1,900 |
|
|
|
1,900 |
|
Total current liabilities |
|
|
163,080 |
|
|
|
135,702 |
|
Deferred tax liabilities |
|
|
6,181 |
|
|
|
4,246 |
|
Debt, non-current |
|
|
214,565 |
|
|
|
215,515 |
|
Financing obligation on leased
facility |
|
|
— |
|
|
|
92,009 |
|
Operating lease liabilities,
non-current |
|
|
82,763 |
|
|
|
— |
|
Other non-current
liabilities |
|
|
5,045 |
|
|
|
12,493 |
|
Total liabilities |
|
|
471,634 |
|
|
|
459,965 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock |
|
|
— |
|
|
|
— |
|
Common stock |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
654,857 |
|
|
|
551,937 |
|
Accumulated other comprehensive income (loss) |
|
|
501 |
|
|
|
(287 |
) |
Accumulated deficit |
|
|
(365,830 |
) |
|
|
(332,268 |
) |
Total stockholders’ equity |
|
|
289,529 |
|
|
|
219,383 |
|
Total liabilities and stockholders’ equity |
|
$ |
761,163 |
|
|
$ |
679,348 |
|
(1) The Company adopted ASC 842 as of January 1, 2019 on a
prospective basis. Amounts presented as of June 30, 2019 are
under ASC 842 and amounts presented as of December 31, 2018 are
under ASC 840.
SVMK INC.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited) (1) |
|
|
|
|
|
Three Months
EndedJune 30, |
|
|
Six Months
EndedJune 30, |
|
(in thousands, except per share amounts) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue |
|
$ |
75,139 |
|
|
$ |
62,696 |
|
|
$ |
143,780 |
|
|
$ |
121,187 |
|
Cost of revenue(2)(3) |
|
|
19,047 |
|
|
|
17,691 |
|
|
|
36,577 |
|
|
|
35,754 |
|
Gross profit |
|
|
56,092 |
|
|
|
45,005 |
|
|
|
107,203 |
|
|
|
85,433 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development(2) |
|
|
22,407 |
|
|
|
16,292 |
|
|
|
43,213 |
|
|
|
34,232 |
|
Sales and marketing (2)(3) |
|
|
29,689 |
|
|
|
19,879 |
|
|
|
55,739 |
|
|
|
37,300 |
|
General and administrative(2) |
|
|
19,746 |
|
|
|
13,400 |
|
|
|
40,302 |
|
|
|
26,418 |
|
Restructuring |
|
|
— |
|
|
|
28 |
|
|
|
(66 |
) |
|
|
33 |
|
Total operating expenses |
|
|
71,842 |
|
|
|
49,599 |
|
|
|
139,188 |
|
|
|
97,983 |
|
Loss from operations |
|
|
(15,750 |
) |
|
|
(4,594 |
) |
|
|
(31,985 |
) |
|
|
(12,550 |
) |
Interest expense |
|
|
3,647 |
|
|
|
7,591 |
|
|
|
7,306 |
|
|
|
14,685 |
|
Other non-operating income
(expense), net |
|
|
575 |
|
|
|
(282 |
) |
|
|
2,554 |
|
|
|
351 |
|
Loss before income taxes |
|
|
(18,822 |
) |
|
|
(12,467 |
) |
|
|
(36,737 |
) |
|
|
(26,884 |
) |
Provision for (benefit from)
income taxes |
|
|
(344 |
) |
|
|
(4 |
) |
|
|
(482 |
) |
|
|
296 |
|
Net loss |
|
$ |
(18,478 |
) |
|
$ |
(12,463 |
) |
|
$ |
(36,255 |
) |
|
$ |
(27,180 |
) |
Net loss per share, basic and
diluted |
|
$ |
(0.14 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.27 |
) |
Weighted-average shares used in
computing basic and diluted net loss per share |
|
|
131,099 |
|
|
|
101,623 |
|
|
|
128,943 |
|
|
|
101,419 |
|
(1) The Company adopted ASC 842 as of January 1, 2019 on a
prospective basis. Amounts presented for the three and six
months ended June 30, 2019 are under ASC 842 and amounts presented
for the three and six months ended June 30, 2018 are under ASC
840.
(2) Includes stock-based compensation, net of amounts
capitalized as follows:
|
|
Three Months
EndedJune 30, |
|
|
Six Months
EndedJune 30, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Cost of revenue |
|
$ |
991 |
|
|
$ |
646 |
|
|
$ |
2,087 |
|
|
$ |
1,304 |
|
Research and development |
|
|
5,629 |
|
|
|
2,966 |
|
|
|
10,395 |
|
|
|
6,413 |
|
Sales and marketing |
|
|
3,016 |
|
|
|
1,147 |
|
|
|
5,796 |
|
|
|
1,915 |
|
General and administrative |
|
|
5,518 |
|
|
|
3,993 |
|
|
|
11,987 |
|
|
|
7,660 |
|
Stock-based compensation, net of amounts capitalized |
|
$ |
15,154 |
|
|
$ |
8,752 |
|
|
$ |
30,265 |
|
|
$ |
17,292 |
|
(3) Includes amortization of acquisition intangible assets
as follows:
|
|
Three Months
EndedJune 30, |
|
|
Six Months
EndedJune 30, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Cost of revenue |
|
$ |
1,403 |
|
|
$ |
488 |
|
|
$ |
1,891 |
|
|
$ |
976 |
|
Sales and marketing |
|
|
766 |
|
|
|
604 |
|
|
|
1,303 |
|
|
|
1,208 |
|
Amortization of acquisition intangible assets |
|
$ |
2,169 |
|
|
$ |
1,092 |
|
|
$ |
3,194 |
|
|
$ |
2,184 |
|
SVMK
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited) |
|
|
|
|
|
Six Months Ended June 30, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
Cash flows from operating
activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(36,255 |
) |
|
$ |
(27,180 |
) |
Adjustments to reconcile net loss
to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
20,545 |
|
|
|
23,652 |
|
Non-cash leases expense |
|
|
6,059 |
|
|
|
— |
|
Stock-based compensation expense, net of amounts capitalized |
|
|
30,265 |
|
|
|
17,292 |
|
Amortization of debt discount and issuance costs |
|
|
150 |
|
|
|
484 |
|
Deferred income taxes |
|
|
(415 |
) |
|
|
295 |
|
Gain on sale of a private company investment |
|
|
(1,001 |
) |
|
|
(999 |
) |
Other |
|
|
51 |
|
|
|
176 |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,830 |
) |
|
|
(814 |
) |
Prepaid expenses and other assets |
|
|
(3,387 |
) |
|
|
(3,753 |
) |
Accounts payable and accrued liabilities |
|
|
1,996 |
|
|
|
2,624 |
|
Accrued interest on financing lease obligation, net of
payments |
|
|
— |
|
|
|
(703 |
) |
Accrued compensation |
|
|
(6,311 |
) |
|
|
(3,554 |
) |
Deferred revenue |
|
|
18,576 |
|
|
|
14,511 |
|
Operating lease liabilities |
|
|
(6,731 |
) |
|
|
— |
|
Net cash provided by operating activities |
|
|
21,712 |
|
|
|
22,031 |
|
Cash flows from investing
activities |
|
|
|
|
|
|
|
|
Acquisition, net of cash
acquired |
|
|
(53,138 |
) |
|
|
— |
|
Purchases of property and
equipment |
|
|
(1,335 |
) |
|
|
(4,809 |
) |
Capitalized internal-use
software |
|
|
(6,527 |
) |
|
|
(5,467 |
) |
Proceeds from sale of a private
company investment |
|
|
1,001 |
|
|
|
999 |
|
Net cash used in investing activities |
|
|
(59,999 |
) |
|
|
(9,277 |
) |
Cash flows from financing
activities |
|
|
|
|
|
|
|
|
Proceeds from stock option
exercises |
|
|
37,593 |
|
|
|
178 |
|
Proceeds from employee stock
purchase plan |
|
|
2,662 |
|
|
|
— |
|
Employee payroll taxes paid for
net share settlement of restricted stock units |
|
|
— |
|
|
|
(3,218 |
) |
Repayment of debt |
|
|
(1,100 |
) |
|
|
(1,500 |
) |
Net cash provided by (used in) financing activities |
|
|
39,155 |
|
|
|
(4,540 |
) |
Effect of exchange rate changes on cash |
|
|
(55 |
) |
|
|
— |
|
Net increase in cash,
cash equivalents and restricted cash |
|
|
813 |
|
|
|
8,214 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
154,371 |
|
|
|
35,345 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
155,184 |
|
|
$ |
43,559 |
|
Supplemental cash flow
data: |
|
|
|
|
|
|
|
|
Interest paid for term debt |
|
$ |
6,913 |
|
|
$ |
10,813 |
|
Interest paid for financing obligation on leased facility |
|
$ |
— |
|
|
$ |
4,076 |
|
Cash paid for operating leases |
|
$ |
6,731 |
|
|
$ |
— |
|
Income taxes paid |
|
$ |
676 |
|
|
$ |
50 |
|
Non-cash investing and
financing transactions: |
|
|
|
|
|
|
|
|
Fair value of common stock issued as acquisition consideration |
|
$ |
30,092 |
|
|
$ |
— |
|
Stock compensation included in capitalized software costs |
|
$ |
2,031 |
|
|
$ |
756 |
|
Accrued unpaid capital expenditures |
|
$ |
321 |
|
|
$ |
2,098 |
|
Lease liabilities arising from obtaining right-of-use assets |
|
$ |
2,477 |
|
|
$ |
— |
|
Derecognized financing obligation related to building due to
adoption of ASC 842 |
|
$ |
92,009 |
|
|
$ |
— |
|
Derecognized building due to adoption of ASC 842 |
|
$ |
71,781 |
|
|
$ |
— |
|
|
|
SVMK INC.RECONCILIATION OF GAAP TO
NON-GAAP DATA (unaudited) (1)(2)Reconciliation of
GAAP to Non-GAAP (Loss) Income from Operations |
|
|
|
|
|
Three Months
EndedJune 30, |
|
|
Six Months
EndedJune 30, |
|
(in thousands, except percentages) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
GAAP Loss from operations |
|
$ |
(15,750 |
) |
|
$ |
(4,594 |
) |
|
$ |
(31,985 |
) |
|
$ |
(12,550 |
) |
GAAP Operating margin |
|
|
(21 |
)% |
|
|
(7 |
)% |
|
|
(22 |
)% |
|
|
(10 |
)% |
Stock-based compensation, net |
|
|
15,154 |
|
|
|
8,752 |
|
|
|
30,265 |
|
|
|
17,292 |
|
Amortization of acquisition intangible assets |
|
|
2,169 |
|
|
|
1,092 |
|
|
|
3,194 |
|
|
|
2,184 |
|
Restructuring |
|
|
— |
|
|
|
28 |
|
|
|
(66 |
) |
|
|
33 |
|
Non-GAAP Income from
operations |
|
$ |
1,573 |
|
|
$ |
5,278 |
|
|
$ |
1,408 |
|
|
$ |
6,959 |
|
Non-GAAP Operating margin |
|
|
2 |
% |
|
|
8 |
% |
|
|
1 |
% |
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Loss and Loss per
diluted share
|
|
Three Months
EndedJune 30, |
|
|
Six Months
EndedJune 30, |
|
(in thousands, except per share amounts) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
GAAP Net loss |
|
$ |
(18,478 |
) |
|
$ |
(12,463 |
) |
|
$ |
(36,255 |
) |
|
$ |
(27,180 |
) |
GAAP Net loss per diluted
share |
|
$ |
(0.14 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.27 |
) |
Weighted-average shares used to
compute GAAP net loss per diluted share |
|
|
131,099 |
|
|
|
101,623 |
|
|
|
128,943 |
|
|
|
101,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation, net |
|
|
15,154 |
|
|
|
8,752 |
|
|
|
30,265 |
|
|
|
17,292 |
|
Amortization of acquisition intangible assets |
|
|
2,169 |
|
|
|
1,092 |
|
|
|
3,194 |
|
|
|
2,184 |
|
Restructuring |
|
|
— |
|
|
|
28 |
|
|
|
(66 |
) |
|
|
33 |
|
Gain on sale of a private company investment |
|
|
— |
|
|
|
— |
|
|
|
(1,001 |
) |
|
|
(999 |
) |
Income tax effect on Non-GAAP adjustments(3) |
|
|
94 |
|
|
|
139 |
|
|
|
188 |
|
|
|
278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net loss |
|
$ |
(1,061 |
) |
|
$ |
(2,452 |
) |
|
$ |
(3,675 |
) |
|
$ |
(8,392 |
) |
Non-GAAP Net loss per diluted
share |
|
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.08 |
) |
Weighted-average shares used to
compute Non-GAAP net loss per diluted share |
|
|
131,099 |
|
|
|
101,623 |
|
|
|
128,943 |
|
|
|
101,419 |
|
(1) Please see Appendix A for explanation of non-GAAP
measures used.(2) The Company adopted ASC 842 as of January
1, 2019 on a prospective basis. Amounts presented for the
three and six months ended June 30, 2019 are under ASC 842 and
amounts presented for the three and six months ended June 30, 2018
are under ASC 840. (3) Due to the full valuation allowance on
our US deferred tax assets, there were no tax effects associated
with the Non-GAAP adjustments for stock-based compensation, net,
restructuring, and gain on sale of a private company investment.
Non-GAAP adjustments pertain to deferred tax expense related to
amortization of acquisition intangible assets.
|
|
SVMK INC.RECONCILIATION OF GAAP TO
NON-GAAP DATA (unaudited) (1)(2)Calculation of
Free Cash Flow and Unlevered Free Cash Flow |
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net cash provided by operating activities |
|
$ |
13,909 |
|
|
$ |
16,268 |
|
|
$ |
21,712 |
|
|
$ |
22,031 |
|
Purchases of property and
equipment |
|
|
(754 |
) |
|
|
(3,929 |
) |
|
|
(1,335 |
) |
|
|
(4,809 |
) |
Capitalized internal-use
software |
|
|
(3,377 |
) |
|
|
(2,827 |
) |
|
|
(6,527 |
) |
|
|
(5,467 |
) |
Free cash flow |
|
$ |
9,778 |
|
|
$ |
9,512 |
|
|
$ |
13,850 |
|
|
$ |
11,755 |
|
Interest paid for term debt |
|
|
3,490 |
|
|
|
5,687 |
|
|
|
6,913 |
|
|
|
10,813 |
|
Unlevered free cash flow |
|
$ |
13,268 |
|
|
$ |
15,199 |
|
|
$ |
20,763 |
|
|
$ |
22,568 |
|
Calculation of Adjusted
EBITDA |
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net loss |
|
$ |
(18,478 |
) |
|
$ |
(12,463 |
) |
|
$ |
(36,255 |
) |
|
$ |
(27,180 |
) |
Provision for (benefit from)
income taxes |
|
|
(344 |
) |
|
|
(4 |
) |
|
|
(482 |
) |
|
|
296 |
|
Other non-operating (income)
expenses, net |
|
|
(575 |
) |
|
|
282 |
|
|
|
(2,554 |
) |
|
|
(351 |
) |
Interest expense |
|
|
3,647 |
|
|
|
7,591 |
|
|
|
7,306 |
|
|
|
14,685 |
|
Depreciation and
amortization |
|
|
10,890 |
|
|
|
11,673 |
|
|
|
20,545 |
|
|
|
23,652 |
|
Stock-based compensation,
net |
|
|
15,154 |
|
|
|
8,752 |
|
|
|
30,265 |
|
|
|
17,292 |
|
Restructuring |
|
|
— |
|
|
|
28 |
|
|
|
(66 |
) |
|
|
33 |
|
Adjusted EBITDA |
|
$ |
10,294 |
|
|
$ |
15,859 |
|
|
$ |
18,759 |
|
|
$ |
28,427 |
|
(1) Please see Appendix A for explanation of non-GAAP
measures used.(2) The Company adopted ASC 842 as of January
1, 2019 on a prospective basis. Amounts presented for the
three and six months ended June 30, 2019 are under ASC 842 and
amounts presented for the three and six months ended June 30, 2018
are under ASC 840.
SVMK
INC.RECONCILIATION OF GAAP TO NON-GAAP DATA
(unaudited) (1)(2)Supplemental GAAP and Non-GAAP
Information |
|
|
|
|
|
Three Months
EndedJune 30, |
|
|
Six Months
EndedJune 30, |
|
(in thousands, except percentages) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
GAAP Gross profit |
|
$ |
56,092 |
|
|
$ |
45,005 |
|
|
$ |
107,203 |
|
|
$ |
85,433 |
|
GAAP Gross margin |
|
|
75 |
% |
|
|
72 |
% |
|
|
75 |
% |
|
|
70 |
% |
Stock-based compensation, net |
|
|
991 |
|
|
|
646 |
|
|
|
2,087 |
|
|
|
1,304 |
|
Amortization of acquisition intangible assets |
|
|
1,403 |
|
|
|
488 |
|
|
|
1,891 |
|
|
|
976 |
|
Non-GAAP Gross profit |
|
$ |
58,486 |
|
|
$ |
46,139 |
|
|
$ |
111,181 |
|
|
$ |
87,713 |
|
Non-GAAP Gross margin |
|
|
78 |
% |
|
|
74 |
% |
|
|
77 |
% |
|
|
72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Research and
development |
|
$ |
22,407 |
|
|
$ |
16,292 |
|
|
$ |
43,213 |
|
|
$ |
34,232 |
|
GAAP Research and development
margin |
|
|
30 |
% |
|
|
26 |
% |
|
|
30 |
% |
|
|
28 |
% |
Stock-based compensation, net |
|
|
5,629 |
|
|
|
2,966 |
|
|
|
10,395 |
|
|
|
6,413 |
|
Non-GAAP Research and
development |
|
$ |
16,778 |
|
|
$ |
13,326 |
|
|
$ |
32,818 |
|
|
$ |
27,819 |
|
Non-GAAP Research and development
margin |
|
|
22 |
% |
|
|
21 |
% |
|
|
23 |
% |
|
|
23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Sales and marketing |
|
$ |
29,689 |
|
|
$ |
19,879 |
|
|
$ |
55,739 |
|
|
$ |
37,300 |
|
GAAP Sales and marketing
margin |
|
|
40 |
% |
|
|
32 |
% |
|
|
39 |
% |
|
|
31 |
% |
Stock-based compensation, net |
|
|
3,016 |
|
|
|
1,147 |
|
|
|
5,796 |
|
|
|
1,915 |
|
Amortization of acquisition intangible assets |
|
|
766 |
|
|
|
604 |
|
|
|
1,303 |
|
|
|
1,208 |
|
Non-GAAP Sales and marketing |
|
$ |
25,907 |
|
|
$ |
18,128 |
|
|
$ |
48,640 |
|
|
$ |
34,177 |
|
Non-GAAP Sales and marketing
margin |
|
|
34 |
% |
|
|
29 |
% |
|
|
34 |
% |
|
|
28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP General and
administrative |
|
$ |
19,746 |
|
|
$ |
13,400 |
|
|
$ |
40,302 |
|
|
$ |
26,418 |
|
GAAP General and administrative
margin |
|
|
26 |
% |
|
|
21 |
% |
|
|
28 |
% |
|
|
22 |
% |
Stock-based compensation, net |
|
|
5,518 |
|
|
|
3,993 |
|
|
|
11,987 |
|
|
|
7,660 |
|
Non-GAAP General and
administrative |
|
$ |
14,228 |
|
|
$ |
9,407 |
|
|
$ |
28,315 |
|
|
$ |
18,758 |
|
Non-GAAP General and
administrative margin |
|
|
19 |
% |
|
|
15 |
% |
|
|
20 |
% |
|
|
15 |
% |
(1) Please see Appendix A for explanation of non-GAAP
measures used.(2) The Company adopted ASC 842 as of January
1, 2019 on a prospective basis. Amounts presented for the
three and six months ended June 30, 2019 are under ASC 842 and
amounts presented for the three and six months ended June 30, 2018
are under ASC 840.
APPENDIX A
SVMK INC.EXPLANATION OF
NON-GAAP MEASURES
To supplement our condensed consolidated
financial statements, which are prepared and presented in
accordance with US GAAP (“GAAP”), we use the following Non-GAAP
financial measures: Non-GAAP income from operations, Non-GAAP
operating margin, Non-GAAP net loss, Non-GAAP net loss per share,
Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP research and
development, Non-GAAP research and development margin, Non-GAAP
sales and marketing, Non-GAAP sales and marketing margin,
Non-GAAP general and administrative, Non-GAAP general and
administrative margin, adjusted EBITDA, free cash flow and
unlevered free cash flow. Our definition for each Non-GAAP measure
used is provided below, however a limitation of Non-GAAP financial
measures are that they do not have uniform definitions.
Accordingly, our definitions for Non-GAAP measures used will likely
differ from similarly titled Non-GAAP measures used by other
companies thereby limiting comparability.
With regards to the Non-GAAP guidance provided
above, a reconciliation to the corresponding GAAP amounts are not
provided as the quantification of certain items excluded from each
respective Non-GAAP measure, which may be significant, cannot be
reasonably calculated or predicted at this time without
unreasonable efforts. For example, the Non-GAAP adjustment
for stock-based compensation expense, net, requires additional
inputs such as number of shares granted and market price that are
not currently ascertainable.
Non-GAAP income from operations, Non-GAAP
operating margin: We define Non-GAAP income from operations as GAAP
loss from operations excluding stock-based compensation, net,
amortization of acquisition intangible assets and restructuring
costs. Non-GAAP operating margin is defined as Non-GAAP income from
operations divided by revenue.
Non-GAAP net loss, Non-GAAP net loss per share:
We define Non-GAAP net loss as GAAP net loss less stock-based
compensation, net, excluding amortization of intangible assets,
restructuring costs, and gain on sale of a private company
investment. Non-GAAP net loss per share is defined as Non-GAAP net
loss divided by the weighted-average shares outstanding.
Non-GAAP gross profit, Non-GAAP gross margin: We
define Non-GAAP gross profit as GAAP gross profit excluding
stock-based compensation, net and amortization of intangible
assets. Non-GAAP gross margin is defined as Non-GAAP gross profit
divided by revenue.
Non-GAAP research and development, Non-GAAP
research and development margin: We define Non-GAAP research and
development as GAAP research and development excluding stock-based
compensation, net. Non-GAAP research and development margin is
defined as Non-GAAP research and development divided by
revenue.
Non-GAAP sales and marketing, Non-GAAP sales and
marketing margin: We define Non-GAAP sales and marketing as GAAP
sales and marketing excluding stock-based compensation, net and
amortization of intangible assets. Non-GAAP sales and marketing
margin is defined as Non-GAAP sales and marketing divided by
revenue.
Non-GAAP general and administrative, Non-GAAP
general and administrative margin: We define Non-GAAP general and
administrative as GAAP general and administrative excluding
stock-based compensation, net. Non-GAAP general and administrative
margin is defined as Non-GAAP general and administrative divided by
revenue.
We use these Non-GAAP measures to compare and
evaluate our operating results across periods in order to manage
our business, for purposes of determining executive and senior
management incentive compensation, and for budgeting and developing
our strategic operating plans. We believe that these Non-GAAP
measures provide useful information about our operating results,
enhance the overall understanding of our past financial performance
and future prospects, and allow for greater transparency with
respect to key metrics used by our management in evaluating our
financial performance and for operational decision making, but they
are not meant to be considered in isolation or as a substitute for
comparable GAAP measures and should be read only in conjunction
with our consolidated financial statements prepared in accordance
with GAAP.
We have excluded the effect of the following
items from the aforementioned Non-GAAP measures because they are
non-cash and/or are non-recurring in nature and because we believe
that the Non-GAAP financial measures excluding this item provide
meaningful supplemental information regarding operational
performance and liquidity. We further believe this measure is
useful to investors in that it allows for greater transparency to
certain line items in our financial statements and facilitates
comparisons to historical operating results and comparisons to peer
operating results. A description of the Non-GAAP adjustments for
the above measures is as follows:
- Stock-based compensation, net: We incur stock
based-compensation expense on a GAAP basis resulting from equity
awards granted to our employees. Although stock-based compensation
is a key incentive offered to our employees, and we believe such
compensation contributed to the revenues earned during the periods
presented and also believe it will contribute to the generation of
future period revenues, we continue to evaluate our business
performance excluding stock-based compensation expenses.
Stock-based compensation expenses will recur in future
periods.
- Amortization of intangible assets: We incur amortization
expense on intangible assets on a GAAP basis resulting from prior
acquisitions. Amortization of acquired intangible assets is
inconsistent in amount and frequency and is significantly affected
by the timing and size of any acquisitions. Investors should note
that the use of intangible assets contributed to our revenues
earned during the periods presented and will contribute to our
future period revenues as well. Amortization of acquired intangible
assets will recur in future periods.
- Restructuring: Restructuring expenses consist of employee
severance and other exit costs. We believe it is useful for
investors to understand the effects of these items on our total
operating expenses. We expect that restructuring costs will
generally diminish over time with respect to past acquisitions
and/or strategic initiatives. However, we may incur these
expenses in future periods in connection with any new acquisitions
and/or strategic initiatives.
- Gain on sale of a private company investment: Gain on sale of a
private company investment because it was recognized on a GAAP
basis resulting from the sale of certain corporate assets. We
expect that such transactions will be infrequent in occurrence and
are therefore excluded from our Non-GAAP results as they do not
otherwise relate to our core business operations.
For more information on the Non-GAAP financial
measures, please see the “Reconciliation of GAAP to Non-GAAP Data”
section of this press release. The accompanying tables provide
details on the GAAP financial measures that are most directly
comparable to the Non-GAAP financial measures and the related
reconciliations between those financial measures.
Adjusted EBITDA: We define adjusted EBITDA as
net loss excluding provision for (benefit from) income taxes, other
non-operating expenses (income), net, interest expense,
depreciation and amortization, stock-based compensation, net, and
restructuring costs. We consider adjusted EBITDA to be an important
measure because it helps illustrate underlying trends in our
business that could otherwise be masked by the effect of the income
or expenses that are not indicative of the core operating
performance of our business that are excluded from adjusted EBITDA.
Adjusted EBITDA has limitations as an analytical tool, and it
should not be considered in isolation or as a substitute for
analysis of other GAAP financial measures. Some of the limitations
of adjusted EBITDA are that it excludes recurring expenses for
interest payments, does not reflect the dilution that results from
stock-based compensation, and does not reflect the cost to replace
depreciated property and equipment. It may be calculated
differently by other companies in our industry, limiting its
usefulness as a comparative measure.
Free cash flow: We define free cash flow as GAAP
net cash provided by operating activities less purchases of
property and equipment, and capitalized internal-use software. We
consider free cash flow to be an important measure because it
measures our liquidity after deducting capital expenditures for
purchases of property and equipment and capitalized software
development costs, which we believe provides a more accurate view
of our cash generation and cash available to grow our business. Our
free cash flow included cash payments for interest on our long-term
debt of $3.5 million and $6.9 million, for the three and six months
ended June 30, 2019, respectively, and $5.7 million and $10.8
million for the three and six months ended June 30, 2018,
respectively. We expect our free cash flow to increase as we reduce
cash paid for interest on our long-term debt following the partial
repayment of the outstanding indebtedness under our credit
facilities of $101.3 million in the fourth quarter of 2018. We
expect to generate positive free cash flow over the long term. Free
cash flow has limitations as an analytical tool, and it should not
be considered in isolation or as a substitute for analysis of other
GAAP financial measures, such as net cash provided by operating
activities. Some of the limitations of free cash flow are that free
cash flow does not reflect our future contractual commitments and
may be calculated differently by other companies in our industry,
limiting its usefulness as a comparative measure.
Unlevered free cash flow: Unlevered free cash
flow is a liquidity measure used by management in evaluating the
cash generated by our operations after purchases of property and
equipment and capitalized internal-use software but prior to the
impact of our capital structure. The usefulness of unlevered free
cash flow as an analytical tool is limited because it excludes
certain items which are settled in cash, does not represent
residual cash flow available for discretionary expenses, does not
reflect our future contractual commitments, and is calculated
differently by other companies in our industry. Accordingly, it
should not be considered in isolation or as a substitute for
analysis of other GAAP financial measures, such as net cash
provided by operating activities.
Safe Harbor Statement
“Safe Harbor” statement under the Private
Securities Litigation Reform Act of 1995: This press release may
contain forward-looking statements about our products, including
our investments in products, technology and other key strategic
areas. The achievement of the matters covered by such
forward-looking statements involves risks, uncertainties and
assumptions. If any of these risks or uncertainties materialize or
if any of the assumptions prove incorrect, the company’s results
could differ materially from the results expressed or implied by
the forward-looking statements the company makes.
The risks and uncertainties referred to above
include - but are not limited to - risks related to our ability to
retain and upgrade customers; our revenue growth rate; our brand;
our marketing strategies; our self-serve business model; the length
of our sales cycles; the growth and development of our salesforce;
security measures; expectations regarding our ability to timely and
effectively scale and adapt existing technology and network
infrastructure to ensure that our products and services are
accessible at all times; competition; our debt; revenue
recognition; our ability to manage our growth; our culture and
talent; our data centers; privacy, security and data transfer
concerns, as well as changes in regulations, which could impact our
ability to serve our customers or curtail our monetization efforts;
litigation and regulatory issues; expectations regarding the return
on our strategic investments; execution of our plans and
strategies, including with respect to mobile products and features
and expansion into new areas and businesses; our international
operations; intellectual property; the application of U.S. and
international tax laws on our tax structure and any changes to such
tax laws; acquisitions we have made or may make in the future; the
price volatility of our common stock; and general economic
conditions.
Further information on these and other factors
that could affect our financial results is included in filings it
makes with the Securities and Exchange Commission from time to
time, including the section entitled “Risk Factors” in the Form
10-Q that will be filed for the quarter ended June 30, 2019, which
should be read in conjunction with these financial results. These
documents are or will be available on the SEC Filings section of
our Investor Relations website page at investor.surveymonkey.com.
All information provided in this release and in the attachments is
as of August 1, 2019, and we undertake no obligation to update
this information.
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