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 first quarter 2019 financial
results for the period ended March 31, 2019, and posted a
shareholder letter with complete first quarter 2019 financial
results and management commentary on its investor relations website
at investor.surveymonkey.com.
Q1 2019 Key Results
- Revenue was $68.6 million for 17% year-over-year
growth.
- Paying users totaled 670,862 compared to 610,457 in Q1 2018,
for 10% year-over-year growth, and up 24,135 paying users from Q4
2018, for 4% quarter-over-quarter growth. Approximately 78% of our
paying users were on annual plans, up from 75% in Q1 2018 and 77%
in Q4 2018.
- Average revenue per user was $423 compared to $390 in Q1 2018,
for 8% year-over-year growth, and down slightly from $425 in Q4
2018.
- Enterprise sales revenue was approximately 16% of total
revenue, up from approximately 13% in Q4 2018. We ended the quarter
with 3,909 enterprise sales customers, up from 2,838 in Q1 2018,
for 37% year-over-year growth, and an increase of 343 customers
from Q4 2018.
- GAAP operating margin was (24%) and non-GAAP operating margin
was 0%.
- GAAP net loss was ($17.8) million and Adjusted EBITDA was $8.5
million.
- GAAP basic and diluted net loss per share was ($0.14). Non-GAAP
basic and diluted net loss per share was ($0.02).
- Net cash provided by operating activities was $7.8 million and
unlevered free cash flow was $7.5 million, for an 11%
margin.
- On April 1, 2019, we closed our acquisition of Usabilla. In Q1
2019, we incurred approximately $0.9 million in transaction costs
in connection with this acquisition which impacted our operating
expenses and cash flows for the quarter.
- Cash and cash equivalents was $165.9 million and total debt was
$216.9 million for net debt of $51.0 million. Subsequent to Q1
2019, our acquisition of Usabilla resulted in a net cash outlay of
approximately $53 million.
“Our Q1 2019 results mark a strong start to the year and
demonstrate the continued progress against the execution plan we
outlined during our IPO. Our paying user growth continues to
accelerate driven by sales of SurveyMonkey Enterprise and adoption
of our collaborative Teams plans with approximately 90% of the net
adds in the quarter from annual plans. Our recent acquisition of
Usabilla strengthens our international presence and we believe our
combined software solutions offer unparalleled value to
customer-centric marketers and will further accelerate our
enterprise sales,” said SurveyMonkey CEO Zander Lurie. “We continue
to deliver solid revenue growth and robust cash flow, and have
increased confidence in the strategy we are executing to scale our
business.”
Financial Outlook
Q2 2019 |
Revenue |
$72 million - $73 million |
15% - 16% YoY growth |
Non-GAAP operating margin |
(4%) - (2%) |
|
FY 2019 |
Revenue |
$298 million - $304 million |
17% - 20% YoY growth |
Non-GAAP operating margin |
(1%) - +1% |
|
Unlevered free cash flow |
$50 million - $53 million |
17% margin |
With the strength in our Teams offering and enterprise sales,
coupled with the acquisition of Usabilla, we’re updating our
financial outlook for Q2 2019 and full-year 2019.
Our financial outlook includes contribution from Usabilla
beginning April 1, 2019. The revenue contribution from Usabilla
will be impacted by ASC 805 fair value purchase accounting
adjustments to deferred revenue that will reduce the amount of
revenue to be recognized. We expect the headwind from the deferred
revenue adjustment to be strongest in Q2 2019 and then have
decreasing impact over the course of the year. Post the deferred
revenue adjustment, we expect Usabilla to contribute approximately
two points of revenue growth towards our full year 2019 financial
outlook – a disproportionate percentage of which will be recognized
in the second half of the year. We also expect Usabilla to be a
headwind on non-GAAP operating margin and unlevered free cash flow
margin.
We are forecasting revenue in Q2 2019 to grow 15% to 16%. In Q2
2018, we benefited from the pricing changes to our self-serve
customers that began in mid-2017 and drove maximum core revenue
impact with 21% year-over-year growth, setting up a more difficult
comparison from a year-over-year growth perspective in Q2 2019.
We expect our growth initiatives in enterprise sales and our
collaborative Teams offering, combined with the integration of
Usabilla, to drive accelerating revenue growth in the second half
of 2019.
As we shared previously, we adopted the new lease accounting
guidance under ASC 842, effective January 1, 2019. Under this
guidance, lease payments associated with our San Mateo headquarters
are now accounted for as an operating expense in the condensed
consolidated statements of operations. Prior to the adoption of ASC
842, these lease payments were primarily accounted for as interest
expense. As a result of this change, non-GAAP operating income in
Q1 2019 was impacted by approximately $1.5 million and we expect
the full-year impact to be approximately $6 million. There is no
impact to free cash flow from this change. For comparison purposes,
under the new accounting guidance, non-GAAP operating margin for Q2
2018 and full-year 2018 would have been 6.1% and 3.6%,
respectively.
Conference Call Information
We will host a conference call today to discuss our Q1 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 May 15, 2019 by dialing (855)
859-2056 or (404) 537-3406 and entering passcode 2065413#.
Upcoming Events
Zander Lurie, CEO and Interim CFO, will be presenting at the
2019 J.P. Morgan Global Technology, Media & Communications
Conference in Boston, MA on Tuesday, May 14, 2019. A live webcast
will be accessible from the SurveyMonkey investor
relations website at investor.surveymonkey.com. Following the
event, a replay will be made available at the same location.
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 350,000+ 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 Damji
investors@surveymonkey.com
Media Contact: Sandra Gharib
sandrag@surveymonkey.com
Source: SurveyMonkey Inc.
SVMK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) (1)
(in thousands) |
|
March 31, 2019 |
|
|
December 31, 2018 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
165,910 |
|
|
$ |
153,807 |
|
Accounts receivable, net of allowance |
|
|
7,189 |
|
|
|
7,336 |
|
Deferred commissions, current |
|
|
2,248 |
|
|
|
1,981 |
|
Prepaid expenses and other current assets |
|
|
15,219 |
|
|
|
7,081 |
|
Total current assets |
|
|
190,566 |
|
|
|
170,205 |
|
Property and equipment, net |
|
|
45,532 |
|
|
|
117,718 |
|
Operating lease right-of-use
assets |
|
|
60,266 |
|
|
|
— |
|
Capitalized internal-use
software, net |
|
|
33,710 |
|
|
|
33,280 |
|
Acquisition intangible assets,
net |
|
|
8,299 |
|
|
|
9,324 |
|
Goodwill |
|
|
336,861 |
|
|
|
336,861 |
|
Deferred commissions,
non-current |
|
|
3,932 |
|
|
|
3,317 |
|
Other assets |
|
|
8,554 |
|
|
|
8,643 |
|
Total assets |
|
$ |
687,720 |
|
|
$ |
679,348 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,983 |
|
|
$ |
2,804 |
|
Accrued expenses and other current liabilities |
|
|
11,937 |
|
|
|
9,692 |
|
Accrued compensation |
|
|
11,730 |
|
|
|
20,070 |
|
Deferred revenue |
|
|
110,691 |
|
|
|
101,236 |
|
Operating lease liabilities, current |
|
|
6,139 |
|
|
|
— |
|
Debt, current |
|
|
1,900 |
|
|
|
1,900 |
|
Total current liabilities |
|
|
145,380 |
|
|
|
135,702 |
|
Deferred tax liabilities |
|
|
4,341 |
|
|
|
4,246 |
|
Debt, non-current |
|
|
215,040 |
|
|
|
215,515 |
|
Financing obligation on leased
facility |
|
|
— |
|
|
|
92,009 |
|
Operating lease liabilities,
non-current |
|
|
82,528 |
|
|
|
— |
|
Other non-current
liabilities |
|
|
5,436 |
|
|
|
12,493 |
|
Total liabilities |
|
|
452,725 |
|
|
|
459,965 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock |
|
|
— |
|
|
|
— |
|
Common stock |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
582,652 |
|
|
|
551,937 |
|
Accumulated other comprehensive loss |
|
|
(306 |
) |
|
|
(287 |
) |
Accumulated deficit |
|
|
(347,352 |
) |
|
|
(332,268 |
) |
Total stockholders’ equity |
|
|
234,995 |
|
|
|
219,383 |
|
Total liabilities and stockholders’ equity |
|
$ |
687,720 |
|
|
$ |
679,348 |
|
|
|
|
|
|
|
|
|
|
(1) The Company adopted ASC 842 as of January 1, 2019 on a
prospective basis. Amounts presented for as of March 31, 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
EndedMarch 31, |
|
(in thousands, except per share amounts) |
|
2019 |
|
|
2018 |
|
Revenue |
|
$ |
68,641 |
|
|
$ |
58,491 |
|
Cost of revenue(2)(3) |
|
|
17,530 |
|
|
|
18,063 |
|
Gross profit |
|
|
51,111 |
|
|
|
40,428 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development(2) |
|
|
20,806 |
|
|
|
17,940 |
|
Sales and marketing (2)(3) |
|
|
26,050 |
|
|
|
17,421 |
|
General and administrative(2) |
|
|
20,556 |
|
|
|
13,018 |
|
Restructuring |
|
|
(66 |
) |
|
|
5 |
|
Total operating expenses |
|
|
67,346 |
|
|
|
48,384 |
|
Loss from operations |
|
|
(16,235 |
) |
|
|
(7,956 |
) |
Interest expense |
|
|
3,659 |
|
|
|
7,094 |
|
Other non-operating income
(expense), net |
|
|
1,979 |
|
|
|
633 |
|
Loss before income taxes |
|
|
(17,915 |
) |
|
|
(14,417 |
) |
Provision for (benefit from)
income taxes |
|
|
(138 |
) |
|
|
300 |
|
Net loss |
|
$ |
(17,777 |
) |
|
$ |
(14,717 |
) |
Net loss per share, basic and
diluted |
|
$ |
(0.14 |
) |
|
$ |
(0.15 |
) |
Weighted-average shares used in
computing basic and diluted net loss per share |
|
|
126,786 |
|
|
|
101,212 |
|
(1) The Company adopted ASC 842 as of January 1, 2019 on a
prospective basis. Amounts presented for the three months
ended March 31, 2019 are under ASC 842 and amounts presented for
the three months ended March 31, 2018 are under ASC 840.
(2) Includes stock-based compensation, net of amounts
capitalized as follows:
|
|
Three Months
EndedMarch 31, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
Cost of revenue |
|
$ |
1,096 |
|
|
$ |
658 |
|
Research and development |
|
|
4,766 |
|
|
|
3,447 |
|
Sales and marketing |
|
|
2,780 |
|
|
|
768 |
|
General and administrative |
|
|
6,469 |
|
|
|
3,667 |
|
Stock-based compensation, net of amounts capitalized |
|
$ |
15,111 |
|
|
$ |
8,540 |
|
|
|
|
|
|
|
|
|
|
(3) Includes amortization of acquisition intangible assets as
follows:
|
|
Three Months
EndedMarch 31, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
Cost of revenue |
|
$ |
488 |
|
|
$ |
488 |
|
Sales and marketing |
|
|
537 |
|
|
|
604 |
|
Amortization of acquisition intangible assets |
|
$ |
1,025 |
|
|
$ |
1,092 |
|
|
|
|
|
|
|
|
|
|
SVMK INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited)
|
|
Three Months Ended March 31, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(17,777 |
) |
|
$ |
(14,717 |
) |
Adjustments to reconcile net loss
to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
9,655 |
|
|
|
11,979 |
|
Non-cash leases expense |
|
|
1,338 |
|
|
|
— |
|
Stock-based compensation expense, net of amounts capitalized |
|
|
15,111 |
|
|
|
8,540 |
|
Amortization of debt discount and issuance costs |
|
|
75 |
|
|
|
242 |
|
Deferred income taxes |
|
|
95 |
|
|
|
143 |
|
Gain on sale of a private company investment |
|
|
(1,001 |
) |
|
|
(999 |
) |
Other |
|
|
(154 |
) |
|
|
175 |
|
Changes in assets and
liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
163 |
|
|
|
(763 |
) |
Prepaid expenses and other assets |
|
|
(2,184 |
) |
|
|
(1,857 |
) |
Accounts payable and accrued liabilities |
|
|
2,991 |
|
|
|
1,099 |
|
Accrued interest on financing lease obligation, net of
payments |
|
|
— |
|
|
|
(358 |
) |
Accrued compensation |
|
|
(8,359 |
) |
|
|
(7,449 |
) |
Deferred revenue |
|
|
9,575 |
|
|
|
9,728 |
|
Operating lease liabilities |
|
|
(1,725 |
) |
|
|
— |
|
Net cash provided by operating activities |
|
|
7,803 |
|
|
|
5,763 |
|
Cash flows from investing
activities |
|
|
|
|
|
|
|
|
Purchases of property and
equipment |
|
|
(581 |
) |
|
|
(880 |
) |
Capitalized internal-use
software |
|
|
(3,150 |
) |
|
|
(2,640 |
) |
Proceeds from sale of a private
company investment |
|
|
1,001 |
|
|
|
999 |
|
Net cash used in investing activities |
|
|
(2,730 |
) |
|
|
(2,521 |
) |
Cash flows from financing
activities |
|
|
|
|
|
|
|
|
Proceeds from stock option
exercises |
|
|
7,640 |
|
|
|
1 |
|
Employee payroll taxes paid for
net share settlement of restricted stock units |
|
|
— |
|
|
|
(1,765 |
) |
Repayment of debt |
|
|
(550 |
) |
|
|
(750 |
) |
Net cash provided by (used in) financing activities |
|
|
7,090 |
|
|
|
(2,514 |
) |
Effect of exchange rate changes on cash |
|
|
(44 |
) |
|
|
— |
|
Net increase in cash,
cash equivalents and restricted cash |
|
|
12,119 |
|
|
|
728 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
154,371 |
|
|
|
35,345 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
166,490 |
|
|
$ |
36,073 |
|
Supplemental cash flow
data: |
|
|
|
|
|
|
|
|
Interest paid for term debt |
|
$ |
3,423 |
|
|
$ |
5,126 |
|
Interest paid for financing obligation on leased facility |
|
$ |
— |
|
|
$ |
2,038 |
|
Cash paid for operating leases |
|
$ |
3,438 |
|
|
$ |
— |
|
Income taxes paid (refunds received) |
|
$ |
247 |
|
|
$ |
(33 |
) |
Non-cash investing and
financing transactions: |
|
|
|
|
|
|
|
|
Stock compensation included in capitalized software costs |
|
$ |
953 |
|
|
$ |
327 |
|
Proceeds receivable from stock option exercises |
|
$ |
6,779 |
|
|
$ |
— |
|
Accrued unpaid capital expenditures |
|
$ |
517 |
|
|
$ |
1,893 |
|
Derecognized financing obligation related to building due to
adoption of ASC 842 |
|
$ |
92,009 |
|
|
$ |
— |
|
Derecognized building due to adoption of ASC 842 |
|
$ |
71,781 |
|
|
$ |
— |
|
Reconciliation of cash,
cash equivalents and restricted cash: |
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
$ |
153,807 |
|
|
$ |
35,345 |
|
Restricted cash (included in other assets) at beginning of
period |
|
|
564 |
|
|
|
— |
|
Total cash, cash equivalents and
restricted cash at beginning of period |
|
$ |
154,371 |
|
|
$ |
35,345 |
|
Cash and cash equivalents at end of period |
|
$ |
165,910 |
|
|
$ |
36,073 |
|
Restricted cash (included in other assets) at end of period |
|
|
580 |
|
|
|
— |
|
Total cash, cash equivalents and
restricted cash at end of period |
|
$ |
166,490 |
|
|
$ |
36,073 |
|
|
|
|
|
|
|
|
|
|
SVMK INC.
RECONCILIATION OF GAAP TO NON-GAAP DATA
(unaudited) (1)
|
|
Three Months Ended March 31, 2019 |
|
(in thousands, except percentages and per share
amounts) |
|
GAAP |
|
GAAP% of Revenue(3) |
|
|
Stock-basedcompensation,net |
|
|
Amortizationof
intangibleassets |
|
|
Restructuring |
|
|
Gain on sale of a private company investment |
|
|
Non-GAAP |
|
Non-GAAP% of Revenue(3) |
|
Revenue |
|
$ |
68,641 |
|
|
100 |
% |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
68,641 |
|
|
100 |
% |
Cost of revenue |
|
|
17,530 |
|
|
26 |
% |
|
|
(1,096 |
) |
|
|
(488 |
) |
|
|
— |
|
|
|
— |
|
|
|
15,946 |
|
|
23 |
% |
Gross profit |
|
|
51,111 |
|
|
74 |
% |
|
|
1,096 |
|
|
|
488 |
|
|
|
— |
|
|
|
— |
|
|
|
52,695 |
|
|
77 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
20,806 |
|
|
30 |
% |
|
|
(4,766 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
16,040 |
|
|
23 |
% |
Sales and marketing |
|
|
26,050 |
|
|
38 |
% |
|
|
(2,780 |
) |
|
|
(537 |
) |
|
|
— |
|
|
|
— |
|
|
|
22,733 |
|
|
33 |
% |
General and administrative |
|
|
20,556 |
|
|
30 |
% |
|
|
(6,469 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,087 |
|
|
21 |
% |
Restructuring |
|
|
(66 |
) |
|
— |
% |
|
|
— |
|
|
|
— |
|
|
|
66 |
|
|
|
— |
|
|
|
— |
|
|
— |
% |
Total operating expenses |
|
|
67,346 |
|
|
98 |
% |
|
|
(14,015 |
) |
|
|
(537 |
) |
|
|
66 |
|
|
|
— |
|
|
|
52,860 |
|
|
77 |
% |
Loss from operations |
|
|
(16,235 |
) |
|
(24 |
)% |
|
|
15,111 |
|
|
|
1,025 |
|
|
|
(66 |
) |
|
|
— |
|
|
|
(165 |
) |
|
— |
% |
Interest expense |
|
|
3,659 |
|
|
5 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,659 |
|
|
5 |
% |
Other non-operating income
(expense), net |
|
|
1,979 |
|
|
3 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,001 |
) |
|
|
978 |
|
|
1 |
% |
Loss before income taxes |
|
|
(17,915 |
) |
|
(26 |
)% |
|
|
15,111 |
|
|
|
1,025 |
|
|
|
(66 |
) |
|
|
(1,001 |
) |
|
|
(2,846 |
) |
|
(4 |
)% |
Benefit from income taxes(2) |
|
|
(138 |
) |
|
— |
% |
|
|
— |
|
|
|
(94 |
) |
|
|
— |
|
|
|
— |
|
|
|
(232 |
) |
|
— |
% |
Net loss |
|
$ |
(17,777 |
) |
|
(26 |
)% |
|
$ |
15,111 |
|
|
$ |
1,119 |
|
|
$ |
(66 |
) |
|
$ |
(1,001 |
) |
|
$ |
(2,614 |
) |
|
(4 |
)% |
Net loss per share, basic and
diluted |
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.02 |
) |
|
|
|
Weighted-average shares used in
computing basic and diluted net loss per share |
|
|
126,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
126,786 |
|
|
|
|
(1) Please see Appendix A for explanation of non-GAAP
measures used.(2) 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 to our benefit from income taxes pertains to
deferred tax expense related to amortization of acquisition
intangible assets. (3) Percentages may not sum due to
rounding.
SVMK INC.
RECONCILIATION OF GAAP TO NON-GAAP DATA
(unaudited) (1)
|
|
Three Months Ended March 31, 2018 |
|
(in thousands, except percentages and per share
amounts) |
|
GAAP |
|
GAAP% of Revenue(3) |
|
|
Stock-basedcompensation,net |
|
|
Amortization
ofintangibleassets |
|
|
Restructuring |
|
|
Gain on sale of a private company investment |
|
|
Non-GAAP |
|
Non-GAAP% of Revenue(3) |
|
Revenue |
|
$ |
58,491 |
|
|
100 |
% |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
58,491 |
|
|
100 |
% |
Cost of revenue |
|
|
18,063 |
|
|
31 |
% |
|
|
(658 |
) |
|
|
(488 |
) |
|
|
— |
|
|
|
— |
|
|
|
16,917 |
|
|
29 |
% |
Gross profit |
|
|
40,428 |
|
|
69 |
% |
|
|
658 |
|
|
|
488 |
|
|
|
— |
|
|
|
— |
|
|
|
41,574 |
|
|
71 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
17,940 |
|
|
31 |
% |
|
|
(3,447 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,493 |
|
|
25 |
% |
Sales and marketing |
|
|
17,421 |
|
|
30 |
% |
|
|
(768 |
) |
|
|
(604 |
) |
|
|
— |
|
|
|
— |
|
|
|
16,049 |
|
|
27 |
% |
General and administrative |
|
|
13,018 |
|
|
22 |
% |
|
|
(3,667 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,351 |
|
|
16 |
% |
Restructuring |
|
|
5 |
|
|
— |
% |
|
|
— |
|
|
|
— |
|
|
|
(5 |
) |
|
|
— |
|
|
|
— |
|
|
— |
% |
Total operating expenses |
|
|
48,384 |
|
|
83 |
% |
|
|
(7,882 |
) |
|
|
(604 |
) |
|
|
(5 |
) |
|
|
— |
|
|
|
39,893 |
|
|
68 |
% |
(Loss) Income from
operations |
|
|
(7,956 |
) |
|
(14 |
)% |
|
|
8,540 |
|
|
|
1,092 |
|
|
|
5 |
|
|
|
— |
|
|
|
1,681 |
|
|
3 |
% |
Interest expense |
|
|
7,094 |
|
|
12 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,094 |
|
|
12 |
% |
Other non-operating income
(expense), net |
|
|
633 |
|
|
1 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(999 |
) |
|
|
(366 |
) |
|
(1 |
)% |
Loss before income taxes |
|
|
(14,417 |
) |
|
(25 |
)% |
|
|
8,540 |
|
|
|
1,092 |
|
|
|
5 |
|
|
|
(999 |
) |
|
|
(5,779 |
) |
|
(10 |
)% |
Provision for income
taxes(2) |
|
|
300 |
|
|
1 |
% |
|
|
— |
|
|
|
(139 |
) |
|
|
— |
|
|
|
— |
|
|
|
161 |
|
|
— |
% |
Net loss |
|
$ |
(14,717 |
) |
|
(25 |
)% |
|
$ |
8,540 |
|
|
$ |
1,231 |
|
|
$ |
5 |
|
|
$ |
(999 |
) |
|
$ |
(5,940 |
) |
|
(10 |
)% |
Net loss per share, basic and
diluted |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.06 |
) |
|
|
|
Weighted-average shares used in
computing basic and diluted net loss per share |
|
|
101,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101,212 |
|
|
|
|
(1) Please see Appendix A for explanation of non-GAAP
measures used.(2) 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 to our provision for income taxes pertains to
deferred tax expense related to amortization of acquisition
intangible assets. (3) Percentages may not sum due to
rounding.
SVMK INC.
RECONCILIATION OF GAAP TO NON-GAAP DATA
(unaudited) (1)(2)
Calculation of Unlevered Free Cash Flow
|
|
Three Months Ended March 31, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
Net cash provided by operating activities |
|
$ |
7,803 |
|
|
$ |
5,763 |
|
Purchases of property and
equipment, net |
|
|
(581 |
) |
|
|
(880 |
) |
Capitalized internal-use
software |
|
|
(3,150 |
) |
|
|
(2,640 |
) |
Interest paid for term debt |
|
|
3,423 |
|
|
|
5,126 |
|
Unlevered free cash flow |
|
$ |
7,495 |
|
|
$ |
7,369 |
|
|
|
|
|
|
|
|
|
|
Calculation of Adjusted
EBITDA
|
|
Three Months Ended March 31, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
Net loss |
|
$ |
(17,777 |
) |
|
$ |
(14,717 |
) |
Provision for (benefit from)
income taxes |
|
|
(138 |
) |
|
|
300 |
|
Other non-operating (income)
expenses, net |
|
|
(1,979 |
) |
|
|
(633 |
) |
Interest expense |
|
|
3,659 |
|
|
|
7,094 |
|
Depreciation and
amortization |
|
|
9,655 |
|
|
|
11,979 |
|
Stock-based compensation,
net |
|
|
15,111 |
|
|
|
8,540 |
|
Restructuring |
|
|
(66 |
) |
|
|
5 |
|
Adjusted EBITDA |
|
$ |
8,465 |
|
|
$ |
12,568 |
|
|
|
|
|
|
|
|
|
|
(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 months
ended March 31, 2019 are under ASC 842 and amounts presented
for the three months ended March 31, 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 gross profit, non-GAAP gross margin,
non-GAAP operating income (loss), non-GAAP net loss, non-GAAP net
loss per share, adjusted EBITDA 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 gross profit, non-GAAP gross margin: We
define non-GAAP gross profit as GAAP gross profit less stock-based
compensation, net and less amortization of intangible assets.
Non-GAAP gross margin is defined as non-GAAP gross profit divided
by revenue.
Non-GAAP operating income (loss): We define
non-GAAP operating income (loss) as GAAP operating loss less
stock-based compensation, net, less amortization of intangible
assets and less restructuring.
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, less amortization of intangible assets, less
restructuring, and less 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.
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. 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.
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 March 31, 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 May 8, 2019, and we undertake no obligation to update
this information.
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