Please ensure Javascript is enabled for purposes of website accessibility

SurveyMonkey Posts Its First Earnings as a Public Company

By Danny Vena – Nov 15, 2018 at 5:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company put in a solid freshman effort.

Though the company has been around since the dot-com era, SurveyMonkey parent SVMK Inc. (MNTV -0.53%) only recently went public in a highly anticipated initial public offering (IPO). The cloud-based survey specialist made headlines: first by pricing its shares at $12, above the anticipated range of $9 to $11, then soaring as much as 56% out of the gate, before settling for a 44% gain on its first day of trading.

Since that auspicious beginning, it's been largely downhill, as tech stocks have taken it on the chin and broader market indexes have flirted with correction. Investors have also been eagerly awaiting the company's initial earnings report in order to assess the company's growth prospects -- and SurveyMonkey gave investors plenty to celebrate, driving the stock up as much as 15% in the wake of its report.

A lighted announcement board outside the NASDAQ welcoming SurveyMonkey to the exchange on Sep. 26, 2018

Image source: SurveyMonkey.

Better-than-expected first showing


Q3 2018

Q3 2017

Year-Over-Year Change


$65.2 million

$55.3 million


Operating income (loss)

($94.5 million)

($5.9 million)


Net income (loss)

($102.4 million)

($13.0 million)


Earnings (loss) per share




Data source: SurveyMonkey third-quarter financial release.

For the just completed third quarter, SurveyMonkey reported revenue of $65.2 million, up 18% year over year, and surpassing analysts' consensus estimates of $63 million. Excluding the $89.9 million IPO-related stock-based compensation charge, the company's adjusted loss per share of $0.01 was far better than the $0.05 loss expected by analysts.

Paying customers grew to 621,000, up 3.5% compared to the prior-year quarter, with 75% of users now opting for annual plans. The company generates more than 90% of its revenue from subscriptions. Average revenue per user (ARPU) grew to $418, up 15% year over year. The number of questions answered on the company's platform crossed 47 billion, and SurveyMonkey is seeing more than 2 million survey respondents per day. The company boasts more than 16 million active users across 300,000 organizational domains.

"We delivered healthy revenue growth and robust cash flow in the third quarter," said SurveyMonkey CFO and COO Tim Maly. "We see continued momentum in our core self-serve channel and acceleration in our sales-assisted channel with our enterprise-grade survey platform and suite of purpose-built software solutions."

Other noteworthy news

One of SurveyMonkey's chief rivals, market-analytics and sentiment tracking specialist Qualtrics, was preparing for its own IPO when it was acquired by enterprise giant SAP SE (SAP -2.33%) just this past weekend, in a deal valued at $8 billion, taking another independent player off the table. In an interview after the deal was announced, SurveyMonkey CEO Zander Lurie said that "SAP helped validate what a huge multibillion dollar market" the company is in.

We don't need to take Lurie's word for it. According to recent regulatory filings, SurveyMonkey was on the receiving end of a $44 million investment from a longtime partner, customer relationship management specialist (CRM -2.09%). Salesforce users have long used SurveyMonkey to seamlessly integrate surveys and customer feedback questionnaires into the Salesforce app.

A woman filling out an online survey on a laptop

Image source: Getty Images.

A look ahead

For the upcoming fourth quarter, SurveyMonkey is anticipating revenue in a range of $64.8 million to $66.8 million, for year-over-year growth of between 14% and 17%. The company is also forecasting non-GAAP operating margin of between 2% and 3%. The company did not provide earnings-per-share estimates.

To put that into perspective of broader market sentiment, the analysts' consensus forecast is for a breakeven adjusted EPS of $0 on revenue of $64.99 million.

For the full year, SurveyMonkey is guiding for revenue of $252.2 million, up 17.5% year over year at the midpoint of its guidance. The company is expecting non-GAAP operating margin of 6% and unlevered free cash flow of between $43 million and $45 million.

The biggest question for investors is whether the online survey market is big enough to sustain SurveyMonkey's growth, or the company will eventually hit a wall. We won't have the answer to that question for some time. But with the combination of better-than-expected results and the confidence provided by a big backer like Salesforce, I think SurveyMonkey is off to a promising start.

Danny Vena has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Momentive Global Inc. Stock Quote
Momentive Global Inc.
$5.64 (-0.53%) $0.03
Salesforce, Inc. Stock Quote
Salesforce, Inc.
$147.01 (-2.09%) $-3.14
SAP Stock Quote
$79.47 (-2.33%) $-1.90

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.