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Why SVMK Shares Plunged Today

By Evan Niu, CFA – Updated Apr 25, 2019 at 12:37AM

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The SurveyMonkey parent announced fourth-quarter earnings and an executive departure.

What happened

Shares of SVMK (MNTV 0.16%) have plunged today, down by 17% as of 11:50 a.m. EST, after the company announced fourth-quarter earnings results. The SurveyMonkey parent also said CFO and COO Tim Maly would be leaving the company.

So what

Revenue in the fourth quarter rose 19% to $67.9 million, topping the Street's forecast of $65.9 million in sales. That translated into a GAAP net loss of $25.2 million, or $0.20 per share. On a non-GAAP basis, the company lost $0.03 per share, which was right on target with consensus estimates. The company said paying users grew 7% to nearly 647,000, which SurveyMonkey attributed to sales of enterprise products and adoption of self-serve Team plans. Adjusted EBITDA was $12.6 million, and SurveyMonkey also amended its credit facility during the quarter.

Falling stock chart superimposed over columns of blue numbers

Image source: Getty Images.

"Our strong financial results cap off a transformative 2018 and highlight the traction that we are gaining in the marketplace," CEO Zander Lurie said in a statement. He continued:

We are capitalizing on our strong brand, massive footprint and open integration architecture to move up market into larger enterprise relationships. Our strategy is working. Over the next few years we intend to execute on our plan to double our business by investing efficiently in new products, geographies, and enterprise sales. The survey software category is a multi-billion-dollar global market and being public has helped us share our vision with current and future customers.

Now what

SurveyMonkey also announced that Maly, who serves as both CFO and COO, would be retiring during the second quarter for personal reasons. Maly has been with the company for nearly a decade and will step down at the end of the first quarter. The outgoing exec will stay on board until the end of the second quarter to help SurveyMonkey search for a successor. If the company is unable to find a permanent new CFO by the time Maly leaves, Lurie will serve as interim CFO.

In terms of guidance, SurveyMonkey expects first-quarter sales in the range of $67.5 million to $68.5 million, with non-GAAP operating margin of 0% to 1%. For full-year 2019, revenue should be $290 million to $295 million, with an adjusted operating margin of 2% to 3.5%. Both top-line forecasts are above current expectations.

Check out the latest earnings call transcripts for companies we cover.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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