Momentive Announces First Quarter 2022 Financial Results
Increased Sales-Assisted Channel Revenue 32% Year-over-Year
Repurchased 2.4 Million Shares in Q1 for $36.4 Million
Made Substantial Progress on Strategic Changes Announced in February
SAN MATEO, Calif. — May 4, 2022 — Momentive (NASDAQ: MNTV), a leader in agile experience management, today reported first quarter results for the period ended March 31, 2022.
“The team rose above the noise over the last few months. We exceeded the high-end of our revenue and profitability guidance ranges and made substantial progress on the strategic changes we outlined in our February 28th stockholder letter,” said Zander Lurie, chief executive officer of Momentive. “Our full-year 2022 guidance illustrates our commitment to driving profitable growth, and our share repurchase activity signals our confidence in our ability to execute.”
Q1 2022 Key Results
- Total revenue was $117.0 million, an increase of 14% year-over-year.
- Sales-assisted channel revenue was $41.2 million, an increase of 32% year-over year. Sales-assisted channel revenue accounted for approximately 35% of total revenue, up from approximately 30% in Q1 2021. We ended the quarter with approximately 13,700 sales-assisted channel customers, up 55% from approximately 8,800 in Q1 2021.
- Self-serve channel revenue was $75.8 million, an increase of 7% year-over-year.
- Deferred revenue was $216.2 million, an increase of 15% year-over-year. Remaining performance obligations were $245.4 million, an increase of 20% year-over-year.
- Paying users1 totaled approximately 894,400, an increase of 6% from approximately 845,800 in Q1 2021. Approximately 91% of our paying users were on annual plans, up from 89% a year ago.
- Average revenue per user1 was approximately $535, up 7% from approximately $498 in Q1 2021.
- GAAP operating margin was negative 30.0% and non-GAAP operating margin was 2.3%.
- GAAP net loss was $37.4 million and GAAP diluted net loss per share was $0.25. Non-GAAP net income was $0.6 million and non-GAAP diluted net income per share was $0.00.
- Net cash used in operating activities was $4.9 million and free cash flow was negative $7.9 million.
- Cash and cash equivalents totaled $238.0 million and total debt was $186.2 million for net cash of $51.8 million as of March 31, 2022.
“Q1 was all about focus and execution. We moved with speed to make targeted changes and align resources to the areas of our business with the highest growth potential and return profile,” said Justin Coulombe, chief financial officer of Momentive. “For the remainder of 2022 we’ll build on the same operating discipline and lay the foundation for durable growth, coupled with expanding margins.”
Stock Repurchase Program Update
On February 28, 2022, Momentive announced its board of directors had authorized a stock repurchase program to repurchase up to $200 million of the company’s common stock in the open market or in privately negotiated transactions (through 10b5-1 trading plans or otherwise). From the announcement of the plan through March 31, 2022, Momentive repurchased approximately 2.4 million shares of common stock for approximately $36.4 million. As part of the program, the company also reduced debt by approximately $25.6 million in the quarter. As of March 31, 2022, the Company’s remaining share repurchase authorization was approximately $163.6 million.
Progress on Strategic Changes
The company has aggressively pursued strategic changes outlined in its February 28 letter to stockholders. Areas of focus include:
- Customer-centric innovation. We’ve reorganized our R&D organization, centralized our product strategy, and prioritized our roadmap around a focused set of opportunities.
- Go-to-market strategy. We’ve begun executing on plans to reinvigorate our self-serve channel and align resources to the products and segments that generate the highest returns in our sales-assisted channel. Additionally, we’re simplifying our positioning and web presences under two complementary brands - Momentive and SurveyMonkey. Finally, we’re seeing early success with existing customer expansion, one of our most efficient and profitable go-to-market motions.
- Leadership and organizational changes. Our streamlined leadership team and organizational structure is leading to faster, higher quality, and customer-centric execution.
For the second quarter and full year of 2022, Momentive currently expects the following:
|Q2 2022||FY 2022|
|Revenue||$120 million - $122 million||$494 million - $500 million|
|Non-GAAP operating margin||1% to 3%||6% to 7%|
|Free cash flow (includes impact of one-time transaction-related and restructuring expenses)||NA||$24 million - $29 million|
As stated above, we expect full-year 2022 free cash flow in the range of $24 to $29 million. Of note, this includes the impact of approximately $27 million in one-time transaction-related and restructuring expenses - a portion of which were accrued as expenses in Q4 2021 but will result in cash outflows in 2022.
For the second quarter of 2022, the company expects basic weighted average shares outstanding to be approximately 150 million and diluted weighted average shares outstanding to be approximately 152 million. For the full year 2022, the company expects basic weighted average shares outstanding to be approximately 151 million and diluted weighted average shares outstanding to be approximately 157 million. The basic and diluted weighted average shares outstanding for the second quarter of 2022 and full year 2022 do not include any forecasts for share repurchases after March 31, 2022. For a detailed explanation of the company’s non-GAAP measures, please refer to the appendix section of this press release.
For more information on the company’s first quarter 2022 financial results, please see management’s letter to stockholders on the Momentive investor relations website at investor.momentive.ai.
Conference Call Information
Momentive senior management will host a conference call today to discuss the company’s Q1 2022 financial results. This call is scheduled to begin at 2:00 pm PT / 5:00 pm ET and can be accessed by dialing (844) 200-6205 or (646) 904-5544 (ID: 354437). An archived webcast of the conference call will be accessible on Momentive’s Investor Relations page, investor.momentive.ai. A telephonic replay of the conference call will be available until Wednesday, May 11, 2022, and can be accessed by dialing (866) 813-9403 or (929) 458-6194 and entering the passcode 947080.
Momentive (NASDAQ: MNTV—maker of SurveyMonkey) is a leader in agile experience management, delivering powerful, purpose-built solutions that bring together the best parts of humanity and technology to redefine AI. Momentive products, including SurveyMonkey and Momentive brand and market insights solutions, empower decision-makers at 345,000 organizations worldwide to shape exceptional experiences. Millions of users rely on Momentive to fuel market insights, brand insights, employee experience, customer experience, and product experience. Ultimately, the company’s vision is to raise the bar for human experiences by amplifying individual voices. Learn more at momentive.ai.
Investor Relations Contact:
Gary J. Fuges, CFA
Source: Momentive Global Inc.
 In Q3 2021, we refined our methodology to more accurately capture the number of paying users, and due to a calculation error, we overstated the number of paying users in Q3 2021 and Q4 2021. The number of paying users for Q3 2021 and Q4 2021 was originally reported as 883,100 and 888,700, respectively, but should have been reported as 877,100 and 879,600, respectively. As a result, we also understated average revenue per user (ARPU) in Q3 2021 and Q4 2021. ARPU for Q3 2021 and Q4 2021 was originally reported as $522 and $526, respectively, but should have been reported as $524 and $530, respectively.