Momentive Announces Third Quarter 2022 Financial Results
SAN MATEO, Calif. — November 3, 2022 — Momentive (NASDAQ: MNTV), the maker of SurveyMonkey and GetFeedback, today reported third quarter results for the period ended September 30, 2022.
“In the third quarter, we remained focused on our long-term revenue growth and profitability targets while navigating an increasingly challenging macroeconomic environment,” said Zander Lurie, chief executive officer of Momentive. “We delivered 7.6% non-GAAP operating margin in Q3, exceeding our prior guidance range, and we now expect to drive approximately 15% non-GAAP operating margin in Q4. By reinvigorating our self-serve channel, expanding our existing customer relationships, and streamlining our go-to-market motion, we expect to drive continued operating leverage in 2023 and deliver Rule of 40 financial performance over time.”
Q3 2022 Financial Highlights
- Total revenue was $121.4 million, an increase of 6% year-over-year.
- Sales-assisted channel revenue was $46.7 million, an increase of 24% year-over-year. Sales-assisted channel revenue accounted for approximately 39% of total revenue, up from approximately 33% in Q3 2021. We ended the quarter with approximately 15,400 sales-assisted channel customers, up 46% from approximately 10,500 in Q3 2021.
- Self-serve channel revenue was $74.6 million, a decrease of 3% year-over-year.
- Deferred revenue was $213.5 million, an increase of 8% year-over-year. Remaining performance obligations were $244.5 million, an increase of 10% year-over-year.
- Paying users totaled approximately 897,500, an increase of 2% from approximately 877,100 in Q3 2021. Approximately 92% of our paying users were on annual plans.
- Average revenue per user was approximately $533, up 2% from approximately $524 in Q3 2021.
- GAAP gross margin was 82.5% and non-GAAP gross margin was 84.1%.
- GAAP operating margin was negative 13.4% and non-GAAP operating margin was 7.6%.
- GAAP net loss was $20.3 million, and GAAP diluted net loss per share was $0.14. Non-GAAP net income was $5.4 million and non-GAAP diluted net income per share was $0.04.
- Net cash provided by operating activities was $1.9 million and free cash flow was $0.2 million.
- Cash and cash equivalents totaled $193.1 million and total debt was $185.3 million for net cash of $7.8 million as of September 30, 2022.
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 September 30, 2022, Momentive repurchased approximately 6.6 million shares of common stock for approximately $83.5 million. As of September 30, 2022, the Company’s remaining share repurchase authorization was approximately $116.5 million.
As announced in a Form 8-K filed with the Securities and Exchange commission on October 13, 2022, on October 10, 2022, Momentive committed to a plan designed to improve operating margin and create efficiencies in our go-to-market motion and in other areas throughout the Company (the “Restructuring Plan”). The Restructuring Plan involves a reduction of the Company’s workforce by approximately 11%.
We estimate that we will incur approximately $4.0 to $5.0 million in charges in connection with the Restructuring Plan, consisting of cash expenditures for employee severance, employee benefits, and related facilitation costs. We expect that the majority of these costs will be incurred and paid during the fourth quarter of 2022 and that execution of the Restructuring Plan, including cash payments, will be substantially complete by the end of fiscal 2022.
Potential position eliminations in each country are subject to local law and consultation requirements, which may extend this process into the first quarter of 2023 or beyond in certain countries. The charges that we expect to incur are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual expenses may differ materially from the estimates disclosed above.
For the fourth quarter and full year of 2022, Momentive currently expects the following:
|Q4 2022||FY 2022|
|Revenue||$120 million - $122 million||$479 million - $481 million|
|Non-GAAP operating margin||14% to 16%||Approximately 7%|
|Free cash flow |
(includes impact of one-time transaction-related and restructuring expenses)
|NA||$(10) million - $(5) million|
The full-year 2022 free cash flow guidance range includes the impact of approximately $33 million in one-time transaction-related and restructuring expenses - a portion of which was accrued as expenses in Q4 2021 but will result in cash outflows in 2022.
For the fourth quarter of 2022, the company expects basic and diluted weighted average shares outstanding to be approximately 148 million. For the full year 2022, the company expects basic weighted average shares outstanding to be approximately 148 million and diluted weighted average shares outstanding to be approximately 149 million. The basic and diluted weighted average shares outstanding for the fourth quarter of 2022 and full year 2022 do not include any forecasts for share repurchases after September 30, 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 third quarter 2022 financial results, please visit 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 third quarter 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: 294113). 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 Thursday November 10, 2022, and can be accessed by dialing (866) 813-9403 or (929) 458-6194 and entering the passcode 098233.
Momentive (NASDAQ: MNTV), maker of SurveyMonkey, collects and analyzes human sentiment at scale. Momentive products, including SurveyMonkey and Momentive brand and market insights solutions, equip decision-makers at 345,000 organizations worldwide with the insights they need to make decisions with speed and confidence. 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 broaden the world’s perspective to shape the future of business. Learn more at momentive.ai.
Investor Relations Contact:
Gary J. Fuges, CFA
Source: Momentive Global Inc.