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SurveyMonkey reports 18% revenue increase during its first quarter as a public company

Key Points
  • Tuesday marked the company's first earnings report since debuting on the Nasdaq in October.
  • SurveyMonkey is projecting incrementally higher revenue for the fourth quarter.
  • Shares of SurveyMonkey surged Monday on the news that its chief rival, Qualtrics, would be acquired by SAP before plans to go public.
SurveyMonkey IPO at the Nasdaq market site
Source: Nasdaq

SurveyMonkey reported an 18 percent increase in revenue, bolstered by sales to enterprise clients, when it reported its first earnings report as a public company after the market close on Tuesday.

Here's how the company did compared with previous reports:

  • Loss per share: 1 cent vs. 2 cents in the year-ago quarter
  • Revenue: $65.2 million vs. $55.3 million in the year-ago quarter
  • Paid users: 621,000, an increase of 5,000 from the second quarter

The stock, which trades under the formal name SVMK, rose 3 percent following the report, after declining almost 2 percent during the regular trading session. Shares have declined about 28 percent since the stock's debut on the Nasdaq in late September, when it jumped 42 percent $17.

SurveyMonkey, which offers digital survey tools and data analytics to business customers and individual users, is projecting incrementally higher revenue for the fourth quarter, guiding toward quarterly sales of between $64.8 million and $66.8 million. The company expects full-year revenue between $251.2 million and $253.2 million.

SVMK revenues up 18 percent year-over-year

The company said its self-serve business accounted for 88 percent of sales during the quarter, but a sales-assisted segment is quickly scaling.

"We're still early in the development and expansion of our sales-assisted strategy and we saw great traction with our sales efforts during the quarter, signing agreements with companies such as LinkedIn, Nasdaq, Sky and Intercom," the company said in its shareholder letter. "By selling SurveyMonkey to the enterprise, we expect to accelerate paying user growth and increase both monetization and retention within organizations."

Enterprise clients likely account for the company's rising average revenue per user. The company reported ARPU of $418, an increase of 14.8 percent year-over-year.

SurveyMonkey posted a net loss for the quarter of $102 million, a drastic jump from its loss of $13 million in the year-ago quarter. The company said the higher losses were largely related to changes in stock-based compensation now that it's public.

SurveyMonkey revealed in its IPO filing that its losses are growing faster than revenue on a percentage basis. The company reported a negative operating margin of 145 percent in the third quarter, compared with a negative operating margin of 11 percent a year earlier.

SurveyMonkey shares dropped last month when its larger and faster-growing rival Qualtrics filed to go public. But after SAP agreed to acquire Qualtrics over the weekend for $8 billion, SurveyMonkey shares rose 7 percent on Monday.

The company, based in San Mateo, California, was founded in 1999 by Ryan Finley. Since 2016, Zander Lurie has served as CEO.

— CNBC's Jordan Novet and Elizabeth Schulze contributed to this report.

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