SurveyMonkey earnings preview: What to expect from Q1 results

SurveyMonkey, the parent company of SVMK Inc (NASDAQ: SVMK), is scheduled to report its earnings results for the first quarter of 2019 on Wednesday after the market closes. The survey software firm’s results will be benefited by the growth in paying users that will be driven by sales of Enterprise and adoption of self-serve Teams plans.

The company has planned to invest in efforts that drive enterprise sales, fuel growth in its core self-serve channel, and expand its international business. SurveyMonkey has expected to generate significant cash flow over the course of the year while investing to position the company for an even stronger 2020.

Analysts expect SurveyMonkey to post a loss of $0.15 per share on revenue of $68.15 million for the first quarter. In the past two quarters, as the company debuted on Nasdaq on September 26, 2018, SurveyMonkey beat analysts’ expectations once while came in line with consensus once.

It is expected that the company will report upbeat results for the first quarter. Majority of the analysts recommended a “strong buy” or “buy” rating with an average price target of $17.07. The market analysts expect continued optimism around the company’s growth initiatives that included the enterprise business and international expansion.

On the other hand, the sell-side analyst from JMP Securities remained incrementally confident in SurveyMonkey’s ability to increase Enterprise adoption, grow paying users and build out its international business. This has hinted that the company could be benefited by enterprise adoption and the international expansion in the long term.

For the fourth quarter, the company posted a 19% growth in revenue helped by a 7% increase in paying users and higher average revenue per user. However, an increase in costs and expenses has hurt the bottom line that slipped to a loss from a profit in the previous year quarter.

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For the first quarter, SurveyMonkey had expected revenue in the range of $67.5 million and $68.5 million, representing year-over-year growth of 15% to 17%. For the full year 2019, revenue was touted to be in the range of $290 million and $295 million, representing year-over-year growth of 14% to 16%.

In the second half of 2019, the company had expected growth investments in enterprise sales and self-serve teams to drive accelerating revenue growth. The investments in the international market expansion were predicted to contribute to revenue growth towards the end of 2019.

Shares of SVMK opened lower on Tuesday and is trading in the red territory. The stock has risen over 3% since the IPO debut in September 2018 and over 29% in the past three months.

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