SurveyMonkey’s loss widens while revenue jumps in Q3

SurveyMonkey, the parent company of SVMK Inc (SVMK) reported its first quarterly results after becoming a public company. For the third quarter ended September 2018, the online software maker’s loss widened to $102.4 million or $0.99 per share from a loss of $13 million or $0.13 per share in the prior year, hurt by the IPO-related stock-compensation expense of $89.9 million.

Revenue of $65.2 million was up 18% year-over-year. Approximately 36% of this revenue was generated from customers outside of the US.

Paying users count jumped 21,000 to 621,000 at the end of the third quarter, with more than 75% of paying users on annual plans. Average annual revenue per user (ARPU) grew to $418 from $364 in the prior-year quarter.

Looking ahead, revenue is expected to be in the range of $64.8-66.8 million for the fourth quarter of 2018 and $251.2-253.2 million for the fiscal year 2018.

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The company stated that the pricing changes introduced in 2017 created a short-term headwind to paying users growth but provided a stronger tailwind to ARPU growth. Over the next several quarters, the San Mateo, the California-based firm expects paying user growth and ARPU growth to return to more normalized levels where paying users growth to outpace the ARPU growth.

SurveyMonkey ended the quarter with $316.8 million in total debt for net debt of $59.7 million. On October 10, 2018, the company refinanced its 2017 credit facility and paid down $101.3 million in outstanding debt using a portion of the net proceeds from the IPO.

Shares of SurveyMonkey, which hit a low of  $10.05 on October 30 from its IPO price of $12, were down 1.83% at $11.29 after the market closed on Tuesday. The stock was up about 1% in the extended hours of the trading session.

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