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.
Restructuring Plan
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.
Financial Outlook
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 p.m. PT / 5:00 p.m. 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.
About Momentive
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.
MOMENTIVE GLOBAL INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited)
(in thousands)
September 30, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
193,096
$
305,525
Accounts receivable, net
30,869
32,489
Deferred commissions, current
9,483
7,945
Prepaid expenses and other current
assets
11,886
11,363
Total current assets
245,334
357,322
Property and equipment, net
1,457
5,442
Operating lease right-of-use assets
33,561
52,232
Capitalized internal-use software, net
29,326
28,158
Acquisition intangible assets, net
5,661
10,773
Goodwill
454,841
463,736
Deferred commissions, non-current
14,629
13,200
Other assets
8,336
9,061
Total assets
$
793,145
$
939,924
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
11,156
$
7,204
Accrued expenses and other current
liabilities
21,529
30,725
Accrued compensation
40,336
45,873
Deferred revenue, current
212,880
200,658
Operating lease liabilities, current
7,951
9,587
Debt, current
1,900
1,900
Total current liabilities
295,752
295,947
Deferred revenue, non-current
669
1,165
Deferred tax liabilities
6,190
5,701
Debt, non-current
183,391
209,816
Operating lease liabilities,
non-current
41,536
66,938
Other non-current liabilities
5,225
5,883
Total liabilities
532,763
585,450
Commitments and contingencies
Stockholders’ equity:
Preferred stock
—
—
Common stock
1
2
Additional paid-in capital
971,779
971,604
Accumulated other comprehensive income
(loss)
(7,594
)
414
Accumulated deficit
(703,804
)
(617,546
)
Total stockholders’ equity
260,382
354,474
Total liabilities and stockholders’
equity
$
793,145
$
939,924
MOMENTIVE GLOBAL INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands, except per share
amounts)
2022
2021
2022
2021
Revenue
$
121,375
$
114,754
$
358,524
$
326,444
Cost of revenue (1)(2)(3)
21,256
22,161
66,650
64,621
Gross profit
100,119
92,593
291,874
261,823
Operating expenses:
Research and development (1)(3)
35,074
33,671
107,420
100,879
Sales and marketing (1)(2)(3)
54,976
54,118
175,910
162,179
General and administrative (1)(3)
25,929
24,466
83,383
71,958
Restructuring (1)(2)
422
—
1,982
—
Total operating expenses
116,401
112,255
368,695
335,016
Loss from operations
(16,282
)
(19,662
)
(76,821
)
(73,193
)
Interest expense
3,092
2,337
7,696
6,940
Other non-operating expense, net
685
543
614
739
Loss before income taxes
(20,059
)
(22,542
)
(85,131
)
(80,872
)
Provision for income taxes
271
361
1,127
915
Net loss
$
(20,330
)
$
(22,903
)
$
(86,258
)
$
(81,787
)
Net loss per share, basic and diluted
$
(0.14
)
$
(0.15
)
$
(0.58
)
$
(0.56
)
Weighted-average shares used in computing
basic and diluted net loss per share
146,953
147,877
148,620
146,270
(1) Includes stock-based compensation, net of amounts
capitalized as follows:
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands)
2022
2021
2022
2021
Cost of revenue
$
1,580
$
1,639
$
4,613
$
4,701
Research and development
8,770
10,081
26,117
29,891
Sales and marketing
5,874
5,672
18,297
17,864
General and administrative
8,087
7,202
24,367
21,310
Restructuring
—
—
2,761
—
Stock-based compensation, net of amounts
capitalized
$
24,311
$
24,594
$
76,155
$
73,766
(2) Includes amortization of acquisition intangible assets as
follows:
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands)
2022
2021
2022
2021
Cost of revenue
$
328
$
1,465
$
2,234
$
4,432
Sales and marketing
459
1,035
2,546
3,285
Restructuring
135
—
315
—
Amortization of acquisition intangible
assets
$
922
$
2,500
$
5,095
$
7,717
(3) Includes acquisition-related transaction costs of $0.6
million in cost of revenue, $3.4 million in research and
development, $3.1 million in sales and marketing, and $4.8 million
in general and administrative expenses for the nine months ended
September 30, 2022.
MOMENTIVE GLOBAL INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)
Nine Months Ended September
30,
(in thousands)
2022
2021
Cash flows from operating
activities
Net loss
$
(86,258
)
$
(81,787
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
23,094
32,349
Non-cash leases expense
8,510
9,824
Gain on lease modification
(6,370
)
—
Stock-based compensation expense, net of
amounts capitalized
76,155
73,766
Deferred income taxes
489
293
Bad debt expense
2,273
898
Impairment of property and equipment
1,411
—
Unrealized foreign currency (gains)
losses, net and other
2,821
1,048
Changes in assets and liabilities:
Accounts receivable
(1,897
)
(2,654
)
Prepaid expenses and other assets
(12,326
)
(9,872
)
Accounts payable and accrued
liabilities
(4,077
)
13,585
Accrued compensation
(4,711
)
7,089
Deferred revenue
11,709
27,013
Operating lease liabilities
(10,172
)
(11,244
)
Net cash provided by operating
activities
651
60,308
Cash flows from investing
activities
Purchases of property and equipment
(449
)
(387
)
Capitalized internal-use software
(6,679
)
(6,450
)
Proceeds from sale of property and
equipment
—
85
Net cash used in investing activities
(7,128
)
(6,752
)
Cash flows from financing
activities
Proceeds from stock option exercises
2,827
21,334
Proceeds from employee stock purchase
plan
2,751
3,873
Payments to repurchase common stock
(83,487
)
—
Repayment of debt
(26,650
)
(1,650
)
Net cash provided by (used in) financing
activities
(104,559
)
23,557
Effect of exchange rate changes on
cash
(1,493
)
(293
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(112,529
)
76,820
Cash, cash equivalents and restricted cash
at beginning of period
306,121
224,614
Cash, cash equivalents and restricted cash
at end of period
$
193,592
$
301,434
Supplemental cash flow data:
Interest paid for term debt
$
7,116
$
6,416
Income taxes paid
$
564
$
732
Non-cash investing and financing
transactions:
Stock compensation included in capitalized
software costs
$
1,928
$
1,666
Lease liabilities arising from obtaining
right-of-use assets, net of terminations and modifications
$
(13,620
)
$
2,676
MOMENTIVE GLOBAL INC.
SUPPLEMENTAL DISAGGREGATED
REVENUE DATA (unaudited)
Quarterly Disaggregated
Revenue
Three Months Ended
(in thousands)
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Mar. 31, 2021
Self-serve revenue
$
74,629
$
76,055
$
75,803
$
77,389
$
77,134
$
75,462
$
71,112
Sales-assisted revenue
46,746
44,108
41,183
39,953
37,620
33,930
31,186
Revenue
$
121,375
$
120,163
$
116,986
$
117,342
$
114,754
$
109,392
$
102,298
Self-serve revenues are generated from products purchased
independently through our website.
Sales-assisted revenues are generated from products sold to
organizations through our sales team.
MOMENTIVE GLOBAL INC.
RECONCILIATION OF GAAP TO
NON-GAAP DATA (unaudited) (1)
Reconciliation of GAAP to Non-GAAP (Loss) Income from
operations
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands, except
percentages)
2022
2021
2022
2021
GAAP Loss from operations
$
(16,282
)
$
(19,662
)
$
(76,821
)
$
(73,193
)
GAAP Operating margin
(13
)%
(17
)%
(21
)%
(22
)%
Stock-based compensation, net
24,311
24,594
76,155
73,766
Amortization of acquisition intangible
assets
922
2,500
5,095
7,717
Acquisition-related transaction costs
—
—
11,900
—
Restructuring
287
—
(1,094
)
—
Non-GAAP Income from operations
$
9,238
$
7,432
$
15,235
$
8,290
Non-GAAP Operating margin
8
%
6
%
4
%
3
%
Reconciliation of GAAP to Non-GAAP
(Loss) Income and (Loss) Income per diluted share
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands, except per share
amounts)
2022
2021
2022
2021
GAAP Net Loss
$
(20,330
)
$
(22,903
)
$
(86,258
)
$
(81,787
)
GAAP Net Loss per diluted share
$
(0.14
)
$
(0.15
)
$
(0.58
)
$
(0.56
)
Weighted-average shares used to compute
GAAP net loss per diluted share
146,953
147,877
148,620
146,270
Stock-based compensation, net
24,311
24,594
76,155
73,766
Amortization of acquisition intangible
assets
922
2,500
5,095
7,717
Acquisition-related transaction costs
—
—
11,900
—
Restructuring
287
—
(1,094
)
—
Income tax effect on Non-GAAP adjustments
(2)
198
96
593
509
Non-GAAP Net Income
$
5,388
$
4,287
$
6,391
$
205
Non-GAAP Net Income per diluted share
$
0.04
$
0.03
$
0.04
$
—
Weighted-average shares used to compute
Non-GAAP net income per diluted share
147,002
151,558
148,927
150,855
(1) Please see Appendix A for explanation of non-GAAP measures
used.
(2) Due to the full valuation allowance on our US deferred tax
assets, there was no tax effects associated with the Non-GAAP
adjustment for acquisition-related transaction costs and
restructuring costs. Non-GAAP adjustments pertain to the income tax
effects of amortization of acquisition-related intangible assets
and stock-based compensation, net.
Calculation of Free Cash
Flow
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands)
2022
2021
2022
2021
Net cash provided by operating
activities
$
1,901
$
16,747
$
651
$
60,308
Purchases of property and equipment
—
(65
)
(449
)
(387
)
Capitalized internal-use software
(1,724
)
(2,032
)
(6,679
)
(6,450
)
Free cash flow
$
177
$
14,650
$
(6,477
)
$
53,471
MOMENTIVE GLOBAL INC.
RECONCILIATION OF GAAP TO
NON-GAAP DATA (unaudited) (1)
Supplemental GAAP and Non-GAAP
Information
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands, except
percentages)
2022
2021
2022
2021
GAAP Gross profit
$
100,119
$
92,593
$
291,874
$
261,823
GAAP Gross margin
82
%
81
%
81
%
80
%
Stock-based compensation, net
1,580
1,639
4,613
4,701
Amortization of acquisition intangible
assets
328
1,465
2,234
4,432
Acquisition-related transaction costs
—
—
638
—
Non-GAAP Gross profit
$
102,027
$
95,697
$
299,359
$
270,956
Non-GAAP Gross margin
84
%
83
%
83
%
83
%
GAAP Research and development
$
35,074
$
33,671
$
107,420
$
100,879
GAAP Research and development margin
29
%
29
%
30
%
31
%
Stock-based compensation, net
8,770
10,081
26,117
29,891
Acquisition-related transaction costs
—
—
3,363
—
Non-GAAP Research and development
$
26,304
$
23,590
$
77,940
$
70,988
Non-GAAP Research and development
margin
22
%
21
%
22
%
22
%
GAAP Sales and marketing
$
54,976
$
54,118
$
175,910
$
162,179
GAAP Sales and marketing margin
45
%
47
%
49
%
50
%
Stock-based compensation, net
5,874
5,672
18,297
17,864
Amortization of acquisition intangible
assets
459
1,035
2,546
3,285
Acquisition-related transaction costs
—
—
3,090
—
Non-GAAP Sales and marketing
$
48,643
$
47,411
$
151,977
$
141,030
Non-GAAP Sales and marketing margin
40
%
41
%
42
%
43
%
GAAP General and administrative
$
25,929
$
24,466
$
83,383
$
71,958
GAAP General and administrative margin
21
%
21
%
23
%
22
%
Stock-based compensation, net
8,087
7,202
24,367
21,310
Acquisition-related transaction costs
—
—
4,809
—
Non-GAAP General and administrative
$
17,842
$
17,264
$
54,207
$
50,648
Non-GAAP General and administrative
margin
15
%
15
%
15
%
16
%
GAAP Restructuring
$
422
$
—
$
1,982
$
—
GAAP Restructuring margin
0
%
0
%
1
%
0
%
Stock-based compensation, net
—
—
2,761
—
Amortization of acquisition intangible
assets
135
—
315
—
Other restructuring costs
287
—
(1,094
)
—
Non-GAAP Restructuring
$
—
$
—
$
—
$
—
Non-GAAP Restructuring margin
0
%
0
%
0
%
0
%
(1) Please see Appendix A for explanation of non-GAAP measures
used.
APPENDIX A
MOMENTIVE GLOBAL INC. EXPLANATION OF
NON-GAAP MEASURES
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with US GAAP
(“GAAP”), we use the following Non-GAAP financial measures:
Non-GAAP (loss) income from operations, Non-GAAP operating margin,
Non-GAAP net (loss) income, Non-GAAP net (loss) income per diluted
share, Non-GAAP gross profit, Non-GAAP gross margin, Non-GAAP
research and development, Non-GAAP research and development margin,
Non-GAAP sales and marketing, Non-GAAP sales and marketing margin,
Non-GAAP general and administrative, Non-GAAP general and
administrative margin, Non-GAAP restructuring, Non-GAAP
restructuring margin, and free cash flow. Our definition for each
Non-GAAP measure used is provided below, however, a limitation of
Non-GAAP financial measures is that they do not have uniform
definitions. Accordingly, our definitions for Non-GAAP measures
used will likely differ from similarly titled Non-GAAP measures
used by other companies thereby limiting comparability.
Non-GAAP (loss) income from operations,
Non-GAAP operating margin: We define Non-GAAP (loss) income
from operations as GAAP loss from operations excluding stock-based
compensation, net, amortization of acquisition intangible assets,
acquisition-related transaction costs, and restructuring. Non-GAAP
operating margin is defined as Non-GAAP (loss) income from
operations divided by revenue.
Non-GAAP net (loss) income, Non-GAAP net
(loss) income per diluted share: We define Non-GAAP net
(loss) income as GAAP net loss excluding stock-based compensation,
net, amortization of acquisition intangible assets,
acquisition-related transaction costs, restructuring, and including
the income tax effect on Non-GAAP adjustments. Non-GAAP net (loss)
income per diluted share is defined as Non-GAAP net (loss) income
divided by the weighted-average shares outstanding.
Non-GAAP gross profit, Non-GAAP gross
margin: We define Non-GAAP gross profit as GAAP gross profit
excluding stock-based compensation, net, amortization of
acquisition intangible assets, and acquisition-related transaction
costs. Non-GAAP gross margin is defined as Non-GAAP gross profit
divided by revenue.
Non-GAAP research and development,
Non-GAAP research and development margin: We define Non-GAAP
research and development as GAAP research and development excluding
stock-based compensation, net and acquisition-related transaction
costs. Non-GAAP research and development margin is defined as
Non-GAAP research and development divided by revenue.
Non-GAAP sales and marketing, Non-GAAP
sales and marketing margin: We define Non-GAAP sales and
marketing as GAAP sales and marketing excluding stock-based
compensation, net, amortization of acquisition intangible assets,
and acquisition-related transaction costs. Non-GAAP sales and
marketing margin is defined as Non-GAAP sales and marketing divided
by revenue.
Non-GAAP general and administrative,
Non-GAAP general and administrative margin: We define
Non-GAAP general and administrative as GAAP general and
administrative excluding stock-based compensation, net and
acquisition-related transaction costs. Non-GAAP general and
administrative margin is defined as Non-GAAP general and
administrative divided by revenue.
Non-GAAP restructuring, Non-GAAP
restructuring margin: We define Non-GAAP restructuring as
GAAP Restructuring excluding stock-based compensation, net,
amortization of acquisition intangible assets, and other
restructuring costs. Non-GAAP Restructuring margin is defined as
Non-GAAP Restructuring divided by revenue.
Free cash flow: We define free cash
flow as GAAP net cash provided by or used in operating activities
less purchases of property and equipment and capitalized
internal-use software. We consider free cash flow to be an
important measure because it measures our liquidity after deducting
capital expenditures for purchases of property and equipment and
capitalized software development costs, which we believe provides a
more accurate view of our cash generation and cash available to
grow our business. We expect to generate positive free cash flow
over the long term. Free cash flow has limitations as an analytical
tool, and it should not be considered in isolation or as a
substitute for analysis of other GAAP financial measures, such as
net cash provided by or used in operating activities. Some of the
limitations of free cash flow are that free cash flow does not
reflect our future contractual commitments and may be calculated
differently by other companies in our industry, limiting its
usefulness as a comparative measure.
We use these Non-GAAP measures to compare and evaluate our
operating results across periods in order to manage our business,
for purposes of determining executive and senior management
incentive compensation, and for budgeting and developing our
strategic operating plans. We believe that these Non-GAAP measures
provide useful information about our operating results, enhance the
overall understanding of our past financial performance and future
prospects, and allow for greater transparency with respect to key
metrics used by our management in evaluating our financial
performance and for operational decision making, but they are not
meant to be considered in isolation or as a substitute for
comparable GAAP measures and should be read only in conjunction
with our condensed consolidated financial statements prepared in
accordance with GAAP.
We have excluded the effect of the following items from the
aforementioned Non-GAAP measures because they are non-cash and/or
are non-recurring in nature and because we believe that the
Non-GAAP financial measures excluding these items provide
meaningful supplemental information regarding operational
performance and liquidity. We further believe these measures are
useful to investors in that it allows for greater transparency to
certain line items in our financial statements and facilitates
comparisons to historical operating results and comparisons to peer
operating results. A description of the Non-GAAP adjustments for
the above measures is as follows:
- Stock-based compensation, net: We
incur stock based-compensation expense on a GAAP basis resulting
from equity awards granted to our employees. Although stock-based
compensation is a key incentive offered to our employees, and we
believe such compensation contributed to the revenues earned during
the periods presented and also believe it will contribute to the
generation of future period revenues, we continue to evaluate our
business performance excluding stock-based compensation expenses.
Stock-based compensation expenses will recur in future
periods.
- Amortization of acquisition intangible
assets: We incur amortization expense on intangible assets
on a GAAP basis resulting from prior acquisitions. Amortization of
acquired intangible assets is inconsistent in amount and frequency
and is significantly affected by the timing and size of any
acquisitions. Investors should note that the use of intangible
assets contributed to our revenues earned during the periods
presented and will contribute to our future period revenues as
well. Amortization of acquisition intangible assets will recur in
future periods.
- Acquisition-related transaction
costs: We incur transaction costs on a GAAP basis resulting
from our acquisitions, including our terminated acquisition by
Zendesk. These costs relate to advisory, legal and accounting
services, and retention payments to certain employees.
Acquisition-related transaction costs is inconsistent in amount and
frequency and is significantly affected by the timing and size of
any acquisitions and are therefore excluded from our Non-GAAP
results as they do not otherwise relate to our core business
operations. However, we may incur these expenses in future periods
in connection with any new acquisitions.
- Restructuring: Restructuring
expenses consist of employee severance, lease termination charges
and related gains or losses from lease modifications, impairment of
certain assets, and other exit costs. We believe it is useful for
investors to understand the effects of these items on our total
operating expenses. We expect that restructuring costs will
generally diminish over time with respect to strategic initiatives
and/or past acquisitions. However, we may incur these expenses in
future periods in connection with any new strategic initiatives
and/or acquisitions.
For more information on the Non-GAAP financial measures, please
see the “Reconciliation of GAAP to Non-GAAP Data” section of this
press release. The accompanying tables provide details on the GAAP
financial measures that are most directly comparable to the
Non-GAAP financial measures and the related reconciliations between
those financial measures.
With regards to the Non-GAAP outlook provided above, a
reconciliation to the corresponding GAAP amounts is not provided as
the quantification of certain items excluded from each respective
Non-GAAP measure, which may be significant, cannot be reasonably
calculated or predicted at this time without unreasonable efforts.
For example, the Non-GAAP adjustment for stock-based compensation
expense, net, requires additional inputs such as number of shares
granted and market price that are not currently ascertainable, and
the Non-GAAP adjustment for amortization of acquisition intangible
assets depends on the timing and value of intangible assets
acquired that cannot be accurately forecasted.
Safe Harbor Statement
“Safe Harbor” statement under the Private Securities Litigation
Reform Act of 1995: This press release may contain forward-looking
statements about our financial outlook, the costs, timing and
financial impacts of restructuring initiatives, outstanding shares,
products, including our investments in products, technology and
other key strategic areas. The achievement of the matters covered
by such forward-looking statements involves risks, uncertainties
and assumptions. If any of these risks or uncertainties materialize
or if any of the assumptions prove incorrect, the company’s results
could differ materially from the results expressed or implied by
the forward-looking statements the company makes.
The risks and uncertainties referred to above include - but are
not limited to - risks related to the COVID-19 coronavirus
pandemic; our ability to retain and upgrade customers; our revenue
growth rate; our brand (including our rebranding); our marketing
strategies; our self-serve business model; the length of our sales
cycles; the growth and development of our salesforce; security
measures; expectations regarding our ability to timely and
effectively scale and adapt existing technology and network
infrastructure to ensure that our products and services are
accessible at all times; competition; our debt; revenue
recognition; our ability to manage our growth; our culture and
talent; our data centers; privacy, security and data transfer
concerns, as well as changes in regulations, which could impact our
ability to serve our customers or curtail our monetization efforts;
litigation and regulatory issues; expectations regarding the return
on our strategic investments; execution of our plans and
strategies, including with respect to mobile products and features
and expansion into new areas and businesses; our international
operations; intellectual property; the application of U.S. and
international tax laws on our tax structure and any changes to such
tax laws; acquisitions we have made or may make in the future; the
price volatility of our common stock; and general economic
conditions.
Further information on these and other factors that could affect
our financial results are included in documents filed with the
Securities and Exchange Commission from time to time, including the
section entitled “Risk Factors” in the Quarterly Report on Form
10-Q that will be filed for the quarter ended September 30, 2022,
which should be read in conjunction with these financial results.
These documents are or will be available on the SEC Filings section
of our Investor Relations website page at investor.momentive.ai.
All information provided in this release and in the attachments is
as of November 3, 2022, and we undertake no obligation to update
this information.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221102006046/en/
Investor Relations Contact: Gary J. Fuges, CFA
investors@momentive.ai
Media Contact: Katie Miserany pr@momentive.ai
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