2433

Momentive (NASDAQ:MNTV) Misses Q2 Revenue Estimates, Stock Drops


Jabin Bastian /
2022/08/04 4:51 pm EDT
Add to Watchlist

Online survey platform Momentive (NASDAQ:MNTV) missed analyst expectations in Q2 FY2022 quarter, with revenue up 9.84% year on year to $120.1 million. Guidance for the next quarter also missed analyst expectations with revenues guided to $121 million at the midpoint, or 4.71% below analyst estimates. Momentive made a GAAP loss of $28.5 million, improving on its loss of $29.2 million, in the same quarter last year.

Is now the time to buy Momentive? Access our full analysis of the earnings results here, it's free.

Momentive (MNTV) Q2 FY2022 Highlights:

  • Revenue: $120.1 million vs analyst estimates of $121.3 million (1.01% miss)
  • EPS (non-GAAP): $0 vs analyst estimates of $0.01 (-$0.01 miss)
  • Revenue guidance for Q3 2022 is $121 million at the midpoint, below analyst estimates of $126.9 million
  • The company dropped revenue guidance for the full year, from $497 million to $482 million at the midpoint, a 3.01% decrease
  • Free cash flow of $1.25 million, up from negative free cash flow of $7.9 million in previous quarter
  • Customers: 909,700, up from 894,400 in previous quarter
  • Gross Margin (GAAP): 81.2%, up from 80.1% same quarter last year

“We are controlling our destiny in a more challenging macroeconomic environment, delivering value that enables us to retain and expand with our customers while managing the business prudently to drive operating leverage,” said Zander Lurie, Chief Executive Officer of Momentive.

Previously known as SurveyMonkey, Momentive (NASDAQ:MNTV) offers software as a service that makes it easy for users create, manage and distribute online surveys.

The Internet has given customers more choice on whom to conduct business with and has also given them the power to easily share their experiences with other customers. These twin dynamics effectively have increased pressure on companies to both improve their customer service and also monitor their brand reputation online, driving the need for customer experience software offerings.

Sales Growth

As you can see below, Momentive's revenue growth has been mediocre over the last year, growing from quarterly revenue of $109.3 million, to $120.1 million.

Momentive Total Revenue

Momentive's quarterly revenue was only up 9.84% year on year, which would likely disappoint many shareholders. On top of that, revenue increased $3.17 million quarter on quarter, a strong improvement on the $356 thousand decrease in Q1 2022, and a sign of acceleration of growth, which is very nice to see indeed.

Guidance for the next quarter indicates Momentive is expecting revenue to grow 5.44% year on year to $121 million, slowing down from the 20.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 14.4% over the next twelve months.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Customer Growth

You can see below that Momentive reported 909,700 customers at the end of the quarter, an increase of 15,300 on last quarter. That is a little better customer growth than last quarter and quite a bit above the typical customer growth we have seen lately, demonstrating that the business itself has good sales momentum. We've no doubt shareholders will take this as an indication that the company's go-to-market strategy is working very well.

Momentive Customers

Key Takeaways from Momentive's Q2 Results

With a market capitalization of $1.3 billion Momentive is among smaller companies, but its more than $209.4 million in cash and positive free cash flow over the last twelve months give us confidence that Momentive has the resources it needs to pursue a high growth business strategy.

We were very impressed by Momentive’s very strong acceleration in customer growth this quarter. And we were also glad to see the improvement in gross margin. On the other hand, it was unfortunate to see that Momentive's revenue guidance for the full year missed analyst's expectations and the revenue guidance for the next quarter missed analysts' expectations. Overall, this quarter's results were not the best we've seen from Momentive. The company is down 8.98% on the results and currently trades at $7.8 per share.

Momentive may have had a tough quarter, but does that actually create an opportunity to invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.