Momentive (NASDAQ:MNTV) Reports Q1 In Line With Expectations, Stock Soars

Jabin Bastian /
2022/05/04 4:53 pm EDT
Add to Watchlist

Online survey platform Momentive (NASDAQ:MNTV) reported results in line with analyst expectations in Q1 FY2022 quarter, with revenue up 14.3% year on year to $116.9 million. Guidance for the full year also exceeded estimates, however the guidance for the next quarter was less impressive, coming in at $121 million, 0.47% below analyst estimates. Momentive made a GAAP loss of $37.3 million, down on its loss of $29.6 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) Q1 FY2022 Highlights:

  • Revenue: $116.9 million vs analyst estimates of $116 million (small beat)
  • EPS (non-GAAP): $0 vs analyst estimates of -$0.02 ($0.02 beat)
  • Revenue guidance for Q2 2022 is $121 million at the midpoint, below analyst estimates of $121.5 million
  • Free cash flow was negative $7.9 million, compared to negative free cash flow of $4.88 million in previous quarter
  • Customers: 894,400, up from 888,700 in previous quarter
  • Gross Margin (GAAP): 80.4%, in line with same quarter last year

“The team rose above the noise over the last few months. We exceeded the high-end of our revenue and profitability guidance ranges and made substantial progress on the strategic changes we outlined in our February 28th stockholder letter,” 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 $102.2 million, to $116.9 million.

Momentive Total Revenue

This quarter, Momentive's quarterly revenue was once again up 14.3% year on year. But the revenue actually decreased by $356 thousand in Q1, compared to $2.58 million increase in Q4 2021. We'd like to see revenue increase each quarter, but a one-off fluctuation is usually not concerning and the management is guiding for growth to rebound in the next quarter.

Guidance for the next quarter indicates Momentive is expecting revenue to grow 10.6% 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 12.3% over the next twelve months.

There are others doing even better than Momentive. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 150% since the IPO last December. You can find it on our platform for free.

Customer Growth

You can see below that Momentive reported 894,400 customers at the end of the quarter, an increase of 5,700 on last quarter. That's in line with the customer growth we have seen last quarter but a bit below what we have typically seen over the last year, suggesting that sales momentum may be slowing a little.

Momentive Customers

Key Takeaways from Momentive's Q1 Results

With a market capitalization of $2.2 billion Momentive is among smaller companies, but its more than $238 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.

Momentive's results Q1 are showing the company is staying on target. The company is up 5.17% on the results and currently trades at $15.05 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.