Momentive (NASDAQ:MNTV) Surprises With Q2 Sales But Customer Growth Slows Down

Kayode Omotosho /
2021/08/04 4:30 pm EDT

Online survey platform Momentive (NASDAQ:MNTV) reported Q2 FY2021 results beating Wall St's expectations, with revenue up 20.2% year on year to $109.3 million. Momentive made a GAAP loss of $29.2 million, down on its loss of $22.9 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 FY2021 Highlights:

  • Revenue: $109.3 million vs analyst estimates of $107.4 million (1.82% beat)
  • EPS (non-GAAP): -$0.01 vs analyst
  • Revenue guidance for Q3 2021 is $113.5 million at the midpoint, roughly in line with what analysts were expecting
  • The company reconfirmed revenue guidance for the full year, at $445 million at the midpoint
  • Free cash flow of $23.7 million, up 57.9% from previous quarter
  • Customers: 862,200, up from 845,800 in previous quarter
  • Gross Margin (GAAP): 80.1%, in line with previous quarter

“In Q2, we executed on our corporate rebrand to Momentive while delivering strong Q2 financial results: 20% year-over-year revenue growth, even faster expansion of our leading growth indicators, and a 22% free cash flow margin,” said Zander Lurie, chief executive officer of Momentive.

Founded in 1999, Momentive (NASDAQ:MNTV) offers software as a service that makes it easy for users create, manage and distribute online surveys.

A lot of research used to be done in person using pen and paper, so Momentive might somewhat benefit from an environment where work is done remotely. But the biggest driver of the business is an increased pressure on efficiency of marketing budgets, as more teams now do the research in-house using do-it-yourself tools rather than hiring an outside agency to do it.

Sales Growth

As you can see below, Momentive's revenue growth has been decent over the last year, growing from quarterly revenue of $90.9 million, to $109.3 million.

Momentive Total Revenue

This quarter, Momentive's quarterly revenue was once again up a very solid 20.2% year on year. On top of that, revenue increased $7.09 million quarter on quarter, a very strong improvement on the $1.32 million increase in Q1 2021, which shows acceleration of growth, and is great to see.

Analysts covering the company are expecting the revenues to grow 19.3% over the next twelve months, although we would expect them to review their estimates once they get to read these results.

There are others doing even better. 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 400% since the IPO in December. You can find it on our platform for free.

Customer Growth

You can see below that Momentive reported 862,200 customers at the end of the quarter, an increase of 16,400 on last quarter. That is a bit slower customer growth than what we are used to seeing lately, suggesting that the customer acquisition momentum is slowing a little bit.

Momentive Customers

Key Takeaways from Momentive's Q2 Results

With market capitalisation of $3.04 billion Momentive is among smaller companies, but its more than $283.1 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.

It was good to see Momentive outperform Wall St’s revenue expectations this quarter. That feature of these results really stood out as a positive. On the other hand, it was unfortunate to see the slowdown in customer growth. Zooming out, we think this was still a decent, albeit mixed, quarter, showing the company is staying on target. The company is flat on the results and currently trades at $20.74 per share.

Should you invest in Momentive 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 full report which you can read here, it's free.

One way how 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.