SurveyMonkey Inc (NYSE:SVMK) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 05:00 pm ET


SurveyMonkey Inc (NYSE:SVMK) Q2 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to SurveyMonkey's Second Quarter 2020 Earnings Call. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions]

I would now like to hand the conference over to your host, Vice President of Investor Relations, Gary Fuges. Sir, please go ahead.

Gary J. Fuges

Thank you. Good afternoon, and welcome to SurveyMonkey's second quarter 2020 earnings call. Joining me on today's call are Zander Lurie, CEO; Tom Hale, President; and Debbie Clifford, CFO.

After our prepared remarks, we'll take your questions. Prior to this call, we issued a press release and shareholder letter with our Q2 2020 financial results and related commentary. Those items were posted on our Investor Relations website at During the course of this call, management will make forward-looking statements, which are subject to various risks and uncertainties, including statements relating to our strategy, investments, revenue, operating margin and cash flow.

Actual results may differ materially from the results predicted and reported results should not be considered an indication of future performance. A discussion of the risks and uncertainties related to our business is contained in our filings with the Securities and Exchange Commission, in particular, in the section entitled Risk Factors in our quarterly and annual reports and we refer you to these filings.

Our discussion today will include non-GAAP financial measures unless otherwise stated. These non-GAAP measures should be considered in addition to and not a substitute for, or in isolation from our GAAP results. A reconciliation of GAAP to non-GAAP results may be found in our earnings release and shareholder letter, which are furnished with our 8-K filed today with the SEC and may also be found on our IR website.

With that, I'll now turn the call over to Zander. Zander?

Alexander Lurie

Thanks, Gary. And thank you for joining us today. Against the backdrop of a global health crisis and tightened macroeconomic uncertainty, we delivered strong Q2 financial performance, exceeding our revenue and profitability guidance and generating $19 million in free cash flow. With Corporate America working from home, protests in our cities and racial justice initiatives on every C-suite agenda, our team continues to rise to the occasion.

This quarter's results further validate that our business is resilient, and our software is critical as organizations accelerate their digital transformation. Based on our first half performance, I am highly confident we can execute on our long-term strategy while managing through the macro headwinds affecting all companies today. Digital transformation was a clear tailwind in the quarter. More organizations are turning to SurveyMonkey to gather feedback and take action in a time when data on your employees well-being and your customers' needs are particularly valuable.

We added 35,000 net paid users in Q2, an acceleration from prior quarters. We were successful in converting more of our user base into paying customers. 86% of whom are now on annual contracts. With our massive user base, we believe there is still considerable runway for further monetization gains as