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spk00: Ladies and gentlemen, thank you for standing by. My name is Chino and I'll be your conference operator for today. At this time, I would like to welcome everyone to the momentous second quarter of fiscal year 2021 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to resolve your question, press the pound key. Thank you. I would now like to hand the conference over to your host, Vice President of Investor Relations, Gary Fugis. Sir, please go ahead.
spk05: Thank you. Good afternoon. Welcome to Momentum Global's second quarter 2021 earnings call. Joining me on the call today is Anne DeLaurie, CEO, Tom Hale, President, and Justin Columbia, CFO. After our prepared remarks, we'll take your questions. Prior to this call, we issued a press release and shareholder letter with our second quarter 2021 financial results and related commentary. These items are posted on our investor relations website at investor.momentum.ai. During the course of this call management, we'll 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 as a substitute for or in isolation from our GAAP results. The reconciliation of GAAP to non-GAAP results may be found in our earnings release and shareholder letter, which are furnished with our 8K filed today with the SEC and may also be found on our IR website. With that, I'll turn the call over to Xander. Thank you, Gary, and thank you all for joining us today. I'd also like to welcome Justin Comby, our new CFO. I'm thrilled to see Justin step into this critical leadership post where he is helping shape what's next for our employees, customers, and shareholders. Justin, welcome aboard. In June, after extensive research using our own solutions, we relaunched as Momentus, the agile experience management company. The move aligned our corporate positioning with the breadth of our agile experience management solutions for the enterprises. While the SurveyMonkey brand is synonymous with agile surveys, we've evolved significantly over the last few years as we've moved upmarket. Our enterprise is broader and deeper. Our go-to-market reach is greater and more diversified. The time was right to rebrand and tell an expanded story of how we're helping 9,400 enterprise customers shape their stakeholder experiences. Q2 was a strong execution quarter across the business. Revenue growth accelerated to 20% year-over-year. Our leading growth indicators, remaining performance obligation and deferred revenue, both grew at 24% year-over-year. And we delivered $24 million in free cash flow with solid non-GAAP operating margin performance. Our first half sets us up for continued strength in the second half of the year, as illustrated by our updated full-year revenue guidance. More importantly, we've laid the groundwork with various initiatives that will drive our enterprise growth profile for years to come. We've begun migrating existing enterprise survey customers to our new response-based pricing model, and we are at the starting line with our rebrand. Recent product innovations and our new customer expansion motion are driving momentum across our enterprise channel. We are poised for further enterprise revenue growth acceleration in the second half. SurveyMonkey Enterprise, GetFeedback, and our market research solutions are the product portfolio that underpin our five new experience management solution categories, marketing insights, brand insights, employee experience, customer experience, and product experience. This new position is aligned with the solutions-based selling evolution we've discussed on the prior calls. And our core principles are consistent, speed and agility, an AI-powered platform that improves feedback quality and services insights quickly across our products, and a foundational commitment to diversity, equity, and inclusion that benefits all our stakeholders and the community. Our goal was to show enterprise customers how our solutions address their specific needs while preserving the strength of the SurveyMonkey product brand, and the team nailed it. As one of our larger customers told us, our new brand is, quote, more compelling, more competitive, more professional, and more innovative. This is a massive project, and the entire company is excited to amplify our new positioning and help more customers shape what's next in their business. Q2 enterprise sales revenue grew 33% year-over-year as we continue to attract new customers across diverse industries and use cases, increase sales productivity, and improve retention rates. We ended the quarter with 9,400 enterprise customers, up 30% year-over-year. We added 550 new enterprise logos sequentially, including NBCUniversal, Daimler, Kellogg, The Container Store, Janssen Pharmaceuticals, and Benefit Cosmetics. We had another quarter of solid enterprise sales execution, with leading indicators of enterprise sales growth again increasing faster than enterprise revenue. Salesforce productivity continued to improve in the quarter, which reflects our product innovations we've delivered, the impact of response-based pricing for new Enterprise Survey customers, which continued to drive average contract values north of 25% relative to our legacy seats-only pricing model, and the benefits of the organizational changes we discussed in February. We're also pleased to see continued strength in retention and renewals, Organizational domain net revenue retention, which includes both enterprise and self-serve customers, again exceeded 100%. Further, enterprise customer renewal rates remain strong, improving sequentially for the fourth consecutive quarter, as customers continue to see the value in our solutions. We have a large untapped opportunity to expand our relationships with existing enterprise customers, and we are focused on two key areas. migrating our remaining seats-only contracted customers to a consumption-based pricing model, and upselling and cross-selling into our existing base. Consumption-based pricing is already in place for our customer experience, brand and marketing insight solutions, and in May, we began the work to migrate existing Enterprise Survey customers to our seats and completes response-based model. It's early, but we're seeing positive trends relative to the legacy model. We continue to view response-based pricing renewals as a long-term opportunity for ACV growth. On the cross-selling front, we have significant upside. Just over 550 enterprises, only about 5% of our enterprise customer base, use more than one of our products, which illustrates the potential we have within our existing customer base. To help accelerate our expansion strategy, Momenta's former survey sales executive, Linda Campbell, has been named our new SVP of customer success, reporting to Chief Customer Officer Ken Ewell. Linda brings a wealth of experience and expertise to her new role, which we believe will help execute on our response-based pricing and cross-selling initiatives. Given the strength of our products and our increased focus on doing more business with our largest customers, we're confident expansion will become an increasingly important long-term growth driver. In self-serve, Q2 revenue growth accelerated to 15% year-over-year. The Teams product, again, drove the majority of the growth. We continue to see benefits from our pricing and packaging strategy. Teams is our best product sold on the web. Customers derive more value from this collaborative package, and retention rates are demonstrably higher than our individual subscription package. Teams subscribers give us an early indicator of organizations that may become enterprise customers. Based on our broad-based execution in the first half of the year, we are increasingly optimistic about our ability to accelerate our long-term growth profile. Our products are delivering value to some of the most discerning customers in the world. We're tuning our go-to-market motions, and our corporate positioning is now aligned to help match customers with the right momentous solution. The experience management category is healthy, and we are well-positioned to capitalize on the market opportunities. 2021 is shaping up to be a great first chapter in our new segment of story. I'll now turn the call over to Tom. Thanks, Xander. This was another stellar quarter of product delivery as part of this year's super cycle of growth investment to support our agile experience management solutions. We're innovating quickly across our supporting products and underlying platforms to help our customers act with even greater agility. Our Get Feedback customer experience solution is more deeply integrated with Salesforce.
spk02: We're now enriching Salesforce data with feedback from digital consumer touchpoints, and our new app makes it easy to create Salesforce dashboards so the CX team can share customer insights more broadly within their organization's customer system of record.
spk05: And our new program builder enables CX teams to build, launch, and manage relational NPS programs with the push of a button. It was rewarding to see GetFeedback recently named a category leader in feedback analytics and experience management in G2 Crowd's grid reports for summer 2021. Turning to market research, as showcased in our June Fast Forward Live event, we launched market research solutions that deliver AI-powered insights on product usage, customer attitudes, consumer segmentation, and pricing and product optimization. And in July, we launched our SurveyMonkey Enterprise in-meeting feedback integration with Zoom, built to deliver actionable insights to the virtual meeting experience. We're focused on innovation that helps tailor our offerings to our customers' specific needs. We now offer over 40 solutions spanning five categories, brand insights, market insights, product experience, customer experience, and employee experience. We've upped our game in solution-based selling as part of the momentum rebrand, and the customer response is resoundingly positive. Here are a few examples of recent customer wins. National medical group Crossover Health upgraded to SurveyMonkey Enterprise to gain deeper insights into their member experience. Our enhanced user management, HIPAA compliance, and AI-powered SurveyMonkey Genius features deliver high-quality data, enabling Crossover to make better decisions in service of their members. Fortune 100 financial services company StoneX chose our Get Feedback customer experience solution. In a matter of weeks, StoneX was gaining insights into customer sentiment, which allowed them to make business decisions based on what they described as powerful, yet easy to consume data and insights. Finally, plant-based food alternative company EatJust used Momentum to discover that its customer base included meat eaters interested in the potential health benefits of their products. This market research insight led Eat Just to craft marketing campaigns that appealed to both vegans and meat eaters, expanding their target market. For more customer examples, like how Upwork chose our employee experience and customer experience solutions, or how Casey's added market research to their enterprise survey relationship to gain customer insights across their 2,300-plus convenience stores, please see our Q2 shareholder letter on the Investor Relations website. Now, our solutions are leveraging our underlying platform that powers text analytics like sentiment analysis and topic categorization and delivers recommendations about users, brands, and products. These enable customers to act quickly on the vast amount of feedback data our solutions collect. And we're focused on building more authentic types of artificial intelligence. There are numerous examples of AI bias across multiple industries, and we seek to be a leader in redefining AI. We've built a diverse team, and we're applying our DEI principles to deliver AI-powered insights that enable our customers to better shape what's next for their stakeholders. I'd like to thank the team for its relentless focus on our deliverables as we launched our new brand. We're excited to be engaging customers as momentum and building the features and products and solutions that help shape exceptional stakeholder experiences. I'll now turn the call over to Justin, who will review our Q2 financial performance and our outlook. Thanks, Tom. It's an exciting time for Momentum, and I'm thrilled to serve as our CFO. I appreciate the trust that our board of directors, management team, and employees have placed in me, and I look forward to spending time connecting with our shareholders and the broader investment community in the coming weeks. Now, on to our Q2 financial results and outlook. Unless otherwise noted, all comparisons are year-over-year. Revenue in Q2 was $109.4 million, an increase of 20% and above our previously issued guidance range of $106 to $108 million. Revenue from our enterprise sales channel increased 33% due to broad-based strength across all of our solutions. Enterprise revenue accounted for 31% of total revenue compared to 28% in the year-ago period. Revenue from our self-serve channel grew 15% in Q2, driven again by our team's product and our fourth consecutive quarter of tailwinds from pricing and packaging refinements. Deferred revenue increased 24% to approximately $197.3 million. Remaining performance obligations, or RPO, which is the sum of deferred revenue and backlog, rose 24% to $221.6 million, reflecting strong customer traction across both our self-serve and sales channels. With respect to profitability, non-GAAP gross margin was 83% versus 80% in the year-ago period, due primarily to revenue growth and continued efficiencies in both our hosting and market research panel costs. Non-GAAP operating margin was 1.3% compared to 2.5% in Q2 2020, reflecting investments made to strengthen our product differentiation and prudently advance our go-to-market capabilities and positioning, including the launch of Momentum, all in support of our long-term upmarket strategy. Operating cash flow margin was 24% compared to 24% in Q2 2020, and free cash flow margin was 22% compared to 21% in Q2 2020. We ended the quarter with a net cash position of $71 million. These metrics are reflective of the cash generative nature of our business and continued progress driving working capital efficiencies. Looking to future periods, based on Q2's performance and our outlook for updating our full year 2021 revenue guidance. For Q3, we expect revenue to be in the range of $112.5 to $114.5 million. We expect non-GAAP operating margin to be in the range of 2% to 4%. For the full year 2021, we now expect revenue in the range of $443 to $447 million. Our revenue guidance assumes that our enterprise revenue growth rate will be in the 30s, as stated previously, and we continue to expect reported year-over-year enterprise revenue growth will accelerate throughout the remainder of the year. Our revenue guidance also anticipates self-serve revenue growth returning to a more normalized low double-digit growth rate in the second half of full year 2021 as we focus on positioning future pricing and packaging refinements for 2022 and beyond. We expect non-GAAP gross margin will be in the low 80% range, consistent with recent performance and driven by continued efficiencies and hosting and market research panel costs. And while we are maintaining our non-GAAP operating margin of 2% to 4%, we plan to pursue the attractive long-term investment opportunities available to us in the second half of full year 2021. As noted earlier, our investment priorities remain focused on strengthening our product differentiation and prudently advancing our go-to-market capabilities and positioning, including the launch of Momentum, all in support of the long-term upmarket strategy we've described consistently and have executed on. Finally, we continue to expect free cash flow in the range of $47 to $52 million. Now, I'll turn the call back over to Xander. Thanks, Justin. We launched Momentum with three core principles, speed and agility, AI redefined, and amplifying voices to advance more diversity, equity, and inclusion across our stakeholder base. Our social impact work is as important as the products we launch and the financial targets we set. It's good for all of our employees, our customers, and our partners. We believe this is good for our business, and there is strong evidence that supports our point of view. BoardReady, a nonprofit focused on board diversification, published a report in July that showed that S&P 500 companies with diverse boards experienced less revenue downside and even grew revenue during a very challenging 2020. Part of our DEI work focuses on our hiring practices. In Q2, 42% of our hires identified as women and 27% identified as Black, Latinx, Indigenous, and or mixed race. We're also helping more customers use our solutions to shape their own DEI policies. Gen Con, the largest tabletop gaming convention in North America, wanted to boost the population of exhibitors and attendees who came from racially and ethnically diverse backgrounds. In Q2, they launched a momentum-powered research project in partnership with the nonprofit I Need Diverse Games. Our diversity and social impact team provided consulting to ensure the study included DEI and survey best practices, and that the work took on an intersectional lens. We've helped other customers like Gen Con, and in the coming weeks we plan to announce a robust DEI solution to help many more. Leveraging our agile products, expertise, and leadership experience, we'll soon launch a DEI offering that's unlike anything on the market today. We look forward to updating you on this important initiative and to helping more organizations prioritize diversity, equity, and inclusion. Thank you. I'll now take your questions.
spk00: At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. First question comes from the line of Mark Murphy from JP Morgan. You are now live.
spk06: Great. Hey, Xander and Tom and Justin, great to meet you. And it seems like a good quarter. Great to see the organic revenue acceleration. Xander, one question for you. I mean, we have recently seen one of your competitors make kind of a move into social listening or speech-to-text analysis, I guess, towards social data or call center data, etc., Do you see Momentum expand in a similar way to help customers kind of incorporate third party social data into the experience management framework?
spk05: Yeah, there's a lot of activity in this space. There's a lot of funding of startups and you're seeing the market leaders expanding. I'm really proud of the product roadmap we have across our survey platform and specifically with the work we're doing on the new customer experience platform and market research. So we've got an ambitious roadmap. I think we've laid out the core principles, which we are using to drive that roadmap. I think AI is going to play a pivotal role in that. We think the collection of sentiment data and opinion data from the people who are there to serve your customers, your employees, is a massive market. And while we understand the opportunity to integrate third-party call center, you know, other sources of data you can publish, into a platform, we think we're going after a really big market. So, you know, there are ancillary opportunities. You know, folks use our data in other systems of records, so there are opportunities to complement or supplement, you know, our data with other listening. But I'm not, we're not hurrying into that market intention.
spk06: Understood. Now, and one follow-up on the response-based pricing area. I think you said, you know, you're getting enterprise survey customers now starting in May. I know it's pretty early, but what are you seeing in terms of the feedback? Are you seeing kind of the similar average uplift that you saw, like the 25% I think you talked about? And when can we as investors see that impact on the P&L? Do you think it'll take four quarters or more for that base to kind of move over to response-based?
spk05: Yeah, I think it's important if you look at the customers uh in our enterprise base the majority of them are still service customers but disproportionately the impact of our cx customers and market research customers that demonstrably hire acvs you're seeing the impact and how that accelerating enterprise revenue will continue it's important to remember the cx and market research business is purely consumption based the larger the deployment the bigger the customer the more they are using products the more revenue we garner On surveys now, because we have been selling to new customers the response-based pricing model, over half of our survey customers now are already on this consumption-based model. And so we are going back to the several thousand installed bays who bought before April of 2020 on a seats-only model. And I think you can imagine it's going to be a smooth transition to, as they come up for renewal, they'll be migrating to the new paper. You will not see the same 25% ACD uplift because we are trying to be super sensitive with existing customers. And, you know, we're going to get them to, you know, they're already seeing value from our product suite. We want them to continue to enjoy value, and we don't want it to feel like too expensive. too sharp of a price change or to new paper. So it won't be the same 25% uplift, but I imagine the renewal rates will be excellent. And thus far, what I've seen to date gives me confidence to share that.
spk06: Understood. Thank you so much. Thank you.
spk00: Next question comes from the line of Chad Burnett from . Your line is now open.
spk05: Great. Thanks for taking my questions. Nice job on the quarter. So just in terms, Xander, in terms of, or Justin for that matter, in terms of the commentary regarding enterprise growth acceleration in the second half, if we think about the drivers there, whether I think you just touched on response-based pricing, but whether it's CX, market research, product penetration with bigger ACVs, or just, you know, the leadership changes you've made on the go-to-market side or cross-sell, up-sell, What would be the, you know, top two or three drivers to that enterprise growth acceleration as you see them today? Chad, you've been around us for a while. You sound like you're giving Gary a run for his money on IR. It's a multitude of factors. It is a really, really strong leadership team in place, bringing on Ken Ewell, our chief customer officer, Linda Campbell moving over to be SVP of customer success is huge for expansion and upsell. John Schoenstein just continues to bring on a higher and higher number uh quality of sales executives who these folks know how to build pipeline driving acvs you saw the move we did on high velocity sales really with tom murdoch is you know helping bring in these lower um acv deals but in a much faster time frame and then freeing up aes to chase the bigger opportunities the super cycle of investments tom's team has made this year on the products we give us a ton of confidence the market research team is killing it with you know, our brand tracker, concept testing, and they've got new product coming out. CX has made a bunch of new advancements with Salesforce and our program builder. And then surveys just continues to move along and continue to move up market with response-based pricing. So better team, better products, better pricing, really healthy macro environment, all those are contributing to acceleration in enterprise. And, you know, we should be in hyper growth mode for years to come, given the size of the opportunity. Got it. This is Justin. Oops, sorry, Chad. This is Justin. The way you can think about that from a metric standpoint, we've seen continued productivity increases quarter over quarter on the AE side of the world. When customers get our products, they are renewing. They're renewing at higher levels, 10th to a quarter of organizational domain, net retention rate above 100%. Again, another quarter of improvement on the enterprise retention side of the world. And by the way, we're seeing more traction in customers that have more than one product. So we have about 550 customers in our 9,400 customer enterprise base who are using more than one product, and that's only 5%. So there's a lot of opportunity that exists within the base for us to go sell back into and provide more value. Got it. Great color. And then maybe one quick follow-up for me. Just on the new logo front in the quarter, I think you indicated roughly 550. Do you care to share how many of that, what percentage of that 550 was CX or market research? We're not breaking out by percentage. I will say that the productivity from these newer categories is increasing. So we're just seeing a higher and higher mix and representation of the new bookings quarter of a quarter from MRX and CX. Again, you know, we said six months ago we were going to accelerate, and the productivity and progress throughout the year has been inspiring, and it is broad-based throughout all three of the product categories with the new solutions we have in the market. Got it. Thanks much.
spk00: Thanks, Jeff. Next question comes from the line of Daniel Portis from Bank of America. Your line is now open.
spk05: Great. Hey, guys. Thanks for taking the questions here. First wanted to ask about employee experience. It certainly seems like it's becoming more top of mind for all organizations kind of struggling with retaining talent through this pandemic. Have you guys seen any uptick in EX? And are you seeing any momentum building for EX in the second half here? Yeah, it's a great question. I'm sure BAML is facing the same challenges that all the other big banks with big real estate footprints are facing. You know, our chief people officer here, Becky Cantieri, her team has done an extraordinary job working with our employee base and listening and using surveys and benchmarks and talking to other, you know, CHROs throughout the industry. And, you know, it's staying over. Like, the Delta variant is offering a whole new set of risks. We've pushed back our office opening to January of 2022, and we're evaluating and making sure we prioritize the health and safety of our employees. The employee experience is number one or number two consistently and has been since the pandemic on our survey platform. So our GM of surveys, Samantha Bufton, her team has been constantly thinking about how can we build better templates, better question types, better benchmarks, so we can help our customers who are using SurveyMonkey to better understand employee engagement, employee experience, et cetera. As we mentioned in the prepared remarks, we are launching a DEI solution which incorporates a lot of what has been so challenging throughout COVID and really thinking about all the populations we're here to serve and the difference between remote, hybrid, coming in person, and how the future of work is changing, the future of coming to the office and how folks work collectively together. So we think this is a very attractive market. As I've said many times, you know, HR was often considered a function that didn't have quite the budget that product and marketing and some of the other functions do. I think that has all changed. The HR function is very much on the CEO and CFO's mind constantly. Human talent is how we produce great products and deliver them to market. And we continue to see a huge upside there and opportunities to expand our suite of products for the employee-related matters. Nice. Yeah, I agree. And that's really helpful. Just shifting over to the CX side of things. Out of your 9,400 enterprise customers, how many have your CX product? It certainly sounds like it might be a small piece of that. But I guess more importantly, what I'm curious about is when you look across that base, do you have a sense of how much of that is greenfield opportunity for CX versus you guys having to go in and maybe displace a competing product there? I mean, Tom can elaborate on this, but the greenfield opportunity for CX is so big. You know, every other SaaS CEO I talk to, this great digital transformation, which has been hyped in so many places, is so real. And it is happening in every vertical, in every geography, in every size of company. The experience for your products and services starts with your website and your app. And it doesn't matter if you're an educational institution, nonprofit, large enterprise, if you're in the auto vertical, CPG, FinServ, every company's app and website is the front door for their customers. And so using that to collect feedback, to understand what parts of the experience aren't working for your customers, is a massive opportunity. As I've said many times, Qualtrics and Momentum collectively have less than 30,000 enterprise customers. And a small majority of those across our two businesses are in the CX arena. You have to think that 50% of Salesforce's 300,000 enterprise customers are going to be buying enterprise software in the next five years. So it is greenfield throughout. Not to say we don't displace Qualtrics. We just popped them out of Upwork who is now a GetFeedback customer, and we're super excited that Upwork and team are going to be using our product to deliver better experiences for their customers. So we love to go toe-to-toe with Qualtrics. We often win when we do, but the vast majority of customers will pursue our greenfield and, frankly, are often serving monkey customers who have an opportunity to move up to our purpose-built solution. The only thing I'd add there, Dan, is that For us, where a customer has an investment in Salesforce and makes that part of their business process for supporting or selling or marketing to customers, we have an unfair advantage because that's our strategy. Most of those opportunities are focused in customers who are also interested in being agile in their solution.
spk04: They want to move quickly, and that's generally someone who has some kind of CX solution, but maybe is not the most mature or invested in CX.
spk05: So that's really where we compete and win, and that's where we target our efforts. There's some industry vertical overlay as well. You know, we don't tend to go after verticals that have been long investors in CX. We go after verticals like emerging companies. Upwork's a great example of that, where they're, you know, moving quickly, moving with speed, wanting to understand their customer, making agile decisions on the back of their customer experience platform, and that's why we work. Appreciate it, guys. Thanks for all the color. Thanks, Dan.
spk00: Again, if you would like to ask a question, please press star 1 on your telephone. Next one on the queue is Ryan McDonald from Ecam. Your line is now open.
spk05: Yeah, good afternoon, everyone. Thanks for taking my questions, and congrats on a great quarter. Xander, you've really focused and emphasized on the cross-sell opportunity and sort of the increased focus there and obviously making some changes internally to really step up uh the investment there can you just talk about where maybe some of the low-hanging fruit lies uh for the cross-sell strategy and maybe what some of the initiatives you're you're sort of putting into place to really target and drive that cross-off yeah so if you look at our base of 9 400 enterprise customers you know we've been growing that at a clip of five or six hundred per quarter and obviously new logo acquisition is critical it's why we've stepped up and built up a great account executive team and bdrs and sdrs to support them But we don't have to get to 100,000 enterprise customers anytime soon. The ACV expansion opportunities via upsell and cross-sell for us are huge. And we have a lot of world-class logos and a lot of Fortune 1000 logos, you know, in our installed base. And today they are using our products often in a very narrow sector, whether that's a geography or division or seat deployment. And so part of the big opportunity with Momentum and painting this new canvas for us to showcase the solutions we have across market, brand, product, customer experience is for us to really execute on that upsell and cross-sell motion. And so for years now, we've had really good net revenue retention, not necessarily world-class, but very good by just renewing a product that people love. The focus over the next few years via this really world-class team we've recruited is to dive deeper into cross-sell and up-sell. And so it's, you know, if you look at SurveyMonkey and the, you know, 5,000 plus SurveyMonkey Enterprise customers we have, often the use cases are directly in line with the new products we offer. And so many folks are doing market research on SurveyMonkey. They are measuring customer experience on SurveyMonkey. We now have much better purpose-built software solutions at demonstrably higher ACVs to sell them. And we've just got to continue to execute on getting in front of the buyer and meeting her needs and when we do we do a great job as justin mentioned five percent of our customers are now buying two or more products but that should be a double digit percentage in the future and if we execute really well there i think it's going to drive a lot of enterprise revenue growth in addition to all the work we're doing with new logos excellent and then sorry go ahead let me jump in on the low-hanging fruit front some of the most low-hanging fruit is response-based pricing That's where we're actually just seeing usage driving upsell. And a very, very large telecom company expanded their footprint with us with many multiple hundreds of thousands of dollars just based on consumption alone. The easy other ones are if you're a CX solution, we can expand from collecting data on a website to mobile to your apps. All the way through, I can think of one big customer in the security space who actually expanded along their CX strategy, along that. Those are low-hanging fruit maneuvers. And the truth is that Momentum branding is actually supporting us by giving us a broader canvas, by making not just, you know, we're SurveyMonkey and that's what you think of us. You think of us as Momentum, a digital solutions company for agile experience management. So it's been a good set of experiences we've had just since the launch of Momentum to give us expansions. Excellent. And then, you know, when you look at the logos you added during the quarter within Enterprise, obviously some very notable big names there. To the extent that within that segment that those are becoming CX customers, I'd just be curious to see where you're seeing sort of the most maybe momentum or velocity of demand for CX. Is it sort of in the larger situations right now where the deal sizes get materially larger, or are you seeing it more at that, say, low end of the market for CX?
spk04: Thanks.
spk05: We're early enough that we're focused on tech. McAfee was a big CX win. Looking at technology, looking at startups, frankly, ones that are super focused on customer experiences is obviously a natural place to start. So if you have a product in a hyper-competitive environment where pricing matters, where customer service matters, where NPS is one of your OKRs, that's tailor-made for our sales team. Tech... FinServ, CPG, direct-to-consumer, But it extends farther. Tom used the example last quarter, I think of Carlex, was a company that was using it for measuring the quality of their onboarding process and how important it was for minimizing attrition. So we're seeing the CX use case span broadly, and that really plays into that digital transformation. How are you helping your customers win? It's not with patents. It's not with exclusive contracts. It's not with supply chain modes. It's by delivering world-class service, and you need software to do that well.
spk00: Excellent. Thank you very much. Your next question comes from the line of Parker Lane from Stifel. Your line is now open.
spk01: Yeah, hi. Thanks for taking my question. Experience management's obviously been a hot topic and a big priority of investment for organizations across different verticals more recently. When you think about where the budget's coming from, how does that compare across the different categories like customer experience, product experience? Is it very different across all those, and is it more manual processes that you see organizations displacing, or are there some technology-enabled activities that they're sort of up when they take on a platform like Momentus?
spk05: Well, I mean, I think the chief product officer and the CMO always command big budgets. You know, their efforts are directly aligned with revenue growth, which tends to be the way most of these companies are measured. As I mentioned earlier, HR, which, you know, has never had a direct P&L, has a bigger budget today because the CEO and CFO care deeply about the customers, about their performance, their employees experience and reputation and glassware rating and attrition levels how they're using automation um you know justin might want to jump in here but clearly there's a whole lot of sas businesses that are helping uh as our agencies helping customers measure the efficacy and roi of their spend Absolutely. I agree with Xander's point. The way that I would think about it is, let's take within momentum, especially during the pandemic and as our business continues to go even more digital than it was before. Even though we're using our own products, the amount of effort we're sending over in that direction is greatly increasing. When I expand that out to other organizations, I think, as Xander said, there's already a fair amount of budget in the product, product development, chief customer officer, marketing organizations. And I think what we'll see is a trend where at the corporate level, there's just a greater level of asset allocation going directly towards those trends because they are immediately in the path of revenue and growth for companies.
spk01: Got it. And then thinking about categories like employee experience and product experience, can you remind me how much configuration work there is to make the platform a great fit across individual verticals that have, you know, different considerations maybe on the product front? Obviously, you know, hospitality is much different than a CPG. So how much work do you have to do there with customers once they finally decide to go with your platform?
spk05: Yeah, as you know, our positioning is agile experience management, and so in many ways we our value proposition is time to value. And we deliver that time to value through a combination of software and a little bit of service, but mostly we deliver the software that enables it. So the configuration and customization, I think that's actually one of the places where we win. We're able to deploy and get a customer rolling quicker and more cheaply than, say, our competition who might take a lot of time and charge a lot of money. And so for customers who are interested in agility and in moving quickly, I think that's where our value proposition resonates.
spk01: Thanks again, and congrats on the quarter.
spk05: Thank you.
spk00: Next question comes from the line of Ron Jose from JMP Securities. You are now live.
spk02: Great, thanks for taking the question. You know, Xander, I think you talked about this a little bit on the call, but I just wanted to touch on it a little bit more. You know, we've talked about increased sales productivity, improving retention rates, and over the past six months, we've just gone through a revamp of the sales force, made several hires, right, added a high-velocity sales team, customer success as a new leader. I think you said corporate positioning is now aligned with customer success or needs. Can you just talk a little bit about where you see the organization is? Is everything now in place, so now it's focused on even more execution, or are there more roles coming that as you go through this and you say, you know what, we needed a customer success focus, so that's what we're doing. Just talk to us a little bit more about the organization and how it's aligned. I'm not too sure I heard... Yet, just insights on the self-serve biz, growth accelerated there, continues to be strong. Just talk about the drivers there. Thank you.
spk05: Yeah, on your second question first, Ron, you know, self-serve's been running hot. The product is clearly got great product market fit. There was, you know, traffic expansion via COVID. Team did a nice job on conversion. We constantly have pricing and packaging levers at our disposal. And so, as we said earlier, we think growth there will slow down a bit and migrate back to the levels that we promised at the IPO, kind of lower double digit. Right now we're 15%. And you're going to see continued expansion and acceleration on the enterprise side. So our mix and the composition of our revenue will be increasing in the enterprise. On the question, Ron, about strategy-wise, I love where we sit today, and here's why. The category is white hot. Digital transformation around the world is happening in every single vertical. Companies are increasingly thinking about, how can my website and apps deliver more value for our business? How can I get more attuned with our stakeholders, our employees, our customers, et cetera? So we are sitting, whether by luck or skill, in a really good market, in a really good position as one of the two or three market leaders. um our products are singing in the market we are winning world-class logos across market research cx and service and so when you look at our ability to then renew upsell cross-sell drive net revenue retention in use cases around your product your customer your market your brand employees those are the five solutions we're selling into and so for us you know tom's team continues to drive um r d product roadmap wins that are delivering more value to our customers that enables us to move on pricing as well. Our sales team is winning bigger deals and renewing them better. And we're going to be on our front foot and be innovative in terms of the product roadmap and in the future M&A opportunities as well. But I love our current position, and I love our ability to get to that aspirational 25% revenue growth rate in the future with the current assets and team we have on the floor. That's great. Thank you, Xander. Appreciate it.
spk00: Again, if you would like to ask a question, please press star 1 on your telephone. Next question comes from the line of Robert Coolbright from Wells Fargo. Your line is now open.
spk04: Hi, Gaffney, and a couple of questions, please. First off, as we reopen and now maybe we're pausing that a bit, just wondering if you could talk to any changes you're seeing in customer urgency, relative focus on time to value versus other solution attributes, sales cycle length overall. So taking a step back from the changes you've made in your go-to-market, any broad changes in customer urgency, whether more urgent or less urgent, that you could talk to. And then on market research, I just wanted to ask about cross-sell, specifically in market research. I wonder if you could just give us any broad view of, you know, attach rates maybe in the enterprise channel, people who have tried, you know, your market research or audience products in the past, you know, wondering if you could talk to a way to drive more frequency or, you know, how you're coming back to customers maybe with that offering with some of the new AI tools that you have in your quiver now. Thank you.
spk05: Great. Thanks, Robert. This is Tom. In terms of changes in urgency, I think it's pretty clear that the digital transformation got a big boost from COVID. Companies had to deal with their customers in far more digital ways and measuring their digital experience really transformed the way many companies who might have been, you know, moving at their own pace had to pick up their pace to interact with their customers and measure it. And I think we've seen that show up in our CX business for sure. And then on market research, I think the same applies. It's slightly different. It has probably a little bit to do with the increased competition and the increase in consumer choice and the ability for consumers to move quickly and generational changes. Market research is more important than ever, and the urgency of it is more important than ever. And that is really a core value proposition that we sell on and deliver, which is the speed and pace with which we can deliver insights and powerful data to help you make better decisions. That cycle is only getting faster. We are uniquely positioned based on our panel, based on our solutions to deliver that. And many times we're competing with old line services agencies that measure their time scale in a matter of months, not days. So urgency is absolutely a driver. Turning to MRX, I think it's really important to just recognize that in Q2, we shipped a banner set of solutions at our research conference. You can say, if you wanted to just go down the list, we have usage and attitude solution, consumer segmentation, product optimization, max dip, conjoin. feature impact pricing solutions using van westendorp and gabriel grayson like the depth of our market research offering this is something that the market actually doesn't know yet our sales people are taking these products to market momentum is a great signal to let people know that we are a player in the market research space and we are ready to go toe-to-toe with anyone and win it's interesting if you look at what our bigger market research customers the ones spending six figures or even the financial services companies that we've disclosed for spending seven figures you get a really proprietary view on what the big undertakings they have, whether it's with pricing, new investments, trackers they're doing on particular industries, startups that they are doing diligence on. Some of our best logos and highest vendors tend to be the most recognizable, fancy brands in our portfolio. And to Tom's point, it's the agility, the software, and these new solutions that we've created to partner up with our panel that's delivering a ton of value to our customers. And building on that, Robert, when you think about attach rates, we haven't disclosed specific attach rates, but I'll go back to the fact that we said it at the top of the call. So approximately 5% of customers have more than one product today. What I will tell you, when you think of attach rate on a dollar basis of those customers, the combination of market research plus another product is by far the most common. And so it is showing a lot of traction in the market. And like Tom said, we're looking forward to telling that story more consistently and broadly to customers.
spk04: Great, thank you.
spk00: Next question comes from the line at Yosef Squally from Truly Securities. Your line is now open.
spk03: Great, thank you, and guys, congrats on a solid quarter. Hey, congrats again. At a very high level, how do you guys see the enterprise sales organization set to face potentially, and I hope not, but Essentially, restrictions in mobility again versus, say, a year ago. Arguably, you guys are way ahead of where you were both organizationally in terms of sales force, number of sales force, number of sales teammates, how you guys sell, et cetera. Just any early insights from what you're seeing in some of your international markets that may have gone through or that may be going through some increased restrictions lately?
spk05: In terms of COVID and travel and the world shutting down again? Yeah, exactly.
spk03: Exactly.
spk05: Yeah, I mean, this is one area where, frankly, we're just really well positioned because we're not the gold watch wearing kind of trombone playing kind of fanfare for an enterprise sales force that needs to go on site. We're not services-led. We are a software business. And, you know, in Europe in particular, you know, we brought on a guy named Graham Douglas out of Oracle to lead our European sales team. It's been phenomenal. He's up leveled the level of relationships we have with, you know, the large pan-European companies that are moving directly into CX. So we are able to do all of this on Zoom and phone. And I think other companies that kind of led with services and first class tickets and steak dinners, they're trying to play catch up. So, you know, our ACVs might not be where we want them to be yet, but the way we're poised to compete and win for world-class business in this environment is great. I think we're all looking forward to spending more time together in the office, but travel restrictions are not hurting our AE's ability to win.
spk03: That's great. That's great to hear. And one additional one, and I apologize because I joined late, but on self-serve, the meetings is a really impressive number. considering, you know, all things considered. And you may have touched on this before, but maybe can you just speak to maybe the one or two products that may have helped accelerate that growth this quarter?
spk05: yes thanks for the compliment you said you know the driver of the the outsized performance on self-serve uh is in many ways the kinds of growth growth levers around pricing and packaging and license control in our customer base i think you know this for many years we've kind of under monetized that business and allowed people to you know use and share logins we've just been really driving that and and that's that's been a big part of the driver in the second half of the year we're going to take a breather on that because we know that the next thing that's coming is response based pricing for our self-serve business and that's something we're going to approach with a fair amount of delicacy and confidence and so we're going to take a breather in the second half of the year maybe let let our customer base settle down a little bit before we drive that into 2022. On the product feature side, the actual feature investment has really been against enterprise and to really help support our enterprise sales motion. And that's where you'll see the features that we're doing, which are about administration or security or integration with the fabric of a customer's enterprise set of systems. That's really where the kind of R&D investment is going. But the business driver is really about account verification, licensing control, and driving constriction in terms of the number of responses.
spk03: Yeah, it makes a ton of sense. Great. Thanks, guys.
spk05: If you'll remember, too, the Teams product, our collaborative survey product, we launched the week of the IPO, and it now represents over half of our self-serve business. So that is just clearly in line with a Betsabree kind of collaborative product that is easy to deliver value for our customers, and they don't need to interact with sales folks at all. So obviously a huge margin product for us.
spk03: Yeah, I remember. Very impressive. Thanks.
spk00: And there are no further questions. And as there appears to be no further questions in queue, I'd like to send the call over back to CEO Xander Louie for closing remarks. Sir?
spk05: Thank you, operator. And of course, thanks to all the analysts who are here to support and ask us questions. Look forward to following up with our investors in the weeks to come. You know, we've come a long way from kind of a rocky Q4 of last year, and it's really been a banner first half and sets us up for continued enterprise acceleration in the second half, obviously leading under this momentum brand, which we've We've been so excited to debut for many months. We're really in a strong position to help our customers achieve the most important objectives, and we're confident in our ability to accelerate to that long-term aspirational growth profile. Been a crazy environment for all of us, and it doesn't look like it's over anytime soon, but I feel better than ever that our team, our product suite, and our strategic vision set us up for long-term success. So I hope everybody stays healthy and look forward to chatting with you again in 90 days.
spk00: This concludes today's conference call. You may now disconnect.
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