Momentive Global Inc.

Good afternoon. Thank you for attending today's Moment of Global second quarter 2022 earnings call. My name is Amber and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad at any time. It is now my pleasure to hand the conference over to our host, Gary Fugis, Vice President of Investor Relations with Momentum Global. Gary, please proceed.

Thank you. Good afternoon and welcome to Momentum Global's second quarter 2022 earnings call. Joining me on today's call are Xander Lurie, CEO, Priyanka Kaur, COO, and Justin Colombe, CFO. After Xander and Justin's prepared remarks, the team will take your questions. Prior to this call, we issued a press release with our Q2 2022 financial results as well as management's prepared remarks for today's call. These items are posted on our investor relations website at investor.momentum.ai. During the course of this call, management will make forward-looking statements which are subject to various risks and uncertainties, including statements related to our strategy, investments, revenue operating margin, unlevered free cash flow 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 in 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, which is furnished with our 8K filed today with the SEC and may also be found on our investor relations website. Finally, today's call will reference Rule 40 financial performance, which the company defines as a combination of year-over-year revenue growth and unlevered free cash flow margin. The company will discuss its target operating model in Rule 40 on its August 5th virtual investor day. For more information or to register for the event, please visit our investor relations website. With that, I'll now turn the call over to Xander.

Thank you, Gary, and thank you all for joining us. We're halfway through a year characterized by increasing macroeconomic headwinds, high inflation, currency volatility, and softer demand signals in late June. We cannot control the macro environment. At Momentum, we are pursuing several long-term initiatives to expand our market opportunity, increase our value proposition for customers, and drive more operating leverage. While transformations are more challenging in a recessionary environment, I have a lot of confidence we are creating long-term shareholder value. Q2 revenue landed within our guidance range. Sales-assisted customer growth was strong. Our new expansion motion had a record quarter, and we hit the high end of our Q2 non-gap operating margin guidance range. We intend to drive more operating leverage in the quarters to come. As illustrated in our full-year 2022 guidance, we expect to hit low to mid-double-digit operating margin in Q4. If you tune into our investor day tomorrow, you'll hear us lay out a very achievable path to rule of 40-plus, financial performance, characterized by durable growth in both of our go-to-market channels and significant operating leverage. We have conviction in our plan, as evidenced by $68 million in share repurchases from the end of February through June. And we look forward to sharing more tomorrow about our product and go-to-market strategies that we believe will help us reach our financial targets. Now, a bit more on our Q2 results. In Q2, sales-assisted revenue increased 30% year-over-year, our fifth consecutive quarter of 30%-plus growth. surpassing $175 million in run rate revenue. The bright spots in the quarter were traction of our expansion motion and the continued performance of our efficient high velocity motion, both driving more profitable growth. We ended the quarter with approximately 15,700 customers, up 67% year-over-year. We added approximately 2,000 new customers quarter-to-quarter, including Jefferies, SecureID, Sodexo Pass France, Tufts Medical, and Volkswagen Group of America. The high velocity team we established in early 2021 is driving strong overall logo growth. This is a highly efficient, profitable sales motion with a focus on capturing new customer relationships early to facilitate account growth as we deliver value over time. With our sales-assisted revenue base at scale, we are focused on growing customers within our existing base of 345,000-plus organizations. We ended the quarter with more than 2,200 customers spending more than $25,000 annually with us. And we now have approximately 900 customers using more than one of our products. Did we experience an impact in sales-assisted bookings from macro headwinds? We did, particularly in new sales, and this became evident late in June. The impact was largest in our Insight Solutions product line, what we previously called market research. As a reminder, our Insight Solutions target four primary buyers, investors, marketing professionals, product leaders, and researchers. Financial services firms and marketing professionals began pulling back on spend in late June, most citing budget reductions. As we've discussed on prior calls, Insight Solutions' revenue recognition is still largely project-based, so its impact on our top line is more immediate compared to our subscription-based products. But we are confident this is a macro-related headwind. The value we deliver to our customers is evident in our numbers. Retention and renewal metrics remain healthy, particularly for customers with multi-seat products, and our expansion motion is building momentum. In our self-serve channel, year-over-year revenue growth of 1% was in line with our expectations. About 36% of our total self-serve revenue is outside of the United States. In our Q1 call, we shared our diagnosis of the main issue in self-serve, a weaker top of funnel, and we outline the steps we're taking to reinvigorate growth on the web. Specifically, generating high-quality user traffic through new content and search engine optimization strategies, focused brand initiatives, and competitive search engine marketing investments to reinvigorate SurveyMonkey traffic. Secondly, calibrating our packaging and adding new features like translation imports to maintain conversion and average order value, or AOV. And thirdly, reducing customer friction by simplifying the buying and onboarding process. We are executing on all initiatives as planned. We created and tested a renewed branding campaign, which will roll out fully in Q3, timed with the bounce back from our seasonal summer lull. We published more than 70 pieces of new SEO content, which is already contributing to health in the channel. We used competitive bidding in SEM to bring down our CPCs. We operationalize several winning experiments that are supporting our healthy conversion, AOV, and engagement metrics. As noted, these top of funnel initiatives will take time to impact revenue, but our leading indicators are showing early positive signals in North America, the geography with our strongest conversion rate, while retention, AOV, and conversion metrics remain in a healthy range. At the same time, we are facing persistent and worsening macroeconomic headwinds outside of North America. which are challenging to the top of funnel. Similar to North America, retention and conversion metrics are also in a healthy range. As we think through the second half of the year, we are adjusting our revenue outlook to reflect increasing macro and FX headman, especially as it relates to new business across both go-to-market channels. However, we are maintaining our 6% to 7% on-gap operating margin guidance for the year, which implies low to mid-double-digit margin in Q4. and believe we can drive meaningful operating leverage to reach Rule of 40 financial performance. The market is there, our products and teams are in place, and we are at scale to drive more profitable growth. Before I turn the call over to Justin, I want to discuss the board of management changes we also announced today. First, I'd like to welcome former GoDaddy president and Microsoft alum Lauren Antonoff to our board of directors. I am confident Lauren will add value out of the gate given her industry experience and product development background. Her expertise will be particularly valuable during this business model transformation. I also want to thank Serena Williams, who's been with us since 2017, the entire board, and I appreciate Serena's contributions over the past five years and wish her continued success in her many endeavors. Secondly, we are making changes to our go-to-market leadership. Ken Ewell, who joined us as Chief Customer Officer in December of 2020, will now oversee the entire sales-assisted go-to-market strategy. from new sales to renewal, support, and expansion. Given our increased focus on growth through expansion with our existing base, we think the time is right to consolidate our sales-assisted motions under one leader. John Schoenstein, who joined us in 2017 to lead our sales organization, is stepping down. We thank John for helping us move upmarket over the last five years. He will stay on through the end of the quarter to ensure a smooth transition. Third, we announced that Justin Columbia will be moving on, effective September 30th. Justin leaves us after having put the finance machinery in place to support our future success. He strengthened the finance organization, hired a strong chief accounting officer, and partnered with the board and executive team to build and process the tie to the operating model targets we'll share with you tomorrow. We're putting our CFO search on the fast track while Justin remains in his role through the end of Q3 and the board and I wish him future success. As we'll discuss tomorrow, the pace of change continues to accelerate, and there's a clear need for our powerful, accessible solutions that help business decision-makers succeed when the stakes are high. We believe we are on a path to Rule of 40 financial performance through more profitable growth, driven by expansion within our existing customer base of 345,000-plus organizations. We look forward to sharing more with you on that tomorrow. I'll now turn the call over to Justin, who will review our Q2 financial results and outlook.